At Moment we believe in understanding our results. We want to build a profitable company that ignites the call to explore. And the only way to get there is to make small improvements every single day.

Rolling 12 Months | 2018 Results2017 Results | 2015 Results


Q4 | Q3 | Q2 | Q1

In 2016 we wanted to take the next step forward in growing the Moment business. With the closing of our Series A (May ’16) we began a 24 month quest to understand how Moment can become a $B business.

In order to do this we focused on three things.

+ Understand how to profitably acquire customers.

+ Understand impacts by increasing our product offering.

+ Understand what works to significantly grow our audience.

Q4 2016

And Year End

Q4 is our busiest quarter of the year because holiday gifting is one of the biggest reasons people buy Moment. What made this year more challenging was the announcement of iPhone 7/7+ and the introduction of dual lenses on these new phones. From their announcement in September to our compatibility confirmation in October, we lost about six weeks of sales as customers waited to find out our fate. This put significant pressure on the final weeks of the quarter.

In the end, Q4 resulted in our best results in the history of the company.

Some additional highlights from the quarter….

+ We opened up our first US warehouse with our new logistics provider, Landmark. This lowered shipping prices and added seven additional shipping days to the calendar.

+ We shipped iPhone 7/7+ mounting plates just in time for the holidays. Ultimately the variance in phone lens dimensions pushed us to bring our next generation products to market in Q1, 2017.

+ Along with new mounting plates we introduced new carrying case accessories, which sold out in a matter of days.

+ Moment Films, Season 1 wrapped up, gaining over 500K views in the process.

+ We executed our first quarter with our content first strategy. We grew our reader base to 38K unique readers.

+ Filling in the gaps between the data we learned from our best customers that press and referrals are the primary reasons that they purchased Moment.


Moment is an e-commerce business, which means we focus on four key drivers.

1. Number Of Customers
We grew our customer base by 10,004 in Q4, bringing us to 48,579 total customers. This resulted in 53.6% year over year growth for the quarter and 41.5% for the year. Adding a significant number of new customers we believe will result in future revenues as we continue to introduce new products. We have always found that acquiring new customers is the hardest aspect of our business.

Most of the customer growth came in the US, which saw 65% year over year growth. Opening a new warehouse in the US lowered our shipping costs and extended a customer’s timeline to purchase. We hope to see similar gains internationally in 2017 as we open new warehouses around the world.

Diving deeper into where our customers come from we can see that major metropolitan cities, especially ones known for design and photography, represent our largest markets. These cities provide us with a geographic road map into the future.

Our audience and customer base is still a male heavy, technology loving demographic.

2. How Much They Spend
We saw a dramatic drop in average order value in Q4, down to $113.83 for the quarter. We held our most aggressive sales yet, testing how this would impact conversion rates and performance. We also wanted to turn as much of our inventory into cash as we move into Q1’17 with several new products, therefore we leaned towards a more aggressive strategy. Finally, changes to our purchase flow inadvertently lowered the average items per order. Issues we will fix in Q1.

Tracking what percentage of customers have purchase which products we see that Q4 was strong for lenses but weaker for everything else. Not having new cases in Q4 for iPhone 7/7+ meant that customers only had the option to buy new lenses. Moving accessory attachments below the “add to cart button” lowered the rate that people bought accessories. We expect this mix to shift to more cases as we introduce new products in Q1, 2017.

Our average lifetime value by cohort continues to rise, toping out at $233. Despite the Q4 cohort starting at $142.1 we expect this group to rise in lifetime value over time as they purchase more of the product line.

Despite average spending in Q4 being lower we still saw 42.45% of sales coming from previous cohorts, which continues to demonstrate that Moment customers come back to buy more. We can’t launch new products fast enough.

3. What It Costs To Acquire A Customer
We continue to learn more and more about customer acquisition. This was our first quarter in shifting the team from a community focus, to a content focus.

The team continues to be a large portion of our customer acquisition spend as we continue to execute a word of mouth strategy. We expect this mix to shift over the coming quarters when we begin to experiment more with paid acquisition. We don’t need more people, we need more sales against the bodies we already have.

Focusing on content we saw our largest quarterly growth in Momentist readers. We reached nearly 40K new readers, resulting in 11.5% of new website visitors landing on the Momentist. We will continue to become more and more sophisticated on how to attract, convert, and engage our readers. We still have a lot to learn over the coming quarters.

Q4 always makes an averaged CAC metric look better. Q3 suffered from ambiguity around the future of Moment with two lens iPhone 7+. While Q4 benefited from the pent up demand wanting to use Moment on iPhone 7+. Our blended CAC (total spend to reach customers) is back under $40.

On an annual basis our customer acquisition costs are rising. Our goal is to maintain a 3:1 ratio on lifetime revenue to customer acquisition costs, which puts us right in line with where we wanted to be. We’re still experimenting with which channels work best to profitably acquire customers.

