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

Iโ€™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 youโ€™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 โ€” 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. ๐Ÿ™‚

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. ๐Ÿ™‚

Lastly, I run LinksSpy. In Michael Buckbee’s words LinksSpy is a “CRM for getting inbound links”.ย 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 โ€” 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. ๐Ÿ™‚

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! ๐Ÿ™‚

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 ๐Ÿ™‚

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LinksSpy โ€“ Monthly Income Report April 2015

I am again pretty late with my income report for April 2015. LinksSpy has lost about 10% MRR in April.

But before I dive deep into this, first let me get some boilerplate out of the way.

Preface

You can find all my income reports here: http://www.christophengelhardt.com/income-reports/.

These are the ground rules for my income reports:

  1. I publish income reports for two reasons: a) Accountability helps me push forward. b) I know that most of us compare ourselves to internet-famous people like Patrick McKenzie, Brennan Dunn, Nathan Barry and others. I am no stranger to that and it is hard to feel good comparing yourself to them. Well, compare yourself to me and you’ll feel better instantly ๐Ÿ˜‰
  2. I will only cover what I make from LinksSpy – no consulting, no day job
  3. I am terrible at accounting – so most numbers (especially expenses) are not 100% accurate.
  4. I have an agreement with Nathan Powell of nusii.com that I will stop income reports by the time I hit $1,000,000 annual run rate. According to Nathan that should happen sometime in June 2015 – we’ll have to see about that (It’s pretty much out of the question at this point ๐Ÿ˜€ ).

The Numbers

Last Month’s Revenue

In March monthly recurring revenue (MRR) for LinksSpy was $1,296 from 38 customers.

This Month’s Revenue

In April MRR dropped to $1,158 MRR coming from 36 customers at the end of the month.

MRR growth graph for LinksSpy

MRR growth graph for LinksSpy

Expenses

Due to the way LinksSpy is set up my costs are relatively low. It was one of my design goals to keep most things running on Heroku‘s free tier. This is partly because I’m really cheap and – more importantly – because I didn’t know how well LinksSpy would do and I was afraid of catastrophic failure.

Total expenses:

  • $36 to Heroku for database, SSL and Papertrail
  • $67 in Stripe fees
  • $49 for Drip
  • $12 for HireFire.io
  • $10 for Google Apps/GMail
  • $40 for PerfectAudience retargeting
  • $70 to oDesk for research
  • $195 for blogging services
  • $7 for Github
  • $8 for Calendly
  • $8 for Dropbox
  • $20 for Churnbuster.io
  • $55 to oDesk for five articles of my next big content piece

The totals for this month are $591.54.

Profit

LinksSpy made a profit of about $566 this time. I’m going to spend it somehow. Probably on a ticket to MicroConf Europe.

Traffic

blog.linksspy.com: 543 sessions
www.linksspy.com: 1,106 sessions

Progress

OK. This month was bad. I lost a good chunk of MRR and didn’t make much progress on other fronts.

The new feature (a.k.a. new data provider) does not seem to provide a lot of value to the beta testers. I guess it needs more work to better show off the value. I invested a bit of time to improve it, but it needs more.

Secondly, I wanted to improve the onboarding, but didn’t do anything about it. Well, I’m keeping that on the list and will hopefully get to it in June (I’m writing this at the end of May).

Lastly, I evaluated the content marketing I was doing in the past. I tried to use a tactic that I learned from Ruben Gamez. I hired a writer with a larger audience to write content for the LinksSpy blog.

The idea is that the writer will bring their audience to your content. In my case that amounted to roughly 300 visitors total at the price of $1,000. I don’t think that the experiment worked – at least not in its current form.

I still think it is a good tactic, but it sure needs some fine-tuning to work properly.

What to Focus on Next Month

Well… I didn’t do much in May either. So I’m not going to talk a lot about it.

My Takeaways

I need to find a traction channel that brings in much more traffic than I currently get. In the past my biggest success was knowing people. I might just have an idea for a traction channel that produces content to publish and helps me connect with other people in the industry. We’ll see how it works – if it works.

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LinksSpy โ€“ Monthly Income Report March 2015

LinksSpy has been rather stable in March with only a slight upwards trajectory of about 4% in terms of realized MRR while at the same time losing 5% of the users.

But before I dive deep into this, first let me get some boilerplate out of the way.

Preface

You can find all my income reports here: http://www.christophengelhardt.com/income-reports/.

These are the ground rules for my income reports:

  1. I publish income reports for two reasons: a) Accountability helps me push forward. b) I know that most of us compare ourselves to internet-famous people like Patrick McKenzie, Brennan Dunn, Nathan Barry and others. I am no stranger to that and it is hard to feel good comparing yourself to them. Well, compare yourself to me and you’ll feel better instantly ๐Ÿ˜‰
  2. I will only cover what I make from LinksSpy – no consulting, no day job
  3. I am terrible at accounting – so most numbers (especially expenses) are not 100% accurate.
  4. I have an agreement with Nathan Powell of nusii.com that I will stop income reports by the time I hit $1,000,000 annual run rate. According to Nathan that should happen sometime in June 2015 – we’ll have to see about that.

The Numbers

CAVEAT: I’m changing the way I retrieve MRR data. I’m using FirstOfficer.io going forward to get data. This will change some numbers, but nothing major

Last Month’s Revenue

In February monthly recurring revenue (MRR) for LinksSpy was $1,285 from 39 customers.

This Month’s Revenue

March ended with $1,296 MRR coming from 38 customers. This is more or less the same it was in February.

LinksSpy MRR graph

LinksSpy MRR graph by FirstOfficer.io

Expenses

Due to the way LinksSpy is set up my costs are relatively low. It was one of my design goals to keep most things running on Heroku‘s free tier. This is partly because I’m really cheap and – more importantly – because I didn’t know how well LinksSpy would do and I was afraid of catastrophic failure.

Total expenses:

  • $36 to Heroku for database, SSL and Papertrail
  • $75 in Stripe fees
  • $49 for Drip
  • $12 for HireFire.io
  • $10 for Google Apps/GMail
  • $40 to oDesk for research
  • $195 for blogging services
  • $7 for Github
  • $8 for Calendly
  • $8 for Dropbox
  • $20 for Churnbuster.io
  • $25 to oDesk for five articles of my next content push
  • $960 for three guest articles

If I didn’t miss anything (which I probably did), the total costs were $1,484.90.

Profit

For the first time in five months I spent more on LinksSpy than I earned from it – fantastic news.
The bulk was spent on hiring an author with an existing audience for three articles. It’s going to be interesting

Traffic

blog.linksspy.com: 919 sessions
www.linksspy.com: 1,113 sessions

Progress

Firstly, I finished the new integration in early March and beta testing is now well underway. This is great news for my users as they will be able to get more up-to-date link opportunities, which will make it even easier to get new links.

Secondly, LinksSpy now automatically checks each entered URL for a redirect. LinksSpy uses an exact match algorithm, meaning that when you enter “doubleyourltv.com” LinksSpy will only look at links to “doubleyourltv.com”. This allows users to laser-focus their campaigns – John Turner has written a detailed article on how to leverage that.
The problem here is when “doubleyourltv.com” redirects to “www.doubleyourltv.com”: Browsers follow that redirection and people end up linking to “www.doubleyourltv.com” most of the time.

In essence, this leads to campaigns showing very few link opportunities, when – with the right URL – there would be 100’s of link opportunities. Anyways, this is now “fixed” and users get alerted to the redirect while still having the flexibility to use the URL they entered. This has improved onboarding quite a bit.

Thirdly, I redesigned the incentive landing page where people can opt-in to my email course while getting a competitive link analysis report as a lead magnet. I also put a bit of work into the homepage, which now has CTAs for the link competitive link analysis report.

01_start 02_background-copy 03_white-box-blue-border 04_subheading-margin-smaller-textarea-alignment 06_different-headline-sub-button-text

 

 

Lastly, I did my taxes and hired a new writer for the blog. Taxes were tremendously fun… NOT.

What to Focus on Next Month

In April I’m going to focus on the onboarding process. The feedback I get from users points me to them often not seeing enough value right after start.
I have some ideas on how to improve onboarding and that is what I will be focusing my time on.

My Takeaways

I definitely improved my email marketing, which will be a great asset moving forward. I’m super stoked about the new feature I am developing and hope it will deliver great results. If my predictions are true (they probably aren’t), this feature will help reduce churn.

At the moment updates to the underlying data are few and far between (>1 month between updates on average), which leaves a lot of room for my customers to forget about LinksSpy. Not a happy place to be in โ„ข.
With the new feature at least customers on the highest plans will get weekly updates, which should help quite a bit.

Conclusion

Baby steps to victory. That’s all I’m going to say for this month.

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LinksSpy โ€“ Monthly Income Report February 2015

LinksSpy has seen a bit of growth during February, not much mind you, but it’s going the right direction. But before I dive deep into this, first let me get some boilerplate out of the way.

Preface

You can find all my income reports here: http://www.christophengelhardt.com/income-reports/.

These are the ground rules for my income reports:

  1. I publish income reports for two reasons: a) Accountability helps me push forward. b) I know that most of us compare ourselves to internet-famous people like Patrick McKenzie, Brennan Dunn, Nathan Barry and others. I am no stranger to that and it is hard to feel good comparing yourself to them. Well, compare yourself to me and you’ll feel better instantly ๐Ÿ˜‰
  2. I will only cover what I make from LinksSpy – no consulting, no day job
  3. I am terrible at accounting – so most numbers (especially expenses) are not 100% accurate.
  4. I have an agreement with Nathan Powell of nusii.com that I will stop income reports by the time I hit $1,000,000 annual run rate. According to Nathan that should happen sometime in June 2015 – we’ll have to see about that.

The Numbers

Last Month’s Revenue

In January monthly recurring revenue (MRR) for LinksSpy was $1,245 from 42 customers.

This Month’s Revenue

February ended with $1,285 MRR from 39 customers. Which is great, because it is slightly higher than the previous month.

05_february-mrr-growth

MRR growth for LinksSpy – provided by the fine folks of FirstOfficer.io

 

 

As you can see from the number of customers, a few customers in the lowest plan cancelled. That was offset by new customers in the higher-price plans. While I have fewer customers, the MRR increased. I lost $114 in MRR and gained $234 for a net MRR increase of $120.

So why do I only report an MRR that is $40 above last month’s? Let me show you another picture:

05a_february-past-due

$443 MRR are caught with past-due customers (i.e. their CC charge didn’t go through) – picture by HookFeed

 

That’s right. I currently have 8 customers with failing payments. Another 34.5% of my current MRR is “past-due”.

I’ve been historically bad at reaching out to people after their payments failed and sending dunning emails. I usually waited for 3 charges to fail, because that was something my friend Andrew recommended. Then I would loose count of how many failed charge each customer had and then I’d just let it be.
This is something I am going to tackle in March.

Expenses

Due to the way LinksSpy is set up my costs are relatively low. It was one of my design goals to keep most things running on Heroku‘s free tier. This is partly because I’m really cheap and – more importantly – because I didn’t know how well LinksSpy would do and I was afraid of catastrophic failure.

Total expenses:

  • $36 to Heroku for database, SSL and Papertrail
  • $74.67 in Stripe fees (More on that later)
  • $49 for Drip
  • $12 for HireFire.io
  • $10 for Google Apps/GMail
  • $40 to oDesk for research
  • $195 for blogging services
  • $50 for a VA

If I didn’t miss anything (which I probably did), the total costs were $466.67.

Profit

For the time being, I don’t plan on making any profit from LinksSpy. I want to focus on growing it as fast and as big as possible, thus I’m re-investing everything back into LinksSpy.

LinksSpy made roughly $800 in profit this month. That means it has made a (small) profit in 4(!) consecutive months and I really want to change that (i.e. blow that money on marketing).
Something always keeps me from doing so.

My war chest is filled with a bit of money and my intention is to spend that money on marketing.

I’ve come to an agreement with two new bloggers who will do paid guest posts on the LinksSpy blog and I guess think I am going to spend the money this way. Additionally, I think I am probably going to invest money into one big content piece, because it would take me half a year or more to finish it on my own.

Traffic

Traffic numbers for this months aren’t spectacular.
One thing of note: Almost 400 users came from a single list/collection on Product Hunt. AMAZING!

blog.linksspy.com: 375 sessions – 311 users
www.linksspy.com: 1,594 sessions – 1,208 users

Progress

February was a month of rather small wins: I set up an email campaign for users who start the signup process and abandon it. They will get two follow-up email.
In case you want to use it, here are the two emails:

Subject: Start stealing links today
Hi {{subscriber.first_name}},

You started the registration for LinksSpy a few hours ago, but stopped before finishing it.
Was there a problem?
Is there anything I can help you with?

You can continue the registration at: https://www.linksspy.com/account/registration

Cheers,
Christoph
Founder, LinksSpy.com

Subject: Don’t leave me this way…
Hi {{ subscriber.first_name}},

You started the registration for LinksSpy yesterday, but got stuck half-way through.
Is there anything that’s blocking you?
If so, how can I help you get unblocked and start earning links to crush your competition?

Cheers,
Christoph
Founder, LinksSpy.com

Additionally, I followed Rob Walling’s advice and dropped the mandatory cancellation reason box in favor of an automatic follow-up email after cancellation.
The reasoning here is that users are frustrated if you make it complicated to cancel their subscription, but once they answer to an email it’s relatively easy to get a conversation going.

Here’s the text for that email – an exact copy of Rob’s email:

Subject: A quick questionโ€ฆ
Hello,

I was hoping you could spare 15 seconds of your time and let me know why you decided to cancel your LinksSpy account. Feel free to just hit reply and fire away.

Thanks in advance,

Christoph
Founder, LinksSpy

P.S. Iโ€™d really appreciate your reply โ€“ even if itโ€™s just a few words letting me know why you decided to cancel.

Apart from the improvements to my email campaigns, I also took part in a few expert roundup posts such as this one: http://www.bloggingcage.com/best-link-building-strategies/ – yes, apparently my opinion is almost as important as Neil Patel’s.
Yes, I am also utterly shocked by that.

Furthermore, I invested a lot of time to implement proper invoicing and reporting for LinksSpy. That took a lot of time, but it was necessary to file my taxes. Sometimes you’ve got to spend some time on the plumbing.

