Profitable, in 3 weeks!
Sorry for tooting my own horn here but I think my current and potential customers will be happy to hear that business is going well, so here it goes.
Exactly 3 weeks after launching, Balsamiq Studios LLC is now profitable.
A few more details, in the spirit of openness:
So my total costs were $4,268.35, which break down like this:
The lion share is lawyers fee: I could have saved money if I incorporated myself or wrote my own EULA, but I'm much more comfortable knowing that a professional lawyer did those (I use a pretty large firm in San Francisco). The telephone costs are mostly for the Skype-enabled cell-phone which I bought, which allows me to do world-wide customer-service from wherever I am. The Taxes are the $800 that California wants from any LLC, just for existing. The software is SnapzPro and Screenflow, which I used to do my demo videos. The rest is small stuff.
Disclaimers: the costs above don't include my salary (now steady at $0) nor the taxes I'll have to pay on my revenue next year. They also don't include some business-related expenses that I made before incorporating like my Macbook Pro. Basically the costs are those listed in Balsamiq's bank account transactions page.
There are 4 sets of columns because this chart counts weeks starting from Monday, but since I launched on a Thursday the first week is really 4 days, and the current week is not finished yet.
Here's the revenue breakdown by product and by # of sales:
Basically I had 2 Confluence sales and 40 Desktop sales. Can you see why I am focusing my advertising efforts on the Confluence version? :) BTW, I am extremely surprised and excited about having those 2 sales under my belt already, I fully expect that most sales of the Confluence version will take much much longer. It hasn't been a month since launch so no trial period has expired yet. I am also considering tweaking the pricing model for the plugin version, more news on it soon.
The Cash Flow
Here's the breakdown of my costs and revenue for each month since incorporating:
And here's the all-important cash-flow chart, the one I was so wishing to go above the 0 line until it finally happened yesterday:
Of course being above that green line is no guarantee of staying above it, but it sure is a good feeling, for now.
Some Lessons Learned
- The predictions I had made back in Feb to convince myself to start Balsamiq were absolutely and totally WRONG. I mean, not even close. In those I had no customers for the first 3 months and was in the hole for 44K, and not $2,400 like it ended up happening.
- It's never been easier cheaper to start a software company. If you are on the fence, I hope the numbers above will convince you to "just do it" and join the party.
- being flexible and quick on your feet is essential: 74% of my current revenue comes from something I didn't intend to sell at all, and changing my mind took some convincing by some of my early users.
- I am incredibly lucky to have chosen rapid-prototyping as a the problem to solve for my first plugin/product. There was clearly a need and a pain there, and most people so far like my solution.
The road ahead is long and fraught with peril, I have a ton of work ahead of me and I am excited about it. Knowing that my company is (so far) successful gives me a sense of security and motivation that makes me even more committed to doing the best I can to keep it that way.
And who knows, one day I might even be able to pay myself some salary! ;)
Ok, time to get back to work for me. Those bugs won't fix themselves you know... :)
UPDATE: this post was picked up by YCombinator's Hacker News forums, and it sparked a nice little conversation there, both about Balsamiq and about proper grammar, of all things. Check it out!