From $0 to $6m in 18 months bootstrapped - the story of Expandi

As a bootstrapped company, Expandi managed to grow from 0 to $6m ARR in just 18 months. Here's Expandi's story.

From $0 to $6m in 18 months bootstrapped - the story of Expandi

This case study will discuss how Expandi grew to $6m in ARR in just 18 months.

The content of this case study is taken from the podcast episode I recorded with the Expandi founder - Stefan Smulders.

[Episode embed]

First 100 paid customers

Stefan figured one of the biggest problems of the people using lead gen and IP tracking software on their websites was to find an effective way to follow up with their website visitors.

So he made a list of prospects by scraping websites with IP tracking scripts and reached out to users with a potential solution of using LinkedIn to send follow-up messages to their website visitors.

He also approached marketing managers on LinkedIn to understand their most significant problems around follow-ups and prospecting.

The challenge

Stefan was testing Expandi in the Netherlands before going global.

But the problem emerged.

People in the Netherlands weren't accustomed to using LinkedIn as a sales/outreach channel.

So they were spending a lot of time educating their potential market.

First, they had to educate them on using LinkedIn as an outbound channel. Then they had to educate them (and actually sell) Expandi.

That's when Stefan realized that his first 300 paying users might not be his ideal customers after all.

He'll need to change his approach.

Fighting the obstacles

To get at least "some" money from the first 300 customers, Expandi gave out an annual payment offer along with helpful LinkedIn messaging templates and strategies.

60 members opted in for the annual offer, which generated $50k in revenue for Expandi.

Now they had money to test their idea global, with a better audience.

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Learning #1 - Even when you make mistakes, try making the most out of them. Oftentimes, besides learning, we can get more value from past experiences and failures.

Try looking at failures from different perspectives and see what can you make out of them that will bring the biggest business value.
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Learning #2 - To get more annual subscriptions, try making your offer irresistible. In this case, besides giving a significant discount, Expandi also offered exclusive educational collateral (templates and strategies).

To have a mind-blowing offer, the price should be at least 10x of value your customers get.

After the feedback of the first 300 customers, Stefan decided to define his ideal customer needs in a better way.

Since he was an agency owner himself, he started Expandi because:

  • He faced many challenges with automation tools in terms of safety
  • Many of those tools were not appropriate for managing multiple accounts as an agency.

So he decided to only focus on agencies and growth hackers.

Agencies and growth hackers were already managing multiple profiles using LinkedIn and automation tools.

This cut down the education burden for Expandi and made it easier for them to sell their service.

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Learning #3 - It's essential to go through a lot of trial and error in the company's first few months. Embrace it. It makes you even stronger.
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Learning #4 - It's okay to do things that are not scalable at first. What's important at the beginning is to learn as much as you can about your target audience. Doing things that scale will come later.

The journey from 100 to a 1000 customers

Now when we understand Expandi's path to the first 100 customers, let's see what happens next.

How did Expandi launch globally, and what were the main growth channels they focussed on initially?

Expandi launched globally in mid-November 2019.

There were a few things the team did pre-launch to prepare for the big event -

  • 💎 The Expandi team scraped a list of prospects from Facebook groups of their competitor tools.
  • 📚 They used tools like TexAu to convert email addresses into LinkedIn profiles.
  • 📝 The team then used its tool to reach out to these people on LinkedIn to build relationships and learn from each other about outreach.
  • ❤️ The team also asked for feedback on their tool.
  • 🔺 The feedback of these people was used to create a comparison page between Expandi and its competitors.

As a result of this "feedback sequence", Expandi got over 500 demo calls through this experiment.

The experiment was later turned into a DIY guide for those who wanted to scrape leads from Facebook Groups and reach out to their potential audience on LinkedIn.

This guide also garnered a lot of attention on LinkedIn, leading to more follow-ups and demo calls for the company.

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Learning #5 - Don't sell your product. Instead, build relationships with your potential prospects and the sales will come.

If your product is offering more value than what they're currently getting from other vendors, you're already more than 90% there.

Use of micro-influencers

Stefan created a list of micro-influencers talking about LinkedIn and used his tool to send out customized messages to each asking for their feedback.

Eventually, some influencers became very good friends with Stefan, which led to Expandi being backed by some popular names in the industry.

🗒️
Note #1 - When I was working for lempire on the lempod project, we had a great partnership with Stefan.

At that time, lempod was the owner of the largest community of LinkedIn Growth Hackers on the web (12k members total).

Stefan was a really active participant, and I remember he was getting a ton of leads from there.

What are the two main growth channels for Expandi right now?

At the moment, Expandi relies on content and partnerships to grow its user base.

