The first 100

The First 100
Measure the strength of your idea with real customers.
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Preface
My name is Ben Lee, and I've been in digital product development for more than 10
years. During that time, I've built hundreds of websites, helped launch more than 500
mobile apps, and worked with clients ranging from Epson and Spotify to Snoop Dogg.
Those 10 years have taught me a lot about how to build great products. But more than
anything, I've learned that snappy UI, beautiful design, and extensive feature lists – all
the things that most developers want to spend their time on – aren't what make a
product succeed. At the end of the day, the bells and whistles don't really matter. What
matters is building something people actually need and want to use.
Whether you're making a blender or a mobile app, the same basic principle applies: if
there's no market for your product, your product will fail. It's that simple. But
unfortunately, most people don't focus on validating demand for their idea: they build
first and ask questions later. And more often than not, that's a recipe for throwing away
hundreds of thousands of dollars on a mobile app that no one wants to use.
We realized this a few years back at my agency, Rootstrap. We saw that there was a
problem in the development model, and to solve it, we designed something that's now
called Roadmapping: a pre-development product workshop that helps founders validate
their app idea against the marketplace before heading into development.
Roadmapping lets founders ensure there's demand for their product – before they build
– it instead of blindly heading into development. With more than 500 Roadmapping
sessions under our belt, we can say definitively that it works: 18% of our alumni raise
more than $250,000 in pre-product seed capital, and Roadmapping alumni have raised
more than $500 million in total. That's thousands of percentage points better than the
industry average.
The material for this course comes straight from our Roadmapping process. We use
these techniques and exercises every day in Roadmapping sessions, and I can say from
experience that they've helped founders validate and build real products that go on to
acquire millions of users. If you read them closely, do all the exercises in full, and bring
your full mental capacity to this course, it'll help you do the same thing.
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Completing this course will put you miles ahead of most founders. This is the work that's
necessary to acquire real, honest-to-God customers – and no matter what kind of
business you want to start or what app you want to build, that's what really matters.
Give it a try. And remember, completing this course is just the beginning. You'll still
have a long road ahead of you to build a successful business.
But trust me – this is an excellent way to start.
Good luck my friend.
Sincerely,
Ben Lee
CRO & Cofounder
Rootstrap
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Why 100 Customers?
Because product development is one big science experiment, there’s really only one thing that
can be guaranteed: the more people who interact with your product, the more feedback you’ll
receive, and the closer you’ll get to building something they actually want.
If you can get 100 people to interact with your product, or even just talk about your idea, you’ll
be well on your way to validation. And without validation, your science experiment can go
horribly awry. You’ll use up all of your time, money, resources and mental bandwidth - all of
which are in limited supply - only to develop a product that will ultimately fail.
And the reason 90% of startups fail is due to a lack of validation. It was this realization that led
us to create Rootstrap, along with Roadmapping - our custom service designed to help our
clients validate their idea before writing a single line of code.
Consider this your own personal Roadmapping session. Our goal is to help you fully develop
from a mere concept into a strong business, starting with 100 customers to help you validate
your idea. Here’s how:
Part One: So, You Want to Start a Business?
Gut check time. Let’s see what you’re made of.
Part Two: Who’s Going To Care?
Before we find those 100 customers, let’s get an idea of what they look like.
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Part Three: What Can You Build For Them Right Now?
All talk and no action make Jack a bad product owner.
Part Four: Can You Prove Your Solution Is Viable?
Time to put a real thing in front of a real person.
Part Five: Building Your Business
Here’s how to create a cohesive brand around your idea.
Part Six: Launching That Bad Boy
It’s time to start gaining traction. 100 is just the beginning.
Completing this actionable guide will require significant effort on your end, but just remember:
validation dollars are infinitely cheaper than development dollars. And you don’t have to
complete this guide in one sitting, so don’t be intimidated. You can take it step-by-step over the
course of weeks or months. And once you finish, compile all of your answers into a single
document that you can share with teams and refer back to time and time again.
We promise, you’re going to be a hell of a lot more confident going into development, and much
more prepared to scale or make a multi-million dollar exit.
So, how do we begin? It all starts with you.
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Part One: So, You Want To Start a Business?
Gut check time. Let’s see what you’re made of.
What does it take to become a great Product Owner?
Traits like avoiding perfectionism, adapting quickly to change, accepting uncertainty and
embracing the process will all help of course, in due time. But right now, there’s something more
pressing at hand:
Intention.
Why are you here?
What’s the dream at the end of the tunnel?
How honest are you prepared to be with yourself?
We ask because many entrepreneurs have trouble with blind spots. Some underestimate their
abilities; others over-inflate their pride or become blinded by hubris. But we’re all human (let’s
hope), and we all suffer from similar biases and errors.
This guide will help you overcome these challenges, but for any of this to work, there must be
absolute honesty - starting with yourself. Again, why are you really doing this? Why go through
all of the trouble, or all of the ups and downs? What is to be gained?
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Zig Ziglar was a genius when it came to questions like these. He always argued that you should
know what you’re working towards, how you’re going to do it, with whom, and why. We couldn’t
agree more.
Exercise One: Set Your Intention
Don’t Cook in the Squat: Goal Setting Advice from Zig Ziglar
“You’ll never make it as a wandering generality. You must become a meaningful specific.” - Zig
Ziglar
“When you catch a glimpse of your potential, that's when passion is born.” - Zig Ziglar
Zig Ziglar’s Seven Steps for Goal-Setting
1. Write it down.
2. Put a date on it.
3. List any and all obstacles you’ll need to overcome.
4. Identify the people, groups, and organizations you’ll need to work with.
5. Spell out a plan of action. (Set that time limit in there.)
6. Identify all of the benefits to you.
7. And do it now.
What’s your vision for the future? What’s the endgame here?
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Do you want to scale your idea and sell? Get acquired and exit? Are you in it for the long haul?
When’s it due?
“Give me a stock clerk with a goal and I will give you a man who will make history. Give me a
man without a goal, and I will give you a stock clerk!” – J.C. Penney
• • • • •
Okay, you’ve got a goal. A noble start. But what about motivation and passion?
Supposedly, Bill Gates once said, “I choose a lazy person to do a hard job because a lazy person
will find an easy way to do it.” Well, if your goal is to retire and do nothing, the easiest way to do
that is to complete the job quickly. And there’s nothing wrong with wanting to secure a
financially beneficial exit as quickly as possible. But for others, there may be a deeper motivation
at play other than money. Some people are called to do things. Maybe you’re being called to start
this business. Or perhaps this has been a dream of yours for many years.
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Either way, now that you’ve established what your goals are, it’s time to understand the driving
force behind them. What will ensure that you achieve your goal? And how will that driving force
serve you after you do? Dig deep. What’s keeping this fire alive?
Exercise Two: Find Your Motivation
Let’s Talk Passion & Sweat Equity
“Passion is one great force that unleashes creativity, because if you're passionate about
something, then you're more willing to take risks.” - Yo-Yo Ma
“Sweat equity is the most valuable equity there is. Know your business and industry better than
anyone else in the world. Love what you do or don't do it.” - Mark Cuban
“I want to know why you do what you do. What is your motive for action? What is it that drives
you in your life today (not ten years ago)? Or are you running the same pattern? Because I
believe that the invisible force of internal drive activated is the most important thing in the
world...I believe emotion is the force of life...and that decision is the ultimate power.” - Tony
Robbins
How about some Maverick motivation?
Only Dead Fish Go with the Flow: How to Be a Maverick
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Excerpts from interviews included in Mavericks at Work by William C. Taylor & Polly LaBarre
Gary Hamel
Author/Consultant
“Most people in an industry are blind in the same way. They’re all paying attention to the same
things, and not paying attention to the same things.”
Chris Albrecht
HBO
“It’s not enough for leaders to challenge the prevailing logic of the business; they also have to
rethink the logic of their own success.”
Richard Tait
Cranium
“We’ve always acted as if we’re a much bigger company than we really are. We’re still a fairly
young player in our industry, but we conduct ourselves as if we are a global movement. This isn’t
a job. It’s the pursuit of a dream, to give everyone a chance to shine. It’s a big, ethereal goal, but
we won’t stop until we’re convinced that we’re making progress against the goal.”
Roy Spence
GSD&M
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“Anybody who’s running a business has to figure out the higher calling of that business, its
purpose. Purpose is about the difference you’re trying to make - in the marketplace, in the world.
If everybody is selling the same thing, what’s the tiebreaker? It’s purpose.”
Vernon W. Hill
Commerce Bank
“Every great company has redefined the business that it’s in.”
Ask Yourself:
● What idea(s) is your company fighting for?
● What values does your company stand for?
● What purpose does your company serve?
● “Are we who we say we are?”
Why are you so passionate about this idea?
Is a rigid ideology driving you, or pure love for the work?
“Oh, to be sure, there are the get-rich dreams that float in and out of idle conversation. But there
are much heavier rewards closer at hand - the freedom to be your own boss and chart your own
course, the chance to explore the leading edge of some new technology, the career-opening
opportunity to take on far more responsibility than any established organisation would ever
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grant. These are what really drive early market organisations to work such long hours for such
modest rewards - the dream of getting rich on equity is only an excuse, something to hold on to
your family and friends as a rationale for all this otherwise crazy behavior.” - Geoffrey A.
Moore, Crossing the Chasm
• • • • •
Now that we know you’re in it for the long haul, the next step is to identify your value
proposition. This needs to be both digestible and understandable for people who don’t speak
tech (or whatever your industry lingo happens to be). For instance, if your goal is to “make the
world a better place,” how - specifically - will you accomplish this? What slice of the pie is yours,
and what steps will you take to own it?
Ultimately, this is a question of value. What is the most valuable component of your idea as it
relates to your goals and motivation? What is essential? The more specific your answer, the
more valuable it is.
To help you with this next exercise, we’ve outlined some of the core ideas promoted in The Lean
Startup by Eric Ries:
Exercise Three: Your Proposition
A Brief Summary of Principles from The Lean Startup by Eric Ries
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“Learn to see every startup in any industry as a grand experiment.” – Eric Ries, Lean Startup
The Lean Startup Basics:
● A scientific method created in 2008 by Eric Ries
● Inspired by Steve Blank’s Customer Development Methodology & the lean
manufacturing principles used in Japan by Toyota
● Focused on experimentation over elaborate planning with an emphasis on customer
feedback
● Encourages “failing fast” in the pursuit of learning what customers actually want
● Results in fewer product failures than traditional methods
The Lean Startup Definitions
Entrepreneur: Anyone depending on innovation for future growth
Startup: Any size organization that creates new products & services under conditions of
extreme uncertainty
Product: Anything customers experience from their interactions with a company
Value: Anything benefiting the customer (and if you’re not creating value, you’re generating
waste)
Growth: How your customers will become aware of your offer (measures how you will “cross
the chasm”)
MVP: A minimum viable product that enables you to test your fundamental business
hypotheses while still delivering value to your customers
Validated Learning: How you measure growth
Innovation Accounting: How you measure validated learning
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The goal of this methodology?
To discover and eliminate waste while de-risking investments through sprints and cycles of
product development, outlined through the Build-Measure-Learn Feedback Loop.
The Build-Measure-Learn Feedback Loop
Ask Yourself:
● Should this product be built? Not just, ‘Can it be built?’
● Does a market even exist for this business to thrive in?
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● Does this product really deliver value to my customer?
Use The Lean Startup Approach to Determine:
● Which customer feedback should be applied to the development process
● Which core features should take priority
● What’s essential vs. wasteful
● Which features your customers have an emotional attachment to
● How to make today’s customers happy without sacrificing the customers of tomorrow
What’s the most essential need your product will fulfill?
At a bare bones level, what are you supplying?
“Thoreau wrote, “Simplify! Simplify!” And, indeed, simplification is one mark of real genius.” -
Dan Ariely, Predictably Irrational
• • • • •
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Now that we have your value prop fleshed out, you can begin the transition from a concept into a
business, starting with your message. More specifically, your mission statement. Think of this
mission statement as the “drawing board” of your brand moving forward. If and when you want
to regroup, always come back to a single, powerful statement that defines who you are and what
you do.
Exercise Four: Create Your Working Mission Statement
Narrow Your Idea Down to a Sentence
Six Elements of a Great Mission Statement:
1. Start with an action verb
2. Make it short & easy to remember
3. Focus on a very specific problem
4. Have a big goal in mind (what are you really working towards?)
5. Write in plain language (read: no fancy words or tech terms)
6. Avoid including the word “help” - be bold & confident
Examples of Action Verbs:
Build, Bring, Coordinate, Create, Document, Eliminate, Enhance, Introduce, Join, Manage,
Maximize, Negotiate, Plan, Prepare, Program, Replace, Solve, Train, Unite, etc.
Examples of Mission Statements:
Honest Tea: "To create and promote great-tasting, truly healthy, organic beverages."
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HubSpot: "To make the world inbound. We want to transform how organizations do
marketing."
Patagonia: "Build the best product, cause no unnecessary harm, use business to inspire and
implement solutions to the environmental crisis."
Zappos: "To provide the best customer service possible."
Ash Ambirge (The Middle Finger Project): “...to help the lost, the confused, the
disillusioned and the ‘how the hell did I become an administrative assistants?’ of the world
become more unf*ckwithable in their work - and lives - by learning how to trust themselves
unflinchingly and build a unique, modern, gloriously independent career using that great, big,
free thing we call the Internet.”
Johnson & Johnson: “Our first responsibility is to the doctors, nurses, and patients, mothers
and fathers and all others who use our products and services.”
Tony’s Chocolonely: “To make ‘100% slave-free’ the norm in chocolate.”
TEDTalks: “Our mission: Spread Ideas.”
Just for Fun: A Madlib Pitch
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My idea (working product name) is for (target customer) who have (list specific
problem). My product solves this issue by (explain solution) because I believe (list
values).
Example:
My idea, “artificial honey bee”, is for farmers suffering from the honey bee crisis who
are having trouble pollinating their crops. My product solves this issue by providing
drone “honey bees” to spread pollen because I believe in crop sustainability.
Or….
Artificial Honey Bee: “To promote crop sustainability and alleviate suffering from the
honey bee crisis.”
What’s your mission statement?
In one or two sentences.
“Outstanding people have one thing in common: an absolute sense of mission.” - Zig Ziglar
• • • • •
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You’ve just determined that your idea will produce a product worth having, and that there is a
distinct problem it can solve. You have a clear mission statement, and now you’re ready to build
upon it.
Take “Artificial Honey Bee” for example. Their mission is “to promote crop sustainability and
alleviate suffering from the honey bee crisis.” The most intriguing aspect of that mission may be
the honey bee crisis. Why is that “worthy of remark,” or remarkable?
You could argue that without honey bees, there would be no more oranges, lemons, limes,
apples, avocados, cucumbers, and other favorite foods. Mentioning this fact might serve as a
conversation starter, which will help your idea spread. Sure, people might not always talk about
your product on its own (out of context), but they may discuss the problem that your product
solves and include you in the conversation.
What do you think would be the equivalent for your business? When it comes to your idea, what
might people be shocked to find out?
Exercise Five: Determine Your “Wow” Factor
Make Something Worth Talking About: Advice from Seth Godin
“The brand of the future is patient, consistent, connected, and trusted. The new brand is based
on the truth that only comes from experiencing the product, not just yelling about it. Word of
mouth is more important (by a factor of 20) than TV advertising, and the remarkability word of
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mouth demands comes from what we experience, not from spin or taglines or a campaign
slogan.” - Seth Godin
“More than anything else, I think prospects, customers and citizens watch what you do more
than they listen to what you say.” - Seth Godin
Seth’s Advice On How To Be Remarkable:
1. Understand the urgency of the situation. Half-measures simply won’t do. The only way to
grow is to abandon your strategy of doing what you did yesterday, but better. Commit.
2. Remarkable doesn’t mean remarkable to you. It means remarkable to me. Am I going to
make a remark about it? If not, then you’re average, and average is for losers.
3. Being noticed is not the same as being remarkable. Running down the street naked will
get you noticed, but it won’t accomplish much. It’s easy to pull off a stunt, but not useful.
4. Extremism in the pursuit of remarkability is no sin. In fact, it’s practically a requirement.
People in first place, those considered the best in the world, these are the folks that get what they
want. Rock stars have groupies because they’re stars, not because they’re good looking.
5. Remarkability lies in the edges. The biggest, fattest, slowest, richest, easiest, most
difficult. It doesn’t always matter which edge, more that you’re at (or beyond) the edge.
6. Not everyone appreciates your efforts to be remarkable. In fact, most people don’t. So
what? Most people are ostriches, heads in the sand, unable to help you anyway. Your goal isn’t to
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please everyone. Your goal is to please those that actually speak up, spread the word, buy new
things or hire the talented.
7. If it’s in a manual, if it’s the accepted wisdom, if you can find it in a Dummies book, then
guess what? It’s boring, not remarkable. Part of what it takes to do something remarkable is to
do something first and best. Roger Bannister was remarkable. The next guy, the guy who broke
Bannister’s record wasn’t. He was just faster...but it doesn’t matter.
8. It’s not really as frightening as it seems. They keep the masses in line by threatening
them (us) with all manner of horrible outcomes if we dare to step out of line. But who loses their
jobs at the mass layoffs? Who has trouble finding a new gig? Not the remarkable minority, that’s
for sure.
9. If you put it on a T-shirt, would people wear it? No use being remarkable at something
that people don’t care about. Not ALL people, mind you, just a few. A few people insanely
focused on what you do is far, far better than thousands of people who might be mildly
interested, right?
10. What’s fashionable soon becomes unfashionable. While you might be remarkable for a
time, if you don’t reinvest and reinvent, you won’t be for long. Instead of resting on your laurels,
you must commit to being remarkable again quite soon.
http://sethgodin.typepad.com/seths_blog/2007/01/how_to_be_remar.html
What’s the most intriguing aspect of your idea from a word-of-mouth marketing
perspective?
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What do you think will excite people the most?
“The path to lifetime job security is to be remarkable.” - Seth Godin, Purple Cow
• • • • •
That’s it for Part One. Nice work! Compile your answers and give them a read through. Are you
still confident about your idea? We’ve just taken a hard look at your goals, motivation, value
prop, mission statement, and the most intriguing aspect of your idea. If that doesn’t get you fired
up, we’re not sure what will.
Let’s keep this momentum going and start talking about your customer. Because if you’re going
to get people to buy into your idea, you must first determine who they are and what will appeal
to them.
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Part Two: Who’s Going To Care?
Before we find those 100 customers, let’s get an idea of what they look like.
OK - we’ve explored your concept and have a general idea of what we’re walking in with. But no
idea can live for long in a bubble - it needs customers to become a reality. So who might your
first customers be?
They’re called innovators and early adopters. These are the most patient and nurturing
customers available, for the sole reason that they’re willing to offer honest feedback. And it’s
through this feedback that you’ll be able to determine whether or not your basic product truly
meets the needs of your customers, and if you can even establish a “beachhead on the shores.”
However, before we can get that valuable feedback, we should have an idea of who we want to
talk to. Who is our basic product perfect for, and how can we connect with them? Who will you
test your ideas on first? Who will provide the most valuable feedback? Let’s turn to Steve Blank
and his Customer Development Process to better understand who our early adopter is.
Exercise One: Your First Customers
A Crash Course in Customer Development
Part One: The Early Adopter
A Process Created by Steve Blank
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https://www.u-cursos.cl/usuario/65cb0019312969dcc44fc854ecdb3419/mi_blog/r/Entreprene
urs_Guide_to_Customer_Development.pdf
What’s an early adopter?
● A special breed of customer who prefers unfinished products
● Wants to be the first to use or adopt a new product
● Can imagine and articulate what a product is missing
● Eager to provide detailed feedback & play a role in development
● Typically the first to pursue tech for intrinsic benefits
● Interested in solving the problem they are currently experiencing.
Ask Yourself:
● Who would you target first with limited ad spend?
● Who’s the person desperately looking for this product?
● Who needs your product?
● Who do they talk to, specifically?
● Who will be the customer who loves your product enough to not only give it a chance
but to talk about it or share it with friends? (That’s who we’re after.)
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The goal with your early adopter?
To establish a “beachhead on the shores.” You want to use this single customer segment to learn
more about your market, build momentum, and capitalize on their communication networks
and structures. (Remember: They have to be able to communicate with each other for your idea
to truly spread.)
Who do you think is your early adopter?
Who is experiencing this problem day in and day out, so much so that they’re willing to take a
chance on a completely new idea?
“The single most important difference between early markets and mainstream markets is that
the former are willing to take responsibility for piecing together the whole product (in return for
getting a jump on their competition), whereas the latter are not.” - Geoffrey A. Moore,
Crossing the Chasm
• • • • •
Now that you have a vague idea of who your early adopter is, let’s drill further down to specifics.
For instance, a bad example of an early adopter would be “millennials” or “college students.” To
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connect with your early adopter, and collect actionable feedback, you need to be able to define
who they are at the micro level - right on down to their personality.
Let’s take HBO’s hit series Silicon Valley for example. Would your target customer be:
1) Richard: An engineering genius, awkward CEO, and frequent sufferer of panic attacks
and nausea
2) Gilfoyle: a confident (if not arrogant) expert on system architecture, networking and
security who’s also a Satanist who enjoys IPAs and an open relationship with his girlfriend Tara
3) Dinesh: An expert in JavaScript who is unlucky in love, has next to no social life, and
has an affinity for gold chains and Solitaire
4) Gavin Belson: A power hungry titan of the tech world with a violent, destructive
temper kept mostly under wraps; he’s in it to win it, but sees the future going on without him -
and he’s desperate to hold onto power
5) Laurie Bream: Mother of four, managing partner at a major VC firm, calculated,
logical, precise; not exactly a people person
All five of these characters work in tech, are around 30-50 years old, and need to prove their
intelligence constantly. But selling to Laurie Bream requires a different approach than selling to
Dinesh or Gilfoyle. So, how can you define your early customer at such a level that they’re as
defined as Richard’s character, or Gavin Belson’s? How can you put a name to the face?
Exercise Two: Create a Picture of Your Early Adopter
Building a Realistic Customer Profile
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Questions to Consider About Your Target Customer:
1. Where might you have a conversation with your early adopter?
2. How does your product make them better?
3. What does their life look like before your product? After? Where do they work? What’s
their age and location? Does that matter? How does your product change their routine?
4. What frustrates them? What do they find “merely disappointing?”
5. How do they communicate? What language or jargon do they use? What are they saying?
6. What would make them hesitate about your offer?
7. Where do they spend their time? What activities do they love? What’s their lifestyle?
What’s their family like?
8. What blogs do they read? What technology do they use? What search terms might they
use to find you?
9. What do they do on weekends? What do they do for fun? What do they like online? Who
do they follow?
10. What else are they buying, and why?
In sum, what does your Early Adopter’s lifestyle look like?
For this exercise, you’ll want to consider the geographic, demographic, psychographic (values,
lifestyle, personality), and behavioral traits of your early adopter. You’ll want to combine
these answers into a description of your ideal prospect. For example: “30-35 year old women
in California earning $30-40K per year who shop at Trader Joe’s, focus on ethical
consumption, prefer Chrome over Safari, and use Intuit’s QuickBooks Self-Employed at least
once per month.”
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“There is only one boss. The customer. And he can fire everybody in the company from the
chairman on down, simply by spending his money somewhere else. - Sam Walton, Wal-Mart
• • • • •
Now it’s time to determine how your product will fit within the lives of your early adopters. As
you can see from the stats below, the average American consumer is bombarded with
information, offers, and calls-to-action every day. In fact, they’re downright overwhelmed by
what Barry Schwartz would call the ‘paradox of choice.’
So what will make your product worth having? How does it fit into the life of your early adopter?
Will it be used as frequently as Richard Hendricks uses his laptop (aka his girlfriend), or as often
as Erlich Bachman reaches for his bong? Or will it be used about as much as Dinesh uses his
gold chain?
Be realistic.
Exercise Three: Imagine How Your Product Fits Into This Lifestyle
Stats on General Consumption
Americans aged 18 and older spend more than 11 hours each day watching TV & using
smartphones and electronic devices.
