Joel Gascoigne: Navigating a Multi-Year Decline to New All-Time-Highs

A candid talk for founders who’ve seen growth stall and want to know what it actually takes to come back.

Following 9 straight years of growth, Buffer experienced the largest decline in the company’s history. In this candid talk, Buffer’s Founder and CEO, Joel Gascoigne, shares the story of Buffer’s multi-year decline, where Buffer’s ARR dropped 20% over 4 years to $17.1M. Even in this nerve-wracking situation, Joel persisted in leading Buffer to new all-time highs, and Buffer’s ARR now sits at $22.3M. A story 5 years in the making, Joel will share his journey navigating Buffer’s decline and the monumental effort it took to turn it around.

In this talk, Joel will cover:

Missteps and early warning signs of an emerging plateau
What it feels like to be in free fall
Going inward to rediscover purpose and seek a new path
Steering in a new direction during a decline
Strengthening culture in the midst of a turnaround
Achieving all-time-highs our own way
Embracing differentiation to thrive long-term

Slides

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Transcript

Joel Gascoigne: All right, hi everyone.

Mark Littlewood: Hello,

Joel Gascoigne: can you hear me? All good. Great, my name is Joel. I’m the founder, CEO of Buffer, and I’m really excited to be here. The last time I was at BoS was 11 years ago. I spoke at BoS when I was a baby in my journey at Buffer, and I’m just really excited to be back, because a couple of reasons, really. First of all, I just feel like the BoS community is such a special community. I think we are a pretty weird, unique group of people, and I feel like when I’m here, I’m amongst my people, and the other reason is that the timing is just perfect for me to talk with you all, because I have a story to tell.

So this is Buffer’s ARR over roughly 15 year lifetime, and so, as you can see, we had 10 years of kind of that up into the right growth that you want to see in your, in your startup, and we just had a great ride there, and then you can see right around 2020 we hit this plateau, it was right around 22 million in ARR, and then we went on to decline for around three four years, and so we declined a total of 20% over that time, and as you can imagine, this was a pretty scary time, and yeah, just I’ve spent some time since then kind of being back to growth and profitability, reflecting on, okay, what happened there, and so I’m excited to share with you all today this journey of what were some of those decisions that led to the plateau and the decline in the first place, and then what did we do to get back to growth and thriving again? And I’m also here to share the emotional journey of this as well, kind of how it felt for me, how it felt for us as a company going through this journey and trying to figure it out along the way.

Just a little bit more about me before I dive fully in. I’m originally from Sheffield in the UK. I’m living in Boulder, Colorado, right now with my wife and our two young kids. We have a four and a half year old and a one and a half year old. So, I’ve had also a parallel journey of becoming a new parent during this time as well, and when I get some free time, which is not a huge amount, but we do have a four day work week, so I do get a little bit of time here and there. I love to ski, go mountain biking, or if we’re by the ocean, I really like to try and go surfing.

A little bit more about Buffer as well, so we started Buffer in late 2010 and I started Buffer to solve my own personal problem, which at the time I wanted to space out the content that I was sharing to Twitter, and so Buffer is a social media toolkit for creators, entrepreneurs, and small businesses. And today Buffer has around 67,000 paying customers, and we are right at around 22.7 million in ARR, and in 2025 we are on track to do around two and a half million in net income and profit. Thanks, Mark. And we are growing 22% year over year right now, and these are the best results we’ve had, probably in about seven years, which is why the timing is really perfect right now to share this journey that we’ve been through.

We’ve also had a pretty unusual journey in terms of our fundraising, we raised a total of $4 million over two rounds, but our last round was in 2014, so over a decade ago, and we have, in fact, since 2017 spent $10 million buying out investors and alumni to put ourselves firmly on a long-term independent path as a company.

The Growth Years (2010-2019): Seeds of What Came Later

All right, so let me set the stage here a little bit. I’m going to breeze through these growth years that we had, because they were fun, but that’s not really the story I’m here to share. But there are a few important details in these years that are relevant to what comes later.

So, in 2010 I started Buffer, got it off the ground, found the first few paying customers, and by the end of the year it was just me, and we had a total grand total of $20 in ARR from these four customers. So, and I’ll say I was excited, because I’d never experienced that before. That was the first money, first dollar I made online.

And then 2011 my co-founder Leo joined me. We went through an accelerator program, and we raised $450,000 at the end of that program. By the end of that year, we’re a team of three, and we had an ARR of around 200,000.

2012, 2013 is where things really started to ramp up for us, and so on the product side, we started with Twitter, and then we quickly added LinkedIn and Facebook. We were doing a lot of different innovations at the time. We had a really powerful browser extension that other products didn’t really have, and we were really connected with our community of customers using Buffer as well, so everything was going really great.

And then in 2012 and 2013 we also made a few really important decisions culturally that kind of have defined us as well. So we around that time decided to be a fully distributed team, and back then this was highly unusual. I could, I remember, count on maybe two hands how many remote companies were at that time, and we were one of them. And it just felt great to be part of this movement. We also formed our values very early on, when we were just around 10 people, and one of our core values is to default to transparency, and in 2013 is when we rolled out salary transparency, both internally and externally, and so to this day you can go to buffer.com/salaries and you can see all the salaries of everyone in the company, including my own salary, you can see the formula that we use to determine salaries, and so that’s something that we’ve been pretty well known for.

