Fighting the Five Core Product Problems ft. Des Traynor

Rarely do I hear a podcast that gives me pause long enough to force multiple listens.  This week’s feature of Des Traynor did just that.  It’s a must listen for anyone building a product.  He’ll walk you from discovery through scaling with insightful lessons even grizzled vets can make use of:

http://thisweekinstartups.com/launch-incubator-des-traynor/

Here are some classic product problems Des tackles:

1 - Founder Focus

Be:

• Customer focused – use customer conversations to drive decisions
• Pattern focused – use metrics to drive decisions
• Visionary – have a strong belief about the way the world should work and execute on that
• Artistic – execute for personal engagement with little regard to external perception
• Pick one and stick with it.

2 - Scope
Swiss Army knife vs scalpel.  Be the scalpel.  Your early product should be easy.

• easy to understand
• easy to test
• easy to compare

It should not do a bunch of things marginally well.

3 - Creep

Every feature should help more people or help people do more. 
i.e. Each of your features needs to engage a larger audience or more deeply engage your existing audience.  Celebrate usage - not launches.  Focus on the core – launch features that help everyone – not a small segment (leads to consulting work).

Features are much harder to remove than launch.  So, if you make a bad choice that feature will likely rot quietly in your product degrading the overall experience.

Apply these tests to all new features:
-Does this fit your company’s vision?
-Does the reward significantly outweigh the cost of adoption for a user?
-Will this grow your business (higher satisfaction, more users, more frequent usage)?
-Will it matter in 5 years?
-Can we support this feature if its successful?

Beware of features that drive engagement but destroy values.  e.g. the LinkedIn/FB friend suggesters  Now that everyone adds everyone else on those social networks users no longer have a list of their deep connections.

4 - Purpose
Understand jobs to be done. e.g. Analytics dashboards are often built to be presented.  So, portability/aesthetics are more important than precision/detail.

Continue to innovate on your job not on a technology platform

5 - The New Magic (aka core trends)
What was once amazing innovation is now table stakes.  These three things are must haves for products coming of age today:

1. Do one thing – apps that can be operated with one click (Uber/Instacart).  
2. Data is there – by connecting to FB/LinkedIn etc.  You can get all the data you need.  Be very careful when asking users for data that you couldn’t get it elsewhere.
3. Recommendation – systems are smart enough to deliver the information to you (ie in a daily email) rather than forcing you to go find it.  Workstreams can be made increasingly more passive with daily digests and activity streams.

How to Validate Your Product Idea

The default answer is yes.  Ask anyone about your idea - that's what most will say. Yes is free.  Yes may even earn them some brownie points.  Yes is easy.  Yes is worthless and not to be trusted.

No is expensive.  It risks insulting someone’s life’s work and ruining a relationship.  Very few will invest a No in you when they can cash in a Yes.

So, how do you figure out if your idea is a good one - and worth building?  These are the three steps we use at Contastic to make users invest with us – this is the real meaningful yes:

Emails (Attention) 

The first step to validating any venture is the landing page.  Mock it up to look exactly like it will after you product is launched.  However instead of a payment form you’ll have a signup form for people to ‘pay’ with their emails.  This is giving you permission to message them about you product.  It signals that they have a problem and your product at least looks like their solution.  Also, when you do launch, you’ll have a set of beta users ready to go. Shoot for 100 – it’s a nice round number that generally extends beyond your close circle of friends.  This is an investment of their attention.

Users (Time)

After gathering an email list of interested users create a quick and dirty prototype. This should be the bare minimum where it is useful to users.  Note that this does not at all mean easy to use, polished, or pretty.  As soon as it can add value in anyway to your users – launch it to your list.  Then, watch to see if people use it regularly.  You can learn a ton about how people are using it, and their regular engagement will be a sign that you’ve hit the mark.  They are now investing their time.

Customer (Cash)

Cash is king – and in this exercise it’s no different.  There is nothing harder than getting a customer to open up their wallet and part with some hard earned cash.  Use the existing landing page from step 1 and convert the email collection to a payment form.  Now that you’ll getting some dollars in the door – congratulations – your idea is now validated!

To be sure, this is not where the validation ends, the Customer Development Process leverages a similarly progressive framework to validate all areas of your business form acquisition to retention.  If you have any other tips and tricks for validating your product ideas let me know in the comments below.

Rethinking Customer Development

I'm a huge fan of Steve Blank his theory of Customer Development.  I've found his writing always inspirational and insightful.  However, has been a little to dense for me to use as a clear roadmap.  Many in the Lean Startup movement point to the Business Model Canvas as a cure - which, try as I might, I've never been able to actually follow in a real live business.

