Welcome! I’m Nathan, a 22-year-old Serial Entrepreneur. This is my story of how I grew one of my companies from zero customers to 13,800 sign ups, 3000 active users and $79,000 in monthly recurring revenue in less than 90 days.So just before I start here are a few facts:The Business was a SaaS Social Media Marketing PlatformI was the sole member of the team; I had no employees or additional helpThe pricing started at €39 and came with a 3-day trial to test the service.I already owned a startup in the same space which had around 300 customers, so I had an understanding of how to market a similar business giving me a bit of a headstart.This post contains around 4000 words, so I decided to break things down into (slightly more) bite-sized chunks. Please feel through to Navigate through the article to whichever sections are most relevant to you.BackgroundJumping straight into this article, I had purchased a pre-built SaaS application, installed on a shared VPS hosted by Bluehost (not recommended, I’m now with Digital Ocean who are a million times better).The app was built with LAMP, PHP 5.6 and CodeIgniter. After installing on my VPS and checking everything was working correctly my journey of growing the business and acquiring customers began.Acquiring my First CustomerMy first point of call was Adwords, I set up a marketing campaign for Instagram Automation Software and went live with my first Ad. I managed to acquire users, but 0 converted into paying customers. I lost around $200 and turned off my campaign feeling quite annoyed that had cost me $200 with nothing gained other than a few emails.At this point, I moved on to Free Traffic Channels; I started engaging a bit in the Reddit community, and also admittedly did a bit of shameless self-promotion. I set up Google Alerts whenever someone was asking the question (“More Instagram Followers?” or “More Followers on Instagram”) I’d get an email alert and could instantly start pitching a product and offer them a free trial.Again, this was pushing users to my site, but nobody was converting into customers or entering card details for the product. It was at this point, I hired a developer to change the signup flow where a user would have to enter card details in order to access the product. This was to filter out anyone who just wanted a free product, as much as I like helping people the purpose of my business was to turn a profit.I reached out to some of my ex-customers from one of my other startups, offering them the services of my new business. I acquired my first ever paying customer who subscribed to a $5 per month plan. This is truly a great feeling; the fact it’s was only $5 didn’t matter. I think any other business owner can tell you one of the best feelings is receiving your first ever paying customer.First 10 CustomersSeeing as I had acquired my first customer through a previous relationship, I continued reaching out to previous customers of another startup of mine and managed to acquire two other paying users through old relationships.Now that I had changed the signup flow, I was also starting to see customers sign up via Reddit and was averaging about two customer signups per day through Reddit.I’m also a very active user of LinkedIn and had previously grown my network to over 58,000 connections. So I knew the power of Networking, I set up Instagram Automation targeting “Business Owners” in the USA offering Social Media Management services, I was seeing out 600 connection requests per day with personalized invitation messages.My personal Instagram account also had over 45,000 followers who were an excellent form of Social Proof. I automated direct messaging to invite users to sign up for a trial to my software, and also set up around 20+ other Instagram accounts targeting various users and offering free trials.LinkedIn & Instagram Marketing was all 100% automated, so once set up this ran forever.First 50 CustomersAt this point, I didn’t make any major changes to the growth channels. I was receiving a few signups per day, and this was all being automated. My original idea for this business is that I wouldn’t need to oversee it much as SaaS doesn’t require much human input (I was wrong!), I would just let it grow in the background while I managed my other startups and it would bring in another stream of revenue.Regarding the business itself, two changes I did make were improving the landing page; I picked up a cheap template of Envato market for $9. I edited the HTML and changed the copy and put this on the server, it really wasn’t anything special but actually doubled the conversion rate from 3% to 6%.I also changed the pricing plan from $5 per month to $5 per week; I felt psychologically seeing $5 per week felt like a lower commitment than $20 per month - although this is purely based on my opinion and has 0 research behind it. It seemed to work as the conversion rate for the site didn’t drop off whatsoever, in fact, there was no change at all which I was quite surprised by.By the time I reached 50 customers, I was around ten days in and had a total of $500 in MRR. Each new signup was worth $20/month, and I was receiving 3-4 per day meaning $60-80 worth of new business per day which isn’t bad.The cancellation rate was also very low, I only had ten days worth of data which of course isn’t great for making significant decisions, but I think only 2-3 out of 50 customers had canceled.First 250 customersAgain, just sitting back and watching my customers climb. I went and met with a fellow entrepreneur for a Beer in Canary Wharf; we were both involved in Social Media although different platforms and often exchanged ideas on the industry, tips, tricks, and hacks. It was nice as we