We write 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 2020. You can read previous updates from 2019, 2018, 2017, 2016 and 2015.
Happy Thanksgiving. The Moment Holiday Sale is now live.
This is our largest sale ever with 85 brands, 50 lessons, and 1,500 products in the shop. We've spent the last 18 months becoming the marketplace for creatives and although we've made a lot of progress we still have a ways to go in being the place everyone shops for the creative in their life.
In making this transition we've made three big changes this year.
1. Categories Beyond Photo and Video
We've expanded beyond photography and filmmaking gear to carry Work & Travel, Home & Studio, Film & Print, and Lessons & Trips.
We've seen two direct impacts. First is the percentage of revenue from Moment branded products has continued to drop from over 76% last year to around 65% the last few weeks. Second is we've expanded search and site navigation to shop all of these categories, which has immediately raised our conversion rates from around 1.1% to over 1.4%.
2. Pros Building Their Business On Us
We have been launching tools and services to help pro creatives drive revenue on top of us. Our services range from lesson production to gear reviewer programs to developing their co-branded products. Pro creatives, especially YouTube filmmakers, drive a lot of market demand. Therefore we're trying to make Moment their commerce platform.
More to come in 2021, but this year we've already seen $670K in direct revenue from pros, up 376% over last year.
3. Brand Marketing Campaigns
We've extended our content to commerce marketing engine to the brands we sell, creating marketing campaigns in exchange for higher margins. We're early in this process but we've raised about $75K the last few months through these campaigns.
Financially this improves our margins. Brand wise it gives us access to the best new products firsts, which increases our audience size, which lets us raise our content rates. It also lets us send more work to creatives who send their audience to Moment.
BUSINESS UPDATE
We're at $21.6M in revenue year to date, now up 5% over last year. This doesn't include $1M in backorders we are sitting on that should ship before the end of the year. Shortages on cameras, lights, mics, and iPhone 12 gear are contributing to our large volume of backorders. Despite revenue only being up 5% year to date, the margins and diversity of revenue are in much better places from a year ago.
Inventory has been a big theme for us in 2020. It has taken several months but we've revamped everything from how we forecast to how we order to how we manage stock levels. The positive is that we have reduced end of year inventories from $8M to just under $4M, while reducing our holding period to just under 100 days. To the negative, we've under purchased new items and have missed sales momentum around new launches by running out of stock.
We continue to add more sellers in the form of gear brands and lesson creators. Long term we're trying to get to over 1K sellers. Currently we're at 95 sellers. Not all brands are equal in revenue potential but each of them leads to more links, more traffic, and more marketing funds.
We launched another lesson about film, this time with Joe Greer. This quickly became our best selling lesson with $60K in the first few days. Similar to a new product we see high demand in the first few weeks followed by a sharp drop to a consistent weekly value. We are only a year into Moment lessons, but continue to improve with each launch. It's clearer to us which audiences hit, what price points work, and how to produce these at a lower cost. We have yet to experiment with a membership or using discounts for new customers. Overall lessons have driven over $500K in revenue this year and made a significant financial impact for our pros.
Apple announced MagSafe and we quickly followed by announcing some of the first MagSafe accessories. We believe MagSafe creates a whole new interface platform that will be massive with everyday consumers. Even bigger than lenses these accessories will work with or without a case. From car mounts to wall mounts to tripod stands we believe we can lead the market for MagSafe accessories. Despite not shipping until March our initial announcements have driven 140K visitors to the site on 517K page views (this is 10% of our pages views this month). Most interesting 72% of these visitors are new to Moment.
If you missed it, previous updates can be found here. (password: #shotonmoment)
Thank you,
Marc & The Moment Team
We launched another Moment product... CineBloom Filters.
This is a fresh take on an existing category of products, diffusion filters. It's an example of what we do best in launching a new product with a unique story that teaches creatives how to experiment with a category of products they previously overlooked.