Expandi focuses heavily on content production and distribution. It has more than 60k unique visitors on its blog every month.

Besides that, they also have a lot of exciting affiliates and white label partnerships.

What's the process behind content creation and distribution for Expandi?

Initially, the team did not focus on any SEO-optimized content. They just tried to fill the content gap and provide value by offering solutions to the burning problems their potential customers experienced.

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Note #2 - If you're following me on LinkedIn, you would probably notice that I'm a huge advocate of doing ICP research before starting your content marketing efforts.

It's of paramount importance to find a content-market fit before investing seriously in content marketing.

This way, you get to deeply understand your potential customers' burning problems and desires, so you can later properly address them inside your article and get conversions.

Here you can find my go-to framework for doing ICP research.

Stefan realized that although there were tons of competitors in the market, they all focussed on producing content to promote their tools.

Still, nobody was covering the strategies and guides users can execute to level up their LinkedIn game.

Stefan grabbed this opportunity and created detailed guides and strategy articles and shared them on relevant LinkedIn and Facebook groups through his profile.

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Learning #6 - The best content is the content that solves your potential customers' problems.

Make sure to write actionable content full of golden insights. This will build trust with your market and position you as a thought leader.

Later, he also invested in creating SEO-optimized content.

It was done manually at first when it came to the distribution of content. Stefan engaged with growth hacking communities and Facebook groups, answering all queries and questions.

And to this day, the Expandi team still follows up manually to each interested user on Facebook, although they have narrowed down the number of groups they engage in.

LinkedIn events are webinars are also part of their content marketing strategy.

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Learning #7 - Content marketing is much more than writing blog posts. The distribution also plays an important role.

If you do the ICP research I mentioned at the beginning, you will exactly know where your dream customers congregate on the web.

This is your place to shine and get website visitors quickly, so you can see whether your content marketing efforts work or not.

What is the process behind growing and managing the affiliates of Expandi?

A couple of hundred people have signed up as an affiliate for Expandi.

Expandi has a basic affiliate commission of 25% for the first month and a 10% commission on recurring payments every month.

Stefan tries to engage personally with the affiliates; he also shows up to sessions of courses created by the affiliates of Expandi to share his knowledge.

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Learning #8 - Look at your affiliates as your partners in growth. Give them the best fee incentives on the market.

Create content with them. Engage with them and their audience.

Ambassadors of your product and influencers in the niche are one of the best (and quickest) ways you can use to grow your customer base.

How to connect with influencers in your niche and build relationships?

Check for common connections so they can help you make an introduction.

You can find most influencers on LinkedIn these days.

You could also try and reach out to them on Facebook.

Try to warm them up by engaging with their content a couple of days or weeks before you're planning to reach out to them.

This will drastically improve your open and reply rates.

Stefan always prefers to make a warm intro or send a personal video.

Personalized videos are harder to do at scale, but they are highly effective.

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Learning #9 - Create a list of your dream partners. Engage with their content. Build great relationships with them by creating mutual pieces of content.

Go with quality over quantity. Go the extra mile to secure those partnerships.

Do things that don't scale. Send personalized videos to better engage with them and build trust. In the era of AI and automation, your potential partners will appreciate it.

What advice would Stefan give to himself if starting Expandi from scratch?

Go to the market as soon as possible. Even if your software is a little buggy or has some issues, it can always be fixed later.

It would be best if you gained feedback by going into the market.

Even if your first users are not your ideal users, they might become your ambassadors. People are always happy to be a part of something extraordinary.

Also, making a community is extremely important. Start a community from the very beginning of your software's journey.

Even a small closed group of like-minded people providing feedback about your software is always better than having no feedback at all.

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Learning #10 - Build the user-first product. Your opinions are irrelevant. Try collecting as much feedback as you possibly can.

How to create an engaging community if there are no customers?

Try to start a group on a personal level. For example, for everyone who joins your group, send them a small 20-second welcome video, welcoming them to the community and asking them if they have any queries.

To add more people to the group, know your audience first and target people on Linkedin and Facebook. Engage with their content on relevant topics and build a real relationship before inviting them to the group.

To engage the community, you could host webinars about upcoming features.

Share helpful tactics and make sure to always ask community questions.

What is one book that transformed Expandi?

Stefan doesn't read many books; he consumes a lot of information through blogs and articles.

One book he recommends is "Predictable Revenue" by Aaron Ross.

But the essential learning in Stefan's journey has been talking to other founders and receiving their feedback.

The Bottom Line

You don't need to have everything figured out to build a 6 million dollar ARR software business.

Just get started as soon as possible and be receptive to the market's feedback.

Also, don't ignore the power of one on one relationships. They will go a long way in building and growing your business.

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