Scaling the freemium model with Linktree’s Alex Zaccaria | Found Podcast

Hello and welcome to found to crunch's Podcast where we bring you the stories Behind the startups from the folks that Are building them it's me your host Becca scac and today we've got something Special for you recently our fellow TC Reporter Rebecca bellan got the chance To talk to link tree co-founder and CEO Alex sakaria they talked about how to Scale a premium model the benefits of Fundraising when money is harder to come By and how Alex thinks about growing the Company sustainably while maintaining Their Aussie culture I'll let the other Becca take it away from Here this is Rebecca Balon I'm reporting For Tech crunch down under I'm currently Sitting in the very cool trendy office Of Link tree the australian-based Premium social media reference landing Page startup and I'm sitting here with The founder Alex why don't you introduce Yourself yeah hi I'm Alex I'm the Co-founder and CEO of L tree well thanks So much for coming on today what do we Say good day you say come On you can say whatever you want good Day will work Yeah good day how you going all right Well tell us a little bit about how you Got here how link tree got to where it Is today I think we just said that you Were founded in 2016 but why don't you Give us a little bit of your founder

Journey yeah sure so link tree was Founded in 2016 it was actually born out Of an agency my co-founders and I were Running at the time it was a digital Agency that specialized in music and Entertainment so we ran a lot of the Digital strategy end to end go to market Strategy for festivals record labels Artists so artists really from the music Sense of the word and a lot of cultural Festivals as well like film festivals And comedy festivals but obviously those Artists are kind of what we refer to More as creators now at that time we had A real challenge where they were having A lot of trouble linking out of Instagram linking out of their social Media from a marketing perspective Especially given there's only one link And creators have a lot of different Revenue streams artists have a lot of Different revenue streams they had their Their streaming on one platform they had Their video content on another platform They had their merch on another platform Their video on another platform and and Often each of them are owned by Different stakeholders as well and They're all arguing over which link is More important and so it was really Actually just a really simple solution That we had to a problem that our Clients had and turned out that actually You know we ran it as a bootstrapped

Side hustle to the agency for a while And it turned out that actually wasn't Just music that had this problem was Actually the entire internet that is This fragmented uh that it has you know Brands small businesses influencers Creators even just individuals having a Lot of different social media accounts I Think is something like 8.9 social media Accounts per internet user in the US so The amount of different places you find Your audience and then the amount of Different places you need to get your Audience to just continuing to explode Over as many years and so link Tre Really cemented as that really easy way To be able to yeah get your audience From A to B essentially and then Continue to evolve from there in terms Of what it can do from a marketing Tech Perspective yeah definitely we all have These different personas different Digital personas that you need to be Able to I guess it's helpful to find it All in one place how are you thinking About growth and scaling with social Media platforms that are constantly Changing the way that they work right Like some do give options for Lincoln Bio some don't it could be more Complicated I think Instagram just added A feature where you can add like five Links so that's kind of coming up on Your territory how are you thinking

About that yeah like ultimately link Tree exists to be able to unify across All of those accounts you get the most Value out of Link Tre if you are driving Your traffic from multiple different Locations right so for multiple Different referral sources so often it's Tik Tok and an Instagram maybe LinkedIn A Twitter YouTube often we see like QR Codes on business cards and you link in Your business card and your email Signature to really completely replacing A website in many cases like in that way And the other thing we notice is it's Imperative because of the way that Social media platforms just change on a Whim the way their algorithm works or The way they want their platform to work That is actually really important for Creators to make sure they are Fragmenting Their audience and be able To own Their audience as much as they Can so get your audience from Twitter Over to Instagram and from Instagram Over to Tik Tok and be able to access Them and reach out audience as many Different places as possible and Link Tre is really designed to help you get Your audience between each of those Different Platforms in terms of Instagram launching multiple links Actually we saw significant growth from That and so there's you know one Particular type of customer maybe that

