Totspot came in to Batch 9 with decent traction, great product market fit and an experienced team — in other words, in the awesome category of early stage companies.
They walked away with new acquisition channels, actionable tracking, more users and more commerce.
Here’s how they did it.
Who were you pre-Accelerator?
We had a product live, and were growing around 20% month over month for about 3 months running. We were in the app store and having some growth already because we’d tried a bunch of things.
What was an early “aha” moment?
We had early product market fit when we came into the batch, so that helped us focus on fine-tuning the product and on growth.
We were using Flurry before, but when we got to the Accelerator, everyone at 500 was big on Mixpanel.
We actually took a full week to implement Mixpanel from the ground up, but it was worth it. That changed everything for us. Mixpanel showed us that we were doing some things right, and some things not so right.
Let’s be real. There are a lot of choices for an early stage company these days. Why here, why now?
First, access to capital and investors.
Second, it was about access to knowledge. We were a small team doing a few different things for distribution, so we had some background. But we were looking for input and validation from people who’d done it many times before, who had built companies before. I’ve lived in the Bay Area for a while myself, and so I talked to my mentors here, and it was unanimous — do it, apply.
The 500 mentor network was priceless. There were mentors who had done mobile distribution before. A few people looked at our funnel and suggested that we take one layer at the top of our funnel and just optimize that first.
So we segmented just at the top of the funnel, and started focusing on subsegments.
Growth is a huge focus of the Accelerator. During our Batch, we had Marketing Hell Week (editor’s note: this has since been “toned down” to Marketing Days), which had workshops and talks covering various parts of distribution and growth.
Before we joined 500, I obviously knew what drip campaigns were and what they could do, but I’ll admit that I wasn’t thinking about it actively.
After the Hell Week session on drip email, it became obvious that drip campaigns were essential for driving engagement and repeat behavior, and for staying top of mind with users.
It really moved the needle for us, and now we’re even hiring for a role just to do drip campaigns and email marketing.
Would say Sean’s browbeating inspired you to make changes?
It was a Come to Jesus moment for us.
In our case, email was one of the biggest takeaways, and yes it inspired us to hire a dedicated email marketer even though we’re a mobile app.
Before, since we were adding new users organically and through word of mouth, we thought we were in an ok place for growth. But going through Hell Week showed us all the things we were missing, and gave us a systematic process to actually fill it in.
Did you have any distribution experiment that paid off especially well?
Instagram. Instagram now converts very well for us, and we wouldn’t have discovered it without 500.
In the very beginning of the Batch, Sean came over to tell us that he’d built a similar business and acquired a lot of users via Instagram. At the time, we were focused on Facebook but when we added Instagram to the mix, we suddenly saw things change.
We’re a mobile community marketplace for moms to shop and sell kids fashion. The key is that we’re both a community and a marketplace. So, in addition to being a place where you buy and sell, it’s also a community where you hang out and build virtual BFFs.
The community is very active within our own product and within the app.
But what we wanted, and what we were missing, was to see our users share Totspot across their social media profiles. We want them to talk about Totspot as the place where they’re not only buying and selling but also making new relevant connections, so that their friends would come back join our community.
We ran campaigns like #outfitoftheday, which helped with engagement, social sharing and downloads. The efficiency of a channel such as Instagram is hard to measure because Instagram doesn’t have direct links, but here’s how we did it.
For one week, we were religious about looking at each username that registered. We would then search for those users on Instagram, and we would count. Yup, just count. We saw a high correlation, and it was enough data to tell us that the channel had good potential for us.
Since then, we’ve gotten a little smarter. We now use signup codes and promotional codes that are tagged with various parameters (including different activities within the app) so we know which campaign and channel is converting into signups or into commerce.
By the way, we also do this for mobile install ads on Facebook.
This is how we determine which channels are working not just for installs but also for commerce and purchases within the app.
How do you get inside the heads of your target audience?
Haha, we were actually passed up for investment opportunities early on because no one believed we could understand the market. While most investors were excited about the potential, they doubted that two immigrant parents would be able to build a product that could be loved and used by moms in America.
We started the business when we ran into the problem of a closet full of barely used kids’ stuff as our own kids grew. We had no place to sell or shop for used fashion. But I guess we did not look like the moms our app was targeting.
So over the last year, we’ve personally talked to our first 500 users to understand everyone’s problems and motivations. However we could segment them, we’ve talked to them.
A lot of them are our friends now! Even though they live in Cleveland, or Florida or Texas, they text or email us to keep in touch.
Beyond this, we’re building a team that has an even better understanding of the audience than we do. Our VP of marketing is a mom with 10 years of experience marketing to moms, and our community director is a godmother and a former fashion editor.
Everyone knows they’re supposed to talk to their users, but it can be awkward if you don’t like talking to people. Even if you’re non-awkward, it can still be very difficult to get users to respond to insights outreach….
How did you get 500 people to talk to you?
We launched it as a private beta for 100 moms in the Bay Area. I myself went to 60 of their homes and talked to them in person about how they used the app. Asked them what they would like to see for it to be extremely useful to them for selling and buying kids items.
How did we get them to talk to us? We incentivized the participation in the beta, and by agreeing to participate, they were also agreeing up front to have those conversations with us.
I’ve learned so much from my users, and not just about our product. The best part is that they are all actually GREAT people.
It was an eye opener for me, being an immigrant parent and not originally from the U.S. For example, we learned that lot of our users (moms) in the midwest get a weekly spend budget, between $30 – 40 a week, to shop for their kids. Totspot will see a spike between Thursday evenings and Saturdays because many of the dads in that region get paid on Thursday afternoon.
We learned this from having those many direct conversations, and it’s rewarding because it not only lets us make the product and commerce experience better, but also shows us that we are building something for real people and families.
Ok, we know that all of 500 Startups is amaaaazing, but what was your favorite part?
The 500 Network, definitely. We had people we could talk to. Some of these people have looked at so many startups — why wouldn’t you leverage a network of people who have done it and know it?
Our success with the Accelerator was a combination of us wanting to build a really good business with lots of discipline, plus the sincerity of mentors.
When someone’s going out of their way — driving from San Francisco to Mountain View through peak traffic just for their meeting with you, or doing a call with us at midnight London time because that’s when we could do it — you want to be sincere and do your best.
We were very humbled by the sincerity that the mentors showed us. It’s about not accountability so much. If you don’t do something, no mentor is going to come after you.
Not only are they subject matter experts, but they’re spending their time with you when they could be with friends or family or building their own business.
Now I want to give back to the other founders. So come talk to me about unit economics or cohort analysis or distribution for your mobile app!