Number of Users on Each Plan

Ryan Carson | DropSend | Thursday, November 9th, 2006

We promised to reveal the breakdown of the number of users on each plan, so here we go!

  • Basic ($5): 216
  • Standard ($9): 157
  • Pro ($19): 90
  • Business ($99): 43

DropSend Plans

Now here is the breakdown of the monthly revenue over these plans:

  • Basic: $1080
  • Standard: $1413
  • Pro: $1710
  • Business: $4257

plan-breakdown-rev-small.png

This data communicates something very clearly: there is money to be made in SMB, premium plans. 50% of our revenue comes from only 11% of our customers..

I had an interesting conversation with Jason Fried of 37signals about these numbers. We both agreed that $5 plans are a lot of hard work, for very little money.

My advice for those of you building web apps based on monthly subscriptions: have a plan for getting people off of the low-paying plans. Or maybe don’t offer a low-paying plan at all.

With DropSend, we found the best way to get people to upgrade is by offering them a coupon. By upgrading before a specific date, they would save anywhere between 10% - 100% of the first month.

Side note: You’ll notice that the numbers for November on both graphs look like they tail off a bit. This is because we’re only nine days into November.

Update

We had a request for the number of users over the months. Here you go:

December 2005: 4,249
January 2006: 8,430
February 2006: 12,478
March 2006: 17,628
April 2006: 22,206
May 2006: 27,882
June 2006: 33,665
July 2006: 38,953
August 2006: 44,635
September 2006: 50,144
October 2006: 56,611
November 2006: 58,462

Important note: Every time you send a file to someone, it creates an account for them. Therefore these numbers don’t really represent the actual growth of DropSend. A better representation would be how many registrations we get. Unfortunately we just started tracking this. Nine days into November, we’ve gotten 249.

22 Comments »

  1. What is the stats package you use to generate the graphs? Looks nice.

    Also, can you reveal the minimum bid amount agreed for the three contenders?

    Good luck with sale.

    Comment by Andrew — November 9, 2006 @ 11:58 pm

  2. It was built by Nick Nettleton, who is the developer behind DropSend.

    Comment by Ryan Carson — November 10, 2006 @ 12:01 am

  3. You mentioned in the last post with stats, that this was a new stats program you just installed.

    Mind sharing if this is an in house stats program you all built or is this something that was purchased? If purchased, from where?

    Comment by Jeremy Luebke — November 10, 2006 @ 12:25 am

  4. Mind sharing if this is an in house stats program you all built or is this something that was purchased? If purchased, from where?

    See above …

    Comment by Ryan Carson — November 10, 2006 @ 12:37 am

  5. It would also be interesting to know the number of free users. Is that something you’d be willing to disclose?

    Comment by Nathan Jones — November 10, 2006 @ 12:41 am

  6. Nathan,

    I believe DropSend has 58462 customers total. There are 506 paying customers of various types, as stated. 58462 - 506 = 57956

    Comment by theman — November 10, 2006 @ 1:13 am

  7. Ryan:
    Thanks for this data. Five questions:

    1) Even though the Basic ($5) plan is a lot of work, would you still say that users in Basic plan are good because:
    a) they help spread the word
    b) they make DropSend feel cheap
    c) they are the prime candidates for conversion to more expensive plans?
    d) still too much work
    2) What makes DS technically difficult to implement? Large storage access? The need for fast disks? High bandwidth?
    3) Have you ever considered generating revenue from advertising, and if so, why aren’t you, or has that not worked out and the non-free plans are a better revenue generator?
    4) Could you please break down the paying users by country?
    5) What file types and what file sizes do paying users send?

    Thank you!

    Comment by Jack — November 10, 2006 @ 3:17 am

  8. So about 0.87% of your users pay you. That’s slightly lower than I would have thought for your service, but still I only figured 1-2%.

    How have coupons worked for converting free customers into paying customers?

    Since an account is created everytime for a file is sent to a new person, do you have stats on the number of people who use it just once (to get the file) verse continue to use it?

    Comment by Bryan — November 10, 2006 @ 4:36 am

  9. Obviously the revenue from paying subscribers is pretty nice, but with 50k+ non-paying you (the purchasing company) would need to develop a plan to turn more of them into paying clients or install some sort of ad revenue for non-paying/free clients.

    Comment by John — November 10, 2006 @ 4:42 am

  10. Ryan,
    I’d just like to say a huge thanks for being so open with your numbers over the last week; I wish there were more entrepreneurs like yourself. It’s a shame that so many ‘Web 2.0′ companies talk-up the size of their user base, but never tell us what the free/paying ratio is.

    Good luck with the sale.

