We write a new business update about ever three to four weeks that is shared with our board, investors, and Moment team members. These are not status reports, instead they represent a chronological journal about what we’ve learned in building Moment. Writing these updates forces us to think about what we’re doing, what’s working, and what isn’t.
Below are updates from 2016. You can read updates from 2018, 2017, and 2015.
What a difference a month makes.
Since our last update we’ve recognized $1.1M in revenue. Bringing us to over $4.6M for the year through our e-commerce efforts. The quarter isn’t over but Q4 should account for over 33% of our revenue this year.
Although top line growth in Q4 is positive, we were much more aggressive this year in turning inventory into cash. We expect our gross margins to take a hit, while our cash balance to grow to just under $2M by the end of the year.
Every year we improve at our holiday execution, learning from the previous year’s mistakes. Last year we ran out of stock. This year we didn’t run out of stock, but we were reminded of a few key lessons:
+ Moment products are “seasonal guide” products meaning that we have to have new products when editors are writing about the “best products for blah.” Last year we had new products, which put us in lots of holiday guides. This year we didn’t and therefore received a lot less holiday guide coverage.
+ Success in our capture product line is heavily dependent on our ability to support the latest devices. Moment sales, pre and post shipping of iPhone 7, were meaningfully different.
+ If you offer faster shipping, such as two day delivery, you better hit the timeline or customers want free shipping. Financially this starts to add up when you are talking about two day and next day delivery.
NEED HELP
We are working on a referral program for our customers. We would appreciate advice on third party platforms you recommend and/or introductions to startups that have executed this well.
We are trying to secure the user Moment on Youtube, Any introductions at YouTube who can help, would be greatly appreciated.
We are beginning to roll out a vertical retail program, with B&H being our first partner. They sold out in the first few days, but if you are a B&H customer we would love help with positive product reviews. You should be able to find us by searching for Moment on the B&H website.
BUSINESS UPDATE
We are over $4.6M in our direct business for the year. This doesn’t count any retail revenue. We still have a week to go, reaching $5M for the year would be a positive step forward.
We are approaching 50K total customers. December will represent our largest month at over 4,500 new customers . We wish the holiday buying season happened every month.
Customer mix towards new customers has been stronger in the last two weeks than any point this year. We have seen repeat purchasing around new product introduction, while the holiday sales have thankfully brought a whole new group of customers.
Looking at device type we’re surprised to see that iPhone 6/6s is holding its own. Collectively iPhone 6 is outselling iPhone 7. But within the mix it’s also interesting to note that iPhone 6/6s outsells iPhone 6/6s Plus, while iPhone 7 Plus is outselling iPhone 7. It shows that the better camera is tightly coupled to Moment demand.
One of the big differences this holiday season was the opening of our first US warehouse. It’s difficult to measure it’s direct impact on conversion rates during the busy holiday season, but we can see that ground shipping grew to over 92%. Keep in mind the rate for ground shipping will continue to drop through the 21st as expedited shipping remains the only methods to reach customers in time for Christmas. Additionally, the opening of a US warehouse extends our last shipping deadline from the 15th to the 21st, enabling six more days of shopping.
Price could be a driver this holiday season for new customer acquisition. Our aggressive sales had a meaningful impact on average order value, bringing us down from $143 last holiday season to $114 this year. Outside of our 72 hour sale, we also tried our first daily deals. It appears that lower product price trumps cheaper shipping as multiple customers ordered every day to get a better deal.
Over the last two weeks we have been iterating on the design for our product detail pages. We added additional product, warranty, and shipping information above the fold. It’s hard to yet know if those changes are making a positive impact on conversion rates, but we can see that attachment rates have definitely dropped. Moving related accessories below the fold appears to have a direct impact.
The Momentist is on pace for a record number of new readers.
Gear guides, photography learning guides, and people stories have us on pace to reach over 20K monthly readers for the first time. We have finally seen meaningful traffic from referral sites, leading to over 62% of readers being new to The Momentist in December. Comparing our results to last year, the Momentist accounts for over 13% of new sessions this year versus 3.5% last year.
Quality of customer service has seen a significant improvement year over year. We offered live chat for the first time, being online an average of 12 hours per day M-F. Our customer service happiness score increased 12%, reaching 82 out of 100. Our average response time during working hours reduced from over 5 hours to barely over one hour. Most importantly, everyone on the team answered emails. This resulted in the top 5 service people only accounting for 61% of the email volume, compared to 89% last year. Keep in mind, last year two of the top five service people quit after the holidays.
We still have a long ways in winning the market, but we made some promising steps forward this year.
We launched two new carrying cases for your mobile photography gear. We just started fulfilling orders, but we are already seeing a similar trend with existing customers being the first to purchase new products.
iPhone 7 and 7 Plus mounting plates are the last products waiting to be delivered for the holidays. We should be fully in stock by the 30th, just in time for our annual holiday sale.
