How to Create Repeat Customers In a Hit-Driven Market
“We’re making music creation more accessible for people who haven’t spent five years at Juilliard,” says Jeff Smith, co-founder and CEO of Smule, a mobile-app maker that lets people create and share music with others via their smartphones. Ocarina, one of Smule’s most popular apps, allows users to play a smartphone like a flute by blowing into the microphone. It has been downloaded more than 10.2 million times.
I Am T-Pain, an app that Auto-Tunes a user’s voice in the style of the eponymous rapper, has more than seven million downloads. Smith started San Francisco-based Smule in 2008 with Ge Wang, his music professor at Stanford University. With a three-year growth rate of 645 percent and $10.9 million in revenue in 2012, Smule earned the No. 708 spot on the 2013 Inc. 5000. Below, Smith shares his tips for keeping customers coming back, even in a market in which users are always on the lookout for the Next Big Thing.
1. Invest in Community
Smule users come for the apps, but they stay for the community the company has fostered. Half of Smule’s research and development budget goes to building a social network in which its core users can interact. A user of Smule’s guitar app in India, for example, can accompany a Smule karaoke singer in the U.S. “The apps are a conduit onto the network,” says Smith. “Once users connect to the network, they really experience the whole Smule.”
2. Trust Your Gut
Smith is an advocate of using data analysis to understand user behavior-;the company tracks more than two billion data points a month across all its products--but he says that sometimes you just have to
trust your instincts-;especially when launching products. “If you concede up front that you don’t know it all, it opens up a whole world of possibilities, because you can try anything,” he says. “Who knew that Ocarina or I Am T-Pain would be a hit? Those concepts were unprecedented.”
3. Make it cool
With roughly 900,000 apps in Apple’s App Store alone, the competition for an app buyer’s
attention is fierce. Smith credits word of mouth for Smule’s ability to attract new users. A big key to that has been the company’s knack for creating fun products that people are eager to show to their friends. “Ocarina is still selling well after five years on the market because it’s a fantastic demo,” he says. “It’s one of those products that is accessible right out of the gate.”
4. Don’t overcommit
To avoid spreading its resources too thin, Smule now introduces only one or two new apps a year. That has allowed the company to focus on expanding its existing offerings to the Android operating system and building international sales. Smith has also learned the importance of killing products that aren’t generating good growth. One example, a virtual-firecracker app called Sonic Boom that Smith describes as “one of our more spectacular failures,” was pulled off the market six months after launch.
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