Year in Review 2014

I am Christoph Engelhardt, the maker of LinksSpy.com and probably best known for my monthly income reports.

I run my business as a side project and work a day job in the defense industry. I usually get about 5-10 hours/week of work done for LinksSpy.

Acknowledgments

“If I have seen further it is by standing on the shoulders of giants.” Isaac Newton

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 my habit of working on weekends (often the only time we get to spend together), with my stress levels. Thank you for yet another great year full of beautiful moments worth remembering
  • Benedikt Deicke with whom I produce a (German language) podcast. Thank you for the countless times you’ve helped me bring LinksSpy back up and correct my worst code fuck-ups. Thanks for making me launch LinksSpy at a time when I didn’t feel it was good enough
  • Michael Buckbee for always pushing me to work harder and spending crazy amounts of time to do mockups, give detailed feedback, and re-write the whole storyboard for LinksSpy’s video
  • Dave Collins for placing your trust in me and committing to LinksSpy at a time when it was just a shell script that would crash 9 out of 10 times. Thanks for a number of great email discussions and for taking the time out of your vacation to meet Katharina & me
  • Charlie Irish for helping me do well on ProductHunt when LinksSpy got on there. Thanks for motivating me time and time again. Thanks for the dinner in London and some exceptionally memorable hours at MicroConf Europe in Prague
  • Rob Walling & Mike Taber for hosting my #1 podcast and an amazing conference. Thanks for sharing actionable tips and tactics, and for inspiring me to follow in your footsteps
  • all the people that hang out in the BBiz Slack chat: You are an inspiring group of people. Thanks for the priceless help and for cheering me on

The Business

My business consists of the following products/services:

  • LinksSpy.com – a tool that helps SEO professionals to find link opportunities for their client’s websites
  • TerminRetter.de – automated SMS & phone reminders for (mostly) dentists in Germany. This has been on auto-pilot for the whole year
  • a little bit of consulting work

The main product is LinksSpy, which gets almost all the love.
I just put the others up there for completeness and will write a few short paragraphs about each.

TerminRetter.de

A few years ago I thought it would be smart to clone Patrick McKenzie’s Appointment Reminder and sell to the German market. Long story short: It didn’t work quite as planned.

I just sucked at marketing (still do) and to sell this software I’d have to do a much better job than just having proper onboarding.

However, I didn’t invest any time into developing new features or doing anything with it this year and it still brought in some money. That’s pretty neat.

I am semi-actively thinking about putting some time into improving the marketing, but it would be a distraction to my work on LinksSpy. So I am probably not going to do it, although I think TerminRetter is a good business.

Consulting

Not a lot of interesting things to talk about here. It pays nicely, when I invest time into it. I don’t go out of my way to find work, it is all inbound.

No plans to change anything here. I want to focus on LinksSpy as much as possible.

The Executive Summary

It was a good year business-wise. I launched LinksSpy at the end of April and grew it to about $1,200 in (Monthly Recurring Revenue) in 8 months. It might not be much, but to me it means the world. LinksSpy has grown faster than I ever imagined.

LinksSpy started out with $190 MRR and I hit my goal of $600 MRR about a week before the deadline at the end of October. I set myself a new goal ($1,200 MRR by April 2015) and hit that goal just 3 weeks later.

The Year in Brief

I slow launched LinksSpy at the end of 2014 to a few select people on my mailing list. Over the course of the first quarter I worked with them to improve LinksSpy to a point where it consistently delivered value to them.

In April I implemented billing and pushed the product out the door.

LinksSpy started with no free trial and three tiers ($9/$19/$49). I changed that about 4 months in to a 7-day trial with $19/$49/$99 pricing. This was probably the single best decision for LinksSpy: the trial brings in more users and I can send them emails to keep them engaged.

In August I published a big research-driven article about paid links that got shared heavily in the SEO community and got me about 5,000 visitors. This resulted in a number of paying customers.

In early November and as a result of Dave Collins promoting LinksSpy during his talk at MicroConf Europe LinksSpy got featured on ProductHunt. That resulted in about 60+ signups and 20+ conversions.

