[Editor’s note: I originally posted this on the Oh Hey World blog]
This post pertains to the earlier product, OHW. I shared a lot of learnings in my 12 months of learnings on Pando in late 2013. That post was written while still trying to figure out a viable strategy around “community” pages — and before ever deciding take another shot at making community accessible everywhere, for everyone with a complete re-brand to Horizon.
Specifically, I want to fill in the blanks in the story and address:
When is enough, enough?
Filling in the Gap
By the time I wrote the Pando recap, we were already out of money. The rest of the team was doing consulting work while I was trying to find a product/strategy that could scale. I’d say late fall 2013 was the low point of my professional life.
We finished “community” pages (see here) and showed them to individual travelers as well as organizations such as Kiva and Peace Corps. What we ultimately ended up hearing from individuals was “What do I get out of connecting? Why should I connect?” From organizations, we heard “how do you get enough people using this to enable people to actually find other community members nearby?” Turns out, outside of entrepreneurs and sales/biz dev professionals, few people have an any desire to connect for no reason. People generally need a very specific reason to ever go out of their way in the real physical world to meet someone.
Oh Hey World was a powerful offering but it lacked a “why use it” people cared about. Connect.com has raised $16M+ and thus have created a better product, but if you compare feature by feature, you’ll find they are virtually identical product offerings.
My next idea was to solve the why use it with “to consume email newsletters and de-clutter your inbox”. I spent several months validating a mobile, social email newsletter reader. The conceptual feedback was amazing from publishers (the thought of analytics on email newsletter consumption is extremely enticing), but I couldn’t identify a large enough “problem” on the consumer side. Cleaning out your inbox is a pain, sure… but there were already existing solutions (that the tech industry knew about and used). There’s also the whole “most email newsletters are spam that get deleted within seconds” reality to fight, and thus I wasn’t sure a better way to consume email newsletters would be of interest to a large crowd. If there’s one thing I learned from building OHW, it was I wasn’t going to build another product that didn’t address a very clear pain point experienced by a lot of people — so I canned the concept prior to ever developing anything.
The breakthrough that ended up leading to Horizon came when a high school friend of mine, Annie Cheng, clued me into a large (19,000) high trust community she belonged to that was interested in a “private couchsurfing” for their members. A strategic deal never ended up coming to fruition, but those conversations provided proof there were very large networks in which private hospitality exchanges would work. I then started to investigate fraternities, colleges, non profit volunteer networks, and religion organizations. From several months of customer discussions and research, I finally got enough validation that enabling private hospitality exchanges inside existing communities was a product strategy with strong potential, and enough of an incentive (free or cheap place to stay, friends, community) on the consumer side to scale.
We were originally going to morph Oh Hey World into this new hospitality exchange product, but thought better of it and realized we should cut our technical debt and start over from scratch — both from a tech and a brand perspective.
With Horizon, we solved the “why use it?” question with “to find a place to stay” — which is something every single traveler has to solve, otherwise they will never go anywhere.
I’ve heard from several people they really want to know the nitty gritty of startups; how much money does it cost?
There is close to $70,000 invested into OHW — pretty much all of it my personal money (some of it was consulting money Eric, Will and I made working on various projects). That’s in addition to the hundreds upon hundreds of hours of research, customer validation, product work, writing, pitching, etc.
Building an equivalent product at market rate (aka a development shop or with developers making a regular salary rather than extremely equity heavy deal) probably would have cost three times as much — or more, depending on the development shop or how senior the engineers were.
Every month, it costs about $200 just to let OHW run. That includes the server (which is on Engine Yard), and core services such as SendGrid and Twilio. Multiple $175 or $200 x 45 (we’ve been paying for Engine Yard since October of 2012) — and you get another $9,000.
Call it a very, very expensive personal learning experience.
Why haven’t I just shut down OHW?
The site still gets users on a daily basis. The domain has 6+ years of domain history, links, and a lot of great content (aka SEO). Every person using OHW is someone that could be using Horizon.
