The Indian Foodtech “Foodpocalypse” Blowup is Rotten to the Core

The trouble that some Indian startups are facing is being touted as the harbinger of a coming apocalypse. What happened at TinyOwl in Pune with employees holding the founders hostage was an embarrassment to all of us.

Dazo shutting down. Zomato laying off employees. Foodpanda, well, just Foodpanda. These are normal occurrences at startups. Most of them are, in any case. Some things are hard to comment on without knowing details.

Six months ago, almost all of the bloggers and reporters were writing about how foodtech is the second coming of the Indian startup economy and how VCs are falling over themselves trying to get into as many deals as possible. Today, those same folks are pontificating on “the bubble” and the coming apocalypse.

I recently read a post on Quartz about how the demise of food delivery will result in the end of the Indian startups. It’s difficult to comprehend the reasoning behind a small sector setting off a domino effect of collapses across startups.

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According to my research on CBInsights, there have been 83 angel, seed, series A, B, and C deals in foodtech and logistics this year in India, totalling just over $400 million. I’ve tried to be very broad in including as many foodtech companies as possible in this number including companies like Hector Beverages (Paper Boat), RedCarpet and LogiNext.

More Diverse Than Some Think

Contrary to what people would like to think, food/grocery delivery is a very, very small part of the much larger Indian startup world. PayTM is going after everything from m-commerce to taxi booking payments on Uber to hotel bookings to hyperlocal to movie tickets. Flipkart, Snapdeal (though far from startups any longer) have changed the way Indians fundamentally think about purchasing products. Freshdesk, FusionCharts, Wingify and many others are going after global markets and are seen as serious threats to incumbents. Even some of our Indian companies are changing the way people think about hiring, education, commerce, gaming and finance. Companies like CultureAlley and OnlineTyari are taking language learning and test preparation to the masses at affordable prices thru the only device they need – a smartphone. Consider how Kraftly is allowing cottage industries where men, women, and even children are making baked goods, clothing, or art at home and able to reach and transact with customers worldwide. SwitchMe is making refinancing a home loan quick, painless and cost effective.

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My point is that the Indian startup scene is far broader and diverse than some critics would like to admit. Going back to my research on CBInsights, I have found that there were a total of 583 deals across all kinds of industries done in India this year totaling almost $8 billion. Foodtech and logistics make up 5% of the total amount of money that’s been invested in Indian startups in 2015.

Overfunding Food

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While the food and grocery delivery space do not take up the bulk of Indian investments, it does appear that these verticals are overfunded. If you look at the table above (it’s based on the same data as the first graph), you will see that 60% of the deals in foodtech and logistics were done at the angel and seed level and 22% at the Series A level. The average deal size and median deal size at the series A were also significantly higher than the broader market.

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If you look at this table, it shows that only 53% of all the deals done in India were at the seed or angel stage. Venture rounds were more consistent. This means there was an overweighting of foodtech at the angel/seed and series A stages or a concentration of risk in a particular sector.

There are amazing entrepreneurs, developers, designers and financial wizards building solid businesses and it’s not going to stop. But not every team is strong and knows how to utilize investment dollars to build a great business.

Would I invest in a pure food or grocery delivery business that picks up veggies from the local market or from three restaurants in my neighborhood and deliver it to me? Not likely. But I would definitely consider investing in entrepreneurs that understand warehousing, logistics and supply chain to provide grocery delivery via distributed warehouses in a city, like the team behind ChalDal or a food company that understands how to manage large centralized kitchens, and has an expertise in logistics. The Harvard Business Review wrote about a cooperative that does this in India.

Learning to Hit the Target

There are fearmongers talking about the foodtech rot in Indian startup land. These stories will get clicks, likes, shares and eyeballs with sensationalist headlines. They may also create an environment where some young dreamer’s aspirations of becoming an entrepreneur (there are a few Quora threads on this) or getting married are stifled because they aren’t working at Microsoft, Infosys or TCS. How does any of this help drive innovation or help any one?

One has to let loose a lot of arrows before learning to shoot and hitting the target. Even after learning to shoot, we may still miss. Often. At 500 Startups, we know that for the many investments we make, we are going to miss a few targets. But that isn’t going to slow down our investment activities in India.

I am excited about the future of not just foodtech, but the overall startup ecosystem in India. As shown by the above stats, the Indian startup environment is diverse, rich, and full of opportunity and with the 500 team, I look forward to maturing the growth of the local ecosystem.

Photo Credit: Sergii Figurnyi, Artwork by Yiying Lu

Q&A with Jake Park, Founder and CEO of Between

In this Q&A, we get to know Jake Park (29), Founder & CEO of Between, a beautiful messaging and photo sharing app for couples. Learn more about Jake’s approach to fundraising, Seoul startups, and more below.

Location : Seoul, Korea

Investors: $4 million raised with SoftBank, Ventures Korea, Japan’s Global Brain Corporation & 500 Startups.

What is your definition of a successful entrepreneur?  

One who solves a problem by creating meaningful social impact.

How do you approach fundraising?

Before we launched Between, we failed two products in the span of a year. During that process, we were able to build relationships with our investors. They saw us at our best and our worst, how we built our team and product, how we failed, and how we learned from our failures. So we knew each other before we first fundraised with Softbank Ventures Korea for our third product, Between. Once we started, the process was fast and smooth because they already understood what we were going to do and how we were going to solve the problem.

I really believe keeping in touch with investors even at non-fundraising stages is very important. Entrepreneurs should be clear and persistent in their visions. Transparency is the best way to gain trust from investors, and trust can make or break a deal.

Do you have a mission and/or mantra?

Our company vision is to “provide emotional communication services to enrich real, offline based relationships.” This vision is the most important mission that we strive to achieve.

Who do you look up to/admire in your field? 

Jaewoong Lee, founder of Daum Communications (2nd biggest portal in Korea, merged with Kakao in 2014). He is a valuable mentor for us. He helped us find the right way to go and the right mindset to have as co-founders when we were suffering through our two failures.

Can you recommend one or more entrepreneurs in your region who are doing great work?

Heeun Park, ex-CEO of IUM. She was a co-founder and ex-CEO of IUM, an online dating service in Korea. There was no dating service in Korea before IUM; IUM built the online dating industry. After she left the company, she became an investor in Altos Ventures. She has been continually supporting the Korean startup ecosystem as an entrepreneur and investor.

Can you tell me about an experience where, at the time, it felt like a failure but looking back on it you can see how it was a positive learning experience or led you to success?

Before launching Between, we failed two different products. We had focused on the tablet PC market in Korea, but the tablet PC market did not grow as fast as we expected. We pivoted our vision to the smartphone market, and reset our company vision. We learned the hard way that the key for startups is creating a product which the market needs–products that the market and the people want, not a product we want to create.