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https://www.statista.com/chart/1971/electronic-media-use/
In 2015, the average American spent 132 minutes on their desktop/laptop devices each day.
https://www.statista.com/statistics/270781/average-daily-media-use-in-the-us/
As of January 2017, 2.2 million mobile apps were available to download for iOS devices.
https://www.statista.com/statistics/263795/number-of-available-apps-in-the-apple-app-store/
Consumers spend over 85% of their time on smartphones, but the majority of that time (84%) is
only spent in five non-native apps.
https://techcrunch.com/2015/06/22/consumers-spend-85-of-time-on-smartphones-in-apps-b
ut-only-5-apps-see-heavy-use/
Facebook accounts for 13% of all U.S. minutes spent on apps, with Google accounting for 12%.
https://techcrunch.com/2015/06/22/consumers-spend-85-of-time-on-smartphones-in-apps-b
ut-only-5-apps-see-heavy-use/
The average American home holds over 300,000 items.
http://articles.latimes.com/2014/mar/21/health/la-he-keeping-stuff-20140322
Why Excess Freedom Paralyzes Rather than Empowers: Advice from Barry
Schwartz
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Excerpts from his Ted Talk: “The Paradox of Choice”
Barry Schwartz: “I want to start with what I call the ‘official dogma.’ The official dogma of
what? The official dogma of all Western industrial societies, which runs like this: ‘If we are
interested in maximizing the welfare of our citizens, the way to do that is to maximize individual
freedom. The reason for this is both that freedom is in and of itself good, valuable, worthwhile,
essential to being human and because, if people have freedom, then each of us can act on our
own to do the things that will maximize our welfare and no one has to decide on our behalf. The
way to maximize freedom is to maximize choice. The more choice people have, the more
freedom they have, and the more freedom they have, the more welfare they have. This, I think, is
so deeply embedded in the water supply, that it wouldn’t occur to anyone to question it. And it’s
also deeply embedded in our lives. I’ll give you some examples of what modern progress has
made possible for us.
I want to say just a word about salad dressings. 175 salad dressings in my supermarket, if you
don’t count the 10 extra virgin olive oils and 12 balsamic vinegars you could buy to make a very
large number of your own salad dressings in the off chance that none of the 175 the store has on
offer suits you. So this is what the supermarket is like.
In other aspects of life that are much more significant than buying things, the same explosion of
choice is true. Healthcare: it is no longer the case in the United States that you go to the doctor
and the doctor tells you what to do. Instead, you go to the doctor, and the doctor tells you: ‘Well
we could do A, or we could do B. A has these benefits, and these risks. B has these benefits, and
these risks. What do you want to do?’ And you say, ‘Doc, what should I do?’ And the doctor says,
‘A has these benefits and risks, and B has these benefits and risks. What do you want to do?’ And
you say, ‘If you were me, Doc, what would you do?’ And the doctor says, ‘But I’m not you.’ And
the result is, we call it ‘patient autonomy,’ which makes it sound like a good thing; but what it
really is is a shifting of the burden and the responsibility for decision making from somebody
who knows something, namely the doctor, to somebody who knows nothing and is almost
certainly sick, and thus not in the best shape to be making decisions, namely the patient. There’s
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enormous marketing of prescription drugs to people like you and me, which if you think about
it, makes no sense at all since we can’t buy them. Why do they market to us if we can’t buy them?
The answer is that they expect us to call our doctors the next morning and ask for our
prescriptions to be changed.
Something as dramatic as our identity has now become a matter of choice. We don’t inherit an
identity, we get to invent it. And we get to reinvent ourselves as often as we like. And that means
that every day, when you wake up in the morning, you have to decide what kind of person you
want to be. With respect to marriage and family, there was a time when the default assumption
that almost everyone had was that you got married as soon as you could, and then you started
having kids as soon as you could. The only real choice was ‘who?’ Not when, and not what you
did after. Nowadays, everything is very much up for grabs.
Work. We are blessed with the technology that enables us to work every minute of every day
from any place on the planet. So what this means, this incredible freedom of choice we have with
respect to work, is that we have to make a decision, again and again and again, about whether
we should or shouldn't be working. We can go to watch our kid play soccer, and we have our cell
phone on one hip, and our Blackberry on our other hip, and our laptop, presumably, on our laps.
And even if they're all shut off, every minute that we're watching our kid mutilate a soccer game,
we are also asking ourselves, "Should I answer this cell phone call? Should I respond to this
email? Should I draft this letter?" And even if the answer to the question is "no," it's certainly
going to make the experience of your kid's soccer game very different than it would've been.
So everywhere we look, big things and small things, material things and lifestyle things, life is a
matter of choice. And all of this choice has two effects, two negative effects on people. One effect,
paradoxically, is that it produces paralysis, rather than liberation. With so many options to
choose from, people find it very difficult to choose at all. I'll give you one very dramatic example
of this: a study that was done of investments in voluntary retirement plans. A colleague of mine
got access to investment records from Vanguard, the gigantic mutual-fund company of about a
million employees and about 2,000 different workplaces. And what she found is that for every
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10 mutual funds the employer offered, rate of participation went down two percent. You offer 50
funds — 10 percent fewer employees participate than if you only offer five. Why? Because with
50 funds to choose from, it's so damn hard to decide which fund to choose, that you'll just put it
off until tomorrow. And then tomorrow, and tomorrow, and tomorrow, and of course tomorrow
never comes. Understand that not only does this mean that people are going to have to eat dog
food when they retire because they don't have enough money put away, it also means that
making the decision is so hard that they pass up significant matching money from the employer.
By not participating, they are passing up as much as 5,000 dollars a year from the employer,
who would happily match their contribution. So paralysis is a consequence of having too many
choices.
The second effect is that even if we manage to overcome the paralysis and make a choice, we end
up less satisfied with the result of the choice than we would be if we had fewer options to choose
from. And there are several reasons for this. One of them is that with a lot of different salad
dressings to choose from, if you buy one, and it's not perfect — and what salad dressing is? — it's
easy to imagine you could have made a different choice that would have been better. And what
happens is this imagined alternative induces you to regret the decision you made, and this regret
subtracts from the satisfaction you get out of the decision you made, even if it was a good
decision. The more options there are, the easier it is to regret anything at all that is
disappointing about the option that you chose.
Second, what economists call "opportunity costs." When there are lots of alternatives to
consider, it is easy to imagine the attractive features of alternatives that you reject that make you
less satisfied with the alternative that you've chosen. Here's an example: Here's this couple in
the Hamptons. Very expensive real estate. Gorgeous beach. Beautiful day. They have it all to
themselves. What could be better? "Well, damn it," this guy is thinking, "It's August. Everybody
in my Manhattan neighborhood is away. I could be parking right in front of my building." And
he spends two weeks nagged by the idea that he is missing the opportunity, day after day, to
have a great parking space. Opportunity costs subtract from the satisfaction we get out of what
we choose, even when what we choose is terrific. And the more options there are to consider, the
more attractive features of these options are going to be reflected by us as opportunity costs.
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Because whenever you're choosing one thing, you're choosing not to do other things that may
have lots of attractive features, and it's going to make what you're doing less attractive.
Third: escalation of expectations. This hit me when I went to replace my jeans. I wear jeans
almost all the time. There was a time when jeans came in one flavor, and you bought them, and
they fit like crap, they were incredibly uncomfortable. If you wore them and washed them
enough times, they started to feel OK. I went to replace my jeans after years of wearing these old
ones, and I said, "I want a pair of jeans. Here's my size." And the shopkeeper said, "Do you want
slim fit, easy fit, relaxed fit? You want button fly or zipper fly? You want stonewashed or
acid-washed? Do you want them distressed? You want boot cut, tapered, blah blah." On and on
he went. My jaw dropped. And after I recovered, I said, "I want the kind that used to be the only
kind." He had no idea what that was, so I spent an hour trying on all these damn jeans, and I
walked out of the store — truth! — with the best-fitting jeans I had ever had. I did better. All this
choice made it possible for me to do better. But — I felt worse. Why?
The reason I felt worse is that, with all of these options available, my expectations about how
good a pair of jeans should be went up. I had very low expectations when they only came in one
flavor. When they came in 100 flavors, damn it, one of them should've been perfect. And what I
got was good, but it wasn't perfect. And so I compared what I got to what I expected, and what I
got was disappointing in comparison to what I expected. Adding options to people's lives can't
help but increase the expectations people have about how good those options will be. And what
that's going to produce is less satisfaction with results, even when they're good results. Nobody
in the world of marketing knows this.
The reason that everything was better back when everything was worse is that when everything
was worse, it was actually possible for people to have experiences that were a pleasant surprise.
Nowadays, the world we live in — we affluent, industrialized citizens, with perfection the
expectation — the best you can ever hope for is that stuff is as good as you expect it to be. You
will never be pleasantly surprised because your expectations, my expectations, have gone
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through the roof. The secret to happiness — this is what you all came for — the secret to
happiness is low expectations.
Finally — one consequence of buying a bad-fitting pair of jeans when there is only one kind to
buy is that when you are dissatisfied, and you ask why, who's responsible, the answer is clear:
the world is responsible. What could you do? When there are hundreds of different styles of
jeans available, and you buy one that is disappointing, and you ask why, who's responsible? It is
equally clear that the answer to the question is "you." You could have done better. With a
hundred different kinds of jeans on display, there is no excuse for failure. And so when people
make decisions, and even though the results of the decisions are good, they feel disappointed
about them; they blame themselves.
Clinical depression has exploded in the industrial world in the last generation. I believe a
significant — not the only, but a significant — contributor to this explosion of depression, and
also suicide, is that people have experiences that are disappointing because their standards are
so high, and then when they have to explain these experiences to themselves, they think they're
at fault. And so the net result is that we do better in general, objectively, and we feel worse. So
let me remind you. This is the official dogma, the one that we all take to be true, and it's all false.
It is not true. There's no question that some choice is better than none, but it doesn't follow from
that that more choice is better than some choice. There's some magical amount. I don't know
what it is. I'm pretty confident that we have long since passed the point where options improve
our welfare...and what is so frustrating and infuriating is this: these expensive, complicated
choices — it's not simply that they don't help. They actually hurt. They actually make us worse
off.
If some of what enables people in our societies to make all of the choices we make were shifted
to societies in which people have too few options, not only would those people's lives be
improved, but ours would be improved also, which is what economists call a "Pareto-improving
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move." Income redistribution will make everyone better off — not just poor people — because of
how all this excess choice plagues us.
So to conclude. [You can be anything you want to be — no limits] You're supposed to read this
cartoon, and, being a sophisticated person, say, "Ah! What does this fish know? You know,
nothing is possible in this fishbowl." Impoverished imagination, a myopic view of the world —
and that's the way I read it at first. The more I thought about it, however, the more I came to the
view that this fish knows something. Because the truth of the matter is that if you shatter the
fishbowl so that everything is possible, you don't have freedom. You have paralysis. If you
shatter this fishbowl so that everything is possible, you decrease satisfaction. You increase
paralysis, and you decrease satisfaction. Everybody needs a fishbowl. This one is almost
certainly too limited — perhaps even for the fish, certainly for us. But the absence of some
metaphorical fishbowl is a recipe for misery, and, I suspect, disaster.”
-Excerpts from his TedTalk: “The Paradox of Choice”
https://www.ted.com/talks/barry_schwartz_on_the_paradox_of_choice?language=en#t-3837
27
How can you become the easiest choice?
When will people interact with your product? For how long, and how often? How do you fit
into their day-to-day?
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“We started this company with the philosophy that the world does not need another soda. That
forced us to look at things differently: how could we create a connection with customers, let
them play with the brand, let them take ownership of it? It’s hard for marketing people to let
other people play with their brand. For us, it’s our whole existence. This is not my brand. It
belongs to our customers. Everything at this company is about sharing ownership of the brand
with our customers.” - Peter Van Stolk, Jones Soda
• • • • •
Alright, now we have a decent picture of who your early customers might be, along with how
your product could potentially fit within their lifestyle. So what’s next? It’s time to start
uncovering areas of opportunity.
For instance, to continue with the ‘Artificial Honey Bee’ faux company from the mission
statement example. An area of opportunity for this company might be millennials passionate
about their avocado toast. Why? Because customers aren’t hiring “artificial honey bee” to
transfer pollen; they’re hiring them to make sure avocados stay available at your local grocery
store. That’s what people really want in this scenario: avocado toast (sad yet true). Clayton
Christensen explains it much better:
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Exercise Four: Think About What Your Customers Really Need
Case Study:
You Hired a Milkshake to Do What?
Clayton Christensen: “We actually hire products to do things for us. And understanding what
job we have to do in our lives for which we would hire a product is really the key to cracking this
problem of motivating customers to buy what we’re offering. So I wanted to tell you a story
about a product we did for one of the big fast food restaurants. They were trying to goose up the
sales of their milkshakes. They had just studied this problem up the gazoo. They brought in
customers who fit the profile of the quintessential milkshake consumer, and they’d give them
samples and ask: ‘Could you tell us how we could improve our milkshakes so you’d buy more of
them? Do you want it chocolatey or cheaper, chunky or chewy…’ They’d get very clear feedback.
They would then improve the milkshake on those dimensions, and it had no impact on sales or
profits whatsoever.
So one of our colleagues went in with a different question on his mind, and that was: ‘I wonder
what job arises in people’s lives that caused them to come to this restaurant to hire a milkshake?’
So we stood in a restaurant for 18 hours one day and just took very careful data: what time did
they buy these milkshakes, what were they wearing, were they alone, did they buy other food
with it, did they eat it in the restaurant or drive off with it? It turned out that nearly half of the
milkshakes were sold before 8 o’clock in the morning. The people who bought them were always
alone, it was the only thing they bought, and they all got in the car and drove off with it.
So to figure out what job they were hiring it to do, we came back the next day and stood outside
the restaurant so we could confront these folks as they left, milkshake in hand. We essentially
asked: ‘Excuse me, please, but I’ve got to sort this puzzle out. What job were you trying to do for
yourself that caused you to come here and hire that milkshake?’ And they struggled to answer,
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so we helped them by asking other questions, like: ‘Well, think about the last time you were in
the same situation, needing to get the same job done, but you didn’t come here to hire a
milkshake. What did you hire?’
‘Good question,’ they’d say. ‘What do I hire when I do this job? You know I’d never framed the
question that way before, but last Friday I hired a banana to do the job. Take my word for it:
never hire bananas. They’re gone in three minutes, you’re hungry by 7:30. If you promise not to
tell my wife, I probably hire donuts twice a week; but they don’t do it well either. They’re gone
fast, they crumble all over my clothes, they get my fingers gooey. Sometimes I hire bagels, but, as
you know, they’re so dry and tasteless. Then I have to steer the car with my knees while I’m
putting jam on them, and then, if the phone rings, we’ve got a crisis. I remember I hired a
Snickers bar once, but I felt so guilty, I’ve never hired Snickers again. Let me tell you: when I
come here and hire this milkshake, it is so viscous that it easily takes me 20 minutes to suck it
up that thin little straw. Who cares what the ingredients are? I don’t! All I know is I’m full all
morning, and it fits right here in my cup holder.’ Well it turns out that the milkshake does the
job better than any of the competitors, which in the customers’ minds, are not Burger King
milkshakes, but bananas, donuts, bagels, Snickers bars, coffee, and so on. But I hope you can see
how, if you understand the job, how to improve the product becomes just obvious.”
-From “Understanding the Job” for University of Phoenix
https://www.youtube.com/watch?v=f84LymEs67Y
What are people ‘hiring’ your product to do?
In the example above, people ‘hired’ milkshakes because they met all the requirements of
breakfast on-the-go, which bananas, bagels, and donuts could not. Similarly, you don’t ‘hire’ a
drill because you want a drill; you hire the drill because you want a hole. So Craftsman is
really selling holes. What are you really selling?
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“You can't just ask customers what they want and then try to give that to them. By the time you
get it built, they'll want something new.” - Steve Jobs
• • • • •
Now, when someone hires a product to do a specific thing, more often than not, they have to fire
something else. In the milkshake example, customers were firing donuts, bagels, and Snickers
bars. Those options weren’t cutting it, which provided a huge opportunity for the milkshake.
What will your customers have to fire in order to hire you? How will this provide an area of
opportunity for your product? We invite you to examine this question through the eyes of the
delightful musical conductor Benjamin Zander. It might help you discover new possibilities.
Exercise Five: Distinguish Between Problem and Opportunity
Case Study:
Two Stories About Possibility
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Benjamin Zander: “I want to give you a story: two shoe salesmen were sent from Manchester
to Africa in the 1900s to discover if they could sell shoes. One of them wrote a telegram back
saying, ‘Situation hopeless! They don’t wear shoes.’ The other one wrote, ‘Glorious opportunity!
They don’t have any shoes yet!’ Now, those two telegrams come from different places. ‘Situation
hopeless! They don’t wear shoes.’ That goes along with the whole language of it’s not possible, it
can’t be done, others are better, it’s the place for competition, for success, for failure, for all
those things that we measure in what we call the downward spiral. The other statement lives
over here. ‘Glorious opportunity! They don’t have any shoes yet!’ And that goes with a different
language, and also a different body language.
Those two worlds are completely distinct worlds. Now, in one world, possibility lives as luck. We
might have it, we might not. In the other, possibility is the norm. Spirituality is the norm. They
are totally separate, different worlds. And the shoe salesmen, the two of them, have conditions
that are identical. The conditions don’t matter. What matters are the words that they speak, and
the expression that they made. My father used to say, ‘There is no such thing as bad weather,
only inappropriate clothing.’ There is no recession so great that it precludes possibility, and
there is no wealth and power and fame that will protect you from falling into the downward
spiral. So it’s available for everybody.
There’s a lot of complaining going on right at the moment, during the financial meltdown, as
they call it. I want to tell you a little story about my father who came from Germany in 1937,
having lost everything. All his belongings, his mother killed in Auschwitz, fourteen other
members of the family killed...he lost everything: his house, his belongings, his money, his
profession, everything. And he came to England with four children to support, and a wife. And,
incidentally, I never heard him complain, at all. I said, “Aren’t you angry?” And he said, “Ah! I
discovered a person can’t live a life under the shadow of bitterness.”
He was interned in a camp for two years, on the Isle of Man. And there, there were many people,
2,000 men living in tents in a state of terrible upset, having lost, like he, everything, in a foreign
country, in war, and uncertainty and a different language...horrendous situation. And most of
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them were in a state of total depression, staring at the barbed wire fence the whole day. And my
father said, ‘There are a lot of intelligent people here, we should start a university.’ And they did.
And forty classes met regularly. There were no books, there was no chalk, there was no paper,
there was no blackboard, and they had forty classes. Yesterday, at the reception, I met a
gentleman who said, ‘My father was in that university.’
So, it isn’t the circumstances that are crucial. It’s what we say about the circumstances that
matter. And we can either decide to live here, or over there. This is a matter of leadership.
Leadership in the sense that every time you open your mouth, you are being a leader. You have a
choice in leadership, whether you speak over here [in the downward spiral], or speak over there,
[with the art of possibility.]”
-From “Mentoring Leadership Through Personal Development” at Davos 2009
https://www.youtube.com/watch?v=nTav0D3YIN4
What do you foresee being your biggest area of opportunity?
Where is the white space in the market that you plan to occupy? What do you consider to be a
glorious opportunity?
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“It’s one of the characteristics of a leader that he not doubt for one moment the capacity of the
people he’s leading to realize whatever he’s dreaming. Imagine if Martin Luther King had said, ‘I
have a dream. Of course, I’m not sure they’ll be up to it.’” - Benjamin Zander
• • • • •
Alright, now we know what we’re up against, who we’re trying to attract, and how. But what if
you have more than one type of early adopter? What if your product can appeal to multiple
customer segments, even early in the game?
To go back to the Silicon Valley example, is it possible that you have a product that might appeal
to more than one character, or perhaps (but unlikely) all of them? Reflect on whether or not
your product might solve different problems for different people, and how that might affect your
marketing strategies moving forward. But first, let’s take a deeper look at customer segments,
and how to use them to your advantage.
Exercise Six: Your Product Isn’t One-Size-Fits-All
Excerpts from The Entrepreneur’s Guide to Customer Development by Bryant Cooper and
Patrick Vlaskovits. They describe their book as a “cheat sheet” to Steve Blank’s groundbreaking
book - Four Steps to the Epiphany: Successful Strategies For Startups That Win.
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What is segmentation?
It’s the practice of breaking down a larger market into smaller, more identifiable groups of users
who share specific needs and who reference (or more bluntly - communicate) with each other.
Why is it important?
Because word of mouth marketing still works best, whether that word spreads in person or
online. So if two customers can’t communicate with each other, they belong in different
segments. If they can communicate, and thus have “access to each other,” then ideally you can
use a common methodology to reach them.
What does segmentation allow you to do?
Initially, it helps you understand product-market fit, and whether or not there’s even a market
for your product to begin with. Once you discover different segments, not only can you focus on
dominating a particular segment, but you can also look for untapped or “unoccupied” segments,
which often have less competition and more areas of opportunity. You can then focus your
marketing resources and attempt to line up and knock down segments one by one.
Segmentation Should Include These Six Characteristics
1. Identifiable: Can you measure characteristics, usage, and behavior?
2. Substantial: Is each segment you’ve identified large enough to be profitable?
3. Accessible: Can you reach each segment via both communication and distribution
channels?
4. Stable: Are the behaviors, hangouts, and lifestyles of your segments going to hold, or do
they fluctuate?
5. Differentiable: How clear are the needs of each segment? What makes each segment
unique?
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6. Actionable: Are you positive that each segment truly needs your product? Who needs it
more than others?
https://hbr.org/2014/07/what-you-need-to-know-about-segmentation
“If you’re doing something strategic and you’re trying to figure out if you have the right brands,
the right value proposition, the right product line, then I would say you should start with needs
or attitude segmentation.” (Identifying needs.) “But if you think you’ve got that pretty much
under control, and you need to understand how to go to market or target your digital and TV
spending, then I would start with behavior.” (Identifying buying and Lifestyle patterns.)
- John Forsyth, McKinsey Consulting
List your potential customer segments.
Think less about demographics this round, and more about lines of communication, hangouts,
and common needs. While your customer profiles often deal with the ‘who, what, when,’
customer segments deal mostly with the ‘where, why and how’.
“You have two people, we know they’re the same age, we know they’re British citizens, and we
know they’re of royal blood. One of them is Prince Charles. The other is Ozzy Osbourne, the
Prince of Darkness. They’re in the same demographic segment, but I can’t imagine marketing to
them in the same way.” - John Forsyth, McKinsey Consulting
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• • • • •
That’s it for Part Two. Are you feeling more confident about the type(s) of people who might use
your product? Hope so, because now it’s time to build something for them.
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Part Three: What Do They Want?
All talk and no action makes Jack a bad product owner.
The next step towards getting 100 paying customers is to establish a testable unit. What does
this mean? It means that you DO NOT need to have a finished product to begin testing. You
don’t even need a semi-finished product.
In fact, creating a “finished” product before testing increases your chances of failure. We can’t
tell you how many clients have come to us after spending thousands - even hundreds of
thousands of dollars - to produce a product that no one wants, at least not in its current form.
We want to help you prevent this.
A few things to consider about your testable unit:
● There are endless ways to create it
● It doesn’t have to scale
● It doesn’t have to function
● You can and should get crafty
● It only has to demonstrate to the customer what they’ll be getting
● This could mean a photo rendering, a PowerPoint, a PDF, and in-person demo, a landing
page, or a number of other things
So before you start building, or even think about spending money on professional development,
ask yourself a simple question: “Do people really want this?
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Remember: anywhere from 75-90% of all products fail, but yours doesn’t have to. That’s why
Part Three is all about reducing that risk of failure and helping you think like a successful
product owner. Let’s get started.
Exercise One: Understanding the MVP
Fail Fast in Pursuit of Learning: Advice from Eric Ries of The Lean Startup
“Entrepreneurship in a lean startup is really a series of MVP’s.” – Eric Ries
The Goal of the Lean Startup Methodology?
