Published 10 April 2018 by Applover
Building business on the mobile app brings us a few questions, among others, how can we make money on our application. AS Piotr Sędzik, CEO of Footsteps said: „It is the first question that we have to answer. If you don’t have a business plan in Your mind from the beginning, if you don’t know how to monetize your business activity, your efforts may be wasted”. Read the article to find out:
Footsteps is a mobile app for exploration of the cities. Thanks to the personalization and wide choice of locations, it has become a popular tool among Polish tourists and quickly won renown – 50 cities are now available and it has more than 50 thousand users.
A group of friends has come up with an idea of such product during their foreign trip in 2014. CEO and co-founder of Footsteps Piotr Sędzik were among them: „We went to Bulgaria and we were unprepared – we didn’t know what places are worth to see. We were sure that in the era of the Internet, there is an application that could help us. However, it turned out there is no similar solution on the market – hence the idea of new product creation.
In the beginning, 3 people were involved in the project, however, none of them was a developer. Therefore, we had to find someone with programming skills, which is crucial in the creation of an application. We had a few options such as finding a partner – programmer, who would join the team, looking for a freelancer, who would create a product and outsourcing of services to one of the software houses specializing in the creation of mobile apps. The co-founders have chosen the first option. In this way, Radek joined the team and became responsible for app development.
„ We didn’t have an investor, in the beginning, we invested our own money in the development of our application. Therefore, we didn’t have money to employ a company to perform a service. In addition, in the initial phase, we didn’t have a clear vision of the product, so we needed a more flexible approach to the subject – a new man on the board gave us the opportunity of quicker reaction and change of project assumptions.”
Piotr said that there is no clear answer to the question „Is it better to look for a developer partner, or maybe outsource service to a company”. It depends on a few factors. If we have enough money for such investment and a clear vision of the development of the product, it is more sensible to make use of software house services – it guarantees quality, knowledge, and experience and liberates us from many obligations.
Jan also joined the team and was responsible for business development. And that’s how was created the team, who won an acceleration program Starter Rocket and acquired first funds for the investment. It helped the team to prepare for releasing MVP with the support of the mentors involved in such projects as Brand 24. The key functionalities that Footsteps wanted to offer its users were supposed to be personalization (the choice of character, for example, connoisseur, businessman) and high-quality, interesting routes in the first test city – Wrocław.
The premiere of the application was preceded by a promotional campaign, that is, a movie, in which a tourist, Janusz, accompanied by „ Quiet man” and „Short man” presented the application in a humorous way. The movie was a marketing success – 150 000 people watched and shared it. It helped to win over first 15 thousand users. „ Piotr said that reception of the application among the users was very good. They were satisfied with the quality and speed of the product, as well as with functionalities. They also appreciated the quality of the routes that actually offered interesting experiences”.
Therefore, after the successful premiere and a large number of satisfied users, you would think that we only have to calibrate and invest in the product to make it grow as quickly as possible. Nothing could be further from the truth. Footsteps quickly faced the problem that wasn’t easy to solve – „We simply did not know how to make money off it. We didn’t have an idea how to monetize our business activity. To charge a fee from the users? They would probably resign from using our application. To charge a fee from nearby restaurants and hotels for the promotion of their services?
Unfortunately, no one was interested in such form of promotion.” The team was running out of money they raised when they had won acceleration program and they had to pay out of their own pockets. It meant that either Footsteps would find the way to make money or it collapses. Piotr treats this time now as one of the greatest business lessons of his career – „We haven’t thought our business model through well. From the very beginning, we should know how to make our product self-financing”. – What is the reference to popular and cult lean startup methodology, which assumes, in an initial phase, testing and adjusting the product in the search for the so-called Product Market Fit?
„Simply, every time you make a change in your product, you have to remember about a business plan. No one tells you to provide accurate figures, how much you can earn and how quickly you can do it. But you simply have to have the idea of how given change of strategy affects monetization and how should you do it. Without that, you may catch on too late, just like we did.”
Then, what was the fate of Footsteps? Luckily, the team has found the way to acquire the funds – „ After one year of work on this project, one of the Polish cities contacted us and wanted to become a city available in application locations. We have decided it is a good approach and we had to change the model of financing from B2C to B2G”. This idea turned out to be great – self-governments having considerable funds for promotion readily spend money for the presence in such undertakings. What turned out to be the key, from the perspective of the company, was the fact that the change of the strategy did not require too much money
„Our product wasn’t really changed, it was still based on the same functionalities. We only had to add other locations that were financed from the money acquired from a given self-government. Of course, we incurred some expenses related to a slight adjustment to a new target of the clients, we added such functions as an urban guide, local events, but it was rather overwriting of new things than product reconstruction, which would require much more funds that we simply didn’t have”.
Currently, Footsteps is doing very well – 50 cities are available in the application, and our goal for this year is 75 locations! In addition, the team, while cooperating with the cities and self-governments, has perceived other needs of our clients in the field of technology and we have an idea for another initiative – „Many cities were interested in the project of urban application for their inhabitants. Currently, cities and self-governments must make such solutions themselves, not knowing how to create and manage such product and generating very high costs. Piotr said that they want to change it. When can we expect new information on this issue? – „We are now at the stage of completion of the investment. If we wrap up all the details, we will share this information with You.”
Footsteps – we wish you luck and we are waiting for the next success story!
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