From Zero To Profit – The NaLyrics Story.

Let me start by saying that I am programmer. What I am about to share with you is lessons learnt by running a business for one year. A programmer can also run a business if he put half as much energy into running the business that he put into coding.

NaLyrics is a platform for distributing and promoting songs via lyrics. It is run by myself and two other people (Not programmers). We have built a mobile app, website and wap site (mobile web). We have some unique idea on how to distribute and promote songs and we believe it will work. Our major concern is if one of our bigger competitors get a whiff of our idea, we are basically dead in the waters. So how did we manage to operate under the radar and yet go from zero to start making profit?

Let me also say that we didn’t have funding from anywhere (well, more like we didn’t want funding). First the reason why we didn’t want funding is because we are afraid the sudden fame that comes with funding might actually be the death of us. If we display our trump card too soon, they (competitors) have the money and resources to just swallow us up.

We also didn’t make any money in the first 9 months. So how did we survive? We had an initial funding of about 300, 000 naira. What we did was maximize the use of that money. For example we didn’t spend money advertising. We also found a way to run the business without borrowing. The lessons I am about to share might not work exactly for your startup, but what I learnt is if you spend time thinking about it properly, you will find a way.

We needed to advertise, without advertisement this project won’t get anywhere, like someone said, having a product without advertising is like winking in the dark. You know what you are doing but no one else does. The problem with advertisement is that it costs money and it puts you kind of in the spotlight. If we start advertising, competitors will notice us and we might be gone the next day. So what did we do? Our major market are the blackberry users, Blackberry smartphones are still the most used in Nigeria, so it makes sense to target the blackberry users. I personally scouted the web until I found two facebook groups where Nigerians post their BBM pins. The idea is to invite the people via their pins and tell them about the app. A major challenge is blackberry BBM doesn’t allow for bulk invitation. I quickly wrote a blackberry app that can do bulk invitation.

Another decision we made that paid off was, we didn’t send BBM broadcasts, because some people find it annoying. So after adding someone new to BBM, we chat with them one on one, telling them about our platform and how they can get use it. The one on one chat paid off. We have made a beautiful app and so even those that don’t like music, after downloading the app recommends it to their friends. This way we are doing advertising without being noticed by the big shots who can swallow us up.

We faced some challenges when we started. The main one is where do we get lyrics of Nigerian songs. There are a couple of websites that post lyrics of Nigerian songs, but about 80% of those lyrics are from less-known artists. Our aim is to post the lyrics of the big shots, and our major challenge is, will they give us the lyrics? Of course the answer is NO! I can remember I was able to setup a meeting with just two known artists during the early days, Vector and Mode 9. I met Mode 9 at an event and I quickly used the opportunity to tell me about my cool new app. Of course he was happy to lend any help he could. At the time he has licensed his lyrics to some other site. But after some cajoling, the site allowed us to use the lyrics on our platform as ling as we give them credit. The lessons I learnt here is, if you wait until all the conditions are right (for us, we need the artists to send us their lyrics), you might never get anything done. We need to find a way around this.

First we made the app a wiki, meaning you can register and post lyrics on the app. But after a lot of spamming, we disabled the wiki feature. We got someone who can listen to songs and write the lyrics. After posting the lyrics, we have an automated system that tweets and post the lyrics on facebook, 4 times a day for 7 days. In the posts and tweets, we copy the artist and other people related to the song, like the producer, record label etc. This gave us credibility with the artist because in a way we are helping to promote their songs via lyrics. After a while we can now count a couple artists who sent us the lyrics of their songs.

We also made some mistakes. One of them I believe now is starting with a mobile app only. We should have launched both the mobile app and the mobile web the same time. We are making some money from adverts on the app, but it is not comparable to the money we are making from the mobile web site. The mobile web site now generates about 90% of all our income and it is growing on a daily basis. If we had started with the mobile web, we would have broken even a long time ago. The lesson here is, Nigerians seldom click ads in mobile apps, but they will gladly click same ads on a web or wap site. The second mistake is we launched with blackberry app. It makes sense at the time. Our major market is Nigeria, and most Nigerians don’t use anything except blackberries and j2me devices. We had over 300K downloads from RIM appstore and another 100K from getjar.com (for J2ME devices) and almost zero income from ads. Those two platforms (Blackberry and J2ME) are the most difficult to monetize.

We also learnt that analytics is good. We found out that we are getting loads of downloads from Cameroon. We couldn’t spend the needed money to translate the app. Remember we are making almost zero income. So I got a Cameroonian friend who assisted us in translating the app to French. We now have the app in two languages. Also we have to launch the Android app (It makes sense, android is becoming very popular).

To make sure we don’t run into debt, we decided to spend the 300K initial funding we had very wisely.

1. We can not get salaries
2. We can not afford to spend more that 20, 000 naira per month (this will keep us running for about 15 months).
3. We refused all forms of grants and investment opportunities less that a certain amount of money. (Sorry I won’t disclose). Because the amount we are asking for is huge, no one invested. I think it did us good, because if we have gotten the grant or small investments, maybe we would have ended up like Tiketmobile (No offence please). Although we didn’t have the opportunity to turn down 25K, but I am sure we would not have turned it down. The reason is that if an investor think there’s a market in what we are doing, we better accept his offer, especially if it is 25K and loads of experience, else he will just take his money, influence and experience elsewhere.

About a month after we launched the mobile site, we started getting some trickles from advertisements and we added two more people to our lyrics writers. Today, about a year after, we have 5 people writing lyrics of Nigerian songs, 1 person writing Gospel lyrics, 3 people writing lyrics of Ghanian songs, 2 managers (one per country) and we are in the advanced stage of starting South African Lyrics.

So in conclusion, our most important decision is to have a wap site for those who couldn’t use the app for any reason. The wap site adverts picked up faster than the mobile apps and today, we have expanded to 2 other african countries, the third one in progress, funded exclusively from the money made from the ads on the wap site.

I believe Nigeria is a big market and soon, apps will start to do well, but for startups, my advice is to build a web/wap site. If you think you have a chance of winning 25K in google app challenge, then please do build a app (case study? AfriNolly), else focus your energy on the web/wap. Then build an app. Also build an app for Android and iOS, they are the easiest to monetize in terms of Ads. Studies have also shown that iOS users tend to even pay for stuff (in app purchases) more than Android users and finally, Blackberry might be dying a slow death in the west, it is still very popular around here, build an app for Blackberry, you might not be able to monetize it, but it will give you the necessary stats you need to pitch if you need to.

Links.

Website – http://nalyrics.com.ng
Mobile – http://nalyrics.com.ng (auto detect mobile sites)
Apps
Blackberry – http://appworld.blackberry.com/webstore/content/113630
Android – http://play.google.com/store/apps/details?id=com.trinisoftinc.nlw

About these ads

1 Comment »

  1. Oladeji said

    NOW THIS IS GRAND.
    CONGRATS.. GREATER HEIGHTS MAN

RSS feed for comments on this post · TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 203 other followers

%d bloggers like this: