In the beginning of 2013, our three person startup raised a small seed round form angel investors and Innovation Norway in order to build a digital book club for kids. We spent half a year building the app and an editor for assembling the books, while also gathering a network of illustrators, voice actors, musicians and writers, so we could quickly create titles for the book club.
In the spring of 2013, we launched the app, and branded it as a ‘Netflix for kids books’, promising parents one new book every Friday for a monthly price of $8. The launch got a lot of coverage in Norway and the app quickly established itself on the top 10 list in the Books category on the App Store.
However, both the app and the market itself grew much slower than anticipated. By the winter, it became clear that we would run out of money before reaching profitability if something didn’t change. We tried several different marketing tactics, but none proved scalable and affordable enough to gain sufficient growth.
In addition to this, the deadlines for publishing new titles forced us to compromise on the quality, which started eating away at our motivation. In our eyes, our product had failed.
As we weren’t 100% honest – maybe even to ourselves – about our sinking motivation, people around us kept encouraging us to improve the titles, continue marketing the service, keep on expanding to international markets, and more.
All these would have been good ideas, if we were still motivated.
So around Christmas 2013, we decided to disappoint them both. We changed the subscription service from weekly to monthly updates, while cutting the price by 60%, which freed up 95% of our time, as we basically froze both the production and the technical development. We stacked up a bunch of titles, so that we didn’t have to think about the book club for over a half year.
As a result, a few subscribers got angry and ended their subscription, but all in all, the transition went pretty smoothly.
Our investors were super supportive when we spoke to them with complete honesty. We hadn’t communicated well enough how tired we were of making medium quality kids books, but when we finally did, their only reaction was: ’Ok, thats fair. What will you do next?’. Had we been more honest earlier on, we could easily have saved 2-3 months.
Lesson learned: Be completely honest to everybody (including yourself) about your motivation. If the team start losing motivation, and you know it won’t change, you are doing everybody a disservice of you keep pushing in the same direction. Don’t even care about the customers you have pre-comitted yourself to. Do whatever it takes to change. Because if you don’t, your company is dead.
During our pivot, we also tried to get some relevant consultant work, so that we could buy ourselves more time. We called tons of agencies and companies, went to a bunch of meetings and got a few jobs.
However, this disturbed the our identity as a startup, and due to mix of skills. Plus, our team and mix of skills weren’t suited for doing consultant work. As a result, the gigs ended up costing more than they paid.
The solution we ended up with after our pivot was much more viable. We basically decided that every Tuesday was ‘consultant work’-days, so that each one of us could make the extra money on the side. Every Wednesday is a motivational boost, returning from boring consulting stuff to our exciting new product. It also turned out to be a lot easier for us to find work separately, than it was to find jobs that all three of us could contribute to.
Even though we have gotten several relevant job offers today, we say no to all of them. When the three of us work together, we are a startup, not a consulting firm.
Lesson learned: Be a 100% startup when you are at the office together. If some founders need more income, it’s better to take one day off per week to make some extra money on the side. This might not work for all companies, but for us, it has been critical.
When we decided to pivot, we spent a lot of time thinking about what we should pivot to. As a startup, you are always moving 110 miles per hour. While that speed is great for the highway, you must slow down when you are doing a turn.
At first, we tested out a couple of directions, which turned out to be dead ends, for many reasons.
This wasted even more of our precious time.
It wasn’t until we sat down with an outside mentor that we started figuring out the right direction. We slowed down completely, and analysed why we had lost our motivation, what we had done wrong, and why the hell we were doing a startup at all. We had to dig deep and find our inner drive.
It sounds like a cliché, but it’s really important.
We finally landed on a path which led us to the product we have been working on for eight months and finally launched, something which seemed unthinkable a year ago.
Lesson learned: If if it’s not clear what direction you are pivoting too, slow down and spend some time finding the right path. Consider getting someone from the outside to help you with this process. If you pivot in the wrong direction, you probably won’t get a second chance.
So if I am to sum up our hard learned lessons, they are: be completely honest with yourself and others so that you can take action as soon as possible. Try to stay away from consulting, but if you have to do it, consider letting everybody do it by themselves rather than together as a firm. Finally, slow down when you are pivoting, it’s really important to choose the right direction.
If you are in a similar situation and want to chat with us, please don’t hesitate to reach out to us at Disco Fingers.
Photo credit: Dean Meyers