Work tools startup Notion, which recently reached a reported $800 million valuation, isn’t on the verge of a big SoftBank round. In fact, COO Akshay Kothari says the startup has “never felt like if we had more money we could grow faster.”
The company, centered around an app that helps non-developers build collaboration tools, has more than one million users and has scaled its product quickly despite having a team of just 27.
I wrote about the company’s partnership with some of tech’s top accelerators and venture capital firms last month. People are very curious about this small company and how it is run, so here’s more from my recent interview with COO Akshay Kothari in which we discussed the hyped startup’s philosophy of staying small and some of the challenges it may have ahead with this brand of thinking as competitors are raising massive sums.
This interview has been edited for length and clarity.
Where does your story begin with Notion? Give me a snapshot of where the team is now.
Akshay Kothari: [Notion co-founders Ivan Zhao and Simon Last] started Notion six years ago and that’s when I invested. I had sold my previous company and I had this newfound money that I didn’t know what to do with. I invested in Notion, so that’s my connection.
We were kind of in research mode for many years trying to uncover what the market needs were. We launched about two years ago; 1.0 was just notes that you could take and a wiki so that you could collaborate with people. And then last year we launched databases and that was the 2.0 version, which kind of seemed like an inflection point, where now you could not only have your notes and your wiki, but also manage your tasks, manage your projects, manage candidates and recruiting, all in a single tool.
Over the last year and a half, the company has grown extremely fast. I joined about a year ago, there were about 10 people at the beginning of this year and now we’re close to 30. It’s still a really small engineering team. We’re 9 engineers, we don’t have any product managers, and we’re 2 designers. So there are about 10 people that are building the product, and 10 people on community and support teams, something that we’ve invested very heavily in. We’re starting to have a sales and marketing team. We have 2 people in marketing and 2 people in sales. That all rounds up to about 27 which is where we are now.
Since you joined do you think the idea has shifted at all?
In terms of the original idea, we were thinking about how people who didn’t know how to code could build things like tools and software that were really useful. I guess the only realization has been that not everyone wakes up wanting to build software, but everyone wakes to solve problems. That was the pivot to focusing on notes, wikis and tasks, because that’s actually something that every team needs.
Are those needs universal for big and small teams?
For the first 100 people you can actually do a lot with Notion. With 30 people, we pretty much run the entire company, except for using Slack for internal communication and Intercom for external communication like talking to customers. Everything else is actually on Notion, like our application tracking system for recruiting inside Notion, our sales CRM is in Notion, our wiki obviously is, our project management as well — no, we don’t use Jira.
For sub-100 businesses, you actually don’t need another tool. When you get to hundreds of people what tends to happens is that some person or some team tends to have a preference for a specific tool. In those situations, Notion plays well with other tools. You can embed things easily. So let’s say Excel or Google Sheets is something that you want to use, you can just embed that inside Notion. So Notion becomes this kind of central nervous system for all of the work that people are doing.
Building on that, one of the things we haven’t done is we don’t do synchronous communication so we’ve stayed away from that because I feel like people like using Slack. On Slack, you can’t actually collaborate on a project… Notion has become a place where you can actually do a lot of your work alongside the synchronous communication.
So, no interest in building a chat or video chat product?
Not in the near term. I think Slack is one of those enterprise tools that people at companies actually like. For a lot of these other tools, we just have to use it, not because we love it but because that that’s what exists.
What are the barriers for satisfying the customers with 100+ employees?
It feels like it scales well for hundreds of people today, to get to thousands or tens of thousands, the main project we’re working on now is better permissioning and figuring out how to build better groups. That’s very much our top priority, the product of scaling. Some people have 3,000-4,000 people and we’re like ‘how are you using it?’ but somehow they’re making it work.
There are probably more good workplace software tools than ever popping up right now, how do you ensure that Notion stays relevant? Are enterprise customers that loyal to relatively new software?
It’s a good question, I guess we focus primarily on delivering value. Even for a 1,500-person company, they can export everything they have on Notion with the click of a button. I guess our focus is a lot on making sure that Notion helps with the work that they’re doing, making it feel like they don’t have to adapt their workflows — that Notion adapts to their workflow. And once companies start to input a lot of information and knowledge, there starts to be a stronger affinity for the product that lets us do very helpful things, we don’t have to trick you to paying faster. We’re very hands off and we try to do right by users.
I guess the biggest value add is that you don’t have to switch tools as much. So you could have a Wiki tool, a bug-tracking tool, a project management tool — you could have three other tools that are all specialized for what they do and they’re probably really good at it. The big pain that Notion solves is that you don’t have to switch between tools as much, you can figure out the one place to do your work
Switching gears to talking about Notion: the venture-backed startup, it seems like there’s been this narrative where investors are kind of beating on your door to invest, is that kind of an odd position to be in?
Well, we’re truly flattered that we’re in that position, but the company is pretty unique. One of the reasons I joined was because, It doesn’t have a board, it doesn’t have a whole lot of external voices, pretty much everyone in this office decides what we’re doing next.
