April 17, 2018

How we made $160,000 in two weeks launching our SaaS on Appsumo


  1. 13

    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!

    1. 2

      Why deceiving? Lemlist made 160k.

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        Don't get me wrong, I enjoyed reading this and I'm happy for their success, but it makes it seem like this was their gross profit, when it was not. It's clickbait-y.

    2. 2

      @Santiago Thanks for the feedback! $160,000 is the total Sales indeed.

      Thanks for your kind words :-)

  2. 8

    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.

    1. 4

      Thanks for the comment @danielmeade ! More than the sales itself, the Appsumo launch was more like a Marketing investment for us in a sense that we wanted to gather as much feedback as possible. All those feedback were great to build a proper roadmap and also understand better the different pain points of our users. We now can clearly define a few use cases and verticals that we need to try out for customer acquisition.

      Regarding support, I totally agree with what you said however, there are two important points to take into accounts:

      1- A lot of the people who bought the deal on Appsumo, bought it because of FOMO (Fear Of Missing Out)

      2- Doing support is part of our DNA in a sense that even if we like to automate as much as possible (FAQs / Demo videos etc...) we also really value our interactions with our users as they are really beneficial for our product development.

  3. 7

    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.

    1. 4

      Thanks a lot for your comment @marcgayle ! It makes a lot of sense and you are raising some very interesting points!

      Regarding the price, we didn't really have a choice... It's either $49 or $39 so we decided with Appsumo to go with $49.

      As a SaaS company, our servers costs are pretty low as you might already know. However, as you mentioned, the costs related to customer support could be high - Our vision about that is that customer support is extremely important for us since our users could become the best advocates and influencers. In essence, even if it's time-consuming, we consider it as a Marketing investment.

      As I mentioned above, a lot of the users bought because of FOMO (Fear Of Missing Out), but it's too early to give an exact number regarding active users and support. I'll definitely write another article in 6 months with all the metrics and reach out to you if I need help with it 😊

  4. 6

    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!

    1. 2

      Good question @MoonBeast !

      It's actually something we were wondering for a while so I asked Appsumo about it.

      Basically, in order launch our Private Beta, I published a post on a Facebook Group for people who are doing a lot of cold outreach. That post was very successful and one of the early adopters was actually an influencer of the Appsumo community.

      He liked lemlist so much that he recommended us the same day he signed up for the beta - the day after, we received that message 😊

      1. 1

        Lemme guess, his name was Sampath :)

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          @ChrisSchwartze No - but I know Sampath very well ;-)

      2. 1

        Or he just wanted to use your product for a big discount :P

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          @rutger 😂😂😂 I prefer my answer but you could be right ahahah!

      3. 1

        Wow, this is really cool :)

        1. 1

          Yeah we were very lucky indeed!

  5. 5

    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.

    1. 2

      It's definitely something we're interested in as well Richard 😊

      I'll write another article in about 6 months to give an overview on metrics such as active users from Appsumo. Also, as I mentioned above the Appsumo launch was more like a Marketing investment for us in a sense that we wanted to gather as much feedback as possible.

      All those feedback were great to build a proper roadmap and also understand better the different pain points of our users.

      We now can clearly define a few use cases and verticals that we need to try out for customer acquisition.

  6. 4

    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!

    1. 3

      Thanks for your message @JulianSamarjiev ! The exposure is great indeed! We have between 20 to 40 signups per day now and we've considerably increased our daily website traffic as well.

      The plan for the next month is to build a lot of use cases with our current users and try to test different verticals. People are using lemlist for many different reason (B2B sales, PR outreach, HR, Backlinks, Churn reduction etc..)

      We are also planning to start a referral program to leverage our big user base.

      We're also using lemlist to do our own cold outreach ;-)

      1. 3

        The plan for the next month is to build a lot of use cases with our current users and try to test different verticals. People are using lemlist for many different reason (B2B sales, PR outreach, HR, Backlinks, Churn reduction etc..)

        Smart.

        We are also planning to start a referral program to leverage our big user base.

        Smart.

        We're also using lemlist to do our own cold outreach ;-)

        Of course, you are, you need to be your #1 fan as well as critic 😉

        1. 2

          Thanks for the kind words @JulianSamarjiev 🙌

          1. 1

            Welcome 👍

  7. 4

    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!

    1. 3

      Thanks a lot for your kind words @louisswiss 🙌

  8. 3

    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.

    1. 1

      It's a very good point @SilverStr !

      When we built lemlist we already had an idea of our target market and ICP (Ideal Customer Profile) - However, as you mention, being on Appsumo drove a lot of different types of customers.

      What we did is, stick to our vision to be the first automated email outreach tool to allow to push personalization to new limits, and also match that with users feedback who we considered as our Ideal Customer Profile. Each feedback doesn't have the same value depending if the user matches one of our Personas (ICP) or not - and also if the user is active or not.

