How a dorm-room blog snared $79M in funding

Anthony Casalena, founder and CEO, Squarespace
Source: Squarespace

Tapping away on the computer in his dorm room at University of Maryland, College Park, Anthony Casalena wasn't planning to start a business when he began writing the code for what would become Squarespace's website-building software in April 2003.

The computer science student, who taught himself to write code as a teen growing up in Northern Maryland, was simply trying to post his own blog. Frustrated that there wasn't a one-stop solution that made it easy for him to put up a stylish-looking site using a template or to quickly tackle tasks, like adding an image gallery, he began creating a system like this for himself. At that time, programs like WordPress were just coming onto the scene. The only way to build the type of blog he wanted was by patching together a hodgepodge of existing software.

It was only after a friend offered to pay Casalena a couple of hundred dollars to use the software that the college student realized that there might be a market for what he created — and began turning it into a business. "It was a triggering feeling," recalled Casalena in a 2014 interview.

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By January 2004, Casalena began selling access to Squarespace, advertising it by using Google AdWords. He had gotten a $30,000 cash infusion from his father, also named Anthony, to pay for a server. Thanks to positive word of mouth, the site picked up traction.

Today, Squarespace, headquartered in New York City, has grown to more than 500 employees and 2015 revenues surpassed $100 million, said Casalena, now 34.

In 2014, the company aired its first Super Bowl commercial, which used a zany horror theme to convey the challenges of putting up a website. In 2015, Squarespace returned to the Super Bowl with a campaign starring Jeff Bridges and his "Sleeping Tapes" album. For Super Bowl 50, Squarespace partnered with comedians Keegan-Michael Key and Jordan Peele to broadcast a live commentary of the game. It will spend about $90 million this year on marketing, Casalena said in February. Users, who range from consumers to companies like Lyft and HBO, pay for plans ranging from $5 to $70 a month to build sites and stores on Squarespace.

Investors are paying attention. In April 2014, Squarespace announced it had raised a $40 million round of venture capital from the investment firm General Atlantic. That followed an earlier, Series A round in 2010, led by Index Ventures and Accel Partners, in which Squarespace raised $38.5 million. After introducing a modernized version called Squarespace 6 in July 2012 and adding e-commerce capabilities for users' sites in early 2013, Squarespace saw dramatic sales growth, according to Casalena.

When you're younger, you don't have much scar tissue from being burned by trying things.
Anthony Casalena
Founder, Squarespace

Without years of business experience behind him, Casalena had to teach himself how to build a company, step by step. Staying an extra year in college to work on Squarespace, the young entrepreneur realized he needed to create a billing platform so he could charge customers to use it and took two months to tackle that. Then he realized he needed to tackle challenges such as hosting Squarespace and creating an advertising campaign.

Looking back at the very hands-on strategy he used, Casalena said, "It's bumbling through everything, in a way. It's a very organic approach, looking at what is working and what is not. It is approaching things with 'I don't know' and just trying things. When you're younger, you don't have much scar tissue from being burned by trying things."

With no historical data about customers to guide his decision making in the beginning, Casalena learned to trust his intuition when, for instance, he had to decide whether or not to put $500 from his tiny marketing budget into a Google AdWords campaign.

"You are just acting on your gut instincts a lot," he said. "You put a couple of hundred bucks into Google AdWords and get three customers and do the math. You're like, 'I have to make my money back. Do we really think they'll ever upgrade — yes or no?' You can't run a test on it. You don't have enough people coming in. A lot of it is flying blind. In that kind of environment, it takes you longer to learn lessons. Things move slowly. Sticking with your convictions is really difficult."

But Casalena never deviated from his overriding belief in the power of design. From the start, he made it a point to offer customers sophisticated templates that don't have a bland cookie-cutter vibe.

"When we put a design template out there, our designers look at real customers' sites using that template," he said. "We remove templates from our store all the time that we don't think are good enough."

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Although Casalena loves solving tech problems himself, he realized gradually that to grow Squarespace, he had to step back from doing that and focus on leadership, trusting his team to solve engineering and design challenges.

"I think the hardest thing for anyone who likes making things, as a business scales up, is to realize you're making a company now," Casalena said. "You can't go back to just being a programmer. I can't solve all of my problems sitting in front of the computer."

To give himself a creative outlet outside of his role as CEO, "I still have my little hack days on weekends to play around with code and stay in touch with programming," Casalena said.

At Squarespace, he is focused on leading his team.

Hiring carefully, with a constant eye out for people who share his appreciation for design, has helped him.

"The important thing is finding people who are more naturally aligned with you so it is not this big fight, where I want to do things one way," he said. "I hope everyone here appreciates the value that design can bring to communication."

To make sure employees stay true to the company's original vision, he encourages them to build products they would want to use, just as he first did when he began creating Squarespace. He believes that approach, rather than one that is driven mainly by market research data, results in products that spark customers' passion.

"If you make it for yourself, you have to be in the customer's position," he said.

To spark the creative process, he allows employees time to work on open-ended projects.

"Sometimes you can't put deadlines on things," he said. "If you play around with things, you can sometimes discover new building blocks that will build up into things you wouldn't have discovered before."

The trick is balancing creative goals with growing the company.

"This is a business. We have to make money. We don't have to make it in the short term. We have to do it in the long term and have to have discipline. Squarespace was never this art project where it was all about design at the expense of everything else."

Lessons learned:

  • Sometimes, a winning business plan's origin story can come out of personal need — and pet peeves. (There might be more frustrated people out there looking for the same solution than you ever knew existed).
  • "Bumbling" your way to success and using intuition is OK, especially when you are young and more open to failure.
  • The best leaders learn to recognize when a start-up has become a proper company — stepping back and delegating is a key to sustaining momentum.
  • A founding concept, like good design, needs to be kept in mind at all stages of company evolution, but it should never override the need to develop a competitive market strategy.