By the end of 2013 we were a team of 16, and we had ARR of 2.3 million, so you can kind of see that we were ramping up pretty fast here, both in terms of the team size and our ARR.

2014: The Pivotal Year

2014 was really a pivotal year for us. We received our largest acquisition offer, and I remember at the time it felt kind of like Chris mentioned yesterday, this was one of those moments where it just felt really crazy to turn this down. It was, you know, beyond life-changing money for myself and the whole team, really, but at that moment in time, we were this remote company, I was traveling the world while I was building this, and we were kind of following our values, doing some things that both on the product side and the culture seemed pretty unusual and really special, and we had great growth. We were just continuing our trajectory, and so really, at the time, I felt like I don’t want to stop doing this. Why would I stop doing this? And I remember one of our advisors at the time, Heaton Shaw, we talked to him about it, and he said, well, you want to keep doing your crazy shit, right? And we’re like, yeah, we do. So essentially, we were just like, what, we’re not done. And so we turned that acquisition offer down, and then some of our advisors and investors recommended that at that time we should raise a little money to take a little bit off the table, and so we thought that was a good idea, to having gone through that kind of existential questioning, making that decision. We thought, okay, we can raise a little bit, just take a little bit off the table, and that will help us be able to go long, and that felt like a great idea. So we raised this three and a half million dollar round of funding, and at the time, because of this unique culture and the direction we were on, we decided to be really firm about maintaining control, and this will become important shortly. We were quite diligent about ensuring that we didn’t give away too much of the company, and we didn’t give up a board seat at that time, so that was pretty unusual for a second round of funding. We raised three and a half million at a 60 million valuation, gave up around 6% of the company, and we maintained full control. So the board was just myself and my co-founder, Leo.

2015-2016: Getting Carried Away

And then in 2015 on the back of this round of funding, thing we felt like, okay, we want to make this big now, so let’s start hiring. We acquired a product, we were like, let’s do this, and we, to be honest, got a little bit carried away. You can see here that from 2014 to 2015 we doubled the team size, and we were kind of investing ahead of our growth here, and we thought, okay, we’ll figure it out, that growth will come, but you can see that we didn’t quite double the ARR from 2014 to 2015, and so in 2016 and 2017 we hit some more turbulent times, and this is really where I see some of the challenges that led later on to some of that plateau and the decline.

So, the first thing that happened was, as I mentioned, we were growing fast and we just kept going, and we really hadn’t built up financial diligence in the company, we didn’t have a finance function at the time, and so our team growth was outpacing our revenue, we were still growing pretty strongly, but we got to a point where we realized we had 1.3 million in the bank, and we were about four or five months away from zero, and so had to make one of the toughest decisions that I’ve had to make in the Buffer journey, and make the decision to say goodbye to 10 people. We were a super tight-knit culture at that point, based on kind of those unique things we’d done, and so this was really kind of a devastating moment for the team, and it took a long time to rebuild the trust from there.

And then in the midst of this, my co-founder and I were starting to have different views on the direction that we wanted to go with the company, we were having moments of the slowdown of the revenue, and we had different views on how we should address that. Leo wanted to keep going on the hyper growth path, kind of the growth at any cost, and just figure it out and change whatever needed to change, the product, customers, whatever, to keep on that path. He also had a feeling that we kind of no longer knew what we were doing. We needed to bring in the experts, bring in the executives, so we kind of started to do some executive hiring around that time, and I just didn’t feel great about this. I felt like the culture is so important, the customers we’ve been serving were super important, and I wanted to kind of maintain, protect, and cultivate that culture that we had, and some things are starting to feel strained, the size we got to, still being a remote company at a time when it was very unusual and the tooling wasn’t there, started to feel a bit challenging, so that resulted in Leo moving on at the beginning of 2017, and I kind of continued on, and at least it felt like we had clarity, because for the team we’d kind of been wavering between these two paths, and I think kind of having a little bit of a whiplash for them.

