Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is the show for budding entrepreneurs, startup founders, anyone working on a side project... What we like to do is actually go around the world and just try to find out who's doing some really awesome stuff that we can learn from in the startup world.
Today I'm in my home country, the U.K., where all the best startups are from, obviously. I've got the great privilege of chatting with a founder who's got a top three grossing app in the Utility section, he's consistently in there. We're going to learn a lot from this chat with David. I'm going to suggest that we talk about the technology choices that he's made, how to engage users, how to optimize for conversions, and perhaps the psychology of getting in-app purchases, which is really actually quite challenging for many of us.
If any of those topics are of interest to you, do stay tuned, but I'm sure we'll cover a lot more, as well. Let me introduce David James. He is the managing director of Total Car Check - it's an app and a website. David, welcome to The App Guy Podcast!
David James: Hi, Paul. Thank you very much for having me.
Paul Kemp: Thanks for coming on, David. It's great! So you reached out to me, and I was really thrilled that I got your message, because you have a top three grossing app. Maybe we can start off by talking about the app.
David James: Certainly, yes. To give a you a bit of background into Total Car Check and what it does, it's an application that allows you to check the history of a vehicle that you might be looking to buy. If you're going out and perhaps looking at a new car and you want to find out if it's been stolen, or maybe written off, if it's got any outstanding finance on it... There's about 50 data checks that we do.
I actually started the company - it's quite an interesting story - when my parents became the victim of a crime. They bought a bar and took it home, and when they took it to a garage to get a problem with it fixed, when they turned up to pick it back up, the police was there. What somebody had done is they cloned the vehicle, used stolen details to [unintelligible 00:02:34.00] the vehicle.
My parents lost quite a bit of money, probably about 4,000 Pounds. My background's in technology, so I thought "How can I make it easier for people to check the history, the provenance of motor vehicles?", and that's how Total Car Check was born. My background's in development and IT, so I had some of the skills already to start an organization, start a business, or really just start an idea, as they always start, and start building Total Car Check.
We have a website, TotalCarCheck.co.uk, an iOS and Android application, and like you say, we're really lucky to have a really successful application consistently in the top three, top grossing apps in our section in the U.K. I checked today, we're number two, so we're doing really well in there.
It's taken some time, but hopefully I'll be able to share with you and your listeners some of the tools and techniques that we've used to really grow and climb up those charts.
Paul Kemp: David, I love this chat, because the reason I started this podcast was that I wanted to learn from people like yourself, and like everyone, I made this fundamental mistake - I left corporate U.K. (the banking sector) thinking that I knew how to launch apps, I knew how to do it. It's simple - you simply look online for what is really successful and then you clone it... [laughter] And what I've come to realize is I want to avoid everyone listening making that mistake. That's not the way it works. It's actually more common to go your route, which is you are in the world, you find a problem that's really relevant (your parents') and then you go out and you find technology to solve the problem - getting ripped off by rogue car salespeople.
Would you agree that if you were to do another company, maybe that's the way you would start, with the problem first?
David James: Not one hundred percent... I don't think it's being understated. I think one of the things that drives any organization forward when it's very small is the passion of its founders and the people that are beginning the organization. I think when you truly understand the problem that you're trying to solve and you also have a passion in trying to see it through, it's very different to perhaps trying to crowbar yourself into an industry because you might have identified an opportunity.
It doesn't always work like that... It's slightly serendipitous the way it happened [unintelligible 00:05:21.21] I had a technology background... But generally, that's the way things happen. Actually, much like you, I was working for an investment bank in London, and I had a 9-to-5 job. I had previously worked in insurance and for a telecoms company... Straight-laced, as you could have imagined, really. I always say to people when they ask me for advice, "Find the problem that makes you have a chip on your shoulder about it, and try and fix it. Be realistic about what you can achieve, do your research on your competitors in the marketplace", but having that fire in your belly I think is really important.
