Why MRR is a deceiving metric and my 2 year old thinks I don’t love him

Man, I am really gaining a lot of respect for people like Justin Jackson and Josh Pigford and and guys have have podcasts. It's not easy to to sound interesting and and off the cuff. So this is, like, my eighth try at this. So this is episode two of the Getting To Ramen podcast. And I'm hoping that I get better at it because my wife my wife listened to the first episode.

Her her feedback was that I say too much. So I'll I'll try to stop that, but there's a lot of other things that I need to work on. Anyways, I'll try and get into it here. So I thought I'd start by telling a quick story. Yesterday morning, my two and a half year old, as I was leaving, turned to my youngest and my four month old after I said as I was saying goodbye and said, well, daddy doesn't need us anymore.

And it just, like, broke my heart. But it's just, like, a picture of realization, like, it's not easy to to to do this, to have this life, and they didn't sign up for it. And and, you know, it's hard enough when you have when you're married to somebody who doesn't who may not may not be entrepreneurial and trying to communicate with them that, oh, no. You have this time that I'm spending that I'm not making any money at, that nobody's paying me for right now, it's gonna pay off. It's like, you know, it's it's kind of like going to, in some cases, going to university or something where it's like there's this long phase where it doesn't seem like there's gonna be rewards.

And I mean, in some cases, it's pretty clear rewards down the line, but in others, not so much. And you kinda have to look at it like there's gonna be a long you know, for for most entrepreneurs, there's gonna be a decent amount of time of, like, failing and learning, and it doesn't look like if you don't get a certificate, you know, hopefully hopefully, you make a lot of money someday or make a living someday at it. But you don't have anyone recognizing you as a successful, you know, successful in your craft. Like so so anyways, it's it's it's it's just one of those things, trying to trying to balance family and work. And meanwhile, while I'm trying to, you know, like, carrying that and and and everything.

I I there's also a drop Upscribe had a had a drop in revenue. And and it's like this happens once in a while. That's kind of common. And I don't know what it's like for companies that are making, like, $20, but when you're making $5 and revenue drops $800, you you really feel it, like and, like, monthly recurring revenue. So it's a lot of cancellations that can happen.

And I had I do have some people paying, like, a $100 a month. And so, you know, one of those and it it and it, you know, makes a big difference. But anyways, that it's kind of like, yeah, it's no fun. And and, I've got a lot of friends or a few friends that are founders, and one thing one issue or addiction that we all have is, like, constant constantly checking revenue. And with with great with, like, you know, like, barometrics and and tools like that where you're it's like, you've just got this beautiful dashboard and you're able to check all your numbers.

It makes it so easy to just I have it I have it open all day long. And whenever I turn my phone, I I'm checking checking it. And it can be really, obviously, stressful, but it can also be really deceiving if you're looking at the wrong numbers. And so for the last few weeks, I've been looking at MRR, which is an important metric to to look at. But there's a few things that are that I'm finding that I'm noticing or realizing are frustrating or hard about MRRs.

One of them is usually have your mixed in there. So you got your annual revenue divided by 12 or sorry. So annual subscriptions revenue divided by 12. And at which which I find is is difficult for me because that doesn't reflect my monthly how much I'm gonna make monthly bring in. And and that that's important because I'm I'm taking money from that and paying some myself paying myself.

So it's hard. It it's when that's not broken out, that can be difficult. The other part, is if you're just looking at MRR and whether it's going up or down, and you're not paying attention to churn and new MRR, it's it you can it it can be it can be deceiving. So I'll be more specific. In this case, revenue dropped, and I'm thinking that tons of people are canceling.

Like, everyone's leaving. Like, what's going on? And I'm and I'm busy with my day job and with bugs from the new launch. Because I just relaunched Subscribe as Lara vel. No.

We'll cut it as a Laravel application. And and so I'm dealing with that stuff. I and I'm dealing with customer service, and I'm trying to show my family that I still need them. And hence and so I don't have time. It's it's it's lower and lower down the list is time to spend drilling into analytics.

So so it's taking me a while, and I'm, you know, carrying that and frustrated that something's going wrong. And then I finally got a chance to look into it, and turns out that turn was totally normal. In fact, it was lower than it had been recently. The problem was that people weren't new people weren't signing up at the same rate that they had been. And so something had changed in my what what I realized was something had changed in the the onboarding process.

So I just needed to go in and fix that. But and I could have fixed it in minutes, but I wasn't paying attention to the right numbers. And so anyways, this is just one of those, like, lessons that you learn. But but those kinds of things, they they happen all the time, and it's diff different numbers that you have to be paying attention to at different times. And when you're doing it by yourself, when you're a solo founder, or even just a small team, you don't always have somebody looking at those things or paying attention or even remembering, like, hey.

We made this change that might affect this. Like, let's watch those numbers. So anyways, that was that was the the deal this time. Anyways, I I think I'm gonna wrap it up there for this episode. And and and and, yeah, that's that's that.

I hope I didn't say too many times this this episode.