NEED HELP
We launched a basic careers page and posted a Controller job that we really, really want to fill. Any recommendations on candidates, especially ones with e-commerce experience would be appreciated. At a minimum, would love help in following our LinkedIn page.
We launched a Moment “gifting” program to support companies that want to buy Moment for their employees. Ideas and introductions to companies you think who would be interested in gifting Moment to their employees would be much appreciated. Gift moment here.
BUSINESS UPDATE
We are moving closer to being in stock with iPhone 7, which appears to be having a positive impact on our revenue. Over the past two weeks we have finally returned to positive year over year revenue growth. It’s a reminder that being in stock with the latest devices is critical to our capture business.
There are about $80K in iPhone pre-orders to be fulfilled over the coming days. Not everyone is willing to pre-order so we are curious to see what happens when iPhone 7 is fully available. It’s arrival is coinciding with our annual sale on 11/28, which should provide for a strong close to the month.
In the last two weeks, weekly traffic and revenue have finally turned positive year over year. Last week alone traffic was up 14% and revenue was up 58%. We hope this is a positive sign for the coming weeks as we look to sell every item we have.
We launched our first US warehouse with an e-commerce focused fulfillment company called Landmark Global. This move lowers our shipping costs, reduces shipping lead times, and adds two new shipping services in overnight and next day delivery. To launch the service we have been testing a $5 ground shipping and free ground shipping if they purchase a minimum quantity. It’s too early to really tell but it does look like US conversion rates are up slightly. Most obvious is that the shipping split within the US has definitely shifted to more ground shipping.
One of the benefits in moving to Landmark is we get accurate data within days of shipping. This is a significant improvement from our previous partner. Looking at just the first week’s orders we already see that we are making a few dollars per order instead of losing money. We have been able to lower the cost of ground shipping to customers by increasing the pricing on express.
We merged the content and community teams back into one content team. Thankfully the community team was built with talented creatives, so it was a natural transition. Currently the combined team is focused on publishing at least once per day, integrating with brands to promote the content, and reaching out to media partners for content distribution. Our key metric of success if how many people we bring to the website through the content we publish.
Over the past month we’ve been doing a much better job on customer service. Everyone in the company tackling at least 25 customer service emails per week is having a dramatic impact on our speed to reply and the quality of our service. It also enables the content/community team to reduce their customer service load to under one day per week.
We are beyond excited to have Miguel joining the Moment team as a developer on the shopping team. Originally from Loredo, TX he’s now calling Springfield, MO home. A self taught developer his passions for philosophy, learning, and creating carefully designed solutions makes him a great fit for the team. When not cranking on Moment you’ll find him traveling, writing, and snapping pics.
A break from our normal updates to post our Q2 and Q3 results.
Q2 was a solid quarter with 178% growth in our direct business and first revenue recognition from our 50 store Apple test. We successfully raised our Series A and started using the capital to increase our inventory levels by the end of the quarter for the holiday season. The key summary from the first half of the year is that we turned a (-$555K) loss in 2015 into a $43K profit in 2016.
Q3 was our fifth straight $1M quarter, but was a quarter of two halves. July/August were record breaking months while September was slow with iPhone 7 ambiguity. Recognizing our 2015 Kickstarter in Q3, or direct business only grew 6% this quarter. Our gross margins and order metrics improved, but our profitability (-$157K) dropped, largely due to September. Additional spend was attributed to filing out the team (now at 20) and spending on new product initiatives. We have done $4.78M the last for quarters and looking to grow that number through the busy holiday season.
Full results here.
(password: #makemoments)
Apple announced their new phones. It has both good and bad news.
The good news is that our lenses will actually work with both devices. This was a surprise as we assumed we would be incompatible based on the rumored hardware changes. This definitely helps with revenue in Q4 as a new lens design will take until Q1. We have been posting updates for our customers here.
The bad news is our cases do not work. Therefore customers can’t buy lenses for either iPhone 7 until we have new mounting plates (end of November) and/or new cases (end of January). iPhone 7/7+ actually working does make our new product roadmap trickier in support existing lenses on iPhone 7 while we work on generation two lenses and cases for early 2017.
We did break our normal, serious approach to have a little bit of fun with the announcement.
BUSINESS UPDATE
We took our latest Moment offsite. It happened right during the Apple announcement which was both stressful but important. We were able to immediately build a plan and get to work. Take away from the offsite is now at 18 people tightening our process, communication, and language is critical if we want to play the game at a faster rate. Read the full recap here. (pw: #makemoments)
Revenue in September sucked. Customers waiting for iPhone 7 to be announced followed by customers waiting for compatibility validation resulted in our worst month of the year.
