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Demand Curve: Email marketing tactics that convert subscribers into customers

Published June 28, 2021
Stewart Hillhouse
Contributor

Stewart Hillhouse writes actionable growth marketing insights as senior content lead at Demand Curve. By night, he interviews marketers and creatives on his podcast, Top Of Mind. Before getting into marketing, Stewart was a semi-professional lumberjack. He also writes at stewarthillhouse.com.

Email has the highest return on investment of any other marketing channel. On average, email earns you $40 for every $1 spent. And the best part is that email is an owned channel, which means you can reach your subscriber directly instead of relying on social media algorithms to surface your content.

At Demand Curve, we’ve worked with over 500 startups, meticulously documenting growth tactics for all growth channels. We also incorporate what we’ve learned from our agency, Bell Curve, which works with Outschool, Imperfect Produce and Microsoft to name a few.

To understand how to use email marketing effectively, we interviewed email marketers at this year’s fastest-growing startups. This post covers the most profitable tactics they use that capture 80% of the value using 20% of the effort.

If people don’t open it, nothing else matters

The subject line of your email is the most important, yet most marketers neglect it until after crafting the body of the email.

The subject line of your email is the most important, yet most marketers neglect it until after crafting the body of the email.

Increase the open-rate of your subject lines by making them self-evident. You don’t want people guessing why you want them to pay attention to your email. If the subject line is unclear or vague, your subscribers will ignore it.

One trick is to write like you speak. Try using subject lines that use informal language and contractions (it’s, they’re, you’ll). Not only will this save character count, it will also make your copy more friendly and quick to read.

Subject lines should be relevant to your subaudiences. Marketers generate 760% more revenue from segmented email campaigns than from untargeted emails.

A good subject line will increase the chances of your email being read

A good subject line will increase the chances of your email being read. Image Credits: Demand Curve

If you’re collecting emails from multiple areas on your website, chances are the context will be slightly different for each. For example, people who subscribe after reading an article on ketogenic diets should receive emails that further educate them on keto and seeds products relevant to that lifestyle. Sending them information and product recommendations for vegetarians would not be relevant and could lead to them unsubscribing.

To ensure you’re sending relevant emails to the right audiences, segment your audience using tags and filters within your email marketing platform. Each platform will do this slightly differently, but all modern platforms should allow you to do this. When crafting your email subject line, ask yourself: “Would this email make sense to receive for this segment of subscriber?”

Your subject lines should be short and concise. About 46% of all emails are opened on mobile devices, which means the subject line must be short enough to fit on a smaller screen while getting your point across. Fifty characters is approximately the maximum length a subject line can be before it gets cut off on a mobile screen.

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Provide a recommendation in this quick survey and we’ll share the results with everybody.

Keeping your subject lines short also makes them easier to scan when your subscriber is looking through their inbox. Including emojis in your subject line can cut down your character count and emulates how friends send text messages to each other. Including emojis in your subject lines will make your email feel less corporate and more friendly.

The Klaviyo EC-1

Designing emails that get read

Once your subscriber opens your email, there are three outcomes that can follow: read, skim or bounce.

Subscribers that read your emails are the most valuable, because they will consume the full contents of your email. Skimmers will only read the headlines and look at the images you include. Subscribers who bounce will open your email, but if nothing catches their attention right away, they will simply delete or close your email.

You’re going to want to design your emails to minimize the number of bouncers, satisfy readers and provide enough high-level information that skimmers still understand your message.

To minimize the number of bounces, choose an email design that catches the eye and is relevant to your brand. Take the Casper email below for example. The starry night background and moon illustration is directly relevant to the mattresses they sell. Visually branded email designs will help elevate your brand perception.

Design your emails to appeal to all kinds of readers

Design your emails to appeal to all kinds of readers. Image Credits: Demand Curve

To optimize for skimmers, write action-focused headlines. Use designs that draw the eye of your reader to key elements. As you can see in the Headspace example, the image of the rising sun pushes your gaze upward to the headline and the call-to-action button. Skimmers should be able to understand the context of the entire email and take action without needing to read the body.