So right after this, kind of been through layoffs, six months later my co-founder moved on, our CTO moved on at the time as well, and I felt like, okay, I need to really just stabilize everything, rebuild the trust with the team. So that’s what we did. We had a hiring freeze, and I just put focus on the existing team. I didn’t want to be bringing in new people into that group, just wanted to rebuild the trust, and then kind of after things felt settled, and it felt like, okay, we’re good, we’re going to be okay, I had this really severe burnout. I just felt like I kind of lost my motivation. I couldn’t get out of bed. That was a really hard time, and so I took six weeks out at that point in time, and really gave myself time to recover from this burnout, and it was wonderful. I initially, I just did nothing. I was like, I can sleep, I can just not do anything for a little bit, and then I started exercising, started feeling better, kind of the motivation, the passion, the care that I felt for the company that I knew was really there deep down, but it was kind of masked by this burnout started to come back, and then one of my fondest memories of that time is that I went to the Dominican Republic and learned to kite surf, and it was great, I kind of got myself back to a good place, and it’s a really good job that I did, because shortly after that I hit also one of the other hardest things that I’ve been through with Buffer, which is, so after Leo moved on, he, for him, he felt like, well, you know, I put six years into building this thing, we got to, I think, 13 million in ARR, built a ton of value, and for him, he wanted to get some kind of a return on that, and he had a level of urgency around that, and so he was hoping for, you know, a big severance or some liquidity for the company to buy out some of his shares, and of course we just gone through layoffs, and we were rebuilding cash reserves, so I was saying we’re not in a position to do that, but I’m confident that your shares are going to be very valuable long term, but for Leo, he really just wanted to get some kind of liquidity, and so what happened was he started to sell shares in the secondary market to other investors, and that’s okay, and you know, I had some conversations with some of those investors, but what happened was that my chosen path of the company now was kind of this long-term sustainable path, and Leo wanted to maximize the valuation that he could get at that time, so whilst he introduced me to a few investors, you know that kind of changed the conversation, and then there’s probably less of that, and so over the course of a few months he ended up making a number of stock sales that we had a right of first refusal, but we weren’t in a position to buy those shares ourselves, but it started really complicating the cap table. I ended up with investors, I felt like long term, I have to figure out a way to get these people a return, and the valuations I don’t think we’re going to be going into them for many, many years, so it just became very problematic. As I mentioned earlier, the board was just myself and Leo, and started to feel like they, he doesn’t necessarily have the best interests of the long-term future of the business in mind, so I started having these conversations, and it got really tense, and then one day I woke up, and he had emailed all the investors, and unbeknownst to me, one of my investors forwarded this email to me, and he basically shared that, you know, the path that I had in mind for this business was going to tank their investment, and that I really didn’t have the experience and the team that was needed to really be on a good path, and so this was a moment of just a really excruciating moment for me, and I had to do a lot of damage control, respond to those emails, talk with a bunch of the different investors, and the hardest part was that, unfortunately, the VCs from the 2014 round of funding, they saw this hyper growth path earlier saying the company should be on as a pretty attractive path to be on, so they were having conversations, and this was a real struggle, and so kind of got through this time. Thankfully, I had been speaking with a friendly non-traditional investor that didn’t have huge expectations of a return, and a couple months later I was able to get them connected, and this investor purchased a chunk of Leo’s shares, gave him that liquidity that I think just started to ease things up for him, and then eventually a little bit after that he resigned from the board, and for me that was the moment where I kind of had this clarity of, okay, I have to figure out a path now to buy out these VCs, because the alignment wasn’t there. So our 2016, 2017 results kind of reflect this journey that we went through, where we made a loss in 2016 and then in 2017 we rebounded, and because we did the hiring freeze and we’re still growing, we were able to really turn around our bank balance, so you can see it went from 2 million to five and a half million in the bank, and this set us on this path where we would have realistically a possibility to do this buyback as well.

The Plateau and the Decisions That Caused It

So now we kind of get into the journey towards this plateau that we had, and a lot of what happened in those years were the seeds for the decline. Coming out of the layoffs and the departures and the conflict as a team, and definitely for myself we felt very kind of defensive, we had a pretty negative mindset at that time, and we also had our growth that continued whilst we’d had this hiring freeze. And so we had 80,000 paying customers, and we started to feel like we got too many different types of customers, we’re too small to be able to handle all their different needs, like this is a struggle, and so, you know, there’s a lot of advice at times, and to this day there’s a lot of this advice, which is ICP, ICP, ICP, you know, who’s your ideal customer profile, and so we were reflecting at the time, we thought, okay, we need to narrow the type of customer that we’re focused on, and so to bring focus, we chose to focus on direct to consumer brands, and these were kind of like the new e-commerce brands that at the time were doing really great stuff with social media, and we felt like, okay, this is the type of customer that are successful on social media, they depend on social media, and so they’re great customers for us. So we decided to kind of put our focus on DTC brands, and so at that time our kind of stated focus was to grow average revenue per user, and at that point in time, as a SaaS business, we were pretty unusual, because we had a very low average revenue per user, about $18 a month was our average price point that those 80,000 customers were paying, and so we felt like really the opportunity here is to grow that, we knew public companies have less customers than this and here we are at, you know, 18 million or wherever we were at that point, and we felt like, okay, let’s bring the focus, and at that point we said we’re comfortable if we can grow average revenue per user even at the expense of our paying customer growth, we’re okay if that’s kind of going to stagnate.

So we made a bunch of changes based on this kind of conviction. We reduced our free plan and we removed a bunch of features. Customers weren’t very happy, but we kind of pushed through. We also increased prices, so we increased the Pro plan from $10 a month to $15 a month, and not only did we increase the price, but we also reduced functionality on the plan, and all of this was with the mindset that we’d been giving away too much for free, there were people on the free plan that should be paying, the value of the product had increased, very reasonable things, and then we, about a year later, we kind of took it further, and so we actually removed our free plan from the pricing table, placed it underneath with a button, so, and these are pretty common practices that you see all the time happen, and then eventually we actually took that a step further, so you couldn’t even sign up to the free plan. We just said if you want to get on the free plan, you need to go through a trial and then drop down to the free plan. So we basically all but removed the free plan at this point in time.

