In September of 2014 we set a stretch goal that in 365 days we would grow the business to $20k Monthly Recurring Revenue (MRR), and more “realistically” to $10k.
I see a lot of people set goals, but I rarely find people reporting on them, so I figured I’d do that here, with a monthly breakdown of what actually happened:
Before I get into a really long post, let me tl;dr this for you:
January 14: We launch the business several months later than we expected after 2.5 months in beta and a few hundred people trying it out.
January - July: We make a ton of mistakes and the business “grows” to around $3k mrr
August - December: We make more mistakes, but we do a lot of things right, and end the year over $10k mrr, short of our original stretch goal, but in line with our “first” goal which was $10k mrr, (although not in 365 days from the original statement, but within 365 days from launch).
[tweet text="We made a lot of mistakes, but we did a lot of things right, and we ended our first year with over $10k mrr" url="https://goo.gl/BnAw9j"]
If that piques your interest, here is a bit more background and then the monthly break down:
Just to provide a bit more context, here is what you need to know.
NinjaOutreach is a blogger prospecting and outreach SaaS CRM. It helps bloggers, entrepreneurs, small businesses, and agencies find bloggers and journalists to promote their content/products. It’s effectively a large database combined with an outreach CRM.
Our team has 3 co-founders (2 marketers, 1 developer), including myself (marketer) and two others from the UK. I have never met them, but they know each other well. We also (now) have 3 full time developers, and several marketing assistants working with us. We are 100% bootstrapped/self-funded, and the whole team works remotely.
The project was conceived in June of 2014, and we spent about 4 months building the prototype and another 2-3 months in beta. We launched on 1/14/15.
Personally, I am 28 and live in Boston. This is my first true startup. I travel quite a lot and live the digital nomad lifestyle, and it’s worth noting where I was during key times during the year, because that also provides a bit of insight as to (maybe) why things started off quite slow, although I did my best to work 100% on it whenever I had free time. I have written this post from my perspective because it is the only one I have.
January - April: I was roadtripping around the US with my girlfriend and working on the project nights, mornings, in the car, whenever I could.
April - August: I spent the summer at home with my parents
September - December: I was house sitting in Costa Rica, although these were some of my most productive months.
December - ??: I am back at home with my parents probably until February.
Overview Of The Business - 2015
After 2.5 months in beta, we launched our product commercially on 1/14/15, by allowing people to check out on the website for the first time, as well as closing the beta and asking several hundred people to buy the software.
In regards to the beta, virtually no one bought it. Although we had several hundred people try it out, and many say they liked it, only 2 people bought. It was heartbreaking.
Some of the things that were seriously wrong with the software were:
- It was a downloadable desktop app for Windows only (Doh!)
- We only had Paypal as an option for check out (Doh!)
- It looked and performed like crap (Doh! x 2)
Luckily, a few people started signing up for the software through the website, and on the first day, an enterprise customer did a buy now without even trying it (they have remained a customer since) - there was still hope.
MRR at end of January: $168
Monthly Report: January 2015 Monthly Business Review
Lesson(s) Learned: Although not entirely true, betas are BS. Inviting someone to the beta is already very unnatural and is not going to be representative of how things are going forward. Speaking to people on the phone is useful for feedback, but also should be taken with a grain of salt, as many people will say positive things, but inevitably not buy. In short, early validation for a saas business product is super hard, there is no substitute for putting it out there for people to buy and seeing how they react.
This was our first full month, and honestly this was more of the same. Sign ups per day increased from 1 to 1.5 so it was 50% growth, but all and all things were not looking good.
When I projected our current growth out to the end of the year I calculated we’d finish at around $4k. It was at this point we realized that we had to make some major changes to the software if this was going to work.
The biggest decision was to transition to a web application, which was going to require a lot of rework and hiring a new developer. Also it was going to cost thousands, which all had to be paid out of pocket.
We apply to some incubators to see if we’re a fit for any funding. We have one application send us through to the final round, which would have given us $50k in exchange for 10% and required us to move to Texas - we decide to pull out of the process feeling that it was not the right direction.