Like you say, if you can start with the problem first, then I think you'll have a better shot at success than perhaps some of the other models that we've seen. I always [00:06:21.18] people sometimes find the domain first, and then think about the business idea later. [laughter]
Paul Kemp: I have been prone to that before. Let's talk about engaging users. That's one of the big challenges, the fact that many people are downloading apps from the App Store and then forgetting about them within a few seconds of downloading. We have the attention span of goldfish, and you have actually managed to retain this very useful app.
Now, I'm imagining that the problem is that when you're out to buy a car, you don't have your laptop with you, so one of the best things is you have your phone in your pocket, and you can pull it out and do a check. Is it the fact that it's so useful that is your big feature?
David James: I think that's a composite part of it. I think certainly user behavior is changing all of the time. I think the official term is "showrooming". People will look online for products before they actually go into the showroom to purchase, or into the shops - they'll try to find it cheaper or better, or bigger, or smaller, whatever they're looking for. All applications work perfectly for that, because in the privacy of your own home, in your living room, you can check things out. If you need to buy a new swing for the children, "Okay, I have to look on Amazon. But is it the cheapest there? Is the best one there? Let's look in some other places. I don't go to a shop that sells the swings."
So although, like you say, you can turn up to buy a vehicle and check it there, what a lot of people now are doing is looking at five or ten vehicles beforehand. Some of the tricks that we use -- I call them tricks, but it's really just simplified thinking.
Some of the things we do is we don't force people to create an account if you want to use the application, and I think that can't be understated. We want people, the first time they open it, to be able to enter a registration of a vehicle and find some information about that vehicle. That gives us great traction, because when they're on that second page, we can start to offer them new products and services, and we can start to up-sell, cross-sell, invite them to sign up after that point. I think that's point number one - try, where you can, to make the application as usable as possible without an account. Obviously, prompt people to do that later.
I think unlocking features in exchange for data, even if it's not making a payment -- if you're saying to someone "What will you do on Total Car Check?" You say, "You can use the application and it will return you lots of information, but if you sign up, we will actually give you for free even more information." With that data that we've collected with the user's permission, we can do other things with that. There's alternative options for monetizing your business model, rather than directly purchasing features and products. Because let's be honest, the vast majority of your users aren't going to be making a purchase every single time they use it, but what you do want to be doing is making it easy for them to come back to the application.
One thing that I always promote here is try and make the application as simple as possible and as usable as possible. I recommend people get ten users and you just watch them in silence as they use it, and just see how they're using the application. Are there any pain points, any sticking points? Because people are fickle. If they find things difficult to use, they might not come back. Sometimes you only get that one chance to make that good first impression.
Particularly in our field, we do a few things to keep people engaged. Once we've collected their e-mail address with their permission, we actually send them reminders for important dates for their vehicle. In the U.K. we have the concept of vehicle excise; it's sort of a road tax, something you have to pay over a year to keep your car on the road, and then MOT, which is an annual test if your car's over three years old, to make sure it's road worthy. So we say, "If you want, we'll send you reminders when those are close to due", and that pulls people back into the application to check data.
For every application that's not going to work; you might not have the right data model for that, but you can always think about ways in which you can perhaps pull people back in and trying to engage them in a way that isn't creepy. You don't want the old Facebook model of e-mailing you every single time something happens on the website, but it's useful for the user as well.
Paul Kemp: That's genius. In fact, in all these 500 episodes that we've recorded on The App Guy, I don't think once has anyone mentioned the benefit of not asking to set up an account immediately. That to me is genius, because a lot of us are trying to solve the wrong problems. It's made me realize that you're maybe trying to make the account setup a lot easier, without realizing that actually that's a major drag initially. Going and making the app really useful is the best thing for your user journey.
Let's talk about conversions then. We've kind of touched a little bit on that, the fact that you are sending reminders and offering great valuable data in return for some actions from the user. I'm guessing a lot of people are returning to your app, because I can imagine a car purchase is only once in a blue moon...
David James: Yes, about once every four years.
Paul Kemp: Yes, so do you get people returning to the app? Is that your goal?
