The article below is taken from SaaS Mag Issue 4. To order your free copy, click here.
David Darmanin, the founder and chief executive of Hotjar, has been passionate about design for almost as long as he can remember.
“At heart, I am a designer,” Darmanin says, “and the reason for that is in my office. I actually have the very old Macintosh Plus that my dad bought when I was 5.” His father used it to publish a gazette. “This was something that I always loved and was very passionate about,” he says. Darmanin eventually became a lawyer, subsequently returning to design when he started building websites for clients. He then used his design and marketing knowledge to help companies grow by building more effective websites. And that became the inspiration for Hotjar.
“We’ve built that into what I would have loved to have back then. We call it ‘behavioral analytics software,’” Darmanin explains. “User behavior analytics tools help you answer behavioral questions about your visitors and customers that traditional web analytics can’t do,” says Darmanin. “Knowing how people interact with your website is a good start, but Hotjar helps you understand why people are taking the actions they take.”
More than 350,000 companies—including Shopify, HubSpot, WordPress, Intuit, and Squarespace—now use Hotjar to understand their users and improve the user experience. Once a company installs Hotjar’s tracking code on its website, the team can start collecting data from users. Hotjar’s methods range from heatmaps, visitor recordings, and form analysis to feedback polls, incoming feedback, and surveys. Hotjar offers three primary metrics: a customer effort score, a net promoter score, and customer satisfaction. Together, these insights help marketers, user experience designers, and product managers implement strategic changes to improve the company’s product and, ultimately, increase revenue.
Hotjar stands out from the field in many ways. The entire team works remotely and, unlike many tech companies, Hotjar has not taken any outside funding. “We want to build a long-lasting, sustainable, and purposeful business with happy team members and happy customers,” Darmanin notes. “What that means to us right now is it’s more about creating a sustainable business that’s profitable, that is a real business,” adding: “We don’t want to be growing for the sake of growth, but at the same time, we want to be investing into ourselves to make sure that we are a long-lasting, viable business.”
You’ve done so many different things, from digital marketing to project management to selling digital products on a global scale, and you’ve also been a creative director for print and for the web. All these things together could be viewed as the DNA for Hotjar. Can you tell me how the tool works for marketers, product managers, and UX designers alike?
I definitely see Hotjar being a creation that comes out of my experiences and frustrations. Probably not just myself, but my cofounders too, we shared a lot of those passions and frustrations in the past.
When I was young, my family lived in Australia and then moved back to Malta, the tiny island country in the Mediterranean where my parents are originally from. I found myself with not that many options in terms of education and career path, and I ended up doing law. I’m a lawyer by profession, although I’ve never really practiced. During that time, studying, and as soon as I could get my hands on any form of technology, you would always find me designing something or creating something. This went back to the concept of the interface, an interface for information and an interface for an event. Eventually, I found myself making money from this.
Later on, when the web started to become popular, I found myself building my first website. I remember a client asked me, “Okay. You’ve done this graphic design for us and these brands. But can you make us a website?” It was a famous international comedian that I got as a client. I said, “Sure, I can.” And I just went for it.
Many of the things that I learned were self-taught and just jumping into these opportunities. This where the Hotjar piece comes in. Building that website back then was really challenging for me because there was no way for me to truly understand how this website I built, what was getting traffic, was actually being used. My view as to what should happen next and how we should improve was based on what the client was telling me or what we needed to do to go win some award or something. I’m quite the analytical type and quite competitive. It didn’t make me feel satisfied that I was building a site that was being used by so many people, but I couldn’t really understand how I could make it better.
So then in my career, I worked at many other companies. This ended up being where I specialized—leveraging my knowledge in design and then later on in marketing to help companies grow by building better experiences, building better sites, and providing better content. Typically, we have a UX team with designers. They’re working closely with marketing. They’re jumping into Hotjar. They’re seeing we launched a new page. How is it being used? Where are people clicking? Are they scrolling? Are they actually looking at this content? They can replay that experience. They can ask questions like, What do you think of this new page? Or: Was this confusing? Or: Why didn’t you do this with us today? And that’s the value that Hotjar brings to these things.
Let’s go into a little bit more detail. Tell me how Hotjar works on other platforms, such as Shopify or WordPress.
