My Summer Starting Activid – Part II (Business Development)

When I started Activid, I had to develop a business plan.  I asked myself, what is my value proposition?  Who is my target customer?  What is my go-to-market strategy?  I made a number of initial assumptions based on gut instinct, and over time, most of them proved to be wrong.

I started Activid because of a personal problem – it took way too long to edit my own GoPro videos.  I figured there were countless other people like me who film lots of GoPro video on their ski or surf trips, but never get around to editing and sharing them.  With that assumption in mind, establishing partnerships with sports equipment rental shops and adventure travel outfitters seemed like a perfect strategy.  (Just picture a group of friends who filmed a weekend ski trip and return their equipment to the local rental shop.  Or a family who took video during their Backroads trip to Hawaii).  In return for promoting Activid, these businesses would gain free marketing (their logo would appear in customers videos) and also receive a portion of each sale.  Not to mention, they’d be adding a service offering that many of their customers would find value in.

Over a three week period, I cold called hundreds of rental shops and dozens of adventure travel companies.  Some expressed interest, but most did not.  I couldn’t understand why they didn’t see value in offering a video editing service to their customers – it seemed like such a logical pairing.  Perhaps the free marketing and commission weren’t big enough pulls, or maybe they worried about the quality of our videos.  Both are valid concerns, and maybe they need to see more traction before committing to a partnership.  Either way, I think this could be an effective go-to-market strategy in the future, but not one that’s available to me right now.

After failing to establish any large partnerships, I refocused my efforts toward direct marketing.  But first, I needed to validate my belief that the GoPro and action sports market was indeed the right market.  To test this, I flew to Colorado for the GoPro Mountain Games, with the goaActivid Handout - Frontl of promoting Activid to thousands of attending GoPro users.  Approaching complete strangers to pitch them my service was a big challenge for me.  I felt like a sleazy sales guy that I myself would try to avoid.  But as each day passed, I gained confidence and got better at making my pitch more efficient, informative, and friendly.  That weekend, I talked to over 400 people and handed out more than 600 promo cards.

Upon returning to Chicago, I eagerly waited for new orders to pour in from all the people I talked to who expressed excitement about Activid.  But to my disappointment, only a handful of people that I spoke with actually submitted video.  I asked myself, “Why did so many people vow to use my service, but so few actually convert?”  A conversation with a fellow GoPro user shed light on this question.  He remarked:

“Most GoPro users record video with a specific goal in mind, such as creating a highlight compilation of their ski trip.  They’ve watched other GoPro videos on YouTube and believe they can edit their video themselves, even though most won’t.  The simple belief that they are capable of such editing reduces their willingness to pay for an outsourced editing service.  In contrast, a mother who films her four-year-old’s birthday party harbors no illusions of editing her own video.  Therefore, her willingness to pay is not reduced by the thought that she can do it herself.”

I had discovered that my primary target market believed they could and would take time to edit a great video themselves, and didn’t want to spend money on someone else do it for them.   This realization forced me to reevaluate who I should target, so I reviewed what types of projects had been submitted to Activid over the past month.  Many came from parents who recorded video during a family trip or event.  Several others came from small business owners (like an African safari company) who wanted a promo video for their website.  Activid solved a real need for these two customer groups, and it was clear that I should redirect my focus towards them.

Launching an early version of Activid allowed me to study which customers used the service, and how they used it.  If I had waited to launch a more robust version, I would likely still be focusing on the GoPro market.  Similarly, reaching out to rental shops and travel outfitters taught me that I first need to focus on direct marketing.  I’m sure that I’ll continue to learn more as new customers come in, but for now, I think I’m on the right track.

  • Doug Hoang

    Good article, Conor. I’ve learned that the most important thing in running a business and developing a great product is the necessity to keep learning and moving forward. In the early stages, a product doesn’t have to polished and it doesn’t have to have all the fancy bells and whistles. This is going to sound wacky, but the best thing you can do is to keep pumping crap out to experiment until you a great value proposition. Once you get that value proposition, then you’ll be surprised as to what customers will accept. You have to make sure your customer service is great. For instance, many of my engines weren’t very durable, they leaked, but they got the job done (somewhat) and we were always there to help fix any problems. 100 million dollars in revenue later…