2018 Starts with a Bang!
2018 has started off with amazing traction. Increased client implementations, speaking engagements, and a chance to prove we can operate at a revenue neutral level so we know regardless of funding, we will survive. Also, Steven started his immersion as co-founder and is learning about funding, capital growth, and selling stuff. A good start to the year!
We ended Q1 with outstanding revenue; almost topping all of last year in the first 3 months of 2018. This was bolstered by Dave Needham's regional speaking engagements and consulting with a few companies. We also realized that we were not tracking sales and client growth very well. We fixed that so we could get a baseline on traditional sales and growth metrics. Here is where we stand:
Q1 Platform Revenue = $11.331
Q1 Consulting Revenue = $4325
Q1 Total Revenue =$15,656
MRR as of March 31, 2018 = $4703
Total Users = 866
Average MRR per user = $5.43
In Q1 we added additional security to our Single Single-On protocol with Google and repaired a number of bug with our reminder system and Slack integration. Essentially we had to rebuild the entire email and reminder protocol. Better now that later.
We ended the quarter with release of v0.36. We plan to announce version 1 which would be widely marketable and bug free very soon!
We learned we can survive on our existing revenue alone! Which is HUGE! We are not reliant on funding to operate! Granted, we want to THRIVE not just survive. We have big growth plans and sooner or later, we need to get paid and we want this company to change the way more companies look at talent. We also want to grow to hlep out investors realize a good return on their money. That would be difficult without some additional investment but it good to know that with a little fiscal responsibility, continued sales, and slower development efforts, we can subsist on our revenue alone.
The Look Ahead
Marketing & Sales
Historically we have grown with very little outbound marketing, which is great. Referrals are the cheapest way to grab new customers. Our new user acquisition costs are about $25/user with an average lifetime value of $162 (at this point.) Which is pretty stellar. But again, you've got to spend money to make money. As a result we are starting to grow our outbound marketing channel and testing a few options. We are also upping out inbound game with some website modifications in the works and working to capitalize on Dave's speaking engagements. We will also be engaging our existing investors a bit more to help us stay present of mind. Additionally, we recognize that no one on our team is a business development expert, so we are interviewing a few possible individuals who can bolster the team. We hope to make an introduction soon!
Platform Development & Service Pilot
Version 1 is in sight and we plan to announce it very soon. We have a few small bugs to work through and a few enhancements we think are crucial to the platform based on feedback. The significance of version 1 is two fold. 1) It is a psychological milestone not only for us but also for clients (and potential clients) that we are offering a full solution that works, and 2) it makes it easier to sell and create some press around.
We want to do a better job announcing and demonstrating releasing new releases and feature updates on our website as well. So stay tuned for a release notes section and feature demo videos.
In May, we plan to launch a service pilot of our possible consulting model. Again, we do not want to create a divergent business model and a consulting services model is certainly different than a SaaS model. We will be launching a decentralized consulting offering at our current co-working space. Essentially, we can offer consulting and vetted subject matter experts and little to no overhead costs for us by contracting out to a 1099 consultant networks. Clients get their needs met, consultants increase their business flow, and we get a little slice off the top - every one wins. Something that, if we wanted, we could later spin off as a separate operating arm if it shows growth potential.
As a team we have decided that crowdfunding fits who we are. We believe in inclusivity. It's one of our fundamental tenants. And the VC market is about exclusivity and widening the gap between the "haves" and the "have nots." Also, as smart as some VCs are, the investor market seems to increasingly reward unsustainable ,"flash in the pan" companies and cultures that offer themselves for free and then sell user data to the highest bidder. While we believe we are creating meaningful data that has value to a large market, we very much want users to truly "opt in" to sharing that data (via a paid personal subscription and participation in a talent marketplace - think LinkedIn endorsements that is not bullshit) as opposed to obscuring terms and treating user like a product. We want to solve real problems, provide real inclusion, and create company that can survive a public offering (or acquisition) and pay dividends to our investors beyond.
All that to say, we are putting things in place for another crowdfunding launch. Wefunder has hired a new team to focus on user/client experience to hopefully plug some of the holes we encountered with our first raise and we are targeting late May-early June as a campaign launch.
We are currently planning two possible rounds. The first through Wefunder with a priced round at $3.5m pre-money valuation and a target of a $500k raise. For existing investors, the first round represents an estimated 52% return on your initial investment as the shares convert. This $500k will hire our initial team plus a sales & marketing lead and provide the necessary capital to launch a second funding round for more explosive growth. With additional traction and a new valuation, our second round (with a 4.25m premoney valuation and target raise of $1.5m) would possibly represent an estimated 201% return on an initial investment for our original investors. With planned growth only accelerating your investment from there.
These will both be crowdfunded rounds available for participation to accredited and non-accredited investors. So existing investors will have the opportunity to deepen their positions and increase their potential returns. These two rounds help us hit our next 18 month milestone which is - $80k/mo in revenue and over 100 clients. Stay tuned!
Q1 was awesome! With more public visibility and increased client traction. We are maturing both the business model, our marketing and sales process, and our clarity of the how we want to grow the company. Please stay aboard the train and keep an eye out for that new opportunity to invest in a growing company who is dedicated to make a difference, be good stewards of our investors money, and operate an inclusive and open culture.
As always, you can reach out to me with any questions you might have!
Dave Needham, CEO (email@example.com)