Key points
- Runway's revenue triples month over month in July after also tripling the prior month, following a June website launch that goes viral.
- About a year in, Runway restarts its product around planning and forecasting for slightly larger companies.
- Siqi Chen says a startup is a company without product market fit, and Runway took three years to start winning.
Siqi Chen spent three years on Runway before it worked
Runway is a bet that business context and business numbers belong in one place. Spreadsheets show the figures but not the reasoning behind them, so people cannot see why their work matters. The company restarted its product and spent two and a half hard years before a viral June relaunch tripled revenue. Siqi Chen's point is that a startup is a company without product market fit, and three years of not winning is normal.
Takeaways
- Runway connects business context to the numbers. Spreadsheets overwhelm people with a wall of numbers, while the reasoning behind them lives in Notion and Google docs. Runway joins the two so people understand why they are working on something and how it affects the business.
- Planning and forecasting is the valuable pain. The first product transformed and pivoted expenses and revenue on a hypothesis the team disproved. It helped people understand spend, which they would pay basically nothing for. A year in, Runway restarted around planning and forecasting for larger teams.
- Viral website tripled revenue month over month. Runway launched a new brand and website in June, Siqi Chen's tweet spread across Twitter, and leads arrived every second. Revenue tripled in July after tripling the month before, and a third of August's revenue landed within hours of September.
- Engineers and designers sit in customer Slacks. Runway's product team makes few product decisions, betting on closeness to customers instead. Designers and engineers join every customer Slack channel, showing what they built and asking whether it solves the problem.
- A startup has no product market fit. Reaching it can take a few months, three years, five years or forever, and nobody knows until it starts working. Runway took three years to start winning. Figma's Dylan Field said half his early team doubted they would make it.
- Building an organization is higher-level programming. Siqi Chen sees business through engineering, where leverage runs from digging with a shovel to software that runs 10m times a second. Beyond solo work, impact comes from finding problems and coordinating people through norms, culture and mission.
Siqi Chen's path to Runway
- He studied math and started as an engineer at NASA JPL. In 2007 he moved to the city and joined Powerset, a search engine startup.
- On the side he built games for the Facebook platform. One became the second largest app there, making about a couple thousand dollars a day in ads.
- Jeremy Liew of Lightspeed Venture Partners called the games a new category of software, social gaming, and offered $5m to build them.