Rajesh Nerlikar

If You Build It They Will NOT Come

So you’ve got a great idea, and you’ve vetted it using the 4 steps I previously wrote about. Now what?

Build an Audience, Not a Product

Many entrepreneurs (myself included) will jump immediately to building a prototype or alpha version of a product. They’re starting at the end of the conversion funnel – focusing on the user experience and ignoring the critical initial steps in a user acquisition funnel: marketing. What’s going to prompt people to use the product? How will they hear about it? How will you convince them to try it? (not sure? see How Jobs To Be Done Can Help You Get More Users To Switch To Your Product Or Service).

Please don’t build something before you know how people will discover it. Please.

This isn’t just my advice: read about Product Hunt founder Ryan Hoover’s take on this.

Instead, I’d recommend testing the marketing campaigns to validate user acquisition costs that could to make sure your business model is realistic. Many startups fail because they run out of cash, and marketing expenses, especially when you first launch, can really drain your bank account.

Testing Marketing Messages

For a few hundred dollars, you can start running ads in a few days to test your user acquisition costs. Try running ads on LinkedIn (if you’re targeting a professional or enterprise customer), Facebook, or Instagram (not sure how to run an ad? Mailchimp, one of my favorite digital marketing platforms, can help). I’m not a fan of Twitter because setting up and analyzing results from ads is painful, but they do offer one unique feature: the ability to target people based on what apps they have installed on their phone.

Build a Landing Page to Collect Emails

So where do you send all the people who click on an ad? Build a simple landing page that explains your product using words and pictures. Ask people to give you their email address to get updates, and then send periodic (monthly or bi-monthly would be fine) updates on how things are going. Or write content they’d be interested in and include that in a periodic newsletter. Track opens and clicks. These are your early adopters and they’re likely to volunteer to beta test your product if you do build it.

If they’re not willing to give you their email address, why should you think they’d sign up for your product?

Here’s an example landing page I’m building for an idea I’m working on:

alpha landing page design

I built it in an hour on Lander and before I even launched it, I ran some usability tests to see how people would react to it. That way, I can tweak the page before running ads so that I can convince more people to provide their email and therefore lower my user acquisition costs.

Want to talk about building an audience for your idea?

Email me: startupproductcoach@gmail.com

How to Recruit User Research Participants from Craigslist

Consistent communications with users is critical for successful products

Talking to your users should be a consistent part of your product development process, no matter what the stage. Don’t ever assume you know how people will respond to what you’re doing – humans are complex creatures. When vetting an idea, it’s a great way to confirm that your solution will be different, and that the problem you’re trying to solve really exists in the world. When launching, it’s a great way to gauge reactions to user acquisition campaigns/ads as well as your first-time user experience. When growing, it’s a critical way to ensure your tactics will scale to large audiences.

So how do you recruit people to interview for their insights and feedback? There are a lot of options, such as UserTesting.com and respondent.io.

But in this post, I’m going to describe a low-cost and perhaps the fastest way to recruit: Craigslist.

Posting a Gig

Pick a city to post in. If you’re looking to recruit for an in-person interview, post locally or in the cities where you’re willing to go to.
Create a post in the “gigs” section. I typically choose the “computer gigs” category but you can experiment with others.
Describe who you’re looking to talk to and what you’re asking them to do.
Provide an incentive in both the description and the “pay” input field on the Craigslist form.

Here’s an example from a recent post I made:

Screen Shot 2017-08-31 at 9.37.25 AM

Some Things to Keep In Mind

Keep in mind some biases that Craigslist will introduce to your participant pool: location (because you had to pick a city or multiple cities to post this to) and where you posted this. For example, I posted the above in the “computer
I find that more people respond when I post the gig to “computer gigs” (vs other categories like creative or writing).
I find that most people respond to these gigs at night, so expect at least one day turnaround for starting the recruiting process.
Craigslist doesn’t allow you post links to screener surveys in the post (I used to use a Google Form to filter out people who didn’t meet the criteria of who I wanted to talk to) so make sure you’re clear in your posting what the requirements are. You might get some fakers still email you, so you might want to think of ways to filter them out before scheduling an interview.
If you feel like you’re not getting enough responses, consider increasing your incentive. A high level of compensation is $1 per minute of time you’re asking them for, but I’d suggest starting a little lower at first as very few people make $60/hour.
Don’t forget to factor in no-shows. For example, I posted a gig like the one below in 5-6 cities and in the course of a week, I had 20 interviews scheduled. Only 6 people (30%) actually showed up, even after accepting the meeting invite. I’d recommend following up the day before or the morning of to confirm they’re coming and remind them of the incentive.

Some Example Results

I posted this ad in both Austin and Craigslist as I’m trying some new meeting scheduling tools. I had 7 interviews on my calendar within 2 hours!

