Talking About Metrics in the Age of Unicorns

As of the time of writing this post Failed Normal is up to 162 paying members with 34 of them having selected to pay a full year in advance. This means that from the full year signups alone I have already collected $2040, and on a monthly basis the site is earning $810.  I have to say I think that’s just flipping peachy, and couldn’t be much happier.

Let’s be honest. I’m proud of Failed Normal, but I’m not an idiot.  Currently the most recent 20 posts are free with the remainder being behind the paywall.  In the future I look forward to having a vast and interesting library behind the paywall, but for now this post will leave the site with an even 30 published pieces that only put 10 behind the paywall. This is a beautiful sapling that I’m excited to watch grow, but it’s not a 100 year old oak.

With that in mind I’m happy to talk about my statistics.  Things are going well, and for what I need the growth path looks sound.  I easily have a 2 year runway for this project, and only need to get to 2000-3000 members for this to be an ongoing success.  If I’m able to bring in an average of 2 signups per day that will end up being 730 members per year, and so 1460 within 2 years.  Add in the 162 we already have and that means at the two year mark Failed Normal would have 1662 paying members. Although this is below the number I’d like as a goal it still gets me to $8310 per month in revenue with an astronomical profit margin. Doing some basic math this then means that somewhere near the 2.5 year mark I would be earning enough excess to reliably look at hiring and expansion in a stable, non chaotic manner. (At 3 signups per day it comes to 1095 signups per year and a total of 2352 at the 2 year mark.)

This is the part of the story where I end up being a very sad Chihuahua.  I’m excited.  The product makes sense.  A large enough sample size has signed up that it seems reasonable to not think people are not signing up out of pity.  The signups have stayed regular past the first few days so it seems that the site can continue to gain traction. The amount of money that can be reasonably forecast at the low end will satisfy my needs as a slightly brain addled geek who likes to poke things they shouldn’t poke and then write what happens, but also being that each 1000 members equals $5000 per month revenue means that there is a very real possibility the site could be stupidly profitable. At any other point in history this endeavor would be mildly impressive. BUT… we’re in the age of Unicorns… and anything less than a billion is paltry…

Recently a n00b YouTuber decided to call me out in one of is videos about the fact that my paid membership is so “small”.  Apparently 150 paying members at the time was laughable. At first blush it’s an easy insult to ignore, but in the modern tech industry sadly this mentality has taken over.  I have literally seen startup founders that are not even yet shipping product laugh at the business owners who are taking home hundreds of thousands of dollars a year because they have “lifestyle” businesses. The idea being that if you’re not trying to be a billion dollar startup then you’re not really doing much of interest.

I find this a hard world to be able to have honest discussions in. I’m proud of my 162 members based on the sheer fact that it’s pretty cool 162 members are willing to hand over their credit card information. Also because I remember standing in front of the folks at Tech Breakfast so many years ago showing off how I had made $330 in a month on YouTube and musing to the audience, “I wonder how far this can go..?” Sadly though in this time of pomp, circumstances, and traction a number as lowly as 162 is barely above contempt. Better to have 1,000,000 members who handed over their email addresses vs. $810 recurring revenue being deposited in your account every month. (When I asked my bank how many email addresses I could use to pay for this months mortgage bill they hung up.)

This is the big reason why I focus on talking about dollars earned, and what your goals are. It’s all fine and dandy to be stock piling email addresses, likes, subscribers and what not bit at the end of the day those things generally are not that valuable.  What’s valuable is when someone is willing to pull out their checkbook and actually pay you.  If you get enough people to write enough checks then you can have a good life, if not you need to find something else to do.

I fear this mindset has been lost on a generation of tech entrepreneurs.  When startups couldn’t show impressive profit they started talking about revenue.  When the revenue wasn’t anything to care about they started talking about traction.  When even the traction started to seem questionable they started finding more and more metrics that were further and further away from anything that actually looked like money.  We now have so many of these people banging their chests about made up numbers that when more reasonable people talk about things like paying their mortgage they are spoken over.

This is just something to keep in mind for new tech entrepreneurs.  One of the reasons this life can be lonely is because so many people in the industry have completely lost the plot. Make sure you know your own goals and requirements, and don’t expect to get a pat on the back from folks that are only tangentially your “peers”. The sad fact is that Im excited as hell about Failed Normals current growth, but there’s almost no one I know where I can have a reasonable discussion about it. So I’ll just plod along, rack up some money, and then console myself in a few months renting a nice condo on South Beach….

Update: While writing this we picked up another monthly member! I think I’ll treat myself with the new Mario + Rabbids Switch game…