The issue was that each of these pieces is part of a flow - not a discrete map.  So, here at Contastic we started using a variant that models the business as a process rather than as a map:

This covers same essential areas as the Business Model, but slightly re-arranged to fit the process of validating a startup.  Generally, each stage from left-to-right is dependent on the next and should be evaluated in that order.  At each milestone the company should seek to find a path through.  I like to have at least two stages written out to look at: general themes, and then specific actions/sources to test:

While by no means complete, this model serves as a basic roadmap of our plan.  We also often use  third level for tactical tests to confirm items in level 2 (ie acquire 20 customer per day at Dreamforce).  As they are confirmed the fact bubbles up to the next level.  As we develop the company we continually edit this knowing that the dependencies flow from left to right and then top to bottom.  

Hope this helps you all bring a strong evidence-based approach to your ventures.  We're continually evolving this model, so if you have any ideas for improvements or cases where it fails let me know in the comments below!

Seven Deadly Startup Sins

I've been working full time on Contastic (getcontastic.com) for about three months now fully immersed in the valley culture.  It's amazing to be in a place with so many resources, but each opportunity is also a distraction.  Time is your most precious commodity - if it's not invested wisely, your company will die.  In the spirit of helping founders make better choices here are the seven deadly startup sins to avoid:

1 - Building too many things

It's hard enough to build one feature well.  If you attempt anything more than that you will dilute your resources and will end up with a basket of mediocre features that nobody cares about.  Approach scoping from the prospective of a 10 second demo - only build what can be demoed in 10 seconds or less.  This is all the time you'll get from a customer or investor.  Spend your time making one amazing magical feature that can wow anyone in 10 seconds.

2 - Getting feedback from non-customers

The first thing people do when building a company is to ask the people around them.  This is lazy and leads to bad information that will lead you down the wrong path.  Focus on customers - people willing to pay for your product at some point.  Ignore all other input.

3 - Building features customers won't pay for

When I started using lean methodologies I quickly found myself drowning in divergent customer feedback.  When asked 'what would you use?', customers will ask for everything under the sun.   The real question is 'what would make you pay (more) for this product'?  If adding a feature doesn't change their willingness to pay drop it.   Only build what changes willingness to pay for a large segment of your customers.

4 - Following advice

Almost all advice is well intentioned, but bad.  Nobody knows your business like you do.  Ask people for their stories, their experience, and their opinion within their scope of expertise.  Do not ask for or listen to anything else.  The worst advice comes from experts outside their field of expertise.  It sounds deceptively credible, but will lead you down the wrong path.

5 - Telling customers what they need

Coming from a sales background I'm naturally inclined to get to 'yes'.  While good sales, this drive is a terrible way to gather data.  When interviewing customers adopt the socratic method - ask questions and avoid making any declarative statements all together.

6 - Not asking for the introduction

Every good conversation you have should send with an ask for introductions to others.  At any stage if you have one person that likes you, your idea, or your product, use them to find similarly minded people.  Birds of a feather flock together, so one fan can usually lead you to more.

7 - Not having a plan

Engineers are often guilty of the 'build first ask questions later' mentality.  Building is the most expensive way to validate an idea.  Create a step-by-step plan which ends with coding - require a high barrier of proof before building anything other than mockups.  We use the rule of 10 - 10 customers must say yes before we move on.  In this model we'll talk to at least 30 customers before coding.  Here's what we follow:

Customer Development Pipeline

Note: after the first couple interviews we lump the first three steps together.  Just be careful to ask them in order so you don't influence the user's perception of the problem with your solution.  Also, drop customers from your funnel if their needs start to diverge from the pack.  You don't need to make everyone happy - just 10.

Finding Founders Post @ HIPPO Reads

 

There’s a new Hippo on the block in high quality content.  After being introduced to Hippo Reads by founder Anna Redmond I’ve really enjoyed learning through their curated content. 

In each ‘curation’ an industry expert leads you through a rich array of secondary content in an essay format.  With topics ranging from Healthcare to Justice the breadth of content and voice of the curators make Hippo Reads a great digital escape where readers can explore a new topic in just a few minutes.

If you want to read more check out their most recent piece on Entrepreneurship (by yours truly): Finding Founders.

Revel in Failure

I often hear long discussions about the right time to found.  However, I truly believe the question is if not when to be a founder. The simple fact is startups are never worth it. The price you pay as an entrepreneur in time, energy, and stress is never worth the monetary rewards. A founder has to be motivated by a passion for pursuit. And if you have that passion – the right time to found is right now!

Founders are attracted to the challenge of creating something from nothing. The careers of serial entrepreneurs are marked by a continually escalating set of challenges – this is why we see Jeff Bezos of Amazon launching rockets and Bill Gates trying to eradicate malaria. Both of these founders have successes that will impact the lives of millions for generations. And yet, they are all still on the hunt for the next great pursuit.

