denise: Image: Me, facing away from camera, on top of the Castel Sant'Angelo in Rome (Default)
Denise ([staff profile] denise) wrote in [site community profile] dw_biz2011-04-05 07:53 am
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2010 Year End Update

So, the year-end accounting is finally finalized, and we can look back at 2010 and analyze the business end of things!

In summary: 2010 was slower than we'd hoped due to three months of being unable to accept online payments and due to higher fees from the merchant processor we switched to in April of '10, but we came very near to breaking even for the year, and would probably have broken even if it weren't for the entire quarter of downtime. In the end, we only spent about $6,000 more than we took in (not counting taxes, which are paid by Dreamwidth).

On the whole, I'm pretty pleased with our performance for the year, and I hope that 2011 will be just as good if not better!



* Our year end income was lower than it was in 2009, but that was expected -- the two factors involved there were the seed account sale in 2009 (giving us a one-time boost to income) and the three months of being unable to accept payments.

* Our three biggest expenditures for the year: data hosting, contractor payments, and travel (for conferences). We expect much less travel in 2011, which will help to lower that cost.

* The merchant processor we found to replace PayPal when they dropped us provides us great service, but their fees are correspondingly much higher. Between the merchant processor fees and the merchant bank account fees, approximately 9% of payments go to processor fees, as opposed to PayPal's 3%. It's less than optimal, but we didn't have much choice!

* Also impacting the cash flow for the year, our merchant bank account required us to hold a rolling reserve against chargebacks, where they held 25% of our incoming payments for the first 6 months we were a client. (This is because internet-only transactions, aka card-not-present transactions, are considered "high risk" in the banking industry, and sites with user-generated content are even more high risk.) They lifted that requirement after six months of no chargebacks, but they continue to hold on to the funds they reserved, and we haven't been able to get them to release that money yet (they're still a bit skittish about not having the reserve). That reserve, plus our tax bill, is the reason why our "operating fund" is lower than we'd currently like.

* This year we also tried an experiment with Google AdWords advertising; we budgeted $1,000 over approximately six weeks to experiment with different keywords, ad copy, and landing pages to see if we could prompt an increase in signups (and retention). The experiment wasn't very successful; I think it failed mostly because we don't have a very good pre-signup "site tour" that explains to people why DW is awesome and why they'd enjoy using it. Plans for 2011 include sprucing up our on-site pre-signup information and giving people a stronger sense of why they should give DW a try, then repeating the AdWords experiment.

* Paid account numbers increased slowly but steadily over the year, both in raw numbers and as a percentage of total accounts (and total active accounts). Around the middle of the year (which is when we started recording statistics in this fashion), paid accounts taken as a percentage of the entire userbase were 1% of total users and 6% of active users and premium paid accounts were less than 1% of total users and 2% of active users. At the end of the year, paid accounts were 2.3 of total users and 9.7% of active users, and premium paid accounts were 1% of total users and 3.7% of active users. (Those figures today are paid: 2.3% of total users, 11.2% of active users; premium paid: 0.8% of total users, 3.9% of active users.)

* Our overall growth through the year was modest, but definitely there. Mid-year, our total accounts were 518,320; 24,288 active in some way; 46,632 having ever posted an entry; 15,336 posting in the last 30 days; 9,878 posting in the last 7 days; 4,524 posting in the last 24 hours. Near the end of the year, total accounts were 676,630; active in some way, 22,969; ever having posted an entry: 60,783; posting in last 30 days: 18,839; posting in last 7 days: 12,208; posting in last 24 hours, 5,396. So, activity level was variable over time, but the stats say that while not everyone who tries DW will stick with us, the people who do stick with us are fairly active (more so than conventional wisdom states that members of a site like this will be) and tend, on the whole, to update at least once a week or so.

(Those numbers today, for comparison's sake: total accounts: 715,393; active in some way: 21,815; ever posted an entry: 66,695; posted an entry in last 30 days: 18,919; posted an entry in the last 7 days: 12,968; posted an entry in the last 24 hours: 6,117.)


On the whole, I'm relatively happy with our 2010! Obviously I wish that we hadn't had such a long period without being able to accept online payments, and the combination of that period of no income, taxes, fees, and the reserve-against-chargebacks our merchant bank is holding means that our operating fund reserve is a lot lower than I'd like it to be right now. We are, however, heading into "payment season" -- our biggest spike in payments happen at the end of April/beginning of May, which is the anniversary of when we first opened for business. (And, therefore, the time when people who pay by the year renew their accounts.)

I'm also expecting a less pronounced, but still present, bump in income in the next few days; the anniversary of our payment system coming back online is in a few days, and we definitely saw the spike in yesterday's payments. (The announcement of payments being back online was April 7 -- so yesterday was the day that the 3-day expiration reminder email went out for people who'd bought a year of paid time as soon as it came back up!)

Our initial plan for DW had us breaking even or having a slight profit in 2010. The fact that external circumstances meant we didn't isn't a dealbreaker, though we are looking at ways to replenish that operating fund for peace of mind. So far in 2011, we are looking to be on track to, again, break even or have a small profit. (I'm rooting for the extra income. It would be very nice to be able to upgrade my pay from 'peanut shells' to at least 'peanuts'!)

