Only Few Finnish Startups Born Global May 16, 2013Posted by Jussi Huotari in : business,startup , add a comment
How many Finnish online products are targeting European markets? More specifically, consumer oriented online products?
If I’m not wrong, there are very few. Overall, the number and scale of B2C product businesses in Finland is much less than in the neighboring countries. Among these few are some that are “born global”. As a rule, their target market is the USA, not any of the European markets.
I’ve been trying to find successful Finnish B2C online products whose target market is Germany, Spain, France, or Russia. There are many good reasons to target the EU markets, in addition to the 370+ million people online. The Western European countries are big, there’s much less competition than in the USA, the culture is similar to Finland’s, and the time difference is manageable.
East is even more interesting. Russia is the biggest European market in terms of unique users, the growth rate is rather healthy (~9% per year), and it’s just across the border for us.
I can name a number of Swedish B2C online product businesses that are expanding to the European markets. But in Finland, there are only five??
- Holvi is the first to come to mind. Their product is super interesting and I think they are going to take advantage of the new EU-wide banking regulation in their mission to make banking better for us.
- Web of Trust has exciting partnership in Russia with Mail.ru. Russia is already a big market for them and visibility through Mail.ru and others sound good.
- Ostohyvitys.fi is focused on domestic audience but they have at least a russian version as well. Let’s see what comes out of that.
- Scoopshot is in English on the web, but their mobile app is translated to e.g. Swedish and Russian. In Sweden they have strong(?) co-operation with Metro: Scoopshot.se.
- And of course, our Nimenhuuto has Mojakomanda.ru, Kadermanager.de, and Yaentrainement.fr.
Can you suggest additions to the list?
Online Business Requires Fast Page Load February 12, 2013Posted by Jussi Huotari in : business,web2 , add a comment
The most underrated feature affecting user experience is speed. Fast page load must be a priority, along with great concept design.
We’ve all heard the classic case: Amazon generated 1% more sales for every 100ms they shaved off the page load time (the original slide deck by Greg Linden). That was almost a decade ago, but users’ preference for speed has only increased. NY Times:
People will visit a Web site less often if it is slower than a close competitor by more than 250ms.
Walmart utilized Real User Monitoring (RUM) analysis to their site and found out that there’s a strong correlation with:
- High conversion rates and fast pages
- High bounce rate and slow pages
Their conclusion seems to verify the 100ms less = 1% more rule.
Making a site fast is not trivial. It’s a science in itself and requires a lot of effort. In addition to the technical challenges there’s the psychological side. Perceived speed is more important than actual speed.
Too often the 250ms is not considered important by concept designers and start-ups building web-based businesses. It should be top prio. Fast page loads mean business!
There are plenty of tools for figuring out how to improve your page speed. For example, this one by Google is very good (especially so because it shows that we’ve done the right things at Nimenhuuto.com): https://developers.google.com/speed/pagespeed/insights
Who’s the Best to Sell Your Online Ad Space in Finland? December 13, 2012Posted by Jussi Huotari in : business , add a comment
Many online publishers in Finland have asked me who’d be the best partner for selling their ad inventory. It’s a crucial question. The right media sales partner can multiply the value of your ad space, and help you in developing an offering that adds value to both the big brand advertisers and your audience.
Here’s a list of the most prominent independent players in Finland. N.B. the descriptions are my opinions, not the companies’ official statements.
Verkossa Media are the biggest with their ~50 publishers, including sites like Rantapallo, Afterdawn, and Kotikokki. In the past, Verkossa Media have done a great job in direct, site-specific campaign sales. They have changed in the past year or two, and it seems their focus is transferring from site-specific campaigns to their ad network. Usually this means more bulk, less tailoring (and thus less added value). On the other hand, for small sites it may be good to be part of a packet in order to appeal to advertisers. Verkossa Media’s revenue in the latest fiscal year was 7,5 MEUR.
White Rabbit have a history of representing “youth/street culture” publishers. They’ve been working with many pop, music and indie sites, and represented Spotify when it was all new and just started in Finland. Now White Rabbit’s media list includes sites like Findance, GrooveFM, Kuvake.net and Stardoll. White Rabbit is forward-looking and is among the forerunners in utilizing Rich Media formats. From my point of view seems that they’d benefit from having a more coherent set of bigger publishers. White Rabbit’s revenue in 2010 was 1,6 MEUR.
