startupSQUARE's blog

Reverse Customer Development a.k.a. Thank God for Early Adopters

Published on June 24, 2010 in Customer Development and Entrepreneurship. 3 Comments Tags: alpha testing, Customer Development, early adopter, feedback.

This week I was incredibly excited to be ambushed at Startup Waffles by a couple of users who told me how many things we needed to fix in order to make the site usable. All of the points were right on.

What thrilled me about the conversation with Ron and Eugene was that they were passionate enough about the concept of startupSQUARE to put up with all the problems and open enough to talk to me about it. I can’t stress enough how important the feedback we keep receiving is. Our site needs a commitment to feedback and constant improvement in order to be a great resource for entrepreneurs.

Alpha is better than Beta

Our alpha users are valuable. Without them, we’d spend months building features no one really wants based on nothing more than our own wild assumptions. The best thing we could have done for our site is to release it to as many early adopters as possible to get a broad range of feedback.

Choose Your Customers Wisely

By “as many as possible”, I don’t mean to just anyone.

I know that there are many advocates for having an open site as early as possible. In many cases that’s probably correct, particularly if you have a consumer product. We don’t. Our customers are entrepreneurs and we’re not too interested in maybepreneurs.

A maybepreneur is an entrepreneur who might start a company if only they had more time. He/she could clearly strike it rich if he/she just had funding. A maybepreneur is someone who specializes in excuses rather than action.

It remains our mission is to increase the success rate of entrepreneurship, and we’d like to do that for everyone. Everyone out there can start a business and be successful. But that starts with the entrepreneur and their commitment to the process. We can’t force people to become entrepreneurs.

As a result, anyone who comes off in our application as a tourist just looking around has to go to the back of the line for a while. Sorry! We’ll open it up eventually to everyone, but right now we’re looking for dedicated entrepreneurs willing to share their ideas and their advice, not only with us, but with other users. We’re looking to build a community. That means sharing.

Selection Bias

This is going to give us a selection bias in our feedback. That’s clear. It’s a fine line between honing our demographic and only hearing what we want to hear. So we have to be very careful about not discarding negative feedback and claiming that it came from someone outside our target market.

We’re fortunate that our early adopters are the ones who are passionate enough to grab us by the collar if necessary and get us moving in the right direction when we go astray. So thank you to Ron and Eugene for putting me in my place!

Cheers,
Tristan

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Hope is the Enemy – Startup Advice from a Monk

Published on June 15, 2010 in Entrepreneurship, Strategy and lean startup. 2 Comments Tags: Buddhist wisdom, Entrepreneurship, startup.

I was recently reading a book by a Vietnamese Buddhist monk (Yes…I really do read books by Vietnamese Buddhist monks. No, I’m not Buddhist.) when I came across this section that struck me:

When I think deeply about the nature of hope, I see something tragic. Since we cling to our hope in the future, we do not focus our energies and capabilities on the present moment. We use hope to believe something better will happen in the future…Hope becomes a kind of obstacle. – Thich Nhat Hanh

Granted, I’m pretty sure he wasn’t talking about starting a business and this is out of context. None-the-less, I think some “live in the moment” lessons can be applied to this thing we call the startup.

Abandon Hope All Ye Who Start Things Up

Despite the title (I like provocative titles. You should have seen what I was planning to call this post.), I’m not suggesting permanently abandoning all sense of hope and replacing it with a black béret, a cigarette, and a wistful look of ennui. Hope (and faith) in our entrepreneurial vision is what gets us started on our path to build a new company. It’s also what gets us through some of the rough patches.

But as entrepreneurs searching for a business model, hope can be our enemy. It can tell us “it might get better tomorrow” when our metrics are plummeting. It can tell us every month that next month will be the one where we turn the corner. Hope is always for something just beyond our present reach.

Your Business Exists in the Present

Your business exists in the present tense, not the future. Although we plan for hockey stick growth, startups have to act daily to incrementally pull ourselves up with our bootstraps. This requires a phenomenal amount of focus and dedication on getting things done day by day. Our startup might not last until the end of the week, let alone years and years. If we spend all of our time planning for the future, nothing will get done today.

