If it is one thing that we are seeing out there in the mobile marketing world it is a huge number of companies trying to decipher the value of location. There are companies focusing on every aspect location brings – who’s there now, who was there, who left a message there, who got a deal there, what they thought of it there, what they ate there, what they saw there, and so on. You get it. If there is a there, there is an app or service that brings it to light.
This is a challenging time to rise above all the “there” companies. A few have reached common language stature – companies like Foursquare and Yelp – while a few others have achieved the “helpful” status which means they are providing a great service that brings customers to and back to a venue. The rest are trying to rise up by differentiating in an industry that is in serious need of differentiation. There is noise out there – a lot of it – and it takes a different approach and a different way of thinking about location to make a lasting impression.
The other side of this is, of course, frequency and longevity. Both are important for success in this space. Frequency means activity. Longevity means, in this instance, something that continues to add value long after it was created. That last one could be in the form of a viable business and/or a piece of information that doesn’t expire. This is where Evzdrop wants to play.
Evzdrop calls itself a “next generation location-based information network that gives people an exclusive voice of real-time insight from the places they visit.” It does this by using location as a way to validate, quantify and verify the data that is left behind. This episode features David Rush, the co-founder and CEO of Evzdrop and we find out how he identified that spot – an elusive one – that no one seems to be focusing on in the location-based marketing world.
We talk at length about the process he took to find his niche, the process he used to refine his pitch (to himself, his co-founder and his eventual investors), why he went down the path Evzdrop is on (read: what the other companies aren’t doing), and some of the challenges he’s faced while doing so.
Differentiation is so crucial to success – especially in what is perceived to be a crowded space. How will David and his team fare competing for mindshare and wallet share? Based on this episode, based on the focus he has on his customers success, the outcome is clearly in their control.
Here is a quick reference of what we covered in the show. Click on the link and the video will take you to that clip
1. What is Evzdrop 2:00
2. What is the interest network 3:15
3. What was the inspiration for starting Evzdrop 6:20
4. How did you transition into Evzdrop from your previous job? 8:50
5. What are the right reasons for starting a mobile company? 11:00
6. What was missing in the industry to allow you to start Evzdrop 12:20
7. Why is anonymity so important for reviews 14:00
8. Why not use the social graph – why invent the interest network? 15:20
9. What wasn’t working in the industry that you noticed that influenced your product 18:50
10. The benefits and challenges of using location to add integrity to the data 19:50
11. What was the development process from idea to product 23:00
12. How were you able to validate that this was an idea worth pursuing 25:00
13. The Evzdrop beta process in detail 26:30
14. How do you make a product simple but still monetize it 29:00
15. What is your revenue metric – how many users, drops, business do you need 31:40
16. What were the main challenges faced as you built the company 36:00
17. Advice: Don’t take more money than you need from investors 37:10
18. What was the process you went through to find investors 39:50
19. What are your thoughts on patents? 41:50
20. How do locations start using Evzdrop to benefit their businesses 43:40
21. What is short-term future for location based marketing 47:30
My key takeaways
The revenue model IS important
This shouldn’t be anything new to you but it probably doesn’t get stated enough. A revenue model IS important. A revenue model IS required. We are getting passed the point where revenue is a secondary notion behind acquiring users (thankfully). The companies that think about the way to turn their service or product into one that generates revenue BEFORE laying a line of code down, BEFORE hiring your first employee (beyond the founders), BEFORE securing premium office space and BEFORE looking for investors have a chance to succeed. If you don’t think about revenue or have a plan on how you will convert what you are doing into dollars, you will most certainly fail.
Now, a revenue model is malleable and we all know this industry changes too quickly to predict what will happen beyond this year so you must be able to adapt your revenue model to the change that will inevitably happen. Also, having a revenue model – a plan – also means you should also know when to turn it on. It might not make sense (!) to start charging right off the bat (!!) but having it as part of your plan is a requirement. Simple math folks: No revenue = no business = broke founders.
As a side note – remember those high school math problems where the teacher wanted you to show them how you came to the answer and not just jot down the answer? Same thing here. Investors are going to want to see the methodology behind the numbers – this is what you will get graded on, not the hockey stick curve trending towards $100M…Keep that in mind.