Would be useful for if you're only Linking from Instagram to a couple links But link Tre is significantly more than Just a list of links out of your Instagram it helps you track your Analytics and move your links around and Schedule them and there's all these like A whole bunch of smart links in terms of The way you showcase your content and For the very large majority of our users They get the value from being able to Bring their traffic from multiple places Into lry and just be able to manage it All in one single simple easy location And so yeah we actually saw a lot of Growth from that and we're just Continuing to make sure that we can help Our linkers what refer to as our users Our linkers be able to be able to track Their content Drive their audiences and Ultimately end in either growth or Revenue for them yeah well one thing I Did notice about the Instagram Additional links was that when you go to Another link that is provided in the bio It still kind of stays within Instagram And doesn't actually link out so Initially I thought well why wouldn't All of these social media platforms just Build this capability for themselves but I guess there really is kind of value I Guess to keeping users on the platform And they would want to disincentivize That yeah ultimately the link does open

In a web view inside those apps but for A Linker to be able to manage all of That in one place be able to update your Link be able to manage how that traffic Is treated depending on what platform it Came from been able to consolidate all Those analytics it's significantly more Than any one platform's able to do and Also creators linkers Brands businesses Social media managers don't want to go Change that link in 3 four five 10 Different places they can manage it all Really easily and then there's obviously A lot of the M marketing technology that We've built in for example like the Music link if you as an artist put in Your Spotify link will pop up and say Hey we just found your song on 40 other Streaming platforms and we'll turn it Into a music link and it means the Visitor when they click on that link They actually get shown all of the Streaming platforms where the songs Available to them in the country they're In so looking at licensing across the Whole world and making that really easy And completely free for artists to be Able to access that kind of Enterprise Record label style technology and we've Done that for book links and podcast Links we'll continue to scale that kind Of thing out so it's well beond just a List of links in a browser inside a Social media platform yeah well that

Might be what it would be for someone Like me who would be using a premium Version of it but what is the premium Version like how do you monetize this Yeah so the free version really big Thing for us is that the free version is Still incredibly powerful and valuable To use but ultimately is a lot of our Growth engine comes from it majority of Our signups still come from visitors Clicking on the link Tre logo finding Link tree through that and so you can Actually have completely unlimited links You still have a whole bunch of Customization options so you can really Make it feel like yourself as you move Up the plan so there's a $5 a month a $9 A month and a $24 a month and ultimately They just scale in analytics Functionality how far historically you Can go for example and then some further Customization Optionality as well but you know that Music link I refer to you can still use That in free majority of the stuff still Available in free the big leap between The $5 to $9 you can remove the lry logo So you can white label it more so so are You thinking of any other ways I mean I Don't know let's say I'm a Creator and I Have an Etsy page and I want it to link To that or maybe I'm an Etsy Creator and I am showcasing the new mugs that I just Made if someone clicks through to that

To then buy are you imagining a world in Which you can kind of get a take rate or Get some commission or something like That yeah I mean so you've definitely Touched on a big area of growth for us So actually lry drives over 1% of all Traffic to Amazon wow and we have a Really significant chunk of the Merchants on Shopify on lry as well so This behavior of Commerce we're on a Very conservative estimate seeing Welling an excess of $6 billion in gmv a Year passing through from a Commerce Perspective on link tree and so that's a Really big growth area for us we want to Continue to make that easier simpler More accessible for creators to be able To earn bigger commissions be able to Drive more traffic and to expand it to More creators who ultimately right now May not know how to do it they have the Traffic to be able to do so and to be Able to make money from it but aren't Necessarily doing it yet or having Understood how to access it and so yeah That's going to be a really exciting Area for us to grow into we've launched Recently our storefront link which has Ultimately been able to just link to Link to products wherever you may be Selling them and be able to Showcase Them with a price and a whole bunch of Product data on your lry and continue to Make linkes way more visual so you're

Able to Showcase a whole bunch of Different content products videos Everything you like on your lry rather Than having to click out of it in terms Of funding how much have you raised so Far so we've raised 165 million us over Three rounds M and what valuation uh 1.3 Billion okay have you been approached to Be acquired at all I feel like this is The type of tech I mean on the one hand It feels like the type of tech that Another social media giant might want to Own but on the other hand it also feels Like social media was just the first Stop and lry actually has the potential To be quite a lot bigger than that so Yeah maybe it's something that you'd Want to keep as your baby or I'm not Sure you tell me yeah for us I mean Absolutely there's been conversations Over the years where for us we're on day One still it's like 1% done we're we're At about 1.5 billion visits a month on L Trees from about 600 million unique Visitors about 40,000 signups a day and Like I gave you those Commerce numbers Before this still you know significant Scale but we have a lot more to go right Now yes a name that was given to us was A Linkin bio category we created this Category and yes it exists and works Really well for Linc bio but actually we See this expanding well beyond to be Actually the way a completely ubiquitous

