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How to find a new niche and grow your app

How to find a new niche and grow your app
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Woofz is an app for dog training developed by Gismart. Can it really compete with professional dog trainers?

In the 14th episode of the SubHub podcast, we talk to Natalia Shahmetova, the CMO of the product. She told us about her experience in mobile marketing, shared the story behind developing and promoting Woofz in a narrow niche, and gave some tips on how to start marketing your app.

Listen to the episode in Russian or read the most interesting parts below in English.

Intro

Nikita Maidanov: Hi, everybody. This is the SubHub podcast and we're back with more episodes. Today we have Natasha, the CMO of the Woofz app, as our guest. She's going to talk about how they chose a niche – an app for dog owners, what interesting challenges they faced, and how they solved them. The podcast is being released with the support of Adapty's service. If you have a mobile app with subscriptions, then you know what service you need to integrate to get cool analytics, A/B tests, and more. So, let's get started. 

Natasha, hi, very happy to have you on our podcast. Welcome. Let's start with telling a little bit about you. Tell us about your career, how you came into marketing, how it all started.

Natalia Shahmetova: Hi everyone, I am happy to share with you my experience and how I came into the world of mobile marketing. It all began in 2010. At that time I joined a big international agency – McCann Ericson. I was working as a copywriter, writing scripts for commercials. Those commercials in the 2010s were about coffee, washing powders... At that time there was no sight of mobile apps, at least not in my life. Later I retrained as a strategist and dealt not only with offline advertising companies, but also with digital ones. We were into digital marketing and we did web-based branding and activations for FMCG brands. Then I studied a little bit at Ikra – a school of integrated digital marketing communications. Ikra helped me a lot to understand how all the stages of the funnel work in marketing, in the digital environment. And on the whole Ikra produced a lot of great specialists in the mobile and IT market in Belarus. There I met my now good friend Arseniy Kugeiko and I was in the same group with a girl who is now a creative producer at Vizor Games. All in all, a large number of Belarusian IT people went through Ikra. Your previous guest Anya from Vochi mentioned it, I think.

Nikita: That's right.

Natalia: Everyone was involved in the creative industry at one time or another in Minsk. And even back then (it was probably 2012) me and my friends were trying to move away from advertising and go somewhere else, to some mobile IT markets. At that time IT was already picking up, we heard about EPAM, we heard about Wargaming, about some huge outsourcing companies. But it was hard to understand how to jump in and what a person with a creative mindset could do there. It was very difficult. But eventually I was invited to work at Apalon through some creative acquaintances of mine, who told me that for mobile app production, in particular for mobile app advertising, you really need videos. I was like, "Wow, that's something I know how to do! Very good, I'll make a lot of videos." There were so many ideas.

Vitaly Davydov: Did you do them as a producer, as a copywriter, or as a video editor?

Natalia: There were different projects. In some projects I was only a copywriter, writing dialogues. Then we had shooting days: lots of cameras, studios, lights, actors. There were smaller projects where I could act as a producer as well: I organized the set, calculated the budget, and negotiated with the actors. We did our own filming for Wargaming. It was an amusing experience, I never thought before that I would be organizing something for Wargaming. At that time it seemed to me something unbelievable, super complicated. But actually, everything comes with experience.

From Apalon to Gismart

Natalia: My buddy, Anton Marchenko, offered me a job at Apalon. They needed someone who was good at making videos. I had to come up with a huge number of ideas for different product formats. There were weather apps, alarm clocks, coloring books. I got to generate a bunch of ideas and test them all quickly. I wouldn't say I was a producer, I was more of a creator – a creative manager. My academic approach to coming up with creatives didn't work, and the guys didn't understand how to test them all quickly. After four months we parted ways. My first attempt to come into IT failed.

VItaly: How many people worked at Apalon when you got there?

Natalia: About 150 people. There I already knew Anton Marchenko, I met Slava Kononenko and a bunch of sellers and guys who still work there or have worked there. Despite the fact that I was there only four months, it was a good, high-quality time, and I was able to learn and understand a lot of things and meet great people. In general, I gained some experience. It was also there that I met Arkady Kuznetsov, who later invited me to Gismart. Everything came together later.

Vitaly: What did you do between Apalon and Gismart?

