This is the story of a woman working 120 hours a week at a job she wasn’t interested in, who had an idea so good that she quit her investment banking job a week later.
If you have an idea but are nervous about quitting your job, wait until you hear how Yunha did it in this interview.
Andrew: Hey there, freedom fighters. You know me, right? I’m Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart, and this is the story of a woman who didn’t even want to be an entrepreneur, but then she found an idea that she got really excited about.
Yunha Kim is the founder of Locket. You know how your mobile phone has that lock screen probably that has nothing but a static image on it? Well, Yunha came up with an app that shows content on the lock screen. Swipe one way, you get to unlock your phone and use it the usual way. Swipe another way, and you get access to that content. Her company also has something called Locket SDK which app makers can use to show their content on her users’ lock screens.
We’ll find out how she built her business, see how successful it’s gotten, and how it got here. And it’s all thanks to Walker Corporate Law. I’m going to hold up their mug right there. Scott Edward Walker is the startup’s lawyer, but we’ll find out more about him in WalkerCorporateLaw.com later on.
Now, I want to meet Yunha. Yunha, welcome.
Yunha: Hello. Thank you, again. How’s it going, guys?
Andrew: Good. What did you want to be, then, as a kid, if not an entrepreneur? All I wanted to be was an entrepreneur. What did you dream of back then?
Yunha: I dreamed of being a professor.
Andrew: You dreamed of being a professor?
Yunha: My parents and grandparents are all professors, so I dreamed of being a professor. At one point, also being a lawyer, like everybody did. When I was graduating from college, I was really not sure what I wanted to do. I didn’t want to study anymore, so I got a job as an investment banker right out of college.
Andrew: And how was that?
Yunha: So, even before I actually… I think probably even a month before I quit my investment banking job to start this company, I probably thought that I was going to be somebody that works at a hedge fund or a private equity. I never imagined that I would be having a startup like I’m doing right now.
Andrew: When you were living as an investment banker, what was the office like back then?
Yunha: The office?
Yunha: The office was cubicles, a bunch of cubicles. I had my own section with two monitors, and I was kind of chained to the desk.
Andrew: I see.
Yunha: You know, working long hours.
Andrew: And today, if you were to flip your computer around – and let’s not, because it took us a while to set it up…
Yunha: Yeah. [laughs]
Andrew: But if we were to flip your computer around, what would we see?
Yunha: So, right now I’m in one of the bedrooms, and you see a bike parked here. We have three mattresses here lying around.
Andrew: Three mattresses in this bedroom.
Yunha: Yeah. [laughs]
Andrew: And so you live and you work out of this place.
Yunha: Yes. We work out of a two-bedroom apartment.
Andrew: All right. So, you were living in a cubicle during the day, but at least when you got home as an investment banker, there was… what was the apartment like? Don’t you feel like this is a little bit of a set-back?
Yunha: [laughs] Yes, it’s definitely a set-back.
Andrew: Okay. [laughs]
Yunha: I had a one-bedroom apartment in Manhattan in Times Square. It’s got a really great view, and I had my own room. Now, I’m sharing my room with three other people. [laughs] So, it is definitely a set-back in terms of lifestyle, but I think I am probably ten times happier.
Andrew: Why? What makes you ten times happier?
Yunha: Why am I ten times happier?
Yunha: I think it’s because I know exactly what I wanted to do, and I love the fact that I’m able to work on something and be able to see the result happening. Maybe not the next day, but maybe ten days after.
Andrew: I see. And the idea that got you here, that got you to change your whole life like this, it happened when you looked down at your phone and… actually, you tell me. Because this is an innovative idea. Walk me through how you came up with it.
Yunha: Yeah. So, that was that one week when I was probably pulling about 120 hours, and I was working for this one boss. That was right after I was… I didn’t have any holidays off, and I was just working and working. And that’s fine, but I wasn’t working on something interesting for me. Because of that, I needed some outside life, and I was always on Facebook through my mobile phone, like this, because our computers at work weren’t really… we were not able to log into any social websites.
So, I was checking my phone probably 200 to 300 times throughout the day, just texting and checking Facebook. Each one of those moments, I was realizing that I was going through this one lock screen that was a picture of a daisy. That was a pretty ugly picture as well, and I was realizing that this was one of the real estate that I stare at several times throughout the day, and why isn’t anybody using this lock screen?
That idea just kind of popped in my head. I started modeling things out, like bankers do, like how many Android phones are there and how many times are people checking their phone? What is the market? And also, if you are able to put up an ad there, and then multiply by CPM and mobile, then this is the market. That just struck me so bad that I quit that week. [laughs]
Andrew: Is there a flaw in that thinking in that you’re saying this is how big the market is. If I could find a small portion of it, then I could be rich. That 1% of this big market… there’s no basis for whether you could get it or not.
Yunha: Yeah. There’s no basis for whether I could get it or not, but that was a real estate that nobody was tapping onto at that time.
