Dave Grow: Visual Collaboration from Idea to Reality

You've seen this broad evolution of a company from the very early days into becoming a much more formidable beast. Lucid has continued to evolve, add new products and expand as a business, and you've been there from the very early days. What I'd love to start with is a snapshot of where the Lucid story started, how you got involved in the beginning, and how it's come to where it is today.

Excellent. Well, I will dive in and mix and weave the personal story along with the company's story.

It was about 12 years ago. I was at Bain & Company, a big consulting firm. And I got a call from Karl Sun, one of our founders. He told me, "We have this great product, and we need someone to come help us figure out and grow the business." As he started telling me, and more importantly, showing me the product, which was the initial version of Lucidchart, I quickly caught the vision of what they were talking about. At the time, I had just spent many months on a big project with a major aerospace and defense company, helping them redesign their engineering processes of how to build helicopters. And I had done all of that in PowerPoint, a tool never designed for that kind of complexity or collaboration. So when I saw Lucidchart for the first time, my mind immediately went to how much time I could have saved and how much more impactful the collaboration could have been as part of that project.

So I joined Karl and Ben in the basement in the very early days when we had a few thousand users. I was employee number four alongside the two of them and one other engineer, and essentially zero in revenue. At the time, again, we had Lucidchart, which Ben had built really from his own needs when he had been the CTO of another software startup, building a complex product in a highly regulated space. He and his team needed to be aligned on exactly how they were going to design and build the architecture of this company and the product. As he started going through that, he became frustrated with the tools that existed at the time. So like a great engineer, he just started building nights and weekends, the solution that he needed. That ultimately evolved into Lucidchart.

As he initially released it online with a basic message, I think, around core diagramming brought to the web with collaboration at its core, he immediately recognized that this was a much broader pain point that he and his team were feeling, much more universal than he'd originally imagined, because so many teams needed to come together and collaborate to bring clarity to the complex.

I love that. It feels like you've been part of a movement that has moved into the mainstream. To your point, you were doing it in PowerPoint, which probably gives Microsoft credit. Their products are probably the ones that have been stretched to the limits for use cases they were never imagined for. When you went out in those early days to talk about Lucidchart and how people could use it, were you met with an immediate aha, or did you have to bring people along that journey?

I think there has always been a key component of education in this journey. In the early days, part of what we were replacing was the incumbent of Microsoft Visio. The folks who understood that historical diagramming market immediately understood the value. But that was a small fraction of our vision, because we believed essentially from the beginning that all knowledge workers could be and should be using visual collaboration more broadly. Along the way, we've had to, I think, one, help cast that vision, and then two, of course, back it up with product and capabilities to deliver on that vision.

Let me give you one very simple example. In the early days, a lot of our users were more technical. That still remains a core component of our user base today, but it's broadened over time. I'll give you the example of sales. If you sat down with a great salesperson, they probably would not think of themselves as someone who would diagram, for example, and use that verb. But then if you say, "Well, tell me about the deal that you are trying to close right now. Who are all the players? What's their relationships? Walk me through the landscape, if you will, of the company that you were trying to sell into." As you start to talk through that use case, they say, "Oh, actually, I have something like that. It's called an account map."

So along the way, for sales specifically, we built out some of that initial messaging. We then built templates. We then built the capabilities where we could interact directly with Salesforce and pull down all that information automatically and help them have that starting point. For each of these different groups, if you will, we have to cast the vision for how visual collaboration is so critical and is better than what they are doing today. Along the way, we've seen the growth from what historically people would have thought as a niche application to something today that I think people who are forward-looking absolutely recognize that this can, should, and will be used by the vast majority of knowledge workers in the years to come.

You can see that in the customers you have. You've got Amazon and Google and, I think, NASA. Do you see this as largely a big company problem, or do companies need these types of tools at different stages of their life, just for different reasons or in different ways?

