Ask IH: How much of your MRR do you invest into growth?
Growth is the most important ingredient for every indie hacker. Growth needs marketing. Marketing costs money. How much do you invest into growing your product? What kind of marketing do you do?
I took all the revenue as profit. Didn't do any marketing. Let my product die. Don't be me :)
Don't you do any marketing or any paid marketing?
No paid marketing, few posts on twitter, reddit and here if that counts as marketing.
Lmao tell me more, man. How much revenue did you make and what would you have invested the money in if you could do it all over again? What was your product. That's tough the product died, but if you could build a successful product once I'm sure you can do it again.
It was probably around $500, I'd do the same TBH. It was a weird info-product, with every sale it was losing value. Reinvesting money for ads would turn it into dust. So I invested in crypto and make it disappear 🤣
40% of our $19,000 MRR:
$3,500 - salaries - I'm counting 75% of Paul's time as growth, he mostly does sales and marketing. Plus 20% of my time, I mostly do engineering, but also a lot of demo and sales calls
$2,400 - expenses for tools - Pipedrive, LinkedIn Sales Navigator, ActiveCampaign, Calendly, WebFlow, Loom etc. They add up, but each serves an important role in our growth strategy
$1,500 - post-onboarding marketing material - to get new customers to leave reviews, share posts on LinkedIn etc.
$550 - commission - we have 2 super-referrers who advertise for us on their training courses
Giving us a total of $7,950 toward growth, which is around 40% of our MRR. I think that will be the minimum we'll spend on growth in the future.
I calculate how much I'll need for a living for the month and reinvest the rest.
All of it. 100% of incoming cash is reinvested.
I'm still only investing my time for marketing but I'd be interested in seeing what others do. I guess it depends on if you're already profitable enough to work on your business full time / have other sources of income that support you as well.
In the beginning, 110% after 10K MRR then 50%, after 50K MRR then 40%. If you don't do this, you work on a hobby, not a business.
Whenever I tried to invest some profit in marketing, it didn't turn out well, and the money was mostly wasted. It's hard to find good marketing people, so I invest more time than money in marketing until I figure out a good way to pay for it.
We spend about 10-15% of MRR at present on marketing, but early on it was much higher.
Unless you're looking at selling the business in the next couple of months, then I'd be looking to reinvest all profits (after paying yourself) until you reach a scale you're happy with.
5% - 10% is usually allocated to marketing so I'd include it within that :)