Looking Back at 2017
Hello friends of Balsamiq!
It's February, when we traditionally look back at the previous year and share our plans for the current one. Older editions are here: 2016, 2015, 2014, 2013, 2009, 2008.
These posts are getting harder to write, because with so many people (we're 30 now), we get so much done. Listing it all would be impossible, and picking highlights is hard and risks making whole sections of the company feel like their work is less important. So I'll try to just give you the real highlights today.
We continue to build two things at the same time:
- a low-fidelity wireframing tool
- a bootstrapped, flat, remote, distributed, profitable, longevity-focussed company
I would have found this hard to believe when I started almost 10 years ago, but both endeavors require the same amount of effort.
Balsamiq Wireframes
2017 was a transformative year for our little tool. We switched 6 out of 8 versions of our product to a fully rewritten javascript-powered codebase. The common knowledge is that full rewrites kill software companies, but I'm happy to report that we've survived ours! Sure it took over 3 years and our revenue growth slowed down, but growth has never been our focus, we're playing the long game here.
The main focus of 2017 was all about finishing the rewrite and shipping Balsamiq Cloud, our brand new web app which uses the new editor. It took pretty much all year, but it's done, and it's fantastic. We're really proud of Balsamiq Cloud and the new Balsamiq Wireframes editor, and its revenue is taking off like a rocket.
We also converted all of our plugin versions to Balsamiq Wireframes, and started working on the new native macOS and Windows Desktop applications, which will ship later this year.
Our main plans for 2018 are to ship Balsamiq Wireframes for Windows and Mac, which will let us finally retire our Flash-based codebase. Having all products on the same codebase will allow us to tackle some big features which we've had to hold back for a while: find and replace, spell check, nested symbols, shared assets... you get the idea.
Balsamiq the company
There was a lot of action in Balsamiq-land in 2017: we had 2 interns and hired 8 full-time people: a huge jump for us! We also said goodbye to two employees, who left for personal reasons. So we ended 2017 with 29 employees...we will grow more in 2018, but not as quickly.
We continued to vigorously work on our processes and policies, and on the tools we use to run smoothly.
A 30+ person company is very different than even a 20 person one. A company that's 10 years old is much different than a younger one. We're spending a lot of effort setting ourselves up for the next decade.
Revenue numbers
If you've been following us for a while, you know that Balsamiq is not the typical Silicon-Valley-style, grow-at-all-cost startup.
Quite far from it. Instead, we describe ourselves as "a five stars restaurant on the web". Like a fine restaurant, we care much more about quality of our work and impact on our customers than growth.
Since we started in 2008, we've asked the market for permission to try to help rid the world of bad software. We just want to make enough money to be able to continue to work towards our goal for years and years to come.
So far, we've continuously exceeded our revenue needs and expectations, and 2017 was no exception.
Revenue in 2017 was US $6,377,613. That's down 3.07% from 2016, and still way more than we need to operate profitably.
The 3% dip, the first in our company's history, was due to a number of factors, none of which should worry you. 😊
This breakdown by product type helps tell the story:
As you can see, Desktop revenue (the orange line) continues to shrink, as people move more and more to the cloud. In 2016 we had a spike in Desktop revenue on the heel of our Balsamiq Mockups 3 release. In 2017 our Desktop application was put in maintenance mode, as most of the team worked on the huge rewrite which will ship in 2018. So it's no surprise that revenue dipped there, the current Desktop app hasn't had a major update since September 2016.
Plugin revenue (the yellow line) had dipped in 2016 because we changed the licensing model for our Atlassian plugins (we moved to Atlassian Marketplace) and gave most of our customers 6 months of credit to ease their pain. In 2017, it nicely made up for it as you can see.
SaaS revenue (the green line) is the one that doesn't look quite right: isn't SaaS revenue supposed to only ever go up and to the right? 😊 Well, not if you put a product in maintenance mode and basically don't touch it for years. For a number of reasons, that's exactly what we did with myBalsamiq. The last major myBalsamiq update was in September 2013 (yes, you read that right, that's over 4 years ago). It still uses our v.2, Flash-based editor, and hasn't had any feature update other than annual subscription plans since. As we like to say around here, it's vintage.
In 2017 we had planned to ship Balsamiq Cloud in June, with the idea of offsetting myBalsamiq's revenue decline with Cloud's new revenue. Alas, we didn't ship Cloud until the end of October. As you can see in the chart below, this meant that Cloud didn't have enough time to cover for myBalsamiq's decline. Oh well.
Speaking of Balsamiq Cloud: it's taking off like a rocket! Look at the chart below. Sure, some of the revenue comes from myBalsamiq customers who are switching over, but I find it quite amazing that a whole new product can already bring in over $50k a month, just four months after its initial public release.
Speaking of countries, we still can't get used to the fact that our little tool is used all over the world. It's so cool to think about! 😊
Here's a breakdown of our top countries, by revenue:
In 2018, we want to continue to improve how we work, and we want to define what Balsamiq should look like for the years to come, both internally and externally. A big effort which will help drive these conversations is a full website revamp project, which will take all year.
The idea is to use 2018 to set up our team, processes, tools and products for an exciting 2019.
That's it! I hope you enjoyed this very high-level update from Balsamiq-land.
If you have any questions about anything specific, don't hesitate to ask! You can either leave a comment here or ask me in the #peldi_ask_me_anything channel in our Slack Community.
Onward!
Peldi for the Balsamiq Team