Lastly, I still believe there is a really compelling product sitting inside OHW. Maybe not for the masses, but certainly for heavy travelers or for the enterprise.
For instance, what if, as an American citizen, it automatically notified the State Department of your whereabouts? The State Department’s “STEP” program doesn’t exactly look like a consumer friendly offering.
What if Microsoft could communicate with their global work force based on current location? What if the Red Cross could rally both their donors and volunteers with location context?
What’s the big opportunity still looking out there that Oh Hey World can capitalize on?
Think Gravatar (a “globally recognized avatar” which I’ll wager 80% of people reading this blog have) — but for location.
The question is how to monetize, short of selling it to the likes of Expedia, Priceline, TripAdvisor, or Hipmunk. Which, inevitably, is a big risk.
Read more about that opportunity here.
Another post to get you thinking: The Starting Point to Real Time Travel Advice: A Location Based Content Delivery Platform.
Go Forward Strategy
The near term goal is to get OHW generating $1,500 per month.
First, strip down the product to the core “check-in”, and then add external partners for related services.
If you go to www.ohheyworld.com, sign in, and then check-in to a city – you’ll end up what I call the “post check-in screen”. Compare what you see there today, to the following wireframe:
Second, add a home page sponsorship.
Third, offer a sponsorship of the Oh Hey World WordPress plugin. This would come with the possibility of many, many links from a wide variety of domains (the holy grail of SEO). Below is what it looks like now:
Fourth, promote the partners on the Oh Hey World blog.
Partnership / Development
OHW can’t continue without development to get it to revenue. That could come in the form of an individual who wants to take on an open source project on the side of their consulting work, or it could be an organization with a development community with an interest in maintaining/growing an open source project.
What an individual developer would get out of taking over OHW:
- A user base of several thousand to start with
- Existing brand & design assets
- Working product
- Financial upside, without needing to take significant financial risk to build something from scratch
- Strong SEO
What a college program, coding academy, or accelerator would get:
- Everything listed above
- An open source project for their students/entrepreneurs to work on
- Branding/marketing. Everytime the open source project is talked about, covered by the press, forked, etc – the brand of the organization would be part of that story
- Ecosystem of jobs with the companies using the open source code base over time
Example organizations that would make sense: Code Fellows, UW Science and Engineering, Start-Up Chile, or TravelStartups.co.
The other option is to find a partner who wants to sponsor the entire site to the tune of $1,500 per month for at least 6 months (or you’re a broker or franchise who thinks big, read this) – and allocate some of that to a developer to spend some of their time growing the product.
Context as to what I/Horizon wants out of a partnership:
- Recoup the money I’ve put into the product (not necessarily looking to maximize revenue)
- Help covering server costs of OHW/Horizon in the near term
- Enable OHW users to find Horizon from the app
- Long term SEO for Horizon
I’d be willing to do a profit split for ohheyworld.com — likely about 75% – after all monthly services for OHW/Horizon (servers, email, accounting software, etc) are covered (currently about $700 per month).
In the event of a sale of the ohheyworld.com brand and assets to someone like Amadeus, Travelport, Concur, TripAdvisor, etc – there would be a sliding basis of the split. 10% of sale price up to $50,000, 30% of the incremental between $50,001 and $70,000, and 70% of incremental above $70,000.
If you’re a developer or organization interested in an agreement in the realm of what’s outlined above, shoot me an email at drew at horizonapp co.
To Pull the Plug, or not Pull the Plug?
Anyone that has slaved away on a startup knows how hard they are. Hundreds of hours. The stressful nights (& resulting grey hairs). The weekends spent in front of your computer while friends are out having fun. It really is like nurturing a baby (from what I’ve heard from those who have done both).
There comes a point where you’ve got to just move on. Shutting down your first “startup” is a tough decision. There’s so many hours, and so much money, that were thrown into it that you want to see it live on to see another day.
Where’s there’s a will, there’s a way.
Ultimately, unless that will is shared by someone with development chops to own and grow the product, OHW will need to see it’s last day soon.