Yunha: Nobody was monetizing that screen. So, I definitely thought that if you were able to figure out how to do that… Also, it’s not just the money. I also really liked the idea of being able to really transform this lock screen, a dead space, into something more dynamic.
Yunha: So, I wanted to be that first one. I also had thoughts of oh, maybe I should finish my first year in banking, and there’s a lot of things that I’m leaving on the table, but also my fear was that I would regret it so bad if somebody starts it and I’m not the first one.
Andrew: All right. And so, you’re not a developer. You found Paul, who is a developer.
Andrew: How’d you find Paul?
Yunha: He’s actually not a developer.
Andrew: He’s not?
Yunha: He’s not. Yeah. How’d I find Paul? I went to high school and college with him.
Yunha: So, he’s five years older than me, so we were not that close because we were not in the same game. But after his freshman year in college, we both went to [??]. He left to do a startup, and it was a digital advertising startup. It was back in those days when you were logging into an online secure platform, like let’s say Bank of America. You were waiting there, kind of… ten seconds. He was showing a [??] ad video there.
Andrew: Wait, we’re talking about in those old ATMs?
Yunha: No, no. Sorry, on the website.
Andrew: Oh, so back then if I logged into a bank’s website while they were trying to log me in, they’d show me an ad?
Andrew: OK. I’d want to punch them in the nose if they did that to me, but I like that you found a guy who was such a perfect fit for what you’re doing.
Yunha: Yeah. [laughs]
Yunha: So he was doing it not only on those websites, but also online security platforms. So, if you’re just loading games. He did that, and I think it was just too innovative. It’s exactly what YouTube is doing today, right? But I think it was too innovative for him, and it didn’t go too well. He did it for three years. But I knew that he had that skill set.
Yunha: And he’s a guy that knows all these things. He’s one of the smartest guys I know. So, I really wanted him as a partner. He’s a guy that also knows tech. He’s not the guy that codes, but knows [??] stuff. So, I asked him, and he said no. He had a really good job. He was working at an investment firm that was investing in startups and VCs, and he had great co- workers that I also knew.
So I flew down to Charlotte, which is where he was working at, and I talked to his boss and really sold him on this idea. The boss ended up investing in the company. So, it made Paul feel a lot better to leave, because he didn’t want to leave his company behind. He was one of the only analysts and he felt really bad. So, it made it easier to move…
Andrew: So, you went to Paul’s boss, and you got Paul’s boss to invest?
Andrew: Wow. The nerve to do that. I love that.
Andrew: What did you say to Paul’s boss to get Paul’s boss to say yes?
Yunha: I had a deck that I made on the job, because all I do as an investment banker is making decks.
Andrew: Okay. [laughs]
Yunha: So I had this probably 50-page deck. Which now, looking back, is so stupid. But I had that deck that had all these financial summaries, and all these ideas on how to monetize [??]. I started showing it to him, and I think he liked the thought process. He agreed in terms of the market size, and that there was nobody that was doing it. So he was just kind of thrown off.
Andrew: How much did he invest?
Yunha: He invested a really small check. I think he invested like thirty K.
Andrew: Thirty K. Alright. So then, Paul said yes. If Paul is not a developer, but Paul’s responsibility was to get this thing built, how did he do it?
Yunha: He’s not a developer, I would not have been in a place where I could interview developers. We probably interviewed a hundred people, a hundred developers in Manhattan. And we found this, we were not looking for the brightest guy with the craziest resume. We were not looking for the guys that worked at Google or Facebook. We were looking for somebody with a start-up mind that would be able to drop everything that he had and jump on the boat with us, and work like crazy. That’s how we found Kowshik[SP]. Paul is because we needed more developing, new coding, Paul started learning on the job as well. [???]
Andrew: The original idea was not to put all kinds of content. It was to put what?
Yunha: It was to put up an ad there.
Andrew: An ad. And the reason that people would want to put, I guess you had two reasons why people would want to have ads on their lock screens. What were those two reasons?
Yunha: I first thought: this lock screen space, we need to use it for better purposes. The only way to really monetize would be putting up an ad there, just like we do for many other things. I want to be able to really test out this hypothesis that people would like to see an ad on the lock screen if it’s number one, if it’s beautiful, and second, if it’s relevant to you.
Yunha: In order to test that hypothesis we needed to figure out… Mobile ads are not that great, right? These small banner ads, who wants to see those banner ads on the lock screen? Let’s figure out why people want to use it. We started rewarding users to unlock their phone. We get paid from advertisers based on CPM, and we give a cut of that to our users.
Andrew: Okay. Back then the idea was: Andrew is your user, he looks at his Android phone, he usually swipes one way to unlock, but this time he sees an ad that is beautiful and is actually relevant so he swipes the other way and then he sees more information about that ad. And at that point Andrew also gets, I guess it was a penny back then, you make some money, and the sponsor gets an impression. Boom.
Yunha: Yep. One thing then, regardless of whether you engage or not engage you get a penny.
Andrew: Oh, just for looking?
Yunha: Exactly, Locket as a company also gets paid regardless of that.
