Converting a Freemium Model Product at 24% with Mailbird CEO Andrea Loubier

Hi everyone, welcome to this week's edition of Growth Everywhere where we interview entrepreneurs and bring you business and personal growth tips. I'm your host Eric Siu and today we have Andrea Lubier. Did I pronounce that right?

You did, good job.

Alright, nice. So Andrea, how are you doing today?

I'm good, thank you. How are you?

Doing well, thanks for joining us. So Andrea, why don't you give us a little background on yourself and then, you know, we'll go from there.

Sure, okay, so I am actually the CEO of this email company called Mailbird. I'm building this software company with a team of 7 other people, and we've been working on this for about a year and a half now. I've lived in Indonesia for close to 11 years now, but I am half American, half Filipino, so very international, and I also love working with an international team. And other than that, yeah, I love what I'm doing.

Cool. So can you tell us a little more about Mailbird? And, you know, I know it has— I know it's It's kind of similar to Sparrow, so we can talk about that a little more.

Yeah, so Mailbird was actually— you started seeing when we launched, we had a soft launch in April, a lot of people started calling it the Sparrow for Windows, because a lot of people were actually looking for it. But basically what we're doing is, yes, we got a lot of inspiration from Sparrow, and there was nothing like that on the Windows platform. But what we're focused on is really just building a secure email platform for Windows that brings productivity back into your life. And we're trying to build this platform so it brings a lot of innovation to email, because it has not really changed that much over the many, many years that people have been using it. And it's still, even today, the number one online activity that people do online.

Cool, great. So yeah, I mean, you know, in terms of, you know, in terms of users, how many users do you guys have right now?

So roughly right now we have around 7,000 active users, and out of those 7,000, about 70 to 75% are actually paying customers.

Wow.

So yeah, the conversion's awesome. It's now really just focusing on finding these customers that are gonna stick around. So yeah.

How does, how does your pricing model work?

So we have a freemium model as well, and as well as a subscription-based model. And so, of course, the freemium model, we're kind of utilizing that to give people a chance to try the software, get familiar with it, and should they decide that they are more of a power user and they want to use some of the other features that differentiate Mailbird from the— so, yeah.

Uh-oh, I think I lost you for a second. Okay. All right. I lost you for like the last, I think the last 15 seconds or so, so anything you can repeat from that?

Sure, yeah. Okay, so I guess the question again was, if you can repeat it.

Yeah, sure. So the question again was, how many users do you guys have right now? And you answered that one. So what does your pricing model look like?

That's right, the pricing model. Okay, yeah. So what I was saying earlier is that we have a freemium-based model just to give people a chance to get familiarized with the software. And then we also have a subscription-based model, so people can actually upgrade, and then their mail application becomes more of a service that we're providing. So yeah.

Cool. So how much does it cost for me to upgrade to the premium version?

So to get the Pro version, it's actually $12 a year, so it's $1 a month. Super cheap. When you're looking at some of the other email clients that are out there, they're quite expensive. In particular, one of the more common ones that you see in corporate offices is Microsoft Outlook if they're on a Windows platform. So yeah, I think it's a great alternative solution for people that are looking for something a little different.

Got it. Okay, cool. So why— I guess the question is, you know, why so cheap?

We actually— because The other email clients that are out there were a little higher or they were free. But a lot of people that wanted something that kind of could be a little more customizable that worked with them, because everyone has different problems with email, whether it's not being able to clean out their inbox, it's out of control, or they need like a really awesome contacts management system. There's so many different things that can help people manage information. that's processed every day. So we thought, you know, why not do this and kind of build more of a community around it instead of just charging a ton of money for it? But of course, that's always something that I guess you test when you're building a startup. So we actually started with the pricing being a little lower before, and then we actually adjusted it. It was funny too because I think at first it was around like $9.99, and that's what Sparrow was charging. charging for theirs. So we're like, okay, well maybe we'll kind of mimic the same thing to see how that works. But then after just talking to some people, we're like, you know, why not go for $12 a year? Because in like a person's mind, like $12 a year is a lot easier to process. Like, okay, that's $1 a month. Whereas, yeah, $9.99, what's that? Like, it's just quickly for people to process. I think the pricing is a lot easier. So we actually saw higher conversion When we increased the price in this case. Okay.

What was the— do you know what the conversion rate bump was?

