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I've been watching Cohost since just slightly before it went public. I was not a beta member, but I saw chatter from people who were on Twitter, and was following that vagueposting about it to try to figure out what it was going to be, so I joined day one of public launch, having read the first ASSC manifesto (ASSC being the company over Cohost):
the first cohost manifesto [http]
The most notable part of the manifesto to me was the part about their funding--basically, they are ethically opposed to venture capital (great!), so their funding strategy as of early 2020 when they formed was that they had a rich friend who was going to help them out.
"while we were griping about the tech industry and considering starting this project back in September, a friend of ours stepped forward and let us know that they had hit the lottery as an early technical employee at a startup that had succeeded and gone public. the first public announcement we’re ready to make is: we have secured a deal with them for at least a year of operating funding on a non-equity basis, and we are publicly committing that we will never, under any circumstances, sell equity to non-employees.
My first instinct was definitely "well, that's not sustainable, so I wonder what their plan is to stop taking money from their rich friend." Turns out that plan was nothing as of writing this in early 2024. They are still taking money from the rich friend, and that money has run out, because rich friend is MIA.
I'm getting ahead of myself, because I really want to start this by explaining what it is and why I'm writing it. But I wanted to set the stage for why I started following Cohost's development in the first place, and why their financials were of particular interest to me. Literally before even seeing the site, before knowing what it was going to be, all I knew was a rich friend of theirs was paying for it. If you're interested in the business end of websites, you're gonna be wanting to watch the numbers closely here.
With Cohost now in its worse financial predicament as of the time I'm writing this, I have had a lot of thoughts about their puzzling financial choices between then and now. And a lot of this revolves around their financial updates, which have been sporadic at best. There's been some weird elements to them that I can't say anything for sure about, but that I have hunches about. So I want to say from the beginning, this post is going to be a mix of facts, numbers and opinions. I am going to say things that are definite facts that Cohost has given us from their financial updates. I am going to do my best with the numbers they have given us. And I am also going to share opinions I have that I cannot hand you receipts for. I'm going to be talking my gut feelings. In the past when I've done this about Cohost I've had people demand proof, but this isn't a post about allegations, this is a post about what I feel about it and what I think is a likely possibilty for what is going on. I could be wrong! I could be right! There's no way for me to know if I'll ever even find out either way! But I hope in sharing all of this that you at least understand why I'd come to those conclusions, whether you do yourself or not. I also want to do this as a way to put context to some of the financial reports, because if you weren't following them, you may not understand what was happening with the site at different times in its history that affects the financial reporting. I think it's also worth mentioning that I am writing this in realtime as I go back through the reports again, so you're going on this trip with me.
One last thing I want to preface this with is a disclaimer about numbers. This post is gonna be full of numbers, because it's about finances. But there are two problems with the numbers.
One, I am not a finance expert. I have no expertise here. If you'd like to send me a quick note about something I typoed or added wrong or something, feel free to use the contact info on the main page of this blog. In a way, forgetting to carry the one somewhere will probably not make a meaningful difference in the point I'm trying to make, as we're talking about large numbers where the scale is more important than whether it ends in a 5 or a 6. But it would be nice to not just totally fuck the math up. I also expect to do a little bit of rounding here and there, because it frankly doesn't matter that much whether the Cohost team were being paid $87k a year at launch or $87,285.00. I also am not going to try to factor in interest on the loans, I don't know what kind of rate that would be and I might as well just say the flat numbers we know, and you can just imagine that actually it's some amount more.
Two, the numbers are...a bit nebulous. They're definitely numbers, but what the numbers mean is a problem. This is part of why I have compared Cohost to the recent Defector story about Autostraddle:
Defector - Autostraddle Is Spiraling Toward A Shutdown Or A Sale [http]
Over the course of the site's history, the financial reports have changed formats, changed timeframes, changed what is included and what is not. I am going to do my absolute best to try to normalize these numbers and make sense of them, but I can't guarantee that I'm interpreting them correctly or that one month's number is a 1:1 representation of another month's number in intent. This is 100% napkin math we're going to have to do. And that's...part of my point here. It's actually not all that clear sometimes what has been happening with the numbers on this site. They've given us a lot of numbers, but whether you can do anything with them is a different story. So I will try my best to make sense of them. For stuff that is vague or nebulous, I may speculate a bit on what they mean. But, that's not something you should have to do with a financial update. It should be pretty straightforward. But as the Autostraddle article above said...
"Part of what’s confusing for a lot of folks, myself included, about what’s happening right now at Autostraddle is that, in many ways, there has always been a commitment to public transparency," said Rachel Kincaid, who rose from unpaid intern to managing editor at Autostraddle before leaving in 2021. "There was always a lot of numbers available, but it’s in a way that I think I still never really felt clear on the holistic financial picture."
So the numbers are going to be vague ideas, because I don't have the numbers to do anything better than vague ideas. They will definitely paint a picture but they won't be anything perfect, because I have imperfect data to work off of. I am an adult and I know very well that there's a lot more complexity to a business's financials than just "revenue minus expenses equals profit/loss", but the best we can do is keep it simple and big picture it because that's all we have the insight for. And maybe all of my math is wrong and maybe I misunderstood every single thing I read here...if that's the case, then you should be asking why I had to do this in the first place? If the updates were clear and accurate, I would not be here trying to piece the puzzle together.
ASSC's financials before our first Cohost financial update are not extremely public or easy to figure out. However, we do know from the July 2022 financial report that at the start of the company, they each made $80k flat in salary. In a way this post is going to be a preview for the July 2022 update, since most of the historical information is in that post. At the time of Cohost launching, it had just three members, Jae, Colin and Aidan. However, the ASSC blog posts only mention Jae and Colin as authors, so it's very possible Aidan came on board somewhere between March 2021 and the public launch of Cohost. I don't have a clear founding date for ASSC, but the Manifesto was in early March 2020, and they've talked about how they started it shortly before COVID lockdowns happened, so for the sake of argument let's just say they started in March of 2020. If they started earlier we don't have any useful data otherwise so we'll live with that.
They claim in this same post that they do cost of living adjustments every year based on the change in the Consumer Price Index. I'm not going to start digging into the historical data for that, but in the July 2022 update they were making $87,285 each, so we can assume that in 2020 they were making $80k each, and in 2021 they were making between $80k and $87k.
The July 2022 update also states that their expense estimate was $86k per quarter with their three employees. However they state this is an overestimate to give themselves a buffer, and that they usually come in a couple thousand under that. That's about $29k a month in expenses. I'm not sure what expenses they had prior to launching Cohost. I know they have said they occasionally consulted with lawyers when dealing with setting the business up, their terms of service, etc. They also pay for health insurance, that kind of thing.
In 2021, ASSC posts an anniversary update to their manifesto:
I primarily just link this to highlight this note about their finances:
we have enough cash on hand to work through 2021 at our current projections; we might also be able to get additional funding beyond that, but we’re hoping to ship something by the time we need to pass the hat again.
