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So here we are, launching Layer to the public after years of blood, sweat, and tears. What a ride it has been with all its highs and lows so far, and we look forward to a lot more to come in the future, even with the usual curveball or two.

Instead of talking about what features we shipped or why you should check out our tool, we thought we would take the chance to take a walk down memory lane, share with you some insights on why we started Layer in the first place, and our learnings from the past three years.

The beginning

Moritz ten Eikelder and I met while working at Helpling back in 2014. We always threw around startup ideas, but it was only in mid-2018 that we started to get serious about starting a company together. And it all began with the forecasting process, which Mo was responsible for—distributing Excel templates among 20+ team members, collecting their inputs, and consolidating it all.

Clunky, error-prone, and time-consuming, Mo hated it. So we circled and kept coming back to this process during our ideation phase in the summer of 2018 and quickly came to a decision. We wanted to free anyone who deals with spreadsheets frequently, literally hundreds of millions of people, from menial tasks or tedious processes like the ones Mo had to manage.

The solution? A collaboration platform for spreadsheets that works on top of existing files addressing the shortcomings of Excel and Google Sheets without forcing the user into a new tool. Limitless applicability and use cases worldwide leveraging the most well-known interface for quantitative work and unrivaled market penetration.

Hell yeah, let's do it!

Introducing Layer 1
Finplan, the first prototypes of Layer

Building the MVP

The first thing we did was build our first prototype with a Ukrainian Engineering Agency to validate our idea with spreadsheet power users.

Our conviction grew with more incoming feedback, and our concept started to take form. Our first pitch deck followed, which was pretty clunky, if I say so myself, for what was back then called Finplan.

We teamed up with our CTO and started our first fundraiser. We were excited to raise just north of €1M from btov Partners and several high profile angels, including Felix Jahn (Founder and CEO at McMakler GmbH) and Max Tayenthal (Co-Founder and Co-CEO of N26). We were also lucky to pick up two additional Co-Founders along the way to take over our product engineering leadership; Ernests Karlsons as CXO and David Barnowsky as CPO who have known each other for a long time as well. Together they have started and exited companies, advised some of Berlin’s most successful startups on engineering topics, and built their own UX agency.

"Sharing the passion for boosting workplace productivity and the joy of building and working with ambitious and driven teams was the perfect combo for me to join forces with Constantin and Moritz to make it our journey, introducing an entirely new way of spreadsheet collaboration.

Knowing Constantin and working with Ernests for almost a decade made me feel confident that together we can endure and also grow in difficult times during the early years of our venture."

Dave, Co-Founder and CPO at Layer

With money in our pockets and a complete founding team, we were good to go!

Introducing Layer 2
The first pitch deck for Layer

Laying the blocks

We needed to get from 0 to 1, building a novelty application in a category that didn't really exist. We kickstarted hiring and product design, laid down the architecture, and ignited demand generation for the beta version of our product—all on a very tight timeline.

First convertible note

In late summer 2019, as the product started to grow and the workload grew along with it, we realized that we had a need for additional firepower on the engineering side. We needed three more senior engineers, and for us to be able to hire them, we needed more money not to shorten our runway too much.

This is when we truly appreciated what great investors we had partnered with during our pre-seed round. We swiftly closed an internal convertible note, giving us enough additional cash to keep investing in our product and our team.

Difficult decisions

Building a startup is essentially taking one decision after another, often based on very few data points and a high degree of insecurity. One of the toughest decisions we faced during our first year was parting ways with our initial CTO.

We had a fragile young team that barely worked together for six months and needed solid technical leadership. However, the rift between us co-founders had gotten too big to fix. As a result, we had to sit down at the notary for a second time that year, but, this time, for a less enjoyable occasion.

It was shortly before Christmas, and it wasn't pretty. However, as a founder, you should expect to face these difficult choices with no easy answers. Sometimes you have to put your emotions aside and think about the overall picture and what's best for the company and everyone involved in the long run.

First traction

One of the most exciting moments in every founder's journey is when you put the product in the hands of users for the first time... but we built a novelty product in a category that did not exist.

Of course, there was no guarantee that anyone would be interested in the product we had envisioned. So seeing real people trying out the tool with increased engagement overtime was a combination of joy and relief.

While most people will tell you that the world needs what you are building, only a few will proactively support you and give your product a spin. And while that may be a bit disheartening to learn, it only drove us to push further to get our product in front of more and more people and start building and nurturing our own community ourselves.

