Updates: Ilya Azovtsev lemlist's Head of Growth, shared on LinkedIn that the company hit a new revenue record of $6M. A month ago when I started collecting info on lemlist, their revenue stood at $3.5M.
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What is it?
lemlist is the email outreach platform that angles around hyper personalization and automation. The SaaS promises to help kickstart cold connections with personalized images and videos, topped up with automatic sequences for follow-ups.
When was it founded?
lemlist was founded in July 2018 by Guillaume Moubeche, interestingly a chemical engineer with a master degree in marketing and two of his technical co-founders.
What's so impressive about lemlist?
3 years since its launch, lemlist has seen explosive growth. In 2020, lemlist recorded a revenue of $3.5M, with a team of merely 20 people.
A simple breakdown of their growth:
- Monthly Revenue: ~300K
- Net Income: ~100k
- EBIDTA Margin: 34.29%
- YoY Growth: 73.61%
- Funding: $0.0
- Ads spent: $0.0
How did they do it?
A unique mechanism
I have found one of the most compelling aspects about lemlist is their ability to remain almost unrivaled in an overpopulated market, all thanks their very own unique mechanism.
The unique mechanism is the very way how a product or service can deliver desired benefit for customers. For customers, the unique mechanism is what makes them choose a product or service over its competitors.
A well-defined unique mechanism should be able to explain how a product or service would change / improve customers' life, instead of merely listing out solutions it provides.
lemlist does this extremely well by addressing one single, specific problem and providing a solution for just that.
- Emphasizing the pain customers faces: cold emails getting ignored because most of the times they are too general.
- Providing a solution: the ability to deliver cold emails with maximized personalization.
- Foreseeing positive results: outbound conversations that get replies
lemlist stays away from the common mechanisms that their competitors have. lemlist's biggest promise to its customers is the ability to maximize sales with personalization, while its competitors go on and on about email marketing automation (which lemlist offers too, but that's the second biggest promise).
- Define your unique mechanism early on.
- Your unique mechanism is the anchor for everything you do, from how you communicate with users to what you decide to build (or more importantly, not to build) for your product.
- Instead of promising users a million things, promise one (or very few carefully selected ones). Then stick to delivering.
- There's always room to scale, but if you fail to deliver what you promise, users are not gonna stay.
Read more: Defining a unique mechanism for SaaS
Product strategy: Build as little as possible
Product development costs a tremendous amount of effort. lemlist doesn't get greedy when it comes to what to build. All their products and features are built upon verified demands and needs of users, and solely to support their promise of email personalization and automation.
- Create and management your own templates
- Template library to kickstart
- Media library
- Dynamic content
- A/B Testing
- Subscriber management
- Reports / Analytics
Other satellite products revolve around sales automation and increasing the success rate of their customers, answers to their promise of "outbound conversations that get replies"
- lemwarm: warm up the domain before a campaign to lessens the chance of emails going to junk / spam.
- lemstash: curate tools and tips for entrepreneurs and founders
- lempod: promote and boost LinkedIn engagement
Exclusivity doesn't always win. lemlist offers customers integration with a large pool of other platforms or apps, leveraging other popular SaaS already used by their customers.
- Build to deliver.
- Build only when there is an actually demand for it.
- Set priorities. Things that your customers need the most, things that take less effort to build, things that bring more return... should be built first.
- Roll out features after features, and make announcements (maybe publish a changelog).
- That way your customers know that you are listening and improving.
lemlist follows the textbook SaaS 3-tier pricing system, ranging from $29 to $99 per user monthly. Each tier is designed to include features that serve different goals of different types of target customers.
The basis of tiering system goes something like this: ~2x the value, but only ~1.5 the fee.
SaaS companies prefer this pricing strategy instead of one single package, for the following reasons:
- Give customers the ability to choose a package that fits their needs and budgets
- Appeal to multiple types of customers
- A great way to upsell (or downsell). As customers start to depend on the services you offer, there is a clear path to the next tier.
Charging per user works for lemlist, because their target customers are mostly solo-husters. However, in terms of upselling, charging per user might become a problem.
For example, if you have 4 salespeople in your team, that's $400 a month for one cold outreach service. Quite a big cost for SMEs, and lemlist has yet to announce any further pricing plans except for individuals.
- In the age of networks and communities, everyone belong to something bigger.