If you have any questions about anything, feel free to ask! I may not answer in depth, but I will do my best to get you an answer.
princessofgeeks: (Default)

[personal profile] princessofgeeks 2011-04-05 01:55 pm (UTC)(link)
Congratulations! I know there's been a lot of turmoil, and I am wishing you all the best.
ilyena_sylph: picture of Labyrinth!faerie with 'careful, i bite' as text (Default)

[personal profile] ilyena_sylph 2011-04-05 02:00 pm (UTC)(link)
I love these posts, can I just tell you?

Thank you for the info.
sharpest_asp: Close up of a lavender eye in a dark face (Default)

[personal profile] sharpest_asp 2011-04-05 02:08 pm (UTC)(link)
Thank you for keeping us in touch. I know it will soon be time for me to pay up again, plus I run contests in 3W4DW context to generate at least a small excuse to spend money here. ;-)

It's home; I want to pay for the upkeep.
dragonfly: stained glass dragonfly in iridescent colors (Default)

[personal profile] dragonfly 2011-04-05 04:52 pm (UTC)(link)
+ 1

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helens78: A man in a leather jacket, seated on the ground, looks up hopefully. (Default)

[personal profile] helens78 2011-04-05 02:25 pm (UTC)(link)
That's awesome! And thank you so much for the info; I'm thrilled by the transparency and honesty every time.

[personal profile] itshiseyes 2011-04-05 07:02 pm (UTC)(link)
Yes Yes! This is exactly how I feel.
indi: Kara Lee S1 promo poster (Default)

[personal profile] indi 2011-04-05 03:03 pm (UTC)(link)
Congratulations on a great year! I haven't been online as much this past year but am still delighted to see how much you've accomplished.

Any thoughts on offering permanent/seed accounts for a limited time, to replenish the operating fund? I would definitely be interested in getting one of those, and supporting your fine cause. :)
silverhare: shirt and tie with text 'Hufflepuff Pride' (hp - hufflepuff pride)

[personal profile] silverhare 2011-04-05 04:07 pm (UTC)(link)
Agreed.

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susanreads: my avatar, a white woman with brown hair and glasses (Default)

[personal profile] susanreads 2011-04-05 04:10 pm (UTC)(link)
Thank you for the transparency. I didn't know the new payment processor was so expensive. Does it make a difference whether people make one large payment or several small ones? If I ever get another job I'll be more active in buying stuff - my first ever paid time was an anonymous gift and I want to pay it forward.
kate_nepveu: sleeping cat carved in brown wood (Default)

[personal profile] kate_nepveu 2011-04-05 08:43 pm (UTC)(link)
I'd also like to know whether there's any benefit to transaction size. Thanks.

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jumpuphigh: DW Logo with text  "You're Doing It Right" (DWRight)

[personal profile] jumpuphigh 2011-04-05 04:20 pm (UTC)(link)
It's been said before but it is worth saying again:

The fact that you share this sort of stuff is one reason that Dreamwidth is awesome. Thank you.
mm_writes: So you said you wanted a cookie... (Default)

OT, but...

[personal profile] mm_writes 2011-04-06 06:36 pm (UTC)(link)
Wow, I love your icon. Gankable?

Re: OT, but...

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azurelunatic: A whole pomegranate and a broken pomegranate on top of scattered seeds. caption: I planted a seed.  (seed account)

[personal profile] azurelunatic 2011-04-05 04:29 pm (UTC)(link)
Thanks for keeping us updated! (Yesterday I spent some of my hoarded points to get a friend a one-month paid account, because this was the second time I'd seen her express frustration about not being able to edit comments. If you give a mouse a cookie The first one's sometimes free...)
Edited 2011-04-05 16:29 (UTC)
green_knight: (Bee)

[personal profile] green_knight 2011-04-06 12:19 pm (UTC)(link)
What tipped me over from 'I like having a LJ-type backup for my journal' to 'I love the DW community' was that I had talked on Twitter about having a permanent LJ account and no being able to justify the expense for a DW account, and someone gave me an anonymous gift.
I was completely blown away by the generosity - and by the fact that someone cared enough about DW to want me to experience the awesomeness.

I wasn't able to thank the person who gifted me; but I'd like to say a general THANK YOU in this place.
lanterne_rouee: cheering about dreamwidth \o/ (dw yay)

[personal profile] lanterne_rouee 2011-04-05 05:07 pm (UTC)(link)
Congratulations! I think that's quite the accomplishment.

Here's to an even better future!

