This is one of the most difficult posts I’ve written to date. Seriously. Sooo many things I’d want to stuff in here. But, you know: it’s as much about what you put in, as it’s about what you leave out. So I’ll leave out how this has been an impossible company from pretty much the beginning, for a whole bunch of reasons. AdEspresso shouldn’t have existed. Period. Because according to lots of people, it’s impossible to make the switch from a service-oriented team to a product-oriented team. If you ever did it, investors don’t put money in something even remotely connected to the AdTech space anymore, so it’s impossible to raise funding.
Also, AdEspresso has been since the beginning one of the companies in the space with the least funding, and it’s clearly impossible to compete with lots others companies with more cash. It’s then impossible to manage a delocalized team and -almost forgot- it’s impossible to build great a company on a single platform (namely, Facebook). Not to mention: it’s impossible to scale a company by sustainably serving SMEs and SMBs, and particularly impossible to do it with content marketing (which notoriously doesn’t scale). BTW it’s of course impossible to scale a company with more than 0% net revenue churn, and it’s finally impossible to grow 10X Year-Over-Year.
Especially impossible to do it while being profitable. Except: a few weeks ago we published the Tweet below on having 67 months of operations covered at the current Net Burn, and now this post. Yeah, well… whoops! If you have been following us for a while now, you may remember that we published this around six months ago, reporting on how we have been growing 10X Year-Over-Year throughout 2014, together with our key takeaways on what we avoided to do it. We’re excited to report that six months later we’re still growing 9X+ Year-Over-Year compared to Jun 2014, having processed $2.2M+ of Facebook Advertising Budget in the last month.
We are the fastest growing company of the category according to Mattermark, as well as the company generating the highest number of Monthly Uniques of the space according to Alexa, even more than the enterprise guys -with one exception- which is pretty fun considering that some of them raised $50M and we raised just little more than $1M last year. BTW if we look at Net Revenue, June 2014 versus June 2015, it’s actually a 15X growth. For context: the minimum multiple for a tech company to be interesting is 3X Year-Over-Year, at 5X you’re exciting, at 10X Year-Over-Year (as mentioned above) you’re an outlier.
Ok ok, it’s not Uber… or Slack, or Zenefits. Still, pretty impressive for an impossible company. So, what will you need to get these results? I’ve got two answers for you. The short one is: coffee. Lots of it. So much in fact that we could quantify it: one box of coffee every $10k of RunRate. The photo below tells it all. Now, we’re *heavy* drinkers (we’re Italians after all) but coffee really stands for time. And to build anything meaningful, you need plenty. The long answer is -well- longer and, since Massimo was a Tech Journalist and I was a Radio Speaker, we know you love ‘listicles’. So here it goes: 9 bite-sized lessons which worked wonders for us and you should never forget.
- Cover the basics. An easy one, but sooo overlooked. Startups are hard (what a surprise, huh?); so the more you cover the basics, the more you can focus on what matters. On the basics, Sam Altman wrote an awesome post here. The problem with “what matters” is that it changes all the time, every day, often several times per day. So how do you decide what matters most? We use two fairly simple algorithms: “does this contribute to hit our Month-over-Month Growth goal?”, and if/when the answer is yes to several things, the following question is “which one requires the lowest effort and the shortest time to generate the biggest impact with the highest chance of success?”. Period.
- Do your homework. I hate to break it to you, but every company is fuck*d up in at least a major way. I’m sure there is at least one thing keeping you up at night too. So please please please do yourself a favor and have a “minimum viable company” set up, with all the key functions in place. We use 5 areas: marketing/PR, sales/support, product/technology, team/HR, finance/operation… not only to run the company but also as a useful framework for our investors’ updates (because you DO write them, right? More here). There will be things you don’t know. Welcome to the club. Study them, or hire somebody that knows how to take care of them for you.
- Know your superpowers. Dave McClure famously said: “a startup is a company that is confused about what its product is, who its customers are, and how to make money”. Beside that, I’d add that a winning startup knows three secrets: why this, why you, why now. Pretty much as in every sale… and after all you can see the making of a great company as the ultimate enterprise sale: with 4–8 years of sales cycle (a.k.a the exit) and millions of decision makers involved in the process (a.k.a. the customers). In our case, we wrote about our three secrets here. Fun fact: people read that GuestPost as an industry essay, but really it’s a big part of the reason why we exist.
