Looka lays off staff as failed rebrand from Logojoy cut revenue in half | Hacker News Reader

Looka lays off staff as failed rebrand from Logojoy cut revenue in half

betakit.com

103 pointsjasong90 comments

As someone in an SEO/digital marketing role, I find it hard to believe that a domain name change alone would have led to an 80% drop in traffic. As long as the logojoy.com pages were set up for a 301 redirect to the new domain (which they appears to be), there would be a small hit to SEO, but nowhere near 80%.

For example, a major Google Analytics/Tag Manager consultancy called Lunametrics was acquired by Bounteous in 2018. The GA-related articles originally written on lunametrics.com are still ranking towards the top of search results, even though they are now under the Bounteous.com domain.

What I did notice on the Looka site was that there was no mention at all that the site has rebranded. Not even a "Logojoy is now Looka!" type banner on the top of the homepage with an explanatory blog post. A lot of SEO traffic comes through content marketing, where somebody clicks on an article link that's relevant to their query. I wonder if they removed or archived any of the blog posts or articles that were bringing in traffic.

> Not even a "Logojoy is now Looka!" type banner on the top

There's a food product I buy for my kids weekly that changed their packaging about 6 months ago. It took me 6 weeks to find it after the packaging changed. I didn't look closely enough, I just thought they were out of stock. After I found it I realized that I knew this product by the package and not by the brand name.

There are a few similar products from different brands so the new packaging didn't jump out, I just ignored it as one I wasn't looking for. If they had simply included a "X is now Y" or "New Packaging" message across the top I likely would have found it sooner.

I recently noticed that instacart actually has both packages for this product in their product list, even though the old package is nowhere to be found in stores. Maybe this is accidental as the UPC may have changed, or maybe it's a brilliant solution to maintaining sales based on the old packaging.

My wife's company recently redesigned their logo and packaging and their sales slipped double digits. It's been 6 months and they haven't recovered yet. They're simultaneously trying to figure out where they went wrong in consumer testing and how they can improve from here (and it takes months for new packaging, new production, and flow through to shelf).

Reverting to the old packaging is an option but of course there was a reason they changed it to begin with so they want to take the pain now and get it right. I assume that's true for Looka too (they don't just do "logos" anymore so they don't want to go back to the name Logojoy).

Reminds me of the Tropicana orange juice rebrand fiasco from a few years back.

It was a case of very bad customer empathy. Basically, Tropicana orange juice comes in a few different varieties that vary based on the amount of pulp. Before the rebrand fiasco, (and currently,) there are very easy to identify visual cues about the level of pulpiness.

After the rebrand, the level of pulpiness was shrunk to very small text on the edge of the label. It was very hard to find. Furthermore, the text changed from well-known names, "Grovestand," "Homestyle," to "high pulp," "medium pulp." Often, due to angles of the shelf, the tiny text was covered.

I had to stare at the shelf, every time, for about 2 minutes just to figure out if "High pulp" or "Pulpy" was really "Grovestand." Now, for me, I only drink "Grovestand," so it was worth it. Most people just got confused and bought the other brand.

I was very happy, when after a few weeks of this nonsense, they brought back the old labels.

The thing is, the newer labels were prettier and more modern. All they needed to do was keep large badging for "Grovestand," "Homestlye," ect. That's it. Instead, whoever designed the label hid critical information in tiny text in a corner.

My guess is the keyword "logo" in their brand name was a big part of their SEO ranking

I switched over a website in a not competitive area to a new domain over the summer and search referrals dipped like 50% and recovered just this month. I'd imagine in something more competitive like logo/brand design they could get hit a lot worse.

It has "Logojoy is now Looka!". This is what Google shows when you type Logojoy:

"Logojoy is now Looka! Design a Logo, make a website, and create a Brand Identity you'll love with the power of Artificial Intelligence. 100% free to use."

Doesn't the google webmaster site have a migration tool to move a site to a different URL??

They do: https://support.google.com/webmasters/answer/9370220?hl=en

You as the site owner would still need to set up the redirects and DNS changes, but the tool basically tells Google to emphasize indexing the new site over the old one.