4. How Happy Our Customers Are

This was the best NPS quarter in our history, averaging a score of 54 for the quarter. This result was a testament to the improved shopping experience and customer service we delivered. Overall this brought us up two points to a score of 48. In Q4 we also came to the conclusion that we can never reach our NPS target of 70 on the current generation of product. The introduction of our second generation will improve on all the user experience details that customers don’t like.

One of the biggest improvements we made in Q4 was the quality of the service we delivered. This season everyone contributed on a weekly basis compared to last year where six people did all the work. Beyond better service, everyone contributing meant that no one had to bear the brunt in dealing with a massive number of emails. After the 2015 holidays two out of six people quit because of the volume. Everyone contributing to service, on a weekly basis, has slowly become core to our DNA. We believe all of us make better decisions when we are connected directly with our own customers.

Looking at Q4 year over year results.


We reached our first $1.5M quarter, passing $5M for 2016 on 49% year over year growth. Deep into Q4 we were no where near this final result but in the last four weeks we brought in nearly $1M in revenue.

2016 also represented our first foray into retail, partnering with B&H and Apple to introduce Moment in 50 stores. In total, retail accounted for 3% of our sales for the year.

Gross margins took a hit in Q4, reaching a historic low of 40%. This result was attributed to three things.

1. We lowered MSRP prices to sell through more inventory, reducing our margins by 4% to 52% on product.

2. We opened up a new US warehouse, requiring us to air/sea freight significant quantities of inventory. This lowered our gross margins by another 3%.

3. Lastly we were more aggressive with free shipping, costing us another 1%.

In total we lost 8% in gross margin compared to Q3. We expect gross margins to remain weak over the coming quarters as we move through our existing generation one products and test the opening of our own Amazon FBA store. We are expanding to more expensive channels without any changes to he cost structure of our inventory.

Lower gross margins in Q4 along with new product spend resulted in a $245K loss for the quarter. That brought 2016 to an 8% loss at $415K lost for the year. That is an improvement from 2015 when we lost 13% and 2014 when we lost 48%. We are looking to bring Moment closer and closer to the 0% profit line.

Additional financial highlights:

+ Direct sales grew 42.7% in 2016 and 22.4% in Q4 (year over year).

+ Retail represented 2% of total sales in the quarter and 3% for the year.

+ Gross margins dropped to 52% for product and 40% all-in with shipping costs to customers, retailers, and warehouses.

+ We lost $245K for the quarter with increased spend on new products and reaching customers. In total we lost 8% on the year, totaling $415K.

+ Customer acquisition costs lowered dramatically, averaging $38 for 2016. Paid accounted for just 6% of total spend.

+ The cost to run the company (minus credit card fees) dropped to 9% in Q4, averaging 13% for 2016.

+ We lowered ending inventory balances by 17% to $1.0M. Inventory turns lowered to 3.0 for the year, impacted by case inventories.

+ We ended the year with $1.8M in cash.


Q4 was a record quarter, bringing in $1.76M in revenue. That pushed is over $5M for the year. Direct accounted for 97% and Retail was the remaining 3% in 2016.

Looking at average prices we can see that we were much more aggressive this year on sales. We expect our prices to come down over time as we push to reach a larger purchasing audience. An expensive price is one of the biggest non-customer complaints that we hear. We will have to continue bringing down our COGS structure in order to bring down retail prices.

Lower prices had an impact on conversion rates as we reached an all time high of 2.4%. Better shipping also made an impact, but it’s hard for us to test which initiative had a greater impact on the number.


By moving from one warehouse to two, we immediately saw the COGS impact in shipping product between locations. Moving large quantities of product from HK to the US, air shipments cost nearly a $1 per unit, while boat shipments cost about $0.10 per unit. Reducing product COGS and minimizing supply chain costs will be a big focus going in 2017.

In opening up a US warehouse we closed the gap between shipping revenue and cogs from $5.4 to $3.5 per order. That’s a 35% savings per order, something we look to continue to improve upon as we move the product closer to the customer.

Looking at this gap on an annualized basis you can see year over year improvements as we increase conversion rates and minimize the loss from shipping.

Gross Margins

Q4 was one of our worst quarters for gross margins. Discussed above, we expect gross margins to remain tight as we continue to close out our generation one products.

On an annual basis we have done a solid job of holding our gross margins even as the product has aged. This is an area we will look to improve upon every year.

Lower Q4 margins did have a negative impact on GMROI, while our case inventory levels continue to be too high. We expect to make improvements in the coming quarters.


Inventory saw a steady decline from $1.2M to just over $1.0M at the end of Q4. This year we did a significantly better job of managing inventory balances as we did not repeat last year’s disaster in running out of product. We ended the quarter with accessories accounting for 19%, lenses for 46%, and cases for 35%.

