Took me more than 2 years to get 200 paying customers for my Web App
startbreakingfree.com
startbreakingfree.com
It's really good to see a success story which doesn't focus on "hey wow, I got a million users overnight through sheer luck". It reminds us that 99% of the time, companies are built slowly and surely, not astronomically.
Best of luck to everyone trying to persuade their customers to pay. I'm also one of you!
I'm kind of conflicted on this. Yes, it is hard to get ten people to pay money, in that you have to have a mostly-functioning product, a website which markets it, and some way to charge their credit cards. But this is not really that hard.
BCC 1.02 ("Like 1.00, but with less crash bugs and the brand new ability to print to non-default printers") got to ten customers in six weeks from 1.0's launch, entirely on the strength of organic search marketing on two pieces of content. That was when I was young and stupid. Y'all can do better.
I think software (let's scope it to B2C software for the moment) is like lemonade stands. You know how you get ten customers with a lemonade stand? Your price? Doesn't really matter. Your stand's design? Doesn't really matter. Your taste? Doesn't really matter. Your location? Probably matters for getting hundreds or thousands of customers, but for 10, pretty much any street will do. The key hurdle you have to get over is charging money for lemonade. I am worried that people think it is really really hard to run a successful business, and that stops them from ever charging for lemonade.
[Edit: I wanted to leave that line alone for impact, but it might be read as overly abrupt or insulting. That isn't my intention.
I've always had free competitors. They were at the top of the three search terms I most wanted when I started, though I have since learned that I was mistaken about that. One thing I've learned over the years is that I am fairly well informed about the top twenty alternatives to my software and my customers are not. Relatedly, I was very sensitive to the notion of paying $25 for software and my customers were not. And I could put up with a little frustration and ease-of-use niggles to get a deal and my customers viscerally hate that.
P.S. I can't decide which is worse, selling to price-sensitive customers or playing price-chicken with someone whose product is free.]
http://images1.bingocardcreator.com/blog-images/hn/free-comp...
Can you see a woman with a graduate degree feeling effing fantastic about herself for printing that out and giving it to a third grader? Just because it doesn't cost any money doesn't mean it is free.
Postscript: that competitor is still in the top 3 for a few related search terms. They run AdSense ads. For me. And they perform the best anywhere on the Internet.
They run AdSense ads. For me. And they perform the best anywhere on the Internet.
Price is an important difference but not the only one and not the most important one for all people all of the time. Be different on something besides price and move on.
Before heading down the freemium path be sure to take the time upfront to build two bottom up revenue plans. One plan for freemium and one for strictly paying customers. Be sure and include a detailed breakdown of each of the channels you'll be using to acquire customers and their costs. It's ok to make educated guesses here.
It can be quite painful so see how many customer you'll need with freemium before you reach your revenue goal and what it will cost to get them vs. just charging. Are you sure you're setup for that? Does it make sense given the size of your market? Given the likely customer acquisition channels available to you and their costs. Does it work with your budget?
Not everyone is Facebook.
$1.50 gallon for a jug in isle 13 at your super market
or $1.75 for a 20oz bottle at the checkout counter.
Are these all the same product? Do they even compete?
Another example would be how Coke is priced (to restaurants, grocery stores, vending machine).
There is nothing wrong with slow and steady growth, I think the hardest part is behind me.
$2k/month is the tipping point where you're no longer bleeding money and eating into savings. Sure, you're not getting richer and you might still need to take the odd freelance job for spending money, but it's a great place be, no longer watching your bank account on its slow & steady march toward zero.
From here, it's all profit!
I meant "pays your rent" quite literally. As in, taking the biggest of your financial worries away and leaving you only needing to deal with the spending money part. So you still can't live on your income, but you can coast along for an entire year on $10k savings.
Up to that point, $10k in the bank meant you'd better start scrambling to pick up a contract in the next couple months before you run out of money.
$2,000 / 160 = $12.50, which is substantially higher than the minimum wage in all fifty states of the Union, so I'm guessing that there exist at least a few people who are somehow making do...
Please don't make me do division with regards to my last salary, it would just depress me.
PS: He did get an internship that played 13.50 his senior year, but he did not quit Shonies until he graduated.
PS: Average monthly pay was ~= 7.5$ * (40 + (1.5(overtime) * 40 (hours) * 4 / 12)) * 52 / 12 = 1950$ a month.
Granted this is 10 to 15 years ago so it went further, but he was also paying for school at the time.
I say this as someone who grew up in rural northeast Ohio and now lives in Columbus. In the city, I don't even have to own a car to get around. Consider how much extra money you'd have every month if you didn't have a car payment, car insurance, and fuel costs. That's just the beginning of what you could save by finding a decent place in a cheap metro area.