Natalia: I got into a venture called RocketBody, a fitness startup. There were a lot of startups in Minsk at one time. It's a very dense community, where everyone knows each other, everyone has worked for each company, and everyone has crossed paths in one way or another. Since I am an avid follower of running, I was interested in everything associated with a healthy lifestyle. I came to RocketBody. It was a fitness startup – a fitness bracelet that could predict the moment of supercompensation. We did a kickstarter campaign, raised a lot of money. But it wasn't that easy with the product, it wasn't that cool. It was unclear where to take it, what to drive it with, how to package it. Basically, my marketing experience at the time was not enough to convert it into a product experience and somehow lay it all down. I worked there less than a year, met some great guys, got a bunch of useful connections, helped the guys raise the investment roundt from Bulba Ventures, and went to work for an outsourced company, in the marketing department. You could spend a fairly comfortable time there, not spend a lot of time working, putting in some effort. 20% of your time brings in 80% of your salary.

Nikita: What year was it, 2015-2017?

Natalia: 2017.

Nikita: I have a real feeling that Minsk at that time was such a small valley, with a bunch of big IT companies, with employees flowing between them. Several thousands of IT people who knew each other. That's what it sounds like from talking to our guests.

Natalia: At that time PandaDoc was already in its juice, Flo. Everyone at least once in their life went for an interview at Flo or PandaDoc, all the big mobile hubs, Easybrain, Gismart, Apalon, Appyfurious. Plus there were closed clusters. We had a Fitbit development office and a couple of other hardware companies. It was hard to get in there at all. And a bunch of outsourcers. EPAM gave rise to a large number of outsourcing companies in Minsk. At one point I was outsourcing, trying to figure out how startups work. Together with a colleague from RocketBody we tried to develop the app Inpreview, the flagship of Onelight, which was later joined by Slava Kononenko. It was going well, it was developing, and I was learning as much as I could. But at some point the guys from Gismart knocked on my door and invited me to work. I went head over heels into Gismart, and I think I was wrong to turn down such a successful startup - Inpreview. I've been working at Gismart for the last three years.

Vitaly: How did it happen, changing your job? You had a choice of joining Gismart, Apalon, Easybrain – there were a lot of really cool mobile product companies where you could realize yourself. Why Gismart? Maybe there was a project or a team that you were interested in?

Natalia: At that time I had some acquaintances from the creative industry working in Gismart. I knew they had a cool office, I knew the guys were doing music apps. And I had a musical background, I used to go to music school. All in all, I was pretty interested in all of that. But somehow it was a coincidence: they came up to me with a good offer, I was in a good mood, and I thought, "Why not try my hand there?" It's probably important to note that when I started there I didn't realize that there were a huge number of mobile companies in Minsk. It came to me later. Now I talk about it and I realize how many opportunities there were, I could have gone to many other companies.

About Woofz and its narrow niche

Vitaly: Tell us, what app are you currently working on?

Natalia: Since the beginning of the year I’ve beenthe CMO of the Woofz by Gismart project. It's a dog training app and a fairly new niche for Gismart. At some point, up to a certain stage of Gismart's development, they were only into music apps. Then a separate stack of games began to appear (the hyper casual trend), and at some point publishing was active, which later became a separate trend. Then there appeared the Wellness Unit, which developed apps for face yoga, meditation, and fitness. Since the beginning of the year, we’ve decided that we want to develop a completely new, unexplored and unobvious direction, which is related to the education of dogs.

Vitaly: How did you choose this niche? In one of our podcasts, a guest was saying that it's super important to get into a fairly narrow niche, but not too narrow. Because there's always some very big player who can do everything 10 times faster and flood it all with marketing money and buy out the whole auction. How do you solve this problem, if you actually do?

