We write a new business updates that are shared with our board, investors, and Moment team members. These are not status reports, instead they represent a chronological journal about what we’ve learned in building Moment. Writing these updates forces us to think about what we’re doing, what’s working, and what isn’t.
Below are updates from 2018. You can read previous updates from 2020, 2019, 2017, 2016 and 2015.
2018 was our best year yet. We worked really hard but we were also fortunate to have the ball bounce our way. The bets we made worked. The slowing nature of phone innovation is keeping all of our phone gear compatible. And the disappearance of competitors is making us one of the only mobile photography companies left standing.
We will provide a full review with financials in the the coming weeks but here is synopsis.
+ We passed $20M in revenue on 2.5x growth from $8.5M and 1.7x growth the previous year.
+ The Moment brand reaches over 900K subscribers, which is larger than most direct to consumer brands.
+ Gross margins are now over 50% on a monthly basis, up from a low of 38% at the end of 2017.
+ We ended the year with $1.5M in cash and zero debt compared to $1.4M in cash last year and $250K in debt.
+ We'll be profitable on annual basis for the first time.
+ The team is now 33 people, up from 21 last year.
+ NPS rose to 58, up from 52 the previous year.
We still have a lot to accomplish, but we are both humbled and excited about the year we delivered.
BUSINESS UPDATE
T3 was our largest trimester at $10.3M and December was our largest single month at $5.2M in shipped revenue. About $1M of that revenue was driven by finally shipping a majority of our Anamorphic pre-orders. We will carry a few backorders into the new year but last minute production ramps on all of our new gear made a huge difference in the final revenue numbers. A big thanks to Alex who basically lived in China the last month making production happen.
The biggest surprise of the holiday was Amazon, which rose to $1.8M for the trimester and over $1M for the month of December. Over 50% of our revenue came through the Moment website to Amazon as we have direct, buy on Amazon, buttons on all of our product pages. For the first time we saw paid advertising to new audiences work in bringing traffic to the Moment site that then clicked through to purchase on Amazon. This in spite of increasing our Amazon prices by 20% to offset for their fees. It's clear new customers trust Amazon more and want to buy there, which is no loss to us as we make the same margin by raising our prices.
Our new Tele 58mm lens brought in $750K in revenue over the 4 day launch window, making this our best non-Kickstarter launch to date. The 58mm remained our top selling item from Nov 13 - Dec 31st selling a total of 12,572 units in the first 45 days. We learned the early November window is a great time to launch as it lands before holiday sale noise and drives momentum into the end of the year.
With 65K customer messages received in T3, we scaled our seasonal support staff to 15 while continuing our existing whole team support strategy. Over peak volumes, we’ve averaged nearly 1000 responses per day while receiving 87% great ratings from customers. The biggest area to improve in 2019 is response times, with our average response time for Nov/Dec at 9 hours. We’d like to see that below 4 hours.
We've continued to refine our content output. YouTube is about 3 videos a week and the Momentist is nearly a post per day. Most telling is the amount of mobile traffic we're starting to receive which begs the question of how we can win on mobile with our content to commerce. This will be a big focus for us in 2019.
The Moment App is starting to get some traction. Camera Apps are harder to do well, especially on Android, but we dropped new releases this trimester which again got us featured which drove more downloads which introduced Moment to new customers. We've seen about $200K in app revenue in the first six months which improved our gross margins by 3-4% the back half of the year. We are also now testing paid adverting with app installs and re-marketing campaigns to see if customers enter the brand at $5 and then level up to buy our gear. If this works we'll be able to out spend every app company by having hardware revenue as the next step for app customers. We still have a lot of work to do on conversions, but we're making progress.
Moment Travel is up to 140 reservations in the first 7 months, putting us at a $750K annual run rate. We're new into travel but already learning a lot on what sells new trips. The short answer is announcing new trips sells more trips. We're also learning which markets are hot (Japan and Iceland) and which aren't (Patagonia). But biggest upside is the marketing power with travel. We dropped our first travel giveaway which had 8M impressions, 160K website sessions, and 66K emails collected. We also sold $16K in gear revenue making the campaign both profitable and a reminder how connected travel and Moment are. The spike below is from the giveaway.
We hosted our annual holiday sale this week.
It's an annual event that starts the Monday after Thanksgiving. We love a good sale but have always found asking a team to work over the holiday weekend isn't worth it. So we close for the weekend and come back the Monday after Thanksgiving with our sale.
Last year our sale was four days. This year it was only 72 hours. We have found that time, 72 hours, is one of the best decision making drivers so we focused the entire sale around only have three days to purchase. The result was our best holiday yet.
We are still rolling up the numbers across direct and Amazon but from a pure sales point of view we did $2.4M in sales compared to $1.3M the previous year. We still have another 14 days to go in closing out the holiday but have a path to reaching $20M this year.
BUSINESS UDPATE
After we ship another $700K in orders tomorrow, we'll be over $16.3M for the year. That puts us past our internal goal of 2x for the year. Both the holiday sale and the introduction of our new Tele 58mm lens have been the biggest drivers over the past month. Our stretch goal is to reach $10M in revenue in T3 which puts us over the $20M mark for the year.
One of the biggest improvements year over year has been with paid advertising. It's accounted for $434K in last click revenue on the site and $285K last click revenue on Amazon. We've also been able to learn what works when launching a new product and driving a sale. We still have to crack paid advertising for when we don't have a direct reason to buy right now.
Another big learning this year is that November, before our annual sale, is a great time to drop a new product. We introduced our Tele 58mm, which is a replacement to our existing Tele lens. It put us in the news two weeks before our holiday sale and drove $900K in revenue on its own. Secondarily it gave us something new to talk about during the sale. We can see the result of that new product reflected in revenue and traffic growth in mid November.
Paid advertising is also amplifying our content results. Putting dollars behind our content is bringing in new readers, which is leading to new customers. It means going forward we can put more into each campaign, publishing higher quality, longer lasting content.
We're finally starting to recognize improvements in gross margins with the introduction of app revenue and higher prices on Amazon while simultaneously reducing product and shipping costs. We surpassed 55% gross margins for the first time in our history. Granted, we expect that number to dip down during the holiday season.
We launched a halloween film festival with Casey Neistat and 368. It's one of the first campaigns we've hosted with a celebrity. And as expected it was a very rushed event from concept to execution.
For the festival we received over 250 films, selected five winners, took everyone to NYC for an awesome halloween party, and hosted online voting to discover the best film. We're still counting the total the final results but at a high level the page received 100K visits, 23K emails were captured, and we added about 7K new followers.
This was the winning film, but you can see all the films here.
Through this campaign we learned a lot. From pitching, to refining the concept, to getting sponsors, to executing the event we learned the fundamentals of how to work like a content agency in creating an event for someone else. But the biggest learning was around paid advertising and how to use Google and Facebook to drive views and sign ups. Collectively we were able to acquire new emails for under $0.30, which is one of the cheapest results we've ever found.
Next will be tracking his cohort over time to understand the value of a customer we acquire through contests.
BUSINESS UPDATE
We've reached over $11M for the year, on 3.0x year over year growth. We're still sitting on about $2M in pre-orders that will finally all ship over the next 5-6 weeks. We've worked hard to solve our supply constraints, which will give us momentum going into the busiest time of year. To put the coming weeks into context...last year we recognized 38% of our revenue in the last two moths. If that holds true that puts us around $18-21M for 2018. We have a lot of work to do in order to make this happen.
One of the channels that has really improved over the last month has been Amazon. We switched back to FBA, improved our page listings, added post purchase messages, built a Moment store, and started advertising. We're averaging about $10K per day with increased positive reviews and an advertising ACOS (average cost of sale) return under 10%. Most interesting is that we increased the price of all our products on Amazon to offset the higher fees and yet the channel is still growing. It means we've basically increased our margins by 15% on Amazon all while growing the channel.
On shopmoment we continue to see 9-13% of revenue comes from third party products. A big shift going into 2019 is changing the perception from Moment the gear brand to Moment the marketplace where you can buy the best photography gear, take the best trips, and find the best content. This shift will also help us to reduce our dependency on lenses, which we assume eventually go away as a product line. Instead it will be replaced by multiple product segments, each with a few lead products that get customers into the brand.
