
Looka lays off staff as failed rebrand from Logojoy cut revenue in half - KFC_Manager
https://betakit.com/looka-lays-off-80-percent-of-staff-as-failed-rebrand-from-logojoy-cut-revenue-in-half/
======
rchaud
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.

~~~
bonestamp2
> 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).

~~~
gwbas1c
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.

------
kresten
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.

~~~
stanislavb
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" ️

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

------
SnowingXIV
> 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.

~~~
milkanic
3 years ago he was a 1 man shop doing 70k/month revenue.
[https://www.indiehackers.com/interview/creating-an-ai-
powere...](https://www.indiehackers.com/interview/creating-an-ai-powered-logo-
creator-and-earning-70k-mo-4ebecd547f)

~~~
giarc
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?

------
garganzol
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.

~~~
whoisjuan
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.

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

~~~
whoisjuan
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.

------
Mikeb85
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...

~~~
rchaud
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.

------
nathan_f77
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](https://formapi.io)

[2] [https://docspring.com](https://docspring.com)

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

[4] [https://earnestcapital.com](https://earnestcapital.com)

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

~~~
imagin8or
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..?

------
Jamwinner
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?

~~~
zyang
They want to expand beyond just logo designs.

~~~
brobdingnagians
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?

~~~
closetohome
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.

------
butler14
"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.

------
stickfigure
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.

~~~
CydeWeys
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.

~~~
perl4ever
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.

~~~
CydeWeys
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.

~~~
perl4ever
They brought the Taurus back, though. The period with the 500 in production
and no Tauruses being built was like six months.

~~~
CydeWeys
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.

------
subpixel
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.

~~~
jessaustin
A: "I live on the second floor."

b^)

------
dxhdr
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...](https://growthlab.com/convertkit-founder-nathan-barry-on-undoing-a-
rebrand/)

------
weego
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.

~~~
whalesalad
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.

------
bb88
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.

------
mv4
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.

------
reilly3000
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.

------
technotarek
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.

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

------
lacker
_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.

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

~~~
rasz
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!

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

------
arbuge
> “[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...](https://www.sec.gov/Archives/edgar/data/1762301/000104746919003139/a2238508zf-1.htm)

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

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

~~~
erikig
Channel diversity is severely underrated.

------
onetimemanytime
>> _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.

------
axaxs
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.

------
windsurfer
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.

~~~
tqkxzugoaupvwqr
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.

~~~
asdkhadsj
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.

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

~~~
pkalinowski
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

~~~
yabadabadoes
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.

------
hartator
> “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.

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

Kinda funny that they failed at their own rebranding.

~~~
mv4
Overfitting.

------
markdown
In my country looka is slang for snot/mucus.

------
onetimemanytime
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.

------
ptah
change it back

