Lessons Learned from Connected
As it’s been over a year since the acquisition of Connected by LinkedIn, I thought I’d take a moment to reflect on the most important lessons I learned as a founder of Connected.
Connected has been by far the most rewarding, successful, and fun startup adventure I’ve had to date, full of experiences I hope to repeat as well as mistakes that I hope to avoid in the future.
The importance of complementary skills amongst founders.
I had the unique opportunity to found Connected with my wife, Ada Chen Rekhi, and it was by far one of the best decisions I made for Connected. While I know working with your spouse is not for everyone, an important aspect of our working relationship that every founder should seek is complementary skills amongst founders. One of the reasons Ada and I worked well together was that while we consulted each other on most decisions, we were masters of our own domains. I led our product, design, and engineering initiatives while Ada was in charge of user acquisition, analytics, marketing, and operations. Having a clear separation of responsibilities based on each of the founder’s skill sets is essential for a great working relationship.
People will pay for valuable software.
A critical risk that we wanted to understand early in our business was whether users would be willing to pay for a productivity tool to help manage their professional relationships. So we decided to launch our product with a price tag on day one to help us quickly assess this. We even created an aggressive 14-day trial (instead of industry standard 30-day trial) since we wanted to get feedback as soon as possible.
On the day of launch we saw negative comments across our various launch blog posts from readers suggesting that they would never pay for a tool like this. And it almost made us regret not initially going out with a free product. But then 14 days later when the paid conversions starting coming in, we realized that there was certainly a segment of users that our solution was resonating with and even in our product’s infancy, they were willing to pay.
By charging from day one we were able to quickly understand that people were willing to pay for our solution and help focus our efforts on the audiences it was resonating most with.
Setup your acquisition dashboard as soon as you launch.
One of the dashboards we put together several months after our launch was an acquisition dashboard that brought significant clarity to our user acquisition efforts.
This simple dashboard showed for each acquisition channel the number of visits to our site, the number and percentage of trial registrations, the number and percentage of paid conversions, and the number and percentage of canceled accounts. We segmented our acquisition channels down to the level of referral source (the press article that you clicked on to get to Connected, the app store from which you found out about us, the blog post of ours that you read that got you to try Connected, etc).
We quickly found a few channels that while they had low numbers of visits, their conversion to trial and paid were extremely high. We started focusing on these channels and were able to find ways to optimize for conversion from these sources.
Build it and they will not come.
Through our acquisition dashboards we were able to determine that we had a strong conversion to trial (8-12%) as well as a strong conversion to paid (6-8%) and this held relatively steady as our traffic volumes grew. While this was great, it made us realize that we had a top of funnel problem more than anything else. And the innovation we were doing on the core product wasn’t solving that problem.
This realization caused us to dramatically shift our focus to top of funnel user acquisition. With paid products especially, it’s critical to have a strong thesis of how you will acquire your users at a cost dramatically lower than the lifetime value of the customer. Without one you’re left to experiment with various channels until you can get the cost down as well as the volume of conversions up.
Looking back there are a variety of ways we could have built a core growth engine directly into the product and I certainly plan on making that a top priority in the future.
The importance of passion for the problem space.
I think what made working on Connected one of the most rewarding and successful experiences in my career was the deep passion both Ada and I had for the problem space. We both wanted a better way to stay in touch with our most important relationships because we both deeply knew how important those relationships would be to our career. And being able to fulfill our own desire for such a product made it extremely easy to focus all of our energy on solving it.
We incubated the idea for Connected during my Entrepreneur-in-Residence at Trinity Ventures. And I remember narrowing down our ideas to a shortlist of three. While each had their pros and cons in terms of market size, competition, uniqueness of solution, etc, it was clear that Connected was the one we were most passionate about. And I’m glad we optimized in the end for passion. It’s an important startup criteria that shouldn’t be overlooked.
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Apr 21, 2013