How Drift Ditched Lead Forms and Built a $1B SaaS Giant

The Beginnings of Drift

Drift— a chatbot and live chat company was founded in 2015, by the duo David Cancel and Elias Torres. Both founders had experience in marketing as Cancel worked as the Chief Product Officer at Hubspot and Torres was the VP of Engineering at Hubspot as well.

Cancel’s lightbulb moment came during the early stages of the internet when he received an email from a stranger from Russia who had seen his website. That was the first time he experienced a feedback loop—creating something, a stranger finds it, uses it and gives feedback on it.

Having experienced that feedback loop, Cancel became hooked on the idea of being able to help businesses build a connection with their customers which he implemented at Hubspot.

Cancel and Torres saw that the marketing space was saturated with companies like Hubspot that focused on email marketing.

So, with decades of experience in B2B software and growth strategies, the duo set out to create a whole new category of marketing—Conversational Marketing.

🔑 Key Takeaway: Identify gaps in what companies overlook and capitalize on those opportunities to offer something better and gain a competitive edge.

The Strategy That Fueled Drift’s Growth

Unlike many startups, Drift didn’t try to compete in a market filled with large competitors like Hubspot or Marketo. Instead, they created a whole new market—Conversational Marketing.

By inventing and owning the term Conversational Marketing, Drift stopped competing with existing tools and made everyone else play by their rules.

Here’s how they made it work:

• 📖 They wrote the book—Literally. Their “Conversational Marketing” book became the go-to guide for businesses looking to improve their sales process.

   

• 🎙 They launched a top SaaS podcast—The "Seeking Wisdom" podcast, hosted by CEO David Cancel, positioned Drift as a thought leader.

• ✍️ They flooded the internet with content—Instead of selling features, Drift focused on educating people on why chatbots were the future of marketing.

• “Powered by Drift” Branding— Every free Drift chat widget on a customer’s website had Drift’s logo and link. This exposed thousands of new users to the product every day—without paying for ads.

🚀 The result? Instead of competing with HubSpot and Marketo, they made those companies look outdated.

The Monetization Strategy That Made Drift Millions

Drift monetized by using the Land and Expand Approach—starting with a small initial deal to secure a customer and then increasing revenue by upselling, cross-selling, and deepening the relationship over time.

The majority of Drift’s revenue didn’t come from small businesses, it came from enterprise deals.

Here is how they used the land and expand approach:

• Drift didn’t just have a simple free vs. paid plan—they built a multi-tiered model that scaled with business size

  • ✅ Get small teams in the door for free

  • ✅ Monetize growing businesses with mid-tier plans

  • ✅ Charge enterprises top dollar for custom solutions

• Built deep CRM integrations with Salesforce, HubSpot, and Marketo—making it impossible for large companies to switch.

  🚀 The result? Drift captured revenue at every stage of a company’s growth.

🔑 Key Takeaway: The best SaaS businesses don’t just attract users—they create a product so essential that customers can’t leave.

Key Takeaways For Founders

• ✅ Create demand, don’t chase it – Drift invented Conversational Marketing instead of competing with existing tools.

•  ✅ Make every free user a marketing channel – The "Powered by Drift" branding drove free word-of-mouth growth.

•  ✅ Enterprise sales = serious revenue – Small businesses help you grow, but big contracts drive profitability.