The other thing that we embarked upon was this multi-product strategy. This is again a kind of another common playbook that we saw from other SaaS businesses, and you see this as you hit a certain scale, start to plateau, need to layer in new products, and so we felt like, okay, we made that acquisition, that was one of the products we were building out, another product we started to put them together, we felt like, okay, we have this great offering where we can have multiple products with their own pricing, and we felt like this gives flexibility to the customers, and it can also grow our average revenue per user, because we can do upsells and cross sells and things like that, and so again, a very common kind of way to go, and this had, this is how our multi-product looked once we finally got to the point of building it out, kind of got these tabs and go between the products, and it took a lot of work to get there, a lot of architectural changes to make that happen.

And then for me at that time as a leader, I think we were a couple of years out from my co-founder moving on, and I was struggling with this transition of kind of going from having a co-founder to being a solo founder. I think when you have a co-founder, you can kind of spread your strengths and weaknesses, you know, one has some strengths and the other one can kind of match up with the other one’s weaknesses, and I definitely had some of those things where I was really reliant upon Leo for things that he was great at, and so what started to happen was that the leaders that I was working with, I ended up becoming pretty hands off, passive, I wasn’t making the types of decisions that I really should be making, and then, in terms of our strategy, we ended up with this Frankenstein of a strategy of, like, you know, our VP of Marketing says we should do this, and our VP of Engineering says we should do this, and we kind of put it all together, and it just wasn’t really coherent, so the strategy really wasn’t there.

And this was around the time that I started working with an executive coach, my coach Jim, who I’m still working with to this day, about five years later, and that’s been a transformative journey for me, and one bright point in this journey is that we found the path to buying out the VC investors from the 2014 round, and so in mid 2018 we spent 3.3 million, which is half of our cash at the time, to buy out these VC investors. This also unlocked our ability to buy out some of our seed investors and provide liquidity to them, because that was blocked by the series A class of shares at the time, and then we also, a year later, in mid 2019 we were able to fully buy out my co-founder through a combination of a friendly investor from our seed round purchasing 40% of the shares, and then we did the remaining 60% through cash flow, and this was a moment for me, you know, I mentioned previously that, you know, having kind of moments of deciding, okay, I’m on this long-term path, but this was a moment, especially where I’ve gone through this pain of, you know, parting ways with my co-founder, the conflict, figuring out the way to buy out our VC investors, and then our co-founder, and we were finally at this point where we were kind of cementing our future as being a long-term independent business, and so this is a moment for me where I was like, okay, I’m in this long haul now, there’s like another decade here, and I still feel that to this day, where it’s like, why would I put myself through all that pain if I just sell the company, you know, a year later.

And so the tactics that we had implemented, they really started to work. We saw our revenue continue to grow, and the average revenue per customer was growing, and we managed to get that growing at a faster pace, and this was like how our growth was occurring at this point in time, and I mentioned earlier that we were comfortable if we were no longer growing our number of paying customers, and actually in the same time period this is what was going on for us with our number of paying customers, so we hit that peak of 80,000 paying customers, and then we just kind of started this fairly precipitous drop of number of paying customers, and as this went on, initially it was actually our stated strategy, we were saying this is okay, this is what we want, this is how we make it manageable for ourselves, but as it went on, to be honest, I think I certainly, I think, in the company we start to feel like, is this really sustainable? If this is dropping, it seems like a sign of something not working. And so the 2019 results kind of reflect this journey that we went on, where we were able to grow our ARR, but the paying customers started to drop.

Free Fall: 2020-2022

Okay, so now we head into the free fall. So we arrived at the plateau in 2020, and so this is pre-pandemic, 2020, we had already plateaued, and we hit our peak at around 22 million in ARR, and then the pandemic happened, and for us, we had a wide variety of different types of customers using Buffer, a lot of small businesses, a lot of physical businesses, and they started churning rapidly because a lot of them simply had to pause or shut down their businesses, and so our ARR dropped by 10%, 2 million in ARR dropped within the space of a few months, and I recall this, this is one of my journal entries at the time, I was just, it was a scary moment. I didn’t know how long this was going to go on for, and so we were kind of bracing for, okay, what’s going to happen here. Thankfully, we were highly profitable going into this time, and we had a really strong bank balance. I think our bank balance had got up to about 7 million at the time, and then we got this moment to breathe, because we had, you can see in the chart here, that we had that steep decline, we actually had a little bit of a rebound situation, so ARR grew again for a few months back, and then it plateaued again, so it was kind of like when I look back, I think about that, as you know, we had the pandemic impact, but then we were back to where we were, which was this plateau, and ultimately the business was in a pretty weak position.

So this led to a lot of different rethinking for me, so the first thing was this focus that we’d had on these direct to consumer brands. During the onset of the pandemic, we were talking with a lot of our customers, and, you know, a lot of them were saying, I love Buffer, I’ve been using it for years, but, you know, our business, we got to pause it. It’s not working, so they had to leave. We were having these conversations, and it just didn’t really, it started to not sit right with me to keep this like kind of aggressive focus on like we’re shifting our customer type to be DTC brands. So this was a kind of a moment where I started to loosen that focus, started sharing with the team, like, hey, we have all these small business customers, this is who is using Buffer, and this was a moment for me where I started to also reconnect with that original purpose that I’d started out with Buffer, which was really to serve small businesses and entrepreneurs, which I was myself at the time, and especially in the pandemic, I felt like at that time there was so much creativity happening amongst these small businesses, figuring out how they can make it through, and as I mentioned, we had a pretty strong bank balance, we were profitable, and so I felt this calling at the time to say, what can we do to help here? Like, we are in a better position than a lot of these companies. So, we put together what we call the COVID-19 Customer Assistance Program. We did a few different things just to try to help some of these customers out.