Way to express your digital presence Express your identity online and who you Are and all sides of you and we've Seeing this massive shift over time of Like of individuals actually being Curators and curators being creators It's not just major creators creating For the purpose of commercial intent It's actually you and I trusting our Friends curating something and you know Link Tre being actually a really easy And simple way to be able to do that and Not just socially but actually in direct Messaging and wherever it might be so Link tree we really r at day one and Have a lot more growth to go to get to The point of you know we see our user Our Tam in the in the billions and Remind me you mentioned how many users You have um what percentage of those are Paid subscribers so we have about 48 Million linkers we don't speak to Subscriber numbers but we can speak to Visitation growth we're definitely Seeing significant growth month-to month Still from the traffic numbers on those Linkers it's about 40 to 45,000 signups Per day are you profitable sustainable We're sustainable we're we're in a Really great position from a Runway Perspective done a lot of work on just Like any startup this year making sure That we're in a position to be able to Call our own shots and yeah got a really

Long run way so yeah super excited to be Able to continue being to deliver value To our linkers in that way and about how Large is your team so far so 60 people And are they all in Melbourne or where Is your team based so we're about 60% Australia 40% the US few people in Europe as well but yeah we're looking Over time to really move that towards More around a 50/50 or 45 45 10% in Europe and then a lot of the Australian Companies that I've spoken to they often When they expand globally they keep Their R&D they keep their research and Development teams here they do a lot of The software engineering in Australia And then outside Australia is often were They Source kind of marketing and sales Teams I'm not sure are you following a Similar pattern yourself yeah we Definitely started with that pattern we Had a lot of go to market especially our Creative Partnerships team we first Started out in the US which is the team That worked directly with influential Users over time we started to not move But also add product and add engineering Resources to the US mostly because this Type of company we are in Australia There's a lot of B2B consumer isn't that Big there's a few other companies doing A really great job but where we found That the talent and the experience that We've needed to be able to learn from

And get in-house have come out of some Of the big social media platforms has Been beneficial but we're deeply Dedicated to keeping Australian Roots Being an Australian company building Showing showing our us team the Australian culture and you know Maintaining that forever but we've Definitely found that it has been useful To be able to bring some of that past Experience in house our CTO came out of Snap for example and yeah that's been Yeah really beneficial just you know Australia is still in that like Relatively early Generations right like They're incredibly smart people Incredibly smart Engineers as good as Anywhere else just haven't necessarily Had the companies before where we are And at the scale where we're going to That they've been able to learn from Whereas you can kind of find that a Little bit easier and it's a really Awesome opportunity for our team here to Be able to learn from those people as Well when did your CTO come on uh so it Was earlier this year okay that's great Yeah because yeah one thing that's come Up in a lot of my conversations with Aussie startups is the scaleup Experience is not always in country and That's really useful to be able to pull From either either Australians who've Been abroad and done work and then come

Home or just being able to coax people Over by saying hey it's Australia come Live here yeah there's been been a lot Of that and I think during the during Co I mean we kind of saw a lot of our early Scale side of Co been proud of that and Sort of like towards the end of it when Australia was opening up visas there was Like a pretty solid time to get people Over to the Australia although we had a Lot of like pretty nasty lockdowns that Weren't that appealing for people to Come But I think ultimately we we're open to People coming here or we're just you Know building West Coast us to East Coast austr it's a pretty good time zone Crossover and so we' found efficiencies In that way and just setting up office On both sides and and ultimately moving Towards collocated team so we have Surface areas of the product looked After in particular Officers and now we're going to take a Quick break but we'll be right back in a [Music] Second what was fundraiser like for you Because yeah as you say Australia's kind Of moving into this it's getting mature Right it's it's becoming a mature Landscape but probably when you started It was a little bit lesser even though I Guess it wasn't that long ago but yeah Yeah look for me I was it was