At the same time email subscriptions for iPhone 7 have grown to almost 2K over the past month. Using our average order value that is about $300K left on the table. Of course not all of the email subscriptions are new customers but it shows that jumping on new devices is key to the success of our capture business.
What’s interesting about iPhone 7 is that for the first time the 7+ is clearly the better camera with dual lenses. It most likely means that our customers are going to be 7+ users over 7 users. The twitter poll that we’re running somewhat validates that assumption with customers are either going to stay with the 6 or jump to the 7+.
Right after the iPhone 7 announcement we announced our fourth lens, Moment Superfish. It’s our best quality lens so far and our first aspherical design. The data is early and lumpy but we can see that existing customers have outpaced new customers on the purchase of the lens, which makes sense when new customers have been waiting for iPhone 7 compatibility news.
We are continuing to make lots of small improvements at content execution. These improvements come from a series of internal changes including the shifting social media ownership from content to community, creating tighter briefs for each channel, introducing a content calendar, and pre-planning stories. Compared to last year, on average our content traffic is up over 200%. Getting better is definitely takes a lot of hard work.
We shipped our latest version of the Moment App which is iOS 10 compatible and includes new shooting features. Being featured again by Apple definitely helps to grow impressions within the app store and downloads. What’s also interesting is that with this release we changed our icon from a standard black/white Moment logo to a visual interpretation that clearly stands out. It’s early but it looks like the combination of icon and simpler app name has increased our conversion rate (store impressions to store page visits) from 5% to 8%.
We are excited to welcome Caleb to the content team as our first full time video person. Having grown up in Seattle, he has always had a love for the outdoors and capturing beauty with his camera. He started filmmaking about five years ago and has been hustling ever since. You can follow him here on Instagram.
Apple is announcing the iPhone 7 on Wednesday. It’s both exciting and a bit terrifying.
It’s exciting because our ‘capture’ product line can take the next step forward in making your phone an even better camera. Each new iPhone introduction brings an upgrade cycle that we benefit from in driving repeat purchases.
It’s terrifying because it creates short term ambiguity in our business as we wait for their next phone to be introduced. At the same time the introduction of dual lenses creates long term ambiguity as it finally forces us to move on to our next product line, taking the business past phone accessories.
We won’t know the complete impact on our current product line until we receive an iPhone 7 in our hands around September 16th, but on Wednesday we will have a much better sense about where we stand. Based on the internet leaks, it does look like our lens products will work on the iPhone 7, but not the iPhone 7+ (assuming it has dual lenses). Assuming not all the iPhone 7 models have dual lenses, we plan to introduce a second generation version of our entire product line over the coming months, including new lenses, cases, and accessories.
This effort will take us through Q1, at which point we will shift our internal focus to our next product category.
Wish us luck.
NEED HELP
Help us share our latest Moment film on Twitter. Favorite and RT this tweet.
We need to improve our finding, recruiting, and on-boarding of new people. We are looking to chat with any teams that are doing this well so we can improve the process over the coming months. In particular introductions to teams that have gone from 15 to 30 people would be much appreciated.
BUSINESS UPDATE
Our direct business came in at $388K for August. Add in Apple retail sales and we’ll end the month around $450K. We have yet to implement retail sales data into RJ Metrics so our charts just show the direct business.
Introducing several new products over the coming months, we expect the order mix to shift back to more repeat buyers. The trend of sales coming from new customers has continued in August.
Conversion rate changes appear to be based more on customer intent than direct changes we’re making to the site. What is hard to separate out is regular traffic versus traffic that comes from a strong reference to buy, such as the Wall Street Journal article we saw back in July.
A new experience we have been testing the last two weeks, is live chat. To date we have run live chat for a total of 11 hours over four days, handling about 13 customer per hour. The data set is small but overall we’ve seen a 20-40% increase in website conversion rates during live chat hours, while reducing the number of emails received during that same time period. We are now trying to figure out how to carry this service forward on a regular basis.
We launched our third film. It’s called Small Things and it’s by Tim Kellner. It has been our most successful film to date as we are getting better at launching each film. The fourth film arrives next week.
In looking at the data behind Moment Films, we’re learning that the first 15 seconds is everything when it comes engaging the viewer. We’re also learning that advertising the films on Facebook is 10x cheaper than Instagram, while growing our YouTube subscribers is going to take some real hustle. These films serve at an ‘inspire’ level of customer messaging and next we want to launch a series of ‘explain’ level videos tied directly to product benefits.Dollar Shave Club is a great example of ‘explain’ level video content.
Over the last few weeks we have been shifting our internal ownership of social channels from the content team to the community team. Content is still the largest driver for what we share, but by community owning these channels we can better engage people, which is the point. Twitter was our first test and over the last two weeks we have been doubling down on ‘voice’ to better understand what drives engagement. Next up is Instagram, followed by Facebook.
