In August I think we really found our stride in a lot of ways, and hitting $4M is a huge milestone.
At the same time, our MRR growth the last two months has been a lot lower than we’d like – 5% or 6% is not ideal for us. I’m confident with our hard work and new teams set up we can pull that up.
(I also want to share some of July’s numbers—I went on vacation right at the start of the month and let the update slip by.)
- New users: 65,712 (Total: 1,663,761, from 1,598,049: +4.1%)
- Daily active users: 40,365 (up from 39,752: +1.5%)
- Monthly active users: 164,308 (up from 158,894: +3.3%)
- Monthly Recurring Revenue (MRR): $323,000 (ARR: $3,876,000, up from $3,636,000: +6.6%)
- Cash in bank: $770,000 (last month: $715,000)
- Team size: 27 people across 5 continents
- New users: 61,411 (Total: 1,725,172, from 1,663,761: +3.7%)
- Daily active users: 38,545 (down from 40,365: -4.5%)
- Monthly active users: 161,045 (down from 164,308: -2.0%)
- Monthly Recurring Revenue (MRR): $338,000 (ARR: $4,056,000: +4.8%)
- Cash in bank: $821,000 (last month: $770,000)
- Team size: 26 people across 5 continents
We’re particularly happy about our revenue growth and increasing cushion of funds in the bank. While in terms of MRR/ARR we’re not quite profitable, based in bookings revenue (thanks to annual paying customers) we’re making a profit each month and so the bank balance is increasing. We still have much further to go, yet we also feel we’ve reached a stage where the business is operating well.
The key thing we’re striving to pull up is our MoM growth rate of MRR, which is a little low at 4.8% in August. The seasonality and Buffer being a product for professionals means we’ve found August is generally our lowest month each year—but we want to combat that better.
New team structure
Smaller teams, distributed decision making
We’ve always been a distributed team, and with growth we started to think about how we can distribute the decision making in order to scale efficiently without managers with lots of direct reports. We also just felt it’d be much more fun for people at Buffer if we don’t have managers. In the last two months we’ve doubled down on this idea and started implementing what we call the “Decision Maker” setup, inspired by Dennis Bakke, who has written Joy at Work and The Decision Maker.
We’ve divided the product into areas with small teams, and introduced a clear structure for product development. The above diagram shows our team and setup for work on Buffer for Business.
With teams for Buffer for Business, Onboarding, Extensions and Dashboard, we have seen much more focus on individual areas, goals and metrics. We’ve had some big breakthroughs in new learnings of features to build, and we’ve also had success in increasing our overall activation rate of new signups. We’re quite sure this new setup is working well for Buffer.
30% more live chats in August
In August the Happiness Team did a total of 800 live chats, which was a 30% increase from 616 in July. We’re very excited to start to transition some of our “back and forth” customer support channels like email to more conversational channels such as live chat. We’ve also started experimenting with voice-based customer support.
Exploring a small funding round
In the first half of the year, we’ve had a couple of fairly large acquisition offers come in. We gave them thought and concluded that we’re too excited about what we’re doing with Buffer to stop our journey.
The reflection around these offers triggered us to realize that we want to keep doing Buffer for a very long time. We decided it may be wise as we reach the 4-year mark and a big milestone of $4M ARR for us to think about de-risking founders slightly to make it much easier for us to ignore any future offers and keep completely heads down on growing the company to 10X the size we are now.
We’re currently exploring our options to do this. It’s still early for us in this process—if you’d like to talk more, just shoot me an email :-)
Looking to hit the gas on growing the team
While implementing our ideas around the Decision Maker setup, we chose to stay at the current team size and take two months to focus on how to work well together. Now that we’ve got the Decision Maker set up, we’re looking to expand the team to 30 or 35 and will focus on hiring again starting immediately.
We’re in a great position because the product teams breakdown has helped us to identify key roles for additional team members.
Thanks for the great support along our journey so far, and cheers to $4M ARR!