Late yesterday evening I completed my financial projections for today’s noon meeting with potential investor [REDACTED]. It took me a long time to learn to appreciate the importance of financial projections because in my first month I had paying customers and what looked to be a potential hit on my hands. If there’s three things an entrepreneur wants, it’s revenue right now, a crystal ball to see the future, and a time machine to change the past.
My company had early investment inquiries, great buzz (see here and here), so I just figured I just had to keep generating some buzz, blow out the product, and slowly grow the company. I also had a small amount of seed stage investment through the Pittsburgh-based AlphaLab program, which I was sipping, and I was buoyed by the complete arrogance that The Resumator was too good for an investor to pass up on once I left AlphaLab. Yes, I was that idiotic young entrepreneur who, despite reading everything out there from seasoned colleagues, was intoxicated by that first paying customer.
Your first customer is like the first person who ever liked you. They provide you with a rush of exaggerated confidence. A belief that you are are indeed a hottie, despite your insecurities. Sure it was just a, “I think you’re cute” compliment in the hallway at school, but you’re projecting that moment way out into the future, using it to predict your potential. You’re imagining your “cuteness” trend is hockey sticking so far up and to the right that some woman, or some man out there, will have no choice but to acquire you. In essence they are taking you off the market, freezing out competitors as you walk down the aisle. And you assume you’ll have many choices too, as I assumed I would have many investment offers.
I now realize how easy it actually is to get a few customers. Take that moment, love it, and then realize it is the easy part. It’s behind me now, and as I look at my non-hockey-stick-looking “soup bowl” trend, I take joy in the simple fact that the trend is not a downhill slalom. Sure, it’s paid traffic, costing good money a month. Many sign up for the Free Plan. I of course am banking that they will outgrow that plan. But with my expenses being ridiculously low—I mean less than a car payment—I can afford a little ad spend to drive traffic, generate usage, and in the process alleviate my anxiety when I have low sign up days. I have a 30-day free trial, which means no sign ups today equals little chance of revenue next month.
How I wish I could travel back in time, bleep slap the living bleep out of myself and focus on traffic growth, traffic growth, and traffic growth. This is a numbers game, people. You can predict your revenue simply based on the amount of traffic that comes to your site. You must scale your traffic to scale your business. This means every month you must know if your traffic grew or fell, and why.
Here’s an important tip—separate usage traffic from sales traffic. If your site involves daily usage by customers, or the driving of non prospects to your website via those customers, your traffic numbers are flooded with visits that were most likely not intended to generate revenue. You must devise ways to get at exactly how many people visit your website as a potential customer. Here’s some tips:
- Use a special character pattern in all your ad links so you can easily search for that traffic in Google Analytics. I use /home/s:source
- If possible, use a subdomain or some other URL than your home page for users to log in. This cuts out some of that loyal traffic from the sales traffic
- Track the average number of log ins per day and then always subtract that number of visits from the tally for the home page
Do these things and it is amazing how you can zero in on exact conversion stats. I have some funky tools for doing the math on this quickly. It’s a little obsessive, but incredibly valuable. When the template is perfected, I will share it with you.
Now I have to show investors how I will scale The Resumator, and yesterday’s late night exercise was my attempt to mathematically predict how my company would do that. See, I hate projections that are just numbers thrown out there. I need data to base projections on. So after half a year in business, I had numbers to plug in—and let me tell you—my conversions need to get much better in order for me to make a nice business out of this.
So here’s the plan:
- The introduction of recruiter-focused product plans (more expensive, easier customer to acquire)
- A buzz marketing tactic that provides me with a 350% boost in traffic (gotta make it happen)
- 40,000 visitors to my web site’s sales funnel by October (via the buzz)
- Doubling the conversion percentage of all my plans by optimizing my landing pages (I think the conversion can be that much better from where I am)
- Convince this investor that I can do this
I’ve already convinced myself, but the anxiety of not knowing the future sure makes a gray hair grow.