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How Loom went from Chrome extension to a $975M acquisition

In just eight years Loom went from $0 and maxed out credit cards to a $975M exit.

Founders Vinay Hiremath, Shahed Khan, and Joe Thomas, along with their awesome team (more on this later) built Loom around customer obsession and creating the best product possible.

The Loommates are on a mission to superpower productivity by challenging the status quo of text and live video calls.

To get here Loom took a bit of a windy road - with two name changes and a few repositionings.

Loom launched in 2015 as Opentest, but it was only in 2016, when the Loom we know today started to take shape, launching a Chrome extension under the product name Openvid.

Good thing they changed the name.

Then in October 2023, after having raised just over $200M up until this point, Loom was acquired for $975M by Atlassian.

Today Loom has 21M users at over 350k companies - including Tesla, Apple, Goldman Sachs, and Amazon

But this isn’t about where Loom is today.

This is the story of how Loom went from Zero to One. 🚀

Business model: How Loom makes money

Loom has a very simple freemium subscription model, alongside their enterprise plan for large companies:

• Starter Plan: Free

• Business Plan: $12.50/user/month ($15.00 if not paying annually)

Loom’s free subscription tier has limited features and usage caps, e.g., up to 5 minutes per video. And their Loom AI add-on is only available in their Business and Enterprise Plans for an additional $4/user/month.

Their Enterprise Plan, used by companies such as Lacoste and Hubspot, includes additional features such as Salesforce integration, advanced content privacy, and admin controls.

Making Loom the best way to record and share video messages with your teammates and customers - supercharging your productivity.

Loom’s Growth

The first iteration of Loom launched back in 2015.

The original idea was to help teams gather feedback through video. It was a one-line code injection to enable you to record your screen, yourself, and your audio, and was called Opentest.

They believed deeply in the power of video but quickly realized that this was not the right angle to approach the problem.

So in June 2016 they repurposed Opentest’s video feature into a Chrome extension and launched it as Openvid on Product Hunt - testing if there was interest in its new use case.

Within the first 24 hours they had 3,000 new users.

More than the previous six months combined.

Safe to say there was interest.

They now had their first users. Users who loved the product. A simple free Chrome extension that allowed you to record and share videos via a link.

No clunky video editing software or huge files. Just a Chrome extension and a link.

Then after speaking to some of their users, Loom learned that video could solve communication issues at the workplace - particularly for remote teams.

And so in 2017, they rebranded to Loom and positioned themselves as the go-to solution to replace the hassles of written communication.

Loom also had one more major shift in positioning and strategy - but more on that later.

Ending 2019, Loom was doing $720k ARR.

From here, growth sped up.

By the end of 2021, Loom was doing $35M ARR. And by October 2023, $50M ARR.

To get here Loom raised a total of $203M over the last seven years. But it hasn’t been without some hiccups.

In May 2021, Loom raised $130M at a $1.5B valuation. But for various reasons, some out of Loom’s control, such as mass ending to WFH policies and economic downturns, Loom took a bit of a valuation hit post-Covid.

Loom was acquired by Atlassian for $975M in October 2023.

This decreased valuation was likely also in part to Loom fundraising during an overinflated market.

However, being acquired for close to $1B is still an insanely impressive feat. I just wanted to mention this to give you the full story and perhaps a precautionary tale on raising in an inflated market.

There are still many lessons to be learned from Loom’s journey. Experiencing rapid growth and reaching over 20M users.

Key Success Factors (KSFs)

There have been many reasons for Loom’s exponential growth. But here are three that stood out to me, particularly early on in Loom’s journey.

🗣️ 1. Action user feedback: From day one, Loom has been obsessed with understanding its customers and making them feel heard in product development. Creating loyal fans to spread the Loom word.

🎯 2. Repositioned to find PMF: Rather than pivoting its product, Loom repositioned its strategy and messaging during the pandemic to focus on the product’s ability to help remote teams communicate better.

🕵️ 3. Intentional about hiring and employee retention: Loom focused on hiring top talent and creating a space where they want to work. They also aimed to hire specialized talent over generalists, hiring video engineers instead of general software developers.

🗣️ 1. Action user feedback:

After launching on Product Hunt, Loom (then Openvid) grew to 10k users in three months. Users were giving them feedback and they loved the product.

They had validated that video was filling the need to improve communication.