The big shift we've made on the content side is to organize our content around set campaigns and to deliver these campaigns over several weeks with multiple pieces of content. In addition we've started advertising that content, learning the cost of a view, click, lead, and purchase. We'll continue to refine this over the coming weeks but we've already learned how we can get video views for $0.01, page visits for under $0.10 and conversions for under $25. This is going to enable our same content efforts to go a lot further in reaching new customers. Keep in mind we measure content based on a last click from content to purchase so the impact is larger than what the last click data suggests.
Moment App continues to receive steady downloads and engagements. It's pretty clear that being featured by Apple is everything. We're working to improver our launch cadence and working with Apple in advanced so we can get featured. Our next big release is this coming week on both platforms.
We just completed our 16th offsite, this time to Leavenworth, WA.
Off-sites started with four people riding Crystal Mountain, discussing Moment in the bar at the end of the day. They have grown into a week long cultural event that happens three times a year. Each week leaves us better connected, traveled, and understood. Now at 30 people, these gatherings are more important than ever.
Some quick takeaways from the latest offsite...
+ We hit 69% of our goals, which is right at the threshold we want to be. We use a modified OKR goal setting methodology, attempting to hit 60-70% of our goals.
+ We spent most of the time working on our team structure and how it will scale over time. Currently we are organized into cross functional teams and therefore talked about how that scales while considering functional growth and consistency across the company.
+ Our T3 offsite is always stressful as Apple announces their new phones at the same time. It's great that we're all together, but it also distracts from what we need to accomplish during the week. Next year we're going to push our T3 offsite back a week to see if that improves the experience.
+ The end of the week was bitter sweet. We had a great week, progressing from where we started the week. At the same time we shed a lot of tears saying good bye to one of our own.
We document every offsite. It reminds the current team what we covered and helps the new members understand where we came from. You can read Leavenworth here (password: #shotonmoment)
BUSINESS UPDATE
We're at 2.6x year over year revenue growth through September. If you include the $2M in pre-orders we have we'd be at 3.1x year over year. Producing enough Anamorphic Lens continues to be our biggest revenue recognition challenge. We're actively working on enough suppliers to provide the required amount of glass.
We just started our third trimester. We call it T3 and it runs from 9/10 - 1/7. Our base goal for the year is to grow revenue 2x which puts us around $17M. Our stretch goal is to try to cross $20M. Our biggest drivers going into the holiday are shipping Anamorphic lenses, shipping new iPhoneXs / Xs Max cases, a new google phone, and a new Tele lens. This is the most firepower we've ever had going into a holiday season and we're working hard to make it our best yet.
As we grow we're looking to decrease our dependency on lens revenue. It is how the company started but it's the highest risk product line. We're down from 75% a year ago to 61% now.
We've continued to make progress on our gross margins this year. From a low of 34% last November we've recently reached a high of 46% at the end of July. We've chipped away at the number through lower product costs, lower shipping losses, and the addition of app revenue. One of the costs making a goal of 55% gross margins more difficult, is supply chain shipping costs. These are the costs to move product from our factories to our 3PL warehouse. By rush shipping Anamorphics and new phone cases, we're relying on airplanes instead of boats. This incremental cost is real and something we are still struggling to manage.
Gear season is upon us. September to December is the time of year that new phones, drones, and photography gear come to market, which makes our content effort heavily focused on gear reviews. Tracking all of our efforts by campaign, we're looking to get a better understanding this year about which efforts really bring the most, high quality traffic. Just measuring last click traffic we know that gear reviews are our most profitable type of content.
An example of a gear review would be these recent iPhoneXs reviews. We do these reviews ourselves or with influential photographers / filmmakers. Not measured in last click revenue is the positive sentiment we've seen for providing unbiased gear reviews. The biggest challenge now is getting the phone makers to recognize us as a media entity / influencer with a large reach with mobile photography enthusiasts. This way we can get the same early access to new devices as other influencers.
We continue to validate with Moment Travel that new trips sell existing trips. The marketing and awareness that comes with announcing a new spot is what brings people interested in photography travel trips. Like a startup, all of our sales are organic and driven by marketing efforts to announce our offering. Therefore our traffic is lumpy and heavily tied to new trips. A secondary learning is that there are clearly key places around the world that people want to visit with a camera. Iceland and Japan are clearly at the top of the list.
We finally got invited to our first new phone announcement event. This is a small, but important milestone for us. Being seen as more than just a gear maker is important as we look to own the market for mobile photography.
We are now in two official accessory programs, one for Google and one for Samsung. This means we are provided confidential access to future devices to validate our gear works and to ensure we have new products available on launch day. This is critical to establishing a leadership position across multiple phone makers.
Ultimately we want these phone brands to see Moment as a media partner that can reach photography enthusiasts. This opens up new doors beyond the product side to market along side these larger companies .
Next we are working with One Plus, hoping to release our first products for their platform in the fall.
BUSINESS UPDATEWe've now passed last year's revenue mark, tracking to 2.8x revenue growth. We still expect this growth rate to move closer to 2x through the back half of the year. A 2x revenue would be a $17M in 2018 and 2.8x revenue would be $24M so you can see the range we're targeting.
We still are sitting on $2M in pre-orders that we expect to finally ship in September and October. We posted our latest Kickstarter update last week, but both the Battery Case for iPhoneX and the Anamorphic Lens have been slower to ship.
The Battery Case is a great product but was caught in Apple's MFI testing program for three months. We were finally able to prove to Apple that their spec was impossible to hit for a battery powered product and therefore they let us move forward. We start production this week and begin shipping the following week.
The Anamorphic is the best lens we've made, but turning out to be the hardest to produce. One of the glass elements in the lens has had poor yields and three different sub suppliers have struggled to produce enough of it. We're slowly working through the issue, shipping about 200-400 lenses per week. To put that in context we have 8K Anamorphic orders and we've shipped about 750 units to date.
We launched the Moment FREE Time Collection. Created by the women at Moment these are our first products that bring fashion and photography together. With a wristlet, wallet case, and camera straps we're looking to reach more female creatives. We're in the process of seeding this gear with dozens of female creatives shaping their industries.
We're continuing to learn how to market a paid app. We've seen a stabilizing of active users at around 75K between the two platforms. While revenue has been about $90K in the first two months. Still a lot of work to do across the board with marketing, conversions, and product features. The biggest upside is the product has the potential to add 3-5% in positive gross margins. Some of our initial learnings...
+ Android has less competition so we can own the category faster. Downside is compatibility across devices is very painful. Upside is the that community is loyal if you support them.
+ Being featured in the app store matters. Staying ranked also improves conversion rates. Being a free to download with in app purchasing on the iOS side means we are considered a free app, which makes it harder to stay ranked in the top 200. If we move to a paid download we estimate that we can reach the top #50 apps.
+ iOS paid search works. Cost to download is about $0.8-1 for this category. We will need to figure out if app customers convert to Moment customers. If they do we can pay more than anyone in the category for downloads knowing they convert to future revenues.
+ It takes a lot of organic marketing to get downloads. We need more ways for customers to tell their friends to drive downloads.
The new marketplace model for Moment Travel is working. We've dropped five trips in the last six weeks. Four of those trips are already a go. And we've sold 51 spots at an average price of $2600. Annualized Moment Travel is already a $1M business. Over this time period we're really learned how to announce a trip. But now comes the hard part in learning how to market travel over a sustained amount of time, moving from selling a single week to multiple weeks per trip. You can follow us on Instagram @momenttravel or buy our new trip on Monday...it's to Japan.
Gear season is upon us. Our audience trusts us to provide detailed reviews about the latest mobile photography gear. We'll be working hard over the next few months to make gear reviews even better with videos, landing pages, and advertising. Gear reviews on last click (from video to purchase) brought in $25K over the last month, making our content team profitable. Here is our latest in announcing the new Note 9.
We launched Moment Pro Camera, our first paid camera app.
We previously had a free, mvp quality, app. We saw minimal results with a free app and realized we had to either kill it or invest further to make it worthy of customer dollars. We opted to invest more, building a small team and launching both an iOS and Android version of the app.
