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Entries Tagged “Customer Development”

Minimum Viable Products are all the rage these days. It's pretty common for a startup to hole up for a weekend and put together a prototype of a web or mobile application meant to be the starting point for a profitable business.

The problem is Minimum Viable Products are supposed to be about doing the least amount possible to test some hypothesis about whether or not people want the thing you are making.

Writing code rarely helps you find people who want what you are making.

Enter Minimum Viable Distribution

To find people who want what you are making you need at least some rudimentary way to distribute your product.

And if most startups fail because they don't have customers, wouldn't it make sense to find out if you can attract even just one customer before spending a lot of time building a product?

When you have a product in mind you should have a few ways in mind for attracting an auidence. Better yet, have an audience before you have a product built. This lets you build your product with an audience of early adopters in mind.

The smart thing each of these entrepreneurs did was attract an audience that they were able to funnel into a marketing funnel once they had a product ready.

Looking for someone doing this well right now? Check out Nathan Barry who is actively blogging about the difficulty of setting up and running email courses in order to eventually funnel readers into his yet-to-be-built ConvertKit product.

So how can you find your first 1000 true fans?

Write. Write about your domain, your expertise, how you run your company, whatever. Don't be afraid to speak your mind. People will like that.

Create landing pages. Optimize for SEO. Get links to those pages. Drive traffic.

Collect email addresses. Ignore RSS subscribers. Ignore Twitter followers. Ignore Facebook likes. You want to capture your audience in a way that you can most effectively reach back out to them. That means email.

Talk to them as you build your product. Listen to their problems. Keep in mind the words they use to describe their problems.

Then build and launch your MVP. Once you launch your MVP you won't be launching to your 200 twitter followers and 400 facebook friends. You'll be launching to a targeted audience of people who are already interested in you and the specific problem you are solving.

This is Minimal Viable Distrubtion. In a lot of ways it's much harder than building product because you can't just write code. But it's also more valuable.

Does This Work?

Abso-freaking-lutely.

At Zapier we dropped links in SaaS forums where users were asking for integrations. The links pointed back to a short landing page in the service directory where a visitor could leave their email address. We used these email addresses to learn as much about our users as possible.

By the time we launched we had over 10,000 email addresses of targeted users expressing interest how to automate their work.

Additional reading: Finding Early Customers When You Aren't Internet Famous

tldr;

  • Building a product is hard
  • MVPs aren't enough
  • Find a way to build an audience
  • Use that audience to market your MVP

About the Author

Wade Foster is a Co-founder and CEO at Zapier. He likes to write about process, productivity, startups and how to do awesome work.

In the tech world we tend to get self centered. When B2B startups talk about customers, many times they mean the unfunded startup down the street. Not the business that has been running for decades and is just trying to keep up with the times.

These are the companies that power the backbone of America and abroad. These are the companies that only the biggest of tech companies have been able to sell to (think Salesforce and Intuit). Part of it is because we don't know how to reach out to these customers. But another part is that we don't understand how they adopt technology.

With that preface here's an unscripted response I got yesterday from a user asking him how he uses Zapier. But unlike most of these emails it's not just about Zapier. It's about how his centuries old company tries to stay ahead of the curve with technology. And how technology gets adopted. With that I'll let the rest stand on it's own.

I run a very old fashioned business that hasn't changed much for 100 years. Back then we'd get telegrams from China and Japan ordering steel plates. We'd read the requirements and then send a telegram back. Sometimes we'd get an order and then we'd put some big steel plates on a ship - some plates are 40 tonnes each - and they would be delivered 8 - 10 weeks later.

Move forward a 100 years and not a lot has changed. The plate quality is better, we use email instead of telegrams and the ships are bigger and sail faster.

Like most small businesses we have a cobbled together patchwork of systems with most of the transmission done manually. Amongst others we use - Wufoo, Salesforce, Xero, Google, HelpScout, Wordpress and more. So when I cam across Zapier I was initially in Geek heaven. This is cool and it will solve all my problems. Well not exactly.

When you're running a small business the most important resource is time. Specifically the boss's time.

Unlike most tech start ups we don't have bright enthusiastic peeps who will rapidly adopt the latest cool idea. Change is slow and grudging because familiarity with the old systems is far better than the short term disruption that the new brings. So you can't dump software on the team - you need to set it up - then play with it yourself, then iron out all the bugs, then brutalise a victim and make them be the guinea pig.

Then you need to find a way to stop them telling everyone how shit it is whilst you fix the new bugs and then start trying to implement the darned thing. Moving from Outlook to HelpScout has taken us 8 weeks so far and will probably take another 8 for everything to be bedded down and working smoothly.

Limited time and lots of resistance means that this is the life of small businesses. The gains are worth it though. I want to give one example of how we have thought of using Zapier and the issues that we have faced with it. We have some data that we receive regularly that we want to get into Salesforce. For various reasons we use Force.com so most of the integration is to standard objects - i.e. Wufoo's - don't work because we don't have them. Zapier lets us create new custom objects - which is totally cool.

