Bingo Card Creator (& etc) Year In Review 2010

I’m Patrick McKenzie.  For the last few years, I’ve run a small software company which, most prominently, makes Bingo Card Creator.  It creates… well, you probably get the idea.  I recently launched Appointment Reminder, which… yeah.  I also do occasional consulting, shockingly not as Pay Me Lots Of Money And I Solve Your Problems LLC.

In addition to publishing pretty much live stats about the business, I always do a year-end wrapup (see: 2006, 2007, 2008, 2009) covering my thoughts on the year.  I hope folks find it interesting or informative.

Disclaimers: Stats are accurate as of publication, but the year isn’t quite over yet.  Ordinarily the last two weeks of December are fairly slow, but I would expect there to be a few hundred dollars more sales and possibly a few hundred more in expenses, depending on the timing of people charging my credit card.

My business is a good deal more complicated now than it was previously, which changes how open I can be about some bits of it.  See below.

The Big Change

After several years working as a Japanese salaryman, I quit my day job and went full time on my business as of April 1st of this year.  This was the best decision I have ever made.  Words cannot describe how happier I am with everything about my life: I see my family more often, I see friends more often, I travel more, I work less, I make more money, I’m healthier, my apartment is cleaner (well, OK, modestly cleaner), and I enjoy work a whole lot more than I ever did when I was working for somebody else.  Self-employment is awesome.  There are occasionally challenges to it, but since I spent a few years dipping my toes into the water prior to doing it full-time, I have had very little of the “Uh oh, I might not be able to make rent” uncertainty that a lot of folks report.

Bingo Card Creator

Bingo Card Creator remains my bread and butter for the time being, but I think this is likely to be the last year for that.

Stats:

Sales: 1,422 (up 38% from last year’s 1,049)

Refunds: 20 (down from 24 last year, to 1.4% of sales from 2.3%)

Sales Net Of Refunds: $42,589.90 (up 33% from $31,855.08)

Expenses: $16,685.24 (up from $15,485.28)

Profits: $25,904.66 (up 58% from $16,369.80)

Wage per hour: $200~250ish, based on my best guess of time spent on BCC (yeah, I went “full time” and work less than ever.  This is mostly because BCC is mature software.)

Web Stats:

(All stats are from bingocardcreator.com unless otherwise specified.)

Visits: 777,000 (up from 546k)

Unique visitors: 655,000 (up from 470k)

Page views: 2.7 million (up from 1.6 million)

Traffic sources of note: Google (44%), AdWords (20%), Binghoo (11%)

Trial downloads: 21,000 (down from 56,000)

Trial signups for online version: 72,000 (up from 17,000)

Approximate online trial to purchase conversion rate: 1.7%

Narrative Version:

The major change in BCC this year was unofficially deprecating the downloadable version of the software, for a variety of reasons.  This led to a huge cut in my support investment — the downloadable version generates 10 times the work per customer that the web app version does — which helped enormously when I dropped BCC into maintenance mode, which it spent over half the year in.  (Maintenance mode means I answer questions and collect payments and that is about it.)  I did a bit of experimentation over the summer in terms of conversion funnels, and also did some major work in October with regards to seasonal promotions and using my mailing list.

My conversion rate for BCC is slipping steadily.  This is sort of ironic, because it is the result of an unalloyed good thing for the business: as I get better at getting organic search traffic, the population of people using my web site moves from the teacher-heavy target-rich-environment it has historically been and towards a broader audience who don’t have quite such a pressing need for bingo cards.  Sales go up, since converting 1% of a big number is still a good thing, but it dilutes my aggregate conversion rate.  Oh well.

I’m mildly disappointed that I missed my sales and profitability targets this year (by about $2k and $4k respectively).  Oh well.

What Went Right:

  • Deprecating the downloadable version reduces my work and stress level attributable to BCC enormously.
  • Getting serious about using MailChimp and email marketing in general. My Halloween, Thanksgiving, and Christmas mail blasts made well over a thousand dollars in sales for me, for about $30 worth of virtual postage stamps and perhaps twenty minutes of writing.  One thing to note for next year: there does not seem to be a substantial difference in conversion rates for when I put a $5 off coupon in the mail versus when I don’t, so I shouldn’t next time.  Also, given that a huge percentage of folks bounce on the password screen coming from the email, I need to think about either putting a token in the URL to let them in automatically, or making dedicated landing pages for these campaigns.  (I don’t have good numbers for how effective the autoresponder sequence is — i.e. automated emails I send to people on the first and sixth days after they sign up.)
  • Meat and potatoes SEO continues to be my bread and butter (how is that for a mixed metaphor).  My conversion rate has been gradually sliding as I get more parents in for holiday bingo activities through my Sprawling Bingo Empire, but 1% of a very large number is still worthwhile.  I should probably get serious about optimizing those sites individually, but my desire is waning.