What challenges do you have to deal with, and how do you overcome these challenges? 

Our biggest challenge is to grow faster. We have been growing well so far, but I think this year would be the year that can decide the future of our company. To grow faster, we should move more aggressively in the global market. We are trying to hire talented people who understand local markets (especially in SEA) because we saw many cases in which talented people added great value.

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What drove you to build this company in the first place? 

My dream was and still is to “build IT services or products for the society to enhance people’s lives.” I thought the only direct way I could achieve this dream is to found a company, since it would be difficult to do so directly if I chose to join traditional conglomerate companies or professional firms like consulting or banking. Founding a company was not a difficult decision for me.

 

What is your long term dream/vision for the company?

 “Provide emotional communication services to enrich real, offline based relationships.” We will continue focusing on this vision to help people get closer in the offline world.

What’s the greatest memory of building you company” and “what was the hardest day and why”? 

The greatest memories are when I found great people and they decided to come on board. I never compromise when I hire people. I think that’s the reason I have the opportunity to work with great team  members.

The hardest day was right before launching Between. We only had a 6-month runway after failing two different products, which meant Between could be our last chance. We were really desperate, and our desperation drove us to build a great product.

Wanna learn more about our founders in Korea? Check out our interview with Seoul-based founder David Lee, at Shakr:  #500Kimchi

Grateful, Not Dead

Thanks to everyone who tuned into our Periscope stream, where we discussed the past 5 years at 500. To watch the saved video, tune in here.

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500 Mountain View office in Fall 2010 (before we moved in)

A little over five years ago, we started working on something called 500 Startups.  At the time we really didn’t know exactly what we were doing, but we wanted to combine a bunch of things which included a VC fund, an accelerator, startup education, conferences and events, the best elements of our years at PayPal and Google, but most importantly a community of geeks and founders and startups. When we started there were barely five of us, and we hardly had any money to get off the ground, but somehow we managed to (barely) keep the lights on while we figured things out over the next few years. Somewhat surprisingly, we didn’t die… or at least we haven’t yet, perhaps because we were more lucky than smart. But we thought we would take a few moments to be THANKFUL and GRATEFUL.

We owe a huge debt of gratitude to those who initially helped and inspired us. There were many, many people we’d like to thank, but in particular we want to recognize Brad Feld, Fred Wilson, and Mitch & Freada Kapor — those folks encouraged us to give 500 Startups a go, and made some of the first initial verbal commitments to get us off the ground. In addition to those foolish people, other friends and VCs at Founders Fund, Blue Run, Accel and Redpoint were instrumental writing letters of reference that helped us get our initial office in Mountain View. Others who wrote us small checks included Marc Andreessen, Josh Kopelman, Gus Tai, Mark Goines, Geoff Ralston, Aki Sano, Taizo Son, Marcus & Andy Ogawa, Michael & Xochi Birch, and so many other friends and former colleagues from PayPal, Google, Facebook, LinkedIn, YouTube, Yahoo, Microsoft, eBay, Amazon, Twitter, etc — we are probably forgetting a bunch of other early investors (we had to beg a lot of people!), so apologies if we left anyone out. You took a chance on us when so many others wouldn’t or didn’t.

There were also many others who provided inspiration, including Idealab, Y Combinator, TechStars (who we sometimes compete with, but also whose companies we invest in), and especially Bill Gross at Idealab, PG & Jessica at YC, and Brad & David Cohen at TechStars were people we looked up to a lot (and who spoke at some of the events we ran back in 2008-09, like Startup2Startup, or Facebook fbFund, or Google I/O). We also have a ton of respect for investors like Ron Conway, Jeff Clavier, and Aydin Senkut, who were investors in Mint.com and also running micro-VC funds that were somewhat similar in scope and size.  We learned a lot together in those first few years, and we called them for advice and support.

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May 2010 at Google I/O – when Dave was an “internet hobo / angel investor” and Christine was a Googler

There were a few things which we wanted to do that were a little unique to 500 that we were pretty sure about: we knew we wanted to invest in a LOT of companies, help companies focus on “design, data, and distribution” and we knew we wanted to do something with people all over the world. We also knew that diversity was important, and we wanted to involve women and people of color, and we wanted to help a few underdogs who didn’t happen to go to Stanford or Harvard or MIT (although we hoped to get a few of those folks to join us as well). We also liked to write silly press releases, and have fun doing marketing (and it turns out we were pretty good at that stuff).

We joke about how in the early days, we had to beg companies to join our accelerator. That’s not entirely in jest. As much as we took a bet on these companies and in many cases were their first investor, they were taking a bet on us. While the 500 accelerator has evolved significantly over 15 batches for the better (in both quality and quantity), we can’t help but always think of those first few batches as *OUR* accelerator — we probably learned more from them, than they did from us! And hey, as it turns out, we managed to invest in some awesome companies in those early batches like Applauze, TalkDesk, Intercom, ContaAzul, ToutApp, PicCollage, LoveWithFood, and many others who frankly didn’t need us as much as we needed them.

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Batch 3 (Fall 2011) field trip to Facebook

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Batch 5 Demo Day in NYC

One of the amazing things we are most proud of is that we aren’t just some traditional VC fund or yet another accelerator or incubator. We built something called #500STRONG that is really a family of friends, a guild of geeks… whether or not their startups succeed or fail, we are a huge family, all over the world. We have fun, we work hard, we make money, we screw up… but most importantly, we are relentless in our approach to make a dent in the universe, and to do our best to create new products, help customers, create jobs, and create something of value for our employees, investors, and fellow human beings.

We also built a lot of our community and mentors from people we worked with at PayPal and Google and Facebook and YouTube, and we also met (and hired!) a lot of people we met while doing all of our GeeksOnaPlane trips around the world, and all the many conferences we put together like WarmGun, MamaBear, UnSexy, InboxLove, PreMoney, Commercism, and more. We really care about bringing people together, and those events and conferences helped us gather the community we love so much and makes us who we are.

The last 5 years have been quite a ride. We’ve invested in 1300+ companies across more than 50 countries around the world, have $200M under management, 100 team members, and many other numbers which we won’t bore you with (although are fascinating to us). While we’re very proud of how far we’ve come, it certainly didn’t happen without a lot of blood, sweat and tears and sleepless nights. Cheers especially to Enrique, Christen, Melissa, Paul, George, Sheila, and Max for sticking with us those first couple years when sometimes paychecks and money for paying rent and making investments were a little hard to come by.

So what will we be reflecting on 5 years from now in our Thanksgiving 2020 post? Unfortunately, DeLorean time machines are a little hard to come by (not unlike the plutonium that powers them), so we can’t go back to the future to know this for sure. But we know for sure we’ll be GSD and having fun. (a core 500 value).  We know we are going to invest in a LOT more companies all over the world, and who knows — maybe in a few more years we will be 500 VCs, not just 500 Startups.