Now this task - is something that we should do daily - it's repetitive and boring - but unfortunately we can't pass it back up the supply chain - and because the data is unstructured it can't be obviously automated. Parsing it may be possible - but that hits the management time trade off again. So we thought - lets create a Wufoo to Salesforce Zap. We'll then hire a virtual assistant via Elance to process the data for $3/hour. (Won't give them direct access to Salesforce as that costs too much for another licence and we're not really sure how to lock everything down to keep them where they should be). We'll give them a HelpScout account - and forward all the information to there. They'll then transcribe it into a Wufoo form which then zaps it across the ether into a new Salesforce custom object.

Proved the technology in 5 minutes. Got it all set up in about 30 (45 fields to move across). That is the easy part - Now I have to define the process in a structured way that gives me an output that delivers reliably and which I have high confidence in - but which does not require me to spend as much time doing quality control as it took to do the process to start with. Oh - and then we have to start worrying about data security, operative reliability, standardisation.

There's always the thought that this might be another failure - Experimentation means failure as Seth Godin points out. When you are small the costs seem higher. Then there are all the little tweaks.

We get it 80% right on the first run through. The trouble is that as we work through this there are so many little exceptions and rules and caveats that we had never written down that what had seemed like a simple process has become a twisted thorn bush dripping with blood.

Aaargh.

And yet as we do this we have the vision that this is yet another part of the jigsaw that will enable us to scale. So going back to the Steel - not a lot has changed on the surface - but under it lie hundreds and hundreds of little zaps ready to be implemented - each helping us to structure and organise our data faster - and that translates back into customer happiness and support. That's why I use Zapier.

Denis Oakley
Oakley Steel Limited
Helping You Build Better Boilers

About Denis: "Denis runs Oakley Steel, Asia's leading supplier of carbon steel pressure vessel plate, and BeyondTransition.com - the worlds best triathlon guide."

About the Author

Wade Foster is a Co-founder and CEO at Zapier. He likes to write about process, productivity, startups and how to do awesome work.

Building a product from scratch that will support you, a co-founder and your collective families is hard. Really hard.

One of the most comprehensive guides I have seen for doing this is the Thoughtbot Playbook which covers building and growing a product from start to finish.

But after reading a playbook like that you can easily be overwhelmed. After all the playbook has 60+ steps and each step is quite easy to simply not do at all.

So the instinct is to pick and choose articles you see on HN and imitate the darling tech companies we know. Eventually ours brains are stuffed with things like:

  1. If our stack is as good as Instagram's we'll be able to handle scale.
  2. If we can build product as efficiently as UserVoice we can eliminate waste.
  3. If we can manage and encourage growth like Facebook we'll be unstoppable.

All good things. But if you're a two or three man startup with zero customers none of this matters.

So how do you get to a point where these things matter?

Do things that don't scale

This advice has been beaten like a dead horse, but I still see startups every day trying to over optimize their startup in the beginning for scenarios that may or may not ever exist.

[Sidenote: Are we really sure that the process we are trying to optimize can't scale? Zappos managed to scale personalized customer service which I never would have thought to be possible. So maybe some things that feel like they can't be scaled actually can?]

Instead do things that help you learn more about your market. Learn about your customers. Learn about how your business might actually work.

  1. Email your first 1000 customers
  2. Cold call businesses to find early adopters
  3. Know what is core to your business and what isn't

Why we sent 25,000 messages to users and what happened as a result.

At Zapier we had a guess based on building our own web apps and conversations with a few people who used multiple SaaS apps that integrations might be a pain point. Past that we didn't know much.

It would have been easy to build our version of the ultimate integrations machine. But from the very beginning we insisted customers be a part of the conversation.

So we added Olark to our site and we started chatting with users who somehow stumbled across our site. We had one conversation, then ten conversations, then a hundred conversations and we started realizing that our version of the ultimate integration machine isn't what was needed.

The conversations were so valuable that we ended up sending over 25,000 messages to users before we launched while trying to get feedback by iterating on problems and features, and taking conversations to Skype where we could hand build integrations for first time users.

Our vision of the ultimate integrations machine turned into a simple way for businesses to create an integration between 48+ web apps and automate their businesses.

We might have eventually figured it out ourselves, but thousands of conversations with users made it way easier.

So for us doing things that seem to not scale was the most efficient way to build our product. Maybe it will be for you too.

About the Author

Wade Foster is a Co-founder and CEO at Zapier. He likes to write about process, productivity, startups and how to do awesome work.

Finding early customers is hard. Finding early customers with clout is even harder. Finding early customer who will pay you is hardest - especially if you're three mid-twenties tech founders from a small/midsize college town in the midwest.

The bottom line is that sales in the earliest stages of a startup can be overwhelmingly difficult. Especially, since many times you won't even know where to start.

The odds of us landing one of the most influential individuals in the startup world as our first customer seem pretty crazy, but here's how we did it and some tips for how you can do it too.

