It takes 5 months to reach $1k in MRR
Why is that so important? You can benchmark your revenue against these numbers. If you can't hit $1k in MRR within specific period of time. It would be wise to abandon the idea and pivot.
Where are the numbers coming from? I did some simple analysis based on the stripe verified revenue from the product section. On average it takes 9 months to reach $1k in MRR. If you are an outlier, you can hit $1k in MRR within 5 months.
I think this is an amazing rule of thumb when you bootstrap a new product.
Summary:
Avg - 9 months
25% percentile - 5 months
50% percentile - 8 months
75% percentile - 12 months
Trending on Indie Hackers
Thanks for the interesting data - can you help me to understand why this 1k number is an important target? Should there also be focus on business specific revenue targets? Or is 1000 just a pretty number? :)
Most of the time 1k is a magical number, after that velocity of the revenue increases, to hit 2k, 5k etc. Is much easier and faster. Another reason for 1k is the ability to tell that your idea has some value behind and it makes sense to speed up the process.
Thanks for you for the added information. Interesting that this seems to be a trigger of sorts. Will mark that down to help with product validation :)
Could even be a psychological tricker on the founder's side.
Hit round number and you are onto something and finally putting real effort...
You are welcome!
Important caveat - the data source you've used is not necessarily recurring revenue. It's just revenue inflows over the course of time.
I have used a filter to analyze SaaS only and removed data with strange spikes. Most of them have some sort of monthly subscription.
Maybe something went awry in the filtering then.
I can't see the full dataset, but it's clear it's not accurate, for example that Safety Knights is not a SaaS and instead makes its money from advertising.
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Great study! Do you know what founders define as the start of their project? For example, some might consider the ideation as day 1 while some might say that the launch or MVP stage is day 1. Curious about this.
Most of the time it's an MVP launch.
This is really interesting, thanks for sharing. In a weird way it makes me feel way better about how "slow" my projects feel at times.
Yep, me too. So now there is at least some benchmark we can use to set realistic revenue goals.
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cool!
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Yeah it's right
It took us 13 months to get from $0 to $1k MRR, and another 8 to get to $2k MRR - so, 2 years to get from $0 to $2k.
Next month we are turning 3 years since our launch and we are close to $30k.
SaaS growth is (semi) exponential. It's hard to predict when you are just starting out - e.g., you can close an enterprise customer, your tool can go viral, etc. There are too many things to factor in, things that you don't even expect you have to factor in in the begging. For instance, if you are entering a super competitive space with a huge barrier to entry it could take even longer just to get anyone to pay you - a year or two or three to develop a barebone tool that satisfies the basic needs of users. That doesn't mean you won't make it if you are not making $1k in the first 12 months.
Instead of setting your goals based on subjective data, set your goals based on your personal motivations. How long are you willing to work on the tool and for what revenue before giving up? Is it a 1-year project, 5-year, or 10-year work of your life business?
You want at least some revenue as small wins fuel your motivation and validate the basic demand for the tool/idea. Very few people have the motivation to work on something that doesn't generate money for a prolonged period of time, so you have to push yourself to make some money ASAP - not so much to fit the data benchmarks, but for your own motivation.
I'm really wondering why it's like that. What causes that exponential growth.
Word of mouth marketing or what?
I could tell you about our case, but that wouldn't be much relevant as every SaaS is different. For us, the inflection point was going on AppSumo + 2 years of product development, just having a decent product with enough features.
That of course doesn't mean that if you do AppSumo you will unlock growth. Many startups go on AppSumo and still fail to generate MRR.
Thanks, just in case, does AppSumo have some special requirements to be featured?
Yes. AppSumo featured products (those you see on the homepage and that AppSumo promotes) have stricter requirements. AppSumo marketplace has much fewer requirements, but then you should not expect much growth from it as you are marketing it on your own.
How much time did you put in during that first 13 months? Was it nights + weekends? Or full time?
Not downplaying the achievement but just trying to gauge the work volume needed to move the needle.
My co-founder (developer) was full-time. I (marketer) was doing 1-2 days of client work, and 4-5 days of Encharge, often working during the weekends, too.
Unlike most people here, we were full-time entrepreneurs from day 1 and super serious about making a living from this business :) We didn't treat it as a side-hustle or considered ourselves "indie hackers".
That makes sense. So for someone like myself: single part time technical founder, it'll take much longer to get to that point.
It's good for me to keep that perspective.
It could take longer, it could less. We are an example of a slow-growth startup.
Maybe also worth looking for a good marketing founder, too.
Kalo Great inputs
Quick question -> How did you scale from 2k to 30k MRR after the Appsumo campaign, like process, steps, etc
I think this is great directional info but not a singular reason to pivot or let your product die.
Every product journey is different and also every company has different resources put into generating MRR. Maybe some people will take a year to learn how to sell and some have experience from times before.
I think the key thing is the importance of going out and speaking to customers and not building blindly. If there is a metric for how many forms of outreach on average it takes to generate revenue, then I'd use that as a much more binary metric.
This is great information though, bookmarked!
Hey thanks for this post, can you analyze the hardest part?
The $0-$100 MRR is the hardest part?
Then suddenly everything happens much faster?
