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Entrepreneur-ing In Public: Journey Log #1
Almost cash-flow positive!
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.
This being my first official “Journey Log” for Entrepreneur-ing In Public, I’ll start by admitting I’m not quite sure of the best format, and I hope you’ll bear with me through my initial few issues as I get a better sense of the best way to share this journey.
As of right now, here’s what these logs are going to include:
A brief status update (what you’re reading now);
Core metrics (both weekly and aggregate);
A funnel analysis (to determine what’s working and what isn’t); and,
A key entrepreneurial takeaway (or maybe a few key takeaways).
I’m probably missing some valuable things, but the above structure seems like a good start. With that in mind, here’s the current status update…
Autopest is officially launched and running. Since it’s a “freemium” product, it has users, but, being only a few weeks old, it doesn’t really have customers. I’m hoping to fix that as quickly as possible. After all, a freemium startup with only free users isn’t a real startup. It’s more like an expensive hobby.
The good news is that I did get my first paying customer last week… $15 for Month #1 and $25/mo after that. Woohoo!
Customer #1 happened much quicker than I’d expected. To be fair, it’s a bit of a “special case,” meaning the customer didn’t come from a scaleable, repeatable acquisition process. However, considering the only money I’ve spent on Autopest so far is the $19.99+ tax for domain ownership, the $15 sale I made puts me almost at break-even. How cool is that???
Then again, if I include time-cost, I’d be bankrupt. So… yeah… let’s skip that calculation for now.
Thanks for reading about my journey growing Autopest from $0 to $100k/year in revenue. To keep following along, be sure to subscribe!
Site Visitors: 451 uniques (+7%)
New Free Users: 57 (+84%)
Website Conversion Rate: 12.6%
New Paid Users: 1 (+100%)
Total Free Users: 106
Total Paid Users: 1
Total Revenue: $15
Total Costs: $20.91
Net Revenue: -$5.91
The good news is I’ve got a steady trickle of traffic, and the Autopest website is converting my traffic at a decent rate. In fact, if you’d told me over 10% of website visitors would register for an account back when I first started thinking about Autopest, I’d have been ecstatic.
The bad news — and what you can’t see in the stats I’ve shared — is that very little of my new registrants are turning into active users because less than half of them are authorizing their Gmail accounts.
This is a complication I hadn’t anticipated. For Autopest to work, it has to monitor a user’s Gmail account to see if someone responded to an email. If the person hasn’t responded, Autopest eventually sends follow-up emails from the user’s Gmail account. To do these two things, Autopest requires two Gmail auth permissions during the signup process. Here’s what Google shows when users register in order to notify them about those permissions:
Kind of scary-looking, right? Plus, the two boxes are unchecked by default. If users don’t check the two boxes I’ve highlighted above, Autopest can’t work, and I’m getting lots of users registering but not checking those two boxes.
Unfortunately, people seem scared about letting an unfamiliar service view their emails and send emails for them. They’re even more suspicious when, like Autopest, that service uses “artificial intelligence.” After all, “artificial intelligence” makes it seem like the machines are going to spy on your emails.
To be clear, Autopest never spies on anyone’s emails. It can’t! In addition, the A.I. code is completely separate from the Gmail code. Plus, it’s not like the A.I. is some sort of magically sentient robot. It’s just an A.I. language model based on ChatGPT. In other words, there’s nothing to worry about. However, Google’s Gmail auth page makes an integration with Autopest seem evil, and… well… I’ve got to solve that issue, otherwise my great conversion rate of website visitors to signups isn’t nearly as valuable as it seems.
Key Entrepreneurial Takeaway
The numbers I’ve shared aren’t terrible for a new SaaS startup. But they rely on one thing most new startups don’t have: traffic. Simply put, without traffic, a funnel is useless.
What you need to understand when looking at my funnel is that the top-of-funnel — my website traffic — isn’t organic. I’m actually getting that initial traffic by cheating. Specifically, most of the ~400-ish users to autopest.com I’m getting each week are primarily thanks to a buddy with a popular website who’s generously agreed to post a couple small ads for Autopest. The amount of traffic those ads are sending isn’t huge, but it’s enough of a trickle to let me test and tweak my funnel.
I mention this because most new startups won’t have this kind of initial traffic flow, and they’d spend the first few months (or even years!) trying to get it. I’ve gotten my traffic through personal connections, and you should know that when looking at my numbers, otherwise you might think getting initial traffic to a website is cheap and easy.
Trust me… it’s not.