The Zero Dollar Web App
Alternatively: The Death of a web app dream.
This morning, I returned from my morning walk, threw down my iPhone, earphones and cap onto the dining table, sunk my head in my hands and told my wife “I can’t do this any more…”
As is usual on my walks, I listen to the excellent “Startups for the rest of us” podcast. I love Rob and Mike’s work, and for the past few weeks, I have been devouring their back catalog of shows — hoping, praying, that I can find the elusive core secret as to why my dream was on the brink of not working.
Here is my story…
INTRODUCTION
About 18 months ago, I decided to take a change in direction of my life. I had been running a quite successful small business that developed bespoke software for small and medium businesses. But after 25 odd years of doing that, I felt like I needed a change. I felt like I didn’t want to just be writing software to other people’s specs — I wanted to write software that *I* wanted to use and enjoy.
So I decided to make a drastic change. I would sell off all my clients, and my distributorship for accounting software, and focus on just writing web services and mobile apps that had been lurking in the back of my mind for many years.
Friends and family kept telling me that I was crazy to be doing this, to venture out into unchartered territory and turn my back on something that had worked well for me for decades. But I told them “No — I am forging my own destiny from now on, with no one else’s input but my own”. After all, didn’t all the popular books and blog articles espouse the thrill of living out your passions and building your dream? Success ALWAYS followed people who lived the dream. Didn’t it?
As it turns out — not always.
THE IDEA
One of the things that was always hammered into me by successful startups was: “Build something that you find useful, and other people will pay for it too”. Well, the week I decided to make the change, I also decided to do my taxes for the previous year — in the hope that I would get a small tax refund to help fund my dream.
As part of doing my taxes, my accountant asked me for my vehicle mileage, and percentage of business vs personal use so she could calculate my deduction.
Ugh! I remembered how I hated this task every year. Hunting through paper log books and receipts to find out how much I spent of my car for the year.
Then it dawned on me. If *I* hate it this much, surely other people would as well? I asked some business colleagues of mine, and they ALL said “Oh yes, yes, we hate doing that too”. Bingo. Here was a chance for me to build something that would help alleviate some pain.
Fully confident that I had a slew of business people who would willingly pay for a service to make life easier at tax time, I dived into building a web service.
A LOG BOOK IS BORN
It took me about a month of focused work to bring out the first version of LogbookHQ. I was proud of it. It was simple, it was easy to use, it was READY. It was August 2014.
I had to learn a new programming framework (Padrino) and new ways of hosting a web app on Amazon Web Services, but I managed to get over those hurdles with comparative ease.
Now, I thought, the hard work is done. I will launch, and I will await the masses.
How wrong I was.
THE LAUNCH
I decided that the app would be on a monthly subscription model. I decided that $5 per month would be a fair price for the service, and I would offer all new applicants a 30 day trial period to see if they liked it. Totally risk free (in my opinion).
I posted about the launch on my Facebook and Twitter feeds. I also created specific accounts for the web app on those platforms so that I could do pure marketing.
Yes, the books said just tweet about it to your thousands of followers and they will come flocking.
Crickets.
Nothing.
We had about three or four sign ups that week, but then it petered out to silence again. I was mystified.
ADVERTISING
Ok, I thought — probably just sitting back and waiting is not a good strategy, so I will get a bit more proactive and start doing some active advertising.
I decided to stick with Facebook advertising to start with, as I had some success with it for some other online sites that I had built.
I started a small Facebook ad campaign and released it into the wild.
Yay, there was signs of a pulse again. We received another spate of sign ups — probably twenty or thirty in the following 2 weeks of the campaign.
Oddly though, when I looked at the database usage, it seemed that people were just signing up, verifying their account, setting up their preferences, then NOTHING.
No one seemed to be adding trips or expenses into the system.
FIRST BUG
I decided I had to get some independent information on what users were experiencing, so that I could get to the bottom of this, so I asked my wife to sign up for an account on LogbookHQ and pretend that she was a user setting up an account.
She did so, and *BAM* I discovered that there was a silly bug in the web app that prevented a new user from entering their first vehicle into the database.
No vehicle, no tracking. THAT would explain why people were getting to first base and no further.
