The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:08:57 · Federico Simionato
[00:08:57] S2: Yes. Yes. That's the way we try to do it. I'm just saying that sometimes it's more of a estimate game and a gut feeling like I think this is going to be more useful. I think that this feature looks a lot like this other feature that we've built, and so it's it's going to be equally successful. But it's... There's still an element of uncertainty. Some other times, you have literally a business case built for a feature. For instance, on WeTransfer, we built a feature that allows you to recover expired transfers, which wasn't available before. We noticed that many people were hitting this page where basically would tell you the transfer is... Has expired. You cannot download anymore because, of course, if we had to keep old transfers forever, it would just make costs skyrocket, and so it's not feasible. And so we thought, well, but if we only allow paying customers to download files after they are expired, then we increase the number of paying customers and we just benefit from it, and so we can afford to keep the files in storage for longer. Right? And so we were able to model this very accurately in numbers. Like, we had a spreadsheet with couple different scenarios, and we saw what the impact of this feature could be based on how many people were hitting that page daily, the the page of expiration. Right? So when you build instead an exploratory AI feature on Evernote, you don't have a business case because you don't know how many people will use it. You you can guess, but it's different.
00:10:20 · Harry Stebbings, Federico Simionato
[00:10:20] S1: You said there about modeling what it could be, outcome scenario planning. What have you most mismodeled in the downside or the upside? [00:10:28] S2: Well, I think when you try to launch something new, you always want to look like you're being analytical. And so you try to make it look like, yeah, I've built a business case for this. And there is a scenario in which it it works, but then when you launch this kind of projects that are like greenfield, they they rarely work. And so it's kind of hard because, yeah, I saw a scenario where it could work, but it it didn't. So for instance, we tried to launch during COVID. I had a small team, we were trying to launch a fitness product for people that were training at home. And we were like, yeah, let's build a business case for it. And the business case was good, but then, of course, you just have to look at the reality of do people actually want to use this product? They wanted, but it was very hard to convince [00:11:18] S1: Why did you decide that was a good idea? Just out of interest, like fitness products, there's so many kind of freemium where you then hit a hard paywall, such a saturated market. Why why did you decide that was a good idea?
00:11:29 · Federico Simionato, Harry Stebbings
[00:11:29] S2: Yeah. A few years ago, one of our biggest apps was called thirty Day Fitness. It... It's still there. It it still works. It's still a very good business, but at the time, it was one of our biggest apps. And one of the things that we noticed is that thirty Day Fitness is a good product because people want it, but it's not it's not great at retaining people. Meaning that after a while, people lose the motivation that they need to show up every day. You know? When you're training, it's it's hard to every day remake the decision of I'll I'll work out today. And so we wanted to solve this. And we were like, can we find a way to get people to be motivated? And the best way to do it is if you have a personal trainer. Right? But a personal trainer is expensive. And so we thought, we make having a personal trainer inexpensive? And since during COVID, people were used to doing things on Zoom or on video calls, we were like, yeah. Let's put a few people in a WhatsApp group and have a personal trainer that is paid by all of them so that they just need to pay one twentieth of a personal trainer. But the personal trainer is in charge of keeping each of them accountable. The idea is good, but it turns out that it's not enough. You you need somebody who calls you out directly. Like, Harry, you're not working out today. Why why are you not here today? [00:12:42] S1: Thirty day fitness, you mentioned that, still being like a a business. How much of a money does a business like that make years afterwards?
00:12:42 · Harry Stebbings, Federico Simionato
[00:12:42] S1: Thirty day fitness, you mentioned that, still being like a a business. How much of a money does a business like that make years afterwards? [00:12:49] S2: I'm not sure what it what it makes today. I think it's still in the several millions a year. [00:12:55] S1: Is that a paid marketing machine? [00:12:57] S2: There's also a lot of organic traffic going into it because people do look for this kind of product. There is a push. People want to be fit, you know? And so they do things organically. But yes, I think that most of the traffic for thirty Day Fitness was paid. [00:13:13] S1: Yes. Got it, totally. We're gonna get to kind of paid and how we think about that. I do just wanna go back to, we were talking about ideas, testing new ideas internally. When we think about like, okay, impact on top line, can you take me to a product decision where the impact on top line has not been significant, but it was still important for you to do? And how did you think about that?
00:13:13 · Harry Stebbings, Federico Simionato
[00:13:13] S1: Yes. Got it, totally. We're gonna get to kind of paid and how we think about that. I do just wanna go back to, we were talking about ideas, testing new ideas internally. When we think about like, okay, impact on top line, can you take me to a product decision where the impact on top line has not been significant, but it was still important for you to do? And how did you think about that? [00:13:35] S2: I think Evernote is the best example of this. Many of the things that we do on Evernote are not because we want to increase revenue, but it's because we want to make the product more useful. And in a very unquantifiable way, we just trust that by making the product more useful, people will keep choosing to stay on Evernote. Evernote is is an archetype, is a is a kind of a product that that has great inherent retention because people pour their working hours into it, and so they they build their content. They get familiar with the with the product. But really what we do is we try to make Evernote more useful every day even though we cannot, for each individual feature that we build, analyze its financial performance. But it's still something that I would still choose to do every day because it's just so important to people. Even though we can't demonstrate that the ability to collapse sections on a note, for instance, leads to higher retention, the bulk of it, the long tail of features that you build that make the product more useful have to matter in your choice to keep using Evernote every day.
00:13:35 · Federico Simionato, Harry Stebbings
[00:13:35] S2: I think Evernote is the best example of this. Many of the things that we do on Evernote are not because we want to increase revenue, but it's because we want to make the product more useful. And in a very unquantifiable way, we just trust that by making the product more useful, people will keep choosing to stay on Evernote. Evernote is is an archetype, is a is a kind of a product that that has great inherent retention because people pour their working hours into it, and so they they build their content. They get familiar with the with the product. But really what we do is we try to make Evernote more useful every day even though we cannot, for each individual feature that we build, analyze its financial performance. But it's still something that I would still choose to do every day because it's just so important to people. Even though we can't demonstrate that the ability to collapse sections on a note, for instance, leads to higher retention, the bulk of it, the long tail of features that you build that make the product more useful have to matter in your choice to keep using Evernote every day. [00:14:38] S1: How many people still use Evernote? Millions. Millions? Millions. Like, how many million?