In principle, Hotjar doesn’t work differently depending on where you use it. All websites are pretty much rendering HTML, or CSS, so basically, content that’s being rendered in a browser. Now, when you use WordPress or Shopify, we provide an easy way to put in what we call Hotjar Script. You put in a tracking script that you put into your HTML. Once this runs, all the tools that I mentioned, all the things that you can do with Hotjar, automatically work. If you’re, let’s say, selling stuff through a Shopify website, then with Hotjar’s tracking codes running in there, tracking scripts, you can now look at where people are actually clicking. Are they buying? When they’re buying, where did they hesitate? You can see how people are interacting with the content, where they’re clicking and not, and how quickly they leave.
Can you talk about the differences between Hotjar and, say, Google Analytics or other similar tools that measure traffic and usage?
That’s a good question. Hotjar is not the type of solution that you log into and expect to see how many people were on your site. How many of them actually went to this page? How many of them spent this amount of time? That’s more of a logging system, where you have a presentation of data around the usage of the site. But then if we go deeper than that, if we say, “Of those people that are actually landing on this page and then made it to the next page in the sequence…,” it’s showing the number of those and the drop-off potentially between— what actually happened within that page? Where were people moving their mouse? How were they interacting? And more importantly, how did they answer a question that we asked them right at that moment when they clicked on that button? So, it goes deeper.
Then on a technology level, a tool like Google Analytics or other analytics tools look at web traffic, they are looking at pages that load. This page loads from this time to this time, and then they went to this other page; it’s kind of a page-tracking system. Whereas with Hotjar, it’s more of a behavior analysis tool where we’re actually looking within that page: How did the mouse move around, where did they click? And then you can use that data to either re-render it, visualize it—in an anonymous way, obviously. But more importantly—and this is the best part of it—to leverage those activities to know when to ask a question. For example, if someone is actively leaving the page after having visited two or three pages, you can ask them, “What’s missing?” If someone is clicking on something multiple times or finally using something that you recently released, you can ask them to rate it. Especially for designers and product managers who are deploying new features or new parts on a website, this is an invaluable tool that is a short-feedback loop of whether what they’re creating is working and how it’s being used.
Can you give me a sense of what the learning curve is in getting started with Hotjar?
From a technology standpoint, getting Hotjar up and running is quite straightforward— you just need to put our script within your site. Then you’ve got this window of visibility into your site. You can go in and create reports, you can look at how the page is being used or replay the experience of people who are, for example, checking out or buying a product.
Having said that, as with any tool, it’s how you use it. We’re only now starting to talk more and more to our users and customers about the lessons learned from our customers and from ourselves. Because we use it ourselves and we’ve used similar tools in our careers, we are trying to see how to really leverage the power of understanding that experience. It’s really an exercise in empathy, of really understanding what the user is going through. What is the customer experiencing? Because the more the team understands, the better the changes or improvements that they can make for the user. And ultimately, that’s how you win the game. We have a belief at Hotjar that what’s good for the user is good for the business. We live in a world where if you’re not prioritizing the user, the customer, if you’re not building for them, then it’s unlikely you’re going to succeed at the end of the day.
“Getting Hotjar up and running is quite straightforward—you just need to put our script within your site. Then you’ve got this window of visibility into your site. You can go in and create reports, you can look at how the page is being used or replay the experience of people who are, for example, checking out or buying a product.”
Some big companies are using Hotjar. How did you get all these great brands on board, with this mass adoption in so many countries?
It’s interesting—there wasn’t that much design in terms of achieving that outcome. The way we thought about it was quite simple. We had used similar disjointed tools in the industry, but this was a big pain for us. In many ways, we got lucky. I think business has a big aspect of luck, especially from a timing point of view.
The cofounders have a B2C background, meaning our experience is more selling stuff to consumers versus to other businesses. And in that sense, we saw an opportunity. It was an industry that was very enterprise-y, very sales-oriented, and we kind of consumerized or democratized it.
When we launched Hotjar, we said, “Here’s technology that can have a big impact on your role, on your job, on your business, and the experiences that you’re creating. Here’s access to it. No friction. No barriers. You don’t need to fix the sales. You can self serve. Just put in your credit card if you want more advanced features or to collect more traffic, and you do that on your own.”
