15. January, 2021

2020 Year in review

Author avatar
Karsten Madsen
Co-founder & CEO @ Morningscore.io

This is the post where I look back at 2020 for our software startup Morningscore.

2020 was supposed to be our final experimentation year. Our final year of being a startup.

Grow up and become a scale-up, they said.

And so we did… Or at least that’s what they think 😎

Journey highlights

The goal in 2020 was to reach 600 customers, get our product to version 3.3 and find a way to scale our marketing and reach a CAC of $300 (i.e. what it costs to get a customer).

OK, these goals might be more internal lingo and confuse you. So let me instead put it like this:

Basically we wanted to experiment a lot and find the formula for future success on product and marketing. Like a machine where we put in $1 and get $2 out.

Did we succeed? No, not in terms of the exact goals above. But in terms of finding a machine, it’s a yes. Because we learned that such a machine does exist, but not without constant maintenance and upgrades to cope with our business getting more complex. In general I have underestimated the increased complexity caused by growth – and the cost of that.

At the beginning of 2020, I said I have no clue how we could benefit from 10 extra employees. Now I can easily imagine 100 extra employees to help scale and maintain this complex “machine”.

What we achieved in 2020

  • We doubled our customer base from roughly 200 to 400 monthly paying customers.

  • Morningscore went from version 2.7 to version 2.9.

  • The CAC went from $400 to $300 but underwent a wild ride to get there.

  • Subscription revenue roughly tripled (300% increase).

In the next chapters, I will dive into these results and tell you what happened in more detail.

There is one word I am not going to mention in this yearly review. It starts with C, and we are all tired of it. Personally, I am also really tired of being tired of it. So I have killed it with silence. 😉

The Product in 2020

I am going to show you something a little embarrassing. Have a look at this image:

 

This was our first attempt at a development plan for 2020. We managed to release just about 1 of these things, which was version 2.8.

And no, we didn’t sit on our hands for the rest of the year. 3 overall things happened that made this plan useless.

  1. We lost core engineers (and regained them again months later, wuhu!) and was very unproductive for 3 months. So that was already 25% of the year’s product development down the drain.
  2. We stumbled upon scaling challenges. Basically, we had to rewrite a lot of code and improve stability of our huge codebase. We made a lot of progress on that in 2020.
  3. We asked our customers about what they wanted and realized the above plan was wrong. So we fully redesigned Morningscore. In the fall, programming started on what will become version 3.0. We expect to release it by spring 2021.

Apart from that, we had by year’s end tripled the size of our development team from 1 full time engineer to 3 full time and 2 part time engineers.

Big things start small.

Marketing/Sales in 2020

We experimented with many marketing techniques in 2020.

For the full internal and probably confusing list, see this:

Marketing plan 2020

 

We were quite new to building funnels and doing marketing for a specific persona. We set up a landing page for “marketing managers” for example and drove traffic to that page from ads.

The page was nice in our opinion, but we couldn’t get it to convert. And in general we had trouble with the cost side of funnels. There is a big upfront cost of building them (man hours) and they take a lot of maintenance as well with many “moving parts”. In conclusion, we did not come out that victorious from this one.

SEO on the other hand was a success. A growth of 450% of relevant buyer ready traffic. We are an SEO tool, and we get clients by working on SEO. That seems fitting, I think. The doctor must take her own medicine.

In the fall we also hired Merete to come onboard and help us with branding and communications. That was a good decision. What she does might be hard to measure, but we have come to realize that branding is so important for us.

In effect we are way more active on social media, especially LinkedIn, and we do more PR related activities.

2020 Financials (money talk)

Below are the key metrics of our results in 2020 compared to 2019

Yes, we lose money. We are still supported by investment and loans. This is normal for a SAAS startup at our stage. The net loss is in accordance with our budgets. This model allows us to grow faster and be more ambitious.

METRIC 2019 (END OF YEAR) 2020 (END OF YEAR)
Revenue $0.16 million $0.25 million*
Expenses $0.30 million $0.55 million*
MRR $10.000 $23.000
CAC $400 $300
Employees** 5 8,5
Customers 212 421
Trial users 11.000 18.000

*Will be updated once our annual financial review is complete. **Measured in full-time employees.

Looking ahead

Here is a super short overview of our 2021 goals.

Product milestones are shown on a timeline in our roadmap.

And these are the business goals:

  • Go from a revenue of $0.25 million in 2020 to $0.75 million in 2021

  • Go from roughly 400 customers to 1000 customers

  • Go from Morningscore version 2.9 to version 3.4

  • Reach a CAC of $400 (i.e. what it costs to get a customer)

    • So, we reached a CAC of $300 in 2020, and now we aim for $400? Yes! In 2021 we invest in 5 full-time sales roles, which means CAC skyrockets. But then once the new team is up to speed, it will hopefully drop to around $400 and drop further in 2022 to again settle at $300 which we see as an optimum CAC.

  • But maybe the most important business goal is the last one: Be an awesome team and enjoy this wild ride 👽

P.S. 🌳

2020 was the kickstart of something very important. The birth of our new company vision:

We dream of a world where doing good equals healthy business.

This vision is shared with our sister company Morningtrain. I call it an “empire of good” since future family companies could be joining this vision.

Grand ideas to back up this vision are in progress. But talk is cheap. Action counts.

First small action of way bigger to come:

We are planting 1 tree per month per customer as of January 2021.

Follow us on LinkedIn to get in on the action 😎

Karstens 2020 review of Morningscore

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