How Notion Built a Product Without a Category

Lucas: There's this moment in almost every startup story where the founders realize they've been building the wrong thing. The famous one is probably Evan Williams with Blogger - he was trying to build project management software and accidentally built a blogging platform. Luna: Right, and then Twitter was born from a similar accidental pivot. But the one I think about most is Notion.

Because their pivot wasn't from one product to another - it was from 'we make a tool for developers' to 'we make a tool for everyone.' And that's a much harder jump. Lucas: Exactly. Notion today is valued somewhere north of $10 billion, depending on which secondary market you look at.

It has tens of millions of users. But in 2015, it was basically dead. The founding team - Ivan Zhao, Simon Last, and Akshay Kothari - had built a note-taking app for developers that barely got any traction. Luna: And they were running out of money.

I think they had something like six months of runway left when they decided to scrap everything and rebuild. Lucas: Yeah, they burned through most of their seed round trying to get developers to use their original product. It was called Notion back then too, but it was a completely different thing - it was a code editor with some documentation features. They had maybe a few hundred paying users.

Luna: So what was the insight that made them pivot? Because the product now is famously flexible - it's notes, databases, kanban boards, wikis, all in one. That feels like a pretty big leap from a developer tool. Lucas: Ivan Zhao has said that the breakthrough came when they stopped asking 'what should this product do?'

and started asking 'what should this product be?' They realized that the most powerful tool isn't the one that does one thing perfectly - it's the one that lets you build your own workflow. So they rebuilt Notion as a blank canvas with modular blocks. Luna: Right, the block system.

Every piece of content - a paragraph, a heading, a database, an image - is just a block. And you can combine them however you want. That's the core insight. Lucas: And it's deceptively simple.

But when they launched the new version in 2016, growth was still slow. The problem was that a blank canvas is intimidating. People didn't know what to do with it. So Notion started creating templates - project trackers, meeting notes, personal dashboards - and that's when things started to click.

Luna: It's like giving someone a Lego set with no instructions versus giving them a model to build first. Once they see what's possible, they start creating their own. Lucas: Right. But the real growth engine for Notion wasn't templates - it was the community.

Around 2018, a bunch of power users started sharing their setups on Twitter and YouTube. There were these elaborate Notion workspaces that looked like dashboards from a sci-fi movie. And people loved them. Luna: I remember that wave.

It was almost like a subculture. People would post screenshots of their Notion setup for everything from tracking job applications to planning a wedding. Lucas: Notion leaned into it. They started a community program, highlighted power users on their blog, and even hired some of them.

They didn't spend much on traditional marketing - instead, they let the users sell the product for them. And it worked because the product was actually good enough to evangelize. Luna: But let's talk about the elephant in the room. Notion has never really had a clear category.

Is it a note-taking app? A project management tool? A wiki? A database?

How does that affect their sales? Lucas: It's both a strength and a weakness. On one hand, they don't compete directly with anyone. They're not exactly like Evernote, not exactly like Asana, not exactly like Confluence.

So they can claim to replace all of them. On the other hand, when a company evaluates software, they usually have a budget line for 'project management' or 'knowledge management.' Notion doesn't fit neatly into any of those buckets. Luna: So they have to convince companies to create a new budget line, essentially.

That's a much harder sell than just saying 'we're cheaper than Confluence.' Lucas: Exactly. And that's why their enterprise sales cycle has been longer than some competitors. But it's also why once a company adopts Notion, they tend to stick with it.

Because it becomes so embedded in how people work that ripping it out would be painful. Luna: There's also the fact that they've stayed private for a long time. They raised a Series C in 2019 at a $2 billion valuation, then another round in 2021 at $10 billion. But they haven't rushed to IPO.

Lucas: Ivan Zhao has said they want to build a lasting company, not a quick exit. And that shows in how they've managed growth. They didn't try to be everything to everyone immediately. They focused on small teams and startups first, then moved upmarket.

