Yes – it’s time to admit it, my new churn reduction SaaS, LessChurn, which I bought last year, has been a complete failure.
And an expensive one at that.
Not only was the software purchased for $9k, but I’ve also invested an additional $40k in developing the product, bringing the total invested to almost $50k.
On the flip side, the app has only brought in a mere $6139 and has just two paying customers for a total of $78 / month.
Wow – how did this happen?
I’m shocked to even acknowledge the fact that I’ve committed the cardinal sin in building a SaaS, which is to not over invest in your product until you have the sales to justify it.
And as a non first time founder, this is more than embarrassing, albeit not uncommon.
So, what now?
For a long time I simply focused on other projects that were more positive and revenue generating.
“I’ll get around to LessChurn later. It will always be there”, I said.
And then, month after month, LessChurn simply collected dust. Now, new players are entering the market, and monthly costs are piling up (servers to support the application are over $200 / month).
I’ve reached a crossroads.
It’s time to set an ultimatum for this business once and for all.
Launching A New Case Study
A lot has happened in the last few months
- I sold my previous software business, NinjaOutreach, which has afforded me more time and capital than I’ve had ever in my life.
- I married my high school sweetheart.
- I started working at Albacross, a Swedish based B2B lead generation platform, where I spend my mornings as a part-time marketing manager.
And I’ve come to terms with LessChurn.
I’ve acknowledged that it’s been a complete failure up until now, potentially even a mistake, and decided that I’m going to take bold actions with it or cut it out entirely.
I’ve given away 50% of my equity to my lead developer and made him the CTO, and in exchange he’s agreed to work on developing the product free of charge. Together, we’ve set a goal to take LessChurn from 2 paying customers to 25 ($1k MRR) by the end of the year, or we’re going to sell the business and split the proceeds.
And as a commitment to myself, and everyone else, I’m going to provide weekly updates on this blog so you can see how we’re doing.
Here’s What We Know
Before I tell you what we’re going to do, let me start by telling you what we know.
We know that…
- LessChurn is a basic tool, lacking powerful features to really wow signups.
- LessChurn is a niche tool, primarily geared towards other SaaS businesses looking to reduce churn and increase trial to paid conversions.
- LessChurn is a valuable tool in the right hands. In fact, the reason I was so drawn to it originally is that we used it to save ourselves tens of thousands of dollars in reduced churn at NinjaOutreach. However, it requires some effort to set it up and also some knowledge on how to properly utilize it.
So, there is hope, but there are also a lot of obstacles to overcome, and like most startups, we are short on time (both Luis and I have other responsibilities / jobs), and money (I’ve refused to invest any more money into LessChurn outside of paying it’s monthly bills).
Here’s What We’ll Do
Here’s the game plan at a high level.
- We’ll start by understanding the use case better. We know that people sign up to reduce churn, but we don’t know why people don’t convert to paying customers and where they get stuck and why. Our plan is to analyze existing users (LessChurn gets around 13 free signups a month).
- We’ll leverage our existing contacts to create conversations and get referrals. I’m not a super well-connected person, but I know a few people to get started, and I will be offering free consulting to anyone looking to take a chance on LessChurn. That’s right – if you’re reading this and interested, contact me below!
- We’ll develop the product to create a more widely applicable and powerful churn reduction & free trial conversion tool. Luis has a product roadmap to last him a few weeks that includes new integrations and features so we can address the various SaaS models (fremium, free trial no credit card, free trial w/ credit card), and I’m sure more conversations will give us more direction on what’s needed.
And as I said before, we’ll report everything we learn right here, so you can follow along with us.
So, what do you think? Crazy, stupid, both? I want to hear your thoughts and criticisms.