Tag Archive for 'Customer Development'

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

You should share this post here:

$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

You should share this post here:

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

You should share this post here:

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

You should share this post here:

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.

You should share this post here:

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

You should share this post here:

The Taxonomy of the Lean Startup Pivot

Published on April 13, 2010 in Customer Development, Entrepreneurship, Strategy and lean startup. 2 Comments Tags: Customer Development, lean startup, pivot, Strategy.

(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.)

To do this, I started making a list of questions I could ask of my product/market to brainstorm other ideas. In the process, I wound up breaking up my list of pivots into categories based on the questions and posted the list to the lean startup google group. I was wondering, “is anyone else doing this? Is there was any established taxonomy for pivoting or any template? Are there other questions I should be asking?”

Here was my original list of questions and their associated pivots:

Product Pivots:
- Can we solve the problems of our target market with an partly or
entirely different product?

Use Case Pivots:
- Can we use the same tech for a different use case with the same
target market?

Market Pivots:
- Can we apply the same product / tech to a different market?

Narrowing stance:
- Can we narrow our focus to a smaller/niche market or use case?

Widening stance:
- Can our product embrace a wider market or use case?

I thought this list could be the start of a very rudimentary taxonomy of pivots. However, some of the responses I’ve received so far have tested my understanding of the basic pivot concept and made me realize I had tied the concept of pivot into “product / market fit.” As product / market fit is most basic hypothesis I need to confirm before knowing that I have a viable business, any business changes outside of product/market fit didn’t register as a pivot for me.

Expect the Unexpected

Others seem to have a different take on the term, including Brant Cooper who implied “Everything about your business is a potential pivot” and also Eric Ries who suggested the following types of pivots:

“Customer need pivot: same customer segment, different need/problem
Customer segment pivot: same problem, different segment
Business architecture pivot: ie from enterprise to consumer
Zoom-in feature pivot: remove features to focus on just one key feature
Zoom-out feature pivot: add features to become more of a holistic solution
Technology pivot: solve same problem but with different technology stack
Channel pivot: same problem, same solution, different path to customers
Platform pivot: open up an application to third-parties to become a platform (or vice-versa)”

(emphasis mine)

You’ll note that Eric’s list and Brant’s response both imply or include changes which don’t necessarily apply to product/market fit. In Eric’s list, I’m looking mostly at “technology pivot” and “channel pivot” which have nothing to do with who you’re target with what product, but instead focuses on how to make the product.

There is a lot of overlap between Eric’s list and mine and some of his terms are a lot zingier. moz screenshot The Taxonomy of the Lean Startup Pivot moz screenshot 1 The Taxonomy of the Lean Startup Pivot But for my current purpose of achieving product/market fit I need something combining both elements, so I merged them:

(Please note: I wouldn’t recommend taking my list over his, especially if you plan on speaking the same language as the rest of the lean startup gurus.)

Product Pivots:
- Can we solve the problems of our target market with an partly or entirely different product?

This one doesn’t seem to have a parallel in Eric’s list, which I found surprising. I’m keeping it in mine because I think it’s very relevant.

Use Case Pivots:
- Can we use the same tech for a different use case with the same target market?

This is “Customer Need” in Eric’s list.

Market Pivots:
- Can we apply the same product / tech to a different market?

I would group “Customer segment”, “Business architecture”, and “Platform pivot” under this. All of them refer to who you’re selling the product to. I would consider all of this under the broad category of Market although it’s very very useful to break it down further for brainstorming.

Zoom Pivots:
- Can we narrow our focus to a smaller/niche market or use case?
- Can our product embrace a wider market or use case?

This is a great term from Eric and is better than my “Narrowing / Widening Stance” term. The main difference is that Eric’s refers only to product features and I would also want to address the possibility of widening or narrowing the target market. (Although you could just as easily call those Market Pivots.)

