How To Get from $0 to $10K MRR. Key steps and tips from Folderly Success Story

Just imagine — money automatically returns, and even more.
Every. Single. Month. Amazing.

If you're launching a startup or are in the middle of product development, recurring revenue is probably the lifeblood of your company. It ensures a steady stream of income you can count on and allows you to track business growth over time.

But what if it becomes challenging to find qualified prospects, and you are on a limited budget? You need a comprehensive approach.

Read on to get inspired by Folderly’s success story of increasing MRR and get actionable tips to implement immediately into your business growth strategy.

Monthly Recurring Revenue (MRR): What It Is and Why It Matters

Just a few words on what MRR is, so you can ensure you know the essentials. Monthly Recurring Revenue is the amount of money you get from monthly subscriptions to your product or service. It’s stable. It’s predictable. It’s increasing every month if everything is set well.

How to track it? The formula is simple: you need to multiply the monthly subscribers by the average billed amount per user.

❗ Remember that MRR is only about monthly billing intervals. If you bill someone $1,200 annually, divide that number by 12. Then, use $100 as an average billed amount in your MRR figure.

There are a few reasons why this metric is so important for startups:

• Evaluating the success of your business so far. Based on MRR, you can see whether products and services are in demand in the market or how successful your marketing is.
• Taking urgent measures. In case MRR does not change or is decreasing, it becomes a sign for urgent measures, such as refining the marketing strategy, improving the quality of the product, or better studying the target audience.
• Generating forecasts for business development. Evaluating your MRR is an essential step in setting goals for the marketing and sales department from the long-term perspective.

Actionable Tips that Helped Folderly Team to Skyrocket MRR

The following are the most important factors that positively affected MRR in Folderly, and a brief guide of how to play them in your favor:

Define a unique value proposition

Your startup can be truly cool (we bet it is). But what makes your product unique?

Before people learn it by using a tool, potential clients need the answer to WHY. Especially in the modern competitive world. That’s why the part of increasing your MRR is identifying what makes your product stand out.

At its heart, a unique value proposition (UVP) should quickly answer a potential customer’s most common question when encountering your brand:
“What makes this product better than similar products?”

There are three main steps to answer this:

• Define what your prospects need (and want).
• Define what your product does well.
• Define what your competitors do well.

Your UVP is in the area when “What your prospects need (and want)” and “What your product does well” collide. Concentrate on growing this area to increase your MRR.

Wait. But what if, after doing these analyses, you’re left without an effective idea for your business? 🤔

Before you decide that all good solutions are already used by competitors, remember that in almost every area, there is something that needs to be improved or optimized with the help of IT. The rule is simple:

❗ The more important the problem and the more people who face it — the bigger the business can be built around it.

If you have not been able to figure out your unique value proposition even after applying the formula above, search for information about what startups in the industry are currently being launched in the world.

This may lead to getting inspired for your idea. But never borrowing. Because a unique value proposition is impossible to achieve with copying.

💡 The practical tip: Apply UVP formula to define what jobs your business does for customers. It’s not enough “to be unique.” You need always to consider what your target customers need and want.

Customer-centric product development

Before you can implement such obvious tips as “charging more for your services to increase MRR,” you must make your product a 100% match for customers. Of course, there will always be points for improvement. But orienting at 100% match for customers' needs and making it at least %70 is already a success.

Just remember — step by step.

A few key pieces of advice from Folderly to making your product development client-oriented:

• Asking for users’ feedback. Regularly.
• Ensuring customers are part of the product development process at every step.
• Collaborating with the client directly. Trust is the long-term game.
  Involving customers as early as possible. This is the only way to kick-start successfully.

Engaging with customers at scale is a competitive advantage regardless of your industry. If your product becomes a solution to most related problems, a time saver, and an increase in their productivity, they’re unlikely to risk abandoning you.

💡 The practical tip: Arrange calls with your trustworthy users and ask what can be changed, so they can benefit from your product even more.

Complementing marketing and sales channels

What affects your MRR rates more - email marketing or social networks? Tricky question. They rather complement each other.

The main channels for attracting new customers:

1. Social networks (SMM).
2. Targeted advertising.
3. Search promotion.
4. Contextual advertising.
5. Email marketing.
6. Value-oriented content.

But let’s concentrate on the two most proven ways of attracting new leads — email marketing and social media.

Foremost, both channels are driven by unique content. Customers receive hundreds of emails and view thousands of social media posts, so your content needs to stand out from the rest.

