Paul: Welcome to another episode of The App Guy Podcast. I am your host, Paul Kemp. I do this show because I'm inspired to have a lifestyle as an app entrepreneur; I live off the income from the app store and from all the things I do digitally. I can work anywhere, and I also get to be at home a lot so I can spend more time with my wife. But not as much as my guests today. They are husband and wife, and the co-founders of an app called Azoomee. We're going to learn all about what they're doing, so let me introduce Estelle and Douglas Lloyd, the husband and wife team behind Azoomee. Guys, welcome to The App Guy Podcast.
Douglas: Hi, thank you.
Paul: First of all, I'd like to know about you both. You're husband and wife, what's it like working together as a duo?
Estelle: It's great. So there are several ways we can look at it... We talk about work a lot, and the great thing is that we love what we do, so most of the times it doesn't feel like work. But most seriously the reason why it works really well is because we each bring very different and specific skills to this venture, and we don't tend to work on the same thing or the same aspect of the business, so it's very well divided. But this doesn't mean that we're not involved, for example if I'm working on something on content, and I want to have Douglas' opinion on it, we'll have a chat. That's really how we work, we seek each other's feedback, but we are ultimately working separately, each of us on specific aspects of the business.
Douglas: This isn't actually the first venture that we've co-founded, we had another venture which was very successful and was sold very profitably in the media sphere. So in fact we've been working together building businesses for over a decade. So there's a track record there, and we're still smiling, and laughing, and we have three young children.
Paul: This is so inspirational for anyone listening who has a partner as it shows that you are soulmates who can spend work and home time together. Let's put this in the context of what you're doing now, so perhaps we could talk about Azoomee.
Estelle: Sure, so to explain it in a simple way Azoomee is the place for parents to give to their children, to be entertained and learn in a safe environment online. One way that I like to describe it is if you recall your childhood and building a fort or a den with the blankets and pillows… this was your own space where you could go to play.
Douglas: Paul, I don't know how much time you've had a chance to look at the app, but when you login it's like a massive toy box, and what we wanted to do is to create something really exciting that children could engage with. They love being able to discover the different parts of the app, and parents know when they give them Azoomee there’s nothing for them to fear, that all the content there has been curated and is age-appropriate. So it's something that both parents and children embrace as I think that when it comes to technology it's often more a source of conflict than a source of harmony between parents and children. We're trying to resolve that.
Paul: This is great because it really ties into how this podcast started. It was my second ever interview and I interviewed someone behind Toca Boca, and they said...
Estelle: We're big fans...
Douglas: Yes, they're great.
Paul: Okay, well they were told at the time that it was crazy to build an app for kids. Who on earth is going to give their kids access to a several hundred pounds device, and how right they were to dedicate themselves. Are you finding that that age of being scared about your kids being on your iPads and your iPhones is over, and there's a lot more people relaxed about the amount of device time children are having?
Estelle: So before we get into the specifics of this, the Azoomee app is for kids aged 5-11. So it's for primary school children, and it's an age when there is interest about the internet. Some kids are using the internet for their homework, so there is definitely already a presence online. There isn't yet necessarily an interest in social media, although there's definitely chats about social media and awareness, so we think it's a very critical age group that needs to have access to all of the wonders that the internet offers, but without necessarily the threat of finding a really inappropriate piece of content by mistake.
Douglas: Paul, to address your question, first of all let's look at homework - it's become more digital, and therefore parents no longer have a choice about whether their children are online or not, or actually in front of the screen. I mean, if you take state schools in the UK, a huge percentage of maths homework is now done online, through a variety of different brands, and then you've obviously got the growth in ICT, actually it's a core part of the curriculum. So tablet and laptop usage has naturally grown as the curriculum has changed, and homework and the way it’s used has changed, and there's coding in all of that. So that's the world we're living in, it's not something that you can necessarily regulate in a way that you could before, because there are various drivers that go beyond entertainment.
