April 3, 2024

How to best grow your business? - Interview of Emeric Ernoult, CEO of Agorapulse.

by 
Vincent Gouedard
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Emeric Ernoult is the CEO and co-founder of Agorapulse – a leading social media management tool used by over 11,000 businesses worldwide. He is an example of a dynamic entrepreneur with a passion for innovation and problem-solving. 

As a serial start-up founder, Emeric thrives on navigating complex business landscapes and crafting solutions to drive organisations towards success. His knowledge of web community behaviours and online social interactions has been central to the development of Agorapulse. 

In this interview, we share Emeric’s concrete advice and insightful narratives from his entrepreneurial journey, offering valuable advice and motivation to all business leaders willing to grow their start-ups. 

Agorapulse: a model of success for start-up owners

Agorapulse marked Emeric’s second entrepreneurial project with his partner Benoit Hediard. The French platform quickly stood out in the industry and was qualified as a "leader" in 14 categories on the software rating platform G2.

Initially focused on Facebook applications, the start-up shifted to acquiring customers through influence rather than direct sales, resulting in rapid growth. Within a decade, Agorapulse soared from generating €140,000 in annual revenue to achieving the same figure every three days, making it an inspiring entrepreneurship success story

Reviewing essential financial metrics, the importance of timing and adaptation, and the value of learning from your peers, Emeric outlines the key factors enabling you to develop and grow your business effectively. 

In Emeric’s words: "Business success is hard work and luck"

Let's delve into that!

The importance of critical financial metrics 

Growth and retention metrics

Emeric insists on the importance of paying attention to the right metrics throughout the development of your start-up. That is part of what he calls “the hard work”: analysing and understanding your business’s results and what they mean.  

As a SaaS business owner, you should pay attention to growth and retention metrics, or, in other words, standard metrics. In terms of growth, you can look at:

  • your New MRR or Monthly Recurring Revenue (MRR), tracking the predictable and repeatable revenues you are generating;
  • your Gross New MRR, which is the total revenue generated from new subscriptions or upgrades acquired within a specific period, without subtracting losses or reductions;
  • and your Net New MRR, which considers the revenue gained minus revenue losses.

Regarding retention, Emeric mentions the importance of net MRR return, which measures the net increase or decrease in MRR, and net revenue retention, which represents the percentage of revenue retained from existing customers.

However, most importantly, you should know what those metrics mean for your business’s evolution. To do so, you might want to take a closer look at it by analysing other variables such as reactivation, voluntary and involuntary churn, etc. 

Understanding your metrics  

According to Emeric, you should interpret your metrics to have them tell a story

If you cannot read your KPIs, they won’t give you insight into your business, ultimately preventing you from leveraging them properly. To tap into that, you must understand your business's core (your business plan, the region you operate in, the type of subscriptions, commitments, customers, etc.). 

Emeric recommends understanding whether your metrics look good or bad, whether they are going in the right direction, and especially why. This will allow you to make better changes, allocate resources, or make strategic decisions (e.g., doubling down on PLG, the sales team, or the agency segment) and ultimately grow your company efficiently and successfully.

Metrics evolve as your company grows

The metrics Emeric focused on significantly evolved throughout Agorapulse's growth. 

Initially, he relied heavily on inbound marketing for customer acquisition but found that this approach was most effective for smaller businesses. As the company scaled, he realised the limitations of this model, particularly concerning SMBs’ propensity for higher churn rates. Now, he emphasises metrics like Net MRR Churn and prioritises strategies for customer expansion to offset churn, recognising the importance of these metrics as revenue increases.

Here is the idea: as your start-up grows, you should transition from focusing on customer acquisition metrics to prioritising customer retention and expansion metrics (such as Net MRR Churn). This reflects the needs of a growing business while balancing acquisition with retention and expansion strategies, sustaining long-term growth. 

VC-founded vs bootstrapped companies

Emeric also points out that your strategy depends on your business type and whether you receive funding. 

For instance, bootstrap companies prioritise profitability and healthy growth because they lack external funding and cannot rely on investors for financial support. In contrast, VC-funded companies, while now more focused on profitability, still prioritise growth at any cost. Investors expect significant returns and may provide financial bridges, leading to a lesser focus on profitability than bootstrap businesses.

Remember, you can adapt your financial metrics and strategies to match your objectives and business type to achieve better growth. 

How do you follow market trends and demands? 

Luck and hard work

While it's important to work hard in your business so that you don't leave everything to chance, Emeric says that part of the process is still down to luck. You want to adapt to market trends and demands, sometimes by making risky decisions that may or may not pay off—and that's where luck comes in. 

That is how Emeric adapted to changing market demands to achieve sustainable growth and cater to a broader range of customers. Agorapulse started with only six employees and focused on SMBs. They achieved a revenue milestone of $2 million before gradually expanding their focus to include mid-market and enterprise clients. Over time, the team grew to over 20 employees, and their revenue reached $5 million. 