weren’t in direct competition it made no impact on us to share what avenues we were exploring.I told him my new venture was acquiring a steady stream of customers and this was coming from free channels. He suggested scaling via Facebook Ads, having been burnt by PPC before I was hesitant but respected his advice and explored it as an avenue.After setting up Facebook Pixel, Optimising for Conversions and hoping that Facebook's powerful algorithms were going to make me rich, I sat back and waited for the customers to come flooding in. They didn’t, I was picking up signups who claimed the free trial, but about 70% canceled straight after, and my CAC was around $70. I didn’t have enough data on my customer LTV, but a customer would have to renew their subscription for at least four months for me to turn a profit, and that’s before we even include taxes, expenses, support costs, etc. I soon after turned off Facebook ads (at this point I didn’t quite understand, you need to feed the algorithm data in order for it to understand the type of people that purchase on your site, then it will, and your CAC should decrease.)Anyway, my main acquisition channels remained as Reddit, LinkedIn, Instagram and Email Marketing.By this time I had made about $600 and decided to reinvent this in some tools to grow the business. I bought an Instagram Email Scraper, that would scrape a list of profiles based on a keyword and search for emails in Bio. It would also log the number of followers and account username so you could send an email to them saying “I saw you have 2,468 followers. Our average user gains 1200 real followers per month” and I received reasonable results, but as the scraper doesn’t pull the first name it is spammy, and I didn’t scale this any further.For anyone who’s interested I used Amazon SES to send emails, it’s free to send 60,000 emails per month, so it’s a tool worth using and helps keep my expenses down as a bootstrapped founder.I also explored Referral Marketing, I took a 30-day free trial of referral candy and installed their widget on my site. I didn’t see any improvements whatsoever; I don’t think I had a large enough user base for referral marketing to be an effective marketing strategy.Given the success I had seen from updating my landing page, I turned my focus to improving our conversion rates and purchased a new theme for the landing page (which was miles better than either of the previous 2). I spent a day or two updating this and writing what I thought was fantastic copy, but really I was just sticking in the word “Supercharged” wherever it made sense!I changed CTA buttons to all say “Claim Free Trial,” and overall the website looked FAR, FAR more professional. This pushed my conversion rate up to around 11%.Now that I had a website that looked half decent, and I could say I was proud of owning I took another shot at Google Adwords. Many of my competitors were running huge campaigns, and of course, they wouldn’t be pouring money into Adwords unless they were turning a profit.So this is where the real Growth began…I set up about five different Ad types with some ad text like the #1 Instagram Growth Service. My first keywords were targeting when my competitor's customers were looking for alternatives for example “Alternatives to XYZ.” I simply said my target CAC is $20, this is the 1st month's subscription, and anything after that is profit for the business.I kept a very close eye on the keywords, and the second they went over $20 Cost Per Conversion I would pause the keyword, so I was no longer bidding on it.I started making a profit, but the conversions didn’t come in the masses. People searching for “alternatives to my competitors” weren’t exactly high-traffic keywords. However, I had now managed to make my first profitable Adwords campaign, which reassured me that it was possible to make a profit using Adwords.I was acquiring these customers for about $10-14 which was below my target CAC, I researched even more competitors and added these as target keywords.I created a free trial for Alexa.com and entered some of my main competitors, Alexa will then pull together a list of the keywords your competitors are bidding on. I simply assumed that if my competitors are bidding on them, and have been for a while, they must be making a profit.I fired up another campaign on Adwords and added in all of these keywords. Was I right? Yes, and no. Many of the keywords I copied did make a profit; however, my main competitors were charging $50-79 per month, meaning they could afford to spend far higher amounts to acquire customers. Plus they already had substantial user bases in the region of 10k+ customers, so they could afford to lose a bit of money on ads.I monitored Adwords closely, being sure to turn off any keywords that went over $20/conversion. You also analyzed countries we were bidding on, and with higher than $20/conversion cost were removed, and also monitored, age, gender, device and applied the same principle.At this point I was bidding on around 30 keywords, I had previously limited my Adwords campaign to $50/day, but now I was making a profit, and my confidence had grown this went up to $100 per day for several days, I kept analysing the data, and then put up to $250/day making sure I was still making a profit on all my keywords.First 1,000 CustomersNow that I had a successful Adwords campaign running, my problem wasn’t acquiring the users; it was affording to keep my campaign financed. My business had made about $1000 by this point, but with a $250/day Adwords campaign running, I would be out of cash in 4 days.The users received a 3-day trial, and then once charged the money would stay in Stripe and would take another five