Let’s Draw Back the Curtain

You wanna know why I write all this stuff? Why I’m so happy to disclose my income and strategies? It’s pretty simple:

It’s a fucking vacuum out there. Those of us trying to make real money, we’re stumbling around in the dark, alone.

There are thousands and thousands of blog posts about venture capital, viral social media, and decks, and elevator pitches, and on and on. But when it comes to cold, hard facts about web-based subscription software? About making money? About conversion rates, refund rates, churn rates, growth rates, customer service, business expenses? We got nothin!

Why? Because we’re too busy making money? Because we’re afraid? Are either of those a good enough excuse?

SaaS Facts of Life: Case Study 1

Scene: Three weeks ago. Players: me & a new friend who also runs an SaaS catering to small business.

Me: So Freckle just passed $180,000/year projected.
Him: Wow! That’s fast! It took us two years to get to that point.
Me: … Freckle just turned 2 years old last week.

Yep. Privately, we were both impressed by the others’ success, not realizing the paths of our businesses were exactly the same.

What would have been different, if we’d known that sooner?

Would I ever have found out at all, if I hadn’t been the one to name a number first?

SaaS Facts of Life: Case Study 2

Two weeks ago, Thomas & I had dinner with a pair of new friends, a married couple who’s in the same biz. They created & run 3 subscription web apps, including two quite popular ones you know about.

I told them the above story. They laughed and commiserated. While their 2nd and 3rd apps grew much faster, their experience with their 1st app was much the same.

And as the woman said to me, “That’s the thing. There’s NOTHING out there about this.”

They’d had to learn it all the hard way, too. They weren’t forging a new path, but one that had been set by a handful of smaller, non-Salesforce.com-type SaaS companies before. Companies who had often started as single freelancers or tiny consulting shops, but which nevertheless had refused to share.

SaaS Facts of Life: Case Study 3

Yesterday I did an interview with the excellent Andrew Warner from Mixergy. (Here’s my interview – it’s up already!)

Since we’re in Philly, I did the interview at IndyHall, my favorite coworking joint anywhere. Let’s just say I’m not a quiet girl — one of our “podmates” overheard me. We’d never really talked before but she introduced herself after my interview. She said to me, “I was eavesdropping on your interview. Thank you so much.”

You know what she does for a living? She runs a content/community subscription site and she’s been doing it for a couple years. It’s not software, but the parallels are huge.

You know why she thanked me? Because there’s no fucking information out there.

Maybe it just takes 2 years to reach $200k

Maybe that’s just the way it goes for the vast majority of first SaaS apps. Maybe it just takes 2 years to get to $200,000 a year. Subscription income takes time. Maybe that’s normal.

Why don’t we even know if those statements are true or not?

How many people have given up on viable products because they didn’t achieve hockey stick “traction” in 6 months? How many people went back to jobs they hated, or gigs that sucked up all their time, because they didn’t know that overnight success is incredibly rare? How many have ignored the potential of SaaS entirely because they don’t know how very profitable it can be?

Too many, if you ask me.

But it’s uncouth to talk about money…

Then let’s be uncouth and proud of it!

It used to be uncouth to talk about menstruation, about sex, about AIDS, about racism and poverty and crime. History doesn’t say a lot of good things about polite people.

If the choice is between “respectable and ignorant” and “uncouth and well-informed,” I know which side I’ll choose.

I won’t sit idly by

Moving from a consulting business to a product is one of the most rewarding things I’ve ever done. Yep, there’s stress, and anxiety, and lots of work… but there’s also the freedom to choose what we work on, and when, and how, and where, and with whom.

At 2 years old, Freckle is the longest “job” I’ve ever stuck with. I still love it. And I love our next product, Charm, even more.

Not only do I get to design great software without the interference of committees, not only do I get to decide what exactly to tackle, not only do I get to teach what I love, I get to help people run better businesses and lead happier business lives.

I’ve never been happier in my work, ever.

So whenever I’m thinking about how we did finally get started, I can’t help but wonder:

It took me 2 years to get here. What if I’d started 5 years ago?

Maybe I would have, if the information was out there. If there had been somebody like me I could have really learned from. So I’m standing up to be counted.

If you’re currently making & selling products, I hope you’ll join me.

*There’s more no-nonsense business advice where that came from. Don’t miss out: subscribe with RSS and follow me on Twitter.

