#3 SaaS Bootstrappers Interviews - Stefan Smulders

LinkedIn: https://www.linkedin.com/in/smuldersstefan/
Twitter: https://twitter.com/SmuldersStefan
Website: https://expandi.io/
Expandi’s Ebook About LinkedIn Usage: How to Generate Leads on LinkedIn Automatically
Expandi Open Positions: Click Here.

Expandi is a LinkedIn automation tool designed to streamline your LinkedIn processes, including sending connection requests, founded in 2019.

The company successfully established itself in a competitive market by differentiating its product as cloud-based, rather than a traditional Chrome extension like their competitors.

Stefan, one of the co-founders of Expandi, generously shared the entire journey of the company in this interview with remarkable transparency. His insights provide a comprehensive look into how Expandi carved out its unique space in the market.

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Can you provide details about your background and the company you founded before Expandi, LeadExpress?

Interestingly, I come from a non-technical background with no coding skills. I've always been the marketing guy, focused on growth marketing. 

During my university days, one particular question always intrigued me: Why do only about two or three percent of visitors on average B2B websites take action? The rest, the majority 97%, remain unidentified, especially in Google Analytics where you get some location data but no actual identification.

This challenge led me to discuss it with my co-founder, Glenn. We pivoted towards creating LeadExpress, an IP tracking software similar to LeadFeeder and Albacross. We started it as a side hustle, balancing it with our regular jobs. Our focus was on traditional marketing methods and leveraging a local database. This effort brought us close to 1.000 subscriptions, mainly from small business owners and marketers. They were interested in seeing who was visiting their website but struggled with effective follow-ups.

This led to an interesting observation. I noticed users making awkward phone calls to companies, trying to find out who visited their website. This approach often backfired and, as a result, they sometimes blamed us, the service providers. 

Through discussions, I understood their core need – they wanted to make business appointments and needed a better way to engage with the leads identified through our software.

This realization pushed me towards LinkedIn. With only 143 connections and no prior experience using LinkedIn for commercial purposes, I started exploring it as a lead generation channel. It quickly became my most effective lead channel. 

At that time, I was using basic lead generation techniques on LinkedIn, involving connection requests, targeted outreach through Sales Navigator, and follow-up messages. This approach quickly became my primary lead channel. To assist LeadExpress customers facing similar challenges, I began helping them book appointments on LinkedIn using LeadExpress for lead identification. Managing this for multiple customers manually became time-consuming, prompting me to search for automation solutions.

I tried various tools like Duck-soup, Linked Helper, and MeetAlfred, but they all shared a common limitation – they were Chrome extensions requiring complex setups like VPNs and multiple browser sessions. This setup was cumbersome and hindered my ability to scale the agency.

Frustrated, I discussed these challenges with my co-founder, Glenn. 

When was Expandi founded?

Expandi came into existence in February 2019. That was when Glenn, my co-founder, made our first GitHub registration. I didn't contribute to the technical side, but I was deeply involved in conceptualizing and strategizing. We officially launched the service, integrated Stripe for payment processing, and began operations. Initially, it was alongside my agency work, a side hustle that quickly evolved into a primary focus.

How was your early days? How did you handle the investment and hiring part?

Investing in our project, Expandi, required a delicate balance of time and financial resources. This often felt like navigating a chicken-and-egg situation. The commitment to fully developing and launching this project necessitated not just our undivided attention but also a significant portion of our personal savings. 

Recognizing the potential of our idea, we onboarded several young developers. They worked diligently in Glenn's makeshift rooftop office, tirelessly piecing together the initial prototype. Despite its rough edges and the need for numerous improvements, it was evident that there was a real demand for our solution, particularly among businesses already utilizing IP tracking software. These businesses appreciated the technology but consistently struggled with the crucial aspect of follow-up engagements.

To address this gap, I embarked on an extensive data-gathering and analysis project. Utilizing tools like buildwith, I compiled a comprehensive list of companies currently using our competitors' IP tracking software, with a focus on the marketing personnel within these organizations. I prepared a CSV file loaded with their LinkedIn profiles and imported it into Expandi. This was our first real-world test.

Although somewhat unconventional, this strategy was crucial for validating our approach. It enabled us to engage these potential users directly on LinkedIn, leveraging our platform. The result was impressive – we managed to secure approximately 30 to 40 appointments each week, a clear indicator of the value and effectiveness of our approach.

However, the journey wasn't without its challenges. Convincing our potential users that LinkedIn was a viable channel for lead generation and that automating certain tasks could save them significant time proved to be a hurdle. It took considerable effort to overcome these obstacles, but once we did, another challenge emerged: Our users were uncertain about how to engage effectively with the leads they generated. 

This feedback was invaluable. It illuminated a critical limitation of our initial focus on the local market and underscored the need for a broader, more global strategy.

To scale our efforts, we needed to think beyond local boundaries and venture into the global market. This was a daunting prospect, one that required strategic planning and collaboration with growth marketers and community builders. Our financial constraints further complicated matters. We didn't have the funds for traditional marketing efforts, forcing us to think creatively about how to generate the necessary capital for our global launch.

In response to these challenges, we turned to our base of 300 beta users from the local market. We offered them an annual subscription to our service at a reduced rate, requiring upfront payment. This strategy not only provided our early adopters with the tools and templates they needed to achieve better results but also served as a crucial funding mechanism for us. Remarkably, 60 of these companies accepted our offer, enabling us to quickly raise around 50,000 euros. This influx of funds was instrumental in our preparations for a global launch, demonstrating both the potential of our business model and the willingness of our user base to invest in our solution.