Happy Thanksgiving  🙂  ^_^  xoxo

Thanks to everyone who tuned into our Periscope stream, where we discussed the past 5 years at 500. To watch the saved video tune in here.

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Post artwork and Halloween photo by Yiying Lu

Our Journey to the Front Page of Product Hunt

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Jeremy Vandehey is Cofounder and CEO of Growbot.io, a bot that makes it easy to show appreciation in Slack, and a 500 Startups Accelerator company (Batch 15). Previously Jeremy led products at Intuit, Verizon, and several startups. In his spare time, you’ll find Jeremy making beer or music (often at the same time).

Founders can check out applications for 500’s Batch 16 accelerator program.

2 weeks ago we introduced Growbot for Slack to Product Hunt and the audience @ 500 Startups demo day. It was a crazy day for both Growbot and its builders, so we wanted to bring everyone up to speed.

But first what is Growbot?

Growbot is a simple Slackbot that helps employees appreciate each other. It does this by encouraging and recognizing peer praise inside of Slack. Once Growbot recognizes a team win in a channel (teams can call them props, kudos, cheers, etc), that win is shared, celebrated, and saved forever and ever.

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Simple? Yes. Awesome? We think so. But enough selling. Here’s how Growbot did on Product Hunt:

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Props to Hiten Shah for hunting Growbot 🙂

By the numbers

We saw a TON of traffic. Roughly 1/2 of the 30,000 page views came from Product Hunt. The rest came from TechCrunch, VentureBeat, & 500 Startups. Interestingly, almost 3/4 of the 200 teams that added Growbot came from Product Hunt.

 

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These teams aren’t mom and pop Slack shops either. The average team had 85 members with the largest having over 2,200 members. Even more exciting, most teams aren’t just kicking the tires. We saw good initial engagement and promising retention (50% of active users engage with Growbot weekly).

Some more stats for you data junkies:

  • Visitors came from 93 countries
  • 80% were desktop users
  • 17,250 new registered users
  • Over 1,000 Props since launch
  • 3,500 likes/reactions
  • 90% of teams still active

The ‘intangibles’ of Product Hunt

It’s very easy to get lost in the allure of reaching front-page glory when the actual gold came from the product feedback, conversation in the comments, and investor intros post PH launch. We even got a better tagline suggestion (‘the like button for work’) that we immediately A|B tested to boost our conversion rate.

Thanks Chris Toy!

Even more exciting, the community shares our vision of messaging as the next frontier which creates new and exciting ways to solve old problems, like appreciating your coworkers (and eventually all types of feedback).

 Growbot fosters a culture of supportive celebration, the UI is universally understood, and it works on the biggest name in the business [Slack]. — Wade Vaughn

And some more awesome PH comments:

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cc Buster Benson (also, clever use of props, ha!)

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cc: Kelly Kuhn-Wallace

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Here’s Justin Vandehey pitching (and sweating) on stage

Launch 101

There is a lot of great advice on executing a great Product Hunt launch (sources: 1, 2, 3). A few things that didn’t make those lists were crucial to not just getting a ton of upvotes, but learning from the community to help transform Growbot from a simple appreciation Slackbot into a feedback powerhouse for the enterprise:

  1. Keep it simple — launch a simple, polished product. Product Hunt loves ambitious products, but they also appreciate polish. It’s much easier to polish something small.
  2. Tell a story — upvotes are good but comments are better. Try to be one of the first to comment and give some backstory on the founders, how the product has evolved, and your vision. Be very open and honest. Don’t sell too hard.
  3. Get stakeholders to weigh in — the great folks at Slack and several of our beta customers were gracious enough to weigh in on what they liked and what needed to improve. This shows the community 1) we are somewhat legit and 2) open to listening and learning from feedback.
  4. A tiny step — Too many teams think a good launch will magically solve all their problems. The truth is your leaky conversion funnel will be just as leaky a week after launch. Retention won’t magically shoot from 25% to 75%. Think of it as one step on the path to startup summit. It’s important to take a good first step, but there are miles and miles of land-mines after launch. No (edit: few) startups flied or died because of a launch.

We’ll see you soon, Product Hunt

We are excited to see how messaging as a platform evolves to create new enterprise opportunities. We’re heads down on Growbot 2.0, and we’d love to keep you informed along the way. Make sure you follow Growbot on twitter, get notified when Growbot writes a new blog post, or add us to your Slack! Hopefully we’ll meet again on the front page of Product Hunt 🙂

PS… 500 Startups Batch 16 is accepting applications. The program, mentors, and network of advisors/investors were instrumental in shaping our product and strategy (plus $100k in funding). If your startup is ready to pour on the gasoline, apply here!

Some FAQs (and thanks)

Why Product Hunt?

Product Hunt is the best place to discover (and launch) new products. It’s filled with brilliant and kind-hearted people who actually give a shit about your product. Ryan Hoover has fostered a community of fellow makers, early adopters, and investors who understand the time and effort that goes into making anything of substance (so their upvotes and comments come from a place of support and encouragement).

Why Slack?

Slack fundamentally changed how our team communicates. We believe there is no going back from this fundamental shift, and it is going to forever alter the face of enterprise software. The old way of teaching new user interfaces or ripping users out of their workflow is over. This opens the door for new ways of scheduling meetings, managing employees, and giving feedback. Bots are taking over, and we want to be the best appreciation bot there is.

‘Who uses apps anymore?’ — a bot probably

Special thanks to these fine folks 🙂

We Saw 20% MoM Growth through the 500 Accelerator

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Jose ‘Caya’ Cayasso is a co-founder and CEO of Slidebean, an online presentation software and 500 Startups accelerator company. Born and raised in Costa Rica, Caya is a TEDx Speaker and a cinephile.

Founders can check out applications for 500’s Batch 16 here.

A pivot is a change in one or more of your company’s value propositions: PRODUCT, MARKET or BUSINESS MODEL. Choosing which, when, and especially how to change the direction of your company inevitably involves a lot of gut decisions. Measuring the success of that pivot accurately is fundamental to know if the path you chose is correct.

Our company, Slidebean is an online presentation software that takes your content and automatically formats it into an awesome deck, no manual design required. Slidebean has gone through two major pivots in the past year. The first took place during our time at 500 Startups. We changed our pricing (BUSINESS MODEL) significantly, which inadvertently ended up changing our MARKET as well. More recently, we made a new change in our BUSINESS MODEL and PRODUCT, which spiked a new and steeper growth curve.

