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Summary:

In 2006 Moo.com had it all: hype that comes along with top venture investors, a smooth-talking CEO, hot social services as partners and an iconic product. Today Moo is less hip, more low-key — and profitable. Here’s how the company did it.

The last time I saw Richard Moross, founder of London-based specialty printing startup Moo.com, we were both carrying a lot of extra baggage. Mine was around my waist, but his was more ephemeral — he was constantly having to come up with cool new ideas for printed products that people might want, such as small-sized (and iconic) greeting cards or fold-out photos.

Two years later, both he and I are in a better place. I’m lighter and his wallet is heavier, thanks to a simple business decision he made: “Instead of focusing on products that people might want, we focused on what people need,” Moross told me when I bumped into him at Le Web 2009 in Paris earlier this week.

Go Small to Go Big

What Moo does now is take images (including those from popular web sites, like Flickr and Bebo,) and prints them on business cards — albeit business cards that are exactly half the height (28mm x 70mm) of traditional ones — using an industrial-strength laser printer made by Hewlett-Packard.

For as he explained, even though people loved the ability to print semi-bespoke mini cards or photo greetings using their Flickr (or some other social network) photos, Moross found that the customers weren’t very sticky and the demand not constant. What the company needed was a more sustainable and predictable business, one that brought the customers back to Moo.com more often. And he found inspiration in Swatch, the Swiss watch giant.

The Swatch Side Story

“I think it is a Swatch approach to our business,” said Moross. “They went in and reinvented the category of affordable watches by making them more fun to own but marrying them to the sensible Swiss technology. ” Of course, by making them more affordable and fun, Swatch also prompted its customers to buy more watches, thus becoming a mega success. So much so that the company now owns James Bond’s favorite watch brand, Omega.

Moross wanted Moo to do the same for the business card market. So in June 2008, the company made the switch. “We had a unique product that attracted a lot of attention, which allowed us to stand out,” he said. “If we had gone straight to making business cards, without our own twist, we would have had a tough time building a business.”

The company focused on small- and medium-sized businesses in the creative community, including web workers, who need business cards but can use Moo’s customization to showcase their talents or their work. And just like that, demand exploded. The company has since added other stationery goods to its menu, which is helping to convert even more of its casual customers into repeat buyers. It makes sense; after all, even independent and small businesses run through business cards and stationary items every couple of months.

Moross said the company is now getting a much better return on its marketing dollars; it’s seeing triple-digit annual revenue growth and has become profitable. Moo, which raised $5 million from Atlas Ventures and Index Ventures three years ago, has also set up an operation in the U.S., which now accounts for about 40 percent of its revenues and includes 10 of its 50 employees.

Lessons from the Moo Story:

1. Develop a product (or service) that stands out enough to get a lot of attention.
2. That attention makes people “want” that product.
3. But be smart enough to shift focus from “want” to products that customers “need.”
4. If they “need” what you sell, they will come back and become repeat customers.
5. Repeat (or loyal) customers cost less and bring in more revenues.

After speaking to Moross, I started thinking how universal these rules were, and came up with two more popular examples of where they’re working: Hulu and Apple. When Hulu launched it got a lot of attention. And because only a few people initially had access to the online video site, such access quickly became something everyone wanted. When Hulu opened up to everyone, it was already stocked with great television content, which quickly turned the “want” factor into a “need.”

Apple is another company that has done a good job of converting wants into needs and thus turning millions into repeat customers who continue to pay for new Apple products, without needing much marketing. On the flip side, Joost had the early attention and people wanted it, but it couldn’t translate that want into a need and eventually flamed out.

On a more personal front, as a company we focus on developing content — from blog posts to research to our events — that members of our community need. If we meet their needs, then they reward us with their attention, which ultimately leads to revenues. Like everything, it’s a work in progress, but I’m encouraged to see that it’s working for Moo.

Here’s a little then-and-now comparison:

2006 2009
Product: In September 06 the company launched with one product (MiniCards) and one partner (Flickr). Business cards and stationary products for creatives and small businesses.
Strategy: The company’s focus was to partner with social networks & services such as Flickr for customer acquisition. It was inventing new product categories and pushing them to market. For example, NoteCards product (innovative, buzzworthy, but not a big existing demand). Make innovative and interesting products for large, existing markets that can be disrupted by technology. For instance the business cards already have an existing demand and the incumbents are slow movers.
Focus: The company was focused on selling to consumers. The focus is decidedly SMB. The majority of revenue now comes from direct customer acquisition.
Bottom line: Lot’s of press, plenty of sizzle, but not enough steak. Profitable.
  1. [...] Here is another nice case study, presented by Om Malik at Giga – Moo. [...]

