The Long Road to Passive Income Part 1: Getting to $100 in Monthly Revenue

Originally published by Cory Zue on November 7th 2017 4,485 reads

@czue

Cory Zue

I make monetized side projects and sometimes write about it.

How I’ve taken my SaaS app from $1 to $100/month in three months.

“The journey of a thousand miles begins with a single step. “ — Lao Tzu

Two months ago Place Card Me, my little place card making website and SaaS-building testbed made its very first dollar.

Two months later, towards the end of October, it passed another major milestone: $100. With a few more sales it will pay back every dollar I’ve put into it so far!

Moreover, if you ignore the Y-axis, the revenue growth looks great so far:

I’m now convinced that barring any surprising unforeseen changes (like Google deciding to kill my search rankings or a new heavyweight competitor jumping in) it will be feasible — if not easy — for the site to become a steady source of passive income, maybe one or two hundred dollars a month.

Pretty great, right?

Honestly, I am stoked. There were many times where I thought I was going to fail to earn a single dollar in six months. That would have been — among other things — super embarrassing for me.

At $100/month, I can cover all my hosting costs, many of my lunches, and maybe even the occasional night on the town!

The rest of this post describes — in possibly more detail than necessary — exactly how that happened. And while a lot of what follows is specific to my own product, I hope the lessons and thinking can help guide and inspire others to continue to grow their SaaS businesses.

From $1 to $100/month

So it took me 5 months and 200+ hours to earn my first dollar. By comparison getting to $100/month was a cakewalk.

These were the major contributing factors — in approximate order of importance:

1. My organic reach and top-of-the-funnel continued to grow.
2. I picked up a new distribution channel.
3. I started charging more.

That’s it!

I’ll talk more a about each of these below.

The Compounding Effects of Reproducible Organic Reach

Many months ago — when I was first trying to figure out how to market my site — I read Traction.

The book outlines 19 different channels you can use to get traction for a product, and provides a methodology — called “bullseye” — for picking which ones to focus on. I found it to be super helpful in coming up with my overall traction strategy and I’d highly recommend it to anyone that isn’t sure where to start with marketing and selling their product.

When I did the “bullseye” exercise I selected SEO as as the number one channel to pursue. As a result, I set about learning SEO and adapting a strategy that worked pretty well. Through the techniques described in that article, I was able to slowly target certain keywords and phrases until my site started climbing the rankings in search. And as this happened, I started getting more and more organic traffic until eventually making that first joyous sale.

However what’s important to realize is that that sale wasn’t a miraculous single-event. It was the eventual conclusion of very simple game of probabilities.

One of out every N visitors to my site will eventually make a purchase. So if that first sale came after N visits, then the next sale should come after approximately 2N, and so forth. Therefore, if the rate of visits went up (which it did) then the rate of sales should also go up (which it also did). It’s just math!

So far, I believe that the biggest factor in my app’s increase in revenue over the last two months is simply that it’s getting way more traffic. More traffic = more sales, plain and simple.

As an aside, I now have enough data to know what my sales rate is and enough traffic to run A/B tests to try and move it — but that’s a subject for another time…

New Distribution Channels

The second increase in revenue came from a completely new distribution channel. That channel was Etsy.

Early on in my research of the wedding industry I learned that Etsy was an absolute behemoth in the space. In fact, a significant proportion of brides (and grooms) will search only on Etsy when they’re looking for things for their wedding.

Realizing this made me want to figure out how to get in on some of that Etsy action. The simple way to do this — which you’ve probably guessed — was to create a shop on Etsy and sell my place card templates there. This did require building out some tech to support a workflow centered around someone purchasing something on Etsy, but turned out to not be too complicated.

Those orange slices in the chart at the top — those are my Etsy sales. In September they were actually higher than my organic sales, though in October I toppled them with organic.

Unfortunately, I don’t quite know how to improve my organic reach on Etsy so the numbers seem to stay much flatter over time — at least so far. If anyone figures out how to exponentially grow a shop’s Etsy reach, I suspect they could make a lot of money!

Also please let me know if you know how to do this. :)

Pricing Changes

The last thing I did to increase revenue was raise prices.

The way Place Card Me works is that you can use it for free, but certain templates on the site cost money. When I was deep in the trough of sorrow — wondering whether I would ever make a single sale — I dropped the price of all templates to just $1. After several back-to-back weeks of regular sales I decided to start bringing them back up.

Specifically I did three things:

1. I eliminated all free designs except the “blank” one.
2. I raised prices on most designs from $1 to $1.95.
3. I started charging people who uploaded their own designs.

The combination of these changes actually increased sales rates. I believe that was mostly a result of removing the free designs — which I suspect created a psychological effect of making people think that they “should” have to pay for a design, and were therefore more willing to do so.

One last funny anecdote: charging for custom uploads was actually an accident.

When I introduced the change that made all designs paid, I changed the default behavior of the site in a way that inadvertently caused the upload workflow to also cost money. The way I found out I had changed it was getting notified that someone had paid for a custom design! Of course — once that happened — I decided to keep the change in place. Custom design sales are now the most popular single template/option on the site.

What’s Next?

I’m quite happy to be at $100/month in revenue at the moment, but it’s still a long ways away from anything that might meaningfully get me on a road to passive income.

In the next installment of this series, I’ll talk about how I plan to try and grow that number by at least 10x to $1000/month. It should be fun! If you’d like to follow along you can subscribe below.

Edit: Part 2 is now out! You can find it here. You can still subscribe if you want though. :)

Originally published at www.coryzue.com.

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