As the point person on growth and metrics at Slidebean, analyzing CAC, LTV, MRR Growth and Churn has become part of my daily routine. Whatever your business is, make sure you have an assigned stakeholder looking at the data, dropping it in spreadsheets and tracking performance. For us, it’s proven to be the most efficient and safe way to make decisions.

To get started, take a look at our growth chart since our Jul 2014 launch.

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Round 1: Launch and Initial Revenue  

Our go-to market strategy was to start with individual users and move our way up to larger businesses, which seemed to make a lot of sense to everyone at that point. We started gathering traction (or so we thought) 3 months after going live.

We were signing up around 2,000 new users per month, with a 20% activation rate and a ~3% conversion to paid. This results in a funnel that looked like this:

New Signups/mo: 2,000

New Active Users: 600

New Paying Users: 60

New monthly MRR: ~$300

By September 2014 most of the new signups were coming organically, mainly from word of mouth or referrals from our current users. Presentations are intrinsically shareable and this was attracting a decent amount of traffic. Each completed presentation was generating an average of 1.21 new signups. We figured that the key to growth was to continue fueling that organic engine.

We overlooked two core issues:

  • While subscription rate was not bad (again, 3%) churn was around 25% which is absurdly high:that meant an average user would stick for only 4 months. With a pricing of $5-6, this resulted in an LTV of ~$20. Users were only subscribing to build one or two decks, and then cancel because they didn’t need the product anymore (a MARKET issue).
  • Due to low LTV (lifetime value) per user, the maximum amount of money we could spend to get a paid user was ~$7 (as a SaaS standard, LTV should always be greater than 3x CAC, or cost per acquisition cost). With a 3% conversion rate to paid, we could only afford to spend a few cents per sign up, which is basically impossible (a BUSINESS MODEL issue).

We believed in our organic growth engine so much that we assumed we were on the right track. The first one to point out an issue was our 500 Startups POC. She challenged us to find a promising scalable, sustainable growth channel in the course of 2 weeks. In other words, if we had $10K, how would we spend them to make $20K?

Changing our pricing by 30x

We could not afford to get a paid user for $7. Our organic engine didn’t work, because it was not scalable.

We reluctantly agreed to test the price sensitivity of our users. We had settled on $5-6 because it was competitive against Office 365, Google Docs and Prezi, and because we didn’t believe anyone would be willing to pay more than $5, while there are cheaper alternatives in the market.

We set-up 4 different pricing pages with the following pricing options:

A: $4.99 and $5.99 monthly subscriptions with discounted yearly plan (original pricing)

B: $44.99 an $54.99 yearly subscriptions (no monthly option)

C: $19 and $29 monthly subscriptions with discounted yearly plan

D: $119 and $199 yearly subscriptions (no monthly option)

We split our pricing page traffic using Optimizely, and after 2 weeks we had these results:

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  • The number of users that subscribed to each plan was fairly similar.
  • Revenue on option D was 18x compared to our original pricing. The huge difference in revenue was a clear indication that we were on to something.
  • Pricing C also seemed promising because it brought the most MRR, but since our historic churn was 20-25%, the LTV of those users would’ve been lower than Pricing D.

We changed our pricing (to option D) and started investing in paid advertising, aware that we were now able to spend around $100 to acquire a new customer and still turn a profit on the first transaction.

Inadvertently, this pivot in BUSINESS MODEL also represented a pivot in MARKET. The type of users that were willing to pay $199/yr for the platform were very different from the audience willing to pay $5/mo. Users from small businesses and startups started showing up in our dashboard, which cut students and teachers out because of the elevated cost. We implemented Live Chat support from Intercom, which pointed us towards this insight.

PRODUCT: Slidebean: Presentations that Design Themselves

MARKET: B2B – Small Businesses

BUSINESS MODEL: Freemium platform, free limited plan and premium plans at $119 and $199.

After taking a close look at these users, we decided to re-experiment with monthly pricing. We figured a smaller ($19/$29) up front cost would make the transition easier.

Cancellations and Churn

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Re-enabling monthly plans allowed us to subscribe and onboard users relatively easy, but churn was a large concern. We were able to bring churn down to 5% (by offering only yearly plans), and monthly MRR (monthly recurring revenue) churn spiked back to ~20%. We used ChartMogul to measure this, because it differentiates between Gross Churn and Net Churn, which takes into account reactivation and expansion MRR.

While our LTV was significantly higher than before ($150-$200 in June), it still limited our CAC to ~$60-75, which while nice, gave us little flexibility to bid on competitive keywords in Google AdWords. Furthermore, one should always assume that faster growth will increase CAC.

As our Live Chat support became more and more efficient, we disabled the self-service cancellation in Slidebean: users were required to speak to our team before they cancelled. We created incentives for our chat support team to prevent user cancellations, and started tracking every cancellation and the reasons behind it.

The most common reason was technical: bugs or issues with the product. Our dev team worked hard to patch them, and we started to see a decrease in product-related churn.

Another popular cancellation reason was that users no longer needed the premium features on the product. Our premium features at this time included enabled PDF exports, custom branding and extra design templates. We noticed many people subscribing for a month or two, using the export features and then cancelling. Another common reason, based on feedback from the unsubscribe form was that they ‘ didn’t feel the premium version significantly better than the free version.

This was a revelation of a deeper underlying problem with our product and business model. Users felt OK cancelling and reverting their accounts to free, because they knew that they could just activate again later and download any presentations that they needed.

So do we try to force a behavior in our users? Or do we adapt to them (by implementing pay-per-download, for example)?

Half Measures

After taking a deeper look at our data, we noticed that around 50% of our paying users were building no more than 1 or 2 presentations per month. Some of then cancelled, some of them didn’t. This pretty much discarded the possibility to charge on a per presentation or per download basis. Crunching the numbers, we’d have to charge $10-$20 per presentation to keep a healthy revenue stream.

This shed some light on the behavior of our users: on average, they didn’t need to create new presentations as often as we thought when we pivoted to B2B. A good % of users kept their accounts active even though they didn’t use the platform that often, but others cancelled with the plan to re-subscribe later.

Another behavior we noticed was users sharing a single account and password. If they were part of a small team, they preferred to use the same account rather than pay for two separate plans. The collaboration features didn’t add enough value to pay twice or thrice the price of a single subscription.

With these metrics in mind, we figured the solution to stop churn was finding ways to add more value to the product.

  • We converted our plans into ‘team’ plans, that allowed users to add up to 5 team members at no additional cost (they were sharing they account anyway).

We started implementing features so that users would be motivated to keep their account active. The main one was Presentation Insights, which tracks the viewers and their activity on the presentation, and only works if you are an active paying customer. These alternatives worked to a certain point. By August we were tracking one of our lowest points in churn, but it was still in the double digits (very bad!).