The results have been better than we expected. Beyond the financial results ($59.4K in revenue on 104K total installs), we've seen a lot of market support for the app. Between the messages, articles, and Reddit threads we've found that customers really want us to deliver an amazing app.
iOS Results+ $37K in revenue, settling in at about $2K per day.+ 4.6 rating on 427 reviews+ Moved between #37-150 top photo/video apps.+ Averaged within top100 grossing photo/video apps.+ Got featured as a best new update. + Now running paid iTunes ads.
Android Results+ $22K in revenue, setting at about $500 per day.+ 3.5 rating on 549 reviews. + Launched with just photo, no video features. + Not running any advertising.
Now comes the hard part, learning how to market an app. The Moment brand is our largest advantage over the other camera apps, but it's clear that we need to develop a sophisticated approach with both organic and paid content to stay highly ranked. At the same time both apps require additional features to become 'the' highest rated pro camera app.
Collectively we believe this can become a $2M product for us and a new way for thousands of customers to enter the brand at under $5.
BUSINESS UPDATE
We posted our financial results through May (password: youin? ). We continue to focus on gross margins, acquisition costs, and minimal profitability. At sub $35 to acquire a new customer, we continue to realize that we should be spending more money on growing our customer base.
We increased our gross margins to 44% in May, driven by reduced shipping losses and better supply chain management. In Q3 we expect to see lower product COGS along with app revenues, which together should help us reach over 50% gross margins.
Shipped revenue is up to 2.9x over 2018. This doesn't include the $2M we're sitting on in pre-orders or any of our new app revenues. With the addition of apps and travel, we need to update our dashboards to reflect revenues across all of our offerings.
One of the biggest benefits of launching new apps is the buzz that coincides with a new product offering. Being in the press matters and since last Tuesday we've seen a positive trend with increased daily revenues and higher order values. We can't yet connect an App customer to a Marketplace customer but overtime we want to validate that customers upgrade for our $5 app to Moment Gear and Travel.
Along with a new app we dropped our latest Moment Trip, Iceland. What makes this trip unique is it represents our new structure where guides create the itinerary, we market the trip, and if four people commit then the trip is a go. We aren't sure if Iceland is just more popular than the Southwest, but we sold 20 Iceland spots in six days. To put that in context we've only sold 6 Southwest spots in over two months. Our plan is to drop a new trip every Monday. Next up is Hong Kong with Tyson Wheatley (@twheat).
We continue to find our how-to content works, especially videos. It's lead us to simplify our content focus to Tips, Gear, Travel, and Pro's. To help in creating more content faster, we're adding a third filmmaker to the team in the coming days.
We are finally in beta with Moment 3.0...our pro camera app. To date, we've had a free camera app but are stepping up our game to make it a paid app to compete against other paid camera apps.
We announced the beta publicly and have already captured 7K emails (75% iOS and 25% Android) which makes it our largest teaser campaign to date. By comparison, our travel teaser captured 3.5K emails and our filmmaker campaign captured 6.5K.
Stats aside, there are existing pro camera apps in the market. Many of them are years ahead with features we don't yet have. And although we believe our software products have to be as great as our hardware ones, we don't believe mobile photography is won by features. Ultimately we win if our content to commerce engine can successfully reach millions of customers faster than anyone else.
Currently, the mobile photography market is filled with lots of single product, niche brands. It's our job to move fast enough to put all of these offerings together into a single customer experience that can in at scale. This app is important in expanding our offering, but more importantly...it creates another channel to reach millions of customers.
BUSINESS UPDATEWe took our latest team offsite, this time to Zion National Park. As a celebration of our 2017 results, this was our first traveling offsite outside of Washington State. The biggest takeaway from the week was that we need more outdoor, less-laptop offsites. Exploring and accomplishing together is much needed when the team is spread across the US. You can see what we covered here. (password: #shotonmoment)
Revenue in May was another record month for us at $1.6M for the month, compared to the same period last year with $195K in revenue. Granted our recent results were driven by shipping a lot of backorders, but none the less we are trending at a 3.65x year over year. We do expect this multiple to slow as we move into the back half of the year where we'll be selling a similar product line to 2017.
Similar to previous Kickstarter campaigns we have seen a steady drop in traffic since the campaign high in early April. Although pre-orders have remained constant customers are looking to finally get their order to tell their friends if they should buy it or not. Q3 is always a slower time period so we have our work cut out for us over the summer as we look to maintain our growth rates.
One area where we have gotten significantly better is paid advertising. We are starting to use paid to boost organic content to reach new customers. We've seen paid become one of our best channels over the past few months. Our CAC calculation is always a month behind but we expect it to be in line with the $30-35 we have seen the last few months.
Reselling third-party gear has continued to improve since we launched the marketplace. There are still shipping and customer experience features we want to launch, but the biggest improvement here is collapsing our warehouses down to one US warehouse, therefore opening up our 3rd party products to being available worldwide. Currently, most of the third party gear is only available to US customers. At the end of the month this changes as we're in the process of switching our two warehouses to a single, DHL operated one in Ohio. Their affordable international shipping opens up third-party products to worldwide sales.
With the number of campaigns we launched last trimester we are taking a step back this trimester to improve our content execution. Now adding a writer and soon a third filmmaker we needed to slow down to then speed back up. But one trend we have noticed is the shift to more and more mobile traffic to our content. It's a reminder of how much work we still have to do in converting mobile traffic to customers.
We have learned a lot in the first month of Moment Travel. The biggest takeaway is that we have the model backward. We started by creating the trips ourselves, finding an operator, and then a photo guide to teach it. Instead, we're finding real traction with famous photographers who want to launch their own Moment trips. Therefore we're turning the model around to where they build the trips, we collectively launch it, and if the trip gets for customers, we make it a go and run it. This will allow us to get way more trips to market at a faster rate empowering the photographers to drive demand for them. We are about to launch our second set of trips with this new model.
We launched a travel company...Moment Travel.
Over the last four years we've learned that our customers live at the intersection of travel and photography. 'Taking a trip,' is the biggest reason people buy our gear. While at the same time 'experiences' are what motivates them to get out and see the world.
Last year we piloted our first Photo Trips to Alaska. Those trips went so well we decided to take a real step forward in launching Moment Travel with our first four trips. Modeled after REI Adventures, we've created our own 5-7 day photo trip adventures to discover hidden spots, capture epic shots, and learn from expert guides.
What makes our trips unique are the photo guides. Alex Strohl joined the team to lead the way, but Moment guides know the best photo spots in the world, love to teach others, and have social reach to spread the word.
REI Adventures is over a $50M adventure travel business. At scale we think Moment Travel can have 500 Moment Guides leading 5K customers around the world with their cameras...generating $10M in revenue.
We launched our MVP this week and like any new startup we have a lot of tinkering and learning to do in the coming months.
BUSINESS UPDATE
We posted our Q1 results here (password: youin?). To the good we grew revenues by 2x, increased NPS to 55, lowered CAC to $29, and put 2% on the bottom line. To the bad, we were constantly out of stock, which put pressure on gross margins, bringing them down to 41% and well below our expectations. Of all the data, what really jumped out in Q1 was our ability to dramatically lower our cost to acquire a customer from $70 a year ago to under $30 this year. We're growing and acquiring new customers at a more profitable rate.
Year to date revenue is up 3.2x at $4.5M, not counting our $300K in back orders (out of stock products) and $1.9M in pre-orders (new, yet to be produced products). We should recognize all of our backorders and a significant portion of our pre-orders here in T2. If you recall we financially report on quarters but run the business internally on Trimesters (Jan-Apr, May-Aug, and Sep-Dec).
The third party gear we now resell in our marketplace is trending towards 10% of sales on shopmoment. This is better than we anticipated as 3rd party gear is only available to US customers. Currently we have our first two collections (Daytrip and Filmmaker) in the marketplace with our third and fourth collections coming in T2. We still have a lot of details we're working on to improve marketplace performance.
Low stock levels of Moment Gear plagued most of our T1. Since October our forecast has increased 1.6x, which means what we ordered months ago for T1 wasn't enough. We've been catching up all quarter, but that means we've used airplanes over boats to replenish our warehouses, leading to lower margins.