Lastly, I started a rather big new feature, which will improve the quality as well as the frequency with which LinksSpy delivers link opportunities for your campaigns. I finished an early versionย in early May and am getting the first beta users set up with it as I write this.
Pretty excited about that one, as I hope that weekly emails will help make LinksSpy’s value more easily understood by my customers.

What to Focus on Next Month

In March I am STILL going to focus on growing my list with my new lead magnet (Get a free competitive link analysis in exchange for your email address).
I have to make a slightly less ugly version of that site and want to promote it on other blogs and podcasts.
Then I have to figure out how to properly promote it.

Additionally, I am going to do something about the “past-due” issues.

My Takeaways

I definitely improved my email marketing, which will be a great asset moving forward. I’m super stoked about the new feature I am developing and hope it will deliver great results. If my predictions are true (they probably aren’t), this feature will help reduce churn.

At the moment updates to the underlying data are few and far between (>1 month between updates on average), which leaves a lot of room for my customers to forget about LinksSpy. Not a happy place to be in โ„ข.
With the new feature at least customers on the highest plans will get weekly updates, which should help quite a bit.

Conclusion

Baby steps to victory. That’s all I’m going to say for this month.

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LinksSpy.com โ€“ Monthly Income Report January 2015

It’s already mid-february when I write this. Honestly, I can’t say why I pushed it away for so long, I just didn’t feel like doing it. But what good are income reports if you don’t continue?
Thanks a bunch to Cezar Floroiu for gently reminding me that I had kept you waiting. Sorry for keeping you all waiting.

LinksSpy was on a “stable” trajectory for January, but I’ll talk about that later. First let me get some boilerplate out of the way.

Preface

You can find all my income reports here: http://www.christophengelhardt.com/income-reports/

These are the ground rules for my income reports:

  1. I publish income reports for two reasons: a) Accountability helps me push forward. b) I know that most of us compare ourselves to internet-famous people like Patrick McKenzie, Brennan Dunn, Nathan Barry and others. I am no stranger to that and it is hard to feel good comparing yourself to them. Well, compare yourself to me and you’ll feel better instantly ๐Ÿ˜‰
  2. I will only cover what I make from LinksSpy – no consulting, no day job
  3. I am terrible at accounting – so most numbers (especially expenses) are not 100% accurate.
  4. I have an agreement with Nathan Powell of nusii.com that I will stop income reports by the time I hit $1,000,000 annual run rate. According to Nathan that should happen sometime in June 2015 – we’ll have to see about that.

The Numbers

Last Month’s Revenue

In December monthly recurring revenue (MRR) for LinksSpy was $1,210 from 41 customers. I had lost 13% MRR, which was giving me headaches. Especially because by the time I wrote the income report it had dropped further down to $1,087 and that was painful to watch.

This Month’s Revenue

January was a special months in that LinksSpy lost $193 MRR and added only $57 MRR – if one looks only at new customers. However, for people who started using LinksSpy after MicroConf Europe the discount (3 months for free) ran out, which brings LinksSpy back up to $1,245 from 42 customers at the end of January.

04_january-mrr-growth

Again, most cancellations where from people on the lowest tier plan and who had been a customer for just one month.

Expenses

Due to the way LinksSpy is set up my costs are really low. It was one of my design goals to keep most things running on Heroku‘s free tier. This is partly because I’m really cheap and – more importantly – because I didn’t know how well LinksSpy would do and I was afraid of catastrophic failure.

That now has the benefit that I can spend all ma moneyz on marketing.

Total expenses:

  • $36 to Heroku for database, SSL and Papertrail
  • $73.61 in Stripe fees (More on that later)
  • $49 for Drip
  • $12 for HireFire.io
  • $10 for Google Apps/GMail
  • $189 to oDesk for programming
  • $99 for KingSumo Giveaways license
  • $130 for blogging services
  • $50 for Twitter ads
  • $40 for StumbleUpon paid discovery
  • $80 for a VA

If I didn’t miss anything (which I probably did), the total costs were $688.81.

Profit

For the time being, I don’t plan on making any profit from LinksSpy. I want to focus on growing it as fast and as big as possible, thus I’m re-investing everything back into LinksSpy.

LinksSpy made roughly $476 in profit this month. That means it has made a (small) profit in three consecutive months and I really really really really really want to change that (i.e. blow that money on marketing).
Something always keeps me from doing so.

My war chest is filled with a bit of money and my intention is to spend that money on marketing.

Traffic

I have not included traffic numbers before in my income reports, but I think they help give a better perspective. So I am going to include them here:

blog.linksspy.com: 1,003 sessions – 821 users
www.linksspy.com: 1,800 sessions – 1,345 users

Progress

It feels like I made very little progress in January. In early January I finished the integration of the VATMOSS form during signup. VAT MOSS is a ridiculous new European law that effectively now stops any non-business customer in the EU from using LinksSpy – that’s what “setting the environment for startups to grow and prosper” looks like.

Additionally, I overhauled LinksSpy to send out better receipts. I have to rework this again, because it’s still not perfect. blah

I also added an XML-sitemap to the LinksSpy homepage – finally. I don’t know why I pushed that away for so long. And I did some link building and outreach, which is showing positive effects already.

Lastly, I started a giveaway for an Online Marketing Starter Pack and got some friends to contribute prizes (Brennan Dunn’s Double Your Freelancing Rate, Dave Collins did a website teardown). The pack was worth more than $1,000.
I did so many things wrong with that and I will dedicate a full article to my failure there, but it resulted in only 100 new email addresses to my list.
Which is waaaaaay less than what my friend Josh Earl managed to pull off.

What to Focus on Next Month

In February I am going to focus on growing my list with my new lead magnet (Get a free competitive link analysis in exchange for your email address). I plan on doing PPC ads for this as I have some money in the war chest. We’ll see if that works.

My Takeaways

I did a bit of outreach, started and failed horribly with the giveaway. I did marketing – way more than coding, which is great.
I learned a lot from the failed giveaway – or so I hope. I’ll run another one in March – we’ll see how that goes.

Not much else that I learned this month except that the road ahead is long.

Conclusion

January ended on a higher note than December and I am glad for it. I didn’t exactly grow the business, but I managed to keep it steady.
There are so many ways to improve it and I’m looking forward to iterating the product.

PS:
I am still on the look for a mastermind group(assuming the group meets after 16:00 UTC – 1 p.m. Eastern Time). If you have a mastermind group and would like me to join you, please reach out to christoph@$ANY_DOMAIN_I_OWN

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LinksSpy.com โ€“ Monthly Income Report November 2014

Welcome to another monthly income report.
You can find all my income reports here: http://www.christophengelhardt.com/income-reports/.

November was a great month and I will be hard pushed to keep my MRR level. I already see some people churn and have to find a way to stop that.

Before I get into the details here are a few things I want you to know about my income reports:

  1. I publish income reports for two reasons: a) Accountability helps me push forward. b) I know that most of us compare ourselves to “famous” people like Patrick McKenzie, Brennan Dunn, Nathan Barry and others. I am no stranger to that and it is hard to feel good comparing yourself to them. Well, compare yourself to me and you’ll feel better instantly ๐Ÿ˜‰
  2. I will only cover what I make from LinksSpy – no consulting, no day job
  3. I am terrible at accounting – so most numbers (especially expenses) are not 100% accurate.
  4. I have an agreement with Nathan Powell of nusii.com that I will stop income reports by the time I hit $1,000,000 annual run rate. According to Nathan that should happen sometime in June 2015 – we’ll have to see about that.

