My pet project is about to pass the 4,000 user mark. It’s taken two years to build any traction but considering the fact that I’m just one guy doing it all solo and the amount of marketing I’ve put into the app this is an impressive number. Now that I’m on the verge of hitting the 4,000 mark I’m beginning to rethink some of the decisions I made early on in Write.app’s development. In particular, I’m kicking myself for not charging sooner because now the app costs more to run than it brings in.
Okay, so maybe I’m exaggerating a bit there. I’m not operating at a loss as of yet but I very well could be depending on where I take it. Right now I have two choices. I can either allow the userbase to grow at a slow, steady pace allowing users to choose free or paid plans as they want. Or I could begin leveraging the audience I now have and begin marketing new features, upgrades, and other related apps. Putting aside the ethics of cross-promotion right now, the big question is whether it’s worth the risk to put any money into marketing.
The cost to run Write.app as it stands now is minimal. I’m spending about $20.04 each month and another roughly $30 per year on top of that. I would be spending the initial $20 anyway as I love my Linode VPS.
I have a 2GB Linode that I pay $20/month for. I’ve been incredibly lucky as each time Write.app was about to outgrow it’s server Linode ended up giving their customers a free upgrade. When I first started using them in early 2011 I was paying $20 for a 512mb Ubuntu 11.04 VPS. A year later they gave me a full 1GB and double the storage for the same price and now they just recently upgraded their servers again so that I have a full 2GB of RAM, SSD storage, and better CPU utlization. So that’s not really hurting me but I was hoping that the site would begin to pay for at least some of the costs of servers at some point in it’s lifetime.
I back my database and user files to an Amazon S3 bucket. For a long while that was costing me nothing. Now it costs about 3 cents per month to run. I could pay for that with change I find on the ground so let’s not even talk about it.
Okay so here’s where things get tricky. Luckily I was grandfathered in with Google Apps for business right before they stopped offering free email hosting for custom domains. Now I only need to worry about mailing lists and transactional emails. Turns out those can get pretty expensive.
I use Mandrill for transactional email. I chose them because they’re a Mailchimp company and I love Mailchimp. I get something like 14,000 transactional emails per month for free. I’m not even close to that limit so no need to worry here.
This is where things are about to get pricey. I use Mailchimp for my marketing emails and their free plan cuts you off once you get to 2,000 subscribers. I have about double that now. Mailchimp doesn’t let you just send to a subset of your list once you hit that limit either. Once you get 2,001 list subscribers (in total between all your lists) you must upgrade. For a list my size I would have to pay $50 per month for unlimited sends or $100 for a single campaign.
The cost to continue the service
At this point I have a few options. I can continue to run the service without using any more email marketing services, I could suck up the cost and carry on as I used to, or I could try to turn a profit. I’ve decided to try to turn a profit or at least get the app to pay for itself. My first step on this path was to turn off the free upgrade feature. I always planned to charge for the service one day but until I felt comfortable doing so I left the upgrade functionality alone. Users that proceeded to the upgrade area were given a free upgrade automatically and I never collected any payment information whatsoever. Now when users visit that page they’re presented with a payment form. I’m charging a whole $1.99 for the upgrade (I had it at $4.99 for about 4 hours before I chickened out). My hope is that users begin to upgrade and I can begin to put the time and money into the service that it deserves.