ShoutEm story It’s alright to pivot

Luka AbrusFive Minutes CEO

ShoutEm Member of the board

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How it all started.

• Five Minutes development team–Web development company, 2 guys– Product oriented at first - Pticica,

Trosjed…– Standard issues with local market• In a nutshell, too low ROI

• Custom mobile & web apps– Service oriented– Global product developed

in parallel

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First steps.

• Two key motivators– Google Android and Ning platform

• Huge potential for Mobile Social Networking?

• First idea: “Mobile Ning” (without the mobile)– Anyone can create their own community

• Schools, sport clubs, companies…

– Twitter simplicity– Web-only microblogging– Launched on LeWeb 2008

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Web.

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(No) Funding.

• How to continue the development?– Finance it internally from other projects– 5 people team / company• Working weekends, holidays, long hours…• Number of users rising, but no money

• Trying to find VC’s and large customers– “Invest in lines, not in dots”

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First pivot.

• Technology oriented – move to mobile– Smartphone platform growth– ShoutEm App – unified app for all communities

• Year 2009 – year of learning– Networking, development, pitches,

competitions

• Number of users growing – freemium model– No conversion from free to paid, no profitability

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Misleading number of users.

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Epiphanies. Three of them!

1. People are willing to pay for their branded apps– One blog post briefly mentioned customized

apps– Huge interest – we picked a few & built them

2. Community management crucial for success– Examined 30.000+ networks on ShoutEm, very

few active– Build networks around existing sites and content

3. Majority of mobile apps are pretty similar– Huge interest for mobile apps – 400.000+ in

iTunes– Typical costs 10-50k USD– News, Events, Community, Location,

Podcasting, Photos, Videos…

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Idea. Pivot. Investment.

• Second pivot was business oriented– What if we could…

• Create a standardized app that fits 75% needs • Sell it for 50-100$ per month• Do it as a self-service model and scale it• Build on top of current code base

• RSG Kapital investment, VC from Ljubljana– They monitored us for two years

• Five Minutes team grew to 25 people • 100% YoY growth, worldwide clients

– 1.2m USD funding in August 2010

VC funding

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New web.

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Interface.

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How did we use the investment?

• Opened up London and New York offices– Hired sales representatives (Seedcamp

network)

• Boost up the development– Optimizing features, user experience,

process…

• Hiring only the best– And “restructuring” the rest

• Speed up the sales process– Enterprise and lighthouse customers– Self-service is good, but…

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Today.

• Five Minutes– 35 people, services & product business

• ShoutEm– Sales. Sales. Sales. New York!– 10 people– Series B?

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Pivoting 101

• Everyone does it.– YouTube, Nokia, 3M, Twitter, PayPal,

Flickr, Seesmic…

• Natural process of evolution.• Everyone will doubt you.– The team.– The partners.– The community.– You.

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That’s it.

Luka AbrusFive Minutes CEO