Photo by Craig.
I have decided to move on from RecordBox, my first attempt at bootstrapping a software business. While the product will live on, it will no longer be my primary focus. There are a number of reasons for this decision, and I will spend a part of this post articulating these reasons.
I will also ponder the question: what would I have done differently, were I to start today? I am sure that my honesty and transparency in answering this question will help me in my future ventures. But I also hope that it will help the starry eyed engineer-entrepreneurs who are sure to follow in my footsteps.
Let's start with some context
I have always used this blog to share a personal perspective of my entrepreneurial journey. In particular, I have written 'report card' posts every six months reflecting on my progress during the prior period while laying out the plans for the future.
I think these posts provide great context. So here they are, in order:
- On deciding to bootstrap: a most crucial decision.
- May '11 thru Jan '12: the first six months.
- Feb thru May '12: deciding to focus on mobile.
- June thru Dec '12: thoughts on marketing strategies.
Calling it quits: a couple of reasons
The decision to move on from RecordBox is two pronged.
First, I said that I would give RecordBox till January 2013 to prove itself as a business. It hasn't.
RecordBox, the product, has met with some success: it has 5-star ratings on the App Store and is now the third result when you search for 'audio recording'. As a result, I am getting 150+ downloads of the app a day, 30 new daily registered users, and 100-200 daily listens of audio shared through the service.
The problem is that the conversion to paid users is approximately 0.5%. What's more, the churn rate of paid users is more than 80%.
So the business model in its current form is not working out, even though the product has met with moderate success.
Secondly, for RecordBox to succeed as a business, I probably need to focus heavily on a specific vertical. This will take a significant customer development, marketing, and sales effort.
These are not activities that I am particularly interested in. And these activities are not the best use of my skills.
So my only option, as I see it, is to either pay someone to perform these activities, or to find a partner. This is an option which I will explore, but it is something which can happen on the side, while I turn my focus elsewhere.
Lessons from hindsight: #1: Don't do it alone
So what would I do differently if I were start RecordBox today?
First, I wouldn't do it alone. When I started, I underestimated the importance of marketing and sales. Nor did I realize how much talent and skill it takes to do these tasks well.
Most of all, I did not realize the extent to which ones natural proclivities affect ones productivity. I have realized that I lack a natural proclivity toward marketing and sales. As a result, I did not make enough of an effort on these fronts. And the efforts I did make were simply not good enough.
Engineering types tend to think that the product markets itself. As a result, we tend to keep adding features with the hope that they will change our business fortunes.
I suffered from this mentality. While I continuously added features which my users asked for, the features I chose to implement were the ones which were most exciting from an engineers perspective. I tended to choose the ones I would learn the most from technically.
Ultimately, these features did not make the product more sellable.
I should have instead focused on a specific customer segment. I should have focused on adding features which would have made a compelling difference to that segment.
A good marketing / business / sales partner would have been instrumental in discovering which features made business sense. They would have provided outside accountability to get these features done.
These are vital functions. I will not do another venture without having a person on board who is primarily responsible for these functions.
Lessons from hindsight: #2: Avoid business books, find an advisor
Second, I won't spend any time reading popular business books. I would find an advisor instead.
The world is full of all sorts of books with all sorts of advice for would-be entrepreneurs. On the one hand, you have the 37Signals variety which focus on bootstrapping and organic growth. By contrast, you have Eric Ries, Steve Blank, etc., who try to help you figure out a scalable VC-backed business model as soon as possible.
I have read a lot of them and have only this to say: they are all overly simplistic. Reality has many more shades of gray than any business book can capture. As a result, none of these books equip you to face this reality in any meaningful way.
That's why I think having an experienced advisor whom you trust is infinitely more important than all the business books put together. I didn't find such a person because I didn't look for one. Next time, I will try to seek one out as soon as possible.
So here we are at my journey's end. This is not the last post I will make about RecordBox, but it does convey most of what I have to say at the moment.
What's next for me? I am going to shed my entrepreneur's skin and slide into my engineers costume. To that end, I have accepted an offer from LinkedIn to work on the graph database engine that sits at the core of their product.
What excites me about it is the technical challenge. I have never worked on a database engine before: the problems of query parsing, query caching, and query optimization are quite new and exciting for me. I am sure I will learn a lot and grow as an engineer.
At the same time, there is a bit of wistfulness as I look back at RecordBox. It seems to be picking up more and more steam from month to month (at least as far as app downloads and user registrations go). Plus, I can't pull the plug overnight: I am hosting a lot of people's data and have a sizable number of paid customers.
So what exactly to do with it is a dilemma. The best outcome would be for some business whiz reading this blog to step forward and put in the effort needed to drive it forward as a business. ;)
Winding down such a venture is always a hairy problem, and one that is not written about very often. So I will do my part and write about the decisions I make and how they turn out.
See you all again soon!
Finally, I want to thank all my regular readers for cheering me on so earnestly over the past eighteen months. It has been fun to share my journey with all of you. Your comments have been very encouraging and insightful. And some of my readers have even contributed code to RecordBox!
So it has been quite a journey, and one which I will look back on fondly.
Till next time!