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When choosing a case study for this kind of book, it’s always tempting to select a hip young start-up that’s attracted millions in investment and professes to be the next big game changer.
But cases like these are not the norm. Nor are they necessarily representative of good web apps, but might simply be the result of a persuasive sales pitch and an influential network of contacts. The app itself may never delight users or deliver reliable income: surely the two most basic ambitions for a web app.
It didn’t take long for me to decide on the ideal role model for app makers: Patrick McKenzie, founder of Bingo Card Creator (BCC) and other apps. With BCC, Patrick successfully identified a niche market with an unfulfilled need and quickly evolved a product to satisfy that need.
“Many teachers like playing bingo to review vocabulary or skills built in a recent lesson. However, creating cards by hand takes about an hour a class. Bingo Card Creator reduces that to a few minutes – less if the teacher uses a pre-made set of bingo cards.”
Despite being in ‘maintenance mode’, BCC generates over $40,000 annually – and is steadily growing – with little ongoing development effort. I asked Patrick about the origins of BCC and his approach to marketing.
The Bingo Card Creator website: http://www.bingocardcreator.com/
I was a ‘salaryman’ (full-time salaried employee of a Japanese company) for approximately six years, working first as a technical translator and then as an engineer. BCC started as a side project about two and a half years into that period.
One of my duties while working for my previous employer was supporting English teachers in the prefecture. Somebody mentioned on our prefectural mailing list that they needed bingo cards for class tomorrow. I told them to Google to find software that makes them. They told me that they did and the search was unsuccessful. The rest, as they say, is history.
Over 95% of my customers are female. Roughly 60% are teachers at US elementary or high schools; the balance play bingo with their family, company, or social clubs. I know this both because (a) I periodically survey them, offering extra free bingo cards for answers to these and other exciting questions, and (b) I observe those who speak to me regarding support issues.
BCC has a free trial that allows you to print up to 15 unique cards. The typical parent has less than 15 children; the typical teacher does not. This allows BCC to function free forever for parents, who link to me sometimes (and are not exactly in the market for a $30 game to play at dinner), while requiring the paid version to be useful in a classroom.
My single largest competitor is non-consumption: many teachers still make bingo cards by hand or give up on playing bingo when they discover how much work is involved. There are many other downloadable software packages and web sites that will make bingo cards. A few of them were created to clone BCC. Only one or two are marketed competently, and I spend very little time thinking about competition.
The largest factor affecting my pricing was my terror about charging money for something. I kid you not! I was mortified that I would take someone’s hard-earned money and the software would break. I originally was split between pricing at $15, $20, and $25, and asked my buddies on the Joel on Software forums for guidance. In probably the most important moment ever for my business, someone told me to buck up and charge $25, since people would pay it. Turns out he was right. Several years later I upped the price to $30.
BCC monthly revenue since the web app launched (a desktop version of the software pre-dates the web app). Notice how the peaks and troughs follow the US academic year, with clear growth between the 2009 and 2010 troughs (summer holidays, July) and peaks (start of school year, October).
If a tree fell on a page not indexed by Google, who would care? I eventually got one sale two weeks after launching the product. He had some pointed feedback and even asked for (and got) a refund. Cue version 1.02.
I don’t get negative press. I deal with many customers who are not as technically savvy as the mean engineer, so there is a good deal of negative feedback for which the underlying cause is that computers are hard to use. I try to make my software and website better to make it fail-proof. There is still a ways to go.
In general, prior to putting BCC into maintenance mode, I spent about 70% of the time on marketing (chiefly organic search optimisation and AdWords), 10% on support and admin, and 20% on development. BCC doesn’t really sell due to having more features than the leading bingo card maker – it just needs to reach someone at the point they have need for the software.
I have no idea what most of the content on my website is. Do I have cards for organs of the human body bingo? Hmm. Probably. Let me check. Yep, I do!
I have extensively A/B tested many parts of the website, even going so far as to write the leading Rails A/B test library to do so1.
Among other interesting results, if one has a multistage workflow for creating bingo cards, ‘Next Step →’ greatly outperforms many other possible button wordings (such as ‘Print Cards’) in terms of influencing users to successfully navigate the workflow.
Patrick automatically publishes the results of his A/B tests at http://www.bingocardcreator.com/abingo/results
Given that the software is sold on a buy-once basis, this is a fairly boring answer, but the lifetime value is one purchase: $29.95. My cost of customer acquisition via AdWords is approximately $12 to $15 depending on what time of the year it is. Sadly, I saturate all the volume available at those prices.
AdWords, particularly the Content Network, is so effective for me that Google uses BCC as a case study. The ROI goes up and down, generally in the 50% to 100% range. Sadly, I saturate all available inventory, so I cannot just scale the business by buying up tens of thousands of dollars of ads.
SEO is the primary marketing channel for BCC, and consumed most of my efforts for the project. The primary strategy that worked was productising the creation of more pages for the website, each built around a specific need for an activity a teacher might have, and then scaling that process by hiring a freelancer to write the activities. This resulted in approximately 1,000 pages created for only $3,000 in costs. Those pages have brought in well over $30,000 now.
The breakdown of BCC revenue over the lifetime of the app. Patrick's investment in automation and outsourcing results in a healthy profit from little ongoing effort.
I once paid $200 for Facebook ads for BCC, and $170 for Frontierville dresses for my virtual wife. The dresses were definitely the better buy.
Organic SEO, organic SEO, organic SEO.
You can read more from Patrick on his MicroISV on a Shoestring blog at http://www.kalzumeus.com/
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