The Numbers

Last Month’s Revenue

In October I had increased my MRR to $593.50 from 22 customers. It was a month of great growth (~ 85% over the previous month), mainly due to a great blog post I had published in September.

At the end of October I attended MicroConf Europe in Prague (I took some notes for you to indulge in) where LinksSpy was promoted by one of the speakers and subsequently ended up on ProductHunt. That drove a load of signups that were still in trial at the end of October.

This Month’s Revenue

Of the 50+ signups “only” 24 ended up converting to paying customers. That conversion rate is slightly lower than what I usually see, but that is to be expected considering the audience. People on ProductHunt like to try out things – that doesn’t mean they actually have use for a service like LinksSpy.

Those new customers brought LinksSpy up to $1392 MRR from 46 customers, which equals a whooping 134% increase in revenue.

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OK, just kidding. But that is fricking amazing! And this time I think all that growth is NOT because of a software bug – yay!

Here’s a nice MRR growth graph taken from FirstOfficer.io:

LinksSpy November MRR growth chart

That looks satisfying ๐Ÿ˜‰

Expenses

Due to the way LinksSpy is set up my costs are really low. It was one of my design goals to keep most things running on Heroku‘s free tier. This is partly because I’m really cheap and – more importantly – because I didn’t know how well LinksSpy would do and I was afraid of catastrophic failure.

Total expenses:

  • $36 to Heroku for database, SSL and Papertrail
  • $53.87 in Stripe fees
  • $49 for Drip
  • $215 for one blog article per week – written by my content marketing genius (this is the average for one month of the weekly rate of $50)
  • $116.92 for Retargeting with Perfect Audience
  • $55 on FacebookAds
  • $5 for email / Google Apps
  • $618.4 for a developer (including hiring process/test project for 2 developers)
  • $5 for a fiverr gig to design a picture for my Facebook ads

If I didn’t miss anything (which I probably did), the total costs were $1,154.19. YAY! The first month I spent more than $1,000…

Profit

For the time being, I don’t plan on making any profit from LinksSpy. I want to focus on growing it as fast and as big as possible, thus I’m re-investing everything back into LinksSpy.

LinksSpy made roughly $235 in profit this month. Iย already spent that on a new explanatory video for LinksSpy, which should hopefully be ready by christmas.

Progress

I didn’t make a ton of progress in November. At least it didn’t feel like it. But luckily I have my business journal (hat tip to Brennan Dunn), which tells me that I did quite a few things more:

  • I hired a great developer (I think he’s better than me – so he’s a perfect hire)
  • Refactored the backend, so it can handle the load from having 2x more customers
  • Optimized Retargeting campaign: Moved to Facebook Sidebar ads, removing subscribers from target list, added conversion goals
  • Added FAQs to the signup process and improved the design of the process
  • I worked on building two new marketing assets (ultra mega hyper top secret ๐Ÿ˜‰ ) to be released in December/January
  • I added a drip email campaign for users in the trial phase
  • I refactored the data export, which now supports more filters

Optimizing the retargeting campaign lowered the cost per click (CPC) from ~$25 per click to a CPC of just $1.79 – that’s an amazing improvement right there!

I don’t feel like the Facebook advertising is working right now, but I hope to figure this out eventually. I got a great head-start because a friend shared his targeting settings with me.
I am currently promoting the drip email campaign through the Facebook ads, which I think is the right strategy.

The hiring process for my developer took quite a bit of time (It was a 5 step process, including Skype interviews, live coding and test projects). Currently he is adding features to some open source gems I use, but eventually he will be contributing to the main LinksSpy application. He is working for 5 hours a week, which is about as much time as I invest into developing the application.

The marketing assets will hopefully help me to further grow LinksSpy.

What to Focus on Next Month

December is going to be a slow month: Christmas is going to take its toll – which is fine by me. I am looking forward to spending some time with my family and my wife.

I am trying to set up some customer interviews and see what my customers really need/want. I did one in November, which was really amazing and got me started on some ideas, but I need to hear other customers voicing the same problems before I actually go about implementing those ideas.

Additionally, I want to finish my two marketing assets. One is ready to ship as I am typing this report, but I still need to set up the marketing campaign for this.

The same can be said about the second marketing asset: It still needs a lot of work/content creation and I need to figure out which marketing I want to do for this for maximum effect.

My Takeaways

Biggest takeaway: Remarketing on the display network sucks – big time. Facebook sidebar ads work much better for retargeting – at lest their CPC is 1/20 of the display network.

Other than that, I don’t have much insight this month. I just kept on doing a mixture of improving the application and some light marketing. Not enough marketing now that I think about it… I have to focus more on that.

Conclusion

November was out of this world. I thought that October was great, but November just blew that right out of the water.
I learned a few things and did some preparatory work for my marketing. Not bad overall, but nothing too exciting.

I am quite happy with where LinksSpy is right now – to be honest it has exceeded my wildest dreams. At the same time I feel anxious about everything: My guesstimate for churn is around 10-13% (law of small numbers), which means I need to get a lot of new customers to just keep my MRR level. That in turn makes me think I will fail horribly; I will disappoint everyone around me and be ridiculed forever.

Don’t get me wrong: I am grateful for where I am with LinksSpy now. I feel very lucky for having crossed the $1,000 MRR barrier with such ease. But at the same time I have to acknowledge the problems lying ahead of me. I need to find a way to reduce churn and I need to radically improve my marketing.

I have learned a lot – which was immensely fun. Nonetheless, I still have much more to learn. I need to understand my customers better and have to find a way to deliver more value more consistently. So stay tuned, this won’t be the last income report ๐Ÿ˜‰

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LinksSpy.com – Monthly Income Report October 2014

Welcome to the third installment of my monthly income report. After an awful income report in September (for which I got a lot of great feedback & encouragement – Thanks a lot to everyone who reached out!), LinksSpy came back swinging.

Before I get into the details here are a few things I want you to know about my income reports:

  1. I publish income reports for two reasons: a) Accountability helps me push forward. b) I know that most of us compare ourselves to “famous” people like Patrick McKenzie, Brennan Dunn, Nathan Barry and others. I am no stranger to that and it is hard to feel good comparing yourself to them. Well, compare yourself to me and you’ll feel better instantly ๐Ÿ˜‰
  2. I will only cover what I make from LinksSpy – no consulting, no day job
  3. I am terrible at accounting – so most numbers (especially expenses) are not 100% accurate.
  4. I have an agreement with Nathan Powell of nusii.com that I will stop income reports by the time I hit $1,000,000 annual run rate. According to Nathan that should happen sometime in June 2015 – we’ll have to see about that.

The Numbers

Last Month’s Revenue

In September I had increased my MRR to $320 from 16 customers. That was after a correction of $216 MRR – I had accidentally kept charging customers after they had cancelled.

On the plus side, I published a blog post that got quite a bit of attention in early september. That brought me about 5,000 unique visitors and 100+ subscribers to my mailing list.
You can read the full story in my last income report.