Open Ended Answer

You may also note that in the list above I ditched Eric’s suggested categories of “channel” and “technology” pivot as they don’t help me with product / market fit, but rather refer to marketing and production techniques. That’s not to say they’re not valuable, just they’re not relevant to the problem I’m trying to focus on right now.

As such, I have no firm conclusion to this post. I started the taxonomy as a thought exercise and I’m continuing in that spirit. I realize I may be using the term pivot differently than the lean startup folk and I need to adapt my terminology. Speaking my own language is not particularly useful for communication purposes, although I do find it helpful to associate the term pivot with the product/market fit concept. Otherwise pivoting can be applied to everything and is synonymous with the word “change”.

That’s it for the geeky post. Next week I’ll try and share some of our user behavior maps.

Cheers,
Tristan

You should share this post here:

Customer Development: Fight or Flight

Published on April 6, 2010 in Customer Development and Entrepreneurship. 0 Comments Tags: Customer Development, escapism, fight or flight, lean startup.

Motivations are unimportant if you happened to be B.F. Skinner. But since he’s dead let’s assume you’re not him. Here’s the obvious question, why do you want to start a business?

Let’s start off topic with a ridiculously simplistic dichotomy: Fight or Flight

Those are the two basic choices we all have when faced with a conflict situation and it’s deeply ingrained in our physiology. Even when faced with something as non-threatening as public speaking, our basic instincts can take over and flood us with adrenaline. Our instincts tell us we have to fight or run away. But as in so many modern day stress or conflict situations, fighting is useless (you cannot punch out a public speaking opportunity) so we generally go for the second option: escape the situation.

Run away! Run Away!

We can choose not to accept the speaking engagement, we can (consciously or not) miss our ride, feed our speech to the dog, or otherwise chicken out. We can avoid this situation and any other. We choose not to discuss our problems with our co-workers, spouses, or lovers. We can be sullen and withdraw. At the extreme end of the escapist impulse, we can distance ourselves from our own lives by building a wall of alcohol and drugs between us and everyone else. We can convince ourselves we don’t care. We can simply leave.

There are situations where running away is the right choice. When faced with a half dozen rifle toting grizzly bears with a penchant for human flesh, the correct choice is to run. But more often than not, we choose flight because we don’t see how we can possibly fight. If the bank has lost your wire transfer, yelling gets you nowhere and neither does yelling at the teller. Most times, stapling that memo to your asshole boss’ face is a poor choice of action.

There are other options.

We can choose to take that burst of adrenaline inspired energy and instead of fighting against our problems we can choose to partake of a solution. The most successful people I’ve met do this with aplomb. Terrified or not, they will approach a crowd of 1000 people and burst onto the stage brimming over with energy. They’ll speak with a passion and conviction that will convince their most antagonistic critic. They’ve changed to dichotomy from fight or flight to escape or partake.

Why are you starting a business?

I think most people start a business for one of those two reasons. They’re either running from something (i.e. a bad job, a shrinking industry, stress, etc) or they have a fervent desire to experience and partake more broadly of the world. They want to experience more, engage with other people, find solutions to problems. They want to travel, engage in esoteric sports, and most importantly, they love to talk to people with a different point of view. This second type of person has taken their fight instinct and channeled it into a creative and productive force.

It’s this second type of person that I want to be involved in. Those are the partners I want. They are the ones that aren’t interested in building something arcane in a basement for a year until it’s perfect. They are out of the building actively engaging with customers, trying to understand problems and build the right solution. They dream about how to improve their products and when they problem solve they never use the word “but.” Instead, they’ll use the word “and.” They’ll take one idea and use it to brainstorm another idea and another and another until you’re sitting on a mound of possible products waiting to be invented.

A Single Caveat

We don’t all start businesses for the same reasons.

Success could be profit. It could be the number of hungry children fed. Success could mean having enough spare time to spend with your family. It could be just getting out of your last dead end job. I won’t argue that any one of these goals in more or less important than any other. There’s plenty of other people who will argue that. I am suggesting that it is important that we know what our motivations are, and align our actions with that.