A year ago we reached 120K people on social. At the end of April we reached 375K people. Giveaway style campaigns have been one of our largest drivers of social growth, something we are going to have to re-invent this year to prevent our brand doesn't become known as the giveaway brand. People still sign up to receive something, but we'll have to get more clever on how and when we do that.
We're offsite this coming week for our 15th team offsite. We're heading Zion National Park for our first traveling off-site.
Well that went well.
Our internal goal was to reach $500K with this campaign, as we assumed filmmaker gear was niche compared to our previous campaigns. We were pleasantly wrong. We did set the funding bar low at $50K, but we didn't expect to fund it in 41 minutes or to reach $1M in under four days.
Now we have a different set of problems, trying to make enough gear to meet the demand. Especially the new anamorphic lens, apparently few people try to make this many all at the same time.
Some quick takeaways from the campaign...+ The teaser campaign worked, we had almost 10K signups before Kickstarter went live.
+ Press worked. It's always a gamble so we feel very fortunate for any press coverage.
+ YouTube was our best organic channel with videos from Peter McKinnon and Matti Haapoja hitting on launch day.
+ We had 95 influencers who joined the campaign to promote it. We have to add up affiliate revenues by hand but they brought about 16K sessions, which is a record number for us.
Collectively this was our best launch yet.
PLEASE HELPWe just launched the voting phase of the Moment Invitational - our mobile film festival. Eleven films are now published online with a $15K gear and travel giveaway. This is by far our biggest marketing campaign ever and we would love your support to vote and share.
You can vote here.
OR retweet here.
BUSINESS UPDATE
Kickstarter lifts all revenue boats. We've now shipped $2.9M for the year with another $600K in backorders. By comparison that took us until August last year to accomplish. If you add in Kickstarter at $1.4M we're up 5x over this same period last year.
Shopmoment has accelerated the last week, averaging over $45K per day. If we could just stay in stock with our existing gear we could really take advantage of the growth in traffic we've seen.
We launched the Moment Marketplace a few weeks back with our first collection of 3rd party gear. We called that collection the Daytrip Collection and without doing much to promote it, third party products have represented 5-8% of weekly sales. We have a bunch of features and content still to deliver that we think enables the marketplace to win as the location to buy your photography and travel gear.
We premiered the Moment Invitational films in NYC this past week. We flew all the filmmakers out and invited the local community to enjoy a night of films, photos, and good times. Over 300 people showed up and the positive response has us thinking about how to do more of these.
We continue to invest in our how-to video series. We're seriously constrained with only two filmmakers and are looking to add a third we can cover a lot more production ground. You can see our latest how-to guides here.
Our 2017 results are in.
The good - we grew top line by 1.7x to $8.5M, while only growing the team from 19 to 21. We decreased our cost to acquire a customer to $34, a historic low. We were profitable Q3 and Q4. And we are now cashflow positive.
The bad - our gross margins shrunk from 45 to 42%.
Collectively 2017 was our best year yet. We were fortunate that our Moment 2.0 gear worked with iPhone 8/8+ and X. But outside of the camera ball bouncing our way, we just got better as a team. We hit 63% of or goals and improved our NSP score by 12% to 54. Yes there were things we could have done better, but overall we're pleased with our results.
We finally understand how to drive growth and consistency in our business.
You can read the full recap here.(password: #shotonmoment)
BUSINESS UPDATEWe're struggling in 2018 to keep our best products in stock. It's promising that customers will back order, but it's not good for maximizing customer interest. When our sales trends accelerated during the holiday season we didn't react fast enough in reordering.
To date we've shipped $1.8M in revenue with $460K in back/pre orders to consumers and $150K in retail backorders that we can't yet fulfill. Despite the large back orders we are still up 2.5x year over year. If we had shipped everything we'd be at 3.2x yoy.
Shopmoment is our best source of data in measuring demand and acquisition. Two of the biggest growth drivers are higher traffic and increased order values. Year over year, order values are up 32% while traffic is up 100-150% on a weekly basis. Email and YouTube continue to be our best acquisition channels.
The first phase of the Moment Invitational has completed, which was the community submission phase to discover the 11th filmmaker. We had 275 films submitted on nearly 40K contest visits. This is our first film festival and we're already learning a lot about how to improve. Next up is flying all the filmmakers to NYC to premier their films on 3/31, followed by massive online voting the first two weeks in April. Tickets are available here if you want to attend the premier.
We publicly announced that we are part of the Samsung accessory program. This is something we've been waiting to tell everyone for the last four months as we worked with Samsung to design new Cases for their latest camera phones. Just like we did with Google, we're able to launch new Moment gear with Samsung and bring it to market with them. Apple is the last camera phone maker we need to reach the inner circle with. Pre-orders are up available for our S9 and S9+ gear, shipping in April.
If you missed it, previous updates can be found here. (password: #shotonmoment)
Thank you,
Marc & The Moment Team
Well that didn't work.
Back in October we moved to two US warehouses, one in NYC and one in LA. We were building our way towards Amazon's Seller Fulfilled Prime, which required an east coast warehouse in order to hit the expected delivery times. At the time we also assumed that on Amazon we needed to have virtual bundles so when people bought a lens there was a matching case to go with their purchase.
Through Q4 we proved that we don't need virtual bundles to succeed on Amazon therefore we don't need to push for Seller Fulfilled Prime, we don't need two US warehouses, and we don't need to continue killing our margins moving product between two US warehouses.
Gross margins were heavily impact by shipping in Q4. Shipping costs, especially from factory to warehouse, increased to over 4% of sales driving all shipping to 14% of sales by the end of the year. It didn't help that we needed to air freight everything to meet new phone demand, but it's pretty clear that we can now go back to one warehouse in the US.
Business UpdateRevenue in 2018 has continued to be strong, trending at 2.8x year over year. To put the first five weeks into perspective we've already recognized over $1.1M in revenue compared to 2017 wher it took 14 weeks to match that same mark. That doesn't even count the $250K in pre-orders and back-orders we still have to recognize as revenue.
T1 runs 17 weeks from Jan 8 until May 6. Our aggressive goal is to reach $4M in revenue. Right now we're trending to about $3.6M so we have some work to do. Our biggest challenge has been staying in stock through T1 as we over sold our estimates in 2017. Unfortunately supply chains take time to react and a three week break for Chinese New Year doesn't help. It's to the point that we can't fulfill any of our retail orders, just keeping stock for our direct to consumer channel.
Early in January we took our 14th offsite, this time to Port Angeles. Here were some of our takeaways....
+ We hit 68% of our goals, up from 65%. This was a record result for us.
+ Two-thirds of the team has now been together for two years, making planning to execution better and better.
+ We have completed Phase 1 of the business (a consumer products company) and are now entering Phase 2 (a vertical retailer). Our business will begin to shift from branded only products to include third party products, travel, apps, and services.
+ We set annual goals this year to grow our revenue 2x, grow our audience size to 1.5M people, and improve our gross margins to 55%.
+ We set our first financial rewards for our 2017 success and our 2018 targets.
You can read the full update here. (password: #shotonmoment)
Directly out of the offsite we launched a help center. We also improved our international shipping, moving from the global mail system to UPS. Both changes have dramatically cut the number of emails people send us asking about the status of their order. Better information up front and faster delivery have made a big improvement in the first few weeks of the year.
We've been spending more time with our NPS data as we scale, continuing to identify areas we can improve. The good news is the issues from last year are different from this year, but we still have areas of improvement. NPS takeaways from this past holiday include:
+ People don't like pre-orders, especially when the schedule slides out. We can improve at messaging and expectation setting at the time of purchase.
+ Having our "new" gear that is not compatible with our "original" gear still makes people angry. Even though we made this change over a year ago we still have legacy customers who score us a 0 because of this. We have a trade-in program to help but it doesn't recover the 0 score.
+ Slow shipping, especially through the global mail system, gets low scores every time.
+ Price, some people still think our gear is too expensive. This year we opened the Garagewith closeout and used gear to offer people a lower price.