To convert more readers, fulfill the expectation set by the subject line. Readers will be looking for any promises or hints you gave them in your subject line. Be sure to deliver on this promise in the body. Do so in an aggressively concise way — just because they’re reading doesn’t mean they don’t value their time.

Call to actions that convert

The goal of your body copy is to drive people to your call-to-action button (CTA). Your CTA is crucial, because it’s how you convert an email subscriber into a paying customer. To increase the conversion of your CTA, make a valuable promise in your body copy and headers that’s only delivered through your CTA.

Good CTA copy typically begins with a verb that teases what the reader will encounter next:

  • Get your free sample.
  • Redeem discount now.
  • Browse the full inventory.

Low-converting CTA copy is vague or nonactive:

  • Learn more.
  • See inventory.
  • Download.

Your email should only have one CTA. Any more and your conversion will decrease due to unnecessary decision-making. Ensure that the page on your site that your CTA leads to fulfills the promise you made in your body and CTA button.

Recap

Once the focus of the subject line is clear and the desired outcome is chosen, everything else should be crafted to carry the reader step by step through the email, eventually taking them to the desired action.

It’s a good idea to work backward from the desired outcome you want the reader to perform. If the desired outcome is for them to click on a CTA button, frame your subject line, headers and body copy as a valuable promise that can only be achieved by clicking the button.

Consider the experience of your email through the eyes of all three types of subscribers: readers, skimmers and bouncers. Use visual and written prompts that make the purpose of your email clear to all three categories. Failing to do so could lead to unsubscribes and lost revenue.

Email has the highest return on investment than any other marketing channel because you have a captive audience who has opted-in to you communicating with them. Email can drive six times more conversions that a Twitter post and is 40 times more likely to get noticed than a Facebook post.

Help TechCrunch find the best email marketers for startups

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A startup’s guide to software delivery

Published June 28, 2021
Rob Zuber
Contributor

Rob Zuber, CTO of CircleCI, is a 20-year veteran of software startups, a three-time founder and a five-time CTO.

One of the biggest factors in the success of a startup is its ability to quickly and confidently deliver software. As more consumers interact with businesses through a digital interface and more products embrace those interfaces as the opportunity to differentiate, speed and agility are paramount. It’s what makes or breaks a company.

As your startup grows, it’s important that your software delivery strategy evolves with you. Your software processes and tool choices will naturally change as you scale, but optimizing too early or letting them grow without a clear vision of where you’re going can cost you precious time and agility. I’ve seen how the right choices can pay huge dividends — and how the wrong choices can lead to time-consuming problems that could have been avoided.

The key to success is consistency. Create a standard, then apply it to all delivery pipelines.

As we know from Conway’s law, your software architecture and your organizational structure are deeply linked. It turns out that how you deliver is greatly impacted by both organizational structure and architecture. This is true at every stage of a startup but even more important in relation to how startups go through rapid growth. Software delivery on a team of two people is vastly different from software delivery on a team of 200.

Decisions you make at key growth inflection points can set you up for either turbocharged growth or mounting roadblocks.

Founding stage: Keep it simple

The founding phase is the exciting exploratory phase. You have an idea and a few engineers.

The key during this phase is to keep the architecture and tooling as simple and flexible as possible. Building a company is all about execution, so get the tools you need to execute consistently and put the rest on hold.

One place you can invest without overdoing it is in continuous integration and continuous deployment (CI/CD). CI/CD enables developer teams to get feedback fast, learn from it, and deliver code changes quickly and reliably. While you’re trying to find product-market fit, learning fast is the name of the game. When systems start to become more complex, you’ll have the practices and tooling in place to handle them easily. By not having the ability to learn and adapt quickly, you give your competitors a massive edge.

One other place where early, simple investments really pay off is in operability. You want the simplest possible codebase: probably a monolith and a basic deploy. But if you don’t have some basic tools for observability, each user issue is going to take orders of magnitude longer than necessary to track down. That’s time you could be using to advance your feature set.

