12 Things You Should Know Before You Launch an App
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You're launching an app? Great! Here's a summary of the 12 most important things you should know about before you launch. This deck was presented at the Google Campus for entrepreneurs in London in May 2016.
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12 Things You Should Know Before You Launch an App
- 1. 12 THINGS YOU SHOULD KNOW BEFORE YOU LAUNCH AN APP MARIE OUTTIER FOUNDER @ WISEMOBILE 11TH MAY 2016
- 2. 1 . “ BU IL D IT AN D T H EY W IL L C O M E” Copyright WiseMobile ltd
- 3. “ AL M O ST AL L F AIL ED ST AR T U PS H AD A PR O D U C T W H AT T H EY D ID N ’ T H AVE IS EN O U G H C U ST O M ER S” Copyright WiseMobile ltd
- 4. 2 . AC Q U ISIT ION IS A J O U R N EY Copyright WiseMobile ltd
- 5. - Time + Minimum Viable Product Soft launch, and full launch Sustained acquisition Steady state -Volumeofcustomersacquired+ Copyright WiseMobile ltd
- 6. 3 . D O YO U R H O M EW O RK Copyright WiseMobile ltd
- 9. T H E B U L L S E Y E M E T H O D O L O G Y SOU R C E: “ TR AC TION ” 19 channels 3 channels 1 channel Copyright WiseMobile ltd
- 10. 4 . D EF IN E YO U R T R AC T IO N G O AL
- 12. Be wary of vanity metrics Copyright WiseMobile ltd
- 13. 5 . T H O U SH AL L KN O W T H Y AD VER T ISIN G U SER F U N N EL Copyright WiseMobile ltd
- 15. 6 . U N D ER ST AN D KEY M ET R IC S F O R YO U R A P P Copyright WiseMobile ltd
- 16. C U ST O M ER AC Q U ISIT ION C O ST ( C AC ) 500 Installs $2 CPI 250 registrations $4 CPR $1000 Budget In this scenario the “real” CAC =$4 Copyright WiseMobile ltd
- 17. CUSTOMER LIFE TIME VALUE (CLTV) “All the revenue a single consumer will generate from the time he or she downloads the app until it’s no longer used” Copyright WiseMobile ltd
- 18. LTV/CAC > 1 ? Copyright WiseMobile ltd
- 19. 7 . T H E IM PO R T AN C E O F T R AC KIN G AN D AT T R IBU T ION Copyright WiseMobile ltd
- 20. C905C11D-CD01-4E6A-826D- 09B324183740 T H IS IS A M O BIL E D EVIC E ID Copyright WiseMobile ltd
- 23. 8 .BE C O M F O R TABL E W IT H BEIN G U N C O M F O RT ABLE Copyright WiseMobile ltd
- 24. LUMA landscape 2014 Copyright WiseMobile ltd
- 26. And it keeps changing….. Copyright WiseMobile ltd
- 27. 9 . EVER Y T R AF F IC SO U R C E IS VAL U ABL E AT A C E R T A I N P R I C E P O I N T Copyright WiseMobile ltd
- 28. $10,000 $0.75 13,333 14% 1866 $5.35 $10,000 $3.45 2,898 60% 1739 $5.75 Budget Cost per Install #Installs % loyal users #loyal users Cost per Loyal Users Low quality traffic Targeted traffic Copyright WiseMobile ltd
- 29. 1 0 . YO U N EED D AT A T O O PT IM ISE Copyright WiseMobile ltd
- 30. Impressions Clicks Installs Registrations $ Remember how the funnel works! Copyright WiseMobile ltd
- 31. 1 1 . S A T U R A T I O N I S A B * T C H Copyright WiseMobile ltd
- 33. 1 1 . AS YO U SC AL E, Q U AL IT Y W IL L G O D O W N Copyright WiseMobile ltd
- 34. 1 2 . R EVISIT YO U R G R O W T H ST R AT EG Y EVER Y 6 M O N T H S Copyright WiseMobile ltd
Editor's Notes
- Hi guys, I don’t want you to be exploited. This business. An emotional value is super important. What are you trying to convey? Trying to move people. Even when Let’s start on time because there’s a Yoga session coming up next here :) So the next 45mn are going to be a beginner’s guide to marketing your app. We’ll go through a list of 12 tips about app marketing and we’ll have a Q/A at the end of the session. A quick introduction from my side first: my name is Marie, I’ve spent the last 3 years helping mobile apps and games acquire users globally. I worked for a major mobile marketing platform and as of 6 months ago I started consulting app entrepreneurs to help them on their way to traction. I’m also a member at the google campus, and use the facilities downstairs to work on a new project, and as part of my frequent visits I noticed there were a lot of new app startups on the campus, a lot of which hadn’t yet reached the stage of ‘going live’. Being invested with the google campus community here, I’ve been asked to share my experience with entrepreneurs who are new to this field, so hopefully you’ll learn something new today :) Just a quick show of hands to start with: who is currently working on the development of an app? who already has a live app? who has already spent some marketing budget on user acquisition?