The conversion rate bump, I don't have the specific number, but I can tell you that right now it's roughly 24%.

Okay. And 24%, this is from freemium to pro?

Yes.

Okay, got it. I mean free to pro.

Yeah.

Cool. So I guess, you know, another question is, you know, have you— are you— did you guys take any funding? Because you said you have like— you work with 7 other people right now, right?

Yes. So the initial capital that's been injected into our startup was bootstrapped internally, so we have not received any outside funding yet, but we are actually starting to actively seek it because we are starting to grow now. We want to kind of expand our efforts and resources to really keep the business moving forward. Okay.

I think an interesting part of the puzzle is that, you know, you're working with 7 other people, and I know you have 7,000 users right now, but, you know, the revenue I mean, you know, thinking about the math off the top of my head, it doesn't add to like pay everyone. So, you know, for people that are wondering how you can, you know, get these 7 people to work on a compelling, you know, something with— get them to work on something with you. I mean, how are you compensating them right now? Let's put it that way.

Yeah, sure. So everyone kind of has their own focus in the business. And one of the things that you see, why you're seeing so much— so just to clarify, I'm in Bali right now. And I'm working from a coworking space. space that is here. And the reason why we're seeing so many more entrepreneurs from all over the world coming to places in Southeast Asia, I guess because you're in, I believe, California?

I'm in Santa Monica. Yep, I'm in California.

Santa Monica. Okay. So it would be a lot more expensive operational cost-wise to run a business in California than it would be in Southeast Asia. Just cost of living is cheaper than in Western worlds. And otherwise, like, yeah, that's what it boils down to. So resources are a little more available here.

Cool. And are you paying them all like a salary right now, or does everyone get like a share of equity? I'm just wondering, you know, for our viewers, they're wondering, how do I get 7%?

How do we do it?

Yeah.

Everyone has a share in equity in the company. All our core team does. And on top of that, we've kind of, in this coworking space that we have here, part of the benefits offered are also, you know, this community that's here. So for example, cost of living would be covered. So yeah, sure, salaries for all of us right now maybe aren't amazing, but we also have the benefit of this community and all these resources around us in this environment to help us grow. I think that's really cool and what makes it different.

Yeah, so I guess we can talk about Bali a little bit. So I mean, what's the typical cost of living there just so people can get a better idea of what if If they want to do something exactly like you.

Yeah, exactly. So, okay, I guess, I know you think about getting an apartment in San Francisco, it's easy going to be at least $3,000, just a small apartment. In Bali, you could get a whole villa with staff to help you day to day for less than that.

Wow.

Okay. Yeah.

Cool. Yeah, so I guess, so is most of your team based in Bali right now?

Actually, no. So we have a pretty distributive team. We have some team members in Copenhagen, and then the rest of the team members are, all of us are in Indonesia, but some of us are in other parts.

Okay.

Yeah.

Cool.

Great.

So I mean, you know, you making the move from the US and then deciding to take the plunge to, you know, just move into Asia.

Yeah.

I guess, you know, walk us through that experience.

So, like I mentioned before, I've lived in Indonesia actually for like 11 years now. I actually grew up in Jakarta. I went to an international school there, so I was kind of already, you know, brought up in this like very healthy, diverse mix of people. And as you can imagine, like all these people at this international school, eventually when school is over, go off to college and A lot of people go back to Europe or the US and whatnot. So, I think because I had grown up in that environment and around these types of people, it was always— I always knew that I wanted to kind of branch out and work on an international team and eventually come back to Bali. So, kind of my home away from home.

Got it. Okay, so there's some familiarity there.

Yeah.

So, yeah, I mean, you know, because the way I'm trying to think of this right now is I read a lot of articles out there. It's like, okay, you know, yeah. Don't start your startup in San Francisco, you know, put it in like, you know, X, Y, or Z, like some random spot, and then it's just like your cost of living will go down, operation costs, things like that. So it's like this is almost, you know, you're kind of hacking operation expenses, right?

Exactly, yeah.

Yeah, and I think that's great, but I'm trying to, you know, for a lot of people it's a risk and I think it's a scary thing. So I still, even though you're familiar with Bali or Indonesia rather, you know, you making the plunge to go back, I think that's still, you know, A fairly brave thing to do, and I think it's something maybe a lot of people should consider, maybe even myself. Cool. So in terms of, you know, the struggles with having a distributed team, I mean, what struggles are you dealing with right now?

