It’s one year since I charged FirstOfficer.io’s pilot customers for the first time. I’m proud to say that they all are still onboard and their businesses are healthy and happy.
My own business has survived it’s first year and I’m proud of that. 80% of businesses fail within the first 18 months
Let’s talk about money!
If people hadn’t shared their revenue numbers to inspire me, I’d still be a corporate slave. So I feel I should give back and inspire others.
But I also believe that publishing churn and CLTV numbers puts young SaaS businesses into a too vulnerable position. Fortunately, you don’t need to see other people’s SaaS metrics to know if your metrics are good or bad, all you need is the understanding of the SaaS business dynamics. So I’m just publishing the revenue.
After 12 months in operation, FirstOfficer makes a little over $4,000 of MRR.
Is that good or bad?
Looking from one perspective, I’m extremely happy. Looking from another, I’m disappointed.
When I started building FirstOfficer in autumn 2013, I wasn’t sure if SaaS metrics could make a decent business. Then my friend Josh launched BareMetrics. Our whole chat group was following up as he built the app in two weeks. I was mortified from fear at first, but when the app came out, it was clear that his vision of SaaS metrics app was different from mine. So I kept on going and eventually launched too.
Josh did me a huge favor by showing that SaaS analytics could make a small business. Unfortunately, his success made me overly positive about my own situation.
I saw my background in accounting a bigger asset than it was.
I had the knowledge to build an app that calculates the metrics in a right way - but it took me 7 months to calculate metrics accurately enough to launch. When people need assistance in analysis, data-mining or interpreting their metrics, I can help with that, so they get superior support too.
But neither of those things got more eyeballs to my business - and no matter how good a product, if people don’t know about it, they won’t buy it. I’m nowhere as good at marketing as Josh is - everyone loves to follow up what he shares, including me.
I love running FirstOfficer
Looking only at my own performance, I’m very happy with FirstOfficer.
It’s growing steadily and now fully replaces my previous day-job wages.
It’s amazing how low-cost you can run a SaaS app, if you spend your pennies wisely. I’m running at 85% gross profit margins. However, I employ only myself so this is really a job at the moment, not a business.
I’ve also learned to fret less and my current workload is very sustainable. Up until the last Christmas, I was working way too much and was constantly in a reactive mode, putting out fires.
But since, I’ve automized heavily and learned to prioritize. Thanks to GTD-method, I now happily live with unfinished business and I’m back to the creative and proactive mode where I work best.
Best of all, I love working with my customers. People running startups are interesting, intelligent and polite - it’s a pleasure to serve them.
Customers love FirstOfficer too
What really keeps the business afloat is customer love. I created a second page for the testimonials to fit in all the people who wanted to support me publicly.
FirstOfficer gets a lot of word-of-mouth and the churn rates are nice and low - no gimmicks needed.
In fact, I’m sorely aware that if people would have churned at rates that would be normal for a young business like this, the growth would have stopped already.
I’d like to see FirstOfficer grow to 5-digit MRR during the next year. That means I really, really have to move my focus more to marketing and improving my onboarding funnel.
The overall situation is super interesting. It’s like having competitors crowd up at the start line and the race during the next years will show how the market will be divided.
There are funded apps that try to make metrics simple and accessible, like BareMetrics and ChartMogul. And there are apps like FirstOfficer & ProfitWell, that focus on strategic insights and are built by professionals in accounting and finances. I believe both app types are needed.
My natural tendency is to focus on development and feature-wise I’m just getting started. It takes a lot of work to hold myself back and try to focus on marketing. I’ve left most of the profit inside the company, so I hope to also hire some help in marketing.
As I explained recently, I’m not really into startup superstardom, but I could imagine employing an US day-time support person, a sales person and some UI design and development help in the future.
My investment of the year
Warren Buffet does not pay dividend because he creates more shareholder value by investing the profits by himself than giving them out.
I’m not Warren Buffet so I actually did pretty much the opposite to lower my risks.
I used FirstOfficer to secure a loan and bought a rental cabin in Lapland. The profits from rentals should cover the loan and in 10 years the cabin will be mine.
This will also work nicely with my lifestyle, as I’ll be able to use the low-season weeks myself. There’s tranquility and full 4G mobile broadband coverage!
I’m actually there right now, decorating the cabin for the tourist season. I hope you like the looks:
If you want to see the northern lights and reindeers and wander/ski in the wilderness to spark up your creativity, you’re welcome to stay in my cabin.
It’ll be up for rentals through Destination Lapland before autumn.
When it comes to investing and acquiring wealth, it’s sometimes best to diversify - even when there’s always the opportunity to make high-risk investments to you own business. Even experience doesn’t help. Based on data scientist Thurston, seasoned entrepreneurs are just 12% more likely to survive.
Keeping your funds in a good mix of of high-risk and low-risk investments gets the best long-term results.