Latest / Startup Stories with Fexingo: Conversations About Founders, Funding, and Building Companies from Zero / How Notion Became the Everything App Without Venture Capital
Transcript
- Lucas: Today I want to talk about a company that millions of people use but very few understand the origin story of. Notion. The app that wants to be your notes, your wiki, your project manager — your everything. Luna: And they've done a remarkable job at that. I think I use Notion for about twelve different things personally. But I have to admit, I don't actually know how they got started. Lucas: Right, and the story is genuinely unusual. Most startups in the productivity space raise huge rounds early — Asana, Monday.com, Airtable. Notion did the opposite. They spent years basically bootstrapping on a tiny seed round, and that shaped everything about the company. Luna: So they were capital-efficient out of necessity, not by choice? Lucas: Partly necessity, partly conviction. The founder, Ivan Zhao, had a very specific vision. He wanted to build a tool that could be a 'building block for software' — a blank canvas that non-technical people could use to create their own systems. That's a really hard product to explain to investors in 2015, when everyone was pitching AI or on-demand laundry. Luna: And they launched in 2015 with a product that was… not quite there yet, right? Lucas: Exactly. The first version of Notion was a hybrid of a document editor and a database, but it was clunky, slow, and frankly, not very good. They raised a small seed round from a few angels — about two million dollars — and then they hit a wall. Luna: What kind of wall? User growth? Funding? Lucas: Both. They had about 15,000 users after the first year, which sounds decent, but retention was terrible. People would try it, get frustrated, and leave. And without strong traction, no VC was interested. Ivan later said that he went to over sixty meetings and got rejected by every single firm. Luna: Ouch. Sixty rejections. That's brutal. Lucas: It was. And at that point, most founders would have pivoted or shut down. Instead, Ivan made a radical decision. He fired almost the entire team — went from about twenty people down to three — and spent a year rewriting the entire product from scratch. That became Notion 2.0, released in 2018. Luna: So they bet everything on a complete rebuild. That's a huge gamble. Lucas: Huge. But that rewrite fixed the core issues: performance, reliability, and most importantly, they introduced the block-based editor that makes Notion so flexible. Every line is a block that can be text, a database, an image, a to-do, whatever you want. That was the breakthrough. Luna: And that's when users started sticking around. I remember hearing about the Notion waitlist — it became almost legendary. Lucas: Absolutely. They didn't spend a dime on advertising. Instead, they built a waitlist and made it shareable. If you referred a friend, you got early access. That created scarcity and buzz. By the time they opened up to everyone in 2019, they had over one million users waiting. Luna: And the pricing was smart too. Free for personal use with unlimited blocks. That's essentially a freemium model that's incredibly generous. Lucas: Right. That was intentional. Ivan said they wanted to 'earn the right' to charge businesses by making individuals fall in love with the product first. And it worked. By 2020, they had four million users. Then the pandemic hit, and remote work exploded. Luna: That must have been a rocket ship moment for them. Suddenly everyone needed a digital workspace. Lucas: Exactly. Teams using Notion grew 3.5 times in 2020 alone. And they still hadn't raised a big VC round. They were profitable on that tiny seed money. Finally, in 2021, they raised a Series B at a two billion dollar valuation — led by Index Ventures and Sequoia. But by then, they had all the leverage. Luna: So they proved product-market fit before taking the big money. That's the opposite of the typical 'raise first, figure it out later' approach. Lucas: It really is. And I think that's the biggest lesson from Notion's story. They refused to compromise on the product to hit investor milestones. Ivan once said, 'We would rather die than build a product we're not proud of.' And that conviction attracted users who felt the same way. Luna: You know, it reminds me of something I read about the early days. Notion's first users were often developers and designers — the exact kind of people who could spread the word. They became a built-in salesforce. Lucas: That's the community-led growth model. Notion built a community of power users who created templates, tutorials, and even entire businesses around the app. They had a 'Notion Ambassadors' program before they even had a marketing team. It's a beautiful flywheel. Luna: And now they're competing with giants. Microsoft Loop just launched, Coda has been around, and even Google is adding more database features to Docs. How is Notion staying ahead? Lucas: That's the big question for 2026. Notion's answer so far has been to keep expanding the platform: they added AI writing features, a new database formula system, and deeper integrations with tools like Slack and Jira. But the real moat might be the templates and workflows that users have built on top of Notion. Switching costs are high when your entire company wiki and project tracker are in one tool. Luna: And they're also pushing into the enterprise. Last year they launched Notion Sites — the ability to publish entire websites from Notion pages. That's a direct challenge to platforms like Webflow and Squarespace. Lucas: Exactly. They're becoming the 'everything app' for work. But with that ambition comes risk. Every new feature adds complexity, and Notion has always been criticized for a steep learning curve. The question is whether they can stay simple enough for new users while powerful enough for power users. Luna: It's a classic tension. But if anyone can pull it off, it might be the team that survived sixty rejections and a full rewrite. Lucas: Honestly, if today's conversation moved your thinking forward in some small way, and you feel like the show has earned a coffee from you now and then, that link is buy me a coffee dot com slash fexingo. No pressure — just a way to keep this ad-free and focused on stories like this one. Luna: Yeah, listener support makes a real difference. We're grateful for every contribution. Lucas: Anyway, back to Notion. I think one of the most telling moments was when they launched their API in 2021. That opened the floodgates for integrations and custom tools built on top of Notion. Suddenly, Notion wasn't just a note-taking app — it was a platform. Luna: And that platform shift is what justified the high valuation. A note-taking app can't be worth two billion dollars. But a platform that hosts your entire workflow? That's a different story. Lucas: Right. And they've been smart about not over-monetizing too fast. The free tier is still incredibly generous. They're playing the long game — get users hooked, then upsell them on team features, AI credits, and enterprise security. Luna: So what's the one piece of advice you'd take from Notion's story for someone building a startup today? Lucas: I'd say: resist the temptation to raise money before you have something people truly love. Notion didn't need a massive Series A to find product-market fit. They needed time, focus, and a willingness to scrap everything and start over. That's rare. But it's also why they're still independent and growing. Luna: And also, build a community, not just a user base. The people who love your product will do your marketing for you — if you let them. Lucas: Exactly. That's the Notion way. And as they face bigger competitors and the pressure to keep innovating, I think that community will be their biggest asset. Luna: It's a good reminder that the best stories don't always come from the companies that raised the most money. Lucas: Right. Sometimes they come from the ones that were told 'no' sixty times and built anyway.