To the positive, this introduction was one of our best launches. Sales in the first week were equivalent to some of our largest Kickstarter campaigns. To the negative, we sold out within 10 days which demonstrates we still need to improve at forecasting launch quantities. We did have to order initial quantities back during the height of the pandemic, but we should have re-adjusted as we got closer to launch.
The reason these Moment products are so important is they drive higher margins than the other categories we sell. Similar to REI, which now drives 30% of their revenues from REI branded products, Moment branded products bring significant traffic and margins.
Lastly new Moment offerings improve traffic to the marketplace through influencers reviewing the gear, press talking about it, and ads converting better. These new offerings raise all boats, bringing new and existing customers back to the site to buy more.
BUSINESS UPDATE
We're at $19M in revenue year to date, flat over last year. This doesn't count the $450K in backorders we have waiting to ship MTW bags, Cinebloom Filters, and cameras. We continue to see our direct site up 30% YoY despite Amazon being down and the travel industry being shut down. This time last year we were running a lot of Moment trips. Despite Covid, Q4 is normally when we drive 40% of revenue so we still expect a large three month run with new products and holiday purchasing. We've also been expanding the site from just Photo and Video to Work and Travel, Home and Studio, and Film and Print to give us the best chance at a large holiday season.
Cameras have been a larger driver for us in 2020. We've been launching some of the largest brands on the site this year, bring new revenue, customers, and visitors. We're driving demand through content, especially YouTube, getting customers into their first cameras. Each brand we successfully launch brings us the next brand we can add. Next we're adding a Film store (yes film is now a growing market) and working on Canon plus Leica.
We started announcing new online lessons. This new lesson from Willem is a great example for the type of creative and lessons we want to be launching. Willem is a massively popular, up and coming creative who has never sold online workshops before. His lesson did so well we're then able to launch both an Insta and Film Store with new brands in Kodak, Fuji, Lomography, etc. In the first 30 days we can instantly see his fly wheel working with Willem's lesson receiving 32K visitors (14K directly from Willem) who spent $51K on his lesson and $10K on gear.
We continue to put more creator grants out. The second set is focused on female creatives in partnership with Sony, Wandrd, and Tiffany Nguyen. We're working our way to supporting multiple creator grants at the same time. It's our way of helping the yet to be discovered with gear, mentorship, and a platform to share their work.
We launched Moment Travelwear, gear for working anywhere.
Bags during a pandemic, great timing.
We started working on bags about a year ago, building up our capabilities from small slings to rugged camera slings to everyday bags. The opportunity in the market is to make gear for a remote lifestyle. Originally positioned at the intersection of work and travel, this line will evolve into a broader line of gear to work (and learn) anywhere. Bags, video kits, and mobile stands.
We're quickly learning that soft goods have a slower momentum build, especially compared to tech products where consumers purchase them immediately. Our playbook this campaign was more profitable than our last campaign, focused on a broader set of smaller creators. Combined with higher margins and more profitable ad spend, this should be one of our best profit-driving campaigns.
We did already start production so we expect to be shipping by November.
If you didn't already back the project, we'd love your support!
BUSINESS UPDATE
Revenue is now flat year over year. This doesn't account for Kickstarter sales or the $200K in back orders & preorders we have. We started Q1 down 29% with COVID and since then we've made up the difference. The real shift has happened in the last five months where we are up 20% YoY. Amazon and wholesale channels are offsetting stronger shopmoment revenue. We expect the last five months to continue for the rest of the year.
Back orders continue to be a struggle. It's improved since the peak of COVID but it's a constant challenge, especially with electronics-based products. Microphones and webcams have been the most difficult to keep in stock due to the increased demand.
We continue to focus on adding more Pros and Publishers to our partnership program. These partners send us traffic through affiliate links to the gear they recommend. Each major brand we add to the shop provides a new list of pro creatives we can work with. Currently, we have 93 pros who reach 22M followers.
