This update is a bit late in the month, because I held off on publishing it.
We felt that it was more respectful to customers and clients to personally make the big announcement (we’re shutting down our training/coaching business) to them, before publishing this letter.
So here’s – finally – the story of August, which has been quite crazy:
While most of the world was on summer holidays, we were hard at work on Nuro.
We knew we’d have to face some churn from all the new July users (we had tripled signups in a month).
So we had to work on balancing that with new sales, plus providing extra love and care to everyone who joined during the July surge.
- Revenue is UP 22%, and we ended August just 2 users short of the $100,000 ARR (annual recurring revenue) mark!
- We now have a financial forecast!… And it says we have 5 months to prove ourselves a viable company 🙂
- Big news: We are shutting down the training business.
- And… Big time success — Sébastien presented the proof of concept of a crazy new AI feature at Hotmart’s Fire Festival in Brazil, and immediately received multiple offers to partner on distribution of Nuro in Brazil, Europe, Latin America and Japan.
⭐️ Elevator Pitch (how to talk about us)
For experts, coaches and online course creators, Nuro.video is the AI video editor that takes your raw video content, and provides you with a high-value, fully edited video – in any language that your audience speaks.
This has changed a little since last month – because of our recent AI breakthrough (see below).
❓How you can help
I am looking to « dig the well before we’re thirsty » to get in touch with the international markets we want to launch in.
So I’d like to speak at events (physical and online) in the following markets: USA ; Colombia ; Mexico ; Brazil.
The ideal event :
- Has an audience of information marketers, coaches, online course creators
- Has 400+ people in the room
We should be launching internationally in early 2023, so I would appreciate any introductions, since events take time to plan.
Pleas let me know if there are people we should be talking to that you can connect me with (or if you’re running an event where I can speak!).
🏆 Growth: our key metrics
OK I can’t even start showing you graphs without saying the scary, dreaded C word that kept me awake at night this August :
How can we beat Churn!? 🥵
A few years ago I worked in a startup which had 30% month-on-month churn in the first year. That’s brutal.
Every month we were rolling a boulder uphill, and on the 31st of the month the boulder would fall back down a third of the way and be even heavier the next month.
So I made the vow to work on churn even before we worked on marketing Nuro :
- We launched with the « wizard », a step-by-step onboarding experience built with AppCues.
- We have a BIG incentive for users to create their first Nuro video in the first 30 days (it removes all limits from your account, you can create and host unlimited videos as long as you created your 1st project in the first 30 days)
And it’s working :
75% of users have created their first project already. 53% have created more than 2 projects.
Is AppCues worth it? Well, more than half (54%) of all users use the « wizard » to create a project.
And during all my webinars and online demos, I use the onboarding wizard because it helps people feel like the tool will take them by the hand, when they no longer have Sébastien to talk them through it (all I do is literally read out loud the wizard instructions and do what it says).
Because we did this… We’re still winning! +22% ARR🤘
Our big challenge was that July buyers would have less customer support and live sessions during August, AND we had a huge server issue bubbling up at the end of July/early August (terrible timing ; I’m looking at you DigitalOcean!)
So I feared that 20% or more might bail through our overly-generous guarantee (seriously, the wording of the guarantee was like practically paying people to leave. We’ve since fixed it)
We did get hit by some churn (lower than 20% !) but we also rallied at the end of the month with a cool time-limited offer, which allowed us to keep the line going UP:
Note: the July number has been reviewed downwards to account for 2 churned users who were also entitled to refunds of previous payments 🤦♂️
Our ARR is now EUR 98,588 € – just two users shy of getting to $100k ARR!! 🙌🥳
Show me the money!, she said
I’ve been getting great coaching from my good friend Annie Pratt (author of The People Part: Seven Agreements Entrepreneurs and Leaders Make to Build Teams, Accelerate Growth, and Banish Burnout for Good).
She kept prodding me to finally take the scales off my eyes and build a financial model, instead of blinding charging forward my unstated assumptions.
I first spent 6 months struggling with a Google Spreadsheet:
But then, because of a IndieHackers thread, I had the « duh » moment that for any crummy process which uses a spreadsheet, there has to be 12 SaaS companies who offer a dedicated tool to do it for you.
Behold – the results after just 1 day of using Finmark:
Are we really on track to $1M revenue, $300k MRR a year from now?
This looks wild, but this is me trying to be conservative and reasonable 😂 :
The above is based on several key assumptions:
- We assumed churn would start at 20% and slowly go down (15% in January, 10% by July next year)
- We assumed that our affiliate program will launch in September and slowly take a larger proportion of sales over time, becoming our largest channel after roughly a year.
