It's been nearly 18 months since I started bootstrapping my first business, RecordBox.
In these eighteen months, there hasn't been much 'success' to write home about: there hasn't been exponential user growth, and thus there has --unsurprisingly-- been tepid revenue growth. Sadly, RecordBox hasn't found product/market fit.
But I ain't givin' up yet!
Today, there are fundamental choices to be made at the highest strategic levels. There are many potential paths to take, and I am quite sure that all but one of them is a rabbit hole from which it will be hard to escape. A big mistake now will be fatal for RecordBox.
Hence this post. I have learnt some hard-won lessons through these eighteen months. I am now going to draw upon them to lay the foundation for the next eighteen months of RecordBox. [Provided, of course, that we will be in business for that long.]
Business 101: Some obvious theory
Here are some of the things I knew in an abstract sense when I started.
For a business to succeed, you need:
- A product which solves a specific problem in a unique way.
- A sizable group of people who have that problem and for whom your product is a solution worth paying money for.
- A scalable way to reach the your potential customers with a positive customer acquisition cost.
- And for a bootstrapper, you need positive gross margins as soon as possible.
For people who are well versed in the modern business lore (the Lean Startup, the Business Model Canvas, etc.), this isn't news. In fact, for anyone with common sense, this list is no surprise.
But for a first time founder with a purely technical background, it is really hard to keep these ideas in mind when designing and building products.
So, over the course of the past 18 months, I have lost sight of these things from time to time. Make no mistake, I 'got out of the building' and talked with plenty of users and potential customers. I also implemented a lot of things which users asked for.
However, I failed to see the woods for the trees most of the time. To be quite honest, I have not made great progress on the latter three things listed above. So it is no surprise that RecordBox-the-business is languishing, even though the RecordBox-the-product is quite complete and robust.
Mistake #1: Building a product that isn't compellingly unique
RecordBox started as a simple product born out of a personal need: to easily store and find audio recordings of my drum lessons along with their associated notes.
It turns out that none of my fellow students had a good solution for managing their recordings, and all expressed a need for such a tool.
So I built it from July 2011 through January 2012 (learning Rails and iOS development along the way). That didn't work out. None of my fellow students opened their wallets.
Then, from January 2012 through July 2012, I added more features like sharing, a better mobile experience, etc..
But nothing I did managed to coax my early users to become paying customers.
In hindsight, the the reason is clear: RecordBox was not a unique tool. There were other --free-- ways to store, organize, and share audio, and nobody felt the pain badly enough to pay for a tool whose only distinguishing feature was convenience.
Mistake #2: Not focussing on a well defined target audience
Since then, I have worked on differentiating my offering.
I added 'time-stamping', which enables one to mark the important bits of audio while recording or during playback.
I also added the ability to share audio and the timestamps via private urls like this one.
There isn't another product which offers this combination of audio recording, time-stamping, and private sharing of playlists. So RecordBox has indeed become a unique offering.
And thereupon I have found the next problem: not having a well defined group of people who need such a product.
Targeting 'musicians' turned out to be too broad. Most musicians don't need this combination of features.
For instance, I am currently running Facebook ads targeting singers. They are working quite well: 3% CTR, 100's of downloads of the app for $10 a day. 15-20 new signups daily, etc..
But none of these people have so far converted to paid customers. To my mind, the reason is simple: as it stands, people only need to pay for RecordBox when they want to privately share more than an hour of audio per month. But it turns out that most of my users have no need to share at all.
A stroke of luck: an unexpected silver lining
It is not all doom and gloom, though. Through all these efforts I have found that RecordBox in its current incarnation is catching on with choruses.
There is a chorus in New York City who is paying to use RecordBox to distribute recordings of their rehearsals privately amongst themselves. The choir director uses RecordBox to mark out and share the important portions of each rehearsal, and this allows the singers to practice only those portions before the next rehearsal. This could not have been achieved without RecordBox.
What's more, a couple of other choruses have found RecordBox through my Facebook ad campaign and they are using it to distribute recordings of their rehearsals privately as well.
This is encouraging for three reasons:
- It looks like RecordBox is on the cusp of product/market fit for choruses: they clearly need to share sets of edited audio recordings privately.
- The market is sizable: there are a huge number of choruses in the US and abroad.
- There are known ways of reaching the target audience (well connected blogs, mailing lists, word of mouth, etc.).
The fundamental dilemma: breadth or depth?
And now we come to my high-level dilemma: Should I focus on choruses? This would involve developing tailored features, collecting testimonials, creating targeted marketing materials, experimenting with marketing channels, developing relevant pricing schemes, etc.
Or should I go broad? Should I try to spread the word about RecordBox as far and as wide as possible and see who else it resonates with? There may be several groups I can target, some of whom may be better bets than choruses. If I don't get the word out, I won't know.
After all, I have a unique product which works pretty well for a number of users. The best way to leverage this asset would be to get as many people to use it and see what happens.
My choice: A depth first strategy
The focus on breadth is indeed appealing. It opens up the possibilities in unpredictable ways. Finding another viable market would indeed be huge.
But consider this: if I do find another market by going broad, it will need to be developed just like choruses do: I will have to talk to potential customers in that market, develop custom features, etc..
In other words, the best case outcome of going broad will be to find myself in the same position as I am with choruses today.
That is why I am going for a hybrid approach. I will focus on developing the chorus market as a priority. But at the same time I will explore low overhead ways to go broad, like getting featured in tech publications, getting some publicity through relevant online communities, etc.
A hybrid approach will enable me to develop one market while at the same time lining up adjacent markets which I can grow into in the future.
What do you'll think? Should I go broad or deep? What is the right balance to strike? Hit me up in the comments!
Postscript: An obligatory report card
Back in May, I wrote a post about where I would like to be this October. It's only honest to clarify where I stand.
So, how did I do on those points?
- I wanted 10-20 Paid customers. I have 12.
- I wanted to incorporate. I haven't yet.
- I wanted a revamped mobile experience. It's done.
- I wanted additional developers. I've got 2 working part-time.
In my books, three out of four is not bad. Especially since the miss is the least important thing at the moment.