April + May 2023 Shareholder Update

ℹ️ Sent to shareholders on June 23, 2023

Hi there,

My apologies for skipping a month, it’s been a full season with some time off with family, sickness and then straight into a performance review cycle. I’m here with a shareholder update for both April and May of 2023. See below for the numbers, key updates, and what’s on the horizon. If you have any questions, as always hit reply to discuss.

And for May:

• In several of the past shareholder updates, I’ve mentioned the VAT payment we’ve been preparing for. In May we made this payment to the HMRC, and this project is now all wrapped up. As a reminder, this was a tax liability we had to pay related to consumer customers located in the UK. The reason it is a large sum, is that we were required to backdate our tax liability for several years. We’re glad to be done with this item, and overall we were very happy with the impact, which was lower than we initially anticipated. Even after our payment, we have 58 months (4 years, 10 months) runway based on our $4.4M cash.
• I would describe our current growth situation as being in a holding pattern. We’ve hit a level of stability in our MRR that we’ve been working towards for a couple of years, as we shifted and solidified our strategy for longer term growth. While we’re not where we want to be, which is consistent healthy growth, this is a clear step towards that place and we’re glad to be in a new phase rather than the declines we’ve been seeing for a while. And in a flat phase, our runway gives us plenty of time to continue the diligent work that has led to us stalling the decline, to find growth soon.
• It’s worth noting that the segment of customers on our current product and pricing offering is continuing to grow at a healthy pace (4.42% and 4.21% MRR growth in April and May respectively). Our declines are caused by the legacy segment who continue to churn out gradually, due to that segment having a higher average revenue per customer than the New Buffer segment. New Buffer is the product, pricing and packaging update we rolled out in mid-2021, which most notably is priced by channels (social accounts) rather than having tiers with a fixed number of channels included, and consolidated separate products into a single price.We’ve been successful in achieving higher volumes and solid growth with New Buffer, and we chose not to force a migration thus far for the legacy customers since the pricing model is so different and customer goodwill is vital to our strategy.

Note-worthy updates

Here are a variety of the updates and improvements we’ve rolled out in the past couple of months:

Revamped Zapier Integration

We rolled out a significant upgrade to Buffer’s Zapier functionality. This involved upgrading to Zapier’s new code-based builder, which has enabled us to more easily add functionality in the future as well. For customers, this upgrade has enabled a wide range of new options for Triggers and Actions to allow integrating Buffer with other products. We’ve added 4 new triggers: New Draft, New Queue Item, New Contribution (for approval) and New Idea. On the Actions side of things, the significant one is that you can now add Ideas to Buffer’s Content section via Zapier, and you can also pause your queue. With these upgrades, we are now a Zapier Gold Partner, which gives us new co-marketing opportunities. And in April, we were prominently featured on their blog. Read more.

Stripe Checkout and Stripe Tax

We migrated a significant portion of our billing interface to Stripe Checkout. In doing this, we’ve been able to offload the maintenance of this portion of our account section to Stripe, who have a whole team working to make sure the experience is optimized. This is one of those things that wasn’t available years ago when we built out our billing system, but would be a no brainer to go with if starting a SaaS product today. We’ve been making a number of these types of decisions in recent years (e.g. adopting Segment and Mixpanel for product analytics rather than managing our own data pipelines). The other key reason we made this change, is to make use of Stripe Tax to assist with collecting required tax information to start charging a variety of different sales and value added tax, depending on the location of the customer.

AI in the main composer + post suggestions

We launched the first version of our AI capabilities in February, which were only available in our Content space. This was a great place to start testing out how we could use AI to help customers. Even with the limited scope of AI in our first offering, it has already assisted in creating over 31,500 posts for 8,100 users, generating 2.5 million words. In April we launched the Buffer AI Assistant in the main composer across all channels, and we’ve added a set of clear options to work with posts: rephrase a posts, summarize long-form text, expand sentences into paragraphs. Additionally, we launched a post idea generator in our Content space, to help solve the blank page problem. Read more.

Instagram Stories Scheduling

We launched direct scheduling for Instagram Stories, a recent addition to the Instagram API. This is a wonderful step in completing Instagram as a fully fledged channel within Buffer - you can now schedule Posts (image and video), Reels and Stories and have them posted directly to Instagram without the need for a mobile notification, or opening the IG app. Read more.

Thanks for reading. I’ll be back in early July with the next update.

Joel Gascoigne
Founder CEO, Buffer
joel.start.page