The founder of logojoy once said in an interview that he could have stayed as a single founder company.

I think logojoy was pulling in > $350,000 per month at the time.

If he’d sat on that as a single founder he’d be rolling in cash.

Imagine sitting on $350,000 a month for 3 years.... you’d never need to work again.

Instead, venture capital, offices, 40 staff, rebranding failure staff cuts, logojoy gone.

Yeah, I'm sure he regrets it now. A lesson well learned.

Moreover, I still can't get it how one would think that "Looka" is a better brand than "Logojoy" ️

Only education can make people that sure of something that foolish.

Some lessons in life you only need to learn once.

This was one of those elusive passive income models - so perfect for automation.

I seriously doubt the 350K/month number

350k of profit or revenue? It's not the same thing. In profits, that's typically a 50 million company.

Revenue.

As a single founder company, I’d think that would be mostly profit, say 90%? That leaves about $400,000 per annum to pay for an ec2 instance and salary if working from the kitch table.

Imagine having a company 90% profitable and burning it up on the dream of venture capital backed growth.

Depends on if logojoy would stay as lead gen for actual software play, a la canva, or if they were selling human-in-the-loop as pure AI. The former then margins might be fat but the latter his margins will be slim.

Additionally to continually stay ahead of the pack most of his revenue might have to get dumped right back into advertising.

Say it's a $5MM/annum business, after costs, paying out salaries it might be half a million in profits.

> Depends on if logojoy would stay as lead gen for actual software play, a la canva, or if they were selling human-in-the-loop as pure AI. The former then margins might be fat but the latter his margins will be slim.

They were selling monthly packages (which made little sense for just a logo), I guess that’s why they added all the new features.

Also, no humans are involved — it’s "AI" in the sense that the logos are machine generated, but they’re also pretty bad. It‘s basically icons from the noun project combined with text in set in free fonts.

Eh, if he had to pay for a lot of the traffic that generated sales, I wouldn't be surprised if it was closer to 50%. But still, this was almost certainly $100k+ profit per month.

No way. They paid for all the actual work and took a cut. He wasn't a single founder doing all the actual Service work

What service work?

> Looka has also raised around $7 million in funding, with a $900,000 seed round and $6 million Series A in November 2018.

That seems like excessive funding for what this company is. A neat little tool he could have solely owned and kept majority of the profits. Really curious to why this webapp required so many employees to run. Rebrand was obviously a disaster LogoJoy was a great name that didn't require a total rebrand just for wanting to include additional assets, I'm not even sure what Looka is.

You beat me to this.

There's a lot here that doesn't make sense. Supposed 5mil entrepreneurs used it. I assume that's paying customers because why count looky-loos that don't buy a logo as a customer? $20 is the cheapest logo plan. That's $100mil. They're having trouble because? Plus I mean, their "AI" technology is supposed to eliminate the need of employees anyways... so... what's the problem?

Unless... gasp... they're full of shit and it's not AI, just a randomly generated template system with a large library of symbols that are keyworded extensively since the entire process requires you to actually pick within narrow parameters?

I feel like I'm taking crazy pills sometimes.

3 years ago he was a 1 man shop doing 70k/month revenue. https://www.indiehackers.com/interview/creating-an-ai-powere...

Seems like they should have used their own capital to grow rather than take outside money. I'm sure with the influx of investor money, they were pressured to hire staff. Inflated themselves and felt they needed to get "professional" with a new brand.

He was likely throwing off a ton of money at $70k/month as a sole owner, why not just hire a few people at a time?

With $7m comes an army of VC endorsed people. You need a board, because what company doesnt have a board, right? New CEO is a no-brainer. New CEO means rebranding! because he needs to leave his mark and the name is obviously wrong, you pay $50k (bargain!) for a new one, its too important to make one yourself. Bumblebloggel sounds great, has great emotions embedded in its core. Dont worry, 3-5 months down the line you will be renaming the product again because CEO is bored (or you got a new one in the mean time) and you didnt run out of money yet. You need managers, to manage. Managers need something to manage, so you hire a bunch of people. Colors are important, so you pay another $50-100k to pick a right color for you. Etc

For reference how Andy Rubin, silicon valley darling, runs his VC investments: https://theamphour.com/394-jeri-ellsworth-and-the-demise-of-...