We also continue to add more sellers to the site in gear brand and pros with video lessons to sell. We've started to add large brands like Sony, which opens up a whole new customer base and list of pro creatives. The pitch of being a marketplace that can drive demand with 18-45 year old creatives works.
Lessons took a hit during COVID in not being able to create any new productions. In August we just started announcing new lessons and expect to consistently have at least 2 per month going forward. We found in the past that new lessons sell more lessons. We expect August to finish our best month since March.
We announced our first creator grants. In partnership with Fuji and Peak Design, this first set funds five up and coming photographers. The initial response has been positive, which means we'll be continuing this program in the months to come with new grants tied to brands we carry and the pros we work with.
We are three months into Covid and we've seen growth in our business.
We are up 42% YoY the last three weeks, with Shopmoment up 120%. Our wholesale and Amazon businesses are still down about 50%, but these channels are smaller in total dollars than our direct business.
What is going on?
Last updated we shared what we were learning in real time. Two months later we have more detail and confidence these drivers are now long term opportunities. Yes, more consumers are shopping online. But bigger than that, we're getting more sellers onto the platform, which is enabling us to drive more demand.
1. More Sellers
We have two kinds of sellers, gear brands and pro creatives (lessons and workshops). The more of these we add to the site the more revenue goes up. We are seeing large brands, like Sony, now want to work with us. Plus popular creatives who want to create lessons with us. It takes time to get these sellers launched, but we're trying to increase our base of sellers to 200 brands and 50 pro creatives.
2. More Partners
We continue add more publishers and pros who are driving their audiences to our shop. This group is driving around 13% of revenue with an average cost of around 10%, making this channel much cheaper than paid advertising. More sellers enables us to get gain more inbound links.
3. More Effective Ads
It's unclear how long this benefit lasts. But while it's here we're putting more dollars into paid ads where we can get a profitable first purchase. Assuming our gross margins average around 45% we are looking to keep ROAS above 2.3x and total advertising under 16% of revenue.
BUSINESS UPDATE
Revenue is now flat over the previous 12 months. We are still sitting on about $390K in backorders, much of it coming from camera companies who have struggled to increase production with Covid.
Season sales are still our best driver for new customers. Father's Day brought in $1.7M this year, compared to $750K last year. Running the sale longer and including more brands definitely helped to improve our results. We're working to outline sales earlier so we can pitch our sellers to get involved.
One category negatively affected by Covid has been our lesson business because we can't create new productions when travel is limited. We know that new lessons sell more lessons so getting new productions shipped in the coming months will help a lot. We still need a lot more inventory.
We introduced the Moment Camera Sling. Slings have been a solid category for us, but it always help to have a Moment offering in the shop. This new Camera Sling is the most technical bag we've created and a big step towards camera bags we have coming out this year. It's also our best reviewed product out of the gate with a 4.7 star rating on the first 39 reviews.
We've been spending a lot more time with our community the past month, listening to what else we can do to help. In the first week we asked for community feedback through emails, dms, and zoom calls. The overwhelming request was to show more diversity in our content, so we've started doing that on a regular basis. Our community is also asking for more opportunity so you'll see us create micro campaigns that fund and support underprivileged members of our community. MIFF is a big piece of that, putting $100K in cash and gear into the hands of fellow creatives.
What a six weeks it has been.
We hope everyone is staying safe an optimistic. In these trying times we feel very fortunate that Moment is an internet only business and that our culture has always been remote. We've been able to stay safe, keep everyone employed, and move our purpose forward.
No doubt our industry has been affected. Customers buy photo, video, and travel gear because they are going to take a trip. Let alone the impact on consumer spending for expensive products when millions of jobs are lost.
Most of the brands we sell have seen revenue drop 20-40% over the last month. Retailers are either physically shut down or have frozen open to buy dollars. Even Amazon revenue has dropped to nearly $0 for everyone as Amazon push out ship dates for non-essential products. All of this had us very concerned three weeks ago.