We learned again that Wall Street Journal articles work to get new customers. Covered by the travel section this time, validated again that people often buy Moment before life events, especially trips.
Post June 30th we have seen a noticeable increase in daily revenue. Even though traffic hasn’t grown significantly, we’ve seen a rise in daily orders. It has us looking at the profile of a WSJ reader in relation to our current customers.
Most notable from the article was the increase in average order value to $198 in July alone. The people who purchased in the beginning of July were clearly more affluent as they bought a higher percentage of the total line.
At a basic level we’ve also seen that our conversion rates have been improving. A combination of website improvements with the more affluent WSJ audience have helped to drive desktop conversion rates back to an acceptable level. Mobile is still a work in progress.
BUSINESS UPDATE
July is on pace to be a monster month for us, hopefully passing the $500K mark for the first time in a non holiday month. We still have more work to do, in order to maintain our momentum this month.
We are continuing to refine the secondary metrics in our business. We have been spending more time around our content to better understand its value. In particular we are looking to understand it’s ability to bring in new visitors, its influence during the buying process, and if it brings our existing customers back.
The first question, does our content bring new visitors, we are now starting to track. The data pre July is skewed because it it includes traffic via our mobile app, but so far in July, Momentist articles are bringing about 9% of our new visitors to the website.
The third question, does it bring our customers back…we are finding about 40% of our readers are repeat. This is consistent with the +45% open rates we see via email with our most active customers. It is reiterating that the content is engaging our existing customers more than it is bringing new ones to the front door. It has us thinking about how we can create partnerships with each piece of content to provide it more reach.
Following a similar thread within community we have started diving deeper on what is working. We have built our own tool that helps us track engagement from the Collective, people we take on our adventures, and people we give free product too. It’s a crude tool but it’s helping us to realize that more frequent, lower cost community events are working to reach more people. It’s an important learning as we continue to expand our community efforts.
We hosted our first FB live event with Mashable. Definitely an improvement from the FB live event we did on our own. Their studio made the video higher quality where their 477K FB followers provided a larger starting base. We are looking to make this part one of a five part content series with Mashable.
NPS data can get better. We have been spending more time on the data now that we have over 1300 customer responses. The biggest areas for improvement are around shopping (better shipping, more lenient returns, easier UX) and products (mounting interface and case execution).
We are excited to welcome Phillip to the team. He is a software engineer that joins us by way of Misfit Wearables where he worked in China on the integration of hardware and software. Outside of Moment he is an avid traveller, music lover, and photographer of the outdoors. Find him @philpass.
We learned a lot from being featured in the App store. The biggest lesson is that Apple really does control the keys to the kingdom. Being featured and ranked drives tens of thousands of new installs without any change to our customer acquisition strategy.
The app store feature started on May 27 and and drove roughly 65 MM impressions of the app in the app store, and approximately 570k views of the Moment iTunes app page during the time when the app was featured worldwide..
The App store feature drove approximately 66k downloads of the app, with top download days of 8k, 9k, and 10k. Pre-feature, we averaged less than 200 downloads a day. After the features ended, we have seen the number of downloads per day begin to trail back down to pre-feature levels.
The feature has led us to think about how we can retain those users and use the app as an entry-point to the Moment brand. Currently, our retention rates are are showing that 24% of downloads are active one day later, and that we are retaining approximately 2% of downloads as long-term, engaged users of the app. Turning app downloads from people new to Moment into Moment customers will be key for us in leveraging the app as an acquisition vehicle.
BUSINESS UPDATE
June is on track to reach about $325K for the month. That should put us up 175% over June of last year but that is still down from our monthly March high of $473K.
Looking at why, we see that average order value has stabilized at around $160. This result is attributed to maintaining positive stock levels. What has fluctuated is the number of orders we receive per months.
Understanding our order mix further we see that orders from first time and repeat customers are following a similar pattern. This says that both groups are experiencing similar reason not to buy. As a whole we are seeing our order mix shift to nearly 70% first time buyers which continues to speak to our need to introduce new products for our existing customers to continue buying.
Even looking at website conversion rates we see a similar trend between people that are new to Moment (first time visitors) versus people who are already familiar with us (repeat visitors). Pre consistent stock levels in March our conversion rates would fluctuate wildly based on the receipt of new stock. April began to stabilize and since the first week of May we have seen a decrease in conversion rates with the shipping of the new website. Continued site bugs with checkout have hurt. Keep in mind we would expect first time visitors to have a lower conversion rate with a recent influx in new visitors via a free app. But when repeat visitors also see a shrinking conversion rate it leads us to believe that they are both struggling from the same non-purchasing reasons.