Screen Shot 2017-10-03 at 5.25.41 PM

Want help recruiting user research participants, or any other parts of the user research process?

Email me: startupproductcoach@gmail.com

Capturing Customer Insights for Your Squad

Not everyone from the squad (design, engineering, QA) may be there when you talk to customers. So how do capture insights to share what you learned with them?

My vote is the Job Story and I feel this article does a great job explaining it. A Job Story summarizes key insights way better than an audio recording or written notes.

Let’s write an example job story from my experience in FinTech: planning for retirement.

When I start a new job, I want guidance in selecting my 401k contribution rate, so that I can feel confident about my decision, finish my HR paperwork and get to work!

Let’s look at each clause in further detail.

The When Clause

This is perhaps the most critical part – it provides important information about the context in which the person is trying to do a job. Some key questions to ask when writing this:

What’s prompted the person to think about doing this job? (In the CREATE framework I wrote about previously, this is the cue). In this example the cue was probably filling out some HR paperwork.
Where is the person when the cue occurs? As you might imagine things like whether this person is at home, at work, or on the road would be important. Do they have a computer nearby? Or just a phone?

In the example above, if I had just talked to a new hire about their journey to make this decision, I might refine my when clause:

When I’m sitting in my first day HR orientation and am asked to fill out paperwork about how much I want to contribute to my 401k…

The I Want Clause

This is where you explain the job to be done. In this case, it’s deciding how much to save for retirement. Note that I intentionally didn’t specify a solution – no mention that we should show something like “you’d have $50,000 per year if you saved 5% and $70,000 per year if you saved 7%” or “to max out your employer match you should contribute 6%”. I’m not saying you can’t suggest solutions when reviewing the story with your squad, but I’m a big believer that product managers should be presenting problems, not solutions.

In this example, as the squad starts brainstorming possible solutions, they may come up with either a tool to explore the implications of different contribution rates or an engine that just spits out a recommendation with an explanation. Both solutions might work for the person.

The So That Clause

This is where you explain why it’s important to the person to complete this job.

In this example, it’s important to note that for this person, they want to make a good decision but the real goal is to get through the paperwork and start the role she was hired to do. There might have been other reasons the person wanted to do that job:

…So that I can retire as soon as possible (he doesn’t like working!)

…So that I can minimize my annual tax bill (trying to lower her take home income)

Think about how different the squad might interpret the story based on the way it’s written.

Don’t forget the emotional and social aspects

Every job story has 3 components:

Functional
Emotional
Social

I’ve only written about the functional here to start: what is the person trying to do? It’s important to consider the other two aspects though.

Emotional. How does the person feel before, during, and after they’re doing this job in their life? In this example, we know that doubt is a prominent feeling when retirement planning; no one is really sure when planning for something that might feel so far away.

Social. Will others know that the person has done this job? Will they discuss it openly? What will others think about the person based on how they did this job? In this example, we know it’s not common to discuss your 401k contribution rate with others. Maybe part of the solution is to make it easy to share your contribution decision anonymously within the company or to publish anonymous data from HR so new hires know what others have done in the past.

Want to talk more about how your team is collecting, documenting and using customer insights? Drop me a line.

Why You Should Design Experiences Like Real World Conversations

Nc1U8Di — *Does your digital experience feel like a real world conversation?*

Yesterday Michaela Hackner, Head of Content Strategy at Capital One, came to talk to us at work about how they’ve used content strategy to improve their user experiences and business outcomes. She also mentioned that her team is part of the Conversation Design and that they design interactions using “talk bubbles” to imagine what the back-and-forth between C1 and the user will be, as if the person had walked into a retail branch (or in this case, was talking to Alexa).

It got me thinking to how great digital experiences mimic great real-world interactions – they all start with a conversation. A common place I see startups failing with this is asking users to register before demonstrating value or even understanding what the user is trying to accomplish. Don’t assume this person read your entire marketing site or your app’s entire description in the App Store or Google Play.

I’ve written about this before (with the shame-on-you example being LetGo). Asking me to register before even understanding what I’m registering for or the value to me of registering is like:

A car salesman asking you to fill out a customer lead form the minute you walk into a dealership, before he greets you or you even tell him why you’re there
Asking for my credit card as soon as I walk into a retail store, even if I’m just browsing
A banker shaking my hand and immediately asking me for my Social Security Number and address so he can open a new account for me, without even trying to understand why I might be interested in a new account

Instead, imagine if you had a retail store – how would you train your employees to greet a prospective customer when he/she walks in the door? What types of questions or responses would you expect? Start there and see how much better the user feedback and business outcomes can be.

Want to talk about making your user experience more conversational?