- The first of the top 12 tips is to put this mentality behind you. You can’t just wait for users to come to you. You have to go out and get them. The ugly truth is that you’re going to have to spend money to get your product out there. And how efficient you are at spending this money will define whether your app has a chance of making it. At the end of the day, it is about how you can manage your financial resources effectively to demonstrate value, to prove traction within a restrained budget.
- “All failed startups had a product What they didn’t have is enough customers” “Customers determine our success” Moto at GE
- You won’t get it right the first time For your app to be successful you’ll need to verify two things: 1) product risks (that customers want what you’re building) 2) ) market risk ( that you can reach customers in a sustainable way).
- From the first version of your product, MVP, to the steady state where you’re getting millions of users, you’ll change your marketing mix, audience, app features, messaging a plethora of times. Following the 50/50 rule throughout this journey means marketing will engineer the success of your product. “Reid Hoffman Founder of linked-in said “ If you’re not embarrassed by the first version of your product you’ve launched too late”. Consider that you’re product product is a leaky bucket.
- Start by researching what marketing channels exists. You need to understand the ecosystem before you can claim to own it: “What are the choices I have as an app entrepreneur to promote my app?” It’s your lucky day, because I’m gonna make this part a lot easier for you: 2 guys have already done your homework, all you got to do is read their book
- This book has been written by 2 serial entrepreneurs who have identified 19 traction channels that are the most used for startups. Those include: ASO, viral marketing, in-App advertising etc
- There’s lots of different channels you that exist and that could be right for you. You’ll notice that “Growth hacking” isn’t on this slide, because growth hacking isn’t a channel. It’s a creative use of any of those channels that doesn’t imply spending large amounts of money. So if you’re wondering, you could theoretically “growth hack” any of those channels. But that’s the subject of a different talk entirely :) To device which one are right for you, the authors of the traction book, offer a framework which is both super easy to follow and very helpful because it gives you a methodology for growth. It’s the lean startup equivalent for marketing. Which is called bullseyes.
- Here’s an exercice for you after this session: 1) Write down the 19 channels 2) Find an idea for how you would promote your app within each of those channels. 3) Select the 3 most promising channels according to your traction goal and run a test with no more than $1000! 4) For each of those channels you a test on you need to be able to answer the following question: - how much will it cost to acquire customers in this channel? - Do I think they are the right types of customers (Quality? Retention?) - How many of those customers could I get if I tried to scale this channel? And assuming 1 takes off, you focus on that one. You DROP EVERYTHING ELSE AND FOCUS ON THAT ONE. AND REALLY TRY TO COME UP WITH THE TACTICS THAT CAN GET YOU TO MAXIMISE THIS CHANNEL FOR YOUR GOALS.
- What does traction mean for your company? People have legitimately different goals! Your goals could be: - To get enough traction to raise money - Or you already have funding and you want enough users to prove your model to get enough traction to be profitable Whatever your goal is, you need to figure out what it means in terms of hard numbers. Else there is no way for you to know whether you are on track or offtrack.