Andrew: Okay, alright. How do you even test that? How do you see will people try it out?
Yunha: By launching an app that does that.
Andrew: How long did it take you to launch the app?
Yunha: We started that entire… I left my company, my previous company, in March of this year. That’s like 9 months ago. Then because we’re all about testing an idea out first. As soon as we have an idea, we just want to… It doesn’t matter if the idea is perfect or if the product was perfect. We launched that app within probably three months.
Andrew: Three months. One thing that I’ve learned about you is that you’re kind of impatient about this stuff. That… You are. How long did you think it was going to take you?
Yunha: I thought it was going to take, like, three weeks.
Andrew: Okay. As an entrepreneur you hear that you’re supposed to be the person who is moving people, who is getting them going, what do you do when things take three times as long as you expect? How did you handle it?
Yunha: Yeah, probably all the developers hate me. Because I’m the one there, every single day, “so how are we doing, where are we, are meeting deadlines?” We never met deadlines, ever. Sometimes I’d be the one to push. Are we prioritizing right, or do we really need to have this [??] right? This feature does not need to work, let’s just get it out there ASAP. I think because of me being so impatient we probably lessened the time that we needed to, and so the product was less perfect, I think, than what our developers probably wanted to do.
Andrew: Okay. Actually I’ve been there where I feel helpless, and I want to drive the developers forward. And I do whatever I can, and it just is a pain for them. What did you learn about yourself that you’re never going to do again? And what did you learn about yourself that did work for moving things along?
Yunha: [??] That’s a good question. I think if I were to do it again I would probably be impatient again.
Andrew: You would?
Yunha: Just because, yeah I think. The way I approach it might be different. Instead of being, like, every hour, “Hey where are we? Can we do it ASAP? Can we do it ASAP?” I think it’s best if we can sit down together, go through all the items that needs to be done, and cross out these things that we don’t need to prioritize. Then set up a deadline and agree on that deadline. And I put it up on the wall that says next Monday.
Andrew: I see.
Yunha: Every day we have a goal.
Yunha: So I don’t think we had that. Because I didn’t have enough experience or knowledge about technology, that it was more about ‘is it done?’. You know I thought it was a simple thing.
Andrew: How does Paul handle it, when this is taking three months instead of three weeks?
Yunha: So I have all these ideas that come up wherever I go and I come to Paul instead of going to the developers because I don’t want them worrying about all these products. So I go to Paul, and tell him “these are the features that I think of that are going to be really nice for [??] or for [??]. He is the one to be like “oh this will take two weeks, this will take one month”, and he is the guy that prioritizes these things. He then goes to the developers and says instead of working on all these five things lets work on this one thing.
Andrew: Like a real project manager?
Andrew: So you finally have this thing, it’s ready to launch and it’s time to get users. How did you get your first users?
Yunha: What happened was we got connected to this quarter at Tech Crunch.
Yunha: No, it was Sara Perez[SP].
Yunha: Through a friend. I told her we might be launching next week. We were not really sure first of all whether or not she was going to write about us, and second of all when. We were willing to accommodate to her schedule for this guaranteed press. Well, she didn’t really just respond, but that one day she just responded right away saying, “I’m ready to write an article and are you ready to launch?”. So from business perspective it’s a guaranteed article, we need to get it out there right now. I got back to our developers and explained we had this two hour window we had to launch to which their response was no. So what we ended up doing was launching.
Andrew: Even though they we’re not ready you said “hey, I got to launch.”
Yunha: We knew there were some bumps that we might need to fix, but let’s really launch it. So we launched it that day. It was more of an accidental launch. Something that was more scheduled towards press more so than the product. We had this poster that said “as soon as we hit 10,000 users, which was our monthly goal, let’s go to Rhode Island and take a day off because we never took any days off. We ended up meeting that goal that day within 10 hours of launch. On second day we had 25,000 users, we were delivering over two million impressions that day.
Andrew: Let me hold off for a second here. This is before the Tech Crunch article actually hit right?
Yunha: This was on the day of our Tech Crunch article.
Andrew: Oh, the day of? Because the Tech Crunch article, I think I have the right one here. August 23rd 2013, the last line says, Locket has been downloaded nearly 90,000 times since launch and there are 80,000 active users. So, was this updated later on?
Yunha: No, there is another article by Surpress[SP].
Andrew: Oh, I see, Okay.
Yunha: They didn’t have live Tech Crunch articles.
Andrew: This was the article where you got to vote, got it. Wow, so that one article got you actual users?
Andrew: Okay. Did you guys go to celebrate?
Yunha: Because we were fixing those vlogs. Also, our server were down so people couldn’t log in so we probably lost a lot of users there. We ended up getting that 25,000 users.
Andrew: Wow. I see now Sara Perez’s article came out July 18th. Alright, I want to know then how you grew from there and also about this issue, but first let me say thank you to Scott Edward Walker at Walker Corporate Law, he is a start ups lawyer. Who do you guys have as your lawyer, even though it’s an ad for Scott, I got to ask you even if it’s a different lawyer, I’m curious?
