Year in Review 2015

I’m Christoph Engelhardt, the maker of LinksSpy.com and the guy who writes the notes at MicroConf Europe. I run LinksSpy as a side project and work a day job in the defense industry. I usually get in about 4-6 hours per week.

To help me think about what happened in the past year, I write year in review posts (2013, 2014). In those posts I review what worked, what didn’t, and where to go from here.

Acknowledgements

I’ve had the help of many amazing and inspiring people who pushed me to where I am today. My thanks go out to:

  • My wife Katharina who puts up with me and my gnarliness when things don’t work out, and yet still believes. Thank you for yet another great year full of beautiful moments worth remembering
  • Benedikt Deicke with whom I produce a (German language) podcast (Nebenberuf Startup). Thank you for the countless times you’ve helped me bring LinksSpy back up and correct my worst fuck-ups. Thanks for being my advisor on hard decision and for pushing me forward with the occasional kick in the butt (If you love Year in Review posts, here is Benedikt’s)
  • Michael Buckbee for dozens of inspirations on how to work smarter. You’re an amazing entrepreneur and human being
  • Dave Collins for the numerous times you’ve guided the product decisions for LinksSpy. A special thanks for taking the time to have lunch with Katharina & me
  • Charlie Irish for many funny conversations and for great hours we spent together in London. It’s always great to hang out with you.
  • Rob Walling & Mike Taber for hosting my favourite podcast and the best conference for bootstrappers like me. Thanks for sharing actionable tips and tactics, and for inspiring me to follow in your footsteps
  • Jane Portman for great conversations, pushing me forward, and for being the first one to take me up on my standing invitation (come to Munich and dinner is on me).
  • all the people that hang out in the BBiz Slack chat: You are an inspiring group of people. Thanks for the help offered along the way and for taking the time to listen when I was troubled with the situation

The Business

I have two products and also do consulting — quite a mix. This comes with pros and cons.

On the one hand, I might be able to push a single product harder if I devoted all my attention to it.

On the other hand, I enjoy the consulting work and working with other founders. It’s nice to have something different to work on when you get frustrated with one product. :-)

My first web application/SaaS business is TerminRetter, an appointmentreminder.org clone I developed five years ago. Apart from the one time I tried to integrate credit card billing using Stripe and Koudoku, TerminRettter was completely on auto-pilot. It’s profitable, but it needs a complete overhaul if I want to push it further.

Secondly, I work with clients to improve their marketing (SEO, email marketing, conversion optimization). It’s fun to work with other founders and help them grow their business.

It’s both a great feeling, and demoralizing, to know that I make more money in one day consulting than I do all week in the day job. I have to stay in the day job for another six years day job(don’t ask, please). Anyway, everything is cool and fun on this front. :-)

Lastly, I run LinksSpy. In Michael Buckbee’s words LinksSpy is a „CRM for getting inbound links“. In my own words, LinksSpy is „the sweet love-child of Ahrefs and BuzzStream„.

The Executive Summary

Looking back at 2014, the year I launched LinksSpy, my product saw fantastic growth: going from $190 monthly recurring revenue (MRR) at launch in April to $1,296 MRR in December. Not a bad growth rate — but, alas, it wasn’t meant to stay that way.

It was a struggle in 2015 to keep LinksSpy’s MRR constant or growing.

LinksSpy started 2015 with very high MRR levels, caused by LinksSpy being featured on ProductHunt. When those customers churned, I had to struggle to keep MRR above $1,000. I failed at it for a few months when MRR went down to $814. Through a combination of product improvements (automated follow-ups for email outreach and integration of Ahrefs data) and marketing, I pushed MRR back above the magical $1,000 line.

Although I had to neglect LinksSpy almost entirely for the last three months of 2015 it has stayed above $1,000 MRR (currently at $1,050).

The hardest lesson I learned this year is that churn is a real bitch for a SaaS business. On the bright side, I’ve learned many lessons about onboarding churn.

The Slightly Longer Story

LinksSpy started off extremely strong in 2015. It had just been featured on ProductHunt. The promotion on ProductHunt sky-rocketed the number of paying customers and the MRR.

Being featured on ProductHunt was amazing, wonderful, exhilarating!

Seriously, I was thrilled. I thought I’d 3x my revenue in 2015, because obviously I had things figured out – right? I knew what I was doing – right?

