Highlights
- Costs up like nine hundred percent thanks to the App Store
- Revenue up infinity percent thanks to the App Store
- You can’t divide by zero
Company Overview
Pastecard formally launched in Q4 2010 in Palo Alto, California. In the years since, it has relocated its headquarters to Jupiter, Florida; Carrboro, North Carolina; and West Palm Beach, Florida. For over twelve years, its only product offering was a free web app. It added a paid iPhone app in Q2 2023 and became one of the fastest-growing companies of all time (revenue-wise).
Leadership
- Brian Sutorius, alpha dog and beta tester
- Hudson the koala puppet, Chairman of the Board
Product
Pastecard is a simple notes app. From the first prototype in Q3 2008, through the company’s founding in Q3 2010, all the way to Q2 2023, the app was available solely on the web. An internal skunkworks project began in Q2 2017 to create a functionally-identical iPhone app that was never released to the public. It was eventually rewritten from scratch, polished to an acceptable level, and officially listed for sale an impressive six years later.
Metrics
- YAU (yearly active users) in 2023: 16
- New users in 2023: 10
- Paid users in 2023: 5
Analysis
The company puts absolutely no effort into new user acquisition. By virtue of existing on the web and in the App Store, it is possible that a prospective new user happens upon the product by way of searching for a related keyword. “Notes” or “app,” perhaps? It is unfathomable that the company would rank favorably for either. And yet, it appears that the new users continue to trickle in. It’s worth mentioning that the only new users capable of converting to paid users are iPhone owners. This is an unfortunate contribution to the cultural meme that Android users are poors.
Financials
| Year | Costs | Revenue | Profit |
| 2022 | $11.88 | $0 | -$11.88 |
| 2023 | $108.96 | $1.25 | -$106.81 |
| Δ | +910% | +∞% | -899% |
Operating Expenses
The company has long celebrated its remarkably low operating expenses due to prudent supplier relationships and offensively underpaid labor. In Q4 2021, it consolidated all of its infrastructure to Google services: i.e. $12/yr for domain registration and 3¢/mo or less for servers. As of this report, that second item has been completely free for a while and the company hopes it will remain this way.
An additional way the company keeps expenses low is by covering all costs with a credit card that offers 1% cash back on all purchases, minimum of 1¢. This amounts to 12¢ back every year on domain registration, and in the months where server costs are 1¢, a complete refund. Such shrewd financial management is usually rewarded with jail time.
However, Apple charges $99/yr for the blessed opportunity to list your software in its App Store. Even with a 3✕ cash back multiplier on this particular charge (i.e. $2.97), this is an expense many orders of magnitude larger than what the company has traditionally weathered. Time will tell if this is the telephone-pole-sized straw that breaks the camel’s back.
Revenue
It’s impossible to overstate the immense pride that the company has in finally bringing in actual USD revenue. Following twelve long years of bleeding money by only offering a free web app, the release of the iPhone app in Q3 2023 opened the door for paying customers. At the low, low price of 29¢, how could they resist. There was an initial flood of purchases in the first week of availability, which diminished to a small drip by the end of the first month, and has been reduced to nothing in almost the full year since.
After Apple took its share and one customer in Brazil was refunded their full purchase price, the company closed 2023 with a whopping $1.25 in revenue.
PRIVILEGED AND CONFIDENTIAL
Alan Kay, one of the pioneers of computer science and a direct influence on the Apple ecosystem, once said: “People who are really serious about software should make their own hardware.” And Pastecard is now nothing if not really serious about software. Riding high on the success of a real app that makes real money, the company is planning a hardware device to complete the user experience.
It will be the size of a few credit cards stacked together, with a black and white touch screen like a Kindle. At launch, it will load a customer’s Pastecard text content over WiFi. The first major update will involve some virtual keyboard trickery so customers can add new text as well. In our increasingly-connected world, it’s important to disconnect once in a while and leave your phone at home. With the Pastecard hardware device, customers will be able to enjoy the mental health benefits of disconnecting while still keeping their Pastecard close.