SaaS Scaling Secrets
The SaaS Scaling Secrets podcast reveals the strategies and insights behind scaling B2B SaaS companies to new heights. Dan Balcauski, founder of Product Tranquility, leads conversations with successful SaaS CEOs, exploring their challenges, triumphs, and the secrets that propelled their businesses to the next level.
SaaS Scaling Secrets
The Surprising Strategy that Created a Six-Year Competitive Edge with Emeric Ernoult, CEO of Agorapulse
Dan Balcauski talks with Emeric Ernoult, the CEO of Agorapulse, a social media management platform. Emeric shares his journey of scaling Agorapulse to serve over 8,000 customers across 140 countries. The discussion covers the importance of constraints in driving innovation, differentiating products in a crowded market, and navigating the competitive landscape. Emeric elaborates on the pivotal innovations, such as the social media inbox, that set Agorapulse apart, as well as the challenges of moving upmarket. He also touches on his experiences with bootstrapping, and the necessity of hiring the right talent. The episode concludes with personal insights on managing stress and plans for AI-driven product development.
01:06 Emeric Ernoult's Journey with Agorapulse
02:12 Navigating a Competitive Market
05:20 Innovative Approaches in Social Media Management
17:32 Challenges and Realities of Bootstrapping
22:59 Taking Chips Off the Table: Secondary Funding Explained
24:12 The Importance of Taking Risks
25:03 The Reality of Entrepreneurial Fear
26:16 The First Major Pivot: From Facebook Contests to Social Media Management
27:02 Mini Pivots and Pricing Strategies
34:59 Building a Mid-Market Go-To-Market Team
42:03 Coping with the Challenges of Running a Company
Guest Links
someone innovates. It's never obvious on day one that this innovation is gonna change the game. one beautiful thing about bootstrapping a business is that constraint forces you to do the right thing, when you have a ton of money the lack of constraint pushes you to do a lot of the wrong things. constraint was the forcing function to do things differently. I think no human being on earth is shielded from fear. We all feel fear. There's no exception. And my lesson from that is that there are areas where you have to innovate. And there are areas where you absolutely should not innovate and you should do what people are used to see and used to use.
Dan Balcauski:Welcome to SaaS Scaling Secrets, the podcast that brings you the inside stories and the leaders of the best scale up B2B SaaS companies. I'm your host, Dan Balcauski, founder of Product Tranquility. Today I'm excited to welcome Emeric Ernoult CEO of Agorapulse, a social media management platform that helps marketers prove social media's impact. With measurable, ROI, Emeric has scaled Agorapulse to more than 8,000 customers across 140 countries. Emeric, welcome to the show.
Emeric Ernoult:Dan, thank you for having me. I'm excited to have this conversation with you.
Dan Balcauski:The excitement is shared. Before we dive into your scaling journey, it gives the elevator pitch. What does Agorapulse do? Who do you serve?
Emeric Ernoult:Agorapulse helps businesses and agencies who do social media for businesses to. I. Measure to get everything social media in one place and measure if it works or not. Basically helping them prove the value of their work. That's the super short pitch. I think everybody didn't understand social media and social media management. Everybody has been exposed to the buffers and hoot suites so they understand the centralization. So I don't think we have to, I have to sell this anymore. What I love to sell is that beyond the simplicity and the simplification of your, of the job we're bringing the. The measurement of how valuable that job is. Like how what value, what business value it's creating for the business.
Dan Balcauski:Yeah, I, and I imagine that, that journey has changed over a while from, probably when you started over a decade ago to, to now where, folks probably didn't understand what. What these platforms were. You did mention a couple of well-known competitors and there's a long list of others and I imagine that creates challenges of its own, I guess,
Emeric Ernoult:oh
Dan Balcauski:just focus on that competitive space. Like, has it been that way since the start or has it gotten more and more of a red ocean as you've grown?
Emeric Ernoult:Oh, it's gotten more and more of a red ocean as we grew for sure. No question. It's, it is a red ocean today. It's, this industry was hard in 2012 till 2018. 19 but so many smaller companies is, because it felt easy and fun Between 2016 and 2020, that now is a complete red ocean. Yeah.
Dan Balcauski:So I'm curious, given those dynamics I mean, how do you think about making headway in such a. Crowded market. I mean, I think this is a situation that a lot of SaaS founders are finding themselves in. We may touch on AI later, but, the ability to sort of, build software seems to be getting easier and easier. And what maybe seemed like, oh, we've got this lead on this, market all of a sudden folks are fighting themselves with sort of 10 competitors in the space, all of a sudden what might be overnight? How did you think about. Okay. Given the constraints of the market and all these people, like ostensibly offering what, to a novice or naive buyer might look the same, how do you think about making your mark within that market?