Inventory turns settled in at 3.0 at the end of the year. We would like to continue reducing inventories, improving our turns closer to 4x per year. As we move to using more boat shipments we will have more inventory tied up in transit, something to monitor closely over the coming quarters.

Investment In Product

In Q4 we need significant investments in new product initiatives. These products will be announced in Q1 2017. The cost of people, especially designers and engineers, continues to be the large majority of our spend.

The full year had a similar mix to Q4.

We have invested about $1M in new products each of the last year. As we expand our product lines, finding more engineers will be our biggest challenge. We expect to add more and more value through software over time.

Running The Company

We maintained our team size of 20 at the end of Q4. It’s easy to throw more bodies at the problem, especially in reaching more customers. In 2017 we plan to spend more on marketing per employee compared to previous years as we expand our customer based through larger and larger marketing bets.

Looking at revenue per employee on an annual basis, we are heading the right direction. We still have a lot of work to do in improving this number.


Our inventory/parts in process balances dropped by 35% over the past two quarters. Not running out of inventory this year had a positive impact on our business. But losing money the last three quarters is having a negative impact on our cash reserves. We expect inventory to continue dropping as we make way for our second generation products in 2017. We still have a $1.25M line of credit available if needed.


The back half of the year was not the trend we were looking for. The raising of salaries to near market rate, the spending on new products, and lower margins all had an impact on our profits. We lost 8% this year compared to 13% last year, but we would like to be running Moment right at 0%.

Q3 2016

Q3 had two halves. The first half, July and August, brought in 80% of the revenue. September on the other hand shrunk year over year as new iPhones were announced, leaving us without in-stock products to sell for these new devices. Last year we went through a similar waiting cycle, except customers didn’t need to buy a new mounting plate and/or case like they do this year. Customers having to wait until the end of November for compatible mounting plates definitely has a direct impact on our conversion rates and therefore our revenue.

We did expect this ambiguity heading into September, we just didn’t expect our existing products to work at all with iPhone 7. Existing lenses working is a positive and it allows us to delay introducing our second generation Capture Products until Q1 2017. Post this new group of products we will move on to our next category of products.

Despite a slow September, Q3 was our 5th straight $1M quarter, bringing us to $4.78M over the past four quarters. There is still a lot more work to do, but we are making progress.

Some additional highlights from the quarter….

+ Our offsite this quarter was to Lake Quinault.

+ We figured out that Moment lenses work on iPhone 7 and 7+. We made this video to celebrate.

+ We introduced our fourth lens, Moment Superfish.

+ The Moment App was again featured by Apple, this time for being a new iOS10 app.

+ Moment Films launched as our first true venture into video. We plan to launch a lot more videos. This one is from Tim Kellner.

+ We were featured in the Wall Street Journal again. It drives sales every time.

+ We hosted several meet-ups, including a series with Artifact Uprising.

+ We launched our first Instagram contest.


Moment is an e-commerce business, which means we focus on four key drivers.

1. Number Of Customers.

We added 4,628 customers in Q3. That put us up 5% from Q2 and brings us to 34% year over year growth for the first nine months of the year. In 2015 we recognized our Kickstarter sales in Q3 and Q4 so we expect these quarters to show modest growth compared to the first half of the year. This brings us to 38.5K total customers.

US sales grew to 78.2% this quarter. If you segment the world by first time versus repeat customers we seem a similar split, which is positive considering the significantly higher shipping costs for international customers.

We are starting to get better and better data about our customers. On Twitter we have a male, tech heavy audience. On Facebook we have a better balance of men and women. And on Instagram we have a more international audience with larger social reach than the other platforms.

2. How Much They Spend
Average order value reached an all-time high in August at $178 before dropping back down to $151 in September. This drop was attributed to a promotion we ran in September with the introduction of our new Superfish lens.

Looking at average order value over time, we have seen constant year over year growth. Q3 grew by 26% compared to 2015.

Superfish lenses started shipping at the end of the quarter but in the first few days we did see that repeat customers were the first to purchase. New product introductions continue to demonstrate that we need more and more new products.

Attachment rates continue to rise for our lead products. It’s hard to believe but we sell a strap for every two cases we sold. That’s much stronger than we ever anticipated. While lens caps have been the hottest selling lens accessory. Customers do want us to include a lens cap in the box, but right now they are adding positive margins. This will allow us to be more aggressive in lowering the price of our lenses.

Cohort spending has risen past our previous ceiling of $211 to $220. The introduction of the Moment Superfish was a contributing factor. In addition, Q3 is the first cohort where their starting order value was over $200.