Potentially even more skewed raising Experience because as I said the Dig Agency specialized in music I was Generally at like music conferences and Living in Like Music World never really Considered ourselves a startup or Exposing to the kind of tech scene I Didn't understand a huge amount of how Venture Capital worked to the point Where like from within Australia by Australian standards like we were Relatively kind of sheltered you know And it wasn't really until like I didn't Really recognize how strong of a Business lry was or how strong our Numbers were until a Tre actually Recognized it and and talked me through It and helped me like put a deck Together and and recommended that we Raise and helped kind of open our eyes To really what that actually our Benchmarks were well like better than Many benchmarks in the US and so that's Kind of what started out fundraising Journey a tree and a lot of the VCS in Australia were extremely supportive they Kind of helped us put that story Together knowing that we wanted to raise A bigger check than many had a bigger Valuation early on than many of the VCS Could support here they're still very Supportive and saying hey we're going to Follow we're going to put a check in you Can go show that to any lead in the US

And know that we've already done the Diligence already helped already ready To go and you've got support and that Made it way easier to be able to go to The US and say hey we're ready to go we Were in a really really fortunate Position that we were growing very Quickly during Co that were able to like Build a quite a competitive round but You know I've been I've been investor in Many other startups that it's a very Different story and post you know Economic change over the last year yeah It's just one of those takeoff stories Right that the pandemic actually would Have helped with yeah yeah the agency Got flattened because it was all music And all the festivals stopped but yeah Lry definitely got a bit of a Tailwind Yeah and then in terms of bringing on International investors and probably Mostly us investors how has that helped You have you found that they are able to I don't know help you with customers or Are they just there with bigger checks Yeah I mean it's the biggest thing for Us are we'll Bo strapped and more cash Flow positive before we raiseed we Didn't really actually need to raise for Me it was that kind of thing of like Actually still being a little bit Sheltered in Australia not really that Many other consumer scale startups Obviously like canos huge scale and they

Can kind of almost be considered Consumer but really their B2B or pruma Afterpay it's kind of not huge amount Others like obviously last is a Wonderful company B2B it's very Different styles and so we kind of were Looking to just get extra people around The table that have been there and have Seen it so it's really about build out Our board and having access to more Advisers that had seen it and access to More Founders that we could learn from And then a lot of your growth as you Said happened during the pandemic we're Not there anymore we're not really there Anymore how has that shaped your Leadership style what what is it like to To rule this company I mean it's a huge Privilege I mean it's been you know During that early days it was kind of Like been to do that 0 to one which I Absolutely love being able to grow and Figure out you know how to find product Market fit which we were very again Fortunate found product Market fit Almost immediately and then that kind of Growth or costs scale period during 2020 To 2022 during the pandemic was hard but It was a different type of hard it was Like just finding the most effective way To be able to scale as sustainably as Possible but be able to make sure we're Still hiring the right people we're Hiring the right people building the

Team for success and knowing ultimately Kind of putting the pieces in place to Know the scale we're getting to I think Then it's just like being the third Phase of okay the economy's changed it's Chang our strategy a little bit Ultimately we're still grown really Really well but we want to be in a Position where we're able to grow Sustainably where we want to make sure That we're like raisings no longer Really the strategy we want to be Completely sustainable get to cash flow Positivity on on the core business and Be able to go scale all the other Revenue lines we know we can from there And so it's a bit of a strategy change And that's been a really interesting Year this year kind of actually just Getting back to our Bo Roots really Those kind of muscles we built really Early on on how to grow really Sustainably high in line with our Revenue do all those kinds of things Outside of having Capital where you're Investing heavily ahead of the curve It's kind of like pulling back into that Really sustainable mindset which is like A big shift yeah well I mean that's Again that's something that I feel like Australian startups kind of do really Well because they come to investors Usually with a product that's already in Market generating revenue and not just

An idea so I think that Capital Efficiency is something that I've seen a Lot in my reporting in Australia yeah I Wondering if you can speak a little bit More about that yeah I think it's Definitely a I mean there's a mentality Perspective I think it's also just like You can't just go build a sales team in Australia and have them sell to the US Like time zones are a bit annoying sell To Europe you're generally like find the Guys from atasan Scott and Mike speak to This a little bit around how the early Days they really went for a SAS model Because they couldn't have an Enterprise Sales model being in Australia picking Up calls at 400 a.m. and we found the Same thing we had to build our support Team in with the US and go down a s Model I think you kind of like find ways To be able to build the revenue without Needing heavy sales teams and those Kinds of things and you're therefore way More efficient and you find ways to get Money earlier and be able to grow your Team sustainably and I think that's Awesome like my advice is always just Bootst as long as you possibly can if It's want to put you in a better Position later but from a valuation Perspective but more so just to build That muscle and build the understanding Of how to really run a business Effectively and sustainably more so than