Emeric Ernoult:Yeah. That's a great question. First of all, you win by. Product or by go-to market. Those are the two ways you win. You win by having a better product or a different product, or you win and or you can, it can, you can combine both obviously and or you win by having a better go-to market than the competition or a go-to market that they ignored or they left alone or they underinvested. And my view for my business is that obviously the product has to be great. That's a given in my space. If your product is city, people are going to notice, but is by having a better go-to market in the specific verticals that we've identified and the specific geographies that we know we're already strong in, we can win in our market. There, there's no way we can win at everything. So we have to choose the geographies and the verticals that we are already doing good at and focus on these in in, in a very effective way.
Dan Balcauski:So.
Emeric Ernoult:So that's a, it's a hard thing to do and it takes a lot of talents and I've made a lot of mistakes trying to hire for those talents. But that's my take today. We're gonna, we're gonna keep thriving because our go-to market is gonna be more effective than the others.
Dan Balcauski:As you think about, I guess you could take it, either the go to market or the product approaches that you mentioned. Were there any creative or unconventional approaches that you took given this com highly competitive landscape that you think helped you in either of those domains?
Emeric Ernoult:Yeah. In 2014, we invented the concept of a social media inbox when nobody was doing.
Dan Balcauski:I.
Emeric Ernoult:An inbox for their social media, incoming comments and dms and PMs, and all these incoming social content. We were the first company in the first product to come up with an inbox like way to treat incoming content from social media. else was doing a bunch of Collins, Hootsuite was doing that tweet deck was doing that. everybody else was doing that, and it was very chaotic and very messy, and we looked at that and said, this is a problem. And we looked at other ways to treat incoming content that everybody was using. It was email. It's incoming content as well that you have to reply and mark as view and basically handle and sometimes handle as a team. we decided that it made sense to treat incoming social content like we treated emails. And really between 2014 and 2020, that was the thing that made us go from zero to 10 million of revenue. Because nobody else was doing that. Sprout copied our inbox in 2016 and Hootsuite copied our inbox in 2019, so it took them six years. So we had this edge on the competition by having something unique and special that nobody else was doing well. So if you had a brand that had a lot of engagement and a lot of activities and their social profiles. Really, we were the best solution on the market. And so we had this very unique value prop that of the market didn't care about because most of the market back then only cared about posting and publishing and boom, boom, boom. And so the buffers and the Hootsuite were doing that really well. And we were not doing that really well at the time, at least for the mark, for the ones in the market that needed this. duty. There's all this engagement and all this content I need to handle, especially with a team. We were the best solution on the market and still I believe, the best solution on the market for that need because we've we've continually improved it and today we have very deep and strong inbox processes and workflows that nobody else has. it's it, it's not a unique thing anymore because everybody has an inbox. So that was the thing between 2014 and 2020. Since 2020, obviously as the founder. The co-founder I've been obsessed about this. How do I create that again? Like, what is the product thing I can create that makes us look different? And also that makes us tell a story that feels different. And we developed a social media, ROI. tool that allows you to measure what's happening once people go from social to your website and convert into something, a lead, a sign up, a trial, a demo request
Dan Balcauski:Hmm.
Emeric Ernoult:a webinar subscription, whatever. everybody was doing that with email. We've paid with. Marketing automation, all the other marketing activities were tracking this next step. And so nobody was doing that on social and no tool was doing that on social. So we built this, I actually patented this in the US believe it or not. A patent pending on this item, which is we're still being worked. It's yet another discussion for another day. It's. It's a weird world, the patent world, I can tell you that I didn't understand any of the patent that I submitted. It was weird language. And it didn't do what the inbox did for us. I'm convinced that it's a great tool, but it require, requires the users to basically. their own measurement in place, which many of them, believe it or not, do not have. So like most comp companies in the world especially small and medium size, they do not have a measurement framework. When you tell them what's your analytic tech stack I dunno. Or it's not my department, it's someone else and I dunno how to interact with it so I can't use it. And that's something we've heard a lot from the social media peeps that we've been talking about. So the usage penetration of that feature was not as great as the inbox where it was basically right there and everybody was using it where the ROI required. Them to have access to their analytics framework and systems and be able to tweak them, be able to, oh, I need an event here to be tracked, and an event there to be tracked. And if the event was not tracked, then do anything they want on social and go to your site. If you're not tracking what's happening next, then you're not gonna track any ROI. So it was a little bit more challenging. So my next, my, my vision for the next thing, it will be AI related. And we already working on it. And I think that's gonna be how we can innovate and be a little different when, again, when it comes on, when it comes to the products differentiator,
Dan Balcauski:Hmm.
Emeric Ernoult:different can your product be
Dan Balcauski:There's, there's,
Emeric Ernoult:where.
Dan Balcauski:oh, go ahead.
Emeric Ernoult:No. Why? I believe we can, we should really be better is on the GoTo market side of things. We need to work on the product. There's no question your product has to have something that, oh my God, it's amazing.
Dan Balcauski:I,
Emeric Ernoult:as you said, rightfully so, it looks the same on paper from the newbies. So you can't. You can't say, I'm gonna build a great product and I'm gonna win thanks to that it's not gonna work. So
Dan Balcauski:yeah.