Yunha: We work with Stephane Levy from Cooley.
Andrew: Okay, why did you go with a major firm like that? Aren’t their expenses really high?
Yunha: Yeah, it is expensive.
Andrew: Are they taking a piece of your business too?
Yunha: No. Coming from an investment banking background I understand the importance of law or legal issues and how they can hurt your company going forward. So when I was introduced to him, I knew [??] make sense of it. I think they have really good experience with startups and so far even though those are high I think it’s worth it because at times somebody came up to me saying I want this piece of equity, I’ll invest this and that.
And I thought that was a good deal at the time because we didn’t have any product we didn’t have a team, It was just me. And I was working with Stephane and asked him and Stephane was like, “No there’s no way we’re going to take that check, or that term sheet.” And he was a guy that he gives me, like, really good advice, not only as a lawyer but as somebody that has seen so many start-ups. Yeah, sorry to say this after the…
Andrew: No problem with that. I actually think, I have nothing bad to say about them, I think they’re a good firm. I think what Walker, what Scott does at Walker Corporate Law is he’s got the same service, the same experience and the same kind of connections but lower price. And the reason that he does that is he believes that entrepreneurs end up paying too much for legal help.
The one thing that you and I agree on I think is that you have to have a lawyer who actually gets it. I remember when I started my previous business I went to them with a similar issue to you, I wanted to give equity. If they weren’t stumped by the process and they would come up with ideas that must have worked in the real estate business or something but they totally didn’t understand me. And they were one of the top firms in New York but they didn’t get, like, what we were doing in the startup community.
Anyway, we want someone who gets it, we both agree about that. We have two different options for you, I’m going to suggest that you go with Walker Corporate Law or at least, you know what guys? Call them up and consider talking to Scott Edward Walker if you’re looking for a lawyer. At least hear the other side Scott@walkercorporatelaw.com. Pretty good lawyer. Alright, now you got everything going for you. Yeah the site is down but that’s a good thing when it means you’re down because you’re flooded with traffic. What happens when all these different people come to look ads and to get paid, do you have an advertiser for them to see?
Andrew: Okay. Good? So what did you do?
Yunha: We didn’t know that we would grow that much. Right, remember we had, we thought that we were going to have 10,000 users within a month. So, we had enough advertisers for that 10,000 users but we didn’t have enough for that 25,000 users that just signed up on day 2. So, that was one of the most challenging days in my life.
Andrew: But you still have to pay people because they’re looking at the ads. This model, by the way, is no longer there, you’re no longer paying people, which is a good thing. How did you get that first, is it one advertiser. How did you get that 1st advertiser?
Yunha: Okay, so what I did was instead of hitting up on agencies because I didn’t know that agencies existed, I thought that we had to go to clients directly and ask them, “Hey, advertise on the Loft Screen” So, at that time, what I did was I went into Duke alumni network, which is the school I went to. And I started looking for anybody that had marketing or advertising in their title.
And then I got connected to the CMO of Sears and I told him, like, this is what we’re building you should advertise here. And he said no. “You guys don’t have a brand and we don’t know what the metrics are, you don’t have any case studies.” And so I told him, “Listen, like, you know, I think this is a very innovative idea and he agreed to the fact that this is really good real estate and it would be awesome it would be the Holy Grail if they could target it inside the stores why people are shopping. So, I gave, I told him, “Let’s do a free test.” And he finally, finally said yes.
Andrew: To a free test.
Yunha: For a free test.
Andrew: Wait, by a free test you mean he was getting ad impressions but not paying for them?
Andrew: Okay. Alright, because you want him to give you good creative to put on the site and so on.
Yunha: So I started using that Sears creatives and all that to market it to other guys, so I was able to bring in Hershey’s and Sunny Delight and some of the others [??] or some of these other brands. So we quickly brought in like 10 to 15 really high quality brands on the walk screen. They were still not spending, you know, a huge amount of money.
Andrew: Wait, how did you get those guys?
Yunha: I just started cold calling.
Andrew: Cold calling. Just calling the CMO of all these companies?
Yunha: CMOs, Brand managers, you know, whatever it took.
Andrew: And how did you find them?
Yunha: On Linked In.
Andrew: Linked In.
Yunha: Also, the alumni network.
Andrew: Okay. You told April Dykeman in the pre-interview that you’ve now gotten so good on your cold calling that you have, what is it, a 3 sentence pitch?
Yunha: Three cents pitch? What is that?
Andrew: What is that? What’s your pitch now three sentence, what is it? How does it go?
Yunha: Oh, three sentence pitch Okay, so that’s the email pitch that I always do.
Andrew: Tell me about that then? This is why I do my research, I need to know every detail of the way you build your business. So what is this three sentence pitch? That gets you on the phone with them?
Yunha: So I’ve done so many things on pitch, that I find the best way to pitch, is for the subject, instead of writing too much stuff, I just say, like, hey, and exclamation mark. Because if you get that, you want to, you want to like, know who this person is.
