By Elizabeth Yin (Co-Founder, LaunchBit) Happy New Year! 2011 was quite a ride for us at LaunchBit. Jennifer and I are so thankful to everyone who's helped us.
We started LaunchBit in January 2011 as a way to help entrepreneurs start and grow their internet businesses. This is a problem I've become really passionate about, as I've mentioned here. But, we didn't know exactly how to tackle this problem, because we didn't know *what*, in particular, entrepreneurs were struggling with.
We decided to hold a class on customer development and we built a customer development workflow-tool to learn what our customers were struggling with most. We built the tool and developed an outline for the class within 2 weeks and start doing some marketing simultaneously. We wanted to know if we could identify specific, large issues entrepreneurs were facing, as we helped people with their startups via the class and tool.
It was rather meta, because in true Lean Startup fashion, we decided that we would only start creating the class videos if more than a minimal threshold of people signed up. My bar was 5 people. Jennifer's was 30. Fortunately, we didn't have to negotiate this, because we exceeded both threshold numbers quickly.
In fact, between the class and the standalone tool, we generated $10k in revenue in the first month by acquiring customers through email advertising (which is now our business) and tweets from people.
In the public eye, we entered the 500 Startups accelerator program a few months later, and by the end of the summer, people learned that we were now an email advertising company. Whoa.
A number of our LaunchBit classroom customers called or emailed asking me what gives?
"I thought you guys did something really relevant for first time entrepreneurs and I was surprised to learn that you changed direction during 500Startups accelerator program. I was wondering if you could share this experience with me and your reasoning behind this decision?"
So in all fairness to our customers, I thought I'd talk about this pivot publicly. By February 2011, we already realized that we were barking down the wrong path for us. People paid for the course or the tool, but few people were "doing anything." We certainly had not implemented any hooks in our product to get people to come back, but with time, I think we could've iterated to improve engagement.
But, the main thing that bothered me was that not a lot of people taking our course or using the tool were even working on their businesses. I knew this, because I reached out to people personally and constantly talked with our customers to get feedback via Skype or phone.
Our audience was primarily folks who were working full time jobs, aspiring to leave to start a company someday. While I think it's perfectly fine to not actively work on a company or even ever start one, in my mind, helping people grow their companies now/today was what I personally wanted to do.
I wanted people to be able to use their knowledge right away. I wanted to be able to say -- hey, these are the companies/customers I'm helping. I wanted to have bigger and more immediate impact. But, because of our price-point for our class, the audience we were attracting was an audience that still held their jobs -- they were not entrepreneurs entrenched in building their businesses. And that meant doing a major pivot.
So between February and May, we developed content and held two LaunchBit courses, and in our spare time, we'd already started thinking and working on other ways to help entrepreneurs grow their companies.
We entered 500 Startups in May and isolated the problem we wanted to solve: customer acquisition. We spent all our time doing customer development and building prototypes around a variety of different ideas, including an optimization tool for Google AdWords, a 99Designs for Sales, a marketing automation tool, among many others -- about 7 ideas in total.
We gave ourselves until Independence Day to figure out what we were going to commit to, but July 4th came and went, and we still did not have a direction we felt was fleshed out and interesting. This was largely because we only spent a couple weeks of work-time on each idea and varying amounts of calendar-time to allow people to try our prototypes.
We decided we would miss Demo Day if need be, because it wasn't worth committing to something unless we both felt very strongly about it, based on customer feedback and our own personal interests.
By late July, we hit upon an interesting experiment. We helped a couple of companies promote their products via high quality email newsletters and were suprised by the high click-through-rates and conversion rates.
"Startup success involves luck, but the more experimentation you do, the more likely you'll get lucky." (tweet this)
From those initial experiments, we decided we had enough to build out a closed beta program to see if we could consistently repeat our results. In August, we raced to prepare for Demo Day, and our announcement effectively ended all previous explorations and certainly the LaunchBit Classroom and workflow tool.
"The truth is if you're not excited about your company-direction, even if sales are good, it's time to pivot or leave." (tweet this)
But, I don't take pivoting lightly. In fact, it was extraordinarily hard to pivot, because we built rapport with a group of people who were excited to help us do something that we ended up abandoning, and many of these people became our friends.
So, I'm very grateful to all our initial customers. We certainly would not have come this far without them. But, I hope they and everyone can understand that in order to really serve the business community well, we needed to move away from our old model.
I'm very excited where we're taking LaunchBit -- our platform is helping companies reach new customers and grow. I want LaunchBit to have a big impact in helping our economy.
So even though we are no longer in the "education business," our door is always open, and you can email us at hello [at] launchbit [dot] com. Thanks for the incredible support in 2011, and here's to a great 2012 ahead!
This post originally posted at LaunchBit's blog.
About the guest blogger: Elizabeth Yin is a Co-Founder at LaunchBit and is currently in the 500 Startups incubator program. She is an internet marketer and backend programmer. Previously, she ran marketing for startups and also worked as a marketing manager at Google. Prior to Google, Elizabeth wrote backend code for startups during the rise and fall of the dot com era. Elizabeth holds a B.S. in Electrical Engineering from Stanford and an MBA from MIT Sloan. Follow her on Twitter at @launchbit.