Episode 6: The fall GetGuided, Year 4 and almost 5
Hi there, hope you are well. This is the last episode from the Series of GetGuided, where we analyse the fall of the company. I will keep intro short this time, welcome back and enjoy the show!
So last year we were pivoting and not having full time team, building the wrong product and so on. So this time I want continue with the story of pivots and the things that we did right. We first started with monitoring before building. We sent thousands of emails to corporate leads, intensively did google ads and installed #Crazyegg, a monitoring software on the marketplace product and the landing page. We saw that our marketing worked and we had decent traffic but the bounce rate was insanely high. On the other hand, our corporate leads were confused, as the message we gave in the emails was not followed by with the message on the B2B2C page. After analysing this and advising with mentors we realised that we need to overhaul the UX/UI design of the marketplace product and rebuild the proper B2B platform.
For UX/UI redesign we actually chose a team that would take over from start to finish. Working with a full-time team who is only focused on one thing and one thing only was incredible to observe. From customer interviews to the research and to design the difference was incredible. As a result our new design helped to drop the bounce rate from almost 90% to around 60%. The new design also helped us to separate the B2C and B2B products from each other.
The B2B product was built by Nadir, Turan and myself. I went back to drawing board, with help of my mentor Karim and went to the client’s offices one by one with a box of macaroons. That was a pleasant surprise for them and led to more casual chat, where I did not ask anything to related to the product, but just learned about their day to day operations. The more I learned the more I facepalmed myself. The way companies worked was totally different than one we understood before. That not only helped us to finally to build the product that was solving the unaddressed problem in the industry, but also made us to change the whole business model.
So, let me try to summarise. You see, we thought the companies we worked with had a problem of finding a guide. It was the case only couple times a year when it was a busy season, and then even we did not have guides. On the contrary, they had too many guides that they would email, call, book and arrange manually using emails and excel spreadsheets. It was a mess! They did not have a search problem, they had a management problem. We needed a B2B product that would help them manage their guides and their orders, a supplier management system. I knew the problem well, because I had the problem myself, managing requests we were receiving from clients manually before. The good thing is we had some kind of a system we built internally, that we could change and adapt for our client’s needs. Doing that it was also easier to envision the product and its use.
Now the question was, why would a company pay us a % to manage their own guides? The would not of course. What would they pay then? They would pay a small monthly fee for a software that makes their operations easier, faster and digital. But how small? We did not know and neither did the clients. So, we tried to offer them ideas. Would 500 per year be too small? What about 5000 per year, too high? Because we were so honest and close with our customers, they did not ask for the lowest price and together we formed the optimal price point that is 1000 pounds per year.
What are the lessons here? I guess, several. First is that if you have access to full time team that is specialised in one thing, hire them and watch them deliver. Secondly, talk to your customer more and talk about them and their lives to know how you can make it better. Third, be open and honest with clients, so they act the same with you.
Once we started targeting both B2B and B2C users/clients, I started seeing an obvious difference between them in all possible aspects. Here are some quick and headliner ones that you should consider.
- Product — In B2C world often you need to have a minimum viable product that focuses on one thing and does it well. In B2B world it is getting harder and harder to stand out in the market with such type of approach. Clients often wait almost a complete product. The way you can solve this is to work with select number of clients and let them be part of the development process, whereas in return they would get a free subscription for a period of time when you are launching.
- Marketing and sales — This one is also very different. Although your goal is to get as much traffic and awareness as possible with the lowest CAC, the timelines and approaches are different. The B2B sale cycle, can last you several months before the client is fully onboarded and paying. The good thing is that depending on your product, the customer may be to invested to switch. On the other hand, you need a good customer support and infrastructure in place, as the bill per customer is often times higher and so are the expectations.
So, we got the product right and the business model. Meanwhile we ran out of cash and we could not raise further investment due to either: A) market was too niche; or B) the investor needed proof. My visa was going to run out in a just over a year and the thoughts of the uncertain future starts crippling in, unless we found a way. That way was to launch a product in January, get cash in the company that will help us to hire people slowly and that would help me hire people for a period over a year and I could extend my visa and keep going. The launch got delayed till February and then, it hit us, the Covid19. We lost all potential clients and that was end of it. At that point it was final nail in the coffin. The Covid was not the excuse to blame our failure on, but it was the final blow on our final hope.
When do you call it off and give up? When you tried everything and it just does not work is one answer, whereas the second answer is you plan better and do your research and analytics before trying all spending your time and money. My advice, learn the product discovery, unit analytics, data analytics well. All that will save you both time and money. When the answers are clear and the time is right you will know and you will let it go, without regrets and unanswered questions.
So you are pulling the plug, which is sad and stressful but it impacts not only you, but also people who are involved, including investors. We have heard ugly stories before, about how investor and founder relationships were damaged badly after failure. Luckily not in my case, as I kept good rapport with our investors. Not hiding everything, keeping them involved and informed, being honest and giving your best helps your investors to be fair when things go south. Not raising too much cash also helps here, but the paradox is would you even be in this situation if you raised more cash?
Overall, looking back it was a long journey with ups and downs and I am thankful for all. At times I think I worked a lot and learned a lot; at times I think I did not do enough and was not enough for the role. Those doubts will always be there, but the key is to understand both pluses and minuses of the experience and take that onto the next journey with you. Well, this is the end of these series (but not the podcast), and thanks all for listening. Share this podcast with friends, make sure to check Podcast channel for the audio version. And as always, do not forget to check my Teespring tshirts in the description and stay safe and well! Tty in the next episode.
