Latest / Startup Stories with Fexingo: Conversations About Founders, Funding, and Building Companies from Zero / How Loom Won Async Video by Solving One Annoying Problem
Transcript
- Lucas: There is this moment in every startup story where the founder realizes the product they are building is not the product people actually want. For Loom, that moment came in 2016, when co-founder and CEO Joe Thomas was running a completely different company called OpenTest. Luna: OpenTest — that was a browser testing tool, right? Lucas: Exactly. It was a tool for developers to record and replay tests in the browser. And it had this side feature — a Chrome extension that let you record your screen and share it with a link. The team noticed that users kept using that feature for things entirely unrelated to testing: giving feedback on designs, explaining bugs, onboarding new hires. Meanwhile the core testing product was struggling. Luna: So they basically stumbled into a product people actually wanted by accident. Lucas: Right. And to their credit, they paid attention. In late 2016, they pivoted. They rebranded from OpenTest to Loom, and focused entirely on that screen recording feature. But the real breakthrough came a year later, when they made one specific change that transformed the product's growth trajectory. Luna: What was the change? Lucas: They eliminated the download step. Before 2017, if someone sent you a Loom video, you had to download the video file to watch it. That's friction. So in early 2017, they made it so the video played instantly in the browser — no download, no account needed to view. They turned it into a link you could click and watch. That single change took the product from useful to magical. Luna: And that's when growth started to take off. Lucas: Yeah. By 2018 they had a million users. By 2019, five million. And then the pandemic hit, remote work became the default, and async video went from a nice to have to a must-have. Today Loom has over 25 million users and more than 200,000 paying teams — including companies like Atlassian, Dropbox, and HubSpot. Luna: What I find interesting is that the core concept isn't new. Screen recording has existed for decades. What Loom did was remove every possible barrier between intent and action. Lucas: That's exactly right. They didn't invent screen recording. They invented a distribution mechanism for it. The link-based sharing model made it as easy to send a video as it is to send a link to a Google Doc. And they didn't stop there. They also made the recorder itself dead simple — one click to start, one click to stop, and the link is automatically copied to your clipboard. Luna: That's the kind of obsessive attention to workflow that separates breakout products from features. Lucas: And they bet big on the freemium model early. The free tier let you record unlimited videos up to five minutes long. That gave teams a chance to try it without any commitment. And once you're hooked, upgrading to remove limits and get features like viewer analytics feels natural. Luna: Let's talk about the numbers for a second. Loom raised over $200 million from investors including Sequoia, Kleiner Perkins, and Coatue. At its peak, it was valued at over one and a half billion dollars. But there's always a question with async video: is it a standalone product or a feature that will eventually get absorbed into Slack, Teams, or Zoom? Lucas: It's the perennial question for any tool that lives in the collaboration layer. And we've seen some moves from the big players — Microsoft launched video clips in Teams, Salesforce owns Slack and has its own video capabilities. But Loom's advantage is that it's platform-agnostic. It works with email, Slack, Notion, Jira, you name it. That interoperability is hard to replicate if you're a platform trying to lock users into your ecosystem. Luna: Still, the threat is real. If Slack or Teams adds a one-click screen recording with link sharing that works as seamlessly as Loom, why would you use a separate tool? Lucas: That's a fair challenge. But I'd argue that Loom's depth — things like viewer insights, custom thumbnails, team templates, and integrations with hundreds of apps — gives it staying power. Also, there's a network effect: the more people use Loom, the more it becomes the default way to send async video. It's becoming a verb, like 'loom me that feedback'. Luna: Speaking of which, do you use Loom yourself? Lucas: All the time. Honestly, for this show, if I need to explain a complex concept to our producer, I'll just record a quick Loom instead of writing a long email. It saves so much back and forth. Luna: And if these conversations have moved your work forward in some small way, we'd love it if you considered supporting the show. There's a link in the description — it's buy me a coffee dot com slash fexingo. Just a way to keep this ad-free and focused on the stories. Lucas: Absolutely. No pressure, but if today's episode gave you a new idea or a useful framework, that's the link. And now back to Loom — one of the things I admire is how they've stayed focused on their core use case. They haven't tried to become a full video platform. They're not doing live streaming or video editing. They just do one thing really well. Luna: That's a hard discipline for startups, especially when you have pressure from investors to expand your total addressable market. Lucas: And yet, that focus is probably why they've survived the competitive pressure. If they had tried to compete with Zoom on live video or with iMovie on editing, they would have diluted their brand. Instead, they own a very specific slot in the user's mental map: quick async video. Luna: Let's talk about the early days of the pivot. How did they convince investors to back a screen recording tool when the original product was failing? Lucas: It wasn't easy. Joe Thomas has said in interviews that they had to convince investors that the video sharing use case was big enough. The turning point was when they showed the growth data from the side feature — users were recording videos and sharing them at an increasing rate without any marketing. That organic traction is what got Sequoia to lead their seed round. Luna: So the data spoke for itself. Lucas: Exactly. And they used that data to make a compelling case: screen recording is a universal need, but existing solutions are too complicated. Loom makes it one click. That narrative worked because it was grounded in real user behavior. Luna: One thing I find interesting is how they handle privacy. When you record a video, it lives on Loom's servers, and viewers get a link. That's convenient, but it also means you're trusting Loom with your content. Lucas: That's a valid concern, and Loom has invested heavily in security — SOC 2 compliance, encryption in transit and at rest, and for enterprise customers, they offer custom data retention policies. But the trade-off is real: convenience versus control. For most teams, the convenience wins. Luna: And that trade-off is exactly what made Loom successful. They made a bet that people would trade a bit of control for a lot of ease of use. Lucas: Right. And the bet paid off. But now the question is: what's next? Loom has been rumored to be exploring an IPO, though no official filing yet. The company is still private and hasn't disclosed recent valuation. But with 25 million users, they have a strong base to build on. Luna: Do you think they'll eventually add more features, like transcription or ai powered summaries? Lucas: They already have automatic transcription. And I think AI is a natural extension — imagine getting a summary of a five-minute video in thirty seconds. They've also introduced things like interactive captions and the ability to search within videos. So they are innovating, but always within the context of async video. Luna: It seems like the biggest risk now is not competition, but a shift in how people communicate. If async video turns out to be a pandemic-era trend that fades as people return to offices, that could hurt. Lucas: That's a real risk. But the data suggests async communication is here to stay. A 2025 McKinsey survey found that 60 percent of knowledge workers still use async video weekly, even among those who go to the office most days. It's not a replacement for meetings; it's a complement. And Loom is well-positioned to be the default tool for that. Luna: So the lesson from Loom is: find a painful workflow, remove one giant piece of friction, and make it shareable. Lucas: Exactly. And don't be afraid to pivot when the data tells you something else is more valuable. Loom's story is a reminder that the best startups often start as something else entirely.