Right around this time I got tendinitis in both of my arms on account of having an improper workstation while traveling and typing so much. In order to continue to write content and contribute to the business I started working with Dragon Software, which helped a lot to get articles completed. It took a few months for this to really subside.
MRR at end of February: $341
Monthly Report: February Monthly Business Review
Lesson(s) Learned: Don’t be blind to the path on which you’re heading. It was clear that our current trajectory was not where we wanted to be, so we had to make bold changes and spend the money. Better to make a necessary pivot sooner rather than later in order to maximize the benefit from it (in this case it was transitioning to a web application).
In March we hired another developer and started working on building the web application. At this point we weren’t making any real changes to the desktop app so the product wasn’t getting any better. We were spending thousands of dollars to make the transition, which is all out of our own savings since the business is far from being able to pay for itself.
Sign ups per day are the same as they were in February, and marketing seems to be making minimal progress, but the business effectively doubles although the absolute difference is quite small.
We have no analytics on our customers and no dialogue with them - we basically don’t know anything. We also have no additional software tools because we’re a desktop app and nothing really integrates with it.
MRR at end of March: $629
Monthly Report: March Monthly Business Review
Lesson(s) Learned: The new developer was hired off of Upwork and has since become our lead developer, so think critically about who you bring on because they may end up playing a very large role in your SaaS business.
The first iteration of the web app is finished and we start beta testing it with users. In some ways it’s a lot better (it looks and performs much better). In other ways the quality and relevance of the search results from the database are not as accurate as the desktop app (differences in the way the search results are pulled). Also the new web application has no outreach capabilities, it’s only a prospecting CRM, which is quite ironic for a SaaS business called NinjaOutreach.
Because we’re not confident in the web app, we continue to market the desktop app on the website and then if someone cancels or says they’re a mac user we offer them the web app.
The number of daily sign ups grows slightly and business nearly doubles (again, the net amount is very small).
I arrive home to Boston to spend the summer with my parents and live cheaply at home, while I continue to invest my savings into the business.
MRR at end of April: $1157
Monthly Report: April Monthly Business Review
Lesson(s) Learned: Although we did a lot of market research before we started the project, we decided to go with a desktop app, because we already had existing technology built that we could reuse - what we thought was saving us time and money actually cost us a lot more in the long run. Invest in doing things right upfront, it will save you a ton of time, frustration, and money.
At this point I’m at home and am working my *ss off, putting in 60-70 hours a week, along with my partners. My tendinitis has gotten better too.
Our goal was to launch the web app commercially in this month and we failed to do that. It wasn’t that people couldn’t use it, people were using it, it was that we didn’t feel that the web app was superior to the desktop app and didn’t want to lead with it.
Although it was a web application, it was very basic and lacking in a lot of features, so we continued to just deliver it on request.
I started getting more into conversion rate optimization and redid the website to make it much simpler. Sign ups went from 1.7 - 3.3 per day, largely due to the fact that the website was converting better. CRO is really a wonderful thing, because without changing anything substantial about the business we were able to get more out of it.
The end of May marks a year since we first conceived the business. On the one hand we have a SaaS business, it’s growing, and the product is getting better everyday - just like we always wanted.
On the other hand, we’ve all been working for a year without pay and realize we are not even close to where we need to be to actually draw a reasonable salary ($5k/month each). I’ve been burning through a lot of cash supporting the business every month, which costs thousands more than it makes, and I’m beginning to wonder if we’re going to run out of money.
MRR at end of May: $1705
Monthly Report: May Monthly Business Review
Lesson(s) Learned: SaaS businesses take a really long time to grow, and we were totally ill prepared for this project. At this point we're all practically living on welfare, with debt, or with our parents. Be prepared!
We launched the web app commercially for the first time (meaning that users are finally delivered the web app over the desktop app) and all of the home page images are switched to represent the web app.
It converts horribly.
