Customer Development with Network Effects

How does customer development differ with regards to products which require a network effect to be useful? Short answer: No one knows.

Companies offering services such as Skype, eBay, Facebook, and others have cannot really test their value proposition without having a critical mass of users. A telephone with only one person on it is pretty useless. Yet these are some of the most lucrative inventions ever. So how do you apply the principles of customer development to these situations?

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Top Takeaway – Startup Lessons Learned

On April 23rd I was able to go to the Startup Lessons Learned Conference and had my world rocked. I thought I was lean, I could be leaner. I thought I had a minimum viable product, I could have built less. Although Steve Blank, Eric Ries, Dave McClure, David Weekly etc. etc. all have written and spoken prolifically about their methods and thoughts, there is a powerful feeling to being the the same room as a thousand other people drinking the same kool-aid.

Sponsorship Helps

First off, I should mention that I wouldn’t of been able to go at all without the sponsorship of the Microsoft Bizspark program. Usually I’m not one to thank MS except sarcastically for bricking my hard drive, but there’s no way a bootstrapped company like ours could have gone. So special thanks to Adrian Perez, Joel Franusic, and Bizspark! Continue reading

Pay No Attention to the Man Behind the Curtain

Wow I’m tired. Tired and energized. In the past few weeks we’ve had the typical ups and downs of every startup. We’ve let in a number of alpha users, got another hundred signed up thanks to a very minor TechCrunch mention, and realized our Minimum Viable Product wasn’t minimum enough.

We started building our site with a basic premise that entrepreneurs were willing to post their pitches to attract co-founders and investment. We confirmed this hypothesis through numerous customer interviews and surveys. We test drove our site with a limited number of alpha users and despite the clunky interface we were pleased by the results. We pushed people through a rather long survey and got an 82.9% completion rate, far higher than we would’ve thought. So we knew that people were willing to fill out some forms.

So you can imagine our surprise when our first chunk of 50 alpha users decided not to post any business ideas or pitches. Oops. Continue reading

The Taxonomy of the Lean Startup Pivot

(warning: this post may be highly theoretical / geeky)

Last week I was planning for the worst. Having gone through 51 iterations of my mockups and gathered as much as feedback as I could with our primitive alpha, I feel confident about our basic customer problem hypothesis. Still, I play a lot of chess and like to think at least five moves ahead in the five most likely futures. So I decided to make a list of my potential pivots.

(note: For those not familiar with the term, pivot is a lean startup vocab word that states in it’s simplest form: If your business model isn’t working, change something. More on this below.) Continue reading