Category Archives: Hiring

When Product Development is Better Than Customer Development

The Lean Startup movement and its reliance on customer development and validated learning is great, but it doesn’t make sense for every situation.

If I have cancer, I don’t want my doctor to ask me if I’d pay for a particular solution to cure my cancer. I want my doctor to tell me how to get rid of it in the most effective way possible given their experience and knowledge based on their access to the latest research, techniques and medicines.

Serious Pain Sometimes Requires a Prescription

If you’re an entrepreneur with deep expertise in a particular domain, sometimes you already know that a particular pain point exists. You don’t need interviews to confirm the pain.

And sometimes your domain expertise allows you to understand whether or not you have a solution to the pain that is better than anything being offered. You know everyone hates the solutions that exist, but customers are stuck because there isn’t anything better to choose from.

And sometimes you know your potential customers are willing to pay for existing solutions designed to fix their pain (even though it doesn’t) at a price-point that you’d be happy selling your superior solution at. You don’t really need to bother with the “would you pay $10 if I could take this pain away?” type questions.

If this is the case then whole-hog customer development feels like a round peg/square hole kind of situation. A prescribed solution may be in order.

Customer Development Isn’t Always The Answer

37 Signals built Basecamp and launched it as a fully functional product to solve project communication problems. They didn’t ask what we’d pay and they didn’t ask if we wanted it. They understood the pain that some project managers felt every day and they built something to take away that pain.

Amy Hoy built Freckle and launched it as a fully functional product to solve agencies’ time tracking problems. She didn’t ask what we’d pay and she didn’t ask if we wanted it. She understood the pain that some agency owners felt every day and built something to take away that pain.

Apple built the iPhone and launched it as a fully functional product to offer the greatest technological advancement of the century. They did it again with the iPad. They didn’t ask us what we’d pay or if we wanted it. They understand the pain that we felt with our phones and built something to take away that pain.

There are countless other examples, but you get the point. What all these examples have in common is that the creators used their domain expertise to identify a real pain point, they had strong opinions around the best way to alleviate the pain and they had the ability to create great products to solve those problems.

I’m Leaving Customer Development Behind (at least for a while)

My team and I are creating products designed to help founders build great companies and ease the transition from founder to CEO. I’ve been trying to follow the lean startup methodologies and ask what founders need to solve the pain, but today I realized it doesn’t make a lot of sense for what I’m working on.

The pain that founders experience around leadership and management as they build their companies is very complicated. It’s very real and I don’t need interviews to confirm it. The solutions are even more complicated than the pain. A decision you might make today around compensation policies or culture because it seems neat or trendy can have adverse effects that don’t show up for maybe 10 or 50 hires down the road.

Asking a founder what they need to solve their leadership and management pains is sort of like a doctor asking cancer patients how they want to cure their cancer. Asking them if they’d rather pay for chemo, radiation or both is just as ridiculous.

There is no panacea for building a product (or business). My approach to what I’m doing and this blog are about to change. Stay tuned.

Remote Working Works

HP recently pulled “a Yahoo!” by ending their remote working arrangements with employees. Justin Jackson had this to say about the Yahoo move:

The only time a manager should fear a flexible workplace is if they’ve hired the wrong people. If you’ve broken Rule #1, all bets are off. It doesn’t matter what kind of office you have; mediocre people create mediocre results.

A few years ago our lead developer  had an opportunity to move to Australia for a 3 years, all expenses paid. His partner received an incredible job offer in Sydney for a three year contract and her employer was willing to pay for him to go with her (we’re in California).

It was an uncomfortable decision, but I gave my blessing. And then he did everything he could to make sure it worked out perfectly. That meant he had to work mornings and evenings with a break in the middle of the day every day to keep his internal customers happy and the team on track. He made it happen.

He’s back in the US now and everything worked out fine. I agree with Justin. Our team is currently scattered all over the world and it doesn’t bother me one bit. If you have great people, and you’re able give them the support they need, remote working works.