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Full Measure: From Freemium to Premium

The most popular cancellation reason continued to be ‘I don’t need the premium features anymore’ and we knew the way to stop it was getting rid of the free alternative.

Part of the team leaned towards just flipping the switch and going premium. But but being able to measure the actual conversion/churn improvement was a major priority for me. Comparing data from different points in time would not have been ideal, so the A/B test had to be simultaneous.

After a lot of push back from the team, we agreed to do a massive A/B test. Half the users would be ‘assigned’ to a 14-day full access trial, and half the users would get a freemium account, just like before. Here are the details on each set of plans:

Old Plans – Free Mode

Free: Up to 5 presentations. No export or branding. Limited templates.

Advanced ($19/mo): Unlimited presentations. Exports. No Branding. 3 Users.

PRO ($29/mo): Unlimited presentations. Exports. Branding. 5 Users.

New Plans – Trial Mode

No Free version: just a 14 day trial.

Espresso ($19/mo): All Features. 1 user.

Macchiato ($29/mo): All Features. 5 users.

Cappuccino ($49/mo). All Features. 10 users.

Implementing this required:

– Redirecting traffic through Optimizely.

– Creating a ‘trial’ type of plan that the app would interpret as an expiring plan.

– Building a separate on boarding process for the trial users, with a whole new set of emails.

– Training our support team to make sure the wording was correct depending on the user type.

Since the trial expired after 14 days, we needed to wait at least 30 days after starting the test: we needed sufficient users with a completed trial and a grace period after it to measure conversion. This is the data that we gathered, based on roughly 4,000 sign ups:

Activation Rates (users that completed multiple presentations):

Users on Trial Mode: 9.42% (winner)

Users on Free Mode: 6.95%

Historic Benchmark: 6.42%

> Enabling all features was causing a ~50% improvement in activation rates. Great!

Conversion to Paid (from total SignUps)

Users on Trial Mode: 1.42%

Users on Free Mode: 2.35% (winner)

Historic Benchmark: 2.64%

> Wait? Better conversion rate on the free plan?

We also measured the average MRR per signup, it looked like this:

Users on Trial Mode: $0.22

Users on Free Mode: $0.56 (winner)

> Wow. That’s less than half!

And finally, churn rate…

Users on Trial Mode: only one cancellation in over 30 days! (winner)

Users on Free Mode: same as before, ~18%

We made a list of the insights that we got from the data:

  • 1. Better Activation Rate | Access to all features was helping users see the value in the product.
  • 2. Worse Conversion to Paid | Users would use all the features, export and leave. This was confirmed by looking at the number of presentation exports.
  • 3. Worse MRR per User | Users who were presented with new plans were subscribing to the cheapest (individual) plan, while users on the old plans selected the high end plan, because it provided them with full features.
  • 4. Lower Churn Rate | Users were not canceling because they knew they would lose access to their work.

The rest is history. In early September we used our conclusions to merge the free and trial plans into a single hybrid plan. We addressed each one of these conclusions in the following way:

  • Plan mode: Trial, with access to all features except exports (addressing above points 1 and 2).
  • Plan Options (solving point 3).
    • Espresso ($19/mo): 1 user. Exports enabled.
    • Macchiato ($29/mo):  5 users. Exports and Branding enabled.
    • Cappuccino ($49/mo). 10 users. All Features Enabled.
    • Mocha ($99/mo): 25 users.  All Features Enabled.
    • Latte ($199/mo): 50 users. All Features Enabled.
  • Finally, simulating Mailchimp’s model, we decided that an active plan was required to gain access to an account. If you cancel, your account locks out until you reactivate it (solving point 4).

Therefore, we ended up with this:

PRODUCT: Slidebean: presentations that design themselves

MARKET: B2B – Small Businesses

BUSINESS MODEL: Premium platform, plans from $10/mo to $200/mo. In September and October, we registered our lowest churn rates and our highest conversion rates ever.

Looking back on this 2 year process of growing Slidebean, we wish we had chosen to pivot sooner. Resources are limited and any month of operations that you spend heading in the wrong direction can take a bad toll on your company. Here’s an article about how we spent our first $250,000 in funding.

Deciding when and how to pivot is crucial and the only reason we’ve been comfortable doing it has been because of how closely we measure the data. All the data that you gather can often be overwhelming, so make sure that you identify the KPIs that you want to track and avoid any other distractions if possible. Track everything, analyze later and make educated decisions.

Learn more about Slidebean, a 500 Startups accelerator company and apply to be a part of our next batch of startups.

500 Growth Talks — a universe of top growth advisors, on your Slack

“Hey, what’s that thing you used to verify email sender?”

“Which of you has used this b2b sales automation tool?”

“What’s the best way to SMS-based referrals with this 10k list?”

Today, we’re thrilled to announce 500 GROWTH TALKS, a members-only Slack for early stage startup growth.

WHAT IS IT

A membership-protected community connecting growth marketing mentors and startup founders over Slack.

Think of Growth Talks as a growth advisory board at your fingertips.

Growth Talks gives founders exclusive access to experts who’ve defined the growth category, including Sean Ellis, Andrew Chen, Aaron Batalion, and of course 500 Distro.

It’s open at ZERO COST to 500 founders, but it’s application-gated. This helps us make sure participating founders are ready to take on a growth mindset, and ensures that we don’t waste our mentors’ time with low-value pings.

500 Growth Talks will also be available as a premium subscription to qualifying founders outside of the 500 portfolio at a membership cost of $99 monthly. 

WHAT IT’S NOT

Growth Talks isn’t an internet marketing forum to talk about aspirational info schemes, or how to game the next affiliate system (with all due respect to my people making mad cash in the internet marketing world). 

Instead, we’ve created Growth Talks to make it possible for early stage founders to learn from top growth marketers actually running experiments and doing growth for early stage companies.

500 Growth Talks is a place to bring specific questions about the growth experiments you’re spending time and money on right now.

WHERE IT HAPPENS

500 Growth Talks lives on Slack.

The 500 Growth Talks Slack features channels organized by growth topic, and works just like any Slack account — you can opt in to notifications for any topic channel that’s relevant to you.

WHO IT’S FOR

  1. 500 founders who are already running growth experiments with dedicated growth staffing (this can be the founder themselves), and who are looking for that extra, outside “sanity check” — from the top growth marketers in the world.
  1. Founders outside of the 500 family with hard questions, no answers, and who are looking to get in on the 500 Distro experience.

 HOW IT WORKS

  1. APPLY to 500 Growth Talks at http://growthtalks.com/application  SIGN UP at no cost until midnight PST November 30th at 
    https://growthtalks.stamplayapp.com
  1. We’ll let you know once your application has been approved, and you’ll get all your access info from there.

