
How we got to $1,000 in recurring revenue - smalter
http://blog.idonethis.com/post/59489601294/how-we-got-to-1-000-in-recurring-revenue
======
louthy
Please take this as constructive: I pay for your system for a team of about 10
people. It works and it's been useful to us - but as soon as I get some free
time I'm very likely going to roll my own, because I slightly resent the $5
per user per month price-tag for such a simple service; I think it's pretty
expensive for the features compared to other single-purpose cloud tools.

I'm not asking for more features, because I like the fact it does one thing
and does it well. I reckon it's probably a fair price around $1-$2 per user
per month. I can't help but think you'd get more revenue overall with a lower
price-tag.

~~~
asanwal
Dear iDoneThis team - do NOT lower your prices [1].

As a fellow subscription revenue biz, we've found that lower priced plans
invite customers whose support requirements are much greater. And you won't
make it up in volume.

Real businesses that value their time will spent $50/month for a service that
saves them time without thinking twice. Your early traction proves this out.

The graphic you had in your post about developer thinking makes me think you
guys already know this, but I see the lower price advice a lot on HN, and
almost always, I think it is the wrong advice.

[1] - This is obviously 100% opinion, and you know your business 1000x better
than I do. BTW, our product's subscription price point is significantly higher
$12k per annum at the low end, and we just moved this up from $7500 earlier
this year. BEST DECISION WE EVER MADE.

~~~
7Figures2Commas
> As a fellow subscription revenue biz...

I think it's hard to group all "subscription services" into the same bucket.
Selling proprietary data in the financial services market (like CB Insights)
is very different from selling a simple tool (like iDoneThis).

Also, it should be noted that price is just one component of a _pricing
model_. If you don't look at _how_ you charge, and only consider _how much_
you charge, chances are you're not going to maximize revenue.

$5/user/month looks good on paper, but I wouldn't necessarily assume that the
perceived value scales with a flat-fee-per-user (no tiers) model. Example:

1\. If my company has 10 people, sending iDoneThis $50 each month probably
isn't a big deal.

2\. If my company has 10 teams of 10 people, iDoneThis is now a $500/month
expense. That's $6,000/year. I might not dispute that there's value to the
service, but my perception and consideration of its value is likely to change
as the total cost increases.

~~~
richardw
If your company has 10 teams of 10 people, your most important action is not
saving $500 a month. You're (hopefully) earning a proportionally higher amount
for your 100 people and you should continue to focus on that. If the software
stack helps, don't fiddle with it to save a few bucks.

The challenge for iDoneThis is not to make it cheaper per user, it's to re-
invest the highish costs in order to beat the competitor who is charging 50c
per user. Make iDoneThis better at managing the ever-growing complexities of
syncing information when you have 100/1000/10k staff members and you have no
damned idea what they're doing.

Especially because quite a few hackers are thinking "you know, I could make
that app and sell it for a few bucks less." Don't race them to the bottom,
because Twitter is at the bottom at $0p/m.

~~~
7Figures2Commas
> If your company has 10 teams of 10 people, your most important action is not
> saving $500 a month. You're (hopefully) earning a proportionally higher
> amount for your 100 people and you should continue to focus on that. If the
> software stack helps, don't fiddle with it to save a few bucks.

This type of thinking is prevalent on HN, but it's not always realistic. Most
companies of a certain size have financial controls, and even if $500/month is
not a lot of money in a relative sense, the number of $500/month line items
for _nice-to-have_ , _this-helps-a-little_ products and services is reasonably
limited.

Getting a budget for something that isn't in a "checklist cost" category can
be a real headache, every vendor relationship has overhead, and instituting a
new SaaS for 100 people (and getting them to actually use it) may have its own
costs (staff time, etc.).

> Make iDoneThis better at managing the ever-growing complexities of syncing
> information when you have 100/1000/10k staff members and you have no damned
> idea what they're doing.

That's a fundamentally different product than what iDoneThis has today. To
support development of that product, it will need substantially more than
$1,000/month in recurring revenue, or it will need additional funding.

