How Flodesk Grew from 0 to $27M ARR Without a Sales Team

Launched 2019, Flodesk is an email marketing platform for small businesses. In just 5 years, it has grown from 0 to 27M ARR with zero external funding and without a sales team, a no easy feat for a bootstrapped SaaS company. Throughout their journey to $27M ARR, Flodesk has remained focused on their target customers and used different organic strategies to grow their business to $27M ARR. Their growth journey underlines the importance of solving real customer problems and driving growth through organic channels.

Founding Story

In 2018, Martha was working full-time as Director of Business Development at CRM company called HoneyBook. Her job was very intense, and she often had to work all night and on weekends. Her emotional and physical health was deteriorating due to improper eating habits and a hectic routine.

In her work, Martha came across many small business owners who needed help with designing their emails as well as large companies could. She realized that large companies had specialized teams for designing and marketing. However, small business owners could not afford to own an specialized teams to design and build their emails.

Martha first reached out to Rebecca who already had her email template store which others could use. Rebecca was a prolific graphic designer who previously worked with large clients like Rihanna and Linkin Park before starting her own email template store for marketers.

Upon Martha’s request, Rebecca refused to take additional clients as her existing customers were facing issues with reusing email templates on their email platforms. The email platforms her customers were using were not designed to render the email templates created by Rebecca. This encouraged Martha and Rebecca to partner to solve each other’s customer problems.

Being from non technical backgrounds, Martha and Rebecca reached out to Rebecca’s friend Trong, who was helping Rebecca to help her create the email templates. Trong initially refused but initially helped by providing them with a team of developers before joining them full-time as CTO. All the founders worked remotely for the initial years.

Launch

Launched in August 2019, Flodesk was a new product in a large, established market with high competition. However, Martha realized that the market was really large for a lot of different solutions which could serve different customers needs. By focusing on their niche and serving a small percentage of a large market, they can build a good business.

The biggest MOAT Flodesk has compared to other tools in the market was product education built into the user journey. New users don’t have to struggle by starting anything from scratch and are more successful using the product. When the user is more successful in using the product and getting better results, they are encouraged to refer other users to use the product.

Pricing

Contrary to other SaaS products, which charge their customers based on usage, Flodesk has a fixed price model of $35/month without an upper limit on the usage of the product. By having fixed pricing, they provided their customers with an anxiety-free experience even after their usage grew after they were successful.

Growth Strategies

Flodesk has grown from 0 to $27M ARR as a bootstrapped company in just 4 years. Throughout their journey, they remained focused on their target customers, were highly receptive to customer feedback, and improved their product.

Since Flodesk was targeting to sell it’s subscription at $35/month, they realized they needed to focus on organic growth to make the business profitable. They have used multiple strategies to organically grow Flodesk, such as referral, SEO, and social media communities.

Viral Referrals

When a business owner uses Flodesk to send marketing emails to their customers, their customers would see Made with Love in Flodesk at the bottom of the email, which is linked to the Flodesk website. This helped the readers of the emails to know that Flodesk was used to generate beautifully crafted emails, and they can also create similar emails by visiting their website and trying it out. Hotmail and Calendly have also used similar growth strategies.

This footer at the bottom also allowed Flodesk customers to refer Flodesk to other users. By referring the product to others, the referrer would receive $19 in credit, and the person using the referral code would receive a 50% discount on subscribing to Flodesk. This referral program has encouraged most users to add the Made with Love in Flodesk at the bottom of their emails and create content on social media so they can share their referral with their audience and provide value to them.

Promoting User’s Content

When Flodesk was launched, Martha found that their initial customers were actively creating content on Flodesk. Since their customers were small businesses that relied on content marketing to grow, they started creating useful content on Flodesk as it was a cool new product in the market. This helped Flodesk get effective word-of-mouth marketing from its customers.

To encourage this further, Flodesk started referring to their customer’s created content on their own website. When a new feature is launched, they add a guide at the bottom of the email to encourage users to share this news in their own blogs. They also provide image and video assets to their customers, which they can use to create their own content.

Building Communities

Right after the beta launch in 2019, Flodesk also launched their facebook community as their customers were already familiar with Facebook. Using Facebook communities helped their users to ask questions and share their feedback on the tool.

The Facebook community is currently at 18k members and has an engaged user base. Flodesk also shares helpful content on its Instagram handle, which currently has 73k followers.

Flodesk University

Flodesk runs Flodesk University, a free university that hosts courses on various topics related to email marketing. The courses are created by experienced instructors on email-related topics such as marketing strategy, lead generation, and automation. Flodesk University helps new users become aware of Flodesk and encourage them to try using Flodesk.

Conclusion

After the alpha launch of Flodesk, Squarespace also released an email marketing product with similar functionality. However, surprisingly, the growth trajectory of Flodesk was not affected. Their growth journey highlights the importance of community building, viral referrals, and content creation to drive product growth.