When Rahul Bijor of Uber API, Leore Avidar of Lob.com, and Adam Jackson of Doctor on Demand took the stage at the On-Demand Conference on May 19th to talk about their company’s growth strategies, they would reveal how different their company’s paths had been. Lob is a relatively new company offering a direct mail API, who wants to grow by helping other companies to grow. Uber API focused their definition of success to a single moment, and crafted a philosophy for forming partners. Doctor on Demand had to craft their own pathway to growth, with each step marked by a overcoming the barriers to user adoption.
Each company exists in a new market where the roadmap is somewhat unclear. And so, each has formed their own path to their own coherent growth strategy, more a continuous narrative than any single hack.
Engaging at the moment of need
Leore Avidar of Lob.com and Rahul Bijor of Uber API each described a similar growth strategy with their API, wherein they each sought to provide solutions to customers at a time of need. The moderator Aunkur Arya noted that as Uber was a late-stage company their API strategy was likely already defined, and asked about what it was. Rahul Bijor described the philosophy for Uber’s API as seeking to connect with partners who were engaging customers “At the moment of travel”. Their growth strategy was informed by creating partnerships with companies that were also in the business of “Moments of Travel”. Bijor used Uber’s early partnership with OpenTable as an example, noting how effective it was to reach out to those that had already booked a table as an alternative to driving themselves and paying $10 for parking.
“We seek to provide value to users at the moment when they don’t know who we are.” [Tweet this!]
— Rahul Bijor (Uber API)
You could say that their presence at the On Demand Conference itself was a good example of Lob’s growth strategy. With so many operators and investors of companies that were focused on city expansion in the audience, Leore Avidar, CEO and Co-founder of Lob, infused his responses with specific details about the value of the Lob API: a 0.5% — 0.9% conversion rate for the first batch of postcards, before optimizing. The cost of acquisition was about $50 — $80 per customer, so ideal for services with high LTV. The result: A scalable way for companies to expand to new cities.
“The first time you get handed a calculator in math class you keep using and learning with that calculator forever,” said Avindar. “We want to be the API for mail, one that scales as you grow and when you want to do more things with your content and outreach.” Avidar was in the right place at #odc2015, as so many of the panel discussions at the conference seemed to feature City Expansion as key topic. By their presence, the Lob team was indeed meeting their customers at their moment of need, as they had perhaps the largest booth presence at the On Demand Conference. (Hot pink “Pursuit of APIness” t-shirt, anyone?)
“Sending out a million emails is trivial. Sending out a million post cards is very hard. We set out to make the process easier.” [Tweet this!]
— Leore Avidar (Lob)
Overcoming barriers as growth strategy
As a user, Doctor on Demand may seem simple at first — within a few minutes you can be live-video chatting with board certified medical doctors or therapists. The problem of getting a user to actually try the service is a problem of risk management. “40 dollars is not a lot of money to see a doctor”, Co-Founder Adam Jackson said. “But 40 dollars is a lot of money to give to an app. There is greater risk involved for the customer. What if it doesn’t work out and you are still sick?”
Jackson emphasized that the core of what his company does is change consumer behavior. “We backed our growth strategy up from there, by asking what we could do to lower barriers for our customers.” This strategy resulted in a three-legged growth strategy that focused on working with insurance companies to lower costs, on their net promoter score to generate referrals, and on partnerships with self-insured companies.
In seeking to improve their net promoter score and boost referrals, Doctor on Demand found usefulness in traditional channels that might have been forgotten by the Silicon Valley mindset of today, namely in direct response television, local news PR, wallet cards for insurance agents and local influencers. This focus paid off, as Doctor on Demand found that the users who had been referred were much more likely to become repeat customers. Working with insurance companies was admittedly a struggle, but they did succeed in driving costs down for customers. Offering Comcast employees their service validated their brand and provided them with a playbook for enterprises.
On building trust: “Mommy bloggers love us.” [Tweet This!] — Adam Jackson (Doctor on Demand)
Doctor on Demand is an example of how the difficulties experienced during growth can lead to strengths as they are overcome. Jackson spoke to how their playbook has become more comprehensive as a result of their unique struggles. “Our efforts have become more coordinated. We have learned how to speak to different kinds of people, from enterprise to call center to customers.”
The growth roadmap that Doctor on Demand must travel is different than, say, Uber. When you are standing on a street corner and hoping for a ride, you are in a moment of travel and are looking for someone to pick you up. When you are sick and wondering what is wrong with you, you are in a moment of risk and are looking for someone you can trust. They are different problems with different paths to growth.
Funds and Growth
As the CEOs of rapidly expanding early-stage companies, Avidar and Jackson were asked about their approach to raising money and managing their burn rates while striving for rapid growth. Their responses revealed some key differences between their businesses.
Leore Avidar, Lob: On the one hand it’s great right now with these crazy valuations, but on other you have to be realistic. High-valuations make it harder on yourself. You have to take a step back and ask yourself if it makes sense. Will I provide enough value to VC in the next round? Or the round after that? There is lots of capital available, but be cognizant of burn rate.and keep it as low as possible. Amazon (Avidar’s previous company) taught me about frugality, that things can change in a split second.
“Don’t focus on money, provide value
and VCs will come.” [Tweet This!] — Leore Avidar (Lob)
Adam Jackson, Doctor on Demand: Now is a great time to raise money. Load up on cash when you can. We’ve seen the downtimes in 08 and 09. “I’ve done this wrong before so I’ll do it right when I can.” Yes, manage your burn and have a long runway ahead of you. Also, have an intimate knowledge of your Lifetime Value and be able to defend that. Your story doesn’t have to be a net positive story while you are figuring it out. You might even spend unreasonably while you are proving it out. Your economics don’t need to make sense so long as you have a scalable story in your future.
“If you’re in a new market, you have a bit more time… but there’s always a clock ticking somewhere.” [Tweet This!]
— Adam Jackson (Doctor on Demand)
What is your general advice to companies in the on-demand sector?
Rahul Bijor, Uber API: We use the spaghetti principle, where we throw things at the wall and see what sticks, and derive our learning from that. Our partners large and small help us inform our product roadmap and fix bugs.
Adam Jackson, Doctor on Demand: Focus maniacally on a great experience for users. We are obsessed with our net promoter score. Uber is a good example, where someone would take an Uber to a party and tell friends about Uber when they arrive. Those are the kinds of experiences we are looking for.
Leore Avidar, Lob: Focus on what you need to, outsource what you can. There are lots of great APIs out there that can help you in business, so you can focus on your key product.
What does the future hold for your company?
Rahul Bijor, Uber API: We are thinking of new ways to meet our customers in their moment of travel even if that moment is in the future. [Tweet This!]
Leore Avidar, Lob: We are developing a suite of APIs around our print API. A complimentary API is being released very soon. [Tweet This!]
Adam Jackson, Doctor on Demand: We look forward to connecting new technology like thermometers and glucose meters to our service. [Tweet This!]
This post was written by me, Logan Johnston. I do growth at Tradecraft, and I believe in contact. Thanks to Misha Chellam for help editing this post.
You can find the full list of posts about the On-Demand Conference here.