Emeric Ernoult:It, it's a condition precedent to win, but it's definitely not a condition in sufficient.
Dan Balcauski:Yes, exactly. I wanna double click on this this inbox idea this feature set. And there's a tactical view and there's more of sort of a philosophical view. So, in, there's often a conversation. I've been involved in these conversations as a product leader before where. You, maybe you have an idea like this inbox, right? Where it's like, and there's, there, there could be a debate saying, well, like, look, yeah, that might be unique, but it'll be so easy for. Competitors to just basically copy it and replicate it. You said something interesting, you said, you did have a few years of runway before those competitors who prob I imagine were a little bit ahead of you in terms of size of company and maybe even market share,
Emeric Ernoult:Yes,
Dan Balcauski:Where you did have some runway. So I, I'm curious what you think about that as at a philosophical point like. Like what, what allowed you to have that runway on that sort of capability for so long? Is there areas, is there a rationale why those other companies didn't sort of immediately replicate? Is there something that most folks who aren't sort of building product or dealing with that competitive strategy every day, don't understand when they say, oh, well those folks will just be able to churn it out in their next release.
Emeric Ernoult:Yeah, of course. First of all, we were really small. Back then we were at one to million a year of annual
Dan Balcauski:Mm-hmm.
Emeric Ernoult:very, very, very small. Not even that at, in 2014 we were like 500 K or 400 k of
Dan Balcauski:Mm-hmm.
Emeric Ernoult:Annual. So I think we were. the radar. That's number one. And number two, there's momentum in product, SaaS product building. It doesn't take a, a snap of fingers to build a great SaaS product. It will take six to nine months. If you're fast and especially back then, today, maybe you can be a bit faster. But then there was no way you can transform your bunch of columns into a social media inbox in less than reasonably. to nine months. So there was that moment, negative momentum, that, that prevents you from moving fast to copy people like this, this, this quarter over quarter. That's the second thing And the third thing back then Collins was the way everybody was doing something. So when an entire industry is doing something in one way. And someone comes in and do it in another way, it will not take a month for everybody to realize, oh my God, this new way is amazing. They will look at this new way. What are they doing? It's not the way we're all doing this. It must be wrong, and they will only start to realize that it's actually a way that works when. Prospects will come to them and say, oh, you don't have an inbox. Oh, that's a problem. These guys are Agorapulse. They have an inbox. It's so much better. Why don't you have an inbox? And that feedback from the market, percolates up and goes to dealership and then dealerships will say, oh gosh, we have to notice this guys that keep being mentioned and we're losing deals and this and that. not gonna happen like this. When someone innovates with something like that, it's. It's not gonna be instant that the competition notices. So let's take another example. All the companies that did, qII, that's very social media stuff, but they did q publishing instead of doing scheduled publishing. So instead of doing create the post and schedule it for tomorrow at 3:00 PM and then another post and for Thursday at 5:00 PM and so on and so forth. That's a scheduling way. And some companies came in and said, no, we're not gonna do that. We're gonna create. Queues based on topics. So you create a queue that's every Monday at 2:00 PM and it's the topic podcast news. And then there's another slot that we create for Wednesday at 3:00 PM and it's the topic world news and then the war in Ukraine. We talk about that on Friday at 5:00 PM and then you keep cranking that content. Well, that's a war in Ukraine. That's a world news, that's a podcast news. And it goes into those queues and it gets posted automatically. During, at that. Very time slot that's the same every week again and again and again. That was the Q system. So some companies created this and obviously. They, same thing here. They had a leap and they did that for years and before others like us noticed and say, oh, what are they doing? Should we do that? Should we add this as another way to post content? Is this going to change the way people post content on social? And it does take some times before you realize that. Huh? Yeah, it's nice. Let's add that, but it's not gonna change the game. Or, oh my Lord, it's changing the game. We need to adapt and that is gonna take you 1, 2, 3 years before you realize is the game changer you didn't see coming. Or this is not the game changer, we're losing 10% of our deals because of that, and we have bandwidth. Let's build this. So we stop losing those deals
Dan Balcauski:Hmm.
Emeric Ernoult:someone innovates. It's never obvious on day one that this innovation is gonna change the game.