- In other to scale, product-led SaaS should go beyond serving to individuals.
- Figure out a pricing system that answers to team adoption, colloboration, and companies.
Here comes the part I'm most excited about lemlist: their strategy for customer acquisition is nothing short of brilliant.
Over the last year lemlist grew its searches by 314.3%. lemlist's is trending positively. Google searches peaked in Feb 28, 2021, after G announced lemlist decided to pull out of an invest of $20M. There are no ads, no affiliate program, it's all organic growth.
lemlist's Traffic Growth (stat: Review Bolt)
lemlist's launch journey is for the book. They got customers before the product was live.
Here it's important to understand that no SaaS is 100% software. There are always humans involved, just at different levels.
In lemlist's case, Guillaume chose to offer lemlist's features as services before actually building the platform. Before its launch on Product Hunt, Guillaume spent almost a year offering his cold outreach expertise to the target audience he had in mind for lemlist.
This helped him:
- validate whether there was an actual demand for a SaaS like lemlist
- understand more about his target audience
- acquire initial customers
lemlist appeared at the right time. Back in 2018 when cold outreach was THE thing, the need for email personalization was tremendous and urgent. As soon as it was launched, money was already rolling in.
Two things that made it happen:
- hitting #1 product of the day on ProductHunt.
- listing a lifetime deal on AppSumo. The insane exposure boosted lemlist to be a pioneer, and a leader in the email personalization niche.
- No SaaS is ever 100% software. There are always humans involved, just at different levels. It's easier said than done, but sell, as a human being, what your future product offers first if you can.
- Serve services first will help you: Further validate your idea and audience, Get customers and revenue before launch, Discover insights from the audience on how to build a product they'd actually want to use.
Acquiring new customers is hard, keeping your current customers with you is way harder, especially when everybody is building and running SaaS.
Marketing Metrics shows that while you have 5-20% chance of selling to new customers, you have 60-70% chance of selling to current customers.
The cost of acquiring new customers is 25 times higher than retaining current customers.
Leveraging your current customers is a great way for growth. Here's how lemlist does it.
Provide value consistently.
Blogging is serious business for lemlist. They have been consistent with their blog ever since they launched. lemlist's content is genuine and authentic. Their blog has never been about getting on the top results on Google search, it has always been about providing knowledge. Their content are mostly how-to's, with examples that readers can easily follow.
Another thing to take into account is that their content is highly branded. Take a look at their content guidelines below, benchmark it with every piece of content they produce, and you'll see the insane level of brand consistency.
A strong, active community
What do Apple, Disney, Tesla, Harley Davidson, Trump have in common? A cult-like community of followers.
lemlist is going the same route with these tactics:
- Forming their own unique language: all their products' name start with lem (lemlist, lemwarm, lemstash), their customers are called lemlisters
- Serving a purpose beyond the commercial motives: transforming the perspective that salepeople are boring.
- Creating culture-inforcing stories, legends: lemlist shares in great detail about company-related matters because they promise their customers transparency. For example, G shared about the $20M investment they got and how they turned it down, or how they lost a big client and then overcame the crisis. Those stories might seem unrelated to customer success, but they create a sense of belonging for customers, like they are a part of the company.
- Neutering an exclusive commutity: lemlist operates a private hub on Facebook for only registered lemlisters. The hub has over 14k members, various new posts daily, value-packed content generated by members themselves.
- Celebrating achievements: the LoTW (lemlister of the week) highlights customers who get great results using the product. It's a brilliant way to make people feel seen, heard and appreciated. Customers stay with and patronize companies that treat them well.
- Imaging caring, kind, approachable leaders: the team at lemlist engage in conversations directly, providing help, support and value. This tactic makes customers feel more individual, as if they are connecting with human beings, rather than a brand or a product.
- Customer retention determines whether customers stay or break up with you.
- Customer retetion usually take less effort, but more profiting than customer acquisition.
- A gated, value-driven community helps turn customers into brand advocate.
- The best "customer support" should happen inside the community, where questions are answered fast, effectively and seemingly personally.
Every little decision well thought out, every move followed an insane level of structure and consistency, lemlis achieve a healthy great growth which soon led to a $20M investment from Storm Ventures.
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You know what's up. The full read on these updates will be on Obvs - Edition 1.
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