Entrepreneur 2 Entrepreneur: Kosh Samuel on Adapting

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Kosh-SamuelThanks to Split Rock Partners for underwriting the Entrepreneur 2 Entrepreneur series.

Minnesota tech entrepreneur Kosh Samuel is the founder and CEO of Avabar, a startup company focused on “remixing nightlife” through mobile technology.

After launching last April, Avabar experienced a common scenario in the world of consumer tech startups: a go to market launch bump followed by lackluster results.

Since then, Samuel has gone back to the drawing board to reinvent nearly every aspect of the business.  As a result of his ability to adapt, Avabar has found new life full of receptive users and paying customers.

What high level changes were made to the model and why?

It’s funny. Anyone who knows our company knows that we were SO into planning, attention to detail, and identification of anything/everything that will help Avabar succeed. In spite of these traits, it’s shocking how much we MISSED! But you don’t know what you don’t know…

The best thing we did as a company was spend an extraordinary amount of time meeting with our client users, client venues and client suppliers across our 5 pilot markets to better understand their client experience (good and bad). In fact, our closing request was always “Tell us why we’ll fail” In doing so, we generated a great list of experiential improvements we needed to address in order to adapt and improve.

As a result, we made wholesale changes to our technology (user interface and back-end) to make it more user-friendly, compelling and “sticky”. Additionally, we made significant changes to our marketing approach (primarily user acquisition and venue registration). In doing so, we also restructured our team to reflect the aforementioned changes. In fact, we turned over our team 80%.

Lastly, we even reframed the definition of Avabar. It became evident that we were no longer just an app. This definition marginalized us. Avabar is a nightlife-focused targeted advertising and analytics company that happens to use a mobile platform.

In short, we changed EVERYTHING. More importantly, we HAD to!

Split Rock Partners

What were incorrect assumptions made early on and how did you identify what adaptions to make?

Admittedly, Avabar made many incorrect assumptions. One primary area where our assumptions were misguided was with respect to user adoption. We focused our attention on in-venue “Guerilla Marketing” promotions where a team of promotional personnel would engage users during peak times. This in practice proved less than fruitful for a number of reasons including too much noise, users weren’t too distracted/drunk to set up profile, promotional staff not focused, etc. Our cost-per-download via this method was exorbitantly high. More importantly, our adoption was too low via this method.

In analyzing the data, we found that our highest user adoption rates tended to be when we had high visibility events (e.g. article in paper, strategic event partnerships, etc.). In response, we decided to identify higher volume events that we could partner with in order to drive high volumes of downloads at one time. We ended up partnering with major promoters, DJs and event organizers and in doing so will significantly increase our user adoption rates.

For example, instead of getting 40-50 new downloads in a 2hr in-venue promotion, we now will get 3000-5000 users at a single event.

Simply put, our willingness to look at the data and pivot as a result saved our business.

What kind of metrics are you seeing as a result?

We have some key performance indicators (KPIs) that we have identified including:

  • User adoption
  • Venue registration
  • User retention (Stickiness) including check-ins, redemptions, social engagements
  • Venue retention: Staff check-ins, total check-ins, redemptions, SM integration
  • Incentive program response rates
  • Social Media reporting
  • Monetizations (by type)

As we are currently rolling out our production version, we are seeing consistent double-digit growth week-over-week with respect to venue and vendor adoption/registration. It is too early to provide any statistical significance for any of our other KPIs but they are trending in the right direction.

What advice do you have for a peer entrepreneur reading this who’s wondering how they can adapt and thrive?

The two key pieces of advice I’d share are as follows:

First, it’s ALL about the client experience! – Invest the time to listen to your clients beyond  technology/product standpoint. Of course, you need to listen, understand, process and execute on client feedback to improve your technology/service/offering. This is no small task and most entrepreneurs pay lip-service to this but their egos won’t allow them to submit themselves to their clients’ wants.

But just as importantly, you need every touch point, every interaction, EVERY facet of the clients experience to be considered and developed in such a way that the client feels that she is not just getting a good experience, or even a great one… BUT THE BEST EXPERIENCE POSSIBLE.

Second, continually analyze all aspects of your business. When your days are completely saturated with day-to-day activities it is so easy to focus on what will get you through the day. You have to take a step back regularly to assess what you as a company can do better with respect to your technology/ product, your business processes, your financials, your marketing, etc. Wherever possible, apply tangible metrics as a baseline to measure against. Many times you’ll find going through this exercise may not yield that much, however, it only takes that one time where you discover something that can have a seismic impact on your business.

Is there anything else you would like to add?

You’re technology or product will only go as far as the people carrying out your plan. I impress on our team that we are NOT a technology business…we are a relationship business. Avabar ingrains this philosophy in our team members. All new potential team members are put through a trial period where they are trained on and have to demonstrate a commitment to:

– Client experience: Every interaction has to be great. Every follow-up has to be done on time. Every time you think the client is happy, do one thing more.

– Results: Our team knows that they are measured not on hopes or intentions or potential, but on decisions, actions and results. Each team member is reliant on the other.

– Communication: They can say ANYTHING. If there is a problem, communicate it. If there is a better way to conduct ourselves, share it. We foster a truly open collaborative environment.

– No attitudes or egos or BS – those types don’t last long. There are plenty of things I did wrong in our business, but I was able to find some high quality, high character, hard working people who I’d run through a brick wall for. And they would for me.

– Innovation: We expect everyone to contribute new ideas or innovations that can improve our business either outwardly or internally.

Frankly, to get a team that meets these expectations, you WILL burn through people. Constantly have new people in your pipeline that you can have at the ready. Also, occasionally from this stable of people you’ll find a high-talent “rockstar”. If so, find a spot for them regardless of whether they have experience, degree, etc. I’ve always believed it’s a lot easier to hire someone with talent and get them experience than it is to hire someone with experience and try to get them talent!

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