We launched a film festival. Internally we call it the film festival that Apple should be doing. Externally we call it the Moment Invitational. It combines everything that has been working in our content marketing...10 amazing filmmakers who collectively reach 2M people, a YouTube contest to find the 11th filmmaker, 12 brands who reach 5M people who are helping to co-market the festival, an event in NYC to premier the films, and a $15K giveaway with online voting to find the winner. This is the biggest marketing bet we've ever taken with $75K in cash, gear, and travel prizes.
What a sprint to the finish.
The last week of the year was a microcosm of how we've grown in 2017. We hosted a thank you sale the last week, used trickle email campaigns, and a countdown timer for when the sale would end. All tactics we didn't have in 2016.
It resulted in the last week of the year being up 588% year over year.
A full recap of 2017 is coming in the next few weeks but overall we feel good about our results. We grew 1.7x, ended with $1.5M of cash in the bank, and demonstrated the second half of the year that we can be profitable month over month.
BUSINESS UPDATEWe ended the year with $8.3M in sales. That's up 70% from the previous year. About $300K of potential revenue was recognized in January instead of December because the year ended on a weekend, therefore we couldn't ship the product until January.
We added 35.6K new customers in 2017, enough to fill a medium stadium. New customer acquisition accelerated YoY to 1.6, up from 1.4 the previous year. Adding more customers at a faster rate is a good sign for us.
With increased sales brought in a lot more emails. We handled 30.9K conversations in T3, up 123% year over year. That almost matched the 145% year over year growth in revenue over the same period. A lot of this was driven by people asking about their pre-order, when it would ship, and why we were two weeks late in shipping.
We learned in T3 that sales count down timers really working. Making it big and obvious at the top of the website when a sale is ending, dramatically increases conversion rates. The last day for our holiday sale peaked at a 17% conversion rate by the final hour. We saw the same thing happen the last week of the year.
Freefly launched a new gimbal called Movi. We helped them launch it with this video and this giveaway. They don’t ship until April but we’ve had almost 110 orders for $40K in pre-orders for their product. The giveaway added 50K emails (most ever) on 160K website visits. The combo of launching a new product, video, giveaway, and pre-orders with another brand, worked.
We continue to learn more about content and what works to convert customers. We recently started creating photography guides that combine both a photo and a video. This "How to take low light portraits" was one of our best guides yet, bringing in over 10K sessions and 20K video views. This is a theme we plan to continue going into 2018.
We just got back from our latest offsite to Port Angeles, WA. A full update is coming in the next update, but we hit 68% of our goals. This was the best trimester performance we've ever had and a trend we look to carry into 2018. For what it's worth, we're half way into January and we've already done 2.2x year over year.
Every year we host an annual holiday sale. It's a 4-day sale where everything is 20% off, which makes this our most important shopping event of the year.
Going into the sale we always try to learn from the prior year making improvements in our execution, offerings, and services. This year's four-day sale resulted in $1.2M in sales on 9.8K orders from 132K sessions. Comparing that to 2016 where we saw $392K in sales on 3.2K orders form 57K sessions. Overall we saw 200% revenue growth on only 100% growth in traffic.
This year's sale confirmed a lot of what we already know...
We are a holiday business. 25% of our YTD sales have come in the last two weeks alone. By year end we estimate the last five weeks of the year will represent 35% of our revenue.
A timed discount represents a powerful reason to purchase, which we see validated by conversion rates that rose from 2% to over 9% during the sale. The addition of sale countdown timers at the top of the website drove the conversion rate over 18% in the sales final hours.
The drivers bringing in traffic are equally important coming out of the sale. We are currently running this $7K giveaway and a series of co-branded lightning sales like this to keep the holiday purchasing going.
Being in stock matters. We had a record number of new products available which helped to maintain our average order values over $130, up 20% from last year. This was our best season of having new gear in stock for new devices.
BUSINESS UPDATEWe've recognized $6.4M YTD with about $1M in back-orders that we still need to ship this month. Our Galaxy cases, new wrist straps, and DJI accessories are all shipping this week. The largest holdout is our iPhone X photo cases which start shipping by the 20th.
Comparing revenue (what has shipped) versus pure sales we continue to see that being in stock and shipping every order on time has a dramatic impact on the end result. In 2017 we did enter the annual sale with a handful of key products still on pre-order, which gives people room to cancel before we eventually ship. In total sales for T3 (sept-dec) we're at $3.8M compared to $1.2M last year.
Outside of revenue loss, the biggest impact of preorders is the added customer service levels. The entire team shares in the workload which allows us to scale in crisis, but it's still a taxing weight on the team. The positive is that a 200% growth in orders year over year only resulted in a 130% growth in email volume. The biggest culprit, of course, was a dramatic rise in what we call "order fulfillment" emails, which are emails received after they order and before we deliver. Next year we'd like to dramatically grow sales while continuing to decrease emails per order.
When looking at revenue sources over the last month, the biggest impact on 2017 has been the increase in brand awareness along with email execution. Moving to drip email campaigns had a significant impact the last month as we continue to improve at acquiring customers.
Going one step further we've seen that YouTube has become our best channel. From 25K subscribers four weeks ago to 40K now, we're seeing that the creation of video content plus video ads are working to reach new customers. We see this reflected in our exit interviews as a key channel people use to learn about Moment.
Looking at our latest campaigns we see that new product announcement themes bring the most traffic. We will continue to develop this theme further, especially as we dive deeper into photography learning content.
The best news of all is we're going to end the year with about $1.5M in cash and zero debt. In 12 months we've re-introduced our entire product line, used our loan to maximize inventory purchases, and will end the year with more cash than we started.
iPhone X has arrived. Even though it's just a phone, it is arguably the most advanced camera ever made. Good news for us, is that our gear already works with iPhone X so we can capture immediate sales. Our lenses work. Our Case is available for pre-order. And a new Battery Case is going to be announced 11/14 for pre-order.
It seems obvious in retrospect but it has taken us years to learn how to launch our capture products on time with each new phone. From the products to the content to the commerce we're getting faster at capitalizing on launch day. Comparing our results to last year, both in dollars and percentage growth, we see just how important it is to have compatible products to sell. Last year our products weren't yet available for purchase, which had a dramatic impact on weekly sales. This year we're in stock or just a few weeks away from shipping.
BUSINESS UPDATES
We crossed $2M in Q3 for the first time. We continue to see week over week improvements crossing $50K in a single day this past week. If you look at the revenue run rate since June, when we launched Moment 2.0, we are tracking towards $8.5M in annual sales.
In order to reach $10M this year we need to hit $6M in T3 (sept-dec). When you put our revenue it in the context of $6M we have a ways to go. But if you compare the business year over year to the same eight week period we're up 225%.
What's been encouraging about the recent growth is it's not just based on more sessions, but also from improved conversion rates. The site continues to make small improvements and we are getting better and better at giving people a direct reason to buy right now. Having more products and providing an incentive to purchase are both working.
Our best channel right now is YouTube. We've doubled our subscribers in the last month to 22K. But more importantly we've been learning what works to drive the channel. We're shipping timely vlogs (reached over 250K on this video), boosting those vlogs with ad dollars to grow search ability, creating lightning sales with the videos to drive purchasing, and then carrying forward the vlog theme into personal commercials (like this one). We see the results in watch time, engagement, and checkout questionnaires.
Content tied to giveaways continues to perform. October was a record number of total readers and repeat readers to the Momentist. A lot of it was driven by our last giveaway that included three weekend experiences, three influencers who each created a Momentist location guide, and six brands who contributed to driving awareness. Each of these brings a whole new audience to Moment, while increasing social counts across the board. We're already working on 2018 campaigns, to hit one per month.
We launched a new Case with Google and their Pixel 2 camera. This was the first time we collaborated with a major phone maker to ship a new product the day of their announcement.
Pixel has minority market share, but this was an important milestone for two reasons. First, Google is pushing the envelope with mobile photography and this enables us to dominate a niche phone. Second, it demonstrates that mobile photography is a real accessory category with Moment being the only gear for camera lovers.
Best of all you can buy Moment directly in the Google store when you pre-order your Pixel 2.
BUSINESS UPDATEQ3 was our first $2M quarter. This is another important milestone as we look to break $10M for the year.
