Latest / Startup Stories with Fexingo: Conversations About Founders, Funding, and Building Companies from Zero / How Notion Built a Product Without a Category
Transcript
- Lucas: If you ask most startup founders what they want, a lot of them will say 'product-market fit.' The problem is, that phrase gets thrown around so much it's lost its teeth. Today I want to talk about a company that didn't just find product-market fit — they basically invented a category that didn't exist. Luna: You're talking about Notion. Lucas: Yeah. And I think it's a fascinating case because their path looks nothing like the typical Silicon Valley playbook. No growth hacking, no aggressive freemium tricks, no sales team for years. Just a really weird, flexible product that people fell in love with. Luna: Weird is the right word. I remember first opening Notion and being completely lost. Is it a notes app? A database? A wiki? It felt like someone mashed together Word, Excel, and Trello. Lucas: Right. And that ambiguity was actually their biggest asset and their biggest risk. Because if you can't explain what your product is in one sentence, good luck getting people to try it. But once they did try it — and figured out how to bend it to their own workflow — they became evangelists. Luna: So how did Notion actually get started? I know the founding story involves a failed gaming company. Lucas: Yeah, the founders — Ivan Zhao, Simon Last, and Akshay Kothari — originally built a company called Verses, which was basically a mobile-first creative suite. It flopped. But they realized the underlying technology they'd built — a flexible block-based editor — could be repurposed for something else. So in 2013, they pivoted to Notion. Luna: And they raised a tiny seed round. I think it was $2 million from some angel investors. Lucas: Exactly. $2 million in 2016. That's almost nothing for a product company. And they spent years iterating in relative obscurity. The early versions were buggy, slow, and only available on desktop. But the people who got it — really got it — started building things like company wikis, project trackers, even personal journals. Luna: So how did they grow without any marketing spend? Lucas: Templates. That was the secret weapon. Notion made it dead simple for users to create and share templates. So you'd have someone build an 'Engineering Wiki' template or a 'Weekly Meal Planner' template and share it on Twitter or Reddit. Each template was essentially a viral ad for the product. Luna: I remember the 'Notion for Everything' trend on Product Hunt and Twitter. People were creating templates for things like 'Managing Your Job Search' or 'Planning a Wedding.' Lucas: Yeah. And each template came with a link to sign up. By 2018, Notion had about a million users, all organic, zero paid acquisition. Then in 2019, they finally launched a mobile app and a web clipper, and that's when things really took off. Luna: But they still weren't spending on ads. They had a freemium model, but it was very generous. The free tier was actually usable for individuals. Lucas: That's key. A lot of SaaS companies use freemium as a tease — you hit a wall after 10 projects or 50 rows. Notion's free tier was genuinely useful forever. The only real limitation was file upload size and version history. That built trust and lowered the barrier to trying it. Luna: So when did the VCs start to notice? Lucas: By late 2019, they had over 4 million users and were generating meaningful revenue — I think around $10 million in annual recurring revenue. That's when Index Ventures led a $50 million Series B at a $2 billion valuation. Then in 2021, they raised another $275 million at a $10 billion valuation. Luna: That's a massive leap in two years. But I wonder — did the product change after all that money? Did they start trying to be everything to everyone? Lucas: That's the million-dollar question. To their credit, they kept the product pretty focused. The big additions were things like databases, relational links, and API access — all of which made it more powerful for teams without bloating the interface. They also launched Notion AI in 2023, which was smart. Luna: I've used Notion AI. It's basically a writing assistant that lives inside your documents. Pretty seamless. Lucas: Yeah. And it was another growth lever. But the real lesson, I think, is about category creation. Notion didn't try to compete with Evernote or Confluence head-on. They built something that was more malleable, and that allowed users to define the category themselves. Luna: That's a great point. They let the community tell the story. Lucas: Exactly. And the community did it for free. Notion's template gallery became a marketplace of ideas, and every shared template was an acquisition channel. By the time they had 20 million users, they still hadn't run a single ad campaign. Luna: I think there's a deeper lesson here about patience. Most startups would have panicked after two years with slow growth and no clear category. But Notion just kept iterating. Lucas: Right. And they were bootstrapped in spirit even with venture money. They didn't hire a big sales team, didn't do enterprise cold outreach until much later. Their whole growth model was 'build something people want to share.' That's harder than it sounds, because it requires the product to be genuinely excellent. Luna: It also requires a certain humility. You have to accept that you don't control the narrative — your users do. Lucas: Yeah. And I think that's what makes Notion's story so compelling for founders. It's a counterexample to the growth-at-all-costs mindset. They proved that slow, organic, community-driven growth can lead to a $10 billion outcome. Luna: It's also a reminder that categories aren't discovered — they're invented. Notion created the 'all-in-one workspace' category by refusing to be just one thing. Lucas: If today's episode was useful to you — maybe you're a founder thinking about product-led growth or just someone who loves a good startup story — this kind of content stays ad-free because of listener support. If you want to help keep it that way, you can buy me a coffee dot com slash fexingo. It's a small gesture that makes a big difference. Luna: Yeah, and it genuinely helps us keep digging into stories like this. No pressure, just an option if you find value here. Lucas: Alright, back to Notion. One thing I think is underappreciated is how they handled the enterprise transition. A lot of consumer-grade products fail when companies try to adopt them. Notion actually invested in things like admin controls, SAML single sign-on, and team permissions without ruining the individual experience. Luna: That's a hard balance. Most products either become too complicated for individuals or too simple for large teams. Lucas: Exactly. And Notion managed to layer in enterprise features without cluttering the UI. For example, they introduced 'Teams' plans that gave you shared workspaces and billing, but the individual user interface barely changed. That's a design philosophy that respects both audiences. Luna: And they did it without a sales team for the longest time. I think they only hired their first enterprise salesperson in 2021. Lucas: Correct. Before that, enterprise adoption was entirely self-serve. Companies would just start using it, then IT would call to get a plan. That's the holy grail of product-led growth. Luna: So what's next for Notion? They're now competing with Microsoft Loop, Coda, and even Google Docs to some extent. Lucas: Right. The competitive landscape has gotten a lot more crowded. But Notion has a few moats. First, the network effects of templates — there are tens of thousands of them now. Second, the AI features, which are becoming table stakes but Notion integrated early. And third, the brand itself. Notion has a cult-like following among tech workers and creators. Luna: Do you think they'll eventually go public? Lucas: It's possible. They're still private as of mid-2026, but with that $10 billion valuation and strong recurring revenue, an IPO is a likely endgame. Though I wouldn't be surprised if they stay private for a while longer. The founders seem to value control and long-term thinking. Luna: It's a rare thing — a startup that grew slowly, stayed true to its product philosophy, and still became a unicorn. Lucas: Yeah. Notion is proof that you don't have to follow the playbook. You just have to build something that people love enough to tell their friends about. That's a lesson worth remembering.