A few months ago I wrote about the difficulty of self-funding a rapidly growing startup. If you haven’t read that yet, go and do that now. I’ll wait. Here’s the quick timeline: JUN 2013 — Reached $2,000 a month in recurring revenue (MRR). SEP 2014 — Revenue declines to $1,330 per month. OCT 2014 — Make the decision to double down on ConvertKit. Focus full-time, hire a team, and invest $50,000. JAN 2015 — $3,000 MRR JUN 2015 — $10,000 MRR OCT 2015 — $25,000 MRR DEC 2015 — $97,000 MRR FEB 2016 — Growing quickly, but just barely profitable with only $30,000 in the bank. Make the decision to get profitable as quickly as possible. Goal of 3 months of expenses in the bank by July 1, 2016. We didn’t do much to cut costs (just renegotiated a few contracts), but instead focused on efficiency so that our new costs wouldn’t grow as quickly. Basically revenue and expenses should not be directly correlated. Growing to profitability Since we already were on a solid growth trajectory we just needed to stop increasing our spending lock-step with new revenue. Renegotiate The first step was to renegotiate every contract I could.
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