This Is Bizness: The Fourteenth One

Welcome to This Is Bizness: The Fourteenth One

Welcome to another edition of This Is Bizness, your weekly newsletter that explores the world of buying and selling small businesses outside traditional channels. Today we are going to do things a little differently.

I will be giving you guys an update on how my first acquisition, Sourcely has been doing!

Without further ado, let's dive right in 🤿 

Sourcely AI October 2023 recap

Remember how it was at $2,500 MRR and worth $100k last month?

It’s now at almost $4,000 MRR and worth ~$150k

…. in just a month 😲

Reminder: I acquired sourcely 4 months ago on Acquire.com for $4,000

October was the 1st month since acquisition that students are back in school

Safe to say that it did not disappoint 😉

Come with me to take a look at what we did in the last month to achieve this growth & what we learned 👇

Memory refresh 🧠

Numbers at acquisition

Monthly visitors: 4,000-5,000

MRR: $500 (100 paying users)

September Recap

Unique visitors: 9,226

Revenue: $3,800 (hella yearly subs at $70 👀)

Paid subs: 280 (1.5% conversion)

Monthly Recurring Revenue: $2,500 (400 paying users)

Onto the good part:

Last 30 days (Growth month over month)

Site visitors: 19,145 (+24%)

Unique visitors: 14,263 (+25%)

New subs: 1,322 (+38% 🤯)

Revenue: $3,784

Monthly Recurring Revenue: $3,500+ (500+ paying users)

Another Cheeky Back-of-the-envelope valuation no one asked for

$3,500 x 12 months

= $42,000 ARR x 3.5 (Avg SaaS Acquisition Multiple acc. to Acquire.com)

= $147,000 (I wouldn't sell for this 🤷‍♂️)

I know this isn't a perfect valuation, but it does the job here

So....

How has revenue stayed flat but MRR increased so much?

I’ll explain it all down below!

Changes we made last month:

1. New features and UI upgrade

Probably the most important and impactful

Massive feature additions and UI changes courtesy of my cofounder, Elman

Added advanced filterability for searching through sources like excluding keywords and minimum number of citations

Users LOVE these new features and they bring us closer to PMF than ever before!

2. Increased prices by ~30%

Along with these new features and with school starting back up we felt it was the right time to increase prices

Monthly= $7 -> $9/ month

Yearly= $67 -> $87/ year

So far we have seen no real decrease in subs sold or increase in revenue but it has only been 2-3 weeks so hard to say

3. Setting up new distribution channels- Cold email, Student ambassador program, TikTok

These new channels of distribution will enable us to level up in terms of customer acquisition

I am still experimenting with these so not had the level of success we’ve seen with influencers and SEO

I strongly believe setting up these distribution channels will pay massive dividends as we keep growing and allow us to really diversify our customer acquisition strategy

I could really keep going here but I’ll leave you with one last tidbit

TikTok was Sourcely's previous owner's largest customer acquisition channel but we haven’t worked on it at all (till now) 🤔

Changes we saw this month:

1. Higher no. of subs sold- increased by 40% in a month

This is a massive increase month over month

School starting back up was definitely the primary factor

Saw a massive increase in subscriptions sold despite the increase in price

Will be very interesting to see how this develops

2. Flat revenue despite an increase in subs sold & increase in MRR

This is mainly because of the disproportionate number of yearly subs we sold last month

Yearly subs sold dropped by 30%

Monthly subs sold increased by 20%

Monthly subs have picked up the revenue slack that Yearly subs left behind!

Not only that, but they have increased MRR at a much faster rate since old yearly subs were at ~$5/ month compared to $9/ month now

Overall effect has been that revenue is flat while MRR increased

3. 10% drop in avg. order value

This is again due to fewer yearly subs being sold, decreasing the overall revenue

returning customers average order value is 32% higher than the AOV of our first-time customers

With our increase in prices, I hope this comes back up and keeps increasing

Will keep monitoring the developments

Learnings from the past month:

1. First of all school is back stronger than ever

We presumed most numbers during the summer were to be taken with a pinch of salt since its not representative of the whole

With school coming back we have continued to see an increase in web traffic

Most importantly our conversion rates have not changed (I was very worried about this)

2. Increase in monthly subs

Lots more users are opting for the monthly subscription with academics starting back up

I believe that the unusual number of yearly subscriptions sold during the summer was due to its low price and the fact that those doing academics during the summer are likely to be serious about their work and more likely to buy a yearly plan

3. Having a well-priced yearly plan changed the game for us

It has given us a budget to play with going forwards

Most importantly, after the massive increase in yearly subs sold last month

It gave us a loyal user base that regularly uses the tool

This core user base also becomes an extremely viable source for all types of advice and feedback- marketing, features, etc.

Use your core users as a sounding board for all your ideas

Bonus: Yomu

Just launched (in beta) the newest addition to StudentCo. with Yomu

While Sourcely has been amazing, we have been hard at work to bring you a brand new student AI tool

Yomu is a general essay-writing AI

Email me if you want access to our beta

I would like to leave you guys with this awesome map showing Sourcely users from around the world 🌍️ 

If you have any feedback, suggestions, or specific businesses you'd like us to analyze in the future, please don't hesitate to reach out. Your input is essential in shaping the content of This Is Bizness.

Thank you so so much for taking time out of your busy day to read This Is Bizness. I appreciate and love every single one of you 😊 

Alrighty see you guys next week 🖖 

Dev

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