We still suck

Here is a refreshingly honest admission from Clusterstock:

“We’re in beta now, which means we still suck. We’re working hard, though, and we hope to get better fast.”

Nice!

But, I still think it’s a bit silly to say a website is “beta”.

For a start, unless you’re customers are software developers it’s unlikely they even know what that means.

And, more importantly, it is a mistake (albeit a very common one) to think you’ll ever be finished building your site.

I wonder if the team at Clusterstock can really imagine a time in the future when they will no longer be working hard and hoping to get better?

The trick to angel investment

This cartoon from Hugh MacLeod at GapingVoid is a goodie:

trick125

I think there is a corollary which applies to investing in start-ups:

The trick to angel investment is to be smart enough to want to do it, but not smart enough to be objective about the true potential of the companies you invest in.

:-)

A selection of other GapingVoid cartoons from previous posts:

Some questions about your idea

If you have an idea, here are some question you should ask yourself before getting too excited about it:

  • How difficult will it be to launch a worthwhile version 1.0?
  • Is it clear why people should use it? (i.e. what’s broken)
  • How much value can you ultimately deliver? (i.e. how deep could it go)
  • How many people may ultimately use it? (i.e. how wide could it go)
  • How will people learn about your product?
  • How hard will it be to extract the money?
  • Do you really want it to exist in the world? (i.e. is it personally compelling)

I think the last question here is perhaps the most important of all.

All of these come from Evan Willians, who has some credibility in this area as the founder of Blogger (subsequently sold to Google), Odeo and Twitter.

Paul Buchheit on Product/Market Fit

Here’s an interesting response to the great Marc Andreessen post on Product/Market Fit (which I can’t believe I haven’t linked to from here before now!)

“What’s the right attitude? Humility. It doesn’t matter how smart and successful and qualified you are, you simply don’t know what you’re doing. The good news is that nobody else does either, though some are foolish enough to think that they do (and that’s why you can beat them).

What is the humble approach to product design? Pay attention. Notice which things are working and which aren’t. Experiment and iterate. Question your assumptions. Remember that you are wrong about a lot of things. Watch for the signals. Lose your technical and design snobbery. Whatever works, works.”
The most important thing to understand about new products

I like the idea of humble product design.

Paul used to work for Google and was the guy who wrote Gmail.

His own story is a goodie:

“I wrote the first version of Gmail in one day. It was not very impressive. All I did was stuff my own email into the Google Groups (Usenet) indexing engine. I sent it out to a few people for feedback, and they said that it was somewhat useful, but it would be better if it searched over their email instead of mine. That was version two. After I released that people started wanting the ability to respond to email as well. That was version three. That process went on for a couple of years inside of Google before we released to the world.”

Authenticity

Why do small businesses so often pretend to be bigger than they are?

By this I mean the voice they use when talking to customers.

So many manufacture a fake corporate persona.

They assume, I suppose, that they need to do this to be taken seriously.

I remember doing an interview shortly after Flathunt launched and at the end the journalist asked me what my job title was. I thought this was a slightly odd question as I was a company of one. I said something dumb like “CEO” or “Managing Director”. After the article ran I got a phone call from somebody asking to speak to the head of marketing and had to explain that I was that person too. Very embarrassing!

What’s more the assumption that corporate = good doesn’t stand up to much scrutiny.

Consider this –

“We are all conditioned to expect terrible customer service from large companies and great customer service from little companies.”

— Eric Sink in “Absurd Customer Service”

That’s definitely true. But why?

I think it’s because little companies tend to just use their own voice. They talk with us rather than at us. In other words they don’t try and pretend to be something that they’re not.

“People like it when companies have personalities. It makes us feel like there are actual people on the other side of the communication. It’s fun to be the customer of a company with a personality. This seems totally obvious, and yet you too rarely see companies with distinct personalities really grab your attention in the marketplace. Why is this? It’s actually hard to remove personality and character from communications. So, instead of saying that companies don’t take the time to have personalities, it’s probably more accurate to state that companies don’t allow themselves to show their personalities.”

— Dick Costolo in “Have a company voice”

An excellent example of a company not scared to show their personality is Flickr. They seem to enjoy the fact that talking in a real voice brings them closer to their customers.

Here is a simple technique you can use to help with this…

Try looking somebody in the eyes and reading your words out loud.

It doesn’t have to be a real customer, just the person sitting next to you will do.