Cohost launches publicly on June 28th, 2022, after a few months of closed beta testing with friends and family. Jae's first post (that I can find right now) was December 9th, 2021. We can assume that they didn't start inviting friends and family the literal day they made the site live, so to make things easy let's just say that Cohost started operating at the start of 2022. In terms of finances all that matters from the beta period is whether or not Cohost Plus existed, because that's what affects whether they started getting revenue yet. I don't know this piece of info. I'm just going to do the math this way--we're going to say that for 2020 and 2021 they did not have revenue, starting 2022 they did. If that's the case, then that is roughly 22 months of no revenue. They said they usually come a couple thousand below their $86k a quarter budget. If we take "couple" literally (might as well, we have nothing else to do) and do our math from $84k, then that's about $28k a month. So at 22 months, that is $616,000 of debt to start us off. However, there's an important addendum to this math--I have no idea how long $86k was their quarterly budget, and as far as I can tell, as of their early 2021 manifesto post it was just Colin and Jae, meaning that if Aidan came on later in 2021, that $86k budget may have been only for part of that year. But again...we don't know. $616k is the only math we can truly try to guess at, but it's a guess. Even if we subtract a year's salary for Aidan not being there in 2020, even if we're generous and go with the $80k number even though by 2021 it sounds like they would have increased it, that's still over a half a million dollars. So, through this post I'd like to attempt to do a running account of how much debt they have. Just to be generous, I'm going to actually use $500,000 as a starting point. It's arbitrary but we were doing so much guesswork anyway, we might as well play in this space, but it's more likely that we're underestimating than over here. We can just think of this value as "Cohost's possible debt". I'm also going to round all the cents off of this number because nobody wants to look at two extra numbers anyway, I'm sorry if my imaginary number is a few dollars off in the end.
On July 2022, Cohost staff announce they will begin doing monthly financial updates (which...well you'll see). They indicate that they do internal auditing once a month for their all-hands meetings, so presumably this would be taken directly from something they are doing already anyway.
One of the important aspects of this update is that it lays out definitions for the terms they use. I linked the post but here's a basic rundown:
Conversion Rate is the percentage of users subscribed to Cohost Plus. This is basically tracking how many people are converted to paying customers. Their goal at this point is to keep this number over 5%.
Subscriber churn is essentially the lost subscribers, the users who did subscribe to Plus but then cancelled.
Monthly Recurring Revenue, abbreviated MRR, is the amount of money coming in from Cohost Plus per month. This does not include merch sales, but does include 1/12 of the lump sum of a yearly subscription.
Monthly Active Users, abbreviated MAU and sometimes referred to as Monthly Active Projects by Cohost, refers to the number of users who have taken action on the site (liking posts, making posts, etc.).
I do not expect to spend much time talking about conversion rates and subscriber churn, as I'm more interested in the broad dollar figures, but subscriber rates will come into play a few times so it's worth knowing the terminology.
Now, the July 2022 update was posted August 5th, and some of the numbers here are grabbed live, like the current subscriptions. However it's five days, so I'm willing to just call this the data for July. Data for June may or may not be included in this, it's unclear, but if they did include data from June it would probably only be the two days or so after going public. Trying to lump the numbers into months is going to become impossible later anyway.
Here's our numbers:
Cohost is getting $1,692 in monthly revenue, with 358 active Plus subscriptions. They also had some merch sales, and "only" lost $21,217. They are estimating their losses for Q3 2022 will end up being around $81,000. I prefer to stick to month to month personally, but sometimes we only have quarterly values, and this is an estimation on their end anyway. The main reason I add it is that they admit that July is going to be an abnormally high month for them having just gone public and don't expect it to hold up, hence expecting to lose more in the coming months.
They do not list their expenses here, but if we look at their revenue and add their total loss for the month, it should be about $19,524. Around $20k seems to be roughly right for this quarter looking ahead.
As of their last all hands meeting, they had $158,711 in the bank. This would of course be what they have left from their most recent loan from their friend, and would not include the debt owed from their total funding.
Cohost's Possible Debt value: $519,524.
August 2022 Update Link [http]
We start with a brief note about the MAU count--in the July post, Cohost calculated this number by users they had activated. Now they are using users that have actually engaged in activity: liking posts, sharing them, writing them, etc. I believe they calculate this number this way from here on. This is important, because as of August they have 19,056 users, but only 17,310 of them are activated, and only 4,314 of them are actually active users. That's a...pretty different number at this scale. Previously they were counting 6,068 activated users as their MAU number, so this is down quite a bit, and likely was nowhere near that number if they used this new calculation the previous month. But it's more realistic this way. They now have 476 Plus subscribers, so this went up. Their MRR for this month is $2,223, so up about $500 from last month. But their expenses get...tricky now. What they tell us is that they have so far "only" lost $43,417 this quarter. But, we aren't doing math from the quarters, we're trying to track what they're doing monthly, because these are monthly updates. They lost $21,217 of that in July, leaving us with $22,200 for August, and yet unknown for September. Despite being someone who likes rounding numbers off, it's a little weird to see them go from a number like $21,217 to something a clean and even as $22,200, but I'll give the benefit of the doubt here. Keep in mind that this is how much they've lost total, not their expenses. So using our typical revenue minus expenses math from before, we should expect expenses to be roughly $19,976.44.
But what I want to talk about is that we're starting to see why tracking Cohost's finances is so hard, and why despite the talk about transparency, it's a little trickier than that. It's easy to look at a bunch of numbers and say yes, numbers! Transparency! But you need to be able to use those numbers. It's already hard because the timeframes are so inconsistent. The two reports we have are both for "a month", but July might include some days from both June and August (it's unclear!) and August is thus missing those days. The report is roughly covering a month of time, but those months might overlap, or borrow days from each other, and some numbers are live numbers as of the day of posting and some are from specific cutoff dates. Sure, I can do the math and figure out from their Q3 loss number minus the previous month we know for that month and know what their monthly loss was, but why are we bouncing back and forth for how we give these numbers out? Not to mention they frequently switch between talking about net loss vs expenses, to the point where I had to do some revising on this a few times due to mixing the two up. The lines are extremely fuzzy here and they don't get better with time.
There's something else that bothered me here...
As of today, we have a total of $158,711 in the bank. We still intend to raise additional funding before the end of the year.
Didn't you have exactly $158,711 in the bank in last month's update?
What I think has happened is this: The previous update was posted on August 5th, and covered July's expenses, which had already been paid out, so they had $158,711 in the bank. This update was posted August 30th, so August's expenses have NOT been paid out yet, meaning that as soon as they do that they will have $136,511 in the bank. Next month's update will make this even weirder, spoiler alert. I was going to save this until then, but I want you to start thinking about this now.
In this update we get a little bit of a breakdown of their expenses. They say that this quarter, they have earned $13,326 and spent $56,653. Now, the quarter in question should be July, August and September. We've only done July and August. Earlier they said that they had an MRR of $1,692 and $2,223 for July and August's updates. This gives us $3,915, which...is a lot less than $13,326. I can't account for the several grand difference here. I guess it's not from their monthly revenue, but...where did it come from? Now, there is a possible answer to this, but this comes purely from having seen a lot of these updates, which nobody would have when this update was posted: it may be that they have added yearly subscriptions into this number, which are not part of MRR but are still income. I can't tell you if they had enough of those to cover roughly a $9k difference. Maybe they did and it's that. Maybe they didn't and I have no idea where it came from. But the important point here is that we don't know and they didn't tell us. They just tossed $9k into the pile without explaining it, or telling us how it's divided up between the two months. Which means that our estimates for their expenses, that we had to calculate ourselves, are going to be wrong. But they were probably going to be wrong anyway because...
The expenses complicate things as well. With our previous $19,524 and $19,976 figures, we have $39,500. But remember, we did that math ourselves. They told us what they've lost, and how much they budget per quarter for expenses, but they haven't told us total expenses for these months, so all we can do is the basic old formula. This post says that they have spent $56,653, that's quite a bit more. But that's fine, because they have a breakdown of the expenses, so maybe we can figure it out.
For this quarter, about $44,000 of that $56,653 is payroll. That tracks (with some rounding, which they did) for three employees at $87k only two months into the quarter. So $22,000 a month. That's a bit more than the expenses we calculated, but with the mystery income that probably checks out okay. Then we have $5,200 on hosting, $5,000 on taxes, and $1,300 for their lawyer. That's $11,500. That comes a bit shy of $56,653, but they were probably doing some of the same rounding and sanding off that I was doing. They shouldn't do that with their financial reports like I do with a stupid blog post but whatever, I can at least reconcile this.