To discover and eliminate waste while de-risking investments through sprints and cycles of
product development.
What’s the Goal of an MVP?
To test your fundamental business hypotheses while still delivering value to your customers.
Defining an MVP:
● A simple creation rather than a highly polished, finished product
● Meant to be just enough to test your assumptions without creating waste
● Think of it as the bare minimum version of your product needed to test your theories
● Used to gather actionable feedback from users, rather than accomplish a huge launch
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● Results are measured in validated learning, which uses milestones to determine what’s
working and what’s not
“The minimum viable product is that version of a new product which allows a team to collect the
maximum amount of validated learning about customers with the least effort.” - Eric Ries
MVP Examples:
● A short video (Dropbox)
● A simple landing page (Buffer)
● A Wordpress Blog (Groupon)
● Your Apartment (Airbnb)
● Email Capture (Yipit)
● A simple website with ecommerce (Zappos)
● Single offer (Virgin Air)
● Most things on Kickstarter
“The only way to win is to learn faster than anyone else.” - Eric Ries
Questions Your MVP Helps You Answer:
● Should this product even be built?
● Does a market exist for my product to thrive in?
● Which customer opinions really matter?
● Which core features take priority?
● What’s essential?
● Does this product really deliver value to my customers?
● What’s the right price point for this product?
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What’s the most basic model of your product that customers would pay for?
List your top three features.
“The first step in exceeding your customer's expectations is to know those expectations.” - Roy
H. Williams
• • • • •
Looking at your basic product, what are you working towards some day? What else might be
nice to offer your customers? Think big picture. What’s your long game? Dream big without
biting off more than you can chew.
Exercise Two: Avoiding Feature Creep
“You know, you can please some of the people, some of the time. One of the hardest things,
when you’re trying to effect change, is that people - like this gentleman - are right, in some areas.
I’m sure there are some things Open Doc does, probably even more that I’m not familiar with,
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that nothing else out there does. And I’m sure that you can make some demos, maybe a small
commercial app, that demonstrates those things. The hardest thing is, how does that fit into a
cohesive, larger vision that’s gonna allow you to sell $8 billion, $10 billion of product a year?
And one of the things I’ve always found is that you’ve gotta start with the customer experience
and work backwards to the technology. You can’t start with the technology and try to figure out
where you’re gonna try to sell it. I’ve made this mistake probably more than anyone else in this
room, and I’ve got the scar tissue to prove it. And I know that it’s the case. And as we have tried
to come up with a strategy and a vision for Apple...it started with what incredible benefits can we
give to the customer? Where can we take the customer? Not starting with, “let’s sit down with
the engineers and figure out what awesome technology we have and then how we’re going to
market that.” And I think that’s the right path to take.” - Steve Jobs, WWDC 1997
In a perfect world, what other features or capabilities would your product
eventually need? Are you sure?
Just have a little fun here and dream big. This exercise is about exploring possibilities for down
the road.
“Any product that needs a manual to work is broken.” - Elon Musk
• • • • •
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Now that you have an idea of what your MVP could look like, you might be feeling a bit anxious
about showing customers something that isn’t finished. Just remember the wise words of Reid
Hoffman: “If you’re not embarrassed by the first version of your product, you’ve released too
late.” And keep in mind, constraints can be beautiful things.
Exercise Three: Working Within Your Means
When Life Gives You Lemons: Advice from Adam Morgan & Mark Barden from A
Beautiful Constraint
What is a constraint?
A limitation or defining parameter, often the stimulus to find a better way of doing something.
Types of Constraints:
● Foundation (e.g., opening a shoe store online, meaning customers cannot try on shoes
before purchase)
● Resources (e.g., an airline having a four-plane route, but only having three planes)
● Time (e.g., limited amount of bandwidth)
● Method (e.g., making a hospital apply the systems of serving fast food to eye surgery)
How can a constraint become beautiful?
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By seeing it as an opportunity, rather than a restriction; or by using it as a stimulus to discover a
new or even better way of achieving something. In other words, by capitalizing on
constraint-driven inventiveness.
How Can We Make This Constraint Beautiful?
1. Victim, Neutralizer & Transformer
a. People tend to respond differently to constraints. Here are three types of responses:
i.Victims: Lower their ambitions.
ii.Neutralizers: Find a different way to deliver.
iii.Transformers: Use the constraint as an opportunity to increase their ambition.
b. Moving from victim to transformer requires only a shift in mindset, method and
motivation.
i.Do we believe this is possible?
ii.Do we know how to start doing this?
iii.How much does this matter to us?
c. Professional problem-solvers have a different relationship with constraints from the rest
of us. To them, constraints are:
i.Inherently beneficial
ii.Provide clear problem definitions
iii.Enhance focus
iv.And provide boundaries to push against
2. Break Path Dependence
a. Ask yourself:
i.How does success today blind me to what could create success tomorrow?
ii.How does my language lock me into ways of thinking and behaving that will limit my ability to
see new possibilities?
iii.What can I do to move away from unhelpful paths on which I’ve become dependent in order to
reveal newer, more productive paths?
b. Path Dependence can:
i.Lock you into assumptions that are no longer relevant, appropriate or best for the future.
ii.Close you off to new possibilities.
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iii.Blind you to new kinds of information, or to the inefficiency of your current path.
iv.Lead you to follow approaches that won’t help you solve the problem.
c. The most disabling constraints we face may be those inside our heads and our culture.
3. Ask Propelling Questions
a. A propelling question is one that has both a both ambition and a significant constraint
linked together. The discomfort of propelling questions makes us think differently; they break
path dependence and propel us toward new solutions. If we don’t ask propelling questions of
ourselves, someone is going to ask them of us, and by that time we will be behind the curve.
b. A propelling question is most powerful when it has specificity, legitimacy, and authority.
c. Examples:
i.How do we win the race with a car that is no faster than anyone else’s?
ii.How do we build a well-designed, durable table for five dollars?
iii.How do we establish a stronger relationship with this buyer than the market leader, without a
communications budget?
iv.How do we grow more and better quality barley using less water?
4. Can-If
a. Can-if thinking can include:
i.Thinking of assets in a fundamentally different way
ii.Finding new ways to resource shortages
iii.Adapting existing assets to fit new purposes
iv.Combining different innovations to arrive at a unified solution
b. Start your sentences with, “We can if…”
i.We think of it as…
ii.We use other people to…
iii.We remove x to allow us to y….
iv.We access the knowledge of…
v.We introduce a…
vi.We substitute x for y…
vii.We fund it by…
viii.We mix together…
ix.We resource it by...
5. Creating Abundance
a. Ask yourself:
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i.In what ways can we gain access to other people’s resources to help us overcome our own
scarcities and meet our ambitions?
ii.What prevents us from seeing and accessing these resources today?
iii.How can we find new value in what we have, so we have more to trade and more power to create
shared agendas?
b. List Your Assets:
i.What do we have in abundance? What can we trade?
c. Then counter your assets with the list reframed.
i.How can we reframe these assets to give them more relevance and value to others?
6. Activating Emotions
a. Identify the activating emotions able to fuel more creative tenacity.
b. Personalize your emotions to capture a full range: fear, greed, frustration, excitement,
love, and desire. Find the tug of both the positive and negative.
c. Without activating the right emotions, it will be too easy to regress to the victim mindset
- which gets you nowhere.
Don’t think constraints work?
After the success of Cat in the Hat in 1957, the head of Random House Publishing bet Theodor
Geisel (aka Dr. Seuss) $50 that he couldn’t write a book using only 50 words. Geisel responded
with Green Eggs and Ham, which uses 49 words of one syllable and the word anywhere. It
became the best selling Dr. Seuss book of all time.
Now, what can you build today?
What constraints are you facing, and how do you plan to work around them, or with them?
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“The more constraints one imposes, the more one frees one's self. And the arbitrariness of the
constraint serves only to obtain precision of execution.” - Igor Stravinsky
• • • • •
After learning what your customer truly needs, compare what you would like to build to what
you can build right now. Of course, our goal is to help the customer solve whatever problem
they’re currently facing; but it also helps to consider unforeseen problems or challenges that
your solution might inevitably cause.
What are some of the risks of your product - specifically, your ideal technology and scope of
features? Have you considered the learning curve for product adoption? What does your
customer not know? And what will you need to teach them?
Exercise Four: Your Technology and Educating Your Customers
To Complicate or Simplify? Excerpts on Tech and Machinery from James P. Carse’s
Finite and Infinite Games
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Note: This book was written in 1986, and Carse probably couldn’t have imagined the giant leaps
technology would make over the next 30 years. Perhaps this allows for a more objective view of
how technology fits into our existence as flawed, human creatures. As you read, keep in mind
that the word ‘machine’ would have most likely been replaced with the word ‘technology’ had
this been written today. Food for thought.
Who’s Really In Control?
We make use of machines to increase our control over natural phenomena. By nothing more
than fingertip controls, a team of workers can cut a six-lane highway through mountains, or fill
in wetlands to build shopping malls. While a machine greatly aids the operator in such tasks, it
also disciplines its operator. As the machine might be considered the extended arms and legs of
the worker, the worker might be considered an extension of the machine.
To use the machine for control is to be controlled by the machine. To operate a machine one
must operate like a machine. Using a machine to do what we cannot do, we find we must do
what the machine does.
Machines do not, of course, make us into machines when we operate them; we make ourselves
into machinery in order to operate them. Machinery does not steal our spontaneity from us; we
set it aside ourselves. We deny our originality. Because we make use of machinery in the belief
we can increase the range of our freedom - but in fact only decrease it - we use machines against
ourselves.
What Do We Really Want From Our Technology?
Machinery is contradictory in another way. Just as we use machinery against ourselves, we also
use machinery against itself. A machine is not a way of doing something; it stands in the way of
doing something. The goal of technology is therefore to eliminate itself, to become silent,
invisible, carefree.
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We do not purchase an automobile, for example, merely to own some machinery. Indeed, it is
not machinery we are buying at all, but what we can have by way of it: a means of rapidly
carrying us from one location to another. Neither do we watch a movie screen, nor look at
television. We look at what is on television, or in the movie, and become annoyed when the
equipment intrudes - when the film is unfocused or the picture tube malfunctions.
When machinery functions perfectly it ceases to be there - but so do we. Radios and films allow
us to be where we are not, and not be where we are. Moreover, machinery is veiling. It is a way
of hiding our interaction from ourselves under what appear to be actions of great effectiveness.
When most effective, the technology of communication allows us to bring the histories and the
experiences of others into our home, but without changing our home. When most effective, the
technology of travel allows us to pass through histories of other persons with the “comforts of
home,” but without changing those histories.
When it is most effective, machinery will have no effect at all.
Can Technology Go Too Far?
In still another way is machinery contradictory. Using it against itself and against ourselves, we
also use machinery against each other. I cannot use machinery without using it with another. I
do not talk on the telephone; I talk with someone on the telephone. I listen to someone on the
radio, drive to visit a friend, compute business transactions. To the degree that my association
with you depends on such machinery, the connecting medium makes each of us an extension of
itself. If your business activities cannot translate into data recognizable by my computer, I can
have no business with you. If you do not live where I can drive to see you, I will find another
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friend. In each case your relationship with me does not depend on my needs but on the needs of
my machinery.
If to operate a machine is to operate like a machine, then we not only operate with each other
like machines, we operate each other like machines.
When the use of machinery springs from our attempt to respond to the indifference of nature
with an indifference of our own to nature, we have begun to acquire the very indifference to
persons that has led to the century’s grandest crimes by its most civilized nation.
Does your technology represent a risk?
Or better yet, what is the core dependency your tech is based on? At this early stage, is your
technology just for show, or is it actually helping you learn something about your customers?
What’s the learning curve for customers?
“Finite players play within boundaries; infinite players play with boundaries.” - James P.
Carse
• • • • •
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Now that we’ve considered risks, features, and needs, let’s talk about how your product will fit
within the minds of your customers. What will make your offer memorable or unique? How can
you position your offer within the marketplace so that you stand out among the competition? If
you’re not first to market, how can you still gain traction?
Let’s examine the work of Ries & Trout to learn more.
Exercise Five: Positioning Your Product
The Battle for Your Mind: Advice from Al Ries & Jack Trout on Product Positioning
What is Product Positioning?
A communication tool used to reach target customers in a crowded marketplace by positioning
that product within the mind of the customer.
The Problem: Information Overload
Customers are flooded with advertisements on a daily basis. As a result, they only respond to
those products or brands that are consistent with their past experiences or knowledge. This can
lead to oversimplification, or even shutting out information that is inconsistent with their
beliefs. Unsurprisingly, it’s very difficult to change a customer’s mind once an impression has
been formed.
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How to Break Through the Noise?
Present a simplified message focused on the perceptions of the customer rather than the reality
of the product, being sure to stay consistent with what the customer already believes.
How Can You Get Into the Mind of the Customer?
Customers rank brands in their minds, giving those who are first in a market, or the first to
claim a unique position, a huge advantage over their competition. In order to overcome this
perception issue, it’s best to relate your product to the leading brand in some way. Pretending
that the leading brand doesn’t exist is a losing strategy, so instead, you should compete based on
your current position in the marketplace. For example: Avis was competing with Hertz (a
market leader), and for years, pretended that Hertz simply didn’t exist. Avis finally became
profitable after using the line: “Avis is only No. 2 in rent-a-cars, so why go with us? We try
harder.”
What If You Are The Leader?
According to Ries and Trout, the top three brands in a product category occupy market share in
a ratio of 4:2:1 not because of a high level of marketing acumen, but because the number one
brand simply arrived on the scene first. They argue that the power of a company comes from its
brand - not from its marketing campaigns. But if that’s the case, how do you maintain your
leadership position? Boasting about being number one is sure to fail, as customers tend to
believe that brands that follow this strategy are insecure. Instead, brands should imply that all
other products that follow it are merely imitations, as Coca-Cola did with their campaign: “the
real thing.” Ries and Trout also believe that it’s easier and cheaper to simply create a new brand
than to change the position of an existing one, which is why they argue for introducing multiple
brands rather than change an existing one just to stay competitive. This strategy can also help
established businesses adapt to new technologies, which may threaten existing markets. Ries
and Trout suggest that to maintain a leadership role in the marketplace, companies should
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create new brands that are able to enter a new market first. A broader product or business name
can serve as an umbrella for this kind of adaptation.
What If You’re a Follower?
If you’re not first in a product market, then you must find an unoccupied position in which your
product can be first. For example, Volkswagen introduced the Beetle with the slogan “Think
small.” They weren’t the first small car to go on the market, but they were to the first to claim
that position in the mind of the customer. Areas in which you can compete include age, price,
gender, time of day, place of distribution, quantity, etc. But Ries and Trout warn against trying
to appeal to everyone - that’s a sure fire way to appeal to no one.
What About Repositioning the Competition?
If there are no unique positions to carve out for yourself, then you can try to convince customers
to view the competitor in a different way. For instance, DuckDuckGo repositioned Google by
declaring that their product would not track you, as Google does. Another example: vodka. Most
vodka brands sold in the U.S. have Russian names, but are actually made in the U.S. This gave
Stolichnaya Russian vodka an advantage by exposing the brands being made in America and
highlighting that theirs was made in Leningrad, Russia. By making customers aware of the flaws
with a competing brand, you can gain market share at their expense. And as Ries and Trout
point out, once a brand had lost favor due to a bad image, it’s very difficult to bounce back. It’s
better to introduce an entirely new brand, rather than salvage the old one.
The Power of a Name
One of the most important factors affecting brand perception is the brand’s name. And in
today’s crowded marketplace, it’s wise to have a memorable brand name that conjures up the
position of your product. Descriptive names are preferred by Ries and Trout, such as Head &
Shoulders and People, rather than Kodak or Xerox. They also advise against using names that
might be confused with another brand name. For instance, Goodrich vs. Goodyear can be
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confusing for customers. Be sure to differentiate, and stay away from abbreviations. Those only
work after a brand has become famous - not before.
http://www.quickmba.com/marketing/ries-trout/positioning/
Vice Versa: Examples of Opposites
Apple vs. Microsoft
Everlane vs. Banana Republic
Jones Soda vs. Coca Cola
Green vs. Pink
Picasso vs. DaVinci
Hugo Boss vs. Roberto Cavalli
Wal-Mart vs. Etsy
Independent Bookstore vs. Amazon
Facebook vs. Twitter
Google vs. DuckDuckGo
Case Study:
Starbucks vs. Dunkin’ Donuts
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Dan Ariely: “When Howard Schultz created Starbucks, he was as intuitive a businessman as
Salvador Assael. He worked diligently to separate Starbucks from other coffee shops, not
through price but through ambience. Accordingly, he designed Starbucks from the very
beginning to feel like a continental coffeehouse. The early shops were fragrant with the smell of
roasted beans (and better-quality roasted beans than those at Dunkin’ Donuts). They sold fancy
French coffee presses. The showcases presented alluring snacks—almond croissants, biscotti,
raspberry custard pastries, and others. Whereas Dunkin’ Donuts had small, medium, and large
coffees, Starbucks offered Short, Tall, Grande, and Venti, as well as drinks with high-pedigree
names like Caffè Americano, Caffè Misto, Macchiato, and Frappuccino. Starbucks did everything
in its power, in other words, to make the experience feel different—so different that we would
not use the prices at Dunkin’ Donuts as an anchor, but instead would be open to the new anchor
that Starbucks was preparing for us. And that, to a great extent, is how Starbucks succeeded.”
-From Predictably Irrational: The Hidden Forces That Shape Our Decisions
How will you position your product as being different or unique?
And how can you keep your customers front of mind?
“Positioning is the single largest influence on the buying decision.” - Geoffrey A. Moore,
Crossing the Chasm
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• • • • •
That marks the end of Part Three. Nice work! Let’s do a quick recap of what material you should
have so far:
● A gut check assessment of your goals, motivation, value prop, mission and defining
characteristics that make your offer unique and remarkable
● Strong, clearly defined assumptions about who your customers are, what their lifestyle is
like, and how your product might fit into their day-to-day
● A deeper look into what you’re really selling, and what your customers might truly need
● A breakdown of Lean Startup principles, including the framework for building your MVP
● And thoughts on how you’re going to position your product and frame the value
proposition to innovators and early adopters
Got all that? Sweet.
Now that we’ve covered how you’re going to position your product in the eyes of the customer,
it’s time to do just that: get eyeballs on your product.
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Part Four: Can You Prove Your Idea Is Viable?
Time to put a real thing in front of a real person.
Steve Blank and Eric Ries call this stage of the process “Get Out of the Building.” But, that’s
often easier said than done. Get out and do what? Talk to whom? Ask what? In this next section,
we’ll break this process down a bit more so you can gain a better understanding of where to look
for feedback, how to ask the right questions, and what to do with the information you collect.
First, we’ll look at how to find the right people, then we’ll branch out by discussing how to make
the ask, start the conversation, and move forward from there. It all starts with who you know.
Exercise One: Accessing Your Network
Advice from Kelly Hoey, Author of Build Your Dream Network: Forging Powerful
Relationships in a Hyper-Connected World
“Networking is every human interaction. We’ve got to step out of the mindset that networking
involves walking into a cocktail party or having an informational coffee date with somebody.
Networking is your email signature line. It’s your profile on Twitter. It’s your business card. If
you start looking at the micro-actions you undertake on a daily basis as networking, you can
realize you have a far bigger chance of making an impact that will improve your career than if
you worry about that one big cocktail reception or that one big party and whether or not you’re
going to collect a bunch of business cards and transform your career.”
Her tips for networking in the digital age:
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1. Stop committing random acts of networking.
“Everything for me comes back to a goal. So much networking advice starts with: You should
attend a meet-up, you should be on this platform, you should have your elevator pitch when you
walk into a room, you should have your business cards in your right pocket. But if you don’t
know why you’re in the room in the first place, then it’s random.”
2. Think of social media platforms as physical spaces.
“I think of social media networking platforms as physical spaces. How do you behave and how
do you engage with someone in a particular physical space? LinkedIn for me is the office or the
industry conference, Facebook is friends and family, and Twitter is the cocktail party. So, are
you the good guest that someone wants to talk to? LinkedIn for me is my past life as a lawyer.
It’s a suit and a briefcase. I want point of view, I want it cold, I want it dry. I do not want to know
what anyone had for lunch.”
3. Assume the mindset of the host.
“If you’re uncomfortable, in a room of 100 people, I can promise you: Other than the bartender,
everybody else is uncomfortable. Everyone has an anxiety. If you start worrying about how other
people feel, and think ‘let me make them comfortable,’ you can take away your own discomfort.”
4. Combine your online and offline pursuits.
“This is not an era in which you can just network online or just network offline. You need to be
amphibious; you need to be able to work both. I’ve had a lot of cold introductions and direct
messages because we engaged on Twitter around shared interests. It may take you sending this
person an email, reposting something they put on Facebook, retweeting or mentioning
something they did on Twitter. It may take multiple touchpoints for you to get assurance.”
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5. Say no to 911 networking.
“You never want to be a 911 networker. I think a lot of us have been fatigued since 2009 with
people coming up at the last minute. If you emailed me and said there’s been a restructuring at
my start-up, they’ve let all of us go in the marketing function, I’ve been managing their social
media accounts and taking care of their digital strategy for the past 15 months. I’m looking for a
new role that’s going to enable me to do this, and I’m currently looking at these three other
start-ups, or I’m thinking of going to a midsize company, and I see you’re connected to X. Now I
can help you because you’ve given me a target.”
Source: https://jkellyhoey.co/writing_blog/little-tricks-big-job-the-new-ways-to-network/
What’s the best way to reach out to (or build) your network?
What’s your game plan for not only making connections but building relationships?
“Technology is a compulsive and addictive way to live. Verbal communication cannot be lost
because of a lack of skill. The ability to listen and learn is key to mastering the art of
communication. If you don't use your verbal skills and networking, it will disappear rapidly. Use
technology wisely.” - Rick Pitino, Basketball Coach
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• • • • •
Now that you have your sights set on specific people to ask for feedback, it’s time to make the
ask. In most cases, you should follow your gut on how to approach certain people. If it’s your
friend since grade school, a text or phone call might suffice. If it’s your boss or co-worker, a brief
conversation at the coffee machine might work. But if you’re looking for a more formal ask, or
prefer to use email, these sample pitches may inspire you. Feel free rewrite, edit, or reframe
these templates in order to make them your own.
Exercise Two: The Big Ask
Different People = Different Proposals
Here are a few rough suggestions to get you started:
Asking An Acquaintance or Old Friend
Subj: A Quick Favor
“Hey ______!
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I’ve been working on my [project] for a while, but I think it’s finally time to share it with
someone I trust. I’m looking for brutal honesty here, so naturally, I thought of you. It’s a just
simple MVP at the moment, nothing more than [MVP type], but theoretically, it should give you
an idea of what I’m working towards, and if it’s capable of solving the problem we’ve been
discussing. You’re great when it comes to this kind of stuff, and I really value your opinion, so
what do you say? Meet up for coffee or drinks sometime this week or next? My treat.
{Signature}
Asking Someone Referred by a Friend or Colleague
Subj: Friend of a Friend
“Hi [name],
Our mutual friend, [name], recommended that I contact you regarding my latest project, [name
of product]. It’s designed to [solve this particular problem], which I’ve heard is something
troubling [you, your organization, your customers]. I’d love to show you my basic build to see if
this is a potential solution, and maybe get some feedback from you in the process. I’d be happy
to meet you for coffee or cocktails at your convenience. We can discuss the problem you’re
facing, and if there’s any way I can help. But don’t worry - this isn’t a sales pitch. I really just
want your expert opinion on this matter, if you can spare the time. I believe it would be mutually
beneficial.
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How’s [e.g., Wednesday at six outside your office] sound? My treat.