💡 Social media tip from Folderly: creating viral and shareable content and trying different social media platforms. You never know where is your perfect lead waiting for you.

Email marketing is usually more complicated. Did you know that Folderly was also born out of need? There was a problem with ensuring all emails were delivered directly to the inbox and reached the target audience.

So don’t worry if you do not have enough knowledge in this area. Such AI tools as Folderly will do it better and faster. This email deliverability service combines the best delivery practices and will show you how many of your emails end up in the subscribers' inboxes.

How does it work? Folderly provides an analysis of the previous activity of the sender and the reputation of the domain and shows what needs to be changed. As a result, all your emails will get into the Inbox folder, and your mailing lists will be turned into an effective marketing tool.

💡 The practical tip: Set up Folderly to ensure your emails are emailed deliverability rate is high, and your great emails land in the right place. Let your MRR increase from emails!

Management & operational structure: right people in the right place

The key to happy customers? Happy Employees.

It’s always about motivated people. The best teams with good ideas are more likely to have increasing MRR than good teams with the best ideas.

At the first stage of a startup, it is important to know who will become a co-founder of the company. Ideally, people should complement each other: one can be well versed in business, and the second in the technical part. This will increase your chances of success. However, over time it’s imperative to attract new specialists.

Depending on the field of activity, there should be a technical director who understands the numbers, a sales manager who will generate cash flow, and a person who will communicate with users and collect feedback.

Also, it’s all about proper management. The scheme of work in each company and team is developed independently. The founder should be able to delegate part of his functions, and top managers should be able to divide the work further.

Here are essential steps that helped our company to build the growth team in Folderly:

• Recruiting people capable of developing themselves in the team.
• Relying on professional employees to do their best. Trust always pays off.
• Creating a safe atmosphere where everyone can acknowledge their own failures, talk about them openly, and learn from them.
• No Jack-of-All-Trades. Everyone should be in the right place.
• Working with metrics. Employees should be “their own boss” in setting and knowing success metrics to reflect on their performance and stay motivated.

💡 The practical tip: Make sure all employees have their own clear system of success metrics and regularly reflect on their performance. Organize weekly meetings where everyone presents key achievements.

Evaluation of results: key metrics of MRR growth

Without estimating certain indicators, it will be almost impossible to understand what is happening with the business. Metrics for companies in different industries vary quite a lot. However, there is a set of basic universal indicators that should be considered by almost any company.

1. Burn Rate. The burn rate is the rate at which the company “burns” money in the account. This indicator is critically important, as it gives an understanding of how long the company will have enough available money and when to start raising the next round. A company's burn rate is calculated based on its monthly cash expenditures.

So, if a company has $2 million in the bank and spends $200,000 a month, its burn rate would be $200,000. Then, it becomes possible to define runaway (how long a company will endure):

$2,000,000) / ($200,000) = 10

2. CAC (Customer Acquisition Cost). This metric shows how much it costs a company to acquire a paying customer. It is calculated as follows:

A small tip: start with determining the time period that you're evaluating for (month, quarter, year) to narrow down the scope of your data and get stronger metrics.

3. LTV (Lifetime Value). Each new client brings additional revenue not only per month but also over their expected ‘lifetime.' So Lifetime Value is a key variable in MRR forecasting.

💡 The practical tip: Count your Burn Rate, CAC (Customer Acquisition Rate), and LTV (Lifetime Value) regularly to see the broader picture.

Thinking from the long-term perspective: Business development goals

Not only studying the current state of the business but also setting goals is critical for a startup to ensure an increasing MRR.

What matters the most at every stage of business development — making sure your product “does” jobs for customers and beyond.

Start from your mission statement and goals divided into stages. Answer the following questions:

• What do you want to do with your business when thinking about the end result? Visualize and write it down in detail, with numbers.
• What does my ideal customer look like? Of course, it may change. But at the current stage, define what is your ideal customer from the long-term perspective.
• How do I get the desired result? Here comes a step-by-step strategy. Create two plans — one with broader milestones and one with every small step to grow.

Keep your vision in mind and review it often. Also, make sure your team shares the same vision.

💡 The practical tip: Divide big goals into a milestone to have a clear vision and notice small successful steps (as well as reflect on mistakes).

Wrapping Up

If your business struggles to make ends meet, consider the abovementioned tips for defining your potential “weak places.” Even if your MRR is trending upwards, still, you need to proceed with the same growth steps since there is always a place for improvement. Only with the comprehensive approach will you quickly get the desired result in high MRR.

Enjoy the ride by seeing a real-time financial picture of your business and making workable plans for expansion.