Xolo Cuts the Share of Meta and Google Ads in Its Marketing Mix

Interview with Xolo Growth Manager, Kristin Kirštein.

Xolo is an Estonian startup that helps freelancers and solopreneurs easily manage their businesses. The platform offers a comprehensive solution for company formation, accounting, invoicing, and tax management. Among its users are many e-residents worldwide who wish to manage their business through a company established in Estonia.

Let’s start with the customer profile — what does Xolo’s ideal client look like?

Our client is a knowledge worker in their thirties. Most often they are a freelancer who sells their knowledge, not manual work. Typical professions include designer, IT specialist, marketer, or business consultant. They are professionally strong, often just starting their solo business, and highly skilled. This means they are not very price-sensitive.

Our services are not intended for someone who does entrepreneurship on the side of their main job, but rather for those whose main income comes from freelance work. Therefore, they are less sensitive to price.

An important nuance is that our so-called ideal client lives in a country where they were not born and is doing business there. It is significantly harder for them to set up a company, open a bank account, or understand the local language — especially in countries with high bureaucracy. They often lack information about the unwritten rules.

That’s why we describe ourselves as a partner that helps expats. For us, entering a new market almost always starts with targeting expats. Once we have sufficient cash flow through the expat segment, we then expand to the local market.

Why this particular age group?

They have reached a point in their careers where price sensitivity is lower. Among younger people, price tends to matter more. With older clients, the challenge can sometimes be changing their beliefs and habits. It’s not the same everywhere, but for example, in Spain — one of our core markets — we often have to break generational beliefs.

For instance, the idea of how accounting works: whether one must take papers to someone or can actually do everything online. According to our client research, the sweet spot is people aged 30 to 40-plus, sometimes up to 50.

Freelancers work in quite different fields. Who is the best client?

The best client is an expert in IT. There’s more money moving in that field, and they value their time more. They don’t want to handle accounting themselves — they delegate it.

For example: an Estonian programmer who has moved to Spain for the better climate and runs a remote business from there. They need help with Spain’s tax system and business setup — from choosing the right business regime and registration to quarterly and annual reports and potential audits.

The main value of our product for the client is peace of mind.

Describe the customer journey in a new market. How does a client find you?

About 50 percent of clients come through referrals. They plan to create a company and ask others what they have used, or they ask in expert communities on Facebook or Reddit. Expats form tight networks and support one another. Often, they are in a more vulnerable position in a new country and need community support.

How many clients come through search and advertising?

Roughly a quarter come through active search — Google search, AI conversations, or other search engines. We reach them through organic visibility or precisely targeted campaigns on various platforms.

We have consciously tried to reduce our dependence on major platforms like Meta or Google. When a large part of your clients comes through these platforms, you are, figuratively speaking, at their mercy — hoping they don’t change their algorithms or pricing.

Already, the cost of signups from these platforms rises by up to 20% every year. And recently, in August, many companies suffered a sudden blow when GPT-5 was launched, as it changed its principles for how it sends traffic out from its chatbot. As a result, less traffic is now reaching company websites through AI chatbots, which likely means a drop in the number of signups and paying customers from this channel.

To mitigate such risks, we are increasingly using our existing clients as a growth source.

Existing clients are the best salespeople a product can have. They can recommend your product within their own networks and share information on their own platforms.

We often run campaigns where we ask clients to send us a video testimonial and offer a small discount as a thank-you.

Clients are willing to talk about you not when you simply meet their expectations, but when you exceed them. For example, we are currently testing micro-virality: identifying moments that are meaningful for the client and making them feel special — nudging them to share that moment with their friends and contacts.

Example of a Xolo client video testimonial

What new developments in marketing have you noticed recently?

If you stay focused only on existing and proven channels, you might overlook new and high-potential ones. For instance, our biggest revenue growth currently comes from the 18–29 age segment, whose media consumption habits differ from older groups. They get a large part of their information from social media — for example, TikTok — which, for them, has partially taken on the function of a search engine.

At least 10% of a marketer’s time should go into testing new channels — to find new ways of communicating with the target audience and to reduce the concentration risk that comes from relying too heavily on major platforms.

Do you do active direct sales?