I sent out an apologetic email to the 40 odd customers we had, and automatically extended their 30 days trial period by another month. I didn’t hear back from any of them, and checking the database in the following days, it only seemed that one or two of them started entering vehicles and transactions.
Perhaps I had angered them too much that they had turned their backs on me. Fair enough. Lesson learned.
THE UX
I persisted with using my wife as my test guinea pig. She agreed that the web app was easy to use, but it still needed some more guidance for newbie users to find their way around.
As a programmer, I always fall into that trap that everyone knows how to use my software, so I took her feedback on board, and spent a further day or so modifying the web app to include little cartoon characters that would pop up at various stages and offer helpful suggestions to the user. After all, Basecamp had introduced cartoon characters in all their marketing and collateral, so it had to be a fashionable thing, right?
It seemed to work to some extent. New sign ups trickled in over the next couple of weeks, but it was still not up to what I thought was the potential.
GOING MOBILE
Sitting back and pondering the web app, it became obvious to me that being a purely desktop browser type app was not going to be the best long term solution.
After all, the most convenient way to enter your trip logs would be to do it while you were in the car! The web app was designed using a responsive Bootstrap based framework, so it could adjust itself to suit either desktop or mobile browsers, but I wanted to take it a little further.
I briefly though about creating a dedicated mobile app for LogbookHQ, but instead decided to make some adjustments to the responsive template to make it a little more mobile friendly. So much so, that when run, it was almost indistinguishable from an actual native app. I added mobile icons and splash screens, and tailored content to suit the different platforms better.
We changed our main site to highlight this. We also made some other changes to the landing page of our web app to include more screenshots etc.
Still the new sign ups were only dribbling in at a rate of one a day.
PLAYING WITH PRICING
We were now getting into October 2014. The web app had been up for nearly 2 months. Long enough that the initial batch of sign ups were going past their 30 day free trial.
As yet, no one had signed onto a paying plan.
This made me worry that our pricing strategy was wrong. Perhaps we needed to add the perception of value?
To that end, I made some more modifications to the web app — essentially creating two tiers. There would be the Basic plan, which only allowed one vehicle to be logged and expensed, and a Pro plan, which would allow multiple vehicles.
I thought that would cover freelancers and solo business people, as well as small businesses that would have, say, a team of salespeople on the road and needed many cars tracked.
I kept the basic plan at $5/month, and the Pro plan at $15/month. I also introduced Annual pricing, with basically 2 months free if they signed up and paid for a year in advance.
No change in rate of new sign ups. But at least the users who were still in their trial period seemed to be adding transactions.
FREE WEB APP PROMOTION
Because our revenue was still $0 from the web app, I was reluctant to throw any more money towards advertising or promoting it.
In fact, our Amazon AWS stack was costing around $100/month to host the web app, so we were already falling into the red.
Desperately, I searched around Google for cheap or free ways to promote our web app to the masses, and get more sign ups.
I came across articles like this and this excellent one by Justin McGill that listed over a hundred sites that I could promote my web app on.
The list was large and daunting, but I decided to grit my teeth and go through the list from top to bottom and do what it took to get the word out.
I spent the better part of a week creating accounts on all of the sites on Justin’s list, and submitting LogbookHQ to them.
Almost immediately though, I saw a significant jump in new account sign ups. We were getting 5 to 10 sign ups per day.
Hooray! Would this be the turning point I was looking for?
Nope.
It seemed that the same things kept happening. People would sign up, enter a transaction or two, then just let their trial periods expire.
DIRECT EMAILS
Around this time, I also integrated our web app with MailChimp. Every user who created an account also got added to our mailing list automatically.
I started sending out newsletters to everyone who had signed up. I thought keeping in touch with them would bring them back to the app and keep it fresh in their minds.
Although we got around a 40% open rate for our newsletters (which I am told is quite good), we never saw the usage go up.
Still at $0 revenue.
PIGGY BACKING
I have used Xero Accounting in my business for a few years now for our general accounting, and love the system.
One day the light dawned on me — Why not integrate LogbookHQ with Xero? That way when an expense is entered in one system, it will automatically go to the other. No double entry. More convenience.