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  1. Ben

    Once you hit that 200k mark do you think it’s best to try and squeeze more out of that product, or move to something else?

    • Amy

      We’re doing both. Freckle is still growing steadily without a lot of promotion – so I’m stepping up the promotion. People who use it love it.

      Charm will grow in revenue a LOT faster because it’ll be at a higher price point & aimed almost exclusively at teams. But it also has a lot more cost (time, energy, and actual money) associated with building and growing it, too.

      • Lisa

        Hey Amy,

        What’s the best way to contact you – any chance I can get your email address?

        Thanks, Lisa.

  2. Noah Gibbs

    You, Rob Walling (Micropreneur Academy) and Naomi (IttyBiz) are pretty much who I’ve found that talk at all about such things. And Naomi’s a bit of a stretch if you’re specifically thinking subscription software, though she’s awesome in general.

    I’ll keep at it. I have two little daughters right now, so ‘real’ entrepreneur/startup hours are beyond me — with luck, by the time I have that time available, I’ll also have the skills to make it happen. Working on it.

    • Francesco

      @Amy: Speaking of similar blogs/resources, would you recommend any other blog on the same line as yours (apart from Rob’s and Naomi’s)?

  3. Seth Engelhard

    Thank you for discussing this. My business partner and I have been considering making the move from a purely service-based business model to something that incorporates subscription-based services and it helps to hear a frank account of someones who has done just that.

  4. Tara

    Hey Amy,

    Thanks for the article! I love getting your posts :)

    I can’t read enough about this sort of thing. Out of all of the business books you’ve read, perhaps you could recommend the top 5 or something? I’d really appreciate it.

    Books like the E-Myth are obviously ‘against’ small businesses and have the ‘think big’ & ‘sell out’ attitude. Do you know of any books that support the subscription based web apps business model..?



  5. Tim Jahn

    I’m glad you won’t sit idly by, Amy. There’s way too much talk about venture capital, exit strategies, and anything but actually making money. We need more people, like yourself, talking about this kind of stuff.

  6. Jim Jones

    Thank-you, thank-you, thank-you Amy. I’ve been working on RunFatBoy for over five years off and on in the evenings and am just now starting to figure things out. It’s definitely a tough road..

  7. anon

    Thanks for the great posts Amy, this is incredibly helpful stuff.

    I’ve just built a simple app for the company i work for 9-5 (it took me two weeks dev and one week analysis & design working on it alone) they’re selling it to corporates for $10k/month plus a service rate of $50 a day(1 signed up already – another about to sign up). This service was originally my idea 10 months ago; at the time when i expressed it to the management/strategy team i was basically laughed at by the business types and told no one would ever pay for it.

    Now it’s actually built(pushed by a 3rd client who hasn’t actually signed up yet), my manager has been lauded as the “mastermind” behind the development. He didn’t even understand it until a few days ago when i explained it to him(again).

    It’s hard to express my true feelings about this situation without loosing-my-shit completely. :)

    Reading your blog and my recent experiences, like the one i described above, give me confidence i can succeed alone as you describe.

    Now, it’s time to begin working on my exit strategy.

  8. Jerome Iveson

    Hi Amy

    I’ve just launched a SaaS app but it seems hard to find any concrete stats for things like conversion to trail and conversion to sale. It’s very difficult at the moment to know wether we are doing well or not. Like you’ve mentioned elsewhere SaaS takes time to build up so our bottom line figures don’t look amazing but the metrics could be.

    Do you release your metrics?

  9. Victor


    Thank you for your encouragement to “ship the damn thing” you gave me some time ago in another blog post comment. I have already shipped the damn thing 14 days ago. No paying customers yet but it is out.

    Also, I was wondering if you use a specific ajax or jquery library to build your easy to learn and intuitive apps. I already know php, do you recommend to learn Ruby?

    Last question, I promise; what credit card processing company do you use, ejunkie.com?

    Thank you for telling it like it is.


    P.S. After our “comment” I realize I need to learn the credit card software first, and then build around it. Otherwise, I get “featuritis”.

  10. Emil

    I often feel most aren’t talking numbers out of a fear of faliur. I have recently had my mind bledered into reality by a friend who recommended your blog. Business is simple, money is the goal. If it feels like that’s a hard subject to be frank about it’s not a business but a hobby with espinoge overtones. Great article I’m with you.


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