We have tested different approaches, but we do not do classical direct sales. In 2023, we decided to make Xolo profitable.

That meant the marketing budget was cut by over 50 percent, and we reduced the size of both our sales and marketing teams by half. We moved to a product-led growth strategy. If the product is good, it markets itself partially.

We built growth engines and referral programs into the product and did very precise work to understand client needs. Previously, we spent millions on paid marketing. Now that cost is over ten times smaller, yet growth continues, and we compensate the difference through other channels.

Sales are not at the core of our DNA. We are somewhat between B2C and B2B. One person makes the purchase decision and uses personal money, but the sales and activation cycle is long. Some clients activate in two days, others over several years.

We can’t strongly influence when a client starts their business — that depends on whether they have their own customers.

What matters in the client’s world, and how can you influence them?

Ironically, the best situation is when the client almost forgets we exist. They need to log into our platform very rarely. Some log in once a month just to issue invoices.

We don’t consider it valuable for them to spend time actively using the platform.

How do you offer good customer support on a platform-based service?

Although we are developing the platform and automating as much as possible, each client still has a personal accountant.

That accountant serves hundreds of clients but provides crucial customer support. While the platform generates reports automatically, clients still have questions — and they can talk to a real person when needed.

This reduces anxiety. If we make an accounting error, we are also ready to bear any resulting financial loss. There have been rare cases where we have paid a fine or penalty on behalf of a client.

In how many countries do you operate, and where do your clients come from?

We have clients in 150 countries, largely connected to Estonia’s e-residency program.

We operate with local products in three countries. We entered Spain in 2021, and we’re doing very well there. Awareness of our assisted brand has grown by over 20 percent among our target audience. The sector is highly competitive, but we have found a niche among expats.

In 2022, we expanded to Italy using the same strategy. At the end of 2024, we entered the Dutch market, again focusing on expats.

How do you use communities and influencers?

We work in a very targeted way. In our target countries, we map organizations that work with expats — relocation agencies, expert centers, news portals — and we reach out to them to offer partnerships.

Globally, we can’t reach every country separately.

In our 10th-anniversary campaign, we asked clients to send one-minute video testimonials and offered a 10 percent discount until the end of the year in return. We received videos from about 30 countries.

Additionally, we have a referral program. In Spain, we pay €50 for every activated client. If a blog or video brings in 10 clients, that’s €500 earned by the client.

How do you select new markets?

We have a framework for selecting countries. We look at the share and trend of expats and freelancers.

For example, our new market, the Netherlands, stood out because 16 percent of its population are expats. We also consider the level of English proficiency, competition, and how quickly we can solve accounting problems with our technology.

Before developing the product, we test demand. We create a test landing page with a promise that we could deliver without investing in development. We then run a targeted search campaign and measure signups.

We call the interested users to verify their purchase intent and whether they are considering competitors. Then we create a product prototype, often using AI, show it to users, and determine their willingness to pay. Only then do we start development.

What metrics do you track for the test landing page?

Our benchmark is that if fewer than 4 percent of visitors sign up, there is a problem — either with the content or the offer.

That 4 percent threshold is based on our historical data. It may sound high, but search campaigns bring very specific prospects to our page.

If we were to run Facebook display campaigns like “Freelance is the future,” the conversion rate would obviously be lower, and Meta would serve more as a branding channel than a direct conversion channel. We focus on picking the low-hanging fruit — capturing those who have a specific pain or a clear need for our service.

Finally, give one recommendation — what to read/listen to/watch?

My favorite is Lenny Rachitsky’s podcast. It’s product-focused but also reaches marketing topics. Our team listens to it a lot, and we sometimes discuss specific episodes among ourselves.

Xolo's Go-to-Market Strategy

1. Identify a country with a large share of freelancers and expats (such as Spain or the Netherlands).

2. Create a test landing page with a promise that could be delivered without development investment.

3. Run a precisely targeted search campaign and measure signups. If the conversion is below 4%, do not proceed.

4. Contact people who signed up directly to learn about their purchase intent and views on competitors.

5. Create a product prototype with AI assistance and determine willingness to pay.

6. In marketing, focus on referrals rather than paid advertising.

7. Pick the low-hanging fruit — capture those with a concrete pain or clear need for Xolo’s service.