Instead of relying on sales and marketing teams to drive growth, they went all in on a Product-Led Growth (PLG) strategy. A strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers.

But to maximize their PLG, Loom focused on getting two key things right:

1. Fast or instant time to value ⌛️

Loom met this first piece of the PLG puzzle by delivering value within minutes.

All you had to do was add the Chrome extension to your browser and you could start recording. No commitments. No credit card details.

Straight to the value. In less than five clicks.

But for PLG, you need more. You need loyal customers to spread the word.

How do you do that…

2. Building the best product focused on users’ needs 👷

Loom became customer-obsessed.

They completely dialled in on their users’ needs. Asking for user feedback, listening to it, and then building for it.

The team built and shipped features every day. But not just any features. They had to fill three criteria:

1. Fell within Loom’s mission ☄️

2. Users and the team would find relevant. 📚

3. Improved Loom’s product. 📈

This is what led to their rebrand to Loom.

The go-to solution to replace the difficulties of written communication.

Loom had started to reflect their customers’ voices in their product. They had built a product their customers actually wanted and needed.

Loom made sure to show their users how their feedback was being incorporated, they responded to every single email, message, and comment - recording personal Looms. The Founders took turns on support shifts and built relationships with early adopters.

Loom was relentless in understanding its users. Tracking every piece of data they could, importantly: why people used Loom, where they dropped off, and why they dropped off.

From this, the Loom team identified multiple features that we know as key parts of the product today, such as notifications when your video is watched, recording your entire desktop, and leaving the video flipped after you record (they figured out this made users more comfortable with how they looked on camera).

During Covid, Loom increased the features on their Free Tier, halved the price of their Pro Plan, extended the length of their free trial, and gave any educational users of Loom (teachers and students) FREE Loom Pro forever (and still do this today).

Through all of this and more, Loom’s users became ambassadors. They wanted to see Loom grow. They wanted to share what they knew.

Their users wanted to share Loom.

🎯 2. Repositioned to find PMF

When Loom first launched on Product Hunt as Openvid, they had already pivoted from a tool using a line of code to gather feedback via video into a Chrome extension to record yourself and your screen - and share it with just a link.

Loom was used to listening to what the market wanted and adapting.

But critically, they weren’t just building new products all the time. They were making tweaks to find better positioning in the market.

Going from Opentest to Openvid, all the team did was repurpose and reposition their built-out features.

Then, an interaction with a long-standing customer, Scott from Hubspot, would change the brand forever.

The team learned that video was an awesome solution to solving communication issues within teams - particularly for remote teams.

And so Loom was born - a rebranded Openvid. Again, a repositioning to get closer to PMF.

They were now the go-to solution to replace all the hassles of written communication. Even though it was still the same tool as it was previously.

Loom then had one last major transition.

They wanted to now attract the biggest companies in the world to use Loom for internal communication.

Their GTM (Go to Market) strategy here was simple. Launch an existing product in a new market - Enterprise teams.

They accompanied this change in positioning with new features such as the beta Loom for Teams and a centralized video library (think repeatable internal messaging like onboarding).

This launch was perfectly timed.

With all companies forced into remote working and needing better tools to communicate.

Their messaging became more focused:

Sometimes to find PMF, you don’t need to change your product. You just need to find the right audience for it.

🕵️ 3. Intentional about hiring and employee retention:

In around 4 years, Loom reached 100 employees.

But it wasn't linear growth. It was slow. And then all at once.

In 2020, went from around 45 employees to reaching the 100 Loommate mark. Hiring 30 employees alone between February and May.

The team at Loom lives and works in over 11 countries, including Portugal, Brazil, and Australia.

This is intentional. Loom wants to structure its team with the goal of being able to work with the most talented people.

Wherever they are.

And they want to build this world-class global organization without anyone feeling like they’re not part of the Headquarters.

They want Loom to reflect the modern world we’re in.

This includes working with organizations such as Techqueria and Women Who Code to create a more inclusive and comprehensive recruitment process.

The Founders were also very intentional about the roles and types of people they hired. Choosing to hire specific skill sets for their team.

This meant looking for the best video engineers instead of the best general software developers. As well as making very specific senior hires, who had experience with very specific skills, for example, Joshua Goldenberg as the VP of Design, who was the previous Head of Design at Slack and Palantir.

Another critical piece of Loom’s growth has been a focus on employee retention.