Moreover, we have to look realistically at the data that is coming in and not shy away from it while thinking blissfully about a tomorrow that may never come. We need to talk to our customers every day and sift through all that qualitative and quantitative data to find out how to provide value to our customers. If we get too wrapped up in the future, we might not realize that reality is telling us to pivot.

If we spend too much time dreaming, we might not realize that our customers have a different dream.

Walk the Line

There is a very fine line between a business model pivot and giving up too soon. The one can feel like the other. It’s important for us to walk the fine line between planning for the future and paying mindful attention to the present.

A good pivot doesn’t mean giving up on your dreams and goals, it just means you are going to achieve them in a slightly different way. Perhaps you’ll solve the same problem, but with a different product. Perhaps you’ll solve a different problem, but for the same customer.

Perhaps, even in business, there is some wisdom in listening to Buddha and living in the present.

Cheers,
Tristan

P.S.: The book is “Peace is Every Step” by Thich Nhat Hanh.
P.P.S.: I’m still not Buddhist.

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When Should You Find a Co-founder? Before your idea is even half-baked.

Published on June 8, 2010 in Entrepreneurship and Finding Co-Founders. 0 Comments Tags: co-founde dating, co-founder, entrepreneur, idea.

When Should You Find a Co-founder? I’m going to go with my gut here and say: Before your idea is even half-baked.

I’ve had a couple discussions recently about when is the right time to look for a co-founder. As soon as you have an idea? Once you’ve tested some of your core assumptions? Before you have an idea? There’s no rule and I haven’t seen anything written on the subject.

The Perfect Idea

The goal of your startup is to find a business model that works. If you think you’ve come up with the greatest idea ever, everything is worked out in your head, and you just need to execute, well…you’re probably wrong about everything (or at least most things) and you won’t get the one thing out of a co-founder than you really need: a second opinion.

If there is anything I’ve learned during my own startup journey, it’s that I know nothing and I need to learn as much as possible. I need to learn about my target market, my business model, coding, design, where the best sandwiches downtown are sold, etc.

If your idea is permanently fixed in your head, you’re not really trying to learn, you’re trying to prove to everyone else that you’re right. So why do you need a co-founder at that point? Just to do your bidding? Then you should be hiring someone.

If you want someone to join you in a partnership, it will probably work a lot better if it is actually a partnership. You should both be learning from each other and questioning each others assumptions so you can learn faster. If your co-founder asks you uncomfortable questions, that’s a good thing. Your co-founder should be helping you answer those hard questions. Embrace it.

Half-baked

I think the best time to find a co-founder is when you’re tossing around crazy ideas about changing the world with duct tape and a Swiss army knife. I want to hear more bizarre ideas that might not have occurred to me. I want to be able to throw my idea and my ego under the bridge if my co-founder has a better one.

I also want to make sure that my co-founder has an idea of their own. Preferably more than one. Creative solutions are often a numbers game.

It’s not that some people come up with the top 10% of all ideas. It’s just that there are some people that come up with a lot of ideas. Some are good, many are bad. If you don’t have a lot of them, you won’t be able to sift through and cherry pick the brilliant concept that will drive your business to the next level.

2 Cents

I’m sure many entrepreneurs will ignore this gladly. Some will say, “Determination is the single most important factor in success.” That’s true…sort of.

An entrepreneur driven by pure determination with a preconceived notion and no desire to learn is a bit like a fool wandering around in the dark with map he drew himself twenty minutes ago who refuses to turn on his flashlight. Would you rather invest your life savings in someone who was stubbornly determined to succeed along a single preconceived notion? Or perhaps invest in someone who was determined to learn how to succeed?

To learn as fast as possible, find a study buddy.

Cheers,
Tristan

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$3.95? We’re Rich! First Revenue During Alpha Testing

Published on June 1, 2010 in Customer Development, Entrepreneurship, Sales and lean startup. 0 Comments Tags: affiliate marketing, Customer Development, Entrepreneurship, lean startup, revenue.