Your implementation here may be some placeholders with simple approaches. But those placeholders will force you to design effectively so that you can enhance later without massive rewrites.

Very early stage: Maintain efficiency and productivity

At 10 to 20 engineers, you likely don’t have a person dedicated to developer efficiency or tooling. Company priorities are still shifting, and although it may feel cumbersome for your team to be working as a single team, keep at it. Look for more fluid ways of creating independent workstreams without concrete team definitions or deep specialization. Your team will benefit from having everyone responsible for creating tools, processes and code rather than relying on a single person. In the long run, it will help foster efficiency and productivity.

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The pandemic showed why product and brand design need to sit together

Published June 28, 2021

Young startups need to be great at design, not just for their products, but for their brands. The pandemic made that all harder — but lessons are being learned. We caught up with Scott Tong, a startup design expert who advises early-stage companies, to learn more.

The office may still be the best place to hash out big multiteam decisions, he says, but new best practices and modern tools are making remote collaboration easier and easier.

Brand design seems to only be getting trickier, however. “To users,” he explains, “brand and product are lumped together and they each represent the other.”

Today, many users have spent lots of time at home online, often thinking harder about world events and how they are living their lives. They’re scrutinizing what they can observe about a startup to see if its values line up with theirs before they make a decision to sign up (or quit).

The solution, in Tong’s view, is to create a unifying plan where design decisions can address problems before they emerge.

More details are in the interview below. For a full conversation, check out Tong’s talk about design strategy coming up at our TC Early Stage 2021 – Marketing & Fundraising conference on July 8.

The pandemic affected us all. How has it affected user-focused brand design?

The pandemic drove people to consume even more media than before. News about science, politics, race and the economy were unavoidable. Brands have had to navigate a very complex landscape of topics that can be divisive. People increasingly identify with brands that are aligned with their values. But in order to understand a brand’s values, someone has to sift through competing signals — some from the brand itself, and others from vocal supporters and critics. Say the wrong thing and a brand can risk alienating large portions of their audience (including their own employees). If a brand says nothing, their silence can be interpreted as complicity. And if brand messaging comes across as unauthentic, it could spell disaster. It’s a difficult needle to thread. It’s not uncommon for companies to run surveys to gather signals about how their brand is perceived by customers and noncustomers alike.

What new things about users should startups consider when working on designing their identities? What are you advising startups now about designing their brands, versus what you said circa December 2020?

Identities are only one part of a much larger constellation of touch points that make up a user’s perception of a brand. User expectations are extremely high and will continue to rise. Even with their free products, users have gotten accustomed to highly polished experiences. While “high quality” is table stakes for users, the challenge for a company is to pinpoint the handful of dimensions that matter most. That’s why constantly seeking to understand users is so important. Deeply understanding what they care about will help isolate those critical dimensions so teams can focus on areas that will drive the most meaningful impact.

Founders, help TechCrunch find the best growth marketers for startups.

Provide a recommendation in this quick survey and we’ll share the results with everybody.

What do startups continue to get wrong?

One recurring observation is that brand teams and product teams often sit in different parts of a company’s org structure. While there are reasons for this, it’s important to remember that users don’t care about your org structure. To users, brand and product are lumped together and they each represent the other.

Internally, how are companies handling internal challenges like collaborative designing in a more remote world? In-person communication has been vital historically to get all parts of a company thinking in the same way. What is helping those who have gone remote-first succeed (tools, approaches to meeting and documentation, etc.)?

Collaboration tools have never been more abundant. But while tools are plenty, norms around their usage can vary significantly from group to group, even within the same company. Where can I find the project brief? How many back-to-back meetings is too many? How are brainstorms run in a virtual environment? When do I use Slack versus email? Establishing those norms requires conversation and experimentation.

Along with norms around tools, it’s helpful to establish a cadence/rhythm that allows team members to get and stay in sync. Depending on the team, that cadence may be daily, weekly, biweekly, monthly or quarterly, etc., but find the appropriate cadence for each audience.

Alternatively, do you think the demands of good design work will motivate more early-stage startups back into in-person office work?