Paul: So Estelle and Douglas, one of the big challenges from listeners to this podcast is they love the idea of having a lifestyle built from digital, and obviously both of your incomes are tied up, the household income is all to do with this business. Is it profitable to enter the kids space, the 5-11 year old type of space? I'm just wondering in terms of how you actually monetize and whether it's worth it from your perspective.
Douglas: It's worthwhile, bear in mind that we're serial entrepreneurs, it's not the first business that we've built a business. We looked very carefully at the business rationale and how we would run it, and how we would raise capital from high net worths and institutions, as well as how to monetize the app. This is a subscription-based product, like Spotify or Netflix. You either pay a monthly subscription, every six months or every year, and the monthly price is £4.99 per family. It's immaterial to us whether you have one, two, three, four kids even five - it’s the same price per month. We've looked at alternative pricing options and we feel that's a very sustainable price for a variety of reasons. First of all, it's worth bearing in mind that we make no money from advertising and there are no in-app purchases, which from a parent's point of view is great news because you don't want your primary school children being marketed or advertised to. So we believe that parents will feel comfortable that their children are being given a pure experience, an entertained experience, and that's one of the components that sits within the price tag. Also don't forget there's a huge amount of video content there, which obviously we had to license, just like Netflix; there's a cost of using that. And I think the other aspect worth bearing in mind that maybe we should touch on is that our strategic partner is the NSPCC, and for every single month that someone subscribes, they pay through us and donate 20p to the NSPCC. So there's a huge charitable underpinning here. This is an entertainment platform but we're also looking to keep children safe online, and that's a key mission for the NSPCC, and it's important that we support them in doing that.
Paul: Great, I've learned an enormous amount from you. In fact, you have a similar vision to Toca Boca in a way, that they don't like to do in-app purchases or selling ads to children. How important do you think it is to have in your business a belief system? Something that you really believe in, you're trying to change, and obviously in your case it's protecting children.
Estelle: It totally underpins everything that we do, Paul, it really does. The socially responsible aspect of what we do is at the center of every decision that we make, whether it's partnership with established brands that help us distribute potentially the app. Our partnership with NSPCC is a perfect reflection of that, but it's also the way that we curate content, the type of content that we bring on to the platforms. I'll give you an example, and we haven't really talked about the content that we have on the app, but I think one of the very important aspects of what we do is the content and how we curate it. So the content is videos, games, audiobooks, art, tutorials and a messaging app. If you look at the video content, for example, we've got great, entertaining content, great entertainment brands that are very well known and that kids love, but we are also very keen on tutorials. We bring on a lot of art tutorials, cooking tutorials, science tutorials, magic tutorials, and it's the whole idea of getting kids active, getting them creating things, making things, wanting to do it with siblings or friends. So that's the whole idea of what we curate on the video content, and I would say that the tutorials make up at least 50% of our videos.
Paul: Actually, one of the big challenges from the app entrepreneurs that are listening to this is that it's often very challenging to get investment, and I'm guessing because you're serial entrepreneurs it must have been quite easy for you, just a case of picking up the phone... Is that the case?
Douglas: It's never easy... Raising money is never easy. What we'd say collectively is first of all we're very privileged that there are people that believe in our idea and have been prepared to back us, because we think we have a great idea and we think we're doing something good, not just with the NSPCC. Obviously, people made a fair amount of money in our previous venture, and therefore we are potentially - I'm putting words in their mouth - more appealing than other opportunities they might be looking at, because at least we've delivered for them once. Then there are those people who didn't invest in our previous venture who are saying, "Well, I don't want to miss out on this one", so obviously that creates a virtuous circle, and that's certainly helped us. For the record, we've raised just under two million pounds so far, which is no mean feat, it's a serious amount of money. So it has been easier, but the process remains the same: investors want to meet you, they want to look at your business model, they want to look at the market, and obviously the more they invest, the more seriously they look about whether they're going to get a return on their investment.