But over the last two weeks our evolution from a product company to a retailer has clicked. We have had our best two weeks of the year. Comparing site results the last two weeks to the previous year...
Traffic from…
This has resulted in 3rd party revenue growing to 30% of our revenue.
Why are we up?
There are four main drivers.
1. Sales By Brands
The world is on discount for the foreseeable future and as a retailer we get to take advantage of it. Not only can use Moment gear discounts, but discounts from the brands we sell makes everything easier...email conversions, advertising returns, etc.
2. New Affiliate Platform
We launched Partner With Moment (pw = youin?) to media publications. Over the last three weeks we've created partnerships with sites like Wired, Wirecutter, Gear Patrol, Future Publishing, etc. Beyond bringing us traffic and direct revenue, they are improving our SEO rank. High quality traffic makes all of our search and shopping bids cheaper.
3. Brand Partnerships
Everyone needs to shift to online marketing tactics so they want to partner with us. We've been running lots of micro campaigns on social with different brands who are driving us traffic. Like this DJI x Andy To giveaway brought in 33K sessions, 75% of who were new users. Getting @moment into feeds like DJI matters. Before this downturn it was much harder to create these relationships.
4. Video Lessons
Not only are video lessons selling but some of the biggest creators now want to work with us. Creators have lost work overnight and video lessons drive real revenue, which means we can partner with creators who were previously out of reach. We are planning several new productions to start immediately once travel restrictions lift.
// The overall is that we have no idea what to expect in the coming months. At the end of last year we made a series of cuts that lowered our overhead spend. We took another step a month ago to cut any non-people spend we could find. And although we're running the business off of a much more conservative plan we're optimistic about our position in the market coming out of this recession in growth mode.
BUSINESS UPDATE
Revenue is down -3% over the previous 12 months. Our recent success will need to continue if we want to show year over year growth. We are sitting on about $260K in backorders that we expect to ship here in April.
The one category growing right now is work from home, so we launched our own WFH Store. It's all affiliate links to start but it opens the door to new categories we can enter and new partnerships we can start. If these categories hit we can then look at stocking them.
The one channel still impacting everyone is Amazon. Despite being in stock with our gear, they have pushed out all shipping dates to later months which dramatically lowers conversion rates. Although we expect these numbers to come back we've gone form $29K per day last year to about $4K per day this year.
We have reduced our inventory levels by 21% from $6.9M at the end of the year to about $5.5M at the end of March. We were fortunate to end the year with too much inventory as it allowed us to continue without any supply chain interruptions. Although Asia was shut down with COVID-19 we were largely unaffected.
We are all in on lessons. We have doubled the team size to four and are planning our our next eight productions with creators who collectively reach 4M followers. We're also changing our production locations form international to domestic so we can produce these at a faster, cheaper rate. Coming out of the summer we should have a premium catalog of video lessons.
The team is holding steady on customer service. All of us now contribute about three days per month. It's enabled us to maintain a high NPS score despite everything going on. We've also shifted a lot of our content to be more inspiring, keeping creatives creating.
A new test we launched this week is an email class called Learn Mobile Video In 7 Days. Over one email per day we teach you how to shoot better videos on your phone. We've already acquired over 25K emails in the first few days at less than $0.15 per lead. Each email includes a few products so we'll learn quickly how these email customers convert into paying customers.
If you missed it, previous updates can be found here. (password: #shotonmoment)
Thank you,
Marc & The Moment Team
We launched RTRO, our fun photography brand.
It's starting as a vintage camera app for Instagram stories and TikTok. But over time this gives us a new label to bring fun photo / video products under. From artistic filters to disposable cameras, RTRO will be all things fun.
This is our second app in the marketplace and our most successful launch. The app store requires being featured and by being a second time developer we have more Apple friends who help to feature us at launch.
