How Rapid Iteration Saved Skystra

Disclosure : I am the founder of Everything detailed here happens, exactly as described. The only edits are to names or places, protecting the privacy of those involved.

The early years at Skystra, just like at most companies, are full of unconventional stories and challenges. One constant at Skystra has been the need to pivot, change, update, revert, tear apart and rebuild. Essentially, it comes down to 1 word : Iteration.

Iteration, and sometimes, extremely rapid iteration are part of the company’s DNA. Now, nothing becomes part of the fabric of a company if there wasn’t some success and hard learned lessons achieved because of it. Iteration is one of the keys that saved our company as it grew earlier on.

Our team back then was much smaller, but the decision making remains the same today. Everyone has the ability to affect change within the realm they control. More on this later.

An example that comes to mind is the company’s pricing strategy. Originally, Skystra was following the mold of the web hosting industry, with the best discounts on 3 year plans. While it made sense to not reinvent the wheel, after a single month of moving into the “3 year contract” strategy, we not only found that it was harder to gain customers, but the customers who did sign up were almost always experiencing doubts. This meant refund period stress. And in the end, we’d do a lot to onboard these customers, in exchange for the high possibility of a cancellation.

We took the decision one afternoon to go all the way in the opposite direction. By that evening, our plans, services and website were all converted to a monthly option. A fair pricing structure, a lot like the model Netflix and others ran on.

What happened? Growth was good, but within 3 months, we realized another problem. Almost 20% of the monthly signups would start defaulting on automated monthly payments. Every day, we were seeing these monthly customers no longer renewing. Credit card declines being the biggest problem.

Again, one afternoon later, the pricing changed to favour yearly plans. A decent discount, with the year paid upfront, proved to be an extremely good choice for us and our industry. Customers love the certainty of paying for the entire year for a discount, and not worrying about yet another invoice in their inbox every month and perhaps not making payment.

From an accounting and revenue perspective, this gave us a lot of certainty. Not only was revenue paid upfront, allowing us to reinvest that amount right away, but we knew that revenue was with us for the entire year.

Decisions like this, all taken within a few hours and executed a few hours later, allowed us to grow by 60% since they were taken. And because of this, everyone in our team is allowed and encouraged to make decisions that change things within the realm of their control.

A system administrator should test things and see what works, and what doesn’t. Go ahead and break a test server, it’s fine. A customer service team member should think outside the box on how to help a customer. If a change is needed to make something work, try it out. There is nothing that can’t be undone.

This is just one example. Given how important pricing works on recurring subscriptions, it’s always an educated guess. Just like everything else. We work within a rapid iteration model where changes are encouraged. Status quo or slow deliberate movement is fine…for other companies. Being nimble early on was easy, and it saved us. Now we maintain that nimbleness as a larger business, and it is a part of our DNA.

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