I wondered for a long time whether I wanted to share my income publicly. I have done it in the past – either on the podcast I am co-hosting or in the Micropreneur Academy. But these places are either a closed community (the Academy) or no one really listens to them anyways (my podcast ). Publishing it on the blog for the world to see, and for Google to index, is a whole different ball game.
I write this report for people like myself: People who are building a product and are struggling with the first steps of the journey. Not with the technology, but with actually bringing it to market and growing it.
I write it for reactions like this one from Nathan Powell:
It’s so nice to read about a “normal” launch.
Encouraging even. Keep it up, and here’s to 2022!
In short: I write this report for YOU. I want to encourage you to travel this (hard & stony) road. It’s immensely fun.
What is Covered in This Report
I will only cover what I make from LinksSpy; if you want to know what LinksSpy is, then here’s an article on how I started. This means, that I do not include money earned from consulting/freelancing nor what I make in my day job.
I will try to provide detailed information on my expenses as well, but my systems for accounting are lacking in precision (read: “I suck at keeping track of all the invoices”). So the numbers could be off by a bit.
Looking Back – The History of LinksSpy
I launched (and started billing customers) in May 2014 after a long private beta. I started out with 10 customers and $190 in Monthly Recurring Revenue (MRR) after a few days.
In the months after that I saw slight improvements from new signups. I don’t get many visitors to the website (yet), so there isn’t much volume going into the funnel.
In June my revenue went up to $235 from 13 customers. Than it was $255 from 15 customers in July. On August 1st it was down to $235 again – this time from 16 customers (I lost one customer with $40 MRR, but gained 2 customers at $10/mo each).
Revenue in August
August has been the most successful month so far in terms of MRR growth: I more than doubled MRR to $489 from 21 customers. I’ll talk about how I did this in a bit, but first focus on the numbers.
In total I collected about $478 in payments from my customers.
My Stripe account is in Euros (€) and I used today’s (14.09.2014) exchange rate to calculate the dollar amount – so this is a bit off.
Due to the way LinksSpy is set up my costs are really low. It was one of my design goals to keep most things running on Heroku‘s free tier. This is partly because I’m really cheap and – more importantly – because I didn’t know how well LinksSpy would do and I was afraid of catastrophic failure.
Thus, I only pay $9/mo for the hobbyist database plan and $20/mo for the SSL endpoint.
- $20.48 in Stripe fees
- $49 for Drip
- $166.65 for 3 blog articles written by my content marketing genius
- $20 for design work for a blog article I wrote
If I didn’t miss anything (which I probably did), the total costs were $435.13.
For the time being, I don’t plan on making any profit from LinksSpy. I want to focus on growing it as fast and as big as possible, thus I’m re-investing everything back into LinksSpy.
However, I didn’t spend all the moneyz in August and so I made a small profit of $42.87. Rest assured that I will find a way to spend that money in September
So what caused this steep increase in MRR?
The single biggest factor was/is that i doubled my prices for NEW signups – I grandfathered all my existing customers in at their old rates.
Yeah, you read that right: I DOUBLED prices. Insane – isn’t it?
That – of course – wasn’t my idea, but rather Patrick McKenzie’s idea of “Charge.More.”. I think it was at MicroConf Las Vegas in 2013 where he laid out a simple enough rule: “Double your prices; watch conversion rate; repeat until conversion rate drops significantly”
That rule is REALLY easy. It makes sense intuitively: As long as people sign up with (more or less) the same frequency, they are seeing the value in your product.
The only problem with this is: You have to overcome internal objections to actually double prices. It is hard; You have all the worries in your head that people will hate you for it.
Fact is: No one will hate you for it. Most people won’t even realize that you doubled prices. Plus, you can always just go back to your old pricing, if the need arises.
Another contributing factor is that I randomly threw money at the problem: I invested $100 in StumbleUpon and $50 in Twitter advertisements.
Of course I didn’t set up ANY analytics AND/OR tracking (that’s for cowards, obviously), so I don’t know which (whether?) of the two ads brought in customers. Well, there’s always room for improvement – in this case there is a LOT.
Overall, I think that the biggest factor was that I finally focused on marketing, instead of coding away on LinksSpy.
Progress in August
Despite being away on holiday for two weeks in August, I managed to finish quite a few things:
- moved the LinksSpy blog to http://blog.linksspy.com and the application to www.linksspy.com
- I finished writing a really cool blog post about the costs of paid links – I’ll talk more about the impact of that in my September report
- numerous small improvements in the application itself – among them lifecycle emails. E.g. users who entered their email address, but didn’t enter credit card details (i.e. they churned during signup) now get an email the following day which reminds them to finish the signup process
What to Focus on Next Month
I’ll try and focus more on marketing again. After all, that’s what will get me new customers. Despite all my vows to do more, I still suck at actually doing it.
August was an incredible month for me. It really fueled my motivation for LinksSpy. That said, you can see for yourself from the numbers above that I am no where near making a living off of LinksSpy.
It is easy to loose motivation when you compare yourself to the likes of Brennan Dunn, Nathan Barry, Patrick McKenzie, Mike Taber et al., but if I look at things with a bit of realism, I feel like I’m not doing that bad after all.
Oh.. and my goal of making enough money out of LinksSpy by 2022 suddenly became a lot more realistic