3. What It Costs To Acquire A Customer.
We are learning more and more about what works to get a customer. Our team cost is still 75% of our overall spend with direct costs on community (9%) and shopping (6%), following suit.

One of the strategies we wanted to prove was that community was a cost effective way to reach new customers. To initiate this strategy we have added a community team member in New York, Los Angeles, and Seattle where they can be an active part of the local creative community. Granted, half of their time is spent handling customer service, but otherwise they are focused on building relationships with brands and influencers in their local markets. One thing we are learning is that local community events don’t lead to direct sales in that physical market. Because of the international make-up of Instagram, local activation is being shared globally, minimizing the local market impact. We can see this best illustrated by looking at web traffic over time, we see that US traffic goes up and down, regardless of in market activation.

Constrasting community to content we see that content is having an increasing success in reaching new customers. In September alone, The Momentist brought 17% of our new website visitors on 13,487 new readers. Going one step further we see that a single article can reach thousands of people, compared to a local event that reaches 100-200 attendees.

What’s most interesting is the potential of the Moment App to extend the Momentist audience. Not normally counting content views in app, we see that if we did, the app would account for over 30% of readership.

In adding another person to the team we again raised our CAC to $66. It’s a troubling number that we expect to come down through Q4. At the same time it’s a good reminder that external spend will need to out pace team growth.

Our LTV and LTB to CAC dropped with a rising customer acquisition cost. This is partially attributed to a slow September as people wait for iPhone 7 mounting plates to begin shipping. There are still margin dollars here to be spent that we will be exploring through Q4 advertising.

4. How Happy Our Customers Are
NPS dropped two points to 46. Peaking ahead, our numbers start trending up in October but we have a lot of work to do in reaching our goal of 70. Product improvements coming in the next generation while removing friction with a better shopping experience, we expect NPS to begin rising.

The number of customer service emails are down quarter over quarter. We see this as a positive sign as we continue to make product pages more informative and post purchase content better. Our happiness scores are also up, pointing to better service levels.

What’s not positive is that our first response and total response times are down. Even though we’re doing a better job handling our customers, it is taking us too long to respond.


We recognized our fifth straight $1M quarter despite experiencing our worst month of the year in September. Direct sales only rose 6% year over year because we recognized $500K in Kickstarter sales in 2015. Apple accounted for 8% of our revenue as our 50 store trial moved into its final stages.

Product gross margins improved to 58%, bringing total margins to 50% for the first time in our history. Even with better margins we recognized our largest quarterly loss in five quarters. The $205K we lost came on $176K in additional spending over Q2 of which 44% was attributed to new product initiatives. We expect higher development costs to continue through Q4 and Q1 as we move through manufacturing with several new products.

A few financial highlights:

+ Direct sales grew 6% year over year. Subtracting out Kickstarter revenue recognition from 2015, we saw 70% year over year growth.

+ Gross margins increased to 58% (product) and 50% in total. This is the first time we have passed 50%.

+ We lost $205K this quarter moving us from a YTD profit to a $170K loss. Increased spend was attributed to new product initiatives and growth in headcount.

+ Inventory turns improved slightly to 3.53 as we converted more parts in process and sold through more inventory.

+ Customer acquisition costs continue to rise, passing $66 in total. A larger team and a slower September attributed to this growth.

+ Running the company dropped to 13% of total spend while revenue per employee shrunk to $65K. We added a net of one person this quarter.

Revenue this quarter was made of direct sales and Apple retail. Our 50 store test will begin to wind down early in Q4.

Looking at revenue sources this quarter we see how much conversion rates have been impacted by iPhone 7. From the middle of August through to the end of September we saw a continues decline both for first time and repeat customers.

Revenue in September was definitely supported by the introduction of our new Superfish lens, especially with repeat customer. The weak of the launch, orders from repeat customers was greater than orders from new customers. Just imagine if we had a larger catalog of products.

Pricing is an aspect of our business that has held strong. We are always wondering if our prices are too expensive and with the transition from Gen 1 to Gen 2 products over the coming quarters we will finally be able to experiment with price in a meaningful way.

No change quarter over quarter. Shipping still represents 22% of our COGS, something we will be watching through Q4 as we open up our first US warehouse.

Our shipping revenue to cogs exploded in Q3 to over $7 as we recognized more shipping costs in moving product from suppliers to our 3PL. Tying overhead shipping costs to exact product SKU’s is something we will improve over the coming quarters.

Gross Margins
Q3 was our best gross margins in the history of the company. The selling of more accessories has definitely improved our product gross margins to 58%, helping net margins pass 50% for the first time.

GMROI dropped to 3.18 as we maintain high stock levels in preparation for the holiday season. Last year we were under stocked and this year we hope we didn’t buy too much stuff.