    Comment by Dan Zambonini — November 10, 2006 @ 11:55 am

  11. What application are you using to generate those beautiful graphs?

    Comment by Xavier — November 10, 2006 @ 6:12 pm

  12. I’m not quite sure what you mean by the last part of the post…. you’ve had 1,851 net new users so far in November, but only 249 new registrations. what does this mean? That 249 people signed up of their own accord, and the rest (1,851-249=1,602) were automatically signed up because they received an email from an existing user?
    Does the 249 include the new paying members?
    I’m also interested in the question above by Bryan — how many of new users who are automatically signed up continue using the service?

    Thanks again, Ryan. This is extremely helpful for other entrepreneurs.

    And on an unrelated note… have you guys thought about developing a plug-in for existing email clients, so that using dropsend is a similar experience to just adding an attachment? Or maybe a browser plug-in, for those users who have web-based email clients?

    Comment by rob — November 10, 2006 @ 7:02 pm

  13. Ryan

    I have to say that as someone who is running a busy, but not yet profitable, webapp — your an inspiration. Please keep up the open, honest and transparent way you work. Its really refreshing.

    Best of luck

    Comment by Richard Bundock — November 11, 2006 @ 8:24 pm

  14. What do you use to build these shiny charts?

    Comment by dan — November 13, 2006 @ 8:26 am

  15. There is nothing in the numbers so far about your costs, especially to serve the >99% of your non-paying customers. Can you say something about how much capital is tied up in providing the service? I know that the cost of storage itself is not the whole of this, but I suppose it’s a larger part in your case than for some others. How about bandwidth, if the focus is on very large files?

    And do you sense that you are reaching only users who have significant upload bandwidth on their end? After all, the dialup user might choose to cut a CD and mail it, not because their email server refuses to transmit a large file but because they don’t have the patience. Can you say something about this factor?

    Comment by Jim Hickstein — November 13, 2006 @ 9:17 pm

  16. Well, OK not “nothing” about costs, but it’s not clear about capital. Also, how long do the files stick around, for free and for paying customers? If paying customers demand more space and this is created by deleting free-customer files earlier, how early can it go? Ultimately, what did you have to risk before you knew whether this would work?

    Comment by Jim Hickstein — November 14, 2006 @ 1:20 am

  17. Ryan,

    Thanks for all the stats, really interesting stuff.

    As some others have posted, would you be willing to post some costing information? Things such as:
    1. App development time and costs prior to go live
    2. Cost changes during operations

    I think it would be informative to see the costs related to developing an app in addition to the rewards attainable if you have a hit. Keep up the great work.

    Comment by Shai Shefer — November 14, 2006 @ 6:30 pm

  18. He has done, many times before, there are a 100 podcasts of him explaining all the nitty gritty costs etc. http://www.thinkvitamin.com

    Comment by James Deer — November 18, 2006 @ 7:42 pm

  19. […] Another competitor, DropSend, has made subscriber and revenue numbers public because creator Carson Systems is selling off the product. They are much smaller. But this is a crowded market, and companies will have to offer more specialized services to get by. For instance, MyFabrik, which launched this week, is focusing on digital media and provides embeddable player widgets (also with 1 GB free). See our previous coverage. VentureBeat reports MyFabrik has raised $12 million in financing. […]

    Pingback by GigaOM » YouSendIt Bigger Than We Thought — November 22, 2006 @ 10:22 pm

  20. […] There are two feeds from Ryan Carson and co. from Carson Systems, namely Bare Naked App and Vitamin. Ryan’s posts on the process of building and latterly negotiating to sell DropSend have been very enlightening, and I’ve been impressed with the way that he has been prepared to share figures that I think other companies would guard jealously. I’ve signed up for the UK Future of Web Apps conference in February. (The podcasts from previous FOWA conferences are highly recommended.) […]

    Pingback by Blogroll Updated « Andrew Whitehouse’s Weblog — November 23, 2006 @ 7:21 am

  21. […] DropSend Metrics: We start by building metrics for DropSend based on the public information on BareNakedApp. We break down revenue contribution for each account type, because this is the assumption that we will have to make for Basecamp. We also will use the percentage of accounts that are paid as a metric. […]

    Pingback by Voodoo Ventures - Idea Fuel Blog » Basecamp vs. Dropsend Valuation Smackdown — November 27, 2006 @ 4:38 pm

  22. […] There are some additional considerations to be aware of. More customers is not always better — serving some customers may actually help you lose money, making it more important to focus on the most profitable customers. Many businesses find that a large part of their revenue comes from a small number of customers. For example, DropSend, a web application allowing people to email large files, reported that 50% of their revenue comes from 11% of their customers. Product managers who understand the economics of their customers will realize that more ways to buy your product does not usually equal more profit. […]

    Pingback by How To Be A Good Product Manager » Blog Archive » How can I buy your product? Let me count the ways — December 12, 2006 @ 1:30 pm

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