At $15/month with 10% churn (which would be an unbelievably good churn rate for a paid B2C product) would make your LTV $150. An optimistic conversion rate from visitor to paid would be like 2% (imagine you convert 20% of visitors to a trial, and 10% of those to paid). In this incredibly optimistic world, you break even paying $3 to acquire a visitor.
Congrats you have a money printing machine!
More realistically though, you'll have like 33% monthly churn, $45 LTV, and 0.5% visitor-to-paid conversion. In that case you break even at $0.22 per visitor, which is a lot harder to make work.
The game is building a valuable product with good onboarding and retention, then finding ad creative that works. It's not easy!
Contrast that with B2B where churn rates are generally <10% (or better yet, net-negative revenue churn) and LTV is often $10k+, and you can see why it's a lot more appealing.
$15/month means you're competing with the likes of YouTube Premium or Netflix. Not sure what an indie hacker can do that's going to provide that much value.
Depends on how well the ads run, if you don't get the right ads you can blow through your ad spend and end up spinning your wheels.
Check out influencer marketing as well, the channel Superwall on YouTube has some great interviews on how to do it well. They're also a RevenueCat competitor and are pretty good. Basically you can hire college kids to consistently make videos for you on brand new TikTok accounts, using a service like Sideshift.
That makes it harder because you have to make a lot of sales and sales is the hardest part of making money.
And worse, even if you provide 10x value it is probably not worth talking to you about whatever you are trying to sell…and you don’t really want customers who are optimizing a business around $150/month.
If you can only charge $15 a month, you are probably not addressing an important business issue.
And realistically, since 10k a month is maybe 1/2 the cost of a software engineer, you won’t be making enough to do things right in terms of sales, IT, and customer service.
In the end, you have lots of customers, the customers are likely to have little loyalty because the problem you solve is not high value, many customers will be cheapskates, and you don’t make enough to provide excellent customer service, a high quality product, and develop new business.
To a first approximation, developing a successful small business takes about as much hard work as developing a successful large business. Capital is where the difference mostly lies. That’s how capitalism works.
Whatever ideas landed you on $15/month are bad ideas.
At $15/month with 10% churn (which would be an unbelievably good churn rate for a paid B2C product) would make your LTV $150. An optimistic conversion rate from visitor to paid would be like 2% (imagine you convert 20% of visitors to a trial, and 10% of those to paid). In this incredibly optimistic world, you break even paying $3 to acquire a visitor.
Congrats you have a money printing machine!
More realistically though, you'll have like 33% monthly churn, $45 LTV, and 0.5% visitor-to-paid conversion. In that case you break even at $0.22 per visitor, which is a lot harder to make work.
The game is building a valuable product with good onboarding and retention, then finding ad creative that works. It's not easy!
Contrast that with B2B where churn rates are generally <10% (or better yet, net-negative revenue churn) and LTV is often $10k+, and you can see why it's a lot more appealing.
You need X new users a month where X = 700 * churn rate. So if you churn 10% you need 70 new users a month to stabilise at 700.
It's a hard goal BTW but might depend on how lucky you are. I.e. easy if you are lucky but hard for most.
$15/month means you're competing with the likes of YouTube Premium or Netflix. Not sure what an indie hacker can do that's going to provide that much value.
Depends on how well the ads run, if you don't get the right ads you can blow through your ad spend and end up spinning your wheels.
Check out influencer marketing as well, the channel Superwall on YouTube has some great interviews on how to do it well. They're also a RevenueCat competitor and are pretty good. Basically you can hire college kids to consistently make videos for you on brand new TikTok accounts, using a service like Sideshift.
You’re building a $15/month SaaS.
That makes it harder because you have to make a lot of sales and sales is the hardest part of making money.
And worse, even if you provide 10x value it is probably not worth talking to you about whatever you are trying to sell…and you don’t really want customers who are optimizing a business around $150/month.
If you can only charge $15 a month, you are probably not addressing an important business issue.
And realistically, since 10k a month is maybe 1/2 the cost of a software engineer, you won’t be making enough to do things right in terms of sales, IT, and customer service.
In the end, you have lots of customers, the customers are likely to have little loyalty because the problem you solve is not high value, many customers will be cheapskates, and you don’t make enough to provide excellent customer service, a high quality product, and develop new business.
To a first approximation, developing a successful small business takes about as much hard work as developing a successful large business. Capital is where the difference mostly lies. That’s how capitalism works.
Whatever ideas landed you on $15/month are bad ideas.
Good luck.