9. September 2013–
What's more useful than hearing about someone's success? Hearing about hard lessons along the way. One year after releasing event discovery app Vamos and raising €100,000, Luis-Daniel Alegria – the startup's CEO and co-founder – opens up about some of the team's biggest lessons so far. As he puts it, starting your first tech startup can get you into a "canyon of problems"...
#1 Succeed on one platform first
Samsung’s smartphone share has grown sevenfold over the last two years, making Android the largest OS by far, even surpassing iOS worldwide. But – after launching with iOS – moving forward with Android required our dedicated team to spend more time finding and killing bugs than actually working on innovating.
We simply couldn’t afford to spend any more time and money to develop natively for another platform than iOS. To the anguish of the Android community, we took ourselves down from Google Play after just three months, to go full-throttle solely on iOS.
Lesson learned: Focus and go fast on one platform until you’ve proven your business case. If you are building native, it only makes sense to launch on other platforms once your app is bringing in the profit to justify the maintenance and development costs.
#2 Make sure you're doing it for the right reasons
In the beginning Vamos was featured in well over 400 press mentions worldwide. When the initial hype is over, there is a grand canyon of pain ahead of every tech startup. In fact, it is said that 75 per cent of all startups close down within three years of their launch.
Our team has come a long way with the product, surviving on salary levels of about €400 per month – well under bare minimum and now, when the money is gone, we are gunning ahead without any salary at all. The team spirit at Vamos is powered by the thought that thousands of people – enough to fill a football stadium – are using the app to find live experiences every week.
Lesson learned: The art of surviving is to find an intrinsic motivation larger than money and hype. You need a lot of passion for what you're doing because when things get rough, any rational person would give up.
#3 Don't add barriers to entry
In the very first version of Vamos, there was a button on the event views to see photos from the location via Instagram. We monitored conversions and saw that only a few people found this feature. When they did, they engaged with a lot of photos! In the next release, we embedded the photos right under the event descriptions – rather than requiring a button – and saw a big overall increase in engagement.
In another example: In a recent US study, only 38 per cent of respondents said they felt Facebook protected their personal information. This might be one of the reasons we lost about 35 per cent of users at the sign-in stage for an earlier version of Vamos, which at that point required a Facebook login. We implemented it on an early assumption that the user experience would be limited and more users would drop off if people couldn't see where their friends were going.
In the latest version, users can try without Facebook and then upgrade to bring in their friends' activities. It’s still early days but data suggests drop-off rates going from 30 per cent to 15 per cent.
Lesson learned: Lead people directly to the content you want to present and don’t put doors in front of them. Embed content on the vertical, rather than use buttons, since people are used to scrolling on their phones. In short, don’t make it hard for "super users", potential investors and journalists to use your service.
#4 Don't spend your marketing budget blindly
We tried a lot of different marketing channels in the beginning, but quickly saw that only mobile-to-mobile channels had conversion numbers and costs worth talking about. For example, we could send out 50,000 SMS offers together with a local club with free entrance with the app in the door.
This would get about one per cent of those people to download the app – while a feature on CNN Chile to millions of people on TV only saw conversions of around 0.01 per cent. With the help of new COO Peter Morczinek, who has published and marketed over 20 apps, we have now ramped up our performance-based user acquisition strategy.
Lesson learned: Make surveys, interviews and try to find the characteristics of your most engaged users. Why are they using your app? Target like-minded people and optimise towards them on channels where you can track the user from the first click to install and post-install. In this way you measure the real value of your marketing campaigns and you’ll see if your acquired users really are getting involved with your product.
#5 Close your viral loop
We’ve tried calculating our referral rate for some time now. First, we listed installs per week over a period of two months without any paid user acquisition in an Excel sheet. We then calculated the per cent increase (or decrease) between each week. The trend line was going down with approximately 80-90 per cent between each week, which means each new user is referring an average of 0.85 new users into the platform. The holy grail of mobile marketing – exponential growth – is when a new user refers one or more new users.
Lesson learned: Without a media storm, campaigns or raving fans talking about your app, you simply need good enough content to make people want to share it to their friends. Then, offer their friends a big enough incentive for them to feel it’s worth it to take the time to download the app. An increased referral rate is the KPI we’re shifting our gears towards this fall.
The latest release received the one-year gift every developer could wish for – a feature in the App Store. This is our fastest version yet, and also features the ability to jump-search cities in the map view, the option to skip Facebook login, as well as to buy tickets from Eventbrite and Ticketmaster.
As we’ve made it through our first challenging year, we are looking ahead. With Apple now backing us up and a stronger user base, we’re ready to enter the next round and monetise our users with ticket sales and featured event promotions.
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