Retool is a poster-child for product-led growth. Founded in 2017, by 2020 it had reached a near-$1 billion valuation.
How did it get there? And what does Retool’s org chart look like today as it prepares for hypergrowth?
In this article, we will be covering:
- Retool’s founding journey and how it started off as a fintech company
- How David found the right positioning for Retool by sending 40,000 emails
- Retool’s crazy vision
- The Retool org chart and why it is structured the way it is
It all started with payments
What a lot of people don’t know is, Retool started out as a fintech. Yes, you heard that right. But, how?
Before Retool was Retool, it was a group of Oxford students trying their hand at starting up. They wrote an app called Cashew, which was basically Venmo for the UK. In 2016, fintech was starting to become hot in the UK, with Monzo and Revolut already getting started.
Retool’s founder, David Hsu, and a couple of his friends figured that cash transfers should be a lot easier than what legacy banking apps offered. With this insight, they built a mobile payments app that allowed Oxford students to pay each other, and also their favorite restaurants and pubs in the city. The app was a success.
When interviewed by Oxford’s student newspaper, David was exuberant. At one point 6 out of 10 students in Oxford were using the app.
“Exponential growth is hard to reason about — if we maintain our 20% week-on-week growth, we’ll be at 800k users in 6 months! That’d be pretty incredible.”David Hsu, founder of Retool (then Cashew)
On the back of the blistering pace of growth, Cashew got into YCombinator. If they expected the YC partners to be impressed by their work, however, they were going to be sorely disappointed.
At YC, Paul Graham told them that Venmo never managed to crack their unit economics problem. There just wasn’t a business model there. “We lost money on every transaction and were burning about $2000 a day. At that rate we had 70 days of runway left”, said David. The team signed up for office hours with John Collison, Stripe’s co-founder, to get more advice.
“The YC office hours were scheduled for 20 minutes, but by the 12th minute we actually had nothing left to say, because John had shot down all our ideas [to monetize the product]. John said he even thought about doing this at Stripe but decided against it.” David and his co-founders had been convicted about Cashew, but at that point, they started to think about alternatives.
One benefit of working on fintech, however, was that the team had spent a lot of time building internal tools. They had to build tools for AML, fraud, transfers, and all kinds of processes. That got David thinking. If all this time was spent coding something a customer never saw, surely there was a better way to do things?
Positioning the product
Did Retool go gangbusters once they landed on the idea of internal tools? Well, not really.
Although the idea of ‘building internal tools fast’ and with minimal code seems obvious in retrospect, it took a lot of experimentation to stumble upon this framing of Retool. When they first launched on Hacker News, the reception was lukewarm. You can probably see why:
Other ways David tried to position the app included describing it as Retool is like FileMaker but for the cloud.
It just goes to show how often a concept makes sense in our own minds, but it comes out as gibberish when we try to describe it for the mass market.
To solve this problem, David scraped the emails of 40,000 potential buyers who fit Retool’s ICP, then emailed them different permutations of Retool’s positioning. It was a lot of hustling, but it eventually worked. He landed on “Build internal tools faster”. Read more about this product-market fit experimentation process on Retool’s blog. Interestingly, this also mirrored what Intercom founder Dres Traynor did in its early days.
Retool relaunched on Hacker News, and this time round it exploded. “From the moment we launched Retool on Hacker News, our business basically immediately shifted to inbound,” said David. “We had 5, 10, 15, 20 companies signing up for Retool every day.”
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Today, Retool focuses on helping companies build internal tools. But what if a large chunk of software can actually be built this way? Internal tools are more replicable and doesn’t have as many demands on scalability and front-end functionality. That’s why Retool sees it as a good wedge into becoming the foundational no-code infrastructure of tomorrow. However, it’s unlikely they are happy just being ‘that internal tool app’.
“Retool’s goal is to change how software is built. Today, something like .0001% of all software is built on Retool. If we can even potentially make that 1% or 10% or 25% or 50%, this is going to be a tremendously impactful company.”David Hsu, Retool’s founder
Retool’s org chart today
Here is a breakdown of how Retool distributes its headcount across the org.
Here are 3 surprising take-aways from the org structure
- Retool is still very engineering-heavy. Until not too long ago, Retool was almost entirely relying on product-led growth. The product is an infrastructural one and has considerable complexity. A high density of engineering talent and building high-quality product is Retool’s moat, and it shows in the org chart.
- Almost no product managers. For the longest time, Retool had no PMs. It was almost proud of it. This was pretty similar to Stripe, which resisted hiring a PM for more 3 years, by which time it was processing billions in payments. The similarity here probably reflects how both companies were building products for developers. This has 2 effects: Retool’s engineers make good PMs since they have natural empathy for their customers, Retool and Stripe were able to attract strong engineering talent that could double as PMs. The advantage of this approach is that engineers are very empowered. Being able to scope out the product and ship it increases the quality and pace of execution exponentially, as Patrick Collison explained here.
- Starting to heavily layer on sales. Today, Retool’s selling to some massive enterprise customers. They range from tech giants like Amazon to more old-school businesses like AB InBev (an alcohol conglomerate), NBC, and Mercedes. Being able to explain your product and build top-down relationships is critical for making inroads upmarket. This is especially so when you are asking companies to trust you with their data and critical, customer-facing operations.
Here’s a deep dive into the Retool org chart
Numbers in brackets represent headcount within department/team. For leaders, they indicate the total headcount reporting into them.
- Founder (123)
- Head of Engineering (53)
- Engineering Product Managers (2)
- Support Engineering Manager (5)
- Support Engineers (4)
- Customer Engineering Leader (3)
- Customer Engineers (2)
- Deployed Engineers (6)
- Engineering Manager (36)*
- Software Engineers (33)
- Mobile Lead (1)
- Security software engineer (1)
- Data Scientist (1)
- Head of Design (4)
- Designers (3)
- Head of Sales (25)
- Sales Strategy and Ops (1)
- Sales Leads (2)
- Account Executives (4)
- Enterprise Account Executives (8)
- Outbound BDR (1)
- Sales Engineers (7)
- Sales Associate (1)
- Head of Marketing (15)
- Community Manager (1)
- Developer Advocates (3)
- Head of Content (3)
- Content Writer (1)
- Technical Writer (1)
- Head of Product Marketing (3)
- Product Marketing Managers (2)
- Growth Marketing Managers (2)
- Head of Growth (5)
- Head of Growth, India (1)
- Growth team (3)
- Head of Customer Success (7)
- Associate Support Engineers (6)
- Head of Talent (8)
- Recruiters (3)
- Candidate Experience Specialists (2)
- Senior Workplace Experience Designer (1)
- Workplace Manager (1)
- Bizops (3)
- Head of Engineering (53)