And then the next thing I was thinking about was the team, a lot of people in the team, their world was turned upside down, and they’ve got kids at home, and things like this, and I’d been thinking about a four day work week for a number of years at that point, and reflecting on it, just felt like this could just ultimately be a better way to work, and so that was the moment I took the opportunity to say, let’s try this out, and it seems like a good time to do this for ourselves as a company, let’s start doing a four day work week, so we had a one month trial of this in May 2020, and then we did a six month pilot after that, and it just stuck. So we’ve had a four day work week now for five and a half years, and throughout the whole rest of this journey, everything we did, we did with a four day work week. This was a moment for me, another one of my journal entries that I dug up. I had this realization that I could make a decision like this. Making the decision to do a four day work week was not really a hard decision for me. That sounded pretty great to me, but for the team it was kind of almost unfathomable that we would have a four day work week, they would, you know, get this whole day back, and it was, you know, we didn’t increase the hours on those four days or anything like that, and so, yeah, I think this was a moment for me as a leader where I was kind of regaining some of that conviction.

And then the other thing we questioned was this multi-product strategy, and we realized that it would just create a lot of complexity for customers, and we had implemented it at a time where we had more of a focus on extracting value versus delivering it, so we started our plan to consolidate the products again, put them back together into a single offering, a single product with a single kind of price point, and then by the end of 2020 I had kind of solidified this renewed focus on small businesses, and so this is the moment I shared kind of a refreshed vision and mission with the team, and to this day our vision is a world with more small businesses that do good while doing well. And so the idea was, okay, how can we help actually more small businesses to succeed and be able to exist in the world, get off the ground, and then as a company, with how we approach things, can we be an example of doing good along the way as well, so this was a moment where I started to feel like, okay, we’re starting to feel some shift and making some new decisions here, but unfortunately it got quite a bit worse before it got better.

So first of all, we were kind of riddled with tech debt by this point. We were a 10 year old product, and the thing I recall about our tech debt around this time was a lot of it was more fear based. It was a fear to go and touch parts of the code, because you touch something over here, and something else would pop out the other side, and something would go wrong, and so we ended up with this fear to touch parts of the code base that also happened to be the most core parts of our product, and so, like the composer for the main publishing experience, for example, is something that we just ended up not touching for years, because everyone was scared to go and do anything there, and so that meant that we just really slowed down in terms of our shipping pace. The combination of this wavering of strategy with this tech debt we had, we ground to a halt, and then in 2021, which was when you might recall this Great Resignation, we had our own Great Resignation from Buffer, where that year, historically we’d been seeing a 5% voluntary turnover rate, and then in 2021, 24 people chose to leave, and so that was around 26% turnover, and I think it was just time, you know, we were really in this free fall at this point of the growth of our revenue dropping, and this is a moment where people were coming up for air a little bit in the middle of the pandemic and seeing opportunities, so many more opportunities at remote companies, and I think a lot of people, and quite a few long-tenured people moved on at that point. That was really hard for us as a company, and amongst those departures, there were quite a few leaders as well, and so these leaders started to move on, and we started doing executive searches. We started getting into executive recruiting for these leaders, and just felt like, well, that’s what we should do. And so before I knew it, I found that we had taken on two different search firms, we were looking for four different executive roles at the same time, and I recall that year was just like I was in a weekly meeting with both of these search firms, and I was interviewing people, trying to kind of sell them on Buffer, and historically we’d had such a strong culture, people come to us and knew everything about Buffer, and it was like, felt like, okay, well, now I need to sell it, and like, they’re not fully convinced, and we’re declining, and we went through long processes with multiple people, got really excited about people, and then made multiple offers that felt like, okay, this could be great, and then ultimately they turned us down, and so I think out of four or five roles we ended up bringing on one executive that had an impact, but it really was a tough situation.

So, the end of 2021 you can see that we were just in this free fall, ARR is dropping, customers dropping as well, and so, but we continued on with these different efforts that we had, and the clarity that was starting to emerge, and so around January 2021 we reinstated our free plan, and then the efforts that I mentioned around bringing the product back together, this one Buffer effort became what we call New Buffer, and in August 2021 we launched New Buffer, and we had this new pricing that was the one product all together for one price again, and we positioned this New Buffer pricing for this lower end of the market, really serving small businesses and entrepreneurs and individuals, and so it was freemium again, and we actually found a way to arrive at our lowest price point that we’d ever had for Buffer, and something that we were really seeking from this multi-product strategy was to have multiple axes of pricing, because this is something that, you know, people say over time you really need to have more than one reason or one way that customers could pay more or get more value, and so what we arrived at was this very simple pricing, just two plans, and it was priced per social account, so per channel, and this gave us these two axes of pricing, and then we also decided at that point in time that we were not going to force migrations to this new plan from legacy customers, and so this felt like the right thing to do for customers, it’s somewhat unusual, but again, we wanted to do right by customers, and we were comfortable with that, meaning that we would take a little bit longer to see the transition to this New Buffer pricing, but every new customer at that point would go on to this New Buffer pricing model that we had, and that was around the time when we kind of regained our clarity that we do in fact need to be growing our number of paying customers over time, that is important just for us having a healthy business, and so we kind of stated our goal as a company at that time that we would try to grow customers.