They announce that they are going to hire a contractor to assist with development. They would go on to hire Jess for this. Jess is paid $50 an hour, max 24 hours a week, for 12 weeks. According to them, the "maximum cost" of this contract is $14,400, spread across September, October and December (so part of Q3 and part of Q4). But she does not start in August, so we aren't doing any of this math yet, it's just worth putting the numbers out there for now.
They expect at this point to end Q3 with $128,000 in the bank and end Q4 with at least $39,000.
I don't want to talk about how much time it took me just to cover these two months, because of how many times I had to redo the math or found discrepancies that I had to reconcile to make the numbers as presented make sense, and it hasn't even gotten as bad as it'll get yet. These financial updates never should have been harder than just here's our expenses, here's what those are made up of, here's our revenue, here's what that's made up of, here's the totals. But they aren't that.
Cohost's Possible Debt value: $543,417.00 (at least they gave us their loss numbers so this can still be calculated)
September 2022 Update Link [http]
I want to go into September 2022 pointing out that the August update was posted on August 30th, and the September update was posted on September 29th. It would be so much easier if they waited for the month to be over to do the numbers for it. But I shouldn't complain because this gets worse later, at least this is close. But I say this because I'm pretty sure this is a big source of a new problem we have, which is...
Cohost now has 3,837 active users, and they say that as of September 27th, they are at 497 subscribers, up from 483 the month before.
Except in the last update they told us they had 476 the month before. Which brings us to this month's MRR, which is at $2,305, up from $2,255 from last month. Except last month they told us it was $2,223. Anyway, both MRR and subscribers are down no matter which set of numbers you use, and we're about to learn why the numbers are a nightmare anyway.
There's a big nasty section of this September update, which is an explanation that their numbers from their last update were entirely fucked up.
Basically, the end of month payroll was not being included in their expenses. Because they were putting the reports out before the months were even over (worth noting--this one is September 29th, they didn't learn a lesson from this). August's numbers are just totally fucked and unsalvageable. So all that time I spent explaining them? Sorry, totally wasted. Don't worry, it wasted way more of my time writing it than it did you reading it, because I am rereading these as I write and I had totally forgotten this detail.
So, let's go back to August. Remember their money in the bank amount? Yes, in fact, it did go down in the month of August, that is now $136,224. But I want to highlight something else here:
This means that our estimated EOY cash on hand, which we initially estimated at $39k, should have been closer to $16k. $23k is a lot to be off by! Instead of having about an extra month and a half of runway, we have closer to two weeks
This wasn't just them putting the wrong numbers into the report they showed the public. Their own calculations were wrong this whole time. They didn't know how much money they were working with.
So for September, they have $108,189 in the bank. They lost a total of $69,712 in Q3. We know the August numbers are fucked up, but I need something to put the column for September's net losses, and since they insist on giving us quarterly numbers despite telling us the monthly numbers we had were wrong, I'm just going to keep August at $22,200 for now and put down $26,295 under September. If they didn't want me to have to guess they could have been explicit about the numbers. And since they say "Our proportion of expenses to revenue hasn't meaningfully changed since last month, nor has what all the money is going to, so I'm not going to break it down again," I'm just going to do revenue minus expenses and give us $23,989 for expenses this month.
On funding, they are having meetings to get more funding, and their biggest issue is "figuring out how much money we actually want/need". But this is still coming from their one anonymous rich friend, it is not a new source of funding just a new round.
There's a lot of promises for features they intend to ship, most of which they never did, and that's it for September. I know we had to do a little guesswork to get some ballpark figures in July and August, but September has told us that everything we did was completely wrong anyway and the numbers are just what we want to make of them, so that's what we'll keep trying to do.
Cohost's Possible Debt value: $569,712.00 (at least we know it's our starting half mil minus the Q3 loss so this is still a salvageable number for now)
October 2022 Update Link [http]
October 2022 was...a rough month for Cohost outside of finances. This was the month of the first big sitewide argument about the lolicon/cub art rules. In fact I think this was the first big sitewide argument period. Lots and lots of drama here, lots of people leaving as well. It was a huge complicated mess that left its own mark on the site, and would need a whole different post to cover. But, you won't be able to tell that from the numbers, because this was also a month in which Elon pissed off a ton of people and they chose to leave Twitter en masse, meaning some percentage of them decided to try Cohost!
We now have 38,165 users, up from 20,793 last month, I've not been tracking total users close enough to know if those numbers differed from last month's report but whatever. Now they have 9k MAU, up from 3837 last month, which IS the number they reported, but "9k" (as they wrote it themselves) is almost definitely a rounded number. Kind of annoying to switch to that when you were doing exact numbers before. We're at $3,535 MRR and 763 subscribers. Up from $2,549 MRR and 550 subs.
Which, if you'll remember, were reported as $2305 and 497 in the last update. Meaning our numbers are still changing every month because we're still doing all the math before the month is over.
Right now they say they have just over $85,000 in the bank, which is pretty consistent with their monthly "in the bank" number dropping. They also say though, "We are still in the process of securing new funding from our existing funder ("the ball is entirely in our court; we need to decide how much we need"). At several times in these early reports they describe the money they are getting from their funder this way, where it sounds like their funder is willing to give them as much as they want and they just need to name a number, which is something they seem to struggle to come up with occasionally.
Unfortunately when we want to look at our actual profit/loss for this month, it's...a little iffy. The numbers have gotten less specific for these. They have "just over $85k in the bank", and a Q4 spend thus far of "a bit over $22k". I'm just going to use these numbers as is for my math here, $85,000 and $22,000. Part of my problem is that I don't know what they mean by a "spend" here--do you mean your expenses were $22k, or do you mean your net income for the month was negative $22k? Given that they had $108,189 in the bank last month, and now have $85k or thereabouts, I am going to have to assume this is net income, but this is definitely a judgement call because previous months expenses have also been pretty close to a $22k amount. If we take it as net income, that puts their expenses at $18,465, which is the lowest so far, but not terribly far off from the average (the previous month apparently included hosting, as confirmed in this post, which is why it was a few thousand more than average).
Again though, why am I having to do this kind of math to find out what they mean?
Cohost's Possible Debt value: $591,712.00
November 2022 Update Link [http]
For November, the update is posted on December 1st, so at least November was actually over when it was done.
But before we get to November's update, we need to add some context to November--on November 8th, Cohost announces that they are hiring for a customer support/moderator role. This would eventually be Kaara. As Cohost's stated structure is being worker owned with flat salaries that grow every year with COL changes, this means an additional full salary will soon be thrown into the finances.
It's worth pointing out how this update starts: by saying that they have good news about the financial trajectory of the company (and bad news about being "so fucking tired").
Cohost's usercount is now 111,128, that's up from last month's 38,165 (which matches October's reporting of October's numbers!). This is a massive leap that is likely still coming from the people fleeing Twitter. MAU is now 37,000, up from 9,000. Pretty large spike there of active users, which will come up in their 'bad news' bit towards the end. But we have more numbers before that.
Subscribers are now at 1852, with an MRR of $8,648.48. The last month's numbers are 763 subs with $3,535 MRR, so again we're matching last month's report again finally. Conversion rate however is significantly down from last month, because although a lot of new people are subscribing, far more people are joining.
Now we get to our profit/loss bit. They have ended the month with $84,000 in the bank, suggesting a net income of -$1,000. They refer to this as a profitable month for November, because the negative amount was due to some "mismanaged hosting resources". To me that's not a profitable month, but I guess their thought is that "well, that's just a weird little one off, it didn't really count".
