On Launching A Profitable User Feedback App
After successfully selling two telecom business, and unsuccessfully launching a social media business, I founded Userlytics Corporation in 2009. It helps businesses improve the usability and user experience of their websites, mobile apps, desktop applications, prototypes, digital adverts, and in essence any digital asset.
It does so through a software platform that records a picture-in-picture view of participants as they follow instructions and answer questions about our client digital assets while leveraging a global panel of almost 1,000,000 market research participants and usability testers.
Like most startups, we struggled during the initial years, but are now cash flow positive and growing strongly (> 50% growth in 2020).
Explanation of how it works:
What's your backstory and how did you get into entrepreneurship?
I spent most of my early life outside of the US, and from quite an early age tried my hand at generating income from entrepreneurial activities. I remember selling used toys on the sidewalks of Madrid, Spain at the age of 8. And when I was 15, in Javea, Alicante, I started a remote grocery delivery business.
If you succeed, remember; you did not do it by yourself, your team was a key component of your success.
When I moved back to the US I took a more traditional route, working for large companies such as Bechtel before moving back to Europe for my MBA at INSEAD.
Upon graduating from INSEAD I moved to Japan and spent some years trying to gain traction with a Japan-focused startup, which did not ultimately succeed although it did allow me to pay the bills for a few years.
Moving back to Spain I launched an audio text platform, and after a few difficult years, it became cash-generating and dividend-paying. From there I moved fully into a telecom startup, which went from startup to almost listing on the NASDAQ 3 years later, then through the DotCom crash into a chapter 11 restructuring, and finally a successful sale to Clearwire 5 years after the crash.
I then took a bit of break for a few years, and enjoyed a foray into writing and filmmaking, before launching Userlytics.
Take us through your entrepreneurial journey. How did you go from day 1 to today?
What I think allowed me to achieve success is a combination of luck and perseverance, coupled with an openness to change my mind continually.
Being stubborn is good if it is strategic stubbornness, where you never give up and always keep on trying to achieve the final goal, as long as it is coupled with tactical flexibility, the ability to do quick pivots, to change your mind, to admit that what you thought and believed in strongly is not working, and quickly change direction, while keeping the ultimate strategic goal intact.
Luck has a very important role, frequently unacknowledged, and I am very grateful for the impact it has played in my life and my entrepreneurial journey. But it could never have been applied if I had not created the conditions for it to appear, first by persevering through very adverse circumstances, and secondly by quickly seizing opportunities as they finally appeared.
One final note. I am a firm believer in Peter Drucker´s maxim that “Culture eats strategy for breakfast”. I would recommend that entrepreneurs spend 30% to 40% of their time hiring and coaching a great team, and doing so in a way that is designed to build a great company culture.
How are you doing today and what does the future look like?
2019 was a great year. We continued being cash flow positive, even while growing by 300%. 2020 was more challenging, because of the Covid 19 pandemic and associated economic impact, but we still managed to grow by over 50% and keep our profitability and cash flow positive status. Q4 2020 in particular has been excellent, and we are starting the new year with very good momentum.
Our gross margins continue to stay around 75%, and the payback period of our lead generation costs is only a matter of days. Our churn rate, although higher in 2020 than 2019, when we had a remarkably low monthly churn, is still below 3% and trending down now that the worst of the global economic setback seems to be behind us.
Almost 75% of our sales are formally recurring revenues, and our international sales, as a % of total revenues, are close to 40% and growing.
Looking forward, we expect growth to accelerate in both 2021 and 2022, as both our red hot US, Canada, UK, and Australian markets continue to expand, and as continental Europe and Asia Pâcific start to adopt remote user experience testing as a key driver of profitability and revenue growth
Through starting the business, have you learned anything particularly helpful or advantageous?
It is often stated, but cannot be oversaid, that the most important driver of entrepreneurial success is the team you play with, more than the business model, the market size, growth rates, competitive positioning, pricing, innovation, or anything else.
No amount of time spent interviewing and ensuring that the persons working on the team are the right fit is ever misspent.
Mistakes will nevertheless be made, and we inevitably find we have hired the wrong person. When that happens, the sooner one acts on that realization, the better. Better for the employee, who will not waste his or her time in a venture that they are destined to leave, and better for the team and the company.
What platform/tools do you use for your business?
We use Salesforce, Salesloft, Invision, Adobe XD, Jira, Bamboo, AWS, Bitbucket, Zendesk, Upwork, and many others.
A platform that we have found to be immensely versatile and useful, in “automating” the various processes that we need to scale, is a platform called Zapier. Very cool, and very useful.
What have been the most influential books, podcasts, or other resources?
The Four Steps to the Epiphany, by Steve Blank.
I read it a the beginning of my journey with Userlytics. I thought I had it figured out, but then went on to disregard many of its lessons, including conducting premature scaling, which almost cost me the business. Fortunately, I was able to recover, and “de-scale” and then, when the time was right, scale again.
Advice for other entrepreneurs who want to get started or are just starting?
Do not try to figure out the perfect idea or business model. Paraphrasing Napoleon, “No business plan survives first contact with the market”
Far better to start working in the area, industry, or domain that excites you, and from there, start trying to figure out how you can add value, even if in small ways.
If you continue with that activity, and keep your eyes and ears open, and are constantly trying to figure out ways you can improve things, then sooner or later things will click. This will also afford you time to locate the right team.
Happiness is not replicating Bill Gates or Elon Musk. However, creating a successful business, that is profitable and growing, no matter how small, in any field, generates a truly transformative sense of satisfaction.
If you succeed, remember; you did not do it by yourself, your team was a key component of your success.
And if you do not succeed, do not be discouraged; every failure is a stepping stone to success, and every success a potential stepping stone to hubris.
Where can we go to learn more?
- Website
- A commercial video of what Userlytics does.
- Another commercial video about some special features we offer.
- A commercial video on how panelists can earn money at Userlytics.
- An example of how it works.
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
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