What Didn’t Work So Well:

  • In the wake of the FireSheep release, I decided to implement SSL for Bingo Card Creator, right in the middle of Halloween busy season.  This broke my pages in several different ways, from causing security popups on the login screen in IE (whoops) to not showing key images on landing pages in some browsers (whoops).  I really should have put off that implementation another few weeks, or thought through my testing strategy for it better.
  • I don’t have a staging server for Bingo Card Creator yet.  Having seen the enormous advantages from having a staging server through my Appointment Reminder, I am retroactively dinging myself for not making one in the last four years.
  • My Halloween promotion could have been handled better: $6,000 in sales is nothing to sneeze at, but I’m still of the opinion I could have broken $10k with a little better execution.  Maybe next year.
  • AdWords has been on auto-pilot for virtually the entire year, and when it goes onto auto-pilot it seems to optimize for Google’s bottom line over mine.  I should block off some time to get it under control, and aggressively cut weakly performing aspects of my campaigns.

Consulting

Last Christmas Thomas Ptacek at Matasano (whose office I am in as we speak) suggested to me that people would pay for my expertise in software marketing.  I was skeptical, but put the word out quietly that I was available for hire, and did three large projects this year for a few clients.  The only one I can publicly comment on at the moment is that I worked for Matasano, on stuff.  My general field of expertise is in engineering marketing outcomes: A/B testing, SEO, and the like.  Basically, I bring the fanatical iterative improvement mindset and apply it to things other than bingo cards.

I love talking about what I do.  Unfortunately, consulting clients pay a lot of money to get me to shut up.  This means, for example, not blabbing on the specifics of new projects which are as-yet unreleased, and not blabbing on the particulars of engagements.  Since I had only a handful of clients, giving exact numbers tends to give a wee bit too much detail, since if you happen to know one data point then you can guess the other two fairly easily.  So treat these as very ballpark numbers:

Consulting sales: $45,000

Consulting expenses: $10,000 (Plane tickets and hotel rooms get expensive quick, what can I say.)

Consulting Profits: $35,000

I know somebody is going to ask my rate, and I’m torn between a desire to quote it and the knowledge that there is absolutely nothing good that can come of quoting it.  The reality for consultants is that clients pay you exactly how much you can negotiate with them.  Everybody knows this and yet everybody would be shocked, shocked to know that someone else got a better deal.  In addition to causing problems with existing clients, it complicates raising rates for new clients in the future.  (Given that I could fill 100% of the hours I wish to, have been saying ‘Nope, sorry, not available’ to interesting work frequently, and now have a few CEOs singing my praises, my rates are only going up next year.)

What Went Right:

  • Client selection.  All three clients knew me well from the Internets, all had confidence in my ability to do what they wanted me to do, and all were model clients: they knew what they want, they communicated perfectly, and they paid all invoices in a timely fashion.
  • Pricing: Aside from frightening my bank a few times when I got large wire transfers from America, charging a lot of money is a great idea in every possible way.  It makes your clients respect your time more, keeps you motivated, and helps pay the rent during the lean summer months of the bingo calendar.

What Didn’t Work So Well:

  • Newbie consultant blues: I did my first consulting project for a friend.  Unfortunately, due to a combination of it being my first gig ever and my first experience with using Heroku, I greatly underestimated the amount of time the project would actually end up taking.  What I thought would be 20 hours over a two week period stretched into many more hours over months and months.  Luckily, my client was sympathetic, but I ended up doing a lot of writeoffs for good will and diverting my attention for longer than I wanted to.
  • Juggling consulting with project work: I worked 90 hours a week and still had cycles to spare for BCC.  How hard could it possibly be to do 10 hours of consulting in a week and still get productive work done?  Very freaking hard, because the 10 hours tended to be splayed across several days, require creativity and focus to execute, and not include the whole email/sales/support dance that comes with consulting.  This is in no way a criticism of the client, it is just to illustrate how consulting works: I got a request from a C-level exec at a company you’ve heard of in April, and despite us being mutually enthusiastic about the project it took forty emails and five months until billable work actually started on it.  I had to gracefully extricate myself from my clients and block off November and December to get Appointment Reminder launched.