Aside from that, I hoped that being an approved add on for Xero would help our marketing effort as our web app could be cross promoted on their site.
I dived into the Xero API documentation, and got in contact with their Developer Relations Manager.
I spent about 3 weeks modifying our code and integrating Xero into LogbookHQ. It all seemed to go well at first, but then a few issues cropped up.
Xero uses the OAuth protocol to authenticate the user — that means a side trip to the Xero site to grab the user’s Xero credentials each time a transaction was entered. Not really very convenient when you were in the car and just wanted to record, say, a refuelling expense. I wanted to keep things to one screen.
In talking to the Xero guys though, it turned out I could go the next level and become a Xero Partner App, which would mean I could store the authentication tokens and eliminate the round trip each time.
Fantastic, I thought, and modified my code accordingly.
But just as I had thought we were done, I was advised by Xero that I would need about 10 to 20 existing Xero clients to beta test the integration before they would give me the go ahead, or Partner status approval.
I really wish that I had known about this beforehand, so I could have prepared. But thankfully Xero offered me their developer forums to reach out for some beta testers. I did so, and we even offered a free 12 month Pro plan for any volunteers, but we only got about 7 or 8applicants. Not enough to complete their testing.
Back to square one. Revenue still $0.
PLAYING WITH PRICING (PART 2)
It was now December 2014, and I was rapidly becoming more and more dejected that I was merely going backwards in comparison the effort I was putting in.
In more desperation, rather than any financial shrewdness, I decided to make sweeping changes to the pricing of LogbookHQ and to set the Basic price to a mere $1 per month, and the Pro plan down to $5 per month. That is something like an 80% discount on regular pricing.
I thought at least SOMEONE would bite at that price and lock in a paid subscription. I stated that this was a limited time offer only, and sent out a MailChimp blast to past customers.
I left the pricing up until the end of January. Not a single user took us up on the new pricing.
Revenue still $0.
MORE PAID ADVERTISING
All right, it was now time to look at what venture funded startups were doing in comparison to my teeny little bootstrapped one.
All the ‘big boys’ seemed to be spending big on marketing campaigns, so I thought I would bite the bullet and spend some more on social media ads. I took about $1000 I had saved aside and put them into a combined Facebook and Twitter ad campaign.
This time I decided to be a bit smarter about it, and created about 2 or 3 different ads for each platform, and split test them to see which one worked better.
As expected, ads with pictures in them worked better than pure text, and strangely ads with pictures of people seemed to work LESS well that ads with pictures of screen shots. I assume this is because that people are interested in seeing what the app looks like.
I ran the campaigns for about 2 weeks. Got lots of likes and followers and saw another medium spike in sign ups, but still no conversions.
At this time, I also spent $50 on another site (which I forget the name of, otherwise I would post the link here) which promised to promote my site on various lists. There was some overlap with Justin’s list of sites I mentioned above, which I had already submitted to, but by this stage I was getting really burned out by marketing and decided to pay the $50 to hand off this task to someone else.
They did a fairly good job, and we saw another significant spike in sign ups. However, looking closer at these new users, it appeared that most of them were coming from the sub continent somewhere, and they were just signing up and not even entering transactions, so I assumed that they were paid shills that were purely stacking the numbers for some promotional sites, or that they were competing developers just checking out what was out there.
PRICING (PART 3)
I looked at the pricing again, and decided to split the different between our initial pricing of $5 per month and our crazy special of $1 per month and set it at $3 per month for the Basic plan.
I also wanted to try out a ‘Once Off’ price of $49 which would give you perpetual access to the Basic plan for a single payment, rather than recurring.
I know, I know — all the experts say that recurring is where it is at and to never offer a fixed price ever, but hey — what have I got to lose at this stage?
REACHING OUT
Being an introvert (INFP), I usually shy away from cold contacting people, but I was getting desperate here, so I downloaded a list of all users of LogbookHQ from our database.
I cross queried the list and separated out:
(a) Users who had signed up and used the system a little and let their subscriptions expire,
(b) Users who had signed up but hadn’t entered any transactions yet, and
(c) Users who had not signed on in over 60 days
There were about 60 to 80 users in each list, and I emailed each and every one of them individually to ask them why they had stopped using our app, and would could I do to make them come back again.