Just like how to spend cash have you Noticed or have you felt any pressure From your investors like if they give You a really big round I think that in The past there's been this kind of Pressure to spend the money right and to Make sure that it doesn't make it look Like you're actually doing something With it and so people probably overspend They over hire how do you navigate that I think it comes down to investors like Our investors are in super high quality Again really really fortunate to have Really amazing people around the table Yes there was absolutely during that Period where like super low interest Rates VC had a heap of LP money that VC Was the best place they could put in cuz Interest was making them nothing and so They wanted to deploy as much Capital as Possible and so you could it was a General feeling in the ecosystem more so Than specific investors of just like hey You can spend more scale more grow and Then you'll be able to take more money And that I mean ultimately was a Interesting period let's call it like Not a sustainable period but our Investors are always actually like hey You need to make sure you we're worried About culture if we scale too quickly we Worried about being able to you know Maintain operations and processes and Efficiency like yes we should use the

Capital to solve problems quicker than We otherwise would be able to and be Able to take on more markets quicker Than we would be able to but how do we Do that sustainably and it's not just About you know spending the money as Quickly as possible just so I can give You more but I think now we're in a just A much healthier ecosystem where you Know Founders are encouraged to build Very sustainable businesses growth Efficient growth and profitable growth Is what's re wed more and I think that's Just better economically all around Builds better Founders builds better Resilience and also like the Expectations I think like I sometimes Speak to Founders that are like oh you Know it would have been nice to raise During that period And I I was like no I Think you you should be fortunate to Raise in this period because the Expectations are entirely different like Here's your amount of money we know you Need to grow sustainably go do the right Things compared to hey we've raised this Much money and therefore we expect it to Grow X percentage quicker And therefore you're like you're going Really fast and you're kind of making Maybe not such sustainable decisions Yeah so like not only are you maybe you Know your business model is more worthy Of funding but also you don't have these

Insane expectations yeah it's like you Just have time to be more intentional About your decisions I think is the Biggest Pace yeah like you know you look At funding Trends over the last few Years and there was a big boost in 2021 2022 in Australia and then it drops in 2023 the investors I've spoken to say That's actually a good thing yeah I Think it's great I think it was Obviously that initial shock like you Know it was hard for a bunch of startups That well in the svb thing that happened As well around the same time like not Great timing but I think now that Everyone's out on the other side of it Obviously like very tough time for a lot Of people employees as well with the Requirement for layoffs and those kinds Of things across the market so super Tough for everyone involved but I think On the other side of it you've got a Bunch of businesses that are you a much Cleaner position to be able to like go And actually reach their goals and reach Their Vision so what about your goals And your vision what are are you Thinking are the next steps for link Tree any other products that you want to Add different revenue streams new Markets yes ultimately like I said Earlier we see our T in the billions I See lry to be this completely ubiquitous Centralized way to be able to express

Your whole self and we've got a number Of steps to get there which we're really Really excited about it's about the idea Of like empowerment and like Democratization of your digital presence Where anyone should be able to express Themselves really simply bunch of ways To get there but you know like I said Earlier as well big Focus for next year Commerce further empowerment enablement Of creators Brands businesses to be able To drive Commerce through link tree we Really see through that crators are the Storefront of the future right like I Don't see any world where where Brands Aren't seeing creators being the main Distribution channel for their products Well beyond you know paying for shelf Space in Walmart for example that Creators actually through the Authenticity the reach of their Audiences these really powerful Distribution channels and so we're Really looking to P that do you imagine A world in which you're using kind of Different form factors to you know I'm Thinking augmented reality virtual Reality I'm thinking yeah a lot of the Promises that have been made from Specifically augmented reality companies There was one years ago that pitched me And I cannot remember the name of them But it was basically like if you came up To someone and you held up your phone

