This month saw a net MRR loss but I have reasons to be optimistic. I’m including some charts that I didn’t show last time in addition to updating the same charts from last month.
Here we go!
Referral traffic update
Referral traffic is up 10% again month-over-month. This is good progress and a really important trend to maintain. My success as a solopreneur lives and dies by this traffic.
Most of my major referral traffic sources grew and only a couple fell. I got a bunch more clicks from YouTube this month from a couple of new tutorial videos that went up recently. I hadn’t considered YouTube to be a legitimate source of leads for me. I know volume is high but I assumed quality was low. I’ll keep my eye on it.
Not surprisingly, my LinkedIn referral traffic is way up too. I find this traffic is good quality so, as has been my strategy all along, I’ll keep writing stuff like this.
Finally, referral traffic from my API documentation doubled last month. API users are the best customers. They stick around longest, pay the most, and once they’re integrated, they need the least customer support. That’s a solopreneur’s trifecta right there. I want to keep that traffic growing.
However I still haven’t acquired a new big referral source. More on why and what my plain is to fix this later in the report.
Here’s month-to-month referral traffic growth since April, when I started putting more time into Toofr. In fact, referral traffic has grown 250% in the six months since that low point in May.
Organic traffic update
Organic traffic was basically flat. Google traffic fell slightly but Bing and others improved and made up for it.
In this category I just wanted to stop the bleeding from my huge September drop. Last month organic traffic fell 17% and it appeared to be due to a drop in the “find emails” SERPs.
This month Toofr jumped up a few more positions on “email finder,” “find email address,” and “emailfinder” saw a huge jump of 21 positions and is now in the top 10.
So I didn’t get back to my August high but at least it didn’t fall any further. I know SEO changes don’t impact overnight or even within a few weeks of a change, so maybe, just maybe, last month’s SEO project with new industry and domain pages will start to yield results next time.
Marketplace traffic and sales update
List marketplace traffic continues to grow. I’m not sure why I said it fell in my last report. I’m now showing a steady incline. I may have made a mistake with the analytics parameters. Whoops. Regardless, it’s been growing and I think this is an investment that will pay off.
There were 7 new lists put up for sale in October and 15 sales. These numbers are about the same as the last few months.
The challenge I’ve faced with the marketplace is in promoting new lists. I want to better merchandise them for logged in users and of course get them to register and subscribe if they haven’t already. I also think the marketplace can re-engage dormant or churned users. It’s a great tool for that.
I tried running Facebook ads but the comments were all very critical. They ranged from confusion to outright derision. But the people who use this feature love it. I know because I hear directly from them. Paid ads were clearly not the way to get awareness. I’ll have to stick to good old referral and organic traffic instead.
It’s early days still but this pageview growth is great.
Overall traffic update
In all, traffic was up about 4%. I didn’t get the traffic dip I feared from dropping my Google and Facebook ads. That’s a relief. It means I’m going to keep my display ad budget at a bare minimum and only do retargeting.
To really give where I’m at now in total traffic some context, I took the next chart out to October 1, 2016. This was a couple of months before my second daughter was born and about the time when it was becoming clear that my team was going to have to sell Scripted (my full-time job at the time, which I was co-founder and eventually CEO.)
Suffice to say I was not spending a lot of time on Toofr then. The traffic shows it. I’ve come a long way since, growing almost 400% from the low point in February.
Okay, so all of that was feel-good preamble to the tough metrics. I did not enjoy looking at ProfitWell last month. It churned my stomach every time.
Last time I came off a monster August, so I was able to write off a down September because that’s what happens after you have a really good month.
I acquired just over $2,000 of new users in September but I churned nearly $3,500. One of those was a $1,200/mo customer I had for a long time. He found a bug, quickly churned, and went to a competitor. That hurts! I might get him back now that the bug is fixed and I’m dangling a big discount in front of him but still, every time I lose one of those it kills my metrics. That single customer took me from a flat month to a really bad month.
Last month I also had a few stretches when I went several days without a new customer. This happened frequently before I was full-time on Toofr and I attributed my attentiveness and improved welcome sequences to preventing those flat stretches. Now I’m not so sure.
Is it random? Is it something I said or did? Has there been a data quality problem and I only just heard about it from that big API customer?
I don’t know. So far in November it’s been better, but it’s still frustrating. I don’t like all that churn.
Another way to spin this, if only to make myself feel better, is that I’ve been acquiring a lot more new paying customers in the last six months than I did in the six months prior. I made this new customer growth my header chart of the month.
Bugs and churn are unavoidable to some degree. The SMB market is known for having the highest churn rates. So I can’t get caught up in the month-to-month noise but I’m of course weary of watching bad trends develop.
The best I can do is to respond to customers quickly, keep the data strong, and continue to fine-tune Toofr so the search engines love it.
It’s interesting how both the new and total paying customer charts overlap with the overall traffic chart. In all cases, things started to take off in March and April.
If I can keep the traffic growth up and continue to drive conversions then my overall customer base will grow. A larger customer base will add enterprise value (if I ever sold Toofr) and decrease revenue volatility (I’ll care less about losing any one customer) and that’s a terrific combo for businesses large and small.
