Apps have become the constant companions to our 21st century lives. We have apps to help us sleep, apps to help us wake up, apps to keep boredom at bay, apps to keep friends close, apps to help us organise efficiently, work productively, and communicate easily. Faced with a challenge – whether it’s deciding what to eat for breakfast, figuring out how to manage our finances, or even, ironically, learning to detox our lives of technology – our local app store has become our first port of call. For every time we utter, “If only I could….” there is the now inevitable response: “Oh, you can! There’s an app for that.”
With more than 2.2 million apps available on Apple’s App Store alone and more than 149 billion app downloads recorded last year, it’s no wonder that we now take them for granted in a way that makes it easy to forget they are usually the product of innovative thinking and immense hard work. So we’ve got the Australian founders of two recent successful apps here to give us a behind the scenes look at the trials, tribulations and triumphs of starting an app.
The eGift card service app Prezzee and social media app Tinybeans, offer solutions to two classic “problems” of contemporary life. Prezzee, founded by husband-and-wife team Claire Morris and Matthew Hoggett, does away with desk drawers filled with dusty, expired gift cards by making it easy to buy, send and redeem gift cards online, while photo-sharing app Tinybeans, founded by Stephen O’Young, Eddie Geller, and Sarah-Jane Kurtini, is eliminating the scourge of “sharenting” with its super private and efficient alternative to mainstream social media platforms for the sharing of photos of your kids.
For both companies, the initial excitement of forming the idea, doing the market research and executing a business plan, was followed by the daunting reality of securing finance. In a market environment that has one constantly looking over one’s shoulder, waiting for the competition to appear on the horizon, fundraising becomes a more urgent priority than ever.
For Prezzee, the seed funding came surprisingly easily. The first small round came from a previous boss of Claire’s who immediately saw the potential in the product. The second and major round of investment came when they mentioned the idea to an investor who was interested in helping startups. “They fell in love with the idea and came back very quickly with an offer. It was a major step and not one we took lightly. But it was also very exciting to start this new relationship,” says Claire. “With an investor, it’s not just about how much they love the product. They are buying into you as people. They are looking very closely at us and deciding whether we’ve got what it takes. The trust involved on both sides is huge.” The major advantage of securing this investment so early on in the app’s development was that Matthew and Claire could get on with the business of being first to market. “We never had to take our eye off the ball – which is product, product, product,” Matthew says. “Sometimes you have to be flexible enough to make a quick decision and run with an unexpected opportunity.”
Tinybeans got its first round of seed investment from private investors mid-2014. “We approached a whole range of people,” says Kurtini, “and we did it all ourselves. It was a hugely time consuming process and frustrating in the sense that it took us away from the parts of the business we really wanted to be focusing on. But nothing could move ahead without funding and we didn’t want to outsource that process to anyone else.” Like Claire and Matthew, the Tinybeans team recognised that they were selling themselves as a team, just as much as they were selling an idea.
“Outsourcing the first part of our app development was necessary but ultimately not sustainable.”
Tinybeans took the significant next step of listing on the Australian Stock Exchange in April this year. “There were a lot of regulatory hoops to jump through and it was nerve-wracking because at no point is it a guaranteed outcome. Right up until we actually rang the bell at the ASX, we were anxious that something might derail us,” explains Sarah-Jane. The advantage of going public, she adds, was “achieving flexibility by providing a liquid opportunity to our investors who feel like they have more control over the outcome of their investment.” Was it hard to take the company public by, in effect, handing a chunk of it over to shareholders? “By that point, no! We wanted to grow the business and, for us, listing was the most effective and efficient way to get that done.”
With funding in place, both Prezzee and Tinybeans were able to focus on building outstanding teams of staff and bringing operations entirely in-house. “Outsourcing the first part of our app development was necessary but ultimately not sustainable,” explains Claire. “Having the resources to start doing everything ourselves was fantastic. It not only made sense financially, but meant that we were now working with a team that was completely dedicated to the product and emotionally invested in its success. Our team is everything.”
The Tinybeans team includes users of the app who were so enthusiastic about it that they reached out, wanting to be part of the ongoing story and success of Tinybeans. “Having people on board who love the product that much is invaluable,” says Sarah-Jane. “It’s been the most unexpected and wonderful way to recruit people.”
“And one of the best things about being one member in a partnership is that we never have our down moments at the same time.”
One might imagine that being in a business partnership with your spouse, in the case of Prezzee, or with mates, in the case of Tinybeans, would be fraught with difficulty. And sure, agree all the founders, they have their moments. But, in both cases, having distinctly different roles with very little overlap has really helped to keep relationships balanced.
“And one of the best things about being one member in a partnership is that we never have our down moments at the same time,” explains Sarah-Jane. “There is always someone to lift your spirits and get you back on track. I think I would find that much harder on my own.”
World-class teams and secure financial backing have allowed Prezzee and Tinybeans to get on with the business of growing. For Prezzee, this has meant developing the Prezzee Business platform, a B2B service which has quickly outstripped even the original consumer app. “Things can move incredibly fast,” says Claire, “and to stay in the game we are constantly thinking and planning 3, 6, 12 months in advance.”
For Tinybeans, growth has involved capitalising on partnership opportunities, especially within the US where the app has found its greatest popularity and where the business operations will now largely be based.
Expanding and diversifying can be tremendously satisfying and creative, but all the founders agree that with it comes the ever-challenging struggle to achieve that holy grail of work-life balance. “Yes, having one’s own business gives you unique flexibility, but it can be all-consuming,” says Sarah-Jane. “We have to be vigilant about making the mental shift out of work mode when we get home,” echoes Claire. “We choose to start late and finish late, so that we get optimum time with our kids.”
Is that level of intense preoccupation something that gets easier with practise? “Definitely,” says Matthew. “You learn not to lie awake all night worrying about things. You have to protect yourself and your family from that level of relentless stress.” Sarah-Jane concurs: “We have got much better at judging where to best direct our attention and energy. It does always feel like an endless to-do list, but we’ve got to the stage where we can be more selective about what we say yes to. And we can even take the occasional holiday now!”
As for the question of whether it’s worth the slog and the sacrifices, well, that’s met with smiles and emphatic nods all round. “Absolutely,” says Sarah-Jane. “And this is just the beginning.”