Today, Pure Chat hit a major milestone: We broke past the coveted $1 million Annual Recurring Revenue (ARR) mark. It has been a long, fun and rewarding journey to get to this point and of course, we’re just at the beginning. They say the first million is the hardest. Fantastic! I look forward to the next $9 million being significantly easier as we begin our journey towards our next major milestone, $10 million in ARR.
But before we go too far, lets recap on how we got here…
A Beautifully Simple Product
It all started as a 30-day project that went beautifully right. The first version of Pure Chat was aimed at creating a simple live chat solution that was both easy to setup and easy to use. More importantly, the entire project had to be done in a time-boxed 30-day period, from start to finish! That time box created some interesting challenges, but eventually the team landed on a product that won the hearts of thousands of users.
The single-page website to allow users to signup for Pure Chat was built in less than a day and looked like this:
It wasn’t long before our 30-day project hit all kinds of scalability snags. As we gained more users, we had to re-write and scale big portions of the applications. Soon, we found ourselves dedicating some full-time developers to this project. The original website, along with the simple Pure Chat application, was responsible for nearly 100,000 account signups. But this was a side project that had become a distraction. We knew we were onto something, and had to do something about it. It was time to break Pure Chat into its own company and give it a full-blown run.
Building a Real, Funded Company
In September of 2014, we introduced paid Pure Chat plans that were generally anywhere from 1/3rd to 1/10th the cost of most competing solutions! Combining low prices with an easy-to-use and powerful product was a winning combination. In the first month alone, we added more than 500 paying customers! But of course, as with any SaaS product, we knew that it would take time before the incremental SaaS revenues would be able to pay for its own expenses, so we also decided to raise an angel-lead round, targeting $1.5 million.
In April of 2015 we closed our angel round with $1,550,000 raised. Along the way, we applied to and won the Arizona Innovation Challenge run by the Arizona Commerce Authority, which gave us an additional $250,000 in funding, bringing our total funding to $1.8 million.
We had a real company, a popular product and funds to execute on our plans. It was GO TIME!
Focusing on ARR!
One of the first things we did was to build an internal dashboard that shows the entire Pure Chat team how we are doing. We identified key metrics like MRR/ARR, number of paid accounts, number of chats, cancellations, attrition and a dozen more metrics…Every day, everyone at Pure Chat monitors these metrics and can see how the company is executing on these goals. Our dashboard gives us not only quick snapshots of where we are, but also a graph of how we’re doing for the past 30 days and how our current performance compares to 30 days ago.
With the metrics in hand, we knew what we had to do. Our top priority goal, besides making a kickass product, was to increase Annual Recurring Revenues from $0 to $1 million as fast as we possibly could, while maintaining usage growth.
We decided early on that the best way to achieve our $1 million ARR goal was through improvements of our product. Continually making it easier to use, easier to get started, and adding meaningful functionality that users love. Features like Visitor Tracking, which allow our customers to see exactly who is on their website and what pages they have visited, have been a huge hit. Along the way, we’ve experimented with pricing, with our latest iteration being a four-plan offering that looks like this:
And month after month we have been fortunate enough to see our Annual Recurring Revenue continue to grow as customers rave about Pure Chat and love what it does for their bottom line…and finally, on August 16th, we broke the $1 million ARR milestone!
Hitting that $1 million mark is a fantastic milestone. It helps validate the idea, the product, the execution and the team. And of course, we are just getting started! We can’t wait to show you the great things we have planned for Pure Chat’s future. Stay tuned…