One of the results in receiving a large increase in app installs is the growth in views for Momentist content. Within the app you can open up the Momentist, which has helped to make content almost 20% of total page views. This is pushing us to dive deeper into content metrics to understand the influence content is having on the purchasing decision.
We hosted our first Facebook Live event via a photography Q&A with three Collective members. We don’t yet have a benchmark for engagement but we saw 90 questions asked on 647 video views. That was against a reach of 122K. We did learn a lot form this first event and plan to keep engaging the community through similar efforts.
We hosted our first Collective off-site, taking five members to California for a weekend of camping, shooting, and connecting. Another first time learning experience the Collective members were engaged in helping us to think through ways in making the Collective stronger. The biggest take away was thinking about how to better build community within the group versus just focusing on the relationship between Moment and each member.
We are excited to welcome Jessica (@jessicalivak) to the team. Coming from a background in software testing, she brings diligence and detail to the team. Being a photography enthusiast she is excited to combine her love for photos with her love for building great products. When not cranking on a laptop she enjoys going on spontaneous adventures with her husband.
We got featured in the App store this weekend.
This is the first time we have been featured so lots of learnings going on. iTunes data is always 24 hours behind so we barely have any data, but we’ve learned a few insights so far.
Being featured brought significant traffic to our app store page. The 215k visits brought at least 16k new app downloads, approximately a 7.7% conversion rate. For comparison, excluding this past weekend, we have averaged 153 new downloads per day, converting at approximately 48%.
We are interested to see how app feature traffic varies from the traffic we have been driving to our own app store page. We will be interested in seeing how the influx of new app users use the app, and if they remain users over time. It’s too early to tell, but the 1-day and 2-day cohorts are trending lower than users acquired before the app store feature. Not surprising, but obviously turning them into regular users is an important goal for the app, and we will be doing far more analysis of how people are using new features and what features bring people back consistently.
One of the new features in the app was to highlight the Momentist and drive traffic to the website, and the rush of new users drove significant traffic to the website over the weekend. 52% of app users visited the Momentist through the app, and the sheer volume of app users resulted in 11% of website pageviews coming from the app.
We still have a long ways to go in cracking the top category list of Photo and Video but this is a nice start. With the addition of two new software developers joining the team, we expect to go faster with more features.
NEED
We are looking of our first full time finance/accounting person to add to the team. We are looking for someone that 3-5 years of finance experience that can handle our basic accounting as well. Or someone with an accounting backgrounds looking to grow on the finance/analytics side. You can reply directly to this email with any names and ideas.
BUSINESS UPDATE
We published or latest offsite recap. Now at 15 people we are doing these off-sites 3x per year for a whole week, making our recaps even longer. If anything we’ve realized that the documentation process is important for own reflection and serves as a point of reference for future team additions.Read the full recap here. (password: #makemoments)
Q2 has been a consistent quarter to date. What’s interesting is that we hit the Apple stores the first week of May but we haven’t yet seen a major impact on our revenue. If you add in the Apple revenue, about $250K, we are over $2M for the year.
What has changed on the website is our conversion rates the past month have dropped. The V2 launch of the website was a learning in how not to launch a new version of the site. Instead of one mega release we should have broken it into smaller pieces to ship, tackle bugs, and ship again. A combination of shopping cart bugs and incomplete product pages has lead to a lower conversion rate.
Despite the lower conversion rate we have seen one core assumption proven to be correct. On the new lens product pages (https://momentlens.co/shop/wide-lens/) we included a “quick add” option so with a single click they could add a lens cap and/or lens pen to their order. Looking at the average number per lens sold, we have seen a significant increase for both of these products.
A side impact this month on our conversion rate has been the promotion of Moment by a few YouTubers, including Mr Ben Brown. He posted hereand here about Moment. It definitely brought an influx of new traffic that converted at a very low rate, which tells us that either the price, reason to buy right now, and/or website pugs is having an impact.
An area of additional focus over the past month has been improving the frequency and quality of content we publish on The Momentist. We have seen a dramatic lift the last month in readership. We are also getting much more diligent about our creative briefs, marketing process, and SEO.
We are excited to welcome Audrey Louchart to the team. Originally from France she did a stop in SF before landing in Seattle. Recently with Fifythree, she is passionate about making great products and discovering the PNW. She’s just back from a two month trip through Japan, Vietnam, and Indonesia.
If you missed it, previous updates can be found here.
Thank you,
Marc & The Moment Team
We have some big news to share.
First, we are honored to be partnered with Lux Capital on our $3M Series A. Zack and the team at Lux deeply share our vision for the future of mobile photography. We also can’t say thank you enough to all of the investors who participated in the round. Your support means more than we can express in words. The news was covered by Geekwire.
Second, we are now live on Apple.com and on shelves in 50 US stores. Sell through data comes every few weeks, but we started started on track at half a unit per store per week. They limit the in store engagement we can have via the Apple employees, so we will build into this relationship over time. It’s a bit counter to our aggressive nature.