Inventory levels remained at $1.2M at the end of Q3 as we re-stocked what was sold during the quarter. The inventory mix did change as we stocked up on accessories (17%) in advance of the holidays. Accessories and their strong margins are going to enable us to be more aggressive on case and lens pricing.

Inventory turns improved slightly, a trend we want to carry into Q4. As we expand the product line and expand into more warehouses we need to get a lot more granular at both forecasting and re-ordering.

Investment In Product
New product investments will rise over the coming quarters as we release our next generation capture products. Manufacturing is the most expensive phase so expect large one time charges for tooling and NRE charges.

Running The Company
We ended the quarter with 20 full time people, a number we don’t expand until we get through the holiday season. The current team size is near complete to execute the strategy at hand with our Series A. Most important is we need to continue reaching new customers with the team size we already have. We are sensitive to the negative impact the dismantling of teams has on a startup.

Revenue per employee dropped to $65K. We look forward to increasing that metric over the coming quarters.

Our cash position improved against our inventory and parts in process balances as we sold through more product. Compared to this point last year we are using our larger cash reserves to ensure we have enough holiday product. Looking to avoid the same out of stock fate as last year, our combined inventory / parts in process balances are up 141%.

Our loss for the quarter grew to $205K on $176K in new spending over Q2. We experienced a similar result Q1 and Q2 of 2015 as we invested in new product initiatives. The new Capture Products we are developing are moving from engineering to manufacturing over the coming two quarter and therefore expect high costs in bringing these new products to market. In addition we are spending more to reach customers which we hope will have an impact on sales as we move into the busy holiday season.

Q2 2016

Q2 was an important quarter in the history of Moment. We more than doubled our customer base from the previous year, recognized our fourth straight $1M quarter and turned a -$555K loss in the first half of 2015 into a $43K profit through the first half of 2016. Most important of all we successfully raised our Series A to capitalize the business for the foreseeable future. Joining forces with Lux Capital as our lead investor enables us to take the next step forward in building a $B business.

In typical fashion, the quarter wasn’t without a lot of hard work. We made improvements to our e-commerce platform, launched in 50 US Apple stores, and added five members to the team. All the changes we made the previous two quarters in our supply chain finally came to fruition in Q2 as we never ran out of stock! It made a significant difference in our overall performance.

Some additional highlights from the quarter…

+ We took another off-site, this time to Ashford Washington.

+ Launched in 50 US Apple stores.

+ We shipped two versions of the Moment App, receiving our first Apple feature.

+ Joined forces with a new Tier 1 supplier to work on Moment Gen. 2 products coming early in 2017.

+ Shipped 45 Momentist stories (our most ever) which brought in 26K new readers and about 13% of new visitors to the website.


Moment is an e-commerce business, which means we focus on four key drivers.

1. Number Of Customers.
We added 4,420 customers in Q2, which is down slightly from Q1. That does represent a 113% growth rate over the same quarter last year. That brings us up to nearly 34K lifetime customers. Our current milestone is to reach 100K customers, which means we have a ways to go.

Acquisition paths continue to demonstrate that Moment is a word of mouth based business. Conversions from Direct and Organic search were up 280% and 212% year over year, which demonstrates general brand awareness is growing. We can still improve at channel refinement and figuring what is working best to acquire a new customer.

International continues to be about 25% of the customer base. We don’t expect a major shift in this mix until we move in country with our inventory, bringing Moment product closer to the customer. Within the US market we see that Moment resonates best within creative, technology focused markets. While internationally Asia is our largest market.

2. How Much They Spend
Our average order value continues to rise as we maintain stock levels and offer a larger catalog of products. At the same time average lifetime revenue is trending down as we grow our new customer base.

Items per order is the key metric we track in relation to customer spend. Our data in June did change dramatically because the system started counting the free mounting plate included with a lens purchase as a second item.

Within items per order the attachment rate of an accessory to our lead products is what we are focused on. In particular we are improving the website experience to make it much easier to add an accessory with a single click.

Cohort data continues to trend in a positive direction. The top cohort has reached over $220, which would be an amazing target to reach with all of our cohorts. It will be interesting to see how these cohorts change during the holiday season.

Breaking down cohort spend over time we see that after five quarters about 75-80% of their life time value comes in the first quarter. Follow-on purchasing appears to best align with new product introductions and/or the Q4 holiday season.

In Q2 we saw 29% of sales come from past customers. This is consistent with previous quarters.

In looking at what repeat customers bought this quarter, lens accessories accounted for almost 45% of the items sold. Better website merchandising should help to add these items at first purchase instead of being follow-on items.

3. What It Costs To Acquire A Customer.
We continue to evolve our word of mouth, customer acquisition strategy. Focusing on content, community, and commerce the cost of our team continues to drive over 70% of our spend. We expect people, as a percentage of total spend, to drop over time while paid advertising will rise from 3% to a much larger number.

