How a Canadian Company Took an Investment From a European Incubator?
In early 2011, I met an entrepreneur and angel investor from London, at a Starbucks in my small province. He literally just took the red-eye from London, I could tell by his blood shot eyes. He wanted to know what I was working on and I explained, an “online IDE for programmers”. I could tell immediately he didn’t know what an IDE was…
Talk about a pivotal experience. I was a programmer turned marketer, yet I still used very technical terms to describe what I was working on. The angel investor looked at me with a blank stare; he didn’t understand exactly what I was working on.
After another couple of minutes of questions, I explained and tweaked my value proposition. He finally understood what I was working, but exclaimed that I definitely need to work on my non-technical elevator pitch. Naively, I responded I’ll never need to pitch to non-technical people.
Now, I know that a non-technical pitch is critical. You may end up with non-technical investors like doctors, who will want to brag to their friends what they are investing in. You don’t want to put your doctor in a situation where they can’t explain exactly what you’re product does, killing viral potential. This is sometimes the case, because the investor is more in love with the team than the product.
After this, he explained an incubator from London was putting a session together in New York. The incubator was called Seedcamp. I’ve never heard of them before, I looked at them online, saw they had invested in a several companies and were considered a European Incubator. They definitely didn’t have any credentials like Y-Combinator or Techstars. In fact, the only acquisition that I saw, to date had been Mobclix.
I decided to apply to Seedcamp anyway since it New York was literally a 2 hour flight (I had never visited New York, gave me an excuse). Plus it was at Google’s office in New York. Our product, Compilr, was definitely potentially a product to someday be acquired by a company like Google, Microsoft, Salesforce, Facebook, and the list goes on. Any visibility I could get at this stage was definitely worth it.
Compilr was accepted to present in New York to the Seedcamp list of mentors. We presented at Google’s office in front of 100 mentors or so. Presenting in front of 100 people was definitely not on my bucket list, but I got through it. It actually has helped in a lot ways. I’m definitely not worried presenting in front of 100s of people as much as I thought.
The day after, Compilr was invited to pitch to some of Seedcamp’s core investors. The room had maybe 15 people but I was more nervous than the day before. In all honesty, I thought I blew it because I was being asked a ton of questions. I answered them all, but Carlos, one of the main guys from Seedcamp had asked a question and I got sidetracked with an answer, when someone basically said “Well, ok thanks for your time, we’ll be in touch.” I still feel like a total d-bag because I didn’t answer his question…
At this stage I became defensive in my mind, even though I hadn’t received a yes or no to their investment. In reality, I didn’t care if I received Seedcamp’s investment or not. Personally, I was funding the company out of my own pocket, almost $150,000 a year, their small investment would only really marginally accelerate my company. I was hoping to get visibility in front of the right potential acquirers.
A few weeks later, I was in total shock when Seedcamp told me they were willing to invest in Compilr. Even though, I personally felt like I blew the follow up meeting in New York. When I told several of my advisors, most of them were eager for me to take the funds. While some opposed to the idea, stating the same facts I alluded to earlier, only one successful exit, etc…
Our team decided to go ahead and take small investment from Seedcamp to use towards accelerating our business. Our end goal was that Seedcamp would present our company to potential acquirers like Facebook, Google to hopefully stimulate an exit, producing a positive ROI for them.
SIDE NOTE: When we originally pitched to Seedcamp we had 45,000 users. Today almost 5 months after we have over 75,000 users.
Design Matters: And We’ve Got The Numbers to Prove It
Here at Ninja Otter we’ve attended a number of startup conferences on a few continents, often invite other startup founders to come into the office and meet our team, and we keep a keen eye on the world’s top startup books and blogs. In doing this we’ve spotted a scary trend: some people in the startup world have begun to claim that design doesn’t matter. However, in our experience it does matter; sometimes a lot.
The “unimportance of design” seems to stem from some interpretations of the lean startup movement. These interpretations seem to take the stance that spending too much time on design unnecessarily delays product launch and iteration, which in turn delays the learning that is fundamental to building a great product. However, design can also be a driving force behind your startup’s growth, and a key factor in whether or not your startup is successful. Dave McClure, venture capitalist and founder of 500 Startups, has even gone so far to say that design (and marketing) and more important than engineering to your startup’s success.
Design and Your Conversion Rate
A few weeks ago we wrote a blog post on the importance of good logo design, and in this blog post, we want to share some of the early results this redesign has had on our conversions.
