Leaner Budget and Growth Strategy

Background

The BAG project has reached a pivotal point where our core product is robust, feature-rich, and ready to scale. However, our current spending levels are high and could hinder our long-term sustainability. Up to now, the team’s operating expenses have been approximately $130,000 per month in salaries and around $23,000 per month in software and infrastructure costs. This total burn of roughly $143K per month is significant for our project’s current stage and outpaces our existing revenue streams.

In light of this, the team conducted a comprehensive review of expenditures. We recognized the need for stricter cost controls to extend our runway and move the project toward profitability. At the same time, with the product now in a strong position, we see an opportunity to reallocate resources toward growth and user acquisition. Rather than funding a large operational overhead, we should invest in bringing more users into the ecosystem and increasing revenue. The current market climate also favors projects that demonstrate financial discipline and a clear path to sustainable growth.

In summary, our product is built and monetization-ready, but our cost structure must be realigned with our goals. The following proposal outlines changes to reduce operating costs and strategically invest in growth.

Proposal

We propose the following budget and priority adjustments for approval:

• Reduce salary expenses: Cut monthly team salary costs from about $130K to approximately $60K (a 54% reduction). This has been achieved by downsizing and consolidating roles, significantly lowering our fixed overhead while retaining the critical team members needed to operate and grow the platform. Severances will be paid in April.

• Optimize software and services: Continue reducing software, tool, and infrastructure spending from roughly $23K per month to an estimated $15K–$20K per month. This entails eliminating non-essential services, downgrading expensive subscriptions (for example, moving to a lower tier for our X (Twitter) account), and not renewing certain optional services (such as select GoDaddy domain renewals).

• Flexible growth marketing budget: Establish a flexible growth budget for user acquisition and marketing efforts, with a floor of $20K per month and a cap of $80K per month. The team will start at the lower end of this range and only scale up marketing spend if and when we see strong performance metrics (i.e., positive ROI from advertising campaigns). This flexibility allows us to aggressively pursue growth when it’s working and pull back when it’s not, ensuring efficient use of funds.

• Focused feature development: Acknowledge a slower pace of new feature development due to the leaner team, and concentrate development efforts on revenue and growth-oriented features. Our upcoming priority is a dynamic wagering-based raffle system for players – a feature designed to boost user engagement, marketing effectiveness, and generate additional revenue. Other new features will be deprioritized in the near term so the team can focus on this growth-driven roadmap and maintain the stability of the existing product.

Rationale

Financial sustainability: Reducing our fixed expenses is crucial for the long-term viability of the project. By cutting our burn rate roughly in half, we extend the project’s runway and reduce pressure on our financial reserves. This leaner cost structure means the platform can operate longer and has a better chance to reach breakeven or profitability with the funds on hand. It also aligns with responsible treasury management, as expected by the community, ensuring that our resources are used wisely on high-impact areas.

Strategic growth investment: Reallocating resources toward growth initiatives allows us to capitalize on our strong product foundation. Now that the platform is stable and monetizable, bringing in new users can directly translate into higher revenue. By experimenting with ads across different geographies, languages, and creative styles, we aim to discover the most cost-effective ways to acquire users. When an advertising strategy is successful, having the ability to increase spending up to the $80K cap means we can fully exploit that momentum. Conversely, maintaining a $20K baseline ensures we continue user acquisition efforts without overspending if results are underwhelming. This dynamic approach to the marketing budget maximizes growth while minimizing waste.

Product focus and trade-offs: With a smaller team, we anticipate a slower velocity of new features in the short term, but this is a deliberate trade-off. The core product experience is already robust and enjoyable, so our community will continue to be well-served even as we shift focus. Importantly, the features we do develop will be those that support growth and monetization. The wagering-based raffle system is a prime example: it’s intended to increase player engagement and create a new revenue opportunity, directly contributing to our profitability goals. By concentrating our development efforts on such high-impact features (and either pausing or slowing down other enhancements), we ensure that our limited development resources are driving the project’s growth and financial health.

Positioned for success: In summary, this leaner operating model refocuses the project on profitable growth. Lowering costs gives us the breathing room to invest in user acquisition and experiment with revenue-generating strategies without jeopardizing our stability. Meanwhile, our strong product foundation means we can confidently shift from a build-heavy phase to a growth-centric phase. By approving this proposal, the DAO will be endorsing a plan to make the BAG project more self-sustaining and successful in the long run. We believe this approach serves the best interests of the community and token holders by striking a healthier balance between operational efficiency and aggressive growth.

We welcome the community’s feedback on this proposal. The team is committed to executing this plan and will provide updates on our progress. Thank you for considering this strategy – together, we can ensure BAG’s continued success and growth.