Kirill Vee Journal #001 | My previous startup Obrigado: Idea, Process, and Why I Shut It Down

Warning: it’s a long read, as I am just summarizing several months of work into 1 post.

Background

Obrigado.ca was a startup that I’ve been working in the last few months and decided to shut it down right before starting my Journal.

The idea came from a friend, and it was based on his personal pain point.

Target audience: Real estate agents.

Problem

When realtors help their clients buy a new property, they want to show their gratitude and appreciation that the client trusted them with such an important, expensive, and stressful process. The way they usually do it is by buying some kind of gift as a token of appreciation for the possession day (when the realtor gives the keys to the new home to their clients). Usually, they choose a gift basket of some sort (sweets or cheese/snacks) and a bottle of wine/champagne. Others buy one or several gift cards for different household-related retail stores (e.g. Canadian tire, Home Depot, Amazon, etc.). Others buy something for the household, e.g. a nice tea set, or a high-quality chopping board). The problem for the realtors is that it takes time to go to the store(s) and find items they want. Another problem with the gift baskets is that they are perishable and will disappear within a week; also, sweets and alcohol maybe not be suitable for everyone.

Solution

The idea was to help realtors save time by providing several pre-compiled gift sets. They would buy one of our kits from the online store and we’d deliver it to them on a specific date/time. Depending on the property sale price (which affects their commission) they usually have a different budget. So, we’d have different options to satisfy their different budgets.

Process

Research

I started by interviewing the shit out of that friend who told me about his problem, asking about all aspects of the current process and trying to understand how big of a pain it was. Then, I created a very short anonymous online survey (using Google Forms). I always try to be mindful of the people’s time, so I do my best to trim my questions to only the most essential ones (unless somebody is willing to help with more in-depth conversation). After a few iterations of the question based on my realtor friend’s feedback, I sent the survey out.

With a dozen answers, I could already see some patterns on how realtors were going about solving this problem, as well as different price ranges for their gifts. Overall, I think it was quite valuable and influenced my pricing strategy – I decided to offer 3 different kits (at the beginning): $150, $290, and $450.

Next step, was to identify what items I could include in each of the kits. The main objectives were: long-lasting, durable, high quality, useful for a household, ideally used very frequently. The whole idea was to choose items that will be providing value to their clients often and during a very long time, so the memories about their realtor would be “refreshed” frequently. I also thought that another essential part of the kits should be something to celebrate the big purchase right now, and a bottle of good red wine was my choice, and depending on the kit price, the wine would be increasing in price.

After researching the most reliable and high quality “candidates” for each kit budget, I finalized the lists and determined the approximate weight and size of the boxes. Then, I calculated the approximate shipping cost on the Canada Post website and added the cost to the cost of the kits. I had to swap/replace a few items to make sure my target margin can fit within the retail price of each of the kits ($150/$290/$450).

After nailing down the kits’ contents, it was time to make product photos for the website, so I had to get my hands on all the items I shortlisted. I ordered them online and while waiting for them to be delivered started working on the online store and branding.

Website

It’s fascinating how many things you can accomplish with modern technology. I could set up a working e-commerce store myself using WordPress and Woocommerce plugin almost for free (just $10/year for the domain, and $7/month for the web hosting). Several evenings customizing the theme and finding the right payments plugins and it was ready. While I didn’t have real photos, I found the high-quality photos on the manufacturers’ websites and uploaded them to my website. When the products arrived, I borrowed a Lightbox kit from a friend and made all the photos myself. Lightbox is a good way to go, but to be honest, I wasn’t super happy with the quality of my photos, maybe because I should have experimented more with the camera settings and lighting setup. Lesson learned for the next time.

Branding

As for the branding, my main tools are thesaurus, Wikipedia, and domain search. I defined a list of words that are somewhat relevant to the problem I was trying to solve: gratitude, thank you, grateful, thankful, appreciation, and a few others. I used the thesaurus to get more synonyms. Obviously, the domains for all the words were not available. Next step was to go through the list and see if there are any available domains for these words in other languages (with the similar writing). As a result, I found a word I loved – Obrigado, which mean “thank you” in Portuguese. I like this language and love the sound of it. My default choice is always .com domains. Sadly, obrigado.com was taken for a drink. Considering how prominent the word is, how it sounds, and that obrigado.com is not in the same industry, and that I was planning to work locally in Canada, I decided to go with the obrigado.ca domain.