Paul: So this is appropriate to anyone who has funding, or even the guys that are bootstrapping their own projects and businesses. What would your advice be on where you spend the money? Obviously, it's relevant to what you're doing, but do you have any guidance for us on where it's best to actually spend the investment that you're getting?
Douglas: I suppose my overall advice would be... To me it's obvious, if you don't have an app that works, then what's the point in marketing it? So it's WHEN you allocate the money that matters. If you look at the money we've allocated, it was much more geared towards technology to start as it should be, so it functions and works, and then as you begin to have an MVP and it's something that's working properly, then you move more to the marketing and the embellishment, and where you allocate cash changes. But as we all know, if the app doesn't actually work then you've really got nothing to market. The initial investment - and this is the hard thing - is in turning a dream into something that works in the app store, and until it works in the app store you effectively have nothing to prove for your money.
Paul: Also, people are challenged by whether to employ developers themselves or use third-party developers. Do you have a view on that?
Douglas: Well, our previous business we contracted more through third parties, and I think it's fair to say that we found it much harder. In this instance, the team is completely in-house, vested, they're all shareholders and we're all sharing the same journey. I think one of the key things I'd always say to anyone is if your team is aligned with you and they all believe that they're going to benefit from the association - I'm not just talking financially, but just being a part of the business. I'll give you an example: we all have hoodies in the office with different characters from our Oomeez. The Oomeez are the playful, cartoon-like characters that you'll see in parts of the app. When you join you get a number. Now, it's probably a bit hackneyed you might say, but everyone quite likes that. "Hang on, was I number 4? Was I number 5? Was I number 11?" You know, it's a sense of "I'm part of that team."
Paul: Yes, actually we have to shout out to Ed Burleigh, who put us in touch.
Douglas: Yes, I know. He hasn't got his hoodie yet, but he will have it soon.
Estelle: Can I add something to your question about where you spend the money? I think what we've done this time, our second time building a business, is that we have spent more money, and certainly time, prototyping at the very beginning, and it's definitely a critical part of the journey, and it's something that needs to be done very well and definitely not where you want to not spend money. I think that we were very lucky to be introduced to somebody who did the prototyping with us, and we ended up recruiting him as our CTO at the end of this process. So that would be my number one priority piece of advice in terms of where to spend money early on. The second thing is not so much spending the money, it's more looking at the size of the market, because you can build the best possible product, but if you are going after a tiny market, then your business model is flawed. It's sometimes incredibly difficult to get a true sense of the size of the market and how the market is going to hopefully grow in the future; it's sometimes very difficult to actually get a very clear view on that and it requires a fair amount of research and industry surveys.
Paul: I guess it's a shame that Netflix can't tell you exactly how many people are logging into the kids only section.
Douglas: It is a shame, yes.
Paul: But we just assume it's massive, because obviously with Netflix now funding its own content, and happy to throw away $100m on House of Cards and all these other programs, then I can imagine the market is huge.
Douglas: Yes, the market ought to grow for two reasons: one, we touched on it earlier, tablet usage should grow, and also as the cost of the tablet comes down, particularly if you look at the Android tablets, the tablet is no longer as much of a luxury item as it used to be two, three or four years ago. And because our app works best on tablets, and also it's easier for children to consume the various aspect of Azoomee, that will be one of the drivers that is very important for us.
Paul: So there's two more things we need to do guys, before we say goodbye to you. One is that I'm really interested in how you obtained feedback, because I know it's all about building a community, especially through the prototyping, the beta stage, and I just wondered if you had any guidance for us on how you've gone about getting feedback on your prototype, on your MVP, and almost building up a community whilst you're in this beta test.
