This was the latest update I sent to investors for Jan./Feb. 2016.
One thing I did after writing this update was look back at old updates we sent and notice how the style of our investor updates have evolved over time.
If we look back to early 2014 (when Crew was about 1 year old), these updates shared metrics and what we thought were major project updates from the month.
However, I noticed the focus of our latest update has moved from sharing metrics and projects, to a much deeper breakdown of the key parts of our business and how these parts and projects all connect together.
It’s interesting for me to see this change because I’ve felt, especially over the last few months, we’ve gotten better at focusing more on the projects that matter most and saying ‘no’ to others.
I’m guilty of trying to take on too many things at once. When I see an opportunity, I don’t like to let it pass by.
What I’ve come to learn though is that it’s important to weigh every opportunity, no matter how good it sounds, against your current ones. If you’re working on something right now that you’ve said is important but then another opportunity comes along (even if it feels important), you need to be able to say ‘no’ or ‘not right now.’
Starting too many things at once won’t help you get anything done faster. It will likely just distract your attention.
Our latest investor update is a good representation of where we are focusing as a company. Everyone on our team gets this update as soon as it’s sent to our investors so we all get a reminder of where our focus is. With so many projects going on, it’s easy to lose sight of how every task we do connects to the bigger vision.
So just like this update is useful for our investors to know how everything we’re working on connects to our vision, it’s even more important for all of us on the Crew team to be reminded how everything we do fits together toward where we want to go.
If you have any questions on this one, feel free to write me on Twitter @mikaelcho.
Thanks for reading.
Here’s an update from the first 2 months (Jan/Feb) of 2016. Since Q1 is not complete yet, we’ve compared to the last 2 months (Nov/Dec) of 2015 for context.
Jan/Feb Approved Projects were 3.4M (+20% from $2.7M Nov/Dec).
Jan/Feb 2016 Metrics (compared to Nov/Dec 2015):
- Approved Projects (meet vetting requirements): $3.4M (+20% up from $2.7M)
- Net Revenue (15% Crew fee): $77k (0% up from $77k+)
- Projected Fill Rate (% Approved Projects that complete payment): 29% (+0% up from 29%)
- Avg. project size: $11.2k (+1% up from $11.6k+)
- Net Burn (Total Spend – Net Revenue): $180k/month (+7% up from $167k/month)
- Projected runway: 18-20 months
- Team (full-time): 30
- In trial: 3
The key levers that drive revenue are:
- Approved Projects
- Conversion of Approved Projects (Filled Projects)
- Repeat Projects from existing customers
- Referred Projects from Mini Crew partners
Though it’s improving, we feel our core product still doesn’t drive enough growth for these key levers.
To do this, our product needs to get better in the following main areas:
- Speed: Time spent vetting/matching is still too long. Hurts momentum of the project. Our focus for improvement is around speeding up the time it takes from project submission to match. In Nov/Dec our avg. time from submission to project kickoff/payment was 22 days. In Jan/Feb that was 17 days (23% faster). We’re also moving away from dependency on email. 46% of the projects we don’t convert are because we receive no response after our first followup email. (Update: One of our investors suggested that no response after an email is a symptom of a cause not the cause. Here’s my response: “Good point. It’s not the cause. I should have gone deeper here. There’s multiple assumptions we have as to why people don’t reply after the first email. One of our leading assumptions is the speed of our replies, which is something that we have been improving (as we deal with time zone differences): We’re also looking at categorizing the drop off reasons at different project states. Ex: when a project is submitted, when a project is approved, when a project is matched, funded, etc. We should have this breakdown shortly.”)
- Automated project management: Our project management tools still feel too clunky and not as enjoyable as we’d like. First, we need to make communication easier and make project management easier by providing more contextual, automated guidance. For instance, how you should give feedback on a specific design, etc. Our goal is to have our software act as a project manager to guide you through from start to finish.
- Better flows to encourage repeat usage: We’ve added actions like “start an extension” and offered credits on completion of projects which has had an impact on repeat projects. But we can still do better.
To address these improvements, we have 2 main product launches that are on time for Q2 2016:
- Dream Crew. Turning our current core product into a fully automated/real-time vetting/matching/project management platform. More: How we’re designing Dream Crew
- Mini Crew. Evolving Crew from 1-1 project matching to a connected creative network for hiring/referring work. Soft launch page live: https://crew.co/
Our product release cycles are on time. This is mainly a result of:
- Increased team autonomy
- A dedicated team for Mini Crew
- New product process where each teammate focuses on 1 project at a time
Dream Crew and Mini Crew will be announced publicly by May.