500 Growth Talks is totally free to 500 founders (public membership rate $99 / mo). If you’re a 500 founder, past or present, you can get no-cost access to Growth Talks anytime, but remember — you gotta apply.

We want to help you grow, and most of all, we want you to stop sending us one-off emails that could help tons of other founders just like you.

No more wasted time or $ — APPLY NOW.  SIGN UP NOW UNTIL NOV 30th.

7 Little Known Techniques in the NEW Email Marketing

Last updated: August 18, 2016

Note: if you already know you’re not going to master email marketing after 1 (monster) blog post and are ready to steal some shortcuts… check out my upcoming projectEmail For Startups.

I’ve generated millions of revenue dollars through email marketing, helped dozens of startups get positive ROI on their email campaigns, given lots of talks about email…

and made a lot of dumb mistakes.

Today I’m going to share the NEW rules of email marketing that I’ve discovered through recent experiments of my own, and through my advisory work with pre-A startups in the 500 portfolio.

First, a little context.

THE POST-EMAIL AGE

Have we reached PEAK EMAIL?

Some quick stats:

  • 4 billion accounts worldwide
  • 25% of these are business/work accounts
  • ~3 accounts per person
  • 20-25% average open rate for marketing emails
  • average person receives 500 marketing messages / month

I’ll dive into each of these stats briefly later on, but for now, here’s the takeaway:

Email is STILL the most effective, highest ROI way to communicate with an audience — of ANY size — and email is the foundation of all other channels.

You have to have an email address to sign up as a  Facebook user, and while there are almost ONE AND A HALF BILLION monthly active Facebook users around the world…

there are nearly 3 times as many email accounts.

Email = reach.

Every consumer on the planet — including b2b “consumers” — has an email account. And, everyone accesses their primary email account almost daily.

But despite this considerable promise…

There are BIG challenges.

Email is a mature channel.

This means that there are many players — from local businesses, to info marketers, to big brands, to startups.

In the rest of this post, I’m going explain 7 techniques from the NEW email marketing, which I hope will give you an unfair advantage in turning more prospects into leads into customers into fans.

7 Little Known Techniques in the “ New Email Marketing”

1. De-Personalization

No personalization is the new personalization.

We’re not only desensitized to {firstname} in the subject line of emails we receive from marketers. We’re actually repelled by it.

Personalization was originally ‘invented’ as a way to flag someone’s attention, based on the old truism that “there’s no sound sweeter to someone than his own name.”

But, then the marketers got their hands on it (doh!) and now it’s a signal that you’re being marketed to.

People who really know me, and whom it’s my priority to read and respond to, would never put my {firstname} in the Subject line.

It’s now a marketing flag, and just as they do to all other marketing flags, audiences quickly develop banner-blindness to protect themselves to protect themselves from the noise.

Instead of clunky and unnatural {firstname} personalization, Technique #1 in the NEW EMAIL MARKETING is about NO personalization:

Noah-screenshot-gray

In the above email from Noah Kagan, I actually thought he was writing just to me.

His subject line is short and casual, and doesn’t sell anything or over-describe — common when we’re eager to explain ALL the exciting benefits of our product or service to a defenseless subscriber.

Noah doesn’t use a greeting, and jumps straight into the message, even starting his copy mid-sentence in the preview text (extremely important as it functions as a 2nd subject line).

The subject line and its preview text both feel imperfect and casual as if from a friend, not over-proofed or premeditated like it’s been through the hands of the entire marketing department.

The NO PERSONALIZATION subject line:

— disrupts our natural defenses against marketing,

— gets us to complete the key 1st action: CLICK TO OPEN

— and gives the email copy a chance to work its magic on us.

2. Next-Level Personalization

So {firstname} personalization is completely OVER (side note: ALWAYS RUN YOUR OWN TESTS, never listen to random “experts” named Susan).

But there’s a lot more you can do with personalization.

COMPANY / AFFILIATION

I forgot I gave Hubspot my work info, so in this email from Hubspot, I was immediately alerted by the “500 Startups” in the subject line.

Hubspot-companypersonalization-gray

 

My little reptile brain went, Oh sh*#! Gotta pay attention to that one cuz it’s about WORK.

I opened it, read all the way to the bottom, clicked on the CTA, and only then realized that I had just been lead-qualified.

People respond to company- and affiliation-level personalization because it’s their JOB to pay attention to those keywords, or because they are otherwise dutifully invested.

FW: / RE:

As I was researching the above point about Hubspot, I remembered another smart email they sent me.

In this message, Hubspot uses “Fwd:” as a personalization flag.

Hubspot-fw-screenshot-gray

Why does “Fwd:” work as personalization if it doesn’t cite the recipient’s name, company, or any other personal attributes?

“Fwd:” and “Re:” are un-marketing at its best.

“Fwd:” tells me that the message is from someone we know (not a marketer), who thought this message was so important or so relevant that they felt the need to pass it on.

“Re:” tells me that this is a reminder — perhaps for something we forgot about (oh shit! Was I supposed to respond to something??) — or it implies that I myself was the originator of this thread. Now I want to pay attention.

One caveat for ALL next-level personalization:

Remember the 1 truth about banner-blindness — it spreads fast.

If you abuse next-level personalization, your recipients will simply extend their banner blindness to protect themselves from you.

Go ahead and use next-level personalization to get their attention because it works — for now.

But then add value IMMEDIATELY through excellent content, consistent follow-through on offers and promises, and sensitivity to frequency and noisiness.

3. Getting Past Promotions Tab

Did you know that Mail app doesn’t have priority inbox? 🙂

65% of emails get opened on mobile first. This is great news but has a couple of takeaways:

1. You MUST mobile-optimize all email campaigns.

Watch out for high opens but low clicks.

It could mean your content is not good, but if you are reasonably confident that your content and lead-up are decent, then it could be due to:

  • lack of mobile optimization or
  • simply because most people don’t like to click on things on their devices because it takes them out of the app they’re on.

Mobile can be a huge secret weapon for getting past priority inbox, but only if you create campaigns with a MOBILE-FIRST attitude.

2. Mobile-based followups

Another approach is to do mobile-based followup to signup, because remember there’s no promotions inbox on most mail apps.

If they’ve just signed up, and you are also getting their phone number, you can send them an SMS as an immediate reminder to go check their confirmation from you, right there on the device that they’re already on.

This would be especially worthwhile for your key transactional emails — like your Welcome email or other confirmations.

Once your Welcome email gets through, don’t forget to work it.

You should use your Welcome email to:

  1. Instruct recipients about Priority vs. Promotions Inbox
  1. Set expectations about what emails to expect next (“In the next few days, I’ll be sending you some useful information about XYZ, so please look for those emails.”)

Additionally, the fact that they open the Welcome email is itself a signal to Google to stop putting you in promotions.