Third, we have put together our Q1 analysis here (password: #makemoments). Top line grew by 132% year over year while profits reached 7%. This represents our third straight profitable quarter. Profits and consistent growth are both a continued focus for us in 2016.
Reach the complete Q1analysis. (password: #makemoments).
One of our goals in winning the market is to deliver products that win ‘choice’. We have learned that the best product don’t always make market winning companies, but creating the best products is critical to building a strong foundation.
Wirecutter updated their mobile photography lens guide and we are proud to again be the winner. What’s interesting is that the article was posted on Gizmodo, but when we compare the referral traffic we see that the Wirecutter website converts into sales at a much higher rate than Gizmodo. The Wirecutter guide is one of our best sources of conversion traffic.
We still have a lot of work to do, in order for the App and Case to win similar shootouts.
NEED
We are looking to add more writers that can contribute to The Momentist. Help liking our IG post is appreciated. And feel free to make any direct email introductions to potential candidates.
BUSINESS UPDATE
April is off to a solid start. It doesn’t have the same pent up ‘out of stock’ demand as March, but we are on pace for a $400K month. April 2015 was $125K so we are already well past last year.
Over the last two months we have seen a steady rise in average order value and items per order. It starts to fully demonstrate the impact of remaining in stock. We are at our highest rates of all time for both metrics.
Over the last 2 months we have increased our testing and spending on paid advertising, but it is still a test: over the last 2 months our Facebook advertising has driven less than 3% of sessions and less than 1% of transactions. Of our social efforts, Instagram has proven to have the largest impact in terms of both site traffic and sales.
Our top landing pages continue to be the homepage and the shopping page, followed by the individual lens pages. (Note, the Momentist contributes to 10% of overall landings once all Momentist pages are included). But interestingly, our conversation rates are significantly higher for traffic landing on our homepage and shop page than on the individual product pages. Improving our product pages has been a focus of Moment website v2.
Looking at our landing pages in a little more detail reveals the depth of the impact of organic search, with the top landing pages by source/medium are predominantly Google organic search.
Cart abandonment is also an area we are spending more time understanding, especially in preparation for v2 of the Moment website. Looking back over the last six months we have seen a general cart drop off rate of 27% and a checkout drop off rate of 58%. Since February 1st that has resulted in about 6,500 conversions against 10,800 cart abandonments. With an average order value of $153 that is $1.6M in lost sales. Crap.
Digging a bit further we see a big gap between US and International customers. On US orders Checkout abandonment is closer to 48%, while the average from our top 10 International countries is around 64%. Because this discrepancy mainly happens on the checkout screen, we attribute this result to the higher shipping costs and import duties that international customers face.
At the beginning of February we implemented a checkout abandonment email program, targeting any customer who bailed on a checkout of over $40 or greater. It has helped us retain 6% of checkout abandonments with a total saved revenue of $34,322.34.
We did or first ‘experience’ based contest, giving away a free ticket to Dan Rubin’s (@danrubin) photography workshop. Dan is a member of the Moment Collective and someone who is well regarded within the mobile photography community. Over four days we had over 600 submissions to pick a single winner. It has us thinking about more experienced based give aways.
We have the Moment Collective up and running for 2016. It’s starting with 30 members that we are engaging through a private Facebook group, private Snapchat, and email. We have a much deeper plan with the group this year on how we engage them and support their creative projects. More to come on this front.
If you missed it, previous updates can be found here.
(password: #makemoments)
Thank you,
Marc & The Moment Team
Growing an e-commerce business, month over month is hard. We are finding that it’s highly dependent on the continuous introduction of new products, seasonal purchasing cycles, and maintaining proper stock levels. Stuff we are trying to get better at.
In our case, month over month growth has been all over the map. Shipping Kickstarter orders is the largest contributor to large swings in month over month growth, followed by inconsistent stock levels. This also demonstrates that our business is highly dependent on word of mouth, which provides positive margins at the cost unpredictability.
Looking year over year we see more consistency, especially moving into 2016. March alone had a +225% growth rate over last year. A trend we are going to be working hard to maintain.
NEED HELP
We would love feedback on how to make these updates better. Especially any questions you have about the business so we can push ourselves to diver deeper into understanding our key drivers. You can reply directly to this email with any feedback.
BUSINESS UPDATE
Q1 is off to a solid start. It’s our third straight $1M quarter and our first without any Kickstarter shipments. March alone, at $474K, eclipsed all of Q1, 2015.
Increased conversion rates drove our March result. Web traffic the past three months has been consistent, but moving back to being in stock has made a massive difference on our conversion rates.
New customers appear to be driving this growth. This is consistent with the fact that we haven’t announced any new products in Q1.