Identifying a Need

We started Zapier with the idea that integrations between all web apps should exist. After our initial Startup Weekend beginnings we had a barely functioning prototype and no clue what people wanted. So step one is finding people who need integrations and figuring out which ones seemed most popular.

For us that meant trolling as many SaaS service forums as we could find and lots of Googling for different integration combinations.

We'd go to 37 Signals forums and find people begging for Google Contacts integration. We'd go to Salesforce and find people begging for Evernote integration. It was literally a gold mine.

That's when I Googled Highrise Paypal and found this gem.

Yep that's Andrew Warner himself asking for PayPal data to sync into Highrise. After my initial excitement I work up the courage to send Mr. Warner an email and find out if we can help. Unfortunately the article at the time was about 8 months stale. Odds are he's found a solution already, but I decide to take a gamble and fire off this email:

Andrew,

I just noticed a few months ago you were looking for a solution to auto-import Paypal addresses into Highrise.

http://webapps.stackexchange.com/questions/13007/how-can-i-auto-import-contacts-from-paypal-into-highrise

Have you found a solution for this yet?

If you have, what did you do?

If you haven't, would you be interested in a service that let's you do exactly this for you without having to hire a developer or write a single line of code?

Keep kicking butt with Mixergy. I listen to at least one new interview every week.

Thanks!

Wade

I hate being cold emailed with a sales pitch so I intentionally try to avoid selling him on anything. I just trying to find out if this is still a problem for him. After writing up the email I hit send and wait.

Three days later Andrew emails back saying he already found a solution, but was curious if we had built a PayPal Highrise bridge (which ironically at that point we had not).

I'm a little bummed he's found a solution, but he left a small door open so I give him the pitch and let him know what we're working on.

Making the Sale

As luck would have it Andrew is in need of a Wufoo AWeber integration.

Unfortunately we don't have Wufoo and AWeber integration built so I tell Bryan and Mike we need to build this.

In a few days the integration is done. And I email Andrew and let him know it's ready and here's his response:

This is freakin' fantastic.

Andrew asks how much he owes us and we quote him $100 gets him into the beta period. Andrew immediately says yes and asks where to send the money.

Closing the Deal

At this point we don't have a bank account or any way on the site to accept payments so we start to scramble. The last thing we want is to lose him because we can't take payments.

So at the last minute I tell Andrew to send it to my personal PayPal account and we decide it's time to open that bank account.

Before we head to the bank though I set up a quick PayPal to SMS Zap that would send me an SMS when I got paid. I did not want to miss Andrew's money coming through.

As luck would have it right as we walk into the bank I feel my phone buzz and sure enough there's a message from Zapier saying:

Check PayPal: Andrew Warner just paid you.

And with that text message Zapier became a revenue generating company and two hours later I see this Tweet go out and Zapier gets more traffic in an hour that we'd ever had before.


Follow Up

Unfortunately just because you make a sale doesn't mean your done. Over the course of the next few weeks we worked with Andrew to make sure he got Wufoo to AWeber set up correctly and we even built the filters feature specifically for him.

We even did a walk through on Skype to help him get things working since our interface was absolutely atrocious at the time. I'm honestly a bit surprised he put up with it.

It just goes to show you what people are willing to go through if you solve a big problem for them.

Repeating This

With customer one in the bank it was time to find out if this was a fluke or not. So I started this process from the beginning all over again. I'd find someone in a forum who had a need, send out an email asking if it was a problem or not. And occasionally it would be and they'd choose to join our beta program.

And that's how we got traction with our earliest of customers.

(P.S. I'd love to hear from other folks how early sales went down at their startup. These always seem to be the most fascinating stories to me)

Additional Thoughts

On Repeatable Sales: Clearly this is not a repeatable sales process - especially at the $100 price tag, but when you are first starting with an untested product it's essential to do everything in your power to get someone to like what you have and pay you for it.

On Getting Lucky: You might think we got lucky by happening to stumble across Andrew Warner and him having a need for our stuff. You might be right. But the thing is, there are lots of people with a soapbox like Mixergy who talk about problems and solutions all day long. In fact, I bet if you picked any random Mixergy interview out of a hat you could find an idea for a piece of software or a business idea that could have helped that specific founder out.

How Can This Work For You?

If you're running an early stage startup the most important thing you can do is get the idea out in front of as many potential users as possible and find out if they would use what you are building and if they would pay for it.

So if that means trolling forums, cold calling businesses, emailing potential users then go for it. And once you have someone interested in what you're working on don't be afraid to do things that won't scale. Provide more support than is necessary. Build features only for that person (within reason). Write hand written thank you cards.

If you do all these things early on you'll learn way more about your customers and your business. Don't worry about scaling. Don't worry about being inefficient. After all if you don't make sure there is a today; you won't have a tomorrow.

About the Author

Wade Foster is a Co-founder and CEO at Zapier. He likes to write about process, productivity, startups and how to do awesome work.

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