On Friday, I received this welcome email:

Subject: Sale – Entrepreneurs Guide to CustDev- ID:5777670 Entrepreneur’s Guide to CustDev eBook

You have earned an affiliate fee of 3.95 USD for the sale (ID:5777670-686=
2856) of Entrepreneur’s Guide to CustDev eBook on Thu May 27 2010 23:52:3=
9 MST.

Sincerely,
Entrepreneurs Guide to CustDev

startupSQUARE, having not yet progressed to beta testing, now has revenue! Granted, a very small amount of revenue. Why?

Confirm Every Hypothesis

After enjoying the Startup Lessons Learned Conference, we decided to simplify yet again and try and figure out how we could test every hypothesis, no matter how silly. One of those hypotheses was, “We can earn sufficient revenue from affiliate marketing to offset operational expenses.” (Translation: That we’ll make more money than we spend per customer.)

That hypothesis is too complicated to test right now and we actually hadn’t planned on testing anything until September or later. So we tried to pick something simpler we could test today. We settled on, “Entrepreneurs will click on affiliate marketing links.”

So we picked a couple products that we think are genuinely useful to all entrepreneurs and that we actually use. Then we threw a couple of links into the right hand column of this blog for “Four Steps to the Epiphany” by Steve Blank and “The Entrepreneurs Guide to Customer Development” by Brant Cooper and Patrick Vlaskovits. Result? $3.95

Get Rich Quick

Ok… $3.95 isn’t really a huge success story and I’m certainly not going to retire on it. (In fact, split three ways I was only able to buy a bagel with my share.) I’m just happy it only took two clicks to get a sale. Regardless, it does confirm that it is at least possible to make some money off a very specific target market (entrepreneurs) without charging up front.

We’re a long way off from really confirming that we have a viable business model with a revenue per user higher than our customer acquisition costs. However, it was important to us to develop a business model which helps entrepreneurs start their businesses. Charging entrepreneurs up front for the service seems…well…off.

When you’re trying to start a business, you’re short on time, money, and people. Charging $15-20 or more a month to offer a co-founder dating service is not a lot of money and people have largely indicated that they’d be willing to pay it if it works. Still, we’d like to do one better. We’d like to offer a free service to entrepreneurs and get paid by the people already in business.

Adblocker

Clearly we’re don’t want to run a site plastered with Google ads and certainly we’ll work hard to develop our premium model like everyone else. This was just a small test to recommit ourselves to the customer development and lean startup philosophy.

We’re still alpha testing and we’ll keep testing both our product and our hypotheses until we’ve created something that will sustain itself by helping entrepreneurs build businesses. I’m happy that we were able to take that first step towards real revenue now.

Now…off to earn another bagel.

Cheers,
Tristan

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No Titles Please – We’re a Startup

Published on May 28, 2010 in Entrepreneurship and Finding Co-Founders. 0 Comments Tags: CEO, co-founder, co-founder dating, startup, startup titles.

I had to laugh out loud when I read this at jacquesmattheij.com:

At some point in the thread he writes: “We are working on that now. It might give us more breathing air but still will keep us with a CEO (him) that I cannot trust professionaly.”

I practically fell off my chair when I read that. A three letter title in a two man company ? What does that make him ? CTO ?

…and then he continues:

Titles are for insecure people that need to have their egos re-inforced or they are for people that have reached a stage in the life of their startup where it starts to make sense to divide the work in to fixed roles, where you have well defined territories and people as a rule will avoid crossing over in to each others territories.

I could not agree more. That’s why we only have one title at startupSQUARE: Co-founder. The Co-founder is responsible for whatever needs to be done, including dealing with the bank, ordering staples, and getting the coffee.

What Title Will I Have?

If you’re on a first date with your co-founder and he/she starts talking about what C-level title they’ll be getting, you should run screaming from the room.

Sure, we have some roles. I do most of the customer development and couldn’t hope to touch the database structure without breaking half the site. None-the-less, we all have to shoulder the burden because we’re always short on manpower. That’s what startup life is. Always short on time, money, and people.

If your co-founder isn’t willing to clean the toilet, find someone else.

Tech Guys

And for a tech guy corollary: If code breaks in a startup, it’s broken and whoever is on hand has to fix it. There is no “fault.” Blame is unimportant, solutions to problems are critical.