Cohort analysis capping out around $208 per customer demonstrates that we need new products in order to drive this number higher.
The product mix continues to be driven by lenses. Three different lenses that work across multiple devices is a much broader product line than just two iPhone cases. This something for us to consider as we expand the case product line over the coming months.
Two months into a reduced case price we see that lowering the price really has improved unit sales. The average price has begun to settle at $59 per customer, which shows that Wood helps in driving additional margin dollars. We are in the process of creating addition material based cases.
In anticipation of hitting 50 Apple stores we have started to build a geography focused community plan. Below represent our current benchmarks. We are going to be exploring location based results over the coming months.
We recently expanded our Facebook advertising tests into retargeting, and it’s driving a 6:1 return on advertising spend. We’ve divided our Facebook ads into Reactivation (targeting past customers) and Activation (targeting potential new customers), and recently added Retargeting (targeting website visitors that haven’t purchased). While retargeting should in general be a high-performing marketing, driving purchases at $12 per order, the volume is still small, with Facebook advertising driving only 9% of March orders. Our Activation efforts are returning approximately 1:1 return on ad spend, and most of our efforts will be spent on optimizing our Activation campaigns.
We recently started using Promoter to track our NPS results. This tool is much easier to use and enables us to better understand the data. Currently at a score of 58, we are up slightly from our low point of 54 back in September. We still have some work to do in reaching 70, which Promoter considers to be world class.
Looking at what is driving our NPS number, out of stock and high prices are two of our biggest negative contributors.
We are excited to announce that Dani Chase (@quequequeso) is joining the Moment team from LA. A writer, traveler, photographer, and community-builders, she’s spent the past six years creating marketing campaigns for non-profit and for-profit companies alike.
It feels good to have product to sell.
Over the last 14 days we have brought in $330K in revenue alone. That accounts for 40% of our revenue year to date, putting us on pace with holiday season run rates.
What is giving us a little bit of confidence is seeing our post ‘in stock’ sales increase to over $15K per day. Prior to being out of stock we were averaging about $10K per day.
We would love to see this trend continue in the coming months.
Need Help
We are looking to meet brands and influencers who are killing it on Snapchat. We are pushing past Intagram this year to other visual platforms and would appreciate introductions to anyone that is building an engaged following on Snapchat. You can follow us at: makemoments
Business Update
We are on track for another $1M quarter. We would be stoked to pass our first $400K, non holiday month here in March. We still have a lot of work to do the next three weeks but we definitely have a shot.
Being back in stock has a positive impact our average order value, which has risen to $165 in March.
Over 60% of the recent sales have been coming from new customers, which is consistent with the large ‘out of stock’ email list we have been building. We would love to figure out how to measure the true impact of of missing a sale. We know we miss sales when out of stock and only about 55% of the email addresses we capture directly click through our emails to by.
Our acquisition channels continue to show a strong word of mouth brand. Email in particular brought in over 30% of our sales the last two weeks with a +15% conversion rate. While review sites like the wirecutter prove why winning product comparisons are critical to long term success.
We have been working on something big the past two months…a 50 door Apple Store test. This is a divergence from our direct to consumer strategy, but the opportunity was something we couldn’t pass up. The financial terms were net positive and the level of exposure was reasonable for our current size. We should be in store in April in 50 US locations.
We’ve started using Promoter to better track NPS. This will give us a much better way to segment our customers in order to ask their feedback at different points during the customer journey.
We are stoked that Erica Gonzalez has joined the Moment team to help us build out community. From palm trees in Miami, Florida to pine trees of the Pacific Northwest, she brought her love for photography in tow. A self taught photographer that likes to dwell in traditional film and digital, she has a passion for food, people, and cultivation.
We are almost past our ‘out of stock’ crisis.
We started working on this problem two months ago when our December sales required the inventories that we had reserved for January and February. Add on top Chinese New Year and 8-10 week lead times on new product and you end up with continued stock issues through the first two months of the year. By the end of this week we will finally be delivering against our plan, providing us with consistent stock levels.
We can see this crisis reflected in our daily sales. The large spikes represent days we were able to ship orders. Please keep in mind we recognize revenue when orders are shipped, not made.
Our out of stock struggles have been most evident in February where we sold out of Wide and Tele lenses on the fourth day of the month. Receiving about 800 lenses this past friday we sold out in a matter of hours.
Building a great supply chain is hard and we look forward to enjoying the progress we have made as we push to complete Q1.
Business
January grew 275% year over year. February only grew by 40% because of stock issues. Keep in mind February last year was the peak of our Kickstarter campaign which made that month unusually high. We do believe that 2016 would have been higher if we had consistent stock levels.
The biggest impact to less stock is lower average order values and items per order. January and February are both lower compared to the holiday months.