A larger team has a direct impact on our overall customer acquisition cost, which has risen to $51. We believe there is a minimum team size required to drive a successful content to commerce strategy, but we have to be careful in assuming that adding more people results in more customers.

Our LTV and LTP to CAC ratios continue to demonstrate there are margin dollars available to spend more money. With a limited product, the initial cost to acquire is the most important number for us to watch over time. If we can introduce new products we expect these numbers to continue to improve.

4. How Happy Our Customers Are
In Q2 we started using a new NPS tool called Promoter that is fantastic. It allows us to email our customers post purchase and then analyze the results. Our ultimate target is an NPS score of 70, but we have a long ways to go from the score of 48 we received in Q2. That score is down 15% from Q1 and not a total surprise, considering this group of customers experienced out of stock and Moment Case quality issues.

Looking at our top 10 issues these are a series of things we will improve over the coming months through new product initiatives and shopping improvements.

We are looking to make service a strength of the company. The community team is the largest contributing team, but everyone in the company has to put in at least an hour of service per week. Q2 saw a 141% increase in year over year email volume.

We see that the team is getting more efficient in answering customer emails over the previous quarter. First response time and and time to answer an email both improved, a trend we want to continue.

Despited our improved efficiencies our happiness scores were down slightly from Q1.


We realized our fourth straight $1M quarter on 178%, year over year growth in our direct business. We also recognized our first retail sales, with Apple accounting for about 10% of the number. A few highlights:

+ Direct sales grew 178% over the previous year, mainly because Q2 of 2015 had our second Kickstarter. That Kickstarter revenue wasn’t recognized until Q3 and Q4 of 2015

+ Gross margins remained flat at 56% for product and 48% with shipping losses. Until we move logistics in country, these numbers will not change much.

+ Inventory turns dropped to 3.04 on a trailing 12 month run rate as we moved from being out of stock to being over stocked.

+ Customer acquisition costs rose to $51 as we filled out the rest of the team. Keep in mind our CAC number does not include any repeat purchase activity, just a total business spend against the number of new customers added.

+ Cost to run the company rose 2% to $5,548. Revenue per employee dropped 6.5% to $72K as we added a net of three new people in the quarter.

Revenue this quarter was made up of direct sales and Apple retail. Apple is a 50 store test to see if we can drive community in their stores. It was also a one time purchase, capping the potential exposure. The risk with Apple is if the product does well and the account scales, their payment terms can put a lot of strain on a startup.

Average order value is the biggest revenue driver. We continue to see a gradual increase, ending the quarter at $155.52 per order. New customers have a considerably higher average order value, something we want to continue driving higher with a larger product line.

Looking at our customer types we see that 30% of our orders come from repeat customers, which represents about 25% of of revenue. When looking at order mix over time we see that orders from existing customers are growing at 2:1 rate to new customers. This says that our biggest focus needs to continue around acquiring new customers, knowing that they come back and purchase more down the line.

No different than previous quarter, shipping continues to be around 25% of total COGS. This is something we will improve in Q4 as we expand beyond a single HK warehouse.

Over time we have slowly closed the gap between shipping costs and revenue. In Q2 we finally broke $4, reducing our loses per order to $3.88.

Increasing shipping revenue is a result of customers choosing our faster shipping option. It demonstrates that we have to be able to offer two day and next day shipping. Adding these services in the coming quarters should help to improve conversion rates as we constantly receive emails from customers who want product immediately before an upcoming trip.

Gross Margins
Gross margins have held nicely, even with the recognition of Apple retail sales. Our direct to consumer sales are about 60% product margins while Apple is around 40%.

We started buying significantly more inventory this quarter as we prepare for the holiday season. Our case inventory has not turned as fast as our lens inventory, but the combination has brought our gross margin ROI down.

The second quarter represented our largest growth in inventory balances. In particular we increased both our lens inventories (46%) and case inventories (37%). We aren’t able to break out inventory turns per product, but at a high level lenses are turning faster than cases. We will need to move through case inventory balances through the holiday season.

Inventory turns dropped significantly with the increased inventory levels. We’d expect these to fluctuate through Q4 and settle around 4x per year.

Investment In Product
In Q2 we started working on new product initiatives in preparation for the new iPhone 7 devices. New hardware products consistently have high prototyping and people costs, especially early in the development process.

ROI on product initiatives continue to be positive, especially as a new product gets more time in the market. On average our quarterly product spend fluctuates between 20-40% of gross margin dollars received. It’s the cost to get into manufacturing for a new product where our investment costs spike. We will expect this to be evident in our Q4 and Q1 numbers.

Running The Company
We continue to run a lean organization. We ended the quarter with 19 people, five of which work remotely. We expect to run a company with minimal overhead costs.