Natalia: It's a pretty interesting story with the product selection. I'm reeling back a little bit. When I was working in outsourcing, one of my tasks was to come up with a project for some developers. Since the guys knew I had a background in mobiles, they said, "Come up with an algorithm for identifying successful products and choosing the best ones in the niche." I agreed and eventually came up with a dog training app. That was four years ago. I laid it out for them, gave them all the statistics. And because they were the guys from outsourcers, they started the development, but gave it out to outsource, and I had already left by then, I was not interested. At Gismart, I had been in the music direction and utilities for a very long time. During the pandemic, one of my colleagues brought up the idea of an app for training and educating dogs. And I was really worried at the time, "Man, that was my idea, but in another company. I know how to do it, and they won't take me there. "And somehow it happened that by the end of 2021, the founders and I were talking about: "Where do you want to grow next?" I said, "Of all the things we have, I like Woofz. I believe in this project, I've done a marketplace research. There's a certain amount of competition out there in mobile. This niche is not warmed up at all, it's brand new, I believe in this direction." – more on a subconscious level, though. And plus, there is a large number of competitors on the web from the outside. If we're talking about the niche, our competitors right now are not other apps or cell phones, but web solutions, YouTube, video courses, and books. This is competition with quite different sources and different media. So we chose this app, we believed in it, we chose some potential points of growth through which we can grow, through which we can become market leaders. And we came to try it out.

Nikita: And what are the advantages of mobile apps over your competitors, over YouTube, over professional dog trainers?

Natalia: Over the dog trainers – obviously saving time and money. A session with a cynologist will cost a lot more money than a weekly or quarterly subscription to our app. Either way, it's a convenience. You can train your dog here and now. Take your phone out of your pocket, choose lessons, assignments for the day, or a program of some sort, and off you go. At any time you spend 5-10 minutes with the dog. 

Nikita: Sounds like it's a fitness app.

Natalia: Yeah, it's like a fitness app, it's the same thing. When you don't have to drag yourself to the gym, you can take some 10-minutes set for the day, spread out a mat and do it on a mat. I've read a lot of information, articles about how the dog services market (pet industry) is gaining popularity, and that people at some point switch from spending money on themselves, to spending money on their dogs, on their pets. It's a huge industry that represents a huge expenditure. First of all, it's food and some merchandise. In the Asian market – whether in Japan or China – having a dog is equated with having a child. In terms of the cost, in terms of the time you spend on the baby and on your pet, it's almost the same.  In Europe, you have to take a course on training, on raising dogs. With our app, we are working to make our courses valid and have some weight in the countries of Europe and America, so that the completion of our courses could also be credited for taking a course at the "Dog Academy".

Vitaly: There are all kinds of people who have dogs. How do you estimate how much you can make from them? Have you done that kind of analysis or can you explain how it's done?

Natalia: Yes we can earn a lot in the long run. Depending on how much we spend. Honestly, we haven't done any prediction on the extreme amount of profit. We want to make, let's say, a million in the near future. What can we do to do that? We’ll do A, B, C, and D. We'll do and we'll try to capture that audience. Now developing this niche works just like developing a fitness app or a utility app. We haven't done anything drastically new yet, other than working with Influencers. We're trying different niches. While we're looking at ROI, we're looking at how much the user costs. Of course, there's a super big CPA difference between the dog niche, and the utilities niche, like music or photo apps

Vitaly: Where is the CPA higher?

Natalia: Of course in our niche.

Vitaly: Why?

Natalia: It's hard to find a user who will pay, as it's not so obvious to sell that value to the user. But we also have a much higher LTV. If we find these users, they are of the right quality, they come for value, and they pay. And they pay for a long time. If we talk about hyper casual or music apps, it's easier to find someone who's into karaoke, but it's just as easy for them to leave because they don't have a strong emotional attachment. It's more like entertainment.

Vitaly: Yeah, you can't just throw away a dog, but you can throw away a microphone.

Natalia: Well, yes. Or you can download other 10 karaoke apps or go to a bar. It's a very interesting niche. At first, when I first switched from music apps to Woofz, I was like, "God, the CPA is so huge, and so is LTV". But then you understand that it's just several times higher and longer. But it's also higher in our app, and it's super gratifying to hear from users who are grateful that we've taught their dog to walk straight – we've taught them something. It's very flattering when you realize you're bringing some real value to your users, not just selling onboarding. 

Strategies and planning

Nikita: Tell us a little bit about the challenges. What are you doing to make an app like this grow, where are you looking? Is it social media, performance marketing?

Natalia: Our main source of money traffic is performance marketing. We work closely with Facebook and are moving towards TikTok. We work a lot with Influencers, trying to rock this direction. A huge bonus that we work under the Gismart umbrella brand is that we have access to managers and different advertising platforms. We can come up with solutions that would be rather unique for us, and the platforms would make concessions. And you know, it usually goes like: "We're doing a dog education app." and everybody's like: "Oh! And I have a dog. Give me a promo code and I'll help you do this and that. How cute!" At all the general meetings with platforms, a platform manager can say, "For example, for Woofz, we can do it like this or like that." Brand loyalty is enhanced by the fact that we're about dogs.

