A Product Market Fit Show | Startup Podcast for Founders

After I passed, this startup grew 30x in 3 years to $10M+ ARR. Here's how he did it—& what I missed. | Francois de Kerret, Co-Founder of Zeffy

Nov 28, 2024

Francois de Kerret, Co-founder of Zeffy, a nonprofit fundraising platform, shares his remarkable journey from raising a $3M seed round to achieving over $10M in annual recurring revenue. He discusses the company's unique tip-based revenue model that allows nonprofits to use Zeffy for free. Francois highlights the importance of building trust, effective marketing strategies like leveraging Google Ads, and the significance of reaching profitability quickly. He also recounts the pivotal moments that led to Zeffy's impressive 30x growth in just three years.

30:36

Episode guests

Francois de Kerret

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Episode notes

Podcast summary created with Snipd AI

Quick takeaways

Francois emphasizes the significance of adaptability in business, illustrating how Zeffy overcame pivots to achieve product-market fit in nonprofit fundraising.

The unique revenue model of relying on voluntary tips rather than fees has played a crucial role in building trust and sustaining profitability for Zeffy.

Deep dives

Evolution of Zephy's Business Model

Francois, the founder of Zephy, transitioned his business through various stages before settling on a successful model for nonprofit fundraising. Initially launching a marketplace for volunteering, he discovered the nonprofit sector's needs and pivoted towards a platform that facilitates donations. Zephy operates on a unique model where it offers a free donation platform while leveraging tips, which proved essential in building trust with users. This evolution highlights the importance of adaptability in achieving product-market fit in a rapidly changing environment.

Intro

3min

Evolving Philanthropy: From Corporate Models to Nonprofit Platforms

6min

Scaling Strategies for Startups

10min

Profitable Growth Strategies for Startups

8min

Enhancing Nonprofit Engagement Through Innovative Platform Solutions

2min

Identifying Product Market Fit and Founders' Advice

3min

Zeffy is one of my biggest misses so far. I met Francois 3 years ago when he was raising his $3M seed round. But I passed.

They were at ~$500K in revenue at that point. In the last 3 years, they've grown 30x. Clearly, I missed out.

But it's been a long road for Francois. Before he got to the current idea, he had to make 3 pivots, including building a marketplace and selling to schools.

Finally he landed on what Zeffy is today, a fundraising platform for nonprofits. The crazy thing is that it's absolutely free to use. They make all of their money, which is now in the tens of millions in revenue a year, from tips. Voluntary tips that are given by donors while they donate to the nonprofits who use Zeffy's platform.

It's not an easy model to wrap your head around, but it's working in a big way.

Takeaways

How to use new revenue models as differentiators.
When to use sales-led vs marketing-led growth.
Why the one and done funding model can work so well
Why getting to profitability gives founders so much power.

Keywords
fundraising platform, nonprofits, product market fit, startup growth, profitability, marketing strategy, trust building, talent density, donation model

Timestamps
(00:00:00) Intro
(00:02:49) The Origin of Zeffy
(00:05:56) Gaining the Trust & Cold Calling
(00:08:52) Having a Sales Team Not Trying to Get Money
(00:13:21) Zeffy's Growth Timeline & Raising
(00:15:35) Google Ads Changed the Game
(00:18:54) The Mindset After Raising the Seed
(00:21:50) Staying Conservative When Recruiting
(00:24:05) What Makes Zeffy Unique
(00:27:38) Finding True Product Market Fit
(00:28:37) One Piece of Advice

Send me a message to let me know what you think!

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