Turns out they didn't need that many employees to run after all, since they seems to be doing fine cutting from 40 to 8... Sounds a lot like someone trying to create a big business out of a little tool.

Yeah, I wondered about that as well. "Design as a Service" type tools are a dime a dozen, and there are a few I've seen on IndieHackers already, so we're talking 1-5 person shops that outsource the work to designers in Eastern Europe or Asia.

The "AI play" is likely a big selling point for the VCs, even if it's not impressive in practice.

But still, considering how much harder it is for Canadian companies in the right sectors (cloud, AI/ML, marketing automation) to get funding compared to US ones, it seems strange that they picked up $7 million.

Here is a deal. Change offer name back to LogoJoy, keep Looka as a company. Then build it from that.

Once it is established and substantial, one can always do a smooth logojoy.com -> looka.com/logojoy tansition. For example, the transition to looka.com/logojoy can only be applied when a customer is logged in.

Once they have registered customers, they can pitch them other offerings from looka.com domain like looka.com/brandjoy etc.

Such incremental approach would open a smoother path to success.

P.S. As a quick remedy, they should change looka.com/logo-maker/ to looka.com/logojoy right now. Then, they should pitch the visitors with the right message: "Make a logo with Looka" should be changed to "Make a logo with LogoJoy" or "Make a logo with Looka LogoJoy". Karma is real, once one has it they should not deny it.

The name is not the issue at all (or the domain name for that matter). They were highly dependent on organic traffic. They probably had a semi-large range of content marketing articles on logo design, branding design, design for new businesses, etc.

Those articles were driving traffic, creating soft conversions (people who create logos but don't necessarily pay for the export version)... Then they probably had a funnel to slowly move those passive customers into active paying customers. Probably a lot of those doing one time purchases.

They also have a subscription model but I suspect their recurring revenue coming from these is poor. They were probably making their money from one-time purchases the same way an e-commerce website earns money.

Enter the rename. That by itself is not a complex issue. Domain changes happen every day and Google correctly re-indexes your content under the new domain as long as your 301 redirect is set correctly. But when you do that AND also broaden your content to include new areas, you're at the mercy of how Google's algorithm is going to reclassify your content. Since they created a broader offering, they lost specificity and Google hates that. So all their content marketing went to hell and their main revenue funnel started declining.

If you do this to an e-commerce website you will see the same results. It's like if you are a store that sells bed sheets only and one day you decide that you also want to sell kitchen items (slightly related but not the same category). If you do that, you lose all the relevance in bed-sheets SERPs that you dominated and it's kind of hard to come back from that.

If your business depends on Google, this can happen to you even if you don't rebrand. A simple algorithm change can damage your rankings.

TL/DR: Their fundamental error was renaming AND making their offering broader(vaguer) at the same time.

probably their CTR also went wayyy down. I'd click on a logojoy listing but think twice about Looka

So how do you expand your site to other areas without getting a SEO hit? (Your kitchen and bedsheet example)

You expand horizontally, by adding new pages and slowly creating content that ties back to your new offerings. You keep the keyword density of your main SERPs unaffected and try to do a minimal integration of new links targeting the pages you want to rank for new search queries.

Their mistake was destroying their relevance with a big bang change. If your website ranks generally well for a term like "logo creation tool" it's because you did some work to build the authority against that keyword. But if you decide tomorrow to change terminology around your business and redesign the without understanding the key content of your pages, you're going to affect relevance.

Google crawls your website today under logojoy.com and sees a lot of logo creation related keywords. Then it crawls a week later and sees a 301 redirection a shit-ton of changes and new terms, and potentially completely different markup with those changes. Of course, you're going to get a massive SEO hit. This was a poorly timed and uncoordinated strategy that resulted in this outcome.