The graph above shows the number of times Wakeful has been downloaded in BlackBerry App World over the past month; the data drops to zero at the endpoints simply because there is no data selected for those dates. On the 15th of October we changed the icon that our Wakeful Talking Alarm application uses in BlackBerry App World to reflect our recently redesigned logo. Although we only have about a week’s worth of data, our downloads have increased by roughly 60% after changing the design of Wakeful’s icon.
Does this mean that a redesign will necessarily double your sales? Of course not. But…does this mean that you should be wary of startups saying design doesn’t matter? Absolutely.
Intangible Effects
When you do a redesign you might find that your conversion rate and other important metrics remain unaffected, but this doesn’t necessarily mean that your redesign was a waste of resources. Your design is the face of your startup, and integrally related to how the world’s perceives your startup, and even how your startup’s team perceives itself. When Jason Cohen tested a redesign for his company WP Engine, he didn’t see much change in his company’s key metrics. What he did see was a change in how his company was perceived both externally and internally; customers were no longer “embarrassed” to refer their friends to the website, and the company’s employees took pride in the redesign and its reflection on them.
Figure Out What Works For You
Design matters…well, most of the time. As with everything in startups you can’t take what has worked for one startup, apply it to your own, and expect to have the same results. Your startup is unique, and you always have to evaluate what may or may not be the best course of action in your own particular situation.
We just hope you’ll take a few moments to think about it the next time someone says to you “design doesn’t matter”.
The Importance of a Good Logo
A Good Logo Makes a Good First Impression
One area where Ninja Otter never cuts corners is when it comes to logo design. In many cases our logos are the first impression that our customers and partners have of our products. A good logo design may not be important to all of your customers, but these first impressions are certainly important to some.
If you’ve ever applied for a job, we’re sure you’ve heard that first impressions are often based on looks. If a highly qualified candidate arrived at her job interview wearing torn and dirty clothes, this first impression is likely to overshadow the fact that she may otherwise be well-suited for the job. In contrast if a relatively less qualified applicant arrives well dressed and well groomed, by making a positive first impression she may be selected for the job over her poorly dressed counterpart.
It’s not rocket science, but what many of today’s startups fail to take into account is that when you are asking a customer to hand over their money, you are in the exact same situation as any job applicant. You are applying for the customer’s money, and make no mistake, first impressions can be an important factor.
A beautiful logo will not convince any customer to pull out her checkbook; what’s will is communicating the value that your product has to offer. However, just as in a job interview a good first impression is an impetus to opening the channels of communication that allow you to express this value.
With this in mind, it is important to know if logo design is relevant in your specific situation.
Your Early Adopters Don’t Care
When you’re building a Minimum Viable Product, a good logo really isn’t that important. Your early adopters are more concerned with the value your product provides, and likely won’t judge you based on your logo (or website’s) design. If you need a great logo in order to convince your early adopters to try out your product, then your startup probably has a fundamental problem with its core value proposition. With early adopters, it is best to keep design considerations out of mind, and focus on opening a dialog to discuss the value your product seeks to provide.
When you move beyond early adopters, and into a more mainstream marketplace, logo and design become more important. This was the case recently with Wakeful, one of our own products. Wakeful is a smartphone alarm that wakes you up by reading aloud customized news and weather. We built a Minimum Viable Product and released it to early adopters on the BlackBerry platform, iterated on this product for several months, and released an Android version of the app last week with an iPhone version soon to follow. We have gotten to the point that we are moving beyond early adopters and into the mainstream market, and as a result, yesterday we launched a new and improved logo. It was time to shift to a mainstream market, and as a result, it was time to leverage design as a way to build a quality first impression and open the channels of communication with mainstream customers.
It May Not Be Important For You
Wakeful is a B2C product, and this was an important factor when considering the relevance of a new logo design. A logo may or may not be important in your own situation. When making the decision on whether or not you want to invest in a new logo, the important question to ask yourself is whether or not a good logo design will open relatively more channels of communication with your customers. In our case Wakeful is sold side-by-side with hundreds of thousands of other smartphone applications; a good logo helps us stand out from the crowd. Standing out from the crowd means more customers visit our product’s dedicated page in the application marketplace, opening these channels of communication, and resulting in more conversions.
In other scenarios a good logo design may not be important, and it is important to critically evaluate potential impacts in your own company’s context.
Know Your Limits
This post is being written by Ninja Otter’s in-house designer. I’m a good designer in general, but I have never designed a good logo and probably never will. Logos are my achilles heel, and many designers have told me that logos are theirs as well. If you are your team’s designer, be honest with yourself about your logo design skills. If you’re not capable of designing a great logo, outsource it to someone who is.