{Signature}
Asking a Complete Stranger You Found On LinkedIn (or Wherever)
Subj: Shot in the dark
Hi [name],
I recently came across your profile on [social media platform or other source] and discovered
that you’re trying to [solve this particular problem]. Turns out, I’m currently working on a
solution right now. I’d love to show you what I’m building to get your feedback. My goal is
merely to solve the problem as best I can, so I won’t try to sell you on it. I just want to know if
you think, in your expert opinion, that it will work. I’m looking for brutal honesty here, and since
we don’t really know each other, I figured you’d give it to me straight. I’m happy to send you a
link, or set up a call. If you’re in the area, we could even meetup for coffee or drinks. Let me
know what would be most convenient for you. I think you’re really going to be intrigued by what
I’m cooking up.
Talk soon,
{Signature}
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What’s your pitch to get them to agree?
How will you talk to different people in different ways? How much information does each
person need specifically to get them intrigued?
“Leaders cannot work in a vacuum. They may take on larger, seemingly more important roles in
an organization, but this does not exclude them from asking for and using feedback. In fact, a
leader arguably needs feedback more so than anyone else. It's what helps a leader respond
appropriately to events in pursuit of successful outcomes.” - Jack Canfield, The Success
Principles
• • • • •
They’ve said ‘yes!’ Congratulations! The meeting is on the books, you’ve got your MVP at the
ready, and now you’re heading to meet them for feedback. Then, it suddenly dawns on you that
you’ll have to actually lead this conversation and set yourself up for success. So, here’s a
breakdown on how to do just that, so that your friend or acquaintance feels comfortable judging
your project, as well as confiding in you about their problem.
Exercise Three: Starting a Conversation
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Excerpts from Thanks for the Feedback by Douglas Stone & Sheila Heen
The Arc of the Conversation: Open, Body, Close
Opening: Don’t just dive right into talking about your product. Set up expectations and clarify
your purpose. What specifically are you trying to learn, and why? What core dependencies are
you testing?
Body: Stone & Heen break down the four skills you’ll need to manage the conversation:
1. Listening: Acknowledge what they’re saying, ask deeper questions to clarify, even
paraphrase.
2. Asserting: Share any data or knowledge relevant to their feedback, reasons why you
agree, disagree, are surprised, etc. Not about being being combative - it’s about engaging.
3. Process Moves: Hinges or forks in the conversation that begin to move it into a more
productive direction. Think sequencing, logic, stream of consciousness, etc. Get creative here
and allow for discovery.
4. Problem Solving: Based on their feedback, what potential solutions could arise? What
do they really want? What are they willing to do to get it? What new possibilities can be created?
Closing: Close with commitment. Let them know what you’re going to do next, and how you
plan on keeping them updated along the way. Recap the conversation to cement the takeaways.
“Regardless of context or the company you keep, you are the most important person in your own
learning.”
Five Ways to Take Action
1. Name One Thing: In other words, keep it simple, focused, light-hearted. Look for
themes or patterns. Be blunt, and ask about what truly matters to them.
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2. Try Small Experiments: You’ll be receiving feedback on your product from an array
of different people, both online and in person. Try to learn from each session, and tweak things
like your approach, your questions, your presentation, etc. to see if different things resonate.
Take chances and allow yourself to be surprised.
3. Ride Out the ‘J’ Curve: Change can be uncomfortable and frustrating. So whenever
you ask a customer to change their routine, things will most likely get worse before they get
better. How will your product get a new customer through the inevitable uneasiness, and make
changing more appealing than not changing?
4. Coach Your Coach: The coach is anyone giving you feedback on your MVP. Find ways
to collaborate and minimize interference. Tell them how you prefer to receive feedback, i.e. “I
don’t do subtle. Just be blunt and explicit, and don’t worry about sugar coating or hurting my
feelings.” Or talk about your goals of the feedback session: “I’d like to get your take on the
procedural aspects of my app, not necessarily about the colors, fonts or design, since those
aren’t set in stone yet.”
5. Invite Them In: Tell them what you need help with, and be honest about what’s
working and what’s not. Acknowledge that they’re helping you and that you’re appreciative.
Allow yourself (and your product) to be vulnerable.
How will you structure these sessions?
What will you lead with? What do you hope to achieve? For how long do you plan to chat?
“Whatever you do in your organization - whether it’s selling shoes or saving souls - you’re
surrounded by people you can learn from.” - from Thanks for the Feedback
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• • • • •
Once you’ve setup the structure for your meeting, you’ll need to determine which questions to
ask. Every individual will provide their own unique feedback, but the right questions can probe
even deeper into their opinion of your MVP. You want to keep the questions broad enough to
inspire unique answers, yet specific enough to be relevant to your product. Here’s some advice
for doing so:
Exercise Four: Getting Feedback and Asking the Right Questions
More Excerpts from Thanks for the Feedback by Douglas Stone & Sheila Heen
“Feedback is not just what gets ranked; it’s what gets thanked, commented on, and invited back
or dropped. Feedback can be formal or informal, direct or implicit; it can be blunt or baroque,
totally obvious or so subtle that you’re not sure what it is.”
“...if the receiver isn’t willing or able to absorb the feedback, then there’s only so far persistence
or even skillful delivery can go. It doesn’t matter how much authority or power a feedback giver
has; the receivers are in control of what they do and don’t let in, how they make sense of what
they’re hearing, and whether they choose to change.”
“The real leverage is creating pull. Creating pull is about mastering the skills required to drive
our own learning; it’s about how to recognize and manage our resistance, how to engage in
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feedback conversations with confidence and curiosity, and even when the feedback seems
wrong, how to find insight that might help us grow.”
The Three Types of Feedback As Outlined by Stone & Heen:
1. Appreciation: To see, acknowledge, connect, motivate, thank
2. Coaching: To help receiver expand knowledge, sharpen skill, improve capability
3. Evaluation: To rate or rank against a set of standards, to align expectations, to inform
decision making
And, How We Think These Can Be Applied When Asking For Feedback on Your
MVP:
1. Appreciation: Do they agree that the problem you’re solving even exists, and if so, are
they experiencing it themselves? Would they be thankful for a potential solution like yours?
What would motivate them to engage with your product, or even share it with others? Again,
think of your core dependency: what do you really need to learn from customers? What’s the
biggest thing your customers have to agree to?
2. Coaching: If someone is agreeing to give you feedback, it means they want to help you.
So pitch your idea as quickly as possible, and let them talk. Try not to interrupt with too many
canned questions, but rather try to pose organic, relevant questions in search of understanding
and empathy. The more they talk, the higher the chances are that you’ll hear something
surprising or profound.
3. Evaluation: What does your feedback participant expect out of a product like yours?
Have they tried other products in your industry, and if so, where did those products fall short?
What appears to be the status quo? If you can get these questions answered, you’ll most likely be
able to identify the biggest areas of opportunity.
Want to see feedback at its worst and most hilarious? Check out
http://sharpsuits.net/
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When Asking For Feedback, Think About Your Mindset:
Fixed Mindset: My product is what it is. If people don’t like it, it’s probably just not for them.
They can take it or leave it. And we certainly don’t have the resources to invest in a brand new
angle, not after we’ve already come this far. This is what we do.
Growth Mindset: My product will be what the market demands. If the market changes or
adapts, I will also prepared to change and adapt. If people don’t like it, I will find out why. If
and when it’s time to pivot or find a new angle, we will find the resources. We’re not afraid to
pivot.
Mini-Case Study: Scott Cook & Intuit
An Excerpt from The Lean Startup by Eric Ries
“When Scott Cook conceived Intuit in 1982, he had a vision—at that time quite radical—that
someday consumers would use personal computers to pay bills and keep track of expenses.
When Cook left his consulting job to take the entrepreneurial plunge, he didn’t start with stacks
of market research or in-depth analysis at the whiteboard. Instead, he picked up two phone
books: one for Palo Alto, California, where he was living at the time, and the other for Winnetka,
Illinois. Calling people at random, he inquired if he could ask them a few questions about the
way they managed their finances. Those early conversations were designed to answer this
leap-of-faith question: do people find it frustrating to pay bills by hand?
It turned out that they did, and this early validation gave Cook the confirmation he needed to get
started on a solution. Those early conversations did not delve into the product features of a
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proposed solution; that attempt would have been foolish. The average consumers at that time
were not conversant enough with personal computers to have an opinion about whether they’d
want to use them in a new way. Those early conversations were with mainstream customers, not
early adopters. Still, the conversations yielded a fundamental insight: if Intuit could find a way
to solve this problem, there could be a large mainstream audience on which it could build a
significant business.”
What questions are you going to ask?
And how do you plan to collect the most actionable feedback? What if your MVP is simply a
conversation?
“If I had an hour to solve a problem and my life depended on the solution, I would spend the
first 55 minutes determining the proper question to ask, for once I know the proper question, I
could solve the problem in less than five minutes.” - Albert Einstein
• • • • •
Now, let’s say your customers have questions for you. How are you going to answer without
causing them to lose faith in your ability to solve their problem? Maybe you’re “too in-it” to see
the blind spots in your offer, but when customers start asking questions, it’s an opportunity to
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see the bigger picture and address certain pain points or concerns. Here’s how you can use these
moments to your advantage:
Exercise Five: Diffusing Confusion
Five Tips for Answering Tough Customer Questions
Excerpts from the Harvard Business Review & Steve Martin
1. Clarify before answering.
a. Drill down to what your customer actually wants to know by repeating, rephrasing, or
asking for additional information.
2. Avoid industry jargon or buzzwords.
a. Use simple language and make sure your customer truly understands what you’re talking
about.
3. Become a trusted advisor.
a. Highlight your expertise and experience in your field, but always frame the information
so that it’s relevant to your customer.
4. Redirect inappropriate questions.
a. “The question you really should be asking is…”
5. Use metaphors.
a. These are analogies, stories, parables, and other detailed examples that your customer
can relate to and identify with. (Avoid point-by-point facts and figures whenever possible.)
https://hbr.org/2012/06/handling-customers-toughest-qu
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Was there any confusion from your feedback participants? What questions did
they have for you in return?
What benefits did they foresee gaining from your product? How many said they’d buy it?
“If you have a real shop, you can communicate with your customers. You can understand what
they like and dislike. They can ask and you can answer. In the online world, there’s no
communication and if you don’t have that communication you don’t understand why your
customers are doing what they are doing.” - Ariel Finkelstein, Kampyle
• • • • •
Once you’ve established how you’ll generate feedback, you need to have a system in place to
measure the results. Let’s discuss how you’ll collect answers and break them down into
actionable steps forward. Because if you just listen, but don’t record, you’ll end up losing
valuable insights down the road.
Exercise Six: Being Prepared to Measure Your Feedback
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A Quick Guide to Innovative Accounting
A Process Devised by Eric Ries of The Lean Startup
Your Strategies are Based on Assumptions
Your goal is to systematically test these assumptions, without losing sight of your overall vision
for the company. If an assumption is proved to be incorrect, that is actually a positive discovery,
as it means you are learning something new about your customer, product, and business.
Metrics are People Too
Your customers are human beings, not machines. They behave in irrational and emotional ways.
While your product may have plenty of logical appeal to you, it may not convert or translate to
your customers, which is why it is imperative that you speak with living, breathing customers to
gather feedback - both logical and emotional - that can be measured and applied. This feedback
is one of the most important tools you’ll have at your disposal to validate your assumptions. It’s
also a wonderful opportunity to see if your ideas are based in reality, and if the problem you
hope to solve even needs solving.
Using Innovation Accounting
This quantitative approach to customer feedback enables you to measure progress, determine
milestones and prioritize your work moving forward. Before you “get out of the building,” be
sure to measure where you are right now. Be brutally honest and deliver concrete answers. How
will you be able to measure progress if you do not know your baseline? More importantly, as you
make changes moving forward, how will you measure what caused that baseline to shift? So,
right now, determine exactly how you’re currently performing. Next, how would you like those
number to change? What is your goal moving forward? Don’t just measure total revenue or the
total number of customers you currently have. Take a closer look at the performance of each
customer segment. If you don’t have any customers right now, what are your estimates for each
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group? How many new customer signups do you require each month? What behaviors do you
care about? Set clear and actionable goals now that are not only accessible but auditable.
How is This Different from Traditional Accounting?
Traditional accounting methods are designed for established companies, and those standards
are not reliable predictors of startup success, since startups by nature are far too unpredictable
for accurate forecasts and milestones. In contrast, innovation accounting allows a startup to
maintain a quantitative financial model based on validated learning. In other words, it enables
startups, which are working off of assumptions, to turn leap-of-faith assumptions into
quantitative metrics.
How Innovation Accounting Works:
1. Establish real data on where your company is right now through the use of an MVP.
a. Examples:
i.Create a complete prototype of your product and offer to sell it to real customers through your
main marketing channel.
ii.Build separate MVPs aimed at getting feedback on one assumption at a time.
iii.Perform a “smoke test” by giving customers the opportunity to pre-order a product that has not
yet been built.
b. TIP: Test your riskiest assumptions first.
2. Tune the engine from the baseline toward the ideal. (This may take many attempts.)
a. Every product development, marketing, or other initiative that a startup undertakes
should be targeted at improving one of the drivers of its growth model.
b. TIP: A good design is one that changes customer behavior for the better.
3. Pivot or persevere.
a. If you’re not moving the drivers of our business model, you’re not making progress - and
it’s time to pivot.
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The Three A’s of Metrics
1. Actionable
a. Demonstrates clear cause and effect. (Otherwise it’s a vanity metric, which you should
avoid.)
2. Accessible
a. Reports should be easy to obtain and easy to understand, with explanations made as
simple as possible with tangible and concrete facts clearly explained.
3. Auditable
a. The only way to check if your reports contain true fact is to talk with customers. (This
also ensures that your data is credible to employees.)
How will you record responses and measure feedback?
Which metrics will you use? What do you expect to learn? What specific feedback do you really
need from them?
“The goal of creating learning milestones is not to make the decision easy, it is to make sure that
there is relevant data in the room when it comes time to decide.” - Eric Ries, The Lean
Startup
• • • • •
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Now that you know how you’ll make your guest comfortable, gain the right feedback, collect the
information, and make it actionable later, you need to prepare yourself for the actual event.
What if someone hates your product? What if you discover your customer needs something else
entirely? What if you realize you have the wrong customer? Don’t worry. That’s all highly
valuable knowledge, even if it’s depressing at first. Let’s look again at the principles from The
Lean Startup, which were inspired by the Japanese belief that you must “go and see” for
yourself. It’s known as Genchi Gembutsu.
Exercise Seven: Genchi Gembutsu
Go and See For Yourself: The Goal of Customer Feedback
Advice from Eric Ries and The Lean Startup
The Goal with Your Startup
● Transform your ideas into products.
● Conduct experiments to determine what techniques will help you achieve this
successfully.
● Use this strategy to determine the right questions to ask customers for maximum utility.
That said, expect the initial reaction to your MVP to be bad.
A negative reaction may surprise you because you’re “too in it,” or unaware of how your target
audience will respond. It’s easy to get lost in traditional methods, or in the bubble of your
project. The goal of meeting with customers is to give you a much needed dose of reality.
Sometimes that reality will be hard to face, and a negative response could damage morale - but
even negative feedback is better than none at all.
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Avoid Analysis Paralysis
This is the trap of endlessly redefining your plans. As Eric Ries puts it, “the problem with most
entrepreneurs’ plans is generally not that they don’t follow sound strategic principles but that
the facts upon which they are based are wrong.” It’s only through conversations with your
customers that you can determine exactly which of your assumptions are false. Don’t assume
that you’re on the right path just because your team also assumed that you were. Get out there
and take a chance.
And Remember:
Customer feedback is both qualitative AND quantitative. You’re measuring what your customers
like and don’t like, as well as how many would find it useful and valuable. Be sure to measure
and weigh these reactions objectively.
“If we’re building something that nobody wants, it doesn’t much matter if we’re doing it on time
and on budget. ” - Eric Ries, The Lean Startup
What was the overall reaction to your idea?
What were the top three positive notes? The top three negative notes?
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“The goal with early contact with customers is not to gain definitive answers. Instead, it is to
clarify at a basic, coarse level that we understand our potential target customer. This archetype
is an essential guide for product development and ensures that the daily prioritization decisions
that every product team must make are aligned with the customer to whom the company aims to
appeal.” - Eric Ries, The Lean Startup
• • • • •
So, based on your feedback, what have you learned about your product? What about the
problem you’re trying to solve? Did you gain any valuable insights about your customer and
their specific needs? The answers to these questions fall under the jurisdiction of validated
learning, something Eric Ries believes is the true goal of working lean. Let’s explore that idea for
a moment.
Exercise Eight: Validated Learning
The Only Way to Win is to Learn Faster than Anyone Else
Excerpts from The Lean Startup by Eric Ries
What is validated learning?
● A rigorous method for measuring progress.
● Achieved through scientific experiments used to validate assumptions.
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● An empirical process for discovering valuable truths about your startup’s business
prospects.
● A way to avoid the waste which plagues most startups today.
● More concrete, accurate, and efficient than classic business planning or market
forecasting.
“Startup productivity is not about cranking out more widgets or features. It is about aligning our
efforts with a business and product that are working to create value and drive growth.” - Eric
Ries, The Lean Startup
How can it benefit startups?
● Startups are built under conditions of extreme uncertainty; therefore, the fundamental
goal should be learning.
● Learning how to build a sustainable business is more valuable than simply building
products, making money, or serving customers.
● This type of learning forces us to face the truth regarding our strategies: what’s working
and what’s not.
● It also forces us to learn about what our customers really want - not what we think they
should want.
● And finally, validated learning gives you the necessary insights for growing a sustainable
business.
“What differentiates the success stories from the failures is that the successful entrepreneurs
had the foresight, the ability, and the tools to discover which parts of their plans were working
brilliantly and which were misguided, and adapt their strategies accordingly.” - Eric Ries, The
Lean Startup
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Ask Yourself:
● Am I making my product better?
● How do I know?
● How do I know that the changes we’ve made are related to the results we’re seeing?
● How do I know that we are drawing the right lessons from those changes?
“A startup has to measure progress against a high bar: evidence that a sustainable business can
be built around its products or services. That’s a standard that can be assessed only if a startup
has made clear, tangible predictions ahead of time.” - Eric Ries, The Lean Startup
What surprised you the most about their responses?
Was a certain feature loved or hated? Was the feedback unexpected, or deserved?
“I think it’s very important to have a feedback loop, where you’re constantly thinking about what
you’ve done and how you could be doing it better.” - Elon Musk
• • • • •
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Let’s think about your MVP as it is right now. Based on your feedback, are you on the right path,
or does it need to be altered ever so slightly? It’s normal not to get it right on your first go round.
That’s why we get feedback. So, let’s look at your MVP with fresh eyes and determine what needs
to change, if anything.
Exercise Nine: Revisiting the MVP
Lessons from The Lean Startup and Eric Ries
When Adjusting Your Hypotheses, Keep in Mind:
The Build-Measure-Learn Feedback Loop
1. Establish what you need to learn.
2. Use innovation accounting to decide what you must measure to know if you are gaining
validated learning.
3. Determine what product you must build to run that experiment and get that
measurement.
The Goal of Your MVP:
To start the process of learning as quickly as possible and to test your fundamental business
hypotheses.
Your first MVP is not meant to be perfect.
You don’t need a perfect solution to attract early adopters. (Remember: they prefer something
rough and unfinished.)
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When in doubt, simplify.
Use your judgement to determine how complex your MVP should be.
Extra features are a form of waste.
Any additional work beyond what’s required to start learning is waste - no matter how
important that work may seem on the surface.
Consider the Concierge MVP.
To better know your customers, hold off on automation. Instead, give each new customer the
concierge treatment, at least in the beginning.
If you don’t know who your customer is, you don’t know what quality is.
Focus your energy on producing outcomes the customer perceives as valuable. Ask: “Does it
serve their needs?”
Remove any features, process, or effort that does not contribute directly to the
learning you seek.
Set aside traditional professional standards and/or perfectionism to begin the process of
validated learning as soon as possible.
After receiving feedback, does your MVP need to be altered?
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Will different people use your product for different things? Are there any features that would
be dead weight based on customer sentiment? Do you still need a robust website? Any
platforms you should leave or join?
Dan Wieden
Wieden + Kennedy
“It’s the hardest thing to do as a leader, but it’s the most important thing. Whatever day it is,
something in the world changed overnight, and you better figure out what it is and what it
means. You have to forget what you just did and what you just learned. You have to walk in
stupid every day.”
• • • • •
OK, maybe you discovered through feedback that you’re idea isn’t what your dream customer is
looking for. Maybe they thought your idea was ridiculous, too expensive, or unreasonable. If
that’s the case, ask yourself, have I been talking to the right people? Does my solution solve the
right problem? You’ll find a case study below that can really drive this message home; but don’t
lose heart. Even if your idea didn’t work for one group, it may still work for another in a different
capacity. Here’s what Steve Blank had to say on the subject:
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Exercise Ten: When Your Target Audience Hates Your Idea
Case Study:
What If Your Customer Isn’t Really Your Customer?
Steve Blank: “One of my favorite examples is a student team out of Stanford. They’d decided
that the world’s best thing they could think of building was a robotic lawnmower. Maybe you’re
doing it on large campuses, or something else. And they were actually pretty good computer
scientists. They understood machine vision and they understood all this other stuff, but they
didn’t quite understand how it would fit as a business.
So, their first hypotheses were all about robotic mowing, and they got out of the building and
started talking to potential customers who all said, ‘How much is your device gonna cost?’ And
they said, ‘oh about a quarter million dollars.’ And they said, ‘we pay somebody $8 an hour to sit
on the John Deere and go do this. Why would we want your product?’ And they [student team]
came back after the first couple of weeks incredibly depressed. They had done a whole bunch of
customer discovery, but the customer segment they had thought about was telling them that it’s
the dumbest idea they’d ever heard.
And so the teaching team nicely suggested that, ‘You know, in California we actually have
agriculture outside of Silicon Valley - about sixty miles away is Salinas Valley. If you can
recognize grass, could you maybe recognize plants or weeds?’ And they went, ‘Yeah, maybe we
could.’ So they got out of the building again, and this time, talking to farmers, asking them
‘would there be any value in being able to tell the difference between a weed and a plant, and
maybe some way to automatically kill the weeds?’
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Now, it turns out, in California we grow a lot of organic crops, where you can’t chemically kill the
weeds. You had to actually hand pick them, and we were using hundreds if not thousands of
migrant workers in the fields to do this. And when farmers heard about a robotic solution for
what’s called ‘precision agriculture,’ they started to get excited.
To make a long story short, after talking to about 85 customers, this team completely pivoted,
that is, changed their assumptions about their customer segment, about the features that were
important, and even pricing. The farmers taught them that they shouldn’t be selling the machine
- they should be leasing it based on the density of the weeds. Who would have figured that out
sitting in a building?”
-Steve Blank for The Kauffman Founders School
https://www.youtube.com/watch?v=lLEebbiYIkI
Did you discover any new or unexpected customer segments or needs?
Did you find out that different people want to use your product or service for different things?
If you’ve discovered new customer segments, what does each one want the most? Did you
discover unknown needs or problems in your pre-defined segments? Or do you need to
completely pivot?
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“A pivot requires that we keep one foot rooted in what we’ve learned so far, while making a
fundamental change in strategy in order to seek even greater validated learning.” - Eric Ries,
The Lean Startup
• • • • •
That wraps up Part Four! By now you should have successfully gathered feedback from
prospects struggling with the problem you’re planning to solve. We hope you’ve gained some
valuable insights into both the problem and your proposed solution. If you need to go back to
the drawing board on this one, simply revert back to the earlier lessons. If you’re ready to move
forward and get ready to launch your business, let’s dive into Part Five.
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Part Five: Building Your Business
How to create a cohesive brand around your idea.
Thanks to feedback from your prospects, you should have an idea of where to head next with
your product. A revised MVP, enhanced by actual feedback and deeper insights, can become the
catalyst for your actual brand and business to take shape. And since things start to get expensive
once you put this ball into motion, you want to be sure you have a sound strategy moving
forward. This next section will guide you through that process, starting with addressing the
biggest obstacles standing in your way - namely, your perceived value in the marketplace.
