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Entrepreneur-ing In Public: Journey Log #7
Entrepreneurs don't need statistical significance in order to get excited
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.
It happened again! Autopest scored its second annual subscriber for $144!
OMG… is this Autopest thing actually working? Am I on the precipice of exponential growth???
No. Of course not. But my newest customer is pointing toward some interesting potential…
The new customer is a co-worker of the customer who signed up last week. That’s important because it means someone discovered Autopest, started using it, and liked it enough to buy it and also tell someone else about it. That’s the the holy grail of customer acquisition. If it continues happening, it means I’ve got the potential for product-led growth rather than marketing-led growth, and, as you can probably guess, product-led growth is much more profitable because it has lower customer acquisition cost (CAC).
To be clear, I’m not popping champagne bottles just yet, nor am I booking any trips to Sand Hill Road. I’m just noticing something interesting about my earliest customers and wondering what it might indicate as I continue growing the business.
At the very least, it’s telling me I might want to explore building a more robust referral program in order to chase word-of-mouth growth. I guess I’ll add that to my ever-expanding to-do list.
Speaking of to-do lists, can anyone explain why startup to-do lists only ever seem to grow? No matter how many tasks I complete, the list keeps getting longer. Does anyone else have this problem, or is it just me?
Thanks for reading about my journey growing Autopest from $0 to $100k/year in revenue. To keep following along, be sure to subscribe!
New Feature Announcement: Custom Signatures
While I try not to draw too many conclusions from limited data, two of my users asked for the same feature. Specifically, they asked for the ability to create custom signatures at the ends of their Autopests.
Since, as a reminder, I only have three users, 2/3 of them asking for the same thing seemed important. That’s why, this past week, I launched custom signatures. Now, users can control the signature on their Autopests and make them match whatever signatures they’re already using with Gmail.
For those of you who already have Autopest accounts, you can configure a custom signature in your Message Configs.
For those of you without Autopest accounts, what are you waiting for?
WEEKLY ACQUISITION METRICS:
Site Visitors: 554 uniques (+8%)
New Free Users: 46 (+0%)
Website Conversion Rate: 8.3%
New Paid Users: 1
AGGREGATE ACQUISITION METRICS:
Total Free Users: 386
Total Paid Users: 3
Total Revenue: $328
Total Costs: $30.90
Net Revenue: $297.10
WEEKLY USAGE METRICS:
Extension Installs: 14 (+40%)
Unique Senders: 9 (+200%)
I want to discuss two things about my funnel…
First, looking back on my journey log from a couple weeks ago, I was confused why some big updates to my onboarding process weren’t impacting Autopest’s customer acquisition funnel in the ways I’d expected. Specifically, I assumed the changes would decrease my signup conversion rates and increase product usage, but that wasn’t happening.
At the time, I wondered if I just didn’t have enough data. Rather than continuing to make changes to my funnel, I decided to wait.
The decision appears to have paid off. After a couple more weeks, I’m seeing the trends I expected. My signup conversion rates are dropping, but usage rates are increasing. That means my changes were effective.
I bring this up because it’s an important lesson for lots of entrepreneurs in the early days of their startups. Chances are, you won’t have enough user traffic to have statistically significant data. Keep this in mind when you’re making decisions, and avoid the temptation of jumping to conclusions about your pipeline based on limited info. You need to be patient and work hard to get the right data rather than the easy data.
The second thing I need to share about my funnel is an honest acknowledgment that it’s value, as currently constructed, is limited. Specifically, as I shared in last week’s issue, the only signups that seem to matter are from professional users (i.e. users with non-Gmail accounts), but my funnel is tracking all users. That’s not helpful, and it’s probably giving me an incomplete view of what’s actually happening with Autopest’s customer acquisition process.
Unfortunately, I don’t have a huge pipeline of professional users, and I haven’t started exploring a marketing strategy for them. Until I find a way to increase the number of professional signups I’m generating each week, the funnel data I’m sharing is going to have limited value.
Sorry about that! I’m working on a new marketing strategy to attract professional users. Once I have something in place, I promise I’ll share.