Why I made my startup’s revenue public
Today, I made my startup’s revenue public by joining the Baremetrics Open Startups movement. You can see every transaction and every cancellation, live as it happens.
Why did I do it? I hope that by joining the transparency movement I can help other entrepreneurs.
Perhaps it will help if I tell my own story.
Starting a startup is hard. When you start you have no product, no customers and no one has heard of you. It doesn’t help that all your friends and ex-colleagues think you’re crazy (at least if you live outside of Silicon Valley). As time goes on, you start to wonder if you’re crazy too.
It doesn’t help to have the weight of your own unrealistic expectations. People tend to only publish their success stories. Reading TechCrunch makes you think successful startups were successful from day one. Meanwhile your revenue is flatlining — here’s what my revenue looked like in November 2014.
Baremetrics felt sorry for me, and scaled my axis to help me feel better. But bear in mind, I quit my job in March 2014 and 8 months later my startup is only making $140/month. Even worse, it had just fallen to $120. My startup wasn’t growing, it was shrinking! One potential investor said to me:
“You’re not still flogging that dead horse are you?”
That’s when I gave up.
A month later, at the London Google Campus Cafe, my friend and fellow entrepreneur Guillaume Devinat proposed a brilliant solution.
“So your problem is 200 people a month are signing up for your product through SEO, but they’re not paying after the free trial.”
“And you think it might be because the product is crap. But you don’t want to do the work to make it better, in case you then discover people still don’t want to pay. They just want something for free.”
To which I replied “Yes! I’m in an impossible catch 22 situation. Isn’t my life terrible?”. To which he said:
“Why don’t you ask for their credit card details when they sign up. Immediately afterwards show them a message telling them they haven’t been charged.”
Brilliant! Why hadn’t I thought of that before? I had attended countless Lean Startup talks — so it should be obvious. But perhaps the fear, that it would annoy people, had held me back.
But I had given up. I had nothing to lose. So I did it. The results amazed me. In the month of January 2015, 26 people entered their credit card details and clicked ‘Pay $20/month’. They hadn’t even seen the product! In contrast over 1000 people had completed the free trial over the past 8 months, and only 2 had chosen to pay.
The message was clear. People were willing to pay for what my product offered. They would pay for it before they’d seen my product, but not after. It was just my product wasn’t good (yet). And, as a startup, that’s actually a really good place to be!
So I stopped trying to find a cofounder. I stopped trying to find an investor. I just sat down and coded, and built the product. Here are the results:
As I was only talking to paying customers, noise was eliminated, and I was given focus. I started to learn what type of product I should build.
Before I offered businesses the ability to sync data between 360 web applications, Microsoft Excel and Google Sheets. Unfortunately, writing software that connects to 360 different APIs is not possible for one programmer who requires sleep. So I used Zapier as an intermediary. But Zapier wasn’t designed for syncing data. So my product was frustrating to use.
So I started to improve my product by building direct connections. One connection turned out to be a roaring success. Today, Instagram accounts for 90% of my customer growth.
My startup, Magi Metrics, has been transformed. It now gives you access to the raw data in your Instagram account. For example, Magi Metrics will give you a spreadsheet listing every follower, and the number of followers each of your followers has. So you can really understand who your most influential followers are and reach out to them.
The popularity of the Instagram feature, has made me consider pivoting and becoming a social media analytics company. Which brings me full circle. Starting a startup is hard. It’s hard because in the beginning you are unlikely to have product/market fit, and it takes time to find it. It’s hard because you have unrealistic expectations of success. The danger is you give up. Talking to other entrepreneurs, and hearing similar stories, has convinced me that perseverance is key.
You can see other Open Startups on Baremetrics here:
It helps to change the date selector on their revenue graph, to the very beginning. Now it looks more similar to yours? Not so intimidating.
People only tend to talk about their success. At only $1750/month, Magi Metrics, is one of the least successful Open Startups. That’s why I thought it was important to publish it.