Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is the show where we I go around the world and get lots of wonderful guests so that we can learn from their journeys to inspire you to do something awesome with your life, with your app journey, whatever the projects you're working on that lead you to have a wonderful life.
This episode is very relevant to app developers. I know there's a lot of you listening who develop your own apps and the technical side of your business. To help us with the understanding our users, which I think is very important, I've reached out and got a wonderful guest. His name is Zahi Boussiba, and he is the CEO and co-founder of AppSee - very related name, given that this is The App Guy Podcast.
AppSee helps developers understand their users through powerful visual in-app analytics such as heat maps. We're going to find out all about AppSee, all about Zahi, so do stay tuned.
Thank you, Zahi, for coming on The App Guy Podcast.
Zahi Boussiba: Hi, Paul. Thanks a lot for having me. I'm super excited to share my story and the AppSee story on The App Guy Podcast.
Paul Kemp: Wonderful! Zahi, let's talk straight away with understanding the problem that you're trying to solve. You've been in business now for a few years... I wondered what was the initial problem that you were trying to solve with AppSee.
Zahi Boussiba: Actually, it's a funny story, Paul. Exactly five years ago myself and my co-founder decided to develop our own mobile application. It was around the peak times of Groupon and check-ins and coupons, and we wanted to create an app around that. The name of the app was ShopTalk - it was a mobile social commerce application. We built it very quickly - it took us around 2-3 months. We released it to the public and we measured it with the available analytics solutions that were free at the time... Mainly Flurry and Google Analytics. We saw that we were getting a decent number of downloads, but actually we got very low engagement with the app. We saw that most users only use the app once and never returned. We couldn't understand why.
When we measured it, we saw that most of the users are not completing the super simple three-step onboarding process. That's where we kind of hit a brick wall. We couldn't really understand what's preventing our users from completing it. Again, it was like a three-tap, super easy process, in our opinion.
We couldn't understand why users weren't completing that process, so we started developing capabilities that could help us better understand what our users are actually doing inside the app. We would actually take screenshots of every screen, we would send them to the server, and then we would actually look at screenshot after screenshot and see what users actually encounter and do inside the application.
Now, the amazing thing we found out - and this is something we had no idea when we planned the process - is the first thing we asked for in the app was location permissions, and it was our assumption at the time (again, this was five years ago) that everyone would approve sharing their location. Actually, 70% of users did not confirm sharing their location. Obviously, as very sophisticated programmers, we showed them a message: "Please go to the settings screen and update your location settings", and we actually saw that they went to the setting screen, but they went to the app's settings screen, and not the phone's settings screen.
So we saw a lot of screenshots of users actually getting confused, going to the apps settings screen, trying to search for location settings... They weren't able to find what they were looking for and they left the app and never returned.
Paul Kemp: Fascinating!
Zahi Boussiba: That was really the first a-ha moment of how a simple user notification can actually be very confusing, and you mean one thing and the user thinks another thing, and that's why you're losing 50% of your users.
Happily - or sadly - the app was not successful, but we felt that we stumbled upon something that is really interesting - the ability to actually see what the user is doing inside the application. That's how AppSee actually came to be.
Paul Kemp: You reminded me, Zahi, of my conversation with the founder of Brunch, which has almost an identical story to you... The initial app failed, but what came out of it was an understanding of a real problem that needed to be solved. So what happened then? You discovered that this was a real problem... How did you start AppSee? Talk us through the early stages. You had this a-ha moment, but how did you get that from a-ha to then a real business?
Zahi Boussiba: The early days were very challenging. First of all, we're talking about two guys with some development experience, basically new to the app world, bootstrapping from the garage with two laptops. The ShopTalk app kind of failed, and we set out to initially build what was called UserVOD; we couldn't even afford a proper domain, so we bought the first domain that was available, and kind of in the area of what we were looking to do.
UserVOD was not a good name. It gave people connotations of an entertainment video streaming service, while we were aiming for helping you see what your users are actually doing inside the app. But we went ahead and built a very basic prototype, again, with zero funding... Just us and our coding skills.
We built a landing page, we had a very simple SDK that you would integrate into your iOS app - initially we only supported iOS - and a very simple dashboard where you can actually see recordings of user sessions. At that point we'd advanced from the screenshots to an actual video replay. You would put the SDK, stick it inside your app, and then you could watch recordings in the dashboard. That was pretty much the only feature we had. With that feature we went to some friends and people we knew in Israel, in Tel Aviv where we live, and offer them to try out the solution.