In a previous update we discussed lowering the price of the Moment Case. Based on sales data across different price points we determined that $69.99 was too high. We enacted this plan in the first week of February by lowering the black case to $49.99 and the wood version to $69.99. First we saw an 145% rise in February units sales and a 91% increase in revenue.
By lowering the price of the Case we also have seen a sales shift in color mix. At $99 per unit, the wood case made up about 25% of sales. Now that this case is $69 it has accounted for 35% of sales, which is a positive trend when we consider the margin in wood is much higher than black or white.
We have been invited to begin working directly with the Facebook advertising team to build out our paid acquisition model. We have come to realize that people buy Moment products for life events and Facebook owns all of our life events. Therefore we started two weeks ago by launching over 300 different advertising combinations to begin learning what best connects with people. We don’t yet know which message (inspiration, technical, versus non technical) or types of photography (inspiration, product in context, or product on clean backdrop) work best with different audiences, but we will be testing it closely over the coming months. Even during our testing phase, though, we have been finding segments of our approaches that are generating a 3x return on advertising spend.
We continue to improve at managing our customers. We have moved to the whole team contributing at least an hour per week while shifting the team from customer service to community (customer -> influencer). We are receiving some of our highest customer satisfaction ratings to date.
Our content game continues to evolve. Over the last few weeks we have tried photography guides and top lists. That content is getting better shared which is evident by The Momentist traffic being up 89% over the last two weeks.
We have been building out the local Moment Guides, which we previously called the Street Team. We are psyched to add @briancason in NYC and @steph.martinez in LA to the team.
Taylor Davidson (@tdavidson) has joined the team full time and we are stoked about it. He bring his love for photography and numerical analysis to the team. He is going to help us ramp our paid acquisition strategy and improve our overall analysis of the business.
If you missed it, previous Moment updates can be found here. (password: #makemoments).
Thank you!
Marc & Moment team.
Welcome back.
In a departure from our normal updates the following is a recap of 2015. We believe that in order to build a great business, we have to deeply understand our results.
You can read the full recap here. (password: #makemoments)
Or here are the cliff notes…
Happy New Year!
When we raised our seed round 18 months ago we wanted to be able to answer three questions.
1. Do we have a repeatable business model?
2. Can this be a +$100M revenue business?
3. Do we know how much money it takes and where to invest it?
After 2015 we believe we are ready to answer these questions.
First, our content to commerce strategy has worked to acquire new customers who end up becoming repeat buyers. This mix may shift if we move towards paid acquisition strategies, but word of mouth tactics to date have worked in creating passionate customers.
Second, the unit economics lead us to believe that this can be a +$100M business. Customers continue to spend more money with us over time, which tells us that growing our customer base should now be our number one focus.
Although we can’t directly compare cohort and customer data against other companies, we can see that our unit economics falls somewhere between Fitbit and GoPro. Two companies that ended up being multi-billion dollar businesses.
Third, we do believe there is a category to be won with mobile photography. Our original market analysis, that a single brand can win with a family of products, continues to be true. Therefore we are actively planning how to accelerate our early success.
Business Update
December ended up being considerably larger than we expected. If we didn’t sell out of product, we most likely would have had our first $1M month.
We have yet to close our books but we should finish the year over $3.5M in revenue which is a nice 3.5x over last year. With a direct to consumer business that has only raised $1.8M, we are proud of this result. It will be close, but we’re hoping that our strong December pushed us over the profitability line for 2015.
Going into 2016 we are asking ourselves a lot of questions about how to better merchandise our products. We have a nice start with customers buying more and more of the whole system, but this is definitely an area of focus this coming year.
Within product merchandising, we are also wondering if the Moment Case is too expensive. It has solid margins at $69 (black/white) and $99 (wood), but when the case has been cheaper the volume has increased dramatically. The only two data points we have are Kickstarter and the holiday sale, but the data seems to suggest that moving towards $49.99 and $69.99 would drive much higher volume.
Continuing to build community is a big push for us in the coming year. We realize that mobile photography is social by nature and therefore we have a chance to touch customers and influencers alike in local markets. We are still planning out how this works in 2016 but we definitely learned a lot in 2015.
The team has done a solid job of maintaining quality customer service through the holiday season. We are thinking through changes we can make to the Moment store, our systems, and our delivery experience in order to reduce the volume of customer service requests. We are also thinking through how to scale this team over time so everyone in the company is still connected to our customers.
Although 2015 was a solid year, running out of stock was definitely our achilles heal. We have already created a better forecasting/ordering process with all of our vendors. We are also working with them to move from large spot orders to consistent weekly shipments. This will go a long ways towards maximizing quality, margins, and cash.
We can’t wait to get even better in 2016.
If you missed it, previous Moment updates can be found here. (password: #makemoments).
Thank you!
Marc & Moment team.