This Month’s Revenue

October has been a crazy month for me. I started to see the effects of my blog post about the costs of paid links.
The retargeting didn’t go so well: I spent $25 for just a single click. Not what I had hoped for ๐Ÿ™

Still a number of people signed up for the trial and converted to paid. This leaves me with 22 paying users – not counting 2 users who have failed charges and need to update their credit card data. The MRR from those 22 users is $593.50 – with the other 2 customers I’d be looking at $644.50 MRR. That is a growth of 83% MRR.

01_october_mrr_growth

Graph taken from FirstOfficer.io (go check that out – it’s an amazing tool!)

 

 

Finally, I went to MicroConf Europe in Prague at the end of October, which resulted in a huge spike of new signups (about 50 by the end of November 3rd). More on that further below.

Expenses

Due to the way LinksSpy is set up my costs are really low. It was one of my design goals to keep most things running on Heroku‘s free tier. This is partly because I’m really cheap and – more importantly – because I didn’t know how well LinksSpy would do and I was afraid of catastrophic failure.

Total expenses:

  • $36 to Heroku for database, SSL and Papertrail
  • $23.80 in Stripe fees
  • $49 for Drip
  • $215 for one blog article per week – written by my content marketing genius (this is the average for one month of the weekly rate of $50)
  • $37.50 for Retargeting with Perfect Audience
  • $5 for email / Google Apps

If I didn’t miss anything (which I probably did), the total costs were $366.30.

Profit

For the time being, I don’t plan on making any profit from LinksSpy. I want to focus on growing it as fast and as big as possible, thus I’m re-investing everything back into LinksSpy.

LinksSpy made a loss of about $400 in September and made a profit of $226.70 in October. That’s pretty cool overall, because it means I got about half the loss from last month back.

Progress

I got quite a few signups from the blog post I published and tried to follow it up with another one on how I bought a link on BuzzFeed. I published it before I felt good about it, which turned out to be a really stupid mistake.
I got hardly any visitors and the few I got were disappointed in the quality. Understandably, because that article adds NO value.

My guess is that most people who signed up during October did so because they went through my drip email campaign. I need to get some hard data on that, but at least 2 of the 6 new customers used a coupon code I gave away at the end of the drip campaign.

I also had two people basically say to me: “I love the data I get out of LinksSpy, but I don’t have the time. Could you do the work?”. I had to say “no” and forward them to existing customers of LinksSpy, which is cool because that is a win-win-win situation. But it also keeps me wondering: Could I automate the link outreach to the point where I provide that service for e.g. $249/mo?

Additionally, I managed to book some reddit ads and they will go live in mid-November. I think I booked $15.84 of inventory in /r/bigseo. We’ll see how that goes.

Furthermore, I started a business journal (hat tip to Brennan Dunn for the idea)). That journal tells me, that I also did this:

  • added two beta features to LinksSpy: an automated email that informs customers about the new links they acquired (as a method to hopefully reduce churn, because it shows LinksSpy’s value) and a link building report that customers use in proposals to win over more clients
  • wrote a 1,600 word article about getting clients to pay on time – just another piece of content marketing

Finally, I went to MicroConf Europe in Prague at the end of October. While the ideas I took away from the talks (full notes here) were worth the ticket alone, the hallway track was amazing. I had such a great time talking with friends – both old and new – that I was heartbroken on wednesday when I had to leave.
The best part is yet to come: My friend Dave Collins was a speaker at MicroConf and added a slide to his presentation promoting LinksSpy (without me knowing, he told me a day before his presentation – THANK YOU, Dave!).
That slide was visible during his whole Q&A session – the better part of 20 minutes. A few people started talking about LinksSpy on Twitter, which piqued the interest of Adii Pienaar. Adii submitted LinksSpy to Product Hunt, where it – thanks to the help of Nathan Barry, Charlie Irish, Brennan Dunn and other MicroConf attendees – rose immediately to the top 10 and stayed there for the rest of the day.
Long story short, just from being on Product Hunt and the buzz (blog posts, news stories and Tweets) LinksSpy had 50+ new signups. They are all in trial right now, but I have some $1,500 MRR in the pipeline waiting to be realized. (nb: That’s almost 3x my current MRR!)

Nathan Barry also suggested to me to reach out personally to anyone who signed up for LinksSpy during that period. I managed to do that for the first 2 days, but I was really stressed about it and have not sent a single email since ๐Ÿ™
It is a fantastic idea, though and definitely helped me keep people interested in the app. I should pick it up again.

During that phase I had a few bugs – e.g. I destroyed the sorting algorithm for suggestions. That shouldn’t have happened, but man… I am stupid, what can I say?
Luckily, I have exit interviews in the app, so I at least got a bit of qualitative feedback out of the cancellations.

Overall, this month was exceptional. I don’t think I can easily repeat that in November – but that won’t keep me from trying.

What to Focus on Next Month

November will be a mixture of improving the product, talks with customers and more marketing.

On the product side I need to improve the backend to bring down the time it takes to finish new reports and finish the two features currently in beta. I also have a few items on my todo list after MicroConf to improve the website.

Talking to customers I hope to find ways to improve LinksSpy to deliver even more value. I think there might be a way in automating/streamlining the outreach for link building. Anyways, I need to talk to customers and find their pain points.

Furthermore, I need to do more marketing. I bought reddit ads which will go live this month, but I also want to try my luck with Facebook ads. I also want to do more link outreach since that is showing first results.

Lastly, this is my todo list after MicroConf Europe:

WEBSITE

  • add telephone number to marketing websites
  • move trust symbols into container on “Credit card page”
  • move trust symbols closer to CTA on CC page
  • turn “hide” into “X” on campaign#show
  • improve onboarding process (less repetition)
  • remove last step of onboarding process and turn into layover

(Most of the items on this list are due to a UX/UI teardown by Jane Portman)

MARKETING

  • hire VA for editing/publishing blog posts
  • Convert “Paid Link Study” into SlideShare (STARTED)
  • Let koudoku_coupons change views to show the coupons to the user
  • Customize Drip email campaign โ€žconfirmation email/pageโ€œ
  • Facebook sidebar ads (STARTED)
  • Add Facebook sidebar ads to PerfectAudience (DONE)
  • ask customers for testimonials & referrals
  • Onboarding emails: different email campaigns depending on where they are in the onboarding process

DEVELOPMENT

  • hire freelancer (STARTED)
  • add “delete campaign” button for users (DONE)
  • add Customer Happiness Score (CHI)
  • record user events
  • refactor backend for parallel execution (STARTED)

My Takeaways

My big takeaway this month is that it pays off in unexpected ways to have friends like Dave Collins of SoftwarePromotions.com. Without his promotion of LinksSpy I would have never got on Product Hunt and would never had such a huge number of new signups.

Other takeaways are:

  • I need to hire people to help me grow LinksSpy – going at it alone is terribly slow. I already started the hiring process for a part-time developer, but I also need a part-time assistant to help me with various tasks like article editing and social media (if you are interested, send me an email to christoph@[any domain I own])
  • personal emails are huge, but also time-consuming & stressful
  • I am a lucky man for having an understanding wife and a great community & friends that push me me forward

Conclusion

October went extremely well and I can not expect November to be anything like it.

