It's been an eventful few months for Marvel and as we get closer to coming out of beta it feels like a good time to write about our stats and progress.
We've been massively inspired by the transparent posts from Buffer and Groove about traction and financials. It's helped us in many ways so if we can return the favour to the community, it can only be a good thing.
One thing I had struggled to find when we were starting out was what kind of costs would be involved during this initial 'building' phase. How much do we pay ourselves? What is the typical burn rate each month? How much do you really need to get going? Hopefully this will give you bit of insight into spending and also our progress.
The funding enabled us make the leap and work on Marvel full-time, get office space and hire freelancers to help us take our product from a rickety side-project, into a scalable revenue-generating service that people love.
So who's building Marvel and where are we at after 4 months?
- Brendan (backend, security, sysadmin stuff), co-founder
- Jonathan (iOS development), co-founder
- Murat (design, support, marketing, finances, fundraising), co-founder
- Oleg (front-end, feature development, interactions), freelance
We're pretty lean in our set-up, both Jon and Brendan are developers and I handle the design, which means we manage to save quite a bit on hires.
We have used much of funding to bring in several freelancers at various points of the process, a day or two here, a week there. Our only regular freelance hire at this later stage is Oleg, who's been instrumental in putting together the front-end for Marvel.
The story so far:
November 2013 to present:
Built: Web and iPhone app, private API
Funding and spending
Angel funding from Haatch in November: £60,000
- Monthly founder salary £2250 (before tax) x 3 = £6750
- Monthly desk space: £230 x 3 = £690
- Monthly business insurance: £30
- Average per month spent on various freelancers £3500
- Legal fees: £0 - Haatch gave us a 'Founder Friendly' term sheet in plain English which meant that the process was very straightforward
- Hosting: £0 (for now, see below)
Approx monthly burn rate: £11,000, with just under 2 months runway left.
It's no surprise that at this stage pretty much all our money is going on salaries and freelancers. We keep things pretty tight and try to haggle deals and grab a bargain for other stuff everywhere we can.
One tip here is: If you don't ask, you don't get. Cheap office space, free hosting, free plans on software, you name it, everything can be bartered! So many companies want to help little startups like us because obviously if we flower into something bigger, we'll send them more business. Plus loads of people are just really nice in this industry.
Resource is one of our biggest challenges at the moment, as we grow it's clear that we need help and that's something we'll be able to address with further funding, as it stands we just don't have the cash to hire another freelance backend dev for long periods of time.
Traction and usage
So here's the meat, as you can see from the graph, our user base is growing steadily. While there's no 'hocky stick' we've ready seen a massive increase in engagement and activity since we switched to Django and the new front-end design. Users are spending much longer on the site and we're hitting 2000 design files added each day.
Because Marvel is synced with Dropbox, we re-process PSDs whenever they are updated so in a sense, it's like another upload. We're close to nearly 1 million updated files which is insane.
- 16,400 users to date (last month we added nearly 3500 new users)
- 17,500 prototypes created (i.e projects)
- 100,000 design files uploaded
- 4000 active each month (we class active as users who are creating projects/uploading files/previewing)
- We've process nearly 1 million updates to design files uploaded via Dropbox
- 3-4% monthly churn (quite high and something we need to address)
We still have much work to do on bug fixes and stability. Again this comes down to the tricky issue of resource and where to put our time, at the moment it's just Brendan doing all the backend powered by coffee.
There are also a lot of users who joined in November and December and just never came back. The old version of Marvel was very basic and often broke so I'm in the process of reengaging those users and letting them know things have changed.
It's safe to say that things haven't quite gone according to plan, we had aimed to be a lot further along in development and revenue. However shortly after receiving funding, the cracks in our MVP began to show and it became clear that it was never going to scale.
We had the choice - keep patching it up until we raised another round of funding at which point we could hire some devs, or stop everything we were doing (including new features and major bug fixes) and spend 8 weeks completely rewriting Marvel. We chose the rewrite.
That put us back months and caused us to miss several milestones. The funding was supposed to give us a 6-month runway and allow us to finish our roadmap, resulting in revenue-generating features on Marvel.
This put us in a bit of a dilemma, we needed to validate our business model and prove people would pay for Marvel, but the delay meant that by the time we'd launch, it's likely our funding would run dry.
So we decided to launch some Pro features we had already built as an 'early adopter' plan along with a discount.
There was the risk that users just wouldn't see the value in a small portion of the overall Pro package, but there was only one way to find out..
On the 1st March we launched a stripped down version of Pro, here are the numbers:
3 weeks since Pro launch at "Early adopter price of $5pm"
- 100 upgraded to date, 20 paid yearly = $1300 revenue.
Amazing! There was a collective sigh of relief when we got our first few paying customers. I can honestly say that for me, it was the most nerve racking part of our journey so far. It's an emotional rollercoaster I tell you :)
But now we're buzzing, Pro is growing and we've moved onto the next set of features to make it even better. Thanks to everyone who's upgraded, we love you!
I'm incredibly proud of what we've managed to do in 4 months, everyone is working their socks off trying to make this all come together.
The next couple of months will see several projects integrate into the platform and reach the holy grail - version 1 of Marvel, when we can get out of beta and officially launch!
This is the first time I've ever blogged about numbers/finances so apologies if it's not concise or if I've missed anything. Happy to answer any of your questions either here or on Twitter.