Reflections on 2023
At the start of 2023, I did not have a business. I had a small web extension (or plug-in) that had
952 users but was not monetized.
As of now, I have almost
2800 users in total and out of these users, I have
57 paid ones (approximately).
That gives us a conversion rate of approximately
2% which is abysmal, let's not kid ourselves.
The
MRR has gone down since November and is now around
$2500 with an LTV of
$300.
The
CAC is around
0 since I am not doing any marketing besides writing blog posts.
How to build a business in 2024
I think that starting with something small that had a single feature, was a good way to get the ball rolling.
I did not have to worry about the competition too much as the competition was busy fighting with each other.
My extension did one thing and 1 thing only but it did it well.
I think this confirms that the way to succeed these days is to create an
MLP instead of an
MVP.
If you are not familiar with those acronyms, you can read more about them in the link below:
MVP vs MLP
MVP stands for
Minimal Viable Product which means that you create the most bare-bones functioning product that works but can also look like crap and with a non-intuitive design straight out of the 2000s.
That may have worked at one point but nowadays, I think the best bet is to go with the
MLP or
Minimum Lovable Product.
It is the same principle as the
MVP but this time, you‘ll spend more time on the UX/UI to make your product very lovable(think nice animations, nice branding/colors, cool name) and very intuitive to use.
How far you take it depends on you and there is no clear consensus as to when an
MVP becomes an
MLP.
Use your gut but don’t spend too much time before launching.
Praise for managed services
I use MongoDB which is hosted on Mongo Atlas for my database needs. I use Vercel to host my web application and I use the Chrome Web Store to distribute my extension/plug-in.
I always go back to this article when in doubt about what I should spend my time time on:
11 years of hosting a SaaS
Could I save a few bucks by deploying my application on AWS myself? Sure, but I would lose some sleep over it.
Could I save more money by using something other than MongoDB? Also possible.
Is it worth it? I don’t think so. Spending money on services that allow you to sell your product is not an expense, it’s an investment.
When you start thinking about adding more functionality to your product, start by looking at managed services that specialize in what you're trying to achieve.
I use another service to run cron jobs. I could build my own Node application, deploy it, manage my own jobs, and I would pay 5 dollars a month but I have to maintain it, secure it, update it.
I would rather spend time making more money than maintaining another application. This is what most people who start SaaS companies get wrong at the beginning.
You should spend your time building things that make your product better, not nickel and dimming your way to profitability.
There is always the possibility to optimize your costs down the line as long as you are profitable from the start.
A premium business is better
Do not be afraid to charge a higher price point than your competition. I price my product based on value not based on features.
I barely hear from my paying users unless I am the one reaching out. My free users on the other hand are never satisfied. There is such a thing as bad customers.
Free users are great for vanity metrics(think number of installs, page views, and so on) and early feedback but they don’t pay the bills and never will.
It is madness to think that if you bend over enough for your free users, that they will suddenly transition to paid users.
Most of my paying users pay without even finishing the free trial.
Free users are a PITA. That is why in 2024, I will ask for a CC for the free trial accounts. It should cut down on the free users signing up and inundating me with requests for features.
Be a product led company, not a feature led company
If you don't know where you are going, how do you expect to get there?
It’s fine at the beginning to not necessarily know where you will be at month number 6 or 12 but if you have a product that is more than 3 months old, you should already have an idea of where you want the product to be in the next 12 months.
I personally write everything I can possibly think of in a Google document, I let the ideas simmer and I get back to it later once I have had time to think about them.
Because of this process, I now have a good idea of the direction I want to take the company towards.
This means I can easily say yes or no when a customer requests a feature. If it fits in the overarching vision of the product, then I may consider putting the feature on the road map and if not, I can tell the user that it won't happen.
Do not be afraid to turn down customers.
I am never shy when it comes to telling the truth to my users. If a user is not happy, I prefer to cancel their subscription, refund their last payment and move on. No point trying to get blood from a stone.
When given the choice, the user can either accept things as they are now or move on and the choice is on them which makes it easy on my side to cut them loose.
This obviously needs to be done in a professional way. We are all adults here, no need to be a dick about it.
There are good days and bad days
Leave your ego at the door and keep your emotions out of the decisions. This is a business not therapy.
If a user is mad, take it on the chin and move on. If you are pissed at a customer, go for a walk. Nothing good can come out of you being a prick to your users.
Remember, it takes a lifetime to build a reputation and only 5 minutes to destroy it.
Some days, you feel like you are making zero progress, that the whole thing is just a waste of time and that getting a Switch and powering through Zelda for the next 2 weeks might be a good idea.
