Exit for AdEspresso: A Great Example of Dual Model on Steroids
AdEspresso sold the company to Hootsuite!
News like this make me truly happy, but in this case I’m twice as happy. First of all, an Italian, a friend of mine — Armando — made it and sold his successful company to an Internet giant and secondly, his company, is one of the best example I know of “dual model on steroids”. AdEspresso, in fact, has been structured since day one on two continents: the founding team in San Francisco and the rest of the crew in Italy.
They are just 3 years old, but they have amazing metrics to share:
from zero to 40+ people, 5k+ customers, 100k+ subscribers, 350k+ monthly uniques, $25M/mo+ AdSpend processed.
Unbelievable and not just for some Italian guys, but for top startups on the planet Earth. They wrote on their blog:
Today we are the most widely used Facebook Advertising Optimization Solution in the world.
… it’s mind blowing if you stop thinking about it! This amazing team demonstrated some really important things to the rest of the world:
1 — You can bootstrap your idea as a side project in your web agency from Italy and make it a hit.
This is really good for Italian startups, because it is the perfect model for our country. Make enough money with your digital services and invest part of your profit in one product — I’m saying “one product”, not two, not three; one.
2 — When you understand your product has potential to fly high, it’s better you incorporate in the USA.
We are talking about companies with a global business here, that’s what startups are. If that is not your case, don’t panic, you simply are doing a wonderful lifestyle business. You just don’t want to go from meeting to meeting with professional investors looking for capital. If you need money to start your business, ask them to your friends, family members or find an company that can be your partner for the next 20 years.
3 — You can raise a small amount of money and make it last forever.
That is easier if you localize part of your team outside the the USA or outside Silicon Valley, at least. For AdEspresso that place has been Italy, because they are Italians and they know how to manage an Italian company with the right energy, make people happy and keep everyone laser focused.
4 — If you raise money on a USA legal entity, you can probably get a visa to make business in that country.
That is always one of the main problems if you want to set up a US business. You need work permits, at least for the founders. After that you probably need some other visas for you key people in Italy and in this case, having an Italian subsidiary is a great strategy — see L1 visas.
5 — A good product becomes revenue positive and profitable very soon, if you can keep the burn rate under control.
Keep an eye on your burn rate or even better, have a strategy to lower your burn rate systematically: it’s always a great idea. Raising money will become increasingly complicated. The competition will be higher and higher, people want to get your metrics, your ARR, MRR, CAC, LTV …. and most of the time the answer is “Great, come back when you have more”. Capital you raise from investors doesn’t last forever, but you can make it last longer. So as you can see Italy is damn cheap, plus is a great place to leave.
6 — To make a great product you need talent and you need a strategy to retain them in the company during the years.
That’s one of the biggest problems founders face in Silicon Valley. Talent is over and best people normally don’t want to work for a startup of an Italian immigrant with no track record. So Italy makes a perfect sense once again, because it’s a lot easier to get access to talented designers, programmers, community managers and social media specialists.
So, congrats on your exit AdEspresso and keep talking to us. Keep telling your story on your blog and let us know how you made it. Here at LombardStreet.io we are betting on companies like yours, with great founders and smart Italian teams ready to win big with our help.