Douglas: So we have, as Estelle alluded to, throughout the process we have undertaken market surveys, and before the product was actually launched we did three different market surveys and large ones, nationally, to talk about the various components of our product and what the appeal would be and why that would be valuable to use it. Because if you break down Azoomee into different components, video, games, messaging, the art app etc, it's useful to understand what people want. And indeed, there's another survey going on right now. So there's the market research, which to some extent has given us guidance. In the beta test - we know a lot of the people on the beta. Remember, we're fortunate that this is a market we know well in the sense that we have three young children, all of whom are potential Azoomee users, and a lot of our friends have children of this age, so it's quite - I'm not going to say it's easy, but there are a lot of children we were able to talk to through their parents as to how they used it. It is pretty useful having that direct access to the market. But we will continue and need to undertake much more thorough focus groups and market testing as we go forward, because the app itself was only officially launched last Thursday.
Paul: Right, okay, so it's pretty young. What sort of market surveys - are you actually appointing a company to do these for you, are you undertaking them yourself?
Estelle: Before I get to that, just to follow on Douglas' point, one of the very interesting, key pieces of feedback that we got from these surveys is that parents are very interested in the educational content that we have throughout the platform, and that anything educational resonates very well with parents. They understand that it has value, they understand that, and I would go even further - they are prepared to pay for it because there is an educational component to it. One of the series that we didn't discuss, which is a series that we produced ourselves, you mentioned Netflix producing their own IP - so we produce our own IP called Search It Up. Search It Up is an animated series, two-minute cartoons that essentially guide children on how to be a good digital citizen. It's a bit of a mouthful, but what it means is essentially imagine little cartoons that explain what's a password, how you use it, how you create a good password that you will be able to remember, what happens when you put a photo online and how long it stays there, and all these very important topics that children between 5 and 11 need to start understanding, particularly as they are going to continue spending a fair amount of time online later on.
Paul: That's wonderful.
Douglas: And it's worth adding, Estelle has not mentioned two other series we've curated, which are art series, and this goes back to the whole tutorial point of trying to make sure that the app is valuable as well, because it teaches active play. I'm using my screen so that I can produce an origami whale, or a plasticine snail, and we like that. So there's a very strong artistic craft component to Azoomee.
Paul: So the final question then, and I don't often get the chance to ask this, but I'm a parent, I've got twin boys, I firmly believe that being a work-from-home dad and being in charge of my own destiny is beneficial for the kids, but I'd love to know from a husband and wife with three children, what's the pros and cons of the lifestyle that you have as serial entrepreneurs?
Douglas: I think one of the benefits is... Yes, obviously we're always on, because one is with one's own company, but we're also able to create time for the children in a special way, so that we can go to that swimming gala this morning, or we can go to... You know, we have more freedom of movement, because it's our business. It doesn't mean you work any harder, but you can work around all those wonderful events in your children's life that you want to go to, but if you were working for someone else you would always have to make excuses for, either to your employer or to your children. So I think that's a massive bonus, and it really shows up in terms of both holidays and also, as I said, being very engaged with them. I take my children to school every single day, and if that means I have to work a bit later in the evening then that's a price I'm prepared to pay. I think that's a massive benefit.
Paul: Yes Douglas. I do, as well. There's not many men I meet at the gate, I have to say, but it's nice to be someone that has... And you must be the coolest parents on the block, being app entrepreneurs and sharing an app that you've built for kids, you must get a lot of kudos from your children's friends.
Douglas: I don't know, I mean I hope they say that. I have no idea if they do say that, but they're very proud of what we're doing. They actually love coming to the office, they love to test the games and videos. I think, to be honest, it's the content of what we do, rather than the fact that we're entrepreneurs, that excites them. But they are great ambassadors, and we don't want to let them down.
Paul: All the show notes are going to be on episode 438, and for everyone listening, it's theappguy.co, and just search for Estelle and Douglas Lloyd. Guys, how best can people reach out and connect with you, and I guess get a hold of Azoomee.
Estelle: It's in the App Store and the Google Play store on tablets, and obviously the best way to get in touch with us is either on our Twitter page, our Facebook page, or LinkedIn, which is more for professional purposes. So either of these three, or come and see us in our office in Old Street.
Douglas: We're where you'd expect us to be.