We have our work cut out for us in reaching $6M in T3. To the positive, we have product in market for every major new phone. To the netagive, we need to keep driving awareness on a weekly basis. We will need our recent daily sales to continue in order to have a shot at the number. Since the launch of Pixel 2 we're averaging close to $30K per day. *note: Amazon sales get updated once a week, which is why they are flat in the chart below.
NPS is up to 54, an increase of five points since the introduction of Moment 2.0. The biggest improvements were seen through product quality and customer service. While the largest detractors are coming from shipping and battery case software. Our target is still to reach an NPS of 70.
When it comes to product reviews we are seeing our highest reviews ever, nearly 5 stars on Amazon. Now we just need a lot more reviews.
We have also gotten more granular with our customer service data, using both primary and secondary tags to better understand why customers are emailing us. We're also tracking our own efficiency as to how many emails it takes to resolve an issue.
We've been testing a series of YouTube tactics around iPhone 8. We launched four different videos in the past week that collectively reached over 200K views. We tested different types of content, advertising to extend distribution, and lightning sales to improve conversion rates. High level conclusion is that YouTube ads are very effective at increasing video views, subscriber count, and top of the funnel impressions. These ads also increased organic traffic which we believed was correlated to more people searching for Moment. We are building a similar campaign around Pixel 2, to be launched once their press embargo lifts.
We're building our way towards one giveaway per month. These campaigns not only engage our community but they are the fastest way to grow our audience size. The last campaign, #myfourblockradius, brought in a record number 3,800 submissions.
Ahhhhhh (Ujjayi style).
The last two months just need a collective exhale. Updates have fallen by the wayside as we powered through shipping all of Moment 2.0, managing 5K Kickstarter orders, and dealing with every kind of "you're not going to believe this" manufacturing story.
We can't run the marathon at this rate but there are definitely going to be times when all we can do is pick up a shovel and just dig faster. The last two months have been one of those phases.
We shipped more projects, gained more customers, and drove more revenue than any previous period. Next week we head to our next offsite, collectively tired but excited about the potential for T3.
BUSINESS UPDATEWe are on track for our first $2M quarter. This puts us at $5.6M for our trailing 12 months and puts us in position to go for $10M this year. This is a big stretch goal for us but pushing hard to give ourselves a chance.
Our T2 stretch goal was $2.5M and we'll come a little bit short of our goal, but not by much. We averaged over $20K per day in collective sales which is 2x our sales rate before shipping Moment 2.0. The new product line has been well received while selling Moment 1.0 at a discount has enabled more people to buy Moment.
Our biggest struggle in T2 has been the battery case. Initial reviews have been the best we've ever had, but it's been a battle to get this product out the door. To summarize the pain... first, we were a month late. Second, we have been in a battle with shipping companies justifying why we aren't a dangerous good. And third we've been shipping new case software and app versions to fix connection and battery reading levels. We went with the aggressive route to ship as fast as we could, following up with software updates. We're just now fully in stock with the product and can start marketing it heavily.
The App is making progress. Good news is we shipped more versions in T2 than ever before, the bad news is most of the effort was around the battery case and fixing bugs. We plan to shift our app focus to several iOS 11 features as we expect T3 to be big for the app. Lots more upside here without enough software engineers to get everything done.
Customer service levels have crushed us in T2. Kickstarter fulfillment always brings a lot of questions but being late with battery case only added to the issue. We made a series of improvements in the last few weeks to provide customers with delivery updates to help cut down on the email volume but overall the system has to continue to get more efficient and automatic.
As we go into new phone season we announced an upgrade guarantee. The purpose is to give customers confidence that Moment is going to support their device from here until the end of cell phones. We also announced this program knowing that our product already works with some big time phones yet to be announced. We'll be at our first phone launch in T3.
We started a travel company and completed our first trip to Juneau, Alaska. The biggest insight was that other brands wanted to get involved in the program and give away tickets on the trip to their audience. With the announcement, we created a giveaway between some relevant brands that gained over 10K email addresses and $6.5K in sales from the emails collected. We are working on 20 trips for next year and some big sponsors to partner with us on the program.
We doubled down on our influencer marketing program to better on board and engage the creatives we work with. Lots of learning about how to maximize new product introductions, but this an effort we're going to continue to improve upon as we go into T3.
Content development has taken a back seat in T2 as we focused on seeding and shipping product specific content. With Moment 2.0 we had to re-do all of our getting started content across 12 products and a new app. In addition, we rebuilt the content on our shop pages which took time. This content matters for customers and ensuring the best experience, but impacts the numbers for the Momentist. What really drove readership the past month was better integration of our content through out the Moment shopping experience.
We are excited to have Kevin joining us on the Moment Team. We built Contour together and he came on board to take over our app design and development. When not chasing two young daughters around, Kevin can usually be found riding bikes or boards down Pacific Northwest hills. You can find him @kevkor just about everywhere.
We're off this week on our next off-site, kicking off Trimester #3. You can read about our last offsite here (password: #shotonmoment).
If you missed it, previous updates can be found here. (password: #shotonmoment)
Thank you,
Marc & The Moment Team
It's good to be shipping.
Launching and running a Kickstarter is exhausting but shipping might be even worse. Over the last three weeks we have shipped 12 new cases, four new lenses, and a new lens adaptor with two different suppliers across two warehouses, while using airplanes and boats to move the product. To add to the shipping complexities we received 7,150 emails alone in June, up 62% from the previous month.
Despite the stress of delivering we've managed to maintain a customer service happiness score of 85/100, reduce our first response time 3.5 hours, and reduce our overall response rate down by 27%. The whole team starting their day by answering 5-15 emails has made Kickstarter a massive team effort.
Best of all, the initial response to Moment 2.0 is higher than any previous launch. You can see the #momentgear feed or find YouTube reviews like the one below.
The next six months are going to be big push to finish out 2017 on a positive note.
BUSINESS UPDATEWe're at an estimated $2.7M in sales year to date. We say estimated because in getting Kickstarter orders out the door we haven't had time to update our metrics database to show the full value of each order shipped. Instead our revenue metric only shows "add-on" revenue to kickstarter orders and the shipping of all our non-kickstarter orders. It's a long winded way to say sales are about $2.7M, YTD shipped revenue is about $2.2M, and June will end up around $700K for the month.
Biggest upside to revenue is each Kickstarter order is average $17.65 in "add-on" sales. That increases average Kickstarter value by nearly 13%. Hopefully this trend continues as we fulfill the rest of these orders.
The last week has seen a dramatic rise in sales. Our goal is to maintain average daily sales of $20K and the last seven days alone gives us hope we can maintain this rate with Moment 2.0. and This Trimester we are making lots of small improvements that we believe will keep growing awareness and increasing conversion rates.
The biggest driver to last week's growth was YouTube. Being featured by a few YouTube stars drove 114K sessions, up 294% year over year. The YouTube impact was even greater than the social data suggests because organic searches saw the same spike with each video posted, showing that people watched it on YouTube and searched for Moment.
We are in the process of closing out Moment 1.0 products. Three days ago week we dropped prices on V1 Lenses and Cases. Additionally, we implemented bundle pricing when V1 Cases are bought with a V1 Lens. Early data from these two changes is showing a 36% increase in V1 Cases sold per day, and a 29% increase in Total V1 products sold per day.
Outside of the demands in shipping, our biggest setback has been the Moment Battery Case. We announced last week that we are a month behind and thankfully almost all of our customers are patiently waiting for the new case. It comes down to the complexity in selecting the female lighting connector and the stringent test requirements in making an MFI product. Thankfully Apple has been helpful in getting this product over the line so we can start producing. We let our early backers know through email, the video below, and a Kickstarter live event.
We continue to refine what content is working. Explain level, especially photography guides, are translating into revenue. While YouTube is our fastest growing channel. The combination of written photography guides and YouTube videos is something we want to start experimenting with. Of all channels, YouTube is the one channel that is already over our daily average goal.
If you missed it, previous updates can be found here. (password: #shotonmoment)
Thank you,
Marc & The Moment Team
Next week we start shipping Moment 2.0. This represents three years of learnings about what customers want in their pocket. Physical products get better with every release and we believe these products can deliver a 5 star experience.
The New Lenses and Cases start shipping next week and will be fully in stock in six weeks. Battery Cases are going through final testing before mass production, expecting to ship in July.