And thanks so much for sharing this stuff with us. :)
shalom: (Default)

[personal profile] shalom 2011-04-05 05:35 pm (UTC)(link)
Thank you for everything.
I'll absolutely be renewing my paid membership when it comes up at the end of this month.
amadi: A stylized photo of two calla lily flowers (Default)

[personal profile] amadi 2011-04-05 06:14 pm (UTC)(link)
I'll also be renewing my premium paid membership when it comes due, and hope to run some contests for paid time/points in my communities for 3W4DW. I appreciate the transparency, getting us down into the nitty gritty like this when other sites (not just LJ) won't even cop to basic reasons for extended periods of downtime, server issues, etc. This is why Dreamwidth remains my primary online home, where I keep the "important" stuff.
syderia: cyber wolf (geek)

[personal profile] syderia 2011-04-05 06:18 pm (UTC)(link)
Thanks for keeping us in the loop.
pauamma: Cartooney crab holding drink (Default)

[personal profile] pauamma 2011-04-05 07:48 pm (UTC)(link)
Yay encouraging Figures!
bethany_lauren: Patrick's rune from A  Swiftly Tilting Planet by Madeleine Le'Engle (Default)

[personal profile] bethany_lauren 2011-04-05 08:43 pm (UTC)(link)
Thank you for the transparency. It means a lot.
zvi: self-portrait: short, fat, black dyke in bunny slippers (Default)

[personal profile] zvi 2011-04-05 08:49 pm (UTC)(link)
out of curiousity, what's the status on v-gifts? although for smaller amounts, I would imagine they would help spread payment around some.
kareila: (Default)

[personal profile] kareila 2011-04-06 03:44 pm (UTC)(link)
My gift display code and the shop code still aren't talking to each other, and I haven't had time to work on it recently. :/

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twincy: (misc | he a-a-ate my heart)

[personal profile] twincy 2011-04-05 09:00 pm (UTC)(link)
Fascinated by the activity stats in ways my language-oriented brain isn't usually fascinated by numbers. *tempted to make a graph*

Just wondering, how do/did you define "active in some way"? Is it purely based on posts, or do you count commenting/logging in?

foxfirefey: A guy looking ridiculous by doing a fashionable posing with a mouse, slinging the cord over his shoulders. (geek)

[personal profile] foxfirefey 2011-04-05 09:11 pm (UTC)(link)
Active in some way is at least logging in in the past 30 days, I believe.

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turlough: Gerard Way doing thumbs-up, Warped tour 2005 ((mcr) gerard approves)

[personal profile] turlough 2011-04-05 09:19 pm (UTC)(link)
Thank you for keeping us informed!
lannamichaels: Matt Smith holds two thumbs up, before heading into Certain Danger. Cap from season 5 promo trailers. (two thumbs up)

[personal profile] lannamichaels 2011-04-05 10:37 pm (UTC)(link)
Thanks for doing this post. :)
kore: (Dreamwidth on the xkcd map)

[personal profile] kore 2011-04-05 10:42 pm (UTC)(link)
I love the transparency and accountability, and I'll be renewing my paid account when it's up.
hypatia: (Default)

[personal profile] hypatia 2011-04-06 12:32 am (UTC)(link)
thanks for this post. i'll be renewing my account as a premium one as soon as i am job-enabled :D
hypatia: Detail of XKCD's map of the internet showing DW as a small island off of the coast of LJ 	 (island)

[personal profile] hypatia 2011-04-06 06:02 am (UTC)(link)
whoever paid for account time for me: thank you ♥♥♥♥♥♥♥♥
kate: Kate Winslet is wryly amused (Default)

[personal profile] kate 2011-04-06 01:03 am (UTC)(link)
I love this place, and you lovely folks who run it.
bell: a dreamwidth sheep with a psychadelic background and the text "dreaming in color" (dw sheep)

[personal profile] bell 2011-04-06 01:05 am (UTC)(link)
Thanks for the update!
silverflight8: bee on rose  (Bee)

[personal profile] silverflight8 2011-04-06 01:22 am (UTC)(link)
Whoa, that's a lot of numbers, but thank you for this! It's really nice to know what's going on. I think this will be a good year ;)
poulpette: Smiling Nine Doctor from Doctor Who (Dr Who - Nine)

[personal profile] poulpette 2011-04-06 01:37 am (UTC)(link)
Thank you for the 2010 break down :D lovely and informative ;D

About the pre-signup thing, maybe we could gather a few testimony about which feature makes people happy, and why, and serve a few at random during the tour? Might make people curious or interested by certain feature. Or have a few example of how users actually use certain features, preferably with a couple of testimonials to illustrate different options?

I haven't thought about much, but that's what popped through my brain when I read through this point in your report. Thought I'd better share it before the idea went away :)
green_knight: (Kaffeeklatsch)

[personal profile] green_knight 2011-04-06 12:26 pm (UTC)(link)
The happy testimonials can backfire. I've just been told by several people that the enthusiasm of DW members is offputting to them :-(

This admittedly puzzled me (if my friends love something, I'm more likely to check it out), but short of not being enthusiastic about DW, I don't know what we can do.

Examples of the options DW offers would be better, I think, simply because some peopel have the perceptino that it's only for one type of blogger. I'd also like to see a statement about inclusiveness, and a clear distinction 'you can just use the service, post, and talk to your friends. If you feel like it, you can get involved (here are some ways to do that). I've heard from several sides that they felt there was a pressure to become a 'part of the DW community' when all they wanted was to write in their own journal.

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[personal profile] feathertail 2011-04-06 03:24 am (UTC)(link)
Do we have any statistics on number of communities and number of active (commenting) OpenID accounts? Also comment metrics in general.

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