Throughout the process, Emeric significantly changed Agorapulse’s product, particularly in areas such as legal compliance and security measures, to meet the needs of larger clients. He recognises that the success of such changes sometimes depends on luck. 

Right timing and adaptation

At the core of Agorapulse’s success lies adaptation and reactivity. As Emeric puts it, growth is linked to a constant pivot from one service to another according to the market’s realities. If luck and good timing are essential here, they are always combined with strategic decisions (about the vertical you are working on, business model, or business type).

As your start-up and strategies evolve, Emeric's main advice is to monitor and question your practices constantly. Never take anything for granted. While operating changes on your business (eg. from PLG to sales-driven), or focus (eg. SMB to mid-market), you should never assume that what you are doing is right simply because it was right before.

Questioning your practices will help you spot and fix your mistakes. According to Emeric, mistakes are very likely to occur when transitioning from familiar practices to new ones. If your processes, employees, indicators, and KPIs are right in one scenario, they might not be in the next one. That is why you might have to make hard decisions such as letting people go, cutting off tools, destroying processes, or creating new ones. 

Therefore, following Emeric’s words and experiences, when erasing the whole board and starting new, you must remember to “be very, very agile with your practice.”.

Informing yourself and learning from peers

Alongside this process, Emeric advises you to remain up-to-date, informed and interested in new trends, methods and techniques. Here's why.

As Emeric emphasised, operating a pivot in your company can be challenging. “You have to get your energy back as a founder”, he says. Indeed, as you switch to a new model, everything is suddenly back to how it was in the early days of your business, meaning gritty, messy, and rough. Therefore, if you are not enjoying the transition to a new environment or make a change out of necessity but lack enthusiasm for it, you will influence the process and its outcome and risk failure. 

This is why Emeric recommends getting into the new topics you are approaching. To do so, you could talk to peers who have undergone similar changes and experienced the accompanying challenges and consequences. Similarly, he advises listening to SaaS podcasts, notably the ones from Jean-Louis Bénard, the CEO of Sociabble. Here is a selection of other detailed and comprehensive podcasts you could check out:

  • The SaaS Podcast: Omer Khan’s channel features over 400 interview-based episodes with startup founders and provides advice for growing your business from its early stages.
  • Saastr Podcast: Harry Stebbings and Jason Lemkin teach you how to scale your start-up successfully to faster achieve a $0 to $100m ARR growth.
  • SaaS District: Akeel Jabber gives you financial insights (metrics and KPIs, investing, fundraising, etc.) and actionable tips for your start-up journey. 
  • The SaaS Venture: This is a great channel to learn about pricing and day-to-day entrepreneur activities.

Learning from your peers will help you identify your weaknesses and give you insights into what you should focus on and invest in, helping you strengthen your company and strategies. 

A few pieces of advice on pricing

Finally, Emeric shares three critical pieces of advice on pricing to guide you through this delicate matter during your start-up journey. 

Pricing should be rethought once or twice a year

When discussing pricing strategies for sales companies, Emeric emphasises the fluid nature of pricing in the SaaS business world, asserting that there isn't a singular "correct" pricing scheme. Instead, your pricing must adapt continuously to align with market shifts and business evolution. 

For instance, he notes the distinct requirements between PLG and sales-driven models, highlighting the importance of regular assessment and adjustment of pricing strategies to suit the business landscape. He says pricing should be rethought at least once and ideally twice a year.

Changes in prices should be done one element at a time

Emeric secondly advises you to take a cautious approach to price changes, with gradual adjustments. He warns against a review of price structures all at once, suggesting instead changing one aspect at a time. 

By isolating modifications, you can accurately gauge the impact of each adjustment and make informed decisions. This enables you to control your pricing strategies while minimising the risk of unforeseen consequences.

The downfalls of under-pricing & fast price increase: why you shouldn’t do it

Lastly, Emeric discusses the delicate balance between pricing too low and too high. He advises not to underprice products in the early stages, as this may undervalue offers and hinder growth. Conversely, too high prices can deter customers and reduce demand. Emeric advises finding an optimal pricing point that maximises the product's perceived value while ensuring it remains accessible to the target market. 

Understanding the customer's willingness to pay and the product's value proposition is essential for successful pricing in a competitive SaaS environment.

Conclusion

Emeric Ernoult's knowledge as an entrepreneur and co-founder of Agorapulse offers invaluable lessons for aspiring start-up owners. His experiences underscore the importance of adaptability and strategic decision-making in navigating the challenges of the start-up journey. From understanding critical financial metrics to staying attuned to market trends and learning from peers, Emeric's insights provide a roadmap for building and growing successful businesses in the current competitive environment.

As Agorapulse has grown from a small start-up to a global leader in social media management, Emeric has shown the impact of innovation, combined with a little luck and a lot of hard work. By embracing change, remaining open to new ideas, and prioritising customer value, you can follow Emeric's footsteps and chart your path to success.