working days to process and hit my business bank account, after that, it would be another 30-days until I saw a profit.To solve this issue, I wanted to increase prices for the app. I had a steady user base, and even changing by a few dollars would have a significant impact on my annual recurring revenue.I initially decided to change from charging $20/month to €20/month. This is quite strange as I’m based in the UK, and we use GBP, but I felt the Euro was more widely recognized, and also more stable after Brexit and the uncertainty around the pound.20 USD to GBP is around £15.1620 EUR to GBP is around £17.53Also, when we look on a larger scale, even a £2 increase in pricing is an extra £2000 in revenue per month per 1000 customers. Making this change didn’t decrease conversions whatsoever which again I was surprised by, that’s twice I had put up the prices, and conversion rates hadn’t decreased at all.I continued with this pricing model for a week, and after talking about this to my girlfriend, she raised the interesting point of “If something’s cheap, often people think it’s not good, or too good to be true.” This was understandable, If most of my competitors were charging double or even quadruple my rates, was I being viewed as a lower quality cheap option? With this in mind, I thought I’d raise the prices again to see if my conversions drop at all.I doubled my prices, from €20/month to €39/month (psychologically ended your pricing with a nine is the most appealing to the mind). I was shocked by the results, my conversion rate didn’t drop at all, It went up. It seemed people had more trust in a more expensive app, even though no changes to the software had been made whatsoever. The only difference had been pricing; people trusted a more expensive product over a cheaper version which is exactly the same! (Funny how the mind works!).Now with increased pricing, this opened the doors for me to bid on keywords that had previously been over my desired CAC. So I dived into my Adwords history and anything keywords that were under $40 CAC I reactivated in the campaign.Now I was bidding on more keywords, and for all my existing keywords I would be doubling my money assuming they didn’t cancel their account.One thing to note, whilst my conversion rate improved, my churn rate also increased. Unfortunately, I don’t have any specific metrics as I wasn’t tracking this from the start, but I can tell you a more expensive app significantly pushed up cancellations.My Adwords campaigns were bringing in a steady profit, I scaled up my ad budget to $500/day, and as soon as money entered my bank account from Stripe, I was pushing this straight back into ads.With a $500/day campaign, I was bringing in around 50-60 new signups every day.Now that I was bringing in more than a steady stream of customers I was focusing on maximizing revenue.I installed a few apps to help boost conversions and retain customers.Intercom - $500Intercom to provide Live Support to users, I also setup Intercom Engage to send in-app messages to users.This was a very effective way to automate use onboarding at scale; I could deliver targeted messages and send embedded YouTube videos explaining each feature.I also set up welcome messages on the landing page asking users if they had any questions and asking if they wanted to join our mailing list/OptKit - $39I also installed OptKit; I used exit-intent popups on the landing page to offer an extended trial of 30-days in exchange for an email, I also offered this on each stage of the sign-up funnel before users entered their card details.This actually saved around 15% of all exit attempts, which isn’t bad at all.UseProof.com - $139One of my competitors were using UseProof, I installed it on my site, and it worked. Notifications of my most recent sign-ups were displayed on my landing page, sign up page and upon entering card details.I felt this really pushed users to complete the sign-up process if they can see many other many doing this.Reviews.co.uk - $50This is a cool app; they allow you to embed a widget on your site displaying reviews you receive from customers. This also helped with Social Proof and boosting conversions.I did a test and played around with many other tools, but these were the ones that actually worked and had the most significant impact on my conversions. They were also the motivation behind my most recent startup Notifia hybrid of the 4-tools listed above available at a fraction of the cost.AutopilotHQ - $200This is a visual email marketing application where you can create complex user journeys based on behavior and interaction. Using Zapier, I created an Automation Workflow, so whenever a user created an account but didn’t enter their card details, I would send a drip sequence containing 11 emails over the next three months. This would offer a 30-day free trial, and I was receiving around 10% conversion rate on these emails.Churnbuster - $99As the business continued to scale, I was receiving more and more failed payments I added churn buster which sends automated emails on failed payment asking users to update their card. I did profit from the service but later canceled the subscription as Stripe recover was even more effective and is free.At this point, all of my Growth Channels have been set up. As a had a large customer base and decent traffic to the site most of my time was forced towards customer support (this is probably my biggest regret, and If I were to do this again I would hire external help. I was a terrible support agent, and I found the job very repetitive and unenjoyable.If I were to do this again, I would hire a Customer Support Agent and Customer Success Manager, one to handle basic queries and the