I defy anybody to keep a straight face while saying “Thank you for submitting a feature suggestion. I have passed this on to our Feature Prioritisation Committee to review at their next monthly meeting.” (or whatever your standard response to somebody who has made a suggestion about your product is).

Do this for everything you write for your customers to read – emails, help, web content, etc.

Whatever you do don’t worry too much about looking small. Especially if you actually are small. Just talk straight and be yourself.

People won’t care as much as you think.

Dragging a big sack

In the early days of any new product it’s really important that you choose your customers carefully.

I realise that sounds slightly unconventional, and it certainly is uncommon. After all most start-up businesses are desperate for whatever customers they can get. Beggars can’t be choosers, etc.

But there is a method to this mad suggestion…

More than anything in the early days you need people who will actually use your product and give you honest opinions about it. Ideally these are people you don’t know so well. People who are close to the product, who understand that it’s early days, will forgive missing features or clunky performance. But, this is not really the time for fanboys or sycophants. Actually, a little bit of “glass half empty” thinking is probably a nice counter balance to your optimism for the idea.

And, as much as you can influence this, you need users who are a good match for your product as it is (not as it might one day be). It’s vital that they love it and will be prepared to tell the world about it.

Last but by no means least, it’s important that they are representative of the broader group of customers that you want to target your product at. Otherwise, the feedback that you get from this influential early group will end up distorting your perception of what the market as a whole is likely to want and value. Make sure there are lots of others like the users you have.

Consider this quote from the NZTE AfterMail case study:

“Lawrence Russell who joined in AfterMail’s very early days likened the impact of building the customer base to ‘dragging a big sack.’ Every new customer you get you put in a big sack, he expiated. And you’re dragging that sack behind you It gets heavier and heavier as the number of customers and support burden grows. The customer relationships become less personal — requiring systems and processes and standards for responding to requests for up-grades and new features, tracking issues and response tries. All slowing your product development down.”

Do you agree?

Where to start?

Let’s say you’re launching a new website.

How good is it going to be when it first goes live?

Probably pretty crap, truth be told.

Here is a screen shot of the Trade Me home page from 1999:

Trade Me Home Page Circa 1999

Doesn’t look like a million dollars you’d have to admit … let alone 700!

New website owners are left with a difficult decision between three options:

  1. Spend months and months (perhaps longer?) trying to make the site perfect before letting it see the light of day.
  2. Throw it out there, and follow quickly with a huge marketing campaign hoping that people won’t notice that the site itself isn’t all that you’re cracking it up to be.
  3. Launch quietly, get a few users, watch closely to see how they are using the site and how you can make it better for them, be patient, continuously improve the site, and focus on making sure that those people who discover the site have a good experience and tell their friends.

Truth be told … all three options are flawed.

The problem with option #1 is that no matter how long you spend building the damn thing it’s unlikely to be very good. Just like the best laid military plans, it’s unlikely to survive long in the heat of battle. I’ve linked to this quote before, but it’s worth repeating I reckon:

“If you ship your product and you’re not a little ashamed of it, you shipped too late”
— Reid Hoffman, LinkedIn

The problem with option #2 is that you need very deep pockets. And, even then, all of the people who do visit the site on the back of the marketing push will quickly discover that it’s rubbish, and at that point will either leave (probably never to return again, no matter how much you later improve it) or, worse, they’ll tell their friends how crap it is. Let’s call this the “Ferrit effect”.

The problem with option #3 is that it takes a lot of hard work over a long period of time and it’s not obvious in the beginning whether it’s going to ever pay off. You need to be very patient, and ensure that you can stick it out long enough to enjoy the success when it (hopefully and eventually) comes.

There is, however, some evidence that tips the balance in favour of this last option. Just about every big consumer site has taken this path … Google, Yahoo, Facebook, You Tube, Amazon, eBay, My Space, etc, etc. This is a pattern of success that has been repeated over and over.

Of course this is not to say that everybody who has used this approach has been successful, just that those who have been successful tend to have this in common.

Can you think of any successful sites that buck this trend?

Or, is there a fourth option I’m forgetting?

Train the trainer

Here is a nice technique if you think you’ve got a killer idea.

Get someone who knows your idea try to pitch it to a third person. Or ask them to complete the elevator test for you, and see how they describe your product or service.

You’ll learn a lot about your idea [1].

