Hello! Who are you and what business did you start?
Exto.io was founded in 2018. Creating a family of e-commerce solutions for Shopify, Magento, and BigCommerce, we soon concentrated on our flagship product Recom.ai – the application for automated upselling and cross-selling.
Today, Recom.ai has evolved into a full-fledged marketing tool with a $96K monthly turnover. Our clients vary from small mom-and-pop shops to enterprise companies. And we are proud that all of them use our product to meet everyday e-commerce challenges and boost sales.
Our goal is to help online merchants around the globe sell more, grow faster, and engage customers with effective sales strategies.
What's your backstory and how did you come up with the idea?
I devoted a decent amount of time to Ahedworks, where I gained experience in various e-commerce areas due to the wide assortment of extensions the company developed. And one of the hottest and the most promising niches was product recommendations (aka upselling and cross-selling.)
Once you see an opportunity to enter the market, don’t waste your time, develop the MVP immediately and launch it. The sooner you get your first customers’ feedback, the more chances to rock your business.
Before exiting the company, I bought out their product recommendation apps, including Recom.ai. So when released under a new brand name, it had already generated some revenue. And since 2018, we’ve been working closely on this product.
These apps were not a core asset of the company, although very promising. And since I was one of the founders, I had a priority queue for purchase at a discounted price. There was no point in replicating, as it was easier to start from more or less steady positions.
Why rebranding? I just saw the real potential of the apps and knew they could perform better. So, after the rebranding, their performance visibly improved, proving we were on the right track.
After my exit, the stars aligned. First, I had spare money to invest in the Recom.ai development and its capitalization growth. So stretching for quick yield wasn’t my priority. Second, the team of developers working on these products in the previous company moved to Exto.io as well. Therefore, investing all our resources in product development, we managed to successfully kickstart Recom.ai.
Take us through the process of designing and prototyping the apps.
The first version of Recom.ai was created in the Aheadworks period. Why did we choose product recommendations? With 100+ extensions in our catalog, we could easily detect and analyze the most promising product niches and concentrate our efforts accordingly.
Besides Product recommendations, I could also mention Conversion and Marketing categories as the ones that have always enjoyed great popularity. This is because online merchants always tend to sell more, thus equipping their stores with the tools that help them do it.
At the very beginning, Recom.ai was developed as the test product for Shopify based on the Polaris framework. Although the version was quite basic, with limited functionality that allowed recommending only related products, it enjoyed popularity among online merchants who have been using it up to now and have become our loyal clients.
As you might have guessed at the initial stage, all product costs were covered in-house. At that moment, the product development team consisted of three developers, which cost the company $3-3.5K/month for each developer.
Describe the process of launching the app.
The launch strategy was quite simple – to enter the market and check the demand. So once the first version was ready, we uploaded it to the Shopify App Store. And the first results were not long in coming. Almost immediately, merchants started installing our application, thereby showing that the market needed our product.
However, this approach doesn’t work anymore. Today’s e-commerce market is highly competitive. And by simply launching your product on the App Store, you’ll hardly get a sufficient response.
We started with the Recom.ai app in 2018, and of course, the entry barrier was different at that time. In addition, since we didn’t start from scratch, we had an advantage over the competition. But it doesn’t mean there was no competition for us at all.
What are the biggest lessons we’ve learned from the process of starting? If you have an idea, try to make it live as quickly as possible. We managed to do this, that’s why our product succeeded. We’ve seen a lot of companies rolling out worthy products in various niches. Unfortunately for them, if they missed that “very moment” for a successful start when the demand for their solution was on top, they failed on the Shopify App Store. And today their products are either disabled or haven’t got enough customers.
In other words, once you see an opportunity to enter the market, don’t waste your time, develop the MVP immediately and launch it. The sooner you get your first customers’ feedback, the more chances to rock your business.
Since launch, what has worked to attract and retain customers?
Our product promotion strategy is based on performance marketing principles. We’ve tested various lead gen channels to pick up the ones with the highest performance. So what works best for us?
For customer acquisition:
- PPC channel (internal Shopify App Ads and Facebook Ads)
- Organic traffic from Google
- Organic traffic from Internal Shopify search
Shopify Ads generate more than 50% of all traffic, while the numbers from other sources may vary from month to month.
Try to get the first revenue as quickly as possible. This is the only accurate indicator of your product’s viability. Don’t offer the product for free, hoping that one day users will start paying.
Regarding internal SEO for the Shopify App Store, I can admit that they don’t provide any specific information on their ranking mechanism besides some standard requirements. Therefore, to make data-driven decisions, we constantly test different approaches and analyze them in real-time.
For customer retention:
- We pay careful attention to product metrics and analyze customer behavior using hotjar live session recordings and Mixpanel. This data helps better understand our users and effectively estimate the success of the recent product updates.
- Being client-oriented, we spend much time on collecting and analyzing customer feedback to use it for Recom.ai improvement. Therefore, it is the clients who decide what our product should be.
- There are no holidays or weekends for our support department. Customers can reach out to our specialists 24/7 to solve any specific issue. This approach helps to build trust and eventually make customers stay with our product.
To win back customers:
I want to admit that we have a really low churn rate. And very often, our customers leave not because they don’t want to use our application but because they close their store. So here, of course, nothing depends on us.
But if we talk about clients who stop using our app, the main reason here is that customers simply don’t use its potential to the full. In this case, we help them set up the most appropriate combination of cross-selling and upselling widgets according to their store specifics. We also stay in touch until customers make sure the app generates extra revenue.