Andrew: Hey, and question mark?
Yunha: No, an exclamation point.
Andrew: An exclamation point, Okay.
Yunha: So that, it might be like from friends, so they open it up, and once you do it’s just three sentences. Hey, Andrew we’ve got to talk about putting your content on our lock screen. Or, for our publisher sale right now, we’re saying, hey, I would like to talk to you about putting your, you know, maybe your app could be Netflix. I have an ad here, so let’s put Netflix content on your user’s smartphone watch screen.
Yunha: And then, are you free to talk today? And then, thanks.
Andrew: And then they just have to reply and then you chat?
Andrew: And these guys would reply to that? You would get on the phone with them, and then how do you convince them to try something so new?
Yunha: It’s surprisingly our hit rate has been so great. I think it’s because it’s the lock screen. You know, they haven’t thought about putting their own content through their user’s lock screen. So as long as you have that one sentence that’s pretty interesting, I think they want to look. OK, so I have all these things like right below my signature, it has links to my website, it has links to my Linkedin, and also the Locket SDK site where they can learn more about it.
Yunha: So if you put in as little info as possible on the email, the likelihood of those is higher. Because you want to know if, is this person even important? [Laughs]. You know, they want to look into your Linkedin to see, you know, who this person is connected to.
Andrew: Do you use any software that tells you if they’ve clicked on the email at all?
Andrew: What do you use?
Yunha: I use, Yesware.
Andrew: What is it? Yesware, yes, and it plugs right into Gmail.
Yunha: I also use Rapportive.
Andrew: Rapportive for finding out about them?
Andrew: And for finding their email address I imagine?
Yunha: I usually just do Linkedin, but I also, like if I want to, if there’s a person that I really badly want to reach, then I would just like, randomly guess all these email addresses, using Rapportive.
Andrew: I see, Okay. When you say, you Linkedin, are you saying that you use Linkedin to email them? The Linkedin in messages?
Yunha: No I don’t do the Linkedin in messages.
Andrew: Yes, so how do you get the email addresses from Linkedin?
Yunha: I do connect, and then have friends, and then I just like connect people. If people connect then you can see their contact info.
Andrew: Gotcha, oh, you know what I’m going to give you if, -we have a spreadsheet internally that we use, we probably even used it to find your email address, I don’t know. We’re going to give this to our members soon, because we’ve been testing different ways to do it. I will give it to you so that all you will have to do is type in a little bit of information and you get all the email variations.
Andrew: And we are, Ann Marie’s husband is not going to create some kind of site for us, hopefully, where we can just type in the person’s first name, last name, and domain and get all the emails, -get the one email address that works. But anyway, I’ll send you a, a copy of that spreadsheet, let me write myself a note, spreadsheet for Yunha. I saw you earlier, shoo away what seemed like a dog, was there a dog on the right?
Andrew: Yes? So who were you living with when you started this business, who, -what was your life like?
Yunha: So we started, out of Manhattan, with four, -so I started living with four other, living and working with four other guys.
Andrew: Four men?
Yunha: Four men.
Andrew: What is it like to be the one woman back then, living with four men?
Yunha: It’s good and bad, good in that there are things that you can get away with, as a woman. For instance, we were living out of a two bedroom apartment. And since I’m the girl, I got to have my own room.
Yunha: Which is a good thing, the bad thing is that you’re the only one that’s cooking, and cleaning, [laughs]. So, I was the cook and also since we were, we had this thing where we had to cut our meals down to 2.00 per person, so we had to cook in our own house, so I’m the one that was cooking.
Andrew: How do you get your meals down to under 2.00 per person, in Manhattan?
Yunha: Yes, so you go to Costco, once per month.
Yunha: And then you, like, put in as many things as possible, and you get like hot dogs, we lived on hot dogs, we lived on the pizzas, Costco pizzas. We rarely had any fruit because fruits were expensive. We had these buns that we kind of toasted and put in, like, turkey. Yeah.
Andrew: This is like listening to the stories of the early revolutionaries. If you listen to what Che Guevara, or even Mao Tse-tung, what he used to eat when he lived in the middle of nowhere, it was basically stuff like this. You just kind of make do until you get to capture the territory that you’re going after.
Andrew: And for you, it’s this Android world. The first version, you spent so much time, you wanted it to look so good. I don’t see a screenshot of it here on the Tech Crunch article. What did it look like? Was it as beautiful as you imagined?
Yunha: I think so.
Yunha: So we had a lot of temptation on putting any advertisement, but one thing that I really did, I think I did, or we did really well, is not being tempted by those, you know, lower quality brand ads.
Yunha: So there were a lot of partners that would say “Hey, let’s put these banner ads on the lock screen, and we can make you $5 CPM,” or “we can make you,” you know, a certain amount of money from day one, but we had this really high conviction, like, one thing that we really wanted to do, make sure, is that this lock screen space is a sacred space. This is not a place where you can just put in whatever ads you want. So every single one in the space needed to be customized for this lock screen.
