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Utah Business

Seek pivoted to a freemium model during the pandemic (and it worked)

When you’re in the middle of a massive whitewater rapid, it’s easy to panic and lose sight of the big picture. But I’ve been kayaking for 20 years and have learned that the key to navigating the choppiest waters is to look beyond the chaos. Instead of simply staring at the mountain of water rising up ahead, you have to keep your cool, know your bearings, and act quickly.

It’s a lesson I return to frequently as the CEO and cofounder of Seek―a startup in the emerging field of augmented reality (AR). When my partners Mike Snow, Thane Brimhall, and I launched Seek in 2016, one of our founding values was to embrace adventure, both in pioneering a new technology and finding new ways to impact people everyday. Our goal was to use technology to create meaningful experiences in retail, e-commerce, and education. 

We really found our groove when we launched our AR platform that made otherwise difficult tasks and implementations easy for the sectors above. Over the past few years, our customer list has grown to include companies like Overstock, Vans, and Nestle. Earlier this year, we were projecting even more progress, with the securing of a new patent, the launch of Seek Education, and other significant milestones. 

Then the pandemic hit and the whole world turned upside down. Within days, two of our biggest clients canceled contracts and others signaled that they might scale back. Plenty stayed and new ones began to emerge, but we knew we had to change our business strategy and customer acquisition approach quickly. 

To figure out our next move, we analyzed our customer base and realized that they fell into three categories: companies in retreat, companies acting like nothing had changed, and companies willing to try something different in a world where shaking hands was now taboo. The third group is where we saw opportunity and decided to double down.

Before the pandemic, we’d been toying with the idea of absorbing the costs of onboarding new clients—for many retailers new to AR, the upfront expense of building 3D models of their products is a big obstacle. But, faced with a make-or-break moment, we realized it was finally time to act. 

Covering the cost of 3D modeling ourselves would mean eating easily $10,000 to $20,000 per client, but we believed in the product and the power of the customer click. We knew it was a gamble and a possible red flag for investors, but we went all in and offered to install our software for free.

Then in March, we unleashed our sales representatives to convince hesitant brands to give Seek a try. Once they signed up, we built 3D models for free, devoting hundreds of thousands of dollars in resources and labor. After we invested in the clients for a few months, we reviewed the data with them and looked for upticks in sales and ROI. 

Five months into our new strategy, it’s clear our bet is paying off. Over the past several months, we’ve seen a 600 percent increase in AR usage on our clients’ websites, with furniture companies most eager to adopt AR during this timeframe. Potential clients that had doubts about the effectiveness of AR have become believers and are now converting into full-paying customers, making it easier to sell our platform to a new wave of potential clients. In just a couple of months, we’ve signed on the same number of brands we signed in all of the last two years combined. 

In addition to changing our approach to new business, the pandemic has also pushed us to innovate internally and improve the operations that will help us scale. We’ve streamlined onboarding, improved our 3D model development process, revamped documentation, and hired more team members to facilitate smoother customer integration. 

As the pandemic continues to rage on, we’re as committed to our vision as ever, adjusting our strategy with each new wave. As long as we can create value for our clients and end consumers, we know we’re moving in the right direction. This is key for any entrepreneur (or even established business) wondering what they can do to survive right now—if you can create enough value, people will pay.

Through it all, we also haven’t lost sight of the fact that we’re in a lucky place. This is a challenging time for companies in every industry and we’re all bracing for a tough couple of years. But I know we will get back to normal. We will be shaking hands again, meeting clients face to face, traveling the world to conferences, and enjoying each other’s company without the masks hiding our laughs and smiles. In the meantime, the world needs all the innovation it can get, so we’re staying focused on building transformative experiences and helping others do the same.

This article is part of a month-long work from innovation series where executives and entrepreneurs discuss how their companies have innovated as a result of COVID-19. Read more here.

Jon Cheney is the CEO and co-founder of Lehi-based Seek, which delivers best-in-class augmented reality content and services to companies all over the world, with a primary focus on web-based AR solutions for retail, e-commerce and education.