How 2 Founders Bootstrapped Autoklose, Sold for 5x ARR in 2 Years
Who is Shawn Finder?
Shawn Finder is the Toronto-based co-founder of Autoklose, who previously had a career as a sales director and an academic background with an MBA in finance. Additionally, he launched his entrepreneurial journey with Exchange Leads before creating and quickly scaling Autoklose.
What problem does Autoklose solve?
Autoklose alleviates the challenge of inefficient sales processes by integrating email marketing with a built-in B2B database, streamlining lead generation and campaign execution for sales professionals. This reduces the time and effort required to find and engage prospects, tackling the pain point of maintaining a steady pipeline of high-quality leads, which is crucial for driving sales and business growth.
How did Shawn come up with the idea for Autoklose?
Shawn Finder, the co-founder of Autoklose, identified a gap in the market during his tenure as a VP of Sales. He observed that many businesses were purchasing lists that had low-quality data, which was frustrating for sales teams who relied on that data for outreach. This pain point inspired him to create a service that combined accurate B2B data with email sales automation, eliminating the need for separate services and improving efficiency.
Before fully committing to the idea, Shawn used his previous business, ExchangeLeads, as a foundation by integrating its database into the new platform. This not only validated the market demand but also helped in funding and informing the development of Autoklose. He continuously refined the initial product through feedback from early adopters, offering discounts in exchange for insights, which helped tailor the tool to meet real customer needs.
Despite facing challenges like high churn rates and the necessity of educating small businesses on the value of the service, Shawn's strategic approach, including hiring customer success teams to reduce churn and employing a methodical pricing strategy, helped in quickly growing the business. His key lesson was leveraging existing resources while being open to pivot based on customer feedback, ultimately culminating in building a product that suited the market's needs effectively.
How did Shawn build the initial version of Autoklose?
Shawn Finder, co-founder of Autoklose, embarked on building the product with a strategic approach of using in-house resources and lean operations. The company leveraged an outsourced development team based in Eastern Europe, primarily in Serbia, which allowed them to manage costs effectively. With the development team's personal connection to Finder's co-founder, they were able to build the MVP (Minimum Viable Product) within six months, starting from the basic email automation features.
They began iterating from there based on detailed customer feedback collected through extensive live demos, which drove the refinement of the product interface and functionality. The team used a direct, customer-focused development process, which involved recording onboarding sessions and feedback to continuously enhance the platform. These methodologies enabled them to rapidly evolve and improve their service while ensuring they kept close contact with early adopters for immediate feedback on usability and performance.
What were the initial startup costs for Autoklose?
- Product Development: Built the software for Autoklose with an outsourced team in Serbia, costing about $100,000.
- Initial Customers: Secured an early purchase order from Rogers for $160,000, which funded further development.
- Pricing Adjustments: Incrementally increased pricing from $9.99 per month to $49.99 per month to find the market’s sweet spot.
- Team Costs: Employed 30 people, with about 80% based in Eastern Europe due to cheaper labor costs.
- Marketing: Spent minimally on marketing, primarily using LinkedIn and email campaigns.
- Customer Success: Implemented a customer success team to onboard and support clients, which significantly reduced churn.
- Legal and Financial Preparation: Faced challenges when preparing for acquisition due to unprepared financial statements, incurring additional accounting and legal costs.
How did Shawn launch Autoklose and get initial traction?
Kickstarter
The company launched a Kickstarter campaign to fund the development of their product. It did $300,000 in sales in the first 3 months. In their Kickstarter campaign, they offered a 10% discount to early backers.
Why it worked: Kickstarter is a great platform for getting initial customers, they were able to get a lot of attention and get 1,000+ people to buy and test the product.
Direct Sales
The company launched a direct sales campaign to get their first customers. They spent $1,000 on Facebook ads to get the word out, and then collected emails from people who visited their website. Their conversion rate was 10%, and they got 100 emails.
Why it worked: For a product like this, direct sales is a great way to get initial customers. Even though it's not the most scalable solution, it was a great way to get the word out and get initial customers.
Product Hunt
The company launched a product on Product Hunt. They got 100 upvotes, and 1% of the people who upvoted bought the product. They did something really smart thought, they sent a follow up email to everyone who upvoted their product. This resulted in 10 more sales.