Exercise One: Understanding Value & Growth
Are You Value-Creating or Value-Destroying?
Lessons from The Lean Startup by Eric Ries
Three Ways to Always Be Creating Value:
1. Understand the reasons behind your startup’s growth.
a. Avoid “Success Theatre,” which is merely using the appearance of growth to make it
seem that you are successful. E.g., growing through outside money and paid advertising but
failing to develop a value-creation product.
2. Learn to see waste and then systematically eliminate it.
a. Value is defined as something that provides a benefit to a customer.
b. If it doesn’t provide a benefit to the customer, then it’s wasteful to the startup.
3. Discover ways to learn without building something, whenever possible.
a. Learning is your essential unit progress.
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b. Any effort that is not absolutely necessary for learning more about what customers want
is waste.
What’s the biggest challenge you’ll have to overcome based on your feedback?
What have you learned? How will you use that knowledge to overcome the obstacles standing
in your way?
“Every day, companies solicit feedback from customers, yet only a few translate that feedback
into meaning. An even smaller fraction of companies actually take action or close the loop with
the customer, to let them know their voice was heard.” - Whitney Wood, Phelon Group
• • • • •
Now that we’e explored our obstacles, it’s time to look at the market as a whole. In order to
succeed, you’ll need to do what Geoffrey A. Moore calls “crossing the chasm” from your early
adopters to the early majority. These are two very differnet customer segments who look for very
different things in a product. But, if you’re going to stand a chance at mainstream market
success, you’ll need to appeal to these “pragmatists in pain” by achieveing product-market fit.
Here’s what we mean:
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Exercise Two: Start by looking at the market
A Crash Course in Customer Development
Part Two: Product-Market Fit
A Process Created by Steve Blank
What does it mean to “cross the chasm?”
This is the goal of your business to make the leap between early adopters and the early majority.
It also signals the ability to tap into more mainstream channels.
What defines the early majority?
● Have a problem similar to the one faced by your early adopter
● Aren’t as passionate about the problem as your early adopter
● Unlikely to jump in early; want something tried and tested
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● Could be considered: “The Gatekeepers to the Masses”
● Have a “wait and see” attitude
“Product-Market Fit means being in a good market with a product that can satisfy that market.”
- Mark Andreessen
What exactly is Product-Market Fit?
There are three types of market: new, existing, resegmented. Most likely, you’re dealing with an
existing market, as it is very rare for technology or a product to be so new that it creates a
completely unique market. If you were to enter a new market, you would have to also take on the
role of educating your customers on what your product is, what it’s for, and how to use it. For an
existing market, on the other hand, you’re main goal is not necessarily to educate, but to steal
market share from the competition. In that case, you want to sway customers over to your side.
However, competing on price rarely helps in this case. You’re far more likely to succeed if you
compete on quality instead. But - in the case of resegmented market - you could win over more
price-sensitive consumers with a lower cost. Still, the best bet is to compete on functionality.
How does this apply to product-market fit, exactly? Well, you can believe that you are in one
market, competing against a certain type of business or product; but if your customer doesn’t
see it that way, then you don’t have great product-market fit. Consider the Milkshake Example
from Lesson One: Those milkshakes weren’t competing with other milkshakes; they were
competing with bananas and Snicker bars. Similarly, Product-Market Fit is very much in the eye
of the consumer.
In a Nutshell:
Product-Market Fit is when there is a strong demand for your product by passionate users
representing a sizeable market. There are three essential needs:
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1. Your customer is willing to pay for the product.
2. Your cost for acquiring the customer is less than what the customer pays for your
product.
3. There is evidence to suggest that the market is big enough to support your business.
“The early majority want to buy a productivity improvement for existing operations. They are
looking to minimize the discontinuity with the old ways. They want evolution, not revolution.
They want technology to enhance, not overthrow, the established ways of doing business. And
above all, they do not want to debug somebody else’s product. By the time they adopt it, they
want it to work properly and to integrate appropriately with their existing technology base.”
― Geoffrey A. Moore, Crossing the Chasm
What kind of market are you about to enter?
New? Existing? Resegmented?
“The only suitable reference for an early majority customer, it turns out, is another member of
the early majority, but no upstanding member of the early majority will buy without first having
consulted with several suitable references.”
― Geoffrey A. Moore, Crossing the Chasm
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• • • • •
To win over your chosen market, you’ll need to see who might be considered by your customer to
be your competition. Think back to the “milkshake example.” Who are you really competing
with? It may help to consider who is trying to solve this problem right now. How can you solve it
better? When it’s time to battle for market share, you better be prepared. So let’s dig a little
deeper into who you’re up against.
Exercise Three: Market Research
Studying the Competition
“We are always looking at things around us in relation to others.” - Dan Ariely, Predictably
Irrational
Questions to Ask Yourself:
● Who are they? What service or product are they offering?
● How did their customers find out about them?
● What are they charging? Is there anything unique about their pricing tactics?
● Are customers happy with their products and services? What’s their relationship like?
Are there any pain points or areas of frustration?
● What’s their onboarding process? How long does it take? Are there any areas for
improvement?
● How do you think your product and offer will be better? How will you communicate your
offer more effectively?
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● What’s their branding like? How do you feel about their style? What would you do
differently?
● What ideas for disruption come to mind?
In regards to the problem that your product will solve, who else is out there solving
it now?
“No one” is an acceptable (yet unlikely) answer. If no one is solving this problem, who else is
trying to then? Keep in mind that there could be several other companies solving only certain
aspects of the problem, whereas you’re trying to solve the entirety of the problem.
“The strong take from the weak, but the smart take from the strong.” - Pete Carril, Hall of
Fame Basketball Coach
• • • • •
One of the best competitve advantages you can have over the competition is the ability to make
your customer feel something about you. An emotional experience is far more meaningful than a
logical list of products and features. So consider how you might stage a memorable experience
for your customers. Why will they remember you? How will interactions with you make them
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feel? And how will this differ from the competition? Remember: gaining loyalty isn’t just about
solving a problem, it’s about forging a relationship.
Exercise Four: Making Your Customers Feel
Alternate Reality : How to Stage Memorable Customer Experiences
Excerpts from The Experience Economy
The Essence of Theme:
● Not a corporate mission statement or a marketing tagline
● Doesn’t need to be publicly articulated - it should be felt
● Drives all design elements & staged events of the experience toward a unified storyline
that wholly captivates the customer
● Forms the foundation of an experience
● Alters the guest’s sense of reality
● Creates a reality other than everyday
● Engaging themes integrate space, time, and matter into a cohesive, realistic whole
● Put guests in motion in the experience - think ‘choose your own adventure’
● Should fit the character of the enterprise staging the experience
Impressions:
● The “takeaways” of the experience
● Words are not enough: must introduce cues that affirm the nature of the desired
experience, and each cue must support the theme (e.g., the coffee house that specialized in
customer experience incentivizing their baristas to memorize their regular’s favorite orders and
have them ready before they get to the register)
● Ask yourself: how do you want guests to describe their experience with you:
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○ “It made me feel…”
○ “It was like…”
○ “I enjoyed... “
The Six Dimensions of Overall Impressions by Schmitt & Simonson
1. Time: Traditional, Contemporary, or Futuristic
2. Space: City/Rural, East/West, Home/Business, Indoor/Outdoor
3. Technology: Hand-made/Machine-made; Natural vs. Artificial
4. Authenticity: Original or Imitative
5. Sophistication: Refined/Unrefined or Luxurious/Cheap
6. Scale: Grand or Small
When designing your experience, consider:
● How can we improve our aesthetics? How can the environment be more inviting,
interesting, comfortable? How will we enable our guests to feel free ‘to be?’
● If our guests become active participants in our experience, what should we encourage
them to do?
● What do we want our guests to learn from the experience? What information or activities
will help to engage them in the exploration of knowledge and skills?
● What can we do by way of entertainment to get our guests to stay? How can we make our
experience more fun and enjoyable?
Four Concepts of Stage “Enactments”
By Richard Schechner, Expert in Performance Theory
1. Strategy is Drama
a. Tells the “actors” what to do through mission statements, business plans, strategic
visions, etc.
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2. Processes are Script
a. Employees must learn the script and the script must interpret the drama
3. Theatre is Form and Function
a. Connects the drama and script to customers by staging a performance that engages them
as an audience
4. The Offering is the Performance
a. The entire constellation of events, most of them passing unnoticed, that take place as
part of your customer’s experience
What emotions should customers have when they interact with your product?
And how does your product make them feel before, during, and after their experience with it?
“It’s not enough that we build products that function, that are understandable and usable; we
also need to build products that bring joy and excitement, pleasure and fun, and yes, beauty to
people’s lives.” - Don Norman
• • • • •
A large part of staging experiences is writing powerful copy that resonates with your target
audience. Why? Because people purchase products and services based on emotional connections
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that resonate with their identity, and these connections are often created through the words
used to describe the offer. If you’re looking to sell your product only online, this is especially
important, as the words you use must serve, essentially, as your digital sales rep. Here are a few
tricks of the trade to get you thinking strategically about your message.
Exercise Five: Copywriting & Communicating Value
7 Copywriting Tips from Words by Sørensen
1. Be a human first, company second.
a. Your sales copy might be selling to hundreds, even thousands of people at a time (god
willing), but it still must convince each person individually. Imagine if you had to sell your
product face-to-face with your customer - in person - how would you do it?
2. Focus on the benefits.
a. If a certain product feature isn’t benefiting the customer, it’s waste. If your sales copy
isn’t educating your customer on the benefits of your product, it’s just as bad.
3. Do not use fancy words or tech jargon.
a. Cut the fat, get to the point, and please, keep it simple. Use language that everyone and
their 60-year-old mother can comprehend.
4. Be clear, concise, and compelling.
a. Tell a story, but only as it relates directly to your customer. More importantly, don’t
self-indulge with long winded diatribes about yourself, or how your product will change the
world. How will it make your customer’s life better today?
5. Don’t shy away from longer copy.
a. Just make sure it has a point and keeps your customer intrigued. Remember, the three
ingredients of a good story are the beginning, the middle, and the twist.
6. Be simple.
a. Dilute your idea and message into its purest form. What is this product, and why should
they care? Really? Get it down to a simple sentence and build up from there. It doesn’t have to
be groundbreaking literature, but it has to be clear and comprehensible for your customer.
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7. Know your platform.
a. Website sales copy is different than sales copy in an app store or on Facebook. Determine
what style does well on each platform for a product like yours, then take into account any
limitations that platform might have. Adjust your message according.
Advice from the Greats:
Robert Collier, The Secret of the Ages
“Before you put pen to paper, before you ring for your stenographer, decide in your own mind
what effect you want to produce on your reader — what feeling you must arouse in him.”
Victor Schwab, “The greatest mail-order copywriter of all time”
“It has also been demonstrated that, when picturing the product in your advertisement, you will
get more attention by showing it in use: doing something, accomplishing something for the
reader. That, as W. S. Townsend said, ‘makes it live and breathe and serve right in front of the
eyes of the prospect.’”
Eugene Schwartz, Breakthrough Advertising
“Tap a single overwhelming desire existing in the hearts of thousands of people who are actively
seeking to satisfy it at this very moment.”
Fairfax M. Cone, Foote, Cone & Belding
“Good advertising is written from one person to another. When it is aimed at millions it rarely
moves anyone.”
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David Ogilvy, aka Original Gangster
“When I write an advertisement, I don’t want you to tell me that you find it ‘creative.’ I want you
to find it so interesting that you buy the product.”
What’s your big idea for a sales pitch?
How can you condense your value prop and benefits into a powerful landing page?
“Consumers do not buy products. They buy product benefits.” - David Ogilvy
• • • • •
Let’s turn back to identity and creating a message that resonates with your customer. When
building your brand, you also need to consider your unique style. What does your brand look
like? How is your offer packaged? And how does this form a cohesive identity when combined
with your message and copy? These are all things a prospect will judge within sections, so you
want to find the right fit for not only what you’re selling, but also for who you plan to sell to. You
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want your target client to identify with your business, even at first glance. Here’s a rundown of
the basics to get you started.
Exercise Six: Determining Your Style
A Quick Guide to Typography
The Basics:
● Bold headers and titles need lighter subheaders and subtitles.
● Size matters! It tells people what to read first.
● Make sure it’s easy to read.
● Choose a font that matches your brand’s personality, message, and purpose.
● Use contrasting fonts and different weights.
Five Font Groups to Know:
1. Geometric
Pros: Clear, modern, objective
Cons: Cold, boring, impersonal
Examples: Helvetica, Futura, Gotham, Franklin Gothic, Avant Garde
2. Humanist Sans
Pros: Modern yet human
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Cons: Corporate and insincere
Examples: Veranda, Gill Sans, Optima
3. Old Style
Pros: Classic & readable
Cons: Traditional
Examples: Garamond, Jenson, Palatino
4. Transitional & Modern
Pros: Strong & stylish
Cons: Neither classic nor modern; a bit academic
Examples: Baskerville, Times New Roman, Bodoni
5. Slab Serif
Pros: Can convey authority, but also be friendly
Cons: Requires the right context
Examples: Rockwell, Archer, Courier, Clarendon
Quick Fix? Visit www.fontjoy.com
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Source:www.smashingmagazine.com/2010/12/what-font-should-i-use-five-principles-for-choos
ing-and-using-typefaces
A Quick Guide to Color Theory
The Basics:
● Complementary colors are opposites on the color wheel.
● Monochromatic means one color in various tones.
● Analogous means that a group of colors are neighbors on the color wheel.
● A tint is a lighter version of a certain color.
● A shade is a darker version.
Basic Color Meanings:
Red
Passion, ambition, aggression, energy, lust, anger, alertness, power, rebellion, romance, fire,
intensity, warmth, urgency, courage.
Orange
Communication, optimism, superficiality, determination, joy, encouragement, creativity,
charisma, excitement, visibility.
Yellow
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Intellect, cowardice, impatience, philosophy, summer, idealism, energy, extroversion, wisdom,
thought, spontaneity, innovation.
Green
Growth, self-reliance, money, possessiveness, fertility, calmness, environment, generosity,
progress, good luck, youth, frankness.
Blue
Trust, peace, loyalty, integrity, conservatism, frigidity, authority, confidence, protection,
responsibility, stability, virtue, intelligence.
Purple
Imagination, creativity, impracticality, aristocracy, reflection, anxiety, enchantment, dignity,
independence, intuition, wit, value.
Pink
Unconditional love, nurturing, immature, silly, girlish, calmness, innocence, optimism,
femininity, gentle, tranquil, emotional, friendly.
Brown
Comfort, protection, down-to-earth, serious, security, material wealth, loyalty, trustworthy,
dependable, genuine, sincere, honest.
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Gray
Color of compromise, unemotional, detached, gothic, industrial, remote, distant, careful,
articulate, wisdom, futuristic, stable.
White
Perfection, purity, innocence, light, goodness, cleanliness, safety, faith, hygienic, refreshing,
clarity, simplicity, optimism, hope.
Black
Air of mystery, hidden, secretive, the unknown, elegance, formal, power, strength, authority,
prestige, black humor, fear, grief.
Quick Fix? Visit www.colormind.io
Source:
http://www.empower-yourself-with-color-psychology.com/meaning-of-colors.html
http://www.arttherapyblog.com/online/color-meanings-symbolism/#.WVMR0IpJmHo
https://www.colorpsychology.org
In terms of style, what do you envision for your product?
What’s the vibe?
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“This is what customers pay us for - to sweat all these details so it's easy and pleasant for them to
use our computers. We're supposed to be really good at this.” - Steve Jobs
• • • • •
Now that you have an idea of your brand’s style, it’s time to talk about design. Dieter Ram was a
German industrial designer who believed that less is more, and his specific design aesthetic even
inspired early Apple products. Here are his principles of good design to get you thinking about
how your product will look in the eyes of consumers, even if only in terms of how your website
appears on mobile. Beneath that you’ll also find valuable questions regarding general user
experience (UX) principles. In combination, you might consider this exercise to be a crash
course in making simple things that function well in a chaotic world.
Exercise Seven: Understanding the User Experience (UX)
Dieter Rams’ 10 Principles of Good Design
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"My heart belongs to the details. I actually always found them to be more important than the big
picture. Nothing works without details. They are everything, the baseline of quality." – Dieter
Rams
Good Design…
Is Innovative
Technological development is always offering new opportunities for innovative design.
Makes a Product Useful
Good design emphasizes the usefulness of a product whilst disregarding anything that could
possibly detract from it.
Is Aesthetic
Only well-executed objects can be beautiful.
Makes a Product Understandable
Clarifies the product’s structure, and helps the product clearly express its function by making
use of the user’s intuition. At best, it is self-explanatory.
Is Unobtrusive
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Products fulfilling a purpose are like tools. They are neither decorative objects nor works of art.
Their design should therefore be both neutral and restrained, to leave room for the user’s
self-expression.
Is Honest
It does not make a product more innovative, powerful or valuable than it really is. It does not
attempt to manipulate the consumer with promises that cannot be kept.
Is Long-lasting
It avoids being fashionable and therefore never appears antiquated. Unlike fashionable design, it
lasts many years – even in today’s throwaway society.
Is Thorough Down to the Last Detail
Nothing must be arbitrary or left to chance. Care and accuracy in the design process show
respect towards the consumer.
Is Environmentally Friendly
It conserves resources and minimizes physical and visual pollution throughout the lifecycle of
the product.
Is as Little Design as Possible
Less, but better – because it concentrates on the essential aspects, and the products are not
burdened with non-essentials. Back to purity, back to simplicity.
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https://www.fastcodesign.com/3047450/what-10-dieter-rams-products-reveal-about-the-princ
iples-of-good-design
http://www.archdaily.com/198583/dieter-rams-10-principles-of-%25e2%2580%259cgood-desi
gn%25e2%2580%259d
Excerpts from “A UX Crash Course” by The Hipper Element
The Five Ingredients of UX:
1. Psychology
What is the user’s motivation to be here in the first place?
How does this make them feel?
How much work does the user have to do to get what they want?
What habits are created if they do this over and over?
What do they expect when they click this?
Are you assuming they know something that they haven’t learned yet?
Is this something they want to do again? Why? How often?
Are you thinking of the user’s wants and needs, or your own?
How are you rewarding good behaviour?
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2. Usability
Could you get the job done with less input from the user?
Are there any user mistakes you could prevent? (Hint: Yes, there are.)
Are you being clear and direct, or is this a little too clever?
Is it easy to find (good), hard to miss (better), or subconsciously expected (best)?
Are you working with the user’s assumptions, or against them?
Have you provided everything the user needs to know?
Could you solve this just as well by doing something more common?
Are you basing your decisions on your own logic or categories, or the user’s intuition? How do
you know?
If the user doesn’t read the fine print, does it still work/make sense?
3. Design
Do users think it looks good? Do they trust it immediately?
Does it communicate the purpose and function without words?
Does it represent the brand? Does it all feel like the same site?
Does the design lead the user’s eyes to the right places? How do you know?
Do the colours, shapes, and typography help people find what they want and improve
usability of the details?
Do clickable things look different than non-clickable things?
4. Copywriting
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Does it sound confident and tell the user what to do?
Does it motivate the user to complete their goal? Is that what we want?
Is the biggest text the most important text? Why not?
Does it inform the user or does it assume that they already know what it’s about?
Does it reduce anxiety?
Is it clear, direct, simple, and functional?
5. Analysis
Are you using data to prove that you are right, or to learn the truth?
Are you looking for subjective opinions or objective facts?
Have you collected information that can give you those types of answers?
Do you know why users do that, or are you interpreting their behaviour?
Are you looking at absolute numbers, or relative improvements?
How will you measure this? Are you measuring the right things?
Are you looking for bad results too? Why not?
How can you use this analysis to make improvements?
Source: http://thehipperelement.com/post/75476711614/ux-crash-course-31-fundamentals
How do you plan to address UX?
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What is the most important goal your users wish to achieve through your product? How will
you make them extremely effective at achieving this goal?
“Quiet is better than loud.” - Dieter Rams
• • • • •
Even with a seamless design rooted in minimalism, you still have actions that you need and want
your customer to take, whether it’s to download your app, sign up for your newsletter, or simply
hit purchase. That’s where a strong call-to-action comes into play. Here’s what you should know
before you start designing buttons.
Exercise Eight: Inciting Action
ENGAGE! A Quick Guide to the Call-to-Action (CTA)
What is a CTA?
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An image, button, or line of text that prompts your reader or customer to take action, e.g., to
download your eBook, subscribe to your blog, etc.
CTA Elements to Consider:
● Size
● Color
● Wording
● Contrast
● Position
● Urgency
Examples of Good CTAs:
● Sign up for early access!
● Pin it!
● Talk to us!
● Let’s do it!
● Get yours now!
● Start a Campaign!
In most cases, your CTA will need to be enhanced by additional content on your landing or sales
page, which, in clear language that aligns with your early adopter, will minimize the risk of
taking action. A lack of detail can cost you clicks, engagement, and opt-ins.
CTA Best Practices:
● Use short sentences and action verbs
● Make it obvious what you want the user to do
● Don’t be afraid of white space surrounding the CTA
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● Think about your color scheme and really make your CTA pop!
● Always be communicating your value
● Require as little effort from the user as possible
● Tell them exactly what you want them to do next, and how
● Don’t hide behind flowery language or beat around the bush
● Keep it simple, with only one to two CTAs per page
● Always get right to the point
● Enforce a sense of urgency, excitement, and immediacy
● Size matters
How do you want customers to respond?
What types of actions must they take? How will you invite them to take that action?
“Design is not just what it looks like and feels like. Design is how it works.” - Steve Jobs
• • • • •
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Alright, someone has decided to opt-in or look into purchasing your product. Great! But,
abandoned carts are still a big problem online. The wrong price point can turn someone off just
as quickly as poor design and bad copy. So, now is the time to consider what your ideal price
point may be. If it’s too expensive, customers might never purchase your product. On the other
hand, if it’s too cheap, they may not respect or trust your offer enough either. How can you
balance these two reactions? Where’s the middle ground?
Exercise Nine: Pricing
The Trouble with Free: Advice from Dan Ariely from Predictably Irrational
Mini Case Study: We Don’t Want Your $30
A few years ago, the AARP asked some lawyers if they would offer less expensive services to
needy retirees, at something like $30 an hour. The lawyers said no. Then the program manager
from AARP had a brilliant idea: he asked the lawyers if they would offer free services to needy
retirees. Overwhelmingly, the lawyers said yes. What was going on here? How could zero dollars
be more attractive than $30? When money was mentioned, the lawyers used market norms and
found the offer lacking, relative to their market salary. When no money was mentioned they
used social norms and were willing to volunteer their time. Why didn’t they just accept the $30,
thinking of themselves as volunteers who received $30? Because once market norms enter our
considerations, the social norms depart.
What is your ideal price point to make this viable?
Do you have any data to support this conclusion?
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“The difference between two cents and one cent is small. But the difference between one cent
and zero is huge!” - Dan Ariely, Predictably Irrational
• • • • •
There are many benefits to offering a free product, but this decision can also affect your business
model and relationship with customers. You’ll need to determine how best to navigate these
waters early on, especially since there is “no such thing as a free lunch.” What else might this
decision end up costing both you and your customer?
Exercise Ten: Levels of “Free”
The Currency of Time and Attention: Advice from Wired’s Chris Anderson
Anything that can be converted into cash is a form of currency in and of itself, which includes
your time and respect. “Money is not the only scarcity in the world,” Anderson argues. “There’s
also the supply of reputation and attention.” Google has already become a central banker of sorts
for these scarcities. For instance, through Google’s platforms, we can convert our reputation
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(measured by PageRank) into attention (seen as traffic), which then becomes cash (through
ads). Back in 2008, he highlighted six “free” business models:
1. Freemium
○ Consider the Rule of One, which for online businesses means that 1% of users support all
the rest.
○ In this model, 99% of users get free access to the basic model of Web software, services,
or content.
○ This business has various levels of access, ranging from free to expensive, or a premium
“pro” version (e.g., LinkedIn) for the best experience, service, or content.