Above is a picture of the logo re-design that we recently released for Wakeful. We outsourced it, and the designer did a better job that I ever could.
Prove Us Wrong
If your company has seen great and/or poor results from a logo re-design, we’d like to hear about it; leave us a comment and let us know how logo design has affected your business.
Follow up on your churned accounts!
Lately, I’ve noticed a scary trend with a large amount companies… If at some point I was paying for your services but recently decided to stop paying, you’re not following up to find out why!
Some of these companies we were paying $200+ a month for their services. One company we were spending six-figures a year on advertising… You’d think at least one of these companies would have immediately followed up with us to find out what happened! But most companies seem to think, oh well we lost one paying subscriber; let’s just find a new one.
This attitude needs to change! I would have loved to tell my pain points to the number of companies we’ve begun to cut out of our life in the past 6 months. However, I haven’t been given the opportunity to do so, and our team is moving on!
Follow up on your churned accounts – or die!
Understanding How Long Your A/B Test Is Going To Take
With A/B testing, startups map out the road to success. This is done by taking a few steps down each possible path of the company, and seeing which path produces the best results. But how many steps down that path are necessary to make that decision? In other words, how long do you need to run an A/B test before you can start to make decisions based on your results.
In our experience, if you answer that question with commonly held ideas you may very well head down the wrong path.
We’ve heard the benefits of testing completely different landing pages, so recently we ran an A/B test on the landing page of one of our products, Tether for BlackBerry & Android. We created eight unique landing pages, set up a campaign with VisualWebsiteOptimizer, and the employees placed bets on which landing page would emerge the victor and quadruple our conversion rate…well maybe not quadruple, but we certainly had high hopes.
Some of the Designs We Tested
A few days into the test Design #1 was well ahead of the game, with conversion rates more than 50% higher than our original site design, and we were almost ready to declare Design #1 the experiment’s stand-out winner. But we decided to continue running the test for a few more days in order to be absolutely sure that we wanted to implement the new design.
Within a few days the rankings had changed and Design #3 was now on top. A few days later, the rankings changed again. With the rankings varying so widely we decided to consult someone who knew their way around stats…they punched a few numbers, and it turned out that our test would have taken several months before it produced any reliable data. We decided to discontinue the test.
What We’ve Learned
Although the start-up community praises the benefits of A/B testing, almost as a religion, it is difficult to get a feel for what is involved in an A/B test before engaging in one yourself. Before beginning your test you need to understand how long a test is going to take to complete, and whether or not you are willing to hold all other variables on your site constant for that period of time. To do this you can use tools such as Visual Website Optimizer’s calculator, but keep in mind that these should be taken as guidelines and not rules.
The VisualWebsiteOptimizer Calculator
Our New Office
This year we are looking to hire a few new engineers to our team. As such, we need to upgrade our office space. Our current 150 square feet wasn’t cutting it. Our new office has over 500 square feet and has features such as our own conference room, blackboard wall and white board wall. On top of this, we wanted to create our own desks that will slide up and down the wall, to allow our team to stand for a few hours every day and stretch out that spine. We’ve even got a brand new Xbox 360. If you’re interested in joining our team, shoot us an email.
How $500 saved my company over $10,000
Every year around Christmas time, I like to reflect of those who helped my company grow over the past year. Everyone from employees, friends, family to my professional team are evaluated. Last year, was very exciting. We had to restructure the entire company from the ground up. In the same year, my business partner and I made our first rental property purchase.
It turned out to be an expensive year for us in the legal and accounting department. However, the advice I received continues to pay itself out in dividends. And because they helped so much, I decided to invest $500 to buy them gift certificates at some local restaurants.
Everyone loved the certificates. My real estate lawyer phoned us up right away to thank us and I could tell there was definitely excitement in her tone. But, something more amazing happened that was completely unexpected. Suddenly when they were asked for advice they would rarely send an invoice for their time. Overall this year it has already saved us over $10,000. Good lawyers, good accountants are very expensive!
Small gestures like this, can really help your business. Keep in mind if you are being too frugal, it may hurt you in the long run.
How much traffic did Humble Bundle send us?
Almost two weeks ago, one of our startups, Compilr.com, became a top contributor on Humble Bundle. Our goal was to get in front of indie game developers with our recent XNA release. Let’s take a deeper look and see if we got the exposure we wanted.
