Pimp my startup - a new series.
You've built you're MVP, but haven’t generated the sales you expected nor reached profitability. Do you quit or keep hustling?
This is a common dilemma for founders. In this maiden issue of pimp my start-up we look at a fledgling app with exactly this problem: should the founders give up and move on, or can their marketing be optimised and fortunes reversed?
140canvas.com - a purple cow
The idea for 140canvas.com is simple, yet original. You design a customised tweet and for a reasonable price this is printed on a large A1 (or smaller) canvas and shipped to you. The concept is an example of what marketers call a purple cow: a bog-standard product made ingeniously captivating by a simple twist. Print shops offering canvas prints are ubiquitous: but the combination of a canvas print with a custom tweet is a great idea that feeds into a zeitgeist where social media increasingly impacts all aspects of life: what better novelty gift than a customised tweet?
The app underlying 140canvas.com is built in react.js, with the twitter API driving live customisation from real twitter accounts. The landing page is well executed- conveying the value of the product immediately, with a well-placed call to action and video on-boarding explaining how the product works: this is pitch-perfect UI.
Under $400 of revenue 3 months post-launch.
Purple cows normally sell themselves: unfortunately, 140canvas.com has struggled with sales, generating just 12 sales in the first 3 months of operating. To generate these sales, the founders spent $450 shipping large A1 canvases to influential youtubers such as Chilly (808K subscribers). This strategy payed off, with the canvases being featured in a number of videos leading to robust traffic. You can watch one of these videos here, with a snapshot of the site's traffic since launch, below:
A single youtube video led to 2 million people viewing the product, and collectively this massive youtube exposure generated just under 6000 motivated referrals to their website. From a marketing perspective, this is a home run, and a highly efficient marketing campaign. To get 6000 clicks through adsense and facebook adds would cost an order of magnitude times what was spent here. So 140canvas.com have a great product, and great initial exposure, but why have they struggled to sell?
Dissecting a low conversion rate.
Large commercial webcart APIs generate robust statistics about average retail conversion rates. You would accept an average retail site to convert somewhere between 1-4% of search engine and organic traffic into sales: this is for an average site. Had 140canvas.com achieved a 1% conversion rate (towards the lower end of average), they would have generated 60 sales ($1800 revenue) leading to a healthy profit and a positive return on their marketing expenditure. The gross profit would have been circa $540, with a net profit around $240 after recouping advertising expenses. Critically, at this conversion rate, it would be profitable for them to reinvest all profits into pursuing the same marketing strategy and growing sales.
Unfortunately, their YouTube videos only generated 6 sales, meaning their conversion rate is only 0.1%. This is ten times below what would be expected from interested referrals. How can we explain this? There are few potential causes:
A golden rule of marketing is to sell to people who have money, while adults would have no problem forking out money for a gift like this, the audience of the youtubers targeted are mainly children and adolescents: Chillie regularly receives Super Mario drawings. It could be their 6000 visitors like the product, but lack the disposable income to pay for it: like kids drooling over a videogame they can't afford until Christmas.
Secondly, there is something in how the product is pitched. In the youtube video, where Chillie shows off the product, there is a tension between Chillie who loves the gift, and her co-host who sees no value in a made-up fake tweet - 'but it’s not real' he keeps repeating. Indeed, the underlying value of social media is in how it captures organic and authentic memes of conversation. Could it be that pivoting the product towards capturing highly memorable authentic tweets would increase conversion?
Thirdly, the youtube traffic generated is significantly US based, while pricing is in British Pounds. The sales copy is also in British idiomatic language. You may think that small details like this won’t make a difference, but data from Chargebee a large payment processor suggest otherwise. Chargebee consistently finds localisation a significant factor influencing conversion efficiency, and estimate that product growth can be increased by 40% with localised pricing.
At WebAppPro we're optimistic that the fortunes of 140canvas can be improved with some adjustments, and have come up with a customised marketing strategy for the brand. We will review the company again in a few months’ time to see how they're getting on after implenting these changes.
What are you thoughts on 140canvas.com? Harry, the co-founder of 140canvas.com has kindly agreed to answer questions in the comments below. I would also welcome your thoughts on this new series.
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