Dan Balcauski:So, I mean, I heard a couple things there. One was, there is a, there's a bit of mo momentum in terms of the, it takes time for. The market feedback to creep up in a larger company, to hear about, the person who's has a sort of disruptive way of doing things, and maybe you're not sort of losing those deals necessarily, but maybe they're cropping up in more conversations and then all of a sudden it becomes a larger, larger piece. And then I'll buy that. Point, you're a couple years behind by the time you get your act together. And then I think the other thing I heard there was you had a very strong sort of point of view on the way customers should interact with their social media through this inbox paradigm that was maybe not in direct conflict, but would definitely a different sort of starting point or paradigm than these. Other products were built around. And so it's not necessarily that, like did we just tack this thing on? But you were sort of, you had a different motion that that maybe these other companies didn't quite, they, everyone has their demo scripts and you sort of built workflows and onboarding and et cetera that all of a sudden you're like, okay, if we're gonna change it to this, like this is, we can't just sort of slot this in. It's not just adding a feature, but it's sort of having a point of view on how that work should be done from the customer point of view. I think that there was something else that you mentioned within that arc around inbox though, was that you did say that Agorapulse was not as good on sort of the publishing side. As you were I guess this was kinda earlier in the thread. And that sounded like a, sort of a a decision to say, okay, they're winning over there and we're okay letting them sort of win on that side because we have this view that this way to sort of manage the social media is better. I'm curious, like how do you sort of bit like, what was it about that that sort of allowed you to build that. Conviction.'cause I could, the opposite way, right? Those folks, like, they're ahead of us on this. Like our best investment is to go catch up with them on that same dimension. But, you took what is maybe the contrarian approach or a very, strict approach of like, like, that's fine. We'll let them win over there for now. Like, and we'll make that explicit, like we're not gonna chase that. I'm curious like how you built that conviction and what that looked like on your end.
Emeric Ernoult:Wow, that's very simple. We were bootstrapped, I had three developers at my disposal to build this thing. And I was very accurately aware that there was no freaking way on earth that I could compete on every aspect with the other products at the time had raised more than a hundred million dollars. And I had. Zero million dollars. That makes a big difference in the means that you have to compete. So when you are completely outnumbered and out, dollared in the means you have to compete. You have to pick your battles very wisely and go very deep in one of those battles, and certainly not try to fight all of them. If you asked Emrich of 2014, he would've told you, I wish we could do this and this and this and that, but he would've immediately told you that right after that. I know I can't. So I pick this battle and not the others.
Dan Balcauski:Highly pragmatic.
Emeric Ernoult:Constraints. It's just constraints. And I think that's one beautiful things about, beautiful thing about Bootstrap is bootstrapping a business is that constraint forces you to do the right thing, when you have a ton of money the lack of constraint pushes you to do a lot of the wrong things.
Dan Balcauski:Well, let's you brought up the bootstrapping, so let's talk about that constraint. You see folks are doing all these things. You have a wishlist that, three developers even if you have, you had 30 developers, I'm sure you couldn't fulfill your entire wishlist. Why don't you attack that constraint directly? Did you think about raising institutional capital?
Emeric Ernoult:I did. I tried for many years and it didn't work. Like nobody wanted to invest in social media in 20 14, 15, 16. Like, it always, it failed every single time I did all the pitches. I went to San Francisco, I did all the competitions. I went to startup Garage. I forgot their name. In in, in Silicon Valley. I, I tried like. I tried everything I could in, in the US and in Europe, and it never worked out because people looked at what we did and said, how different are you from X, Y, and Z? Let's call them Buffer Hootsuite and whoever else was there already at the time. are you from them? And I said, I don't know. We didn't have the inbox back then. We were less than a million. We were less than 500 K of vr r like. well, the only thing I knew is that I am hungry as heck want to win, and I'll do whatever it takes, but that's all I have for you, Vc. So they say, okay, it's not enough. We need like that unique competitive advantage. We need that unique feature that defendable barrier to entry that, and we had none of that.
Dan Balcauski:Hmm.
Emeric Ernoult:it didn't work out. I wish, at the time I wished I could. money because my life was hell. I didn't pay myself for two years. My wife paid for everything thanks to her. Now I'm giving her back. And and for the first two years and for the next two years, I paid myself minimum wage, which is not great in, when you live in a big city like Paris. I mean, for a minute living in New York with$1,500 a month, that's, they're not gonna have a very fun
Dan Balcauski:Lot, lot of ramen. Lot of ramen on the menu.
Emeric Ernoult:Yeah, Absolutely. So that's, that was the cost of not raising. But the fact when I look back I see the benefit of that, which is constraint created the, was the forcing function to just do something, to do things differently.
Dan Balcauski:And correct me if I'm wrong, I believe you did eventually raise capital in like 20 18, 19.
Emeric Ernoult:No, we did not. The it was secondary.
Dan Balcauski:Ah, okay. Took a little, took some chips off the table. Okay. Got it.
Emeric Ernoult:some chips off the table. I bought my house and my co-founder did the same thing. And we had three business angels from the previous business.'cause Agora Post was built on the back of a previous SaaS business that was kind of dying, but still making us a little bit of money. So it funded the beginning with, we were doing like 12,000 a month, something like that. back then and it, it paid for the three developers that I talked to you about earlier. We exited them in 2019, but no money went in the business.
Dan Balcauski:I'm curious about the sort of the, I've seen several companies do that where they just have secondaries and sort of, allow, folks to take chips off the table. I'm curious, like, was there a decision point there in terms of. Like thinking about like, I mean maybe it's not 0% or a hundred percent, maybe it's somewhere in between of like, hey, if we sort of do some of this as secondaries, but then add some of this to sort of the business coffers. And I'm curious kind of what, what led it to, your decision to be sort of purely a secondary approach.
