For everybody that does not know aboalarm.de yet: What products does Aboalarm (www.aboalarm.de) offer and which are the main features and USPs? How did the “vision” of Aboalarm change over time, in reaction feedback from users?
Aboalarm (www.aboalarm.de) is a leading mobile & web-based contract management service in Germany which makes it easy for users to find new contracts, cancel old contracts and keep a perfect overview of all contracts (for insurances, cable, electricity, gas, etc). Aboalarm was founded by Stefan Neubig and myself as a bootstrapped company in late 2008 and has developed since then into a fast growing, self-financed and profitable internet company. In 2011, we launched mobile apps for iOS and Android very succecssfully. At the end of 2011 Apple named us the best Finance App in Germany.
Our vision is that every person in Germany uses Aboalarm to manage his/her contracts. We will achieve this by offering the best tools to manage contracts. While the vision has remained stable, the tool set we offer is becoming more and more comprehensive. After focusing on features that enable users to cancel contracts easily, we will roll out features that will revolutionize the way people compare prices for contracts they need. It’s all about product innovation. In developing our products step by step, user feedback was crucial. First we had to ask for feedback; now we are in the lucky position to have a very active community of deeply engaged users that are delivering input on a regular and structured basis.
Going a step back: could you give us a brief overview of your career up to now?
After receiving my university degree, I worked at Cap Gemini for 5 years as a business consultant and two years at Fujitsu Siemens as Director of Consumer strategy. In 2007, I founded my first start-up, named andUNITE. It was a Social Search start-up utilizing search traffic from Google, Yahoo and Bing to connect users with similar interests. We got funded but had to close operations after 18 months as we did not see sufficient traction from the user base.
Right after andUNITE, I started Aboalarm as a bootstrapped start-up in late 2008 and worked at Experteer as Director for Product Management at the same time. But meanwhile, due to its success,my focus is completely on Aboalarm.
Before you started aboalarm.de, you had another startup, andUnite, a kind of social search engine. What are 3 main lessons learned?
1) Just do it and do not be afraid to fail.
2) Always keep learning.
3) Know when to start doing and stop planning and stop doing if it does not work.
Aboalarm was launched pretty soon after the end of andUnite, but you also worked full-time in product development at experteer.de. How did you experience the time as a part-time founder? Which goal did you set for yourself as a requirement for quitting your job and becoming a full-time entrepreneur again?
It was a very intense time. In most weeks I worked more then 110 hours – so the proverbial day and night. Handling all expectations of Aboalarm, Experteer and my family (married, two children) was truly challenging. On the other hand it was very helpful to stand back a little from Aboalarm and make decisions after having some time to think about problems and ideas while working for Experteer. Actually, having two jobs means that you gain twice as much experience – that’s a good thing. I quit Experteer when I realized that Aboalarm truly needed a full-time CEO. Our team grew to 5 people and the number of decisions and the required speed for taking them increased dramatically.
For a bootstrapped site, Aboalarm is pretty successful. You state that 10.000 contract cancellations take place using Aboalarm each day. Is that an estimate based both on actual paid transactions and free cancellations, where users just use the cancellation letter samples, or only the paid transactions? What is the percentage of online and mobile transactions?
Aboalarm (www.aboalarm.de) is growing very fast – every year we see an increasing growth rate regarding reach – our main KPI. We do much more than the outdated 10.000 transactions per day I mentioned some time ago. The ratio of paid transactions is financial information which I do not want to reveal at the moment. But I can expose this much: more than 50% of core user activity is done using mobile devices. Since we launched our apps, and especially when Aboalarm was named as the Finance-App of the year 2011 by Apple, our brand has become widely known and trusted. And trust is the key to winning in this segment in the long run.
Your biggest traffic source is probably organic google traffic. Do you see optimization potential in that? For example: there are about 6.500 Aboalarm pages in the Google Index, but in Germany alone there are already 5.500 local fitness studios. Do you see growth potential in creating more targeted pages regarding location or product? And internationally with an increase of international businesses in the database?
Organic search traffic is important but by far not the biggest source. Brand traffic is our main source and fortunately the fastest growing driver.
