I lost $300k on a project... 3 lessons I learned:

Hello!
My name is Igor, I'm 27 years old, I'm from Ukraine. I invested $300k in the project and closed it without earning anything.

What did we do?
In 2019 we made “Uber for plumbers.” Is your pipe leaking? Leave a request and the master will be there in 20 minutes.
The project was really cool! The average score in Google reviews was 4.9 with 395 reviews.

Team.
Founder (me)
Product owner - $2500
Marketer - $2000
Two programmers - $2500 + $2500
Three managers - $1000 + $1000 + $1000

Salary expenses are about $13k per month + advertising expenses.

Bottom line.

• 1.5 years of work
• 300k investments
• 2k revenue
• 10k+ satisfied clients
• closed project
• depression for 3 months

Why did this happen? 3 reasons:

1. Obsession with development.
   The idea was that we would make such a convenient product that people would just shout about it in the streets. Call your grandmother in a neighboring city and share the great news about how the toilet was fixed.

We spent a lot on development, improving the landing page and functionality. As a result, this did not significantly affect the conversion from visitor to client.

In fact, the client does not care about the product, he has his own problems.
You solve the problem perfectly - you get your money, no one will shout about you in 99.99% of cases.

2. Lack of a marketing strategy.
   As is clear from the paragraph above, our marketing strategy was “a good product sells itself.”

We hoped that there would be virality and clients would bring new clients, and masters would bring new masters.

By the way, this is why we have such revenue. We didn’t take a commission from the plumbers for a year, we thought they would be more loyal that way.
It turned out to be in vain, after the introduction of the commission, many masters simply left and we had a lot of problems.

As a result, we became fixated on one source of traffic (Google Ads) and spent almost the entire budget there in the negative, not understanding how else we could advertise the product.

3. Main reason: Lack of understanding of the target audience.
   Essentially, when you don’t know exactly who you are making a product for (often the wording is “everyone needs our product”), then you don’t know what to develop and how to advertise.

Somewhere after 1 year of work, we started conducting in-depth interviews with clients, did about 50 of them, and this is what we found out:

A) The market size is much smaller than we thought.
We thought: Kyiv, 1 million apartments = 1 plumbing breakdown per year = 1 million orders per year.
The numbers are correct, BUT most of the breakdowns (50-60%) are repaired by fathers or other skilled relatives, that is, these orders do not reach the plumbers.

B) Those who are willing to pay for quality have their own plumbers.
Property owners take care of the property and have plumbers they have worked with for years.

Case No. 1: a man has 10 apartments and rents them out; over 20 years of such work, he tried 5 plumbers and chose one with whom he has been working for 15 years.

Case No. 2: a family bought an apartment, while they are doing renovations there, they suffer and go through different craftsmen, but in the end they find good ones and complete the renovation. After this, they already have a contact with a good plumber and they call only to him.

The 2 most profitable segments are simply not looking for a master on Google.

C) Who mostly searches for plumbers on Google?

• those who recently moved to the city and do not yet have contacts
• those who are looking for cheap plumber (after all, normal ones have already refused them)

Having identified 3 customer segments and realizing that we had the most unprofitable one, we decided to close the project.

In short,
we thought we needed “a polite plumber who will arrive quickly.”
But it turned out that they needed “a time-tested plumber, it doesn’t matter that you have to wait a week for him.”
Speed of arrival (our main feature) is important in rare cases - approximately 10% of all orders.

P.S.
We had a rating of masters and I still have the data. Therefore, if a plumber breaks down, then I call the best master in Kyiv. I often joke that I spent 300k just for this :D

P.P.S.
Everything you read is true, but it's an advertisement :D
Now I am developing a service that helps Founders avoid the mistakes I made:

• know who your target audience is and where to find them
• have a marketing strategy and build a customer supply system

Want to know more? Visit: https://m1-project.com/
Want to chat? Here you go https://www.linkedin.com/in/igor1313/