Lemlist founders explain how they found product-market fit by stopping internal dishonesty: ignoring polite nods from friends and launching a rough MVP instead. An AppSumo launch brought 160K in revenue and real user data, revealing low activation rates they fixed by iterating on UI. They quadrupled activation and tripled paid conversions by building a 20,000-person community and staying focused on their actual customer, not chasing Uber and Facebook.
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365 days later, we were able to achieve these numbers. So we went with the month-over-month growth was at 33%, monthly recurring revenue at $20K, and on top of that, our churn was actually way too high. So I'm even getting a question from Jared. How did you know people wanted to see all this though? This is what we're gonna cover, Jared, in in the future slides, but I would say that what made us realize that as before we even started building the product, Guillaume was an agency owner. So he was actually the one conducting outreach on behalf of his clients. And he realized obviously by networking with a lot of other agency founders and salespeople that the biggest problem that everybody's facing was not even the tech stack. It was really the ability to get replies to the cold emails. And this is obviously the pain that we are all struggling with. Even today. So one of the— at that point, we didn't have any ways to actually personalize our outreach. So people were sending spammy messages, cold emails that were not really getting replies. And the reason for that is because in the initial phases, obviously, we didn't have technology to personalize properly our outreach. So at that point, we decided to bring personalization and give the ability to people to actually personalize their outreach. Now, this was the initial moments of building out Lemlist. However, following that, our product has evolved based on the customer's feedback that we received, and this is what we're going to talk about really soon. So before we go into the how you identify and validate your product-market fit and what are the stages, I want to make sure that everybody that is currently potentially looking to grow their businesses to think about one very important factor in growing your initial stages of your business. Which is the phenomenon that a lot of founders face, which is the internal dishonesty. So internal dishonesty is a phenomenon where we see that founders are actually validating their— they have this amazing idea, they believe that it's gonna change the world, so they get stuck on it. They spend nights and nights thinking about how it can change the world and the pain that they might be able to solve. And what they're looking for is that they're looking for validation of that idea throughout their network, their friends, their family, speaking with the potential clients, and they're just getting, you know, nodding, yes, this is an awesome idea, this might work. And they're relying only on that and asking for this validation from the people itself instead of actually validating it through the metrics. So going to the next part of the— maybe somebody can change the slides. We're gonna go to the So founders will actually see how the world could be better with a product and want it so badly so that all they do is actually day and night is they interpret all signals as positive. So the important part is to realize that when everybody nods in agreement from your network, it's not the same as having the product-market fit. Product-market fit needs to be validated through the metrics itself. We can skip this slide because we're gonna be out of time soon and I wanna go to the actual part of the webinar. So first rule that we've wanted to have is that we want to validate our idea fast. So the one thing that we've done is we built a very bad-looking product that had a very poor interface. And the motto that we went by was that if you're not embarrassed by the first version of your product, you've launched too late. So the mistake that we see is that founders would take months and months of trying to figure out the strategy, best growth strategy, ways to raise funding without actually building out anything and validating it with the audience. Instead of doing that, you want to build something and see if it's something that will actually stick with the audience that you want to target. Going to the next slide. We're actually going to take a look. Our first step in doing so was actually launching our product on Product Hunt. The way that it helped us in the beginning is that we managed to get our product out there and see how many people will actually like the idea of what we want to build. It ended up being actually the number one product of the day. But the mistake that we have made is that what we were offering as a potential value was actually not meeting in reality when it comes to the product. So we had a lot of dissatisfied people, but the one thing that it did help us is it did help us identify that there is a need and request for these types of personalization features. The next step for us was to actually launch on AppSumo. Which is a huge community if you haven't heard of it, that enabled us to get in front of a lot of people that were looking for lifetime deals with early-stage products. And it helped us actually go to $160K in just 2 weeks, out of which we were able to get 30% out of when it comes to the revenue. But the main benefit of it was that we actually ended up having thousands of companies that started taking paying for Lemlist. Why this mattered is not only because of revenue, but for us, this gave us a chance to actually have a batch of people who are actually using the product that we can get feedback from. Going to the next slide, our most important step here was actually getting customers' feedback. We noticed that a lot of people were signing up, but our conversion rate from a free trial to a paid client was actually very low. So we actually started studying and testing our buyers' behavior. So we're not talking about here asking for their feedback and asking them questions on what they think. It's actually tracking the metrics of what they do once they enter the product on a free trial to actually then becoming a paid client. If the activation rate in our case was low, that was telling us that it was something wrong with the experience that they were having with our product. Now going to the next slide. We actually managed to— give me a second for it to change. We decided to track these metrics. So the number of signups, number of activated users, and number of paid users. The most important metric here was actually number of activated users because it's not just enough to acquire people to get interested in your product. It's if they're actually going to use it till the end. Going from here, the number one fail that we have actually had in the beginning was that because our activation rate was low, we actually decided to make assumptions. So we decided to change our entire interface thinking that that was the reason people were not sticking with the product. What happened afterwards is that we actually had very poor feedback from our clients in our community. So going to the next slide, you can actually see a couple of very angry customers back in the early days that were giving us very negative feedback on our interface change. Based on their feedback, we actually managed to change this and actually improve our product. Now, the biggest power and maybe the biggest takeaway that I want you to all have from today's event is that the reason that we were able to get this feedback is because we started building our own community in the early days. So going to the next slide, you will see that this community went to actually right now have more than 20,000 members. And in the early days, this was a critical part of us identifying our product-market fit because we had a community of early adopters that were openly expressing their own opinions on the product, on the platform, of how evolution of sales should look like and what they're actually needing and missing on the market. This feedback that we've gotten from the customers itself and the changes that we have made to the product enabled us to actually increase our conversion rate. From free trial to paid customers by 3 times and activation rate by 4 times. So going to the next slide, I'm going to quickly jump through this. The moment that we have hit this moment, the number one, the second fail that we have made, and I know that a lot of you might be tempted to do the same, going to the next slide as well, is that we got distracted from our main ICP. So ideal customer profile. So after that AppSumo launch that I mentioned, what happened is that we've gotten some very nice logos coming to us, such as Uber, Facebook, et cetera. And obviously we were very tempted to go along and hunt these companies down, sign them as clients, put those big nice logos on our website. And what ended up happening is that we've spent way too many time, way too much time on companies that were actually not our ideal customers. Profile where the product's going to meet their needs. And we spent tons of resources trying to hunt down basically wrong audience. The most important part here is that you need to work backwards from your total addressable market and find out your real niche of who your target, who your product is actually going to help out the most. So the way that we've managed to do this, and we've the steps that we have taken to actually go and find out our product market fit, what is the clear value proposition for it, and who is our target audience at the end of the day, was actually by following the guidelines of Superhuman, a very amazing startup that had a very nice survey that they've launched.
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