Profitability, Growth and Unit Economics
Finishing the week at DigsConnect having achieved 120% of our bookings target for the week!
So proud of our team, almost all of whom have been working right through the Christmas and New Year’s period to ensure that every student that comes to Digs finds a home!
During the incredibly rough COVID and lockdown years, when it was do or die, Greg and I made a commitment that we would never run an unsustainable business, and that profitability would be the priority.
This meant two things.
1. As a platform based startup, obviously; growth. It’s grow or die in this game. But growth on our terms.
2. And that meant cutting wasteful expenditure and relentlessly iterating on system inefficiencies to the conversion rate until we reached a CAC that was just dreadfully pleasing (no other word for it haha).
In practical terms, we’ve cut our fixed costs per sale by a factor of 100 (!!!) and cut our marketing CAC by an even bigger number that I don’t even want to share cause it used to be so inefficient - the whole hyper-growth-by-any-means-necessary is almost embarrassing in hindsight! That insane marketing stunt we pulled back in 2018 when we threw money off a building and started a riot may have launched us into the public eye and secured a market for us, but on a profit margin spreadsheet it doesn’t look as exciting haha.
Simultaneously we’ve increased our conversion rate at every stage of the user funnel, which in some markets has resulted in a 20x increase. We’re maximised the efficiency of our incredibly talented team, with half the headcount of last year while still growing bookings.
And most importantly, our abilty to stay true to our mission that students and young people will never be homeless, that everyone deserves the foundational security of a home.
And that the solution to the global housing crisis is entirely fixable with the right mindset, the right team, the right tech, the right financing and incentives and the right solution, and that we are the team that will, and is, doing exactly that.
Zooming out and looking at the trends; shifting focus from insane growth to insane efficiency is paying dividends. And another one of the main reasons why, which you can’t really quantify or put in a spreadsheet, is founder peace of mind.
Startups don’t have to be precarious, and you don’t have to exist on an investor-lifeline and burn-out inducing hamster-wheel of high stress. Relentless effort will always be required, and now as we shift our focus back to growth, it’s with surest possible footing.
Excited for our biggest year yet.