Crazy Egg

Crazy Egg started from a simple problem that its founders had themselves: people visit a website, but that does not mean they buy. Rather than guess, the product shows where visitors click, how they move their mouse across a page, and which elements cause them to leave. Neil Patel described it as user session recording that reveals why people aren't converting, so site owners can change the right elements and run A/B tests. The team had also spun out Kissmetrics after realizing they needed their own way to track lifetime value and funnels, and other companies had the same problem.

The business has been run as a lean, bootstrapped company. Patel said that when the company raised money, it was for Kissmetrics, after True Ventures turned down Crazy Egg. The first year of revenue was small. Patel said the company was not yet hitting about $10,000 a month, and he called that first-year result terrible. Today the team is mostly contractors and works virtually. Engineering is largely outsourced to South America at about $150 an hour, which Patel justified by code efficiency rather than hourly rate.

Crazy Egg's acquisition funnel has been tuned heavily. The team tested a simpler landing page with a long story against a shorter variation, which lifted new trial signups by roughly 30 to 40 percent. Visitors enter an email through a Google sign-in step, pick a plan, and start a 30-day trial. Plans range from $9 to $100 per month when paid annually. Between selecting a plan and reaching checkout, Patel said conversion ran about 22% to 30%, depending on traffic source. Paid traffic converted lower than people who searched for Crazy Egg by name.

Paid acquisition has been the growth engine. Patel said YouTube advertising was the channel he was scaling, with more than $100,000 a month in spend and an average customer paying about $25 per month on that channel. He described a payback of about one month, though he said he was willing to accept two to four months to grow spend. The weak spot is churn: YouTube-acquired customers churn at about 31-32% annually. The team has also tried automatic test-running for users, which did not create enough value because users need to run tests themselves. Patel also said the company refunds customers who say they never used the product, a policy he framed as a signal that the product was not delivering value.

In 2015 Crazy Egg reported total revenue greater than $1 million and less than $1 billion, a range Patel gave on air. The company is bootstrapped, run as a cash cow, and used for growth experiments rather than an exit. Patel said he personally focuses on new channels and growth, and that the company is considering a freemium plan to widen its top of funnel.