Klikkicom are an all-round digital marketing implementation house. A few years ago, around 2006, Klikkicom did media sales for many publishers and had a strong vertical in e.g. sports. Since then they’ve expanded to SEO and SEM, along with analytics and various social media promotion products. The expansion caused a shift in focus and their performance as a media sales partner suffered – at least for new sites. This may be changing, though: Klikkicom were VC-backed and was acquired by Edita this year. In 2011, Klikkicom’s revenue was 6,9 MEUR.
Saarsalo is a smaller, fresh player from Tampere with a background in printed media. Saarsalo’s largest accounts are Otavamedia’s brands (e.g. Suomen Kuvalehti, NettiX) and A-lehdet (including Apu and Urheilulehti). While it’s early to say much about their performance in online space, I’ve been told they’re on the right track. Saarsalo’s revenue in 2011 was 0,36 MEUR.
Diamonds and Pearls is the latest addition to the list. D&P were founded in August 2012 by Sami Kelkka, a long-time CEO of Verkossa Media. D&P say their strategy is to pick only a handful of publishers and work in close partnership with each. The target is to create branded publishers and media products that help both in expanding your audience and attracting advertisers. Interesting approach! D&P’s media list includes sites like Hellapoliisi and Iltapulu.
Selecting the best partner for your media is an important decision. Definition of the “best” of course depends on multiple factors that are different in each case, so take out your PEST and SWOT diagrams and see where the strategy ladder ends up. At Nimenhuuto.com we selected White Rabbit.
btw, the revenue numbers are not directly comparable. Some companies on the list report only their commission while others report the full value and then pay publisher’s share later, etc.
btw2, please feel free to post a comment if you think there’s someone worth mentioning missing from the list.
Startup Marketing: Lean or Fat July 11, 2012Posted by Jussi Huotari in : Uncategorized , add a comment
How to go to new markets with a startup product and minimal marketing budget? Here are a few notes based on what I found on the web.
What is your market type? Steve Blank writes well about market type as a part of his Customer Development Manifesto. Does your product enable people to do something they couldn’t do before? Or is your product a faster, better or cheaper way to do something people are already doing? Marketing tactics for one type of market fail in others.
Market type is a choice you need to make. I thought of it like this: mobile phones were an existing market in 2007 when Apple released iPhone. But instead of competing on who had the fastest processor, biggest memory and most megapixels they created a new, apps-focused market. It proved to be a good choice.
New market is the typical type for any online startup. But it’s a difficult market type. Matthew Mamet puts it well
Creating a category, placing your product in that category, generating demand where there is no existing demand . . . all while building a product that will (hopefully) satisfy the demand. All with the Investors, and Board, and competitors breathing down the back your necks. Not easy stuff.
What if you already have a product? That is, you already cover one market (one country) and want to expand to other country? This still happens. The Internet is not a single marketplace where you succeed by offering a product only in english and without localizations. Michael Moore-Jones points out that the Lean Startup methods may not be the right path to take:
The point is that if you’re not venture capital backed, you’d better be in lower right corner of the matrix. Otherwise you’ll miss the opportunity and the incumbents will win. Michael writes:
… a local Groupon clone that I saw here in Wellington began using lean startup methods, even though they were entering a new market with an existing product. They didn’t need to learn a thing about their market – they just needed to get to the market first. Nevertheless, they spent frugally and spent a lot of time testing aspects of the website. Missed opportunity and an epic failure – stupid.
@Hotmail #Fail #Mail May 6, 2012Posted by Jussi Huotari in : startup , add a comment
Number 1 tip on how to get your emails delivered to inbox: don’t allow the recipients to have Hotmail accounts!
I’m helping out a service that sends out quite a lot of emails. In this case the list size is +150k double opt-in subscribers. Since Feb 2012 we’ve been getting questions from Hotmail users wondering why they are not receiving our emails anymore. It turns out that Hotmail is silently dropping much more emails than any other big email provider.