How are you doing today and what does the future look like?
Today our business shows stable growth. Along with the increasing number of paying customers, we see the monthly revenue rate boost.
What about our clients? According to our statistics, the Recom.ai app helps users generate more than $50M of extra revenue a year and more than $200K every day. And we hope that’s just the beginning.
To stay competitive and meet customer needs, we constantly update our product. One of our most notable extension upgrades is a new Amazon-like Scout feature for instant product recommendations. Unrivaled throughout other Shopify apps, AI-powered Scout sets new standards of online shopping and lets merchants significantly increase the relevance of product recommendations in real-time. So we are proud to be the first to implement this feature in our Recom.ai product.
A couple of words about our goals: we plan to conquer new markets in the near future. For that reason, we’ve already released Recom.ai for BigCommerce and Magento platforms.
Through starting the business, have you learned anything particularly helpful or advantageous?
One of the most challenging things for me was to hire professionals with experience in e-commerce. And I’m glad that we managed to form a powerful team of seasoned specialists.
To keep the team tightly welded, we stage 15-minute daily meetings to discuss what we did yesterday and synchronize our plans for the upcoming day. This simple but powerful approach helps us stay in touch and instantly tweak our goals and tasks to crack everyday challenges effectively. Besides, all the team players have a sense of community and clearly understand all company processes.
Of course, not everything was so rosy on our way. Although no one loves talking about their mistakes, I’m convinced there is no experience without mistakes and eventually no growth. Talking about our failures, one of our most crucial ones was that we underestimated the importance of marketing at the pre-launch stage. We tried to create an ideal product, upgrading and polishing its functionality, and waited for the profit increase to invest in marketing activities. Now I understand that to ensure sustainable product growth, we should have started with marketing much earlier, even before product development.
Talking about mistakes, I also want to mention choosing the Shopify Polaris framework as a basis for our application. Unfortunately, this decision prevented us from quick scaling to other e-commerce platforms. So we spent much time moving to another platform-independent framework. But now, we can quickly adapt our product to other platforms.
But let’s talk about our strong points. Right after the product launch, we focused on building relationships with our clients. We constantly stay in touch with customers, providing any type of assistance at any time. There is no place for ready-made quick replies. Instead, our specialists carefully investigate each client’s case to offer personalized solutions.
Also, I’m sure that we’ve hooked a decent amount of customers due to proper product presentation on the Shopify App Store. Why is it so important to pay attention to your product page? It takes just a few seconds for a customer to scan your page and decide whether to stay or leave forever. Thus, you need to present your product value simply and clearly.
Apart from that, we devote a lot of time to the Shopify community and forums. This activity shows end-users that Recom.ai is run by real people who are just a message away and are always ready to help. This approach lets us build trust with potential customers and prompts them to install our application.
And of course, talking about our success, we can’t but give kudos to Shopify and its partners’ support. Being an entrepreneur is always challenging, so knowing where to go for help is essential. The Shopify support team works like a well-oiled machine resolving all our issues in the shortest time possible and providing us with tons of helpful info.
What platform/tools do you use for your business?
We use a range of various tools for our business purposes:
- Mixpanel for product analytics and triggered emails
- Google Analytics for web analytics
- Built-in Shopify Analytics for product analytics
- Ahrefs for SEO activities
- HubSpot as our ERP system
- Upwork and Fiverr to work with freelancers
- WordPress for our website and blog
- Slack, Jira, and Confluence for team collaboration and task management
- Intercom to assist our clients
To develop the product, our team uses:
- Python, Flask, Celery - Backend
- JS, React - Frontend
- MongoDB, MySQL, Redis - Databases
- DigitalOcean, Kubernetes - Cloud Platform
- KeyCDN - Content delivery network
- Grafana, Kibana, Raygun - Monitoring and logging
What have been the most influential books, podcasts, or other resources?
- Lean Customer Development: Building Products Your Customers Will Buy
- Running Lean: Iterate from Plan A to a Plan That Works
- The Effective Executive: The Definitive Guide to Getting the Right Things Done
Advice for other entrepreneurs who want to get started or are just starting out?
First, gather a strong team of professionals who share your company values - this is the engine of your future product.
Second, try to validate the maximum number of product hypotheses, i.e., you can quickly generate several different MVPs or product variants to test them all.
And finally, try to get the first revenue as quickly as possible. This is the only accurate indicator of your product’s viability. Don’t offer the product for free, hoping that one day users will start paying. In this case, your startup will simply run out of cash.
What slips do other startups make? Well, the most evident mistake is that newcomers often copy their successful competitors. As a result, app stores are overloaded with similar plugins. And as the practice shows, even a lower price doesn’t change the game. Users are more likely to choose a more expensive, reliable app than purchase a cheaper no-name copycat.
So don’t try to do what others do. Instead, find your way - this is the only strategy that always works.
The good news is that the e-commerce market is still growing along with the demand for high-quality applications. Thus there is always room for new players who know what customers want.
Are you looking to hire for certain positions right now?
We are looking for an experienced Product Manager. Our ideal candidate should be a pro-active and organized person who succeeds in a dynamic e-commerce environment, is ready to take responsibility, set priorities, and work with minimal guidance to drive the entire production process and maximize business value.
Where can we go to learn more?
Our website, blog, and social media accounts:
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