March 2023 Shareholder Update

ℹ️ Sent to shareholders on April 10, 2023

Hi there,

I’m here with Buffer’s shareholder update for March 2023. See below for our numbers, updates, and what’s coming up. If you have any questions or something stands out, don’t hesitate to hit reply to discuss.

• We’re certainly celebrating our March results over here. We’ve had increases across the board other than a tiny decrease in paying customers.
• Most of our numbers have been gradually improving over the course of many months, so it genuinely feels like we’re seeing the bottom of our decline. Time will tell, but April is already off to a strong start.
• Notably, MAU has now increased for 7 of the last 8 months and is up 13% overall in that 8 month period.
• The growth this month is small, however it has taken a lot of diligent effort to get here (more systemic change of our product and culture, rather than growth hacks and short cuts). Therefore, I believe that we are strongly placed to see compounding improvements to our numbers into the future, so long as we can continue strong strategy and execution.
• Our runway is based on the average monthly burn for the past 12 months, and this number is down to $69,863. Notably, the past few months burn rate has been much lower than this, so I expect our runway to continue to increase. It also takes into account our expected VAT liability estimated at $1.2m, however we expect this number to come in slightly lower, and will be paid within the next 1-2 months. At that point, we will see this runway number refreshed and likely even higher. Still, 53 months is already 4 years and 5 months, so we’re in a very solid place.
• Despite a slow decline for a long period now (around 20 months to be precise), I’m proud of the fact that we came into this period with a very healthy cash balance and runway, and have been able to avoid layoffs while they have been very prevalent across the industry. I believe that this strengthens our culture and trust, and will enable us to continue to have stronger collaboration and results ahead.

Note-worthy updates and reflections

AI for highlighted text and new prompts

In early March we rolled out a new set of features for our beta AI integration in our Ideas space. Users can now highlight text within an Idea and choose to Rephrase, Summarize or Expand that content. It’s also still possible to simply click “Generate” and have us generate content based on the text in the Idea. This acts more as a prompt to create content, whereas the new functionality works with existing content to rework it in some way. AI is of course a very fast-moving new technology with almost unlimited potential, so we are increasing our investment and focus on it accordingly. Stay tuned for much more here in the coming months.

Keeping Buffer Free campaign

On March 31, we launched our Keeping Buffer Free campaign, something we had been working towards for a couple of months. This was a campaign we came up with related to Hootsuite’s decision to remove their Free plan on that date, however the campaign became a larger message of commitment to our entrepreneur, creator and small business customers and to keeping a free plan for Buffer. We had an incredible response to this campaign, both to our overall message (Twitter, Instagram) shared through our Buffer social channels, as well as to my Twitter Thread I wrote sharing more of my thinking on freemium as part of our strategy. Ask: I’d be really grateful if you could reshare one of these posts with your network, if this feels like useful content for them.

Stripe Checkout to facilitate tax collection

We are clearly moving into a world with more complexity and regulation around selling SaaS products globally. We’ve felt this with the increased accountability for VAT collection, and for a while now we’ve been paying state sales tax in many cases. Going forward, we have made the decision that it will make sense to be transparent with the customer, and also apply that tax to the price. This is a change from a singular price that always applies, to a singular price which will have eligible taxes added that differ based on the customer’s location. In preparation for this, we rolled out Stripe Checkout to replace our existing checkout system. This is going to make rolling out this type of tax collection much easier in the coming months.

Upwards Manager reviews - During March, we conducted a round of reviews however in the opposite direction to usual. Instead of managers reviewing their team, we had individuals reviewing their manager. This gets us towards more fully rounded feedback (akin to 360), yet with the work required happening at different times. This is the first time we’ve done a real upwards review like this, and we’ve had great feedback from both individuals and managers about this new ability to share feedback, and gain those valuable insights into their leadership.

What’s coming up

AI in the main composer

During April, we will be adding AI functionality to the main composer. Whereas the Ideas section is used by 8% of monthly active users, our main composer is used by 91%. Therefore, getting AI into the main composer is going to be a very significant step in our AI functionality and market position. We’re also digging deeper into UX improvements to ensure that we are adding AI functionality in the right way to truly reduce friction and help users get more value from Buffer, or speed up the pace of getting value.

YouTube Shorts

We’ve been working hard on building out YouTube Shorts as a channel within Buffer, and this should be ready to launch towards the end of April or in early May. YouTube has been the most requested channel addition to Buffer for a long time, and YouTube Shorts will be our foray into this massively popular channel. We’re starting with Shorts as this will allow us to provide significant value with a feature that closely matches our existing functionality (Instagram Reels, TikTok). We plan to expand to fully support YouTube videos in the future, too.

Finalizing our new Twitter API contract

After a frantic January and February of intense discussions with Twitter around the future of their API, we’ve heard from them again after a couple of months of them being quieter. They needed more time to arrive at a clear direction ahead, and we’re expecting to have that clarity within April. This will mean we finalize the new price for our API contract, and we expect to see roughly a doubling of this cost. This will impact our COGS and profitability and put us further away from profitability again, however with growth likely ahead I believe we will be able to recoup this cost. Ultimately, this means that the cost of providing Twitter is very high for us, and we do not make too much for providing Twitter to customers. Twitter is instead more of a required piece of the channel mix customers expect. With that said, there is a possibility that this consolidation of the market is to our favor and we see growth in Twitter usage within Buffer as people need to move from other platforms that can’t afford the API price increase.

Thanks for reading, and for your support for Buffer. If any thoughts arise from this, hit reply.

Joel Gascoigne
Founder CEO, Buffer
joel.start.page