If you change your domain name AND change the terms that you're targeting and add more vagueness to your content Google will re-index you differently. It's as simple as that.

Not sure I'd trust these people with my branding...

Logojoy is a better name, likely is easier to google, definitely easier to remember and connect to their product. Also, it's hard to get traction as a startup, re-branding that early is suicide...

Agreed. Startup names are so ridiculous anyway, what value was there in changing the name?

Salesforce for example moved beyond a pure sales CRM ages ago, and the platform supports all kinds of applications, including healthcare and university application systems. They didn't need to change their name to do that.

Yep, if you can't handle your own rebrand, how am I supposed to trust your AI to do my brand?

A name like Looka doesnt drop out of a hat. You pay $100k consulting fee and receive it in a very nice envelope with a 30 minute pitch about its origins, emotional impact, color and connotations!

This was really interesting to read, since I'm about to rebrand my own startup. The stakes are a lot lower in my case, but hopefully it doesn't turn out like this.

I'm going to rename FormAPI [1] to DocSpring.com [2]. I'm also launching a new website, and you can see a preview on my staging servers [3]. The main reason for the rebrand is that FormAPI wasn't a very good name. The service is an API for filling out PDF forms, but FormAPI doesn't communicate that clearly. People would often spell it incorrectly, and I got tired of explaining it to people.

I also wanted to move to a decent .com domain. "FormAPI.io" feels like a small side project, and my theory is that "DocSpring.com" will feel a bit more trustworthy. (I'm still a solo founder with a small company, but I recently raised a small round from Earnest Capital [4], and I'm still around after 2 years [5]!)

I think I'll be launching the new site tomorrow, so wish me luck! And please let me know if you have any feedback about the new site (or in general.)

[1] https://formapi.io

[2] https://docspring.com

[3] https://staging.docspring.com

[4] https://earnestcapital.com

[5] https://news.ycombinator.com/item?id=15427891

I don't know if I'm just being dim because its not a weekday, but, what do it do?

Is it for me to fill out forms on random sites, in which case how is it an API? Or is it for the people with the forms to make it quicker to fill them out (which makes sense, but doesn't match the one line of blurb on the site)?

If it's for form filling, why is the word "doc" in the name, which I'd assume meant document rather than relating to form data or personal data.

Looking on the staging page it makes more sense, it seems to be for the companies who have the forms rather than the people who have to fill them in.

But does it take a pdf and generate an electronic form from it, or take filled-in forms and pull the data out of them?

Or is it for companies who have data to use to fill in forms from that data?

Just quite confused, tho maybe I wouldn't be if I was a company with forms.. or data..?

While I think the FormAPI name is perfect, I can see why DocSpring is better suited to more mainstream customers. There’s a tiny potential for confusion with FormSpring, but since they’re not around anymore I don’t think it matters.

I like the new site, here’s my feedback:

1. I’d not set the main headline in all caps

2. The “Upload Template -> Set up fields“ thing on the old site is really good at explaining the the tool does - if I were you I’d put that on the new site too, and de-emphasize the screenshot.

3. The logo in the top left corner is slightly blurry, I’d use an SVG instead of a PNG.

Apart from those tiny notes the new site is a big improvement!

How is 'LogoJoy' not a better branding in every way? 3 sylbles, 2 letter abv, has joy in the frikkin name. Has the rare aspect of actully describing what they do to boot! What does the new one even mean? Another misspelled word? Harder to search? I want to know the politics that drove the change, because I feel the data must be sparse. Any marketing/branding pros care to chime in and set my ignorance alight?

They want to expand beyond just logo designs.

Sure, but there are multiple ways to get there. They could have kept the LogoJoy site as it was and made a separate site/service called "BrandJoy".

You're hired!

Seems like it would work to just have LogoJoy as a product with its own page, and expand to Looka as the company name with additional products. Does anyone with experience know if that is done in the industry/would work?

I work in ecommerce/design/branding, and with very very few exceptions, mindshare and domain authority are always worth more than whatever ephemeral benefits you'll get from rebranding.

