I promised I’ll be completely transparent, today I’m going to share our finances. We spent a total of $172,298 in April and made a total of $45 from one sale during the whole month. I know… it’s kind of sad.
Here is how we spent $172,298:
Why such a disappointing outcome?
This month we decided to run some tests to see if people would actually sign up for Finic Beta. We used Facebook ads to drive 1,391 people to visit the site and had 286 people put 375 items into the shopping cart, but nobody transacted.
We have what we perceive to be the best product on the market, and we could not sell one person from 1,391 who visited.
We asked ourselves: How come nobody transacted from our Facebook campaign?
Here is what we came up with as potential reasons:
1. Our prices are too high
2. The site has bugs to prevent people from purchasing
3. We don’t have enough information on the site
4. Our interface is not intuitive enough
Looking at data on CrazyEgg, KISSmetrics and Google Analytics we didn’t find much evidence to support any of these potential reasons.
Then it came to us: We were sending completely wrong traffic to our homepage from Facebook, and this is the cause of the problem.
We were targeting the general public, but we should have targeted risk-takers, innovators, early adopters, people who love to play with something that most other people do not want to touch. We want to target the 2.5% in this chart:
Then we started to brainstorm on how to reach these early adopters: Where are they? What are they looking for? How can we find them online and drive them to Finic’s website?
As we talked more about this we started to consider: Do we even have early adopters in our niche? Could it be that Wall Art market does not have many early adopters?
Or perhaps early adopters in our space are simply folks such as skydivers who are risk takers and love photography?
Searching for characteristics of early adopters in our niche made me rethink our business model that is directly related to our target market and our competitors.
Better Business model to eliminate competition
Wall art is a very crowded market; there are a lot of competitors. When I started Finic, I wanted to create a company that will do everything 10x better than any competitor.
We want to do something that already exists but 1000x times better. We need to have better quality, better delivery timing, better packaging, better overall service, in short, better everything!
We spent all of 2014 concentrating on perfecting every single detail of our product. We sold a lot of prints offline to our friends and relatives as well as people we did not know and received a lot of positive feedback. All of them loved the product.
We started 2015 with a feeling that we were ready to launch our product to the masses. People loved us so why wait to launch, it’s now or never, lets do it! We were wrong, and I am glad we did not launch!
Because we have so many competitors in our market, our only differentiation is a better product. Our competitors are established and could build something very similar to our product that could kill us.
I came up with a completely new business model for Finic, which will allow us to differentiate ourselves enough so that no one can afford to come close to us (or I at least think so).
The goal here is not only differentiate ourselves based on our product but also on our business model so it would be twice as hard for our competition to replicate our efforts.
It’s very cliche to say, but when I think of this new business model for Finic I think of UBER. How they came to an existing taxi market with a new business model; that allowed them to eliminate their competition.
The only problem with this approach is if someone tries to copy the same business model, as well as your product offering. Lyft, SideCar, EasyCar are all trying to copy Uber’s business model and a product, but they are currently having a hard time since Uber was the first mover.
What is the new business model for Finic?
I’ll write a separate post about it shortly, I’m still fine tuning all the details. I’ll share something very soon. Stay tuned!