My favorite metric as a small tech business owner
I don’t write about my company very often. I work only about 4 hours a week on it, so I don’t have much to share. This Sunday, as I was reviewing the annual metrics for my SaaS, I felt like sharing the one metric I like the most.
Monthly active users (MAE)
There are many ways to calculate the MAE; I like to use Google Analytics one. This year I am analyzing from 2017 to 2022 (The last five years). I like to use the five years because it gives me a long time view. It is easy to get scared or excited by minor hiccups in the short term. However, when you look at a view in 5 years, we can clearly see progress or not. I like this metric because it is the analytics of the admin portal of my solution. It shows pretty well the number of users who use our application daily. And that is also to credit our super low “bounce rate” of only
I am showing some of the data to use as a reference in the next chart. During the pandemic, I got a terrible surprise, with usage dropping
40% in a single month (red arrow in the chart). The fear of losing my job at that event was also real for the first time in the last ten years. I use that unsafety feeling as fuel to invest back in my own company. In the last two years we:
- Released a new app to users that only want to use it via iPhone or Android. Most of my advanced features are still only on the web with a computer, but today I have some customers that run 99% from mobile phones only already.
- Exposed as APIs, 90% of our features. We had nearly 0 APIs to be used externally, and I used the APP I was building to build APIs that other integrators could use. Today we already have at least three other external integrators that use these APIs, and the cost to onboard them was nearly 0.
- Created a service to auto-export sales to the Brazilian taxes system for my customers. We decided to do this as an external service because there are good libs on PHP to do this, and none are good in Scala or Java.
- Created what is still experimental integration with Whatsapp (largely used in Brazil) to send a notification to the customers remembering appointments.
- Improved scaling and infra and monitoring quite a bit to meet +99.9% of availability, boosting trust from the users.
It is not a big list if you think this is more or less the last two years. But remember, I run this as a side project while working full time on my job and building Nun-db as another side project. Moreover, I only work at max 4 hours a week on it. The latest investments have paid off; we grew
75% in the pandemic year and
69% in recurrent users since last year.
Our revenue grew “only” 333% since 2017, while the monthly users increased 968%, so we are not capturing all this growth in money. However, I am still happy. Having more users using the platform every day makes me feel safe. I can rely on the money this product brings to the table as far as I can keep delivering value to those users.
Why I don’t work full time on my business?
Salaries in tech are outstanding at the moment. And for those like me that can live in Brazil and make a living in USD, it is tough to build a product that can be that profitable.
I can still make more money as a Software Engineer than in this business. With my current number of users, I would have to bill about 10 reais (~2 USD) per user to match the average (not impressive at all) salary of a meed-level engineer in the USA. So I can still do much more work as an individual contributor than this business can produce value at the moment.
More time, not necessarily = more results. Today I have little time to work on this business. So I have to choose very carefully where I spend my time. This leads to better prioritization and stability in the platform, leading to more trust from the users.
If I can manage it to keep growing, dedicating only 4 hours a week. This can be my future dedication to it once I decide it is time to run this business only.
Why not search for external investments?
I am against getting external investment in this business.
I started this business 12 years ago, so I can take control of my schedule one day, and I don’t want investors questioning my decisions. I often decide not to do something and lose customers to keep the platform healthy and stable. I am not sure if I would be able to do that with other people owning parts of the business. I already have a
50%partner; He runs support and sales, and I run operations and tech. I don’t need more conflicts.
I like to grow slow and operate calmly. I don’t need this business to scale 10x next year. If it grows
10%a year for the next ten years, it would be all I need to have a comfortable income if I decide to stop working.
More investments not necessarily = more customers. And more customers nor necessarily = more profit.
We run this business with less than 100 USD a month of infrastructure. It helps people to operate their business more manageable and from anywhere. It benefits
+5k users on a monthly bases. It is profitable. I will run this service as a side project for as long as possible. It has been growing sustainably in the last five years; let’s see how it will go in the next 5 :). See you in the next post.