Overall revenue and net income
So yes, unfortunately MRR fell about $1,400 in October. However, a couple of annual subscriptions more than made up for it on the cash front.
I actually broke $25,000 in total cash receipts for the first time! The net came down to just over $23K but you can see the high point in October below.
Still, I am very aware that I shouldn’t celebrate growth for the sake of growth. I want high quality growth. High quality, sustainable dollars from a large customer base that is engaged with my product. A tick up in low quality revenue one month will no doubt be answered by a tick down soon thereafter. So even though October revenue overall was actually up because of one-time and yearly purchases, I’m not doing any touchdown dances.
Here’s the P&L YTD. Looks different than last month because I’ve finally moved my books over to Quickbooks and hired a real accountant. We’re growing up over here!
I’ve also split out Toofr revenue and COGS from Inlistio revenue and COGS since it looks like Inlistio will have much lower margins than Toofr intially.
The monthly fluctuations, as described, are largely due to the acquisition and churn of large customers. I much prefer to look at SaaS on a quarterly basis so that one-off noise gets washed out. I’m proud of this chart.
This was a turnaround year for Toofr. Q4 is already on pace to beat Q3. Not by a crazy amount, but enough to make a another pretty chart at the end of the year. The important thing for this company and its future prospects is that I was able to grow revenue (by a lot!) AND lower the cost of that revenue (also by a lot!)
That’s a winning combo for any business, but it’s especially important for a small, bootstrapped, one-man show like mine. I won’t be able to keep the cost of goods sold piece trending down. It will plateau down to the 15%-ish of revenue mark, putting Toofr squarely in that 85% gross margin bracket that people expect from a software product.
This means the business healthy and if I ever decide to sell it, I should get a nice multiple on revenue.
I hired a part-time content manager! I described the process here and here.
To circle back to my plan to acquire another referral partner, it’s all about content. I’m very excited to work with someone who knows SEO, social media, and has a writing style that matches my own.
After working on blog posts for Toofr and Inlistio, we’ll write some posts specific to the blogs of some key SEO targets and see if they’ll post. If not, I’ll post it on one of my own sites, but eventually we’ll find a taker.
I decided to dive into SEO myself and get some consistent blog writing relief by hiring someone. I feel good about this arrangement. It’s the right mix of making myself do the important work and not doing too much myself and failing.
If you’re curious why I hired a writer instead of using Scripted, I’m actually doing exactly what I told people like myself to do when I took sales calls. I need to do as much as possible in-house first, get my formulas and style guides worked out, and then go to Scripted when I’m ready to scale.
I’m hoping to be a Scripted customer early next year 🙂
Here’s a rundown of the product improvements I made last month:
- Launched Toofr Audiences, the most requested feature I’ve ever had. It’s a tool to filter lists by title, industry, or domain. They can be uploaded to use as PPC display audiences.
- Also by customer request, I paginated the Prospects API.
- Fixed a bug where different emails for the same person had the same score (this should never happen with my algorithm.)
- Added back some background processing that sets the industry of a given domain using a NLP classifier I trained a while ago.
- Added a Crozdesk badge and my new very thorough Crozdesk review.
- A lot of technical SEO improvements based on recommendations from SEMRush. H1 tags are back.
- Another SEO play: a page dedicated to the verify emails keyword.
- Improved the upsell language on the email notifying users when they’ve run out of credits.
- Found and fixed a terrible bug that tied emails to random one-letter domains and had been doing so for a long time.
Last but not least, here’s a rundown on my other projects.
Sessions this month: 101 (55 last month)
Registrations this month: 1 (2 last month)
Paying customers: Still 0
Thinbox is a customer email analytics tool that still needs some love. I’m putting a lot more time into the technical marketing side of Toofr and I hope that the next time I write this report I’ll be able to describe some of the marketing improvements made to Thinbox as well.
Sessions this month: 187 (145 last month)
Registrations this month: 2 (7 last month)
Paying customers: Still 0
eNPS is an employee net promoter score survey tool that still has tons of potential. Encouragingly, I spoke to one potential customer last week who found eNPS on Google. He unfortunately wanted to use it for customer NPS surveys, which isn’t at all what it’s built for. Like Thinbox, eNPS needs some ongoing marketing attention.
Sessions this month: 271 (295 last month)
Registrations this month: 3 (3 last month)
Paying customers: 3 (0 last month)
Inlistio is my collaboration with Max Altschuler from Sales Hacker to track job changes on email or customer lists. The good news is Inlistio works! People like it. They’re paying for it and sticking around. So far I haven’t churned anyone. The bad news is the same as above. Marketing has not been my focus on any of these. It’s gotta change.
Sessions this month: 113 (launched on 10/22)
Registrations this month: 4
Paying customers: 0
Glist came about because I wanted to send mass emails to my friends and family and give them a polite way to unsubscribe. I was also curious about AI chatbots and found Wit.ai and then couldn’t get enough of it. So I’ve used it myself and have four other people who at least registered and made lists. Still a ways to go on this but it was fun to build. If it gets traction it will do so via its own referral marketing mechanism: links back to Glist.io in the bottom of every email.