Last month I ended by saying that it felt like I was at a turning point, as maintaining 10% average month on month growth was only going to get harder, maths (or math, to my trans-Atlantic readers) is a cruel mistress. I was also feeling confident though, the new version was finally live, and I was able to put time into marketing again.
I can reveal that my confidence was not misplaced, August was, as the title says, alright. If you follow me on Twitter may have already seen the advance preview of August’s revenue on transparentstartups.com. It’s a really awesome site, that shows revenue figures for a number of startups, and from now on I’ll be revealing each month’s revenue figures ahead of my monthly blog post there.
Also, if you don’t already follow me on Twitter, you definitely should, where else can you see iPhones compared to Metallica albums?
So, August was alright, but it was very nearly awesome. I had 5 new paying subscriptions started, and right up until the end of the month, revenue growth was over 10%. Unfortunately on the 22nd I lost a subscription, and then on the 27th and 28th I lost two more.
This is one of my biggest problems with BugMuncher, a lot of my customers only ever have a temporary time frame in mind, eg: they use BugMuncher for communication while developing a site, or while beta testing, but then stop using it once the site goes live. The upshot is that BugMuncher has a pretty high churn rate. I can’t complain though, the 5.7% growth I saw in August is a hell of a lot better than the 1.1% I saw last month.
Before I move on the figures, I want quickly go over some changes. Up until now I’ve been working with a fixed figure of £1,839.36 as my monthly expenses. I came to this figure by working out my expenses for the previous year and dividing by 12 - see this post for more details. From now on each month will include the actual itemised expenses, as I think that will be more accurate, and also more transparent.
I’m also going to start including my actual monthly revenue in $, and Fastspring’s fees, as well as Monthly Recurring Revenue. Usually MRR is equal to revenue for the month + fastspring fees, but they can sometimes be quite different. This is because MRR is simply a snapshot taken on the last day of each month. It basically says how much I will earn in the next month if I get no new customers, and none of my existing ones upgrade, downgrade or cancel.
|This Month (August 2016)||Last Month||Change|
|Savings (end of month)||£7,292.46||£7,796.97||6.5%|
|Monthly Recurring Revenue||$2,198||$2,080||5.7%|
|Revenue (excl. fees)||$2,032.23||$1,530.98||3.3%|
|Average Month on Month Growth||11.12%||11.63%||4.4%|
|- Personal Plan||20||20||-|
|- Startup Plan||12||10||20%|
|- Corporate Plan||6||6||-|
|Unique users on landing page||3,052||~1,400||118%|
|New Free Trial sign ups||65||36||80.1%|
|Free Trial sign up rate||2.1%||2.5%||1.6%|
|New Paying customers||6||1||500%|
|Lost Paying Customers||3||3||-|
|Free Trial to Paying conversion||9.2%||2.8%||228.6%|
|Monthly Burn Rate||£504.51||£464.12||8.7%|
|Runway||14.5 Months||16.8 Months||13.7%|
That’s more like it, still not a sea of green, but much healthier than last month’s red-fest. Every month when writing these I go through the same emotions, fear when I realise how much my savings have dropped from the initial £20,000, and then relief when I calculate the runway, and see how far my savings will go. It’s pretty awesome to know that the ~£7,300 I have left will last me well over a year at my current burn rate.
It was also pretty cool to have 65 people sign up for the free trial, beating my previous record of 64 in both March and April.
The eagle-eyed among you may have noticed some things don’t quite add up in the table above. There’s always a certain amount of discrepancy as I occasionally do little bits of freelance work, and I host a couple of website for family members. I don’t include these items simply as they don’t relate to BugMuncher.
This month, however, has a big gaping money hole - $ revenue is up, but £ income is down - The reason is there was some confusion with one of my customers that resulted in an accidental $400 charge back (ouch), they’re still a happy BugMuncher customer, and will be repaying the $400, but it has messed up my figures a bit. Next month things will be more normal.
For the first time ever, here’s my complete, itemised expenses for BugMuncher, even that time I was hungry at the co-working space, so expensed a sandwich.
|Me||Home office allowance||£54.71||-|
|Barnstaple Work Hubs||Co-working Space||£180.00||-|
Much like detailing my revenue figures each month helps me keep on top of things, I’m hoping doing the same with my expenses will help me keep costs down (and stop me expensing too many sandwiches).
Inspired by the beautiful graphs on transparentstartups.com, that quite frankly put mine to shame, I’ve decided to upgrade to some fancy interactive graphs, courtesy of Chart.js:
It’s good to see I’ve kept some distance between my revenue and the 10% growth target, it really took me by surprise how much it had started to gain on me.
It’s been a while since I played the Startup Growth Calculator game, so I plumbed in the figures from this month, and found that BugMuncher’s revenue could now grow at just 0.45% each month, and I’d still be default alive, although at that growth rate it would take over 3 and a half years to reach profitability. If I can continue to grow revenue at 5%, I’ll be profitable before the end of 2016!
Traffic was up, way up, but roughly a third of that traffic arrived on the last 2 days of the month. This is because I published a blog post about my previous failed business ideas on the 30th, which seemed to resonate with a lot of people and was shared around Twitter, Reddit, Hacker News, Facebook and others. Check out the traffic spike caused by that one post:
Even without the traffic spike, uniques would have been around 2,000, so still up a healthy amount on July.
Plans for September
Primarily I just want to stay the course - keep up the marketing efforts and resist the urge to bury myself in code. Having said that, next week will be spent buried in code, as I have challenged myself to to create five API integrations in five days. It’s kind of a marketing exercise though, as a lot of third-party services have a place where they showcase integrations, like this one for BugMuncher’s Slack integration, so by developing these integrations I’ll be getting some more exposure.
And then my next big thing is going to be trying out a freemium business model. I’ve always written off freemium as a bad idea, but I like to at least try things before I disregard them, so that’s what I’m going to do. I’ve got a good idea of what the freemium plan will look like, and how I’ll (try to) stop it becoming a burden. But that’s a topic for another blog post.
Finally, I’d really love to hit $2,500 in Monthly Recurring Revenue by the end of the month, it’s quite a lofty goal, but I’m hoping that having a short term goal like that will help me stay focussed on marketing and growth.