And it will force the person making the pitch to consider your idea in a different light [2].

Remember, if you’re going to rely on word-of-mouth marketing this is exactly how your idea will spead.

Notes:

[1] This is just one of the many great pieces of advice covered by Marc Hedlund in his Etech tutorial

[2] Watching with intent to repeat ignites key learning area of brain, from ScienceDaily

The elevator test

I think this is a nice way to collect your thoughts about a new idea.

If you can’t explain it clearly using this model then the idea probably needs to be simplified.

Just fill in the blanks …

For [target customer]
Who [statement of the need or opportunity]
The [product name] is a [product category]
That [key benefit, compelling reason to buy]
Unlike [primary competitive alternative]
Our product [statement of primary differentiation]

So, have a go.

Let’s hear how you describe what you’re currently working on.

The Fortune 5,000,000

I really like the idea of The Fortune 5,000,000.

This is from the 37 signals home page:

Who uses our products?
While our products are mainly built for small businesses and individuals (we call this group The Fortune 5,000,000), companies of all sizes use them every day.”

It’s a nice way to describe the opportunity of creating software for the long tail of small- and medium-sized businesses.

But, don’t fall into the trap of thinking that this much larger group is in any way similar to the handful of large companies or government departments where many technology people spend their careers working on multi-million dollar projects.

OnStartups.com lists some of the differences.

To paraphrase:

  1. They don’t have the cash to pay big up-front fees for software.
  2. So, you can’t afford to spend lots of money chasing sales (instead, focus on building a great product which people will find useful and tell their friends about).
  3. Compared to the pain and hassle of a custom built application, a simple hosted solution which they can buy and start using right away is likely to be quite attractive.
  4. As such, they will mostly be happy to take the software as-is rather than expecting to have much control or ability to customise to their specific requirements.
  5. They don’t get a lot of love from the software industry today, so there is a massive opportunity to fill that gap.

Paul Graham

A while back Natasha (who works with us at Trade Me and is also one of the people behind Webstock) asked me to nominate my dream speaker for their next conference.

For me it was an easy question to answer: Paul Graham.

If you’re not familiar with his writing, please stop embarrassing me by reading this relative drivel and go and read some of his stuff instead.

His latest article is here:

Why to Not Not Start a Startup

Here is a quote that appealed to me:

“If you took a nap in your office in a big company, it would seem unprofessional. But if you’re starting a startup and you fall asleep in the middle of the day, your cofounders will just assume you were tired.”

:-)

PlanHQ has launched

I’m a couple of days late with this, but …

PlanHQ has launched

Congratulations to the team (Tim, Natalie, Koz, Ben, Oliver + Nik).

You have a great v1 product. Now the real fun begins!

Here is a good quote:

“If you ship your product and you’re not a little ashamed of it, you shipped too late”
— Reid Hoffman, LinkedIn

From: http://blog.guykawasaki.com/2006/08/startup_success.html

If you haven’t heard of PlanHQ yet, it’s a tool designed to transform your business plan into a living online document which can be viewed and maintained by your whole team. This makes it much easier to keep your plan up-to-date as you go. It’s also great if you’re just starting out on the process of creating a plan, as it guides you thorough the various sections you should include. Take a tour.

I like this description:

“[It’s] a system as flexible as a wiki with focus on business plan development.”

From: A roundup for developers developers developers

Enjoy!

Orientation Week

Student life is socially-validated slumming – be sure to abuse this.

— Steve Nicoll, Salient

It’s orientation week around the country.

This time seven years ago Dave (pictured) and I were tripping around the South Island spreading the word about flathunt.co.nz.

Later the site was acquired by Trade Me and over a number of years morphed into Trade Me Property, but at that stage it had just launched and was desperately in need of some customers.

We stopped at pretty much real estate agency and property manager we could find, and tried to convince them to use the service, but I doubt we got a single listing.

It was a much better reception at the universities where there were lots more internet-literate people in need of a room or a flatmate who were also poor enough to be reluctant to shell out $30 for a newspaper ad and willing to give something new a go.

In case you’re wondering, Lake Tekapo had no role in the marketing strategy – it was just a beautiful place to visit en route. And the sign is looking a little beaten up after an outing the previous night at Carisbrook for the one-day match between NZ and Australia. At the time having the freedom to do things like that was half the attraction.

Can’t believe that was already seven years ago!