There are varying opinions on whether being in-person spurs innovation or productivity. The pandemic has forced us all to adapt, and design is no exception. It’s been encouraging to see good design happen in remote work environments, and a lot of that has been enabled by tools and the norms around their usage. While I personally would prefer being in-person, especially at the early stages of company building, I think it’s entirely possible to establish a high-functioning team in a remote environment. Of course there are cases — like hardware or soft goods — where tactile feedback is important and hard to replicate remotely. But even then I’ve seen some successful workarounds (for example, sending the same material sample to every team member). Given that this is all still very new, there will inevitably be hiccups along the way. But a team of willing participants with the right mix of tools and norms can make it work.

Overall, with more teams remote and distributed, it may be even more natural than before to work with a third-party brand design expert. When do you advise startups to bring in an outside consultant today, and how should they work with them?

This depends largely on how design is valued within an organization — as a service or as a partner.

If design is viewed as a partner, then the relationship is ongoing and iterative. This means design is a function that builds, measures and learns alongside their product and engineering counterparts and the benefits of institutional knowledge compound over time.

If design is viewed as a service, third parties make sense, because in a service relationship there is usually a defined beginning and end to an engagement. Clear scope, timeline and deliverables will set this kind of service relationship up for success.

5 companies doing growth marketing right

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Facebook to target Nigerian learners with educational app Sabee, created by its R&D team

Published June 28, 2021

Last fall, Facebook announced it was opening an office in Lagos, Nigeria, which would provide the company with a hub in the region and the first office on the continent staffed with a team of engineers. We’ve now spotted one of the first products to emerge from this office: an education-focused mobile app called Sabee, which means “to know” in Nigerian Pidgin. The app aims to connect learners and educators in online communities to make educational opportunities more accessible.

The app was briefly published to Google Play by “NPE Team,” the internal R&D group at Facebook, which has typically focused on new social experiences in areas like dating, audio, music, video, messaging and more.

While the learnings from the NPE Team’s apps sometimes inform broader Facebook efforts, the group hasn’t yet produced an app that has graduated to become a standalone Facebook product. Many of its earlier apps have also shut down, including (somewhat sadly), the online zine creator Eg.g, video app Hobbi, calling app CatchUp, friend-finder Bump, podcast community app Venue, and several others.

Sabee, however, represents a new direction for the NPE Team, as it’s not about building yet another social experiment.

Instead, Sabee is tied to Facebook’s larger strategy of focusing more on serving the African continent, starting with Nigeria. This is a strategic move, informed by data that indicates a larger majority of the world’s population will be in urban centers by 2030, and much of that will be on the African continent and throughout the Middle East. By 2100, Africa’s population is expected to have tripled, with Nigeria becoming the second-most populated country in the world, behind China.

Image Credits: Facebook NPE Team

To address the need to connect these regions to the internet, Facebook teamed with telcos on 2Africa, a subsea cable project that aims to serve the over 1 billion people still offline in Africa and the Middle East. These aren’t altruistic investments, of course — Facebook knows its future growth will come from these demographics.

Facebook confirmed its plans for Sabee to TechCrunch after we discovered it, noting it was still a small test for the time being.

“There are 50 million learners, but only 2 million educators in Nigeria,” said Facebook Product Lead, Emeka Okafor. “With this small, early test, we’re hoping to understand how we can help educators build communities that make education available to everyone. We look forward to learning with our early testers, and deciding what to do from there.”

Image Credits: Facebook NPE Team

The disparity between learners and educators in Nigeria greatly impacts women and girls, which is another key focus for Sabee — and the NPE Team’s efforts in the region as a whole. The company also wants to explore how to better serve groups who are often left behind by technology. On this front, Sabee is working to create an experience that works with low connectivity, like 2G.

We understand the app is currently in early alpha testing with fewer than 100 testers who are under NDA agreements with Facebook. It’s not available for anyone else beyond that group at present, but the company hopes to scale Sabee to the next stage before the end of the year.

