Frustrations of Flat Annual Revenue

Tips for dealing with stagnating revenue — hint - make some big bets!

Hi, I’m Zach — I’ve built my app business to about $4m in annual recurring revenue. Building a successful app business is really hard. That’s why I write a newsletter about the things I’ve learned along the way. My goal is to help you grow your business and profit. If you want to learn more about the app business, I highly recommend subscribing.


I’ve been a bit frustrated lately. The reality is if you look at my company’s revenue over the past year, it hasn’t grown much. Despite investing a lot into people, app improvements, and growth, revenue hasn’t taken off. I’ve been scratching my head trying to figure out why. My conclusions is we need to shoot higher.

Over the past year, most of the upgrades to Hashtag Expert, our core moneymaker, have been incremental. Optimizing design. Adding more options for customizing how hashtags are generated. Making user experiences more intuitive. Granted, all of those things are incredibly important, but, it’s difficult to move the needle with them.

Ideally, while we are polishing the app, we want to in parallel be taking some big shots. I define a big shot as something that fundamentally changes the character of the app. Something that if we get wrong, could negatively impact us seriously. But, if we get it right, has the potential to dramatically improve the business. High-risk, high-reward. I guess that’s what I’ve been feeling—that we’ve been playing it too safe. What’s the worst case scenario if you launch a feature that users absolutely hate? You revert. It’s really not a huge deal.

We took our first big shot recently which was launching web onboarding and payment for the app. You can see that our Stripe revenue is almost $1000/day (here’s the dashboard link). That’s having a significant impact on our Profit1. This was a big bet and big project. We spent a painstaking month building that flow out and now we’re seeing dividends.

We have another big shot in the pipeline which should be launching next week. We’re letting users create collections of hashtag groups. Before, users could save hashtags groups to their profile, but they often would get overwhelmed by the disorganization. This new system should address that major pain point. Further, it opens up more opportunities down the line. We can make hashtag collections shareable by giving users a unique link that lets anyone see their groups and copy them via the web. Imagine an influencer sharing their 50 hashtag groups for small businesses with a link on their Instagram story. We can even build trending charts that show top hashtag collections by views.

So now, I’m starting to ask myself what other big shots could we take? Launching a new app is one—that’s where Like Expert comes in. It’s a work in progress. We launched v1 of it, got a lot of user feedback, and learned a lot in the process. Those learnings are now driving our v2 of the product which is a big evolution.

Taking a step back, the lack of growth is very frustrating to me. It brings me back to the days of when I had published a bunch of apps and hadn’t been able to get any traction. It’s part of the entrepreneur journey, ups and downs constantly. Also, the job fundamentally changes at every stage. Getting from 0 to $1k revenue a day is very difficult. It required a specific skillset. Thinking like a hacker, constant iteration, obsessions with ASO, never-ending analytics. Getting from $1k to $5k was likewise different. Scaling ads, paywall optimization, attribution tracking, better infrastructure required. $5k to $10k also different. $10k to $50k different. $50k to $100k … different.

It’s a never ending journey of reinvention. My days now look completely different than they did every previous year. I don’t code a lot. I’m on calls constantly. I’m thinking about company organization, values, and culture.

There are some good aspects of stagnation. It forces you to evaluate what you’re doing and look deeply for areas of improvement. It’d be weird if I didn’t change much about how we operated and our business somehow grew to $10 or $50m a year in revenue. Of course things will stagnate here and there and we’ll have to learn and adjust course—it’s part of the process!

So for all those facing stagnation, trying making some big bets!


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1

I call this metric Profit, but it’s not net income. It’s basically total revenue minus ad spend. This is an easy way for me to track how much money I have to play with each month on other expenses.