If you only have two to four guys programming, everybody better know everyone else’s code because eventually, someone is going to go on vacation or quit. At that point, all the code is “your” code.

I’ve broken “my code” and broken Manuel and Marcel’s code as well do to my own misunderstandings. I’m always heartened when we’re able to look together for solutions and not degenerate into a blame fest.

Again, if your co-founder starts talking about how he/she isn’t willing to deal with an issue because it’s “someone else’s problem”…not a good sign. Find someone who is willing to do what it takes.

There’s another word for people who need a snazzy job title and a narrowly defined set of responsibilities: EMPLOYEE

Cheers,
Tristan

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First Dates and One Night Stands for Co-Founders

Published on May 25, 2010 in Customer Development, Entrepreneurship and Finding Co-Founders. 10 Comments Tags: co-founder, co-founder dating, first dates, open source.

Before you and your co-founders step up to the alter and say “I do”, it’s a good idea to get to know each other a little first. Maybe even play a little footsie.

I’ve been searching and searching for good advice on the subject and consistently come up empty. There’s plenty of advice on how to split up equity, qualities to look for in a co-founder, and even the occasional article on places to go to find entrepreneurs. Why is there zero information on how to vet them? The typical article seems to suggest a good conversation will do the trick, presumably because you’ve just dosed your co-founder with sodium pentathol and wired him to a lie detector.

While there’s no perfect answer for this, just as there’s no perfect first date, I’d like to suggest a few options. (For the record: The perfect first date is always in black tie. Everyone looks good in a tux.)

Open Sources Projects

You might think that an open source project is only for vetting technical guys and gals, but I can’t think of a better way for an MBA to prove their worth than contributing to an open source project. It may be a niche market of engineers with a low price point and low feature expectations, but it’s still a market.

When it comes down to it, the principles of customer development are the same whether you’re getting paid for a product or not. There is always a price tag that’s associated with user adoption even in free products. For example, Facebook and LinkedIn require a significant investment of time to get your profile looking nice. That time is the purchase price, open source is the product, and every open source project should be searching for product / market fit.

A keen business person should be able to significantly contribute to even a purely technical product by talking to customers, defining the minimum viable product, figuring out when to pivot, developing a marketing strategy to popularize it, etc. A really savvy MBA will find a way to turn your open source side project into a business.

Volunteer Work

I admit that I’ve only started giving back to society with volunteer work recently with the BUILD entrepreneurship program. Now that I have, I can’t imagine not doing it. Are your core goals and values aligned with your partner? Try ladling soup for a few hours with them and you’re sure to find out. They can’t deal with the smelly homeless guy? How are they going to deal with a pissed off customer?

Admittedly, this may not work if you’re in a pure for profit business and you want to find someone that is as cutthroat in business as you are. Then again, are you really going to be able to trust someone like that enough to work effectively with them in close quarters for a couple years?

There are plenty of volunteer opportunities that don’t require a long term commitment. Pick something for a weekend and see if your co-founder is willing to lick stamps for 48 hours. If not, will they have what it takes to sell door to door or do manual data entry when the going gets tough?

Hackathon

There are some great events like Startup Weekend which throw a bunch of people into a room together and let them experience the joys and heartbreak of a startup in 48 hours. It’s a sleep deprived and coffee driven bonanza with moments of brilliance.

Many people go to them to find co-founders and pitch their ideas. I think another idea is to try out your new co-founder. Take them to a Startup Weekend or other similar event such as Hacks and Hackers storytelling / hacking event and find out if you can really work with them.

You can join someone else’s project for a weekend and find out some very valuable information. Can your co-founder work in a larger group? Can they handle pressure?

Most importantly, can your co-founder work in a team towards a goal, even if they haven’t 100% committed to that goal? Because there will be times when your co-founder is staring at an empty bank account while you’re scrapping around for angel funding. Will your co-founder bail at the first sign of trouble or stick it out for the long run? If they can’t make it through 48 hours, you might want to keep looking.