Then, I created the logo and business cards, ordered business cards and custom Thank-You postcards (which were a part of each kit) and launched the website to the public.

Marketing

Besides the website, I created a Facebook business page, and Instagram account, where I was engaging with local real estate agents. Though there were a few daily visitors to the website and several likes of the Facebook page, nobody purchased any kits. I ran a few ads on Instagram and Facebook, which brought many more eyes on the product, but no sales.

Talking to my realtor friend, he said that the majority of services and products being offered to them were following a different path. A vendor would visit their realty offices and give presentations, which was our plan to move forward. Unfortunately, the timing if the possible meeting slots were during the day, which was hard to combine with my full-time job. The plan was to involve my wife Diana who could go to the offices and make presentations, but sadly she wasn’t very excited about this idea in general and wasn’t passionate enough to do this job.

In parallel, I was reaching out to realtors on Instagram and LinkedIn to ask more questions about the problem we were trying to solve and if they would be interested in such a product. As expected, very few people agreed to help with insights. Cold-calling is still cold-calling, even if you use Instagram =)

Analyzing the business model further, another disadvantage of this idea was the requirement to keep stock of the products for the kits. We could not wait till the order comes in and then order the items, as it would increase the time significantly, and would not provide a good experience. So, investment in keeping the products in stock was another friction point, as I didn’t want to keep thousands of dollars inventory and deal with the logistics. Due to price differences and availability, some items had to be picked up in the United States, and the delivery times were varied. Another hassle. And all of this would have been fine if there was any traction with the target customers. And there was none.

I kept talking to people and understanding the context more, and I kept hearing the message that the problem we were trying to solve was not really on their minds. Some of them preferred to purchase something unique specifically for this client, some were getting the cleaning service, others opted out of any gifts at all. Another interesting insight was that our initial assumption of betting on the return business wasn’t entirely true. Quite a few realtors said that they focus on the first sales and ignore repeat. Average home buy/sell cycle is 7 years. But that time a lot of things would have happened, and it was not worth it putting in the effort to maintain the relationship (which, I personally don’t agree, but this was the insight).

Pivot

After no traction for a few months, my realtor friend dropped another idea on my head =) Very relevant to the first idea, but with much less effort and cost involved. The idea was to have a service that would send hand-written postcards to the clients. The arguments were that nobody reads printed materials, and the open rate of a letter/card written by hand was almost 100% (emails were about 25% for real estate industry, and printed mass-mail – I think about 4%). So, it seemed like a good way to reach the client and remind them of their realtor. Talking to several realtors, I realized that there was an interest, but only within a very small group. The younger realtors (experience, not age) who believed in the importance of the personal touch were doing it themselves (and even to a higher extent). The more experienced ones who prioritized their time differently often had an assistant or an office admin who was doing it for them. So, my sweet segment was between these two personas – somebody who believes in the value of a personal touch doesn’t have time to do it themselves and doesn’t have an assistant to delegate this task to.

Where could I find the potential target audience? They must be experienced, but without an assistant yet. I already talked to all my first and second circle connections in this industry. It was time to expand my reach into the “cold” zone =) I found a list of the top 10% of all realtors of British Columbia which was a good start. Unfortunately, the list had only names and their realty company name. So, I had to source the contact details through other means. Good thing their list was public and didn’t require any special skills. Then, I wrote a script for the conversation and tasked my wife Diana to call the first 10-20 people on the list. Sad reality with cold-calling is that people do not expect the call, and as a realtor when you receive a call, you really hope it’s a new sales lead. And even though we were focusing on the research and asking a few questions, it was obvious people didn’t want to spend their time answering the questions they didn’t invite. After a dozen calls, we realized this method didn’t work.

In parallel, I reached out to the most active local realtors on Instagram through direct messaging, and I had a better response rate there. However, none of them were very interested in the service. The good thing is that some of them answered a few questions which helped me get more insights that contributed to a similar pattern that we observed while working through the first idea – realtors didn’t see a lot of value in post-sale customer experience, which I still think is short-sighted, but they had their own arguments and priorities, and I didn’t want to go down the rabbit hole trying to educate and convince them of the importance of maintaining the customer relationships. On the other hand, I am an outsider to this industry and they sure have more knowledge about what works and what doesn’t, so I accept the idea that I may be wrong with my beliefs.