- 1)You need 10k downloads within your $10k budget. Your average CPI should be no more than $1 2)You have $10k budget and want $2.00 CPIs You can only have 5000 downloads 3)You want 1m downloads at $1, you’ll need to spend $1m (and good luck finding that volume at that price!) A word of caution: Be wary of Vanity metrics VS tangible , Actionable measurable ones -
- That’s what vanity does to you. It flatters your ego but is superficial It’s very easy to get complaisant and satisfied with having a high number of downloads. It’s an ego boost, but it’s worthless without strong retention. Downloads per se mean nothing these days. Retention of users means a lot more. When defining your traction goal, whatever your app is you can rely on 2 things: you’ll need to prove you have a product people want (downloads) first step of engagement You have an app people come back to attractiveness + stickiness i.e. long term value Another way of looking at it is: value hypothesis, growth hypothesis.
- That’s a what a user funnel looks like. An inverted pyramid. Not everyone who sees your ads will click on the ads. In fact there’s only X who do. Then start spending low level budgets on Facebook. It’s easy to set up, all you need to do is go into power editor and put a $100 budget - selection an audience, come up with a creative and let it run. Post download events: Use your organic users as a benchmark VS paid users. Organic users a non paid users.
- the life of an app entrepreneur is paved with metrics. But let’s not get lost in translation and focus on 2 metrics: Customer Acquisition Cost and LifeTime value.
- Let’s take an example of a $1000 budget. Your traction goal is to get as many registered users as possible within this budget. Assuming you pay $2 per install and your registration rate is 50%, you get 500installs and 250 reg i.e. a cost per registration of $4. You CAC is that , not $2.
- OVERSIMPLIFIED DEFINITION OF LTV IS “All the revenue a single consumer will generate from the time he or she downloads the app until it’s no longer used”. LTV is imprecise. Because it’s complex. It’s measured over multiple purchases and assumptions are made about the repeat rates, and depending on what your business model is, LTV can be based on churn rates, which are notoriously hard to predict in an early-stage business. The Payback period may be long even if LTV/CAC is large, and having a long payback period requires you to be able to raise capital to fund this deficit period. So if you’re able to raise easily no problem. If you can’t raise — you’re dead. End of story. As Marc Suster, the entrepreneur turned VC, puts it: “misunderstanding your startups metrics can cost you your business.” I recommend you read this to get more insights.
- In the example of Dripp App: is every user you acquire bringing you more than $4 in his lifetime in your app? The last tip about measurement of performance is about tracking and attribution
- Attribution is matching a download with the source that generated it. You can’t improve what you don’t measure. Data trumps EVERYTHING. Now… attribution is unequal across the different marketing channels you use: some
- On iOS its called an IDFA, on Android it’s called an Android referer. This number is pinged to your backend system everytime a user downloads one of your apps. And it’s not just used at the moment of the download. With device IDs, you can track the entire journey of your users within your app.
- You can track the different stages of engagement of your users. With this information, you can start creating cohorts of users who have gone through the entire engagement funnel and those who haven’t. Not collecting your IDFA or not knowing about them, is the one biggest rookie mistake. I’ve worked with clients who had had their app downloaded 1 million times, but who hadn’t recorded device ids. There are a number of sophisticated advertising networks who support custom ID uploads, which means once you’ve segmented your data, you can reengage with your churned users later on, and that costs 1/4th of the price of acquiring a brand-new user! So how do you do it? 2 ways: the first one is to get your devs to collect this data in the back end. They will collect device IDs of all users who have ever downloaded your app. But you also need an attribution piece. Without it, all of the IDs you collect will be marked as “organic” i.e. there will be no way to differentiate the source responsible for generating the download. A few attribution tools you can use: singular, Adjust, Appsflyer, just to name a few. SDK
- They all give you the ability to collect device IDs and attribute them to the source that generate it. So let’s stop here for a second. At this stage, if you’ve implemented what we described in the earlier pages, you should have: a traction goal 3 channels to test, and 1 that you can drill down on a clear idea of what moves the needle for your business (registered users, paying users, whatever it is) an understanding of how to calculate CAC and LTV and a tracking solution in place. So you’re ready to get going. Now you need to put yourself in a mindset where you’re confortable with being uncomfortable
- What does that mean? Get out of your confort zone You’ve already done it when you picked the channels that aren’t overcrowded by your competitors. But quickly you’ll find there are forces pulling you back to ‘normal’. If you pick the channels everyone else picked, you’ll feel safe. It’s human. Drew houston the CEO of Dropbox did it, they chose SEO to promote their product because he worked at hotspot before and that channel worked wonders! But it was a mistake they quickly found that SEO wasn’t getting them anywhere because no one was looking for solutions to store your pictures on the cloud. It happened to the best of the entrepreneurs so expect this need for “normality” and confort will happen to you to. Choose normal? Perform normal. Now let’s assume the 1 channel that came out was Mobile marketing. Great. You ran a little test with Facebook (not because everyone else is using it but because it made sense to test a low level budget on a channel that was easy to switch on yourself and has no daily minimums) and thought it looked promising. You’re ready to expand and try some new networks. Well this is what you’re looking at:
- That’s the industry we’re in.Yes. Really!