David James: Yes, so the marketplace is interesting, because you have consumers which are perhaps making a purchase about every three-and-a-half, four years, but naturally what will happen and what we've seen is they will tell people about the application, because someone they know might be buying a vehicle - their extended family, close friends - but also there are what we refer to as home dealers. These are people that actually run businesses in the U.K., and that are buying one or two cars a month from their bedroom, essentially, or from their homes, and they're trading those on eBay and other classified websites. Those are high volume users.
There's quite a long tail to the market in the U.K., and it's relatively fragmented, as well. But to talk specifically about conversions, echoing one of the things I said initially, we're trying to make the fewest clicks possible to buy. On a Total Car Check in the app and on the website, if you enter registration plates, then you really only have to press one more button to make a purchase. You have to enter an e-mail address and payment details (if you're paying by PayPal or credit card), but we found that removing all of the friction from that process and not asking for people's -- I always say, "Don't ask for the things you don't need." Don't ask for that home address, you don't need that. Also, people are nervous about giving that to you. Ask the minimum.
We just ask for your e-mail address, because that's all we need at that point. Someone might say to you, "Well, you could do some interesting management information on all the other information that they give you." Well, we probably could, but it wouldn't make us any money directly. What we want is to convert them at the time of conversion.
A few other things we do - these are sort of slightly fabled, slightly backed up with some evidence, but you should try your own ways of doing this... But some of the things we've found is the order of products - the way in which we display the products can have a difference on our level of conversion. Is it the cheapest product first, or the most expensive product first? There's a great book, The Psychology of Persuasion, and in one of the first chapters they talk about the contrast principle... They give an example of a pool/billiards table salesmen in the U.S. - he would always take people to the cheapest pool table first, and then he would work up to the most expensive pool table, and then they would make a sale at some point, or maybe not.
When you change his behavior to work from the most expensive products back down to the cheapest product, I can't remember the exact figures, but he significantly increased his monthly revenue. When people see a product, they're only seeing it in comparison to what else you could give to them. [unintelligible 00:15:15.14] but I think it's good advice; it's worth experimenting the way in which you display your products, the order in which they're displayed to users, because that gives them some sort of cognitive triggers to think about which one they want to buy... And some other things, as well - the color of the buttons, and things you might not think would be incredibly significant, but there is some research out there that suggests -- and I know after I say this, everyone's gonna try and do it and expect a 25% increase in conversions, but we changed our buttons to red... It sounds so trivial and so silly, but we saw a not insignificant increase in conversions, and there's some evidence to back it up from a psychology perspective.
I always say to people, "Do some A/B testing for conversions", that's the best thing you can do. We're quite fortunate in our area, because the industry is already quite used to paying for this sort of check, and in lots of other organizations maybe they're not... But I always say, don't try cheap tricks; be clear, open and honest, and if people think that they are getting a good deal, then you're more likely to convert.
One thing that really resonated with me that I was told once was this concept of the fear of regret. When people purchase something, before they purchase it, one of the first things they're thinking is "What if after I buy this I don't want it or I don't need it, or it's the wrong product, or it doesn't do what I want it to do?" One way you can negate that and increase conversions is by offering people 100% money-back guarantee, within reason. You say to people "If there is a reason that after you got this check that we're giving you, that you feel entitled to a refund, we'll just give it to you no quibble. Say that there were some data fields missing that you felt was important for whatever reason, we just give you a refund."
Not everyone can do that... Obviously, physical products are slightly different, but removing that friction from the buying process I think is one of the key parts of converting people.
Paul Kemp: Yes, and we often forget that, because actually, trying to get a refund from an in-app purchase is always quite a minefield anyway.
David James: Yes...
Paul Kemp: So we're really talking then about the psychology of getting in-app purchases, and it's wonderful to hear you go through all those trivial things... Do you use any particular tools to do the split testing?
David James: Well, it's very basic, actually. We have an even number of web servers that serve our content up, so we build our own internal A/B testing. There are ones available, especially if you're running it on a website, but the difficult one is A/B testing within applications, because that is slightly more difficult to do because you'll be constrained; you can't update the application every time someone uses it.
