Last week I was discussing with my wife about Lean Startup and how we were applying it on eEvidence, almost by accident.
When we first launched the product, Feb 2012, we made a few assumptions that soon proved to be absolutely wrong.
Error #1. We started defining premium plans based on a user scale, assuming service usage would be in proportion to the number of users. That was absolutely wrong: single users were sending ten times more emails than what licenses shared by many generated. We now have plans for up to 1,000 emails a year, 10,000 or unlimited usage, with no user limitations.
Error #2. We thought some users would value unlimited use, others unlimited backup and a few the combination of both offers. That was absolutely wrong: users wanted to use the service whenever they needed to, some very often and others just now and then, all expecting backup as a key feature. All our plans include perpetual and unlimited backup for a flat rate fee.
Error #3. We decided all premium plans to have a 20 GB storage limit for backup. If more needed, customers could buy more for 1.2 € per additional GB. Hey! this is common sense: with flat rate plans and perpetual backup, the cost of the data storage would end up exceeding our income. Was this assumption correct? Well, it was, no doubt about it. The question we didn’t make ourselves was: how long will it take for that to happen? Having moved our backup needs to Amazon S3, it turned out this would occur in about 240 years time, the sooner! Storage limits were history.
Error #4. We knew that sooner or latter the service would get the attention from large companies and software developers. Simply because it works great from enterprise software solutions emailing out critical data. This expectation became real much sooner than later, with companies asking for quotes to certify millions of emails a year. Our business model didn’t consider such a massive use of the service: in other words, we weren’t sure we could accept such volumes at a reasonable fee. It turned out we actually could: we placed a limit of 100,000 emails to our 449 € a year top premium plan, charging 0.005 € per email for the next 900,000 emails and 0.004 € over 1 million. The result cannot be simpler neither more reliable. Any company or project requiring from 10,001 to 100,000 emails a year costs 449 € a year, flat rate, with unlimited backup; requests over 100,000 emails a year also come with unlimited backup and now include an additional cost per email, just a fraction of a cent. So how much does it cost to certify 1,000,000 emails a year, including backup? Does 4,949 €, or 0.00495 € per email, sound reasonable?
Congratulations to Eric Ries and his “validate learning” concept. We commit ourselves to never stop questioning our decisions.