Fundraising during a pandemic

April 2020 - The pandemic had just started, the world went into a state of uncertainty, and investors were busy putting out the fires within their portfolios. Most were hesitant to make any new investments, and we only had enough funds to last us a few more months. We had no choice but to go out and try to raise our seed round amidst the chaos.

While it might have been frightening, we were up for the challenge, and luckily, things went well. We signed a term sheet with Index Ventures only a few weeks later. We were also able to convince several high-caliber angel investors to join the round, including Ajay Vashee (General Partner at IVP, Former CFO at Dropbox) and Matt Robinson (CEO at Nested).

Rebuilding the blocks

We were extremely pumped after our seed round and wanted nothing but to plow away and put the additional funds to work. However, it seemed we were once again standing at a tactical crossroads. We needed to increase our product velocity, and in order to do so, we had to simplify our architecture. It was too complex and over-engineered.

The next phase was strenuous. We refactored significant parts of our app and ended up at a standstill for two months, where we couldn't release or barely work on any new features until we could slowly but surely reap the rewards of our simpler architecture.

It's definitely nerve-racking not to be able to present any tangible progress for several months to new investors that have just joined on board, especially at an early stage when you're fighting against the odds to prove your product's worth. However, in hindsight, that was the best thing we could have done and should have done even earlier.

A war for talent

We had heard it from everyone even before we started. Hiring great talent is hard... very hard, especially when you have no brand, product, customers, or visibility. Why would anyone even want to join? In addition, the rise of remote work meant that we didn't just compete within the Berlin market but the European and global talent market, really.

It took us a while to assemble our first core team, and still, not everyone we bet on made the cut in the end. You truly have to find something to stand out early on.

For us, it was our Open Culture Guide which was our first employer branding initiative, and that helped tremendously not just with recruitment but also with showcasing our team and culture.

Biting off more than we can chew?

Building a web app that sits on top of Excel and Google Sheets and leverages tools already used by hundreds of millions of users to keep adoption barriers as low as possible... Sounds like a smart approach, right? It may be smart, but it is definitely highly complex.

We had to learn the hard way that every Excel file and Google Sheet is different. Developing support for features like data validation, charts, tables, and external data sources is a massive undertaking, to say the least. And with the ever-changing nature of the tools and continuous updates, we know that we may never be able to fully support every single file coming our way. Still, we're always working on and implementing innovative strategies that would allow us to get as close to complete coverage as possible.

Signs of success

Is this whole thing a painkiller or a vitamin? While we were convinced that Layer solves a big problem, you can't know for sure until your users are actually paying to use it.

Some residual doubts remained, and we were nervous when we entered the pricing discussions with our early users. The conversations went very smoothly, and, surprisingly, there were no negotiation attempts either.

Are we charging too little? Maybe. But while we aim to identify a price point that would be best for users and wouldn't discourage leads, what was more critical was gauging the user demand and need for the product as an integral part of their organizational processes.

The dream team

After three years and our initial hiring and team challenges, we were finally able to build the team we always wanted. Today, we are proud to be a hybrid company and a diverse team, with many of us of various nationalities based in Berlin but others also living in other places all around Germany, Portugal, Spain, France, Poland, and India.

Every three months, we all come together in Berlin to spend quality time in person. And boy, do we have a great team. You could feel the energy and high spirits everywhere we went. Jokes, sophisticated talks, hard work, inquisitive questions, and an overall feeling of camaraderie.

It makes everything we had to go through, and all the challenges surpassed to reach this point gratifying. It feels special.

Introducing Layer 5
Layer then and now

Adding a Layer of collaboration

So now, here we are, launching Layer so more people can join us on this journey. And while putting everything you've worked tirelessly on for years out there might be slightly anxiety-inducing, we're more excited about seeing how Layer can help more and more teams and companies. There will always be more uncertainties in the future, but one thing I'm certain of is that we can take any challenge head-on and come out on the other side better and stronger than ever.

Finally, we would like to thank our team, users, investors, and all our early supporters who helped make this possible. Nothing makes us happier than seeing spreadsheet users and teams rely on Layer to manage their processes in Finance, Marketing, Project Management, Sales, Management, and Human Resources, and we look forward to working with and catering to even more use cases. We're excited to be entering this new phase on our journey to build the connective tissue of spreadsheets.

P.S. We're live on Product Hunt today and would appreciate your support!

Constantin Schünemann
Constantin is CEO and Co-Founder at Layer. Originally published Apr 26 2022