There are a lot of items on my todo list, which should make for a few interesting weeks ahead. My motivation is soaring after MicroConf, hopefully it last for a bit.

Anyways, I’m looking forward to seeing you again next month ๐Ÿ™‚

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LinksSpy.com – Monthly Income Report September 2014

Welcome to the second installment of my monthly income report. I nearly quit this after I realized what a horrible mistake I had made with the first income report. I triumphantly announced having doubled my monthly recurring revenue (MRR) – when in fact I had committed an embarrassing blunder.

Before I get into the details here are a few things I want you to know about my income reports:

  1. I publish income reports for two reasons:
    1. Accountability helps me push forward.
    2. I know that most of us compare ourselves to “famous” people like Patrick McKenzie, Brennan Dunn, Nathan Barry and others. I am no stranger to that and it is hard to feel good comparing yourself to them. Well, compare yourself to me and you’ll feel better instantly ๐Ÿ˜‰
  2. I will only cover what I make from LinksSpy – no consulting, no day job
  3. I am terrible at accounting – so most numbers (especially expenses) are not 100% accurate.

The Numbers

Last Month’s Revenue

In August I boasted about having doubled my MRR to $480 from 21 customers – only I didn’t. I fucked up royally.

The short version is that I had 2 different ways for users to cancel their LinksSpy subscription. Unfortunately, I only knew about one of them. Worse yet, most people cancelled using the way that I was unaware of. This also happened to delete any traces of their account in my database WITHOUT cancelling their Stripe subscription. In essence, people could cancel their account and I would keep charging them.

After I learned about this blunder, I immediately searched for every (previous) customer who had been affected by this. I cancelled their subscription and refunded the last payment – together with an email explaining my error.

This has cost me 6 customers and $216 MRR. In fact, I only had $273 MRR from 15 customers in August. A modest increase over July, but not exactly great.

This Month’s Revenue

In September I increased MRR to $320 from 16 customers. Small steps… small steps…

Expenses

Due to the way LinksSpy is set up my costs are really low. It was one of my design goals to keep most things running on Heroku‘s free tier. This is partly because I’m really cheap and – more importantly – because I didn’t know how well LinksSpy would do and I was afraid of catastrophic failure.

Thus, I only pay $9/mo for the hobbyist database plan and $20/mo for the SSL endpoint.

Other expenses:

  • $15.80 in Stripe fees
  • $49 for Drip
  • $230 for one blog article per week – written by my content marketing genius
  • $100 for design work for a blog article I wrote

If I didn’t miss anything (which I probably did), the total costs were $423.80.

Profit

For the time being, I don’t plan on making any profit from LinksSpy. I want to focus on growing it as fast and as big as possible, thus I’m re-investing everything back into LinksSpy.

LinksSpy operated at a net loss of about $100 in september and I refunded $295. That leaves me some $400 short for september – nothing to worry about.

My Takeaways

The biggest takeaway for me is that messing up the payments and subsequently apologizing to your customers is painfully humbling. I never want to do this again.

Another “takeaway” this month is that content marketing drives quite a few people to your blog posts, but it does not bring in new customers immediately. If you are doing content marketing, you commit yourself long term.

Progress

The biggest thing I managed to get done this month was publishing an amazing in-depth research article about the prices of paid links.
It managed to briefly climb to the front page of Hacker News and was quite popular on /r/bigseo – accounting for 1,403 visits combined.
It was shared by some “famous” people in the SEO industry and reached an audience of about 300,000 on Twitter – which sent a grand-total of 268 visitors.
It also made it into the Moz Top 10 newsletter, which drove 4,578 people to my blog.

Again this shows me that email marketing is insanely effective.

The outcome of that blog post has been fantastic: I have about 100 new subscribers to my drip email campaign. I also enhanced the drip email campaign by adding another email that is more of a hard sell – something that was previously missing from the drip campaign altogether.

Furthermore, with the influx of new visitors I finally was able to start retargeting via PerfectAudience. I had the banner ad done months ago, but never had enough people tagged. I’m sending them to a dedicated landing page and trying to sign them up for my email list.

Additionally, I finally re-designed parts of the LinksSpy homepage to make it more appealing. I also integrated HireFire into LinksSpy, which will dynamically spin up/tear down Heroku worker instances and help to bring new reports into the hands of my customers faster.

What to Focus on Next Month

Same as the last few months: More marketing. I have ordered more articles (1 per week instead of 3 per month) from Ryan, my content marketing genius.
We are also going to implement a better process (using Trello) for publishing new blog posts. This will include adding pictures to all posts – something we haven’t done in the past – and publishing all new articles to a few places such as reddit, inbound.org and others.

In addition, I am already working on a follow-up post to the last one. This one will be about how buying a link on BuzzFeed can affect your search engine rankings. I hope this post will have a greater reach than the previous.

I will also start sending out newsletters to my mailing list. I will probably use the new content for those newsletters as well.

Conclusion

September was a month of mixed feelings: The bug was horrible, but on the other hand my article was great.

LinksSpy is improving in small, but steady, steps and revenue is also increasing. I’ve got more than enough to get on with in October, not least among them attending MicroConf Europe (If you are coming, don’t be shy – say “Hi”!)

I’m looking forward to seeing you again next month ๐Ÿ™‚

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LinksSpy.com – Monthly Income Report August 2014

I wondered for a long time whether I wanted to share my income publicly. I have done it in the past – either on the podcast I am co-hosting or in the Micropreneur Academy. But these places are either a closed community (the Academy) or no one really listens to them anyways (my podcast ๐Ÿ™‚ ). Publishing it on the blog for the world to see, and for Google to index, is a whole different ball game.

But people like Pat Flynn, Matthew Woodward and Josh Pigford as well as companies like Moz and Buffer convinced me to do this.

I write this report for people like myself: People who are building a product and are struggling with the first steps of the journey. Not with the technology, but with actually bringing it to market and growing it.
I write it for reactions like this one from Nathan Powell:

Hey Christoph.
Itโ€™s so nice to read about a โ€œnormalโ€ launch.
Encouraging even. Keep it up, and hereโ€™s to 2022!

In short: I write this report for YOU. I want to encourage you to travel this (hard & stony) road. It’s immensely fun.

What is Covered in This Report

I will only cover what I make from LinksSpy; if you want to know what LinksSpy is, then here’s an article on how I started. This means, that I do not include money earned from consulting/freelancing nor what I make in my day job.

I will try to provide detailed information on my expenses as well, but my systems for accounting are lacking in precision (read: “I suck at keeping track of all the invoices”). So the numbers could be off by a bit.

Looking Back – The History of LinksSpy

I launched (and started billing customers) in May 2014 after a long private beta. I started out with 10 customers and $190 in Monthly Recurring Revenue (MRR) after a few days.

In the months after that I saw slight improvements from new signups. I don’t get many visitors to the website (yet), so there isn’t much volume going into the funnel.

In June my revenue went up to $235 from 13 customers. Than it was $255 from 15 customers in July. On August 1st it was down to $235 again – this time from 16 customers (I lost one customer with $40 MRR, but gained 2 customers at $10/mo each).

The Numbers

Revenue in August

August has been the most successful month so far in terms of MRR growth: I more than doubled MRR to $489 from 21 customers. I’ll talk about how I did this in a bit, but first focus on the numbers.