Here's the problem I have, that has really dug into me as I've tried to make some kind of sense of these numbers rereading them fresh--it's actually extremely hard to get a sense of what is actually happening here, because of the numbers they choose to give us. Telling us how much you have in the bank is a terrible metric here, especially when you can refill the bank with more loans. We don't know how much you were in debt, which if I was going to talk about what I have in the bank I would find a way to add that in there, but it would probably scare people off. I could tell you how much I have in my bank account right now, but it wouldn't tell you what my total amount of money is, or my assets, or my debts.
But more importantly, telling us how much they took out of their bank account serves to obfuscate their sustainability, and I think the biggest reason for this is yearly subs. Now, to be fair, they do point out the yearly sub issue in the post...after highlighting the numbers and talking about how they are profitable for the month. Sandwiching the disclaimer between two "incredible news we're doing great!" paragraphs leaves people with the impression that...you're doing great. Which is exactly what has happened with all of the posts like this, the userbase's takeaway was "sounds like they're doing great!" when they've never been doing great.
Anyway, for the math: we know from prior months that Cohost's expenses have an average of roughly $20k a month. Sometimes they are more or less because businesses have expenses that aren't exactly monthly (like hosting, or legal fees, or buying more or less paperclips or whatever). But $20k is close. However, Cohost's MRR minus $20k is nowhere near breaking even, it's about twice what it would need to be to make sense. The reason is, if you are just looking at "what we had to use from our bank accounts", this is including yearly subs in their entirety. But MRR only includes 1/12 of the yearly subs, to account for the fact that they won't see that money again for a year. But, they have that money to put in their bank account right now. To me, this is a form of double dipping, it doesn't necessarily mean that you are putting the numbers in there twice in the books, but in terms of how you're presenting the numbers to your userbase, you're both including them in the MRR, and including them in a final sum that makes the last number sound better than it is. If you were new to the site and had no idea what Cohost's monthly expenses looked like, you'd just read "we're profitable finally" and not think much more about it. I think omitting expenses from these early reports is fairly egregious in terms of not showing the big picture. We should be looking at revenue, expenses and net income, not money in the bank and here's how much we lost total. There's no reason we can't see a breakdown of MRR versus other income.
Anyway we don't know their expenses, so I'm putting down $20,000. My first instinct was to use their -$1,000 figure for net income, but then I realized that if I did that, then in future math when I utilize MRR, I'd be counting the yearly subs twice. So it only makes sense to utilize the standard equation, as people who can see into the future past this specific report, and give ourselves -$11,351.52.
Cohost was expecting to end the year with $22,500 in the bank, but are now expecting to end the year with $54,000 in the bank. This, they claim, gives them "incredible buffer and means [they] likely won’t need as much funding overall." This is an absolutely incredible claim to me, given that they are about to hire someone for another $87k (and later more) yearly. They know that the sudden surge in subscribers is due to the Twitter surge, they can't possibly be expecting that to happen repeatedly. Even more troublesome to me is this comment:
our MRR is enough that employee #4 is effectively free for us
Their MRR is not even covering half the expenses they have now, and again, this is an unusually high MRR for them. I have absolutely no idea how they've come to this conclusion. Like, none. I can't even speculate at what they meant by this but it's so clearly not true that it baffles me.
Before this one signs off, they give their bad news, which is that they can't keep up with support requests, hence their decision to hire for a full time customer support/moderation role. They also still say they are working on user tipping and subscriptions. They're going to say this a lot of times.
Cohost's Possible Debt value: $603,063.52
December 2022 Update Link [http]
Kaara has been hired on, so Cohost is now at 4 full time staff. Obviously that's a big hit financially. Jess has also been working as as contractor during this time, and this should be her last month of getting paid.
Unsurprisingly, the big spike of people leaving Twitter has dwindled, and their 111k users from last month are only up to 118k now. Also, MAU is down from 37,000 last month to 21,000 this month. Unsurprisingly when there's a big wave of new people to a site, a lot of them fall off of it quickly because it's not their thing. Not a unique problem to Cohost.
Subscribers are at 2027, which is up, which means so is MRR at $9,440. They have ended the year with $59,000 in the bank, but this month's losses were $29,000, due to CDN costs. They mention that they were getting a "sweet deal" on CDN services but will be paying closer to market rates as they move away from Cloudflare for ethical reasons. Since this next detail was in a personal post on Jae's account in March of 2023 and not a staff post, I might as well discuss their "sweet deal" here:
three-ish years ago, i complained on twitter about how cloudflare locked wildcard subdomain support behind their enterprise plan and we were looking for alternatives. a VP at cloudflare running their Startup Outreach program DM'd me offering to set us up with a free enterprise contract. this was supposed to last a year.
they completely forgot they did this and never followed up. we have paid cloudflare a grand total of $50 since then. i never said anything because it was a ticking time bomb; if they noticed and came calling, we'd be kind of boned. but they didn't, and now we're off them completely, so it doesn't fuckin matter! rest easy knowing your posting cost cloudflare money.
Jae's post about Cloudflare [http]
This post absolutely baffled me. First of all, it means that going forward Cohost is going to be spending a lot more money, and that their expenses looked a lot more reasonable than they were due to a literal fluke. But also, posting about this at all is bizarre to me. It's unprofessional for one thing, but it's also not impossible for Cloudflare to have asked for their money. Making a billing mistake doesn't mean the money is no longer owed. I would simply not have posted about this!
Back to the numbers...they lost a bit over $29,000, so that's our net income, which fits perfectly with our usual math to give us -$19,560 for expenses, hitting our typical "close to $20k" number. Actually kind of weird to frame this as an unusual amount given that it's pretty much bog standard expenses for them.
They are supposedly very close to securing "bridge funding", which...luckily the Twitter influx did not necessitate needing this funding any sooner. They also said they are expecting a "roughly 7.5% COL adjustment to keep up with inflation" next month. It is a company policy of ASSC that every year salaries will be adjusted for inflation. I find this to be pretty unrealistic for a company that is still working on just breaking even.
Cohost promises to launch gift subscriptions and pay-what-you-want-subscriptions (in this case referring to Cohost Plus, not the user subscriptions that are paired with tipping). They plan to start working tipping and subscriptions Q1 2023, targeting a Q2 2023 release. Okay then!
Cohost's Possible Debt value: $632,063.52
This post is already way longer than anyone should want to read, and the sad truth of it is, most of what came before now is just preamble to get to this update.
You may notice that this update is not January 2023. Or February 2023. Or March 2023. Or...well, anyway, it was posted on June 15th. And I'm sorry to say, I didn't skip any updates.
I decided to do something extremely tedious and stupid because nobody else should need or want to do this--I decided to look at all of the weekly updates from Februrary 2023 to the start of June 2023 to see what mention there was of the financial updates. It starts in the vol 48 update (Cohost labels its patch notes with volume numbers which makes referring to them in this context a lot easier) on February 1st:
financial update will be a bit late this month; we’re 99% done with this funding round, but want to be 100% before we publish the new numbers. also jae has been largely out sick all week and they’re the one who writes those.
Okay, that's fine. You don't necessarily have to have January's update out on February 1st, that's reasonable.
The vol. 49 update on Feb. 8 does not mention the financial update at all. (Though a side note--I mentioned earlier Jess's contract should have been over, but apparently Jess left this week, meaning they paid her for an extra month and change...so much for her contract being a "maximum" of however much money it was)
The vol. 50 update on Feb. 15 has the following note from Jae: "i just remembered that i forgot to write the january financial update. whoops. gonna get that out soon." Also it does say they finalized their funding round, but only chose to fund the first 6 months (of the year? Even though it's February already? Unclear.) from their same one funder because their growth has been so "spiky" lately.