Why it worked: Product Hunt allowed them to get attention for free, this turned into articles written by other people, which helped get the word out.
What was the growth strategy for Autoklose and how did they scale?
Shawn Finder and his team extensively used LinkedIn to leverage connections and generate leads. They dedicated 8-10 hours a day on LinkedIn for prospecting, which involved reaching out to potential clients, engaging in conversations, commenting on relevant posts, and sending personalized connection requests and emails. This targeted approach helped them secure demos and build a significant presence in the SMB space.
Why it worked: By using LinkedIn, they could directly reach decision-makers and professionals who were likely to benefit from their sales automation tools. Engaging personally with these contacts and being active in relevant discussions built credibility and trust, resulting in effective lead generation and higher conversion rates.
Customer Success Team
To reduce churn, they hired a customer success team that provided a white-glove onboarding experience. This team spent significant time with new customers, ensuring they understood how to use Autoklose effectively and could see immediate value in the product.
Why it worked: Investing in a customer success team helped in making the initial experience seamless and engaging for new customers. This hands-on support improved user satisfaction, resulting in lower churn rates and higher customer retention. By making sure customers saw results quickly and could efficiently use the platform, they increased the likelihood of long-term subscriptions.
Email Outreach with Personalization
Shawn implemented highly personalized email campaigns using Autoklose itself. They used the platform to send automated yet personalized messages to potential clients. For instance, during campaigns, emails such as "Hi [First Name]" proved effective. They kept emails short and to the point, which increased open and response rates.
Why it worked: Personalized emails that appear to come directly from an individual rather than a third-party service achieve higher deliverability and engagement. By tailoring the content to address specific pain points and keeping messages concise, they were able to capture the interest of potential clients quickly. This element of personalization made recipients more likely to engage with the emails, leading to more demos and ultimately more sales.
Podcasts and Content Marketing
Shawn was featured on many podcasts, including 77 in 2020 alone, which helped drive SEO and backlinks to their site. They also created eBooks involving top salespeople worldwide. These eBooks were shared widely, leveraging the network of contributing sales experts to amplify their reach.
Why it worked: Being featured on numerous podcasts expanded their audience reach and built authority in the sales automation space. The backlink strategy from podcast features improved their website’s SEO, driving organic traffic. The eBooks, by including known sales experts, had a dual effect: they provided valuable content that attracted potential customers and were promoted by the experts themselves, multiplying their marketing efforts.
What's the pricing strategy for Autoklose?
Autoklose offers a subscription-based pricing model starting at $49.99/month for its sales engagement tool, and $500/month for the additional B2B contact database, with discounts available for annual plans.
What were the biggest lessons learned from building Autoklose?
- Flexibility in Pricing: Early on, Autoklose experimented with various pricing models, starting very low to attract first users and gradually increasing prices. This strategy helped gauge customer willingness to pay and optimize pricing.
- Invest in Customer Success: By hiring a customer success team to onboard and assist customers, Autoklose significantly reduced churn. Guided onboarding ensures clients understand and effectively use the product, improving retention.
- Leverage Existing Assets to Fund Growth: The initial funding for Autoklose came from the revenue generated by Exchange Leads. By reinvesting profits, they could develop new products without seeking external funding.
- Negotiation Skills Matter: When approached for acquisition, Sean Finder leveraged his negotiation skills to navigate from an unsatisfactory initial offer to a significantly higher final deal. Understanding the value of your product and team can yield better outcomes.
- Be Prepared for the Unexpected: The acquisition offer came unexpectedly. While not actively seeking buyers, being open to discussions and knowing your business's worth can create opportunities.
Autoklose Acquisition: How much did Autoklose sell for and what was the acquisition price?
Shawn Finder sold Autoklose, a sales automation platform, to VanillaSoft on September 30, 2020, for about five times their ARR.
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More about Autoklose:
Who is the owner of Autoklose?
Shawn Finder is the founder of Autoklose.
When did Shawn Finder start Autoklose?
2018
What is Shawn Finder's net worth?
Shawn Finder's business makes an average of $625K/month.
How much money has Shawn Finder made from Autoklose?
Shawn Finder started the business in 2018, and currently makes an average of $7.5M/year.
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