Many times the easiest & quickest fix is to ask the recipient to add our sender in their addressbook and mark the sender as “trusted“. But in some cases even this didn’t work. We dug deeper and realized that these people – who are asking us about the undelivered emails – have accidentally marked us as junk mail sender. Ok, accidents happen. But what about these stats: 99% of all our spam reports come from Hotmail users. And guess what? The remaining 1% comes from Windows Live and MSN accounts.
While there are not that many spam reports, to me this seems like a serious usability problem in Hotmail. Hotmail users are not receiving the emails they want. In addition, our reputation as a sender takes a tiny hit every time someone claims our email as spam, accident or not. #Fail.
The irony is that Hotmail is boasting about their success in preventing spam. Seems like the fine folks at Hotmail have worked so hard to be the #1 in spam filtering that they are throwing away loads of valid emails. While journalists are excited, the users are not so happy.
Hotmail says: “Complaints related to spam, including phishing, junk and malware, have dropped by over 40% over the past year.” The flipside in our case is that the complaints related to undelivered email to Hotmail users have increased by over 400%.
Dear Hotmail, you may be preventing spam efficiently but looks like your users are not enjoying the ride anymore.
Should You Delete Your Google Web History February 27, 2012Posted by Jussi Huotari in : business , add a comment
On Feb 22nd, the Electronic Frontier Foundation announced that “EFF isn’t happy with Google’s plan to expand its use of the information it gleans about you”. Helsingin Sanomat (the biggest newspaper in Finland) picked the story today and strongly suggests that you erase your Google web history now.
I don’t see how this policy change affects the well-known fact that if you choose to use Google’s free products, you agree that Google gathers data about you and uses these data to further develop the products, to provide a better user experience, and – yes – to serve accurately targeted ads.
However, having so many Facebook friends point out this story made me curious.
First, I went to see my personal web history at https://www.google.com/history. The list of my past searches sure is extensive, totaling to 24k searches or, on average, 13 Google searches every day for the past 5+ years.
Second, I Googled (irony?) to find out more. The first link explained the issue
Ok, I can see why that’s an issue for some. Maybe it should be an issue for us all? I am quite happy with having Google point out the links that I’ve visited in the past and push the interesting (for me) links up on the search results page.
I’m not going to delete my search history. Are you and if yes, I’d love to hear why?
P.S. If you want to save your search history before erasing it, there’s a tool for that at Data Liberation Front (that’s a Google product, btw)
Wasting Time or Improving the User Experience? September 18, 2011Posted by Jussi Huotari in : business,startup,web2 , add a comment
I’ve become a fan of cohort analysis! Cohorts provide a great way to focus on product development and the effect our RnD is having on customers. Cohort analysis tells us if we’re making the product better or just adding clutter and obsolete features.
Often it would be the best to “simply” focus on the existing features and make them even better. And as often, in my experience, we tend to consider the existing features done and want to make new exciting stuff that the customers are bound to adore and enjoy.
Most product teams don’t know if they are making their product better or worse; that’s why customers feel a twinge of fear every time they have to update or upgrade. Despite this, those same companies may be having extremely fast growth because even though the product is getting worse, other things are going right: network effects are kicking in, the company is being lauded in the press, or they are surfing on a general wave of growth in their industry.
So instead measuring just the averages, we want to utilize cohort analysis. A “cohort” may be the set of people who signed up during a specific month. For example: Do the people who signed up this month convert to buyers at a higher rate than those who signed up last month? If the conversion rate remains the same, we just wasted a month of RnD effort!
How is this different from measuring the overall conversion rate?
The difference is that using cohorts, you will know which feature or addition got your audience’s attention. This is like utilizing A/B testing in product development. And you will be able to track customer life-cycle events. Ash Maurya writes about this in his post 3 Rules to Actionable Metrics in a Lean Startup. By checking the cohort analysis table you can see if the customer retention is going the right direction. Here’s an example table by Ash:
I can’t wait to find out our numbers. Lot’s of SQL:ing to do…
Right Timing for Email Marketing February 14, 2011Posted by Jussi Huotari in : business , 1 comment so far
You’d better send your marketing emails weekly on Saturday mornings. Then it will get the most clicks and least unsubscribes. That is what the statistics tell us.