There is no way to sign up for a Sabee waitlist, and the app is no longer public on Google Play. It was available so briefly that it was never ranked on any charts, app store intelligence firm Sensor Tower confirmed to us.

We should note that “sabee” and “sabi/sabis” have other, less-polite meanings in different languages, per Urban Dictionary. But the team has no plans to change the name for now as it makes sense in the Nigerian market where the app is targeted.

 

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Samsung and Google preview wearable platform ahead of next Galaxy Watch launch

Published June 28, 2021

Samsung’s Mobile World Congress presser was, once again, all about wearables. The big news at this evening’s (or afternoon’s, timezone dependent) event was our best look yet at a redesigned interface for the company’s line of Galaxy Watches.

One UI Watch – which takes its name from the Galaxy mobile interface — will share a design language with the one found on the company’s line of Galaxy phones. The upcoming One UI Watch will debut at an upcoming Unpacked event later this summer, sporting the new UI, as well as the forthcoming joint Samsung/Google platform.

Image Credits: Samsung/Google

It was first teased at I/O last month that the two technology powerhouses would be teaming up on a wearables project. We still have little in the way of information about it, however, – including what it will actually be called.

The partnership was initially announced as a “unified platform” that would allow developers to create a single app for both Google’s Wear OS and Tizen, the open-source operating system Samsung has long relied on for its own smartwatches. As we noted at the time, third-party app development has proven a considerable hurdle for both companies as they look to take on Apple’s dominance of the space.

Among the benefits of the partnerships is that once a watch-compatible app has been downloaded on a connected smartphone, it will also be downloaded to the watch. Along with first-party Google apps like Maps and YouTube Music, the list includes Spotify (naturally), Calm, Strava, Adidas Running and Sleep Cycle.

Image Credits: Samsung/Google

“Samsung and Google have a long history of collaboration, and whenever we’ve worked together, the experience for our consumers has been dramatically better for everyone,” Google SVP Sameer Samat said in a release tied to the news. “That certainly holds true for this new, unified platform, which will be rolling out for the first time on Samsung’s new Galaxy Watch. In collaboration with Samsung, we’re thrilled to bring longer battery life, faster performance, and a wide range of apps, including many from Google to a whole new wearable experience.”

Such a partnership seems odd at first blush – Samsung long ago eschewed Google’s wearable operating system in favor of its own heavily customized version of Tizen. Ultimately, however, it seems the two are united against the monolith that is Apple – which currently enjoys somewhere in the neighborhood of 40% of the global market. Samsung is in second, but even with Fitbit under its wing, Google’s still got a ways to go.

Samsung will also be showing off improved development tools that make it easier to create things like watch faces for the platform.

Read more about Mobile World Congress 2021 on TechCrunch

 

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VCs discuss the opportunities — and challenges — in Pittsburgh’s startup ecosystem

Published June 28, 2021

Ahead of our TechCrunch City Spotlight: Pittsburgh event tomorrow, I spoke to current Mayor Bill Peduto and Dave Mawhinney, the executive director of Carnegie Mellon University’s Swartz Center for Entrepreneurship. Like many in the Steel City startup community, both share a focus on the historically difficult task of keeping startups in town.

For more on investing in Pittsburgh, be sure to tune in to our City Spotlight on Tuesday, June 29, where we will be joined by Peduto, Duolingo director of engineering Karin Tsai and Carnegie Mellon University President Farnam Jahanian. Register for the free event here.

I asked Peduto and Mawhinney what the single biggest obstacle has been in building out Pittsburgh’s startup ecosystem. Both responded the same way: venture capital. Raising funding is, of course, a hurdle regardless of location, but many VCs have been reluctant to invest in startups outside of traditional hubs like San Francisco and New York.

Pittsburgh-area readers: Save 25% on a 1- or 2- year Extra Crunch membership.
Enter discount code ALLEGHENY, expires 7/31/2020.

“But one of the challenges is getting that capital to come into the community,” said Mawhinney, who leads CMU’s startup efforts. “If you look at how much Uber ATG brought in, how much Argo AI and Aurora — collectively, those three companies, which have all licensed CMU technologies, they’ve all got over $7 billion in collective capital. Not all of it will be spent here, but a lot of it will be spent here. But that doesn’t necessarily trickle down to the next AI startup raising their first $3 million.”

