In the U.S. many small businesses were capitalizing on the local Pokemon Go opportunity. At the time, Pokemon Go had not been officially released in Canada.
My biz partner Mark and I decided to see if local businesses in our community were interested in a managed Pokemon Go service.
We also wanted to test to see if marketers and growth hackers were looking for an authoritative source in marketing to Pokemon Go players.
We have two ideas to test:
- Marketers are looking for an authoritative source to market to Pokemon Go players
- Local businesses will pay for a managed service
We decided we would start testing idea 1 with a landing page. Idea 2 was better suited for cold call emailing.
We also decided that this venture needed to make at least 1,000$/month for it to make sense for us.
We were excited to put together a landing page and launch it to Growth Hackers. We figured this is buzzing right now, we’ll be able to score a few 100 signups.
We did some research. Shops were seeing increases in sales by adding lure modules to the nearest pokestop around their business. We decided to put together a PDF guide on how to add a lure module to your business.
We created a landing page that required an email opt-in to get the guide.
We waited until the next morning to post it. We then posted it to GrowthHackers got a few friends to upvote to give it some initial traction.
Here’s what it looked like:
We waited 14 days before concluding the results.
We got 6 upvotes from our friends which got us in the trending.
The results were disappointing:
We got 0 organic upvotes.
257 views and 4 email opt-ins.
That’s about a 1.56% conversion rate.
This was a fail.
We believe this experiment failed for many reasons.
- There are other more authoritive sites covering pokemon go marketing already.
- There are other sites where you can get this guide without entering your email.
- People are unsure or don’t believe Pokemon Go is worth investing time into.
In hindsight, it may seem obvious this wasn’t going to work. In the moment it felt better to test.
Once the landing page was out we started working on our email campaign.
We decided to go after pizza shops and coffee shops. They were the businesses getting the most attention in the press.
I wrote a script that scraped facebook for leads. I got 113 Ottawa coffee shops with emails and about the same for pizza shops.
Mark wrote the email and we included a link to our website. We finished scraping and writing up the email on Saturday. We scheduled the email blast for first thing Monday morning.
Our emails went out a day after Pokemon Go was released in Canada, our timing was perfect.
We got 11 replies wanting to schedule a meeting. We were pumped.
We felt like we had validation. Everytime I got a new email back we had a big grin on our face.
We scheduled meetings starting Wednesday morning, only two days away. We were moving fast.
I knew I didn’t want to go into these meetings pitching. I wanted to do customer development. But, I also needed to have answers to their questions. We took to the whiteboard again and put together an offering.
- Advertisement on our Pokemon Groups
- Guides/Installation Support
- One 4 hour event
We came out with this number with a mix of cost calculations and revenue projections. It would take us 20 customers to make 1200$/month. Not a lot of money but it was a number that motivated us for a side project.
Note, we never pitched this offering in the meeting. Instead, it provided Mark and I a base point we were comfortable with. This allowed us to ask the right questions and feel out if this was going to be a viable business.
Over the course of the next week we had 1 in-person meeting and the rest were over the phone.
What we found out:
- All the shops were either going to or already putting lures themselves
- They were all interested in getting insights
- They were interested in helping us out
With every meeting, something became clearer. It was going to be hard to make money with this business.
The local businesses that would profit from a Pokemon Go presence had young staff. They were already running or preparing to run lure modules.
Our leads were interested in getting insights. But, they weren’t ready to pay for insights. If they did, it going to be a large amount of money.
They were interested in advertising opportunity if we had clear numbers to show them.
We ran some numbers from the shops point of view.
If we brought them 40 customer purchases a month at 3$ average sale amount, that gives them:
40 * 3$ = 120$
I looked around online to find coffee shop profit margins. This quora question had the best result with 33% profit margin. Calculating their profit:
120$ * 33% = 40$
Let’s say we would charge them 25% of that. 10$ a month for our service.
For this venture to make enough revenue for us we need to scale to at least 100 customers. Which means we’d had to be responsible for 4,000 customer purchases a month.
Our Facebook Group only had +400 members and the top Facebook group in Ottawa only had 2,000 members.
We looked at increasing monthly fee to 20$, requiring us to scale to at least 50 customers. We would have to be responsible for 2,000 customer purchases a month. Even with the combined reach of the existing Facebook, Slack and Discord communities, this wouldn’t work.
We deemed this business not viable.
The profits were too low for our interest. Additionally, this business is at the mercy of the popularity of Pokemon Go. Mark and I are not confident enough that it’s here to stay. Especially here in Ottawa where it’ll be -20 outside in a short few months.