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How we got to $1,000 in recurring revenue

blog.idonethis.com

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Re: How we got to $1,000 in recurring revenue

#41

Post by adamrubin »

tghw wrote: post #35
louthy wrote: post #11

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, becau…

Your time must not be worth very much if you're really considering rolling your own. How long will it take you? A day? You might think so, but no. A weekend? Possibly, but you won't handle all of the corner cases. A week? Getting closer. How much would you pay yourself for a week of work?

I had the idea to build something very similar, but hoped to find a pre-existing solution. When I found idonethis, I found the cost prohibitive, so I built it myself.

It took me about a week, so that's fair, but that's to rebuild not just the core functionality, but also the multi-tenant SaaS part.

I have a 50 person team. So, I would've paid $250/mo, or $3k/year. So, I really invested $2k to develop my own version, which also has the potential to make money if people prefer paying $15 for a team of unlimited users.

So, no, I didn't find that a waste of time. Plus, I learned some new things along the way, and can fine tune the app as I see fit.

This is the risk of building a business around simple, contained functionality. They're easy to clone, and you better get the execution and pricing right, and figure out how to expand on the concept, or you'll be commoditized quickly.

Re: How we got to $1,000 in recurring revenue

#42

Post by djt »

louthy wrote: post #11

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, becau…

For the people that are complaining about this point of view, remember that this is a PAYING customer who is currently $600 a year for the service. I assume that most people saying not to drop the price are not paying users of this service.

I agree that you should not take into account the fact that most people say taht software is too expensive, but I think that you should also take onto account when people would prefer to "roll their own" than pay for your services as it also demonstrates that you dont have a "lock in" effect and so cant charge a lot more than what the product is worth to a customer.

Re: How we got to $1,000 in recurring revenue

#43

Post by asanwal »

7Figures2Commas wrote: post #40
asanwal wrote: post #18

Earlier quoted context omitted.

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 de…

> 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, chance…

Great points all around.

I do agree that for larger company/enterprise type deals, the current iDoneThis pricing may not work and IMO, that's a large opportunity.

Re: How we got to $1,000 in recurring revenue

#44

Post by 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'.

Re: How we got to $1,000 in recurring revenue

#45

Post by gknoy »

zach wrote: post #29
flylib wrote: post #24

Earlier quoted context omitted.

Google has their own similar internal software called Snippets that instead of nightly sends out an email once a week, collects responses and sends out a digest along with a web app interface explanation of software: http://tech.pro/blog/1490/how-it-works-google-s-snippets some former google engineer rolled out an open source version of the software that with some factoring, nightly cron jobs instead of weekly and po…

FWIW, I've used http://www.snptz.com/ off and on since it debuted on HN some years ago for weekly snippets. I've since developed my own daily forward-looking/backward-looking format, essentially a simple text-based mashup of David Seah's inspiring productivity forms: http://davidseah.com/productivity-tools/

Thanks for linking David's stuff, that was something I didn't realize I needed.

Re: How we got to $1,000 in recurring revenue

#46

Post by jkaljundi »

When we launched 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.

Re: How we got to $1,000 in recurring revenue

#47

Post by jkaljundi »

flylib wrote: post #24
louthy wrote: post #11

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, becau…

Google has their own similar internal software called Snippets that instead of nightly sends out an email once a week, collects responses and sends out a digest along with a web app interface explanation of software: http://tech.pro/blog/1490/how-it-works-google-s-snippets some former google engineer rolled out an open source version of the software that with some factoring, nightly cron jobs instead of weekly and po…

http://weekdone.com/ is a service allowing this via web, mobile and e-mail as well. There's even a Google Snippets template. (disclosure: I am a co-founder at Weekdone).

Re: How we got to $1,000 in recurring revenue

#48

Post by 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?

Re: How we got to $1,000 in recurring revenue

#50

Post by victoriap »

jacquesm wrote: post #44

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…

So it's time for a 'Show HNtM', which shows HN the Money :)

That said, Show HNs are one of the most exciting parts of why HN rocks, even if they don't yet make money.

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