We 2.5x'ed revenue from our browser extensions in the last month
The first blin is always lumpy.
Hey, what is up.
I’ve finally pulled myself together to put down the first issue. If you’ve read anything from me before, you know that I write long stuff. This time is no exception.
This newsletter is a pure experiment. The one intended to hone my writing, as well as social and organizational skills. I wanted to start one to share my thoughts and takeaways from running Gikken, the profitable company that I co-founded with a classmate in 2016 (more).
I have been always coping with brutal shyness. All aspects of my life have been suffering from it, including the career. Up until very recently, I was thinking that what I do is not impressive enough to tell people about. If someone would have asked me what I do for a living, I’d humbly reply, “I make iOS and Mac apps.“ They were always left confused and sometimes follow me up with, “so… like a freelancer?“ I’d be just too shy to go into details, shoot a few impressive facts like that I actually run a profitable business that serves 600,000 (at the time) monthly active users. No doubt, there’s a thin line between bragging about yourself to the extent of annoying people and exciting them about what you do.
I figured that I need to give people the bare minimum of information about me and leave it up to them whether they want to learn me better or not. I won’t flatter, I love people’s attention. However, what’s more important is that getting people interested in myself has proven itself useful for building all kinds of relationships. And the largest part of my job as a CEO is nailing relationships with people right. Building a good team, selling to customers, etc. It all boils down to being great at relationships.
So, this newsletter is basically my next step towards stopping to shy away from who I am and what I do. 2021 is the year of change for me and Gikken.
I have been coping with a minor social burn-out (is that a legit term…?)—didn’t feel like sharing or even communicating much, but now I’m feeling more rejuvenated + we have just pulled off a few things that helped us significantly increase revenue.
In the last month, our revenue from Mate's browser extensions grew by 250%. Extensions used to be our weakest spot—most active users but least revenue. Now it's changed. It's still a long way ahead of us to match the Mac app's revenue but it's already surpassed our iOS app.
Just like any "overnight success" it took us months of hard work and a bunch of experiments to get there. Increasing revenue from the extensions has seemed like low-hanging fruit to us for a long time, given how many people are using them per month (~800k).
First, we tried to monetize them if they stayed unpaid forever. There are not too many ways to do it. Mostly, you can either sell their data or show them ads.
We're extremely pro-privacy, so the former was off the list instantly. We went with the ads option. But again, I would feel miserable if we had slapped a 400x200 Google Ads banner on top of Mate's beautiful & clean interface.
We came up with a tiny (for the better or worse, unobtrusive) banner at the bottom of Mate's toolbar window. We could only find one ad network that lets you show ads your way—BuySellAds. It just gives you data and you show it however you want. But they ghosted us 🤡
The annoying perfectionist in me would never agree with anything obtrusive or ugly. We necessarily wanted the ads to be not only good-looking but also as useful & contextual as possible. So we came up with what we called affiliate ads.
We assumed that there are lots of language learners using Mate. Lang learners resort to dozens of different services while mastering a language. A translator app is just one of them. 99.99% of the time, they're also using Duolingo, Anki, Babbel, etc.
Under this assumption (that was proven wrong later—I’ll probably cover it next time), we decided to cross-promote stuff that lang learners might find useful to our extensions users. We threw a bunch of all-purpose educational services like Udemy into the pot, too.
Pro users would not see the ads, of course. We were very excited when we shipped the first version that was proclaimed to help us finally stop subsidizing the free users. One day came by, two, three, and there were no sales.
It turned out to be a complete failure. 500k+ impressions per month converted to only ~1.3k banner clicks to like $30 in commission fees.
We use freemium only for our extensions at the moment. And we used to be very insecure about asking people to purchase the Pro version. We tried our best not to be too pushy.
How insecure have we been all these years? Here's a real story: when we rolled out dark mode, it was initially in the Pro version. Once, some Russian dude wrote a negative review that the dark mode must be available for free. And we actually did move it to the free version.
So while looking for alternatives to affiliate ads in hopes of becoming less dependant on Mac app's rev, we stumbled upon an interesting fact: most active users have already purchased Pro even though we were offering it very humbly.
I emailed thousands of randomly selected users with one simple question, "What made you choose Mate over Google?" An open question would get us fewer responses than e.g. a survey but I was anticipating those responses to be more insightful.
And they were! Many people got back with full-blown essays about how much of a life-saviour Mate is for them. 90%+ of responses were from Pro users 🤑
In short, the most important thing is translation quality, closely followed by our ace UX and that's what Google or DeepL don't have. All these beautiful integrations like double click, full page translations, etc. Pro users have figured out the power of it & totally loved it.
After poking at analytics, we figured that there was a subset of people who were translating as much as our Pro users (top 10%) but were still using the free version. We pulled all our courage together and decided to curb our charitable inclinations by moving way more features to the Pro version in hopes of pushing those users to finally switch to Pro.
We thought a lot, looked at analytics a lot, and decided to do it in two stages to avoid potential excessive backlash. We would basically only keep the very core free—what helped us retain users after they install the app, so we eventually win more time to persuade them to upgrade to Pro.
Fast on-page and full-page translations, as well as those in the toolbar window would remain free, but things like history, Phrasebook, phonetic transcription, synonyms, noun genders, dark mode, speech translation, etc would only be available to Pro users.
Interestingly, if you look at those Pro features separately, they have significantly lower usage than, say, double-click translations. Most-used features remained free due to the reasons stated above.
We took a bet on two things here: 1. clicking on 50% of buttons in Mate's interface would trigger a Pro upgrade pop-up now, which goes hand in hand with 2: we wanted to play on many people's love for maxed-out things.
If they're more or less used to Mate and find it useful, reminding them that they're missing out on a better, shinier version (Pro) may do its job some time. You can easily side-step into being obnoxious & eventually lose users instead of making them pay, though.
We rolled out the first batch of stricter Pro rules on March 23rd. To my big surprise, there was no backlash at all. No negative reviews, no surge in uninstalls. Only an ~80% surge in revenue.
We quickly moved on & released the second batch. We took a bigger shot here and restricted access to synonyms in both toolbar and on-page pop-up windows. To my even bigger surprise, there was still very little backlash. We got a bunch of 1-star reviews (that get diluted in the ocean of 5-star ones, anyway) but again no surge in uninstalls.
To sum it up, I'm very happy with the outcome. "1 month" in the subject is surely just an attention grabber. We really did implement all this in a month or so but it would have been flat-out impossible without the heaps of insights from the last years and dozens of failed experiments.
Don't be easily scared by a couple of negative reviews. Solid goals help you grow a thicker skin. When you know what you're doing this or that for, it's easier to get through turmoil.
Why a newsletter?
I find newsletter the most intimate medium of all. I like that I’ll be sending out these issues only to those who have actually subscribed, hence showed interest in what I have to say. Also, I love that everyone has frictionlessly reply and share their experience or thoughts, intimately.
If you’re reading this far, I’m moved. Thank you 🖤 If you have any feedback on how this newsletter should be shaped in the future (length, topics, etc) or literally any thoughts, feel free to email me back. And feel free to invite your buddies to subscribe, too.