But the key message I’ve heard from most realtors is that the gift or handwritten postcard itself is not that important. The real critical part is the service they provide during the purchasing process, with all the hand-holding, advice, recommendations, and just being available for questions. If their experience with this realtor sucked, no post-purchase gesture could improve the impression. So, many realtors were not really buying into the idea of going an extra mile with the high-quality well-thought-out thank you kits or personalized custom hand-written postcards. They thought that it’s better to focus their effort on providing the best experience up to the point of the handing over the keys to their clients. But after that – they usually focus on helping their current clients’ needs and generating new leads.

The last insight that contributed to my decision to shut Obrigado down was another pattern that emerged after talking to the other side of this service – realtors’ clients. I spoke probably with 40-50 people who used realtors’ services in the recent years, and about 90% of them said that the thank-you gift they received from their realtor while being nice (and sometimes surprising) gesture would not make them go back to the same realtor if the pre-purchase experience lagged. And the postcards – handwritten ones are definitely better than generic mass-produced spam, but still would have little to no effect on the decision to use the services of this realtor in future. The key is great customer service.

Based on all the learnings from research, testing, and various aspects of these business ideas, I decided to stop pursuing this problem.

FIN

Kirill Vee Journal #000 | Setting The Stage

 

Ok, here we go.

The beginning of a more in-depth and focused journaling, for the history =)

What is Kirill Vee Journal?

I will be using this website as my personal journal of how I approach building businesses, my step-by-step approach, what methods and tools I use, the reasoning behind my decision with all the lessons learned and insights about what’s working and what’s not working. This is just my personal journey, so make your own conclusions and decisions. Sadly, several years of my entrepreneurial adventures have passed already, and I may or may not get to documenting those experiences. Maybe, someday.

In addition, I will be sharing the business ideas I constantly come up with. I have too many to work on all of them, so I decided to give it away, in case somebody else wants to try them out.

Why does this website exist?

Almost all my decisions are driven by the belief that life is too short to waste it on things you don’t love doing. Of course, anyone will likely have times when they have to do things they are not very excited about, that’s the reality of life. But overall, from a longer-term perspective, you should do your best to pursue what you love. 

One life. Live it!

Recently, I re-analyzed what I love doing most and what I keep doing over and over. And dissecting my recurring activities, here is my conclusion: observing problems, coming up with a solution and launching different experiments to validate my ideas, with the end goal of building a business. When I asked myself the eternal question “What would I be doing if money wasn’t a question?”, this would be my answer. Following an advice from one of my heroes – Gary Vaynerchuk – I decided to focus my effort on documenting this part of my life.

My goals for this project are:

  • Capture my journey of pursuing my passion for building a business for my kids and grandkids, and grand-grand-… kids.
  • Remind myself of the amount of work I’ve done over the years. I have a problem of focusing on the plans and action items and forgetting about what I’ve accomplished, which sometimes affects my motivation, not in a good way.
  • Expose the struggles and challenges of hustling as a husband and dad, while having a full-time job. Entrepreneurship is not easy, but possible if you put in the work, and don’t give up.
  • Allow others to learn from my mistakes and insights.
  • And potentially build a community of people who are in the same boat as me.

My Startups | Drilling Startup Tools

Drilling Startup Tools

Problem

It is very easy for a starting entrepreneur to get overwhelmed by the number of various tools they can use when launching their startup. All the current information is almost useless as it doesn’t provide enough details for a potential customer to make the decision if that’s the right tool for them. Many startuppers procrastinate starting a business because they don’t know what tools to choose for their needs.

Solution

A video-focused website reviewing and ranking small business tools using a structured approach and analyzing the key components of each app and service a startupper can use for the business.

Status: Merged with Kirill Vee website

 

Startups | Unicorn Socks

Unicorn Socks

Problem

There is a relatively large group of people who are very passionate about unicorns and who love unicorn-themed products. There is a limited number of options for a person who wants to buy bold and stylish unicorn socks. The choices are of poor quality or very childish design.

Solution

An e-commerce store that is #1 place to go when you are looking for unicorn-themed socks.

UnicornSocks.com →

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