As a result of that I hired a developer part-time to help me with LinksSpy. He’s currently ramping up, but I already like the impact he has on the development speed. I expect great things from this.

December was a slow month for me. I’ll write about that separately in my income report, but the short version is: I didn’t do much, so no growth and in fact I lost some MRR when people churned after testing LinksSpy for 1 month

What went well

Here are the things I think went well in 2014.

Launching before I felt ready

This was definitely a big win. When I launched LinksSpy it was a MINIMUM Viable Product. There was no way to lock out users who cancelled their subscription, there were no lifecycle emails, no receipts for charges on customer’s credit cards and not a single index in the database (resulting in bad performance).

The performance was so bad in fact, that LinksSpy could NOT have supported more than 18-20 customers at that point.

Add on top of that a way for users to cancel without deleting their subscription – meaning they still get charged although they cancelled(Read the full story).

Yes, it was that minimal. But you know what? It launched, it delivered value and it has grown from there.

If you are sitting on a – in your mind half-baked – product, show it to potential customers, improve it to the point where they get value and are willing to pay for it, then launch.

Charging more & introducing a trial

Allowing people to trial LinksSpy was a major win. I ask for a credit card upfront, so they have to cancel. When they cancel I ask them for feedback why they cancel. I’ve got some great feedback from that and was subsequently able to improve LinksSpy.
Signing up for a trial is an easier conversion than going straight to paying customer, so the conversion rate has improved, too.

On top of that I now make more per customer once they turn into paying customers. That comes with all sorts of cool effects: I care more about my customers (sad, but true), they care more about LinksSpy, and it filters out quite a few toxic customers.

Putting more effort into marketing

I have put a lot more work into marketing than with anything I did before LinksSpy.

I have reached out to influencers, written articles for LinksSpy’s blog, went onto a podcast and guest blogged about SEO for designers – to name just a few.
I also occasionally write to the LinksSpy mailing list and scan the relevant subreddits for interesting topics to chime in on.

Not all of this work, but some of it brought visitors to the LinksSpy website and some of those eventually converted to paying customers. YAY!

Talking to people about LinksSpy

Be it customers, prospects or conference attendees – I was way more comfortable talking about LinksSpy. At MicroConf Europe I repeated (and altered slightly) the pitch so often that I no longer have to think about it.

I’ve had a number of great Skype conversations about LinksSpy that have helped me guide product decisions. It’s fun to talk about your product and how it can help others.

Continually improving & staying motivated

In the past staying motivated was a major problem for me. I would start a new project, build it and abandon it almost immediately to start something new.
Not so with LinksSpy: I stayed on it and it seems to pay off.

What keeps my motivation up is customer support (of all things!): It’s so rewarding to get emails from people who are using LinksSpy and saving a lot of time because of it. It’s equally cool to hop on a video chat with people and explain LinksSpy to them.

Furthermore, I won’t deny this: Getting money is also very motivating. I’m a filthy capitalist pig – what can I say?

Building great relationships

In 2014 I only attended one conference (MicroConf Europe in Prague) but I had a blast there. I met old friends (Benedikt Deicke, Charlie Irish, Dave Collins, Brennan Dunn, Mike Taber, Rob Walling, Anders Pedersen – to name just a few) and made new friends (Chris Kottom, Jane Portman, Dominik Dotzauer, etc.).
Going to MicroConf is so fricking awesome (Sorry, Dave!) fun, full of actionable advice, and motivating. I can’t imagine doing this without attending MicroConf.

Additionally, I was able to meet some friends during my vacations to Great Britain (Charlie Irish, Dave Collins) and Dubai (Dan Clarke). That was great as both my wife and I enjoyed having dinner/afternoon tea with them.

Doing all this with a day job

I did all this while still working a (almost) normal day job. It’s been stressful at times, e.g. when I was in places without internet for 3 days.

Thanks to a mostly understanding wife I was able to put in some time on the weekends. I’d rather spend it with her, but that’s hopefully something I can correct in the future and cut back on the weekend work.