- We made some assumptions as to how many users would be « active » (create new videos) every month, and how many hours of video would be created and hosted per user.
This is a key assumption because it determines our variable cost for each new user.
Hosting, editing, processing and streaming video is expensive so we have to be super-attentive to unit economics.
- We assumed that we’d add support for more languages in October (we’re already ahead, since Nuro supports French, English and Portuguese now).
And that we would launch our « International » account (more expensive) tier in January, with 20% of new users taking up this new, higher level of account
(this is an innovation with several insanely cool AI features for experts/coaches who create content in multiple languages)
So it does look like the future is bright!
Bottom line: we’ve got 5 months to earn our stripes (and survive) 👀
Predicting a future where we break $1M ARR in the first year is great, but if you look closely at the « Runway » graph above, you’ll notice that we’re coming very close to completely broke:
According to this forecast, we end the year with €813 in the bank before bouncing back like crazy in January
Of course this forecast is super brittle – in fact, if we change a single thing in the numbers (if we get just ONE more person churning or ONE annual subscription less than the model ; if we have just ONE unforeseen Digital Ocean bill), then it goes like this:
In every variant of the model I did, we either go up to the sky forever, OR we go down in either December or January.
I felt a little bit like this:
If you look at it my way, it means we have 4 months to make ONE THOUSAND dollars.
And then we’re guaranteed to win! 🥳
(Really, I’m not too worried)
💪 Learnings since last update:
#1. How the app evolved
The most urgent activity in August was to fix the burning fire of some users getting terrible upload speeds. The software worked just fine, the videos were processed blazingly fast, BUT a bunch users just couldn’t upload anything to the app in the first place. We’re now using Uppy + TUS to upload directly to a CDN ingest server (not our own) and speeds went up 20x.
Feature-wise, we came up with a big breakthrough : « Module pages »
When a user generates an entire masterclass using Nuro, sometimes they just want to share the link to that directly (without needing a member platform, etc).
But just sharing a link to a raw video or a video player is kind of « meh ».
So we now automatically generate a Module Page, which contains the video, its (searchable) structured transcript in a polished form.
It looks great and enables our users to get their online business started even faster (they don’t even need to create a website or membership site anymore!)
One big thing we keep noticing is how many of our Users see Nuro as a way to not only create their (paid) online courses and their marketing videos (like we initially intended), but also their (free) content videos.
This directly impacts our roadmap, because Nuro was intended to host and stream the resulting videos through our Nuro player. Now we have it at the top of our priority list to allow exporting the videos to YouTube. This will allow many of our users to push a ton of high-quality video content to their YouTube channels, in turn driving more traffic to their courses and programs.
#2. Speaking at Hotmart FIRE Festival (7,000 attendees!)
In the nick of time before I stepped up on stage in Brazil at Hotmart’s 7,000-person « FIRE » event, we translated the entire Nuro.video app into Brazilian Portuguese (I needed a screenshot!).
I had a speaking slot on Day 1 (my favorite time to speak, because then I get to relax and talk with attendees for the remaining two days):
And to add some showmanship to my keynote, we put together a proof-of-concept for an upcoming AI feature that blew everyone’s minds.
This deserves a fuller debrief in the next investor update, because it technically happened in September (Sept. 1st).
But because of this, I came back from Brazil with potential distribution partnerships in Japan, Brazil, Portugal, and am invited to speak in Phuket in early 2023 to an audience of Asian internet entrepreneurs.
We’re now entering the scary phase where this upcoming feature is clearly our path to product-market fit and the folks who saw it are messaging and emailing me about it… but it was roadmapped for October 2023 😂
So I have to switch tracks and prioritize it. I think if we play our cards right (and hire well) we can get this to market in France, US and Brazil by the first quarter of 2023.
(I’m not going to share here a preview of this feature because, I feel validated enough that we’re building something people want, and right now getting MORE emails for something that doesn’t exist yet is just going to add distraction. Pre-launching 2-3 months out seems more reasonable!)
#3. Our affiliate program is ON!
In my August update, I mentioned that implementing an affiliate program was the priority for the month.
I initially started on Paddle.net and Rewardful and had it all figured out… but then, at the Fire Festival, I was introduced to Antonio, Hotmart’s Product Owner for their payment product (Hotpay).
Since the event allowed access to meeting rooms, Antonio and I ended up talking for over an hour about all the API and webhook needs that were driving me to choose Paddle over Hotpay…
And it turns out that the full stack of what we needed can be done through Hotpay/Hotmart, which is great!