A big part of escalating risk is failure. If the motivation is to seek greater challenges with unknown outcomes – failure transforms from a possibility to the inevitable. Love of failure is the hallmark of a serial entrepreneur.

Success just isn’t as interesting. When you’ve won the path forward is often smoother – and more mechanical. It’s just more of the same. And, if you keep consistently succeeding, it’s clear that the challenges you are choosing are too conservative. If you’re not failing you’re not taking on big enough challenges.

Failure is where the excitement is. I love this risk – and live for it. That’s why I’m a founder. I look back on the last three years I’ve spent building companies and I cherish every single experience – the failures even more so than the successes. The moment you know that it’s not working you get to look over the precipice, see all the options below, and leap.

The only reason to do a startup is because there isn’t another option. Founders need to imagine a future – and know they can be happy having taken a shot – without regard to the outcome.

If you’re considering a startup life, do yourself a favor and first ask: can I revel in failure?

What World Will You Enable?

To end our last day of VC visits in the Valley we spent the afternoon with Adam Nash.  Adam is a true Silicon Valley veteran who has led product for some of the top companies including LinkedIn, Ebay, and Apple. 

He was most recently an EIR at Greylock, and has recently joined WealthFront – a company dedicated to democratizing access to the financial instruments currently available to high net worth individuals.

It was a unique opportunity to talk with such a thoughtful and experienced person at a time of transition.  During the course of our conversation Adam honed in on the reason for joining WealthFront.  He said that if he didn’t join the team their vision of the future – one he was deeply passionate about – may not come true. 

This criteria resonated completely with me and will be carried forward as the new lens of legacy to evaluate my ventures moving forward.  Whether founding or joining a startup – being a part of an early team requires a complete investment of your energy, time, and reputation.  And – it often will last far longer than one would expect.

Most entrepreneurs are inclined to act.  They want to jump in and get stuff done.  In almost any business this is a great attribute.  However, in the quiet time, the time before the business has been chosen or formed – we all need to take the time to make sure we choose a path that we’ll be happy walking for the next decade. 

I’m very happy that BuildAFlock meets that criteria for me.  If we can create a world – where in the next decade – I can get up and go to a great dinner party any night of the week – I would be ecstatic.  I know I’d be having more fun, and I know this would create the closer communities we all crave.

So let this be the premier test for what is worth making the all-in investment of your entrepreneurial energy:

Will you be a critical member of a team that is making a vision of the future that you are passionate about reality?

Non-Technical Founders

The most common question I get asked by entrepreneurs is what is the role of a non-technical founder?  In today’s market technical talent has become increasingly scarce with the trickle of top talent unable to meet skyrocketing demands.  It’s great to see engineers recognized for the outsized contribution they can make.  However, the pendulum has swung so far away from the business side of an enterprise that many have lost sight of the essential value a non-technical founder brings to a company.

And, for the first time in a long time, I find myself in the role of a non-technical founder with Flock (BuildAFlock.com).  Despite being a technical guy, I haven’t touched a line of code or a pixel of the design.  So, what do I do with my time?

I sell.

At a startup there are really only two jobs – building and selling.  That’s it.

A group of sales guys can easily find themselves with a customer base soon to be disappointed by a late mediocre product and no ability to rapidly iterate.  Identifying great engineers is simply a matter reviewing their past work.  What have they done?  Is it still running?  Even if you’re non-technical you’ll instantly recognize the care and high standards in any product that are the hallmarks of true talent.

A group of engineers without sales will tend to let product scope spiral out of control and end up with product that is a technical phenom that no customer wants.  However, proving value on the non-technical side is much more difficult.  Sales numbers are highly variable based on the market and product.

So, what can a non-technical founder bring to the table to attract engineers?  Customers!  I’ve heard literally hundreds of people with great ideas that have huge unstoppable potential.  I rarely hear from them twice.  However, if you take the time to take your idea into the real world and do some preselling you will be unstoppable. 

This process helps to refine your designs (inevitably your first cut will be wrong) before the first line of code is written.  And, the second an engineer finishes building V1 you’ll have a ready base of users eager to test it out.  So, rather than a half baked idea, you’ve proven the merit of your idea, gathered a customer base, and most important, proven your value in the venture to your future partner.

I challenge every early entrepreneur to pick a role – builder or a seller.  Don’t fall into the trap of trying to be ‘CEO’ or ‘manager of the team’.  Also, if you’re not a designer (ie not the person pushing pixels in Photoshop) don’t be the person running around with a set of wireframes and nothing else.

If you’re serious about creating a venture of any significance – build or sell.