Pittsburgh skyline

Image Credits: Eilis Garvey/Unsplash

Peduto said growing the VC pipeline has been a focus during his time as mayor.

“I think we’ve been able to convince investors from the coast that the companies don’t need to leave Pittsburgh in order to be highly successful and see their investment pay off,” he told TechCrunch. “However, I believe if we had more venture capital arriving here to help take early-stage companies into that critical next stage of expansion, it would build off itself and it would excel growth in all of the industry cluster, significantly.”

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Real estate tech startup Side raises $50M more at a $2.5B valuation as it preps for an IPO

Published June 28, 2021

Side, a real estate technology company that works to turn agents and independent brokerages into boutique brands and businesses, has raised “$50 million-plus” in a funding round that more than doubles its valuation to $2.5 billion.

The latest financing comes just three months after the San Francisco-based startup raised $150 million in a Series D funding round led by Coatue Management at a $1 billion valuation. Tiger Global Management led the latest investment, which also included participation from ICONIQ Capital and D1 Capital Partners. With the latest capital infusion, Side’s total raised since its 2017 inception now totals over $250 million. Matrix Partners, Sapphire Ventures, Trinity Ventures and 8VC led its earlier rounds.

Side says that it is now “backed by the three top technology initial public offering (IPO) underwriters” and that the latest funding “sets the stage for a future IPO.”

The startup pulled in between “$30 million and $50 million in revenue” in 2020 (a wide range, we know), and expects to double revenue this year. In 2019, Side represented over $5 billion in annual home sales across all of its partners. Today, the company’s community of agent partners represents over $15 billion in annual production volume. And it’s predicting that by the end of 2021, it will have closed over $20 billion in home sales, positioning the company “as a top 10 national brokerage by volume.”

Today, Side supports more than 1,800 partner agents across California, Texas and Florida. It says it’s seen a 200% year-over-year increase in agent-represented home sales across its three operating markets of California, Texas and Florida. The company plans to enter 15 new states by year’s end.

Guy Gal, Edward Wu and Hilary Saunders founded Side on the premise that most real estate agents are “underserved and under-appreciated” by traditional brokerage models.

CEO Gal said existing brokerages are designed to support “average” agents and, as such, the top-producing agents end up having to do “all of the heavy lifting.”

Side’s white label model works with agents and teams by exclusively marketing their boutique brand, while also providing the required technology and support needed on the back end. The goal is to help partner agents “predictably grow” their businesses and improve their productivity.

“The way to think about Side is the way you think about what Shopify does for e-commerce […] When partnering with Side, top-producing agents, teams and independent brokerages, for the first time in history, gain full ownership of their own brand and business without having to operate a brokerage,” Gal told me at the time of the company’s last raise. “When you spend years solving the problems of this very specific community of agents, you are able to use software to drive enormous efficiency for them in a way that has never been done before.”

Existing brokerages, he argues, actively discourage agents from becoming top producers and teams, because agents who serve fewer clients can be forced into paying much higher commission fees on every transaction, which means the incentives between brokerages and top agents and teams are misaligned.

“Top producers want to grow and differentiate, and brokerages want them to do less business at higher fees and be one more of the same under the same brand,” Gal said. “Side, rather than discouraging and competing with top-producing agents and teams, enables them to grow and scale their own business and brand.”

This is a good time to start a proptech company

This story was updated post-publication with an updated valuation figure.

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Foursquare founder Dennis Crowley steps back from the company

Published June 28, 2021

Foursquare co-founder Dennis Crowley has announced that he is stepping back from his full-time role at the company. During the first seven years of the company, he was the startup’s Chief Executive Officer. In 2016, Crowley moved to an executive chairman position. He’s also been running the Foursquare Labs R&D group since then.

Going forward, Crowley won’t be working full-time at the company. He’ll remain on the board of directors as co-chair with Factual founder Gil Elbaz.