Build a Team that Ships

Naval Ravikant, founder of AngelList, designed his team to function without middle managers.

Here’s what we do:

  • Keep the team small. All doers, no talkers. Absolutely no middle managers. All BD via APIs.

  • Outsource everything that isn’t core. Resist the urge to pick up that last dollar. Founders do Customer Service.

  • People choose what to work on. Better they ship what they want than not ship what you want.

  • No tasks longer than one week. You have to ship something into live production every week – worst case, two weeks. If you just joined, ship something.

  • Peer-management. Promise what you’ll do in the coming week on internal Yammer. Deliver – or publicly break your promise – next week.

  • One person per project. Get help from others, but you and you alone are accountable.

22 Morsels of Startup Wisdom From Clarity.fm’s Dan Martell

Today PublicBeta hosted a 1 hour “Ask Me Anything” session with with Dan Martell of Clarity.fm. I had heard of Dan before, but I wasn’t a follower. I started looking at what he’s written or shared in the past and it didn’t take very long before I developed a bit of a man-crush.

While Dan has shared a shit-ton of useful information over the years, the best post that I could find is Crazy! 189 Answers To The Top Startup Questions On Your Mind. I just finished reading all 189 and here are 22 snippets that I found to be the most helpful:

On struggling to get users who aren’t real life contacts:

Ask your existing users this question via a survey. “How would you explain Site X to your colleagues or friends” then extract the words they use on your home page.

On how to spend your time as an early stage startup:

It all depends on where you’re at. Here’s my high-level approach for startups. * Product/Metrics (70%/30% time) * Get your product activation (sign-up + meaningful action) to 60% * then, Get your product retention to 20% weekly. Those are the only 2 metrics you need initially.

Once you have that, then you have traction, then spend 80% of your time raising a round (if you actually need it – longer response on why you may not). Pick a date 6 weeks out, and hustle to close on that day (close = money in the bank).

On education:

When you start making $$$, no one will ask or care where you went to school. This doesn’t mean you don’t need to educate yourself, you just do it differently. Books, mentors, advisors, entrepreneurial friends, conferences, dinners, meetups, etc and it’s usually real time meaning you learn what you need today to solve your biggest challenges. Non of this academic stuff.

On “Stealth Mode” and what to do when you have an idea:

No, never keep it secret. The key is to ask the right people what they think – not your friends, parents or partner. The right people are potential customers – ask them if they have the problem. Don’t sell your solution, first validate that they feel the pain of the problem you’re solving. Once you’ve confirmed there is a pain, then discuss the way you think it could be solved and judge their reaction. #1 thing, don’t keep it a secret – tell the world.

And:

Build something. Sometimes I use Balsamiq, sometimes I code a prototype, doesn’t matter – just create something, then tell the world. Once you tell the world, you’re committed <– that could be the best thing you could ever do. Tell everyone.

On how to do user tests:

Listen, don’t tell. Conduct it on their computer. Fix the issues after each test .. iterate like mad, especially when you’re small / trying to figure it out.

On social media mistakes:

They don’t think about the customers problem. You should find and share content (and engage with others who do the same) that talks about your customers problems.

Don’t talk about you and your company, talk about the problem. If I ran an airline, I wouldn’t take about flights, I’d talk about vacations & travel.

On successful content marketing:

There is no secret. Here’s how I do it though. * Build a product worth talking about (Word of Mouth) * Build some kind of invitation / share option in your app to let your users * Create content that’s soooo good, it makes top Digg/Twitter/StumbleUpon * Buy ads on Facebook * Create stories and get press * Write guest post on other blogs

On getting your first X customers:

I pick up the phone and call someone and ask for their business.

It’s that simple.

That’s how I got my first 10-50 customers .. then I learn from them and figure out other ways like paid marketing, social media and specific product flows to help get me more.

But 99% of the time I pick up the phone and explain what my solution does and see if they want to buy it.

