How to Start a Startup: Lecture 4 – Building Product, Talking to users, and Growing

Presenter – Adora Cheung

  • The novice approach:
    • Build product in secret
    • Have an exclusive press launch (sidenote – you should definitely launch on Techcrunch)
    • Wait for users
    • Buy users
    • Give up
  • Problem statement:
    • What is it
    • How does it relate to you – it should be a problem you have
    • Verify others have it too
  • Where to start
    • Learn a lot, become an expert
      • Learn the industry (Learn how to professionally clean, become a waiter, etc.)
      • Find all potential competitor intelligence/industry expert
      • People should trust you when you are building the product
    • Identify customer segments
      • You want to corner off a portion of the customer base- focus on their specific needs.
    • Storyboard ideal user experience: what is the perfect user experience?
      • How the customer finds out about you
      • When they get the service what is that expectation
      • After the service, comments/review
  • What is V1?
    • Minimal viable product
      • The smallest feature-set required to solve the problem you are trying to solve. You need to talk to users, follow the ideal storyboard
      • Be able to clearly tell the users what they are going to get out of it
    • Simple product positioning
      • “clean home for $20 per hour”
  • First few users
    • You
    • Parents
    • Friends, co-workers
    • Local communities
    • Online communities
    • Niche influences (mommy bloggers)
    • Cold calls + emails
    • Press
    • What HomeJoy did was went to a fair and got people to sign up by giving out free cold water bottles on a hot day. Kind of a guilt trip, but most of them kept their appointments.
  • Customer feedback
    • Support@website.com is very important
    • Surveys: OK// interviews are better- make it into a conversation, make them feel comfortable (take users out for drinks, coffee, etc.)
    • Quantitative: retention, ratings, NPS (how likely are they to recommend to a friend?). Know if you are trending in the right direction and need to change things.
    • Qualitative: ask why
    • Beware of honesty curve – if it is free, your friends are a pretty good source for information and random people really don’t care enough. If they had to pay for it, your mom will not tell you the truth of whether your product sucks, your friends will be a lot more helpful, but random people will be the most brutally honest.
    • Use leading indicators
  • V1 Feature creep
    • Build fast, but optimize for now
    • manual before automation (things that don’t scale). You will learn a lot about what the manual things are and better how to scale
    • Temporary brokenness > permanent paralysis
    • Beware of Frankenstein – don’t implement all of the features the day after talking to the users. If someone tells you to build a feature, get to the bottom of why they want to build the feature. See it as them telling you what the problems are instead of their features. They usually will not have the best ideas.
  • S is for stealth, and stupid
    • Someone will steal your idea
    • There is a first mover advantage
    • Just launch it already. Don’t delay your launch because you are trying to make it perfect. There is really no point to waiting to launch your product.
  • Ready for a lot of users?
    • Learn one channel at a time – execute on one channel really well until it caps out.
    • Iterate working channels – Channels are dynamic: Facebook ads, Google ads, etc. should be iterated to optimized.
    • Revisit failed channels – eventually go back to the channels that failed at first
    • The key is creativity – you need to find the little thing that nobody is doing and do that to the extreme
  • Types of growth
    • Sticky growth – getting your existing users to keep buying stuff.
      • Good experience wins
      • clv + retention cohort analysis
        • aka ltv: how much revenue a customer will give you over 12 months
      • repeat users buy more and more
      • Graphic used to show sticky growth and how you want to improve the retention curveIMG_4570
    • Viral growth
      • WOW experience + good referral programs (i.e. PayPal with referral bonus, clymb, etc.)
        • Customer touch points
          • leave behind
          • after signing up
          • after using the service
        • Program mechanics
          • $10 for you, $10 for a friend
        • Referral conversion flow
    • Paid growth: risk putting money out there  in order to get
      • if you are doing paid growth, you should know if your clv>can. Know conversion rates and determine whether they are good or not.
        • sem
        • display ads
        • direct mailer
      • Beware of cash flow!!!!
  • The Art of Pivoting
    • Bad growth
      • if you are still early and not seeing any growth for several weeks, you need to rethink what you are doing since something NEEDS to change
    • Bad retention
    • Bad economics

RG

 

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