The executive team from RealEye, a fast-growing, tech-based startup in the research industry was among the participants of the second edition of Business Model Mastering at Google Campus for Startups Warsaw. In my interview with Adam Cellary, Founder and CEO of RealEye we discuss his experience with building a scalable business model based on digital technology.
Adam, before we come to RealEye, could you first explain to our readers what is eye- tracking in simple words?
Eye-tracking is a technology based methodology that allows discovering what people focus onwhen watching ads, www sites etc. It’s a unique method that uncovers hidden insights whilecreating websites, landing pages, running A/B tests for advertisements or simply runningresearch. Eye-tracking used to cost thousands of dollars and required special hardware tied tolabs.
RealEye provides software for eye-tracking tests. Where did the initial idea for this business come from: did it come from the observation of client’s problems or from the observation of new available technology?
I remember I was once ordering eye-tracking research on behalf of a company I used to work for to test UX on a new website. I was shocked when I heard how expensive and complicated this kind of research was back then!
As far as I remember it cost more than $10k and the results were delivered after a few weeks. The problem was clearly there and I personally suffered from a lack of simple solutions. I’m a coder/developer by heart, so a few years later when I developed a way to make similar tests on-line, using a regular webcam, I instantly decided to wrap it as a SaaS product.
How did you commercialize the offer initially? How was the offer distributed, how did you acquire new customers and what was the pricing model?
At the very beginning, it was a simple MVP built only to deliver ET (eye-tracking) results as heatmaps. First customers came after several growth hacking actions like launching a product on ProductHunt (for polish readers, here are the details:
https://mamstartup.pl/jak-dostalem-sie-na-szczyt-listy-product-hunta-case-study-realeye), Medium or showing it on Quora.
The pricing structure was rather simple. Customers were charged “as they go” based on the number of images they wanted to test. We’ve connected our platform to several on-line testers providers to get eye-tracking research participants whenever there was a need for it.
It was going great and we’ve developed more features on the platform based on customers’ needs. Eventually, the platform grew to the point when we’ve decided to move to subscription-based pricing as more and more customers were professional research companies purchasing higher packages (and having higher feature demands). It was a good idea, we executed it and converted big customers to MRR.
What were the challenges of the initial business model? Was it scalable enough?
After moving to subscription based fee we have realized that we were losing those “little” customers who were purchasing and paying as-they-go.
They were absolutely frightened by “serious” multi-feature, subscription-based platform – because all they wanted was to make a simple study without commitment. We prepared a simple subscription plan (MRR) for them as well but it didn’t work well.
We decided to take part in Business Model Mastering Program to figure out how to approach those two totally different groups. Let’s call them “pro” (Research Agencies) and “light” (single UX/UI designers mostly) users.
At that moment we were trying to use our platform to serve both groups – and after Business Model Mastering we have realized that because of it – it was actually for none of them. Your telco experience was really helpful while discussing our pricing strategy. Some people are using subscriptions and some are using pre-paid. It’s just how it is, so there’s no point in trying to convert them – it’s easier to divide them and focus on those two groups separately.
How did you overcome those challenges? How did you change the offer, the pricing strategy?
We have just launched our second offer for “light” users (https://www.realeye.io/eyetracker). We have completely changed communication. It is less formal, it is more fun and the entire flow is closed on a single page.
Pricing is targeted only for “light” users not to scare them with high subscription plans anymore. We literally launched it days ago – we’re now waiting for results from traffic which we’ve transferred from content sources (PH, Quora)!
What are the main levers of scalability in the new business model?
First, the “light” (not MRR) model needs constant user flow, as we’re not bounding users to the tool. The idea is to get more advanced “light” users and to convert them into “pro” MRR customers.
Second, the tool itself requires the customer to have an idea of how to use ET results in his/her work and how to analyze results. I know that teaching the Market/users is a tough job, but it may be inevitable.
What are your plans for the future, how do you intend to grow?
Together with our customers, we have discovered many different use-cases for webcam eye-tracking. Starting from obvious one like UX testing for websites or Advertisements A/B testing ending on testing OOH (Out of Home) creations and benchmarking them to overall previously tested creatives (more here https://www.realeye.io/billboards).
As both platforms (“light” and “pro”) are actually maintenance-free websites, we’re getting ready to focus on other, more product-based ideas of utilizing Webcam ET data which will help us avoid teaching the Market/users and provide them actionable insight on their work.
Thank you Agnieszka for the interview! See you on Campus! 🙂
Adam Cellary is the co-founder & CEO of RealEye. Previously Adam co-founded several VC-backed Europe&US-based startups (eg.UnStock, acquired by Slidely, MyBaze or Elly) which eventually brought him to found RealEye. Adam is passionate about bringing new technologies more available to people. He’s a Member of Founders Academy by Google for Startups. You can contact Adam by writing to him: firstname.lastname@example.org
Agnieszka Węglarz is an independent consultant, business strategist and practitioner in B2B as well as lecturer, speaker and blogger. She has over 20 years of professional experience working as a manager in both large corporations and SMEs, where she was responsible for strategy, marketing and business development. She uses her long term executive experience and training expertise to assist companies and their managers in building their business development strategy through a series of workshops. She specializes in business modelling, segmentation, value proposition, sales and marketing strategies and consultative selling. She runs her business blog on www.agnieszkaweglarz.com and her own YouTube channel – Biznes Ring by Agnieszka Węglarz. You can contact her by writing to: email@example.com or by directly sending a message via LinkedIN.