In total I collected about $478 in payments from my customers.
My Stripe account is in Euros (โ‚ฌ) and I used today’s (14.09.2014) exchange rate to calculate the dollar amount – so this is a bit off.

Expenses

Due to the way LinksSpy is set up my costs are really low. It was one of my design goals to keep most things running on Heroku‘s free tier. This is partly because I’m really cheap and – more importantly – because I didn’t know how well LinksSpy would do and I was afraid of catastrophic failure.

Thus, I only pay $9/mo for the hobbyist database plan and $20/mo for the SSL endpoint.

Other expenses:

  • $20.48 in Stripe fees
  • $49 for Drip
  • $166.65 for 3 blog articles written by my content marketing genius
  • $20 for design work for a blog article I wrote

If I didn’t miss anything (which I probably did), the total costs were $435.13.

Profit

For the time being, I don’t plan on making any profit from LinksSpy. I want to focus on growing it as fast and as big as possible, thus I’m re-investing everything back into LinksSpy.

However, I didn’t spend all the moneyz in August and so I made a small profit of $42.87. Rest assured that I will find a way to spend that money in September ๐Ÿ™‚

My Takeaways

So what caused this steep increase in MRR?
The single biggest factor was/is that i doubled my prices for NEW signups – I grandfathered all my existing customers in at their old rates.
Yeah, you read that right: I DOUBLED prices. Insane – isn’t it?

That – of course – wasn’t my idea, but rather Patrick McKenzie’s idea of “Charge.More.”. I think it was at MicroConf Las Vegas in 2013 where he laid out a simple enough rule: “Double your prices; watch conversion rate; repeat until conversion rate drops significantly”

That rule is REALLY easy. It makes sense intuitively: As long as people sign up with (more or less) the same frequency, they are seeing the value in your product.
The only problem with this is: You have to overcome internal objections to actually double prices. It is hard; You have all the worries in your head that people will hate you for it.

Fact is: No one will hate you for it. Most people won’t even realize that you doubled prices. Plus, you can always just go back to your old pricing, if the need arises.

Another contributing factor is that I randomly threw money at the problem: I invested $100 in StumbleUpon and $50 in Twitter advertisements.
Of course I didn’t set up ANY analytics AND/OR tracking (that’s for cowards, obviously), so I don’t know which (whether?) of the two ads brought in customers. Well, there’s always room for improvement – in this case there is a LOT.

Overall, I think that the biggest factor was that I finally focused on marketing, instead of coding away on LinksSpy.

Progress in August

Despite being away on holiday for two weeks in August, I managed to finish quite a few things:

  • moved the LinksSpy blog to http://blog.linksspy.com and the application to www.linksspy.com
  • I finished writing a really cool blog post about the costs of paid links – I’ll talk more about the impact of that in my September report
  • numerous small improvements in the application itself – among them lifecycle emails. E.g. users who entered their email address, but didn’t enter credit card details (i.e. they churned during signup) now get an email the following day which reminds them to finish the signup process

What to Focus on Next Month

I’ll try and focus more on marketing again. After all, that’s what will get me new customers. Despite all my vows to do more, I still suck at actually doing it.

Conclusion

August was an incredible month for me. It really fueled my motivation for LinksSpy. That said, you can see for yourself from the numbers above that I am no where near making a living off of LinksSpy.
It is easy to loose motivation when you compare yourself to the likes of Brennan Dunn, Nathan Barry, Patrick McKenzie, Mike Taber et al., but if I look at things with a bit of realism, I feel like I’m not doing that bad after all.

Oh.. and my goal of making enough money out of LinksSpy by 2022 suddenly became a lot more realistic ๐Ÿ˜‰

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How I launched to $190 in Monthly Recurring Revenue

This is the tale of how I launched LinksSpy.com. I wrote it both to get a few thoughts off my mind and to give a counterpoint to articles like this one from RivalFox. I don’t want to be negative about RivalFox’s achievement: Those guys rock and they deserve every last bit of it! – I just want to add another data point.

tl;dr: I did a few things right, I did quite a few more things wrong, but in the end I shipped and had moderate success so far.

Some Background on LinksSpy

LinksSpy allows you to spy on your competition and learn where they get their links from. This helps you to build more high-quality links to your website – thereby sending you more visitors and helps you get ahead of your competition on Google.
It is targeted mostly at SEO agencies, who use it to optimize their clients’ websites.

I came up with the idea while working with the beautiful people at Moz – who were kind enough to take me on as an intern despite serious legal obstacles (Short story: I could only work unpaid because I already get paid, they wanted to pay me for legal reasons).

So I felt that I had to give something back and I came up with an idea to lower their churn rate. That idea eventually evolved into LinksSpy.

How I built LinksSpy

I built LinksSpy on the side. My day job doesn’t leave me with a lot of room, but I usually manage to sneak in about 10 hours of work each week.

For the techies: LinksSpy is built with Rails and runs on Heroku.

The Build-Up Prior To The Launch

I started working on the LinksSpy-predecessor around this time last year. It was a clunky shell script written in node.js. It was designed as a one-off project – to be run only once as a test to see whether it would reduce churn or not.

After I was back to Germany from working in Seattle, I didn’t put much work into the script; mainly adapting it to work with the free tier of the Moz API.

However, I put up a basic landing page and started collecting email addresses. I also bought my way into betali.st, which got me 226 addresses for a modest $39 (at a 41.4% conversion rate). The addresses were of pretty good quality, too.Prelaunch Squeeze Page for LinksSpy.com

 

Up to the launch I mainly focused on building a web app to present the data and talking to potential customers from my growing mailing list. I scanned through my list using Rapportive – which allows you to find people in your target niche. At various stages I onboarded two or three users at a time to beta test LinksSpy – making very clear that while usage is free during beta, I would eventually charge them.

All the time I didn’t have an automated process for the competitive link analysis. Every time a user created a new campaign the process would look like this:

  • the web app would send me a file with the data (URL, competitor URLs, campaign ID, etc)
  • I would load that file into the modified shell script and let it run on my computer at home
  • The script would query the API and compute everything in a single run. Often it would crash two or three times before running successfully – I had to restart it every time and hope for the best.
  • After the script finished, I would take the results and copy&paste them into a special form in the web app at which point they became available to my users (they get an email)

I implemented a lot of feedback from my beta testers (Thanks again, guys!) over the following months – along with credit card processing (using Stripe & Koudoku) and a feature to do outreach.

After about eight months of development, I finally got fed up with postponing the launch again and again and again. I pulled the trigger and announced the upcoming launch to my mailing list of 268 subscribers on 24.04.2014.

The Launch

The Launch Email Sequence

I went with a launch email sequence of three emails:

  1. a launch announcement email(4 days prior to launch)
  2. the actual launch email – 20% off for 48 hours (at launch)
  3. a reminder email (8 hours before the discount runs out)

05_launch-email-stats

Here are the stats for those three emails:

 

 

 

That converted 10 out of 268 people to paying customers – a 3.7% conversion rate. This does not seem too bad, considering I had no free trial.

I think that went pretty well – I could have warmed up my email list a bit more, but overall I am pleased with this part.