Foursquare merges with Factual

In 2009, Foursquare was better known for its location-based social network. People would check in to locations to share what they’ve been up to with their friends. Users would earn badges and mayorships.

Over the years, the most active users had amassed thousands of checkins. Foursquare became a great app to keep track of places you like. You could also use it to discover your friends’ favorite places.

That’s why the company decided to split its main app into two separate apps — the Foursquare City Guide and Swarm. At the same time, the company started working on developer APIs and SDKs so that other companies could take advantage of Foursquare’s location data.

That business in particular has been quite lucrative. With the company’s Pilgrim SDK, developers can build location-aware apps. For instance, an advertiser can send a personalized notification based on where you are. Foursquare tries to be as accurate as possible and can sometimes even figure out when you enter or exit a venue.

That SDK enables many different possibilities. It’s easy to track the impact of an advertising campaign on online sales, but what about offline interest?

Foursquare’s SDK can help advertisers and brands see whether an advertising campaign has an impact on foot traffic. Of course, you can also combine that data with other customer data.

The company has become an important advertising and marketing platform focused on location. Overall, the company has generated more than $100 million in revenue in 2020. And it plans to grow in 2021 and beat that number.

Crowley mentions two reasons why he’s leaving now. According to him, the company is doing well, and he’s been working on the same thing for 12 years already.

“Foursquare hasn’t just found its way … it leads the way. I used to say that my goal was to make the name ‘Foursquare’ synonymous with ‘innovation in contextual aware computing’ … And, here in 2021, we’ve built the tools and frameworks that can make that so,” Crowley writes in a blog post.

“Also, 12 years is a lot of time. I have lots of things I still want to build — many of which don’t fit neatly into the Foursquare of 2021 (and, hey fellow founder, it’s fine to feel this way!),” he adds. He’s also going to spend some well-deserved time with his family.

Crowley has been an iconic startup founder during the Web 2.0 era. He managed to attract tens of millions of users. It’s clear that he’s been a great product CEO during the early years of the company. And now, the company is also generating revenue. So it’s going to be interesting to see what he builds next.

Foursquare Gets $45M And A New CEO To Build Out Enterprise Business

 

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Tapcart, a ‘Shopify for mobile apps,’ raises a $50 million Series B

Published June 28, 2021

Shopify changed the e-commerce landscape by making it easier for merchants to set up their websites both quickly and affordably. A startup called Tapcart is now doing the same for mobile commerce.

The company, which has referred to itself as the “Shopify for mobile apps,” today powers the shopping apps for top brands, including Fashion Nova, Pier One Imports, The Hundreds, Patta, Culture Kings, and thousands more. Following a year of 3x revenue growth, in part driven by the pandemic, Tapcart is today announcing the close of a $50 million round of Series B funding, led by Left Lane Capital. Having clearly taken notice of Tapcart’s traction with its own merchant base, Shopify is among the round’s participants.

Other investors in the round include SignalFire, Greycroft, Act One Ventures and Amplify LA.

Tapcart’s co-founders, Sina Mobasser and Eric Netsch, have worked in the mobile app industry for years. Mobasser’s previous company, TestMax, offered one of the first test prep courses on iOS, while Netsch had more recently worked on the agency side to create mobile and digital experiences for brands. Together, the two realized the potential in helping online merchants bring their businesses to mobile, as easily as they were able to go online with Shopify.

Tapcart’s founders Sina Mobasser and Eric Netsch at their Santa Monica HQ. Image Credits: Tapcart

“Now, you can launch an app on our platform in a matter of weeks, where historically it would take up to a year if you wanted to custom build an app,” explains Mobasser. “And you can do it for a low monthly fee.”

Tapcart’s platform itself offers a simple drag-and-drop builder that allows anyone to create a mobile app for their existing Shopify store using tools to design their layout, customize the product detail pages, integrate checkout options, include product reviews, and even optionally add other branded content, like blogs, lookbooks, videos (including live video) and more. Everything is synced directly from Shopify to the app in real-time, so the merchant’s inventory, products and collections are all kept up-to-date. That’s a big differentiator from some rivals, which require duplicate sets of data and data transformation.