It seems Automaticc did something like this. Wordpress was founded in 2003, and the company Automaticc in 2005, meaning they probably spun Wordpress out as the product. Now, the parent company owns a bunch of different products. Obviously speculation on my end.

Google re-organized with a new parent company (Alphabet) to do other stuff. They didn't change the Google name, so most users are blissfully unaware of the change.

They probably used AI to generate the new name :()

"The CEO explained that with the rebrand the company expected and was ready to see a 20 to 30 percent drop in organic traffic due to the domain switch. “That was sort of the standard [of] what to expect, 20 to 30 percent. And expected to recover in three to six months,” Whitfield told BetaKit."

It sounds like the CEO in question had taken SEO advice, which is reassuring. And the 20-30% drop and 6 (to 12) month recovery period is typical.

However, the people involved in the project likely vastly underestimated the value of having a 'partial match domain name' e.g. the very fact that it had the keyword "logo" in its domain name likely helped it rank for lots of commercially valuable logo-related keywords and phrases.

These sorts of stories remind me that Berkshire Hathaway is still named after a failed textile business (and according to Buffet, the worst investing mistake he ever made).

Rebranding is overrated.

Yup. Get big enough and people think of your name as a familiar proper noun, like a person's name. I don't know what "Aaron" means and it doesn't matter.

It may be unclear which is cause and which is effect, but I think of cars. Honda has been selling the Civic for ~47 years and Toyota the Corolla for ~53. Even Hyundai, which has not always had the best reputation, has had the Elantra for almost 30 years. American manufacturers keep switching the names of their small cars and it looks like they may be giving up on them entirely.

Ford had a good thing going with the Taurus branding (my parents bought three of them over the years), but then for some inexplicable reason they killed it off and went with the 500 or whatever. My parents no longer drive Fords; their default choice was taken from them.

For some reason it's only the muscle car brands that get any respect from their manufacturers in the US; you won't see the Mustang, Charger, Challenger, or Corvette being renamed any time soon.

They brought the Taurus back, though. The period with the 500 in production and no Tauruses being built was like six months.

It's gone again now, though.

And my parents happened to buy a new car during the interval in which the Taurus appeared to have no future.

1. Logojoy is, in every way, a superior brand. (Q: Who designed your awesome logo? A: Luka.)

2. They should never had combined a brand change with a big change in what they offer as a business. Now they don't even really know what is broken.

3. All this was likely compounded by a technical assumption that was incorrect, e.g. some content likely disappeared or backlinks were broken.

A: "I live on the second floor."

b^)

Reminds me of the rebrand ConvertKit did to "Seva", which they quickly realized was an enormous mistake and unrebranded.

https://growthlab.com/convertkit-founder-nathan-barry-on-und...

Changed the brand, expanded their product offerings that clearly had associated cost while expecting a loss in revenue and also rented a large new set of offices at the same time.

Regardless of what he was pitched from an SEO standpoint, mashing together all that risk into one giant clusterfuck shows amateurish leadership.

Totally. You can’t blame the marketing firm for this... at the end of the day you need to be strong enough to say no. If you’re grasping at straws for growth and really think this is what’s gonna do it for you – you’re living in the land of make believe.

Big wake up call for sure.

I guess it's interesting in that a branding startup failed to rebrand itself successfully.

It's clear that "Looka" is less clear about what it is than "LogoJoy".

I also think it may say something about startup branding in general. Brands based upon actual words may do better than trying to make people understand what "Looka" is.

May this serve as a reminder to anyone being offered a non-sensical funding round for their one-person business ("really take this to the next level","1 + 1 = 3", "you will own a piece of a much larger pie!") - maybe consider keeping 100% of your pie.

Perhaps the right play was to start calling the company Looka, but leave up Logojoy as one of the company’s products.

Certainly some SSO woes would have been much less painful than an SEO apocalypse.

Well getting these types of articles is one way to rebuild their SEO! I'm not suggesting they'd do this on purpose -- that would be crazy -- but it might be a clever way to make some lemonade out of lemons. That is, sell the story of how they screwed up in hopes of generating some new organic backlinks.