We got some very nice feedback that yes, it actually works, but obviously it was very hard to scale... So I think the most important thing we were able to achieve was actually a TechCrunch coverage at that point. Five years ago everything new in the app industry got a lot of coverage. We were in an area that reporters found interesting, and we were able to get a TechCrunch story. This was in July 2012. That was really our starting point.
We started getting hundreds of registrations to the website. The SDK did what it was supposed to do, it recorded user sessions, but the functionality was very limited. On the other hand, there was no real business model behind it, so it was just like a service that you could use; we didn't have any terms or pricing or anything around that.
Then potential customers started asking us about "How much does this cost?" and we actually had no idea how much to price it or how to price it, so we built out a very simple pricing model. I think it started with 1,000 recordings for $19/month, and a month later we got our first paying customer, which I think was one of the most exciting events in the company's history... $19 that went into our bank account from a Paypal transaction.
We understood that the product had very limited functionality. If you're testing an app with 10/20 users and you have 50-60 user recordings where you can actually see what the user is doing remotely, that's fine. But what happens when you have 10,000 or 20,000 or 10 million users? How do you make sense of all of those thousands or tens of thousands or millions of recordings? And that's where the real concept of AppSee started maturing.
At that point we were also able to secure the very basic funding to the company, and also finalize the concept of AppSee that I'd be happy to cover.
Paul Kemp: I've learned so much from you on that piece alone. There's many people listening to this that come to the whole app world with an idea, and then they think it's about pitching that idea initially, but what I love is the steps that you just took us through. You started with the problem, identifying the problem, then you actually built a prototype. Then you shared that with friends and family and people in your network, and then you got some exposure which then led to hundreds of registrations and then your first paying customer. You know, a lot of companies don't even get a paying customer, don't even think about that.
Then I guess that was a lot easier to raise funding after showing those solid steps of progress.
Zahi Boussiba: Yes, definitely. When we finalized our funding round we had around 10 paying customers, and the company was generating an astonishing amount of around $250/month. I know today it sounds funny, but for us at the time it looked like "Hey, we're generating $250/month." I think it's all in perspective now, but to take the story a few steps forward...
I would say in early 2013, that's when we got our seed funding - a fairly small amount of $800,000. Based on the dozens of users that had tried the platform, we indeed identify the major gap of just having a list of video recordings is nice, but it's not enough. And indeed, that's when we've made the most significant leap of understanding the real need here, of the ability to create an analytics suite that combines both analytics capabilities and also the session replay capabilities... Meaning that our customers will be able to create reports on questions they want answers for, for example users that don't complete a certain process in the app (like an onboarding process), or users that only used the app once and never returned, or users that experienced a crash. All of these questions will be able to be answered visually by a sample set of recordings that demonstrate that specific behavior, and that for us was the major leap.
In that stage, we actually went to kind of a sleep mode for a few months. We realized that we didn't want to promote UserVOD anymore. We wanted to basically kill the brand and kill the product we had. But on the other hand, we wanted to continue an experiment with features, we wanted to make sure we were building the right thing, so we were adding a very small number of features to UserVOD while we were in parallel building the comprehensive AppSee platform. This went for around nine months, and in October 2013, with another TechCrunch coverage, we happily launched AppSee, with a comprehensive platform. We announced the funding...
I'm guessing that's where the real story begins, because up until that point it was all experimental... But after we launched, the focus was more on proving that there's a business here, that this is something that we can scale for, generating millions or tens of millions of dollars. At that point, the challenge kind of changed for us, and for me personally as the CEO and co-founder.
Paul Kemp: Well, this show is to inspire everyone that anything is possible, especially in the world of apps. What I kind of take as most inspirational is here's two guys working in a garage, identifying a problem, going through those steps we talked about, and with only -- I mean, the $250/month shows you that even the smallest amounts of indicators to show that there's a potential market is enough to get that first step on the funding. And then once you had the funding - I love the fact that you're one of the only guests that talk about running something in parallel, testing with the existing service whilst preparing the big launch of the full-service of AppSee. I think we can all learn from the way you've done that with our own projects.
Let's jump forward, then - you've got the launch... What can we learn from you about the big launch then of AppSee? For instance, did you appoint a press company, a PR company? Talk us through how we can then learn from you about the launch.