We have the lowest trial to paid conversions of any month to date, and frankly I’m a bit shocked as to how this could be the case. Inevitably, it seems to be related to the search results being too irrelevant (a very complex problem to solve).
We hire some additional developers solely to integrate us with Stripe. They do about 90% of the work and then our Co-Founder volunteers to finish the rest of this. This project ends up not getting completed until October.
The founders start having discussions about one of us having to go out and get a job in order to pay our bills. Who will it be and what will happen to the business?
MRR at end of June: $2321
Monthly Report: June Monthly Business Review
Lesson(s) Learned: There is no such thing as 90% done. There’s done and there’s not done. I can’t tell you the number of conversations we had where the verbiage was “well, it’s basically done”, and basically done meant months of more work. Don't leave jobs unfinished and don’t leave small changes stuck behind big ones, because everything gets delayed!
Our technical co-founders has to leave the project to get a job and pay his bills. This is a huge blow and means we’re left with only one, outsourced developer, on a project that sorely needs development.
Although we can’t really afford it, I dip further into my savings to pay for another developer until the other co-founder is able to cover the his backfill once his salary kicks in.
We hire an additional developer from an agency, who ends up being very capable, and helps us develop the outreach portion of the software.
We start implementing some onboarding tools like Intercom and SoHelpful and meeting with signups and our trial to paid conversion doubles. Sign ups also increase from 2.75 to 4.3 per day. All cylinders are going, and it feels like we’re making great progress.
During this time I’m actively going to startup conferences and networking events in the area to see if I can meet any potential investors or clients. One partner is doing the same in London. I have a few very light conversations with some investors, but nothing materializes. We decide to put any investment conversations on hold for the remainder of the year.
MRR at end of July: $2874
Monthly Report: July Monthly Business Review
Lesson(s) Learned: There are a ton of great software tools out there, are you looking for them? We started heavily investing in other tools (made possible when we finally had a web app), and they were huge in improving the user experience and our analytics.
We get featured on Product Hunt, which sends us 1k visits and over 50 sign ups. We also had some very nice guest posts go live on top marketing blogs in our niche, like Unbounce. Finally, I get featured as a guest on Entrepreneur On Fire. All and all this is a huge month for marketing, and our sign ups nearly double.
You can read more on that Product Hunt case study here: Case Study – Here’s What Happened When We Got Featured On Product Hunt
Some great development work is done as well, as we finish off the first iteration of outreach in the tool through a Gmail API integration. In terms of features, it’s at this point that the web app is more or less on par with the desktop app, but can be used by everyone and looks and performs much better.
The business is still running a negative every month, as our costs continue to rise as we make progress and bring on more people, but finally we’re able to support our lead developer.
We decide to double our prices (and let our subscribers know that), because we’re giving so much support (in-app chat, onboarding calls, etc), it just isn’t an efficient use of our time without more customer value behind it. All customers are grandfathered into the old prices, and we drive a bunch of sign ups from people who want to get in before prices go up.
I’ve been living at home now for about 4-5 months and am thinking about my next trip, and wondering how I can balance the work I need to do with the need to get out and see/live somewhere new.
MRR at end of August: $4787
Monthly Report: August Monthly Business Review
Lesson(s) Learned: Although press/features are not a sustainable business model they can really move the business forward - something we saw repeated in future months (October and November).
I’m at home for the first half of the month and then leave to go to Nicaragua for the second half of the month to spend a few months in Central America traveling around a bit and then house sitting.
I go to Hubspot’s conference INBOUND and find it is poor for networking, as is the case for the many other conferences I attended this summer.
We launch a services component (done for you outreach - services.ninjaoutreach.com) to the business to supplement the software, that shows a lot of promise, but unfortunately the execution doesn’t do so well and we lose a lot of the early customers.
There are still a lot of loose ends with the software, including our Chrome Extension not being synced to the web app, and a very poor user registration process (along with Stripe not being fully integrated - still).