On using Facebook for marketing:

Facebook is interesting since what gets you clicks, may not get you qualified traffic. I recently helped Startup Weekend (I’m on the board) with their FB ads.

Ads https://img.skitch.com/20110328-g5ree35kd1q9j3ss391kiss8p9.png

Landing Page http://register.startupweekend.org/facebook/

CPL (email) = $4.35 – our goal was $5 ;)

How we did it (% of what matters to get right): * 1-2 core message (15%) * A tonne of images (80%) * Short value driving description (5%)

The thing about Facebook is you never know what image is going to work, so try a lot of them.

On increasing revenue from existing customers:

Aks them “What do you do 3 minutes before and after you use our product / service?” Then decide if you can build more value on either end of that process to demand a higher premium. The more value you add, the more you can charge.

On why you should care about social media (even if it doesn’t mean direct sales):

Using any social new site (reddit, digg, stumbleupon, etc) does 3 things. 1) creates inbound links (SEO), 2) brand awareness (Audience), 3) very small percent convert. Value in that order.

On when to worry about the fabled “press launch”:

Spend your time on product and building something people love. You and your team have address books. If you need early users to test with, source from that. Don’t be scared to send an email to everyone you know (and post to your personal Facebook / Twitter) to get early adopters. Press is something you should do once you know your activation / retention metrics are good.

On presenting your unpolished prototype to a potential first customer:

If the application isn’t polished and you’re trying to get a sale, then try creating some high fidelity mock ups and asking for a deposit. If your goal is to validate the problem and learn, then don’t go in there to pitch, but ask open ended question about their problem surrounding your solution. My favorite is the IPO question – “If you could wave a magic wand and the solution was built, what would it look like and how would it work?”. Then just listen.

On avoiding the failure death spiral:

If you just failed, the best thing you can do is … Surround yourself with friends that are doing awesome. If you don’t have any, make new friends. Go to the gym and workout, it’ll make you happier. Start making a list of all the problems you have and ways they could be fixed. Go listen to smart people speak and allow yourself to be inspired. Read biographies of people you admire in business. Doing that will bring you back up.

On goals and long-term planning:

I put em’ on my wall in front of me. The most I’ll plan for my startup is 9 months and 10 years. 10 years is a no brainer – world changing app w/ 80% of our target marketing using us. 9 months is different. I then break it out into a concreate 3 months w/ metric goals, with the following 6 months more high-level ideas. Both the 3 months and 9 months have concrete goals around product metrics, monetization, funding, etc. I like pictures so I draw it out in Omnigraffle and annotate it.

On customer feature requests:

I don’t focus on satisfying customer feature request, I focus on solving a problem and using the customers feedback (in aggregate form) to give me clues into how I should do this. If I get it right, I’m rewarded with time & money, if I don’t – I try again.

Keys to effective email marketing:

Permission: Double opt-in and be sure your subscribers know what they are getting into. Consistency: don’t send an update today, then in 6 weeks, then a week later. Content: Insure the content is value add and helpful – not always self promotional. Segmentation: Send the right information to the right people. and remember – “Permission is perishable”. Gail / CEO of ConstantContact

VC or no VC?

Do you have a vision to build a company that can/will generate $100M+ in revenue within the next 7-10 years. If that’s the case, then that’ll likely require capital. If you don’t, don’t raise VC.

On recruiting:

A+ engineering talent. We have a rule to continue hiring smarter people than the last .. it really keeps the bar high and recruiting extremely hard ;–) but worth it.

On getting beta users to try a prototype:

I like using Facebook because it’s relatively cheap. You do need to test a lot of the ads for copy and image, but you can usually get a visit for 60c. Once you get signups (be sure to get emails) use www.survey.io – typically 25% response rate. Send the survey 7 days after they signup.

On the right way to do PR:

Create something interesting and unique and personally reach out to as many press outlets as you can (not doing a press release – personally). If you build a great product and communicate with your users you’ll create brand advocates.

BONUS: I listened to a couple interviews on the Product People podcast. I highly recommend both parts: