Bootstrapped To €14m in ARR With Emeric Ernoult Of Agorapulse

Table of Contents

Emeric Ernoult, Co-Founder at Agorapulse joins Hammad Akbar in this episode of Launch Legends Podcast.

Key Stats on Agorapulse

  • Agorapulse ARR was 140,000 in 2011.
  • In 2013-2014, Agorapulse was adding €1000 MRR per month.
  • Broke even in 2015 and reached 100,000 MRR.
  • Now, it’s adding around 45,000 MRR per month.
  • €14m in ARR in 2020. 
  • Got 7000 customers.

Key Takeaways

  • Making a product does not matter, what matters is how you market your product.
  • Pivot to new ideas when the existing idea is not producing any result.
  • Realize that when you are bootstrapped, your product is always limited
  • Develop a saas software that a person in the company is using on a daily basis.
  • You move slowly when you are bootstrapped and have limited resources.
  • When you are bootstrapped, your growth is slow and you lose a lot of business to big players who have raised funding.
  • Customer churn rate helps you determine whether a business is sustainable or not.
  • Content and SEO are the major source of traction.
  • Attend conferences to build relationships which can be beneficial during a product launch.
  • Work hard in the initial years to reach out to a place where you want to be.
  • Building a good product is not enough, there should be a way for letting the world know about it.
  • The effort you put initially might not be enough at the later stage of the business.
  • Look at the growth and progress of the last six months to determine if you should continue with the idea or not.
  • If you don’t see the needle moving in the right direction then stop following the same strategy.
  • If you have been stagnated, another six months would produce the same result.
  • If there is a little bit of improvement, then keep going.
  • Don’t expect progress to be massive.
  • Think long term
  • What you will do today will determine where you reach in the future.
  • Paid marketing is not a solution when it comes to product launch.
  • Word of mouth gives better results when you are launching a new product.
  • You should be clear enough what is needed to get the results at a later stage.
  • Always reinvent yourself.
  • One has to be ambitious to grow.
  • You need to be different from others. 

Transcription

Hammad:

Thank you very much for being on the show. So Agorapulse, I know you told me you’ve got around $14 million in revenue, subject to exchange rate, because I know you calculate everything in euros, and you’ve got 7,000 customers and most of the customers are coming through your inbound efforts. So before we get there let’s talk about who you are and what you were doing before Agorapulse and why did you start the company?

Emeric:

Thanks for having me. I’m Emeric, I’m a French citizen born in New York. So I also have the US passport which makes me a funny beast because I’m both American and French, which is a weird mix. I started my career as a business lawyer in 1995. So that’s my background. It didn’t last for long because I did that for five years and started my first company in 2000 with my co-founder Ben, who is still my co-founder today. So basically Ben and I started this company, the company behind Agorapulse in July of 2000, 20 years ago. And, we’ve tried to be successful many many times, pivoting many different times as well, and eventually started the Agorapulse in November of 2011.

Hammad:

So Emeric, I am cutting you there. When you say that you are pivoting, what was the company you started in 2000. And what did you pivot to? 

Emeric:

It was a b2b SaaS already. It was called communities at the time. It did sound a lot like Facebook, but it was in 2000, it was in France, it was in French. So it was not a success. A lot of my friends keep telling me you invented Facebook for Facebook and I keep replying to them, the hundreds of people have invented Facebook before Facebook like Friendster, six degrees and Myspace.

So a lot of people had this idea that social networking should be a thing before it was a thing and I always wanted them, but it didn’t work. And I was too early, we had debates with my co-founder at the time about the word social network, he didn’t like it. We launched that at a time when social networking was not a thing and people didn’t agree on what it meant so that it tells you something. 

We did that until 2009, approximately. And, what we did in the meantime is we created a b2b Saas that was white labeled for brands. And that’s what we’ve lived with in terms of making revenue and money between 2001 to 2012. So basically we were customizing the affinities. That was the named solution, putting CSS, HTML, CSS, and different codes and SSO and that kind of stuff.

So a brand could create its own community of passionate people about anything or bloggers or stuff like that. An American company did the same thing. It was creating your own social network. That’s what we were doing. But we started that year before them.

And, I like to say that, Marc Andreessen was behind inc. And I like to say that I was as smart as Marc Andreessen as we both failed at creating a b2b Saas software that allows all people to create their own social networks and yeah in 2011, we were trying to sell this, build your own social network to brands.

And every brand I was talking to were like, nah, nah we go on Facebook and do something there. It was like an introductory 10 meetings like that. I told my co-founder that’s it, you know, we can’t fight Facebook. This thing is going to take over the world.

We heard do something on Facebook or we give up. I’m fed up of making little money. Just to give you perspective in 2011, our ARR was 140,000. That’s what I make in three days or four days right now. So that was my ARR back then. So it gives you an idea of, you know, how far we have come.

Hammad:

How much were you taking home at that time?

Emeric:

Nothing. I was not taking home anything. You can’t take home anything when you’re making so little money? My co-founder was getting a little because he was single and he had to. My wife was making some money and I had unemployment allowance for a while and I did other jobs on the side. So I always struggled for a long time.

It was years and years of being minimum wage, unemployment, side gigs. I did run companies for clients as a manager for several years where I was basically running their company from Monday through Thursday and doing mine on Friday, Saturday and Sunday. 

So that’s kind of that kind of like until we got somewhere, we have Agorapulse which broke even in 2015. And finally I was free.

Hammad:

Let’s talk about how you transitioned from your previous Saas company to this one. What was the product development strategy? How long did that take and how long before you actually achieve product market fit?

Emeric:

Well, you know, you have to realize that when you’re bootstrapped your product is always very limited, somewhat not great for a long time. so what the product looked like in the very early days, it was a Facebook contest and promotion. That’s what it was. And then, you know, we added a couple of components to reply to fake comments on the wall.

So basically it was only Facebook. It was mostly contest and promotion, because that was a big thing at the time. And we started making some money with that and we had some level of growth when we had some level of product market fit with that alone.

But then we realized that the customer churn was very high. Okay. What do we do? So the churn should not be too high because that was a point solution. Funny, you mentioned that in the conversation earlier we had. This book contest and promotion was not a system of record. It was a point solution and that’s not good.

So we said, how do we do, how do we become a system of record? We have to be the b2b Saas software that a job in the company is using on a daily basis, or at least on a weekly basis. What is this? It’s a social media management tool. It’s a tool where they go every day to reply to posts who do all that stuff.

Let’s do that. Who does that? Whose tweet was doing that at the time? SproutSocial was not even doing that because they were on Twitter only in 2012. Well it started as a Twitter only and then expanded to the other stuff. And we said, okay, we need to do that. So if we need to do that and stick to people, can they do that only on Facebook?

No, they’re not interested. We need to have at least Twitter. That was 2012. Again Instagram was not a thing, LinkedIn barely. And so we started to add Twitter to the mix and then it was okay, now we have Facebook, Twitter, what do you want? And then, they also want this and they also want that. And so in the early days when you bootstrapped, let’s say you’re 15% of where you should be to be a good decent legitimate player in the field of social media management tools, which is a system of record for social media managers or community managers and then because you’re bootstrapped your dev team is very very small. The dev team has been three people for a long time with three people between 2012 and 2013 for the beginning of 2014. So you move slowly because you have very little resources and your product is not perfect. 

So I would tell you we had product market fit for a full blown social media management tool, it probably was the end of 2016. That means that before that growth is slow it’s there, but it’s slow and you lose a lot of business to big players who have raised money and stuff like that.

So you have to be ready to be very patient. 

Hammad:

Emeric, a couple of questions. I mean, first of all, it’s amazing, you stuck with it for five years until you actually brought real traction, but it takes a lot of patience and you just have to stick with it. So from 2011 until 2012, you figured out that what you have in the Facebook contest is not going to be the sustainable business. My question is if it was customer feedback or you just figured out that, look, this is not gonna work.

Emeric:

We looked at the churn rate. We saw the churn number and we said, there’s no way this is a sustainable business 20% mrr churn every month. Ask anybody in SaaS they will tell you, this is Death row.

Hammad:

From 2012 to 2016 at that time, was the product sustainable? where it was paying its own costs, product development costs, and paying you guys as well or it was still the other business.

Emeric:

I paid myself minimum wage in 2012 and 2013. I think minimum wage is 1500 per month in France. I started to get a decent salary i.e 3000 a month, which is not decent. So in 2015, we broke even, we reached a hundred thousand MRR in November 2015. I remember very well. And we doubled our salary or almost like from whatever we were to 3035 and that we had decent money. 

Hammad:

Let’s talk about your growth. How were you driving leads? I know inbound. Was it working back then as well? 

Emeric:

Content content and SEO was 90% of it. Also, I think I’m pretty good at one thing, which is building relationships and building bonds with people. So I did travel a lot to social media conferences, especially in the US and I made a lot of friends, who became very helpful and those friends were influential. And so basically the one thing I understood very early on when we were making, I don’t know, 10,000 of MRR and we’re like super small and six people that I’m nowhere. I’m a loser. I’m not making any money. My business shit. My product is like everything shit, but I need to think about it in two years, my product will be much better. I’ll be in a different place. I’ll have much more to offer and at that time, if I have not worked in the past two years at building a way to let the world know about that, then I’ll be fucked because basically I will have a good product. I will have something to offer, but I will have no way of letting the world know about it. So that’s the most difficult thing you have to do as a founder, as an entrepreneur. You have to work very hard during these times where you don’t have a lot to offer because your product is not great or it seems very small and you have very little means if you’re a nobody. 

But you still have to work two years down the road, and that’s hard to do. Hard work now for two years from now. Like that’s always very hard. You want a result tomorrow? No, no, no, no work now for two years, two years from today, because two years from today you’ll have a decent product. You’ll have something to offer, but you need to have a system or a way to let the world know about it. So that’s why I put my butt in planes, went to conferences, built relationships with influential people. And when we had enough to offer, then I had reached out to them and said, Hey, I’ve never asked you to try my software.