One difference between the two apps is the business model. Pro Camera started as a free app and moved to a $6 paid download. RTRO on the other hand started as a free download with $1.99 looks or $15 annual subscription. So far RTRO is winning at 52K downloads compared to our best Pro Camera days at 36K. But PRO Camera as a paid app had a higher peak at $25K vs RTRO at $21K. We still have a lot to learn, but are encouraged with the initial results.
Comparing downloads to subscriptions we're find that about 3.5% of downloads are purchasing a subscription with about about 60% subscribing yearly. A membership matters because after 12 months Apple reduces their fees from 30% to 15%.
If you have connections to any celebrities on Instagram or TikTok we could use the help.
BUSINESS UPDATE
Trailing 12 month revenue is at $25.5M, up 1.07x over the previous 12 months. We are down from our peak of $27M on trailing 12 month as the first two months of last year were very strong as we were shipping backorders from the previous year. We have seen a 16% increase in orders in 2020 but our AOV has dropped 28% form to $153 to $110. We've recently added back a minimum $40 order value for free shipping, which has raised AOVs in the past few weeks. We expect revenue to basically remain flat or down YoY through Q2 when our next products come to market.
We continue to build new revenue streams that move us past our Wide Lens dependency. Third party brands and non wide lens offerings are helping to diversify our revenue. We still have a long ways to go to reach the mix of say REI where their REI branded products only account for about 30% of revenue. Currently Moment gear accounts for 80% of revenue.
We helped Fuji to launch their new X-T4 camera. This expands the Moment shop to carrying everything that creators need from phones to drones to big cameras. Campaigns like this are doing two important things. First these campaigns bring us new partnerships because larger brands see our Launch With Moment campaigns and want to participate, providing us with new gear before everyone else. Second, it broadens our store offering so that YouTubers can link to us as the place to buy. YouTuber recommendations is our number one channel and by carrying a broader selection we can create robust revenue streams for these creators.
New customer growth continues to be our #1 focus. We've added 20.6K new customers in 2020, down 15% from last year when we started the year shipping a lot of backorders. If you look at the last 12 months we've added 139.3K new customers, up 1.2x. We've also seen that repeats purchase rates have increased to an all time high of 48% while average time between orders continues to drop.
A second big focus in 2020 has been reducing inventory levels. We ended the year at $7.2M and are already down to $6.5M at the end of January. We expect this to continue to drop until we're around $4-4.5M. 3rd party products are easiest on inventory as their MOQs are very low, compared to Moment products which have 250 - 5K moq's.
We've sold $240K in online video lessons in our first four months with eight lessons. 73% has come from a single lesson and 84% has come from our top two lessons. We are still experimenting on all fronts from the subject matter to the teacher to pricing to how we launch it. But we are circling in on the formula that works and plan to launch one large lesson each month going forward. This is one area where more capital would make a huge difference so we could hire more filmmakers. Each lessons costs about $5K to make and can return itself in the first few weeks of sales.
Moment Invitation is back for its fifth season. This is our annual mobile film festival and this year we have $150K in cash / gear for 15 finalists. We also added a two day filmmaker workshop in NYC as part of the weekend festival.
We had a solid year.
We added 143K new customers, bringing us to 350K total customers. Grew revenue from $21 to $27M. Improved gross margins from 46% to 52%. Beyond the numbers we...
In reality we had an amazing first eight months of the year and a hard last four months. We were late in shipping our new products, including iPhone cases and a drone lens. This lead to frustrated customers who were waiting multiple months for their pre-orders. This was compounded by the advent of three lens iPhones, which lowered the demand for our hero Wide Lens product.
We are still closing our books but you can read our full 2019 results here. (pw: youin?)
As we head into 2020 we're accelerating our push to become the next-gen retailer for millions of creatives around the world. We started this process two years ago and will now lean into this effort as we start the new year.
Thank you for reading. Happy 2020.
Marc & The Moment Team