hi everyone,
we wanted to share an update regarding our previous financial update. If you haven’t read that post yet, go check it out first.
in this post we want to respond to some common questions and suggestions, provide an update on what we’re planning to do next, and tell you how you can help.
the numbers
first off: an update on how numbers have changed since our update on Monday. we’ve seen a large increase in cohost plus subscriptions, exceeding our expectations significantly. these numbers are accurate as of yesterday, March 14th (stripe only updates every 24-48 hours):
| Category | As of March 14 | As of March 11 | Change |
|---|---|---|---|
| Active subscribers | 3,311 | 2,630 | +25.9% |
| Monthly Recurring Revenue (MRR) | $21,467.49 | $14,536.03 | +47.7% |
| Subscriber churn rate | 1.63% | 2.63% | -38% |
| Revenue per subscriber | $6.48 | $5.53 | +17.1% |
| Monthly active users (MAU) | 30,149 | 29,846 | +1% |
| MAU -> Subscriber conversion rate | 11% | 8.8% | +25% |
this is all, objectively, really great! it has been motivating over the last few days to see how much cohost means to a lot of y’all. even with this boost in MRR, we’re still operating at a loss of, on average, $17k per month, so we’ve got some other plans to help make that up.
the good news is the cash infusion from this recent subscriber wave (a bit over $20k after payment processing) combined with some funding offers we’ve received means we’re comfortable saying we’ve got at least six more months to make up that shortfall in one way or another.
more details follow! keep reading!
common suggestions
we received a lot of suggestions and ideas in our last post. we liked all of them and spent a lot of time going over each and every one. keeping the above numbers in mind, here are some of our thoughts.
shut up and take my cohost plus
any time we talk about our financial situation a lot of people start posting about cohost plus. we appreciate this a lot! cohost plus is an incredible way to support us! if you haven’t subscribed yet, you should check it out.
the astute reader may notice, however, that we don’t tend to promote it too heavily whenever we talk about cash. there is a reason for this.
as of march 11th (before the financial update), cohost had about 30,000 monthly active users and 2,630 active subscribers. this leads to a conversion rate of about 9%. our churn rate (the rate at which people unsubscribe) is 2.6%. these numbers are, frankly, absurd. if we had a macguffin that could enable a subscription-based company to achieve a 2.6% churn rate, we would have all been assassinated for it by now.
the rate at which people subscribe to cohost plus (and stay subscribed to cohost plus) is astounding. we’re really grateful for your support. when you have numbers this good, though, the diminishing returns of further subscriptions are intense.
at our current deficit of $17k, we would need to sell an additional 3,400 subscriptions to cohost plus — this is more than doubling our subscriptions, which is not a realistic goal with the size the site is right now.
please subscribe to cohost plus if you can afford it, and you think the site gives you $5 worth of enjoyment a month. every subscription narrows that deficit by $5 (or more, if you want to sign up multiple times!). but we’re going to need more than just cohost plus to break even.
time to put on the biggest fundraiser this town has ever seen
another suggestion we received in the wake of this week’s post was to take a one time injection of cash through a fundraiser. obviously this isn’t sustainable, but the goal isn’t sustainability here, it’s to get us to the point where we can be sustainable.
given the deficit and the time it’ll take us to build out some of the features we want to build in order to reach sustainability, we will need some more cash. however, we don’t think a large fundraiser is the right way to get that cash.
in order to fund 6 months of development, we’d need about $105k. for the same reasons as listed in the cohost plus section above, this would be a really hard number for us to actually achieve. to use wikimedia’s (in)famous blurb: if every active cohost user gave $3.50, the fundraiser would be over in hours. you’ll notice, though, that wikimedia’s fundraisers don’t last hours. getting 30,000 people to raise that much money is a monumental task.
beyond the practical issues, a one-time fundraiser carries substantial risk: there is still a solid chance we aren’t sustainable in six months. the idea of us taking this much money from users, only to fall short at the end, makes us deeply uneasy. cohost plus allows for continued development at a small monthly rate; a massive fundraiser is for a specific goal. if we fail at that goal, we fail every single user that paid to help us get there.
while many of you may read this and say “I would be fine with that,” (and if that’s you, we really appreciate your generosity) we don’t anticipate that being the universal response. we’re not writing it off, but while we have other options it’s not our favorite choice.