The best thing about Notion as a company is that we’re kind of still running it in a very romantic manner, very idealistic in what we want to do from a long-term standpoint. We have the ability to do it because it’s profitable.
Profitability is earning more admiration these days in light of some of these recently-public startups having a tough time. What are your thoughts? Would you be okay with Notion shifting away from profitability or do you feel like you have to stick in this lane now?
I have a lot to say on that, I guess we were profitable before profitability became cool. I think profitability helps you to control destiny a lot better because you’re not out fundraising every year or 18 months, but interestingly now, I think it’s cool to be profitable again. When I joined Notion I would tell VCs or investors, “oh, we’re profitable” and they they would be like “Oh, so you’re building a lifestyle company.” Initially, I would try to explain that we were still trying to build a very large standalone business, but eventually I just kind of gave up. I was like let’s build a large business and then we can talk about why we could still do it while remaining profitable.
I guess one thing that’s important to us is that we have this long-term mission of democratizing software making and actually we could own a percentage of every enterprise software that everyone uses, technically, because Notion could be used for every piece of work that you do. From that standpoint, we are very much focused on taking Notion there and if that requires us to be unprofitable for a few quarters, that’s fine.
So far one of the things we’ve found is that we haven’t really been constrained by money. We’ve had opportunities to raise a lot more, but we’ve never felt like if we had more money we could grow faster. We’ve always thought about all the things we could do to grow faster, and found that very rarely was it about throwing more people at the problem or throwing more ad dollars.
So no big hiring pushes in the near term?
I don’t know if that accelerates the roadmap, that’s been the thesis so far. Smaller teams have allowed us to grow and ship really fast considering the wide canvas we have. Ivan and Simon rebuilt Notion three or four times and eventually landed on a tech stack that allows us to ship things a lot faster.
We have been focused on getting full-stack engineers so I guess part of the reason we can build such a horizontal product is that we don’t have this system where it’s like ‘You’re back-end, you’re front-end, you’re a PM, you’re a designer.’ The 9 engineers we have, you can just tell them something like “improve search” then one engineer can just go an work on search across whatever needs to be done, which is kind of cool.
There’s similar thinking we’re trying to adapt on the sales side also. Technically, we could do account executive, success, BDR. We’re trying this full-stack sales, which is pick the right companies and then do whatever it takes to get them to an enterprise account.
Eventually, you’ll probably have to hire someone more specialized like a front-end engineer; how does that change the company culture when you do?
We’re kind of doing some version of that, not exactly front-end/back-end but we were nine engineers this quarter. For the next quarter, we’re changing things up a little bit where instead of one person just doing one project, we’ve decided that there are three major projects and for each of those products there are three people working on it.
We’re evolving. What works today may not work for 20 engineers but the philosophy probably still stays on. How do we move in the most efficient manner? The answer to moving faster is almost always not more people.
Assumedly, you don’t want to be a small company forever, or do you?
We definitely want to create a large company, a company that could eventually go public or whatever is the right — you know it’s too early for a lot of that stuff. Our preference is to stay small because staying small helps each person be creative and feel responsible for a large piece of the puzzle.
But some things are hard, like support is increasingly underwater, because our business has scaled so fast in the past year and our team has gone from 4 people to 8 people in support, so tickets have gone up way faster and we can add interesting tools to make things better for existing people but at some point you just need more people. So, I don’t think we’re very rigid about needing to stay small, except that you know staying small helps. So I think we can go to a certain scale by remaining small, we’ll be able to grow in the multiples every year as opposed to growing at some percent every year. Considering the TAM is so large, I would love for us to be growing in multiples every year.
As the company has gotten larger, you’ve kind of pushed up against limitations in Notion in that have led to you signing up for Slack or Intercom. Are there other areas where it’d be easy for you to sign up for another service but you’d rather just invest in building that functionality into Notion?
There are a ton actually, but that kind of gets us into future strategy. I guess I can give you like the functions where it feels like there’s a lot of inefficiency, not just at Notion but outside. Sales is definitely one, support is another one. HR is a big one. A lot of the data that they have is elsewhere so they just have to keep switching a lot.
We went to a large tech unicorn with like 10,000 people right now. Some teams use Notion and they were like, can you deploy it to the whole company? We took a look and saw just every software tool you can imagine under the hood and we almost just walked away, like sorry, we can’t help you.
I think there’s still a ton to be done in the productivity software world. The next thing we’re super excited about also shows up as our top feature request, at least from existing companies, an API. There’s an opportunity there to build an API that, again, a non-developer could tap into. Imagine linking your Notion building blocks with external building blocks, but also doing that without feeling like you have to write code, get the API key, all that stuff. Simple ideas like companies want to connect their task stuff with Github or companies want to connect their application tracking system with their calendar to schedule meetings.
Work software has fragmented too much, and I think with or without Notion there will be a shift back to fewer tools because you can’t really do work with the way it is today.