A backlink is a backlink. Unless of course the Betakit site puts in a nofollow on external links.

Bingo. That’s how to spin it.

Dawson Whitfield, CEO and co-founder of Looka, told BetaKit that it was this decision to rebrand and move into new verticals that led Looka to financial difficulties and layoffs. “Rebrand, they said. It’ll be great, they said,” Whitfield lamented.

This guy is the CEO. What is he talking about with all this “they said” stuff? He’s the one responsible for this rebranding decision. But he is acting like it was forced on him, or like it is the fault of some advisor.

As the CEO you have to take responsibility. The problem isn’t that “they said” to rebrand. The problem is that you decided to rebrand. Be honest with yourself so that hopefully you don’t make a decision this bad again.

Probably the folks that gave him the 6 million he burned in less then a year.

People who give you $6m also give you a list of people you have to hire and keep pushing to spend that moneys fast as you can 'to grow'. They dont care if you spend it on useless shit, move fast and break things!

Feels like rebrand is like The Big Rewrite. Potentially lethal.

> “[In] the logo market … at least a billion dollars of logos are sold every year. If you look at just 99 designs and Fiverr, they sell about $150 million of logos per year. So it’s still a very sizable market,” said Whitfield.

That one is pretty mind-blowing. I'm not sure where he got this number from, but assuming it's accurate and that Fiverr accounts for roughly half of it, that would make it a sizeable chunk of their total GMV:

https://www.sec.gov/Archives/edgar/data/1762301/000104746919...

"Our GMV for the years ended December 31, 2018 and 2017 was $293.5 million and $213.0 million, respectively."

That’s the kind of pain you’re in for when you’re overly reliant on a single channel.

Channel diversity is severely underrated.

>>Canadian design startup loses 80% organic traffic after rebrand

Canadian design startup gains lost traffic and then some after story is picked by a lot of websites.

Brilliant! Money (and or time) well spent to pitch this story.

Why not just keep both? Keep the domain name. Call the product LogoJoy. Brand it LogoJoy, a Looka company. Or LogoJoy, by Looka. Just changing names seems monumentally risky, in my opinion.

Has anyone here tried or used the app? Looka seems to requires users to log in to try out a demo. I have a feeling the rebrand isn't the real issue here.

I tried the logo creator, went through all the steps, and as soon as they had generated logos for me and I started scrolling, a non-closable overlay asked me to sign in or register. I didn’t even have a chance to look at the generated logos! So I closed the tab.

Same, just did this the other day. I also went there from Logojoy and was immensely confused on wtf Looka was, and how I got there.

Also, I just noticed Logojoy is left alone, but my spell check auto corrects Looka to Looks lol. Oy.

I got a brief look. They were uniformly terrible.

Could be competition. Namecheap recently launched a 100% free version of these "AI logo makers" for which there are a ton out there.

Why would a domain change cause any drop though? Surely they kept the old domain and redirected people to the new one?

All backlinks around the internet still link to old domain. Additional redirect causes this, together with IMO ridiculous decision by Google to derank websites after domain migration

I think Google is going with pleasing the user in this case. If I have a passing interest and finally come back years later, I have no interest in following rebranding history to figure out this isn't yet another cheap copy, if Google finds me 1 or 2 of the 3 sites I remember without irritating me or dropping me on sites I'm not sure about, they have a happy user that might be open to ads.

> “Rebrand, they said. It’ll be great, they said,” Whitfield lamented. CEO and co-founder

Loved Logojoy and Whitfield when they launched. Should probably take more responsibility than a `they` though.

> Looka, the Toronto-based startup that uses artificial intelligence and machine learning to design logos

Kinda funny that they failed at their own rebranding.

Overfitting.

In my country looka is slang for snot/mucus.

I guess that they switched from a great name (logoJoy) to Looka because they have more than logos now. However, it sucks as a name, even though what their new name is, is not an issue traffic wise.

Maybe they should have used some of the VC money to buy a real good name? So many people underestimate the power of a great domain name, and it's a huge mistake.

change it back

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