- Let’s take the example of a $10,00 budget. Imagine you spend this budget entirely on a highly sophisticated non-incentivised traffic source, it could be Adwords, it could be Facebook or RTB. On the other hand you spend the same budget of a low quality, fixed Cost per Install incentives traffic.
- With the same budget you can different impact. You can end up having more loyal users with a lesser quality traffic source. And we’re not even talking about the impact on rank here, but doing such a campaign could get your app to rise in the top charts of your category, thus exposing it to the masses ==> generating an organic uplift which will have the effect of reducing your overall CPLU. Forget your biases and let data do the talking.
- You need a statistically significant amount of data to be able to optimize. If you’re running a campaign yourself: you’ll spend $200 a day across 10 different publishers. $20 each a day. After a couple of days where you’ve been able to consistently collect data points indicating whether or not this publisher was delivering volume and quality of users, you can decide to cut them or continue. Or if you’re working with an agency, they will do that for you. But you can’t cut down and get straight to the good stuff. The more sophisticated the channels i.e. the more targeting capabilities they offer, the more exploration will become important. And to move from exploration to decision, you’ll need to gather sufficient amount of data points. Often I get asked the questions: how much time do I need to let it run for? Think more in terms of $ spent = Data collected. how much $ do I need to spend to collect sufficient amount of data? If you have a 10k budget and that’s all you have, don’t spread it over 8 months, else you’ll get too little data to optimise quickly! On the other hand don’t spend it all in one day, you won’t have any time to optimise. 3-4 weeks with a $10k budget and weekly optimisation is sufficient. The more you spend a day the more often you’ll need to optimise. For our biggest clients we optimised campaigns on each of the networks they were running once day. With 8 -12 channels running at the same time and being interdependent from each other, it can get complex quickly at scale. You need to spend $1000 at least on each channel. Networks ask to have a $5k budget. They need to know you’ll be willing to spend this if the channel shows good results.
- That’s a what a user funnel looks like. An inverted pyramid. Not everyone who sees your ads will click on the ads. In fact there’s only X who do. Then start spending low level budgets on Facebook. It’s easy to set up, all you need to do is go into power editor and put a $100 budget - selection an audience, come up with a creative and let it run. Post download events: Use your organic users as a benchmark VS paid users. Organic users a non paid users.
- Saturation will hit you like a hammer if you’re don’t anticipate it. Your costs will start to creep up, and where you used to pay $3 per install you’re now paying $5-$6 for the same quality of users. You can fight back saturation by updating your creatives Your audiences… but also: Your channels. Be the guy that doesn’t stay until the end of the party
- Leave when the food on the table is becoming is running out, and go and find where the next partie’s at. A day will come where you will need to scale. That will be an exciting day
- The definition of traction keeps changing as the environment gets competitive. It’s all about staying alive long enough to find a business model that actually works. “Never stop testing, and your advertising will never stop improving” David Ogilvy. Thanks