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  2. When I first saw a Moo card (years ago), I thought “This is interesting.” And I kept it. Sort of like when I first saw a photographic-quality business card (I’d say this was back in 1995). Kept that one, too.

    Now EVERY out-of-work graphic designer has a Moo card, and it is decidedly boring. They all feel the same, there’s nothing really catching my attention. If a graphic designer hands me one of these at a meet-and-greet, I throw it out.

    My graphic designers have interesting cards that are hand bespoken, not churned out on a laser printer (toner? really?). Some of them include hand-wrought paper stock, silk screen images on top of offset press backgrounds. It shows off the talent of the graphic designer, and it’s real wow factor, rather than “ooh, you spent 5 minutes uploading something to a website.”

    I’m anti-Moo, and I can’t see how the company will really hold value as more people get the same attitude as me.

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    1. AB

      I am sure you have your reasons on disliking the service, but they continue to be profitable so I guess they are doing something right and enough people are willing to buy from them on a consistent basis to turn them into a viable business.

      Your other points are well taken though.

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    2. It may well be the case that every out of work graphic designer has a moo printed business card but I meet a lot of regular business people in small, medium and large businesses and it’s amazing how bad a significant proportion of these cards are! I think Moo therefore still has a lot of mileage left in their market.

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  3. The Lessons from the Moo Story sound like trying to make mistakes on purpose. The first step shouldn’t be building a product and getting lots of attention (is this from a web 1.0 book?), it should be: figure out what people need and then build that. That is called customer development, and the Moo story sounds like an example of just stumbling into the right answer by luck. Congrats to them, I’m sure they are great and I hope they become really successful.

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    1. Nico

      What if you could combine something that is want+need+attention. What the Moo guys did is a simple lesson – knowing when to Pivot and not stick to a strategy that was going to take them no where.

      My view is that either way, the company is on the right track. I am sure there are other start-ups who can learn from them as well.

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  4. For me the lessons might be somewhat different.

    Richard is a design addict; he never let anyone come between him and product excellence. That is why he was embraced, and continues to be embraced, by the design community. He created a group of really dedicated early adopters who helped provide input into the product and act as evangelists. A great “viral node” on which to build.

    Then came scaling. It is true that first attempts were angled towards consumers as the way to express their digital identity offline. There are very large communities out there and you don’t need much conversion to get a sustainable business going. But it was the wrong place to go: better to “fill the recurrent need” of a business population that was tired of tradition and vistaprint quality.

    The key to Moo is that it managed to make business cards aspirational (kind of). With top design and great production quality, it made the business card feel less business and more fun and self-expression.

    I don’t think you can fake the authenticity that Richard and his team bring to the party. It may be a business, but i can tell you it ain’t run by the VC’s or for the VC’s (we are investors).

    As such its products fit a different need than what A.B. Dada is referring to, which is the standout card showing designer skills off, i.e. the card as elevator pitch. As innovations go slightly more mainstream, it’s up to folks like A.B. Dada to show us the next frontier (PS: don’t throw business cards out, you sounds like a snob).

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  5. [...] The Pivot: How Moo Got It Right & Became Profitable – GigaOM 1. Develop a product (or service) that stands out enough to get a lot of attention. 2. That attention makes people “want” that product. 3. But be smart enough to shift focus from “want” to products that customers “need.” 4. If they “need” what you sell, they will come back and become repeat customers. 5. Repeat (or loyal) customers cost less and bring in more revenues. (tags: startup strategy product-management customer-development) [...]

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  6. I love Moo cards. I started out with the free sample of the mini moo cards. My most recent order was for 400 business sized cards. The quality is amazing and now they ship to the US from RI.

    Pic:
    http://www.flickr.com/photos/stevegarfield/4016331491/

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  7. [...] more here Leave a Comment No Comments Yet so far Leave a comment RSS feed for comments on this post. [...]

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  8. This is the first time I’ve used MOO services, for mini-cards for my friend’s bookselling business. The cards are brilliant, the creation and ordering process is clean, easy and intuitive, and the feel of the whole operation is first class. I work hard on my designs before uploading them, I want the printing part to be easy and I’m beyond impressed.
    Way to go, Richard.
    Slice and dice it any way you want, the niche you’ve discovered is more than just opportunity if you’ve passed the mark into profitablity.

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