What didn’t go well

This is the more interesting part, because I need to remember not to do this wrong again – and you can probably avoid a few mistakes yourself if you read this carefully 🙂

Charging Customers Who Cancelled

This was the worst point of the business year for me. Are you into adrenaline rushes?
Try charging your customer’s credit cards although they have cancelled their account and wait for the emails to arrive. Believe me, this will be fun!
You can trust me, I’m a random guy on the internet! 🙂

In the end I figured the error in my code out (Thanks, Benedikt – again!), refunded everyone (not only those who wrote me), and they were happy ever after. But boy was that stressful – and stupid to begin with. You can read more about it in my income report for September.

Not enough marketing

I feel like I didn’t do enough marketing. Only one really good blog post (and a few mediocre ones), a bit of outreach here, a podcast interview there. I neglected my email list to the point where it is lukewarm at best.

I know that I should write my list at least twice a month, but somehow I never feel like I have good enough content. That’s probably bullshit, because I publish it on the blog anyways, so I might as well send it to my list – right?

I’ve also spent a few days to build a new incentive for people to give up their email addresses (a watered down version of the real LinksSpy reports – delivered as PDF to their email address). Additionally, I have built the infrastructure for a big content piece, but the content is still missing.

I need to get both projects out of the door and promote them properly.

Overall, I feel like I know a lot of the stuff, but it’s way more complicated to actually execute on the knowledge.
Oh well, there’s always room for improvement – right?

Progress was/felt slow at times

There are days/weeks when I don’t get anything done for LinksSpy. The latest example would be when I discovered Steam for Mac OS X, bought Civilization V, and wasted hours upon hours playing that game. It is addictive and soo much fun, though.

Sometimes I just can’t get myself to do anything productive after a day at work. There’s truth to the saying that you spend your best waking hours at work.

On the other hand, LinksSpy didn’t do too bad compared to other products in terms of growth. And I actually launched and have revenue – which is nice.

At MicroConf you could hand in your website URL for a teardown. It was brutal and your website got shredded in front of 150 people. The crowd was roaring with laughter from the snarky remarks of a Brit telling people that their website does not highlight the main benefit of the product.
Sounds bad? It is not! Because besides the honest to god feedback you get, you have to be aware of one thing: If you have a website, you are ahead of 99% of the population that are still making plans on how to hit it big.

Memo to self: This applies to you as well, Christoph! You’ve got something and it has revenue – be proud of that.

Not nearly enough systems in place

Would you like to know how much exactly I spent on LinksSpy this year? I can’t tell you. There are invoices all over the place and it will be a nightmare to collect them all for taxes.
I even pay a few bills with my private credit card, because I don’t have a company card. That forces me to wire some money from my business bank account to my private account. It’s messy.
I need a company credit card and a system to (semi-) automatically fetch all the receipts & invoices.

Want to publish a guest post on the LinksSpy blog? Best I can tell you is “send your stuff via email whenever you feel like it and I will”. When I get the article, read it, suggest edits, and eventually schedule for publication. Inconsistently, I do a keyword research and optimize the article for that keyword. Sometimes I forget to share the article on my social media accounts.
Basically the same can be said for the posts that my hired author does for the blog.
What I need is a checklist and a process to govern the publication of blog posts.

Not enough/No analytics

Where does LinksSpy get most of its traffic from? Which traffic source is the highest converting? What is the fricking LTV of a LinksSpy customer?

I can answer each of these questions with a solid “Yes….. No… I don’t know”. This is embarrassing at best. It does not help me steer the ship.

My excuse (of sorts) for this is that LinksSpy is still relatively small and I know which metric I need to grow first: unique visitors to the website (of which LinksSpy had 700 in the last month).

And I don’t really need quantitative data to know that my email marketing or the onboarding process are sub-par suck.

The Numbers

This is probably what you are here for, so let’s get to it.

Traffic:

  • Unique visitors: 7,986 (since April 28)
  • 46.4% referral traffic
  • 31.6% direct
  • 11.8% social
  • 7.8% organic search

Biggest drivers of referral traffic:

  • ProductHunt.com (2,704 visitors)
  • t3n.de (263 visitors)
  • it-engelhardt.de (225 visitors)

That means about one third of my traffic comes from ProductHunt alone… wow.

