How an AI sidecar product drove 30% of sign-ups
Eraser's founder on building and growing DiagramGPT
👋 Kyle here with the 93rd (!) edition of Growth Unhinged where I explore the unexpected behind today’s fastest-growing startups.
Previously I tackled the rise of ungated products, i.e. products that you can immediately try out, no signup required. These loginless products — like Excalidraw, PhotoRoom, Durable, Colossyan, or Rows (which their Head of Growth wrote about here) — see 2-3x as many folks start using them compared to traditional freemium or free trials. More folks reach their aha moment, too, since users only create an account after they’ve experienced value.
Eraser founder Shin Kim is raising the bar with an ungated AI sidecar product, which has become Eraser’s biggest growth driver (it accounts for 30% of new sign-ups) and transformed how he thinks about product development for AI features. Shin reflects on what they did and what you can learn.
Eraser — a documents and diagrams tool for engineering teams that I founded in November 2020 — has grown rapidly, with sign-ups scaling by 20x in the last year.
We focus on serving developers with targeted features like diagram-as-code and GitHub syncing being central to the product. And we have a track record of trying less-explored growth strategies such as virtual office partnerships and an ungated product experience.
In May 2023, we released a sidecar product called DiagramGPT, an AI tool that can generate diagrams from natural language or code snippets. I wrote this post because I wanted to share our experience with other software teams that have built internal LLM-powered prototypes but are struggling to figure out next steps. It’s a case study reflecting on what our team did and learned, and ultimately why your team may also want to build an AI sidecar product.
According to OpenView's forthcoming 2023 SaaS benchmarks report, 46% of SaaS companies launched AI features over the last year and another 31% are actively building or testing AI features. In other words, more than 3 out of 4 SaaS companies have had or currently have AI R&D initiatives.
However, the bar to integrate anything into an existing mature product is usually very high. Two resulting failure modes are:
The AI prototype loses steam going through endless iterations
A significantly scoped down version gets shipped to test the waters but fails to generate excitement from customers
As we show in the example of DiagramGPT, there is another path forward. A sidecar product can be a mechanism to deliver a bold, undiluted vision of an AI feature to users quickly. It will generate qualitative and quantitative feedback that can help bring the AI feature into the main product. And of course, if it grows legs, the sidecar product can become a reliable organic user acquisition loop. DiagramGPT accounts for 30% of sign-ups for Eraser today.
Building DiagramGPT
When we got our hands on GPT-4 like the rest of the world in the Spring 2023, it was soon clear that LLMs were finally smart enough to generate diagrams. We were able to input natural language or code snippets and output beautiful diagrams. The early results were compelling enough that I decided to fly to Boston for a week to collaborate with our Founding Engineer, Yoel Tadmor, and kick off a new AI project.
On the first day, we discussed whether the generative diagramming functionality should be a product feature or its own sidecar product. We quickly settled on the sidecar product because we did not want to burden it with the craftsmanship that goes into building features in our core product. We wanted to find a footing in the quickly shifting LLM landscape, and the best way would be to ship something as soon as possible.
Despite focusing on speed, we still made sure to create moments of delight for the user. For example, instead of just showing a spinner while the diagram is generated, we created a streaming experience where interim outputs are rendered frame by frame. This made the waiting less dull for the user and the product experience more dynamic.
Another explicit decision was to create a separate brand identity called DiagramGPT for the sidecar product. By not calling it Eraser AI, we gave the sidecar product enough distance from our main brand such that we'd have no problem moving on from it if it flopped. We also built DiagramGPT in dark mode despite our then light mode website and even crafted a slightly different logo.
Launching DiagramGPT
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