Hey team,
Hope everyone had a wonderful weekend. 🌞 🍉
As some of our long-time readers know, our team spends quite a bit of time doing the following each week:
downloading data from a few different sources
cleaning and molding the data to make it useful
preparing weekly performance notes
creating and executing growth tests
We're making progress on automating the work above, especially the first two bullets. To an increasing degree, data is flowing into a structured database without much human effort.
This is a big step forward. As a data-driven growth engine, a functioning database is foundational to all we want to do.
The database will allow us to turn the services we currently provide into a more scalable product. This will allow us to better serve our 9 current customers, and to bring on more customers.
In this week’s Yem Jam, let's explore our near-term goals and how they are guiding our product development.
Goals
Within the next 6 months, we’re aiming to reach $100,000 in annual recurring revenue (ARR). A bit intimidating? Of course, but we’re excited by the opportunity and, if we execute well, confident we'll meet the challenge.
With that goal in mind, we can fill in the other puzzle pieces — how many customers do we need, and how much do we need to charge? The table below shows various routes to a run rate of $100k ARR.
On one end, we could solve specific problems for a smaller group and charge a higher price. On the other end, we could solve general problems for a larger group and charge a lower price.
We prefer to lean towards the latter. We believe there's a large & growing group of creators who want the services we provide. We want to help as many creators as possible build a livelihood online. We also believe more customers will push us to solve more problems and to build more compelling products.
As we develop and launch products, we'll need to be nimble and see how the market reacts. As a starting point, we think a good flag in the sand is to aim for a per-customer average of $200 in revenue per month. Assuming we can convert most of our current customers, we would need to grow by at least 5x to reach 50 customers and hit the $100k ARR goal.
Yem’s Product Offering
Ok, nice idea, Reid — good to see you can do some math. How do we actually develop a viable $200/month product that can support 50 customers at the same time?
Below is a first draft of how we may structure and price Yem's product:
Most of what’s listed above are services we provide for our customers today. With our current growth efforts, we've lifted our customer’s monthly earnings by at least 5%. To justify a $200/month payment for a 5% lift in earnings, a creator would need to be making at least $4,000 per month (~$50k ARR). This feels like a reasonable threshold, even next to the target of reaching 50 customers. We’re also confident that, over time, we’ll be able to have a much larger impact than a 5% lift in earnings.
Early on, the core product will likely be the "Growth Starter Pack" (trademark pending). Until we prove creators will pay for an analytics-only product, the “Insights” tier is mostly a customer acquisition tool. On the other hand, the “Growth Team in Your Pocket” tier is mostly products our customers have asked for, but may take some time to work towards.
That’s it for this week — eager to hear what you think! As always, thank you for the support and for following along.
PS - A special thank you to John Aylor for editing.