During Humble Bundle, we saw our traffic increase 84.79% and our number of page views increase 51.11%. A huge increase in traffic, however there were a lot of people just exploring. Our bounce rate and average time on website dropped significantly.
We averaged about 50-80 additional signups per day, resulting in about 840 new accounts directly from this campaign. In total we ended up paying about $593.21 to stay ranked as a top contributor. We felt we would get the same exposure whether we were ranked number 1 or 10. It would be interesting to compare our data with MtGox.com who paid $4,096 to get first position.
If you work out the math we ended up paying:
- $0.71 per user acquisition
- $0.13 per visit
All-in-all it ended up being a great investment and some of it even went to charity.
This should be testament to always be on the lookout for alternative advertising.
Your Analytics is missing tons of data!
With the proliferation of new devices like smartphones and tablets, you’re probably losing a lot of useful data. The worse part of it is you probably don’t even realize it.
Here’s the scenario. Let’s say John finds your website by clicking on a pay-per-click ad for the keyword “mp3 player”. He finds the mp3 player he’s looking for on your website, but the price is a little steep so he’s going to have to check in with the wife before such a large purchase. He abandons your shopping cart.
Later that evening he gets the OK from the wife and decides to make the purchase. Except he throws your analytics a curveball… He goes back to your website from his iPad and makes the order.
From the scenario above, you have several problems with your analytics. John now appears as two different visitors in your analytics, one that completed a conversion and one that didn’t. The worse part is the conversion wasn’t completed in the funnel you paid advertising dollars for.
The original way John found your website was clicking on the ad for mp3 players, which cost you money and lead to no conversions. This can lead you believe your advertising campaign is losing money and ultimately cause you to turn off the ad.
You may think this doesn’t apply to you, because it may be an unlikely scenario. Here is a really likely scenario because so many users have email setup right on their smartphones. A user comes to your website from their PC then signs up to your newsletter. A week later you send out a new email newsletter, the user opens it from their smartphone, makes a purchase. Once again you can’t track the original way the user came to your website.
It’s imperative that you try to come up with a solution to replicate critical session data from one device to another to increase the amount of good accurate data in your analytics. If not it will affect how you are tracking your ad performance and even any split tests that may be running.
Rankings Drop: When Google Split-Tests Their Search Results.
Earlier this week the Ninja Otter team just about went into shock when we logged into our SEOMOZ dashboard and viewed the search engine rankings for one of our projects. Although the application had enjoyed top three rankings in Google for a number of years, for some unknown reason it seemed that we had now dropped to the bottom of the first page. A few quick searches in Google confirmed that this was not just a problem with SEOMOZ, and that our rankings had in fact taken a drastic decline. And of course, our sales took a huge hit as a result.
As per our SEOMOZ dashboard, our organic traffic declined by about 40% on the keywords we were targeting. We went into panic-mode trying to figure out as quickly as possible what had went wrong.
Although you can never be 100% sure what causes a change in your rankings, we’re fairly certain that this particular drop in our rankings was the result of A/B testing carried out by Google. Why do we think this? Because without us having made any changes whatsoever to our website or SEO efforts our rankings were restored the very next day. As startups we have heard countless experts praise the benefits of A/B testing, but many start-ups fail to realize that their own SEO efforts can become the subject of A/B testing, and that this is not a reason to panic. Google often changes the order of their rankings to see which sites get higher click-through-rates in different positions (it is assumed that a higher click-through-rate means the site was of relatively more interest to the searcher).
If this happens to you, remain calm. If you have a quality site and make a point of avoiding black-hat SEO tactics your rankings will likely be restored. When your Google rankings take a sudden and drastic drop, it’s not worth pulling out your hair just yet. Of course you should look into what may have caused the drop, but if you haven’t committed SEO suicide then you should be able to come out on the winning side of the A/B test. If you’re lucky you’re rankings will be restored through no action of your own. If you’re not so lucky then it’s time to start examining why your competition got a higher click-through-rate than you during Google’s test.
Ninja Otter
- How a Canadian Company Took an Investment From a European Incubator?
- Design Matters: And We’ve Got The Numbers to Prove It
- The Importance of a Good Logo
- Follow up on your churned accounts!
- Understanding How Long Your A/B Test Is Going To Take
- Our New Office
- How $500 saved my company over $10,000
- How much traffic did Humble Bundle send us?
- Your Analytics is missing tons of data!
- Rankings Drop: When Google Split-Tests Their Search Results.