Attack a challenge that people are already spending on
Anybody in sales will tell you that there are only a few words that close deals. They will also tell you that there is a hesitation on behalf of business owners and managers to spend money at the front end of a curve (except for the crazy early adopters out there and I salut you for this). These hold true in mobile as they did during the early days of the web as they did during the start of the desktop computer revolution. Once businesses could see the benefit – in terms of increased revenue or decreased costs or improved efficiencies – they flock to the latest and greatest. The same thing is happening to mobile.
With your key customer in mind, how are they currently doing the thing you are offering? Are you trying to get them to do one more thing during their day? Think about how you can take something that is inefficient or costly and convert it into a cheaper and efficient mobile experience. Converting dollars is always easier than finding new ones – and faster.
Be methodical in your process
Quitting a job to start a mobile company can be a huge risk – especially if you are bootstrapping, especially if you are trying something innovative, especially if you aren’t rich. This is where calm heads and being precise are important. A rash decision could leave you either flogging a product that isn’t ready or destitute – neither of which are good. Taking the time to clearly identify the market opportunity, the ideal customer, the technology requirements, the marketing requirements and the skills and funding required to really do it properly are critical things to consider before starting. Once you’ve done that, go talk to your ideal customers (note the “s” at the end) – and not friendly ones. You will need to sell this so talk to people you don’t know. Then ask them if they would pay for it – don’t negotiate, just ask. Then ask them how much. Then decide.
Once you’ve jumped in, be diligent with your time. You probably need to stay at your current job so be realistic about the time you will need to spend doing both. This type of thinking – the long view – will keep you sane, fed and moving forward. If you feel you can’t wait because “someone else will steal your idea” you aren’t thinking clearly. Your goal is to capitalize on a growing market to create a long-term viable business. Right? If so, it shouldn’t be rushed, it should be right.
The number of users will be limited when you add value
If you’ve done your research right and you’ve talked to the right people you will quickly see that the influence you can wield is smaller than you think. This is ok, it means you’ve done your homework. When you pick a niche – one that has revenue potential – and you distinguish your offering versus the competition you will quickly see that a million users is not required to make money for most of us. Volume is fine if you use it right away otherwise it is user hoarding and the problem with that is they expire quickly. Focus your efforts on a core audience and be their crutch, their go to service, their trusted app.
It’s not a volume play, its about the quality stupid
Quality is the goal. Craftsmanship, leads, service – whatever you do, the quality is the output of the work you put into understanding what your customer needs. A cafeteria serves 1000’s a day but you’ll have to settle for crappy meatloaf and gravy. When you build a company or launch a product make sure you either construct the idea and the outcome for the user or the results of the service with the highest of standards for delivery. If you promise restaurants more customers, deliver them. Period. If you promise your users up to the minute news updates, deliver it. Period.
The worst thing you can do as a mobile entrepreneur is provide a half-assed service that angers instead of delights your customer. Hit this and your customer will be yours for life.
What do you think? Also, what do you think of the new format for the episodes? Do you like the chapters for quick reference? The takeaways? What else would you like to see. Leave a comment or two below or email me.
Be sure to subscribe to iTunes to be notified on all future episodes (they are free for the first week!): Audio or Video
About David Rush
David has over 17 years of operational and sales leadership experience with early-stage companies in digital media, software, marketing research, and technology services. Previously in his career, David held senior management and sales leadership roles at companies such as Akamai (AKAM), Gartner Group (IT), PostX (acquired by Cisco), and Iconoculture (acquired by Corporate Executive Board). In addition to these roles, he has been an active consultant and advisor to several other early-stage businesses in social media analytics, financial services software, and payments software. David also has experience in private equity and private banking, and has advised high net worth individuals and family offices on various alternative investments. David holds a BBA in Marketing from Southern Methodist University, where he was also a scholarship member of the men’s varsity golf team. David resides just north of Chicago with his wife Stephanie and their three kids Lucy, Thomas, and Emma. In his free time, David enjoys spending time with family and friends, playing golf, snowboarding, seeing live comedy or live music, and traveling.