Zahi Boussiba: Yes. Actually, I think we've done a lot of mistakes when we initially announced or launched UserVOD; we've corrected a lot of the mistakes made. First of all, indeed we've hired an external PR firm that helped us with the pitch and with the story and how we wanted to approach media, and we were also ready from the commercial perspective. The website had a proper pricing page, you could pay online, we had our live chat support, we had our sales guy, so the entire operation - although we were only five employees at that time - was ready to handle hopefully hundreds of registrations and potential customers that would come through for the live press release. Happily, that was an important lesson that we've learned from the UserVOD launch.
Indeed, in the first few days we closed an extra $1000-$1,5000 in new subscriptions. So we've done 5x in one day on what we'd done with UserVOD in five months. That was a definite positive indicator for us that we'd done something right.
Paul Kemp: What I'm learning from this is that many of the guests that we've had on the show and listeners to the show, they have had experiences of losing a lot of money, and I feel like if more people took your steps where you have more evidence that there is a market there - you've tested, you've experimented and you know the price points, you know the features that are the most compelling, and there's less chance of losing investors' money when you actually take it.
Zahi Boussiba: I agree, but on the other hand, we had the privilege of working in the garage a year without any salary. Personally, I must say it's a very challenging and emotional time. I used to work as a developer, making a decent salary, and then for a whole year I don't have any income. You're eating up on your savings, you're running from one investor meeting to the other... At some point you definitely think, "Hey, is this the right thing? I could go back and work as a developer and make a decent salary, instead of running between meetings and hearing a lot of no's and maybe's and "Let's talk again in a week."
It was very difficult, but on the other hand it kind of built the company structure we have now; it was experimental, we were proving out something before we go ahead and throw a lot of money on it.
On the other hand, obviously, this approach has its disadvantages because it's a safer and slower approach, so you move slower than a startup that has raised 10 million dollars and is now spending a lot of money. But I think in the long run, and specifically in our industry, it has proved so far to be the right strategy for us.
Paul Kemp: Zahi, let's talk about just one thing there that's on the minds of many of the appster tribe listening to this - the safety net of doing something like you've done, having a runway in your own savings... Mike Zuckerberg was giving a commencement speech recently from Facebook and he said that entrepreneurs need a safety net, they need something to fall back on if it goes wrong, but then I kind of feel like on the other hand that the thing that drives you is not having a safety net and not having a comfortable salary, but driving to something bigger. What do you feel is the better way for entrepreneurs to find success?
Zahi Boussiba: I think my personal problem was that there was a big gap between my expectations from the startup world to reality. When we initially opened the company and developed ShopTalk, we thought "Hey, we're going to develop something quickly for a few months, we're going to have amazing success, and in a year max we're going to sit on a beach, drinking tequilas after someone has acquired us for millions of dollars." And I think one of the most important things I learned during this journey is that when you start a company or a startup, you have to understand this is a very long way. In the best case scenario, if everything is going well, you're in a journey of I would say a minimum of five years and an average of ten years.
I think if you realize that once you go into that journey, then one year is actually not a lot of time. But if you are in the mindset that "Hey, I need to have very quick wins", then it's very difficult.
Paul Kemp: Zahi, we're talking about the most important lessons... You know, this app podcast is to try and get the genuine hard story of entrepreneurs - it's not easy, there's too much press that talks about how easy it is to put an app on there and become a multi-millionaire and settle on a remote island somewhere that you buy... It's just so wrong, and so many people get in, so over the years I've tried to emphasize how hard it is, and you were saying just how hard the whole process is. If you have that mindset before you go in, then it's much easier. Let's talk about this - how hard it is.
Zahi Boussiba: As I mentioned, I've learned that this is not a sprint, this is actually a marathon, so you need to understand it takes time. I think if we would have known in advance what we know now, we would have thought about doing the entire thing a hundred times more. We would probably go ahead and do it again, but we simply didn't realize how long of a journey it is.
I think one thing that helped us is that we had a deadline in mind. We said, "If between 12-15 months we're not able to have this thing lift off the ground in a positive way, then we'll go back to our day jobs." And because we set that deadline ahead of time, then after six months we were still pretty relaxed, because we knew we had enough time to complete the process that we started. I think everyone or anyone who's actually starting something new - you should have something set out for yourself; you decide for the next year you can work on the project without the need to deviate from the course.
Paul Kemp: And how important was it to have a co-founder that had your same values and worked alongside you?
