Learning from mistakes
Key Metrics
PS: I learned more about marketplace metrics this past week. Turns out I was using some wrong terms; updated below.
- One-line pitch: Design advisors as a service for startups.
- Gross Market Value: $2,500/mo
- Revenue: $500/mo
- Expenses: $100/mo
- Profit: $400/mo
- Customers: 7
- 2022 Goal: 40 startup customers
Public update #6
Yo, welcome to the first update of 2022. Happy New Year!
This first week has been hyypeeeeeee and filled with lots of learning! In order to try and increase the frequency of these updates, I'll make them shorter so it's easier to be consistent.
Writing on social media
I've been tweeting and posting on Linkedin more often. My hypothesis:
- Twitter: If I can build an initial audience of startup founders & designers, it'll help me increase the rate at which I can get feedback on my work and iterate accordingly. I believe it will also compound over time, so I'm doing a 30-day Twitter writing challenge since December 27. Follow along if you'd like.
- Linkedin: I have more of a reach on Linkedin already, where each post averages 2-4k views and a % of them often turn into conversations or DMs about DesignBake. I'll continue to share, although I'm unsure what topics to focus on amongst all my interests: design, startups, helping students get into tech, productivity, etc. I'll keep sharing and see what sticks.
I'm already seeing some early value of being more active on these two platforms:
- Got my first ever startup that reached out organically via Twitter. If they find DesignBake valuable, I would be stoked to have them on board.
- 2 highly experienced design advisors (15+ yrs experience) also organically applied to join DesignBake, which is a first for me.
I've been measuring revenue wrong 😂
I learned through this blog post that what I'd been calling 'revenue', was in fact a common marketplace metric often referred to as 'Gross Market Value'. Here's how they define it:
Gross Market Value (or Gross Bookings in some cases) is the total value of goods and services flowing through the marketplace.
The article mentions that marketplace companies like Uber or eBay recognize transaction fees as revenues. So in DesignBake's case, my revenue would be the take rate or 'transaction fees' of matching startups to advisors.
Shout-out to my brother Siddhant for trying to raise this from Day 1 (😂) and my friend Clément for helping me understand it too.
With this new learning, here is how I'm measuring and defining the various marketplace metrics:
- Gross Market Value (GMV): Amount of total transactions processed by DesignBake. Currently at $2.5K/mo.
- Monthly Recurring Revenue (MRR): The take rate after paying out advisors for their time. Currently at $500/mo.
- Monthly Expenses: Monthly expenses for software, virtual assistant, etc. Currently at $100/mo.
- Monthly Profit: MRR – Expenses = $400/mo.
Implementing a 'Try before you buy' model
In speaking to a few more startups from the last set of cold emails, I learned that some of them weren't exactly sure about the tangible value that DesignBake could add. They were interested in getting better at design and they valued it, but since the idea of a 'critique' was new to them they weren't entirely convinced it would help them.
So, taking my learnings from a previous post, I had noticed that startups which received a free 30-minute design critique from me were wayyy more excited about DesignBake than startups that had not experienced it.
To scale this, I'm now making some changes in how design advisors are introduced and matched to startups. Instead of them doing a 15-minute introductory call with the startup, each advisor will now offer a 'demo' 30-minute design critique on a real-world design challenge when being matched with a new startup that's interested. This adds value on both sides:
- Startups can vet the advisor and understand what kind of value they can bring to the table.
- Advisors can vet the startup founders or designers, see how they receive feedback, and learn more about the types of design challenges that they have.
I'm excited to see how this goes!
New illustrations on the landing page
Check 'em out! Making tiny updates as I go.
Co-founder?!
Lastly, one of the advisors asked if I was looking for a co-founder (they were interested). This was a really humbling moment since I hadn't really thought about this before. I'm keeping an open mind, and will continue to noodle on the various possible paths for DesignBake to scale and digging deeper into why I'm doing this and if the initial goal still stands.
More on this later as I continue to organize my thoughts. 🙌
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That's it for this update. Thanks for tuning in and cheering on!