The vol. 51 update on Feb. 22 does not mention the financial update.
The vol. 52 update on Mar. 1 does not mention the financial update. Worth noting that some of these updates list what each member is working on for the week, which to me is far too granular a detail for public facing reports, but notably the financial update isn't on anyone's plate in these.
The vol. 53 update on Mar 9 says the new financial update should be out "tomorrow", and was delayed because Jae has "been having serious difficulty with their chronic hand pain lately." Note that at this point, there should be two updates, for February and March.
The vol. 54 update on Mar 15 does not mention the financial update, despite the fact that we were supposedly going to see it on Mar 10.
The vol. 55 update on Mar. 23 has an apology for the delay in updates: "i (jae) have to redo budget math as part of our operating expense changes (fortunately, contracts mean fixed expenses) so the next financial update will include correct data based on that. unfortunately my health issues have continued largely unabated so i’m behind on some things, but i’m starting to catch up again." Worth noting that this post also begs users to sign up for Cohost Plus given that they have moved CDNs to one they actually have to pay for.
The vol. 56 update...does this one even exist? If it existed I cannot find it. Maybe their April Fools post was meant to be taken as this one.
The vol. 57 update on Apr. 6 does not mention the financial update. At this point we are missing three months of updates.
The vol. 58 update on Apr. 13 does not mention the financial update.
The vol. 59 update on Apr. 20 does not mention the financial update.
The vol. 60 update on Apr. 27 does not mention the financial update.
The vol. 61 update on May 5 does not mention the financial update. We're now missing four months of updates.
The vol. 62 update on May 10 does not mention the financial update. I should probably be saying updates at this point tbh but oh well.
The vol. 63 update on May 19 does not mention the financial update. There are some mentions of the community guidelines updates coming soon, which is another story for another time but is also about something Cohost kept saying was coming soon but took a ridiculous number of months.
At this point we won't even see another weekly patch notes update until vol. 64 on Jun 26, which is yet another example of not so timely updating. But, on June 15th, we receive the "H1 2023 Financial Update".
Before we go into it, I just want to recap what we saw here...staff kept promising financial updates, then would go silent on them for weeks, then would mention them as like JUST about to go out the door, then they would go silent on them. And I can't stress enough, users were asking about this. Users were asking where the updates were and largely getting no answers. I understand people get sick, but this many months of getting nothing, not even a "sorry still sick hopefully soon", is just...incredible.
And on a similar note, now might be a good time to bring up a running theme in Cohost's user-facing staff updates that has been an issue for me since the beginning. I believe the staff of this website way, way, way overshares on their personal lives. And I believe doing so has, intentionally or not, pushed a severe parasocial angle between the staff and the users of the site. Maybe this was fine when the users of the site were largely friends of the dev team, but at this point Cohost has tens of thousands of users. It isn't really in anyone's best interest to get them too involved with the day to day of your personal lives. Not only are the parasocial attachments unhealthy for the people who have them, but they can end up flat out dangerous for the people they're targeted at. I also think that the fact that not only the financial update but the patch notes as well occasionally have the excuse of "we forgot to do them" is frankly laughable and a sign of nonexistant management.
Anyway, on to the update we waited five months for.
H1 2023 Financial Update Link [http]
The H1 update starts with some excuses:
first off: where have we been? why has this financial update taken so long to come out?
2023 has been kind of a mess for us thus far. I was unfortunately kind of a non-entity due to health issues (complications from long covid) during the entirety of Q1, meaning that all work I had planned (including revenue-generating work) was automatically delayed. I’m currently the only one who writes these, which means that if I forget or am unable, it doesn’t happen. (we’re working on fixing this part.) I realize this is kind of a non-answer but it’s the truth. I have a bad working memory so sometimes I forget things, like that I need to write the financial update. fellow ADHD-havers will probably understand.
I understand people have health issues, but again, this is a combination of oversharing personal details and extreme mismanagement. Even with a team this small, you have got to have a backup plan if someone is out of commission. More than one person needs to be able to do these reports. And as of the time I am writing this, there's still not a backup person to write these reports.
Also, as a "fellow ADHD-haver", I absolutely do not understand. Because I do not work a job where I can just not do a report for 5 months. I do not work a job where I can just ghost people on reports I was supposed to have done. And I work a job where I am not literally the person in charge. Having ADHD makes doing this kind of shit very hard, I'm sure I've missed a deadline or two because of ADHD, but for this many months, no, I don't understand, because only someone who has no accountability for something can get away with just not doing it for this long. I don't have a choice in my work to not do tasks for five months, and I even have a really lenient company. ADHD-havers still have shit they have to get done, I can't just forget to do my job.
Unfortunately, the H1 report is...going to fuck up the ability to really chart the monthly numbers. A lot of stuff is going to be glossed over and lumped together here. This update is the biggest reason I started with a disclaimer saying that we were going to have to just wing it with a lot of the numbers. We'll do what we can here.
First off, Cohost salaries are now $94,616 from the cost of living adjustment, as of Feb. 15th. Payroll expenses are now $36,000 per month, and that's just salary, taxes, health insurance kinda stuff, not other expenses.
Moving to Fastly means that now they also have $4,850 per month of Fastly costs.
They refer to the rest as "the remaining $4,000ish of expenses", for servers, storage, and "occasional legal/professional services". So we can say that their monthly expenses are about $44,850, which is a significant amount more than they used to be. We're used to seeing about $20k here. With a lack of other data, we are going to use this number for expenses for January through May.
On to the other numbers...as it turns out, despite calling this the H1 report, this is basically just the May report. Surprise!
In May, they had a revenue of $5,300, giving them a net income of -$41,000, which they infamously followed up by saying "ideally, we would like to lose less money." This means their expenses were probably a little off from the $44,850 we got earlier, but these do fluctuate so I'll overlook the roughly $1k that I'm missing here. Instead for the month of May I'll change this number to -$46,300 to give us $41k in losses. Now, it's also worth noting, I have no idea if "revenue" here means MRR, or just all revenue including yearly subs and merch. I'd hope not, but we don't know.
However, the next paragraph gets problematic. Now, Cohost is listing its numbers as such, "approximate and accurate as of June 14, 2023" These numbers are total users 130,000, MAU 12,000, subscriptions 1,900 and MRR $9,008. Except...what time span is this for?? Our revenue for May was $5,300, so is $9,008 for June? But this was posted on June 15th, so we shouldn't be talking about June MRR yet. Honestly none of the numbers in this section should be what we're talking about, we haven't even touched anything previous to May and June is only half done!
The "half of June" numbers also contain this caveat:
this is a larger number than our revenue this month because it amortizes yearly subscriptions across the entire year, which isn’t how that works in real life but makes it a useful metric for Overall Business Health.
a lot of our annual subscribers subscribed in June and November, so revenue in those months will look better than average; the other 10 months will look worse.
Beyond this, we are told that it is time for hard conversations, because the numbers have stagnated compared to six months ago (even though we have no idea what happened between those two months).
This is the update that drops a bombshell that may sound eerily familiar for those only now paying attention to Cohost's finances: "at our current burn rate and bank balance, we will not make July 15 payroll." You may remember that Cohost said that funding was secured for the first six months (which I have to assume means "of the year" despite being solidified in February). So as of the time this was posted, Cohost has no funding prepared for running out of money in 1 month.
don’t panic, we’re not on the verge of collapse; we’re raising additional funding to help carry us through the year. our most recent funding round has lasted us as long as we expected.
