Postcard Panda April 2017 Income Report

New to this series? Checkout the first report for background info on Postcard Panda.

tl;dr – April 2017 was the first month I really used paid advertising (Apple search ads). Unfortunately, the numbers are not in my favor.

Overall Stats

 March 2017April 2017% Change
Revenue$442.67$537.7121.47%
Total Expenses$340.60$497.6246.10%
Profit$102.07$40.09-60.72%

Expenses Breakdown

 March 2017April 2017% Change
Kite.ly$221.00$269.0021.72%
Hosting (Heroku)$24.00$24.000.00%
Advertising$10.82$102.54847.69%
Stripe$79.62$96.8921.69%
S3 + Cloudfront$5.16$5.190.58%
Refunds00N/A

USA App Store Stats

 March 2017April 2017% Change
Guest Orders29316.90%
Logged In Orders18623325.27%
Total Orders21526422.79%
Signups who placed an order44489.09%
Downloads26331820.91%
Reviews110.00%

UK App Store Stats

 March 2017April 2017% Change
Guest Orders00N/A
Logged In Orders65-16.67%
Total Orders65-16.67%
Signups who placed an order01
Downloads1181700.00%
Reviews00N/A

Retention

Retention April 2017

What Went Right

Revenue went up, but that’s not relevant for a bootstrapped business.

 

What Went Wrong

I spent $100.39 in the US app store for 135 downloads, with an average of $0.74 per cpa. In the UK store I spent $2.15 for 18 downloads, with an average cpa of $0.12 cents. Unfortunately I don’t have good tracking in place for attribution so I can’t definitively say how much revenue each conversion got me. However, some back of the napkin math might look like this for the US store:

Average revenue per user (since inception of the app): $7.04

Average profit per user (roughly 25% profit margin): $1.76

Download to paying customer conversion: 15%

Number of paying customers from the ads: 135 * .15 = 20 new customers

Revenue from those customers: 20 * $7.04 = $140.80

Profit from those customers: 20 * 1.76 = $35.20

Profit – ad expenses = -$65.19

The math does not bode well in terms of actual profit, but that is likely the worst case scenario. What’s not captured here is whether or not these users can jumpstart organic growth. If each of those twenty new users brought on an additional two customers organically I would break even.¬†Unfortunately that is a little too optimistic.

I had been running search ads for the first week in May, but I’ve decided to stop them after running these numbers. I’ll keep them going in the UK store since the cpa is much better, but I’m not holding my breath.

So far search ads are the best performing advertising channel I’ve tried, so I may experiment with them again if I get attribution tracking in place.

This is an excellent example of how picking your metrics matter. Postcard Panda is run out of my personal checking account, so the metric I care about is profit. If I was purely looking for ‘growth’ I would continue to pump considerable amounts of money into Apple search ads, because I saw a 20% growth in revenue for this month and that sounds great. ‘Growth’ does not translate to a sound cash flow business. Who cares about revenue growth over profit? People who can pass the buck onto ‘dumb money’ (aka normal people) and call it a success. In my view, if you can’t make a business self sustaining; you don’t have a business.

Next Month’s Goals

Next month I don’t plan to work on Postcard Panda, especially since I’ll be in Iceland for eight days. I may brainstorm other acquisition channels, but that’s probably it.

Thanks for reading, and check back next month!

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