We introduce our second employee, we publish her employment contract, and our revenue declined for the first time: welcome to our Open Startup report for August 2021.
Contents
August at Friendly in the Numbers
- 💵 MRR: CHF 9,817 | ~$10,643 * (-5%)
- 👩 Active customers: 72 * (-1%)
- 💔 Monthly customer churn: 8% * (-16%)
- 👋 New Trials: 7 * (-22%)
- 🔎 Website Visits: 2,565** (-28%)
- 📮 Emails sent (Automate): 755,460 (-7%)
- 📈 Pageviews tracked (Analytics): 508,675 (+38%)
- 💸 Costs: CHF 12,286 | ~$13,316 (+14%)
- 🧾 Profit and Loss: CHF -2,469 | ~ -$2,690 (+676%)
* Slight deviation from previous figures due to changes in the algorithm of our revenue analytics tool Baremetrics
** Sampled due to a temporary tracking problem on our website
This is what moved us in August:
Employee No. 2: Welcome Kathrin Schmid!
In June 2020, I had hired our first employee, Joey Keller. He has been working full time as CTO for Friendly ever since.
In August, Kathrin Schmid joined us as our second employee! Our team thus grows to three people.
Kathrin is responsible for the satisfaction of our customers as Customer Happiness Manager. She supports them with trainings, instructions and videos.
She starts her work with a workload of 20%. We plan to expand this in the future.
We publish the first employment contract
As an Open Startup, we share everything unless there is a reason not to share it.
So our revenue, costs, salaries and the source code of our software are already public.
Today, we’re taking it a step further and sharing an employment contract for the first time.
Because our first employee Joey lives in Hungary and was already employed by his own company there, we did without a conventional employment contract here. Instead, Friendly transfers his salary to his company, which in turn pays him his salary.
This is different for our new employee Kathrin – she lives in Switzerland and has consequently received a normal employment contract.
We have tried to make it as “friendly” as possible – that is, simple, understandable and fair.
The result is an employment contract that fits on one page. Here it is:
Our revenue declined by -5%: an analysis
Ever since Friendy was founded in February 2020, our revenue has grown steadily. In the first 12 months we grew about +25% every month, the following four months the growth continued, but at a lower level.
In August, we had a -5% drop in revenue for the first time. What happened?
To find out, let’s take a look at the development of new customers and cancellations.
The number of new customers was highest in May 2020 and has remained stable since then. That can’t be the reason:
Churns are also quite stable after an initial high. The high at the beginning is normal because many things are not yet running smoothly. In August, the churn rate was 8.2%:
This figure is normal in comparison with other SaaS providers. According to studies, the average churn rate is 5 – 10%, for early stage startups even 10 – 15%.
So far, so normal. However, the “churn time” is interesting. This means that, given our apparently normal churn rate, a customer stays with us for just under a year on average. Many, of course, stay much longer, but some stay much shorter.
At the beginning, we had correspondingly fewer cancellations because all the customers were “new. Over time, the number of cancellations naturally increases because some of the “older” customers keep dropping out. And we have been feeling this effect since April 2021 – exactly one year after the launch of Friendly.
The good news is that once the full impact of churn has been felt after the average churn time has passed, it should no longer have any particular impact on growth. In September, we are already back on track for growth.
And of course we are not yet satisfied with the current churn rate, even though it seems to be within the usual range. We will continue to work hard to improve our products and service.
Costs increased by +14
Our costs increased significantly in August, mainly due to the hiring of an additional employee mentioned earlier.
Here are all our costs in August in detail:
One of my biggest mistakes – and a look back at our first company retreat in Budapest
In one of my most personal blogposts, I share one of my biggest fuckups – and explain why our first retreat in Budapest was so special to me:
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