hey y'all, jae here. it's been a bit since our last financial update (we've had A Lot going on, both personally and within the business) but we're at a point where we aren't going to get meaningfully more information by continuing to wait to publish this. as always, if you have questions about any terms it's worth taking a look at past financial updates [https://cohost.org/staff/tagged/financials].
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REVENUE, EXPENSES, AND USERS
CategoryAs of March 11As of February 13ChangePrevious 4 weeks revenue (subscriptions only)$12,496.42$8,369.14+49.3%Eggbug plush net revenue$10,067.64n/an/aExpenses$34,328.71$32,643.92+5.16%Net Income-$11,764.65-$24,274.78+48.5%Active subscribers2,6302,521+4.3%Monthly Recurring Revenue (MRR)$14,536.03$14,037.80+3.5%Subscriber churn rate2.63%2.1%+25.2%Revenue per subscriber$5.53$5.57-0.7%Total users196,220181,309+8.2%Monthly active users (MAU)29,846n/an/aMAU -> Subscriber conversion rate8.8%n/an/a
I've included the eggbug plush revenue as a separate line item since it's not representative of recurring revenue, which is a better indicator of the overall health of the business. unfortunately, we're still having data issues and can't track MAU-over-time.
cohost and ASSC as a whole are, obviously, still not profitable. our largest expense remains payroll by a long shot. even with only four employees, we're having trouble making ends fully meet. we’ve suspected from the beginning that it’s almost impossible to make ends meet on a social network without compromising on something we don’t want to compromise on — running display ads, or farming out development or operations work to underpaid contractors or volunteers — and the post-Twitter collapse internet has shown us no evidence to the contrary: the fediverse is dependent on volunteer labor all over the place; bluesky is losing a small number of people’s money but those people are several orders of magnitude wealthier than our one person; and most of the other “alternative social media” have fewer paid staff than us, if any at all.
this is why we originally planned to build cohost only as a side project on the way to building a platform for tipping and subscriptions like ko-fi or patreon (hereafter referred to as "eggbux" because it's less to write), rather than depending on cohost plus for funding indefinitely. our conversion rate of MAU to paid subscribers is already incredibly high; the industry standards are around 4-8% and we've been able to clock in above that basically since we launched cohost plus. trying to get that number higher will see seriously diminishing returns and isn't really worth putting a ton of time and effort into.
we've been fully dependent on outside funding from a single person to get us to that point (as has been discussed before, they prefer to remain publicly anonymous for privacy reasons. this is pretty reasonable; I would too if it were me) and they've been wholly supportive of our goals and missions. we have been aware the entire time that we can not sustainably rely on a single person for funding; they do not have infinite wealth.
WHAT'S GOING ON WITH EGGBUX
the launch of eggbux has been hilariously delayed from all of our internal targets. because we only have two developers, we decided to divide labor between the two projects (myself on eggbux, colin on cohost) since otherwise cohost would have been in maintenance mode indefinitely; we decided the risk of "cohost remains unchanged when we know there's issues that need to be solved" was too high to justify having two people on this project.
however, this meant that shipping eggbux on time was fully dependent on its assigned developer (me) being able to work at a consistent, strong pace through the entire process. this didn't happen.
to avoid going into too much detail: I am disabled and experienced related health issues that prevented me from working at even half-pace for much of the back-half of last year. this compounded with fear of failure, preventing us from having the sort of difficult conversations needed to fully right the ship. to be frank, the vibes internally have been rancid, and we weren’t able to start fixing this until early last month. all of this and more combined to keep us from launching eggbux on time or, as of now, at all.
it sucks when there is a single person you can point to as the reason why a massive, important project hasn't happened yet. it sucks worse when that person is you and you feel powerless to fix the issues causing it. but no matter how much it sucks, it doesn't change that eggbux hasn't shipped and we are still dependent on cohost plus as our only source of revenue.
RUNWAY
at current estimates, we will run out of money in early April. we have plans we are evaluating to keep cohost operational. we DO NOT intend to shut down cohost unless absolutely necessary. we have no reason to believe it is necessary. more detail about our plans below.