Should You Let a Customer Subsidize the Development of a New Product?

When you’ve identified a new need in the market, it’s tempting to let the first enterprise customer subsidize the development costs. Here’s a look at the pros and cons of that scenario, along with a recommendation.

Pros

There’s no better way to validate the need for a new product than to have a customer willing to pay for it to be built.
There’s also no better way to ensure it does the job it’s supposed to than to have a real customer who is looking to use it to solve a real problem (likely urgently, so don’t forget to release often, even in beta format, to get feedback from that first customer).

Cons

The customer thinks the product will be “theirs” and that they own your roadmap. Make sure you set the expectation up front that the product is intended to be a SaaS solution that serves other customers as well.
You build the product using only one customer’s use case, making it unusable/irrelevant for other customers.

So Should You Do It?

Yes, but just make sure you:

a. Make it clear to your first customer the product is not “theirs” but that you value their partnership/feedback in being the first customer. (This means you can’t sign exclusives!)

b. Get out with your sales team to pitch the new solution to more customers. Ideally sales is landing a second/third customer while the product is being developed, so that you can get more input on how it will do the same job for many customers.

4 Steps for Vetting A Product or Business Idea

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Is this you? If so, keep calm and don’t build anything yet.

So you have an idea for the next killer app or product? Before you start a company, build a prototype, or do any marketing, vet the idea first. Specifically:

Step 1: Identify What Problem You’re Solving

“People don’t want a 1/4″ drill, they want a 1/4″ hole.”

I would go one step further – why do they want a 1/4″ hole? To hang up a picture? Why? To decorate their house? Why? To impress guests with their style? Alright, now we’re getting somewhere.

It’s important to understand not only what someone is trying to do in the context of his life, but also why it’s important to him, and how he’ll measure progress/success.

Step 2: Talk to Prospective Customers

See if you can find 10-12 people that might buy your product. (Not sure how to find them? Check out my post on recruiting people from Craigslist). Offer them an incentive such as a $25 Amazon gift card to talk to you for 30 minutes. Find out what they’re currently doing to solve the problem at hand.

If they’re not doing anything, find out why. Too much work? Too expensive? No time? Explain your concept to them. Would they use it? Why or why not?
If they’re using something else already, find out how they like it.
- If they’re not happy with their current solution, find out why and ask what, if anything, they’ll do next to find a better solution. (Google it? Ask a friend? Talk to a family member?)
- If they are happy, find out why. What would cause them to change their mind?

Take notes during or immediately after each discussion and later summarize the themes.

Step 3: Research Alternate Solutions

If you heard of some alternate solutions to the problem from your prospective users, research them more. Start with a simple Google search. Things to consider:

Do they have a significant head start? (ex. they’ve been around for 2 years and have 50,000 Facebook followers)
How would your solution be different/better?

Identify the top 3 competitors you’d face and write down how you’d explain to a prospective user how your solution is better than each.

Step 4: Draft the Business Model

How will your business make money? Some questions to ask yourself:

How will I find customers? How much will it cost to get the first customer?
How much can I charge each customer?
What other costs will I incur? (staff and rent are likely the biggest – think about how many people you’ll need)

Create a spreadsheet and play with the numbers. What are the 3-4 key numbers that really change revenue or costs? Highlight those cells – they represent the key assumptions you’re going to need to validate if you move forward.

If it looks like you can generate more revenue than costs, nice job! Sounds like you might be onto something profitable. If not, stop. Do not pass go. Do not collect $200. Move on to another idea.

Want help vetting your idea? Drop me a line.

4 Tips for Picking KPIs to Measure Your Product’s Success

new_kia_car_financing

Of all the items on a new car sticker, which ones should matter most to the car’s product manager?

Product managers, how do you know if you’re doing a good job? Your manager tells you so? A customer leaves a glowing product review? Your coworker likes the new feature you launched? Nope. You’ll know if you’re doing a good job if your product is successful.

But what does success means? It depends on your product, but no matter what, if you don’t have a way to measure success, you’ll never know, and neither will your stakeholders – internal or external. Here are some tips on choosing Key Performance Indicators to measure the success of your product.

Tip 1: Start With the Money

I’ve written about this before: the ultimate measure of success should be a business outcome, so you should have at least one KPI that has a dollar sign in front of it. Profitability is ideal, but revenue or cost savings for your company are also good. If you need a shorter feedback loop on a KPI like revenue (because your sales cycle is really long), use a proxy KPI (for example, maybe you know that your sales team closes 80% of deals after 2 meetings with the decision maker – great, use that instead of revenue).