Andrew: I see. You also, when you were calling customers, getting these beautiful lock screen ads from them, you also got feedback from them, that you then took to Paul and then Paul worked with the developers to make changes. Do you have an example of feedback that you got from making these early cold calls?
Yunha: Feedback from advertisers that we’ve worked with?
Andrew: Or any of the early phone calls where you were collecting data while you were trying to promote your product.
Yunha: Yeah. So before we had any product, nobody really understood, they were like “You’re going to put ads on the lock screen?” Like “How are you going to do that?” And “How would users want to use it?” So, very difficult. Unless you, like, we had this prototype that we showed, and we made our own ads for these clients.
Andrew: Right. Okay.
Yunha: And we showed them that this could be an inspiring, beautiful, picture, which [??], then, you know, people, I think we had really good response rate, or feedback. And soon as we launched and were able to get metrics on, like, these click through rates, our feedback has been awesome.
They were like “These are one of the highest click through rates I’ve seen,” and for some of these ads people were tweeting about how, like, this person was in Target, and we had a [??] ad on the lock screen, and she was walking by a [??] cart, and she saw that, and so she took a picture of her holding it in front of [??] and she tweeted at us saying “I threw in a few boxes of [??] in my cart today. Locket works like-
Andrew: Like a charm.
Yunha: Works awesome. Yeah. Like a charm.
Andrew: That is, alright, that’s a cool story. Alright, well, here’s the thing that I thought when I started researching you, I thought “Why is she giving people a penny a click?” When you start paying, first of all, people who need the money are probably the worst customers out there, and second, it comes across like you’re bribing, and then you end up with all these other issues, right? Like, you can, from time to time pay publishers less, you can take, you can charge advertisers more, charge them less.
You can’t go back to consumers and say, “We were going to pay you a penny. Now we’re going to pay you a fraction of a penny,” and then they start revolting. The whole idea just seems crazy. What happened to you when you were doing that?
Yunha: We were growing so fast that we were not fulfilling advertisement, because their sales cycle, feedback from advertisers has been always great. They love it, but they already planned out their Q3, Q4 budgets. So they were not able to be like “Oh, I found this one great real estate. I’m going to put in an ad tomorrow, and here, I’ll pay you. I’ll start paying you guys.” So that was a challenge where we had to be in the middle where we’re paying users first-
Andrew: Oh, okay.
Yunha: And had to figure out, like, how we were going to make money from advertisers. So that has always been the challenge, and I think we hustled. We hustled whether we sold an ad to start ups or to big brands or agencies, we were able to do well for [??] and also, we brought in the Head of Sales from King, the Candy Crush maker, to make this process faster.
Andrew: Okay. Okay.
Yunha: The reason we stopped paying users, and the reason we moved away from that model and really started focusing on the Locket SDK is that process was hard, and then, also we found out that, I think, at least, like 50 to 70% of our users were using this app, not because of the money. They were using it because they loved that idea.
They like the experience of you wake up your phone and you see certain different things on lock screen. It could sometimes be the weather of the city that you’re in. Or, it could also be the inspiring quote that we show you. Or it could also be that Hershey’s inviting you over to Napa Valley to do VIP wine and chocolate cake [??]. It was not that one, two cents per day that they liked.
Andrew: I get that. I have the Kindle with the ad on it and I thought I could just pay a couple of bucks and get rid of it. But I like it. They actually turned me on to books that I wouldn’t have read otherwise, like Breakfast at Tiffany’s. I never thought I’d want to read that book. It popped up as like an offer for some kind of discount and I was looking for a book to read. I swiped and I bought it and I love it.
Andrew: Yea. It was just a nice read to read in the back yard. It brings back the old experience. I don’t do much window shopping. I don’t expose myself to different kinds of books, but when I used to go to Barnes and Noble, right when I walked in there would be these tables of cheaper books with, on topics that were actually interesting to me. Not the cheap one dollar books that they also had, but the cheaper books that were also marginally interesting and I would, if I explored them, they might be fascinating.
By the way, one book that I found that way, “Empire of the Summer Moon”. Anyone that’s looking for a book to read, I highly recommend it. Consider this a pop up for that book. It’s about the Comanches in the U. S. and how they started taking over parts of Texas and terrorizing the Texans and how they ended up losing ground in the U. S. Really fascinating book. And I got it from that, similar to what you’re doing. Alright, so now the SDK. What’s the SDK like today? And then I want to hear how you evolved to this. What happens?
Yunha: What happened was I was selling, so I called the startup. I called the VP of Engineering at Flixster. Through a link that, actually through that cold email thing again. Trying to have Flixster advertise on lock screen. And then, I got to meet with him and his idea was like, so, from his perspective, I’m always looking for ways to re-engage our users. We have a lot of users. We have millions of users. And [???] has a half million users which is great, but it’s not even close to what I want to reach to.
