We were one of the first to allow for Purchasing Products on Instagram… had $200k investment from early Facebook employees and had brands like Lilly Pulitzer, Kate Spade, Sephora, Lorna Jane, Tieks, Jack Rogers, Lululemon, Tobi, Alex & Chloe, BaubleBar, ThreadSence, and Ruche…so what happened?
When brands with millions of followers tell their customer base to “go shop the link on the profile page” it creates a new marketing funnel by consolidating the awareness, the consideration, and the conversion, which in turn dramatically increases conversion rates. Shopsy was a double-sided marketplace where brands could tag their Instagram pictures to link up to the exact web page for a product and then customers could follow and shop each brand. After a year of hard fought product and business development, we finally found our beachhead and it had network effects built-in by creating what can be likened to an “Instagram Landing Page” that mirrored a brands exact Instagram post, where each picture directly linked to the individual product through the one hyperlink that Instagram allowed.
I didn’t want to publish this or think about this in depth again so much that I began writing this post before October 16, 2016, and ended up coming around to editing and sitting with my initial write up finally again towards the middle of 2017.
It began without full transparency and a lack of understanding about how to operate at an early stage, high growth potential company. We lacked a focus since everyone was working other full-time jobs. We were energized and idealistic. Starting off one of the biggest mistakes was outsourcing the development which ended up to causing a lot of issues down the road. Our leadership was constantly in a push-pull tension with too many of the same traits that weren’t complimentary. We needed guidance and humility and perhaps another programmer. We would have benefited from being in an incubator so that we could work together and focus. Building two-sided marketplaces takes serious strategic thinking. I believe there were at least two main factors that contributed to our downfall:
- Resources. Apparently, according to our Crunchbase profile, we had $200,000 investment from early Facebook employees. We did not leverage it properly. I did not even know that it was funding that could be utilized for the growth of the company and if we were to have done a proper PR push things might have been completely different. Having a clear budget where the founders fully understand the financial roadmap and what it takes to reach certain milestones is critical.
- Planning. If we were to have outlined and answered certain questions like; what are we doing, why are we doing it, what’s the funding going to be used for, what are our assumptions, and how are we going to validate them we would have been able to move with a common purpose instead of wasting valuable time having these topics weave into other discussions.
Ups and Downs
Shopsy went through many ups and downs, after merging with Glowpanda to bring some energy into “shoppable pictures” which it did because of the hustle from our marketing manager and community manager in bringing some leading fashion brands on board. The initial months of development and outreach seemed to be going well until the head of social headed out of town to pursue other interests and then a month later the marketing momentum faded away as the complex two-sided value proposition became difficult to communicate with initial funds dwindling. We were passionate and young. The team admittedly “checked out” after ApplePay rolled out, as a lot of energy was spent on adding the universal cart functionality, a feature that merchants still struggle to wrap their heads around as the fight to own the conversions still wages on (particularly on mobile).
The initial product was built by outside developers to get a working product, so our technical co-founder wasn’t able to easily make updates because of the multiple databases, and various pagination, so the learning here is that if you have a technical product it is better to have someone do the development in-house instead of using bits and pieces from outsourced developers who may not necessarily be tied to the end product.