I got 1 response. ONE. From a guy who said he had simply forgotten to log in after creating his account. I thanked him for getting back to me and extended his subscription for another 30 days. He never signed back on.
Because I sent the emails from my private GMail account rather than MailChimp etc., I had no way to track who had opened or read my email.
AUTOMATION
Seeing that an actual human reaching out seemed to elicit no response, I thought I would see what automated reaching out would do.
I set up a bot process in LogbookHQ that would run every day and send out a reminder email to:
(a) Users whose trial was about to expire
(b) Users who hadn’t logged on in 30 days
(c) Users who had vehicle scheduled maintenance or insurance coming due
It’s only been running for a few weeks, so I have no idea if this will result in any conversions from trials to paid plans. But it costs nothing to run, and should have been there since day one anyhow, so I will leave it running.
SEO, SEO EVERYWHERE
I decided to step back a little from the whole web app and take a look at the landing page and main web site for the app. Was I saying enough there? Was I saying the right things?
I decided to throw out about 30% of what was there and try and re-write it from the user’s perspective, rather than mine.
All the books say that you should be talking about the pain points that the user is experiencing, and how you will solve it for them. So I got busy listing all the pain points that people had told me about their tax time difficulties with car log books.
I also diligently checked Google’s Webmaster Tools to ensure that I had the right keywords on my site and that there were no errors that would confuse their bots.
I also installed SumoBar on the main site to collect visitor email addresses and track hot spots. However, to date, only 3 visitors have left their email address for us to contact them.
RELEASE THE GOOGLE!
By now (May 2015), I was looking at the last of the spare money set aside for promotions, and thought about what I had and hadn’t done.
Well, the one obvious thing I had not done was to use Google AdWords as yet.
So I started an AdWords campaign, with about 4 different ad styles and wording so I could split test them.
Almost immediately, I saw a spike in the number of visitors to our site on Google Analytics. But strangely, that did NOT correspond to any increase in sign ups. We were steadily getting about 40 or 50 visitors to our site daily (up from 10 to 20), but still only one or two sign ups per day.
I had only intended for the AdWords campaign to run for about 5 to 7 days, but I stupidly forgot to deactivate it after that time, and only realised this week that the campaign had been running for the whole month of May, racking up nearly $1000 on my credit card.
Revenue still $0. Costs through the roof!
FINAL THOUGHTS
Well, it is now June 2015, and in a month and a half, it will be a year since we launched our baby web app LogbookHQ.
If you had told me back then that we would have zero users and zero recurring income in a year, I would have laughed. But nowadays I don’t laugh so much any more.
I still have one or two ideas up my sleeve to try out, including a referral programme to extend subscription times for users who refer others to the site, but by this stage it feels like we are just throwing the baby out with the bath water.
I have made the decision that if we still have no paid subscribers by August 2015, I will shut down the service and call it a day.
But hey, on the positive side, at least I won’t have to process any refunds! And I may still yet win a prize for being the only person to run a web app for one year and not get a single paying customer.
I expect that there are many other out there in a similar boat, with apps or web services that are struggling. It would be nice to share stories and reassurances that this is indeed a normal state of affairs. Reach out to me on Twitter @dsabar or via email devan.sabaratnam at gmail.
EDIT: 5th August 2015
Wow, since I posted the link to this blog on Reddits /r/startups channel, I have been inundated with messages of support and advice from developers and startup entrepreneurs every. To everyone — MANY many thanks for your kind and helpful words.
I wrote this piece nearly two months ago, on the very morning I had the ‘mini breakdown’ that I described in my opening paragraph. Re-reading now, I can see that it is quite dark and has a bitter/angry tone, which is NOT my usual writing voice at all. I considered editing the piece to make it more my normal tone, but then decided against it, as I wanted to leave it ‘as is’ so that when I revisit it in future days/years/months, I can measure how much things have changed since then.
Based on advice I have gotten, I am considering making the basic version of LogbookHQ a ‘free forever’ app, and adding some extra features for a premium version. I am going to leave off on active marketing and see how organic growth goes over the next few years.
I will continue to post updates on here as things happen. Thank you all of you again! The world IS full of special people.