Nikita: You just got to be lucky that this manager isn't a cat person.

Natalia: Yes, exactly. There is performance marketing, there are Influencers that we work with. We are trying different platforms now. We work with a Ukrainian agency and a British one, and we are looking for different approaches in this regard in order to be as versatile as possible in terms of user acquisition. Plus, we pay a lot of attention to working with content within the app. Right now we've got motion graphics, we've got two localizations within the app, we’re working on sound design and so on. We try to work not only from the outside but from the inside to grow organic retention, and the whole thing about branding, referral programs, etc. Sometimes technical issues happen with Facebook or could happen to any other ad service, so we're focusing now not only on performance, and not only on the funnel that we're used to, but also on other, internal things, internal monetization, on a deeper level of working with our users, and with engaging users.

Nikita: Maybe there are some specifics? You said you're working with Influencers. Maybe you work with breeders? You buy a dog, they give you a promo code for Woofz or something like that?

Natalia: Yes, it's interesting. But we haven't grown up to that yet. We have plans and have already been written to us by several food manufacturing companies, but we’re saving it for later. Everything needs to be architecturally adjusted in the app first. We're still in the process of active growth, we're really looking for Flutter developers, we're looking for designers to join our team, marketing people. We still need to solve some high-priority tasks, in order to go on to integrations. We have integrations as a separate point, we know about its importance, but we’ll deal with them a little later.

Nikita: What is your biggest goal right now? To bring the economy together or something else?

Natalia: The current goal is to become the top-1 brand in the dog training market and in this industry. If we talk about business goals, yes, we need to grow. We just have our own prediction, which is how we want to grow, how we want to grow ROI and profitability. We've built a plan for ourselves, and we're sticking to it. Of course, we do not always manage to stick to the plan, because we are still heavily dependent on the purchase, on the auctions, on the mood of the algorithms of Facebook and Google. So it's hard to stick to the plan, but we’re trying.

Vitaly: Is there any seasonality in this business?

Natalia: I thought there was, but there really isn't. If we lived in the CIS climate zone, I would 

say that in spring and summer people are outdoors training dogs more often. But since we focus on the English-speaking market – that's the States Tier 1, Latin America, there's no such seasonality there yet. So far, it's even.

Nikita: You were talking about two languages, but do you work and focus on Latin America?

Natalia: So far we only have Spanish in Latin America. We are doing a Portuguese localization to integrate more into Latin America, and we are doing a couple of European localizations as well. And we really want to get into the Asian market.

Nikita: Great. You said you are creating a marketing plan. What should it include? Let's say I have an app, and I want to do a marketing plan for it. What do you need to pay attention to?

Natalia: Since we are still working on the funnel, I think we need to go from the top down. Starting with advertising, the quality of the ad, whether it's video or banners. Let's say we take the classic Facebook approach, make a couple of great banners, and a couple of videos. Then we go down the funnel, we get to the store, we prepare the store localization, screenshots, previews, icons, and a well-written description. Next, the onboarding and cool paywalls. It’s better to make them the way your competitors do, so that everything should go well in the beginning. For starters, there are several key metrics to pay attention to. Conversion rate from view to installation. Conversion rate at the moment of installation in the store, and then the conversion inside the application, i.e. the onboarding, where you can see whether your users fall off or not at every stage of the onboarding. Plus, it’s important to see how they convert from onboarding to payment, and how they behave inside the application in terms of features. It is worthwhile to also know the benchmarks – you can find them on the Internet.

Metrics and indicators to pay attention to

Vitaly: If we're talking about conversion within the app, the sales funnel, let's take two successful apps from different niches. Do you think their sales funnels will be similar, or will be very different in terms of conversions, renewals, etc.?

