On tuesday, we visited a small company called keepsafe. They had built a Mobile Application which allowed you to protect your private files with a pin number. They talked about how it all started out, and how they grew the application from a very small user base to over 45 million downloads. The speaker; Phillip Berner, provided us with some information on what the team comprises of. Initially, the team consisted of only programmers. After the first round of investment; $750,000, they hired someone to take care of the business end of the company. Part of the investment also went into buying an office space. The second round of investment was $3.5 Million Dollars, which they invested into acquiring more staff, and implementing a cloud infrastructure for the application. This allowed them to store all the users private files in the cloud. Their only justification for that seemed to be that when a user gets a new phone, they can move all of their “pinned” files onto their new phone. But I found this very questionable, since a user will most likely want to move all of their file across, not just the private ones. I suggested that they use a more localized approach, where you can transfer files directly between devices. Phillip suggested that some people may not have their old phone when purchasing a new one. Still, It seems like something that was not purely motivated by enhancing the user experience; They now hold a lot of data, that users consider private. I found it strange that they would invest such a large amount of money into building the cloud infrastructure, only to provide a feature that will surely drive away some of their customer base, and to provide people that purchase a new phone with some convenience. The speaker mentioned that they had customer demand for a feature like this, but he did not say how large the demand really was, the only metric he provided was that they ran a questionnaire in their local area. 45 Million downloads does not mean that they have 45 million active users. I wonder how sustainable a business like this really is.
They mentioned that they have not really put much thought into their business model either. If a business is sitting on 10-20 Million Active users, surely they must have at least thought about how to monetize their application. But for me, this was the most interesting part, it got me thinking about how I would structure a business model for an application like theirs. User retention should not be an issue at least, since the app provides a continuous service to each user.
Regardless, I found the experience to be insightful, and it showed me that not everything is as planned out as it may seem on the surface.