Now I can only sell it for life on AppSumo :( MRR is $0 :(
I have analyzed companies with a steady growth. I have removed all companies that had some strange spikes. So the data is pretty clean.
Where did you get the data?
From the product section here on indiehackers
Scraping? Or is there some data dump available?
From over 100 startups I was able to analyse 28 that fits the criteria.
Manually, it's not that much data that fits the criteria.
Sorry if this is a dumb question but those number are from companies: With different founders? Same founder(you)?
I think they're from different companies. Maybe 25-30.
You are totally right!
I have analyzed different companies, different founders, different verticals. In total there were 28 companies.
I really needed these ranges - thank you for the info.
You are welcome! I did it for my new project, just to make sure I set realistic goals.
this is an great idea if you want real growth.
Thanks for sharing this. Helps to put MRR in perspective!
This is interesting. How many products did you look at for this analysis?
It takes months, sometimes a year to get from NIL to $1k MRR, just stick to basics of growth strategy.
Nice research! Now we know how to measure us against average and best projects :)
Thank you.
This generalization is probably right for Software Subscriptions.
What about Service as a Subscription?
I'll guarantee you I can hit 10k MRR in 30 days when launching a Productized Service.
Obviously, there is still fulfillment, but it's much easier to reach these numbers if you have a fantastic offer and target high-budget clients that have a big pain point.
(I'd share it on IndieHackers if I could)
Well interesting but what kind of Companies / Products are this?
Im now in my first month where i charge for a Premium and have now 150$ in revenue (around 100 payed users from total ~2-3k total users ). But the Extension itselfs exists since ~2 years but i have pushed now a bit with more updates / website and so on.
we are currently at $800 MRR in about 6,5 months... so it seems we will make it to $1k by end of 9 months
(but I am not counting development time, only from launch)
I appreciate the effort and didn't get the debate. This data doesn't necessarily looks promising to me. One obvious unclarity is, 5 months from the first paying customer or the first line of code?
With an enough budget for marketing and a solid solution. $1K is ...
It's possible to offer a design service for $1K and your first customer allow you to reach that goal or start a newsletter for $5 and write for years to reach 200th subscriber also vice versa.
This is really interesting and makes for a decent rule of thumb. Obviously other factors are relevant but this helps!
Just to check I've understood correctly, these are projects that all eventually reached 1K, i.e. those that never reached are excluded?
No matter how amazing your product or service is, it won't sell itself. So many try to tell you what you "want to hear" because people will pay for inspiration and people telling them it's easy to succeed. As many have pointed out in the comments, it is hard which is why a HUGE percentage of start-ups fail within the first 5 years of business. Always look for mentors that will be transparent and completely honest with you and not just tell you what you want to hear.
Awesome idea! Wonder if it's different for different types of businesses?
Right!
Smart!
This is an interesting insight.
Maybe I'll try to apply this for my projects too.
Great rule of thumb. ✍️✍️✍️
Thanks for sharing !
You are welcome
Does is apply to all niches ?
It is just a rule of thumb, there is no categorization by niches.
🚀
🤘
Zero revenue yet on https://techtrendsinfo.com
When did you launch?
Thanks for sharing this. I've just started generating revenue for Famewall, 2 months into the business. Have set the goal to reach $1k
Good luck!
Goutham Famewall looks awesome! Congrats man
bookmarked this. thank you.
You are welcome
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Hey there,
I am working on a project in which I have to add two apis.
One is for Map location, and the other one is for face detection.
Can you suggest me best way.
What can you provide I am using both react native and firebase.
https://tubemate-apk-download.apkiz.com
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correct. The data sample size is 29.
I wouldn't consider this data to be "significant" enough
Good to know - that is a small sample size which kind of invalidates these claims.
And there's no way to see to what extent the IndieHackers Stripe data is recurring. It's just revenue, which could be from a 3-month advertising contract, 500 users paying $20 p/m, or it could be from a single expensive one-off contracting client.
So what does this show? Well it's a relatively small amount of data, presented without context (i.e did they spend $1m on an advertising campaign), showing revenue inflows across a broadish spectrum of unknown businesses.
Please, nobody make such important life decisions, such as whether they should continue with their business, based on data like this.
I bet if you have a much bigger sample size there will be almost no deviation at all. I did some qualitative research and asked indiehackers on Twitter the same question, the answers were similar to the stats.
As I wrote it's a rule of thumb and not a scientific university research. There are many variables that play a role.
There are so many variables at play here you would need control in your data to profile types of indie hacker and how they acted after launch. Without this and a with a low sample size I would say the results are almost random
Absolutely
I agree. It took a lot of time for me as well.
This is a good general point about metrics, statistics and KPIs, OKRs etc. They are good indicators, but know they are statistics, which means a measure representing the outcomes of lots of individual pieces of data.
For example the average developer salary in your area being say $100k might be useful info. But it doesn't mean you should either "only" get $100k or that you even "deserve" $100k. But the information is still useful as a guide.
Good point, but you didn't deliver a solution to a problem, when to quit? Or what is a realistic goal to set?
Just by saying my business is different, and no generalization works is a weak argument. It's not even an argument at all, based on your subjective experience. At least I did some simple research to develop a simple rule of thumb.
I don't think there is a good answer to your question. My opinion is when you run out of options, or you found out that people don't need your product.
This comment was deleted a year ago.