Luna: That's a classic playbook, but it's hard to execute. Most startups try to go enterprise too early and end up with a product that satisfies no one. Lucas: Notion also made a smart move with their pricing. They have a generous free tier - unlimited blocks and pages for individuals - which lowers the barrier to entry.

Then when you hit the team limits, you upgrade. It's a classic freemium funnel, but the product is sticky enough that conversion rates are decent. Luna: I think the biggest threat to Notion right now is actually Microsoft. Because Microsoft is bundling more and more of these features into Teams and Loop, which are part of the Office 365 subscription.

If you already pay for Office, why would you pay extra for Notion? Lucas: That's a real concern. But Notion's advantage is that it's not tied to any ecosystem. It works on every platform, and it's built around flexibility rather than a fixed workflow.

Microsoft's tools are great if you want to work the Microsoft way. Notion lets you work your way. Luna: And that resonates with a certain kind of user - the person who wants to customize their tools, who thinks about workflows as something to be designed, not just used. Lucas: That's exactly the user that Notion has cultivated from the beginning.

And those users are the ones who recommend it to their friends, build templates, and create content around it. The community isn't just a nice to have - it's the moat. Luna: Speaking of the community, it's worth noting that Notion's early growth was also fueled by a very specific kind of user: the productivity enthusiast. People who love optimizing their lives with systems.

Lucas: Right. And those people are incredibly vocal online. They're the ones who made bullet journaling a thing, who use things like Todoist religiously. Notion gave them a digital playground to build whatever system they wanted.

Luna: It's almost like Notion is a platform for building your own productivity app. And the best user-generated content - the templates - become a library that attracts new users. Lucas: That's a great framing. And it's why the company has invested so much in developer tools and APIs recently.

They want to be the underlying infrastructure for how people organize information, not just another app. Luna: Before we wrap up, I want to mention something that I think is underappreciated about Notion's story. They almost died. Multiple times.

After the pivot, they still had to lay off staff because growth wasn't fast enough. It wasn't a straight line. Lucas: Absolutely. The narrative we hear is often the success story, but the reality is that Ivan Zhao was sleeping in the office and the company was down to a handful of employees at one point.

It took years of grinding before the hockey stick kicked in. Luna: And that's the part of the story that doesn't make it into the glossy case studies. The grind. Lucas: Yeah, it's a good reminder that most overnight successes take a decade.

Notion was founded in 2013, and it wasn't until 2018 that they really hit their stride. That's five years of struggle. Luna: And those five years were funded by small amounts of venture capital and a lot of grit. Speaking of which, this show is possible because of listeners who chip in a few dollars - it genuinely keeps the lights on.

Lucas: Yeah, if you've gotten anything out of these conversations, a couple of bucks a month at buy me a coffee dot com slash fexingo goes a long way. It helps us stay ad-free and keep digging into these stories. Luna: Exactly. And now back to Notion - I think one of the most interesting questions for the next few years is whether they can maintain that community magic as they grow into a bigger company.

Lucas: That's the classic tension. As you scale, you need to standardize things - sales processes, onboarding, enterprise support. But standardization can kill the very flexibility that made you special. Notion's challenge is to scale without losing the soul.

Luna: And they've been making moves. They acquired a company called Automate.io in 2020 to add integrations, and they've been building out their AI features more recently. Lucas: Right, AI is a big push.

They launched Notion AI, which can summarize pages, generate content, and help with drafting. That could be a whole new layer of value. Luna: But it also raises the question: will AI make the blank page less intimidating? If you can just describe what you want and have it built for you, that could expand the user base even further.

Lucas: Exactly. The blank page is still the biggest barrier to entry. AI might be the bridge that lets people skip the learning curve. And if that works, Notion's addressable market gets a lot bigger.

Luna: Alright, I think that's a good note to end on. Notion - from near-death to a platform that might define how we work. Lucas: And a reminder that the best product often doesn't fit neatly into a category. It creates its own.