Buffer November Update: $2,347,000 run rate, 1,189,000 users

Below is the monthly update email I have just sent this morning to all our investors. I hope you enjoy taking a read about the full details of our work on Buffer in the last month. I’m excited to hear from you in the comments if you have any questions about what we’re up to!

If you want to know how October went, you can take a look here.

Traction update

  • New users: 66,000 (Total: 1,189,000, from 1,123,000: +5.9%)
  • Daily active users: 30,600 (down from 32,500: -5.8%)
  • Revenue: $196,000 (Annual: $2,347,000 down from $2,388,000: -1.5%)
  • Business revenue: $22,250 (down from $30,510; -27%)
  • Cash in bank: $318,651 (last month: $311,719)

The volatility of an early product (Buffer for Business) is affecting our revenue growth rates. We’re growing faster overall, but the growth is spiky. We saw a similar pattern in the early days with our freemium product. October’s hacking incident is the cause for the drop of DAUs, but we’re seeing it returning to previous levels now.

Launch of 2-Step Login 

We launched 2-Step Login last week in the wake of the security breach last month, and as a key business feature.  In addition to this, we have strengthened security by setting up Two Factor Authentication for the main services we use at Buffer.

Buffer for Business

  • MRR grew 17% to $19,200
  • Total revenue declined 27% to $22,250
  • Buffer for Business was 11.4% of total revenue in November (down from 15.3% in October)
  • 376 total paying customers (from 268 in October)

We’ve seen that this month, stable MRR growth has continued (17% MoM growth). The decrease in overall business revenue this month is largely caused by less annual payment signups and no new enterprise customers. As we prepare for the upcoming launch with additional new features, we expect the business segment to resume a higher growth rate.

Team growth and the Buffer Retreat #2

This past month we added three new team members and now we are at 16. A total of 11 of us are currently in Thailand now for the 2nd Buffer Retreat. Members of our distributed team came from as far as the UK, Australia and different parts of the US to be together for a week working from a hotel in Bangkok and villa in Pattaya City. As we experienced in the first ever retreat in San Francisco and Lake Tahoe, this will be another effective bonding opportunity for the growing team.

We’re working towards a launch of Buffer for Business in the coming weeks, which will be an exciting time for us again.

Let me know any questions you have on our progress, I’d love to answer them.

  • Heather YamadaHosley

    Hello! I was glad to hear the retreat was unaffected by the protests in Thailand and that everyone is safe still. I think it would be interesting if you all put the stats together on how the hack affected Buffer’s business (sign up rates, revenue, HH response, etc.) and used it as data to support the importance of putting security features in place preemptively. What do you think, Joel?

    • LeoWid

      Hi Heather, thanks for stopping by and great idea, we’ve been thinking about making this public and added some more info on it here: http://open.bufferapp.com/how-being-hacked-impacted-our-startups-key-metrics/

      • Heather YamadaHosley

        I think that’s a great idea! You all are already so transparent and open, I think in regards to honestly divulging the effects of the hack has really opened the eyes of many other companies. Kudos to Buffer and keep it up! :)

  • http://aizon.me/ Rafael

    I like reading your blog and watch your company growth. Recently you published Buffers financial figures. I have one question. Is team salary included in revenue or not?

    • Patrick Johnson

      Revenue wouldn’t include Salaries – as salaries are an outgoing expense not an income.

  • ericbieller

    Love the transparency guys, keep it up! Question out of curiosity, of the 6% increase in new users, what did your traffic sources look like?

    • LeoWid

      Hi Eric, I realize we have never replied here, so sorry for that! Yes, so we’re actually working on a much more structured break-down of that, unfortunately we don’t have it tracked that well.

      A rough breakdown is this:

      25% is direct traffic
      50% are referrals (from content and our blog)
      25% is through our API and signups from partners

  • Tom

    You have a continual advert for new team members, what are your team growth aims in the next 3 – 6 months?

    • LeoWid

      Hi Tom, great question! Definitely to hire very aggressively, we’re looking for 5 new members right now http://jobs.bufferapp.com

  • http://www.asoftwarestartupguy.com/ David Miller

    Kudos for the transparency.

    I don’t know why annual payment customers should have anything to do with revenue. You should be recognizing as revenue annual payments (if they are prepayments) in 12 equal amounts over the balance of the year, with a deferred revenue account on your balance sheet decreasing each month for the amount paid but not yet booked as revenue.

    Make sense? Or am I missing something.

    • LeoWid

      Hi David, thanks for stopping by and great point! That’s definitely been a shortcoming from us and we’re thinking of making that switch very soon now!

  • http://www.financialsamurai.com/ Sam Dogen

    Having fun on a team retreat for a company expense is awesome! Gotta send some pictures and stuff. Did you guys invite any investors too?

    • LeoWid

      Hi Sam, haha, actually we didn’t! :)

  • http://www.gggroup.net/ thattomking

    Fascinating experiment! Tech, economics and employee engagement are critical. Tech companies must be global, smart and fast fast fast- and only talented, incentivized and focused, people can make that happen.

  • JoshoMosh

    I with you guys good luck!

  • Tong Inbox

    I think you loved Thailand. Why don’t you look for a programmer in Thailand. They are skilled and competitive in term of compensation.

  • Mahendra Tipale

    Great stuff guys! You are fully transparent firm! isn’t allowing mail and salary sharing creates conflict of interest?

    wonderful to know such firm ! Best luck and keep growing!

  • Karoly Molnar

    Man! This is my dream! I always had this weird fascination about the government doing this. It is great to see this being done on the SMB level. You guys totally Rock!

  • Guest

    Hello ! Huge thanks for sharing these great insights in such a mind blowing way ! You guys keep leading the path in so many ways. Keep it up :)

  • Favecast

    How do you all calculate DAU?

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