The first phase of the Moment journey has always been about making the phone a better camera. In the coming months you will see us introduce new services and a second category of products.
BUSINESS UPDATESSales are at about $2.5M year to date. The final number is a bit vague until we get Kickstarter orders into the system and shipped. At a high level it looks like backer drop off rates have been under 3%, which is a much lower rate compared to previous campaigns.
Recognized revenue is at $1.6M. April and May financials will suck as we wait to ship all these pre-orders. Q2 numbers should be solid at the end, assuming we can ship a large majority of these orders in June.
Being on a pre-order status has had a negative impact on the sales of our v1 products as we get close to shipping v2. During the Kickstarter campaign we were averaging nearly $20K per day. Post campaign our daily sales hit a low point of $9K per day before rebounding the last two weeks to $14K per day. Once in stock we're expecting daily sales to surpass our $20K per day campaign levels. Pre-orders on a weekly basis are now greater than v1 sales.
One assumption we've always wanted to test is price point. Once v2 begins shipping we can test aggressive price points on v1. We especially want to see what happens as we get closer to $50. Is there a new segment of customers we aren't reaching who won't spend over $50?
Improving physical delivery of our products has one of the biggest impacts on our conversion rates. We recently moved our Hong Kong warehouse onto the Landmark platform. The timeline to delivery internationally is longer at 5-11 days but the cost is significantly cheaper. The result is a lower check-out cost for international customers. Traditionally US conversion rates were 2x better, but over the last three weeks that gap has dropped to nearly 0. This continues to prove that lower delivery costs dramatically improve conversion rates.
We launched our first Moment Trip. It's to Alaska and it's taught by the amazing Dan Rubin (@danrubin). This is the first product in a series of services we'll be launching that live at the intersection of place and learning. You'll see us introduce full service trips like this one to personalized audio tours that a single person can experience. You can read more about the trip here.
We continue to iterate on our different content series. Our learning content (called Guides on the Momentist) are working. From written content to YouTube videos it's the one form of content that is converting into immediate sales. The rest of the content is an entertainment form of content that extends brand reach but doesn't have the same immediate revenue conversion.
In adding our first analysts to the team we are getting a lot more granular on tracking, measuring, and forecasting. A lot of work is going into cleaning up our data and dividing channel segments across the team so everyone can have a direct impact on growing the business. One of the programs we're most excited about is robust affiliate program with our top referral partners.
Over the last two weeks we ran an experiment on landing pages alongside our graduation promotion. Testing the theory that dedicated landing pages for specific keywords and campaigns will drive better conversion rates. We're seeing promising results with conversion rates over 6% for those sessions.
This is our 50th update in three years. I can't say thank you enough for your continued support throughout this journey.
Much of what you have seen publicly is 'Moment the phone accessory company'. What we hope to deliver on over the next three years is a transformation into a mobile photography products and services company. The accessory lens on your phone was simply the entry point into the market.
We still have a long ways to go, but we are more excited than ever about the opportunity in front of us.
In this update, the only ask I have is to receive feedback about how we can improve. You can reply directly to this email with any ideas you have. Whether it's how I can make these emails better or what products we should be making, and/or how we can better win the market. I'd appreciate hearing from you.
BUSINESS UPDATE
We changed the Moment URL from momentlens.co to shopmoment.com. With the URL changes we also moved the Moment website from Wordpress/Woocommerce to Craft CMS. We're only a few weeks into this transition so not all of our data analysis charts have been updated.
We completed Kickstarter with 5,149 backers on $767K raised. Over three years and three projects we have raised $1.5M on Kickstarter, which accounts for 13% of all time revenue. Kickstarter is our second largest channel.
We wrote an updated guide for succeeding on Kickstarter in 2017. The Kickstarter playbook has changed over the past three years from community building to e-commerce. Help sharing the article is always appreciated.
In total sales we're at about $2.2M for the year with over $93K in pre-orders already. Our daily sales have dropped now that the website has both current products and pre-order products. During Kickstarter these two categories were split across two different websites. Now that they are together, it is causing people to hesitate before purchasing. We begin shipping our new at the end of May.
With the new website we have been scrambling to get conversion rates back up to previous levels. We shipped the website early in order to get pre-orders up. We have been pushing through post launch bugs to remove, making lots of small conversion rate improvements along the way. Currently we are focusing on SEO, checkout, and product pages.
The two biggest channels impacted in switching URLs have been organic search and paid acquisition. Organic is down as we have to bring over 300 Momentist posts by hand while setting up redirects, sitemaps, and seo for all the website pages. Paid is down because we turned it off while we fixed bugs that were hurting conversion rates.
We are getting a lot more granular on revenue channels, shifting to team ownership by channel. We believe this will help the whole team by tied to specific numbers they can improve on a daily basis. Email is one of the channels we want to get even better at. From open rates to clicks to revenue.
We are heads down bringing Moment 2.0 products to market. Case and our new lenses will be shipping by the end of May, followed by Battery case early July. Manufacturing is always hard and we've had plenty of ups and downs throughout the journey. The light at the end of the tunnel is that these are the best products we've ever made. You can read our updates here.
Moment Films Season 2 has launched. It's part of our focus to create more and more video in 2017. Moment Films represents our inspire level content while the Moment vBlog, Product Updates, and Learning Content are much more explain level content series. We are adding a second filmer to the team with short form content being our next big push.
We are excited to welcome Melissa Li to the team as our first financial analyst. Originally from Seattle, Melissa ventured to the NE to study at Dartmouth College and remained in the Boston area since. While not working she’s most likely skiing or dreaming of skiing (if winter is over). You can find her @melissali93.
We made it over the funding line!
In three campaigns we’ve now raised about $1.7M, making Kickstarter about 18% of all revenues. Although their platform is about community they have really become a distribution channel. Each campaign on their platform is similar to a late night infomercial, which we see reflected in really long “time on page” data.
This campaign has made us better at e-commerce than the other two campaigns combined. We set our funding goal too high, losing momentum between the $300K and $500K raised points. But the benefit of slower growth is it forced us to get much more more granular on UTM tracking, understanding channels, and focusing on what was working to drive conversions.
Our data before two weeks ago is imperfect, but it’s clear that the shopping team is winning. The Moment website, emails, and Facebook ads are driving the most conversions. The content team’s effort has improved the depth and quality of the page, but hasn’t directly lead to a lot of new backers. Outside of our main YouTube video we haven’t produced any content that has gotten external lift.
BUSINESS UPDATE
We posted our Q4 and 2016 year end analysis. Overall we grew the business by 49%, passing $5M in revenue on 10K new customers. We improved our supply chain efficiencies, turned inventory into cash, and continued to keep overhead low. We lost 8% in 2016, down from the 13% lost in 2015. Although an improvement we are looking to run Moment right at a 0% profit line. We did invest heavily in the new products the end of 2016, which are now live on Kickstarter.
You can read the full analysis here. (password: #makemoments)
We are on pace for another record Q1 in revenue. Not counting any Kickstarter pledges we should have another $1M quarter. What’s difference this year is that we are now selling Moment across three channels in the Moment Website, Amazon FBA, and B&H. Amazon FBA sales we upload once a week but in March it now represents 1/3rd of our sales.
Adding in Kickstarter sales we’re over $1.5M for the quarter. We won’t break our Q4, 2016 record of $1.75M but we’ll be close. This campaign has taught us that we need to be designing and announcing new products faster as the awareness lift from new products also improves sales on current products. Since the campaign we have averaged nearly $20K per day in total sales.
We have been ramping our Amazon FBA channel. Different from Amazon retail, Amazon FBA means we own the inventory and the page. Amazon holds the product in their warehouse and customers can receive free Prime shipping. Our goal for this semester is to reach $5K in daily sales on Amazon. We averaged $4K last week. We have just started in their “exclusives” program, which is the marketing arm of Amazon FBA. The biggest negative to Amazon is we receive zero customer information, making post purchase marketing non existent.
The Momentist continues to bring in new visitors. We still want to get a lot better at email capture and the quality of content emails we send. The content team has been driving all their traffic to Kickstarter so our readership numbers are down the last 30 days.