Cheers,
Tristan

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Why Get Married on the First Date?…Co-Founder Dating

Published on May 18, 2010 in Entrepreneurship. 0 Comments Tags: co-founder, Customer Development, entrepreneur, founder dating, pitch.

In our customer development interviews with entrepreneurs looking for co-founders I’ve found many pitches follow this general course:

1) My idea is amazing, but I can’t tell you about it.
2) It’s a 100% surefire billion dollar idea, if only I had someone to do __________.
3) I will only tell you about my idea if you commit to indentured servitude for at least one year if not longer.

I find this a bit loopy.

Of course, not all are that bad. Still, many have one of the following three flaws, including the insistence of getting married on the first date.

Stealth Mode

If you can’t tell me what you’re working on, why are you bothering to pitch me? Ok, your resume is weighty and I love the fact that you’re capable of great things, but if you’re working on the latest massage oil targeted at the highly lucrative leper market, I’m not so excited. What can I say? I’m just not that into lepers. It’s not you, it’s me.

When someone asks you to commit to some vague concept based on their resume, it’s almost the equivalent of saying, “You should go down on me because I’ve had a lot of hot girlfriends.” Having a lot of experience doesn’t necessarily mean you’re great in bed, it just makes you more likely to have picked up an unpleasant disease.

The skills you excelled at in a big company will not necessarily do you any good in a startup. It’s a different set of skills that includes being stubbornly determined without being too stubborn, being able to juggle a variety of tasks as well as people, and most importantly the ability to admit what you don’t know and quickly learn to make up for it. Those things are not listed on your resume.

Last comment on this subject, we’ve all heard the excuses and know you don’t want someone to steal your brilliant idea. Let’s face it, if Jeff Bezos came to you ten years ago and told you he was going to sell books on-line, could you have “stolen” his idea? Probably not. It is always possible to give a high level overview without giving away your special sauce and the value for most ideas is in the execution.

Lack of Resources

I know you’re missing resources, every entrepreneur is. I’m working with two great co-founders who have complementary skill sets and there is always something that none of us know how to do. Whether it’s programming, marketing, manufacturing, doesn’t matter. What matters is whether or not you are just sitting on your hands until the the perfect someone comes along.

How hard is it to create a landing page? Not that hard. There’s tons of open source stuff that you can copy and just change a few variables. I’m technically weak, but I’ll do what needs to be done. Need a marketing person? If you’re not at least writing a blog and tweeting, why would I want to work with you?

As an entrepreneur, you can not fall back on the “that’s not in my job description” excuse. Because you will always be short of resources. If you’re not rolling up your sleeves and trying, it’s a sure signal that you don’t have what it takes to make a business work.

Commitment and Co-Founder Dating

These days, no one expects to get married after the first date. Why should your co-founder commit to anything other than dinner and a movie for starters?

Working with someone on a startup is a painful procedure. There are lots of ups and downs that will drain your coffers and leave you asking, “Why on earth did I do this?” At worst entrepreneurship is a lottery ticket. At best, it’s a bingo card.

You need someone who you can work in close proximity with for an extended period of time and it makes sense to try out that relationship on some small projects before committing to the big one. (Seth Cohen has one of the nicer metaphors for this. He says he wants to work with someone he could live on a submarine with. There won’t be a lot of shore leave.)

I’ll make a second post this week on good co-founder first dates. If you’ve got any good suggestions, I’d love to hear them.

Cheers,
Tristan

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Customer Development with Network Effects

Published on May 11, 2010 in Customer Development, Entrepreneurship and lean startup. 0 Comments Tags: Customer Development, Entrepreneurship, lean startup, network effects, pivot.

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?

At the Startup Lessons Learned conference, I asked a panel of people far smarter than myself this question and Sean Ellis‘ response was, “It’s a modified approach that really hasn’t been defined in a structured way as Four Steps to the Epiphany lays out.” He then invited anyone who can figure it out to write a blog post on the subject.

Well, I haven’t figured it out. I will however throw out some suggestions for testing and I’ll let you know if they work later.