> Especially because quite a few hackers are thinking "you know, I could make
> that app and sell it for a few bucks less." Don't race them to the bottom,
> because Twitter is at the bottom at $0p/m.

If you build a business around a simple concept that requires limited
functionality, you can refuse to engage in a race to the bottom, but it
doesn't change the fact that you will almost certainly be undercut if others
see a worthwhile opportunity.

In other words, iDoneThis can keep its $5/user/month price point, but if this
is an appealing enough concept, it will have competition, and cheaper
competition, before it ever obtains enough revenue to "re-invest the highish
costs" as you have suggested.

------
jacquesm
Louthy in this thread is making a good case for the kind of user that you can
afford to lose. If $5 per user does not cause _some_ of your users to go away
then you're too cheap. Scale it up an order of magnitude, or even two, watch
your competition like a hawk and make sure that you make you users _happy_ ,
never mind about them resenting to pay. The way to offset that is not to lower
your price but to give more for the same price.

best of luck, I feel that "We made $1,000 in recurring revenue" is so much
more constructive than 'Show HN'.

~~~
lusr
It's not really a "Show HN", though is it? It's an paid-for extension of an
existing product. In that vein, while an informative post I did find the
following statement a bit disingenuous:

"As Paul Buchheit, creator of Gmail and partner at Y Combinator, says, the
correct order of operations is to “sell before you build.” When you launch,
you want a whole list of people that you can tell to buy it. But more than
that, you want to ensure that you’re investing all that time building
something that people want to buy."

As far as I can tell, they built a product for 40,000 people over a certain
period of time without generating a cent in profit or knowing in advance that
any of those people would ever consider paying from the product. While some
users did claim they wanted a team version they would pay for, this was only
after the base product was built _without_ knowing people would pay for it.

This bugs me a bit because I'm working on a project where I'd love to be able
to sell before I build, as it's obviously a very sound principle, but in
practice I just can't see how to go about it and I was hoping to learn
something new from this post.

~~~
mattmanser
That comment jarred with me too, in reality what they did is the total
antithesis of what Paul's quote embodies.

There are a few options for seeing if people will buy before you build. The
often quoted one here (and it's also used in the Lean Startup as an example)
is have a sales site, have a 'buy now button', but go through to a 'we're
currently in beta, email me when it's ready'.

Then buy google ads or whatever your sales pipeline is and see if people click
'buy now'. If no-one does, you've got a problem.

If you've got a big ticket item, you can do something similar but be upfront
that it's not built. Talk to clients, see if they want what you're thinking of
making and suggest a price to see if they say yes. Again, if you can't find
anyone to say yes, you've got a problem.

And for some projects, Kickstarter is another obvious method.

~~~
jacquesm
Sell before you build: you go through what you could automate by doing it by
hand. Automation is optional. If you actually sell automation then that is of
course impossible but if you sell a product that you could create by hand just
as well as through a computer program then you can sell right away.

------
arohner
Not enough people say this anymore, but congrats!

That first $1/$1,000/$1,000,000 is the hardest. Good luck.

~~~
smalter
Much appreciated, Allen. That means a lot, especially because I'm a big fan of
what you're doing with CircleCI.

------
graeme
Some major feedback: send out a "yay, you're signed up" email.

I signed up on my iPad, and forgot about this, assuming an email would remind
me. If I hadn't checked hacker news again I would have forgotten about your
service entirely.

You can use this email to orient new users too.

Edit: might have been a bug due to a clumsy signup I had on my iPad. Couldnt
input well on the keyboard. Just changed my password and instantly got an
orientation email.

------
JacobDmsky
Excellent work!

Our solution was to email daily commit logs at 12AM to the team. The logs are
parsed and beautified so they're easier to read, like a report. This only
works for the programmers, your solution makes more sense for other
departments.

------
jkaljundi
When we launched [http://weekdone.com/](http://weekdone.com/) team management
and internal communications tool, we decided to take the price out of equation
by having the lowest possible price: $1 per employee per month. That has
proven to show companies willingness to pay, while at the same time experiment
more with the product. At the same time we know we can easily raise the price
in the future.

Basically I suggest other startups to consider the price a part of the
marketing mix. It's never a standalone thing. You might discount on price to
decrease your marketing costs, or vice versa.