I think it's absolutely the latter part of that. When we take a step back and think about the workflow, essentially all teams go through this very common workflow from idea to reality. Yes, that workflow looks different based on the stage and scale of the company. It can look a little bit different by function or by team, but essentially all teams are going through that. It can start with brainstorming and ideating as a team, to decision-making, to planning, to design and documentation, and ultimately to execution. Along that journey, visual collaboration enables teams to communicate and collaborate the way they work best, which is visually.

When we look at our customer base, that's what we see. It's very representative of the broader knowledge user base, if you will, because we have fledgling startups all the way to some of the largest and most complex companies in the world. And when you actually look at the usage within those, it's not just one function. Particularly with our most mature customers, it's literally every function, every team in the company where visual collaboration has become the standard alongside other key productivity or collaboration applications internally.

Walk me through that journey. In the early days, the flagship product was Lucidchart. You've now expanded to Lucidchart, Lucidspark and Lucidscale. What was the timeline? At what point did you realize these were different use cases that merited a different product?

I think a core philosophy for us was reaching market leadership. We did that initially with Lucidchart in that core diagramming space. But the vision for visual collaboration and its breadth and depth for us has always been there from the beginning. We invested heavily along the way in Lucidchart, both from a distribution perspective as well as from a product perspective, but also in the underlying platform in such a way that would allow us to expand and scale innovation along the way.

So how did that actually happen? Essentially, we built and focused on Lucidchart for the first nine years of the company. So a long time, again, reached that market leadership, reached significant scale, tens of millions of users, hundreds of millions of ARR. And then as we, of course, went into the pandemic, that's when I think some of those needs began to become more clear than they had historically. We had a lot of customers coming to us in the early days of the pandemic, where they, of course, had all been forced into a remote situation, saying, "We love Lucidchart. We often use it for some of these other use cases, including brainstorming and ideation, but we'd love a purpose-built experience for that." We said, "We hear you, we get it."

So again, we took a step back and thought about that workflow from idea to reality and where Lucidchart was exceptional at it, but where we believe there could be an outsized role for a different product experience. That's when we decided to build Lucidspark, our virtual whiteboard, which would pair seamlessly with Lucidchart in that workflow.

From the day we decided to build it to the day we launched it to enterprise customers was four months, which is incredibly fast. And it was not because Lucidspark is a simple product in any form, but rather it was because we had invested nearly a decade in the underlying platform of visual collaboration. We were able to leverage so much of that from Lucidchart to quickly build a powerful product in Lucidspark and take advantage of the collaboration and the integrations and the deep administration and security, the data and automation. All of those capabilities that underlie the core platform now allowed us to move quickly to service some of these new needs that had emerged for our customers in a very real way.

Collaboration is becoming much more common in a lot of different products. You look at things like Figma taking designers and putting them into a collaborative environment. From a product perspective, what were the core building blocks that were immediately transferable into that digital whiteboarding experience and allowed you to do that so quickly in four months?

I think fundamentally, a lot of that revolved around having an intelligent canvas. When I say intelligent canvas, that means more than just having boxes and arrows or sticky notes, but actually what those imply on the canvas and their relationship to potentially the other data.

Let me give you an example of that. I mentioned the Salesforce example earlier, where we created this bi-directional sync within Lucidchart to create these account maps for go-to-market teams. When it came to Lucidspark, one of those very common experiences or workflows that teams would go through is do that initial brainstorming and ideation, but then immediately want to go into planning mode. We were able to leverage that same data and automation capabilities to build a deep integration with Jira. So you could actually turn those ideas immediately into Jira tasks and build out the complex plans for the coming quarter or even sprints and so on. So again, having an intelligent canvas, not just a great place for people to drag and drop, but also the data and automation capabilities underneath was a critical one.

Certainly the collaboration capabilities came over very naturally. The collaboration can sometimes look different between those two use cases. In Lucidchart, where you're often diagramming out the people and the processes and systems that underlie your organization, sometimes that's synchronous. A lot of times it's asynchronous, where one person may take the lead and say, "Here's how this complex process looks today," and others can come in and edit and collaborate and comment and so on. Whereas in the digital whiteboarding space, you're often bringing together five or 50 or even 500 people at the same time to brainstorm and ideate together.

