How We Made $160,000 in Two Weeks Launching Our SaaS on Appsumo

However, as you can see on the spreadsheet, the money we actually got out of the Appsumo promotion was way less than the total sales we made... We actually only get 30% out of the total sales 😱

A bit deceiving to say you made $160,000 but congratulations nonetheless, seems like you're on the right path!

I've always been a little skeptical of App Sumo, despite being a user of its service multiple times. They push hard for product owners to provide huge discounts and couple that with lifetime licenses. That alone rings alarm bells. Okay the exposure is great and your product will likely see increased traffic and new signups well after the promotion, but I can't see the value of this making up for the required discounts.

When you factor in that AppSumo takes such a significant cut of the product sales, it just does not appear a viable sales option. User acquisition is great, but the cost is so high with this. Especially if the majority of those users become power users, your running and maintenance costs skyrocket with no future income potential from the userbase.

Thanks for this detailed post with transparency with the numbers. That 30% gross profit is kinda brutal :(

One quick question, when you guys calculated the sale price of $49, how did you estimate the lifetime value? Did you just assume a few years to decide how much the discount could be?

As many others have said, I too am shocked at the 30% gross profit. That seems very low, especially since you have to absorb the monthly expense for each user. I hope you guys have a strong control on the cost per user on a monthly basis.

Have you guys done a lifetime analysis for how long the user will be profitable with this deal? i.e. Based on the expenses of delivering the service for each customer each month, can you profitably service each customer for 12 months? 24 months? Or some other period?

I would encourage you (and any other entrepreneurs considering using AppSumo as a customer acquisition tool) to figure that out, because based on the actual usage from those customers, that will help inform whether the deal was truly worth it or not.

In other words, say each customer is profitable for the first 2 years of their life, but you also estimate that the lifetime of each customer is likely to be 4 years, then that would mean that 2 years of each AppSumo customer (assuming they stick around) is unprofitable.

Then, you can do a cohort analysis to see how many customers stay for different time periods. The full 4 years, 3 years , 2 years, 1 year, 6 months, etc.

Naturally the shorter time an AppSumo customer stays on your product, the more profitable that customer is. If the profits generated from the customers that bail early is greater than the expenses incurred from those customers that are unprofitable, then this was an economically, beneficial customer acquisition channel.

If the expenses were greater, then it wasn't. Surely, you can derive other value from those customers like feedback and such....but if the bulk of those customers bail early in their lifetime was their feedback really useful? Chances are, they aren't the customers you should be taking feedback from because they don't stick around to even use the product!

I would love to see a follow-up post in 6-months that includes this type of info, so we can make a proper analysis about whether AppSumo is truly profitable for SaaS companies. If you want help figuring this stuff out, you can let me know and I can help you out.

Thanks for sharing your story.

1 day after launching our private beta we got contacted by someone from Appsumo to promote lemlist to their community.
Can you tell us, how they knew about you if you were only 1 day, and in private beta?
Thanks!

Definitely very informative and detailed. Thank you. My takeaway is the 30% you get from AppSumo and that you don't make this decision lightly. I would love to see the effect in one year,

I appreciate the candor, kind of like the Groupon effect. I've seen that cripple a small business, I've seen small businesses fly upward on it. Thank You.

Great work!

I get only the 30%, but the team at Sumo provide great support (personal experience) and their exposure on the platform is great!

What is the plan going forward?

Are the sales from Appsumo still coming, or is there a lifetime to it and you need to look into other channels?

Thanks for the article!

Just started using LemList two weeks ago and am very, very happy with it. I don't use the (IMO quite gimmicky) meme feature, but otherwise the functionality is exactly what we need at postperk.com

Thanks @guillaume_lemlist and keep up the good work!

I wonder, did you attract the right buyers with this promo on AppSumo? You seem content that the best outcome from this was the feedback; you built a roadmap around the input. On the surface this sounds great. But were these your ideal customers? If they were buying because of the fear of losing out on a great deal, would they have otherwise paid full price... seeing the value of your offering?

Good product/market fit isn't about winning $160K top line sales if you find after measuring for 6 months to a year that the buyers never use the product. That's a form of hidden churn which you won't see if you gave them lifetime access.

Or worse yet, if you now invest the NEXT 6 months building features for people who don't make up your ideal customer base, will that be a waste of effort that won't attract the right paying customers?

Something to consider. I really appreciate you sharing your experience. I hope though you have some way to filter out to find the right customer that sees value. Perhaps you can follow up with the AppSumo driven customers and ask that bluntly... now that they are using the product, would they have paid full price? If not, why not? That might give you some better feedback.

YMMV. Thanks again for sharing.

Lemlist website is nice - possible typo in 3rd price level - if it is intended to be in English should be Enterprise. Good luck with it!

Thanks a lot for sharing, @guillaume_lemlist . Always wondered how successful could be an Appsumo promotion. Quite insightful

Have you made any additional money from lifetime users upgrading to a higher plan?

Really enjoyable read! Having followed Noah Kagan for some time, I've always wanted to hear the perspective of the SaaS companies themselves and if it was truly worth it. Buzz is great, but sales are more important, so thank you for actually sharing the numbers.

Although you didn't get the full sales amount, you gained a great deal more and $50k~ is still not bad for a bootstrapped SaaS startup in such a short period of time.

If only our company wasn't too niche for AppSumo.... lol.

Nice idea, thanks for the tip about appSumo.

I've noticed that, on the mobile, your call to action "Start your free trial" is longer than the button.

Nice job, Guillaume! Love the honesty and the transparency here.

I know there's a lot of literature out there about discounting and how it "cheapens" a brand but I think this is a great counter-narrative of the kind of exposure it can garner for startups who are looking to get their product out there amid a lot of noise & competition.

One thing I'd like to know once you have more data about it is how these customers ultimately use the product relative to others whom you might have paying full price. Like is one group using the product more or less? Are the discounted customers using different features than the people paying full price? Are the ones locked into a lifetime deal sharing it with their network of friends/colleagues? Things like that. I think that might prove interesting since there's a school of thought that discounted users turn out to be "worse" customers, churn after a short time etc.

Very insightful, thank you for sharing the details. Also, I bought the deal and Lemlist seems like a tool I will be using A LOT in the next few months for my projects.

Hey @guillaume_lemlist was curious to know your thoughts on the appsumo promotion 2 years after, now that lemlist has been super successful

Hi @guillaume_lemlist, great post. Like everyone else, I like the transparency and can see both the upsides and downsides of such a deal.

I have a questions:

Regarding pricing, from the screenshots, it seems you guys were pricing your product at $2,484 -- how did you initially get to this number?
a) Is that assuming around 4 years as the lifetime per customer at ~$49 per month?
b) Is there anything that is not unlimited for which customers may have to pay during the period for everything unlimited?
c) Are you planning any add-ons to upsell these customers?

Also, I'm trying to understand the benefit of AppSumo in this case.

a) What would you say is your weekly active user count (%) from the AppSumo cohort
b) How does it compare to customers coming from channels other than Appsumo? How are they different so far?

There's a lot to learn from this experiment. Nonetheless, I hope the 30% will be enough for you to acquire the rest of your potential customers and to develop a healthy and sustainable platform! Be sure, as mentioned above, not to just build for those who are churning but to really see who that 20% (hopefully more) of faithful and loyal customers is and what they want.

Thank you very much for the article and for being so open with the numbers.

I like your app very much and I bought two licences from App sumo luanch and any one get the chance to promote his app there will get ton of value speacially if it to amazon seller, affliate marketer and digital marketer