Folk: A Successful Go-To-Market Strategy and Scaling to $10M ARR

Folk, a startup in the CRM market, managed to reach their first million in ARR in 4 years.

Currently, Folk has over 100,000 users, including 2,000 paying customers, and records 5x revenue growth in one year. They went from $200k ARR to $1M.

The Launch of Folk

Folk's Go-To-Market began with the CEO gathering 10,000 signups before the product was even developed. They created a landing page with the value proposition: "Get the most out of your network." This value proposition was the result of over 600 interviews conducted by Simo Lemhandez, Folk's founder.

To drive traffic to this landing page, they leveraged the Efounders network through LinkedIn posts and newsletter communications.

They faced a huge and highly competitive market, but with their personal CRM approach dedicated to professional networking and competitive pricing, they managed to stand out.

Development and Product Hunt Launch

Folk spent 12 months launching an MVP, where they manually onboarded several hundred users on a closed version.

This allowed them to show signs of traction and secure a $3.3 million funding round in September 2021. They then refined their MVP for 6 months before launching it as a freemium model on their website. Though development time was long, it allowed them to anticipate the Go-To-Market.

Their first Product Hunt launch was a huge success, estimated to have brought in between 2k and 5k users.
They received over 172 reviews, mainly from the Efounders network but also from their early beta testers.
With more than 2,600 upvotes, Folk was elected product of the month in April 2022, ensuring visibility on Product Hunt's homepage for 1 month. Product Hunt is a site that receives 3 million monthly visitors.

Pricing and Continuous Experimentation

Evolving Pricing Strategy

Folk adjusted its prices by doubling them every six months to find the right balance between accessibility and revenue maximization. The basic positioning is personal CRM, but Folk's ambition is to compete with CRMs like Hubspot. As product improvements and requested features were added, prices evolved for everyone (without charging clients feature by feature).

In 2020, Folk offered pricing that was 4 times lower than current pricing.

This price increase was possible because:

CRMs have the ability to "lock in" customers, making it a significant undertaking for a company to change providers.
Early product customers are satisfied with the evolution and direction of the product and are willing to pay more for a more complete product (the price remaining significantly lower compared to Hubspot).

The freemium model still represents 98% of Folk's users (2,000 paying customers out of 100,000 users).

Onboarding Optimization

Folk started with manual onboarding. An onboarding process that systematically included a sales demo before accessing the product, allowing them to maximize closing rates early in the journey. This also allowed them to continuously learn about their target customer while explaining the product's value before first use.

They then made the pivot to self-serve because with a low average basket size, sales needed to focus on closing larger deals.

Folk's Main Acquisition Channels

LinkedIn: A Primary Channel

Today, 70% of Folk's acquisition comes from LinkedIn. The company uses the platform to promote its product through posts sponsored by well-followed influencers. This strategy allows them to effectively reach a targeted professional audience.

Folk invests between $30,000 and $70,000 per month in LinkedIn influence.

SEO, SEA, and Affiliation

In addition to LinkedIn, 30% of Folk's acquisition comes from other channels, notably SEO, SEA, and an affiliate program. While these channels are used, they play a complementary role to the main LinkedIn-based strategy.

Development of Their Own Lead Attribution Algorithm

Folk, while multiplying its marketing channels, also developed its own internal algorithm to more precisely track the sources of incoming leads.

International Acquisition

Folk is a French startup but only 20% of their users are in France. 60% of their clients are in the United States, as the CRM market is larger there, allowing them to establish a market presence more quickly.

An Agile Team to Support Growth

Team Organization

Folk's team consists of 22 people, with a balanced distribution between commercial and technical functions, essential for viable startup scaling. Folk has 13 commercial employees and 9 technical profiles.

Demos and Targeting Service SMEs

Folk conducts 200 demos per week, primarily targeting small and medium-sized service businesses, which are their ideal customer profile (ICP). These demos not only serve to improve customer knowledge but also to close larger contracts. Their main challenge being to convert freemium users to paying users, they prioritize these demos based on the size of companies registered on their platform. This allows them to maximize the MRR generated by sales and focus on their most promising ICP, transitioning from the image of a personal CRM for freelancers to a CRM for small and medium-sized service businesses.

Conclusion

Folk is an example of successful Go To Market in a highly competitive market. It's important to have a clear vision of where you want to take your startup while adapting along the way.

Folk illustrates that it's crucial to constantly discuss with customers. The CEO's 600 interviews helped mature the value proposition, and the 200 weekly demos guide product and sales strategy.

Starting with a personal CRM aimed at freelancers, Folk gradually adjusted its strategy and prices to evolve into a product capable of attracting agencies and service SMEs.