      I really like the idea of customer interview and to be honest, I do that every day to get as many insights as possible 😊

      I'll keep you guys updated in the coming months!

  9. 3

    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!

    1. 1

      It's fixed! Thanks for proofreading 😊

      1. 3

        We're here to help buddy. That is what makes this community so awesome.

        1. 2

          Really happy to be part of it! ❤️

    2. 1

      Thanks for your kind words!

      It was indeed intended to be in English 😊

      I guess the French part of me decided to take the control on that one 😂

      We will fix it ASAP!

  10. 3

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

    1. 1

      Thanks @azinkevich! I'm glad you find it useful :-)

  11. 2

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

    1. 1

      Hey @sk24iam! It's a bit too early to have proper numbers, however, we have two users who added a new user on their team and who are now paying a monthly subscription fee.

  12. 2

    Great service and article.

    FYI - "A picture is worth a thousands words.."

    You might want to edit that, remove the S from the word: thousands.

    1. 3

      It's fixed! Thanks again 😊

      1. 2

        No worries :)

    2. 1

      Thanks a lot @Lee ! We will fix this typo ASAP 😇

  13. 2

    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.

    1. 1

      Thanks a lot for your kind words @DillonD ! $50K is indeed great for us! We now have some money to spend on acquisition :-)

      What's your company Dillon?

      1. 1

        We help Amazon sellers grow their sales. Initially it was just a CRM for acquiring new wholesale suppliers, but we're now pivoting into a machine learning-based repricing tool that applies to a much larger audience within the market.

        Would love to talk about your growth/acquisition strategy moving forward if you ever have some time!

        1. 1

          It looks really interesting @DillonD ! You can reach out to me via email at guillaume@lemlist.com - it will be easier to set up a time for a chat :-)

  14. 2

    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.

    1. 1

      It is fixed now 😊 Thanks a lot for the feedback 🙌

    2. 1

      Thanks a lot @jpfong ! We will fix this ASAP :-)

  15. 2

    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.

    1. 2

      I think offering a discount for a short period of time won't hurt the brand, but if it's consistent it can really hurt the brand/product. The way it was executed here was a fantastic use of this strategy.

      1. 1

        I fully agree with you @DillonD !

    2. 2

      Thanks a lot for your comment @BlairMacGregor !

      So far, it seems that quite a few people who bought on Appsumo, bought because of FOMO (Fear of Missing Out) and are not active users at the moment... However, it's still too early to have proper metrics about it as you said. I'll write another article in 6 months with all the metrics after the launch to keep you posted :-)

      What we've experienced with the Sumo-lings (Appsumo members) is that they give really great feedback about the app and it was extremely helpful for us to build a proper roadmap and prioritize development tasks. So our goal is really to spend time with support to understand the pain points and needs so we can build the best software possible.

      Some of them have asked about a referral program and we will launch it soon (I'll then get metrics about how our users can help us grow).

      Finally, it seems that our users are recommending lemlist as we already have more than 200 reviews on Capterra (https://www.capterra.com/p/173776/lemlist/) and we still have between 20 to 40 sign-ups per day.

      1. 2

        Nice! Yeah it sounds like getting that customer feedback was worth it in its own right just to make strategic improvements to the product and get yourself pointed in the right direction. Look forward to reading your follow-up. :)

        1. 2

          You're absolutely right @BlairMacGregor !

          Thanks for your kind words :-)

  16. 2

    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.

    1. 1

      Thanks a lot for your kind words @krychek

  17. 1

    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.

    1. 2

      Thanks for your comment @ramoncacho !

      To answer your questions:

      A) Appsumo have their own way of calculating a “lifetime price” but your formula is pretty accurate ;)

      B) Appsumo users are unlimited on our middle plan - however, if they want to add team members or upgrade to a plan with Moreno features they’ll need to upgrade to a monthly plan.

      C) yes absolutely. We spent a lot of time during the last month mapping out different categories of users in order to find the best verticals for upselling.

      D) We launched our payment system after Appsumo ended... so in essence, a great majority of our active users are Appsumo users. I’ll get more detailed numbers in about 6 months :-)

      E) No real difference so far tbh. Our users who are paying a monthly subscription are giving us similar feedback as the active users from Appsumo.

      Regarding our strategy we’re focusing on feedback from monthly paying users and from companies who we believe we can up sell to a higher plan :-)

      It’s still too early to really see the full picture, but so far, we’re really happy with the results :-)

  18. 1

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

    1. 1

      You're very welcome @dcasso 😊

  19. 1

    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

    1. 1

      Thanks a lot @q8kuba ! Welcome to the lemlist family 😊