I would say initially it was just trying to figure out, you know, when you work on a distributed team, you kind of still want to maintain somewhat of a team feeling. So like, even though we're working far away from each other, we still will meet regularly. We actually meet once a week.

Okay.

And that's been really, really helpful for us in keeping us kind of cohesive and moving forward with the business. But also in addition to that, a lot of us will kind of travel and meet with each other too and come together for, let's say, like 2 months straight and really when we're trying to develop something or we have a big launch coming up. So yeah, I mean, it really has worked for us. And we have a great project manager too that helps us kind of stay on track with everything. So it really, I wouldn't say it's— now it's really possible to do it, to work with a distributed team. Yeah.

You know, I used to do that when I was at another startup. We had like 50% remote people and then, you know, the other 50% were, you know, actually in an office. I tried doing the remote thing right now as an agency. It actually gets really hard. So now we're thinking about meeting people like You know, getting an actual office again because it's just really difficult to collaborate on different ideas for clients. So I think at the end of the day it really just depends. In some cases it really works out well. Like, you know, you have a good mix where it's like, you know, getting the FaceTime once a week. I think that's super important still just because there's something you— some things that, you know, you get in person that you don't when you're remote.

Exactly, yeah.

How about what are some benefits of being remote that you can tell our audience Benefits?

I guess you just have a little bit more freedom, I guess, in what you're doing and when you're doing it. I don't think it's ever necessary that you all have to kind of come into work, do the whole 9 to 5. I guess that's a very old-school corporate structure.

Mm-hmm.

And so, of course, we've been looking at other things in terms of building the team and preparing for continued growth, which is a holacracy. So I know GitHub, they actually— something that they looked into, and it's awesome. There's a lot of different concepts in it, but I mean, I think what's great about it is that you can adapt it with your team. So the concept is no crazy hierarchy, no boss barking at everyone telling them what to do, but more everyone— Part of that is also hiring the right people. to join the team, right? So everyone for the most part has great work ethic. Everyone gets their stuff done, and part of that is also because we've developed this culture together as a team by meeting once a week and just making sure that we're all on the same page.

Cool.

So yeah, that's it.

So you talk about Holacracy a little bit. Can you give— I mean, you know, how long did it take you to put that process together? Because I know they have like a big constitution and all that. It sounds like there's a lot of work to get that going.

We're actually in the process right now of doing it. Like, the funny thing about it is that I think because we were so great at establishing like this really great team culture already from the beginning, it's more like right now it becomes like a semantics issue where you're just like changing some of the words around. But otherwise, it also just kind of— We're in the process right now, so how long does it take? I would say At least a couple of months to really adapt concepts and make sure that everyone understands that they're part of this team together. So all these big decisions we can make together. It's not one person.

Right. Yeah, no, I think that's the great thing about it. It removes that layer of management and everyone's responsible. It's just, it's a scary thing to have to make that change while everything's still going. So I applaud you for doing that. Cool. So in terms of, let's talk about user acquisition.

So how did you acquire the first So first 100 users, what we did before we even had a name for Mailbird, we had this like really simple landing page, and I think we didn't know what to call it, so we called it Magical Mail App.

Okay.

And all it was is just a field where you can enter your email address, if you're interested in this cool, you know, new email application, you could sign up and we'd notify you when it was ready. So we started building— our first potential target users from that. When we really started getting true actual users is when we actually launched a soft— we had a soft launch April 2nd, 2013, which allowed people to then actually use the application. So of course all that time before then we worked on product development. But yeah, so first 100 users was probably during our soft launch. What we did is a lot of different marketing initiatives. We started building our blog. Of course, when you start that, no one really reads it, I think, at first until you start to really— I mean, all this stuff I think just takes time and you have to just go through it. What else did we do? First 100 users. We used social channels as well to kind of build brand awareness for it. And with a lot of the news that came out with Google acquiring Sparrow, and people all of a sudden also started looking for the Sparrow for Windows alternative. It was just the right time, I think, for us. And so we were able to communicate to people that, hey, there's this option out there. Give it a try. Cool.

Great. In terms of other user acquisition strategies that you're using today, can you talk about those?