- Have something to prove. Who doesn’t love an underdog? Everybody loves the ones challenging the system and standing for something different, against all odds. So, what do you stand for? If the previous point was all about the ‘why’, this is about the ‘how’. How you do things speaks volume about what you believe in and what you’re fighting for. For us? That the intersection of Inbound + SMEs + SaaS can scale successfully and generate venture-level returns without necessarily raising several tens of millions of dollars in funding. Or, to be more contrarian: that you can generate a $1B company with less than $10M in funding. We wrote about this as well here.
- Tell a kick*ss story. In the hyper-crowded and hyper-noisy world we live in, what you’re really competing for — before the money of your customers — is their attention. If you can win it, you’re halfway there. The companies that win most do it not because they have a superior product, but because end up being associated as the default solution for a specific problem. If you can be top of mind of the category, that’s a competitive advantage you have right there. An example? Search on Google for “facebook ads split testing”, and see what comes up. Of course, how you do it can be very different from how others do it. For us? As you may have noticed, it has been largely content.
- Details make all the difference. That’s how you build the relationship. Did you notice that Leo&Joel from Buffer have a little logo in their social profile, as Hiten Shah and Neil Patel had? Ever wondered why? It’s a low-intensity frequency that builds brand and confidence. Everyone of us in the team has a picture drinking from a cup of espresso (see here), and every post we publish has an image with a consistent style, for which we are recognized. Same story with the ‘coffee dude’ (which, now that I think about it, still has no name… maybe it’s time we gave him one). Also, remember this: attention to details is the ultimate form of elegance and respect for your customers.
- You’re either growing or dying. Really there’s no middle ground. And if you’re not improving your growth trajectory, you’re just “managing” the business. That’s an issue, because traction has a gravity to it. If you get to the point of adding 100 new customers per month (which is awesome), when you have 200 customers it’s +50% Month-over-Month, but when you have 1,000 customers it’s only +10%, so in just 9 months you’ll have lost 80% of the initial traction. Not good enough, sorry. If you look at our Revenue Graph, you’ll see 2 inflection points: a first one in July 2014, and a second one in February 2015. That didn’t happen by chance. We engineered it.
- It doesn’t get easier. But you get better. Our Revenue Graph seems all nice and linear, up and to the right, if we visualize the data on a monthly basis… but that’s not the reality. The reality is that every day you have to earn that, and it’s a grind. It’s difficult when things don’t work, and it’s difficult when things do work. You actually face harder problems, but you also earn more leverage. Because you will have more cash in the bank, more people in the team, more mentors in your network. You’ll do more mistakes as well. One example? We had a mega-bug preventing customers from creating new campaigns at some point (yeah, THAT bad). But you’ll have also more ways to compensate for them.
- Don’t be shy about who you are. Why TVseries are so much better than movies? Because they unfold across years in bite-sized chapters packed with so much stuff, leading to a climax that just leaves you begging for more. You become part of the story, you see the characters struggle and cheer them as they overcome their challenges. That’s true for startups as well. The people around you want to be part of something bigger, and they choose you because of who you are. Everybody loves a good story: find your way to stand out. Case in point, noticed the links included above? That has been -among other things- our way to tell it. More on this/us here, here and here.
Long story short, if there’s one thing you’ll take away from this: do everything you can to be the gorilla in the room. Even if it’s a tiny little room. It’s ok to start small, it’s actually better, and you can always tear down a wall or two and make it bigger. To do so, be so good that people can’t ignore you… or in other words: do not suck. And remember that great founders are not the ones that build the first company in the space, nor the ones that build the best company in the space, but the ones that build the last one. Tiny conceptual difference in the choice of words, huge operational consequences in what to prioritize and how to execute. Be that company.
As for us, after going for $0 to $1.2M RunRate in 15 months, let’s see if we can get to $10M in 15–18 months more. That would be another impossible thing to do, which of course makes it also a fun goal to target. How? Well, that’s a topic for another post… as maybe topic for another post is which strategies/tactics we put in place to generate/sustain growth so far, let us know in the comments if you want more of that. And if by reading this you got excited about our story and want to join us, reach out at email@example.com: we’re hiring. Online marketing should be easy and profitable for SMEs/SMBs as well, that’s where we are going. Stick around, it’s going to be epic!