2. Advertising
○ In this case, content, software, and services are free to everyone, while the business
makes money through ad sales and sponsorships.
○ For example, Google’s pay-per-click, Amazon’s pay-per-transaction, affiliate ads, site
sponsorships, etc.
○ This approach is based on the belief that free offerings build audiences with distinct
interests & needs that advertisers will pay to reach.
3. Cross-Subsidies
○ Example: you get a free Wii if you buy a deluxe game, you get a free lunch if you buy a
certain beer, you get a free CD if you help publicize the band’s tour.
○ Here, any product that entices you to pay for something else is free - but you’re paying
for something, one way or another.
○ The price of each individual component is often determined by psychology, not
necessarily cost.
4. Zero Marginal Cost
○ If it can be distributed without an appreciable cost to anyone, then it can be free to
everyone.
○ For example, online music. Distribution costs have hit rock bottom, which is why some
artists now give their music away for free online as a way to market their concerts, merchandise,
licensing, and other more lucrative gigs.
5. Labor Exchange
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○ In this situation, web sites and services are free to all users, since the act of using these
sites and services actually creates something of value, either by improving the service itself or
creating information that can be useful somewhere else.
○ Examples: Digg, Yahoo! Answers, Reddit
6. Gift Economy
○ Zero-cost distribution has turned sharing into an industry, so in this case, everything is
free to everyone, from open source software to user-generated content.
○ Wikipedia is a great example of this.
Source: https://www.wired.com/2008/02/ff-free/
If your product is free initially, how much time or attention will it cost?
What other scarce currency will users have to invest?
“Free is really, you know, the gift of Silicon Valley to the world. It's an economic force, it's a
technical force. It's a deflationary force, if not handled right. It is abundance, as opposed to
scarcity.” - Chris Anderson
• • • • •
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If you’re not going the “freemium” route, you’ll need to determine how to accept payments from
your customers. While there are many payment platform options available, with more becoming
available each day, you need to make a choice based on the quality of experience you want your
customers to have, and the percentage of revenue you’re willing to lose in the process. Here’s a
rundown of major platforms you may consider.
Exercise Eleven: Determine How You’ll Accept Payments
A Breakdown of Common Payment Processing Platforms
Things to consider:
● Where your customers are located
● How they want to pay
● Platform integrations
● Processing fees
● Additional capabilities
● User experience
● Whether you’re conducting eCommerce, invoicing individual clients, or both
PayPal
● Price: Standard = free; Business/Pro = $30/month
● Getting Paid: Accepts all major credit cards; integrates with just about everything;
● Fees: Inside the U.S. = 2.9% of transaction total + $0.30; Outside U.S. = 4.4% of total +
fixed fee
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● Features: Syncs with your shopping cart; has mobile capabilities; can do recurring
billing
Shopify
● Price: Basic = $29/month; ‘Shopify’ = $79/month; Advanced = $299/month
● Getting Paid: Accepts payments from 70 different payment processors; countless
integrations
● Fees: Basic = 2.9% + $0.30; Shopify = 2.6% + $0.30; Advanced = 2.4% + $0.30
● Features: Customizable templates; discount codes; accepts all major credit cards &
most gift cards
Venmo
● Price: Free to join
● Getting Paid: Mostly peer-to-peer money transfers; limited release for business at the
time of this writing.
● Fees: 3% with credit cards;
● Features: Easy sign in with Facebook, Twitter, or Google+; simple and effective
Square
● Price: Magstripe reader free w/account; array of hardware, software and features at
various price points
● Getting Paid: Magstripes, POS, chip readers, apps, and more
● Fees: 2.9% for businesses; 3.5% + $0.15 for keyed-in payments, 2.9% + $0.30 for
invoices
● Features: Accepts every major credit card; offers invoicing and virtual terminals
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Google Wallet
● Getting Paid: Competes with Venmo, mostly peer-to-peer; can only use for business as
a sole proprietor
● Fees: Receiving money is free; 2.9% transaction fee for credit cards
● Features: Instant withdrawal to debit card; fraud protection; easy, sharp interface
Freshbooks
● Price: $15-$50 a month ($15=5 clients, $25=50 clients, $50=500+ clients)
● Getting Paid: Easily accepts credit card payments; integrates with PayPal, Stripe, and
more
● Fees: Visa/MC = 2.9% of transaction total + $0.30; Amex = 3.5% of total + $0.30
● Features: Great UX, time tracking, invoicing, automatic reminders and late fees if
applicable
BitPay
● Getting Paid: Receive payment of any amount, from anywhere in the world, from any
device
● Fees: Flat 1% settlement charge
● Features: Over 40 integrations and counting; buttons, hosted checkout, cart plugins
and more
What payment platforms will you use?
PayPal, Stripe, etc? What fees will you be expected to pay?
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“A business that makes nothing but money is a poor business.” - Henry Ford
• • • • •
What’s your long game with your product? While Chris Anderson of Wired magazine is a fan of
the freemium model, he’s also the brain behind what’s known as the “long tail” business model.
To see if this concept might work for your offer, read the breakdown below. Then again, if you’re
only offering one product, it may just help you in considering viable options for later down the
road - especially if you’re not offering a digital product right now.
Exercise Twelve: Understanding the Long Tail Business Model
Entering a World of Abundance: Advice from Chris Anderson
“Hit-driven economics is a creation of an age without enough room to carry everything for
everybody. That was a world of scarcity, and now we’re entering a world of abundance.” - Chris
Anderson
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What is the Long Tail?
A theory created by Chris Anderson, the Editor-in-Chief of Wired Magazine, which argues that
popularity no longer has a monopoly on profitability.
“We assume that only hits deserve to exist...but “misses” usually make money too. And because
there are so many more of them, that money can add up quickly to a huge new market.” - Chris
Anderson
Traits of a Long Tail Business:
● Treat consumers as individuals
● Offer mass customization as opposed to mass-market
● Use recommendations to guide customers towards similar yet unexpected products
Examples of Businesses Using the Long Tail:
● iTunes
● Rhapsody
● Netflix
● Amazon
“We equate mass markets with quality and demand, when in fact it often just represents
familiarity, savvy advertising, and broad, if somewhat shallow, appeal.” - Chris Anderson
Rules of the Long Tail:
1. Make Everything Available
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Embrace niches, aggregate dispersed audiences, and know that almost anything is worth
offering on the off chance it will find a buyer.
2. Cut the Price in Half...Then Lower It
The cost of free is the psychological value of convenience. To compete with free, offer fair
pricing, ease of use, and consistent quality. More importantly, price according to digitial costs,
not physical ones. As it turns out, when you lower prices, people tend to buy more.
3. Help Them Find It
Use “hits” to attract consumers, then use lower prices and additional content to lure them down
the tail, towards overlooked merchandise or offers. And by guiding them down the tail, and
learning more about their preferences, you can make more informed recommendations moving
forward.
Sources:
http://changethis.com/manifesto/10.LongTail/pdf/10.LongTail.pdf
https://www.wired.com/2004/10/tail/
How will customers pay for your product?
Direct or third-party? Are there levels of access? Once they make a purchase, is there an
incentive to keep paying for something, or search for something else?
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“The biggest money is in the smallest sales.” - Kevin Laws, Venture Capitalist and Former
Music Industry Consultant
• • • • •
OK, so you’re officially ready for people to start purchasing your product. This is a good time to
touch on empathy. If you can understand the feelings and emotional needs of your customer,
you’ll be in a strong position for market domination. However, you’re going to need to do more
than merely understand these feelings. You’ve got to build that understanding into your
customer experience. Consider, how does your customer interact with your business and
product? How can you demonstrate your understanding of them at each and every touchpoint?
Exercise Thirteen: Building Empathy
What is a Touchpoint?
These are every point of interaction between you and your customer along their journey. For
example, your customer could click on your ad, enter your website, sign-up for a free download,
subscribe to your blog, purchase your product, visit your brick and mortar store, talk with a
customer service representative, chat with a bot, log-in to their membership page, etc, etc.
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A Very Quick Guide to Empathy Maps
Your Goal?
To get a holistic perspective on how it feels to be your customer in this experience with your
organization. You want to focus on what your customer is thinking, feeling, hearing, saying,
doing, and seeing at each and every touchpoint. This will help you build a deeper understanding
of your customer’s motivations, behavior, and actions
Ask Yourself:
● Who is my customer?
● What worries them? Delights them? Frustrated them? What do they love, or hate?
● What are they thinking, doing, hearing?
● What outside perspectives or opinions influence them?
● What causes them pain?
● What do they need?
● What do they want?
● How do they measure success?
● What do they consider as an obstacle to that success?
Add these insights to each touchpoint along your customer journey map.
List your touchpoints. For each touchpoint, what is the customer feeling, and what
is the ideal outcome?
There’s always a logical customer journey, but people are often emotional when it comes to
spending money or taking a chance on a new product. Are they excited, frustrated, intrigued,
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or misunderstood? How can you change their mood as necessary? And, more importantly,
how can you eliminate friction? What do your customers need to accomplish with each
interaction, and how can you make it as easy as possible?
“If you’re not pushing things in a meaningful direction, people tend to put it on the back
burner.” - Carl Guarino, SEI Investments
• • • • •
Now that you’ve outlined customer touchpoints, it’s time to build your customer journey map.
This will give you a holistic view of your customer’s experience from the time they find you
online through their purchase and subsequent experience moving forward, whether it’s through
help from customer service or simply living with your product on a day-to-day basis. Grab some
colored pencils and follow the steps below.
Exercise Fourteen: Your Customer Journey Map
What is a customer journey map?
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A physical interpretation of the steps and emotional states each customer goes through when
interacting with you.
What is it for?
These maps help you consider interactions with your company or product from your customer’s
perspective. In addition, a customer journey map can:
● Deepen your understanding of customer behavior
● Highlight opportunities for building stronger customer relationships
● Help you build trust, respect & consistency with customers
● Determine how your product fits within your customer’s lifestyle
Why use one?
● Improve your customer’s experience (CX)
● Better deliver on brand promises
● Understand customer consumption behavior
● Highlight the most effective channels
● Determine user goals
● Maximize revenue potential
The Goal?
Not so much the physical map itself, but the insights and customer understanding gained by
creating the map.
How to Use It:
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Ask Yourself:
● Who is my customer?
● What is my customer’s real goal, or deeper need?
● What did my customer do right before interacting with me? (Their interaction with you is
part of a longer journey.)
● What will my customer do right afterwards?
● What will make my customer happy?
● What will it take to provide the most positive CX? (Stay mindful of the customer’s
holistic needs.)
● How do customers learn about me, and what potential barriers do they face between
discovery & purchase? How can we solve those problems?
● How do my customers want to be spoken to, what are they thinking, feelings, seeing,
hearing and doing?
What You’ll Need:
● Personas: A breakdown of user needs, goals, thoughts, feelings, opinions, expectations,
and pain points described from the point-of-view of a character.
● Timeline: A finite amount of time, or variable phases of experience, such as awareness,
decision-making, purchase, etc.
● Emotion: The range of emotions your customer experiences, from happiness to anxiety
or frustration.
● Touchpoints: Those specific moments were you interact with your customers.
● Channels: Where those interactions are taking place.
● Moments of Truth: A positive interaction that leaves a lasting impression at a
high-stakes touchpoint.
● Supporting Characters: These are friends, colleagues, etc who may contribute to your
customer’s experience.
The Basic Steps:
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1. What’s the specific goal we’re mapping?
2. How do you think this customer journey will play out?
3. Make a list of every touchpoint (or interaction) on every channel.
4. Draw your map.
A Step-by-Step Guide
A customer journey map can help you better understand your customer’s behavior, goals, and
experience in relation to your business or product. It can also highlight “pain points” in your
customer’s experience (CX), turn customer service strategies into revenue, and make your sales
process more effective. And when paired with the ecosystem map you made earlier, it can give
you a more holistic understanding of how people will interact with your systems & processes.
But the map itself doesn’t deliver these benefits - the mindset it creates does.
Now, there are many schools of thought concerning the customer journey map. Some say you
must complete three to ten weeks of research and interviews before you even build the map;
others believe it’s an artifact that should be put in a place of prominence in your office, or even
for the customers themselves to see. But the truth is that your business and users change over
time. In fact, every time you pivot, your customer journey pivots too. So why would you invest so
many resources into sketching out a map? The goal, instead, should be to understand how your
product fits within your customer’s life, how it influences their behavior, and how you can start
designing better experiences to meet their needs. This isn’t something to think about for three to
ten weeks out of the year - it should be something you consider every time you think about CX.
That said, we’d like you to put pen to paper and create your first customer journey map. As they
say in math class, “show your work.” This is all about taking your assumptions and making a
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visual representation of them on the page. Feel free to get creative with your actual map, but in
terms of the content you breakdown, try to make your most educated guess. Let’s go.
1. First, let’s talk about goals. You’re going to be mapping a very specific customer
interaction. Maybe it’s from the moment your customer hears about your product, or the first
time they land on your site. Once they begin this journey, what is it they hope to achieve or
accomplish? Is this different from what you want them to do?
2. How do you think this experience will play out? From the moment a customer
learns of your product until they hit purchase, download it, or receive it via UPS, what can your
customer expect to experience? What are the steps they must follow? For instance, is it “Create
an account” or “Hit Buy?” Make a list of every time your customer interacts with your brand.
What are those “touchpoints?” How do they get from where they started to where the process
ends? What does the customer do at each touchpoint? Where do these interactions happen? Is it
on your website? Social media platforms? In-person, or on the app itself? Be as clear as possible
on the what and where.
3. Who is your customer? Technically, you should make a customer journey map for
each one of your customer segments. You may know these individuals as “personas,” or
characters; but for the sake of this exercise within Rootstrap, let’s focus on your early adopter.
Who is the customer your product is the best fit for? Who’s actively searching for your product?
4. Let’s dig deeper and flesh out a basic “Empathy Map.” For your target customer
- your early adopter - go through each touchpoint and jot down how each touchpoint makes
them feel. Are there any sensory experiences, such as sight, touch, or sound? Where do you
think they might get frustrated? What do you think they want out of each touchpoint? Why do
they follow the path they do? How does each touchpoint or interaction inform their opinion of
your product? Does anything cause anxiety? How can each interaction leave a positive, lasting
impression? What does “great” look like for your target customer along the way?
5. Now that you’ve gathered all the information you need, get creative and
design a basic customer journey map. Using your touchpoints as your guide, and maybe
lines or arrows to demonstrate your customer’s journey, create a map you can use to test your
assumptions moving forward. Remember, this is just your hypothesis, so there are no right or
wrong answers. Be sure to write specific “pain points” along the journey to take into account
during and after each round of customer interviews and validation. And be mindful that this
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entire customer journey is meant to be from your customer’s perspective, so really dig deep into
their emotional state of being at each touchpoint. The more specific you are now, the more
informed you’ll be down the road.
Sketch a customer journey map for each customer segment.
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• • • • •
Alright, now that you have your customer journey map and understand what takes place
front-of-house, let’s dig deeper into the behind-the-scenes stuff. We’ll do this by creating an
ecosystem map that takes into account everyone involved with your getting your product to
market. Use your colored pencils and map out the guts of your business operations by following
the steps outlined below. In combination with your customer journey map, you’ll gain a much
clearer view of what’s going on and why.
Exercise Fifteen: Creating Your Ecosystem Map
The goal here is to increase your chances of long-term success by mapping out your business
ecosystem. Ideally, by putting pen to paper you’ll be able to discover potential roadblocks and
milestones, while thinking about your business in unexpected ways. So grab a couple of colored
pens and a blank sheet of paper to get started.
First: Identify each entity in your ecosystem and draw a circle around them.
To start, put your product’s name in the middle of the page, draw a circle around it, then begin
to surround it with the names of all entities playing a role in your business strategy. These might
be customers, users, partners, and advertisers, etc. Anyone who is receiving some sort of benefit
by participating in your ecosystem. Draw a circle around each one.
Next, determine what value is being provided or received by each entity.
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On the side of each entity, outside of their circle, jot down their core value. What are they hoping
to get out of this relationship with you? What’s the benefit to them? Is it money, customer
satisfaction, brand awareness, or something else entirely? Keep each core value to a brief
sentence.
Now that you know what your entities value, let’s determine your flow of currency.
If it’s a direct flow of currency, from one entity to another, you’ll want to draw a solid line with
an arrow between them. For instance, a direct flow would be customers purchasing your product
directly from your online store. If there are any indirect forms of payment, such as the same
customer purchasing your product through a third party or an entity earning funds through
advertising, then you’ll want to mark those with a dotted line arrow. Even if you’re using a free
model, with customers paying in time and attention, your flow of “currency” should still be
mapped out. (You can use whatever color you’d like for these arrows, but green seems to be the
most fitting.)
Next, let’s determine product distribution.
How exactly will your product reach end users? What indirect and direct distribution channels
are you planning to use? Map out the flow with solid or dotted line arrows between entities in
another color. (We suggest blue.)
Alright, now that we know who is involved in our ecosystem, how the money flows
from one entity to the next, and how our product is being distributed, let’s talk
MVP.
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Your MVP, or Minimal Viable Product, is the smallest feature set that each entity is willing to
pay for. It can be as simple as a “subscribe” button, or as complex as a fully fleshed out
prototype. There are many levels of MVP development. The most important aspect of the MVP,
however, is that you are able to use it to test the validity of your entire business model, as well as
any high-risk components. Through these tests, you’ll also gain insight into what the “end goal”
should be for your product.
Now, for your ecosystem map, you need to jot down what your MVP would be for each entity,
right next to the core values you’ve already listed. What is the smallest feature set that each
entity would willing to pay for? How will that MVP deliver on their core value? How will each
entity pay for it? Is it with money, attention, or something else?
Now that we have our MVP outlined, let’s determine the risk.
We know what each entity values, and how we plan to deliver that value in the form of an MVP -
but what risks are associated with doing this? What will you have to contend with in order to
build what you think the market needs? Is your technology difficult or costly to produce? What
minimum set of features will you need to build to attract paying customers? What
market-testable milestones will you need to reach? Go through your map and write in risks
associated with delivering value to each entity. And, finally, your ecosystem map should wind up
looking something like this:
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And last but not least, now that you’ve completed your ecosystem map, let’s create
your value path, which will take you from where you are today to your proposed
final MVP. This is your process map from beginning to end.
Take out another piece of paper for this one and turn it horizontally. Here’s what you want to do:
In a bullet point list, write the top three things you need to test, right out of the gate. Maybe it’s
to see if there’s a market for your idea in each of your customer segments. Jot that down, circle
it, then get ready to make another circle to the right (a pattern we’ll continue as we progress). In
another list, outline what’s next on the agenda to test. Maybe this is your first MVP-Interview,
and it’s a list of assumptions before you sit down with real customers to collect feedback. Circle
your list of around 3-4 assumptions, then move on to the next thing you need to test. Perhaps,
this time, it’s an MVP-Product, like a landing page with sales copy and a call-to-action that you
test by driving traffic to it and measuring clicks. Next, maybe you have another set of interviews
and bring product samples or a clickable prototype for additional feedback...and the list goes on
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and on, documenting each step of product development, customer interviews, and testing
assumptions until you reach your Final MVP. In the end, it may look something like this:
Draw your final drafts of both your ecosystem & value maps.
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• • • • •
Part Five is officially a wrap! By now you should have your product, your brand, and your
business operations ready to go. It’s been a long road, but now that you have a solid foundation,
let’s grow. See you in Part Six, where we’re going to focus on gaining traction and finally getting
those first 100 customers.
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Part Six: Launching That Bad Boy
It’s time to start gaining traction. 100 is just the beginning.
You’ve built your business from the product up, and now it’s time to focus on turning the key to
the engine and getting this show on the road. First step? Marketing. We’ve got to start
generating interest in your offer, starting with conversations, relationships, and testing your
MVP in the marketplace. Our goal? To cross the chasm and achieve mainstream success. You’re
already well on your way, so trust the process and keep pushing. It’s time to launch.
Exercise One: Well, What Are You Waiting For?
Words of Wisdom from Jeff Walker’s Launch
On Conversation
“People find conversations a lot more interesting than monologues or lectures...It’s a lot easier
to tune you out when you start shouting at them, “Buy my stuff, buy my stuff, BUY MY STUFF!
So instead of shouting at your prospects, what if you engaged them in a conversation?”
“If you want to make your business and your marketing memorable, then your marketing
needs to tell a story. That doesn’t mean you have to become a novelist, but you need to tell an
engaging story about your products and services and why they matter to your prospect. And
you need to communicate that story to your prospects.”
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“You can’t rely on one single marketing message; instead you need to think in “sequences.”
Instead of relying on a single communication to make your point, you use a sequence of
communications that build upon each other.”
On Relationships
“I frequently hear people complain about their clients - but the thing is, they’re the person who
picked those clients. Remember, if you want different clients, then change your business,
change your product, change your messaging, change your marketing. You’re the one
attracting those clients, and making the decision to work with them...so pick great ones.”
“My current business has literally been created by doing promotional partnerships with
businesses that might be considered direct competition. But instead of competing, we support
each other. The end result is that we don’t have to worry about splitting up the pie. Instead we
work together and grow a much bigger pie.”
On Lists
“List building is one of the core strategies I always focus on in every business I own...In the
online world, your list is everything. EVERYTHING. In fact, it really is hard to fathom the
power of an email list until you have a list and you push that “send” button….and then within
seconds you start to see the people on your list responding and clicking through to your web
site. And, of course, since there is so much data and tracking online, you get to see the results in
real time.”
“...your email is landing in a lot of individual inboxes. Every subscriber on your list is an
individual, a unique person. I know I’m stating the obvious, but many list owners seem to
forget this. I hear them talk about sending a “blast” to their email list - their term for an email
broadcast. But think about it...does anyone like to get blasted?”
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“...the easiest way to increase the responsiveness of your list is to increase the connection and
relationship you have with your list….In terms of pure response rates, an email subscriber is
worth many times more than a social media subscriber. In fact, the latest tests I’ve seen have
shown that email is at least 20 times more powerful than a Facebook list. In other words, an
email list of 1,000 people will outperform a Facebook following of 20,000.”
On Growing
“When you first start out, you will likely have limited capital. And since you’ll be doing most
everything yourself, you’ll definitely have limited time. Picking the right opportunity is
HUGELY important. Making the wrong choice can set you back weeks, months, or even years.”
“The more successful you become, the more ‘opportunities’ you will have. This is what we call
“deal flow.” You start to have success, you build up a series of assets, you prove your worth -
and all of a sudden everyone wants to do a deal with you...That’s one of the reasons why it’s
easier to go from $100,000 to $1,000,000 than it is to go from zero to $1,000.”
“If you’re going to be in business, and you’re going to have long-term success, then you need to
be a perpetual student. Your market, clients, and competitors aren’t going to stand still, and
you can’t afford to either….You have to go to school. And you’re going to have to keep going
back to school.”
At first glance, how do you think you should market your product?
What are your inital assumptions? Where do you think you’ll find your customers?
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“An entrepreneur is someone who jumps off a cliff and builds a plane on the way down.” - Reid
Hoffman, Co-Founder of LinkedIn
• • • • •
Now that you’ve listed your general assumptions regarding marketing your product, let’s turn to
how you’ll achieve traction through these channels. In the section below, we’ll outline major
channels available online and off. See which ones appeal to you, and weigh those options against
your inital ideas. Are there more options available than you had originally thought, or were your
assumptions spot on? How can you work smart, not hard, in gaining paying customers over the
shortest amount of time?
Exercise Two: Gaining Traction
Lessons on Growing Your Business From Traction: How Any Startup Can Achieve
Explosive Customer Growth by Gabriel Weinberg and Justin Mares
“Traction is growth. The pursuit of traction is what defines a startup.”
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“Often, the most underutilized channels in an industry are the most promising ones….Get one
channel working that your competitors dismiss, and you can grow rapidly while they
languish.”
“Spend 50 percent of your time on product and 50 percent on traction.”