Sure, yeah. I feel like nowadays it sounds like it's more obvious, but of course we do a lot of content marketing, so blogging, reaching out to other blogs and influencers. We do a lot of promos too. Sometimes we'll do, for example, Black Friday, which is of course the big sales day. Everyone goes shopping after Thanksgiving.

Mm-hmm.

We decided, okay, you can leverage these these days, these big consumer days. They also have like, what is it, Black Monday or something? Or not Black Monday, Cyber Monday.

Cyber Monday, yeah.

That's right, yeah. So I mean, it's like leveraging those opportunities to do little sales promo, like, oh, you can get this awesome software for that. We actually also tested with kind of like the Dropbox Strategy.

The referral strategy?

Yes, exactly. So we had this thing, and we're still doing it now, and it's been great. We have like over 10,000 people that have had invites to their friends to try Mailbird, which is pretty cool. But in exchange, they each get, you know, the upgraded Pro version for like 25% off or free for a year. So that's been really fun to test. I mean, a lot of this It's like some of it works, some of it doesn't, and we just kind of go through the testing process for all the different types of stuff.

Yeah, that's super important for people to understand. I mean, you know, some stuff's going to work, some stuff isn't. You know, you just got to see what sticks. You know, some people are against that, but I'm totally for it. And then sometimes, you know, something that doesn't work, right, might end up working in a few months. So I think the key here is, as a marketer or as a business owner, You have to keep a really open mind, right? That's kind of what I'm hearing.

Definitely, yeah, definitely.

Cool, great. So when you say, let's say, when you talk about content marketing, right? I mean, you know, how does that process look? Because a lot of people say they're doing it, you know, sometimes it's blog posts, sometimes it's kind of haphazard. I don't know what's going on exactly. It can be a bunch of things. So what is it exactly?

Well, okay, I mean, I think you already kind of hit the nail on the head there. It's just any type of value-added content that is created for your business. So yeah, that could be a blog, that could be even doing a podcast even, it could be an interview, a Skype interview about your business like this. So that would be another thing too. It's just sharing information that's somewhat centered around your business that helps people.

Mm-hmm.

So I don't think there's any one particular thing. So content marketing is, I think, in essence, that. It's developing really great content to share with people that would benefit from the product that you're building.

Got it. Makes sense. And so it sounds like, you know, earlier you talked about measuring specific items, and for a team of 7 people, it sounds like you guys have internal analytics already built in, and it sounds like it's pretty— it's fairly useful already at this early stage. Can you talk about that a little bit?

Internal analytics, what do you mean exactly in that sense?

Yeah, so internal analytics, I mean, like instead of using like a Google Analytics, you guys have your own tools to measure, you know, how engaged people are. You know, you talked about the referrals, 10,000, all that kind of stuff.

Right, right, right.

Yeah.

Right, right, right. Well, we actually do use a tool called Mixpanel, which is basically like, yeah, the alternative to Google Analytics. Google Analytics, but it's been really great for measuring a lot of these things.

Okay.

But otherwise, yeah, we have kind of like our own internal server that manages kind of our database of users. So there's that too, and that has numbers in terms of our retention, new active users, total downloads for like a week. So we are measuring all that stuff kind of with our internal server.

Yeah. Cool, love it. So it seems like, I think in one of— I've read somewhere where it seems like you have your days broken down into predetermined sections. I think this was in a previous interview, right? You know, you might do 30 minutes on this, you know, 10 minutes on that. So I guess my question is, how religiously do you kind of follow this every day?

Okay, so I would have to say that every day is different. So we always like to experiment in terms of like productivity, right? So I don't know, one of the things is, which is probably what you might have heard about already too, is like the Pomodoro, this tomato timer effect where you have like an intense working period and then you cut off and take a break.

Yeah.

So it depends on what you're doing though too, is what I realized because we were testing it a lot. It's like if I'm, let's say I'm writing a blog, doing that, what it was really effective because it's like, okay, this is the time you sit down, you focus, you get it done, and then you just take a little break.

Mm-hmm.

But for other tasks, it doesn't always work. So I think for the most part, because we kind of have Holacracy in place, everyone has developed their own routine that they know is optimized for their own productivity. So I, I don't know if I could say that like, yeah, this is, this is It's the one way that I get stuff done and stick to it.

It's tough to follow, right? As a CEO especially, it's tough for you to have something really set because fires happen all the time, right?

