From 0 to $20M ARR in 5 years

How Guillaume grew Lemlist without raising a dime in funding

While working at a lead generation agency he co-founded, Guillaume Moubeche realized that every prospecting tool he tried was lacking something. So he decided to start Lemlist and solve the problem. Strapped for cash, he attempted to secure some funding for the new venture. Unfortunately, investors didn't go easy on him:

If only that investor knew that, in just a few years, Lemlist would have grown into Lempire, a suite of tools generating over $20 million in annual recurring revenue and last valued at $150 million. I'm sure he would have treated Guillaume very differently :)

Guillaume's growth strategy

Starting Lempire with minimal resources, Guillaume didn't have enough capital to pay for any marketing. So he had to use his own tool for prospecting. "I started the company with almost nothing, so I decided to just eat my own dog food, send outbound campaigns, and eventually close as many deals as I could. From zero to $1 million in revenue, it was basically just me doing sales."

As the million-dollar mark approached, Guillaume realized that focusing just on short-term growth wasn't a long-term winning strategy. Instead of focusing on just one channel, he decided to also invest in brand building. More specifically, he did that via content marketing, producing content for Lemlist's blog and for his personal social media, which quickly grew to 200k+ followers combined. This proved to be an extremely successful strategy.

He explains, "I quickly realized that when we started producing content, conversion rates on our outbound campaigns were much higher. People had seen my content on LinkedIn and would reply two to three times more than before." Noticing the success of this strategy, Guillaume decided to scale it further by training his team to replicate it. "We now have around 10 people on our team posting regularly on LinkedIn and driving millions of impressions for free. They do that because it's also an investment in themselves. If they leave the company, they have a personal brand that they can easily monetize."

The S-curve of startup growth

While Lemlist has grown exponentially in the past five years, Guillaume notes how, in reality, startup growth is rarely merely linear or exponential. Instead, startups grow through a series of S-curves. He explains, "You introduce a new product, channel, or feature, and you grow exponentially because of it. Then the effect of that innovation decays, and you are flat for a while. And when you introduce the next one, you are back to exponential growth again. Your goal as a startup is to find your next S-curve as quickly as possible. You want these flat lines to be as short as possible."

I recommend reading this really interesting article that provides a deeper insight into this topic. It includes a graph illustrating Netflix's S-curves of growth, which I have referenced here. The author explains, "Over several decades, Netflix has navigated technological change, changing consumer preferences, competition, market saturation, and more. Inevitably, the business will slow down again, and they will need to find another growth engine."

A small team of exceptional talent

One of the main reasons that allowed Lemlist to move incredibly fast with limited resources is Guillaume’s focus on building a lean team of exceptional talent. "We've always been a super lean company," he says. "If you want a project to move a lot faster, you need to remove half the people working on it. You really want to maintain the speed and momentum. Every person you add to a team adds more lines of communication than the one before, which adds more complexity and slows down the process every time your team grows."

Moving fast also requires exceptional people. Guillaume calls it "talent density." He explains, "In the early days, it was hard to attract experienced operators. We didn't have enough capital and I was a first-time, very young founder. For this reason, I hired people who were a good cultural fit, had the right attitude, and were coachable. However, if I had to redo everything from scratch, I would focus on highly talented people from the start. If you really want to go fast, you really need exceptional people. As a founder, your role is to always make sure that the talent density is really high."

Project-based management

Putting together a team of talented individuals is important, but it's only half of the job. The other half is empowering and managing them. To do that, Guillaume follows two main principles:

  • Outputs over outcome: "The advice for managing teams," explains Guillaume, "is usually to have one objective and three key results per team. But I prefer to put more emphasis on the output of a project rather than the outcome.”

    To clarify the definitions here: the "objective" of a project is a goal, such as "making our product more sticky." The "key results" are the metrics used to measure it, such as churn rate or net retention. The "output" is the actual task being performed, such as launching a set of email automation or building a new product feature.

    Usually, the general advice for managing teams is to focus on objectives and key results. However, Guillaume prefers to focus solely on the tasks performed. This way, each team takes ownership and is accountable for a specific task, rather than its outcome. He explains, "It can happen that two teams, such as marketing and product, have the same key result, for example, reducing churn, and you might end up in an environment where there is no ownership and accountability because each team blames the other.”

    Instead of assigning the same OKRs (objectives and key results) to both the marketing and product teams, Guillaume would evaluate their work based on how they performed their tasks, such as launching an email automation or implementing a new feature. This ensures clear ownership and accountability, avoiding situations where teams blame each other for not achieving the desired outcomes.

  • Project-based squads: "Our team is organized into project-based 'squads,' which are very small teams of two or three people working on and being the owners of a project. We don't want too many people per squad because we want things to move fast."

By organizing his team into project-based "squads" where each squad owns and is accountable for a specific output, Guillaume ensures that even as the team grows, they can keep executing quickly without bureaucracy getting in the way.

A PR gamble: Organizing a fake funding round

One of the biggest dilemmas in startups will always be how a company that raised millions without a cent in revenue can get articles in every single tech outlet, while a company that grows to $20 million in revenue in five years without any funding will go almost unnoticed. Guillaume certainly didn't like it, and if the media loved a juicy story, he was going to give them just that.

Guillaume pretended that he was seeking $20 million in funding and announced it on his social, sharing their numbers and strategies publicly. The world took notice, and his inbox was flooded with offers from investors. The increased attention led to investors bidding up to an offer of $30 million for a 20% stake in the company.

As planned, Guillaume eventually turned down that offer. "It was just insane," he recalls. "Hundreds of investors reached out, but we turned down all their offers. It was really controversial. Some people even got mad about it." However, the strategy worked perfectly, and Lemlist received the PR attention it deserved. Headlines like "This startup turned down $30 million from a VC" spread across every tech outlet.

However, although Lemlist didn't need the money, Guillaume realized that it might have been a wise decision to sell some of his shares through a secondary sale. We have previously discussed this topic in our interview with Wil Schroter, but it is surprisingly common for founders to raise millions in funding only to find themselves with empty bank accounts.

Guillaume explains, "I always assumed that investors would only give you money with a formal fundraiser, with the cash going into the company's bank account. But some founders might not know that you can also sell your shares via a cash-out or secondary sale, which means that you sell your shares, and the money goes directly into your bank account. So my two co-founders and I decided to sell 20% of the company for $30 million. This way, I have enough money that I don't need to work ever again. This allows me to be a lot more ambitious with my plan for Lemlist."

Talk to your users

And to conclude, what better advice than the old but gold, talk to your users!? In 2019, Lemlist didn't and overhauled its user interface without talking to its users or testing it in beta. The backlash was swift and fierce, with users raging in the Lemlist community:

Guillaume recalls, "Iterating quickly also means some f***ups. And when shit hits the fan, it's super important not to hide and be there for your customers. In hindsight, I don't regret it because I learned to show up and deal with crises. I remember hopping on a call with Jonathan to understand exactly what problems he was facing so we could fix things ASAP. The same day, we released a new, updated version."