I wrote this post a year ago but it was too painful to share until now. Hope you learn some of these lessons the easy way.
My biz partner Dan and I shut down EasyCal last week after three years of work and meagre earnings (we never grew beyond $200/m). EasyCal was an online booking calendar for solo practitioners – massage therapists, hair stylists, etc who worked for themselves. In the end, it wasn’t a hard decision – not only had it become a burden to run, but it was costing us money.
Here are the key lessons we learned:
1. The market wasn’t good enough
Solo practitioners (SPs) are often cheap and unsophisticated business people (and I mean that in the kindest possible way). Even though these folks would charge e.g. $100 for an hour long massage, they didn’t think about the time they spent booking appointments the same way. We had one plan – $19 / month – which could save them hours per month, but many of them balked at the price.
Digging in the couch cushions for nickels ain’t a great way to build a big business (unless your customers are spending someone else’s money).
Being a solo practitioner is often a flexible business. SPs will quit working for a few months, join a salon or practice that already has a booking system, go traveling for a few months, etc. So we’d have customers use the product for a few months, then churn out when their situation changed.
You’ve probably noticed that this boils down to differentiating properly in order to sell to the right customers. Mind Body Online and others are building huge businesses off of selling to multi-practitioner clinics, but doing the same selling to solo practitioners is a lot harder.
2. We built before understanding out customers
I talked to a 5-6 potential customers before we started building the product – far too few. I didn’t learn what their key problems were with booking, or more broadly with running their businesses. We didn’t find a big enough group of customers who were scheduling appointments the same way (and thus had the same type of painful problems) for whom our solution would be first best. We didn’t find out how to reach them.
Consequently, we spent too much time – over a year – building an average product for a too-broadly defined set of customers.
Nobody loves you for being the fifth best solution to their problem.
3. The product wasn’t differentiated enough
Our working hypothesis – which we validated the hard way – was that online booking software was too complicated for the needs of the solo practitioner. The key player at the time was Mind Body Online, which has a great sales force, but at the time (2009) had a gross product. They’ve come a long way with their product as other players like Genbook have jumped into the market.
MBO had a plan for solo practitioners, but the product experience was overly complex for people who didn’t need the bells and whistles associated with running a multi-stylist salon. So we decided to build a better mousetrap for people who didn’t need those bells and whistles. Turns out that we didn’t do a good enough job differentiating from the MBOs of the world, or any of the litany of both small and large players in the very crowded online booking market.
4. We weren’t passionate about the customers
We lost motivation as we realized that we didn’t care about the problems that most of these SPs had. When we realized that the way we were solving online booking wasn’t that important to our customers, we didn’t care about changing the problem we were solving to a higher value problem because we didn’t care enough our this set of customers.
Since we didn’t care enough about our customers, we frankly didn’t deserve to succeed.
5. We weren’t passionate about the problem
We weren’t super passionate about solving the problem of online booking. If we were, we could have tried other verticals (e.g. scheduling phone calls between busy professionals), or expanded to include clinics with a different spin (e.g. mobile first). But we didn’t have the intrinsic motivation to make EasyCal succeed, and so changing direction was daunting.
6. We had no framework for discovering a reliable acquisition channel
We tried four tactics to get customers:
- a free trial postcard in a goodie bag at a massage therapists conference
- landing pages that targeted long-tail terms like “massage therapist online booking calendar”
- small business blogging about running a solo hair stylist business, massage therapy practice, etc
- running a few AdWords ads (a.k.a. “lighting money on fire”)
We never found a tactic that worked (the landing pages were the best, quickly rising to the top of SERPs – a Patrick Mackenzie trick). But worse, we didn’t develop or use a framework to help us find a tactic that would work, scalably and repeatably.
Gabe Weinberg’s Bullseye framework is the place I generally start today though it wasn’t around at the time. Both my co-founder and I were new to marketing, and we never took the time to apply systems thinking to marketing.
Lesson learned: spray and pray marketing without a framework will rarely make you successful.
7. We got caught in the trough of sorrow
Traction cures a lot of problems, at least for a little while. We never got out of the trough of sorrow, and the emotional toll it takes was exhausting. It’s hard to buoy your co-founder when you’re both down in the dumps, doing lots of work but not reaping any rewards. And when your drive to help your customers or solve the broad problem isn’t there, AND you’ve got no traction, you’ve got a recipe for quitting.
8. We spent too much, too soon on legal expenses
We spent over $5k on incorporation and a bullet proof shareholder agreement with a corporate lawyer. Though we had worked together before and liked and trusted each other, this was the first business we started together so we wanted things to be airtight. It was a waste of money to spend so much before we knew whether the business was a real business or a startup idea.
If you don’t trust your co-founder you’ve got bigger problems – legal docs don’t build trust.
The next business I started – SocialWOD – I borrowed an idea from my friend Eric at BeerMenus and signed a “Human Agreement”. A Human Agreement spells out the high level terms of the partnership (equity split, etc) and assumes your partner won’t be a douche. When it became clear we had something with SocialWOD, we incorporated and used the Human Agreement terms as the basis for our shareholder agreement. Much smarter to delay spending until we were making more than we spent to incorporate.
But with EasyCal, we lit more money on fire on an iron-clad shareholder agreement that was effectively useless. This wasn’t a cause of failure per se, but it hurt to spend cash on something with so little return.
I’ve found it to be true that lessons learned are all the more painful when you learn them the hard way. Here’s hoping some of these lessons come to mind when you’re figuring out how to grow your business.