Zahi Boussiba: I think that's probably the single most important thing. First of all, my co-founder and myself, we're known each other for ten years, we've been very good friends. That can also be a potential risk to the friendship in case there are conflicts and disagreement. But in our case, because we knew each other so well, we knew we can work together and we can make big decisions together. I think one very big test we had together - we actually spent a month in South America traveling together. That gave us an opportunity to get to know each other. And obviously, the most important thing is support.
I know it's a cliché, everyone says that startups are an emotional rollercoaster; that's especially true for the first year, where there's so many uncertainties, so you have to have someone to support you, and it's obviously mutual. He has his high times and low times, you have your high times and low times, and you have to be there for one another. But I think finding and choosing the right co-founder is probably the single most important decision you're going to make in the company's history.
Paul Kemp: Yes. And just in the last few minutes, I'm really interested to know if you had spent these last five years on the same course, working as an employee and not getting involved in the startups, the projects, working for zero money, bootstrapping, all that stuff - do you think that you would have learned more as an employee, or do you feel this journey has been worth it?
Zahi Boussiba: That's a hard no. The things I've personally learned about business, about people, about building things are invaluable. It really was a journey that changed my life. I wouldn't trade it for anything. And again, another cliché, but at the end it's all about the journey, not about the final outcome.
The amazing thing is that in every part of the road you have different challenges. In the beginning it's finding the idea. Then getting funding, then the launch, then get your first customer, then hire employees. You have so many different things that are happening constantly, and every time there's a new challenge which is usually bigger than the previous one. Once you reach $10,000 of revenue, you want to hit $100,000, and then you want to hit one million, and then you want to hit 10 million, and every milestone has its own completely different set of challenges. It's constantly evolving, constantly challenging, and if you compare it to, again, the standard day-to-day job, which again, has its advantages... Like, when you take a shower and you go to sleep you have less thoughts and worries. But personally, I think I've developed tremendously as an entrepreneur and as a person, as a result of the amazing journey we've started five years ago.
Paul Kemp: Yes, which is about the same time as when I've started this podcast, and I feel like this has changed my life more than any employment in my history, so it's wonderful to meet like-minded people.
Zahi, as we wrap this up then, I would love to know how can we get people to sign up. Who are the perfect audience for you then to be looking at AppSee and testing it out?
Zahi Boussiba: Great question, Paul. I think that today people - and when I say people, I say end users - have a very low tolerance threshold. I think today when you use a new app, probably the developers have 10-15 seconds of grace. If the user doesn't get it or he's not getting a smooth experience, then you're not going to see that user again.
I think today developers and app owners should be super-focused on understanding how their users experience the app. That's exactly where AppSee comes into play with the session replay, heat mapping and visual analytics capabilities. We have a fully-functional 30-day free trial on our website, so anyone can go into AppSee.com, create a free account, integrate the SDK - it just takes a minute - and then they can instantly gain insights on how their users are using the app.
A typical course of action is that the developer would integrate apps into the testing or QA environment, and then would include apps in the next release. He can gain insights on how the users really use the app, not only from the quantitative perspective, but more importantly from the qualitative side of things.
After that, we do offer some affordable plans for small startups, small companies, and even indie developers. At the end of the day, our goal is to help companies and individuals build better apps. That's what we're here for.
AppSee is really the expert, I would say, in user experience analytics today. We have hundreds of customers globally, ranging from Fortune 500 companies to bootstrapping individuals, so we really serve a wide range of the app development spectrum.
Paul Kemp: Wonderful. How best can people reach out to you and connect? What's the best way of getting in touch?
Zahi Boussiba: I'm available 24/7 through my e-mail. That's Zahi@AppSee.com. If you have any question or issue, please feel free to contact me directly. There's obviously also our website at AppSee.com. It contains all the relevant information and it allows you to start a free trial. But again, for all the App Guy Podcast listeners, please feel free to contact me directly and I'll be happy to assist with any query or issue.
Paul Kemp: That's totally inspirational, thanks for that. That's Zahi@AppSee.com. Zahi, what a wonderful journey! It reminds me of how I love doing this show, meeting people like yourself and getting totally inspired. Thanks for sharing your awesome journey and coming on the show. I look forward to seeing how AppSee grows and takes over the world. Thanks a lot!
Zahi Boussiba: Thank you very much, Paul. Thank you for having me, it was a true pleasure.