Understanding Your Traction Channels
Targeting Blogs
Finding niche blogs with a relevant amount of traffic according to your scale
● Pro: Influential blogs are easy to find through basic searches, and you can start small
● Con: Very difficult to scale, as there are a limited number of relevant, high-traffic blogs
Publicity
Getting recognition in newspapers, magazines, television, journals, etc.
● Pro: Most online publications need content just as much as you need publicity
● Con: Reporters get endless pitches these days; hard to get attention and create an
intriguing story
Unconventional PR
Conducting publicity stunts, contests, and other unexpected events that get noticed
● Pro: If done right, they can propel your name recognition virtually overnight
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● Con: Can be time-consuming and difficult to execute, especially with limited resources
SEM (Search Engine Marketing)
Advertising directly to consumers who are searching on Google and other search engines
● Pro: Can be extremely targeted, trackable, and measurable with little upfront cost
● Con: Keywords can be saturated; a ton of variables to test (keywords, copy,
demographics, etc)
Social and Display Ads
Placing advertising on sites like YouTube, Reddit, Facebook, Twitter, etc.
● Pro: Display - great for brand awareness & new customers. Social - much higher
conversion rates
● Con: When was the last time you clicked on a banner ad? Impressions don’t equal
conversions
Offline Ads
Buying TV or radio spots, billboards, newspaper & magazine ads, direct mail, flyers, etc.
● Pro: Easy to start small; Detailed demographics usually available; Can often find
discounted ad space
● Con: Offline ads are much harder to track than online. Design is critical though, so don’t
cut corners
SEO
Optimizing your website to show up organically in relation to keyword searches
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● Pro: You can often scale at low cost, and SEO can amplify your other traction channels
● Con: A ton of competition and saturation. Can’t half ass it. Campaigns need to be
carefully planned
Content Marketing
Producing relevant, well-written content (often goes hand-in-hand with SEO)
● Pro: Successful content is evergreen, driving new customers for years; can position you
as an expert
● Con: Overcoming writer’s block and creating meaningful, relevant content is harder
than it looks
Email Marketing
Building a list of prospects & customers whom you retain and engage with regularly
● Pro: Extremely customizable; your list is one of the most important assets your business
can have
● Con: Copywriting is an art - takes time & skill; must test everything (subjects, timing,
formats, buttons, etc.)
Viral Marketing
Getting existing prospects or customers to share your product with their network
● Pro: Low customer acquisition cost; repeatable loop; nothing beats word of mouth and
referrals
● Con: Going ‘viral’ is incredibly rare; testing and formulating your viral coefficient is no
simple feat
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Engineering As Marketing
Developing free tools, widget, microsites, and the like to drive traffic
● Pro: Giving away useful tools, widgets, and the like can produce rapid growth and
excitement
● Con: Difficult, both mentally and financially, to use engineering for anything other than
product dev
Business Development
Creating mutually beneficial partnerships to grow your audience
● Pro: Allows you instant access to large swathes of customers, resources, or both
● Con: Deals are hard to execute; a lot of moving parts; can be difficult to find the right
decision makers
Sales
Building leads, qualifying them through a funnel, and converting them into paying customers
● Pro: Money in the bank; allows you to scale if you can develop a repeatable process
● Con: The sales funnel is an arduous process; people hate to be ‘sold’; uses a lot of
internal resources
Affiliate Marketing
Working out a deal with other people or companies in exchange for leads or sales
● Pro: Takes pressure off of sales; vast areas of opportunity; instant access to other
communities
● Con: Markets can be oversaturated; have to give away a cut of your profits; up-front
costs can be large
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Existing Platforms
Leveraging the audience of larger websites, platforms, apps or networks
● Pro: Can piggyback off these sites to find a community; allows you to exploit gaps in
your industry
● Con: Most platforms are very oversaturated; extremely difficult and risky to take
chances on new platforms
Trade Shows
Showcasing your product in person to prospects, vendors, investors, industry gurus, etc.
● Pro: Opportunity to meet prospects, investors and partners face-to-face; full of relevant
contacts
● Con: Can be expensive, both to attend and to provide promotional materials or
giveaways
Offline Events
Sponsoring or organizing events and other meetups to engage with prospects
● Pro: Engage directly with prospects; great for companies with large learning curve or
long sales cycle
● Con: Can be difficult to fill a room without name recognition, even with sites like
Meetup.com
Speaking Engagements
Positioning yourself as an expert by talking with people in your industry
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● Pro: Easy to get started; establishes you as an expert; can lead to larger gigs; allows for
instant feedback
● Con: Public speaking is terrifying for some; time-consuming to prepare a talk; need to
have a good story
Community Building
Building a movement that encourages or inspires people to get involved
● Pro: Helps your fans feel like they’re a part of something bigger than themselves; drives
organic leads
● Con: Long-term strategy - doesn’t happen overnight; opens you up to criticism
Which of the 19 traction channels are best suited for you?
Try to narrow it down to 2-3.
“A lot of would-be founders believe that startups either take off or they don’t. Actually, startups
take off because the founders make them take off. You can’t wait for users to come to you. You
have to go out and get them.” - Paul Graham, Y Combinator
• • • • •
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Now that you’ve chosen channels to focus on, let’s dive further into how to use your resources
wisely. This means exploring what’s known as “The Bullseye Method.” Here’s how it works:
Exercise Three: Narrowing Your Marketing Scope
The Bullseye Method, As Outlined in Traction
What is Bullseye?
It’s a method to help you determine what traction channels you should focus on, since you’re
probably not going to have the time or resources to invest in all 19 of them. Or, as Peter Thiel put
it: “It is very likely that one channel is optimal...if you can get even a single distribution
channel to work, you have a great business.”
How does it work?
The Bullseye method is made up of three rings: what’s possible, what’s probable, and what’s
working. By addressing each ring of the Bullseye, you are forced to let go of bias and look at
each traction channel objectively to see which ones will be best for your business.
The Outer Ring: What’s Possible
Do a brainstorm for every traction channel available, and don’t skimp on the research. Look for
other examples, success stories, and just as important - stories of failure. Get to know each
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channel in relation to your industry if possible. You want to figure out what success would look
like for each channel.
The Middle Ring: What’s Probable
Once you have your outer ring complete, take a step back. Which ones look the most promising?
Once you have a handful selected, figure out what kind of minimal investment you can make
into each channel. Hint: a drop-off occurs after three channels, so don’t go crazy. You want to be
able to answer: What’s your cost per acquisition? How many customers are available? And, are
they even the right customers you should be targeting? You don’t need to set the world on fire
just yet. Your goal is to simply figure out which channel looks the most promising. So keep it
cheap at this stage - no more than $500-$1000 per test.
The Inner Ring: What’s Working
Which channels are showing the best results? How can you optimize those results? Don’t get
distracted by other marketing channels that are underwhelming. You may even be able to focus
on just one core channel and squeeze every ounce of value out of it before moving on to the next
channel.
Ask yourself: what’s possible, what’s probable, and what’s working?
Take into account access, resources, time, and energy. Be as realistic as possible.
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“Bullseye works hand in hand with Lean, or with any other product development framework.
What Lean is to product development, Bullseye is to traction.” - From Traction
• • • • •
Alright, on to building your “tribe” or community online. This is mainly done through social
channels; but no two channels are created alike. Each one has a different structure, audience,
and mindset. Certain marketing messages and formats also do better on certain platforms over
others. So, here is one area where style really comes into play. Consider where your customers
are already socializing, and the platforms they prefer. Then, cross-reference that with the style of
marketing you wish to pursue. Somewhere in the middle is your sweet spot for building a
powerful network of users.
Exercise Four: Social Channels and Community
Getting Familiar With the Major Social Platforms
Facebook
World’s largest social media platform. Used for messaging, chats, professional services, news,
events, live streaming, advertising, analytics, reviews, and much more.
● The Numbers:
○ 79% of internet users have a FB account
○ 1.18 billion daily active users
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○ 1.09 billion mobile daily active users
○ 100 million hours of daily video watch time
○ 50 million active small business pages
○ 79% of FB ad revenue comes from mobile ads
○ 25-34 yr olds make up almost 30% of total users
○ FB users are 76% female (of 100% females) and 66% male (of 100% males)
○ 74% of people say they use Facebook for professional purposes
Twitter
A major social channel, used for industry news, brand awareness, customer service, advertising,
analytics, influencing, social movements, and more.
● The Numbers:
○ 317 million monthly active users
○ 100 million users log in every day
○ 93% of organizations use Twitter regularly for marketing
○ About 50% of active users follow brands and companies
○ 40% of users learn about products and services through Twitter
○ 47% of marketers use Twitter as their most favored channel for customer engagement
○ 63.5% of marketers voted Twitter as their favorite channel for engagement
○ 86% of Twitter’s ad revenue comes from mobile
○ 77% of users feel more positive about a brand when a tweet is replied to
LinkedIn
Largest social channel for business professionals, including job searching, recruiting, hiring,
advertising, content marketing, thought leadership, showcasing products, networking, and
more.
● The Numbers:
○ 25 million LinkedIn profiles are viewed every day
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○ Over 467 million registered users
○ 41% of users log on via mobile
○ 40% of users check daily
○ 56% men, 44% women
○ 67% of digital marketers commonly use LinkedIn
○ 19.7 million slideshares are uploaded to LinkedIn
○ Users conduct 1 billion searches per day
○ 94% of B2Bs use LinkedIn for content marketing
Instagram
Most engaging platform for businesses. Used for sharing high-quality photos and videos, stories,
marketing, influencing, advertising, social awareness, movements, and more.
● The Numbers:
○ 32% of Internet users are on Instagram
○ 95 million photos and videos shared each day
○ Most engaging platform after Facebook, with more than 60% logging in daily
○ 51% men, 49% women
○ Average user spends 25 minutes a day on the platform
○ 53% of users follow their favorite brands on Instagram
○ 34% of marketers plan to use Instagram
○ Hashtags & location get most user engagement (at least 1 hashtag = 12.6% more
engagement)
○ 90% of users are under 35
○ Engagement with brands on Instagram is 10x higher than Facebook, 54x
higher than Pinterest, and 84x higher than Twitter.
Pinterest
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Typically much higher usage by women than men. Great for bookmarking, promotions,
inspiration, connecting, relaxing, advertising, driving traffic, and more.
● The Numbers:
○ 31% of Internet users are on Pinterest
○ 55% of users are shopping or looking for products
○ A third of users prefer Pinterest over Google search
○ Average user spends 21 minutes per day on the platform
○ 76% of top brands and 40% of digital marketers use Pinterest
○ 75% of usage occurs on mobile
○ 67% of users are millennials
○ Two thirds of all Pins are from a business website
○ 93% of Pinners use Pinterest to plan or make purchases
○ Average amount per order that drives from Pinterest is between $140 and $180
○ 90% of users want to purchase
Snapchat
While Instagram is more polished, Snapchat is more off-the-cuff, casual and personal. Great for
getting laughs and reactions, sharing moments and live events, exclusive content, perks &
promotions, influencing, and more.
● The Numbers:
○ 400 million Snapchat stories created every day
○ 150 million daily active users
○ 60% of millennials use Snapchat
○ 300% increase in usage over the last 3 years
○ More users than Twitter, Pinterest, or LinkedIn
○ 70% of users are female, 30% male
○ Average user spends 25 minutes per day
○ 30% like Snapchat because their parents don’t use it
○ 2nd most used platform after Facebook
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YouTube
The dominant video platform on the Web, featuring subscriptions, live streams, news, custom
thumbnails and URLs, paid content, monetization through partnerships, and more.
● The Numbers:
○ Over a billion users watching a billion hours of video each day
○ YouTube reaches more 18-49 year olds than any cable network in the U.S.
○ More than half of YouTube views come from mobile
○ Number of channels earning six figures is up 50% year over year
○ 48% of marketers plan to add YouTube to their content strategy in the next year
○ 71% of businesses w/100+ employees use YouTube (38% of self-employed ppl use)
○ 51.9% of marketers name video as the type of content with the best ROI
○ 4 in 5 consumers believe that video demos are helpful
○ Shoppers who view video are 1.81x more likely to purchase
○ Marketers who use video grow revenue 49% faster than non-video users
Medium
Not a lot of stats or demographic information available yet for this newer platform, but makes a
great addition to a company blog. Great for content marketing, linking back to sites or
promotions, engaging with customers through comments, and tracking analytics.
● The Numbers:
○ 8% of marketers plan to add Medium to their marketing plan in the next year
○ 60 million unique monthly readers
Reddit
Most popular discussion board online. Allows users to share, vote, and discuss topics based on
merit and shared interests. If you have a target customer in mind, there’s almost certainly a
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Subreddit where they’re hanging out. You can also encourage user submissions and comments,
provide customer service, build a community, and even conduct interviews or AMAs (Ask Me
Anything).
● The Numbers:
○ 250 million users
○ 853,824 Subreddits and counting
○ 50,000 active Reddit communities
○ 8 billion monthly pageviews
○ 25 million daily votes
Meetup
Newer businesses can use this platform to network, drive leads, and engage with prospects.
Allows you to position yourself as a thought leader through small speaking engagements, or test
ideas and get direct feedback from people with similar interests.
● The Numbers:
○ 32.20 million members
○ Almost 300,000 meetup groups
○ Over 600,000 monthly meetups
○ 390 million monthly RSVPs
https://socialpilot.co/blog/151-amazing-social-media-statistics-know-2017/
https://www.youtube.com/yt/about/press/
https://www.hubspot.com/marketing-statistics
https://www.meetup.com/about/
http://expandedramblings.com/index.php/reddit-stats/
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How are your prospects communicating with each other currently?
Where are they hanging out? What are they talking about? Are they on multiple platforms?
Where’s the crossover?
“A brand is no longer what we tell the consumer it is - it is what consumers tell each other it is.” -
Scott Cook, Founder of Intuit
• • • • •
OK, so you’ve chosen your platform. Now you must find your audience within that network.
Here are ten tips to get your started.
Exercise Five: Finding Your Audience
10 Tips on Building Communities Through Social Channels
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1. Regardless of the platform(s) you plan to use, have a goal fleshed out and a
roadmap to get there. Whether you want to start conversations, learn about potential market
segments, get feedback, lead people to your landing page, get signups for your blog, etc., always
make sure you’re driving towards something.
2. Stick to a budget and start small. Think about how much you’re willing to pay for
every lead, conversion, or referral. If you budgeted $1,000 for a particular campaign and got just
one or two conversions, would that be enough? If not, how many leads or conversions would it
take to justify the expense? Can you measure ROI?
3. Don’t feel the need to be on every platform. If you don’t have the time, energy or
resources to be consistent on a given platform, consider leaving it out of your marketing plan.
Instead of trying to juggle five or six platforms, what if you just crushed it on one or two?
4. If you want engagement, you have to engage. Ask questions, share testimonials
and stories, run contests, conduct polls about the problem that your product solves, play games,
tease out parts of your offer, create discounts or promo codes, give away free downloads in
exchange for an email address, etc.
5. Think smaller ponds, not wider nets. If targeting capabilities are available, use
them wisely. Go back to your customer profile from Part Two: how many of those demographics,
behaviors, and interests can you go after simultaneously? The less noise you have to compete
with, the better.
6. Speaking of less noise, you could take a chance on a new platform. After all,
the bigger brands are usually slow to come around, so exploring new platforms early could
provide an area of opportunity, especially if you’re going after a younger crowd. It might position
you as the ‘hip’ company who gets it.
7. Use high-quality images and video whenever possible. It’s definitely an upfront
investment, but a quality photoshoot or video series can make you look more professional
overnight. And if you’re able to capture multiple settings, poses, segments, etc., you can stretch
the utility, repurpose, and use the content for years to come.
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8. Share first, sell second. Hopping onto a platform and shouting “I’m here! Check out
my offer!!” isn’t going to get a lot of people to care. If you want to build trust with people, you’ll
have to become a resource - for opinions, facts, jokes, wit, reviews, educational content -
whatever you’re good at. What worldview are you looking to connect with? Is your personality
shining through, or are your social media automation bots just pushing your products and
retweeting stuff that people could find anywhere?
9. Plan ahead. Be mindful of upcoming holidays and events, or try to capitalize on weekly
hashtags and trends. Are you creating useful content (please say ‘yes’)? What’s your content
schedule looking like? When you plan on publishing material, is there a holiday or event that
might coincide? (Note: be careful when riding the coattails of other hashtags. See what they’re
actually about first - you don’t want to pull a DiGiorno and hop on the domestic violence
hashtag #WhyIStayed just to promote your mediocre pizza. Tends to send the wrong message.)
10. Finally, don’t take yourself so damn seriously. You don’t have to be grandiose or
over-the-top. You don’t need to tell people that you’re “revolutionizing” anything, or “changing
the world.” Maybe you’re just the somewhat aloof company that’s nonchalantly building great
products, without bragging or yelling. With so much noise on the Internet, you might be
surprised at how far a little subtlety can take you.
How can you find your audience?
Based on the platforms you’ve chosen, what do you think will appeal to them? What’s the game
plan?
“You have to understand your own personal DNA. Don't do things because I do them or Steve
Jobs or Mark Cuban tried it. You need to know your personal brand and stay true to it.” - Gary
Vaynerchuk
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• • • • •
Just having a profile on a social media platform won’t get your noticed. There’s far too much
noise to find traction by simply being present. You’ve got to grab attention and steer the
conversation your way. Below, you’ll find a few mini case studies outlining how other brands
have achieved the impossible through social channels. Maybe their tactics will inspire a few of
your own.
Exercise Six: Making Some Noise Online
A Few Recent Social Media Success Stories
Buzzfeed Tasty - The Power of Social Video
“When something really works on one platform, we’re learning how to adapt it to other
platforms. It’s not just you make something and then you can put it everywhere. You can make
something, learn from your audience and then adapt it for other places.” - Jonah Peretti,
Co-Founder of Buzzfeed
● As of October 2016, Tasty has created over 2,000 recipe videos, reaching 500 million
people in a month.
● In September of 2016 alone, they received 1.8 billion views.
● The BuzzFeed Tasty YouTube channel has over 3.3 million subscribers.
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● While those numbers are impressive, they see shares as a better measure of success, i.e.
engagement is more important than vanity metrics.
● Roughly half of Buzzfeed’s revenue comes solely from these videos.
● These videos have no fat on them. They’re quick and flashy, making them easy to enjoy
and share.
http://www.adweek.com/digital/how-tasty-mastered-social-publishing-part-buzzfeed-s-plan-m
ake-50-revenue-video-174325/
Herschel Supply Co. - Actually Talking to Customers
“Different social networks attract different audiences. For instance, our Instagram account
attracts aspiring photographers; our Pinterest following caters more towards females;
Twitter attracts those interested in our product releases and news stories. Knowing this, we
share relevant content and grow distinct communities.” - Allison Butula, Social Media Manager
at Herschel Supply Co.
● In 2011, Herschel sold 8,000 bags. In 2015, they sold 4.5 million.
● They’ve turned down over 500 offers from investors.
● Herschel didn’t post a single photo on its Instagram page until they got to 5,000
followers.
● By creating a customer service channel on Twitter (@HSC_Support), they’ve increased
customer satisfaction by 20% and boosted positive brand sentiment by 60%. They also
constantly searched #Herschel and #HerschelSupply for additional mentions, inquiries,
problems, or customer sentiment to engage with.
● They gained popularity and built a community by creating a ‘Well Traveled’ blog.
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● Using the coinciding hashtag #WellTravelled, they allowed customers to partake in the
community by showing off their bags in different settings. This inspired customers to get
involved and express their creativity.
https://hootsuite.com/resources/case-study/social-media-growth-secrets-from-herschel-supply
https://www.entrepreneur.com/article/276904
Cards Against Humanity - Staying True to Themselves
“Just help people. If you are one of those people who has figured out what you are about and
what you believe in, that’s what being a philosopher is about. Just talk about those ideas and
help people who have not yet figured it out.” - Max Temkin, Co-Founder of Cards Against
Humanity
● They’re constantly putting the customer first, offering a constant stream of new
additions, and allowing users to remix the game as they see fit.
● They’re hilarious, irreverent, and downright offensive at times. And their attitude to
those who might be offended? ‘Deal with it and lighten up, or don’t play.’
● CAH is constantly creating viral campaigns and unconventional PR: Creating a
Superbowl ad with nothing but ‘Advertisement’ written on a potato; Black Friday deals
consisting of offering nothing for $5, or the ability to send bull feces to a friend (or enemy); ‘Pay
what you want’ holiday packs; sending 55 gallons of lube to the Oregon armed militia; even
digging a giant hole for no apparent reason.
● They connect with a certain worldview through philanthropy. For instance, they made
over $70K from their pay-what-you-can holiday pack, and donated it all to the Wikimedia
Foundation. CAH has also donated to the Chicago Design Museum, a local Chicago radio station,
Heifer International, and more.
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● CAH creates custom URLs for most of its promotions, events, or partnerships, enabling
them to track the success of each campaign with detailed analytics.
How do you plan to grab attention?
Why are people going to like you? Can you make people laugh, feel creative, or even a little
rebellious?
“The central question for the Internet is not, Is this entertaining? but, Will this get attention?
Will it spread?” - Ryan Holiday, Trust Me, I’m Lying
• • • • •
Of course, once you start buiding momentum for your business, you may want some outside
help to scale. That’s where fundraising comes into play. This somewhat mythical process can be
challenging for first-time product owners, so it’s best to get advice from someone who’s been in
the trenches and helped a few others achieve success in the process. Here’s Paul Graham’s
advice on fundraising:
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Exercise Seven: Getting Outside Money
Rules for Fundraising: Advice from Y Combinator’s Paul Graham
1. Don’t raise money unless you want it and it wants you.
If you’re not after rapid growth, or you’re not ready to convince investors, don’t seek out
fundraising. You have nothing to gain, and everything to lose.
2. Be in fundraising mode or not.
Convincing and negotiating with investors takes time, which you should set aside in your
schedule. Don’t get sucked into meetings when you really should be focusing on your business.
3. Get introductions to investors.
Raise money on your own first, then allow fellow founders or investors to introduce you to
others. Sites like AngelList, FundersClub, and WeFunder should be seen as merely auxiliary
sources of money.
4. Hear ‘no’ until you hear ‘yes’.
Unless an investor makes you a definitive offer with no contingencies, you should conclude that
they are saying “no.” Don’t get led on by flowery, non-committal language. It’s in the investor’s
interest to “wait and see.”
5. Do breadth-first search weighted by expected value.
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Measure expected value by how likely an investor is to say ‘yes’, then multiply that by how good
it would be if they did. Don’t let your desire for a specific investor influence your estimate of how
much they want you, and meet with multiple investors in parallel, rather than serially, giving
higher priority to the more promising ones.
6. Know where you stand.
Judge investors by their actions - not by their words - and before you leave a meeting be sure to
ask what happens next. Don’t be pushy, but know where you stand. If they evade the question,
expect the worst. Being inexperienced at fundraising should not be a deal breaker.
7. Get the first commitment.
Once one investor has committed to you, it’s easier to get others to follow suit. Naturally, money
from friends and family doesn’t count. You need a legitimate offer from a respected investor to
get that ball rolling.
8. Close committed money.
You don’t have a deal until the money is in the bank. Investors are prone to buyer’s remorse, and
they have plenty of excuses on hand to justify why they changed their mind within 24 hours. If
they decide to invest, establish a timetable for when you should receive the funds - and make
sure they get there.
9. Avoid investors who don’t “lead.”
In other words, don’t place a high value on investors who only invest after other investors have
led the charge. These individuals will talk a lot about “leads,” or how they’ll only invest once you
have a lead. Talk to these guys last, if at all.
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10. Have multiple plans.
You don’t need a fixed plan, or goal amount, when fundraising. If asked how much you intend to
raise, it’s really an investor trying to gauge if you’re a suitable recipient for how much they want
to spend. Instead of giving a ballpark amount, tell the investor multiple levels from $0 raised to
a couple million raised and what you would do, specifically, with that money. Different plans
match different investors. If you’re thinking upper limits to your plans, multiply the number of
people you want to hire times $15K times 18 months.