So there were some nuances there, but the underlying capabilities transfer very quickly, I think, to those use cases. When we think about, again, that workflow, idea to reality, I come back to that a lot. We think about the big verbs, if you will, and ideation and planning happens predominantly in Lucidspark. Design and documentation of your people, processes and systems to bring those ideas and plans to life is really where Lucidchart excels tremendously. That's why there's this very natural workflow between the two.

You spent the better part of a decade building out this core infrastructure, and now that unlocks you to say, where are the places where people are spiking on a specific use case or job to be done? I know less about Lucidscale as a product, but from my understanding outside in, it's a very specific use case where people want to visualize their cloud environment and understand what resources are being leveraged where. Is that an example of noticing something so consistent that it deserved a deliberately built environment? And do you think you'll build a lot more of those?

It's a great question. When you have 60 million users over a decade, you have so many data points of how people are using it. For years, I think I continued to be surprised at all the diverse use cases that people had. But of course, there's these common themes that emerge when you give them these common set of tools.

Lucidscale is a great example of that. When we looked at the data and use cases, we realized there were tens of thousands, if not more, of enterprise architects and DevOps teams and others who were designing and documenting their cloud architecture in Lucidchart. They loved it for that use case. But they were also doing it in a relatively manual way through drag and drop, to go through that design and documentation process that you would need to educate your team, that you would need for compliance reasons, that you would need to understand your security protocols and so on.

So we've looked at that need and recognized we can obviously help take this a step further. That's when we did that integration with AWS and GCP and Azure to be able to pull down all the complex data around your cloud architecture. There's so much metadata that exists in that kind of system, and help you visualize it instantaneously and then have different views of how you actually want to drill in and understand what's going on. That was a deep enough use case and a common enough use case that we said that deserves perhaps a separate purpose-built experience.

Now, when we think about the potential of where that could go, it's an interesting question, because certainly there are, I think, lots of great flavors and themes like that where we could similarly build out purpose-built experiences. At the same time, I think a core part of our philosophy moving forward is ensuring that we have the right developer platform and APIs and partner ecosystem so that others, particularly who may be subject matter experts in all of these different use cases, can help take the broad horizontal tool set that we have in Lucidchart and Lucidspark and design more of these experiences built on top of it. So whether we continue to build those out from the first-party perspective or partner with folks from a third-party perspective, there's absolutely strong potential to continue to pull out those common themes and provide even deeper experiences than we do today.

There are two buckets there I want to dig into. The first is that everybody vies to be a system of record, the place people rely on as a source of truth. Do you find it common that you have become that for your customers, the source of truth for the way their systems work? Or is it a constant battle to encourage customers to see this as more than making the flow chart and moving on?

I think there's absolutely a maturity curve there, as you would expect. Part of that education that I talked about earlier is about casting that vision for both individual users and then more broadly for customers, particularly as they start getting hundreds or thousands or tens of thousands of users on the platform.

I think you're absolutely right that a core part of our strategy from the very beginning has been to be the most integrated. Some of those are simple integrations, where perhaps you need the visual of the software architecture in Jira so you know how to build it. But increasingly, there's a lot of depth and bi-directional syncs and a lot of power that happens. So yes, we can pull in all of that information from Salesforce and be that complementary, if you will, visual layer to that system of record, but help your go-to-market teams, pre-sales, post-sales, understand the account, the key players and so on. Similarly, we can do that with Jira. We can do that with other work management systems. We can do that with your HRIS systems.

When you think about the core enterprise applications that run a business, oftentimes they are not great at communicating that information in a digestible visual way. Because we have those deep integrations, Lucid can become and often does become, particularly for our more mature customers, that repository of your ideas, certainly, even if some of those are a little more ephemeral over time, but also of the people, processes and systems that run your business.

