We talk to startups and investors, you get the value.
A lot of famous bloggers, trainers and schools can earn more money using a mobile channel. However, there is a hitch — it is hard to enter this channel classically as it is difficult and expensive. Creating an application is not even half of the battle. Where to get the traffic? How to monetize it? How to study statistics and increase conversion? MobiWise — a startup from Belarus solves all these issues, offering the content authors to make money on a turnkey basis. How does it work and who can become a partner? CEO of the project Pavel Gordon told the Startup Jedi about all these and even more.
We talk to startups and investors, you get the value.
I established quite a large successful advertising business — TDI Group. It is working in Belarus and Russia, but on a world scale, it is a local company. While the world around is digitizing, Belarus already has success stories of creating products for the general audience. It is kind of a challenge I was looking for in my business. I found it and it sounds as follows: to break into the world cyberspace and to create a product that would be highly sought for at least 5–10 years.
MobiWise is not the first startup where I take part as a co-creator. There were several projects before it, which we closed. We made classic mistakes which we avoid now — small market, outdated technologies. Afterwards, on the basis of TDI Group, we created an accelerator where many successful startups have raised, and it works now. This experience is extremely important to us.
A model of a startup is much different from the classic business. Classically, you plan a strategy for half a year or a year, or even more, and usually, you get first results after such period of time. In startups, you have to be ready for experiments and changes. Today you have this business model and this concept, tomorrow it can be changed. It is difficult but specifically, this makes startup approach unique and breakthrough.
You have to know how to change quickly. Not tying up to the idea, test the hypotheses, get feedback and on its basis adjust your next steps.
As it often happens, we came up with MobiWise from our personal problem. Andrew Yurkoit, our co-founder, was getting ready for the exams. There were lots of materials for preparations — textual and unstructured. In such a way, we came up with an idea of formalizing educational programs into applications — to study and prepare using them. We communicated with different content creators and noticed that they have troubles with entering the mobile channel as it is quite difficult.
Later, another co-founder joined the team — Nikita Abrosimov. Having a large experience in monetizing applications, he pointed us to a thought that the main pain of content creators is “how to earn more?”, but not “how to create an application?”. The mobile channel is just means for achieving the ultimate goal.
That’s why we are helping content creators to start making money in the mobile channel by creating, monetizing and developing their applications with them.
Those who decide to create their educational application by themselves usually fall into this trap — they create a soft but cannot earn on it.
It is important to understand which model the application will use to work, how it will be monetized. How will you analyze users’ behavior? What and how you have to change in the application by using this data? How to promote a product? For content creators, it is important to know this, however, simple app developers will not answer these questions.
We create, test and give the application back to the author in 2–3 weeks. In the future, we plan to cut this period in 2–3 days due to the fact, that content creators will be able to master up the soft in the constructor by themselves. From our side, we will optimize the soft, add atypical options and bring it to perfection.
The most interesting part begins after the application release, something that web-platforms cannot offer to the content creators, while mobile solution can:
An operational channel of communication. Every author has 3–5% of the super loyal audience that desires to have access to the author “in one click”. A smartphone is always nigh at hand and it is a direct contact in real-time via push-notification, messages in Messenger or SMS. You do not need to wait until the user checks the mail and opens your letter.
Large involvement. It also results from frequent smartphone usage — we do not carry switched on laptops with us.
Retention of users. Not all of those who start paid courses, finish them up. We collect statistics about every product, and at the right time, we send users the offers, which will retain them for the maximum possible time. And so it would be more comfortable for people to study at any time and place, we deliver our content in “micro blocks”.
Increasing conversion and work optimization. We deeply analyze users’ engagement with the content and we know what courses are seen more, which videos are watched more and what is the percent of reading the texts till the end, etc. Grounding on this information, we build up monetization funnels. The content creator can handle it and we will develop the channel.
All these advantages of the mobile channel are hard or impossible to realize in the web and without a team with the required competencies.
Our clients are Mobiwise partners. If they make a profit then we make a profit, that’s why we are personally interested in their success. Our business model is a revenue share, we consider, that 30% of the revenue is a fair price for our contribution to the content maker’s profit. At the entry and to the moment of revenue appearance in the application we do not charge content creators.
Our potential partners are bloggers, trainers, influencers, who have an educating product with unique content in classic channels like YouTube, Instagram, website blog and etc. Not necessarily online — it can be an organizer of educational offline events.