The Turning Point

And then in 2022 after this kind of year of the resignations and executive searches, I got to a point where I felt like I’m done with this, I don’t want to do this anymore. So I just decided to stop doing the executive hiring. It wasn’t the most popular decision at the time, because it felt like, how are we going to handle this, but I just took on a lot more direct reports, and I’ve kind of continued to have this path where I have a high number of direct reports, and there’s things I started to realize at that time, which was that by bringing on executives, especially in a time of decline, we would actually add distance, we’d add layers in the hierarchy, we’d add distance between people and myself, and it actually felt like the wrong move at that point. And so, instead, I then turned inwards to the company, I’ve been feeling I was kind of like external for so long, going out trying to talk to these executives, and not having that much time to really work with the team, and this was a moment, a big turning point for me, because I realized in making this decision, I was also making a decision to turn inwards to them, and the marketing team, in particular, and multiple teams, I remember they kind of ended up in this limbo of waiting for, oh, a new leader is going to come in, and so there’s certain decisions that they felt like, well, we can’t make that decision until the leader comes in and makes that decision. And so I was able to turn to them and say, you know what, we’re not doing this anymore, and you are a complete team now, and I’m going to work with you. And so that kind of empowered them to start making these decisions, and we could collaborate on these decisions, and this led to a kind of a shift in the culture for us, where we realized that we’d been in this kind of maintenance mode from our years of growth, where we’d brought people in, and the focus was more on, can we maintain what we’ve been doing, because it’s clearly been working, and we kind of kept just doing what we’ve been doing without making a lot of changes, but now we were in decline, and so if we’re going to stay in maintenance mode, that means we’re maintaining our decline, and so started having these conversations with the team. Okay, we need to get back to build mode, get away from maintenance mode, and we need to be building the product, we need to be building our culture again, we need to be building marketing out again, and to really drive this point, I decided, we ran something called Build Week, and this was for me was inspired by some experiences I had before Buffer of a kind of startup-in-a-weekend type of thing, and so we formed cross-functional teams, and for one week we kind of dropped all of other process and said just try and build something really valuable in a week for customers or for us internally, and it was really an energizing moment, and I think we started to realize as a company that we can move a lot faster, we could really make things happen, especially if we dropped some of this process and that permission that we felt.

And around that time, I was also kind of continuing to work with my executive coach and just do a lot of reflection myself, and there’s a number of changes I made myself as a leader around then, I started to kind of gain this conviction of the path that I needed to go, and one of the most important things was, I kind of had this fear of conflict that’s rooted in, you know, childhood stuff, and I tried to really face that and address that, and started having much more honest, direct conversations, giving feedback that people needed to hear to help them grow and do better, and help the business, and I started getting involved kind of everywhere, and working with all the teams, and through that I was able to support them, and also make sure kind of bring together more of a cohesive strategy, and just starting to become more decisive, and this is around the time we kind of had a glimmer of hope, August 2022 was our first month where we grew again. And we went on to decline a little bit after that, but that was a kind of a moment where we felt like, okay, some of this is starting to work.

Finding the Holy Grail

And something I started to really share with the team through these years, where we were kind of still declining, but we were having clarity around our strategy and implementing new things, was this concept that I arrived at that I call the Holy Grail of Growth for Buffer, at least, and the idea is that there are really two different ways to grow a SaaS business, and you can arrive at the two different ways to grow a SaaS business by a very simple calculation for MRR, which is that MRR is the number of paying customers you have multiplied by the average revenue per user, and there are really two different SaaS growth playbooks that exist. There’s the Enterprise SaaS Growth Playbook, which is really about growing average revenue per user over time, a lot of it through the expansion of existing customers, and then having kind of prices rise gradually over time, and then there’s like more of the Consumer SaaS Growth Playbook, which I feel like gets a lot less airtime, but really exists out there, which is that you have these consumer SaaS products that usually just have a free plan and then one kind of premium plan, and these products really grow by growing the number of paying customers they have through customer acquisition, and so for Buffer I arrive at kind of the Buffer SaaS Growth Playbook is a combination of these two, but it’s primarily leaning more on the consumer SaaS growth playbook, because we’ve always been down market serving these small businesses, entrepreneurs, the creators, and so this is kind of what I started to share with the team, this is what we need to achieve. We need to be able to really grow our number of paying customers, and then alongside that, we could grow average revenue per user gradually, but not kind of push it so aggressively.