If you think about how companies have to innovate, so much still runs on tribal knowledge today. That slows down innovation. Because if I want to know how something works, someone's going to say, "Well, go talk to Jill in accounting and then talk to Joe in finance. And then you might need to talk to the internal systems team as well." Whereas instead, if I want to innovate and make our quote-to-cash process tremendously more efficient, if I know how it works today, it is much faster and easier to start developing how it should look tomorrow.

So I think absolutely integrations is a fundamental part of our story, and where we focus a lot with our customers. From the very beginning, we've seen the data that if a customer has one integration, that was one of the most significant leading factors of how likely they were to expand and renew. And then that would just compound over time, because I think it represents both us becoming a fundamental part of their workflows, along with becoming, again, that visual record alongside all of their other enterprise systems.

How does that translate into pricing? Is it based on the number of charts people are creating, or the number of seats? How do you think about translating that value creation into value capture for Lucid?

Today, our pricing remains simple, which is seat-based. While I think we have explored and thought about different pricing and packaging models we could take, for the most part, we've wanted to remove as much friction as possible. We want you to become deeply integrated. We're not going to charge you extra for that. We want you to use these deep collaboration features. We're not going to charge you extra for that, and so on and so forth. Certainly that may evolve over time, but I think today we've tried to make it as frictionless as possible to become deeply ingrained within the workflows very naturally within a customer.

The other bucket I wanted to dig into is this infrastructure-as-a-service play. You spent that first 10 years building this really deep collaborative infrastructure, and so far you've only done it for yourself. People are trying not to have to reinvent the wheel every time somebody wants to build a collaborative product. There are companies like Liveblocks that are trying to bundle these collaborative features and offer them as a service. Is that something you would consider as a standalone offering? Say I'm a third-party company and my real expertise is something else. Take Lucidscale before you built it: maybe one of the cloud providers comes and says, "We'd love to build this collaborative environment, but we don't want to spend all this effort to build the foundation. We'd love to build on top of you." How do you think about extending that to third parties?

I think that could absolutely be part of the evolution of the platform here, because there's no need, to your point, to reinvent the wheel. A collaborative, intelligent canvas can and should be used in a whole host of diverse use cases. Across essentially every function, there are those deep use cases, many of which are manifested today in Lucidchart and Lucidspark usage, but many which I think could be built upon and taken to a deeper level and really customized to that specific use case in such a way that we never will, because there's thousands of them.

As you think about those different potential providers out there, startups all the way to more established companies, that need for a collaborative, intelligent canvas is absolutely one that we could fill. We're taking, I think, steps in that direction initially by exposing a lot more APIs that allow you to bring in other data, even change some of the user experience within our products today to really customize that workflow. But I think certainly it could evolve over time to go a step further, where we become that collaborative, intelligent canvas that everybody knows that's what they could and should use, rather than investing a lot of time into what, for them, would be non-core capabilities.

Switching gears a little bit. Companies like Miro had been around for a while and really took off during the pandemic. If I've got my timelines right, you launched Lucidspark towards the end of 2020, and I think Figma launched FigJam maybe in April or May of 2021. When you looked out and saw the Miros of the world, and considered that other collaborative companies like Figma could potentially play in this market, how did you think about your positioning? What advantage did you have getting into that market?

Yeah, great question. When we took a step back, it was really about this workflow from idea to reality and the end-to-end nature that we could play as that platform. Ideation and brainstorming is a critical part of the process, but it is one major step. When you get to the end of that, the most important thing that you've now come to is, what are we going to do next? Rather than having to go to a variety of other platforms, a lot of that can flow very naturally into Lucidchart to take those next steps to design and develop the people, processes, the systems that are required to bring that to life.

I think that's been a very critical part of the messaging and the positioning for us: one common workflow, one common platform, one common experience, one common partner, rather than having multiple of those. It's actually increasingly common for us to be having these conversations, particularly in this environment, where we can come in and say, "We understand you may be using that tool for whiteboarding, you may be using that tool for diagramming, you may be using that tool for org charting, and so on and so forth. Let us show you the way that you can have a much more cohesive and powerful user experience, while also potentially providing a deeper and better partnership with one partner, one vendor."