And one of the biggest concerns that they have is re-engagement. So they were like, he was like, why can’t you use [???] so that you can deliver the apps own content to the [???] lock screen as a way to re-engage them. So when I first heard that, I was like, what is that? [???] And I didn’t understand it that well. [???] And the more I thought about it, the market’s bigger there. And by solving somebody’s problem, and as an app developer, we know what it’s like, you know re-engagement and retention.
Andrew: The problem is that an app developer gets their app installed on a user’s phone. They did a lot of work. They’re on the phone, but the users sometimes don’t actually open up the app because they have so many other distractions. Through the SDK, that app can pop up on a lock screen and start to engage a user. And how do you get paid from that?
Yunha: So how do we get paid from app publishers, right? I think there are push notifications that are out there that charge our publishers, so I guess we could do that model, a subscription model or we can do something else like creatively, without charging our publishers. And one would be allowing these app publishers to cross promote the teen apps. That would be [???]. Another thing is first I want these apps, especially some of the game apps that I’ve been talking to. They’re looking for ways to monetize their app.
By allowing their users to [???] the lock screen and the lock screen can have some of our [???] beautiful ads. That way they monetize their screens and that’s a screen that they didn’t own before. So what they’re interested in doing is they want to incentivize their users to turn on the lock screen with [???]
Andrew: Oh, I see, so what you get out of it is, what they get out of is that they get another place to talk to their users. What you get is them helping to promote your product, right? Because they have to tell their users, hey go install Locket.
Yunha: So a great thing about this is that they don’t have to download Locket. It’s already pre-bundled into these app publishers’ app.
Andrew: Got you. And then are you charging the app makers to use your SDK?
Yunha: Yeah, we could do that. Right now, since we are so new, this is an idea that we had about a month and a half ago. We’re working with a new app partner as of last week. So we don’t know exactly how we’re going to monetize. Because we don’t know what the pricing model should look like. So we’re putting it out for free at this moment to help our publishers.
Andrew: Here’s what I heard. Tell me what to think of this. I heard you paid for app installs, because it makes financial sense for you to do it.
Yunha: There was on week where we were testing out different channels to acquire users to see what are [??] looks like. But we then didn’t go pay to acquire users for a long time.
Andrew: You paid for the one week but not after that?
Yunha: No, do you mean like CPI campaigns?
Andrew: Yea. Pay per install.
Yunha: We did run CPI campaigns for some of our publishers for the Locket app itself.
Andrew: Where you were paying them every time your app was installed?
Yunha: No they were paying us for users to install their apps.
Andrew: Gotcha! An ad comes up on your user’s screen that says if you want to try this new other app, they install it, you get paid.
Andrew: How did that work out for you?
Yunha: It works really well. But since this is on the lock screen we were able to work with companies like…We did a really beautiful Hotel Tonight advertisement to down load Hotel Tonight. We also did the Amazon Local app, Zip Car, Orbitz, and Dunkin Donuts. We only work with the high quality brand apps and they work very well.
Andrew: These are big names. We’re talking heavy numbers, hundreds of thousands of installs, millions of views how much revenue are you guys making now?
Yunha: It’s undisclosed.
Andrew: Over a million in 2013? Fair to say that?
Yunha: We haven’t been around all year, but if it was at run rate we might have made it.
Andrew: So maybe a million run rate. Run rate meaning you take last year’s numbers November 2013, multiply it by 12 you’re roughly there.
Yunha: Actually I think maybe a little less than that.
Andrew: A little less. Are you guys profitable?
Andrew: No, your investors to great oaks do not want you to be profitable, right?
Yunha: I don’t think so.
Andrew: I imagine that want you to spend their money and a little bit more. What about this ad that I mistakenly thought was your launch ad on TechCrunch. The one that Anthony Ha wrote up was about the voting on ads were you show users ads and you let them vote. How did that go for you?
Yunha: That’s the one idea when I was coming back from a meeting really tired because all of these users where emailing me about what kind of ads they want to see. So they were saying your showing me X ad but I want to see Y or Z ads because I’m a guy I’m 20 years old…I realized oh wow, these guys are people that wanted to see some of these brands that I don’t even know about. If I’m getting hundreds of these emails then why don’t we just ask them?
I came back with Paul and our developers and said we’ve got to make this ranking site where we ask users the brands that they want to see. As usually, no we are not going to spend any time on that side project, because it’s an additional feature not the app itself.
Andrew: I see. You tried it, you got some press for it, you got to introduce it to your audience but it didn’t go so well.
Yunha: No actually that was before we made it. I asked Paul and said I’m going to spend 200 dollars, hire an engineer in India, and make this platform. We made that overnight.
Andrew: Oh wow!
Yunha: Our designer quickly did a mock pod and I sent it over to that engineer in India.
Andrew: Some woman in India who you never worked with before just developed it for you?
Yunha: Yeah. Through Odesk.
Andrew: Odesk. That’s killer! That’s fantastic.
Yunha: We made that and we launched it. We got over 1,000 entries within 20 minutes of launch.
Andrew: Now you can approach a brand and say you’re number one on the list you’re number 5 on the list, gotcha. That gives you another way to promote to them.