Yeah, yeah.

Cool, great. So in terms of, you know, in terms of everyone has a productivity hack, right? So what's one productivity hack you can recommend to the audience?

Productivity hack. I would say, okay, this is a very relevant one. Don't check your emails first thing in the morning. And do, you know, kind of create a plan for what you're going to do that next day and stick to that plan. Some of the many, I guess, strategies that people offer for better email management is to really batch your email time.

Mm-hmm.

I mean, I'm a perfect example of it. You know, at one point in time, I worked for a market research firm. We used Outlook, of course, because we were on Windows operating system. And I think there would be days where I would go in and just— I don't think I did anything but just constantly stress out and worry about replying to emails and clients. So I mean, then you don't get any work done. So that's my productivity hack. Don't check your email first thing in the morning. I know people really like to do it. They get scared when you say, oh, I can't check it. But you'll find that, wow, I actually am getting work done.

Yeah. No, I even sometimes, in some cases, I just sometimes I just ignore email for like maybe even a whole day sometimes to get work done. I mean, yeah, that's what it takes. Um, cool. So actually, you know, a question just popped up in my head. Um, so what is your background? Are you, are you technical? Are you more on the business side? What do you, you know, what's your background exactly in that sense?

Uh, my background is definitely with the business and marketing side.

So, okay.

Yeah, cool.

So I mean, in terms of, you know, If there's any business and marketing people watching this, I mean, how have you kind of adjusted to working with developers, working with creatives like designers as well? How does that work out for you? What's your process?

So, okay, to start off, I would say that this is probably like— I've probably learned more in the first year of working on this tech startup than I would have ever learned in, you know, college. And I think the reason for that is because part of being in a startup is there's so many new challenges that come up, and you just, you learn to adapt with them. And so of course coming in, you know, maybe I don't come from a software engineering background, but like when you start working with people, you have that understanding with each other, they'll fill you in. And now I'm like, okay, now I'm starting to learn some of these like super techie words. But I mean, I think it just happens naturally. If you don't know something, there's always someone there willing to sit down and help and explain it to you a little further.

Got it. And, you know, what's one mistake that you found yourself making with, especially with developers in the beginning? So I'll give you an example, right? I used to be like, oh, that should be easy to do, right? A few hours, right? So that's one example, that's a big no-no that I learned to avoid. What's one no-no you can share?

I was just going to say that's exactly the same thing that's happened. At first you're like, yeah, we just do this, right? It'll just take a day, no problem. But I mean, I think for me too, I was very soon to realize our team members, our developers on our team, they are awesome at what they do. They're experts. And they can be very honest too about, yeah, reality-wise, this is going to take me a week, and not for me to just Be like, oh yeah, it's today, right? So yeah, I think part of what makes it work for us too is because we have also a really awesome project manager. So when we're developing the software and the business, we kind of make those line up and we have a roadmap for it. And so everyone's on the same page. And sometimes, yeah, we miscalculate. Sometimes we are like, okay, yeah, we'll have this done by this date. But New obstacles come up, things take longer than normal sometimes. So I think that's just part of it. But that, yeah, that would be the same mistake, I think. It's just like, oh yeah, we can get all of this done, right?

Yep, yep, cool. Final question for you. So what's one must-read book for entrepreneurs?

Okay, just because this is probably one of the earlier books I read when I was Just joining a startup. It's called Marketing to Win. It's a new one. I actually know the girl because she does a lot of speaking engagements as well. But it's called Marketing to Win. And the reason why I like it is because it's a simple— or it's kind of like the basics. Maybe it might be too easy for most people out there, but for me, someone who is starting this for the first time, It had a lot of valuable, actionable things that I could take from the book. So anything from brand strategy to how you engage and communicate with your users. It was just a really easy, simple read with easy to-dos that I could actually utilize to get the business moving. Got it.

So very practical business book then.

Yeah, yeah, yeah. I know, I was like, Marketing to Win? But it was really good. Yeah, I thought it was really good. Cool.

Perfect. So, you know, Andrea, thanks so much for joining us. Really insightful stuff. I think a lot of people, especially on the business and marketing side, can take a lot away from this. Thanks for joining us. You know, we hope to have you on the show again sometime soon.

Great. Thank you so much, Eric.

Alright, thank you.