Emeric Ernoult:Yeah, absolutely. I'm super transparent about that. At the time a business banker came to see us with, who had just sold the company of a friend. The company of that friend was called Mention, and believe it or not, I bought that company back four months ago for$60,000 because it was getting bankrupt. So it did well, selling it in, in, in 2018. And his business banker came to see me and, told me you should sell. I mean, it's a great time. Your company's going up into the right. Every KPI is on the green and it's a great time. We can sell that and you become multi multimillionaire and you go enjoy life on your sailboat.'cause I love And good for you. And I said, no, not doing this. I enjoy growing this company. I enjoy being, its CEOI enjoy, I've I. You heard that I paid myself minimum wage or I paid myself nothing, and suddenly I was paying myself a decent salary and I was having fun enjoying the growth of the business. So I said, no, I'm not selling it. one of my mentor told me you're, that's great. You shouldn't sell a business. You enjoy running. but you or you would be silly not to take chips off the table, so you need to do that. I say, oh, interesting. How do you do that? Well, you just go to your banker and you tell him that. And I, I just did that. And he said, ah, okay, so you wanna do a secondary funding? I say, I don't know what that means, but probably yes. And so he explained to me what that was. He's basically, you're trying to raise money, but the money is to buy existing shares instead of investing into new capital in the company. I say, oh, that sounds great. That sounds good to me. so we raised the money that was basically enough to give me and my co-founder the comfort that if the thing went bust, we wouldn't lose everything and we wouldn't be homeless basically. That was my inner fear of, oh my God if this thing goes bust, do I become homeless? Do I go sleep under a bridge? I know it's silly, but that fear is always in you it took that fear away from me. I will not fear of. Being homeless anymore because I have enough cash to turn around to invent something else, to go find a great job somewhere. Like my financial future is not at risk anymore. I have enough cash to to basically prepare for that. And I have a house, I have a roof on my head, which is always, which feels like a protection. That was great because it, it pushed us to risk again and try new things and'cause now we didn't have everything to lose again, we. you always. You never want to lose what you have, but if you are protected from homelessness, at least if you know you're okay to push a little bit further, okay. To take a little bit more risk. And I think that's what secondary can help founders do is like, okay let's be bold again and let's take, let's make bold bets. if they does, if they don't work, I'm not losing everything. I already took something out and I don't feel like, oh, I mean, think about you have$10 million, they're yours now, and you do something and you lose them. That you feel terrible if you've lost the whole thing.
Dan Balcauski:Yeah.
Emeric Ernoult:if you take 1.5 and you lose 8.5, you feel bad, but not as bad as if you didn't have the 1.5 on your table anymore.
Dan Balcauski:Yeah, apparently the only, yeah, apparently the only entrepreneur who could do that without feeling those feelings is Elon.'cause apparently he just has rolled all of his winnings from one thing into a
Emeric Ernoult:it,
Dan Balcauski:bet on the next thing.
Emeric Ernoult:but it's not true. It does feel those feelings. It does feel fear, and it is I heard him express that at several occasion that it does feel fear and he hates it. It doesn't like it. We all do, and I don't, I think no human being on earth is shielded from fear. We all feel fear. There's no exception.
Dan Balcauski:Well, I wanna pivot a little bit, just so, and, and kind of talk about pivot. So many, founder CEOs on the show TA have talked about sort of eras of their scaling journey, different inflection points, kind of those points where sort of they realize that, either, either by revenue or number of employees or change in the market. Hey, we can't continue to grow kind of doing things We. We've always done. I'm curious as you've been running Go Pulse for over, over a decade now a couple of different moments you've talked about already. I guess what have been sort of the, I guess what are the big inflection points as you sort of look back where you or maybe the largest one where you have sort of had to kind of, Hey we can't kind of just continue just doing more of what we're doing. We have to really sort of change how we're doing things inside the business.
Emeric Ernoult:Yeah. Basically there were the pivots that we've made. The first pivot we made is when Agool started. It was Facebook contests and promotions,
Dan Balcauski:Mm-hmm.
Emeric Ernoult:Facebook only, and the service was contest and promotion sweepstakes, photo contest quizzes. As you may or may not know, we don't do any of that today. So obviously Agorapulse today is the same brand and the same name, and the same URL, but the product is entirely different. It's as if I would tell you, we used to sell bicycles. We're now selling trucks. It's exactly the same
Dan Balcauski:Yeah.