We also invested heavily into support. We really practiced what we were preaching in terms of sticking to the user understanding, what needs to be fixed, how to prove it, and we saw this opportunity because in this industry, no one was doing that. We were doing all these things at the right time, but also we had this itch. We have very strong word of mouth of people recommending Hotjar because of the way we run the business, the way we’re transparent, and the way we invest into the experience we provide.
Since you have all different kinds of companies, with customers with many different kinds of behavior experiences, was there a certain type of company that you targeted?
The short answer is no. We didn’t target any business. Instead, who we focused on were the people that were like us, the people in the trenches doing the work, doing the design, doing the test, improving the experience of changing the copy and whatnot. Your market strategy is all about how you take a product or a concept and take it to market. Our go-to-market strategy in the very beginning was starting off with a beta program. What this meant was we made Hotjar completely free to access. There was absolutely no friction for a period during which we were kind of battle-testing the tools, seeing what feedback we got, and making sure that it worked correctly. Many big-technology firms have launched product in this way. We’ve actually blogged about how we did this: We created a queue to get access to the beta program, and the more you shared the word about it, the more you went up in that queue, and you got faster access. This definitely created a lot of buzz.
Then what we did to accelerate this word-of-mouth is that we used social paid ads to target people just like us. Again, this was where it’s easy because we knew so much obviously about ourselves that we knew where to find people like us. By targeting interests such as design or marketing or UX, using social paid platforms, it was very easy for us to get the word out about this new tool, this new way of gathering data about the experience in a very efficient, self-serve, and cheap way. That was really effective for us. Part of our strategy as well was, rather than go and sell to the C-level—to the director, the executive—instead we sell to the team in a no-friction way because you can just create a free account. Then what happens is they internally sell to the budget holder. I think more and more, we’re moving towards a world where the budget holder is not the one choosing the software, but instead relying on the specialists within their teams to make those choices. We leveraged that change.
Let’s talk about the company itself. The company is self-funded, and you operate with teams throughout the Americas, Europe, and Asia. Can you talk about your decision to be fully remote?
There was never actually a decision. For us, that was just how the business was going to be and that decision goes a little bit back in time. I was an executive in a software company in Malta because again, I was born here. My family’s here, so this is where I was. And it was a big, big challenge for us. Malta is a tiny island in the Mediterranean, so as the company became successful and scaled, it was very difficult for us to find the people that we needed. Also, for me, having been born in Australia and then moved to Malta, I kind of always felt more of a citizen of the world than Australian or Maltese alone. Also, having worked at internationally positioned companies before, the five cofounders— three of us Maltese, two Swedish—we just had an international outlook to begin with. Building a team in a distributed way was kind of the obvious thing to do. I had worked already for two years as a remote contractor with a British company that was very well-organized, so I had learned a lot from them on how they run the business. I guess being people from a tiny island with global ambitions and liking the remote lifestyle ourselves, it felt like it was the way we wanted to build this business. It’s not a surprise that many other people love to work and live like this as well.
“We encourage our team to embrace what we call JOMO, the joy of missing out. You’ve heard of FOMO, which is the fear of missing out. With our team growing fast, we’ve really emphasized JOMO—meaning you don’t need to be in every channel, in every conversation, or join every call. Part of successfully scaling a business is having a good healthy dose of JOMO.”
Can you talk about how collaboration works at Hotjar? You’ve got departments and teams and meetings across time zones. Can you shed a little light on how that works?
I think remote is not the best way to describe the way we work; I really love the word “distributed.” The reason for that is we use the distributed model, not just for where we’re based or where we wake up and have breakfast and lunch and do some work, but we use this model across the whole company. For example, booking your leave, you actually self-manage and you book your own leave, and you just let your team know. We have allowances and budgets to kick you out of your own home office —a wellness budget, a holiday budget—and everything is self-managed. And we have what we call the “working together budget.” This budget allows you to visit anyone in the team you want as long as it’s published publicly. We cover the costs for you to go and visit them or have them visit you, and others can join in.
The way we like to think about how collaboration works in a distributed model like this, the key word here is ownership. Just like you’re distributing budgets and allowances, you want to be distributing ownership.