3. Use your Thank You page to remind people to look for your Welcome

Don’t forget to use your email signup Thank You page to REMIND recent subscribers / signups that you’ve just sent them a confirmation and that they should look for it now.


4. THANK YOU PAGE BONUS TRICK

On your Thank You page, you can include a link for Gmail users to go straight to a search for your Welcome email to confirm signup, like this:


https://mail.google.com/mail/u/0/#search/SENDER%SENDERDOMAIN.com+RESPONSE+REQUIRED%3A+Confirm+your+request

In the above example, you’re linking them to a GMAIL-ONLY search result for an email from “sender@senderdomain.com” and a subject line of “RESPONSE REQUIRED: Confirm your request”

On that Thank You page, you can include some text like “GMAIL USERS, click here to go straight to your WELCOME EMAIL for your goodies that we just sent you –>”

Every small step helps in your uphill fight against the Promotions tab, so it’s important to try multiple approaches and send reminders, which brings me to my next Technique…

4. Pre-targeting and Retargeting

Email pre-targeting is another great way to warm up your list for a major, conversion-oriented email campaign with before you send the campaign.

Yes, I did mean pre-targeting, not just re-targeting.

Here’s how pre-targeting works:

  1. Identify your recipient list and export them for specific targeting in paid campaigns thru FB Custom Audiences, Twitter Tailored Audiences, and/or Gmail Adwords
  1. Focus ads on brand awareness; do not ever make your campaigns about the “hard sell”
  1. Send your email campaign.  

Be sure to use basic common sense about who’s on that recipient list.

You don’t have to go micro with your segmentation. Even creating a few broad categories of recipients will make your ads perform better, and will make the subsequent email campaigns do better too.

As a bonus, you can run further retargeting after your email campaign goes out.

Here are additional ideas for post-campaign retargeting:

  1. to subscribers who never opened  
  1. to subscribers who opened but didn’t click your CTA
  1. to subscribers who opened MULTIPLE times but didn’t click your CTA
  1. to subscribers who opened, clicked the CTA but didn’t convert

5. NO cta / soft sell / zero sell

This goes against one of the biggest “truths” in email marketing — that every marketing email should contain a call-to-action.

I usually advise companies never to send an email if it doesn’t contain some call-to-action.

Your CTA can vary in its commitment level; it doesn’t have to be a hard sell every time.

For example, “Read the rest of this post,” linking to a piece of content you’ve just published, is a low-commitment CTA.

By contrast, “Join the annual subscription now” is a high-commitment CTA where the action involves both monetary exchange and an extended time commitment.

In some cases, however, it works to completely OMIT the call to action.

This means you send a content email or even a teaser / “FYI” email that has no click to a destination. It’s just an FYI.

An email like this functions as a preview to build desire — without offering an outlet for that desire.

You can also think of this sort of like splitting up a single email into two campaigns — one with the psychological hooks that build desire and interest, and the second with the CTA for them to address the desire / tension you built up in the first email.

My friend and 500 Distro Tommie Powers recently put out a message to a small group of 200-ish subscribers with an FYI about an upcoming webinar on YouTube growth.

Tommie-teaser-gray

There was no CTA and nothing to buy or opt-in to. It was just an FYI.

(Side note: although this message didn’t come through email, the same takeaway applies.)

Fully a week later, Tommie went to ‘cash it in’ and this time put out another simple message with attractive copy and a signup link.

Tommie-conversion-gray

A email variation on this is including a very subtle, oblique hyperlinked CTA instead of an obvious link on its own line break or as a button.

Here’s what Tommie has to say about his conversion rate and costs:

What I look at is how much I spent versus total conversion value (how much I made). If I had to guess, the conversion rate was at least 10%. But that’s because most of my sales came from fans who I had already been engaging and setting them up for something coming.

The numbers probably sound great, but you have to remember that most of them that bought were fans already and that’s not counting the money and time I spent on engagement stuff — NOT ctas or selling — before finally putting up a page for people to sign up.

The point here is that sales-free engagement can be great for creating a build-up to your actual conversion event.

That engagement effort can be a Facebook status update like Tommie’s longer initial post (which he promoted even though it didn’t have any CTA or conversion outlet) or a series of educational content emails.

It doesn’t necessarily have to be a lengthy drip sequence. Even a short or single preview can work if you’re just running a light experiment.

(Don’t let yourself be paralyzed by the prospect of having to create a long drip sequence! Just try something.)

CAUTION: Use this technique ONLY if you’ve got really good psychological marketing game, because it won’t work if you send a boring or long-winded email with no CTA and no psychological buildup, and then try to cash it in with an abrupt and awkward “hard sell” message later.

6. The “Perfect” Time to Send

People ask me all the time, “What’s the best time to send email campaigns?”

Now, we know that every email list is a unique snowflake, but that said, there are still a few things to know about when to send campaigns for maximum effect.

1. Send time doesn’t matter (that much).

Many email campaigns and lists demonstrate a 24 to 36 hour window in which subscribers open emails.

For example, you might have a subscriber list that’s psychographically uniform (nice work on your lead qualifying!) yet demographically fragmented. That is, they could be in vastly different geographies, or have vastly different schedules.

Thus, when you’re thinking about the best send time, think about it NOT as a single moment where your campaign hits their inboxes, but as a 24 hour open window.  

Instead, ask yourself, “What’s the best-performing 24 hour open window (of the week) based on what we’ve seen?”

2. Peak vs Off-Peak

A lot of marketers still send at peak times — first thing in the morning on weekdays, especially early in the week.

This is why they’re the peak times!

It’s like rush hour on the 101.

You’d think people who have schedule flexibility would get it by now… that if you’re planning to drive on the 101 between 7 am and 9 am, the freeway is going to be clogged with a whole bunch of other people with the same idea (or morning meetings).

Unlike the 101, where rush hour has crept into nearly all hours of the day, there are still off-peak times in email marketing.

To identify what the off-peak times are for your industry, you should be subscribed to ALL the major lists of your peers and competitors (you already knew that of course, right? 🙂

Look for the holes in noise, and use those moments to send your most important campaigns.

It can have a significant impact on your message’s visibility, especially if you are sending to high competition audiences.

3. Mobile and “on-the-go”


Mobileopens-gray

Are a lot of your subscribers opening your emails on mobile first (or perhaps mobile only)?

(Your email marketing tool will be able to tell you this.)

Other signs of a mobile-oriented list are lots of opens but few clicks, or many, repeated opens (pixel tracking sometimes gets counted repeated if a subscriber scrolls over your message in-app on their device due).

This is fine, and can actually be part of your bigger plan to target commute or “on-the-go” times, but keep in mind that it’s hard to take action from mobile.