If you’re starting a business, you must know why you’re doing it. Moreover, the other stake holders have to be in line with that motivation or you’re going to have problems. If your investors are out to make money (hint: they are) and you’ve started a business because you just didn’t like working for your last boss, that’s ultimately going to be a problem.

I won’t pretend that I haven’t run away from an uncountable number of problems. I’ve had jobs I didn’t like, relationships I didn’t want to commit to, and large, wall like individuals that I realistically couldn’t beat in a fight. That’s ok.

Today I’m building a business. I’m talking to customers that hate my product to make it better. I’m engaged in the process and I’m learning. I think that’s what customer development is about. So let’s all get out of the building and start talking to the world.

Cheers,
Tristan

You should share this post here:

How to Sell Me (Not), I Dare You to Try

Published on March 16, 2010 in Entrepreneurship and Sales. 1 Comment Tags: consulting, Customer Development, Entrepreneurship, sales pitch, startup.

“Thanks for the meeting, no I don’t want to hire you to consult for my company.”

Having to sit through an increasing number of sales pitches from startup consultants these days, I thought I’d summarize the points that worked in selling me and what just turned me off. At the very least, next time someone tries to pitch me, maybe I’ll just send them a link to this blog before the meeting. At best, I’ll formalize some points to improve on my own sales pitch.

Tip #1: Don’t assume.

I understand that I’m a bit of an idiot. I’m new to this. I didn’t go to Harvard. I don’t have a million dollars. Your fine Italian shoes clearly indicate your business superiority. I am destined to fail without your advice.

Still… please ask me what my situation is before telling me how to correct it. If you’re telling me that my pitch needs improvement, I’d appreciate if you’d listen to my pitch first. If you’re telling me I don’t have the right target market, please make sure you know what my target is first. If you’re telling me I need my teeth whitened, please ask me if I live in LA first.

What I’ve learned: Ask more questions, keep your mouth shut, verify pain points before selling.

Tip #2: Don’t tell me to conserve costs.

Ok… that’s actually really good advice for startups. It’s great advice. But seriously… if you tell me I shouldn’t waste money hiring an attorney to go over tax issues and then tell me I should hire you for $250 an hour to work on my corporate culture, I’m probably not going to hire you.

I have hard problems. Don’t sell me on soft, fuzzy solutions I’m not convinced I have. Perhaps I’m radically mistaken, but unless my corporate culture can fix my tax issues, I’m probably going to hire an attorney before I hire you. Instead, demonstrate some value by telling me how to hire a $100 CPA instead of a $1000 attorney to fix my tax issues and then we’ll talk about your services.

What I’ve learned: Umm… don’t undermine yourself? At least not in the same sentence.

Tip #3: If you can’t shut up, ask questions.

I’ve just said/done something stupid. You’ve caught me in the act. You know how to fix it. Congrats, don’t tell me. Show me. Ask me questions to guide me to the realization that I need help in this area. “Have you tried ______?” “How many customers have you validated that hypothesis with?” “What could you do to get customer feedback earlier in your development?”

You’ll avoid me getting defensive and you’ll impress me with your keen interpersonal skills.

What I’ve learned: Socrates was a bad ass.

Tip #4: I might not be an idiot.

As I mentioned before, I’m a bit of an idiot. But I also might not be

I might be asking you what participating preferred stock is because I don’t know. I also might want to see if you can explain it without being patronizing. I might be changing the topic to see if you bring me back on point. I might be asking you to setup a meeting with an outrageously well placed VC contact to see if you’ll be honest and suggest an alternative within my reach. I might even be picking up the tab to see if you’ll even offer.

As I said twice now, I still might be a bit of an idiot. But if you don’t treat me like one, I’m less likely to assume you suffer from the same defect.

What I’ve learned: I’m a bit manipulative. And again, don’t make assumptions. They’re usually wrong.

Tip #5: Read a book.

