3 Lessons from a failed start-up "operations" _ Website operations

　

Sprucemail is a SaaS product that can help companies publish lucrative Facebook ads. The value orientation of a product is simple: Facebook ads are complex. You have to toss a lot of things, you may soon spend thousands of of dollars and the return is very little. Sprucemail away from this complexity, from the outset to provide you with a profitable advertising strategy.

Rob Jewell, founder and CEO, was previously the owner of Spruce Media, a Facebook advertising agency that spends more than 150 million dollars a year on Facebook, a big, promising company. Rob is an experienced CEO who has a rich understanding of the complexities of Facebook's advertising platform. After he put 300 million of dollars of client money into Facebook ads, he has thoroughly figured out Facbook's advertising mechanisms and strategies and has begun to apply these strategies to sprucemail.

Companies that use Sprucemail are generally rewarded handsomely, with some advertising spending returning even as much as 3,000%. But by June 2015, Sprucemail investors had decided to withdraw and close the company. Why is it that a company with a lot of customer success stories is finally going bankrupt? The exact reasons are not detailed, but here are some of the lessons I learned.

　Lesson 1: User guidance (onboarding) don't be too complicated

One of Sprucemail's main rivals is AdRoll, a social media advertising platform that is now valued at $1.55 billion trillion. AdRoll also provides redirection of Facebook ads, but the interface is simplified.

The main difference between the two is that the sprucemail collects software licensing fees on a monthly basis, but the ad says the cost is not rising. The customer enters the credit card to pay the Sprucemail authorization fee, but also has to access its Facebook advertisement account. AdRoll directly to customers charge advertising costs, but advertising spending on the surface of the 30到50% around.

We believe that we should appreciate the transparency of our pricing relative to AdRoll customers. Customers pay more with adroll words, which can save millions of of dollars if used sprucemail.

But there is a problem with our strategy-there are too many steps for the user to boot. AdRoll takes only 1 steps to enable the client to log on to the platform, and the Sprucemail user boot process requires up to 10 steps.

I am opposed to this lengthy user-boot scenario, and it is recommended that you minimize the number of steps-at most 2, 3 screens should allow users to enter and use the platform as soon as possible. Additional information, such as payment methods or Facebook connections, can be added after the user has logged into the system. But ultimately the leadership decided to take a multi-step approach.

In fact, the customer is very frustrated with this process, if the phone on the other end without a customer manager to help most of the process can not survive. This increased complexity hinders organization registration and greatly increases the manpower required to guide users.

If a customer doesn't start using your product at all, it makes no sense how much value the product can bring to the customer.

　　Lesson 2-Avoid premature expansion

Sprucemail was backed by a small group of investors who had previously been rich in technology start-ups. They are proficient in business, and not only provide financial support for the company, but also provide a strategic insight into the market and business expansion.

Sprucemail initially intended to develop the business through systematic registration. We do have some momentum, but not enough to sustain growth companies. This is a problem for investors because they want to see the rewards sooner. So they can't wait to find out why the momentum is not good, but to push the telemarketing strategy. So we started looking for people, recruited 2 sales VP and a team of salespeople. As the user boot process was lengthy, we recruited a group of account managers to instruct the customer to register and train them to use the platform. These incoming people have increased their daily expenses and forced us to bring a product to market prematurely that I still don't see as mature.

I am not opposed to looking for outside investment, and I think in many cases as a SaaS enterprise needs appropriate expansion. It is impossible to serve the global market at all without expanding, like Uber or Airbnb. But with my hindsight, I think we could have spent more time finding out the barriers to organic registration and what we really value in the marketplace, and then achieving continued expansion with smaller teams and less day-to-day spending. Investment adds to our artificial pressure and forces us to pursue short-term profits and sacrifice long-term benefits.

Find out where your product's value-added space is, and find a good market position before you expand. If possible, do it as much as possible without the need for investment.

　　Lesson 3-Choose your company name

One of the main features of Sprucemail is that companies can subscribe to a special email address into their marketing lists, and that their existing marketing emails can be used to post Facebook ads in seconds.

But when people hear our company's name, they don't realize the genius idea of creating ads through marketing emails, but think of Sprucemail as an e-mail service provider. When these potential customers think they know what your product is doing, their attitude towards us turns out to be out of the way and ignored.

Telemarketing is a tedious job, and it can be exhausting to give someone a phone call to sell their products. Having a confusing name adds to the difficulty of a already painful job.

To consider the name of a good company, to let people who do not know to see what you are doing. It is not exaggerated to say that this has the ability to determine the success or failure of the company.

Overall, the Sprucemail model and the idea behind it were good, but several key decisions led to the company's failure. I hope you can learn from it and not repeat it.