Wrong. I certainly have a good product and I have learned incredibly many lessons on my way here, but what I was seeing at the start of 2015 was just a spike. That spike was caused by an influx of customers that were not an ideal fit for the product – and they never will be.

The ideal customer for LinksSpy is someone who does SEO/link building/outreach marketing all day, every day.

But because of the broad appeal („More organic search traffic“) and the composition of ProductHunt’s audience, I was attracting a lot of founders/website owners. Paying $29/mo for a product that essentially shows you MORE work you could be doing isn’t highly desirable to those guys (but if you’re reading this, then maybe our „Done-For-You“ plan, where we do all the hard work for you, is just right for you).

Lesson #1: Do NOT add more items to your customer’s To-Do-List.

never add to your customer's to-do-list

Even with this huge spike of fresh MRR coming through my door: what goes up, must come down.

I saw that happen immediately.

Customers churned left and right and my marketing just didn’t get enough new customers in.

Much of the churn can be attributed to reaching the wrong market. Also, lack of features, bugs in the software, sub-par marketing copy, and too little traffic are big contributors to the problem of sinking MRR figures.

It was devastating personally to see the revenue graph go down and to the right. The monthly revenue churn rate was 15-20%, and something had to be done about it.

entrepreneurship-relative-joy

(Image by @scottbelsky)

After I had found the motivation to work on LinksSpy again, I focused on relaunching the product with new features. LinksSpy was missing a feature that makes the application „stick“ with customers. They would run the reports, check the data, and leave the app unused for months – or cancel outright.

After speaking to customers and recently cancelled customers, I identified two promising features:

  • better data by including data from other providers (I was only using Moz up to this point)
  • enhanced outreach capabilities, i.e. once you write an outreach email to another website through LinksSpy, we will automatically send follow-up emails until they open the email

I relaunched the application in early September and things have improved since then. With the relaunch I also restructured the pricing from $29/$49/$99 for the three tiers by dropping the $29/mo plan and adding a productized consulting offering („Done-For-You“ plan) for $499/month. At the same time I increased the trial period from 7 to 14 days.

In September 2015, I was transferred to another position in my day job. While I enjoy the work I’m doing now, it is also a huge time sink. I’m doing a bunch of overtime and it leaves me mentally drained to the point that I haven’t done any work on LinksSpy in the past three months.

What went well

First and foremost, having a product that makes $1,000/mo in revenue is great. Being able to not worry about it for a few months and still make money is fucking fantastic!

Second, the relaunch and new features are a great step in the right direction. I want to build LinksSpy into a tool that streamlines the outreach marketing process. To that end I have a few more features that I want to add and that will make LinksSpy unique in the SEO niche.

Next, changing the pricing structure was a great idea. While I still need to create a dedicated landing page for the $499/month productized consulting plan, overall this change was a good one.

Additionally, there were no super bad bugs in LinksSpy. I can live happily without the stress and drama. :-)

Lastly, all the things I did besides LinksSpy were great:

  • attending MicroConf Europe was a blast – as always. I’m so psyched for 2016 already!
  • giving a talk at a local event made me wish I gave more talks (and I’ve lined up more for 2016)
  • hosting a podcast with my good friend Benedikt Deicke allows me to give back to the micropreneur community.
  • building great relationships with inspiring people (I’m looking at you, Charlie, Jane, Jaana, Michael, Dave, Andy, Rob, Mike, Justin, Brennan, Oliver, Anton) is one of my favorite activities. It’s so nice to sit around a table with a bunch of smart folks – try it!

What didn’t go well

I’ve talked enough about how bad the high churn felt and the stress it induced and how I lost motivation for a few months as a result of it, so I’ll spare you a reiteration.

I hired a developer to work on LinksSpy in early 2015. I found an insanely good Rails developer and we agreed on him working 5 hours per week for me. We were right in the middle of getting him on board – he was working on a bunch of open source projects that LinksSpy uses – when he told me that 5 hours per week wasn’t enough for him. I wasn’t ready to spend more than I made with LinksSpy, so increasing was out of the question for me. Sadly, we had to end the contract.

Another thing that didn’t work out at all was my attempt at adding credit card billing to TerminRetter. TerminRetter was my first ever Rails app and the code shows it. I tried to add it for four days with the help of Benedikt Deicke before I gave in. That app is up for a full rewrite if I want to grow it in the future.

