I built an app for kids that created a family currency where kids would pick the chores they wanted to do each day, earn points based upon the difficulty of the chores, and then those points could be redeemed for real-life rewards that they also chose - hosting friends for a sleep-over, a fishing trip with Dad, learn a new card game with Mom, screen time, etc.
The problem came with the marketing. When I did my due diligence before building the app, it seemed cost per click for ads was around 20 cents per click. 20 cents * 2% conversion rate = $10 cost to acquire customer. My lowball avg. lifetime value of a customer was $18 if customers stayed for 3 months on average. $10 / $18 seemed like a decent ratio, and if I could get the conversion rate up or the churn rate down, it could be a good ratio.
So I set out to build the app, which took about a year and half. But, when I finished the app and went to launch my marketing campaign, I was shocked when I saw the cost per click had skyrocketed to $2 per click, meaning my cost to acquire a customer was $100 with an average lifetime value of $18. My backup marketing plans were content marketing based, with a networking campaign with Mommy bloggers, but this takes a lot more time to scale your customer base than blasting out an ad campaign. This caused me run out of runway with my cash timeline, and so the startup failed.
I learned that its important to not get too heads-down coding your product - its important to review your growth strategy every few months while you build your product, because things can come up that can dramatically affect the speed at which you can grow, and that can jeopardize the whole operation. In my case, if I had noticed the ad costs climbing, I could have started networking with more people earlier, doing more content marketing pre-launch, and slowly increasing the size of my waiting list, or evaluating alternative marketing plans before my runway got so small at the end.
I don't think you can guess in advance which marketing channel is going to work for you, you need to experiment and see what brings results. There's a book Traction that goes deeper into this, if you haven't given up yet. Good luck, both in business and marriage! :)
Yeah, maybe so, I just haven't had the time to invest in that. My wife took a high stress / high pay job to support us temporarily while I built the app, and she was nearing burnout and it just was taking me too long to scale my customer base after the paid ads failure, so I had to put it down and go back to a 9-5 to protect our marriage. ;-)
haha yeah you might be right. Startups typically put a huge strain on the founders and their families. I wouldn't advise anyone attempt a startup unless they are in good condition mentally, physically, and relationally.
In my case, I wouldn't have been able to quit my job and attempt this startup in the first place if it wasn't for my wife taking that hard job for a couple years - so I felt like it would have been a bad idea to respond to her good deed by taking advantage of her and burning her out so I could have my dream.
The problem came with the marketing. When I did my due diligence before building the app, it seemed cost per click for ads was around 20 cents per click. 20 cents * 2% conversion rate = $10 cost to acquire customer. My lowball avg. lifetime value of a customer was $18 if customers stayed for 3 months on average. $10 / $18 seemed like a decent ratio, and if I could get the conversion rate up or the churn rate down, it could be a good ratio.
So I set out to build the app, which took about a year and half. But, when I finished the app and went to launch my marketing campaign, I was shocked when I saw the cost per click had skyrocketed to $2 per click, meaning my cost to acquire a customer was $100 with an average lifetime value of $18. My backup marketing plans were content marketing based, with a networking campaign with Mommy bloggers, but this takes a lot more time to scale your customer base than blasting out an ad campaign. This caused me run out of runway with my cash timeline, and so the startup failed.
I learned that its important to not get too heads-down coding your product - its important to review your growth strategy every few months while you build your product, because things can come up that can dramatically affect the speed at which you can grow, and that can jeopardize the whole operation. In my case, if I had noticed the ad costs climbing, I could have started networking with more people earlier, doing more content marketing pre-launch, and slowly increasing the size of my waiting list, or evaluating alternative marketing plans before my runway got so small at the end.