Buffer monthly revenue and growth
In August I think we really found our stride in a lot of ways, and hitting $4M is a huge milestone.

At the same time, our MRR growth the last two months has been a lot lower than we’d like – 5% or 6% is not ideal for us. I’m confident with our hard work and new teams set up we can pull that up.

(I also want to share some of July’s numbers—I went on vacation right at the start of the month and let the update slip by.)

Traction update

July

  • New users: 65,712 (Total: 1,663,761, from 1,598,049: +4.1%)
  • Daily active users: 40,365 (up from 39,752: +1.5%)
  • Monthly active users: 164,308 (up from 158,894: +3.3%)
  • Monthly Recurring Revenue (MRR): $323,000 (ARR: $3,876,000, up from $3,636,000: +6.6%)
  • Cash in bank: $770,000 (last month: $715,000)
  • Team size: 27 people across 5 continents

August

  • New users: 61,411 (Total: 1,725,172, from 1,663,761: +3.7%)
  • Daily active users: 38,545 (down from 40,365: -4.5%)
  • Monthly active users: 161,045 (down from 164,308: -2.0%)
  • Monthly Recurring Revenue (MRR): $338,000 (ARR: $4,056,000: +4.8%)
  • Cash in bank: $821,000 (last month: $770,000)
  • Team size: 26 people across 5 continents

We’re particularly happy about our revenue growth and increasing cushion of funds in the bank. While in terms of MRR/ARR we’re not quite profitable, based in bookings revenue (thanks to annual paying customers) we’re making a profit each month and so the bank balance is increasing. We still have much further to go, yet we also feel we’ve reached a stage where the business is operating well.

The key thing we’re striving to pull up is our MoM growth rate of MRR, which is a little low at 4.8% in August. The seasonality and Buffer being a product for professionals means we’ve found August is generally our lowest month each year—but we want to combat that better.

New team structure

Smaller teams, distributed decision making

We’ve always been a distributed team, and with growth we started to think about how we can distribute the decision making in order to scale efficiently without managers with lots of direct reports. We also just felt it’d be much more fun for people at Buffer if we don’t have managers. In the last two months we’ve doubled down on this idea and started implementing what we call the “Decision Maker” setup, inspired by Dennis Bakke, who has written Joy at Work and The Decision Maker.

Screen Shot 2014-09-07 at 2.53.42 PM

We’ve divided the product into areas with small teams, and introduced a clear structure for product development. The above diagram shows our team and setup for work on Buffer for Business.

With teams for Buffer for Business, Onboarding, Extensions and Dashboard, we have seen much more focus on individual areas, goals and metrics. We’ve had some big breakthroughs in new learnings of features to build, and we’ve also had success in increasing our overall activation rate of new signups. We’re quite sure this new setup is working well for Buffer.

30% more live chats in August

In August the Happiness Team did a total of 800 live chats, which was a 30% increase from 616 in July. We’re very excited to start to transition some of our “back and forth” customer support channels like email to more conversational channels such as live chat. We’ve also started experimenting with voice-based customer support.

Exploring a small funding round

In the first half of the year, we’ve had a couple of fairly large acquisition offers come in. We gave them thought and concluded that we’re too excited about what we’re doing with Buffer to stop our journey.

The reflection around these offers triggered us to realize that we want to keep doing Buffer for a very long time. We decided it may be wise as we reach the 4-year mark and a big milestone of $4M ARR for us to think about de-risking founders slightly to make it much easier for us to ignore any future offers and keep completely heads down on growing the company to 10X the size we are now.

We’re currently exploring our options to do this. It’s still early for us in this process—if you’d like to talk more, just shoot me an email :-)

Looking to hit the gas on growing the team

While implementing our ideas around the Decision Maker setup, we chose to stay at the current team size and take two months to focus on how to work well together. Now that we’ve got the Decision Maker set up, we’re looking to expand the team to 30 or 35 and will focus on hiring again starting immediately.

We’re in a great position because the product teams breakdown has helped us to identify key roles for additional team members.

Thanks for the great support along our journey so far, and cheers to $4M ARR!

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Written by Joel Gascoigne

Joel is the founder and CEO at Buffer. He is focused on the lean startup approach, user happiness, transparency & company culture. Say hi to him anytime @joelgascoigne.

  • Sounds great Joel. Good luck with the new format.

  • Matt Quanstrom

    I like what you described in the decision-making structure. Are you finding that having less managers with less direct-reports to be less cumbersome? Sounds like it cuts down on some of the excess that takes up some time. :)

  • Great post as always Joel… the transparency and dedication to sharing experiences and thought processes not only helps other startups and leaders learn but also builds the loyalty and connection users like myself have for the brand, tool and people that make up Buffer! Keep up the great work!

  • jasoncavnar

    Love this idea. Curious what type of work falls into each bucket for: 1) “growth tech” 2) “growth” and 3) Research. Also curious: This diagram has 10 people in it. How many are engineers?

  • Louie Santos

    This is cool. Are you guys using the holocracy model? (Similar to Zappos?!) =)

  • Dope! Awesome stuff Joel & team!

  • Brilliant update, Joel. Somehow I’d inadvertently dropped off the Open blog mailing list, and so had missed this update. But, as I wrote to Kevan yesterday, I’ve added both of the Buffer blogs to Feedly so that I can stay up-to-date with all that you guys are doing, while better managing my email inbox.

    Congratulations on the hugely positive numbers, the continual push for excellence, and for the acquisition offers — not to mention having the drive and confidence to not pursue them further. Well done.

  • I bet the #BufferChat (et al) really helped with your usership (Is that a word?).

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