- Monthly Income Report December 2014

Hi folks,

I posted my latest income report. Teaser: It might help you feel better if you are struggling with your business.

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I LOLed at the teaser line :smile:

You say in your income report:

My customer base is too small to be really sure about churn rate, but it seems to be somewhere in the 10-15% range, which I have been told is too much.

I think it depends on the acquisition channel of that revenue, more specifically the payback period.

Saas bloggers always recommend 2% rev churn and 12 month payback. 15% rev churn is thus equally acceptable if and only if your CAC is about 2 months of user MRR.

So what do the churn and payback numbers look like if you exclude the ProductHunt customers?

Since you didn’t pay anything (even time) to get those ProductHunt signups, it’s entirely possible most/all of your acquisition channels are profitable but the ProductHunt one with extremely short payback period (and decent enough churn given that) is throwing the averages (seemingly) out of whack.

Thirdly, I lost contact with my blog co-author – he just stopped responding to my emails

Is this someone you have outsourced blog writing to? It seems to be a perennial problem with outsourcing. People just disappear. Its one of the reasons I’m not as keen on outsourcing as many other people seem to be.

ProductHunt users might not be in your target market and that’s why you may have seen your churn rate rise on that month.

Have you contacted the users that have cancelled? You might be able to get some insight on the reasons and get an overview of that needs improvement.

Yeah, exactly. I’m now trying out an agency that @robwalling mentioned in his AMA over at - IIRC it was

The 1,000 word article now costs me $100 instead of $50. I didn’t see a noticeable improvement in the first article, but I’ll give it some more time.

I contacted the users that cancelled, but didn’t get much of a response back. I already ask for reasons at the time they cancel. Not many insights there either :frowning:

The 10-15% range is for “normal” months - I already filtered the month affected by ProductHunt. So yeah, as long as my CAC is < 2 months, I’m “fine” - it’s just not a great place to be in.

This is probably the biggest drawback of outsourcing to freelancers.

But if you can get 6-12 months worth of solid work (like blog posts) out of someone before they flake, that’s a ton of value that you didn’t have to produce yourself. IMO, re-working things once a year is better than doing everything myself.

At that churn rate it’s going to be really hard to grow to anything more than a few thousand dollars. You might be profitable now on your cost to acquire, but if you want to grow this to even a full-time income you’ll want to get that number below 10%.

Also, be sure you’re splitting your churn - don’t look at blanket average churn across all months. Look at churn by how long they have been a customer - people in the first 30-60 days typically have really high churn rates, and after 60 or 90 days it should drop way off (single digits).

If you’re looking at this as a single number it’s not fine-grained enough to figure out how to attack the problem.


6-12 months would be ok. But I employed a couple of people to do bits of programming work. They did a couple of weeks of work, got paid and then disappeared off the face of the earth.

Maybe I am just unlucky? Or a bad employer? ;0)

It’s definitely a learned skill - probably the hiring more than the actual employing. Takes time to figure out how to find the right people who will stick around, and to learn how to delegate in a way that makes them want to stick around.

But maybe you’re already doing those things well; luck certainly still plays a role.

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