Better Late Than Never: What To Do When a Competitor Beats You to Market

Flixel is a successful tech startup that makes mesmerizing hybrids of videos and photographs called cinemagraphs.

The company was honoured with an Apple Design Award and Best of 2014 in the App Store, and they’re integrated into Facebook.

They are thriving… but they almost didn’t make it.

Like many tech startups, they got to where they are today by persevering through unexpected twists and turns, including a competitor with the same idea that beat them to market.

Here’s how they did it.

In this TGIM short, you'll...

  • Learn why being first is more important than being perfect.
  • Discover the power of pivoting, and how it can save your business.
  • Find out why being beat to market isn't the death sentence you might think it is.

Check out the full short below:

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Speaker: Flixel is a successful tech start up. The company was founded back in 2011 and they make a very popular piece of software for creating cinemagraphs, which are these mesmerizing hybrids of video and photographs. Flixel was honored with an Apple design award and best of 2014 in the App Store, so they're doing really well. Like a lot of tech start ups, they got to where they are today by first surviving a roller coaster ride full of unexpected twists and turns in their business. The big lesson of the Flixel story is simply hang on and don't give up.

Speaker: If you're a regular Facebook user, watch HBO, or if you've seen one of those time lapse videos on the internet chances are you've seen a cinemagraph, even if you didn't know what it was actually called. A cinemagraph is a moving picture. It's what you get when you mix video and still photography. Phil LeBlanc remembers the first time he saw one. It was more than 5 years ago now.

Phil LeBlanc: I thought this was like Instagram on steroids. It was just so compelling and beautiful imagery, and it was just mesmerizing.

Speaker: Phil wanted to make one himself. He thought, "There must be an app for that," but there wasn't. The technology was still fairly new at the time. His next thought, "I should make an app for that." Phil, being an entrepreneur knew he couldn't be the only one with the idea.

Phil LeBlanc: From there it was a race. I wasn't a developer, so I knew I needed to get some talented folks that could help with the vision and help execute on the development side and bring their expertise.

Speaker: Phil brought together 3 other co-founders, and in the fall of 2011 they launched Flixel. Phil admits he got a little too technical at first, trying to fit in too many features before they launched the app in early 2012.

Phil LeBlanc: That was a mistake, because our competitor ended up launching a month before us with not nearly as many features as what we had, but because they launched a month earlier they got the momentum and then they just kept on adding the extra features that we had from day 1. They had a really big head start.

Speaker: That was the first business lesson for Flixel.

Phil LeBlanc: The take-away from there is, better get a minimal viable product, even if it doesn't have all the extra features that you need and get it out there, get some feedback, and then iterate from there as quickly as you can.

Speaker: Flixel got a decent amount of downloads from it's initial app, but it never did catch up to it's main competition. Some of it's investors suggested they give up; just throw in the towel. Here's the thing: Phil is a former professional tennis player and he doesn't understand the concept of quitting. In his mind the match wasn't over, he just had to change his strategy. This is a part of the story famously known in start up circles as the pivot: a change in direction to help save the company from eventual demise. Phil studied the metrics and what he figured out was that both Flixel and it's key competitor were focusing on the wrong market.

Phil LeBlanc: We were actually digging the wrong hole, you know. Entrepreneurship is, you try to find the right strategy and then to go as fast as possible. Essentially, if your strategy is not the right one, it doesn't matter how fast you do it, you'll just discover that you're not in the right place.

Speaker: Phil realized that the average person wasn't going to make cinemagraphs on a daily basis. They targeted a whole different group, the marketing and advertising industry. This is a group that would understand the value of a cinemagraph and would pay for it. In other words, Flixel may have been losing the race, but it turns out they were on the wrong track. They got a new direction, but to be successful they'd have to create a higher quality product. That meant rebuilding all of their technology. The only problem: they'd already run out of money.

Phil LeBlanc: It was one of those unfortunate situations where we knew where the puck was going, but we couldn't afford the skates, to borrow Wayne Gretzky's famous analogy. That was a problem. We really needed a miracle at that point in time.

Speaker: What they needed was to cut costs dramatically. That led to the departure of one of the co-founders, the marketing guy Mark Homza. This was the low point in the company's short history. Then fast forward a few months, a miracle actually did happen. Here's the fun part: it happened to Homza. He had a lead. Supermodel Tyra Banks wanted to use cinemagraphs on her hit TV show, America's Next Top Model.

Phil LeBlanc: At first when he said it, I thought he had lost his mind because it was one of those things like, "He's no longer with us, what is he talking about America's Next Top Model calling us?" It turned out that he was actually going to LA for something else. I said, "I can't even afford to fly right now there. You're already there, you're a co-founder." He went out and pitched the first time and they liked it. Then I ended up flying down and then we made that bet. It turned out to be the right bet. It put us back on the map, we got new investment.

Speaker: Not only did Flixel get more business, but also more investors including Banks herself. That's right, supermodel Tyra Banks was now an investor and remains one to this day. It was another lesson for Flixel: never give up.

Phil LeBlanc: That really was a pivotal point for the company. I always say to other founders, "If you really want to win, whatever you do make sure you are still playing. You can't win once you throw in the towel."

Speaker: The momentum grew from there. In 2014 Flixel's cinemagraph pro app won Apple's prestigious design award. Then Facebook came calling.

Phil LeBlanc: That was just one of those amazing, amazing breaks.

Speaker: Today Flixel has a number of big brands using it's technology including A&E, Mercedes Benz, Mashable, HBO, and of course Facebook. Phil won't discuss Flixel's revenue, but says the company has found it's value proposition with Facebook advertisers and is currently on pace to triple revenue this year compared to last year. Flixel's early competitor? They've pivoted also. Now they're competing directly with Snapchat. Looking back, Phil, borrowing metaphors again from his years playing competitive tennis, says entrepreneurship is about playing the long game.

Phil LeBlanc: For me, what's important is to have the right attitude. What I've learned through playing tennis competitively is you have to be very focused on the process and not be impacted by the results. You still look at the results, but you can't get emotionally attached to the results. That is probably the biggest lesson throughout the company's history. That challenge will always exist. It goes beyond entrepreneurship. It really is, in my opinion, the challenge of life.

Show notes:

About TGIM: TGIM is a podcast for people who can’t wait for the week to start. In each episode we’ll be bringing you inspirational stories about entrepreneurs who have overcome obstacles, built incredible businesses, and are now living the life they want.