Appointment Reminder

I finally released Appointment Reminder in early December.  (Don’t worry, I haven’t forgotten about writing the rest of the series about developing it.)  I have one customer already and a handful of prospects currently trying the software out, so revenue is negligible as of yet.  Now I just have to do the other 90% of marketing the software, which I am going to do a bit of in December and then start in earnest in January.  The plan is, unsurprisingly if you know me, heavily reliant on organic SEO.  I have also had a lot of interest about whitelabeling the software, and will do that as well.  That gives me a built-in on-the-ground sales force of people with intimate knowledge of potential clients and the desire to sell them my service — and judging from the numbers thrown around by one of the guys interested in white labeling, that could be “quite lucrative indeed.”

In terms of technical direction, I’ve engaged a freelancer to get it working on iDevices (I could have done it myself, but I’ve got plenty on my plate as it is).  I am about 60% of the way to getting a very impressively hacky solution working on every major US smartphone, because many prospects have asked to be able to access schedules when on the move.  The implementation is so devious that if I had a mustache, I would be stroking it while cackling maniacally.

Semi-exciting news: I received an acquisition offer from a foreign telecommunications firm.  The CEO believed AR fit a hole in their product line, and offered me their estimated development budget for it if I would sell them the whole business.  That was a generous number relative to the amount of work I have put in, but it would not have been lifechanging for me or my family.  I declined and told him I’d like to try to run the business myself and see where it takes me.

The stats:

Sales: Nothing yet.  (Well, one test transaction to make sure Paypal/Spreedly works.  Spreedly is impressively painless, by the way.)

Expenses: ~$1,600 (a few hundred bucks in design work, $800 of Twilio credit, and one or two other things.  Servers and online services which I also use for BCC got filed under BCC because I’m lazy and my bookkeeping software doesn’t support splitting bills: a more accurate accounting would be closer to $3,000.)

What Went Right:

  • It exists and mostly functions! These are both handy properties in software one wants to sell.
  • MVP available for several months.  I didn’t have the cycles to create AR back in April/May, but I did get the MVP of it — basically, an interactive demo of the core of the service — out early.  This helped me in both getting a bit of age and trust on Google prior to the official launch, and also in getting a base of interested prospects to try selling to (I’m currently talking to a few of them).

What Didn’t Work So Well:

  • Delaying release: April, May, June, July, August, September: that is six months, and I got very, very little accomplished (not one line more than the MVP, as a matter of fact).  The distraction from consulting work, working on BCC, and reacclimating myself to a human existence after years of salarymanhood just totally destroyed any desire to do heavy lifting on a new project.  I’m very obliged to the HN-based folks who started a Launch Something in November mini-sprint, which helped get me the energy to actually sit down at the computer for six hours a day five days a week and bang it out.
  • Insufficient pre-launch marketing: I really should have been constantly adding new content to the website for the last six months.

Goals for 2011

Bingo Card Creator

  • Sales of $60k, profits of $40k
  • Getting AdWords back under control
  • Getting the holiday promotions ready for all those domains I own but have never successfully exploited yet

Appointment Reminder

  • 200 paying customers by December of 2011.  This implies the revenue run rate will be somewhere north of $10k then.  Cross my fingers: it might be well north of that, if SEO or white labeling works well.
  • I’m about 70% certain that I’m going to hire a front end developer for AR.

Consulting

  • Perhaps a wee bit more of it.
  • At higher rates.
  • Knock things out of the park for clients #1 ~ #3, and tell stories when possible.

See you all in 2011!

About Patrick

Patrick is the founder of Kalzumeus Software. Want to read more stuff by him? You should probably try this blog's Greatest Hits, which has a few dozen of his best articles categorized and ready to read. Or you could mosey on over to Hacker News and look for patio11 -- he spends an unhealthy amount of time there.

28 Responses to “Bingo Card Creator (& etc) Year In Review 2010”

  1. Ram Viswanadha December 17, 2010 at 8:57 pm #

    You got an acquisition offer and you declined? You are my hero!

  2. Peter Lyons December 17, 2010 at 9:12 pm #

    Thank you so much for all these fantastic blog posts. It is very inspiring to hear you say you are much happier as a self-employed mISV. Best of luck with AR. My gut says AR is going to do really well financially.

