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Turning Weaknesses Around

Published on April 01, 2014

The opinion that hardware-based businesses don't scale is widely accepted at this point in time.

Our product contains a hardware component that requires installation in order to work. Doors don't speak the same language as phones do, so we need to plug a little device into the door's electronics in order to bridge this gap.

Yet what sounds easy on paper, if you have ever dealt with your door's electronics board you already know it is not a pleasant experience. That's the ultimate reason we intentionally hid this process from the user as much as we could and relied on a network of partners.

We are aware that this decision implicitly constrains our growth to the point that we are somehow dependent on their capacity to handle new installations and ours to expand such network. Yet I'd argue that the benefits of delightful customer experiences in terms of retention, quickly outweighs the price we have to pay for slower growth.

Growth

The fact that each sale comes associated with a slow installation might strike the startup crowd as the wrong way to approach business.

And while it is true that we can't grow virally as some other digital products do, it is also true that our retention rates are usually higher.

Once iomando has been installed, we just need to prove that we are more convenient than a key, then people use it. Not because our product is better than your typical marketing SAAS, but because we cover a transactional necessity — which is going in and out of places — people have to deal with anyway.

On the other hand, a harder sale also means a longer relationship with the customer.

We acknowledge that our service is not "a click away". But the chances of retaining the customer are also much, much higher. Once the hardware is installed, it becomes a zero-sum game. If you use our service, you are certainly not using our competitors'. Because of this, once the sale is done, you are more likely to stay and retain your customer for a longer period of time.

Finally, I'd argue that it is easier to monetize atoms than bits.

When it comes to paying, people have a hard time with intangible assets, like an app. I don't have data on the matter, but I'm under the impression that the fact that you are getting "something" in return for your money makes you more confident with the exchange. Because the app is "just" the support function of the service, then paying for the whole pack becomes easier.

It is obvious that delivering pieces of hardware holds our growth back compared to a software-based shop, but it is also true that the hardware helps us monetize and retain our customers for a longer period of time.

Hardware is one of the main reasons we need to rely on installation services. But unlike the hardware itself, the installation process didn't prove itself to be a competitive advantage, or at least, that's what I thought.

Turning Weaknesses Around

Since the very beginning, we were concerned with the installation process. It was by far the most relevant "W" in the SWAT page of our business plan, and we had a hard time arguing back the potential benefits to both customers and investors.

Conversations in our offices revolted solely around the idea of "if only we could make it auto-installable people would buy it directly from our website or impulsively from retail stores".

To the point that we worked obsessively and invested more than we'd like to admit to an auto-installable solution. And while we certainly removed a lot of friction from the process, we failed to deliver an auto-installable solution to the market.

But someday, a friend of mine (and one of the smartest person I know) made me realize one of those small pieces of evidence that have been there all the time, but somehow you haven't been able to see. An elephant in the room of sorts.

If you couldn't do it, with all the effort you poured into it, maybe it can't be done at all. And that's a good thing because nobody will be able to do it, either. So instead of looking at it as a problem, think of it as an opportunity.

And he was absolutely right. Each of our competitors faced this exact problem, so we were gifted with the opportunity to turn this problem around and transform it into a delightful experience. He might be stating the obvious, but it was something no one had ever thought before.

So we diverted all the resources we were pouring into the auto-installable unicorn and allocated them into building an amazing installation service, one you can't forget of.

Simple things like these made all the difference and surprisingly, we didn't think of before:

  • Started to handpick our distributors and rolling out a quality assurance program to unify the experience across the board.
  • Created the "iomando official partner" program, an engagement program for installers who wanted to distribute and invest in the product.
  • Developed a specific training program to directly teach our installers and give them great resources and materials.
  • Designed a step by step guide of what it was like to buy our service, from the first call to follow up visits. We actually build it going ourselves through each stage of the process in different locations of the country.

With a huge focus on making the installation process into a great experience, we turned what we thought it was a weakness into something our customers loved. Because at the end of the day, we were freeing our customers from reading the manuals, dealing with the crappy door electronics and all those things you want to avoid. In their minds, iomando just works.

Because sometimes you obsess over something and get stuck, frustrated. You are dealt option 1 and 2, but never wonder if option 3 even exists. Yet maybe is not a matter of digging a deeper and deeper hole, sometimes you need to just go, and start digging in another place.


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