Moreover, my content marketing efforts for LinksSpy didn’t work out as planned. I hired a good writer for $300 per post to publish content on the LinksSpy blog. My thinking was that his existing network would be enough promotion to have an ROI-positive content strategy. I wanted to just pay for it to work, which just didn’t work.

Furthermore, I stopped doing monthly income reports. It was too much work as I would spend 3-4 hours writing each one up. When you work less than 10 hours/week, that is simply too much for something that yields no return. The reports were fun to write and I got great feedback from publishing them, but it didn’t grow my numbers. I will still do posts like this one, but other than that I will focus on writing actionable posts.

Lastly, my accounting was really bad at the beginning of the year. I spent two weekend building a script to pull all the important data from Stripe, just so I could do my taxes. I didn’t properly collect receipts in 2014, which made taxes an even bigger headache. I have improved that process dramatically in 2015. Doing taxes should be straight forward this year.

The Numbers

Traffic

Marketing Website:
  • 12,054 sessions
  • 68% new users
  • traffic breakdown:
  • 29.7% referral (top: ProductHunt.com, IT-Engelhardt.de, BloggingCage.com)
  • 37.0% direct
  • 16.5% social
  • 15.2% organic search
LinksSpy blog:
  • 5,891 sessions
  • 76% new users
  • traffic breakdown:
  • 12.5% referral (top: Inbound.org, LinksSpy.com, discuss.bootstrapped.fm)
  • 35.3% direct
  • 26.0% social
  • 22.2% organic search

Revenue

At the current exchange rate of $1.09 USD per 1 EUR and according to Stripe’s dashboard LinksSpy generated $13,922.57 revenue in 2015. This amount is missing the last week of 2015 and is skewed by fluctuations in the exchange rate (dropped from $1.20 USD/EUR to $1.09 during the year).

Expenses

I can’t give you anything exact before I’ve done my taxes, but here’s a very rough idea:

  • $700 for Heroku
  • $500 for Ahrefs
  • $800 in Stripe fees
  • $600 for GetDrip.com
  • $2,300 for freelancers on Upwork/oDesk
  • $1,800 for content on the LinksSpy blog
  • $2,500 for MicroConf Europe (includes tickets, flights, hotel, hosting a dinner, and random spendings)
  • $200 for domains
  • $600 on LeadFuze

I blew all the rest on smaller stuff like Sendgrid, Google, Castingwords, KingSumo, Dropbox, Calendly, PerfectAudience, Github, etc.

I aimed to spend all the money back on LinksSpy and I think that’s one goal I achieved! :-)

Goals For 2016

Increase the MRR of LinksSpy

Last year I aimed for 3x MRR and ended up at 0.75x MRR. So this year I’m going to set a more modest goal. I want to bring the MRR up to $1,500.

Write More Exceptional Content

The only traffic generation strategy that is working for me is writing great content and promoting it. In the coming year, I’m going to double down on that and aim to write one great piece every three months. My estimate is that it takes about 60 hours to write an piece and line up promotion for it.

To that end I have hired someone to write roughly 200 shorter articles which will all be part of a big content piece. I’m paying $6 per article and he’s half way through the 200 articles. After he is done, I’ll need an editor to go through again and improve the quality. I need to pay someone to add pictures. After all that is done, I need to promote the shit out of it after publication.

Rewrite TerminRetter

I’ve pointed to it above: the TerminRetter app needs an overhaul. So I’ll probably take a few weekends here and there and rewrite the thing from scratch.

Help The Micropreneur Community

Whether through more talks (which I’d prefer), organizing dinners and meetups, or through my podcast: I want to help the micropreneur community thrive. Not very specific, but I’ll figure the details out as I go.

Attend MicroConf Europe

Same as last year: If day job permitting, I’ll be at MicroConf Europe, taking notes, hanging out with friends, and having dozens of fascinating conversation with brilliant people.

Conclusion

This year didn’t go as planned, but it could have been worse for sure. Not going to give in and we’ll see whether I achieve my goals for next year.

Last of all, I wish you, my dear reader, a Happy New Year 2016 and hope you crush it in your business endeavours!

PS: If there is anything I can help you with, please drop me an email… christoph@$YOU_HAVE_3_GUESSES :-)

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