You can retarget to make sure people get reminded, or send behavior-specific follow-up campaigns to your openers and your non-openers to encourage them to take whatever action they dropped off at (either the click or the open itself).

7. The 1-2 Punch

The final Technique (for now!) is a little something I call the “1-2 Punch.”

Like a few of the other Techniques mentioned above, the 1-2 Punch starts with seeing email as ONE part of your multi-channel re-marketing efforts.

That is, email doesn’t stand alone.

After installing the taxi hailing app Cabify, but not “activating” by booking my first ride, I received the following text message:

Cabify-gray

A few moments later, or perhaps at the same time, I also received this email message from Cabify reiterating the call-to-action: activate, activate, activate.

It doesn’t matter if you start with email and then “re-market” with SMS, or if you start with SMS and then re-market with email — the point here is that we live in a multi-channel world with lots of access points.

Creating campaigns that work means creating messaging that floats across multiple channels and touches your audience in a meaningful and consistent way across more than one access point.

The key to the 1-2 Punch is consistency:

  • same offer
  • same headline
  • same language
  • same CTA
  • one core message that is supported by a chorus in the form of multi-channel followups

Don’t send a bunch of random messages on a bunch of channels with all different asks or CTAs. Instead, keep things focused and tight, and reiterate simple CTAs with the same language.

———-

If you made it this far, good job to both of us 🙂

As you can see from the stats and examples above, email marketing is far from dead.

To the contrary, smart businesses can find lots of green field to explore what’s still the greatest common denominator shared by audiences all over the world.

WHAT’S NEXT

If you liked this post, please help a girl out by sharing and voting:

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More useful stuff here:

Content Marketing 4 Startups (1-hr webinar on YouTube)

Email Marketing 4 Startups (another bigass webinar on YouTube)

And if you’re tired of reading long blog posts and are ready for some proven shortcuts… check out my upcoming project ==> Email For Startups <==

Four companies, 12 weeks, and a whole bunch of new customers

We’re now past the halfway point in our London Distro Dojo program and are happy to report some very encouraging results. The attendees, some of Europe’s most promising young companies, have been working their tails off to iterate and grow. And they are seeing great payoff.

FotorCreated

As a reminder, the Distro Dojo is 500 Startups’ intensive three-month growth-hacking program based at WeWork Moorgate. Post-seed startups receive an investment from 500 Startups and hands-on mentorship from our team of top-notch growth marketers, 500 Distro.

 

Screen Shot 2015-11-10 at 11.11.48 PM

Truly Experiences is a marketplace for unique, extraordinary experiences (a $610B market).  These include gourmet truffle hunts in Alba, behind-the-scenes tours at Sotheby’s, near-space flights, and spy training with ex-MI6 agents. With a net promoter score of 78, their best source of customers are their own growing community.

Truly’s founder and CEO, Jack Huang says, “In the first month, we fully revamped our SEO, SEM, data stack, CRO focus and implemented a new experiment process. We also gathered more ideas for channels and tactics to test.”

Early results: The search marketing refinements reduced Truly’s cost per acquisition (CPA) by 75%. In terms of natural search, Truly  increased their volume of monthly backlinks 10X. They also tested some new email capture on-site, boosting their capture rate by 4X.

Screen Shot 2015-11-10 at 11.16.32 PMTRData has been called “Bloomberg for emerging markets.” Their platform lets professional traders exchange and share actionable information, such as prices, news & analytics. TRDATA provides the basic data access free of charge, focusing on faster content acquisition. They collect market data, automate trading flows, processes trades and help traders manage risk. Their customers include Bloomberg, Barclays, Societe Generale, Raiffeisen, USAID, AIG and over 500 other companies worldwide.

Since joining the Dojo, TRData has focused on growing customer acquisition, and it shows! Their new signups have gone from flat to +20% week-on-week since they started the program. In case you’re wondering, that looks like this:

Screen Shot 2015-11-10 at 11.18.10 PM

Anton Pasechnikov, founder of TRData says, “We developed a new dashboard and a clear set of goals, plus a simple process to highlight where in the funnel to focus. Our active user base has grown by 20%, and our website traffic has grown 2.5X. The program has proven to us that with a structured approach, smart resourceful people, and the right technology, a company can achieve fantastic levels of growth!”

Screen Shot 2015-11-10 at 11.22.16 PMTamatem is the leading mobile games publisher for the Arabic market of 100M users. With only 20 months since launch, they have published 50 games with over 15M downloads and 1.5M monthly active users – currently growing at 40% per-month (no typos in that paragraph, all those numbers are real).

Hussam Hammo, Tamatem’s founder, summarizes their early results: “We were able to launch 4 new games by the end of the first month, including one that reached #2 in the overall apps chart just 48 hours after launch. We signed 2 publishing agreements and have many new leads. 500 Startups also introduced us to a great advisor who will join our team to help us with monetization and our overall ad strategy.”

Hammo continued: “Thanks to the Dojo, our eyes were opened to many things we we were missing. So we’re rebuilding our technology from the ground up. This includes our new SDK, a connected centralized customer database, a full reporting system to the developers we are dealing with, and an ad server.”

Screen Shot 2015-11-10 at 11.23.57 PMOree Artisans crafts a collection of technology tools that are a radical alternative to strictly functional and disposable mainstream tech gadgets.

In the first week of the program, Oree ran a simple button test, that immediately delivered a 35% conversion lift. They also dramatically increased email capture on-site. Now they’re rolling out the PR machine and testing new paid channels, steadily lowering their CPA.

Screen Shot 2015-11-11 at 1.07.13 AMScreen Shot 2015-11-11 at 1.07.19 AM

According to Julien Salanave, Oree’s founder, “The program allowed us to step out of our day to day operational tasks and think about what will really make the biggest difference to our company. We’re pleased with our early results.”

Stay Tuned!

Each of our four kick-ass teams have made tremendous headway. Over the next two months, the teams will continue to test and execute with the skills they’ve acquired to boost their key performance indicators (KPIs). This will be capped off in January with the very first Distro Dojo Investor Showcase, where the teams will meet top VCs from London and beyond.

Want to train with our Master Sensei?

The next London Distro Dojo will commence in Q1 2016. My team and I are scouting Europe for companies with a live product and good customer traction (pre-Series-A). We take applications on a referral only basis, but our European founder and mentor network is over 2,000 strong. So if you’re a true hustler, it won’t be hard for us to connect!

MOAR About 500 DISTRO

500 Distro is 500 Startups’ in-house team of growth marketing experts. 500 Distro helps companies scale growth and close their next round of funding via the 500 Accelerator, a $10M DistroFund, and, now Distro Dojo.

In addition to the growth program in London, 500 Startups has Distro Dojos in Kuala Lumpur, Miami, and more on the way.