And so, how this looks is, you can kind of see here, we can lay out that calculation in these charts, so we’ve got number of paying customers at the top, average revenue per user, and take the number of paying customers, multiply it by average revenue per user, and then at the bottom you get this chart, which is the MRR, which, that’s the journey that you’ve seen this chart many times now, and for the first portion of our journey, we had this situation where number of paying customers was growing and average revenue per user was growing, but you can see that the pace of paying customer growth was outpacing average revenue per user growth. So this is kind of our SaaS growth playbook, and then what really should have happened is when we started seeing declining customers, that’s when the alarm bells should have been going off for us, because we have this period of time where, yes, ultimately we were able to grow our MRR, ARR in this bottom chart, but we were doing it by pushing average revenue per user higher and seeing the number of paying customers decline, and then, of course, then we found ourselves where we plateaued, and for me this is a point in time where I was reflecting and thinking the only way to keep going with this is just this endless hamster wheel of, like, got to keep pushing prices up, and then before we know it, we’re going to be an enterprise SaaS product, and I just felt like that’s not what we started out to do. It’s not what I want to do, and so this was really clarifying for myself and for the team to kind of put it in this context.

And then the other thing was around this time I discovered this metric called carrying capacity, which I think is not very well known, but it’s essentially a metric that allows you to calculate the number of paying customers that this business can carry based on the number of new paying customers you’re getting per month divided by the churn rate that you have at the time, and so this could kind of tell us, okay, are we on track to be able to keep growing based on the current situation we have of the new paying customers we’re getting, and so this might seem familiar. This is very similar to Max MRR that Jason talked about yesterday, and Max MRR is a very similar concept, just based on MRR, rather than on kind of customer accounts, but Jason kindly used the Buffer numbers in his blog post about Max MRR, and this is our Max MRR. You can see it tracking alongside our actual MRR, and around this time, this is where we started to see these signs of, okay, we’re seeing some movement here, and for me it was carrying capacity at the time, but it was following a similar course, and so at this point we started to really double down on freemium and realize that our path to growing our paying customers, the free plan on freemium had historically been such a great way to do that for us, so I had some new clarity that came to me around how can you actually make a free plan really successful. You’ve got to keep adding value to the free plan, and we need to make our whole product holistically freemium, not just have one part of it that’s freemium, and then have everything else be kind of only on the paid plan. So we arrived at this clarity of, okay, we need to become holistically freemium, and around this time we also made a significant change to the signup flow, which was, we’d ended up in a place where we had our main call to action from our landing page would take people to the pricing page, and then they would decide from there which plan they wanted to go on, and start the free plan or trial. We changed it to just the CTA from the home page would take you straight to sign up, straight for the free plan, and this immediately from one month to the next increased our monthly sign-ups from around 65,000 a month to 85,000 a month, and then through a number of other changes and through a combination of kind of increasing our investment in content marketing, bringing in someone that drove growth marketing and all of our product efforts to actually improve the free plan, we saw this, this is our signups per month growing over the past four years that we’ve been able to sustain this growth of signups and ultimately of customer acquisition.

Recovery and the Down-and-Wide Strategy

And so around this time, kind of discovering the carrying capacity concept was also where we were able to start seeing some of the signs of recovery, so whilst our overall ARR still looked like this kind of, in this gradual decline, what was actually going on beneath the surface was that the New Buffer pricing plan that we’d rolled out was really starting to grow and become a significant portion of the of our overall ARR, and so this was kind of a moment for me where I had this clarity of, okay, we are going to grow again, and I can start planning for that.

And then shortly after that, we did indeed hit our kind of bottom. We managed to flatten the decline around March 2023, and a lot of other things were starting to click into place as well. So we found that we were able to figure out this tech debt. We faced our fears and went and changed those parts of the code base that we had been afraid to go and touch, and we also found ways that we could actually address tech debt whilst we were building new value for customers. So any time we were going and working on a certain part of the product to build something new, we would also take the time to pay down some of that tech debt and refactor things, and we really significantly increased our pace around this time. This is just what we launched in one of those years.

And then the other big thing that we started to act on was with our new pricing, it was priced per channel or per social account, and so we started to see that there’s this win-win situation we could have by adding more channels to Buffer, we could add value to customers, like we really add value for them, and then because of our pricing, it was per channel, gave them flexibility, and it was a way for us to grow our revenue per user in a way that was aligned with the value that we were adding, and so actually, of all the channels we support, around half of them we’ve added since 2022, and you can see in this chart here the impact where you see these new channels emerging and adding these layers at the bottom in terms of our number of channels that are getting connected, so 2023 we really were able to slow down that decline. We declined 2% in 2023 versus six, seven, eight percent the few years prior, and then from there it was really about, okay, how can we double down on this now and kind of push through and keep doing what we’re doing.

And around this time was when I started talking with the team about strategy, and I’d done a lot of reflection. I spent some time reading a bunch of different books on strategy and figuring out, like, what actually does it mean to have a strong strategy, because we’d had this Frankenstein strategy slash no strategy previously, and I felt like we were arriving at something strong, and I read this article, What Is Strategy, by Michael Porter, which I think is like 30 years old at this point, but it’s like a seminal piece, I can highly recommend it, and it really just clarified things for me, and I started sharing this regularly in our all hands as a company, and the key thing to take away is that a strong strategy is about establishing a difference that you can preserve compared to your competitors, so for me this highlighted that really strategy equals differentiation, and also that if you can do multiple things across different areas, different teams in the company that come together to create a situation where the sum is greater than the parts, then you have a really strong strategy. So this is essentially kind of been our journey in getting back to growth and thriving, has been all these different activities that we’ve had to double down on and create this differentiation, and the strategy that we’ve had is what I started to talk about with the team, as Down and Wide, and this is like the simplest way that I arrived to describe the strategy that we’ve pursued to get back to growth, which is down, as in down market, going down market to really serve these small businesses, these creators, and entrepreneurs, which is kind of an unusual direction to go, and then wide, as in, let’s also have a comprehensive product that can actually cater to that wide variety of different businesses that we had, where we previously felt spread thin.