One of the improvements we have made to tracking content results is to group our story categories into campaigns. This enables us to see what “categories” of content our readers are engaging with. In addition we have also split acquisition channels for new versus repeat readers. Social and email are our biggest traffic drivers. Referrals and search have the biggest upsides.
We have also realized over the last two weeks that content drives a lot of traffic to the rest of the website. We have gotten much more granular on UTM tags across all our channels whether posting a story or commenting on it. YouTube is the channel with the biggest future opportunities in growing our audience and customer base.
What a first eight weeks to the year. Our Kickstarter project is 2.5 weeks old and about to break $400K. The campaign still has 39 days to go and we’re on pace for about $800K. Our stretch goal is break $1M.
We still need help to get this campaign over the funding line. 15 seconds of your time would go a long ways.
1.Back The Project here.
We are now supporting iPhone 7/7+ and 6/6+. This week we are announcing Google Pixel/XL.
2. Retweet or quote on Twitter.
You can retweet this or make your own. We’re looking to be one of the few companies to go 3 for 3 on Kickstarter.
Thank you for your support!
BUSINESS UPDATE
We are now selling Moment across four channels, passing $1M in sales the first eight weeks of the year. That roughly puts us on pace for $7M this year. We would love to break $10M this year.
*note: we don’t recognize Kickstarter revenue until we ship (Q2/Q3) and we are still in the process of updating our analytics tool to show sales from all four channels.
What has surprised us the most about being on Kickstarter is that our existing sales have not tanked. We figured the introduction of new products would bring existing sales to a halt. Instead the announcement of new products has only increased overall sales, now averaging about $15K per day. This tell us that next time we should go faster in designing and announcing new products.
A full Kickstarter recap will come after the project, but additional lessons we have learned:
Battery Case
Case
We have been testing Amazon FBA the past month. Getting setup on the platform is a giant pain in the ass. It has taken nearly six weeks to find a work around so that each lens can be a single page on their website. When we started each lens had 15 different pages (i.e. one for each device). This would be like posting a small t-shirt on a different page from medium t-shirt, etc. On the plus side, being on Amazon is making us better at e-commerce. It forces you to compete, diving into the details around keywords, positioning, imagery, and price. Their platform has a lot of upside and we’ll be interested to see how it goes over the coming weeks.
We hosted our latest team off-site. It was one of our best off-sites yet, leaving with a deeper understanding of how we win, grow our business, and work more efficiently. We hit 60% of our goals for the first time as we’re learning to make better goals with clearer measurement with less changes mid semester. We posted a detailed analysis of the week here. (password: #makemoments)
We wrapped up Season 1 of Moment Films. This was our first serious video project, which consisted of 16 short films, all shot by different creators. We reached over 538K views (mostly on Facebook) with an organic cost per view of $0.12 and advertising cost of $0.01 per view. We are launching Season 2 in the coming weeks, applying the key lessons learned from the first season. This time we want to test if 90 seconds works better than 60 seconds, if social teasers drive more views, if referral codes entice the creator to push the film more, and if we can get more YouTube views. You can watch Season 1 here.
Content continues to make progress in reaching more readers every month. Our Momentist numbers in February are down as we are pushing all of our content efforts to the Kickstarter campaign and away from our own website. But overall our weekly process continues to improve as we better learn what content works with what audience.
The shopping team is currently moving the whole site off of WordPress/Woocommerce and onto a new platform called Craft Commerce. We have maxed out performance on the current platform and the only way to make speed and shopping improvements is to move. While making that move, one of the key learnings over the lats month is that what we place “above the page fold” matters. A few months ago we tested putting add-on accessory products below the add to cart button, i.e. below the fold. Our items per order dropped significantly. Moving those accessory items back above the fold has resulted in some of our highest attachment rates ever.
We have maxed out our NPS performance with the current products. Improvements to shipping and service have definitely helped, but the only way to make a step function improvement is to ship these new products. Generation 2 products take into account all the small user experience issues that customers wanted fixed, including a lens cap in the box, a better mounting interface, no dark corners, and more reliable cases. For example, the issue of some iPhone 7/7+ customers experiencing dark corners took our January numbers down, something that no level of service can correct.
WE’RE BACK ON KICKSTARTER
Today is a big day for us.
The first phase of our journey was to make your phone a batter camera. Unsexy, the lens on your phone was the best place to enter the market because it enabled us to work with the best photographers in the world, build the foundation of our brand, and learn how to acquire a customer.
We believe these new products enables us to complete across the entire phone accessory market with power, protection, and lenses.
2016 should end up around $5M in revenue (including retail) on 40% year over year growth. That brings us near the 50K customer mark, a milestone we have worked hard to reach.
A full quarterly analysis will be coming soon, but a few big takeaways:
+ Our entire product roadmap needs to be built around the spring and holiday guide seasons. Our latest capture products will launch every spring. Our “next category” of products will be our holiday line-up.
+ Motivation to buy trumps everything else. For all the work that goes into optimizing a shopping experience, we validated that motivated customers will buy regardless. Holidays, offers, and upcoming trips convert higher than any website changes.
+ Forecasting down to the individual SKU is still really hard. We did way better this year in not running out of our core products but we still got some of the mix wrong, especially in buying too many cases.
+ Content works to grow our audience size. Market to market community building is too expensive. People are still the foundation of our content stories, but mobile photography is global which means geographic markets grow and shrink based on the overall awareness that Moment drives.
+ The teenage years of team growth is hard. While growing from 12 to 20 people this year, we managed to make process improvements to better execute across the whole team. But now it’s time for the team leads to take the business to the next level. Marc was doing too much of the work, picking up a shovel to dig instead of enabling.
NEED HELP
Still working to claim our YouTube /moment handle. Any help with YouTube is appreciated.
We are launching Gen 2 of our capture products (new cases and lenses) again on Kickstarter the first week of February. We will need everyone’s help to back the project and help promote.
BUSINESS UPDATE
We ended December just shy of $1M for the month on 6K new customers. That brought us to $1.75M for the quarter on 10K new customers. All four of those numbers are all time highs.
January is starting off a little bit slow as we hit the end of 2016 with everything we had. We also sold out of key accessory products that are bringing down our average order values. We expect January to be modest growth as we work to turn on our Amazon store, an ambassador program, and restock key accessories that sold out.
Adding our first US warehouse continues to prove that people want cheaper, faster shipping. The conversion rate ratio between US and International reached as high as 5x during the peak holiday season. Adding Amazon FBA in the coming days will offer Prime shipping for Moment products for US customers. Next we’re working to move our international warehouse in-region, to reduce the tax and shipping shock our customers experience at check out.
Emailing our NPS nine and ten customers we sent them this survey to help us fill in the gaps between the data. From the responses we were most surprised to see that 28% of customers bought be cause of a referral while 10% bought because of YouTube. YouTube direct traffic is almost zero to the Moment website, which demonstrates people discover us on the platform and then search for the brand.
Dani has taken over running the content team in 2017. Currently content is bringing in over 25% of all new visitors to the website. Pushing out a story per day, consistent social sharing, and the use of IG stories is definitely working to increase engagement and click through rates.
Last year we debuted the first season of Moment Films. We believe being great at video is critical to winning the market and therefore we started investing in a seasonal program to create short films with different influencers. The goal of the program is to learn the whole process from the content creation through to marketing the content. Still finishing up Season One we’re already learning:
+ Video has a long tail. Films continue to be discovered and grow in viewership over time.
+ Consistency in marketing and advertising matters a lot. The tighter each launch is, the better it does.
+ Videos with infamous YouTube creators have higher organic traffic because people discover the film when they search the creator’s name. Creator names are still bigger than Moment’s name, especially on YouTube.
+ We have to tie our advertising efforts to the same campaign tags so we can see the complete ROI on each film.
All of these learnings are going into the Season 2 program, which we hope to launch at the end of Q1.
We are capping out on the performance that wordpress/woocommerce can deliver. It’s a great platform for shipping content, but the size of our database (photos/orders) combined with the large number of plugins required to run the website are preventing us from delivering a fast experience that is bug free. We aren’t anywhere near the 1-2 second page load times that customers expect. Andrew has taken over the shopping team in 2017 and is working to fix the platform over the coming months.