Tapcart, meanwhile, leverages all of Shopify’s APIs and SDKs to create a native application that works with Shopify’s existing data structures.

Image Credits: Tapcart

This tight integration with Shopify helps Tapcart because it doesn’t have to focus on the e-commerce infrastructure, as the way things are structured around inventory and collections are roughly 90% the same across brands. Instead, Tapcart focuses on the 10% that makes brands stand out from one another, which includes things like branding, content and design. Its CMS allows merchants to create exclusive content, change the colors and fonts, add videos and more to make the app look and feel fully customized.

Beyond the mobile app creation aspect to its business, Tapcart also helps merchants automate their marketing. Through the Tapcart platform, merchants can communicate with their customers in real-time using push notifications that can alert them to new sales, to encourage them to return to abandoned carts, or any other promotions. The marketing campaigns can be automated, as well, which helps merchants schedule their upcoming launches and product drops ahead of time. The company claims these push notifications deliver click-through rates that are 72% higher than a traditional email or SMS text because of their interactivity and branding.

Image Credits: Tapcart

The platform has quickly found traction with SMB to mid-market enterprise customers who have reached the stage of their business where it makes sense for them to double down on customer retention and conversion and optimize their mobile workflow.

“Our sweet spot is when you have maybe a couple hundred customers in your database,” notes Netsch. “That’s a perfect time to now focus less on the paid acquisition portion of your business and more on how to retain and engage those existing customers, [so they’ll] shop more and have a better experience,” he says.

Where is the e-commerce app ecosystem headed in 2021?

During the past 12 months, over $1.2 billion in merchant sales have flowed through Tapcart’s platform. And in 2020, Tapcart’s recurring revenue increased by 3x, as mobile apps grew even faster during the pandemic, which had increased consumer mobile screen time by 20% year-over-year from 2019. Mobile commerce spending also grew 55% year-over-year, topping $53 billion globally during the holiday shopping season, the company says. Tapcart’s own merchants saw mobile app orders at a rate of more than once-per-second during this time, and it believes these trends will continue even as the pandemic comes to an end.

Today, Tapcart generates revenue by charging a flat SaaS (software-as-a-service) fee, which differentiates it from a number of competitors who charge a percent of the merchant’s total sales.

Image Credits: Tapcart

With the additional funding, Tapcart plans to focus on its goal of becoming a vertically integrated mobile commerce suite of tools, which more recently includes support for iOS App Clips. It will also soon release an upgraded version of its insights analytics platform and will offer scripts that merchants can install on their mobile websites to compare what works on the site versus what works in the app.

Later this year, Tapcart plans to launch a full marketing automation product that will allow brands to automate and personalize their notifications even further. And it plans to invest in market expansions to make its product better designed for mobile, global commerce.

The funding will allow Santa Monica-based Tapcart to hire another 200 people over the next 24 months, up from the 70 it has currently. These will include new additions across time zones and even in markets like Australia and Europe as it moves toward global expansion.

Shopify’s investment will open up a number of new opportunities as well, including on product, engineering, business strategy and partnerships. It will also help to get Tapcart in front of Shopify’s 1.7 million global merchants.

5 predictions for the future of e-commerce

“There’s still quite a lot of merchants that need better mobile experiences, but have yet to really double down on the mobile effort and get something like a native app,” notes Netsch. “There’s a lot of different ways and methods that merchants are experimenting with mobile growth, and we’re trying to offer all of the best parts of that in a single platform. So there’s tons of expansion for Tapcart to do just that with the existing target addressable market,” he says.

“We believe brands must be where their customers are, and today that means being on their phones,” said Satish Kanwar, VP of product acceleration at Shopify, in a statement. “Tapcart helps merchants create mobile-first shopping experiences that customers love, reinforcing Shopify’s mission to make commerce better for everyone. We look forward to seeing Tapcart expand its success on Shopify with the more than 1.7 million merchants on our platform today.”

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