Lastly, go read some Dale Carnegie. He’s the king of the soft sell. If you’ve read it and you think it’s all about smiling, remembering names, and learning to lie well enough to stroke some ego then you probably didn’t read it carefully enough. If you can name the ancient Chinese philosopher that Carnegie references (and I think most of the book draws from) then you’re hired. (btw: the answer is here.)

What I’ve learned: I’m a philosophy geek.

Conclusion

There you have it. Now you know how to sell me. I dare you to try.

Cheers,
Tristan

You should share this post here:

How to Practice Shutting Up (Customer Development Practice)

Published on March 9, 2010 in Customer Development and Entrepreneurship. 0 Comments Tags: consulting, Customer Development, Entrepreneurship, lean startup, sales pitch, startup.

I’ve discovered a great new method of growing bigger ears. Ready? Wait for it… go listen to sales pitches from startup consultants.

If you’re an entrepreneur, then you probably don’t like being bossed around and you might think your own opinion is pretty damn good. If you didn’t, you probably wouldn’t be starting your own company. (I’ll admit it, I have both of those flaws to varying degrees.)

Given those two features, you may or may not have a tough time (like me) really shutting up and listening to your customers. It’s always tempting to interject your own opinion, and even if you think you’re just asking a clarifying question, you’re probably adding some spin to it to try to nudge your customer’s responses the way you want…the way you expect…the way you know your customers ought to be thinking.

But if you do that, you’re not getting real customer feedback. Instead, you’re just stroking your own ego and validating an opinion rather than validating a hypothesis.

Throw Me the Pitch

If you’re in the middle of starting a company (like me), you’re also probably in the middle of being pitched by a startup consultant, lawyer, accountant, and maybe even a holistic acupuncturist with discounts for hungry entrepreneurs.

You might find this a bit annoying, especially if you didn’t realize you were doing everything wrong and this consultant was going to fix all of your problems for $250 or more an hour. C’est la vie. Make the best of it. Instead of getting frustrated, I suggest taking the opportunity to shut up.

By keeping your mouth shut and a smile on your face you might be able to gain a few advantages:

You might actually be doing something wrong and the consultant might have a good point.
The consultant might stop telling you what to do and start asking questions to clarify your situation and your pain points. (In which case you may have found yourself a genuinely useful consultant.)
You’ll practice listening.

I Still Want Bigger Ears

Listening requires patience and both are like muscles that require exercise to develop. All too often, I feel pressure to never shut up, never allow a gap in the conversation, and sell, sell, sell. Particularly here in Silicon Valley, if you can’t get someone excited about your startup in two sentences and blather on about it for at least 30 minutes without coming up for air, there’s a sense that you’re done for. “You’re not passionate enough.” “You’re not a good salesman.” “You’ll never get investment.”

Maybe all that’s true. I can’t say for certain and I’d certainly agree that the gift of the gab is a great skill that I also need a lot of practice with. Still, while I want to improve my sales pitch, I also want to make sure I am simultaneously developing a fascistic ability to shut up and listen to my customers. Especially when they disagree with me, my product, my unspoken assumptions, and my ego.

I want to be able to listen to a 2 hours diatribe of how much of an idiot I am, continue smiling, neatly summarize the points made, repeat those points back to make sure I understood them, say thank you, and learn from the experience. Until then, I’m going to keep practicing my listening as often as I practice my sales pitch.

Cheers,
Tristan

P.S.: Are you an entrepreneur? Got you help us by taking a quick survey?

You should share this post here:

Tag Archive for 'Customer Development'

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

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

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

Customer Development with Network Effects

Top Takeaway – Startup Lessons Learned

Pay No Attention to the Man Behind the Curtain

The Taxonomy of the Lean Startup Pivot

Customer Development: Fight or Flight

How to Sell Me (Not), I Dare You to Try

How to Practice Shutting Up (Customer Development Practice)

You should follow me here:

You should follow me here:

Recent Ramblings

Categories

Recent Comments