In your financial projections to investors during the last crowdfunding round, your goals stated that you expect to have ca. 102â000 customers by the end of this year. After seeing your senior software engineer Mathiasâ blog post on August 28 mentioning ânow over 40,000 clientsâ I must say Iâm very skeptical that this number can be reached and disappointed that any growth concerns havenât been communicated yet.
I know that you are expanding to other countries which will push customer numbers up, however the open roadmap shows a timeline for international launches of 3-6 months which makes significant growth and meeting projections unlikely for this year.
Could you please communicate whether you plan to revise your financial projections down, how many customers are on your international wait lists and how you plan to meet this yearâs and future projections?
I value your transparency incredibly and although this doesnât always make things easier, this is what sets you apart as a company. Thus Iâd greatly appreciate a response.
User numbers were 54k as of a few days ago, this is up from around 25k around the end of April, at their 4th crowdfunding campaign; doubling in around four months.
If you crunch the numbers the above growth equates to a 20% compound monthly growth rate. If you assume this same growth rate going forward (Bare in mind an enhanced Referral scheme is due to launch soon), Freetrade will hit 103k users by January. So growth is pretty much bang on track, Iâd say.
Finances, AUM, active users, etc are completely different metrics, but I remembered around ÂŁ1m revenue forecasted for 2019 in the crowdfund, albeit made at a loss; Free-trade is growth focused atm in any case to make a strong case for VC investment at a series A in a few months (Growth is all VCs tend to care about).
Hey Lukas, I believe Mathias wrote the post a while ago, and weâve edited the sentence for clarity now.
To add some context, like every company, our growth rate fluctuates, but most companies struggle to reach a reasonable growth rate. According to Y Combinatorâs (YC) founder Paul Graham, for YC companies (such as Airbnb, Stripe, Dropbox, Reddit), a good growth rate is 5 to 7 per cent per week. We are in that category.
I like that @Viktor and the :freetrade: team read Paul Grahamâs material. We as investors should read it too to understand companies better and what to look for when considering taking a long or short positon.
Actually startups take off because the founders make them take off. There may be a handful that just grew by themselves, but usually it takes some sort of push to get them going. A good metaphor would be the cranks that car engines had before they got electric starters. Once the engine was going, it would keep going, but there was a separate and laborious process to get it going.
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You should take extraordinary measures not just to acquire users, but also to make them happy. For as long as they could (which turned out to be surprisingly long), Wufoo sent each new user a hand-written thank you note. Your first users should feel that signing up with you was one of the best choices they ever made. And you in turn should be racking your brains to think of new ways to delight them.
The more time the team spends justifying themselves on growth numbers, the less time they have to work on the stuff that actually matters: product & growth. If you are looking for highly predicable businesses, go for blue chips. Otherwise, sit back, relax and let the FT team do their job.
