Q1 2017 has been a doozy. I’m not sure if it’s a larger market trend or we simply neglected to develop our pipeline towards the end of last year. Regardless, dealflow is down significantly and revenue is suffering. On the upside, we continue to experiment with marketing and service offerings to find our niche.
January started off relatively strong. With two active projects, one winding down and another startup up, it felt like Q1 was going to be great. However, several weeks into the new project it became clear that none of us were getting along with the client. We parted ways soon after. While I think we could have potentially done more to manage expectations with the client, their communcation style was abrasive and disrepectful and our collective experience told us that things weren’t going to get better.
I had wanted to experiment with some different marketing this year and towards the end of January I decided to sponsor a local startup pitch battle event. Sponsorship came with a 30-minute Q/A session at the start of the event. The topic of the Q/A was “Moving from Engineering to Business” and it generated a lot of really great discussion. At subsequent events, several people have pulled me aside to tell me how much they enjoyed the talk. Because of the success of the event, I plan on doing more sponsorships down the road. But not until we beef up the bottom line a bit.
Monthly Revenue: $16,485.00
February is when the proverbial shit really started to hit the fan.
We did a pretty good job last year saving up close to $20k in savings. Part of this was because we wanted to file as an S-Corp, rather than an LLC. This necessitated setting up payroll in Gusto, a task I had originally projected to take 1 week to complete took 6 weeks instead. I was looking forward to stepping on the sales gas pedal while I collected a small salary. Unfortunately an oversight by our accountant caused the IRS to send us a nice little letter telling us we owed them $13k in back taxes. This combined with $3k invested in labor to write some case studies resulted in the bank account being nearly drained, all in a matter of a week. So, payroll was paused (just me on payroll at the moment) and we lost the that cushion I was hoping to draw on while I got to work doing more sales. Lesson learned: Stockpile cash like crazy…you’re going to need it.
One final invoice with the client we fired closed in February, but aside from this, we had no other revenue for the month of February. Last year, the work came in droves and we did very little work to “win” those contracts. I optimistically expected another gig within a few weeks. By the end of the month though the only work we were doing was some small maintenance work for some past clients, totalling only a few hundred dollars.
Monthly Revenue: $4,365.00
We kicked off a small project with a previous client where we built out a handful of new pages on an existing codebase. The project went well but this was our only revenue for the month.
In the absense of any new work, I decided to get serious about a sales pipeline, which I’ll describe below for anyone looking to understand how to setup a rudimentary sales process.
- Sign up for Pipedrive
- Find the top 100 businesses in Colorado
- Add each business to Pipedrive, each as a separate “Lead Idea”
- Send a personal note and a connection request to every CEO on LinkedIn for every Lead Idea in Pipedrive
- Book coffee meetings (5-7 per week) with anyone in any sort of leadership position
- Repeat forever
Since starting this process I’ve met a ton of great people, many of whom are business owners or operators. This has netted me some great referrals and intros. But sales is like farming, you have to plant your seeds, water the soil, and eventually, months down the road, you can harvest the fruit. This past week I got my first paid opportunity from months of meetings. So IT DOES WORK; you just have to be patient.
Out of the many meetings I had with engineering leaders came the idea to repackage RailsCare as a managed security service, rather than the application maintenance service it was previously. We recently revamped the landing page and decided to focus on automating security-related tasks: gem updates, vulnerability notifications, weekly security scans, and more. I’m currently sending ~30 sales emails per day to highly targeted folks whom I know to be running Ruby on Rails in their technology stacks. Much of the process for finding these leads is outlined in a recent Clearbit blog post. Check out the RailsCare landing page to learn more about the service.
Monthly Revenue: $5,530.00
2016 lured me into a false sense of security. We did pretty decent revenue and I thought we had the pipeline figured out. In reality, we’d never even come close to figuring out a sales process.
I’ve already accomplished one of my goals for 2017, which was to experiment more with inbound marketing. We’re going to continue to experiment with sponsorships and speaking opportunities in order to generate buzz and interest about the brand.
We accomplished another goal for 2017 by relaunching RailsCare as a security service. Conversations with engineering managers and executives lead me to believe that there’s a real market for this service so I’m looking forward to getting that first sale.
If you’re interested in working with us or know any one who might be, get in touch with us via our contact page. We are currently paying 15% for referrals, so hit up your network and get in touch!
As always, thank you all for your love and support. If you find these useful, or have any questions, don’t hesitate to comment or reach out!