Such a person has to have a loyal and active audience — desirably starting from 100 000 people. However, the main point is the audience loyalty. It proportionally indicates the percent of those who are ready to pay for the product. It is perfect if a blogger is already making money on his content: delivers events, holds an online school. The author has to treat his content as his business.
For example, one of our clients in the USA has just 15 thousand followers on Facebook. However, she is an active woman, she holds 10 conferences a year, and she has a perfect reputation in her industry. She will be able to involve quite a big audience into the application, so we could understand how to monetize it.
What if the author is ready to share his unique experience but the audience is not large enough? We are ready to consider possibilities of work with such people if they show how they will bring the audience to the application. To do this, they must be entrepreneurs by nature and understand how they will find traffic to their product. We do not consider situations when there is an expert review, but there is no traffic at all, and a person does not understand how to bring it.
We additionally help to monetize the existing audience. And since the traffic is conditionally free — to test different hypotheses of monetization, onboarding, tariffs. However, we mean that it is there initially, so we do not merge the budget into a minus for attracting users. If the economy converges on organic traffic, we can buy an audience according to the classical scheme of advertising and sales funnels.
The global market of educational content is growing 30% a year, and in the next two years, it can grow twice. In 2018 there were 117 million content creators who were developing their channels systematically. Thus, only 1% of them earns more than 10 thousand dollars annually.
Except for markets in the USA and Eastern Europe, on which we are currently focused, we also consider Asia. There is no language barrier, as the content is created by native speakers.
Currently, we are working on the markets of the CIS and the US.
Talking about the differences, the American market in this industry vastly diverges from ours. Here are the main peculiarities:
The market in the US is more developed. A user is ready to pay for the content in applications. In the CIS the majority does not pay: they don’t want, they don’t know how or they just simply cannot. Our people are ready to pay for the steak in a restaurant, but for the application or soft. They would willingly buy a ticket to the cinema but they are not ready to pay a relating sum for monthly access to the legal video-content. This significantly influences the monetization results. Predominantly, our bloggers make money on advertising integrations. Thus, in the US, they do not confine themselves on direct advertising but try to seize all possibilities, they search for a new channel, that can help to get fringe earnings. The average American has many applications on his phone and he pays for them.
In the USA, they are more systematic in working with the channel. And this explains their confidence in the fact that the channel will work. In Russia, the first question that people ask us is like “Will even people pay for mobile apps?” Can we do everything for free?”. They think like that because they personally do not pay, and they do not have any examples of consuming paid content via smartphones.
There is a high demand in the market. Americans are quite skeptical to the applications and companies from abroad. We thought that in America it will be harder for us to find new clients, than in Eastern Europe. However, it appears that their pain — a desire to enter the mobile channel — is so strong, that they are willing to buy our solution. Without meeting partners, we have signed four contracts in 2 months. They are experts in different industries: vegetarianism, Ayurveda, psychology, fitness. In the CIS we already have our first client — MamaPro. Primarily, the author created a simple application with information about childbirth. Now it is a full-scale educational product about pregnancy, childbirth and maternity. In the US, we have launched the application from the expert in the field of meditation and hypnotherapy — KEW Therapy Business Courses.
At the beginning of October, we entered the HTP. Recently, we attracted investments (95 thousand dollars) from Angels Band — a Belarusian network of business angels. This money will help us to launch 7–8 projects until the end of the year. There were quite a lot of people who wanted to invest in our project — we chose smart-money and focused on ensuring that business angels could support our next round of investment. It is super awesome, that there is such setup in Belarus as Angels Band — with its emergence, it has become easier for prospective startups to move on.
We have already proven two extremely important hypotheses.
The First: such kind of offers is in demand on the market. Firstly, we have proven to ourselves that we didn’t just fall into some idea but our solution is really in need of our potential clients.
The Second: being located in Belarus, we will be able to find clients on other markets, different from ours, both by a pattern of content consumption and mentality. Often, it is hard for startups from the CIS to get the first paying client from the USA.
Now we are testing ways of traffic conversion from different blogger channels into the application. For instance, a person has 100 thousand followers on YouTube. How will they be transferred into the app? How to increase the conversion? How to stimulate people to pay for the content? What are the peculiarities of content consumption in different industries?
