2018 Year in Review: Journey of a SaaS Business
Happy Holidays! It’s my favorite time of year. Not just for all of the food, drink, parties, presents, and family, though those things are all wonderful. It’s the time of year where you can look back at what you’ve gained, lost, and most importantly, learned.
I’m excited to write this because we’ve gained and learned so much this year. We lost a little bit as well, and the year on the whole wasn’t perfect, but I’m eager to share with you what our awesome team has accomplished.
And the Sellbrite team, along with our customers, have done some amazing things.
Sellbrite customers: we couldn’t do this without you. But this post is a little different than others like it you may read. This post isn’t just us highlighting some product stats, like number of products listed to marketplaces (10.4M) or total GMV processed ($1.6B). What I want to share are the ways in which our SaaS (Software as a Service) company has grown and evolved, how we’ve transformed the business and positioned ourselves for an exciting future.
An imperfect beginning
2018 didn’t start off on a great note. In fact, it was a somewhat uncertain time for us. Coming into Q1 of this year, our subscriber count had stayed mostly flat. We’d reached what is known as a SaaS plateau in our industry, where new leads stop increasing month over month, revenue stalls, and new subscribers replace old ones instead of increasing the total.
There are several reasons that this happened. Our core value proposition (making multi-channel selling easier) wasn’t living up to its promise: we were trying to be too good at too many things. Our pricing wasn’t reflective of the kinds of merchants that needed our tools. And our product wasn’t WOW’ing customers in the way that it once did. These are just 3 reasons. There were others.
I’m not exaggerating when I say we were scared.
So in March 2018, we did the hardest thing we’d ever done. We let go of 3 of our employees. It was an emotional time, and it would have been totally understandable for the rest of our team to be concerned about their own futures.
But the Britelings are a strong, resilient bunch, and they knew that we were making a difference for lots of our customers, and that we still had a great future ahead of us. The team rallied around Brian and I with their incredible support.
Restarting the engine
March 2018 didn’t come as a total surprise: we were well aware of some of our problems before that and had lots of plans in motion to get Sellbrite back on track. One of the first things was our brand positioning.
I’ve talked about this before, but as a multi-channel solution you have to be good at many things for many different kinds of customers. However, being marginally ok at a bunch of things isn’t the way to be a great product or company, so we decided late last year to invest heavily into our core product feature, the ability to list products on marketplaces.
This meant we stopped adding to our reporting, fulfillment, inventory, and order management features while we brought our listing solution back up to world class. We’ve invested over a year in improving this functionality and will continue to prioritize improvements in this area.
Another thing we did was introduce pricing plans that offered a little more value to our customer base. By starting out a lower price point, smaller brands that wanted to try Sellbrite were now able to, and we could help them grow their business.
Yet another thing was to engage with our customers earlier in their journey with Sellbrite. Our Onboarding Team now makes contact with every trial merchant to begin their onboarding process, which previously didn’t start until after they began paying for their subscription.
And the list goes on…
- We’ve implemented deep product analytics to get a better understanding of everywhere a merchant gets stuck in Sellbrite.
- We do more customer feedback and iteration on a new feature than we’ve ever done.
- We’ve run bigger and more impactful tests in the product this year to make incremental improvements.
- Our Onboarding Team introduced Live Chat for all new in-trial merchants, so they have an extra hand to help guide them forward.
- Our marketing message is more consistent and specific to each persona we support.
- Our development sprints are more consistent, predictable, and effective. We know exactly what we can accomplish and are increasingly accurate with our sprint planning.
From top to bottom, the changes our team has made across the organization have made a huge impact. We want to show you just how much of a transformation the business has had.
Due to our slowed growth in early 2018, none of our customer-facing teams were able to hire. Instead, we asked them to prepare to handle over double the lead volume and customer volume as we had before.
This team of 7 rallied to handle significantly more inquiries/issues/onboardings than ever before. In 2018, our Customer Success, Onboarding, and Support Teams assisted with over 18,000 inquiries from our merchants. They also completed a re-skin and update of our Help Center and added/updated 256 articles, which garnered over 93,000 views!
- Solved 13,687 email inquiries
- 56,736 total customer touches via email
- Replied to 3,984 live chat conversations
- Made/Answered 7,824 phone calls
Our Engineering team, who lost 2 members in March, faced a similar task as Customer Success: prepare the platform for scaling customer count, improve performance and uptime, and plan our development sprints more methodically so we can execute our roadmap with higher accuracy.
And they delivered. Not only is our uptime improved over 2017, but our team was able to make significant optimizations to the system infrastructure and save over 30% in hosting costs!
With improved focus on our core value prop, as well as investing more time with our incredible partners, we blasted through our lead plateau.
We’re looking forward to launching more partners in early 2019 in our new App Store. The graphs we show from here on out don’t include an axis, but the trends are more than enough to tell our story.
Leads (by Quarter)
And most of that is organic… By sticking with our content strategy and expanding the types of tools & resources we offer to help educate and inspire merchants, we’ve seen our monthly organic traffic double within the year.
Organic Unique Visitors (by Month)
Through methodical planning, measuring, and iterating, the Sellbrite product is more focused and effective than ever. Nothing shows this trend better than seeing our Conversion from Trial increase, which has had a massive jump starting in Q4.
Trial to Conversion Rate (by Quarter)
But merchants aren’t just starting subscriptions more frequently, they are also sticking around longer. Even though there is no axis on this graph, you can see that we’ve ventured into healthy SaaS territory, or what some call the holy grail of SaaS.
MRR Churn Rate (by Month)
Putting it all together, we’ve grown our subscriber count over 50% in just the last 9 months.
Subscribers by Quarter
This is not common
To really put our progress into perspective, the charts below show a trend that suggests phenomenal things are on our horizon. First you’ll see that our ARPA, or Average Revenue Per Account, has been declining since beginning of this year.
We expected this, in fact we engineered it. However, a lot of the shrinkage is for existing customers that have downgraded to a new, cheaper plan. What this means is that while we’re adding new subscribers and growing the overall customer base, our revenue is fighting against the current of these downgrades.
ARPA (by Quarter)
Yet, our revenue is NOT shrinking. In fact, it’s starting to explode. This past quarter has seen the greatest subscriber and revenue growth for the business to date. And unlike previous growth spurts for our business, the underlying economics are stronger than ever.
We’re acquiring more new customers at a lower cost than before, and they are sticking around longer and upgrading to bigger plans. What’s more, they are getting more value from our product, faster.
Recurring Revenue (by Quarter)
That clicking sound you hear right now is all of our competitors firing off emails to their board letting them know it’s time to raise more money. Because we’re putting them all on notice: Sellbrite is just scratching the surface of what we can do, and 2018 was just the start of things to come.
To all of our customers, thank you for your business. Your support, feedback, and dedication are what have helped us keep fighting to improve our product and company this year. We look forward to sharing some major product announcements with you early in 2019. Happy New Year!