Lessons learned building Competely
Business model, user acquisition, and activation
Hey, Lior here! In my newsletter, I give you an insider’s view into the world of indie hacking and building products used by millions, with actionable tips on productivity and entrepreneurship. Subscribe below and follow me on Twitter.
Competely is live on Product Hunt!
In the past couple of months, I spent countless hours working on Competely, my AI competitive analysis tool, with early customers.
Today, I’m officially launching it!
I’m on Product Hunt all day to answer your questions, come and show your support:
How does Competely work?
The idea behind Competely is to help founders, product managers, and marketers quickly generate a competitive analysis for their product. This could potentially save days of work.
Once you sign up to Competely, there are three steps to create a competitive analysis:
Step 1: specify the address of your product (or describe it):
Step 2: Competely’s AI looks for competitors for your product online. You can then choose which competitors to compare to your product:
Step 3: Competely scans competitors’ sites, and our AI analyzes the differences between you and competitors across product, marketing, pricing, and more:
Lessons Learned
In the past few months, I’ve been focused on working with early customers to improve the product and prepare it for prime time.
Here are some things I’ve learned throughout this process:
Early feedback is critical
Start (really) early: even before I even had a working product, I started gathering feedback and gauging people’s sentiments with a simple Google Form. I then emailed these users, started a conversation with them, and provided early access to the crappy beta I had built.
Build a community: I then started a community to gather feedback from early users, as suggested by Ron Gross. This has the benefit of people knowing each other and interacting with each other, instead of just discussing individually with early users.
Maximize the contact area with customers: working with dozens of customers to resolve their issues and answer their questions unveiled tons of insights. Adding links to send feedback everywhere really helped, as well as proactively reaching out to users.
3 business models in 3 months
Free can be misleading: I started with a free MVP for a month. While it helped me launch faster, I quickly learned that early free users are usually curious about the product, but they aren’t always the ones with the deepest pain or the willingness to pay. Therefore, in the future, I might start charging even earlier to attract the ideal customer profile.
Subscriptions are great, but users don’t like committing: I started with a subscription model ($19/mo), which made it hard to onboard early users who didn’t want to commit, especially with having no free trial. The fact that the subscription can be canceled anytime didn’t help.
What I ended up with: I eventually switched to a $19 one-time payment, while limiting what users can do (up to 10 analyses) to control the burn rate. This change has reduced the friction to sign up, and increased conversion rates.
This is not the end: I definitely see myself going back to the subscription model once the product matures and offers more value, but for the time being, it’s more important to maximize my learnings from early paying customers than to maximize revenue.
Sustainable user acquisition is challenging
Launching is not a user acquisition strategy. If there’s one thing I’ve learned from launching dozens of products, is that launching is not a sustainable strategy for user acquisition. You get a short peak in traffic and sign-ups for a few days, but then it’s gone. This applies to Product Hunt, but also to PR (TechCrunch, New York Times, etc.)
Running ads is a valuable skill: I started experimenting with acquiring users through Google Ads as a more sustainable acquisition channel. It’s been a while since I ran Google Ad campaigns and there’s some learning curve. However, I’m determined to get better at it, since it’s valuable not only for user acquisition, but also for early validation and understanding of any market.
Positive unit economics is elusive: at this point, I aspire to get to positive unit economics, where the cost of acquiring a new paying user is lower than the customer’s lifetime value. This is elusive, especially since I charge users a one-time payment. However, I did manage to improve the campaign (and the user conversion) significantly over time, so I have hopes that positive unit economics can be reached with Competely.
User activation at scale
Mo users, no money: after making the product paid, I noticed how most users don’t complete their signup. They register with their email, but they end up not paying.
Trial is assumed: talking to many new users about it, a pattern emerged: everyone assumed (or expected) a free trial for the product, although at no point I mentioned there’s one. This makes sense, as free trials are fairly commonplace in smaller SaaS products. However, due to the significant cost of generating a competitive analysis, I don’t offer a free trial as this will quickly bleed me out of money…
Post-signup emails FTW: I decided to start sending emails to users who signed up but haven’t paid. Suprisingly, a lot of people replied to these emails, and some even ended up completing their registration and paying:
Start manually, then automate: for several days, I was running a database query and mailing each user individually from my Gmail, but gradually, the number of new users grew and I became the bottleneck. At this point, I built an automation to send these same emails to new users who had not completed their registration. I’m happy to report it’s still working :)
That’s it for today, folks!
Have any thoughts or questions about Competely or how I built it?
I’m on Product Hunt to answer your questions:
Best,
Lior
Congrats Lior!