Suspiciously Optimistic
It had been a really terressarating couple of months preparing to give up freelancing and go full time on BugMuncher. But now September had finally arrived, and for the first time ever I would be spending the majority of my time on BugMuncher. I say majority, as through September I had agreed to work one day a week for one of my freelance clients while we wrapped things up. October would be when I’d really go full time on BugMuncher.
Just to recap, I finished August with 17 paying customers, bringing in $620 per month.
September got off to a flying start, as on the first day of the month I received an email notification that a free trial user had converted to a paid subscription, on the Start Up $49 / month plan.
It didn’t take me long to break my “focus all energy on marketing” goal, about 3 minutes I believe. The very first thing I did as a full time founder was open up Sublime Text and start coding. I stand by this choice though, as one of BugMuncher’s biggest failings was that the screenshots were all taken on a headless Webkit browser, so they wouldn’t accurately represent cross browser issues.
For a long time I’d wanted to change to using a farm of Selenium Webservers, which would mean BugMuncher would create accurate screenshots no matter what browser was used. I’d been working on this when ever I could find some free time throughout August, but kept coming up against barriers. On the first day of September, after trying three different Selenium Browser providers, I was finally able to get it working perfectly on all browsers.
So I’d just completed what was probably the most important improvement to BugMuncher ever, so of course I emailed all my existing customers to tell them the good news… Didn’t I? No. No I did not.
It seems ridiculous when I think about it now, but I didn’t tell anyone because once again I was scared. Somehow I thought announcing this update could make BugMuncher look bad for not having 100% accurate screenshots before. Even though I’d never claimed BugMuncher should be used for reporting cross browser issues, somehow I thought I could lose a customer if they found out that up until September 2015, the screenshots may not have been accurate to what the user saw. Ridiculous, I know.
Writing these posts really helps me realise how stupid and scared I can be. This fear was completely unfounded, and I realise now had I told everyone about this update it would have no doubt received a mostly positive response, and there’s no way I would have lost any customers. Oh well, you live, you learn.
The last thing I did on my first day as a full time founder was to post a quick Tell HN submission on Hacker News, saying how I was going to be trying to make my living from my side project. The submission got a couple of points and some very encouraging comments. Surprisingly my submission dropped off the ‘New’ page, without ever making it on to the ‘Ask’ page, even though there were older posts with less points there. At this point I decided to call it a day and go home, feeling pretty satisfied with my first day.
The next day started with a pleasant surprise, my Hacker News submission had apparently hit the ‘Ask’ page at some point, and had received a lot more up votes and comments. All the comments were encouraging, and I started feeling very positive about my quest.
Throughout the rest of September I probably split my time 50/50 between marketing and programming. I was aiming for more like 70/30 in marketing’s favour, but on finding myself with all this time to devote to BugMuncher, I couldn’t resist adding a few of the features I’d been wanting to implement. I’d need to work harder to keep my programmer side in check.
I started being a lot more active on Reddit, Hacker News, Twitter and Bootstrappers.io in an attempt to get more traffic to the landing page, and it definitely worked. In September BugMuncher had 2,662 unique visitors, where as most previous months I’d get less than 900.
In fact, September 2015 was the second best month BugMuncher had ever had, and it was only beaten by July 2011 when I first launched BugMuncher and got a bit of press coverage.
Damn, I really wish I’d quit freelancing and capitalised on the momentum and buzz BugMuncher had back then. I wonder where I’d be now if I had…
Aw man, I could have had a small part in Breaking Bad! (…queue tumble weeds)
Moving swiftly on - more unique visitors is great and everything, but it doesn’t mean anything if they don’t at least sign up for the free trial. Thankfully free trial sign ups had indeed increased, but the free trial conversion rate was actually down.
So while my marketing efforts had brought over 3x as many people to BugMuncher, they were overall a lower quality of lead, and less likely to sign up for a free trial.
