Marketing > UX
Way back in 2011, a new competitor emerged in the photo storage space called Everpix.
(Don’t worry, this story is still relevant today)
They quickly raised 1.8 million dollars, and eventually another $500,000.
So where did Everpix go wrong?
First: their time getting to market. It took a year and a half to release the product.
If you’re a solo founder or small team, you have to release faster for a variety of reasons:
- Product validation
- Iterating on customer feedback
- Lack of budget
They had a longer runway due to the funding they had raised, but doing these things would have helped.
These also help with marketing – by validating and iterating on customer feedback; your product should keep getting better and better. That means each subsequent user is getting a better product than they would have otherwise. It might even get you users via word of mouth!
Spend money where it makes sense
Despite raising $1.8 million, $1.4 million was spent on the team members developing the app.
However, that money spent on salaries did not translate to users. When it was released, it had less than 19,000 users and was competing against giants that had millions.
By all accounts, the app offered an excellent experience for users. It boasted a 4.5 rating on the App Store with over 1000 reviews.
As much as I love good UX – it’s not everything.
That money would have gone much further with a higher portion spent on marketing. What can we learn from this as makers?
Don’t create in the dark
That’s probably one of the most common mistakes for makers. “If I create an awesome product, people will be drawn to it.”
You have to be marketing consistently from day one, even with a great product.
Using this site as an example – I wrote the first two posts, and before I had a single interview, I posted it to Indie Hackers and started making the rounds on social media.
Feedback alone has improved the site just after two weeks of starting it!
If I hadn’t done that I would still be shooting in the dark, wondering what people want.
What about the revenue?
Everpix made $254,000 after three years of operating. Considering salaries and server costs, it didn’t come close to covering expenses. They closed their doors in 2013.
They had a high conversion rate of free users to paying at 12% – but their pricing held them back from making more money.
They offered unlimited photo storage for $5 a month, or $50 annually. Maybe this was an approach for competitive pricing. However:
If they charged $7 a month or $70 annually, their numbers would have been substantially better.
Let’s say they had 15,000 users at their monthly price, versus the new price:
15,000 x 5 – $75,000
15,000 x 7 = $105,000
Admittedly, this is a simplification. But that’s a 33% increase in revenue that is probably not going to drop conversion rates by much.
Don’t be afraid to charge for your product
If your product solves a problem for someone, don’t be afraid to charge an appropriate amount for that solution.
Too often, makers undervalue their product and sell it for way less than it’s worth.
I’ve even seen some reduce their pricing to $1 a month hoping to swoop up a market that wasn’t biting at $5.
In most cases, the pricing is not the factor stopping more users from paying for a subscription. Most people spend more than that on a stop at a fast-food place.
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