Revenue per employee is one trend that is going the wrong direction. The growth in team members in front of revenue growth is important but concerning. It’s easy to say that adding more people make the business grow faster, but that is not normally true. This is a metric we will continue to monitor closely over the coming quarters.

Our cash flow analysis is basic, tracking total cash available against current and future inventory investments. We have chosen to invest much of our new equity round in future inventories, which is a shift from last year when we constantly ran out of product. Managing this balance with an increasing SKU count will be important over the coming quarters. Keep in mind our cash balances do not reflect working capital lines available to the business.

We broke our streak of three profitable quarters. The combination of team growth and investments in new products contributed to a 2.5% loss. Even though revenue increased by nearly 10%, operating expenses increased by 38%. Of the $156K in additional spend, $93K came from new product initiatives. Although slightly unprofitable this is a dramatic improvement from the $300K was lost in Q2, 2015.

Q1 2016

Q1 was a positive step forward for 2016. Top line grew by 132% year over year. Profits reached 7%, representing our third straight profitable quarter. We are big believers in positive unit economics because as they force discipline early in our history. Profits and consistent growth are both a continued focus for us in 2016.

Despite the results, the quarter wasn’t without its struggles.

Being out of stock continued to be an issue well into Q1. The impact of a large holiday season spilled over into the quarter as it took several weeks to see the impact of supply chain improvements. In particular we shifted the entire supply chain from spot orders to an annualized forecast with weekly deliveries. This is a big step forward, but its impact wasn’t realized until March.

Some additional highlights from the quarter…

  • Took another off-site to Snoqualmie Washington.
  • Agreed to test 50 Apple US doors in Q2. We spent much of the first quarter moving that project to completion.
  • Introduced v2 of our NPS tracking, including followup emails to our happiest and angriest customers.
  • Re-organized the Moment Collective for 2016. The group is now 30 people strong along with two new advisors in Jessica Zollman and Pei Ketron
  • Shipped v2.4 of the Moment App.
  • The Momentist moved from a bi-monthly to a weekly email, demonstrating an increase in the quantity and quality of our content.
  • Shipped 27 pieces of content that brought in 39.8K visitors.
  • Continued to see positive press reviews, pointing to Moment as the maker of the best products on the market. []


Moment is an e-commerce business, which means we focus on four key drivers.

1. Number Of Customers.
We added 4,600 customers in Q1, which was an increase of 55% over 2015. Our customer growth rate was lower than our revenue growth rate, which means that our dollar per customer value is growing at a faster rate then our customer base.

Our method to acquire new customers is still highly driven by a word of mouth strategy. The announcement of new products, producing of content, and driving of community continues to make direct traffic the largest acquisition paths. We don’t expect this mix to change much over the coming months, but we do our expect our understanding of actions to results to continuously improve.

As we move further away form Kickstarter sales our international customer base has settled into being about 25% of our customer base. This is consistent with a US based e-commerce company that has yet to focus on international expansion.

2. How Much They Spend
The more products we have to sell, the higher our average order value becomes. This trend continued into Q1 as the average order value increased from $140 to $145 per customer. Once we were full in stock, March, this number rose to $163 per order.

The trend of higher order values is driven by the number of units customers purchase. March finished at 2.23 items per order.

Looking at or cohorts, customer spending tops out around $208. This begins to reflect the maximum customers will spend against the current product line. Demonstrating that the continued introduction of new products is key to increasing this number.

Over time you can see how an increasing initial order value impacts future purchasing. Initial order value has grown from 75% (Q3, 2014) to 93% (Q4, 2015). Further demonstrating the need to deliver new products.

In Q1 31.2% of our sales came from previous cohorts. This is positive considering we didn’t introduce any new products during the quarter.

Looking at what repeat buyers purchased in Q1 it’s hard to tell what brought them back to purchase again. Seeing a mixture of key products (cases and lenses) in such high volume it says they are doing more than just adding accessories to their existing purchase.

3. What It Costs To Acquire A Customer.
Outside of some basic re-targeting efforts, our entire customer acquisition strategy has been built around an organic, word of mouth approach. Our content to commerce strategy is built around Content, Community (customers -> influencers), and Shopping (direct to consumer platform).

Looking at quarterly acquisition spend over time we see a shift in our approach on two fronts. First we have moved from external to internal teams to produce results. Second, we have scaled down our content spend from big adventures to smaller ones, resulting in better results on less spend. As we shift to a mix of paid and word of mouth strategies we expect this balance itself out.

The negative to building out the team is the impact on our total customer acquisition cost (CAC). We are now approaching $40 per customer. Granted this increase in cost to acquire has also coincided with higher cohort spend. We can’t totally connect these two points, but we do believe that some of this increase is attributed to the investments we have made in email and customer service.