Revenue

At current market rate (conversion from EUR to USD) and according to the Stripe dashboard LinksSpy made $5,134.70.
That is as accurate as I can get before I do my taxes and without too much effort. The value is skewed by fluctuations in the exchange rate (the Euro lost quite a bit value this year).

HookFeed currently reports $1,191.50 MRR from 43 customers. And here’s a screen grab from FirstOfficer.io for you to go through my numbers. I am pretty close to my deadline for this review, so I didn’t have much time to look through the report. If you find something that I should look into, please let me know at christoph@$ANY_DOMAIN_I_OWN.

02_firstofficer-annual-report

Most of the customers came through ProductHunt (no surprise here as it was the biggest driver of traffic).

Expenses

As I stated above my accounting is a mess. These numbers don’t reflect what I will report to the IRS because a) I will find a bunch of expenses once I do my taxes and b) I can subtract my home office and other items from my taxes as well.

Here’s my best attempt right now:

  • $45 on Fiverr
  • $1,926.58 on oDesk
  • $84.12 for Facebook Ads
  • $154.42 for PerfectAudience
  • $231.58 for Heroku
  • $149 for a new video
  • $800 for blog posts to my hired author
  • $80 for Google Apps
  • $120 for domain names and hosting
  • $294 for GetDrip.com
  • about $1,500 total for attending MicroConf Europe (ticket, hotel, travel and hosting a dinner)

estimated total: $5,207.58

Now that I think about it, that is a pretty good estimate. There’ll be a few additional expenses somewhere and I spent more than I made, but that’s OK as I’m willing to invest a bit of money into LinksSpy.

Plans for 2015

3x MRR for LinksSpy

I want to grow LinksSpy from its current annual run rate of $14,298 to $40,000. That means I have to 3x the MRR. That seems ambitious – and a little bit daunting – to me.

The way to achieve this will be through focusing on marketing. I want to get on more podcasts and blogs with an SEO audience. Additionally I am working on another huge content piece and a new incentive for the drip email campaign.

Furthermore, I need find a way to improve the onboarding (and general user) experience of LinksSpy to make the value it provides more apparent to customers; both to increase “trial to paid” conversion and to reduce churn.
Churn seems to be around 10% (if I include the surge after ProductHunt where a lot of people stayed around for one month and then cancelled) and I need to lower that.

Lastly, I have plans to use another data provider to run the reports, which will increase the volume of link opportunities created and also provide more up-to-date data.

Work less IN the business and more ON the business

I started this process when I hired a writer for the blog and continued it when I brought on a part-time developer.

Having another developer on the team will improve the velocity with which I can deliver features for LinksSpy. Additionally, he’s a really good developer – much better than myself – so that should increase the code quality overall.

Secondly, I want to find a VA to help me with research for additional blog posts and to establish a process that will result in me consistently emailing my list twice a month.

Give a talk

I would really love to speak about my experience as a solo founder of a somewhat successful side project.
Maybe I can call up my professors and give a talk to students at my university. That could be an interesting topic for them.

I want to help others to be more successful.

Attend MicroConf Europe

I will attend MicroConf Europe if that is at all possible. The experience this year was amazing and I can’t wait to go back and meet my friends & idols.

Conclusion

LinksSpy is growing and – although I messed up things quite a bit – I did a few things right. I had amazing help on the way for which I could not be more thankful.

I will definitely continue to be rather transparent about LinksSpy, because I enjoy writing the income reports. It helps me to plan for the road the ahead and it’s great to read them after some time and think back how far I’ve come. Additionally I get a lot of positive feedback for doing them.

Here’s to a great year 2015!

Social Share Toolbar
About Christoph

Christoph lives in Munich, Germany and is bootstrapping his own SaaS application as a part-time entrepreneur.

He likes to write on this blog about anything of relevance to single-founder bootstrapped software startups.

Trackbacks

  1. […] 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 […]

Speak Your Mind

*