Narrow the Market (Sean Ellis)

Sean Ellis did turn around and make at least one good suggestion such as, “The value proposition is a moving target.” He suggests trying to narrow the target market so you can test networking effects with less risk. For example, eBay could have tested auctioning in the pez dispenser market instead of allowing any product to be sold. (His example, not mine) Under Eric Ries‘ terminology, this would be a Zoom-In Pivot and it’s something we’re also trying with startupSQUARE.

We started out letting all sorts of people into our site in alpha state to test it out. However, we found that the level of interaction (people posting ideas and profiles) was very very low. Far lower than our conversion rate and customer interviews would predict. When doing follow up interviews we found that people would look for other users in a very small niche industry (we have an overly large industry list) and find no one there. With no one there, it sent a clear signal that posting a profile wasn’t worth the effort because no one else would read it.

Our solution to this is two fold. First, our industry list is horrendously complicated. Although some users have indicated they would like a more detailed list, we have to start with a simpler list. When the list has broader categories, users will be find more people in each category and thus have a higher level of social proof.

Second, we’re modifying our signup process to collect more information when signing up, including industry interests. This will allow us to let in critical mass groups from each vertical we want to target. We’ll also be able to test the size of the group necessary for the network to have value and better analyze any behavioral difference between users of different industries.

Test Interaction on a Smaller Level (Brant Cooper)

Brant Cooper offered the example of Jeff Smith from Sonicmule who built products to test specific things such as social applications. Behold: the SonicLighter. Without hearing the specifics from Jeff, it’s tough to discuss this. Still, sounds like a great idea. Try to simplify the amount of interaction necessary, potentially in a different context. If anyone has thoughts on this, I’d love to hear them.

Funniest Answer (David Binetti)

David Binetti had the funniest answer. He just shook his head with a grimace when Sean asked if any of the panelists had an answer.

There is Still a Problem

Although no one really has a definitive answer, I would propose that the general customer development thesis can still be tested, even with network effect driven products, for a simple reason: The customer still has a problem.

The telephone allows people to communicate. Ebay allows people to sell things in a marketplace. OkCupid allows people to get laid…err…I mean meet people. All these companies target established customer needs which have clear analogies in the real world. Facebook was based on…well…a facebook of people on campus. In many ways, customer development should have been easier for these companies since the customer problem was really already established. “Who was that hot girl in class today?” (Facebook’s initial customer problem.)

Nothing prevents you from establishing your hypotheses and verifying them with customers outside of the building via a good old fashion customer interview. “Do you have a lot of old junk you want to get rid of? Would you like to sell it? Where have you tried to sell it? What would make it easier to sell it?” Tada! eBay.

Fake It

Another tidbit that I think is valuable is faking data. That sounds bad. Let’s say, “Bootstrapping Data”. When you do your mockups, don’t use “Lorem Ipsum blah blah blah”. But in real names, real text, and real data. Get your friends to post things in your alpha. Post 100 times yourself. Farhad from Atracted.com bootstrapped his first few video personal ads by throwing a party, inviting a lot of cute girls, then sticking them in front of a computer to introduce themselves. Brilliant! Plus he got to have a party with a lot of cute girls!

The Real Video

In case you wanted the full video, here’s the embed starting Cindy Alvarez, Product Manager, KISSMetrics * David Binetti, Founder and CEO, Votizen * Brant Cooper, Principal, Market By Numbers * Matt Johnson, Grockit * Moderator: Sean Ellis. My question appears around 28:00

Watch live video from Startup Lessons Learned on Justin.tv

Cheers,
Tristan

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Top Takeaway – Startup Lessons Learned

Published on May 6, 2010 in Customer Development, Entrepreneurship and lean startup. 2 Comments Tags: Customer Development, entrepreneur, lean startup, startup lessons learned, steve blank.

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!

Top Takeaway

There are a number of great summaries, videos, and more like Steve Blank’s Keynote. I don’t think I can add much to that and plenty of people like Sean Murphy are already on the job so I’ll skip that and talk about teams.

We’re a team of three people. We agree on somethings and disagree on others. Fortunately most of our disagreements are the productive kind where we come up with a third, forth, and fifth solution through discussion and brainstorming. Still it takes us time to get in sync.