The Product At Launch

Pricing & Trial

First lets talk about pricing. I launched with a 3-tier pricing of $10/20/40 – which includes the 20% discount mentioned in the emails.
Two days after the launch I increased prices to $10/25/50. Prices have remained at that level for the past two months.

When I launched LinksSpy there wasn’t a free trial – and there isn’t one up to this day. This was a bit of swimming against the stream and I got some negative feedback about this – despite a 60-day money back guarantee.

I was craving the ultimate validation for my product: People were actually willing to pay for LinksSpy.
To that end it worked beautifully and I got 10 paying customers for a total monthly recurring revenue (MRR) of $190.

In hindsight I believe that it would have been wise to offer a free trial. If nothing else, it would allow me to collect email addresses, improve onboarding and learn faster.
I also got the feedback from a few people that I am not charging enough. I’ve probably told a dozen people that they should charge more – and here I am charging too low for my own product. That is a special kind of stupid.

I am going to change both shortcomings in the upcoming weeks. Together with introducing a 7-day trial I will raise prices to $19/$49/$99.
Having the trial be that short is quite unusual, but users get value out of LinksSpy almost immediately after sign up. That’s why I’ll have a real short trial first and maybe test a longer (14 or 21 days) trial later.

Bugs At Launch

About two (2!!!) hours before launch I decided that it would be a really wise idea to make this little (8 characters!) change to the source. What could possibly go wrong?

Well…. a whole lot of things could go wrong. You could corrupt your data model and show your newly-found customers a (not so nice, default Rails) error page. Things like that.

It took me about 2 hours to put that wrong to right – and about a dozen emails to apologize to everyone affected by it. Lesson learned: Don’t be an idiot, keep your hands away from the code and where I can see them 48 hours before the launch.

Missing Features At Launch

The quote that helped me launch LinksSpy was this:

“If you are not embarrassed by the first version of your product, you’ve launched too late.” – Reid Hoffman, Founder LinkedIn

And indeed, I felt that LinksSpy was months away from being “launch-ready”. Among the missing things were:

  • no automated processing of created campaigns – I still had to run the script manually and it would fail at least every second run. It took 24-48 hours before data was
    available for a newly created campaign
  • While I wanted customers to input their CC data right after sign up, you could bypass that and just create a new campaign. This allowed you to use LinksSpy without being charged a dime. One guy used this and got his report for free (because I didn’t manually check)
  • no custom error pages, just the default ones created by Ruby on Rails (still rocking those)
  • there were quite a few UI bugs in the app (and some still are)
  • No drip email campaign to collect email addresses
  • No lifecycle emails for new users, only minimal onboarding help
  • Even users that had cancelled / were not paying could still log in and use LinksSpy
  • NO consistent design for the marketing website & application. The marketing website / blog is based on WordPress and the Genesis theme – the application and the main landing page are designed using Bootstrap.

I could find more things to go on the list, but what’s important is that LinksSpy was far from perfect when I launched it. Still, I got happy paying customers.

Marketing at Launch

None except announcing it to the mailing list. Despite me knowing that this is the worst possible move, I didn’t put any marketing effort into LinksSpy. I wanted to keep quiet about it, get some paying customers and see how well it would work out.

Luckily, it worked out quite well. Some people got the first quality links to their website within hours of signing up for LinksSpy. LinksSpy got some great endorsement on Twitter:

https://twitter.com/TheDaveCollins/status/470913396523937792

I could have done a lot more than tweeting about it and announcing to my mailing list. I haven’t done much for the last two months either, instead focusing on improving the product. I will focus way more on marketing in the weeks & months to come (hopefully I won’t go back to just coding. If you want to help me, remind me of my pledge on Twitter ๐Ÿ™‚ )

LinksSpy Today

LinksSpy had $255 MRR – coming from 15 customers – on 01.07.2014 (about two months after launch).
I have seen three people cancel their accounts, which means about 15% churn rate – which is to be expected for a newly launched product.
All those numbers should be taken with a grain of salt, because my numbers are still so low.
As my goal is to be able to live off LinksSpy’s revenue in 2022 (no kidding there; that really is my goal) at the current growth rate I will be at about $3500 by then :-D. Not quite enough yet, but not too far off either.

Customer Segmentation

LinksSpy is aimed at SEO agencies, but so far I didn’t convince many agencies to sign up. Most of the customers so far are SMBs and quite a few people who I know personally.

I need to focus more on marketing to SEO professionals.
I will do so by being more active (and buying ads) on /r/seo, /r/linkbuilding and other watering holes for SEOs.

Improvements To The Product

I’d like to think that I have made considerable improvements to LinksSpy, but I still feel like I need to do much more. That’s probably normal, though.

Here are a few things I accomplished in the past two months:

  • completely re-wrote the backend; replaced the node.js script with Ruby and fully automated it. This decreased the turn-around time from 24-48 hours to < 2-4 hours. This is a great win for my customers as they get their data faster.
  • LinksSpy now automatically runs reports for the campaigns every month (whenever Moz provides new data), so that customers can keep a close watch on their competitors
  • The campaigns show a lot more data than at launch (e.g. which websites already have a link back to you)
  • a bunch of minor features like filters for suggestions, better export functionality etc.
  • I added a mandatory “why are you canceling” text box to learn why people are canceling and how to improve my product

Marketing

I have slowly started to ramp up my marketing. I check reddit for topics where I can contribute to the discussion and mention LinksSpy when appropriate.

Most importantly, I started with building content on the LinksSpy blog. I hired a guy through oDesk who writes rather long (1,000 words) articles for the blog (examples here and here. He’s got a bit of an audience, which is a great benefit on top of his well written articles.

Additionally, I started tagging people for remarketing with PerfectAudience and AdRoll about a month ago. My plan is to use remarketing to get people to sign up for a drip email campaign.
I have written 3 out of 5 planned emails so far. I’ve got the banners for it and I’m tagging the people. All that is missing are the last two emails before I can start with remarketing.

Once I have the drip email campaign and remarketing in place, I want to focus more on getting visitors to the page. Before having that it would be like carrying water in a sieve.

Lessons I learned

I have learned quite a bit: Some things went well, others not so well.

  1. First of all: Launch it, ship it, then improve it (based on what you learn)
  2. Have an email list and keep it warm. I partially failed at keeping it warm. I only sent 4 emails over the course of 5 months prior to launch.
  3. Betalist.com works really well for getting a few hundred subscribers to your mailing list
  4. Don’t change code shortly before launch
  5. Do more marketing – something I constantly struggle with doing
  6. All of this is really hard. It’s easy to understand the concepts & broad strokes, but you need to nail the details to succeed. Doing >> Reading

Conclusion

That’s the hardest part here: Do I have enough numbers to come to any meaningful conclusions? Maybe, maybe not.
What I can say so far is this: It is NOT easy. I haven’t even reached product-market fit and the way there is blurry and uncertain to me. There is so much more to learn about my customers and how I can provide value to them.
I am looking forward to that challenge and think that I know enough to succeed. Let’s see if I can execute well enough ๐Ÿ™‚

Was it wrong that I launched so early? I don’t think so. 10 minutes after the launch, when I learned of the severe bug, I felt like it was the worst decision ever. With two months distance from that evening, it doesn’t look that bad anymore. I got some amazing feedback, happy customers and the advice (from said customers!) to charge more. That isn’t too bad – eh?

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