ads!
the most common suggestion was to run some kind of user-friendly advertising scheme. we would never rely on any third party ad broker for a variety of ethical reasons; the only thing we would consider is designing some way for a user to purchase ad space to promote their own work, art, business, or funny joke to other users.
there are a few pros and cons here; various ad systems are something we’ve been talking about for a long time. at the end of the day, we do not think untargeted home page image ads (especially animated ones) would make the site better, and we think making the site better has to be our first priority with anything we build.
more specific ads, such as the ability to place one of these banners in the sidebar of a specific tag search, are something we would consider, but there’s a lot of work we need to do before we could roll something like that out. tagging is currently a wild west in general, and we believe that some sort of tag grouping or synonym system (which is on our next-six-months roadmap) is necessary in order to make these sorts of ads useful — and such a system also makes tags more useful for everyone, whether or not they have something to promote.
we’ve also thought about allowing people to promote posts, akin to tumblr blaze. but we don’t want to do promoted posts, at least not right now, both due to technical limitations of the site right now and questions about the signal-to-noise ratio. we might revisit this down the road, but for now we have other ideas.
when we think about how we would want to do ads, we want to do something that’s a good fit for our userbase, as unobtrusive as possible while still being useful. we want to prioritize artists, streamers, and people making shitposts; we aren’t trying to sell ads to Verizon.
we have a good idea what that looks like, we started building it this week, and we’re gonna try to ship a beta by the end of the month. our working name is “artist alley,” and we’ve got some details below with more to come as we get closer to launch.
our plan going forward
we believe that the best way for us to make money sustainably is to increase our active userbase. even if our subscriber and churn rates got worse, a doubling of our active userbase would be well worth it. it’s not easy convincing people to come to a website on the edge of sustainability (the curse of transparency). as such, we believe that the development of features that make cohost actively worse to use are a non-starter. anything we do needs to forward our cause of making cohost a better place to post and interact. with that in mind, our plan is roughly as follows, subject to change as necessary:
- as we said above, we will continue to need short term funding to develop cohost. we have received some very generous offers we are considering for bridge funding from users, and we have also been able to reestablish contact with our initial funder. it will be a few weeks before we actually have any paperwork signed, but we are confident that the site will continue operating for at least six more months through one or more of these avenues.
- develop and ship “artist alley,” a take on user-to-user ads we feel good about — a dedicated space which users can access to see promotions from other users, like an artist alley at a convention. users can promote their artwork, business, and products and they’ll be able to direct you both to their cohost profile, and any storefronts or other resources they have set up off-site (etsy, patreon, kickstarter, etc.) we hope to have a beta version finished within the next 2-3 weeks for you to begin using.
- interested in something like this? tell us how you’d use it and what you think a fair price would be! email artistalley@cohost.org with some information on what you’d promote and what you think you’d pay for a weekly spot in our artist alley.
- we do not anticipate artist alley to fully cover our deficit, but we hope it can narrow it significantly, maybe by 10-20%.
- continue development of eggbux, our tipping and subscription platform
- taking money from someone is easy, taking money from someone and giving it to someone else is a lot harder; tipping will be our first step in making sure this system works, not a product we want or expect to generate significant revenue. once we know tipping is working well, we plan to launch subscriptions, which will have a small (~5% or less) platform fee.
- again, we don’t expect this one product to fully cover our deficit, but another 10-30% would make a big difference.
- continue developing cohost to ensure the experience is positive and attracts new users
- the best way for us to make up for our deficit is to have more active users. the best way to have more active users is to make cohost better.
- if features like eggbux and artist alley can bring the deficit down below $10k a month, promoting and improving cohost plus to cover the rest becomes significantly more doable; at that point we’re also in striking distance of being able to close the rest of the gap with things that are entirely in our control.
thanks for using cohost
this is a difficult time for everyone. none of us want to be going through this, but we’re feeling a lot more optimistic than we were on Monday.
thanks for using cohost and sticking with us. we’ll keep sending out updates to y’all as we get new things to share. keep an eye out for artist alley and send us your thoughts about it to artistalley@cohost.org.
<3 @staff 
💜