I always say to people when doing A/B testing, as long as you are controlling all the variables, it's just as valid to do one thing one day and another thing the next day over a continued period of time, rather than trying to run both in parallel and collect that data, because it is more difficult to do that. Obviously, you can assign session IDs and things like that, but I always say to people, "Just simplify what you're doing. Change one thing, test it for a week (or however long you want to measure it for) and then go back and compare it." Don't try and overthink the way you're measuring what you're doing, because if there are significant results, you're going to see them relatively quickly. And don't get too bogged down in the tools that you're using.
Paul Kemp: David, let's change gears slightly now, because one of the passions I have is helping anyone who feels like they're destined for bigger things or a different kind of life than working in a corporate environment. You mentioned that we have a shared experience - I actually worked in investment banking as well, and wore the pinstripe suits to work and all that sort of stuff, and I realized that there was a better life to follow what you're passionate about and have a life of freedom from the constraints of the corporate environment. Have you got any guidance for anyone who is feeling stuck in a corporate job and would love to switch to doing something as a tech entrepreneur?
David James: Yes, I think one of the first things I'd recommend is sort of a book/PDF you can download... I think I read it in 2009-2009 (maybe earlier than that). It's actually by an artist called Hugh MacLeod; he creates cartoons on the back of business cards, check him out. The PDF is called How To Be Creative - if you google it, you'll find it almost instantly. One of the pieces of advice he says in there is "Don't quit your job and then start thinking about how you're going to start a business." If you really feel that passion, you've got that got that creative juice in you, temper it and work with it within the constructs of your current job, evenings and weekends.
When I started Total Car Check - I always tell people - I was developing the application on an application that my then-girlfriend, now wife, got free with a mobile phone. I was just working evenings and weekends, and now I've got two children and my time is more precious... But you've still got the same amount of time as everyone else, so the first piece of advice, I'd say don't (what people refer to as) rage quit. Don't just quit your corporate job and say, "I'm gonna do this!" Do it sensibly. Think about the product or service you want to offer, do your research, use your spare time to get something up and running and show it to people, and iterate that way.
I'm a big proponent of work/life balance, as well. I think success is great, but what's really important is that you're happy in what you're doing, and it's often the case that you might look over the hill and see the grass is being greener, but for those of us that have trodden that path, it isn't always rosy. I'd always encourage people to follow their passion, but do it in a controlled way, until you can find out that the idea that you've got is perhaps gonna work. Then you can just iterate from there.
Like I say, the How To Be Creative PDF from Hugh is great, and the other one I think is really excellent advice is called Getting Real - it's by 37signals. You can download that from their website, it's a PDF. It's just sort of a proforma on how to begin a startup, and the things you should do at the very beginning. Don't jump into the deep end is what I'm trying to say, and try to swim. Get in the shallow end first, and walk upstream.
Paul Kemp: Well, I wish I'd listened to you when I jumped in the deep end, and that's why I love sharing this content. You touched on something called work/life balance, and that's always quite challenging, because as soon as you open up your laptop or get set, ready for the day, no matter how early you get up, you could fill up your day and doing a million and one things... And especially if you work from home or work close to home and have children, it is quite hard to juggle.
How do you juggle your day, and any guidelines for us to try and be strict about our work/life balance?
David James: I think the first thing that I always have to remind myself about is the most important thing to me is my family and not my work. It's easy sometimes to think that it's the other way around; you never intentionally think it, but if you're spending more time than you have to... I always have to remind myself that the reason I'm working so hard is so that I can have a better time with my family.
Actually, I've got two young children at the moment, and actually I've got that already now... I've got a two and a three-year-old, and a wonderful wife. Sometimes that can pass you by a bit, because you become so tunnel-visioned on trying to achieve your success... But to give specific advice, one thing I do is I say, "Okay, I have a list..." -- it's just a .txt file that I keep on my desktop; that's my to-do list, and it's called "to do.txt" and I have a year goal, a month goal, a week goal and a day list that iterates up and down. That is at simple as it gets, and it helps me focus on what I need to do next.