Tip 2: The Customer KPI

At least one KPI (not revenue) should be one that you share with customers and that measures the outcomes they’re trying to achieve through your product. It might be time or cost savings, or weight loss if you’re building a health app. Don’t be shy to get creative with this one – maybe you derive a new formula that combines cost savings, time savings and weight loss if all 3 are key outcomes your customers are seeking. Having this customer KPI focuses the team on delivering value regularly, and helps you avoid awkward “I don’t know what I’m paying for” conversations when you ask customers to extend their term with you.

Tip 3: Don’t Pick Too Many KPIs

At most, I’d suggest 2 or 3. Why? Because if you’re prioritizing changes (or tests) to improve your KPIs, it’s hard to juggle too many. Don’t forget about the “K” in KPI. In an ideal world, you might even assign a KPI to each of your product owners and development squads, so that they know whether their work is resulting in meaningful business value.

Tip 4: Measure Often

KPIs don’t matter if you can’t measure them easily, especially if you’re releasing frequently as a part of an Agile process. Make sure you can measure your KPIs within a few minutes, and that the data needed to measure them is updated often – at least daily. If you need to prioritize time to instrument your product to make measurement easier, do it. Otherwise you’re either flying blind, or there’s too much of a delay in your feedback loop. Also, don’t forget to publish your KPIs regularly for internal stakeholders, so that they can also see how your product is doing.

Want to discuss your KPIs?

Don’t Forget About Quality

car_fire_

Some of your product’s bugs could be as devastating as a safety issue that leads to car fires.

“The FAA prohibits you from plugging your Samsung Note 7 into any outlets on this aircraft.”

I heard this on a recent flight and felt bad for Samsung, a brand I had come to respect for what they’ve done to compete with Apple. After hearing this, though, I’ve lost all respect and have a great response to my wife’s plea to switch to Android.

You can’t rush a good product. Quality takes time, because it means the squad took time to understand real-world scenarios, and how to test them before launching your product or a feature.

This doesn’t just apply to software products. Chipotle had an e. coli scare in the spring, they later reported an 82% drop in profits, compared to the spring/summer of 2015.

Who’s job is quality? While it’s on the entire squad to deliver a quality product, having a good Quality Assurance team makes it so much easier. They’re the ones asking “what happens in user scenario X?” and thinking about the best way to thoroughly test the changes. So if you haven’t already, give everyone on your QA team a hug, high five, or bug zapper.

Want to talk about how to improve your product’s quality? Drop me a line.

Do you need a roadmap?

Not having a roadmap is like off roading. You can certainly get somewhere but it may not be the most comfortable journey.

April 2017 update: my thoughts on roadmaps have changed – if you’re working in Agile, be sure to read Why Agile and roadmaps don’t mix.

Not every product needs a roadmap. They’re a lot of work to produce but are definitely appropriate for more mature products / organizations. Unless you’re pre-revenue and there entire company is sitting in the same room (as in, there’s no way you don’t know what the product team is working on), you probably need a roadmap to communicate:

Priorities

Your roadmap should be a reflection of the changes to your product that are most likely going to improve one (or more) of your KPIs, which define what success means for your product. (more on KPIs in this post). So the highest priority items on your roadmap are the ones that are expected to move the needle the furthest.

Timelines

When is that change gonna go live?! Timelines are also really important to your customers, whose businesses might depend on the timeline (maybe they need to integrate with your product and need to plan for that or are going to change a business process as a part of a change you are making).

Be careful in presenting these timelines. If you only did t-shirt sizing to estimate the timeline, your estimate might be off (especially towards the end of your roadmap). My recommendation is to remind the audience that these are estimates and that the accuracy of the roadmap should get better as epics come closer to starting. Also, as the timeline nears, don’t forget to be Agile and demo too customers often – wireframes, comps, half-built functionality, etc. That way you can get feedback and provide status updates on timing.

Even if you don’t have a roadmap, you should still have defined KPIs to measure the success of your product so that you can know whether your changes are meaningful.

Want to talk about your product’s roadmap? Drop me a line.

Breaking Down An Effective Print Ad

I saw this ad on the way to work on the El and thought it was really effective (or at least compared to the other ads on the train). Specifically:

Effective layout and content – I glanced at this for 3 seconds and immediately knew what the ad was for.
Great imagery – I can see what running in the race downtown would be like. (Bonus points if they had used the behavioral technique of visualizing my future and had an image of people celebrating as they crossed the finish line instead. I know it would have gotten me thinking how great it would feel to finish the race)
Call To Action – visit the site! It’s an easy URL to remember too.
Urgency – the $10 discount that expires at the end of the month makes me realize I’d better act soon. And the discount code is easy to remember.

Now, as much as I like this ad, having just had another kid, I’m not gonna register for this race. But kudos to the designers and I’m sure they’ll fill up the 15,000 spots quickly.

Author: Rajesh Nerlikar