Tracking Metrics as a Bootstrapper

To my fellow SaaS bootstrappers still relying on a creaky home-grown metrics system — or worse, not having access to any metrics at all — I recommend you start using ChartMogul to get accurate insights into the health of your product.

I’m a ChartMogul customer, and I’m a bootstrapper. I’m the founder of Feature Upvote, a bootstrapped and profitable SaaS.

As a cash-strapped bootstrapper, if I spend money on a service, it has to be essential. I need to choose wisely where I spend my company’s limited funds. Because, as 100% owner of my company, the money I spend is money coming out of my own pocket.

So why do I spend some of that precious, limited money on ChartMogul?

Before ChartMogul: Home-grown Metrics

In the early days of my business, I wrote my own system for calculating metrics. I say ‘metrics’, but it was really just the singular ‘metric’ of MRR. I only cared about MRR because I hadn’t yet learned about other important SaaS metrics such as Churn and Lifetime Value. MRR was what many bootstrappers were sharing on Twitter and Indie Hackers. Calculating MRR seemed easy, something I could do with one SQL query and a basic web page. And it was easy — when I had just one price point and a few customers.

But as my business got traction, pricing got more complex. There were discount plans, coupons, and refunds. My SQL query to calculate MRR was becoming complex and indecipherable. I also had no way to view history and trends. Knowing MRR alone is not useful if I can’t compare it to MRR from a month, six months, or a year ago.

Then I added multiple currencies. That completely broke my home-grown metrics. The data it showed was simply wrong. But I didn’t want to spend time maintaining it.

I was in the unpleasant situation of having to make business decisions with little data, and what data I had was wrong. As my fellow bootstrappers will know, you always have too many things to do. It is hard to find the time to maintain an internal system used only by the founder. It is the type of work that always finds itself pushed off the to-do list.

Discovering ChartMogul’s free plan

I read a blog post from another bootstrapper that featured an attractive chart of their MRR growth over time. This chart was generated by ChartMogul and it was awesome! I wanted one for myself!

So I took a look at ChartMogul. I instantly realized this was so much better than what my home-grown solution ever could be. Even better, because my MRR was below $10K, I could use ChartMogul’s free plan. More metrics, attractive charts, and free? How could I not use ChartMogul, at least until Feature Upvote grew out of the free tier.

Best of all, unlike my homebuilt system, the data was actually accurate.

What I initially learned from ChartMogul

ChartMogul has excellent free resources that explain what SaaS metrics are and how I can use them. From them I learned that SaaS metrics are more than just MRR.

Even just the way MRR is reported in ChartMogul was eye-opening. It breaks down my MRR growth into “New Business” MRR and “Expansion” MRR. This concept of expansion growth was new to me. I soon learnt that it is important for success in SaaS.

Expansion revenue is revenue growth that comes from existing customers when they upgrade to a more expensive plan. If your product doesn’t yet have a pricing model that allows your happy customers to give you more money/month, I highly recommend adjusting your pricing model.

I discovered that by accident, I had baked expansion revenue into my pricing model.

Another SaaS metric that ChartMogul gave me was Gross Churn Rate, a metric I now watch as closely as MRR. This shows how quickly I’m losing those hard-won customers. In the early days, this churn was way too high for my company to ever be sustainable. I got churn under control, partly by improving my product, support and docs, but mostly by increasing prices.

$10K MRR: Time to start paying

Happy day! I got a notification from ChartMogul telling me I had hit $10K in MRR. But also a sad day, because now I would no longer be able to use ChartMogul for free.

My first impulse was to cancel my ChartMogul account. I was still cash-strapped, with too many competing demands on my limited revenue. Paying money to see some pretty charts each month didn’t seem to be a sensible business decision.

And yet, I realized it was much more than pretty charts.

I had come to rely on the information that ChartMogul gave me. It had become essential in my decision-making.

To save money, I could resurrect my home-built SaaS metrics system, and devote some time to make it accurate and show more metrics. But when I estimated how long that would take, it seemed like a silly thing to do, when I could instead pay ChartMogul to keep getting the information they were already providing.

In the age-old conundrum of buy-vs-build faced by SaaS founders, buy was the right decision in this case.

Decisions I make using ChartMogul

I want to share how spending money on ChartMogul has helped me, financially and psychologically.

When to pause Google Ads

Last year I started running my first Google Ads campaign. After two months of learning and tweaking, Google Ads started to give me new paying customers. But were they paying enough to justify the ad spend?

What I needed to know was my “Customer Lifetime Value” or LTV in ChartMogul. I discovered that it wasn’t high enough based on my cost per acquisition from Google Ads. So I paused the ad campaign until we could improve our LTV.

Knowing that I should pause the Google Ads campaign saved me way more than I was paying ChartMogul. From that decision alone, my ChartMogul subscription has been worth it. Once our LTV improved, I restarted my Google Ads campaign, confident that doing so was now worthwhile.

How did I increase LTV? By increasing prices, which I’ll tell you about further down.

Focus on the long term

More than I like, my self-esteem as a bootstrapped founder goes up and down with MRR growth.

Month-over-month growth greater than 10%? I’m the champion of champions, I tell myself, a true business visionary! But growth only 1% or 2% this month? What am I doing pretending to be something I’m not? Clearly, I have no business acumen at all and should start checking the job ads. A way I’ve found to deal with the yoyo-ing of my business self-belief is to look at longer-term trends in ChartMogul.

One way is to compare metrics year-on-year. ChartMogul does this comparison with many metrics by default. This long term view keeps me relatively calm.

Another way is to smooth out the curves by grouping data by quarter. I set the date range to all-time and group data by quarter instead of by month, then view the MRR chart. This quarterly view shows me a smooth and steady increase in MRR. Instead of being blinded by monthly swings, I can see that our long-term progress is good.

Effect of a large price rise

I have the developer’s mentality, shared by many technical founders, whereby we vastly undervalue our work. For a long time I wasn’t charging enough for Feature Upvote.

Slowly and steadily I’ve become willing to experiment with pricing, but every price rise still causes me anxiety. My first price experiments were small and cautious price increases — followed by weeks of closely monitoring the result in ChartMogul. Are people still signing up for paid accounts? How does behavior differ at different pricing levels? Who is churning?

I monitor the long-term results of pricing changes via ChartMogul’s “Average Revenue Per Account” or ARPA chart. This is perhaps my favorite view of my business in ChartMogul. Watching the consistent ARPA growth helps steady my nerves as our prices go up.

After the initial price increases went well, I started to feel bold, so in late 2020 I abruptly doubled our prices for new customers. (Existing customers remained on the old pricing.)

Using ChartMogul’s segments feature, I can compare customers by pricing: one segment for customers on old pricing plans, and one segment for customers on the new much higher plan. Comparing customer segments by price has been a revelation. Customers at the new price point have much lower churn. They have higher LTV, way more than double. SaaS veterans already know this, but I had to learn this myself.

Only by seeing the result of a large price increase in my own business did I really understand what happens — increasing prices overwhelmingly leads to better customers, who pay more and churn less.

I can conclude that raising prices — despite causing a drop in customer signups — was a very good decision.

A vital tool for decision making

My product was launched four years ago this month, and I’ve been using ChartMogul for three of those four years. It remains a vital part of my decision making process. I discarded my old home-grown metric system long ago, and it is never coming back.

Although I was hesitant at first about paying for ChartMogul, it has helped me earn much more than I pay for it.