The higher you go with the price: $3, $5, $10 per user - the harder it becomes
to understand how much is it the price and how much the product that's holding
back paying users.

Another option is to have different prices for different team sizes depending
on your sweet spot. Eg Atlassian JIRA starts at $10/10 users, then goes up to
$2-3, then down again. Asana is free for 30 users, then goes up, then down
again. Weekdone now is also $1.5 at lower level, then growing to $2-3, the
lower again.

Weekdone has some similarities to iDonethis by the way, although we work with
the weekly, not daily paradigm. We actually have many users who use both, or
switch between the two.

------
caseyf
Launching the paid team version was a great idea.

As a personal tool, iDoneThis is neat but it competes with a ton of other
tools in a very crowded market. I had already lost interest and stopped using
it when they launched the team version and pricing.

...but when I heard about what they were doing with teams it was immediately
obvious that this would be great for us. Everyone seemed to like it and get it
right away.

Thumbs up to iDoneThis for recognizing their potential as a team product.

------
graeme
Well done. Just signed up for personal account, I've been looking for a system
to let me track this.

------
adamrubin
Coincidentally, I recently built a similar service as a week-long project to
solve the same problem for a client.

I tried idonethis, but found the interface confusing and the pricing
prohibitive.

[http://simplestatus.io](http://simplestatus.io)

~~~
adventured
Two quick points of feedback:

First - not a particularly important detail - but please do your site a favor
and get rid of the very tacky rocket ship clip art. I don't know why every
SaaS MVP decides to abuse that image.

Second, this: "Status reports suck. We make them suck less."

That's not a professional sales pitch. Unless you're trying to sell to college
teenagers (who wouldn't buy the product to begin with), it comes across as
almost a parody or joke.

Also, saying you make the focus and point of your product suck less, is an
extraordinarily bad way to try to sell a customer. It's a sales pitch from a
negative. Never do it.

~~~
adamrubin
Appreciate the feedback. The icons are all stock flatui. As I said, I built it
in a week, and launched it two weeks ago. I'm working on a makeover, but
prioritized getting the app polished ahead of the marketing site.

I disagree on the tagline, though. I'm not saying that our product sucks less.
I'm saying that it makes doing status reports suck less. You may prove me
wrong in the long run, and I'd be happy to be wrong on this, but my initial
instinct is to keep it the same.

Thanks though! And sorry to the idonethis team. I don't want to hijack your
thread.

------
speg
I've been an idonethis user for a while, but feel like it is missing some
extra features. So I rolled my own and am looking for early alpha testers:
[https://teamtracker.io](https://teamtracker.io)

------
e12e
First: congratulations!

Second: you say that: "Your privacy and security is our top priority. We take
all reasonable precautions to keep your data safe and secure."

Does that mean that you support s/mime and gpg for the emails you send and
receive?

------
sspiff
I wonder, with a product as simple as theirs: how do they differentiate from
clones?

I mean, they're targeting developers and teams with a useful service, but also
a service so simple that most developers could create a minimal clone that
performs their core feature in a few hours.

Either their product needs to have really neat integration into other tools
(like time tracking, project planning, etc) or they need to have some magic
tricks that I don't see. Anyone care to enlighten me?

~~~
seunosewa
The domain is pretty unique and memorable.

------
energyboy
congrats guys! i love products that leverage email as part of their core
workflow/product experience. email is so ingrained in our everyday habits, i
hope more startups take advantage of it. email is really the ultimate
"dashboard" for knowledge workers.

------
stephenhacking
I initially checked out iDoneThis and liked the idea, but $5/user/mo was a
little too much for my bootstrapped startup.

Hence, I just created a mashup of Google Calendar + Docs and Gmail to create a
solution does the same thing as iDoneThis for zero dollars.

------
fsareshwala
Nice work! I've been tracking your product for quite a while. I've been
building something similar for myself as well. It's not quite ready yet
though. Congratulations on your achievement!

------
giantSlayer
Nice. I know how it feels. I'm done with my first 1,000. Going to the next
level.

------
king_magic
Congratulations!