Currently, we are doing everything manually but in the future, we will digitize this knowledge and deliver to bloggers-partners basic knowledge about traffic, funnels, conversion. Having an idea how all these works, they will be able to make a better offer to their audience.
Still, there are interesting hypotheses that have to be proved or disposed of. For example, whether content verticals will be of interest to end-users and bloggers, i.e. interconnected applications when the audience of different authors on one topic intersects. What can be the economical effect?
We are not only talking about mobile applications but also about the revenue in the mobile channel. Thus, we are open to different technical solutions like PWA (Progressive Web App), when you can add some features of the mobile application to the ordinary website. Keeping our eyes to the ball, and if our partners need PWA for fringe earning, we will go for it.
Such companies as Quattro Capital, “Volat Capital” and investors from Angels band association — Gabil Tagiev and Kiril Holub, invested in MobiWise. We got to know from business angels what attracted them to the project, and why it was the first community transaction since the beginning of the year.
A determinative factor for investing in MobiWise
For me personally, it was the founder’s role in the face of Pavel Gordon. He is experienced and he has a successful classical business. During the presentation of the business model, I did not have any questions. All I wanted to say was: “Let’s try!”.
I was personally interested in the word “influencers”. I know all the competitors in this area, and each of them goes its own way: some try to sell advertising, others make big integrations, still, others collect data and sell, in fact, Engagement Rate. In any case, the market is growing rapidly, and the future lies within individual segmentized media — television is losing its audience at a very fast pace.
Why there is no equivalent platform on the market
MobiWise product is not something simple that can be replicated. Integration with each thought leader — it is a hell of a task; the one who solves it can get access to the “warm” audience of the blogger. Not everyone is successful at this: the influencers are usually are a far cry from a business. They are enchanted with their project but they do not know how to additionally plowback their audience, calculate the metrics and work with advertising.
And Pavel has a large experience in working with clients in the framework of his advertising agency — TGI Group. Besides, in his team, he has skillful specialists with experience in attracting traffi
The most important thing that an investor can give to a startup, surplus money — it is his outside perspective. The founders are usually so soaked up with their projects that they do not see obvious things.
Personally, I often help them to define what metric to consider important and to put maximum efforts particularly at it. On the meetings with investors and fonds I tell about my portfolio project in terms of what we have done already, what do we plan to do and etc.
In the framework of Rocket DAO project, we prepare a series of mail outs to venture fonds. I hope to “highlight” several potential MobiWise clients, attracting their attention to the advances of the project.
Why was the first Angels Band transaction made in the third quarter of the year
Venture community in Belarus is on the upswing. Projects become more serious and awesome, founders — more adventurous and insolent, investors — more experienced and capable of estimating the perspectives.
All over the world, business angel communities have approximately the same metrics: only 1–2% of the reviewed projects find financial support, and the Angels Band is not an exception. What is more, it is better to watch how the founders work for a few weeks, or even months, before making an investment decision, therefore, from the initial interest to the closing of the transaction may pass two or three months.
Also, in order to consider it as the “Angels Band transaction”, there is a minimum of two people from the network, who have to invest in a project (one of them has to be a lead-investor), and this project has to be a venture-like. Only these types of transactions correlate with the Angels Band main goal: support startups and promote joint capital investments.
A determinative factor to invest in MobiWise
I make the early-stage startup evaluation according to the two important criteria: you need a potentially big history for the big market and a team that can make this history a reality. A MobiWise team in the face of Pavel and Nikita is actually a perfectly balanced pair of founders with the full range of required competencies.
It is a rare moment when founders can go along without venture investors’ money, but with this money, they will build a great company much faster and sidestep the competitors. The main thing in the venture is the speed of development, which can be gained through investments.
It often happens, that experienced and mature “classic” businessmen become successful startuppers. However, they are stopped by the misconception that startups are for the youth. How to deal with it?
I don’t know what is it: a misconception, a reasonable stereotype or a truth. I saw several pieces of research on this topic of varying degrees of reliability, but I do not believe any, because any methodology of such (pseudo)researches always gives the answer that needs the author.
You can launch a business at any age. But everything is determined by the speed of development. Speed is a function of many variables, including experience, energy, founders temperament, ability to learn something new, eagerness to risk, quickly generate, test and dismiss business hypotheses. However, there is no such variable in this formula as “age”: with age some personal trades meliorate, another gets weaker, that’s it.