They were laser-focused on employee happiness and retention as they believed it would be a key lever for growth. So far, they’ve been right.

To do this, Loom focuses on a few things:

• Extremely competitive benefits package (particularly for their size and funding), including medical, dental, and vision insurance with 99% premiums paid by the company (including dependents!), monthly fitness and mental health benefits, and much more.

• Clear career growth opportunities, with 24 transfers and promotions in 2020 alone.

They want the best part of working at Loom to be the people.

With the Founders stating the order of the focus of their business as:

1. People 👯

2. Product ⚙️

3. Profit 💰

Actions you can take to replicate Loom’s success

Cherry-pick successes to mimic 🍒

One of Loom’s most successful features has been its “someone has viewed your video” notifications.

Sound familiar?

We’ve all experienced the exact same notifications with LinkedIn: “Sabrina and 8 others viewed your profile.”

And we’ve also all had the exact same reaction of wondering who viewed our profile to only find out we need to pay for LinkedIn Premium…

Loom took this feeling and put it into their product.

They created an anonymized notification to let you know someone had viewed your video.

I can only imagine the excitement (and nerves) if you use Loom for something like sales.

This feature spiked the usage of Loom. Creating a curiosity hit in their users - as well as them seeing it working!

This feature was key in scaling Loom in its early days. And helped create a customer base that was obsessed with using Loom. 🚀 

So look around your daily and work life. What are some features or products that you love?

Why do you love them? Do they make you feel excited? Curious? Inspired?

Replicate that feeling with a similar feature. Just like Loom did.

But be careful, you need to make sure this feature fits with your product. You don’t want to force a feature that doesn’t fit or doesn’t help your users.

You also don’t want to start looking like everyone else. So as Author Austin Kleon titled his bestseller, you need to Steal Like an Artist.

Add your own spin to a successful feature. Make it fit your brand.

Cherry-picking features also works both ways.

When you look around your daily life: What are some features or products that you dislike or even hate?

Why do you hate them? Do they make you feel frustrated? Angry? Sad?

Avoid features that bring these emotions out.

Don’t only replicate successful features. Avoid unsuccessful ones.

Hire specialized talent 👩‍🏭

Being product-led, Loom needed to build the best product possible.

One way they did this was by hiring the best specialized talent.

They focused on what their product was, a video recorder, and hired highly skilled video engineers instead of general developers.

Their first hires were also to fill the puzzle piece on specific parts of their business - bringing in relevantly experienced and talented people to lead their growth, operations, design, and marketing.

Loom has shown that it’s worth the extra time and effort to find specialized talent for whatever your core product is.

It is the best way to build a product your customers actually want and will share.

Leverage what makes your product novel 🧐

A lot of products look the same.

Especially because of how easy it is to launch and build today (comparatively).

It’s simple to just copy what works and paste it into your product, but you need to remember to steal like an artist.

What’s important here is to not only create something unique - but to shout about it as well.

The average customer will struggle to tell the difference between two screen recording softwares. Why choose Loom?

Because Loom saves me and my team time by taking all the hassles from written communication and getting rid of them, all with just a few clicks.

See how that completely changed the way you see the product?

It is a screen recorder. But what’s actually novel about it, is how it can save you time in a simple way (just a few clicks) - it makes recording, editing, and sharing videos a breeze.

You need to show your potential customers what makes your product novel.

One way Loom does this is in the first comment of each launch on Product Hunt, providing the key feature updates to show their distinction.

Why should they use your product over the dozens of similar competitors?

Don’t leave them to guess. Show them why you.

Give your users instant value ⏰

Loom’s time to value is almost instantaneous.

With the first version of Loom, all you had to do was install the Chrome extension, review the settings, and then you could record.

Less than five clicks.

Users loved this.

Loom was quick to install, learn, and use.

But importantly for the Loom team, this also meant that Loom was quick to share.

Remember, you’re trying to make your product as frictionless as possible.

It’s hard to get someone to add a new tool to their life and their routine.

Don’t make it any harder for them.

Make it as easy as possible for your customers to use your product - like Loom did. They didn’t ask for any commitments. Straight to the value.

First impressions aren’t only important when meeting new people. They are also critical in building trust with your customers.

So use this time to wow them!

If they love their first interaction, you will win their trust.

From there you can earn their loyalty by listening to and building for their needs.

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