One step forward, two steps back
Churn happens, it’s a part of running a SaaS company. But it still hurts when a customer decides they don’t need BugMuncher any more. The 16th of September brought the first cancellation of the month, I’d lost one of my customers on the Personal plan, but I was still up overall this month, so I wasn’t too cut up about it.
Two days later came September’s second new paying customer, this time on the $19 / month Personal plan, September was shaping up pretty well. Then with in a matter of hours came the second cancellation of the month, this time I’d lost one of my precious $99 / month Corporate plan subscribers. That one hurt.
Halfway through my first month of working full(ish) time on BugMuncher, I was now worse off than I had been in August, but with the same number of paying customers. Revenue had slumped, and my mood with it.
One of the new features I added in September was multiple user accounts, this was something that customers had been asking for since I first launched BugMuncher, so I was excited to finally have time to implement it. As I would be adding different user account limits to the plans, I figured now would be a good time to evaluate what the plans included and their prices. I’d also recently been told that the corporate plan was too cheap, and didn’t come with enough, so this seemed like a good opportunity to fix that.
The biggest change was to the corporate plan, which went from 5 installation profiles and 3 notifiers per profile to 50 installation profiles and 10 notifiers per profile. The price went up from $99 / month to $399 / month. Of course anyone already paying for the corporate plan was grandfathered, meaning they got the increased limits, but carried on paying $99 / month.
I thought by offering so much more on the corporate plan, and grandfathering existing customers that I’d covered all my bases, the last thing I wanted to do was piss anyone off, considering it was quite a significant price increase. But there was one angle I didn’t consider. It was pointed out to me in an email from an understandably disgruntled potential customer. But that happened on the first of October, so if you want to hear that story you’ll have to wait ‘til next time, (ooh, he’s a master of suspense).
The Figures
| This Month (Sept 2015) | Last Month | Change | |
|---|---|---|---|
| Money in the bank (end of month) | £20,037 | £19,960 | 0.4% |
| Monthly Recurring Revenue | $551 | $620 | 11.1% |
| Paying customers | 16 | 17 | 5.9% |
| - Personal Plan | 8 | 9 | 5.9% |
| - Start Up Plan | 6 | 5 | 11.1% |
| - Corporate Plan | 2 | 3 | 33.3% |
| Unique users on landing page | 2,662 | 824 | 223% |
| New Free Trial sign ups | 34 | 18 | 89% |
| Free Trial sign up rate | 1.28% | 2.18% | 41% |
| New Paying customers | 2 | 0 | ∞% |
| Lost Paying Customers | 3 | 1 | 200% |
| Free Trial to Paying conversion | 5.59% | 5.55% | 0.7% |
Update: It turns out some of my figures were wrong here. This is because I issued a refund in September, as a customer accidentally signed up for the wrong plan, and didn’t realise they could upgrade, so they then signed up again to the correct plan and asked for a refund on the first. This means MRR was $551 not $570, and there were only 16 paying customers. All related values have also been updated.
Note: Money in the bank has gone up slightly due to some freelance invoices being paid, it will start steadily declining from next month onwards.
So, revenue is down, and my marketing efforts haven’t had a great impact. In fact I can’t take credit for either of the new paying customers, as they both started their free trials in August. Yet, I’m feeling pretty good, hence this entry being title “Suspiciously Optimistic”. I think it’s because I’ve felt the impact my first (almost) full time month on BugMuncher has had, both in terms of new features, and more free trial sign ups. OK, the free trial conversion rate has dropped, but overall there are nearly twice as many people trialling BugMuncher than there were in August, so there’s more chance of at least one of them becoming a paying customer.
I’ve still got so much to learn in regards to marketing. Content marketing has definitely had a hugely positive effect on page views, but as I discussed in this blog post, I need to find better topics to write about, ones that will bring potential customers to the site.
That’s all for now, thanks for reading, and if you’d like to be notified when even a new entry is posted please join the mailing list by entering your email above.
- Matt Bearman