We’re excited to share with you that Kip has crossed a huge milestone with 1.5M monthly active users and 500k monthly volume! 🎉🎉🎉
More importantly, we want to share our story of how we transformed Kip from enterprise to social shopping, and what metrics we used to measure growth. In the charts below, growth kicked in around Feb 2017:
Kip first started in 2016 and focused on team shopping for offices.
Our pitch was simple: managers were overwhelmed by the needs of running an office, and Kip solved the pain of coordinating back-and-forth requests and simplified team purchasing.
It was a good problem with a good market to solve (440 billion in USA) EXCEPT for a major problem:
In the beginning, we did well and grew to 50k users in 6 months (June 2016). It wasn’t bad, just mediocre. So we looked at growth% per channel and noticed a pattern.
Which means 1% of Facebook traffic =/= 1% of Slack, Skype or Kik.
This matters a lot when you consider user acquisition cost.
Most botmakers are obsessed with discovery. There are so many articles on discovery . It’s true that discovery is important, but discovery is like an “impression” — it’s a vanity metric that just tells me how many people know you exist. For instance, someone might get ads for Pepsi all the time (discovery!) but that doesn’t mean anything if they don’t buy the product.
And that’s the metric that’s really important, which is conversion.
Conversion tells me exactly who sees Kip and is willing to pay for it — and those people are your actual target market
What we found was devastating. To acquire an office manager user on Slack/MSFT Teams/Skype for a single purchase on Kip was $18–20.
This means in order to get 1 million users
Kip would have to spend at least 18 million dollars *just* to get them to complete ONE order
Part of the problem was building Kip inside messaging platforms. Small things we take for granted on websites, like being able to target a user in a specific location, was impossible to track.
Kip users put work into creating orders, putting together team shopping lists, and then not being able to checkout because they were outside the retail zone! The user experience was SO bad and there was nothing we could do about it.
This was Dec 2016, we had just launched a partnership with Delivery.com. Everyone was on holiday and Kip was on fire.
We were worried. We weren’t hitting the milestones we wanted to hit. Most importantly — we felt that the business model was unsustainable because of the high acquisition costs. We knew we had to change something, but we weren’t sure what.
Investor: If you had a million dollars, what would you change right now?
Kip: We’ll go after the consumer market instead
Kip: Because that’s what we know how to do
Investor: Then you should do that, and set yourself a mark of 1 million users. If you can hit that, then you’ll have your million dollars.
Kip: Isn’t it bad to pivot now?
Investor: You don’t have to call it a pivot. Just widen your business scope.
To understand why we were so hesitant, you must understand NYC. Most NYC investors have a preference for enterprise startups, and Slack, where we put most of our effort and resources, was enterprise.
We felt that in order to raise money and fit in, we should focus our energy in the enterprise space even though that was not our domain expertise.
In retrospect, that was a red flag. Our backgrounds are in “fun things”. We have created viral games, built online communities around shared interests with over 12M+ active users, and successfully raised funds at grassroots level.
We have over 10+ years of experience in group shopping and are passionate about group shopping as a primary form of purchasing, but we have absolutely zero experience in enterprise.
It took us this journey to realize that the “fun things” we had created before were not worthless, but impactful things worth celebrating as achievements. After all, who else can say that they invented a meme in 2007 that’s still in use today?
Today, Kip is an AI penguin for social commerce. Users leverage on their existing social networks to instantly create group orders through chat apps to save money.
By pooling group orders and split payments with your network, shoppers save money and frustration navigating unfamiliar websites when buying from international brands.
Kip Direct makes buying direct from countries like Japan, Korea and China much more affordable and accessible by splitting shipping and other fees across your social network so everyone just pays a fraction of the cost.
The other change we did was move Kip completely into a web app. This let us launch faster since we didn’t have to deal with API issues from platforms, and also made sharing much more viral. Anyone and everyone could now use Kip regardless of what app they used. All they needed was a link. Users could easily copypaste the link to any chat window, email, group or even into a public Medium post!
We deployed as a web app in Jan 2017 and focused all our energy into hitting the 1 million user mark. By Feb 2017, we had grown by 77% in 1 month with 300K monthly active users. We calculate monthly active by users who are participating in or have created a group order.
Most telling statistic: Out of the 120K monthly active groups, only 4,000 were enterprise teams. All the other groups were social groups.
Within social groups, the cost of acquiring a new cart creator (someone who creates the group order) was $2.18 and each cart creator would invite 3–5 new users to share in.
If we continued down the path of last year, we would’ve been in trouble. Now, we believe our future as the dominant leader in group shopping AI is brightly lit 🔥 🔥 🔥
If you enjoyed reading, please recommend 💚 or check out our other stories here!
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