Why I Am Killing a Startup That Has Over 100,000 Customers
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Davide De Guz is the CEO of ClickMeter, a business that has 100,000+ businesses as customers, including PayPal, USPS, AT&T and Amazon. Clickmeter grew 250% year over year and has been cash positive since day one. But De Guz isn't satisfied. His philosophy: never follow the money, follow the path which makes your product the best in its field.
So Clickmeter is pivoting into a brand new company, Rebrandly. This sounded rather drastic to me, so I spoke with De Guz to find out the thinking behind such a big move.
Dmitry Dragilev: What was your first taste of entrepreneurship?
Davide De Guz: When I was in business school in 1999, I created University.it, a student community that grew quickly and was sold for $1M. I didn't really know the potential of the Web at that time or how to really manage a startup.
DD: What happened after you sold your first startup for $1M?
DDG: After this first experience I founded a web marketing agency, hoping to leverage my previous experiences. Through this venture, I discovered a specific pain point that our proprietary product could solve, so I personally bootstrapped a new startup, ClickMeter. ClickMeter assists agencies, affiliates and publishers in monitoring and optimizing their marketing links in real time in order to increase clickthrough and conversion rates.
DD: How is ClickMeter doing?
DDG: Pretty darn well! So well that I closed the agency to use all of my time growing ClickMeter. As an industry leader in the tracking and management of marketing links, ClickMeter is now used globally by over 100,000 small and big business.
DD: Why haven't you raised capital to finance your venture?
DDG: I initially invested $50k as seed capital in ClickMeter and I decided not to pay my salary for the first year. We also decided to go live with the paid version of the service from day one. Thanks to these decisions, maniacal attention to cost reduction and to the ability to convert free users into paid customers, ClickMeter was cash-positive very soon. Since then we are growing at an average of 250% year over year. Now we are able to pay all salaries in full and invest a good percentage of the profit into developing new features.
DD: If your startup is cash-positive and growing why are you pivoting to something else?
DDG: In 2015, we received over 30,000+ feedback emails, phone calls and chats. Our customers are the principal source of our ideas and the "brain" that makes the difference when we update our product roadmap. Through this feedback, it was evident that there was a new pain point in how people shared URLs. We don't view Rebrandly as a pivot but rather the evolution of how users share URLs on the internet. Rebrandly is the easiest way to create branded links: short links with your brand. Clickmeter will continue to serve the 100,000+ users but will be positioned going forward for more sophisticated customers.
DD: How did you decide on the idea of Rebrandly?
DDG: Rebrandly was not the first idea we pursued, it was actually the fourth! For every idea we had we would:
Write down a description of what it is and shared it internally, with friends and with other founders to get some feedback.
We took each idea and created a mock-up to simulate specific iterations with the customer to evaluate reliability and usability.
We evaluated the business plan, scalability and traction strategies.
We created a Minimum Viable Product (MVP) and solicited feedback by asking our customer to pay money for it.
After repeating these four steps for four different products, we finally found that the idea for Rebrandly got the most traction and the most people who tested it actually bought the MVP of the product. So we knew we had to go forward with it.
Some of us were still a little hesitant, so we tested and interviewed 100 more prospective customers to understand if they would commit to purchasing the MVP. The interview included a 1-minute pitch of the product and demo of MVP. 86% of people we interviewed wanted to buy the product right away. We knew we had to go ahead with it.
DD: What is the most important "pain point" of ClickMeter that you are solving with Rebrandly?
DDG: We have this feature in ClickMeter called "dedicated domain" and it's the most used feature in our entire product. This feature allows you to create and manage your custom branded domain.
It didn't matter whether it was AT&T or the freelancer next door, all of them cared about one thing: how is their dedicated domain impacting their brand awareness.
ClickMeter customers could create a custom branded domain which allows them to track all the engagement with the links and brand awareness. The problem was that the setup time and price point for this feature were too high for non-enterprise ClickMeter users.
So we "merged" a tracking link with a domain registration tool and Rebrandly was born. Rebrandly makes it easy to register a new domain, setup, and have a dedicated URL shortener and tracking in minutes. Rebrandly removes the confusing setup and is so inexpensive that you only have to pay for just the domain name. Everything else is free.
DD: You are closing the door on a successful company and starting something new, how can you be sure your new startup will be successful? Remember Netflix and Qwikster?
DDG: Haha, yes I remember Qwikster, that was a mess. The truth is I cannot be sure Rebrandly will be successful. I've never been sure of the success of any of my previous startups.
I can say one thing: global brands are pioneering short branded domains right now, just take a look at pep.si, t.co, virg.in etc. this is a big shift in the way domains are being used for brand awareness. I think our timing is right.
It's scary of course, we have a really successful business and we are pivoting away from it and placing a big bet that one feature in this current product is worth to go after as a separate product.
I do want to say that ClickMeter engine will still power Rebrandly, so we are not just throwing everything out. With Rebrandly we are just downscaling the features and going after what most customers are finding value in.
DD: What is the most important lesson you learned in these 16 years as an entrepreneur?
DDG: Never follow the money! If you want to create something meaningful, if you really want to innovate and have success the KPI isn't the money; it's the customer satisfaction. How much does your customer love your product (stickiness)? Is your service really the best of what can be done to solve that specific problem (market leader)? If the answer is yes, then the money will follow.