On a more tactical level, there are some small things that we’ve thought about. We try and keep teams quite small, typically no more than six. We try and avoid anyone having more than five reports, but similarly, not too much less than five. We try to create this nimble accountability and structure of people reporting to each other. What would you say is your biggest challenge in scaling the company in this way? For a lot of experienced leaders, leading a distributed team is a relatively new concept. We sometimes see a little bit of the struggle of: How do I replicate what I used to do at the office in this distributed world? The answer to that question is: You don’t. You rethink the outcomes you wanted to create. For example, if you want good relationships with teams, you need to invest in them, versus relying on serendipity in the office of bumping into people. It’s a very different game, and on a leadership level, it does require a different mental model to achieve it.
“The reality is we never identified ourselves with the type of company that wants to go public, to dominate a category, to win the big jackpot. But at the same time, we are not a lifestyle business that wants to kick back, take it easy, and just take out the profits. It’s kind of this middle ground for Hotjar.”
Can you share maybe three or four of the tools that you use companywide, for collaboration or for meetings or approvals?
I would love to. Since we’ve spoken so much about the distributed nature of business, it probably makes sense to speak a little bit more about the tools that we use from that point of view. I think it comes as no surprise that we use Slack. It’s a very important aspect of how we work together as a business. Having said that, we encourage our team to embrace what we call JOMO, the joy of missing out. You’ve heard of FOMO, which is the fear of missing out. As a company grows, Slack can be very active. With our team growing fast, we’ve really emphasized JOMO—meaning you don’t need to be in every channel, in every conversation, or join every call. Part of successfully scaling a business is having a good healthy dose of JOMO. We also use a tool called Discourse, which is great. It’s kind of like a micro-blogging tool, which allows for comments. This is what we use as our internal comms for, let’s say, making announcements and sharing news and any successes or updates.
We also like to use Trello, which is like a file tool. We use it in many ways to replace the concept of a whiteboard or those materials you typically find in an office, like stickies or whatnot. We have loads of Trello boards that are helpful for us to just organize thoughts or work together. For example, every now and then, we organize something called a Bonfire. We created this name “Bonfire” because sometimes you have a fireside chat. We call this “Bonfire” because it’s a big group, and in it, sometimes you can bring up an interesting topic. So, Zoom and Trello together give us this kind of town hall approach to discussing stuff together.
What is your advice for companies looking to create and sustain a positive culture?
The first piece of advice is to understand that a culture is an output and not in itself an input. You can’t wake up one day and say, “Let’s create this culture.” The main takeaway here is to focus more on values than culture, in the sense that values, you can define and think about how you put them into practice. But you need to really make sure that when you set these values, that they are real ones, and that they are actionable. You need to go deep into what it is that makes your small group click, and what it is that you truly believe in. Be honest with yourself because it’s so easy to create these vanity values that don’t mean anything. You really need to own your values. They can’t be just there for show.
Let’s move to a discussion of growth and sustainability. This goes beyond just financials for you, is that right?
Yes, this is an important subject to us. I have two young kids—they’re 3 and 5. Many of us at Hotjar care a lot about the environment, about the climate. We are not living in a world that has sustainability at the top of its mind. Although we’re a small company, we want to do our part. Last year, we pledged 1% of our revenue as part of our giving back program, and it’s currently focused on the climate. We’re exploring different ways of how we can have an impact. We’re looking at renewable energies, projects we can invest in. It’s a very exciting, relatively new thing for us, and it starts with us becoming a carbon-neutral company.
Another topic I wanted to get your thoughts on was bootstrapping and getting investors.
The reality is we never identified ourselves with the type of company that wants to go public, to dominate a category, to win the big jackpot. But at the same time, we are not a lifestyle business that wants to kick back, take it easy, and just take out the profits. It’s kind of this middle ground for Hotjar. We talk about the vision we’ve laid out, but we also discuss how we want to get there. We have crossed paths with investors before, but we’re again, we’re not the type to say, “Let’s spend a lot of money to get that growth.” It’s just not how we’re wired.
Subscribe for free to read the full SaaS Mag including other interviews with Asana COO Chris Farinacci, SaaStock Founder Alex Thuema, Tomasz Tunguz, and more…