Emeric Ernoult:they don't have the same purpose. So we started with this, we realized it's a very shitty business model and we pivoted to social media management in 2012. Obviously it took a long time to build this. The inbox came coming in 2014'cause we only had three developers and no money. And my wife was paying for everything. I was the first pivot getting from contest and promotion to social media. And then inside the social media journey, there were plenty of mini pivot. Mini pivot in terms of how we price And yeah, we priced in a very silly way in the early days that made our conversion very bad. I'll have to give you this example. So our pricing model was basically, we didn't have a package, a pricing page with packages, though. Here's a 99 plan and the 49 plan, and had a slider. That was basically slide up to tell me how many users do you need and slide up to tell me how many profiles, social profiles you need to manage, and I'll give you your price. And our conversion rate with this type of pricing was shit. The day we changed this to 49, package 99 like everybody else our conversion rate went like doubled overnight. And my lesson from that is that there are areas where you have to innovate. And there are areas where you absolutely should not innovate and you should do what people are used to see and used to use. So, and sometimes it's not easy to distinguish which one you should innovate in and which one you shouldn't. But with pricing. My lesson is make it simple and seamless and don't make them think they have to say, okay, 99 have all of this good, let's go. And oh, I have to think how much it's gonna cost me. I don't, I'm not really sure. And it's not a good idea. So that was like one of those mini pivot. In 20 21, 20 22 the big moment, the big haha moment when he. To change something was the, with the go to market and the market we address, we were very SMB inbound self-serve driven from 2011 until 2019 and starting in 2020, we started to realize that this. Market segment was going down. It was it was not growing and for two reasons, the churn was really high. Net monthly churn around 6% for
Dan Balcauski:Ugh, that's not great.
Emeric Ernoult:5, 5 to six. No, it's not great. It's really bad. and probably the best in class are able to get to four. I think Buffer was at four, something like that. And they I would consider them as best in class. But four monthly is very hard to. It's very hard to grow after a certain point because 4% on 20 million or 22 millions of revenue, a lot of money that's getting out every week. And you only, you don't realize that if your acquisition is going great, so if you're at 2 million, 3 million a r and you acquire like crazy you don't feel the pain. But when you get a 20 million or even 10 million, you start thinking, oh my God, that's a lot of churn. That's a lot of dollar churn every month. How do we replace that? And then you, your SEO does not feel that. The tank anymore, your referrals are not enough. And then you start saying, oh my God, I can't double down on SEO or referral unless there's no way you can do that. So it doesn't, it won't scale. that was the first realization. And so we saw, okay, we have to get as close as possible to 100% NR as we can. So we need to change who we sell to and we need to solve bigger problems with those and not basically SMB. Was SMB Sales Serve Inbound was we solved? Okay. Problems. They're
Dan Balcauski:Mm.
Emeric Ernoult:They're not too bad. They're not too strategic for them. And so we need to change that. The problem we solve have to be complex, strategic, and bad. So when we solve this, oh my
Dan Balcauski:Mm-hmm. Mm-hmm.
Emeric Ernoult:And that is never going to happen for SMBs. Never. It's not the case. SMBs, in general, SMBs are never gonna feel that way for marketing. They're gonna feel that way for many things, but not for marketing and definitely not for social media. for some exceptions that they're the exception and you're trying to market to everyone, not to the exceptions. So we started to pivot our go to market and the way we go to market and the way we do sales and marketing, and the lesson here is freaking hard.
Dan Balcauski:Well, I wanna, this,
Emeric Ernoult:really hard.
Dan Balcauski:this is a great topic. So, so, just to kind of recap. So, so yeah. Hi. Really. So, so SMB might, maybe even micro, SMB super high churn and kind of a characteristic of the market itself. Many products of different industries all kind of learn this lesson really fast, really easy to grow.'cause there's a lot of customers out there, but also really finicky. They tend to go outta business very quickly. But but have those problems. So, so you go from this sort of. It more sort of pure inbound self-service motion. Maybe some might term that like a product led growth to maybe a more moving up market. Maybe it's more like a sales led approach is, would that be an accurate characterization as well? So, so, okay. So you realize the problem, all the executive team realizes the problem, yes, we need to do this. What do you do first? Like, do you go and like. Get a new sales team, like, do you change your marketing? Do you change the product? Like what? Like what do you like, okay, we made this decision. Like what do you go do first?'cause,'cause it, it does entail a bunch of changes that I think a lot of folks are just don't realize how messy that could be.
Emeric Ernoult:you want the easy and sweet answer, or you want the real answer?
Dan Balcauski:Yes, yes.
Emeric Ernoult:Well, the real answer is you have to do all of this. So that's what makes it very so difficult and so challenging. You cannot go at market if your product doesn't change. And that's going to take years, not months, not even quarters, years. So, and, but you have to do it because if you, if your product is not made market enterprise ready. year you don't do anything about it, the next year you will still not be enterprise in market ready and the following year not ready either. So you're never gonna win those deals. So your product roadmap has to drastically change. And you have to realize that this is going to take three years for your product to be okay an RFP against an existing player who's already playing in that field. So. Have that in mind, then you also need to change the way you market to the market. Inbound. Not gonna work. SEO not gonna work. Why is all the inbound stuff not gonna work? Because when you do inbound and SEO and referrals, you get the traffic you get, which in 90% of the cases is not the traffic you want. And so you have to change that because if you and we had a lot of freaking traffic back
Dan Balcauski:Hmm.