Andrew: It was Joel Sposkey who told me when you build on someone else’s platform it’s like pulling pennies out in front of an oncoming vehicle. Do you feel like you’re building on Androids platform and at any moment they can shut you out, what’s the danger? You’re smiling in recognition.
Yunha: I get that question a lot here and there. I think it would be the same with all kinds of developers who are developing something on an Android platform. We never know what they are going to do so there is definitely a risk. Also, this is a risk that we share with all of our competitors, you know, Facebook home is built on the lock screen.
So if they shut Android, Android is shut us down, then they’re also shut down. So, we’re kind of on the same boat. So it’s a shared risk, but you know, if you are sitting there like, you know, worrying and having a scare it’s not going to be helpful at all. You want to be able to figure out ways to grow as big as possible. And do something really cool there on the lock screen.
Andrew: This is really exciting, I got maybe one other important question to ask you, but first I want to say to the audience, I’m getting excited about mobile apps here and if you are and you want to take a follow up, let me suggest two people who come on to the programs to Mixergy that I don’t think lately have been getting enough attention. But I thought what they did was fantastic.
Jen Gordan did one course about mobile app design, she talked about how to design it, how to show it to your users, how to get feedback on it, and she walked us through the whole thing, showed screenshots, showed the designs, and so on. Fantastic, I think you guys are ignoring it. Check out Jen Gordan. Type her name into search, I promise you’ll love it.
And the next person is Ken Yarmich. Ken Yarmich is creating these incredible apps. And before he did all of that, he came to Mixergy to talk about app creation. And let me take a look here, if you go to his app, let me see, SavvyApps.com, you can see, what is that? Why can’t I think of that app? It’s that calendar app and the reminder app, to do both. I got to find this thing. Even if you don’t like me, I think you got to check out some of Ken’s apps.
And one of the things I’m really proud of is that Ken came to talk about app creation. How to develop an app even if you’re not a developer on Mixergy. Unfortunately, I can’t find his, the apps that he creates. He’s one, oh here, hang on a second, I got to find this thing now. Now I’m crazy about this. Alright, I got to get back into the, well here we go! No, I can’t find the apps that he created. I can’t find the actual names of them.
But, what I can tell you is if you type in sir, if you type Ken and app into the top search bar on Mixergy, we’ll find Ken teaching how he built his apps, and giving you advice on how you can have your apps built. All that’s available on Mixergy, you can just do a search, and I hope you do as a follow up to this. What are you think of that? What do you think of the challenge that we’re going to have in our audience, me and people in the audience, if we’re listening to you and saying “she just had this thing built overnight for 200 bucks by someone in no desk, we need to jump in”? If we jump in, what mistakes, or what issues are we going to face?
Yunha: I think, I’ve made a lot of mistakes, in the past few nine months. Jumping into something, a space, that I don’t know. I didn’t know anything with mobile. I didn’t know anything about advertising, or startup. And I’ve made a lot of mistakes, but I’ve also been lucky, here and there. And I’ve been learning a lot, so, if you like, I think, want advice that I have for any entrepreneurs, or any, you know, students-to-be, or anybody that wants to be an entrepreneur is instead of being afraid of all these mistakes that you might make, just jump into it.
I’ve had a lot of investment bankers that reach out to me saying “hey, how were you able to make that transition. Like should I be reading this book, or should I being going to these meetups, like learn about steps before I start my business?”. But I tell them, you know, none of those will be as productive, in terms of time, as you jumping into it right now. Because the moment that you jump in, you will start learning so much more. That’s something that like, I’m really glad that instead of, you know, sitting around in my investment bank, the cubicle, reading startup books and really preparing myself, I actually just jumped in. Because that became my life, and I started learning, and making mistakes. And I’m more prepared for whatever I’m doing for the next 6 months to a year.
Andrew: Alright. I think I’ve got everything here. Oh, Agenda, there it is, Agenda is the name of the app that Ken Yarmich created. I feel like I’ve got this great opportunity to ask you more questions, but I’m all out of questions, so instead, what I’m going to say is thank you, and if there’s someone in the audience who wants to follow up with you, is there a good way for them to do it?
Yunha: Yes. You can follow me on twitter, Yunhajakim, it’s y-u-n-h-a-j-a- kim, Yunhajakim. I’m also available on Linkedin, so if you want to cold email me, please feel free to. Because I understand.
Andrew: Did you find an email address? Or is it Okay if they use the in- mail?
Yunha: Oh, the email address is available there.
Andrew: Oh, you actually just pop it in there?
Andrew: Alright. Thank you so much for doing this interview.
Yunha: Yeah, and also, if you’re app developers, please check out email@example.com. If you have an [??] or you want to check out what it is, Locket app itself is, check it out on Google Play store. It’s called L-o-c-k-e-t, Locket.
Andrew: I see it, I’m on getlocket.com. I clicked the developer’s link at the very top, that’s what you want us to click on?
Andrew: Alright. Cool. Thank you so much.
Yunha: Alright. Thank you, Andrew.