And yes! There is a huge potential still waiting to be captured. Contracts/cancellations are a typical longtail business. First we started with the database of big companies like Deutsche Telekom, because they have millions of customers. But now we are proceeding to integrate smaller companies as well – and this will take some time, as the quality assurance process of company data is time consuming.
We are currently preparing to launch our service in other countries. But not all companies are suitable for an Aboalarm-Approach. Companies in some other countries have different legal requirements for signing, managing and cancelling contracts. We are conducting very intense research to identify most promising countries.
Which other business /traffic scaling possibilities do you see and which will we see within the next 6 months?
I’m convinced that mobile applications will be the future of services like Aboalarm. When we started developing our apps (iOS and Android), it was not clear that people would manage their contracts using their smartphone. It was an assumption. But it turned out to be the right decision! Within 48 hours, 50.000 people had downloaded our Aboalarm-App and used it very intensively soon thereafter… and they still do. Even though the App has registered a volume of 500k of downloads until now, we are still in the early phase of mobile usage.
When we look at your service somewhat more abstractly, we see a service with which users can send legally binding letters with an online signature, an online version of “certified mail”. Wouldn’t that be a promising scaling potential? Filing appeals against rulings by public authorities, cancelling hotel rooms, etc. as well as online contracts?
Digital Signature and certified emails are very interesting markets. But Aboalarm (www.aboalarm.de) will focus on contract management. This is our corporate DNA – this is the problem we want solve perfectly.
With the introduction of your mobile app last year, you made the service even more seemless. Having a touchpad, customers can use it to provide their signature without having to upload an image. What were your initial goals for the app and what are results and experiences so far? Would you share some numbers, also regarding conversion rates?
We developed the app because we believed that it can save time for people to handle their contracts on the fly (e.g. while waiting for the train home). And taking into consideration that the handling of technical devices has changed, we also thought it would be more appealing to sign a letter on the touchsreen with the finger.
Mobile conversion rates are much higher than on the web service. Aboalarm is one of the top-selling apps in the app store (iPhone and iPad) although it is free to download. We are the only high revenue app that is free to download.
Why do you have only 800 addresses in your app while having 3.000 addresses on the website?
Because we roll-out our products step by step. We just wanted to make sure that the process works perfectly, that loading times are low etc. Very soon, we will have 50.000 addresses in all of our services.
During the last weeks, we have seen a big data scandal due to many apps, for example path.com, taking personal information from the users’ address book without having any consent. While you have an application that does not use the address book, there is still another “security topic”: Do you see users hesitating to digitalize their signature? Potentially, there is a high risk of data abuse by hackers if one’s signature and email address are stored online. As a user I am not told whether and how you save the signature after the fax has been sent. Which percentage of the users has used the “pad signature”? How do you ensure maximum security for the users?
Maximum security is to store no data at all when it comes to signatures. We delete signatures the moment the letter is created. Though many users ask us for a feature to save their signature data, as they would love to cancel their contract even more quickly…
Generally speaking, we only save data if the user agrees to it in order to improve his user experience. If we were to extract the data like path did, we would have asked the user in advance and explained why it would make the service better. I am sure users agree to share data if they see the benefit.
Having focused until now on cancellation of services, you recently launched a grey label contract comparing engine from check24. How seemlessly is the service integrated? Do you have a feedback-channel from check24, so that the contracts of the user are automatically stored in the user’s account? Will we also see direct lead cooperation with exclusive aboalarm offers?
We are constantly working on increasing the level of integration of our services. But due to our partner agreement, I cannot give you any details on the integration of check24. However, we are planning to offer exclusive Aboalarm-labeled offers with partners in all kinds of industries.
Speaking of special offers and having seen the exponential growth of “daily deal sites”: Why do you think there isn’t a specific deal site yet that focuses on deals for contracts? Maybe with a twist of the old letsbuyit.com model: increasing the threshold for the minimum number of buying customers and a longer offer time, so that customers also have to recommend the offer to their friends so that the deal is on?
Good idea! You just have to take into account that every segment has its own rules. Pricing of insurances is very different from mobile plans or DSL. But it is possible to do that. We are planning similar products and, yes – we are talking with a handful of companies to offer Aboalarm-labeled contracts. As you see – there is a lot to do!
We thank Bernd for the interview and wish lots of contract cancellations!