The cost is somewhere around $50 per month, but I'm not totally sure because you ride free with an OSU student ID. For those times when you really do want a car and can't ride with a friend or borrow one, rentals are quite reasonable: I just looked at renting a car from noon Friday to 8 AM Monday and the cost is under $70 from Budget.
I've been without a car since April 2008, when a driver crossed the center line, totaled my car, and ran off. I love driving and I miss having a car, but I've been able to get around all right without one. Of course, getting around is a huge pain when I go back home to visit.
That said, living off of $2,000/month is easily doable if:
1. You live in an inexpensive location.
A bit of research on Craigslist can give you a general idea of where to find inexpensive apartments. Sometimes they're rural, sometimes they're not. The key, though, is being willing to move to the inexpensive location.
2. You have very little debt.
This is probably the difficulty that most people encounter. And unfortunately, there isn't an easy way to make it happen unless it's always been a priority for you.
3. You're reasonably good at keeping your other living expenses low.
This means lots of cooking at home, not going to the movies all the time, and probably saving up for several months if you want to buy a shiny new television or game console.
Well, you opened with,
I'm guessing you've never tried to live on $12.50/hr.
I consider this aggressive and personal. Rather than stating your position and evidence, you've attacked the credentials of anyone who disagrees with you. Aside from the fact that it's naive and almost certainly false (there are folks on this site from all walks of life with all kinds of experience and opinions), it is distracting. I do not care at all whether someone has the particular credentials you think are necessary to comment on the topic; I care only about what evidence and experience they do have.
Above all, I want to hear about ideas, not people. If you speculate on people's motives or qualifications (especially if you're suggesting downvotes are the result of disagreement or censorship), or any time in general that you attack the person of other commenters, you won't interest me. You'll annoy me. And unless you say something particularly redeeming, I'll probably downvote the comment.
http://www.sfgsa.org/index.aspx?page=411
Plus you're probably not clocking an even 40 hour work week working on your small business. $2k a month is likely minimum wage-ish or below in SF.
If you don't have too many other expenses, then you could definitely get by on $2,000/month income.
If I got a roommate, my monthly cost would drop by about $200 (I could afford a car). Once I pay off the debt, making $2000 a month would mean I would be putting $500-1000 in the bank every month.
So yeah, what I'm paying now is abnormally low, but with a roommate or two, $250/month is not at all uncommon.
There is no way I'd leave a job for 2k/month startup when virtually any job I can get employing the skills I used to build the startup would easily get me 3-5x my startup income (and health insurance too).
I wrote a little bit about this here: http://yongfook.com/saas-is-not-pure-profit
In a nutshell, to get to 200 members you are not going to be operating on 100% profit margins unless you happen to be extremely fortunate.
The reality is more likely that a decent chunk of that $2k per month is being spent on customer acquisition costs. You won't get 200 customers just by existing. You need to advertise.
The cost of customer acquisition can be very high for a bootstrapped startup to afford. For example, Constant Contact (for $20/mo subscription) spends $375 as cost to acquire one customer. Spending a major chunk of $2k to acquire just a few paying customers may or may not be a viable strategy (depends on numerous variables, of course).
Source of data: http://investor.constantcontact.com/annuals.cfm
This is simply not true. You need to be found but that doesn't mean spending money on advertising. I hit this mark without spending a dime on advertising. A large amount of my traffic comes from owning the most important keywords for my niche. The rest from WOM and blog posts from others about my product (reviews, interviews, CSS galleries, etc.)
Those costs will be largely fixed as the site grows. I may experiment with other advertising to see what if anything converts, but I think the site would do fine without it.
Then, LeadNuke sprang forth as an internal sales tool for RMSR barely a year ago and it's approaching that level already. In hindsight, I'm really glad I didn't have this kind of success the first time around, because I have a much more realistic perspective now and I can appreciate it that much more.
In summary, mad props and respect to you.
Totally off-topic, but some of my friends lately have started joking around about making a subgenre of Nerdcore devoted to startups. There's so many good names and parody opportunities...
> I got 99 problems, but my pitch ain't one.
> whatddup, founda?
> An east vs west style rivalry between the 'Limited Liability Crew' and 'S-corp'.
> Names: 'Series C', ... I forget the rest. There's others.
Patrick doesn't know about what I'm talking about though, this is unrelated.
At 200, you are close to what I consider to be a major inflexion point. It's often as easier (big separate post that I won't go into the full reasons why) to go from 200-2000 then it is to go from 20-200.
Well done and good luck!
I recommend reading:
http://thinkvitamin.com/web-apps/how-to-track-six-key-metric...
Shows he's started a few other sites, including working on a YC funded (stealth) startup.
What are we missing ?
Not sure what you mean on the graph though - it seems correct to me.
I'd recommend him, he was good and fairly priced. (Found him on 99designs).