Entrepreneur-ing In Public: Journey Log #6
Are startups the world's greatest roller coasters?
I teach entrepreneurship at Duke and I’m publicly growing a company — Autopest — from $0 to $100k/year in revenue in order to help entrepreneurs better understanding the process of building startups. Learn more about my journey here.
In last week’s Entrepreneur-ing In Public update, you might have noticed things weren’t going so well. I’d discovered a major bug in my app, and, despite updates to the onboarding process, conversion and usage rates were getting worse rather than better. I wasn’t happy. But, this week, things are looking completely different. Why? because I made another sale! And not just any sale. Someone bought an Autopest annual plan for $144!
For comparison, my entire revenue up to this point was $15, meaning I nearly 10x-ed my revenue. That’s right… 10x! I’m already thinking about sending pitch decks to investors touting my 1,000% month-over-month growth rate. 🤣
OK, things aren’t really “completely different.” I’ve still got a development to-do list a mile long, a funnel that’s leaking like the Hindenburg, and not nearly enough hours in the day to do everything that needs doing alongside my full-time job. But the sale this past week has completely changed my mindset. It’s telling me someone actually likes what I’ve built enough to pay $144. How cool is that?
More importantly, it’s telling me if one person likes Autopest enough to pay $144, surely there are more people. Maybe even lots more people. All I need to do is find them.
Unfortunately, “finding them” is the hard part. That’s what makes building startups such a crazy roller coaster ride. One day, you’re feeling completely defeated, and the next day you’re on top of the world. At the same time, you realize the next big challenge is coming fast, and there’s no time to celebrate because things are going to start sucking again very soon.
It’s a wild ride… especially considering the fact that I’ve barely left my desk.
-Aaron
Core Metrics
WEEKLY ACQUISITION METRICS:
Site Visitors: 514 uniques (+14%)
New Free Users: 46 (+5%)
Website Conversion Rate: 8.9%
New Paid Users: 1
AGGREGATE ACQUISITION METRICS:
Total Free Users: 340
Total Paid Users: 2
Total Revenue: $184
Total Costs: $26.42
Net Revenue: $157.58
WEEKLY USAGE METRICS:
Extension Installs: 10 (+11%)
Unique Senders: 3 (+200%)
Funnel Analysis
As I shared in the intro to this week’s log, Autopest got its second customer. Yes, that’s good news from a “feels good” perspective, but it’s even better news from a funnel perspective because I’ve doubled the datapoints I have to help me understand what a good customer looks like.
To be fair, two customers is hardly a statistically significant dataset. Heck, it’s not even a pattern. But it’s pointed me toward some important information about my customer acquisition funnel that I’d previously been overlooking.
Autopest technically works for anyone with a Gmail account, but both of my paying customers are business users. In other words, they didn’t register using personal @gmail.com accounts. They both have professional domains associated with their email addresses, and they’re using Google’s paid GSuite service.
This isn’t surprising. After all, I never expected personal users to be my primary customers. What’s been surprising, however, is how quickly the professional users went from registering to paying. They sent a couple of emails using Autopest, immediately understood it’s value, and then entered their credit cards… all within a few days of registering. In contrast, and as I’ve noted in previous issues of this journey log, most of my free users register and then never bother even testing the service.
I’ll make the emerging contrast between professional and non-professional users even more stark by sharing some numbers. Of my 340 registered users, only two are paying. That’s a 0.6% conversion rate. However, of those same 340 registered users, only 39 are professional GSuite users. Everyone else is either a personal Gmail user or an academic user (e.g. has a “.edu” email address, which likely makes them similar to personal Gmail users in terms of not being a good potential customer).
When I consider that 2 of 39 professional users are paying customer, the conversion rather increases to 5%. That’s a HUGE jump.
I realize I’m still only working with tiny numbers, so the stats aren’t as reliable as I’d like them to be. At the same time, the early stats sync with common sense and logic, which both tell me Autopest is a tool that’s mainly valuable for professionals. As a result, I need to rethink my marketing efforts and figure out how to get Autopest in front of more professionals.
I guess I know what I’ll be working on this week. And next week. And the week after that…
Yes, congrats! Always good for the morale!
Congrats!