You would just see like a chain of their Social media presence surrounding them And you can interact with it you be like Oh that's their Spotify I can see what They listen to and that's their Twitter I can see what they or sorry they're ex And I can I can um I can interact with That and then you just kind of yeah Almost this slightly creepy version of You know stocking just being able to Look at yeah what surrounds them I don't Know if you've you've dabbled or thought About anything interesting like that we Haven't I haven't seen that one but yeah I think for us right now the surface is You're expressing your identity through Either the content you're linking to the Content you've created it could be Content you're recommending so your Links in your page but also through like Your creative expression the colors the Background the image the fonts how you Want to showcase yourself and it's right Now it's like was really hyper focused On conversion L was you know when we Started it was solving this real core Problem just being able to link out and Creators wanted you to be able to get Your audience wanted to be able to get Their audience to wherever you need to Get them to as quickly as possible so It's just hyper focused on conversion And actually as we've evolved it's Become a lot more about expression a lot

More about a visual expression actually Wanting the click to happen on the page Wanting the experience to happen in the Link Tre rather than just sending them Off for all the time and so definitely Evolving it a lot more at the moment to Be yeah much more centered in this idea Of rather than being kind of the train Station and sending them out we're Actually the destination and we can do a Lot more fun stuff like that to enable Creators to be able to showcase the Things they care about but ultimately Still be able to get them to whatever That conversion needs to be right so if They need to get them from Instagram to Tik Tok how do we make that happen as Quickly as possible and how do we Showcase that allit around them but you Know if we need to help them get a Conversion on a product how do we take As many steps away from that as possible POS when you say like personalizing the Page like have you I don't know you Mentioned canva earlier like are you Working with any companies to help you Or is this done in house to help you Offer creators and people who are using Your platform a way to yeah just make Cool art as the landing page yeah like Right now they can do you know they can Change fonts and backgrounds and colors They can change their fonts their Backgrounds their colors their button

Styles that kind of thing videos on the Background avatars Etc we also integrate With canva so you can do a bunch of that Stuff in canva and put it in teing tree But we're definitely looking to expand On that a lot more this year from an AI Perspective geni to be able to generate And help recommend the way your link Tree should look do a whole bunch of it For you which is going to be really Exciting as well this is giving me early Myspace days Vibes yeah it's actually Been really funny watching that kind of Full Circle moment there's a whole bunch Of yeah linkers that are kind of like Can I just the things they want to do Are like very my my spes but the jensz Genz link is asking for it like I don't Think you've don't think you've seen This yet I think jenz would love my I Actually think they would yeah and yeah We're doing a lot of like you know you Can recommend other friends which is Very Myspace top eight but in a way Cooler way yeah so there's a whole bunch Of that that I think is yeah super Exciting in terms of again that idea of Visual expression through the lens right Now of like how do we Empower this Commerce aspect and what brands are Really pushing for as well brands are Trying to find these new avenues Especially after the whole apple cookie Band performance isn't working as well

And brands are really looking for ways To be able to reach an audience and that Idea of reaching an audience through Creator is really powerful would you Have like a B2B pillar then for this or L B2B pillar but ultimately it's Brands Enabling their products to be able to be Sold by creators and so there's Definitely an element where we need to Be working with Brands yeah what is on Your link tree my link tree cuz I don't Create so it's actually one of those Tough ones for me I'm kind of you got a Free account yeah I'm just on the free Uh version no I'm like it's actually a Bit of a generally if you want to see Things with beta testing you go look at My link tree there's a whole bunch of Crazy things going on there But it's generally recommendations like Things that I'm curating things that I'm Listening to books that I've read Podcasts that I like which is kind of Like really the vision like the where I Wanted to go in terms of individuals not Just creators actually showcasing the Things they care about like if I have a Friend that is in Melbourne and loves Loves food I'm going to trust their Restaurant recommendations and I'll go To their link to look at you know their Restaurant lists and those kind of Things I think there's like this idea of Curation as creation that we have we're

Sitting right there in a position of About a facility which is yeah the big Kind of Next Step excellent well thank You so much for walking me through your Business your plans your past your Future and it's been really cool Connecting yeah really appreciate the Time cool thanks for having Me found is hosted by myself Tech crunch Senior reporter Becca scac alongside Senior reporter Dominic madori Davis Found is produced by Maggie stamets with Editing by Kell our illustrator is Bryce Durban founds audience development in Social media is man by Morgan little Alysa Stringer and Natalie chman Tech Crunch's audio products are managed by Henry pikovit thanks for listening and We'll be back next [Music] Week