This seems a bit late to me to start raising funding when you are so close to not making payroll, especially when finalizing the deal for the previous funding seemed to take them at least 2 months. It also seems a bit late if you consider the possibility that they don't get funding, since your users may want to start backing up posts and whatnot just in case.
There's a bit of talk here about sustainability. The tl;dr is that Cohost would need five times the number of subscriptions they have to be sustainable, and more active users than they have total users now. Their plan for making more money, since "infinitely getting more users" won't happen, is user subscriptions, i.e. the tipping and subscriptions mentioned before, that they said they planned to launch Q2 of 2023 (at this point in the story they are about two weeks away from Q3). I think it's worth mentioning their plan here: they intend to launch subscriptions with a 5% platform fee that they hope to lower if and when they become sustainable. They say they would need process $820,000 worth of subscriptions a month to account for the $41k they are losing. With 12,000 active users, how many of those users do you think post content that someone would pay money to subscribe to? Then how many of those users do you think would in fact subscribe to other users content?
Interestingly, they make a note that despite moving 100 times the amount of money around that Cohost needs, Patreon is not profitable. Cool. They also then go on to say "it's hard to bank on this as our Primary Revenue Strategy". Also cool. I'm sure there's no reason to keep this in mind for later.
They go on to talk about tipping, which they see as a pre-req for subscriptions. Jae calls this "my main priority once asks are live". This has always been a sticking point for me, you know that you are one week from not making payroll, you have known you were in a bad financial state for months now, yet your priority has and still is shipping an entirely monetized feature over shipping one that you at least thought at one point would only take one quarter to implement? Why on earth would you be worrying about shipping tumblr-style ask boxes when you can't get paid next month? Like everything else, asks took them way longer than intended to finish. On top of this, their plan is to take a 0% cut of tips. So tips also will not make any money, and are just kind of a trial run before subscriptions get implemented to make money. But asks are the priority still, with one month before not making payroll.
The update then goes on to talk about how social media on the whole is not profitable. Which is true and something I have said about ten thousand times during Cohost's lifetime. None of them make money. Big, small, doesn't matter. The only sustainable social media is social media run by hobbyists on a hobbyist budget, i.e. a forum or a fedi instance where nobody is pulling a salary from doing it. As a corporate entity that is trying to pay people, social media is pretty much universally a bad idea. Cohost doesn't really have a point here in talking about it, as they go on to ask Is There a Road to Sustainability? great question! no idea!
They go through a few options, like user supported ads or promoted posts, then also suggest an option for them is to pivot to something else entirely. But they don't have any real ideas about that, and don't think they have the capital to do that anyway. Their final idea is "fake it 'til you make it (more funding rounds)", which in hindsight we know is the path they took.
our funder is one person. while we’ve been cagey in the past identifying them, that’s solely because they like their privacy; it’s not a big secret, it’s just not relevant. they are not a billionaire, they do not have infinite money, they can not (and should not) fund us forever.
our current funding is in the form of interest-bearing bonds; these are debt that need to be paid back. every time we do a new funding round, we take on more debt. the fewer rounds the better.
They suggest a possibily of opening up to other funders, but don't expect to find anyone that will fund their nonprofitable business. This is also where they reveal for the first time I'm aware of on this scale (they had mentioned it to people in places like personal account Twitter replies in the past) that the reason they will struggle to find other funders is because the collateral for their loans is the "ownership of ASSC's IP rights (at this point that is exclusively cohost's source code)", which obviously they cannot offer to more than one person, and they have little else to offer as collateral.
There's a section about burnout, which leads into a section where Jae talks about being "depressed, stressed out, and have been for a while now". Again, I think this is getting into overly personal territory feeding into the parasocial angle here. Even worse in a footnote we have a note from Jae about burning all of their savings to move to Florida, and being stressed out about not being able to afford to move again. Again, sorry about the situation you're in but this is extremely bad to have in your financial update for your business. Don't put this here! Why do you have two footnotes about your unwise decision to move to Florida? That's absurd to throw at your tens of thousands of users on a website you run as your job! There's also a footnote from the burnout section that links to Jae saying they've come very close to resigning--again, don't put this in your company's financial report!
Frankly, I think, whether intentional or subconscious or accidental, the only thing the personal details serve to do is manipulate users into giving them more money. I can't say whether this is malicious, but the outcome is the same no matter what the motivation was. By talking about how hard it is and how upset you are and how much you can't lose this job, Cohost will receive an outpouring of one time financial boosts from this post (particularly in the form of "donations", but as Cohost has no donation button, what this looks like is people buying extra copies of Cohost Plus for themselves).
We've ended this update with...a lot of missing data about earlier in the year, some extremely over personal depression posting, and an indication that Cohost is out of money soon with the only strong plan for fixing that in the next month being more funding. Keep that in mind when we get to the present day.
Having no idea what the revenue for Jan-Apr consists of, I'm choosing to just use May's -$41,000 figure for all of these months. Might as well.
Cohost's Possible Debt value: $837,063.52 (just going to end of May here, because well, you'll see for June)
This update is a bit confusing, given that we already had a...half...June update. So I guess really this update isn't the confusing one, just the decision to toss June into the previous one. This update was posted on July 11th, which was only a few days before Cohost was expected to not make payroll. Cohost has seen a bump in revenue, due to the fears of shutting down driving more subscriptions and donations, as well as another wave of folks leaving Twitter over Elon making them angry.
This time, the financial update has an actual chart. If you've just been looking at my words and not clicking the links, the updates have all been just paragraphs about the numbers up until now. Now we have a chart! Which would be fantastic, except the new format has one of the biggest problems that would go on to plague their financial updates until the present day--Cohost has now decided to bizarrely structure their updates from roughly halfway through the month to roughly halfway through the month. And by roughly I mean not even on a consistent basis from month to month. This update covers from June 15th to the day it was posted, July 11th.
Honestly, the only reason I can come up for for structuring the updates this way instead of just covering (mostly) a single month on its own is...not great. The only excuse I can think of for doing this is to try to fudge the numbers to look better. Maybe you can hide some expenses on a bad month. Maybe you can even hide a payroll week somewhere. Now, of course, it's easy to say "well, it would just show up on the next month's report then!" But...well, you'll see. Regardless the decision to do this is going to fuck up our numbers again. I am just going to try to put these numbers down for whatever month they label the report for. I don't know what else to do with them at this point otherwise.
There is one more consequence of the way they have decided to format the new reports. Now, we have no direct comparison between last month's (or half months combined, whatever) expenses and net income and today's. These are listed as n/a. We do however get to see last month's revenue. Again, this feels like a move made to start hiding bad numbers, otherwise I do not know why you would do this. You can compare literally any two numbers in this except for expenses and net income.
And speaking of comparing numbers, let's do that. For some reason now we have "previous month revenue". This really confused me. At first I thought it was just showing the revenue of the period indicated, so on the left 6/15-7/11 and next to that...some date to 6/15. But that seems weird to phrase the way we have it. So I thought maybe it literally was the previous month's revenue, so $31.5k would be for some date to 6/15, but then...$4.4k would be for May, and we know May's number and it isn't that.
So I am just choosing to not even deal with this one, the point seems to be anyway that they got a ton of donation money and that's why it went from $4.4k to $31.5k.
Next are our expenses, which we don't get to compare at all! But right now as of halfway through July they are $26,500. My guess is that this includes the Fastly costs, so I'd expect the total for July, counting by full months like anyone reasonable would, would be similar to the $44-46k we saw in the previous months. But I don't know that. Net income is $5,000, which I guess makes sense for the previous month revenue being $31,500, so maybe we do need to just assume this is the current month's revenue. Or half month's revenue. I give up honestly on this distinction, our math is about to get arbitrary since it will only have to get even more aribtrary soon for other reasons.