Natalia: They can be very different. Because we've worked with a lot of apps within Gismart, I've done some product publishing, it's amazing how, even in some music apps the funnel is different. And in some apps, in some products, the main amount of sales is coming from onboarding. There are products from a similar niche where the most sales come from the inside of the app because the developer and the team found an "aha"-moment, and decided to put a paywall there. It all depends on the product. But nevertheless, the metrics at the conversion rate level, or CTR, and install to rate in the store – these benchmarks are almost the same. And if you have a billing retry above 50%, you're going to have a hard time. If you have a subscription rate above 50%, you're going to have a hard time too. There are straight red flags that can tell you that you've done something wrong here.

Nikita: Does it make sense to do a referral system in the products like this? Maybe you already have one in some form? For example, dog owners go to special places where they train their dogs together. Wouldn't it be interesting for them to advise the app to each other, get a discount, etc.?

Natalia: Yes, that all sounds super cool. We don't have a well-established referral system yet, but it all works on some level. I don't think we need to put a huge emphasis on this yet, predicting that there will be an insanely large number of users coming to us right away. But I'm sure it all works - referral programs, family sharing, and social features. We have plans for that.

Nikita: You said you've looked at a lot of other apps, worked with a lot of them. Tell me how you knew what to look at? For example, you're taking on a new app, maybe in terms of publishing, how did you understand where it needed more attention or refinement?

Natalia: I think I worked with about 10-15 apps from different niches during my time at Gismart. Just like I was talking about the new product launch, we do the funnel analysis on a daily basis. You look at what your CTR level is, what your CPA level is, what your install to rate level is in the store, onboarding pass, paywall conversion, some "aha"-moments, etc.

And evaluating it all together, we have a very handy view in Tableau, where we also look at what stage you have a drawdown, where there’s a falloff by benchmarks, and what you need to pay your attention to. The main thing is to have a great team, I think, that will push you to come up with new ideas and not be afraid to try and go beyond your creative box.

Budgeting and the importance of A/B testing

Nikita: As for big budgets... Where do you start to grow such an app?

Natalia: It would be cool to have at least 50 thousand a month. But you can also start with five. You have to figure out what the concept of your marketing is. There are jobs, contracts with influencers, with bloggers, with sites, etc. You can start at $50 a day, and some start at $5 a day to see if the funnel is working or not. And since we know that Facebook, Google and other major ad networks love big budgets, my advice is not to be afraid either, but to hire a good user acquisition manager who can both look at the funnel and open and close the “traffic tap” in time. In all my practice, 50% of the success in a product was a cool A/B test done, and then another 50% was the will of the buying platform, cause it may have technical issues from time to time. Perhaps, it’s also worth mentioning running a lot of A/B tests. We have a great team of product marketing managers. We found a lot of interesting hypotheses with the guys and tested them. There were various hypotheses of price elasticity, we did multi-subscription, that is, we gave users the opportunity to buy subscriptions to all music products, or to all app bundles, and family sharing was available to anyone. And all of these hypotheses worked very well, and gave a tangible increase in revenue and LTV. And it's very cool when you have the opportunity to quickly test different variations, different forms of subscriptions, and combinations. The idea of intro offers worked for us on one product.

Nikita: By intro offers you mean trials, or something else?

Natalia: It's a type of subscription. It's a paid trial, as I call it – three days for 0.99. In my opinion, it is a very underestimated tool, but many devs gave it up. Especially on Android.

Nikita: I think it works because it's a preauthorization of the card, if I may say so.

Because there's a lot of billing issues after trials, as people are linking blank cards, or virtual cards with limits, so that nothing is accidentally debited. And in this case you immediately take a dollar like in a taxi app – preauthorization.

Natalia: Yes!. It's a pretty good approach in general. A lot of people got hooked at some point in the three-day trial. You should experiment with different kinds of monetization. We also have analysts in the team who help us a lot. They can quickly say if the test is rubbish or can be potentially profitable. Their experience helps a lot, they try to give us models, price matrices for countries, predictions, and things like that.

Nikita: Maybe you can share some advice for developers, especially for indie developers who don't know much about marketing but really want to learn?

Natalia: My advice: get yourself a good marketer. Don't be afraid to get into non-obvious niches, spend time on research, not on cloning other apps. Perhaps not everything will be immediately obvious and clear, but you can research and look for non-obvious niches. I think any indie developer is smart enough to figure out marketing metrics and figure out how to quickly evaluate the funnel.

Nikita: Thank you Natasha, that was very interesting. I want to get a dog now.

Sergey Zubkov
Sergey Zubkov