Emeric Ernoult:the days we had, We had close to 6,000 free trials per month. 90, 95% of which were small to very small businesses. Because what, if you look at all the businesses in the world, 90% of them are small businesses. Out of the 10% that remains, six, 7% are mid-market and two 3% are enterprise like, and maybe it's. 1% enterprise. I don't know, but that's this kind of
Dan Balcauski:Mm.
Emeric Ernoult:It is. It is the realm of what it is. So if your marketing is shouting in the crowd, opening the window, I'm here in my office in Paris, I could open the window and say, Hey, come see us. 90 to 95% of those people in the streets. either freelancers or one person business or two person, it's gonna be mostly thinking that imagining they're all businesses. It's all gonna be very small businesses or small businesses. that's what you get. It's math. It's pure percentage wise, it's not, there's no intent. There's no intent to attract the right kind of customers, like basically shouting
Dan Balcauski:So, so, so, so you, so you realize they got a three year cycle on changing the product, right? You've realized you.
Emeric Ernoult:or you don't realize it's,
Dan Balcauski:You don't realize it at the time.
Emeric Ernoult:days, but Then you realize it.
Dan Balcauski:Okay, so, so, so, and then, okay. You realize, okay, the traffic we're getting organically is not the traffic we necessarily want. So, so I guess, so you set the roadmap on a schedule, and that's going off, but you're like, all right, it's gonna take a while to build that out. I guess, what do you change on the go to market side, whether that's marketing or, and or sales, I guess in the interim to. To solve this problem of Yeah the, the SEO the organic traffic is not what we wanted.
Emeric Ernoult:well, I did what every good CEO would do. I changed leadership and I made big mistakes again and again until I, I realized that, okay, shit, I have to learn this myself because otherwise I'm gonna keep making hiring mistakes and hiring the wrong people for the right job. And, what I ended up doing is learning the thing myself by going to, by listening to podcasts, I listened to a ton of podcasts, marketing podcasts for a year, and going to conferences and speaking with CEOs who've done this switch and speaking with CEOs who are addressing. Mid market enterprise and asking them how is your teammate, how, who is he leading your sales team? What kind of job? What kind of functions do you have in your sales team? What kind of function do you have in your marketing team? Oh, you have an ops function. I don't even know what that means. I don't even have that. Okay, ops, what is that? What do they do? So had to go learn. Myself, what it takes to build a mid-market, go-to market team. And once I had learned that, then I could hire the leader who knew that because I knew what question to ask and what to verify and what to check, which I had no clue about with the first hires that I made.
Dan Balcauski:Hmm.
Emeric Ernoult:That, yeah,
Dan Balcauski:And, and
Emeric Ernoult:I wish
Dan Balcauski:just,
Emeric Ernoult:was an easy answer,
Dan Balcauski:so, so double click on that hiring of the, of that mid-market leader, I guess, and maybe it's faded into the background or maybe you've repressed that memory, but like, if you think about that, like when you finally understood what you needed to hire for, I guess, what were the traits that you realized you needed? And then like, what did you look for in the hiring process? Maybe like, like questions you would ask. Like, so, so if we could short circuit the learning path for the entrepreneur who's going through that process right now. So they don't have to go through, pure listen to all the back episodes of Sask Galy Secrets. Of course we have a bunch of other lessons learned, but if they don't wanna do that, what's the cheat code? What if they want to go hire that mid-market leader?
Emeric Ernoult:Yeah, the cheat code is the marketer who would be really good for an inbound SMB. Let's open the window and shout to the crowd and make as many people come to us as possible, or even B2C, which would be kind of the same principles in the same way to market. The very big difference between this kind of profile and the higher end B2B, mid markets or even enterprise that. does not matter too much in the first kind who you're marketing to. It matters a lot who you're marketing to in the, with the second kind. So if you want the right person, they first should have clarity on, okay, who is our ICP? Who is the ideal customer? Is it manufacturers in Germany and agencies in the US and universities in France? Is it those that we sell the, that are the easiest to sell to and that retain. That stays the longest with us, or is it something else? you don't have this clarity, you cannot define what is the market you're going to laser focus on in Germany, in France, in the us, in the uk, because they're all different. For example, higher education is a market we've been focusing on. In the US there is no such a market In France, it does not exist'cause there's no money in education in France. So
Dan Balcauski:Mm.
Emeric Ernoult:to adapt. Geo by geo, who is the best market for you and the best ICP? you're marketing to SMBs, woo, and to the big crowd of business, you don't need to be that specific about who you're going after. If you're going mid-market or enterprise, you have to be super darn specific about the type of company, the size of company, the vertical of the company, the geography of the company, the type of person you want to talk to. What are the other type of person you want to talk to? Do you need to talk to the CMO or the VP of marketing? For us, we're gonna talk to the social media person most of the time as our champion, but who else are we who else do we need to have on the bandwagon? Helping the sales to close, especially with larger RFPs and larger businesses. So this very acute understanding of who do we sell to is something that's absolutely necessary for the mean market enterprise marketer, and probably not that necessary for the. The small bees or B2C, or let's do, let's build brand awareness and get as many people come to our website as possible. So that's number one. Number two, what I've learned is that the, let's call the first type of marketer and the second type of marketer, right? So that's easier for the story. The second type of marketer, the one I need now, they're very mathematical. They look at numbers all the time. They look at Excel spread. They are born in spreadsheets. They aren't, they read spreadsheets and they read SQLs and MQs and sqs and this and that, and conversion rate and da, da, da. Oh, we have a problem here. Conversion rate is not as good. That's the kind of mindset they have. The first type of marketer that like creative and entertainment and video and when and events and big booths and like the. This is a big difference between the two, that it's not to say that one is better than the other, but one is certainly not gonna succeed at the other's work and vice versa.