  3. Tamer Salsma December 17, 2010 at 9:57 pm #

    Thanks Patrik for posting your business wisdom. Not so many are as transparent.

    All the best for a deserving talent.

  4. Ewen December 17, 2010 at 10:40 pm #

    Thanks Patrick – you’re an inspiration – literally.

    cheers

  5. Josh December 17, 2010 at 10:53 pm #

    digging your attitude. keep up the good work!

  6. Manoj December 18, 2010 at 4:50 am #

    I have been reading your blog posts since few months. It is really helpful

    You are a gem, Patrick !

  7. cja December 18, 2010 at 9:09 am #

    I’ve enjoyed reading you since the beginning. Thanks Patrick.

  8. JR December 18, 2010 at 9:28 am #

    a frank question to an enterpreneur(from another one).

    All the numbers above look quite ok, but compared to other newer companies like groupon, it is quite small.

    How to you deal with inferiority complex ,if any ,by comparing yourself with groupon founders ?

  9. Jack Dempsey December 18, 2010 at 12:27 pm #

    Thanks for the writeup Patrick. It’s easy to have great thoughts and knowledge in your head, but quite another to put it down in easily digestable form for others. Appreciate you taking the time.

    And to JR, from one entrepreneur to another, I doubt he’s ever compared himself to Groupon or any other huge startup. What would be the point?

    I would be more interested in what research he’s done in the AR related space, what competitors he has, and plans for taking over this particular market. Actually Patrick, if you’d do a writeup on that sort of thing (pre-coding market research etc) I think it’d be excellent and something all of us heavy-on-the-engineering entrepreneurial folks could learn from.

  10. Peter December 19, 2010 at 4:13 am #

    I’d be interested in reading more about A/B tests with e-mail marketing. My impression is that each blast increases short-term sales, but sometimes has a detrimental effect on longer-term sales (some people get completeley turned off by spam). I’m wondering if you’ve observed anything like that.

  11. Kevin Dahlhausen December 20, 2010 at 7:59 am #

    Patrick, way to go! Thanks for posting, it’s very informational and motivating to read about the results of your effort.

  12. Thiru December 21, 2010 at 10:31 am #

    Thanks Patrick for posting this. You’re my true inspiration. Keep up the good.

  13. Romain December 22, 2010 at 3:18 am #

    Great work!

    On the Appointment Reminder’s sing up page I noticed that you directly collect credit card details for payment.
    Working on a web app myself, I’d be very interested in your experience setting that up (infrastructure, costs, compliance, etc.)

  14. J. Pablo Fernández December 22, 2010 at 3:57 am #

    Thanks for these inspiring words that help me keep pushing forward:

    > After several years working as a Japanese salaryman, I quit my day job and went full time on my business as of April 1st of this year. This was the best decision I have ever made.[...]

  15. Jason Mar December 24, 2010 at 1:13 am #

    Happy holidays Patrick and best wishes for 2011! I think I first saw you on mixergy and have been seeing your posts voted up on HN all year – your openness is truly helpful to everyone out there thinking of starting a web business of their own. I hope you get all the consulting business you deserve.

  16. Ashwin Jayaprakash December 26, 2010 at 6:22 pm #

    Thanks for sharing and good luck!

  17. Christopher Bruno December 31, 2010 at 1:52 am #

    Inspiring! Seriously AR will be a hit any offer less than 7 figures isnt worth considering.

  18. Christopher Bruno December 31, 2010 at 1:56 am #

    By the way Patrick, are you still ever lurking on the Business of Software forums?

  19. Bryan Lee January 12, 2011 at 11:44 am #

    Great post! I found it informative and kinda inspirational too. I recently released a download shareware app and am also starting to see the support costs, much of it due to installation issues. I may also be looking into switching into producing a web product next (or possibly a mobile app)

    Btw, I was a little curious as to what went into the $16K of expenses for Bingo Card Creator?

    Anyway, it’s great to see someone who seems to be doing quite well with their Micro ISV!

  20. Bryan Lee January 26, 2011 at 10:15 pm #

    Heh, I just found this link, which answers my own question above about where those $16K of expenses came from:

    http://www.bingocardcreator.com/expenses/expenses-pie-chart?year=2010

    Patrick, the amount information you share about your company is AWESOME – best of luck in 2011!

  21. Smart Company Software October 29, 2011 at 4:06 pm #

    I was also curious about the expenses, so thanks for the link.

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