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Buffer Reports

Lisbon, Madrid or San Diego: Which City For Retreat #8?

Buffer People Ops Report

October 2016

  • Team members

    79

  • Revenue in cash receipts

    $1.02m +2.7%

  • MRR

    $1.02m +3.3%

  • ARR

    $12.2m +3.4%

  • Debits

    $822k +3.8%

  • Profit

    $192k +57%

Organizing our next retreat: Location, location, location

As we continue organizing our next retreat, we’re excited to bring the team together in one of the three following locations: Lisbon, Madrid or San Diego!

peopleopsoctober1

We find that taking a “best out of 3 approach” helps the People team have more confidence in the level of service we can offer the team in each location, and at what cost—we’re striving to be very lean in our next retreat, so cost will be a major factor here.

At this stage, we’re having several conversations with vendors, hotels and coworking spaces, and we’re gearing up for flying to some of those locations for a scouting trip—more excitement to come!

Long-term cash planning: Understanding unit economics

As of October 31, we have $1.75m in the bank. This is in line with what we had forecasted—slightly better, even! We want to be and remain cashflow positive.

As such, we’d like to manage our cash a bit closer and improve our forecast for future earnings. As a company, our aim is to build a healthy bank balance and continue building a sustainable business—this means setting quite a bit of cash aside and trying to examine each potential spending decision with more scrutiny than before.

Julian and I have been working on predicting Buffer’s revenue to a higher degree of accuracy, and to do so we created a skeleton model:

peopleopsoctober2

This is a helpful exercise data we got from Looker and then added a financial lens. The goal is to be able to predict with a high degree of certainty how each of our Buffer plans is doing, and become better at making product decisions based on what we’re seeing in terms of user journeys.

We wish to get better in terms of unit accounting, or tracking individual products or plans. We’re currently only observing variations of about 0.31% on our largest plan (illustrated as “Delta” on the table below) – which is helping us build confidence in our model.

peopleopsoctober3

We’re excited to start spotting trends and going from our raw MRR data to a more granular, per-plan estimate of monthly cash receipts.

When we account for monthly revenue, it’s pretty straightforward: we only need to take the number of plans we have and multiply the monthly plan.

From “MRR” to “Revenue,” for Monthly Plans:

  • (FYI) Billings (MRR added) = (Net Added) * Monthly plan price
  • Recurring Revenue = (End of the month Month Customers) * Full yearly plan price
  • Deduction = A guesstimated 5% rate accounting for Stripe fees and past-due transactions
  • Net cash receipts = Recurring Revenue – Deduction

For our annual plans, there’s an interesting twist to account for monthly or annual revenue.

From “MRR” to “Revenue”, for Annual Plans:

  • New billings = (New Customers + Renewal Customers + Upgrades) * Full yearly plan price
  • Renewal from Existing = (Number of Annual Plan renewed that month * Full yearly plan price)
  • Deduction = A guesstimated 5% rate accounting for Stripe Fees and Past-due transactions
  • Net cash receipts = New billings + Renewals from Existing – Deduction

Now that we’ve backfilled our most popular plans, capturing 80+% of our customers, we’re looking at “mock estimating” the month of October that just ended to see how well we can start forecasting revenue ahead, on a per-plan basis – more to come soon!

Over to you

Do you have any experience hosting a group in the cities of Lisbon, Madrid or San Diego? Which would you choose? Is there anything you’d love to learn more about?  We’d love to hear from you in the comments!

Check out more reports from October 2016:

  • John Crespi

    Easy. San Diego.

    Not the most glamorous but most cost effective (compared to the other choices).

    My 2 cents (CDN).

    • Definitely a great element to think about; we will share our cost breakdown when we finalize the decision (and then after the trip as well, to see how we did holding to our budget)

  • Graham Mitchell

    Assuming most or all of your people are in the US, then going local is going to save a packet, and do your carbon footprint no harm either. If you can’t stop yourself from burning a lot of jet fuel, then I’d say Lisbon is preferable to Madrid (having been to neither city myself although I have been to both Spain and Portugal) simply because Lisbon is on the coast.

    • Hey Graham, thanks for this advice! We are just slightly heavier on the US than European side; great to think about carbon footprint here!

  • Glenda Turner

    I’m being a bit mischievous here in terms of your vocabulary, but why do you call it a retreat? http://www.merriam-webster.com/dictionary/retreat

    Sounds like more of a reunion to me. :>)

    • We’ve discussed this quite a lot, especially since a lot of work gets done it does seem a bit odd to call it a “retreat.” Really love the idea of a reunion, that feels very right! (Although some folks will be meeting for the first time, hmm)

      • Glenda Turner

        Maybe it’s not a “re” word. Maybe the name could be a fun activity at your next meeting. :>) You know I love Buffer; you will figure it out.

  • Natalia Yurevich

    If you feel like visiting Europe again, which would be awesome :), I would suggest Lisbon. It seizes with its narrow cobbled streets, azulejo-splashed architecture, vintage trams, scenic city views, great sunny weather, and plenty sights of interest directly in the city. Other advantages are beautiful Fado music and the food. You can try eating in traditional tavernas or in some new places, the food is cheap and very good. As for activities, there are lovely beaches not far from Lisbon, many are great for surfing, and famous Sintra is also easy to reach.
    There’s a buzzing tech community in the city, they just very recently hosted the Lisbon Tech Summit. I also saw photos of a few very beautiful coworking places.
    It seems that there’s a good choice of affordable hotels and AirBnB accommodations too.

    I’d love to learn more about Madrid. I love this city but don’t know much about their tech scene or coworking places.

    Disclosure: I don’t have any experience hosting a group in either of the cities, I just wanted to grab the opportunity to contribute. Hope this helps.
    Good luck with organising!

    • Oh my goodness, you should work for the tourism department, Natalia! Lisbon just shot to the top of my list!

      • Natalia Yurevich

        Thank you so much, Courtney! I am in the Digital Marketing but tourism is a passion too. :)
        Have an awesome retreat!

  • scott

    portugal is the best country in the world. the people are so friendly its amazing

    • Ooh, thanks for sharing that. Have heard wonderful things!

  • Lisbon. We just had Tortuga’s fall retreat there, and it was a blast. Let me know if you need my Foursquare list of restaurants :)

    • Oh wow, so cool to hear that! We may be calling on you for that list!

  • I’m wrapping up organising a company retreat just outside of Lisbon in a place called Såo Lorenço do Barrocal (barrocal.pt) and it’s looking amazing (though not due to happen for another 2 weeks!).

    Beautiful countryside, big venue with 50+ rooms, hot air balloon rides, yoga, wine-making and incredible food :) Obviously not technically Lisbon but if you wanted to spend some time in the countryside, it definitely seems worth a look!

    • Thanks so much for the recommendation, Amanda! Sounds like you’re set for an incredible trip!

  • Candela Garcia

    I cant imagine how hard would be to pick between those awesome destinations. When are you doing the retreat? Maybe it can help you decide which city is best for that month.
    I have read that a lot of employees take advantage of the retreat and take some vacations before/after it in order to explore a little bit more, how do you deal with that? I am aware of your unlimited vacation policies but what do you do when a lot of people want to leave on the same week?

    • Hey there Candela! Great questions here, the retreat will be in late February. Climate definitely factors in, great point! We do have lots of folks who like to spend more time in and around the areas we visit on retreat, yes! Since we’re all aware of the challenge of many folks being out at once, those who want to stay in the city or travel around generally try to do so while working or coordinating with one another so we don’t have too many folks try to take vacations at the same time. :)

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