Introducing VidHug

[kohanz]

Hi all,

I haven’t been active here for some time, but I have been busy. Today I’m happy to introduce VidHug. It’s currently accepting mailing list sign-up, but the full experience will launch very soon (in a matter of days).

The idea for VidHug (which I know is not unique and has been attempted before) came about a year ago as my siblings and I were brainstorming a meaningful birthday gift for our mother. We decided to get her friends & family (dispersed globally) to record videos and edit them into a single montage for her to watch on her birthday. I assumed a SAAS that did this for me existed and was disappointed to find that I was wrong. In the end, I patched together a very lousy MVP, doing most of the things manually myself (think DropBox + iMovie + many hours of tech support), but it worked and the birthday was a success. Since then, I worked on turning that into a real product that anyone could use and friends & family have used it along the way for birthdays, congratulating new parents, and several other occasions.

At the core, VidHug enables anyone, regardless of technical ability, to source video recordings from a potentially large & dispersed group, and then edit those into a single deliverable. The first test market is kind of like the greeting card space, but we believe there are many potential markets for this offering.

In many ways, this business (as currently marketed) is what many of you (and depending on my mood, myself) would consider a SAAS nightmare in terms of business model. Low price, pay-per-use. Rob Walling, for example, is someone I look up to and respect and I’m sure he would shout to run away from this… but something about the product, and people’s reaction to using it, has kept me going. Even in the small amount of beta testing we’ve done, tears of joy have been a regular occurrence (now how to monetize tears of joy?). Anyway, the view I’m taking right now is I want to see if I can make this a product people love and am somewhat hoping that the business model will become more apparent when I get to observe usage patterns. There are also B2B avenues that we’re considering, but again, want to nail the product experience before we go there.

Would love to hear your feedback. I know this places dishes it out in the tough & honest variety. Thanks in advance.

[kjk]

There is no way to market such a product in a cost effective way.

I’ll take this opportunity to rant about Marketing 101 because I became convinced that most ideas fail not due to failure to do something very smart but due to making one of the many possible basic mistakes.

Not thinking about user acquisition (aka marketing) is one of the basic mistakes.

There are millions of websites and software products out there. If you build another one, create a website for it then… nothing will happen.

You need a way to get people to your website (and then to try it and then to buy it).

It must be cost effective i.e. the cost to attract a user that converts into a customer must be lower than what you paid in marketing costs.

From that perspective the worst product to market is a low-cost tool aimed at a tiny subset of general public. Which is unfortunately what VidHug is.

Let me elaborate.

There aren’t that many marketing strategies.

People actively search for certain products e.g. a person who lost a tooth will search for “teeth implants” or someone learning ruby will search for “ruby tutorial for beginners”.

For such products you can use content marketing i.e. write lots of free content, get google to index it. It’s free (well, it costs your time), highly competitive and not applicable to your product.

You can also buy keyword ads on Google search engine or topic-targeted banner ads via AdSense.

It costs money, is highly competitive and also not applicable to your product.

If you have budget, you can blast your ads on TV.

This works for mass-market consumer products that are high-cost and are of interest to large parts of population (e.g. cars).

Your product is low-cost and of interest to a tiny part of population.

You can demographic-target ads on Facebook.

Those are cheaper than blasting ads on TV because if you have a product of interest for young women in urban areas, you don’t have to pay for showing ads to 60-year old male farmer.

Those are are still expensive, highly competitive and not applicable to your product (I don’t believe Facebook has targeting controls that would allow you to narrow down to people who “know someone with an upcoming birthday”).

Some categories have active and large communities around them on the web and not all of them frown upon self-promotion. For example, I wrote a (free) book on Go and I was able to market it very effectively on r/golang. That doesn’t apply to your product.

Then there are niche strategies with low probability of success. You can post a link on forums like thins, you can tweet, you can answer quora questions.

My big message is: think about marketing strategy and user acquisition cost before you make a product. Ask yourself:

• how can I market my product?
• how much will it cost?
• is the cost less than what I can charge users?

Even plugging wild guesses into “cost of acquiring a visitor”, “visit to buy conversion ratio”, “price of the product” is better than nothing because in many cases (this one included) it would show you that even the most optimistic numbers would show “no way this can work”.

There’s fundamental problem here in that there is no marketing channel that can be effective for the product with VidHug characteristics:

• low cost (as opposed to high cost)
• applicable to literally anyone but with a low conversion ration (as opposed to easily targetable subset like “dentists” or “programmers” or “males 19-25 living in a big city” or “young parents”)

This particular combination just doesn’t work.

You can have low cost product applicable to anyone as long as it has a high conversion ratio (think cereal, detergent or starbucks).

You can have high cost product applicable to anyone with (relatively) low conversion ratio e.g. cars.

You can have a medium cost product if it’s good and there is targeted web search traffic for it.

There’s just no way to reach people who might be interested in VidHug in a targeted (i.e. cost effective) way and un-targeted marketing is too expensive for you.

[kohanz]

The community does not disappoint! Thank you for the honest feedback.

While I don’t agree with all of your points (e.g. to say content marketing, AdWords, etc. are not applicable to this product is something I don’t agree with - it would need landing pages for specific niches like bdays, retirements, etc. and then marketing for those niches, but I digress…), the general message is one that I think is a very valid argument.

However, I think it’s premature to judge this business based entirely on the current (completely made up) pricing model. The current price is based on basic consumer usage, which doesn’t make sense as a subscription and yes, is low cost (like the greeting card industry - which is a huge industry, but to be fair, greeting cards are a common part of the culture, VidHug is not, we can’t group ourselves in with them). Bottom line: I agree that making this a viable business at “$15 a pop” would be tough/impossible.

However, at this stage I’m more about getting the product out there and seeing how well it works from a UX perspective. Even in it’s limited exposure, I’ve had people suggest several applications that could lead to a better (read: B2B) business model (e.g. easy creation of mementos for event organizers/venues for one and there are others).

To clarify, when I say “product” here, I’m talking about the functionality, but not the way it’s marketed (e.g. in the landing page’s case, greeting card style stuff). So when you say:

There is no way to market such a product in a cost effective way.

That may well be right for the greeting card space, but I don’t think we can say it for the product as a whole.

That said, I appreciate the feedback and affirmation that one-time, low-cost SAAS is something to stay away from.