FUNDING
as discussed above, we have been dependent on a single funder throughout ASSC's history. the way funding is structured is through a series of promissory notes issued by the company to our funder — essentially collateralized loans from them to us. they DO NOT own any actual equity in ASSC (this is important to us as a worker-owned co-op); we’re ultimately responsible only for paying the principal on the loans as well as a small amount of interest, then we own the company free and clear. the collateral on these loans is IP rights on ASSC's output. barring a renegotiation on these terms, if we default on the loans then our funder will have ownership over the cohost software.
this is part of what has blocked us from open-sourcing cohost thus far; we think we could but things are dicey there. (the other aspect preventing open-sourcing is that, ideologically, we do not want to be getting paid for development work while also accepting volunteer labor — especially since we’re still an LLC.)
here’s the most urgent problem right now: our funder has been completely incommunicado for over a month right as we’re drawing on the last of our funding from them. we’ve been friends with them since before ASSC was a thing, so not only is this is a matter of paying the bills, but also unexpected, unusual, and leaving us concerned for their personal welfare on top of everything else.
this leaves a lot in the air: are we going to get new funding? are we going to have to do one of our alternate plans? are we even able to do them, given other outside requirements?
PLAN B (AND C, AND D, ETC.)
we’ve considered a bunch of possible ways forward subject to various conditions. they are presented in roughly order-of-preference but we have not done things like "take a vote" or "make any final decisions." everything here is subject to change.
BUSINESS AS USUAL
conditions:
* we are able to contact our funder and secure further funding
this one doesn't really need a ton of explanation. the goal here is to actually fucking ship eggbux and Get Revenue to become financially sustainable. it is Plan A.
WE CROWDFUND COHOST FROM USERS MORE EXPLICITLY
obstacles:
* equity crowdfunding (wefunder, circleup, etc.) is a nonstarter for us on moral grounds. in general, we don’t want this company to be owned by the type of people who have angel investment money kicking around.
* the only asset we would consider using as collateral for a loan (our work product for the past few years) is already being used as collateral.
* as an ostensibly for-profit entity, “please give us money in exchange for no long-term guarantee of anything” is not a proposition we think we can use to raise the ~$400,000 a year we need to keep the lights on for long.
* we’re open to officially reincorporating as a non-profit, but: that would require our funder’s approval, being a non-profit carries with it a significant amount of additional work on its own (the paperwork itself, finding an external board of directors to control the direction of the organization, and spending time working with them), and we’re not actually sure how much more money it would help us raise.
COHOST STOPS BEING SOME OF OUR FULL-TIME JOBS
obstacles:
* right now, we have enough steady revenue to pay one of our paychecks, host the site, and hire other people on an occasional contract basis. if we did this, our priority for continued spending on full-time work would be moderation.
* choose your own adventure:
* site development slows down further.
* we start accepting volunteer labor. this would require open-sourcing the codebase, which would require our funder’s sign-off (since they own our software in the event of default). this is also terrible from an ethical standpoint unless we reincorporate as a non-profit. see above for some of the issues here.
* the rest of us would have to get other jobs to pay rent and like. have you seen the job market?? it’s not great
COHOST GETS ACQUIRED
conditions:
* someone actually expresses interest here (we are not shopping ourselves around but we're also somewhat open to offers. e-mail us [corp@antisoftware.club] if you’ve got one.)
* we receive an offer that prevents mixing or sale of user data, or any other changes that would go against our ethical red lines.
in the event we agreed to a sale, we would provide full data export tools and allow users to opt-out of the sale, fully deleting their account from the database prior to any transfer. more detail on what that would look like below.
COHOST SHUTS DOWN
this one’s obvious. some of the specifics of how we’d do this:
* we would write data export tools and a small static site generator so you could reconnect with your cohost friends on other sites and easily rehost old posts “as they were meant to be seen”, and e-mail everyone links to their data before the site shut down.
* the links would remain operational for at least several months since the cost for hosting a static copy of this data is negligible.
* on our way out the door we would wipe the database. your data would not be sold to data brokers or marketing companies and the only copy left would be the one we exported for you.
we like this option the least. I can say personally that I would be very sad if it went in this direction.
THE FUTURE
so where does this leave us? right now it's business as usual, working on cohost and eggbux, trying to figure out what's next. there's still a distressingly large amount of unknowns here. it's eating at our sleep and thoughts outside of work, which is eating at our ability to do our best work, which creates a real dogshit cycle.
I am fully aware that putting this out is likely to create a panic. I hate that I can't say "it's going to be fine" because at this moment I literally have no idea where things go from here. we have some options that all come with their own issues, but no decisions yet.
no matter where things end up, I want to say that I am proud of what we've built. I am proud of cohost, I love the weird sort of culture that we've got here, and I'm glad we've been able to make it happen for as long as we have. we're doing our best over here to keep it going indefinitely, and we're really grateful for your support this whole time and going forward.
we'll hopefully be back soon with good news. until then, thank you as always for using cohost. :eggbug:
~jae
iComputer7
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