Most of our investors specially worry about the growth rate and the capacity to scale your business. Truth is, they are not concerned about the metrics, but the underlying cause that might slow them down: the installation process.
Our product contains a hardware component that requires an installation in order to work. Doors don’t speak the same language as phones do, so we need to install a little device next to the access in order to control it from the phone. Therefore, we install an electronic board that connects to the door’s control unit and speaks back to smartphones.
If you have ever interacted with your door’s control unit you know what I’m talking about. It is a crappy experience. Each one is different, intentionally confusing and usually mixed with cables, and other electrical equipment. Believe me, you don’t want to be involved in such business.
This little detail potentially holds our product back from growing faster without involving a massive (and costly) labour force. That’s because the adoption rate mostly depends on the capacity we have to build a network of installers that delivers and actually install the product.
Growth vs. Defensibility
Manipulating the electronics on the accesses automatisms is not as trivial as connecting an appliance to the wall. Each one is different and more confusing than the other. That’s why the installation has to be carried out by a professional.
Investors perceive the fact that we need a hardware equipment as a ballast to our business. While it is true that we can’t grow virally as some digital products do, it is also true that our retention rates are usually higher.
- We don’t need to actively “drive traffic” to our app, because once the service is installed, people use it. It sounds pretentious, but it is simpler than it seems. We cover a necessity, which is accessing places. People needs to use something (a key, a remote…) to enter the place. Once the hardware is installed and therefore, the service enabled, we just need to prove that we are more convenient than a key, then, people keep coming.
- A harder sale also means a harder exit. We acknowledge that selling our service is much harder than signing up for the latest and hottest social network. But the chances of retaining the customer are also much, much higher. Once the hardware is installed, accessing that space becomes a zero sum game. If people use our service, they are certainly not using our competitors’. Because of this, once the sale is done, you are more likely to stay and retain your customer for a longer period of time.
- It is easier to monetize atoms than bits. When it comes to pay, people has a hard time paying for an intangible asset like an app. But if the support function of our app is a tangible hardware, then paying for that becomes easier. People are under the impression that you are getting “something” in return for your money.
It is obvious that delivering pieces of hardware holds our growth rate back compared to a full software based shop, but it is also true that the hardware helps us monetize and retain our customers for longer periods of time.
Of course hardware is one of the most relevant causes we need installation services, which is the main point of the article. But unlike the hardware itself, the installation process didn’t provide a single source of differentiation or competitive advantage. Or at least, that’s what I thought.
Turning Weaknesses into Strengths
Since the beginnings of iomando I was concerned with the installation process. It was the most relevant “W” in the SWAT page of our business plan and I was having a hard time arguing back the potential benefits to both customers and investors. I worked obsessively to remove it. I poured a lot of resources and people working on an auto-installable solution. But I failed. I couldn’t do it. We certainly removed a lot of friction from the installation process, but we aimed for something more and we couldn’t deliver.
If only we could make it auto-installable people could buy it directly from our website or impulsively from retail stores. We were envisioning an ideal place for our service, but we couldn’t quite get there.
But someday a friend of mine - and one of the smartest person I know - made me realize one of those small pieces of evidence that are laying around but somehow your are not able to see or articulate. An elephant in the room. He told me “if you couldn’t do it, with all the effort you poured into it, maybe it can’t be done at all. And that's a good thing, because anybody won’t be able to do it either. So instead of looking at it as a problem, perceive it as an opportunity, a gift.”
And he was absolutely right. Each of our competitors faced this exact problem, so we were gifted with the opportunity to turn this problem around and transform it into a delightful experience. He was just stating the obvious, but it was something no one had ever thought before.
So we divert all the resources we were using to get rid of the installation process, and allocated them into building an amazing installation service, one you can’t forget of. Here are some of the tactics we used to deploy the installation strategy.
- Started to handpick our distributors and rolling out a quality assurance program to unify the experience across the board.
- Created the “iomando official partner” program, an engagement program for installers who wanted to bet on iomando.
- Developed a training program to directly instruct our installers and give them great resources and knowledge of our product.
- Designed an step by step process of what it was like to hire our service. We actually build it going ourselves through each stage of the process in different locations of the country.
- Designed an official uniform to appropriately "dress" the experience of installing the service.
With all of these and a lot of iteration and learning along the road (that’s a beautiful post for another day) we turned what we thought it was a weakness into something our customers loved. Because we built an amazing experience that at the end, was freeing our customers from reading the installation instructions and dealing with the crappy door electronics.
So this post was not about our brand new installation program. It was about how sometimes you obsess over something and you get stuck, frustrated. But maybe is not a matter of digging a deeper and deeper hole, maybe what you need is simply to look up, and start digging in another place.