Within 48 hours of the event, I was all set.
The big draw of Hotmart over other options (like Paddle, or Stripe) is the ecosystem : no other platform has such a fast-growing reach of affiliates and producers in the information-marketing business.
So I was excited to put up our offer on their marketplace – we are now open for affiliates to promote!
(in French for now)
🙌 The end of an era… we’re shutting down the training business
So, Nuro is progressing by leaps and bounds.
Everyone is pumped and feels the momentum.
We are stretched really thin though and while it’s been awesome seeing everyone step up, it will take a lot of focus to keep the exponential curve going.
For this reason, I made the decision (after months of consideration) to shut down our training and coaching business.
We are running one last Sprint Challenge for the clients of our year-long intensive coaching program, which will bring pretty much everyone to the end of their contract.
So this quarter is the « swan song » for a coaching program that has been our most powerful and results-generating offer (ever).
Between my business partner David and I, we’ve sold about 15 million dollars worth of online courses over the lifetime of our training businesses (I started the Free Entrepreneur Movement in 2010 and was separately running a dating advice business and a dance school previously).
In the last few years my business (not including David’s numbers from his own business) stabilized around EUR 1M€ per year (which is a bit over $1M), with some ups and downs. But since I started focusing on developing the software (rather than launching more courses) it was becoming very hard to maintain the profitability of the coaching side.
When you have a team of 20-ish people, where only 2.5 of those (two developers and half a CEO) are working on the main strategic initiative (the SaaS side), the cost structure just makes no sense at all. We had to transition the team to have more hands on the software.
Does it seem crazy to shut down a 7-figure-per-year information business in order to focus on a $98,000 ARR software business?
BUT – as an essentialist, I believe this is the obvious choice.
As long as I try to run both simultaneously, both companies would be hamstrung… and while our training business has been a fairly stable bedrock, the SaaS (software as a service) business is going to allow us to help many more entrepreneurs (all over the planet, not just in French-speaking countries).
It’s a bet on the future, but not such a crazy bet if you think about it.
From a personal standpoint, running a $300k per month recurring-revenue business (which is our forecast for 12-months from now) is not only much more lucrative, but also a more peaceful, dependable lifestyle choice. (And let’s not forget that Recurring revenue + fast growth = a business that is worth a lot more financially).
Heck, even if we fall way short of the mark, even if it takes longer to get to a lower bar, it’s not like I’m burning bridges: we are wrapping up the training business very gracefully, and keeping a great relationship with the list of subscribers and customers.
And it’s not like launching a new information product is going to be tough if we need to: not only do I still have my expertise, IP, brands and trademarks… but if I ever need to launch a new online course it’s going to be WAY easier a year from now than it was a year ago. Because there’s a crazy new AI tool that will edit all the videos and create the entire online experience for me 🙂
📅 Review: Last Month Commitments
- The ONE THING: Putting together our affiliate program! ✅ Done as promised (twice)
- Nail my presentation at Hotmart « FIRE Festival » to find potential local partners ✅ Done as promised
- Make our Player more robust so it’s lighter, supports iPhones better, and allows more customizations of the video look and feel. 👍 2/3rds done (iPhone support needs more testing)
- Changing subscription plans to quarterly, move away from Stripe ✅ Done as promised
- Automate the « invitation request » process so that I don’t have to manually create Bonjoro videos for everyone ✅ Done as promised
📅 Priorities for September
The ONE Thing
- The much-requested feature : Allow Users to publish their videos to YouTube
- Sign up our first affiliate
- Make the affiliate program easy to join, and provide affiliates with impactful promotional materials
- Initiate a redesign to generate more video styles
- Get our landing page reviewed (« roasted ») by an expert
📣 A word of gratitude
Thanks to Olivier Roland for replying to my previous update (where I was looking for possible partners to promote us in the French market) and initiating a conversation which opens great possibilities for the next quarter!
After the last update, Jeff Walker also made some very useful comments on our video demo (the one on the landing page), so I rewrote it. Thank you Jeff! We will record the new video soon – at the same time as the new version of the landing page itself!
I’m so grateful for Annie Pratt for giving me the confidence to put together the financial model. It is scary but happy-scary (knowing about the landscape in front of us is much better than running around in the dark, which is not the happy kind of scary).
Thank you to Nicolas Pellerin for getting me the opportuntity to speak on Hotmart’s stage, as well as getting me a meeting with Hotmart’s payment PO.
Happy to answer any questions you might have.
Thank you for all the support!