<aside> <img src="/icons/calendar_green.svg" alt="/icons/calendar_green.svg" width="40px" /> This February 2024 update reviews our performance from January, 2024.
You can expect to see our next update on March 20, 2024, reviewing performance for February 1-29th, 2024
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https://www.loom.com/share/6f1757d8d4c2461192fe5b4c395dd4a5
<aside> <img src="/icons/circle-dot_green.svg" alt="/icons/circle-dot_green.svg" width="40px" /> Levels Investors –
Four months ago we shifted our focus from generating compounding growth to improving contribution margin and decreasing burn while building a path to non-linear growth. In January we delivered our fourth consecutive monthly improvement in contribution margin, achieving a result of $400k for the month.
In connection with this result, we also achieved best-ever results in revenue - $2.1M, LTV:CAC - 3.8, and annual retention - 44%. Our normalized operating burn also improved to $287k.
In product and engineering this month we made significant progress in several areas:
Our growth team delivered a solid result, bringing in over 1,700 new customers while reducing spend, and achieving an LTV:CAC of 3.8 for the month.
In operations and support, we ramped up the team to support increased volume while improving customer happiness and delivery SLAs.
<aside> <img src="/icons/arrow-right-basic_green.svg" alt="/icons/arrow-right-basic_green.svg" width="40px" /> Looking ahead to February
As we enter 2024, we’re expanding our focus from contribution to maintaining and improving our operating burn, while continuing steady and sustainable revenue growth. We’ll deprecate our focus on contribution margin and focus on company-wide metrics related to burn, retention, and growth.
In February we are coming off of strong seasonal tailwinds from new year renewals, and are entering a shorter month. As a result, we expect our results to regress slightly from January highs.
We made significant progress in product and engineering in January and will look to roll out the logging, accountability, and performance features we built and tested in January to the broader customer base. We’ll also start testing reception to our freemium offering with an alpha cohort of customers.
In growth and operations, we’ll look to maintain steady (day-adjusted) acquisition metrics while maintaining efficient spending. We’ll focus on lifecycle efforts to improve our acquisition funnel as well as retention. We’re also investing in improvements to our signup flow (to improve LTV & conversion) and evaluating incrementality in our paid acquisition channels.
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<aside> <img src="/icons/help-alternate_green.svg" alt="/icons/help-alternate_green.svg" width="40px" /> Asks
<aside> 📨 Advice — Product Engagement Metrics as Proxies for Retention We’re having some challenges defining product metrics/KPIs to focus on, and evaluate software development projects. Please reach out to @Cosima ([email protected]) for any feedback and insight.
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<aside> 🙏 Special thanks this month to Lachy Groom, Keith Pascal, Shaun Gordon, Matt Fleming and Beth Newman
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<aside> ✅ In October we shifted our focus to improving contribution margin and decreasing burn while delivering on a path to non-linear growth. We’ve focused on our operating and spending efficiency and made steady improvements in contribution margin since that time. In January we exceed our target again, achieving a contribution of $400k for the month.
As we enter 2024, we’re beginning to focus on sustainable and non-linear growth and are building strong momentum in our product and engineering group. We don’t expect to see significant movement over the next few months, but we’ll look to hold our results steady with modest improvements over the first quarter. As such, we’re shifting our focus to balance the following priorities:
<aside> 👉 We saw strong results across our key metrics in January. This was the result of both strong underlying business performance and seasonal tailwinds from the new year’s resolution season. We expect the seasonal impact to taper off over the next few months, and we’ll work to hold results steady while we continue to improve our product. This month we updated the above table to exclude contribution margin - we’ll now expand our focus to include overall revenue performance and manage our burn rate company-wide. We’ve updated the definition of burn rate to exclude payment-related timing differences.
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<aside> 📝 Definitions for New customers, LTV:CAC, 12 month retention, Normalized Burn Rate, and Runway are included in our Metrics Appendix.
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