The Pivot

"It's like decending half way down a mountain just to climb another..."

Hey friends,

It’s been a long time since I’ve sent out this newsletter. In actual fact, this is the first newsletter I’m sending in 2024.

There is a lot to cover so I’ll jump right in…

So where do things stand so far in 2024?

So far, 2024 has been a frustrating year.

I started the year with high hopes that I had finally worked out “the model” so I could scale my agency. Last year, projectBI did $237,000 in top-line revenue and I had a goal of hitting $500k by the end of 2024.

The team was doing well, I finalized a strong offer early in Q1 and worked with an amazing designer and webflow developer to redo our website. The pieces were in place and I started putting my foot on the gas on the marketing front.

I started posting consistently on LinkedIn (thought leadership content), and doing a lot of business development by connecting with different players in the space.

Fast forward 8 months and this is where things stand:

• New DTC leads generated: 5

• New DTC clients closed: 1

• Total active DTC clients at time of writing: 2 (1 X retainer, 1 X project)

The only reason the agency is still alive at this point is we’ve closed enough business this year from non-DTC clients to keep us going.

Below you’ll see the performance of projectBI so far this year.

As you can see we are slightly ahead of where we were at this point last year and we still have 2 weeks left in August.

On the surface this doesn’t look too bad considering the fact that the DTC market as a whole is having a bumpy time and a lot of agencies in this market are struggling. The big issue for me is that we’ve increased our costs quite significantly since this time last year.

We added an account manager to the team, are now working consistly with a top freelancer who helps us with Tableau development, and I’ve spent more this year on design and webflow development than I did all of last year. In short, we are a lot less profitable this year compared to last year because we’ve been under capacity and I haven’t managed to close enough new business to fill that capacity and scale.

How are things going with Hawkeye Ventures (“the SaaS acquisition play”)?

As a quick reminder, in November 2022 I acquired my first SaaS product, PulseBanner, and in June 2023 I acquired my 2nd SaaS, Meet Slack.

As you can see in the table above, these two SaaS products have generated over $24k in revenue so far this year. At this same point last year the SaaS had generated just $14k. Q4 is also the strongest month for the SaaS and I expect to end the year around $40k - $45k.

Considering the fact that we’re running at >85% margins and I spend less than an hour a week on the SaaS, this is an incredible outcome.

I’m still paying down seller financing for Meet Slack so I’m not yet able to stack the profits from the SaaS, but by the end of the year I’ll be done paying down the debt and can start building up a war chest for my next acquisition.

So what’s the bottom line?

Across both the agency and the SaaS we are up around 5% compared to last year with still 2 weeks left in August. Not great but also not the end of the world.

I’ve focused on building up some cash reserves this year and we still have a few months of runway if things get worse.

The Pivot

So now that you have a decent idea of where things stand with my businesses let me share some significant news.

After 3.5 years operating in the eCommerce / DTC market I’ve made the decision to pivot out of this market and back into the SaaS market.

Unfortunately I never truly succeeded in reaching service-market-fit in the DTC market and after years of hard work and multiple mini-pivots I’m waving the white flag.

During the last 3.5 years we only managed to work with 12 DTC businesses, many of them on small one-off projects.

There are many reasons why we failed to generate significant business in this market, but the main reason in my opinion, is the fact that we were addressing challenges which most brands didn’t consider as major pain points. We were offering an antibiotic to a patient that wasn’t sick (in their minds).

The last thing you want to do as a business is have to convince your target market that they have a problem. This requires massive investment in marketing, branding, positioning and business development. In short, it’s playing the game on hard mode.

You want to offer a solution to a very painful problem. This is the big lesson I take away from this whole experience.

Before launching the agency in 2020 I worked as a freelancer helping SaaS startups implement BI infrastructure and reporting. I know this market well and have helped over 30 SaaS businesses throughout my career.

The new direction for projectBI will be helping SaaS businesses answer their most challenging product-related questions.

For many SaaS business their product is a “black box”. It’s challenging to answer key questions such as:

• “Which features are my users using, when, how often and why?”

• “Why are only x% of our users upgrading to a paid plan?”

• “Do we have product-market fit?”

• “What’s the % of users that continue using the product after, 30 days, 6 weeks, and 12 months?”

projectBI will specialize in helping SaaS businesses answer these questions and many more in as little as 4 weeks.

Why focus on product analytics?

I learnt the hard way serving the DTC market that the more areas we cover, the more complicated things become.

I previously moved away from the SaaS market because so much of the work is custom, and I didn’t believe I could productize the service delivery. In order to simplify things and make the work we do as standardized as possible, I’ve decided to focus on one key area, product analytics.

Focus and simplicity are key for getting the business to 7-figures in annual revenue.

We will solve one specific, painful problem for one ICP in a large and growing market for a premium price.

So what’s next?

I’ve already publicly announce this pivot on LinkedIn, updated the team and I’ve started pushing out SaaS focused content on social media. I’ve made some changes to our website, and reached out to select contacts in my network to share the news.

There is a long list of things to do before the business will be realigned to this new focus but I’m very confident in this decision and I’m excited to see how we move forward from here.

My goal is to close 2 new SaaS clients ASAP. After signing 2 new clients we’ll be at capacity and I can start searching for a new account manager to add to the team.

By the end of the year I want to have doubled the team and have 5 - 7 clients on our roster. At that point we’ll be doing $35k - $50k in monthly recurring revenue, and very profitable.

If you run a SaaS business and need help with your product analytics, hit reply and let me know, or contact me directly on LinkedIn.

Thanks for reading and wish me luck.

Justin