How was your emotional situation at that time?

Of course, running our business incurred significant costs. Initially, we couldn't draw salaries for ourselves, so we relied on our savings and the income of our spouses to get by.

This period was emotionally challenging. There were moments of doubt, wondering if we were on the right path, especially when faced with difficulties. It's tempting to return to a more comfortable and secure routine in such times.

The thought of seeking venture capital (VC) funding crossed my mind. The fact that we had 300 subscribers, with 60 of them willing to pay a year's subscription upfront, was a strong indication of our solution's viability. Their readiness to invest in our service upfront was a compelling sign of its potential success.

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Did you consider VC funding at that time, or were you focused on bootstrapping?

At that time, seeking VC funding wasn't even a consideration. We saw immediate traction and growth upon launching Expandi in mid-November 2019. Within six months, we achieved a 1 million ARR, allowing us to cover costs and generate income with a small team. Our rapid success and self-sufficiency meant that we didn't feel the need to seek external investments.

How many employees did Expandi have in its early stages?

In the beginning, we were a small team of about seven or eight colleagues, each wearing multiple hats. It was a lean operation with everyone contributing to various aspects, from support to strategy, wearing multiple hats.

How did you attract talented individuals to your startup?

We built relationships with international students at Eindhoven University, many from Bulgaria, who needed work to stay legally in the Netherlands.

You're active on LinkedIn and have a community on Facebook. How do you manage these platforms, and what benefits do they bring?

In the early stages of our business, we didn't focus on traditional marketing or paid advertisements, primarily because our budget was limited. Instead, we believed in creating valuable, practical resources, such as eBooks and playbooks. These materials detailed the best strategies for lead generation on LinkedIn, complete with examples, proofs of success, and step-by-step guides. We devoted considerable time to crafting these eBooks and playbooks, believing they would be more beneficial to our audience than conventional marketing methods.

To assemble a community around our brand, we adopted a strategy of community marketing. This involved using our tool on our profiles to design and test innovative, out-of-the-box strategies for LinkedIn. These strategies, which were previously unexplored by others, yielded the best results for us. We meticulously deconstructed these tactics, creating comprehensive guides with detailed explanations, messaging strategies, proofs, results, and screenshots. These guides were then distributed across various communities and channels where our target audience - growth marketers, agency owners, and sales teams - were likely to be found. Our aim was to funnel these individuals into our own community.

We envisioned this community as a safe space for like-minded professionals to discuss LinkedIn lead generation strategies, share experiences, and provide feedback. This approach not only facilitated direct conversations with our audience about their needs and content preferences but also allowed us to gather valuable insights for product development and refinement.

Our community became a vibrant hub for sharing tactics, strategies, and insights about LinkedIn. In the early days, I juggled multiple roles, from content creation to engaging with community members, conducting demo calls, and providing support. This hands-on approach helped us grow organically and build solid relationships with our audience, compensating for our lack of budget for traditional advertisements.

Now, with nearly 55 employees, our company structure is more organized with defined processes, departments, and responsibilities. We have a community manager responsible for maintaining our Facebook group and nurturing relationships with members. This shift from a one-man operation to a structured team has enabled us to maintain and grow our community effectively, continuing to build relationships and trust that have been pivotal in our expansion and success. Our approach, focusing on building relationships rather than spending on ads, has proven effective, setting us apart from larger companies and positioning us as pioneers in our field.

Could you share some challenges you've faced and how you've overcome them?

Navigating the journey of a startup founder is laden with struggles and challenges. To outsiders, everything might seem smooth and successful, but the reality is often quite different. In my case, I began with a mindset typical of an early-stage startup founder. My approach was characterized by a 'growth hack' mentality, where I thrived on the hustle, embracing creativity and spontaneity over data-driven strategies and structured processes.

However, as we reached a certain plateau in our growth, it became evident that a change in approach was necessary. This realization was both daunting and uncomfortable for me. Transitioning to a more process-oriented, structured, and systematic way of operating, especially with a growing team, required a more data-driven approach. This shift was a far cry from my natural inclinations and left me feeling out of my element.

The feeling of being overwhelmed and unable to address these new challenges single-handedly was disheartening. It was my first time leading a successful SaaS company, and I often found myself at a loss for what steps to take next. Acknowledging that I was holding a 'golden egg' with immense potential, I knew that every decision had to be made with careful consideration.

I reached out to them for guidance, sharing my story, our achievements in terms of revenue and profits, and my uncertainties about the future. Their initial disbelief at our success as a bootstrap company quickly turned into laughter when I concluded my presentation. Their unanimous advice was simple yet profound: hire people for tasks that are beyond your skillset or those you dislike.

This advice was a turning point. It helped me to communicate more effectively with my co-founders and seek out individuals who could complement our skills and help us develop a clear action plan. This process of reaching out and networking not only helped me overcome my personal challenges but also unlocked new opportunities for our company.

Embracing this advice, I started focusing on activities that I excel in and enjoy. I became more outgoing, participating in events, delivering keynotes, and contributing to podcasts. This shift in role also included working on Expandi's branding and authority, building a public presence, and growing a significant following. This new approach significantly enhanced Expandi's brand recognition, especially in the LinkedIn automation space, making us a leading name in the industry.

This transformation also positively impacted our recruitment efforts. We no longer relied on external recruitment companies. The content I shared on platforms like LinkedIn and Twitter resonated with potential candidates, attracting talented individuals who were eager to be part of our unique bootstrap success story.

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