How to Bootstrap to $5M ARR in Less Than a Year

Building a new business in a crowded space with already established competitors can be quite nerve-wracking, to say the least. Market fluctuations, rather than stability, are often the norm, and it’s hard to feel like your brand will have a place in it all.

If you’re starting out in an already crowded market, this next case study should give all founders some confidence. Flodesk, an email marketing platform, bootstrapped to $5M ARR in less than one year. And we all know the world could really use another email marketing software, right? So how did they do it?

Their CEO, Martha Bitar, shared a few secrets to their success with us. 

Secret # 1: Choose your customers

Bitar stresses you must first know for whom you are building your product, whatever it may be. To validate your customer-related assumptions, you must first understand their needs and their pain. Flodesk “picked” customers they understood and did a deep dive.

Secret #2: Develop a workout routine 

We’re not talking hot yoga here. Bitar said Flodesk’s ability to develop a system of customer interactions was primary to what propelled them forward at such a fast rate. Here are some of the actions they took :

* Talking to current and potential customers one-on-one all the time. And asking, “Why?” 

* Scheduling weekly calls with churred customers. And asking, “Why?” 

* Hanging out where email marketer types spend time — i.e., Facebook groups and other forums, for a sense of what they were thinking and discussing. Bitar said they took this so seriously they made their own Facebook group part of the company’s R&D.

Secret #3: Focus your team around the customer experience

After your workout routine is established and you’re cultivating group and forum-type research, you will be better able to focus your team around customer goals. Bitar said they like to talk with customers who recently joined Flodesk and those who recently left and ask both, “Why?” 

What a customer thinks they need versus what they need might align, or not. Bitar said Flodesk found a lot of their customers were feeling stuck in the age of COVID-19. Some were brick and mortar but had to move online once the pandemic hit. Flodesk developed COVID-specific templates that became some of the company’s most requested.

Secret # 4: Aim for customer-led growth

How you capture customers’ attention and convert them from customers to fans will be crucial to your growth. Bitar said the business world in the past offered mostly sales-led growth. Currently, it’s product-led, and the future will be customer-led. Customers will no longer want to be “sold” but rather be “shown by others like themselves.” She said the Flodesk team focused on the ideal experience of their ideal customer, knowing those people would go out and tell others, i.e., Instagram, and the result would be customer-led company growth. 

Secret #5: Realize customer and company goals can be aligned to serve both

For Flodesk, it started simply. Customers wanted a tool to send emails. Flodesk wanted new customers but knew there were several other options around. Customers desired the ability to edit templates to make them on-brand. Flodesk wanted to provide customers with that, but they also focused on giving them an “aha” moment, something they wanted, but in such a way they had not seen before.

Consider what happens when you experience such a phenomenon with a company. You rush to tell others. By choosing Flodesk for their email marketing plan – to send emails to their audience – Flodesk’s customers initiated a viral loop for the company. As customers grew their lists, Flodesk grew its viral loop. The customers made money, became fans, sent out videos proclaiming their satisfaction, and Flodesk was able to retain more customers and drive up revenue. 

Secret # 6: Don’t underestimate the power of small voices

For Flodesk, small voices have been the core customers. Secure them by including them, Bitar said. Facebook groups can help by allowing customers to share problems and solutions about your product with others. You can strengthen your relationship with satisfied customers and avoid churning by putting the two groups together to share their experiences. 

If your company aspires to see the kind of rocketed growth Flodesk has enjoyed, stay patient and focused. You will sometimes miscalculate. You may lose customers along the way. But if you keep looking to the horizon, you may see yourselves out there one day.

Published on November 6, 2020

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