Vision/Strategy: Mini Crew
In Jan we setup a 5-person team for mini crew (2 operations, 1 bus dev, 2 product)
Feb we started our soft launch onboarding select pilot partners: [removed pilot partner names out of respect for privacy]
The biggest positive thing we’ve seen is agencies want to use us for hiring and they want to use Mini Crew to do that. The activation on these accounts is 2-3 months so we’re just getting these relationships off the ground. Notable agencies like[removed pilot partner names out of respect for privacy] have all sent us contract projects during this pilot.
The biggest hurdle we seem to have is trust – trust to onboard existing partners, trust to refer projects and trust to add existing partners. While onboarding pilot partners, even though most partners said they were excited, less than half referred projects when given access. Reasons were different for different use cases. Agencies were hesitant to give up a percentage of their referral commission and to force their partners to use the Crew app for payments when they have established systems setup in place already (for studio partners). VCs were hesitant to onboard their preferred partner list.
For agencies, it seems the best way to build this trust is through contract hiring. Contract hiring seems to be a much lower friction entry point with much less to build product wise. These contract relationships are worth a ton, are recurring, and we’re able to activate them much quicker because it’s based on an immediate pain point they have in their business and directly effects the bottom line.
Other steps we’re taking to improve activation:
- Designing an onboarding flow the properly educates a potential partner.
- Immediate introduction to a Crew partner account manager by email and option to add us to their team communication tool (i.e. Slack) – this has had a big impact for increasing activity of Mini Crew partners
- Crew partner account manager will do regular followups based on actions/inactions
We’re still not focusing on driving substantial growth through Mini Crew yet until we have a clear understanding of the right product/operations/sales combo that results in a high partner activation rate and low churn.
We believe we’re still on track to publicly roll out Mini Crew in Q2.
Our Operations/Community team is on time with deliverables:
- Set up a dedicated Stories team (expected to release 1 story/2 weeks) http://stories.crew.co/
- Split team to optimize operations for crew/mini crew
- Set up member onboarding guide
- ID’d specific strategies for reactivation of inactive members
- Deep data analytics set up in Periscope. We had a custom reporting system but it was not flexible enough so we’re replacing all reports with added depth in periscope. Steph is going to share access to our dashboard with context on our metrics.
This is mainly a result of:
- Increased team size. Doubling our Operations/Community team in the last 6 months has helped us take on more opportunities for growth
- Internal team experience. 7 of the 9 members of our Operations/Community team started last year. With more experience, our team has become more efficient.
- Well-defined team processes. Each teammate now has their own stats dashboard with performance goals.
These deliverables impact our expected revenue in that we anticipate improvement in 2 levers: Conversion of Approved Projects (Filled Projects) and Repeat Projects from existing customers. Here’s how our repeat metrics have started to improve:
Vision/Strategy: Customer acquisition
In Jan/Feb we had 1,735 project submissions/301 Approved Projects (+23% from 1,342/241 in Nov/Dec.)
- repeat/referral: 42% (35%)
- word-of-mouth: 34% (37%)
- content: 23% (28%)
We have 3 main customer acquisition priorities in 2016.
- Creating more focused content (example: https://crew.co/how-
to-build-an-online-business/; industry podcast (featured by Apple))
- Efficiency (re-use/recycle/redistribute) and different forms (courses, podcast, free tools) (examples How we efficiently grow our audience; How we consistently get distribution at zero cost)
- Search/paid acquisition – starting now with Periscope source tracking now in place. We’ve hired a paid acquisition consultant who was responsible for the ad campaign that helped drive $1M+ in pre-launch sales for The Grid. We expect to finalize the contract with an SEO consultant in the next two weeks.
Q1/Q2 2016 hiring is for investing in the priorities listed above:
3-5 product (3 hired in Jan): frontend, backend, data engineer
9 marketing: http://backstage.
4 community/operations: http://
If there’s anyone you’d recommend for any of the roles we’re hiring for, please let me know.
We’re also still working through the best approach for an accurate target/budget model. We’d appreciate guidance on if/when we should be hiring someone full-time to help with this and what that role should look like.
If you’d like to chat about any of the above, feel free to email me or you can reach me on my cell: 514.653.0228.
Previous investor update for reference: Crew December 2015 investor update