Dan Balcauski:Hmm.
Emeric Ernoult:It's not by going into spreadsheets that you're gonna create super entertaining content that the crowds are gonna be excited about. And it's not by doing this, that you're going to see what's working or not working in your go-to market strategy. So that's a big trait I've noticed in those type one, the first type and the second type of marketer.
Dan Balcauski:Hmm.
Emeric Ernoult:And. The last thing I would say, which is a segue. The second thing the second type of marketer sees revenue as a whole. They look at operations enablement and BDRs and account execs and marketing, which would be content and this, and. It's a whole operation. It's, they don't look at it as a siloed operation and they certainly don't finger point at, oh yeah, my leads are great and you don't know how to close them. The first type of marketer they do that, they look at sales and say, you don't know how to close my leads, because they actually have no idea how sales work and they are not. I don't know if they're not interested in what they do, but they certainly are not good at what they do and they don't pay attention and are not interested in what they do.
Dan Balcauski:Mm.
Emeric Ernoult:they re, they keep everything very siloed and they the kind of there are low wars to happen inside the company all the time, so people are fighting and disagreeing and so that's what I've seen with the first type of marketer, at least twice. So that it's twice I got this experience and now I had the second type and it's the opposite. So I, that's my experience at the very least.
Dan Balcauski:Well, that you were hinting at before in terms of like, hey, sales can't close my leads. I've heard kind of a parallel, so like product management and engineering, those leaders. Need to be, maybe they have arguments behind closed doors, but when they come out, they present a unified front When you have your sales leader and your marketing leader that those two need to have a unified front of, like, we are the revenue organization and like we don't throw each other under the bus. Maybe, we have spirited. Debates behind closed doors to, to work problems through. But we are sort of, we own the entire, flow from lead to sale and otherwise yeah, especially as you get into a mid-market enterprise sale, like if that breaks down yeah. You don't have a functioning organization.
Emeric Ernoult:Absolutely.
Dan Balcauski:so many topics I wanted to cover that we're not gonna have time to, we'll have to maybe get you back for a second time. But I want to close things out with a few rapid fire questions. Look running a company, especially as long as you have could be taxing mentally, physically, emotionally, what's your go-to method for clearing your head when you get overwhelmed?
Emeric Ernoult:I don't know if I have one. I do take time off, not time off in a sense that I disconnect. I never disconnect from the business, but I do travel and I do. I do go work from other places, like, just to be, make you a little jealous in
Dan Balcauski:Hmm.
Emeric Ernoult:already booked my catamaran to go to the Grenadines in the Caribbean and I'm gonna go sell for two weeks from French Indies to the Grenadines with my wife and son. I'm gonna have my laptop. I'm gonna do deep work. I'm gonna keep writing my book because I've, I started to write a book. So I'm gonna do work because I enjoy doing the work, but it's gonna be in such a different setting that I will feel like I've had new air and I've added oxygen to my air, to my life. So that's my way of coping with this, which is, I work all the time, but I go and travel and work from different places and take my family with me, which allows me to feel like I have a life. Because if it was office, office, office. All day long. Go to bed, go to the subway, go to bed, go to the subway, go to the office. I I would not feel that great. So that's my way of coping with
Dan Balcauski:Change your environment. Go sailing in the Caribbean. I love it. If I give you a billboard, you can put any message on there for other beating. Be SaaS CEOs trying to scale their companies, what would it say?
Emeric Ernoult:It's gonna be freaking hard, but eventually. will love it.
Dan Balcauski:It's gonna be hard, but eventually you'll love it. Awesome.
Emeric Ernoult:Yeah.
Dan Balcauski:This has been fantastic. If listeners wanna connect with you and learn more about Agorapulse, how can they do that?
Emeric Ernoult:LinkedIn connect with me on
Dan Balcauski:I.
Emeric Ernoult:add a note to your invitation. Say, Hey, I heard you on this podcast, and loved it. Love to connect and I accept all these invitations. I tend to not accept the ones that I don't have a note because I don't want my LinkedIn to become a zoo. So, and I have a lot of invitation, so,
Dan Balcauski:It's a wise policy. I have the same, I have the same protocol. That wraps up this episode of SaaS Scaling Secrets. Thank you Emeric for sharing his journey and insights. For our listeners who found Emeric's Insights valuable, please leave a review and share this episode with your network. It really helps the podcast grow.