That has continued to play out and gained increasing momentum over time, in part because of the economic situation, and in part because I think a lot of companies are now taking a step back and taking a breather. So much technology and so much change was adopted in a pretty hastily fashioned way, and rightfully so, given the circumstances. But now companies are taking a step back and saying, "These band-aids we put in place, or these solutions we picked for a year or two, may not be the right way we want to future-proof our organization." So they're reevaluating, I think, the partners, the tool set, and so on. That's where I think our end-to-end differentiation has really stood out for the vast majority of our customers.

Over the last couple of years, endless capital made people feel like they wanted to be everything for everyone, and people got anxious about whether you can be good at something that way. Are there situations where you step back and say, if this is the specific use case, we might not be the best fit? Where does it make more sense for somebody to go with a competitor? Or have you become such a general purpose tool that you can own almost every use case you've come across?

It's certainly been an interesting evolution to watch play out, because I think so many people were trying to raise money at really significant valuations, and to do that, you had to cast this really broad vision. So the historical swim lanes all of a sudden got very messy between companies as they started encroaching on each other's historical territory. I think that's natural to occur, but I think it got accelerated tremendously during that time.

Generally speaking, with visual collaboration, there's few places we shouldn't be the dominant and single standard for visual collaboration. Now, along the way, and we just talked about this with being the most integrated, we also stress where we are complementary. We are not going to be your work management system. We have some basic functionality there, but really, that's why we deeply integrate with Smartsheet and Asana and Jira and others. Similarly, sometimes people come to us and, because of the nature of our products, ask us, "Do you also replace Figma?" No. Obviously, Figma is a tremendously powerful product in that visual design space. We serve a very complementary use case there and have integrated where you can pull in Figma mocks and designs directly into Lucidspark as part of that idea-to-reality workflow.

So I think while we have broadened the product portfolio very deliberately, we also recognize where we can be best of breed, versus where we're going to, right now at least, defer to others in those spaces. I think that's important, because I talk to CIOs and others all the time. Yes, people want a consistent experience. They want fewer vendors. They want better commercials. But at the end of the day, the vast majority of CIOs today, even as the pendulum has swung back, are not excited to go rip out admired tools from their users. So in all of these cases where we may be replacing existing tool sets, we have to come in and win the hearts and minds of users. It still fundamentally comes down to being the best product for both the end user as well as for the organization and the leadership.

How does that translate into the customer base? You mentioned that a lot of times people use multiple of your products. Is Lucidchart still the flagship and the most common thing people start on, before they expand into things like Lucidspark? Or are you seeing folks who have never heard of Lucid and hear about you because of Lucidspark, which gives you a wedge?

It probably comes as no surprise that given that we were in the market for nearly a decade with Lucidchart before Lucidspark, there is a lot of brand equity built up in Lucidchart, of those tens of millions of users who adopted the product and used it at different times. So we are still probably better known for Lucidchart today, but that is certainly changing.

One of the key decisions we made late last year was we wanted to make Lucidchart and Lucidspark a single suite and deliver it in that way to all of our customers. When we launched Lucidspark, we initially launched it as a separate product with separate pricing. You of course could buy the two together, but predominantly we saw people buying them somewhat separately, where maybe there was an existing customer that had 1,000 Lucidchart licenses, and now they were adopting Lucidspark, but perhaps more slowly or in slightly different functions, so they had 200 Lucidspark licenses.

As we saw that play out, we were seeing great growth in Lucidspark as an independent product as well. But we come back to our mission and we come back to that workflow from idea to reality. We say, we want every user to have all of these capabilities. So again, let's reduce the friction as much as possible. Let's bundle them together in one suite and let's ensure that every user has access to Lucidspark, Lucidchart, so that they can have that complete and full experience. Over the course of the last six to 12 months, we've transitioned the vast, vast majority of our customers to that model, and they have very much embraced it. I think it's eased the conversation significantly to drive adoption into Lucidspark and also to become the visual collaboration standard within companies, rather than one tool alongside others.