My answer to you is : this too shall pass.
Things are not bad forever and they are not good forever. The life of a business owner is made of many ups and downs.
If you are not comfortable with that and expect a smooth ride into the sunset, I think it would be wise to pause and make sure that this is the life you want for you and your family.
9 to 5 becomes 24/7
If you were not happy with your work life balance before starting a business, then Oh boy do I have to warn you to stay away from entrepreneurship!
The business becomes part of your life like nothing else. It is always there in the background. If you hope to have more free time, then think again!
It’s not going to happen, at least not during the first few years of your business being created.
After some time has passed and after you’ve put more systems in place, then maybe you'll be able to unplug, but for me, this hasn't happened yet and it won't happen for many years I believe.
There is just too much to build, too much to do. I am at its beck and call.
Don’t quit your job (yet)
We all have this dream to never work again for the “man”, to own our schedules and be able to take a day off or not work for a week if we want to.
I too share the same
goals but it is delusional to want to quit your job the day the business is created.
If your business is not bringing at least whatever it is you make at your day job after taxes, then quitting your job just puts more pressure on yourself to succeed and to do it quickly.
The problem is that this kind of success is rare.
Most of the time you will try 3 or 4 different ideas before you find the one that works and then it will take even more time before you can live off of your business.
Take some time to read the examples below of slow and long SaaS ramp of death:
The Long, Slow SaaS Ramp of Death - Thomas Carney
Navigating the long, slow SaaS ramp of death - Baremetrics
Instead I suggest you be smart about it.
Try to negotiate going part-time for a while or use the laws of your state/country to your advantage.
For me, I went part-time for 3 months between April and July 2023. I worked 3 days a week at my job and 3 days a week (plus evenings and mornings) on my business.
In 2023 I learned that in Sweden, I could request to go on unpaid leave for 6 months and still keep my job.
That means that if everything goes to shit in 2024, I can go back to my old job in a heartbeat and the financial ruin can be averted.
Nobody told me this, I had to seek this information by myself. Don’t expect anyone to volunteer any information freely.
If you want to make it in this business of working for yourself, then you need to learn this: the buck stops with you.
You are the one who is responsible, you are the person in charge, it is up to you to secure your future to the best of your availability.
If you can’t or won’t put in the work required to succeed, then there is no one else to blame but yourself.
Look at the trend
It is better to take a step back and look at the trend of where things are going instead of focusing on the daily shenanigans. That doesn't mean you don’t need to show up everyday and do the work.
It simply means that most of the work you do will only pay off in the future:
- Write a few blog posts and see them rank in a few months.
- Get an affiliate partnership and watch the money roll in 3 months from now.
- Revamp your homepage and watch the conversions increase slightly over the next few months.
You get the gist.
Things take time and you'll need to be somewhat patient to see the results of your hard work.
Be like a monk, learn to be patient and accept that some things will take longer than you expected.
Time is better than money
If you had asked me 3 or 4 years ago what I most wanted after “making it”, I would have probably told you: a fast car, a big house, and stuff to fill the house from top to bottom.
Today I want only one thing:
time.
Time is the most important thing in my opinion. There is never enough of it and it is and always will be limited.
Even if my business only allows me to live the same lifestyle as I am living now as an employee, as long as it allows me to have more free time in the future, then I would still consider myself wealthy.
To not have to show up at a given time 5 days a week is something that I long for. I wasn’t made for a 9 to 5 but the golden handcuffs almost made me forget that I was in a prison.
I want time to read books, to talk to the people I love, to do what I want during the day without having to ask permission. That to me is truly being wealthy.
I hope 2024 is the last year where I have to put up with this 9 to 5 schedule and I hope you do too.
2024 and beyond
I am not big on making commitments for the future. I think the whole premise of the
new year's resolutions is just a cop out to do nothing until January each year but each to their own I say.
My
goal for 2024 is to finally end my employment at my job and to maintain the same lifestyle I currently have but this time, paid for by my business. Anything above that is going to be a bonus.
That doesn't mean that I am not aiming to multiply my revenue and profit by 10 this year, not at all, in fact, I want to multiply it by 20, but it is also important to know what a wishful outcome is and what a satisfying outcome is.
Either way, I am going to work like a mad man and I will give it everything I have because our lives are too short to spend them having regrets.
I wish you all an amazing 2024 and I hope you succeed but if you haven't reached your goals just yet, don’t give up and try again.
The world is full of opportunities, 99% of people are too busy watching TikTok to notice but not you.
You got this.
Believe in yourself and be kind to yourself.
Take care.