Subscribers have gone up from 1900 to 2531, which hopefully is not counting multiple subscriptions bought by donations as different subscribing users, since it's not described as "subscriptions". MRR is listed as $14,000, which is up quite a bit from $9,000 due to the two big factors mentioned earlier. MAU is 22,400 up from 12,000, this part only being affected by the second Twitter exodus.
A really concerning bit to me in this is that Cohost has not closed additional funding yet. They are four days away from not making payroll. It sounds like the sudden push for donations has made this safe, but it's extremely worrying that they only scraped through because enough people threw money at them. Not exactly the most secure strategy for not being broke.
Work on tipping is just now starting, because Tumblr style asks finally shipped. This update is being billed as "things are looking better", but...has anything actually really changed about Cohost's situation here?
I don't actually want to do a debt update on this one because...well...we already included some of June, and we have part of July, and while we seem to be $5,000 up we have the rest of July still to look at and...the debt update is going to become a problem from here anyway. Here we go!
You might have thought with the backlog of financial updates cleared (even though we didn't REALLY get updates for most of those months), and getting a second one a little too soon, that the pressure would be off a little and we'd be back to regular monthly updates. But we aren't! Once again as financial updates get delayed and ignored, Cohost users ask where they are, typically with no answer. Let's go through the patch notes, see if you can guess how long they'll go on for, if you didn't cheat looking at the table of contents.
Technically the update that goes to July 11th was June's financial update, so I will start from vol. 69 on August 2nd, which is the first one post-July.
The vol. 69 update on Aug. 2 says "new financial update coming this week probably". Sounds good, that would be very timely.
The vol. 70 update on Aug. 9 does not mention the financial update.
The vol. 71 update on Aug. 17 does not mention the financial update.
The vol. 72 update on Aug 24 does not mention the financial update.
The vol. 73 update on Aug 30 does not mention the financial update.
The vol. 74 update on Sept 14 does not mention the financial update. We now have two months on the list (real months I'm not doing the weird half month shit).
The vol. 75 update on Sept 20 does not mention the financial update.
The vol. 76 update on Sept 28 says that they will have a full financial update out next week for the start of October (that would presumably include July, August and September), and that they have finalized their most recent round of funding, meaning that between July 15th when they thought they were not going to make payroll and September 28th, they were...I guess running on fumes. Seems extremely late.
On Oct 10 they promote their new campaign with Makeship to produce eggbug plushes. Worth mentioning since it'll come up in later financial updates.
The vol. 77 update on Oct 13, which is definitely not the start of October or "next week", says "jae is still putting together a financial update and is planning to have it out Monday or Tuesday; their week has been impacted by a covid case in the house so it’s a bit delayed."
The vol. 78 update on Oct 20 (a Friday if you'd like to know), says "we’d hoped to have the new financial update out by now but Things Came Up, as they often do; jae’s going to be training aidan on how to write them once she’s back so that we’ve got redundancy here. should be done next week!". The idea of Aidan writing them sounds pretty good considering Jae clearly has their hands full and Aidan is the site's art person so probably has a less full plate than the coders do at this point.
The vol. 79 update on Nov 2 does not mention the financial update. October can now be considered a month that is due.
The vol. 80 update on Nov 8 does not mention the financial update.
There aren't any more patch note updates (though there should have been) before we get to our next financial update...the November 2023 update! I was extremely upset by this because I spent the four missing months of updates placing my bets on January. I got closer than I should have though.
November 2023 Update Link [http]
This update is actually "November 2023 Financial Update + Tipping Launch Plans". Remember tipping?
"hi folks! jae here, we know it's been a bit since the last financial update but there's been a lot going on behind the scenes that has made getting one out before now difficult. I don't want to get too deep into it, so I won't."
Cryptic thing to say but we have a chart with numbers.
See, a problem we have here is that we can't actually compare these numbers with much. Because there's several months of updates missing, and this is for November. Cohost has decided that it isn't important to cover the months that they didn't get around to.
The revenue for November is $33,453, as of 11/20 (again, not doing months anymore). This is up from $9,348 "as of 10/24", so from some date to 10/24. Remember the revenue numbers here because I want to come back to this. Expenses are $39,574, but we again have n/a for the previous month's expenses in this new format. So...no fucking idea! Same for net income, but net income for the current random chunk of time is -$6,121. Woof. The new standard for expenses in 2023 with the new hire and cost of living change seems to be close to $44k (particularly before we started doing the weird half month thing), so...if we do the math with the previous sort-of-month's revenue, that would be -$34,652. -$6k looks nice in comparison.
Subscribers are down a bit, 2,682 to 2,576, MRR went from $14,748 to 14,367 which isn't too bad of a change. The user numbers get weird though--they are all calculated "as of 11/9". You see...they lost the numbers. Nevermind that this is something they should be able to pull again, but they lost October's numbers entirely for this. Well, from 11/9 to 11/20 MAU, which is all we care about really, went from 18,446 to 21,142.
The post starts with a caveat that this is one of the largest subscription renewal periods. Since so many people joined during the late 2022 Twitter exodus, yearly subs are popping up again. This means that nice big number in revenue that does not seem to get them into a positive amount of income at the end. Cohost saw a little bump of growth from Tumblr users getting mad at Tumblr and leaving, joining Cohost.
Despite the fact that they had a big bump of yearly money and still didn't break even for the month, they describe this as "the social media part of the business is healthy". They seem to be differentiating the tipping/subscription part of the site from the social media part of the site, as if it's a pivot to a different business, despite them saying originally that they didn't expect tipping and subscriptions to be all that profitable either. But now they are describing them as "major revenue drivers going forward". I mean, I guess this is true when you are comparing it to "no further growth from Cohost Plus" and "a one time plush preorder" and "nothing".
Their current round of funding they secured is supposed to give them runway through to "around the end of Q1 2024", which is March (which is when I am writing this).
They say they will unfortunately "miss [their] internal deadline for tipping" and will hold off its release until early 2024. Given that their last internal deadline from tipping they told us in the December 2022 update was Q2 2023, they already long missed it. They also talk about how tipping will have to be restricted to US users at launch, but non-US users will be included "shortly after launch". PayPal will not be supported at launch. So the audience for the launch of tipping will be Americans who do not need to use PayPal who want to tip other users on Cohost. That cuts out quite a few people.
So, again, we're missing a bunch of months of data. Again, the data we do have is extremely hard to use. But I want to point out a pattern I am seeing at this point. The H1 update was basically unavoidable for them, because they had to break the news that they were a month away from having no money and not making payroll. But then immediately, when that caused people to give them a ton of money, they had an update like...TOO soon about that. Then...we get total silence until November, when again they have a big burst of revenue (while still losing money, it's a lot less than they were losing before). So it's at this point I want to just flat out say this: I truly believe that they deliberately picked financial updates to push out when the numbers looked their best, then went silent again until they either had more decent numbers or were in such bad shape they couldn't avoid it anymore. Can I prove that? No. Do I believe it? Absolutely. Because they seemed to be able to get updates out real snappy when the numbers were better than average. Otherwise we just seem to get them when things are so bad they can't put off telling people anymore. And I think the next update might highlight that as well.
For our debt update, I am going to have to just really play around here. We know November's losses of -$6,121. We estimated October at -$34,652. I'm going to give the $5,000 positive value to July even though it's half-July and inside of June's update. For everything else I'm just going to copy what we had from May 2023. That's what happens when you don't give me anything else to use.
Cohost's Possible Debt value: $995,836.52
Sorry, did you think there would be a December 2023 update here? Weren't you happy enough we gave you another update after so many months of not doing one? You want one right after that???