We’ve been talking about being a lean startup and customer development for months, reading and talking about Four Steps to the Epiphany. So I thought we were on the same page. Still, I was struck when Marcel turned to me in the middle of the conference and said, “So that’s what you’ve been talking about for months.”

Reasoning via Social Proof

Now, let’s be fair, there is a significant portion of the time where I’d describe myself as unintelligible. That’s my failing. However, I think there is always an element of social proof to reason. No matter how many times you might hear a cogent argument, it’s only when another guy chimes in with “I heard 2+2=4 as well” that we’re prepared to believe it. It’s true with facts and it’s more true with a paradigm shift.

Customer Development is a serious paradigm shift, especially for people who have been slugging away at product development in a big company like Manuel, Marcel, and myself. I may have gotten off the easiest since my last company was largely run like a startup (in the chaotic sense) and it has still taken me months to get into the spirit of lean. It takes a serious amount of un-indoctrination for us to even consider something as radical as questioning our own assumptions.

There is a value to sitting in a room with 1000 of your colleagues and realizing that you’re not the only one nodding in agreement. It’s a powerful reinforcement that is programmed into us by thousands and thousands of years of evolution. That’s a genetic trick that we need to take advantage of.

Of course we have to be careful that we’re not just monkey-see monkey-doing the latest business jargon and saying “out of pocket” like it not an incredibly idiotic phrase. We have to approach these things carefully and with thought. Still, we can take advantage of the great resources like the Startup Lessons Learned Conference and use our wired biology to our advantage.

We’re charged up. We thought of several ways we can chop functionality out of our product. We can test hypotheses that we thought we untouchable. We can explore revenue options months before we even considered it.

So my top takeaway from Startup Lessons Learned? Be a team.

A team working and thinking together under the same methodology can be efficient, learn faster, and achieve more.

We can make more value by building less. You can too.

Cheers,
Tristan

P.S.: Go buy Four Steps to The Epiphany if you haven’t read it yet.

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Pay No Attention to the Man Behind the Curtain

Published on May 4, 2010 in Customer Development, Entrepreneurship and lean startup. 0 Comments Tags: Customer Development, lean startup, Minimum Viable Product.

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.

Behavior Matters

We now realize that social proof and user experience is going to be more and more critical for us. Without a few hundred people posting ideas and pitches, new people to the site won’t be bothered to post their own. A classic chicken and egg problem which makes our alpha testing more difficult. Also a classic confirmation of the behaviorist maxim: “I don’t care what you say, I care what you do.”

So aside from pondering whether or not our minds are epiphenomenal to our behavior (yes, I’m a philosophy geek), where does that leave us? Without getting a basic sense of how many people are willing to put in data, we can’t adequately test our other assumptions regarding interaction with the website. So we need to get more basic.

Pay No Attention

Aardvark allegedly ran for 9 months in Wizard of Oz mode (see their video at the Startup Lessons Learned conference here). Meaning that there were a number of employees sitting around looking up answers to questions manually and punching in the answers. A number of other services seem to do this as well using Mechancial Turk or a small army of outsourcers.

The point of doing things that way is to see if someone is willing to use or pay for your service before you waste a lot of time building something obscenely complicated. We thought we were doing that by testing our assumption with customer interviews, mockups, and alpha testing. We could have done less.

So we’ve decided to try and simplify even more and focus on the most basic type of co-founder matching. We’ve got a few hundred entrepreneurs. We’re going to match them up one by one. It may take a while.

We’re doing this to test out a basic assumption that we skipped before. We always asked if entrepreneurs were willing to post their ideas. What we forgot to ask is, “Is anyone willing to read them?” So far I’ve got a 90% “Yes”. Still, “fool me once…”

We’ll test behavior instead of survey responses by sending out pitches via email, directly to people who’ve expressed an interest. We’ll be measuring how many people open the mails and how many people actually click through and read the full story. We hope we’ll find the unsubscribe rate is as low as our monthly mailer (<1%).

I’ll settle for <10%.

Got a pitch? Want in on the action? Go to our home page and signup now!

Cheers,
Tristan

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Pay No Attention to the Man Behind the Curtain

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