I know this is a growth group and what I'm posting is a "decline", but I feel there are lessons to be learned too when your revenue dropped so significantly.
In this post, I'm sharing the 5 things I learned and how I'm using them to build a better business.
I run an email service provider.
In January we were sending around 5 million emails/day for our customers, netting us around 15k MRR.
A month later, these numbers dropped to 1 million emails/day and 5k MRR.
To cut a long story short, we had to cut off bad customers who abused the platform.
As an ESP, we already have measures in place to spot for “bad user behavior”. Both human and automatic system alerts and suspensions if users have poor stats (spams, bounces, unsubscribe rates, open rates, etc).
Somehow this group of bad users managed to stay within these thresholds. They didn’t show any sign of abusing the platform.
After further manually reviewing their mailing activities, we discovered that they violated our terms of service, and hence we suspended their accounts.
Don’t just take anyone’s money. If you’re not comfortable doing business with someone (because of their business model or ethics or whatever reason), don’t let them become your customers.
If you only serve your intended audience, you’ll have an easier time making them happy since they share the same traits and needs. You don’t need to build many different use cases for different types of users and include them into your product, which can get complicated and hard to maintain.
Birds of a feather flock together.
Imagine bad customers recommending other bad customers to join your business. Eventually things get really toxic.
Bad customers → join your business → recommends other bad customers → your business is ruined (eventually)
That’s what happened to my business. Don’t let it happen to you.
By “sensitive”, I mean you’re constantly under the surveillance of a neutral organization(s) whereby if you don’t comply with their rules, they have the power to ruin your business.
For us, as an ESP, we’re always under the scrutiny of anti-spam organizations like Spamhaus, which mailbox providers like gmail, yahoo, hotmail, etc. use to determine whether or not to deliver your emails to your recipients.
An example of a business that’s not “sensitive” is a landing page app. Nobody is scrutinizing the kind of landing pages being created by their users and then “banning” them saying these pages be published.
This problem arises because I didn’t do enough digging and research to make sure only legit users get to use the platform.
I have learned this painful lesson. Moving forward I’ll spend more time and effort in the vetting process.
In my case, once we understood this group of bad eggs were causing trouble for us, we suspended their accounts, even though that meant we’ll lose ⅔ of our MRR.
But it MUST be done before things get worse. I cut off my limbs today so that the business can become much better tomorrow.