A little over a year ago, I started building a recurring revenue SaaS product. The product, Churn Buster, has since grown from $0 in revenue to around $37,800 in annual recurring revenue.
Briefly, for those who don’t know, Churn Buster provides a turn-key solution for the otherwise difficult and time-consuming problem of handling failed credit card payments and delinquent customers in your Stripe account.
People loved the idea of Churn Buster from the very beginning and offered me money if I built it. After actually signing customers up, I started going totally nuts solving this specific problem, because the dollars being lost across all customers using Churn Buster could justify it.
Just to give you an idea of the scope of what the product does, here are some of our primary features:
Automated Emails: Our off-the-shelf drip campaign is finely tuned to increase conversion and reduce cancelations.
The Path of Least Resistence: We make it easier for folks to update their payment information on a customer's domain without signing in.
Reporting: We provide incredibly detailed failed payment and outcome reporting so our customers can actually understand what's going on.
Outbound Phone Calls: A real human with a friendly British accent, white-labeled as a customer service rep on our customers behalf, phones customers to jog their memory and resolve any issues once our initial email attempts have been exhausted.
24/7 Inbound Phone Numbers: Each customer gets a unique inbound telephone number where customers can call 24/7 for help updating their payment information or answering any questions.
I Wanted to be Transparent
From the very beginning I had wanted to be very open and transparent about the entire experience of building and running a SaaS (including all the financials,) but I failed. I originally started writing and posting every day on a Tumblr, and as we rolled into the winter months, I started missing days... and before long I wasn't writing at all. From that point forward, despite being a very transparent person, the only folks with the inside skinny on Churn Buster were the folks in a semi-private bootstrapper chat room and whoever I ended up at dinner with at conferences.
The fact is, those months were hard.
The product grew, but at a slower pace than I had envisioned.
Revenue grew in spurts, but at a slower rate than my friends envisioned.
Some months saw the revelation of bugs and oversights on my part that required fixing and time consuming clean-up.
Other months saw crippling amounts of administrative overhead, even to the point of affecting the product's performance for a few customers.
There were times I was actually relieved if no one signed up.
I lacked the pride and confidence in the product itself to feel comfortable emailing my waiting list. (I still haven’t!)
I neglected marketing almost entirely.
As months went by, I felt the disappointment of onlookers.
I struggled to find the balance between "working on product" and doing the consulting that provided the funding portion of the "self-funded startup."
Whatever success the product was experiencing, it felt like it was happening in spite of me.
There were times when I was overwhelmed and wondered, "Should just throw in the towel and give up?"
But I didn't. I may have been falling short of my own expectations during that time, but the one thing I didn't do was stop. I kept the product and business moving forward little bit by little bit. After months and months, we eventually emerged from the darkness and looking back now, it's clear to me that even in though the months were dark, a lot of really cool stuff happened in the meantime, and it was actually those things that brought the business where it is now.
1. Part-Time Hires
I hired two part-time employees who are critical to the operation of the company. The first, Jean, is a veteran of small business financials with decades of experience, and now has complete oversight over the cash flow of the company and our household, to the point where the only number I think about these days is the growth of Churn Buster's monthly recurring revenue (MRR.)
The other, Antonia, brings the sort of British accent everyone loves to hear to the hundreds of outbound phone calls we make each month to customers who need to update their payment information. Given the sensitive nature of our business, I chose to hire a close family member and paid her well enough ($30/hour) to make it worth her while. (In her words, it's "the best job ever.") Before this, I was actually making these calls myself, and combined with everything else, the workload was crippling.
2. Shipping Features
We shipped a lot of little features to make new customers happy. A lot of these features which were small individually really came together to provide a much more complete and transparent user experience. As a result, customers who had been pinging us regularly to ask questions eventually had their answers without reaching out to us. Customers who had been pinging us for features that they felt were critical now had those features, and new customers were enjoying them out of the box.
3. Attacking Operational Overhead
Lots of tasks that were part of the product's regular administrative overhead became automated. More and more little features were added that have empowered Antonia to provide the best service she can to customers on the phone. Those features have not only increased the number of dollars we rescue on the phone, but they've substantially reduced the number of accounts that get escalated to me for handling.
4. Streamlining Onboarding, But Still Doing “Concierge”
Onboarding customers got easier and easier. Since more and more needs were being met right out of the box, less new customers needed to wait for something to be implemented. The process of importing data became more and more automated. Templates that I would use for email communication with new customers emerged and made it easier for me to get customers started on the platform.
From the beginning we've provided one-on-one personalized onboarding with each customer on Skype if they want it, and most do. As the product became more robust, the amount of time I had to spend with each customer who opted for a personal onboarding session on Skype went down by half. This makes it easier to schedule calls with new customers and allows us turn around their new account faster. These 30 minute sessions are by far the most value-producing operational overhead we have. Unlike other types of overhead which are not an effective use of my time, talking to customers on Skype is worth every minute I spend doing it.
I still do this, so if you’ve got more than 200 subscription customers in Stripe and want to take Churn Buster for a spin, please feel free to schedule a call with me:
5. Understanding Cash Flow and Establishing Goals
Our part-time CFO figured everything out across both our business and our household and reduced it all to a single number that has become a goal we need to accomplish: $4,000 in new monthly recurring revenue. I'll write more about that number later and how we're going to do it, but the real beauty is that I actually know what that number is. In the absence of that revenue, I know how many additional consulting hours I still need to work, instead of just overworking myself to blindly make ends meet or thinking I’m in a position to spend less time consulting than I really can.
Light at the End of the Tunnel and Clear Skies Ahead
All these incremental improvements, (the new features, the new people, the new processes,) together they've really brought to a conclusion those dark months. Not everything is perfect, and I don't expect it ever will be, but it's manageable. I'm not burning out. Instead, we're managing and we're getting even better results for customers than we were before and doing less work manually. We're growing in the sort of way that actually makes the business easier to run each day. It's easier to service new customers, and the revenue from new customers makes it easier to find time to grow the product and our efforts marketing it, which in turn adds more customers.
Looking back now? They really were some hard months, but I'm glad I kept fighting instead of throwing in the towel.
And I'm Writing Again
The mental blocks, whatever they were, are gone. The words just flow, which is now allowing me to do what I wanted to do all along: Share the inside skinny on this whole experience with anyone who is interested. There’s so much more to share and the next few months are going to be exciting. Did I mention I have a launch list I haven't emailed yet? :-)
For those of you already working on a product, I hope you'll find some insight in the stories and experiences I’ll be sharing that in turn help you grow your own product. If you're not already doing a product, I hope you'll find the stories and experiences motivating and inspiring, just as I've been motivated and inspired by those who have been transparent before me. Thanks Patrick McKenzie, Brennan Dunn, Alex Turnbull, Josh Pigford, et al. Please consider this my "pay it forward."
I hope you'll join me on the journey!