Customer Success Manager to optimize users experience and also look for opportunities to upsell.Seeing as I was gaining 50-60 new customers per day on average, it didn’t take long to reach 1000 customers.2,500 customersFrom a customer acquisition perspective, I didn’t change much, aside from putting ad budget up to $1000 per day, setting up retargeting ads, optimizing ad relevancy scores to try to achieve 10/10I did add a second campaign which was a mirror of the first campaign only with campaign objective changed to target Cost per Conversion, rather than maximize conversions.Aside from that, I didn’t feel the need to change anything. I had an Engine of Growth that was making me money automatically if anything now I look back I was scaling too fast.No matter how much automation you introduce to your business when one person and a heck of a lot of automation try to manage 3000+ active users, things get messy.At this point, I turned my focus from acquiring new customers as this was all automated to trying to boost revenue through existing users.As I mentioned earlier, I was also seeing a rise in failed payments, when I last tallied up the total number of failed invoices it was in the region of $600,000+ worth of failed payments. I’ve since done my best to try and recover some of this revenue, using automation scripts to Auto Retry, although Strip’s recover is pretty damn good.My days were pretty much spent on Intercom responding to customer queries.Aside from that, I didn’t really make any further changes to the engine of Growth; I continued to spend $1.5k on ads per day. Now, a total of 3 months (90 days) since I first set up on my $30 shared VPS I had achieved $79,000 in monthly recurring revenue. I had a total of 13,000 users in the MySQL Database, 3000+ of those had entered credit card details and over 2000 active, paying customers.Then What?Following a legal dispute with Facebook, I really can’t and don’t want to go into detail I was forced to shut down and no longer offer services to my users.What did I learn from this experience?With PPC Advertising, you must be prepared to lose money to collect Data on what works and what doesn’t. Be prepared to lose money first; profits come later.Don’t underestimate the power of a good landing page ;)Don’t price your product too cheap; people are wary when something seems too cheap compared to the competition.If you are using PPC ads and spending large amounts, invest in tools for CRO. Hotjar, Notifia.io (shameless plug), Intercom would be excellent starting pointsWhat would I do differently?Focus on my strengths - My core skill set lies with Growth Marketing. I’m a jack of all trades and can do pretty much any task within my business; I tend to set up all the servers myself, usually build sites from scratch and then market and grow the business.However, when a company gets to a certain point, you need to hire external help who are experts rather than just having an understanding of the field. If I was in the same scenario, I would have hired full-time customer support, customer success manager, and at least a part-time full-stack dev.I should have also brought on a CRO specialist and UX designer to give recommendations.—Optimise cancellation pagesThis is so important, especially with SaaS. It's pretty much your last chance to save your customer from leaving. I developed the Churn Saver kit which delivers targeted offers to your users based on their motivation to quit.—Talk to users about what they would like to see improved.Other PointsI believe it’s better to focus on 1-2 channels of Growth and do them well, very well. Unless you have an entire team to cover each channel of Growth, it’s virtually impossible to cover them all effectively.With over 19 Growth Channels you want to find the ones most effective for your business and then optimize, and scale.What am I working on now?Given the success in my previous Startup, I decided to jump straight back into SaaS. I was working on building many in-house tools for internal use to optimize our AARRR metrics (Acquisition, Activation, Revenue, Retention, and Referrals).However, I’ve since launched them as a platform, and they are available for everyone to use @ Notifia.io - We are still in Beta stages, but when completed it will be an AIO platform for growth with the following features...Acquisition: Social Proof Widgets, Live Visitors on-site, # of rent purchases, others viewing this product, Checkout Abandonment Kits, Triggered CTA cards, Exit Intent triggers offering discount coupons, Automated Demo BookingsActivation: Onboarding Cards, Automated Messages, Onboarding checklistsRevenue: Upsell customers, Failed payment notifications, Hosted Payment FormsRetention: Churn Reduction via User Off-boarding Surveys with triggered offersReferrals: Refer a Friend Widgets, Social Media Share, Giveaway kitsFeedback: Exit Intent survey, Feedback popup, cancellation survey, NPS surveysCurrently, the average marketer has eight products installed on their site. Usually meaning eight paid subscriptions, and with Notifia.io I’d like to offer end to end tools for Entrepreneurs to Grow Online Businesses.I’m going to be writing about the entire journey from $0-$10m ARR as well as building a YouTube series documenting the entire process of growing a company.I’ve struggled to find a good eCommerce channel that isn’t just trying to sell you on some $999 course, and I’d like to change that and deliver some value back to the community. I’ll be publishing videos on Youtube.com/nathastonIf you have made it this far, thanks for reading and I hope you enjoyed it.All the best,Nathan. via /r/business https://ift.tt/2N1y2EA
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