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About a year ago, we had to shut down our first product - Mule. Once we shut it down, we were loosing hope. We didn’t know if we could find a way out. The following 8 months were brutal. Without clear direction, we thought it might be time to hang up the gloves. However, we decided we had a duty to make this work.
We pushed through and pivoted to a new product. The business is now fast approaching £1m ARR, having grown at 24% a week for the last 5 months.
We couldn’t be happier with the progress we have made, but it was not always like this…
The last 12 months have been crazy; the highest highs, the lowest lows, often on the same day.
I wanted to reflect on just how difficult it has been to get here and shed light on the our experience of pivoting as well as share where we are heading.
In June 2019 I called up my friend Luke and suggested we build an app that enables people to compare the price of sending a parcel (we were both in our second year of university at the time). Luke and I had previously built and sold a cleaning business at school called Buzz Maids which we sold when we moved on to university (more on this another time).
Our mentor, a cleaning business veteran called Ray had said to us when we were 17: “cleaning businesses aren’t much fun to build, if you decide to build an app instead I might invest in it”. We took him up on his offer a few years later and he wrote us a £40K check.
Giddy with our newfound wealth, we channeled our inner Scorsese and splurged on an advert that was more comedy sketch than sales pitch. (unfortunately, it didn’t help us get customers):
Here is a quick summary of what the next 2.5 years of Mule looked like:
Highlights:
Lowlights:
From about June 2022 our growth started to stagnate. We decided that we could get growth if we built integrations with more ecommerce platforms. When that didn’t work we had a difficult decision to make: continue with our current product or pivot. Cash was running out FAST (we only had a few months of runway left).
We didn't want to feel we were jumping ship too early but we couldn't see a way to make the business more profitable.
We informed our investors. This was not much fun - we had to answer quite a few questions. However, surprisingly the VC who had invested in our business said this:
It was nice to get a vote of confidence that we had at least made the right decision.
We reduced our costs and now had ~16 months of runway. Surely we could figure something out in 16 months?!
We had already developed a "pricing engine" for Mule (our previous product) to accurately calculate shipping costs across multiple couriers. We thought we could market this software to ecommerce merchants and logistics providers.
However, after six months of unsuccessful attempts to sell the product, we realised it didn't sufficiently address ecommerce merchants' needs, and logistics providers already had similar systems.
We decided we needed a low-cost, time-efficient way to identify pain points and test solutions.
Luke came across this book called Sprint by Jake Knapp. The big idea with Design Sprints is to build and test a prototype in just five days. You clear the schedule for a week, and rapidly progress from problem to tested solution using a proven step-by-step checklist.
The 5 D’s of a structured pivot:
We had a 1 hour call with Adrian Sanders, CEO of Chargehound (sold to PayPal) who gave us some really helpful advice: “You need to build a product that delivers massive value. You need to be building a 9/10 product rather than a 6/10, 7/10 product, because if you aren’t, you are not solving enough of a pain point”. Easier said than done, but it was helpful in setting a high bar when it came to the feedback we’d get in user interviews.
We spoke to over 150 e-commerce merchants and cycled through over 10 product ideas. Some examples:
Some of the ideas we tested were good and we got positive feedback from customers. However, we felt there was one or more of the following problems:
They felt like 6/10 solutions. We also started to iterate on the Design Sprint process and came up with an alternative version that we felt was better suited to our use case. Here is a link.
It came down to a call with Mat Mullen (a US based ecommerce expert) where, in answer to our questions about shipping claims, he asked “you guys heard of Route?” We hadn’t. Some merchants were using Route to upsell delivery insurance at checkout. We hadn’t seen this anywhere in the UK. After lots of digging, we saw several opportunities:
The solution we came up with was to enable merchants to upsell delivery protection to their customers at checkout, but they would keep the delivery protection revenue rather than giving it to an insurance provider. Instead of selling insurance at checkout, the merchant would be selling a service. As a result, the delivery protection revenue would go straight to the merchants' bottom line. This would be 6x-10x more profitable for the merchant than using an insurance provider. The merchant would be able to reduce the cost of delivery issues whilst also adding to their margin.
We made sure this approach was legal both in the UK and the US and then got started building the MVP.
During our user interviews, we’d offer the interviewee the option to use the product for a discount. Most people are agreeable, which means they’ll tell you what you want to hear (even if they don’t realise that’s what they are doing). We were tired of agreeableness. We wanted painful, ego-destroying feedback.
Asking customers whether they want to pay you for a solution is a good way of removing their “agreeableness” to get honest feedback. This is probably the most valuable question in the entire user interview.
With previous solutions we tested where we tried to get customers to sign up, we’d get a lot of responses like “I need to check with the team”, “it sounds interesting, we could look at integrating this in 6 months” etc (signs of a 6/10 product). However, with this idea we had 10 customers signed up to use the product before we had even started building it.
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The MVP took 1.5 months to build and we then went live with the customers who had signed up. The results exceeded our expectations: 45-73% of all consumers were purchasing delivery protection at checkout. As a result, merchants were making a lot of money and consumers were getting peace of mind.
From customer feedback we then built two more key features:
Both these features have been a hit with customers, helping us convert more merchants and increasing their delivery protection profit.
Our first goal was to reach breakeven, which we reached 5 months after launch. Our next goal is to hit £1m ARR, which we should hopefully achieve by May 2024. If we achieve this we would have reached £1m ARR in 11 months. Fingers crossed!
We also want to both continue to operate on Shopify, but also move into the enterprise space through API integrations. We believe enterprise customers will have good opt in rates, but since they are much larger - will generate much larger amounts of profit through the product. “Operation enterprise” is already underway.
We were so fortunate to have a team who trusted us and preserved when the chips were down.
We have countless early adopters who joined ProtectMyOrder before they probably should have, and showed patience and trust in us as we built out the product.
I’m thankful for these things. But none of them mean anything unless we can continue to execute at a high level and make ProtectMyOrder 100 times better than what it is today. Undoubtedly there will be more challenges along the way.
Knowing what I know about what’s in the pipeline, I can promise you the best is yet to come. Here’s to the pivot and the £1m comeback.
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