The problem that I think a lot of small [unintelligible 00:24:38.10] suffer from is context switching and trying to swim upstream sometimes, trying to fix problems... Obviously, things will come up, code reds, errors in production - that's always going to happen, but if I know the things I want to achieve, then I can check against that list and I can feel how close I am to achieving them. That gives you a great deal of satisfaction when you do achieve them, and it also creates an endpoint for the day. If I know that I want this to happen today, great. Once I've done that, within myself I feel slightly more happy to go and spend time -- but like you say, Paul, it is difficult, work/life balance. It's something that you have to work hard to remember that it isn't always about spending 70 hours a week in the office.
Paul Kemp: I'm really thrilled that you mentioned that, because when you mentioned success - and actually you could have success in front of you but not realize it, and I'm sort of thinking back to when my kids were two (I've got twin boys) and we took off and spent several months living in Dubai, we did a ski season, and I guess I got mislead to think that success was all about chasing the profit, the bottom life figure, your bank balance, not realizing that here we are, living with my family, my wife and kids, we're in France, or we're skiing, or we're jollying around Dubai or around Asia... Actually, that was at the time the most successful thing. Can you define success?
David James: That's right, exactly. You want to have professional success, but like you say, the success you're really garnering for is perhaps sometimes really there. If you haven't read the Alchemist, it's a spoiler alert coming up, but this guy spends his life traveling the globe to try and find this treasure, and then he returns home to only find it buried underneath the tree he sleeps underneath. Sometimes, like you say, it's there in front of you.
That sounds maybe a little bit hippie you might say, but it's important to have that balance and to have that focus. By all means, strive for success professionally, but not at any cost is what I would say.
Paul Kemp: The whole reason for this show is to expose the appster tribe to alternative lifestyles, and the fact that we have all these tools, the fact that you can be out looking at a car and do a check-up, or you can work from home, you have all the communication you need... The whole world is set up for us to have a great work/life balance, but I do feel like a big portion of the people are missing this, because they are kind of stuck in what they're expected to do, which is drive to work or commute, and go to do something they don't particularly enjoy, and then leave and get their enjoyment from spending the money on things they don't really need.
David James: Exactly! But it's difficult... It is really difficult to notice that. I always think that self-awareness is one of the most telling/compelling, but most difficult features to have. Being aware of what you're doing with your time, being aware of the influence and impact you have on your family and your colleagues and other people... It's important every so often just to take a step back and realize, "I really want this organization to be successful, but you know what I want more than that? I want my family to be happy and I want to be happy myself."
We've all had experiences which [unintelligible 00:28:20.22] You've worked long hours for an organization you don't particularly like, but you want to pay the mortgage, and there's all sorts of factors involved... But it's always nice to get reminded that there is a bigger picture outside of the iOS App Store, and it's important to find it.
Paul Kemp: David, it's been so pleasurable talking to you, and meeting people like you is the reason I do this, and I'm so glad that we connected. How best can people connect with you and get involved with Total Car Check?
David James: The best way to get in touch with me is probably over Twitter, I'm @DavidJames. I actually used to have the handle @DJ, but I didn't use it; I should have kept onto that. But yes, @DavidJames on Twitter, and anyone that wants to have a chat, feel free to drop me a chat and we can take it forward.
Paul Kemp: Yes, you missed up on that. [laughter] @DJ would have been worth quite a lot then...
David James: Oh, can you imagine...? Just for Dow Jones, perhaps...
Paul Kemp: I think I do recall an episode of The App Guy where I actually talked to a guy with the shortest Twitter name I've ever seen, and he was one of the first hundred batch of employees at Twitter, I think. I think he's probably ended up making more from his Twitter handle, selling that, than what he actually made from the company.
David, thanks for joining us, and for everyone listening, the show notes will be at theappguy.co. You can search for David James, it's episode 516. There is a rich archive of episodes if you happen to...