Almost exactly a year ago I moved Storemapper from a neglected side project to real business focus. It’s fitting that it just hit a pretty cool milestone: $100K in annual recurring revenue. Pretty good for a simple little widget.
Check out the latest live metrics here
The business is very high margin so that number equates to probably around $90-95k in net income, which is honestly about as much money as I really could want to support my lifestyle without any dependents. Anything more is gravy.
This will be an interesting test. Working on Storemapper for the past year it’s been so easy to measure progress. Is monthly recurring revenue (MRR) going up and by how much. And in 12 months that number went up 271%. And that’s recurring revenue subscriptions. And I owned the business, that money went in my pocket (and then straight to Chase, Citi and Amex, but that’s another story). It’s basically like getting a salary raise every single week and it’s a powerful dopamine loop.
But there was always supposed to be a point where it was enough money. I wasn’t going to get caught up in the “money as a scorecard” trap where you just keep on trying to get more and more. Money is a tool to get back your time.
There is this fantastic anecdote from Biz Stone’s little memoir on the founding of Twitter. Biz and Ev are in a bar, at the time they are still working on Odeo, the podcasting business that preceded Twitter. Biz starts:
“If we execute the vision you laid out, we will become the kings of podcasting.” I gave a great flourish when I said “kings of podcasting.” I made it sound very kingly.
“Wow, you think it was that good?” Ev looked pleased with himself.
“Yes,” I said, “but I have a question for you.”
“Do you want to be the king of podcasting?” I asked, because this was the question I’d been asking myself. Ev took a sip of his whiskey, set the drink down, and then laughed.
“No, I totally don’t want to be the king of podcasting,” he said.
“Neither do I,” I told him.
It’s a question we so often forget to ask ourselves. I do NOT want to be the king of store locators. There are things about the business that I do love. I love that all my customers are themselves entrepreneurs, so in the process of doing support I also learn a ton about them. I love providing an incredibly simple UX and fantastic customer support. It’s sad but true that people in general, and particularly in B2B, are used to receiving pretty horrible support and grappling with terribly designed software. Customers regularly write unsolicited little notes expressing their delight, and that makes my day.
But I always saw the value in Storemapper as a way to make recurring revenue while freeing up my time to work on other projects. Well, we’re basically there now. So what happens next?
2015 plan: a true 4 hour work week
The Four Hour Work Week (4HWW) was one of the books I read back in 2010 that put me down my current path. The premise is straightforward, build a business that runs on four hours per week of your time, then use the rest of your time to do awesome things.
Here is a common misconception though, you can’t actually build a business on four hours a week. At the start of the book’s narrative, Tim is running an online nutritional supplement company that generates $30,000 per month in revenue. He didn’t build that on four hours a week. But once he has it, he then starts a process of reducing and automating that keeps the business doing well with less and less of his time.
The point is you have to build a real business first, then you can 4HWW-ify it. That’s roughly what I plan to do with Storemapper. My key metric is switching from increasing recurring revenue to decreasing my weekly time spent (while holding revenue at least steady).
When your business doesn’t have an accelerator pedal
The other thing that made this decision easier is that Storemapper really doesn’t have an accelerator pedal. It continues to grow really well (typically >10% per month) from organic customer acquisition channels like organic search and the “powered by” links, but no matter what I tried, nothing seemed to be able to increase that growth rate. Adwords was a waste, refer-a-friend programs were a flop — I document this in more detail in the first big post on Storemapper. There just wasn’t an accelerator pedal to push to turn this into a really big business.
As entrepreneurs this is a tough, but fairly common, situation. We spend a lot of time striking out, building prototypes and businesses that totally fail, on the premise that when we do strike on something it could be home run.
But sometimes you just get a single or a double. And nothing you do can turn it into a home run. And it’s really easy to get stuck there banging your head against it because the alternative is to go back to the plate and likely to more strikeouts. But sometimes the best answer is just to let it be.
How’s that for baseball-business metaphors? There’s probably a missed opportunity for a Money Ball reference in there somewhere.
2015 plan: two part-time hires
I plan to make two very small and carful hires for Storemapper to replace the two areas of time that the business requires. $100k and growing is still not a ton of cash so I’m going to compete by offering an impressive amount of money. But both positions will part-time and extremely flexible. If you’re working on a project, already living cheaply and looking for a little side money, either one could be a great fit.
1) Customer support (see also: customer happiness guru, client success wizard)
Support for Storemapper is pretty easy. The bulk of it revolves around helping merchants upload their data in the right format and get their settings tweaked the way they like. Some basic knowledge of CSS and a desire to learn more is very helpful in this role as we sometimes need to add some CSS tweaks to get the store locators looking nice on each site. I currently do support in less than 1 hour per day 5 days a week. I’ll probably be able to pay for about half-time but it would likely not be nearly that much work.
2) Ruby on Rails developer
This is a super easy and super part-time position. I have done all the coding to date. I’m looking for a good Ruby on Rails developer to basically be on retainer for occasional maintenance, tightening of screws and upkeep. We’ll get started by making my code less crappy: improving some slow database queries, writing some better tests. Once you’re familiar with the code I’m looking to pay someone some easy money to just be on hand in case of an emergency, occasionally deal with gem updates and minor tweaks. Storemapper is a pretty standard Rails setup on Heroku, Postgres, Resque, etc augmented with these services.
If you’re interested in either of these or someone who would be a great fit please reach out to me.
2015 plan: Automating systems
The second focus for the year is automating all the systems and processes needed to run a business. Mostly this is accounting, payroll, bookkeeping and taxes. I am literally the world’s worst at all these things but I’ve been working with my friend Dan Hobbs who is a master at this. Dan and I are actually putting together content from all our sessions into some kind of a package for micro-entrepreneurs and/or digital nomads like me
Basically the content consists of me screwing up in EVERY possible way, and Dan patiently walking me through how to sort things out and systematize them in the future. We’re not sure if it will be blog posts, an ebook or online course of some sort but if that sounds interesting to you, hit me up on email or twitter and we’ll put you on an early announcement list.
In any case Storemapper is actually in fairly good shape in this respect, as a testament to Dan’s skills but I’ll be looking to really tighten things up and automate them and of course post it all here.