We don’t make a ton of progress on the marketing front as compared to August and we see pretty high churn after the big spike in August, still the business grows 20% largely drive by August sign ups and a 14 day free trial that spills over into September. I’m beginning to wonder if increasing the prices was a bad idea.
We’re hearing less and less from our other co-founder who had to get a job, as he is working and commuting a lot, but he is contributing to pay for his backfill.
MRR at end of month: $5889
Monthly Report: How We Grew 20% In One Month – September MBR
Lesson(s) Learned: I spent the summer going to about 6 or so conferences of varying sizes, and even spoke at several of them. I never found them to be useful for acquiring customers, at least not for our business.
We partner with AppSumo to sell the software in a flash sale. It’s a big decision and one we didn’t take lightly, but we decide to go with it to get additional exposure/momentum for the business.
We spend most of the month fixing all of the loose ends so that the software is functioning properly and is ready for thousands of new users. We hire an additional developer to finish the Stripe integration and are now up to three full time.
Overall, it goes very well and we get thousands of new sign ups and only a few cancellations of our current users.
You can read more on that case study here: How We Recruited Over 2k Users To NinjaOutreach With AppSumo
Unfortunately, outside of that partnership the business doesn’t actually grow very much, on account of extremely high churn and just not enough juice in sign ups.
I’m living and working from Costa Rica with my girlfriend.
MRR at end of month: $6050
Monthly Report: The Foundations For Growth – October Report
Lesson(s) Learned: Partnerships again played a big role in moving the business forward. Although the MRR didn’t grow we netted many thousands of dollars from that deal with AppSumo that essentially assured the sustainability of the business for the next six months.
Seeing that we have a huge churn issue and believing it is related to poor onboarding, I do a deep dive into our onboarding process and build out a whole new email and in app sequence based on user behavior through Intercom. Conversions go up, as do sign ups on account of the additional exposure we got through AppSumo as well as the Stripe integration being finished.
Additionally, with Black Friday at the end of the month, we partner with several affiliates to offer discount codes to their audience. We get a decent burst of sign ups from Black Friday to Cyber Monday from these affiliates as well as from our own newsletter and some paid advertising, many of which do Buy Nows to capitalize on the deal.
It’s a huge month for growth, and I’m confident we’re going to hit $10k before the end of the year.
Roles between founders are becoming more clear. Mark is managing the BizDev, the services, and the customer calls, while I am focusing more on backend onboarding, churn, and product. It’s a good balance.
Personally, one of our founders breaks off a serious relationship to focus more on the business, and I am finishing up my time in Costa Rica.
MRR at end of month: $9043
Monthly Report: How We Grew Almost 50% In November – Monthly Business Report
Lesson(s) Learned: Definitely have an offer for Black Friday, because just having an offer gives you access to thousands more people on account of affiliates publicizing your offer to their newsletter.
I fly home from Costa Rica after hearing that my dad is ill (he is better now).
December is a lot slower as it’s the end of the year and the big online fervor passed already per Black Friday. It is going to be a good month primarily from the November cohort that will convert in December after their trial, but it definitely feels sluggish for new sign ups.
Our developers are working on tightening up the software and fixing all of the little annoying bugs that have been upsetting users. We’re going to push some big features out including automated emailing.
Additionally, the services business we started in August is picking up and Mark is handling the majority of the sales.
The founders are still not paying themselves a substantial salary.
We have over 300 customers (up from 3 at the end of January) and have met our goal of $10k (but very much short of $20k).
MRR at end of month: $10k+
Monthly Report: You're reading it!
Lesson(s) Learned: The goals you set for yourself are very deterministic. This entire year I had $10k in my head and kept pushing the business to make sure we were on track. That’s not to say that if I had set a goal of $100k we would have hit it too, but your goals influence your decisions and act as an internal compass. I knew that we could still hit $10k mrr if I went on a road trip and house sit in Costa Rica, so I did those things despite the fact that maybe it was more difficult to contribute to the business during this time. Had our goal been $50k, I would have done things differently.
Our goal for 2016 is $30k and 1k customers! How was your 2015?