MailChimp, the email-marketing service, scanned through 10 billion emails as part of their Email Genome Project. Their findings were surprising. Dan Zarrella of HubSpot put together an interesting webinar from the data (see his slides embedded below). In my opinion the main points – or as Dan would probably say: The super-duper-DUPER-important key takeaways are:
- Click-through rates spike on weekend. Marketing emails will get more share of mind when people have less work to attend to. Or is it just because very few companies send their messages on weekends, and those who do will get noticed?
- The unsubscribe rates are highest on Mon and Tue. Don’t send your messages in the beginning of the week! It is the busiest time of week for so many people.
- The actual time of day is not that important. But sending email early morning (around 7am) is slightly better than other times.
- If you want people to click a link on your email, you’d better have a LOTS of links. More links equals higher overall click through rate. Dan’s rationale is that the more links there are, the more ways you have to convince the reader. All of the links may of course point to the same url.
- High frequency is not a bad thing. The unsubscribe rate is at highest if you send email only once or twice a month. Sending daily is no worse than sending weekly (in terms of unsubscribe rate). Thus high frequency outweighs any decline in click rates.
A Groupon Deal Analysis January 18, 2011Posted by Jussi Huotari in : business,startup,travel , 1 comment so far
Stephen Joyce wrote a great post on how Groupon advertising works. He offers insight into Groupon’s impact on sales and profitability from a local small business’s perspective. The bottom line is: you’re gonna lose!
Groupon is the 2-year-old group buying service that has received a great amount of attention (and a billion $ in venture capital) because of its huge growth. Groupon partners with local businesses, agrees on a heavy discount on the local business’s service, and sends a daily coupon by email to the local members.
It is geographically targeted risk-free advertising: the local business pays only if a certain amount of the discount coupons are bought, i.e. there are interested customers. There’s no upfront cost.
The customer pays Groupon for the coupon and Groupon splits the revenue with the local business. Let’s say there’s a 50% discount: a €100 product would be sold for €50 of which the local business gets half, i.e. €25. Now, a 75% discount sounds like a no-go even with healthy profit margins, don’t you think?
Groupon has inspired hundreds of clones. In Finland the most prominent is CityDeal that is currently running an overwhelming advertising campaign on Adsense and other ad networks. Today, for example, CityDeal.fi is offering a Spa treatment in Helsinki at a 53% discount. Groupon bought CityDeal last May and will rebrand it and maybe then we’ll have Groupon.fi…
Another interesting clone in these parts of the world is the Estonian Cherry.ee. They made a deal with Estonian Air to sell travel vouchers at a 40% discount last December. Their coupons were sold at such a pace that Estonian Air had to stop the deal! The travel voucher’s face value was 1000EEK and they sold 6500 of them at 600EEK. If Estonian Air gets 50% of the proceeds, that adds up to 50% x 600EEK x 6500 = 1.950.000EEK, i.e. 4.550.000EEK less revenue than at the retail price. Four and a half a million EEK is about €290.000… Quite a marketing stunt for a small airline.
99,9% of Display Ads Are Not Clicked January 1, 2011Posted by Jussi Huotari in : business,web2 , 1 comment so far
Are the websites relying on display ads doomed to fail? Only 0,1% of banners get clicks. Most people downright ignore banners altogether. Compare this with search-related ads’ 35x higher click rate and it becomes obvious why so many online media are resorting to gigantic panorama banners and other desperate measures in order to increase their click rates.
BUT: Measuring the click rate is wrong!
comScore’s Gian Fulgoni wrote an interesting post on display ad’s efficiency. He refers to comScore’s research that followed the purchase process all the way to the actual offline in-store buying. The most interesting points are:
- There was 16% lift in sales among people who were exposed to display ads only. Even if the click rate was only 0,1%. Display ads support search ads very well.
- There are only a limited number of people searching for a product. Display ads reach much wider audience. Thus the total dollar sales gained from display ads may be much larger than from search ads. According to comScore: the sales volume lift index for search ads is 100 and for display ads 198. Interesting and totally unexpected.
Another comScore research done in Europe reveals that Internet users exposed to a banner campaign are 94% more likely to conduct a trademark search on the advertiser’s brand.
comScore’s numbers sound reliable. Display ads seem to be much more efficient than I thought. Combine this with personalization and targeting (as in TripSay) and you’ll get a money-making machine like TripAdvisor.