And so another thing that Michael Porter says, which is really powerful, is that growth is one of the things that can have the biggest negative effect on strategy. When you start really chasing growth, that’s when you start doing things that are not actually strong strategically. And so, how can you have sustained growth over time? What you need to do is take the points of differentiation, the positioning you have, and actually do things that will bolster those positions, so once you find that you have something that you are differentiated on, you need to go and do another thing on top of that, and kind of keep reinforcing that position that you have. So we started doing this, and this is a campaign that we put out, and it happened to be that some of our competitors, Hootsuite, and later, were all going up market. It’s kind of the natural way to go, we decided to go down market, so we found ourselves in this very differentiated position. We decided, okay, let’s just double down on this and keep going here and do things that can be interesting in the culture. On the culture side, we started kind of finding our conviction to change things and kind of reinvent ourselves as well, and so this is an example of we put out a new salary system where we kind of cleared up a lot of debt that had built up over time, and so I’d highly recommend going and reading that, and then 2024, we turned it around and we achieved 9% growth in our ARR, and we started to see our customers grow again, and so we just kept going here, and one of the most exciting things we launched earlier this year was Streaks, and so this is an example of what I mentioned, of, okay, we’ve got this positioning of being a strong freemium product now, which is differentiated in the market. What can we now do to not only have a strong free plan, but what can we add to this free plan that only really we can add to the product that is not even something that, you know, a lot of businesses really need. So, we’ve added Streaks, which is a really fun kind of more consumer type of feature that’s been really useful, and yeah, as a company, as a culture, we had our 14th company retreat in Antalya earlier this year, and it’s feeling really great. The energy is really strong, and we’re finding that now we’re in this strong position, we’re well-resourced, we’re profitable again, we can kind of keep going further and tap into this creativity and feel like, okay, we have control of our destiny, we’ve kind of bought out investors, and how far can we take this thing now, in our going our own path, and one of the examples that I want to share that we’ve recently done is we’ve started to proactively cancel subscriptions for inactive customers, so I’m sure most SaaS products have a bunch of inactive users that are still paying for the product that started to not sit right for us, and so we thought, okay, let’s start cancelling these plans for customers, so we just reached out, we emailed them and say we’re going to cancel it, just email us if you want to keep the product, but we’re going to go ahead and cancel it otherwise. So you can see here this kind of dip on the number of paying customers that we’ve had this year, but then what’s great is we’ve got this momentum now of growth, and you can see that we’ve already climbed back to new highs in terms of the number of paying customers, and we’re shipping at a great pace right now.

Back to Growth and Beyond

We’ve got a couple of really exciting things that are coming soon to Buffer. We’ve got a public API, and then we’ve got community building features, and then just to give an update on the situation with the ownership of the company, I mentioned at the beginning that we spent over $10 million since 2017, and we’ve been able to repurchase 30% of shares since 2017, and then we came to a point where we paused issuing stock options, but we are in the midst of starting to reissue stock options to give the whole team ownership again in the company, and we also have done a couple of liquidity programs, liquidity events for early team members, and this is something now that we did last year, and we’re about to do it again this year, and we’re kind of getting into this flow now, where even as a long-term independent company, we can start to, we can issue stock, and we can repurchase stock, and we can make all of that work, kind of coming back to this Holy Grail of Growth. We were able to obviously get back to the Holy Grail of Growth and achieve the growth in paying customers that’s been leading to our really strong growth again. And so this is our 2025, so far we are in kind of the strongest position that we’ve ever been, and we actually just crossed the Rule of 40, if you know about the Rule of 40, which is something that I just really didn’t expect that we would hit as a not funded company anymore.

And so, yeah, to summarize, how we achieved this, we really went back to our roots to serve entrepreneurs, going down market to cater to them. We doubled back down on the brand, we reignited our growth, we strengthened our culture, became creators ourselves, and had this healthy bias towards building. And then we got back to growth, profitability, and thriving really by re-establishing our differentiated position in the market. All right, that’s that. That was a lot.

Joel Gascoigne

Joel Gascoigne is the Founder CEO of Buffer, which he founded in November 2010. Buffer is a social media toolkit serving over 70,000 creators, entrepreneurs, and small businesses. Today, Buffer is a profitable, remote-first company with a distributed team of over 70 people across 22 countries.

Joel was born and raised in Sheffield, England. He loves to travel and has spent time living in Japan, Hong Kong, Hawaii, and both coasts of the U.S. He now lives in Boulder, Colorado, with his wife and two sons. They love to ski, surf, mountain bike, and hike. Joel has spoken at BoS previously on the topic of transparency and growing a business without compromising your principles.