min read
July 7, 2014

Strategy Matters: Lessons from the Springpad Shutdown

Digital Trends

The recent (and surprising) shutdown of the critically heralded productivity app Springpad rang a stern warning through the tech community: A great product is not enough.The startup spent six years building and operating a platform that empowered users to clip, organize, and annotate all types of web content to create a comprehensive, actionable hub of the articles, videos, images, recipes, DIY tips, and more.Springboard entered the market in 2008 as a formidable competitor to Evernote, and did what Pinterest does before Pinterest even existed. But despite a highly engaged base of 5 million users and positive product reviews, including frequent acclaim from productivity hub Lifehacker, Springpad was not able to generate enough revenue and was forced to terminate its service.Springpad co-founder Jeff Janer attributes Springpad’s shutdown to the company’s myopic focus on product-market fit and its consequent failure to develop a cohesive strategy that supported its core product. “There was a need for people to store their stuff and sync it across multiple devices. But that does not a business make,” he said. “We built a cool product, but we didn’t build a business.”Springpad’s unfortunate downfall can at least provide a valuable lesson on the importance of a well-developed digital strategy needed to support any company’s products or services. A few key takeaways for those looking to avoid Springpad’s fate:

Choose a Monetization Strategy that Scales

Springpad’s most significant failure was its inability to develop a revenue model strong enough to support its modest yet steady growth. Rather than a premium/“freemium” business model that charges users a monthly fee, Springpad chose an ad-supported model hinged on sponsored project-based notebooks. The startup also planned to roll out sponsored products similar to Pinterest’s promoted pins that would allow DIY-enthusiasts to transact directly from their feeds, but was forced to fold before it had the chance.Ultimately, Springboard found that it was unable to grow its userbase fast enough for the ad-supported revenue model to effectively float the company.

Create a Personalized User Experience

It is absolutely critical that every company develop a robust, comprehensive understanding of its users and design its user experience accordingly. Springpad’s personalization strategy was limited and failed to account for some core users, including the international demographic that made up 35-40% of its total userbase.Metadata used to enhance saved content was U.S.-centric, so international users browsing books, movies, and other products would see prices in U.S. dollars. This limitation truncated Springpad’s usefulness for a core demographic, and these users relegated their Springpad use to task management and note-taking features.Not only did Springpad fail to build a personalized experience for its current users, but it neglected new users that could have been. While competitors like Evernote expanded and customized products for professional use, Springpad focused on the individual user and lost out on potential revenue from enterprise accounts.

Articulate the Value of your Product

According to Janer, Springpad’s diverse toolset became a hindrance rather than an asset as the company found itself unable to clearly articulate its unique value proposition. “We were always different things to different people,” he said.Companies built on consumer-facing offerings must develop a unified message on the value of their products and why these products are different — and better — than everything else on the market. Development of a digital business case is essential to identify the highest value features that should be prioritized in a company’s marketing and user experience design.

Centric Digital