How we grew RecordJoy to $1000 in gross annual revenue
In this article, I am going to explain how we managed to grow RecordJoy (www.recordjoy.com) to $1000 in gross annual revenue.
Here is a quick breakdown of where the money came from:
- $735 from 15 $49 lifetime subscriptions sold via Appsumo
- $78 from 2 $39 lifetime subscription sold = $78
- $29 from 1 $29 lifetime subscription sold = $29
- $180 from 3 $5 monthly subscriptions (annualized at 60$)
These amounts add up to a projected grand total of $1022 for the year.
Early Sales
Originally, I didn’t have a strong idea of what to price RecordJoy at. We first experimented with a $29 lifetime plan and decided to lower it if no one bought it at that price point. One person bought at $29 plan so we then experimented again to see if someone would buy at the $39 price point. A few more people bought at $39 so when we launched at AppSumo we tested out $49.
In the first week at AppSumo, we got around 7 sales at the $49 price point. However, after the first week, RecordJoy did not get promoted as heavily on AppSumo and the number of sales dropped considerably.
Building Features to Earn Sales
We realized that we could not passively sit and wait for sales to come with our current product. We noticed a lot of comments on our AppSumo product page were requesting features relating to custom subdomains and white labeling our product with their logo. The users who commented said that they liked our product, but would only pay if we added these features. We decided to quickly hack together an enterprise solution for their use cases. Our hacky solution required a lot of manual effort to onboard an enterprise customer, but we did not want to spend too much time automating everything until it was absolutely necessary.
Pivoting to Enterprise
We realized that building enterprise features such as white labeling and adding custom domains were a main differentiator between RecordJoy and other online recording tools.
Example of our white labeled product:
Furthermore, enterprise customers were willing to pay a lot more than our consumer customers. Therefore, we decided to shift our long term strategy more towards building out our enterprise offerings.
Next Goals
Our goals have been to double revenue every month and we are on track to do that for September. For September, we needed to hit $500 in revenue. We break down this goal by figuring out how many customers we need to acquire per week. For example, to hit $500 in September, we need about $125 every week, which is about 2.5 customers at $49 lifetime plans per week.
In October, we will try to reach $1000 for the month, which is about the same amount that we have earned since starting in May. We will likely raise our price to around $129 so that we will have to acquire less customers to reach our goal and hopefully the new features we added will justify the price increase.
Long term however, we will need to figure out a way to stop charging lifetime subscriptions and start charging higher subscriptions than $5 monthly plans.
Lessons Learned
- Before building new features, try to see if you can first get customers to promise to pay you for building the new features. Then build out those features as fast and hacky as possible in order to validate they stay true to their word and pay. It is fine to keep part of the process manual or suboptimal and improve the system later.
- When you are first starting off and don’t have many differentiating factors in your product, it is better to directly go after a few high paying customers and build things that they want instead of trying to scale selling $5 monthly subscription plans through ads. The features your high paying customers suggest will help shape your product towards product market fit.