COVID was an inflection point where a lot of people were introduced to tools they hadn't used before. As people get back into a normal working style, do you think it goes back to certain types of people doing this kind of visual collaboration? Or has it become such a comfortable learned behavior that more people are whiteboarding going forward, and it becomes a more important artifact in the way people build their businesses?

Yeah, I think our story here looks a little bit differently than perhaps some in the space. We were very successful before COVID, during COVID, and now after COVID. That's because I think we've built the products and the value proposition in such a way that it's valuable to people who are working remotely, valuable to people who are working hybrid and valuable to people who are working in person. Candidly, that's just not true of all the tools, broadly speaking, in the software and collaboration space. They gained a lot of momentum over the last couple of years. I think that's going to separate some of the companies from the past couple of years to the next few, of who can really add that creativity, the collaboration, the productivity across any mode of work, because the vast majority of companies, large and small, are going to have some mix of that.

I even think about my own personal use case. When I bring together our executive team, sometimes we do those remotely. Oftentimes, we do them in person. Regardless how we do it, we are in Lucid, using that as the way to drive engagement and brainstorming and ideation and decision-making and so on, because it is just much more effective, even if we were all in the same room together. So I think that is going to define some of the success between the last couple years and the next couple, and why we have so much confidence that this is an enduring trend.

We don't have customers coming back to us who are saying, "Well, actually, now we're three days or four days in the office, so we're going to cut back on licenses." I haven't had a single conversation like that. Not one with customers. There's other reasons why customers may be thinking about things, particularly with this economy. But not one is about this trend of what work looks like moving forward, because I think we've proven our value regardless of the mode of work.

It's such a good callback to your core driving ethos of taking everything from idea to reality, that entire workflow. Reading between the lines, it sounds like some of these tools that are primarily focused on helping with the idea experienced a bit of a spike, because it was much harder to talk about and visualize ideas when you're not in person. For folks trying to map out the entire process from end to end, they need a tool that can do that. It's allowed you to ride that longevity in a way that probably other products haven't.

I think that's summarized very well.

I have to ask you this question, because I think you sit at a very interesting intersection. I've been in the Lucid offices. They're beautiful. I've got a lot of friends that work there and love it. So I know you have a great in-person culture, but you are also probably the best friend of a lot of remote-first companies that value the ability to visualize their processes. Where do you fall in the debate of in-person versus remote work, both generally for everyone and in the way you build Lucid?

Well, this is certainly a topic that is top of mind. It feels like almost every conversation I have with our customers as well as peer CEOs. I certainly don't claim to have all the answers on it. That said, we've strongly encouraged and asked our teams who are around hubs to come in a couple of days a week, because I believe that there is some great power and energy, particularly around culture, around learning more quickly, particularly in evolving competitive or economic environment, and so on and so forth, that comes from some of that in-person interaction.

I was talking to the CEO of another company and he put a pretty strong take on it when he said, "Every day you're remote, you're sacrificing the soul of your company."

Wow. That's pretty extreme. Spicy take, yeah.

It's a spicy take. That said, I think there's some truth to that for those of us who weren't remote first from the very beginning. There are clearly some remote first who are small, who've grown up that way and built all the processes and technology around it. And that's not to say that we couldn't and shouldn't and aren't adapting, but I believe when possible, having some of that common in-person interaction is important.

That said, we all enjoy the flexibility and we all enjoy some of the productivity we get from home. What has resonated with me along the way through this journey is some of the studies that have consistently come out, which essentially said productivity stayed relatively high throughout the last couple of years. What suffered, though, both from the perception of employees as well as in results, was creativity and collaboration. As we look forward, we're going to see both the continued need for solutions like Lucid that support that creativity and collaboration, regardless of the circumstance, but also, I think, balancing the needs and flexibility of remote with having some of that in-person interaction along the way.