We continue to see strong revenue and profits over the the life time of a customer. This continues to demonstrate that we can increase our CAC with paid acquisition, in order to accelerate our customer growth.

4. How Happy Our Customers Are
We have taken a big step forward in how we measure our NPS score. Moving to we now have a much better understanding of the data and what customers are satisfied and dissatisfied with. Our internal goal still remains reaching an NPS score of 70. Accomplishing this will take time as we continue to improve our shopping experience, shipping services, and product quality.

Outside of NPS we continue to focus on service. Within each email we send, customers have the opportunity to rate us. What we’ve learned is that if they receive the answer they want they rate us higher than when they receive an answer they don’t like. Which means that this score reflects sentiment more than service levels.

Through customer service we are always looking to learn how we can make our products and service better. Post the out of stock holiday season we saw a 31% drop in customer emails which helped us lower our first response time down by 19%.


We had a solid start to the year with another profitable quarter. A few of the highlights:

  • We reached $1M in revenue on 128% year over year growth.
  • We had profits of $75K, representing our third straight profitable quarter.
  • Gross margins stayed flat at 58% on product sales and 48% with shipping losses
  • Inventory turns increased to 7.9 despite large investments in future inventory.
  • Customer acquisition costs increased to $38 as we filled out the shopping and community teams.
  • The cost to run the company on a per employee basis, dropped 15% to $5,421. While revenue per employee dropped by 25% from our holiday high to $108K.

Revenue grew by 128% over Q1 of 2015. Considering that new customer growth was only 55%, our growth in revenue was driven by repeat customers an higher order values.

Average order values are driven by how many items the customer puts in the cart. Outside of February, where we were sold out of both lenses, we can see that average order value was up 17% for the quarter while items per order was up 23%.

Comparing year over year growth in first time buyers versus repeat buyers we see that first time buyers were up 55% from last year while repeat buyers were up 238%. It continues to demonstrate that if we acquire a customer, they come back to buy more of the product line.

Looking at what our customer purchased we see that lenses still continue to be the largest driver of revenue. While over 26% of customers have purchased the whole line, which we consider to be a lens, case, and accessory. It will be interesting to see how this mix changes in Q2 with the introduction of the new Moment website.

Most interesting is comparing the accessory attachments on our lead products of lenses and cases. People buy more lens accessories because a camera strap is the only case related accessory that we have.

Shipping continues to be a meaningful contributor to our overall cogs. We still lose money on shipping and increasing the rates we charge customers would have a negative impact on our conversion rates. The impact of shipping is less than the margin impact of retail channels.

We increased our our shipping rates in Q1 to help close the gap with shipping losses. This resulted in a 10% increase in revenue per order. Unfortunately shipping costs increased by 11% per order, which means we have some word to do in closing this gap.

When looking at our shipping type, this is our first non-holiday quarter where orders via express outnumbers orders via economy. Globally this is driven by international sales, where express shipping is the only option we have. And US orders where express shipping has held steady at 36%.

Gross Margins
Despite increasing shipping rates, our gross margins have held nicely. We are up to nearly 60% on product margins and 50% all in when you add shipping losses. We will need to break this mix out in Q2 to reflect direct sales versus Apple retail sales.

Investment in inventory continues to net a positive gross margin return. This is a stat we will eventually break out per product type as or business becomes more sophisticated to make sure each product line is producing a positive return.

As we had more product lines, we have to begin managing stock levels on a per product basis. Although our end of quarter inventory levels came back in line, our mix of products isn’t quite right. We ended the quarter with too few lenses and too many cases.

Our inventory investment is best reflected when you compare cash to our inventory investment, which includes parts in process and assembled goods. Our cash terms vary per supplier so often we are investing in inventory before it becomes a shippable good.

Despite our varying mix, we continue to turn a majority of our inventory the minute it hits the warehouse. This is a trend we want to continue building upon.

Investment In Product
New products are expected to be a key driver of future revenue. In order to make new products we rely heavily on people, which is why it’s the largest percentage of our overall spend.

Our ROI spends fluctuates based on the timing of moving new products into manufacturing. Lenses for example have a lower up front manufacturing cost compared to cases, which have large tooling and certification fees. Now three quarters into shipping the Moment Case we are starting to see a maximum return on our past product investments. We should expect this ROI to go backwards the next few quarters as we dive deep into shipping our next products.

Running The Company
Organizational efficiency continues to be a big focus for us. At 15 people we are starting to break this model and will require the addition of a few people to continue efficiency with a larger team.

Cash Flow
Cash will always be king for us, especially as we scale our growth. The more we sell the more we need to invest in future inventories. In Q1 we did move away from a spot order based supply chain to rolling forecasts, which made a meaningful impact on our cash. Note these cash balances don’t include the $300K line of credit available to us during the quarter.