Would you do that for me? Of course. I’ll do it. I’ll try software and then, Oh, it’s great. It’s amazing. I didn’t know it. Then he started to write about it and make videos and talk about it.

That helps a lot. But today it’s not enough. The level of scale we are at today that’s not going to help, it’s too small. But at the time it was huge. 

Hammad:

Just going back a bit, I always say that hard work is actually not that hard, but it gets super hard when you do the daily slog for months and months, but you’re not really getting any results. That’s when it gets hard, like really hard. But, it’s really interesting how you got through that really painful period and just really slog through and make sure that you got somewhere. And it’s quite interesting what you said about, okay. I looked at myself in two years and you started building those relationships because you knew your product was going to get there eventually and you would need those relationships. 

So that’s really interesting. So someone who’s listening to this and he is there where you were in 2012? They have a vision that is clear, but not so super clear and nothing really works at that particular time. I’m sure you were there and nothing works. there’s no money.  We can motivate them, but what’s the process they should follow to get to where you are right now or where you ended up. 

Emeric:

First of all, they have to decide if they have to stop or keep going. That’s the first decision you need to make. And there’s one thing you need to look at to decide If you have to keep doing, keep going or stop what you’re doing. Look at the last six months. And look at the growth. Have you had growth? Have you had progress? Are things going up and to the right direction even slightly ? 

Do you see that curve going up into the right direction month after month or not? If not stop it, there is no way the next six months are going to be different than the past six months. If you’ve stagnated, if you’ve put a lot of efforts into your business and full stagnation in the last six months, the next six months are going to be the same.

No question. There will be a little bit of improvement. Don’t expect the moon. It’s going to be small. It’s going to be slow. It’s going to be hard, but as long as it goes up and to the right direction, there is a hope. And you can keep going, That’s my criteria to decide if I pivot, if I stop or if I keep going. At the time in 2013, 2014, we were adding a 1000 MRR per month.

I mean, as of today, it’s 40K to 45K MRR. Just to give you the scale of difference. I’m much happier now than I was then, but at that time, 1000 a month was enough to keep me motivated. That’s the first thing. And the second thing is again, think long term. What do you need to do today to be where you want to be next year?

Because there’s very little you can do today to move the needle next month. Show me someone who has been successful and massively successful with very little money and a social product, Facebook ads or Google ads or anything paid. So usually paid is not the solution. Usually the solution is word of mouth especially when you’re bootstrapped. And again, I’m not talking about a sales driven, highly funded company. I’m talking about, you have a bootstrap business and very little means, and you’re counting on a great product and people talking about it. So you need to think about what I need to do now, and next month and the month after.

So a year from now, I’m in that place I want to be in a year, because usually when you’re bootstrapped and most of what you’re doing is organic. It’s gonna generate inbound attention. It takes a long time to build up like content, SEO, influencer marketing, all that stuff.

So you have to do now what’s going to help you get where you want to be in a year. It’s much harder than people think, because again, it’s hard to work today for something in one year as people want something in one week.

I want to click on Amazon and get it in tomorrow on my front porch. That’s how we all are. We want everything now. We want everything short term. It doesn’t work that way and you have to be in that mindset. That’s okay. I’m going to work hard today. It’s going to pay off in 2021 and that’s fine, but at least I’m clear or clear enough with what is needed, like what I should be doing now. So in one year I will be 50%, 60% above where I am today. 

Hammad:

Great. I know you’re rushing for some time. So one last thing, from 2016 till now, did you change anything drastically or you just did more of what was working for in terms of content? 

Emeric:

You always change everything drastically.

What got you here? Won’t get you there. It’s the single truth you should always live with. Basically. What took us from one to three didn’t work from three to six. What took us from three to 16?  Won’t work for six to 12. What took us from six to 12 is not going to take us from 12 to 25.

So, you always have to reinvent yourself because it’s a matter of scale, you know, if basically adding 3 million of ARR in three years is great but in my world today, it’s shit. So If I do now, what I did to go from one to three or one to four, if I do that now again, and again, and again, I’m just going to get three more million in ARR in three years, which is really, really poor, really bad.

Now I want to get 15 million ARR in three years. So you have to reinvent yourself all the time to go with the scale of what you want to achieve. Of course, if you want to scale, if you’re not ambitious and you’re happy with a 5 million ARR and that’s not growing, that’s fine. No judgment.

Everybody has different ambitions and wishes for their own lives and their own success. I’m ambitious, I want to grow bigger, I want to grow the business to a meaningful state and meaningful for me is way way above 14 million ARR or so. We have to keep reinventing ourselves, last year we added 3 million. What do we do to add five million next year or four and a half equity? What do we do differently? Of course there are the basics, a great product, great support. Like all these things. You have to be super good at them. Listening to the customer, understanding their real needs. Even the one they don’t understand themselves and all that stuff.

Customer discovery, all that stuff you have to do. And be very good at great design, great UI, UX, but all that stuff is a given. Once you have that, what do you do to be better than the crowd? And that’s always different. 

Hammad:

Thanks very much. Thanks for being on the show. And I hope I can speak to you sometime soon.

Thank you very much. 

Emeric:

My pleasure. Have a great one. 

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