Once again, people keep asking about the updates. Once again, they get ignored by staff. Once again, let's go through the patch notes posts.
The vol. 83 update on Jan 5 is the first where we could expect to see a December update. Kaara has been at ASSC for a year now and has the option per their guidelines to become a joint owner of the company and has decided to do so. But no mention of a financial update.
The vol. 84 update on Jan 12 does not mention the financial update.
The vol. 85 update on Jan 24 does not mention the financial update.
The vol. 86 update on Feb 2 does not mention the financial update. However, here it is announced that Jae is abruptly moving out of Florida, and due to this, Colin is going to take over tipping and subscriptions, but Jae's move is going to delay the transition for some unknown amount of time.
The vol. 87 update on Feb 14 does not mention the financial update. It does mention that tipping is being worked on.
The vol. 88 update on Feb 26 does not mention the financial update. This is also around the time that a ton of new users left Tumblr and joined Cohost. Jae is still moving.
The vol. 89 update on Mar 8 does not mention the financial update. Jae is done moving, and Colin is "moving over to tipping and subscriptions once he wraps up what he's currently working on". This one threw me for a loop. If this is to be believed, then nobody has really been working on tipping so far all year. Jae wasn't able to do it, which is why they were moving it to Colin in the first place, but Colin hasn't actually moved over to it yet, and is working on something else. I'm not sure what else on the site could be more important than their only plan for increasing revenue at the moment, but tipping seems like it wasn't worked on at all for Q1 2024, despite them making it sound like it was almost ready to launch right before the holidays.
And this brings us to the big show, the thing that sparked this whole retrospective off.
The March 2024 Financial Update is, frankly, a massive trainwreck. Though not really an unprecedented one. It is essentially the H1 2023 update, except this time with a wrinkle that makes it way, way worse.
First of all, the March update isn't...really March exactly. We're doing half months still, and this is March 11th. The previous time period is being designated as February 13th. I have no idea how these dates are selected.
Before we dive in completely I want to point out this line:
"we're at a point where we aren't going to get meaningfully more information by continuing to wait to publish this."
I'm not sure what additional information you expected to have after the time period of your data. None of the data these reports provide really have much of a lag time to them, so what exactly does this mean? What would continuing to wait have brought you in other circumstances?
Frankly, my belief is that they held off on doing updates until they could do one that included the revenue from the Eggbug Plush. Which this one does include, to the tune of a one time $10,000. The problem being that they would have had to make this update by now anyway for reasons you'll soon hear.
Revenue described as "subscriptions only" (is this monthly AND yearly, or just yearly? "Previous revenue" was never clear before anyway on that) is at $12,496, up from $8,369 on our last weird time period. This time, we actually get expenses and net income from the previous period, which makes me have to ask why we didn't before. I'm going to call the previous period February since they're calling this March. February had $32,643 in expenses, with a net income of -$24,274. March had $34,328 in expenses with a net income of -$11,764 thanks to the eggbug plush money. MRR is staying stagnant at around $14k with $14,536 for March and $14,037 for February. Subscribers...you know what, I'm not even bothering with these amounts. We need to move on further in this post to what matters at this point. I am however going to arbitrarily award December and January the average of the last two net incomes we have, which is -$18,019. I don't know if that's too generous or not.
The important details are as such: ASSC is still not profitable, payroll is the main reason why, and they are still reliant on a single person for funding.
There is a section on why tipping was so delayed, and it absolutely gets into too personal territory once again.
"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."
At this point, my questions are this: why are you running a business if you can't have hard conversations with your business partners, and why has every single mission critical project been put on the shoulders of the employee who has missed the most work and had the most illness? This isn't the first time this has been a major issue, and nothing seemed to have been learned from that. This is a failure to me of the entire team, as equal owners, because you have to have these hard conversations and you have to manage your projects appropriately. Everyone fucked up here.
Now, Cohost has enough money to get them to early April. This is about two to three weeks from the time the update was posted. This is even less than the previous "we are about to not make payroll" post. I find these to be extremely irresponsible, once the money is gone users have every reason to believe the site can go away at any minute, and they absolutely deserve more of a heads up that their data is at risk. Even though they say they have "no reason to believe" that closing the site is necessary, why should anyone believe that when they're about to be out of money? Websites cost money to run, and as we see later, there's not much of a plan here to get more money.
There's a long section on their funding, it largely reiterates things we know about the collateral and whatnot.
But the key part of this section is: they have no idea where their funder is.
Their only source of funding is missing. They can't contact them, and haven't been in contact with them for over a month. I have no idea if they have mutual friends who could have contacted them, I have no idea if they've done any kind of wellness check, but what we know is that their funder and long time friend is totally missing, not possible to contact, and they aren't sure whether they're even alive or dead. Unlike the last no-payroll scare, there isn't a quick solution to getting more money in the bank.
Here, they outline their plans, which are absolutely worth talking through one by one. For some reason it starts with Plan B, even though I did not notice a Plan A anywhere. I'm going to number them instead.
Plan 1 - "Business as usual". This plan would be better described as "sit and pray". Their hope here is that they can contact their funder in the next 2-3 weeks and get more money. But their funder is a friend who has ghosted them. Best case scenario (for them) is the funder got ill or went to jail or something that prevented them from contact and now they come back and are still friends. In this case, however, are they really going to be ready to give you a loan in the next couple of weeks? Otherwise, the funder is ghosting them on purpose, or dead, and in these cases they aren't getting any more money from them. Given that they have such little time, this plan might as well be called "do nothing".
Plan 2 - "Crowdfund". This one is barely even worth mentioning, because this plan is "crowdfund with our users", but the entire section is about how it wouldn't be useful probably, they basically veto this one as they talk through it.
Plan 3 - "Kaara Gets Cohost". They have the revenue to cover one paycheck, so this plan is for them to spend their money on full time moderation, which would be Kaara. The rest of them have to find new jobs. There wouldn't be any more development on the site, which means no new sources of income, so this seems like an attempt to kick the can down the road in the hopes a different plan works out instead. They cannot attempt open sourcing the code to bring in volunteers because the funder has their code as collateral, and they cannot contact them.
Plan 4 - "Someone buys us". This is honestly just another "sit and pray" plan because I am not aware of anyone offering to buy Cohost in the first place and they only have a few weeks. Not to mention, they are going to need their funder to be involved to sell as well.
Plan 5 - "Cohost shuts down". This one is self explanatory. They talk about writing data export tools and making static pages. But I don't know who is going to be doing this, and they don't seem like they're planning to code this in the next 2-3 weeks. With how dynamically rendered Cohost is (to a fairly annoying degree sometimes), I can't imagine just leaving the static pages up would be trivial. It seems to me like the time to write export tools was months ago, or at least act like you're planning on doing it right now.
There's not much left after this. And unlike the previous can't-make-payroll post, there's no call to action.
Frankly, I think the Cohost team has given up. But I think they gave up way before this. Social media isn't profitable. But they've honestly never seemed to make much of an effort to make Cohost profitable. Tipping frequently got ignored to make things like the alternate email-style feed view, or tumblr-style asks, or more "fun" features. They have a merch store but the link just exists in the staff account bio page, it's not in the footer or really ever advertised anywhere except by other users. They have no donation link, you just have to be told by someone else that you can buy bonus subscriptions. And they have a userbase that wants to give them money. I frequently see posts from people asking how they can donate, or wishing that they had a merch store (when they do). And even the simplest things like "making the merch store easier to see" haven't been done. And yet in the last financial update...they've given up. They know they don't have a second rich friend to keep funding them, and they know they never had a path to really make themselves sustainable.