Doing a consumer startup? You won’t make it without a daily use case.

(this first appeared as a guest post on BostInno)

Common startup stories go something like this: the founder has a problem in their life, and creates a product to address it. Maybe they had trouble planning their vacation or couldn’t find a vegan restaurant. An example I encounter a lot is the so-called “things to do” problem. “I’m bored, I want to find something to do this weekend.” It’s alluring and sexy to tackle problems like this. They’re fun.

Here’s the harsh reality: Unless your product has a daily use case, you won’t make it.

I learned this the hard way. I was the co-founder of goby, a moderately successful “things to do” app. (Note: Consumer startups are “winner take all” – you either have tens of millions of users or you run out of money. A “moderately successful” consumer startup is one that doesn’t make it.) I’d like to share a bit of our path in hopes others can learn from it.

Goby started life at MIT with serious tech that produced highly structured, semantic data from the unstructured jungle that is the web. We set out to build a travel startup with a focus on events and activities – from concerts to beaches to hot air balloon rides. Events and activities is a multi-billion dollar market with no brand owning it. Our economic case was built on the affiliate/lead-gen model – we’d refer people to providers, be they hotels or tour operators, and take a 5-10 percent cut of the booking. And maybe run some ads.

We launched the company and had solid early success – press from Robert Scoble, TechCrunch, theNew York Times, you name it. We raised a reasonable amount of funding, and grew our audience to over one million monthly app/web visits. Not bad. Not enough. Even at that scale we couldn’t generate enough revenue to be self-sustaining, or to raise financing to keep the company going. Eventually we were acquired by Telenav, a publicly traded GPS Navigation company. It was a great run, but ultimately not a success.

The biggest challenge for a consumer company isn’t building a great product, it’s acquiring users.

A full post-mortem of those years is outside the scope of this article. I want to focus on one topic: the customer/product adoption lifecycle and what it means for your startup.

The biggest challenge for a consumer company isn’t building a great product, it’s acquiring users. Product, as hard as it seems, is the easy part. It’s hard to overstate how difficult it is to get a million people using your product. To get a consumer A round done, you need millions (plural) of users (or have proven monetization).

This is how early adopters experience your product: they read about it on, say, a BostInno article, or hear about it from an enthusiastic friend, and try it out. In our case, they’d say, “Oh, a cool new travel planner!” They try it out, then say to themselves, “next time I plan a trip, I’ll use that.” Here’s what we encountered: People travel twice a year (often to a place they already know). So when they had a need for goby, it’s been six months since they heard about us and they’ve forgotten!

Watching our analytics we saw people were searching for things to do in their local area, not travel destinations. So, we pivoted out of travel and into a local “weekend recommendations” angle. Our use case became more frequent, but still not daily. In principle people have free time every weekend. In practice, it’s often time spoken for – housework, family obligations and so on.

People are busy. They have a problem and want a solution quickly. If you’re top of mind when they have that need, you stand a chance. If your use case is twice a year, or even once a month or every other week, they’ll have forgotten about you by the time they need you. Ben Yoskovitz captured this “attention economy” admirably in his post Grabbing Attention and Holding Onto It.

If you’re doing a consumer startup with no clear revenue model and without a daily use case, just stop.

Look at the “unicorn” consumer companies; there’s a common thread. Snapchat? I communicate with my friends every day. Instagram? I take photos all the time. Dropbox? I save files every day. Pinterest? I bookmark things every day. Foursquare & Yelp? Yes I eat every day, and go places every day. Concerts? I go to a lot of concerts, but it’s still one every other month or so. By the time I want that information, I’ve forgotten about that cool new concert finder …

Are there exceptions? Yes. Do you have a clear and proven monetization path? You might be able to arbitrage (buy) your way to success, if your cost of acquisition is less than your revenue per customer.

What does this mean for you?

If you’re doing a consumer startup with no clear revenue model and without a daily use case, just stop. Pick a new problem, or find a way to convert your problem into something closer to daily. My new startup, The Hawaii Project, discovers great books for you to read. I know people don’t pick new books every day. So I’m focusing on providing topical, interest-driven news on a daily basis driven by your reading interests, to stay top-of-mind until that time comes. Find an angle where you have a reason to be in touch with your customer every day.

More broadly, it’s common to think of your product as your mobile app or website. In today’s context-driven world, this is the wrong way to think about it. Your real product is your first-time user experience and your contextual notifications and alerts. That is how people will engage with you and remember your app.

Deliver real value on a first time visit, proactively re-engage with them and you’ll earn their attention.

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