Tobias is the co-founder of Tandem, a language exchange app where users can find language exchange partners. Tobias studied media science. He was still studying when he launched his first company with four friends. Tandem is his fifth business, which he started in 2015.
Some of the topics we discussed in this interview:
The challenges of app building
Ways to acquire users when you are just getting started
Strategies on how to promote an app
Dealing with setbacks and how to overcome them
What is Tandem?
Tandem is a language exchange community that is accessible through a mobile app or website. Users can create an account where they can set the languages that they currently speak, and the ones that they want to learn. Tandem will then help users connect to people so that they can learn languages from each other. The core function of Tandem is a messaging service, where users can exchange text messages, audio clips, images, and make audio and video calls.
The start of Tobias’ entrepreneurial journey
As mentioned, Tobias was still studying when he started his first company with four friends. One of them had a website where he was publishing daily comedy content, and together as a group, they built a business around the site, creating what would now be termed a crowdsourcing content tool. They were working with a couple of comedy writers on creating comedy content for websites, TV shows.
How Tandem started
Tandem was a so-called pivot, a change of business model. It came out of an app that Tobias helped launch before Tandem, which was called Vive. The idea was to create a video chat community. It was mostly inspired by the friendship group’s experiences of meeting people, often complete strangers, from all around the world, and having great conversations. They created a video chat community and ran it for about three years.
Unfortunately, Vive encountered a couple of real issues, primarily that it didn’t receive a lot of organic traffic. Vive also attracted a crowd that the founders hadn’t really intended to build the app for. The community was still growing, but it wasn’t really going anywhere. So, the founders looked into what the most popular meaningful use cases of the app were, and language exchange turned out to be one of them.
“Once we identified that language exchange was something that people were already doing, we basically took the same app, gave it a different name, changed the app store description, and we launched it. From the first day, downloads went through the roof. It was something people were actually actively looking for.”
From prototype to working with investors
The founders of Tandem initially invested their own into the project, so that they could build a prototype and create a promotional video that described the idea behind the app. After that, they took what they had and approached investors. A couple of months later, they secured their first investment from business angels.
How to secure investors as a fledgling Langpreneur
Tobias mentioned that he and his co-founders’ experience was rather unique. There was one investor they knew from previous projects who had told them that they could reach out to him whenever they were going to do something new. That person became their first investor. He basically introduced Tobias to their second and third investors. And from there on in they were they went from one investor to another. It sounds like a smooth process but every time they found new investors they had to deal with tons of setbacks before securing the investment.
Tobias claims that getting your first investor usually happens through some kind of personal relationship. Some people pitch their ideas at events and find their investors that way, but Tobias always attracted investments through personal relationships.
Difference between working with investors and running a company on your own
It’s very important to pick the right investors who are aligned with you on your strategy, on your mission, and your vision. If that’s the case, you can make the majority of decisions by yourself. Luckily, that has been the case for Tobias and his co-founders throughout their whole journey with Tandem.
Of course, they have to report to investors. They also have board meetings where they get together once per quarter. Also, for any kind of major company decisions, both the team and the investors need to be aligned with each other.
Do you really need investors?
Tobias says: “I think it depends on the business that you’re pursuing. And if you can do it without investors, I would also always advise to try it. It’s the so-called bootstrapping model.”
Tobias and his friends wanted to build a community, but a community has no value if there’s nobody in it. So, they needed capital to grow the community fast and make it available for free. If they had charged from the beginning, growth would have been much slower.
Working with a business partner
Trust is the central element in a partnership and it’s something that you build over time, just like in any relationship in life. Trust is built when times are hard because it’s then that you really get to know another individual.
When you start the project, you’re very enthusiastic and everybody’s very motivated. Throughout the years, Tobias and his partner had been through times where they learned that they can rely on each other.
“You can meet over a cup of coffee and try to get to know each other, and maybe start working on projects, but you really get to know each other when you’re going through tougher times.”
What did you do with your first venture capital?
They invested the vast majority of their funds in growing the team and hiring people to take over functions that are necessary to run the business.
When you initiate a startup, you wear many different hats. One person does the job of three or four others, which results in you not being able to do any of them properly. And then, when you grow the team, you try to split this up and have dedicated people to do these things properly.
Ways to grow business in the beginning
Tandem mainly grew organically, thanks to a high rank in the App Store. Tobias explains that this was mainly because they had a very specific niche in the language learning market, with almost no competition. They also started in 2015 when the App Store was not as crowded as it is today. Most importantly, Tandem is available in 11 languages. It helps to make your App Store description available in many different languages.
In addition, Tobias also put quite some work into what’s called ASO – App Store optimization. It starts with having a good title, subtitle, description, keywords, and so on. His team also performs A/B testing, which Apple doesn’t allow on the App Store, but Google does. You can test different text copy and visuals, texts, see which works best, and then apply it to your description in the App Store.
To have your app rank high in the App Store, you need good ratings and reviews, and therefore it is vital to ask people to leave a review. Ideally, you want prompt users at a point where they might have just had a positive experience within the app, or if something has happened to delight them.
What are the marketing activities you invested in?
In 2015, when Tandem started, it only existed as an iOS app. About a month after launching Tandem, Apple featured it in 130 countries as an App of the Day. That gave the business a huge boost. The team launched the Tandem Android app a year later.
How do you monetize the app?
In 2015, Tobias and his team didn’t really have an idea about how to monetize Tandem. Back then, the subscription economy didn’t really exist. Now, subscriptions are the main way that they monetize the app. A lot of functionality on the app is for free, but to access certain features, users need to upgrade to a premium subscription.
How do you figure out what people are willing to pay for?
“That’s totally a matter of testing.”
When the Tandem team decided that a subscription model was the way to go, they tested over 70 features to see what their users wanted and were willing to pay for. They took the most popular features and offered them in their premium subscription plan.
Why no language exchange for dating?
“We see people using Tandem as a dating app. It’s not really what we like to see because there are tons of dating apps out there. Our aim is to attract people to use the app for what we built it for; language exchange. It can get very annoying for the users if others ask them if they have a boyfriend all the time, for example”
Tandem is doing a lot of things to prevent dating in the community, but of course, it’s a balancing act because most people learn languages to talk to other people. From a product perspective, the hardest part is how to measure how much dating is going on in the community. It’s very hard to tell.
The challenges of app building
Running a company like Tandem feels like a rollercoaster ride, with a lot of ups and downs. The skill of dealing with uncertainty, failures, and successes, is what Tobias believes is the most important skill that entrepreneurs need to develop.
“There are simply setbacks every single day. When we run these experiments, for example, 9 out of 10 usually fail. It’s a question of how to deal with it. When you talk to investors, you have 10 conversations and maybe one investor who’s seriously interested in it.”
The important part is to develop a healthy mindset. You always have to be very passionate about the problem that you want to solve. If you’re not passionate, as an app developer or as an entrepreneur, you’re not going to be successful, because when times are hard, you will give up.
”If every time you make a bad mistake or a poor decision, you tell yourself that you’re not good enough, it’s going to damage your self-esteem.
In a similar vein, if you make a difficult decision and it turns out to be a good one (even if you weren’t sure what to do), the success of it might have you convince yourself it was actually a “genius” move.
They’re a similar kind of trap!”
Tobias’ advice to aspiring Langpreneurs
“My main advice would be to test very early. If you are not embarrassed about your product by the time you launch it, you launched it too late.”