11. Underestimate how much you want.
You need to appear that you’re doing well with fundraising. If you say you’re planning to raise
$500K, and only reach $150K - that reads as failure. But if you say you’re looking to raise
$250K, then $150K means that you’re more than halfway there, which is appealing for investors.
You can always choose to raise more.
12. Be profitable if you can.
If you can get to profitability with zero outside investment, then you’re already in a strong
position of attack that will appeal to investors. No one wants you if you seem desperate. Keep
expenses low and get yourself to the point where you don’t even need to raise money.
13. Don’t optimize for valuation.
Your valuation is not that important, and fundraising is not the test that matters - revenue is!
Your focus should be on 1) getting the money you need to make your company successful, 2)
getting good investors, and 3) your valuation. It’s easier to raise money with a lower valuation
than one you can’t live up to.
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14. Yes/no before valuation.
If an investor is pushing for you to set a price, tell them that valuation is not the most important
thing to you and that you’re looking to partner with investors who want to partner with you.
Offer to talk first about whether they want to invest at all, then determine a price. If this is the
first investor, commit to as low a price as they need to.
15. Beware “valuation sensitive” investors.
These are compulsive negotiators who will try to take up your time and push your price down.
You don’t want these for first investors because they can push your price down too low, and set
an artificial valuation. Approach these towards the end of fundraising; but if they do come across
your path, slow down your interactions with them.
16. Accept offers greedily.
A greedy algorithm doesn’t try to look into the future. It takes the best of the options available
right now. This is how you should approach fundraising from phase 2 onwards, with your
priority always being to get back to running your business. In other words, don’t reject an
acceptable offer in the hope that a better one will come along in the future. A deadline of three
working days is acceptable, but if an investor gives you a shorter period of time to accept their
deal, call their bluff.
17. Have one person handle fundraising.
If you have multiple founders, choose one to do fundraising so the other can focus on the
business. That founder should then be your CEO, no matter their background. Consider bringing
the other founder(s) into the fundraising process only as a final step with an investor interested
in investing a lot. This occasion should be treated the same as bringing home a
boyfriend/girlfriend to meet mom and dad. But don’t forget about growth!
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18. You’ll need an executive summary and (maybe) a deck.
Your one-page executive summary should remind the investor about what you plan to do, why
it’s a good idea, and what progress you’ve made so far. If you’re good at presentations, build a
deck. Otherwise, just focus on having a strong conversation with investors. If they ask for your
materials beforehand, they’re not really interested; and if you give out copies, expect them to
find their way to the hands of your competitors. It’s merely the cost of doing business.
19. Stop fundraising when it stops working.
Don't keep sucking on the straw if you're just getting air. It's not going to get better.
20. Don’t get addicted to fundraising.
Fundraising will not make your company successful; but if you’re good at fundraising, it can
deceive you into believing that you are already successful, and at the expense of your business.
21. Don’t raise too much.
If you raise more than you’re worth, it sets impossibly high expectations. Your valuation is
expected to rise each time raise money. If you start out with a high valuation, you have nowhere
to go but down. And the more your raise, the more you spend, which can trigger a downward
spiral for your company.
22. Be nice.
The safest strategy is to never appear arrogant, especially if you’re new to the game. If you’re
doing well, don’t let it go to your head. The startup community is small, and word gets around.
Be nice, even if an investor rejects you. You never know when they might come back to the table.
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Other Paul Graham Tips:
● Markets will not cut you a break.
● Investors evaluate startups the way customers evaluate products.
● Raising money from investors is harder than selling to customers because there are so
few of them.
● You’re unlikely to have more than 10 interested investors at a time.
● Investors constantly have to make decisions about things they don’t understand, and
more often than not, they get it wrong.
● Investment decisions are big decisions.
● The biggest factor in an investor’s opinion of you is the opinion of other investors.
● Startups live and die on morale, so don’t let fundraising get you down.
● If bootstrapping, you can choose either the short, sharp pain of raising money, or the
chronic ache of consulting.
● The lower your expectations, the harder it is to be disappointed.
● Assume that investors will always let you down, and that whatever deal you have going
on will fall through.
● Raising money always takes longer than expected.
● Put your company first.
● And don’t assume that someone interested in investing will stay interested - if you have a
hot prospect, close them now or write them off.
Sources:
http://paulgraham.com/fr.html
http://www.paulgraham.com/fundraising.html
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How do you plan to get funded? What’s the next step?
Don’t just ask for money because you think it’s what you should do. Have a plan.
“Investors have boards, questionable taste in clothes, and high expectations, but they offer little
strategic value or creativity other than capital. Even worse, they’re your permanent Sugar
Daddy. Yes, there are circumstances where there’s strategic fit - but if you’re looking to take on
investment purely because that’s what the cool kids are doing, you need to rethink your
long-term business strategy.” - Ben Lee, cofounder of Rootstrap
• • • • •
If you’re planning to present your idea to VC firms and angel investors, you may consider
building a pitch deck enhanced by a solid presentation. Naturally, public speaking is one of
those great fears many people have in life, but when you’re properly prepared, those fears will
surely melt away. Here’s a compilation of advice from successful entrepreneurs on how to
properly pitch your big idea.
Exercise Eight: Presenting Your Idea
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The Three-Part Pitch: Advice from Award-Winning Author and Professional
Speaker Geoffrey James
What makes a great pitch?
1. The Benefit - the reason the customer might want what you’re selling.
a. Wrong: “We sell inventory systems.”
b. Right: “Manufacturers use our system to reduce their inventory costs by 50%.”
2. The Differentiator - the reason the customer might want to buy from YOU.
a. Wrong: “We’re industry-leading and best-in-class…”
b. Right: “We have a patented method that delivers materials the day they’re needed.”
3. The Ask - if the customer shows interest, you need to pose a question.
a. Wrong: “Here’s my card. Give me a call if you’re interested.”
b. Right: “Maybe we should run some numbers. What’s your availability next week?”
The 10/20/30 Rule From Guy Kawasaki: 10 Slides, 20 Minutes, 30-Point Font
“Pitching is usually used to raise money. But pitching, more generically, is about the process of
seeking agreement. You can seek agreement for money...to recruit...for partnership...or for sales.
You know that Latin saying ‘I think, therefore I am.’ - for an entrepreneur it is ‘I pitch, therefore
I am.’ An entrepreneur is always pitching.”
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Your 10 Slides:
1. Title
2. Problem
3. Solution
4. Business Model
5. Underlying Magic
6. Marketing and Sales
7. Competition
8. Team
9. Projections
10. Status and Timeline
“Many people think that if you put 50 slides together, the audience will be overcome with shock
and awe, and all they can ask is, ‘How can I wire you the money?’ I have never, ever seen that
happen. The purpose of a pitch is to get to the next stage of due diligence...not to close.”
Why 20 Minutes?
“You should be able to use these 10 slides in 20 minutes. You may have a 60-minute meeting,
but I guarantee you it will start late. The partners from the firm will come in late. You’re using a
Windows laptop and you can’t make it work with the projector. Something will go wrong.”
Why 30 Point Font?
“The single recommendation will prevent you from getting in trouble with most slides. Lots of
people like to use 8, 10, or 12 point font. They like to write out the entire paragraph, and then
they read the paragraph. People can read faster than you can talk. So if you put all the text you
want up on the slide, they will read it (if they can see it), and they’ll be done before you’ve
explained it. If you think this is too dogmatic, let me give you an algorithm: find out who the
oldest person will be in the meeting, take that age, and divide it by two. So unless you’re
speaking to 16 year olds, do not use 8 point font.”
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Richard Branson’s Top Tips For An Elevator Pitch
“As I have written previously, the first step toward delivering a great pitch is to keep it human,
since far too many presentations and speeches can turn artificial and wooden quite quickly. Let
your passion shine through by being yourself and allowing your points to come across naturally.
Use humor to connect with your audience and demonstrate your creativity.”
“A great pitch can do many things. It can convince potential investors and clients that you are
worth taking a chance on. It can also help you recruit top talent that can help your business
expand. These are essential ingredients for a successful venture. Keep in mind that people want
to invest in people. So talk about your previous successes.”
“For instance, if you have succeeded in a business once before, people will believe that you can
do it again. If not, highlight your skills and connections: What abilities of yours will help make
this business a reality? What deals or partnerships have you put in place to help execute your
vision?”
What will your pitch deck look like?
Does it tell a story? Will potential investors see the value and understand exactly what you’re
asking of them?
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“My attitude has always been, if you fall flat on your face, at least you’re moving forward. All you
have to do is get back up and try again.” - Richard Branson
• • • • •
After creating a promising pitch deck, you’ll need to stand in front of your judges and convince
them to bet on you. Here’s advice from a designer on how to present properly. Remember:
portraying yourself as confident and competent is part of the pitch, especially when you’re
asking for money.
Exercise Nine: More On Presenting
Excerpt from Mike Monteiro’s 13 Ways Designers Screw Up Client Presentations
Goal: To do good work and present it well.
“Work that can’t be sold is as useless as the designer who can’t sell it.”
1. You’re the expert, and you’re not there to be someone’s friend, make them happy, or
avoid unpleasant conversations.
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2. Don’t sit down! Get on your feet and lead the meeting. Not only will your voice carry
better, but you’ll be seen as an authority figure. Be sure to keep your hands out of your pockets,
don’t cross your arms, and dress the part.
3. Never start with an apology or disclaimer. Be prepared, on time, and confident.
4. Don’t waste your audience’s time. They have lives and other things they’d rather be
doing, so thank them for their time, tell the why they’re involved, what their role is, what they
can expect from your presentation, and what you expect of them.
5. Never explain what they can read, see, or determine for themselves. Sell the
benefits of your work, not the research. Tell your story.
6. Have someone else take notes that can be shared after the meeting. You’re too busy
presenting.
7. Never read from a script. Remember: your presentation is a show. Build excitement
and reveal a well-crafted narrative. “You’re a scientist when you work, and a snake charmer
when you present.”
8. Don’t get defensive. Your work is not an extension of you. If you get critiqued, listen.
And don’t feel that you have to defend yourself or your work. Take the feedback graciously.
9. Talk about your work as it relates to your audience. You don’t want to make
them uncomfortable because they don’t know anything about tech, design, or whatever it is
you’ve been working on. Sell them on the experience.
10. Don’t talk about how much work you put in. It makes you seem defensive and in
need of validation.
11. Don’t react to questions as change requests.
12. Don’t ask, “What do you think?” You’re opening yourself up to the wrong kind of
feedback. Your audience doesn’t know what kind of feedback you’re looking for. During your
presentation, you could say: “This is the kind of feedback I’m looking for today…” Then, ask far
more specific questions that relate to the expertise of your audience.
13. Finally, never ask, “Do you like it?” You’re not an expert in their eyes after that.
Source: http://muledesign.com/2014/09/13-ways-designers-screw-up-client-presentations/
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How are you going to get investors to buy in?
You may have to present multiple times. Are you confident in your pitch and the process?
“A solid process lays the foundation for a healthy culture, one where ideas are evaluated by merit
and not by job title.” - Eric Ries, The Lean Startup
• • • • •
So, what happens if you can’t gain traction or find funding? Well, if you’ve done everything in
your power to gain traction and make your business work, but you just can’t seem to get it off the
ground, then you may need to consider a pivot. Dont worry, that’s not the end of the world.
Many businesses have successfully accomplished their pivots, and we’re confident you can do
the same. (You’ve made it this far, right?) Here’s what Steve Blank and Eric Ries had to say on
the subject, followed by a few case studies that may provide further inspiration in your time of
need.
Exercise Ten: When You Can’t Get Traction or Find Funding
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The Art of the Pivot: Advice from Steve Blank & Eric Ries
What is a pivot?
When you started your business, you came in with a series of untested assumptions, and, most
likely, at least one of those assumptions was incorrect. After completing the customer discovery
process by “getting out of the building,” you should have a better idea of how and why those
assumptions must change. If it’s a small change that’s necessary, a simple iteration can resolve
the problem; however, if it’s a large, fundamental shift, you’ll need to pivot.
Pivoting can mean changing any of nine different things:
1. Customer segments
2. Channels
3. Revenue Model/Pricing
4. Resources
5. Activities
6. Costs
7. Partners
8. Customer Acquisition
9. Product
Types of Pivots:
1. Zoom-In: A single feature in a product becomes the entire product
2. Zoom-Out: What was considered to be the product becomes a single feature of a much
larger product
3. Customer Segment: You’re solving the right problem, but for a different customer
than anticipated
4. Customer Need: Your target customer has a problem worth solving, just not the one
you thought
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5. Platform: A change from an application to a platform or vice versa
6. Business Architecture: E.g., changing from high margin, low volume to mass market
7. Value Capture: A shift in revenue model
8. Engine of Growth: A change in growth strategy (viral, sticky, or paid) for faster or
more profitable growth
9. Channel: Discovering that the same product can be delivered through a more effective
channel
10. Technology: Switching to a new technology with better performance or a superior price
point
If you focus on only changing your product, you will be severely limiting your strategic choices.
Or, as Steve Blank puts it: “you’ll be bringing a knife to a gunfight.”
Four Pivot Examples:
Groupon
Groupon started out as The Point. Founder Andrew Mason’s initial goal was to improve the
online fundraising experience, but the audience wasn’t there. However, the most successful
campaigns on the site were those that gave consumers buying power. Eventually these deals
became what is now known as Groupon.
Instagram
Instagram began as a location-based HTML app called Burbn. After a year of work, founders
Kevin Systrom and Mike Krieger were finally able to release Burbn as a native iPhone app, but it
was crowded with features. They decided that the finished product wasn’t very good and started
over. Eight weeks later, they produced Instagram.
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Pinterest
Pinterest was originally Tote, a mobile retail shopping app. The goal was to connect consumers
directly with retailers, such as American Apparel and Banana Republic. However, mobile
payments were a problem - especially back in 2009. As a result, users weren’t purchasing items
so much as collecting them as favorites. So, CEO Ben Silbermann chose to pivot and Pinterest
was born.
Fab
Fab was initially designed to be the gay Facebook/Yelp/Groupon known as Fabulis.com. Created
by Jason Goldberg and Bradford Shellhammer, the site never attracted enough users. A drastic
pivot led to the creation of Fab.com, an e-commerce platform for indie clothing, jewelry,
housewares and more. Within seven months, the site had over two million active users.
Consider a pivot if:
● You’re in the Land of the Living Dead (neither growing enough nor dying)
● Your product experiments are demonstrating decreasing effectiveness
● You have a general feeling that product development should be more productive
How best to determine whether to pivot or persevere:
1. Set up a meeting with both your product development and business leadership teams.
2. Have the product development team bring a complete report of any and all results of
product optimization efforts over time, as well as a comparison of how those results stacked up
against expectations.
3. Have your business leadership team bring detailed accounts of conversations with
current and potential customers.
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4. Ask: Are we making sufficient progress to believe that our original strategic hypothesis
is correct, or do we need to make a major change?
Why don’t entrepreneurs pivot sooner?
1. Vanity metrics lead them to form false conclusions and live in their own private reality.
2. Without a clear hypothesis, it’s impossible to experience failure; and without failure, an
entrepreneur will seldom embark on the radical changes a pivot requires.
3. Fear.
https://steveblank.com/2014/01/14/whats-a-pivot/
Are there any ways you should pivot or change your positioning?
Is it time to test a new fundamental hypothesis about your product, strategy, or engine of
growth?
“You may get to a point where you are simply unhappy with your traction. You may not be able
to raise funding or you may just feel like things aren’t taking off the way they should. How do
you know when to ‘pivot’ from what you’re doing? If you are considering a pivot, the first thing
to look for is evidence of real product engagement, even if it is only a few dedicated customers. If
you have such engagement, you might be giving up too soon. You should examine these bright
spots to see how they might be expanded. Why do these customers take to your product so well?
Is there some thread that unites them? Are they early adopters in a huge market or are they
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outliers? The answers to these questions may reveal some promise that is not immediately
evident in your core metrics.” -Gabriel Weinberg and Justin Mares, Traction
• • • • •
One of the main things that keeps us from changing course is taking into account all of the time
and money we’ve already invested in a certain direction. It’s hard not to get attached, we get it.
But, according to Seth Godin, now might be the time to let that sh*t go.
Exercise Eleven: If It Doesn’t Work Out This Iteration
Ignore Sunk Costs: Advice from Seth Godin
Money and effort you spent yesterday should have nothing to do with the decisions you make
tomorrow. Each decision is a new one.
Rationally, that makes sense; but the work we do is personal, and it’s hard to walk away from
that deposit, or art, or effort, we invested in yesterday - even if it’s no longer serving us. But it’s
important to openly admit when you’ve gone the wrong direction - and to eagerly walk away.
Only consider what’s going to happen in the future, not which investments you’ve made in the
past.
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The past investments are over, lost, gone forever. They are irrelevant to the future.
http://sethgodin.typepad.com/seths_blog/2015/02/the-truth-about-sunk-costs.html
http://sethgodin.typepad.com/seths_blog/2009/05/ignore-sunk-costs.html
What Can You Do To Improve Your Offer?
New markets? A new set of features? New positioning? Back to the drawing board entirely?
“The only way to get what you’re worth is to stand out, to exert emotional labor, to be seen as
indispensable, and to produce interactions that organizations and people care deeply about.” -
Seth Godin, Linchpin: Are You Indispensable?
• • • • •
Finally, whether you’re considering a pivot or well on your way to those first 100 customers,
Benjamin Zander believes that you should give yourself an A. No matter which path this
business venture has taken you down, you’ve still learned a great deal in the process and are
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undoubtledly changed by the experience. And because of these changes, you’re a different
person now than you were when you first started this course. So, don’t be hard on yourself.
You’re well on your way, even if it’s been a crazy ride so far.
Exercise Twelve: You’re Already Successful.
“First there is a mountain, Then there is no mountain, Then there is. —Zen proverb” ― Geoffrey
A. Moore
Giving Yourself an A
Benjamin Zander: “I’m a teacher like you. I teach at the Conservatory in Boston. I have a
class on Friday afternoon. People come from all over the world, and they’re excited to be there,
and they’re eager to learn...but what’s really going on, they’re saying, ‘Am I better than her? Am
I better than him? I know I’m better than her! I don’t think I’ll ever be as good as him. I hope I
can be as good as him.’ They’re constantly comparing, and they’re measuring. And when they
come out to play, let’s say the violin, it looks as if they’re one person playing the violin, right?
There are two people! The person who’s playing the violin, and then there’s another person
standing behind the person who’s playing the violin whispering in his ear: ‘You haven’t
practiced enough. Do you know how many people play this piece better than you do? That
difficult passage, you missed it the last time, it’s coming right up...you’re gonna miss it
again…” That’s the voice in the head. And if anybody’s saying, ‘What does he mean, a voice in
the head? What’s he talking about, a voice in the head?’ That’s the voice I mean. Took a moment
for you to hear it, right? But that voice keeps talking and talking and talking, and it never stops.
You know, sometimes it talks so loudly that it drowns out the music.
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So my job is to get hold of that voice, and this is how it works. I do it each year. I come into my
class at the beginning of the year, and there are about forty students in my class, and I say, after
a little bit of housekeeping, I say: ‘Your grade for the year is an A. You’re an A. That’s your
grade.’ And there’s one condition. The condition is that they have to write me a letter in the first
two weeks of the class. The letter must be dated the following May, when the class ends. So the
date at the top is May 2000-of the next year. And then the letter must begin with these words:
‘Dear Mr. Zander, I got my A because…’ Then they have to write a letter describing who they will
have become by the following May to justify this extraordinary grade. And I tell them to fall
passionately in love with the person they’re describing in the letter. And they do, they write
about who they would be, who they could be, who they see themselves as, if only that damn voice
would stop telling them that they can’t do it. When I come into class, the person I teach is the
person that they have described in their letter. You see, I only take A students.
Now, there are a few people looking very concerned, and saying, ‘how does he do that?’ Well the
answer is very simple: you can give an A to anybody. You can give an A to a waitress in a
restaurant or a taxi driver. You can give an A to other drivers when you’re driving in traffic. You
can give an A to your mother-in-law. You can give an A to your boss. You can give an A to
anybody. What happens when you give an A is that the relationship is transformed. This is hard
for teachers. I know this is very, very hard. I addressed a group of teachers earlier this year, and
one of them came up to me afterwards and said: ‘I like this giving an A. It’s sweet,” he said. ‘But
you don’t know the student. You don’t know them. You don’t know their work. So I imagine as
the year progresses, and you find out that some of them are quite mediocre, I image that you
modify the grade.’ And I said, ‘no.’ And then I tell him about this young girl I met. She’s about
15, and I said, ‘what’s your name?” And she said “Joy.’ (arms crossed, very gruff) Now, should
her parents modify her name? No, because we don’t give children a name as an expectation to
live up to. We give children a name as a possibility to live into.
The person who understood this perfectly was Michelangelo, and I’m sure you’ve heard this
beautiful thing, but it bears repeating. Somebody asked Michelangelo about sculpting, and he
said: ‘Oh sculpting is easy because you have a piece of marble. Inside the piece of marble is a
beautiful statue. All you need is a hammer and a chisel, just to get rid of all the stone that’s in the
192

way.’ That’s actually a theory of education. Of course, it’s not the one we use. The one we use:
we’re up here, and the students are down here, and they try to get up, and they do their
homework, and they work hard, and they study, and they work as hard as they can. But there’s a
gap between their achievement and our standards. And of course, they’re very manipulative
because they know what we want to hear, so they can get up a little higher. Michelangelo’s model
is totally different. It’s eye to eye; we each have a hammer and a chisel and we’re working to get
rid of all that stone that’s in the way of that beautiful statue. It’s a totally different world.
This came home to me very powerfully one day. This was the first year I’d ever done this with
the A, and I was really excited about it, and I came into class and I said, ‘what does it feel like to
get an A in the first class of the year? You haven’t done anything and you get an A! What does
that feel like?’ To my amazement, one of the Asian students put up his hand and he said, ‘In
Taiwan, I was #68 out of 70 students. I come to Boston, and Mr. Zander says I’m an A. It’s very
confusing,’ he said. ‘I am #68 out of 70. Mr. Zander says that I am an A, but I am #68...I work
three weeks, very confused. Then one day I discover much happier A than #68. I decide, I’m an
A!” Of course, the A is invented, the 68 is invented! We might as well invent something that
lights up our life, and the lives of people around us.”
-From Conference Held by National College of School Leadership
https://www.youtube.com/watch?v=ry8xkQmCeUo
• • • • •
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Remember the goals you set at the very beginning of this course? Give those a look over. Do you
feel that they still ring true? What about your driving force? Has that changed? A lot has
happened since we began this course together, so it’s perfectly fine if they’ve shifted in small or
even largely significant ways. What’s important is that you’re here, at the finish line, with plenty
of experiential knowledge under your belt. Let’s review:
Throughout the duration of this course, we’ve accomplished the following:
● Created a mission statement highlighting your “wow” factor
● Discovered your early adopters and determined how best to appeal to their lifestyle
● Explored the competition and how your offer might stand out
● Uncovered your biggest obstacles, as well as your biggest areas of opportunity
● Unpacked our customer segments for efficient strategies
● Built an MVP
● Positioned your product in the marketplace
● Accessed your network to gain valuable feedback
● Started a conversation about a very real problem
● Asked probing questions that led to new discoveries
● Collected feedback and let it guide your forward
● Took tough advice on the chin
● Determined product-market fit
● Learned how to stage memorable experiences for your customers
● Communicated your value through strong messaging
● Determined your style
● Built a strong user experience enhanced by eye-catching calls-to-action
● Found a proper price point
● Explored other business models
● Determined the right payment processing platform for your business
● Built both a customer journey and ecosystem map
● Launched your product
● Chose your traction channels
● Began your marketing efforts with strategic purpose
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● Chose your social media channels and began to build your online community
● Made some noise online
● Built a pitch deck for investors
● Gave a solid presentation
● And determined whether to stay the course or pivot
These are enormous accomplishments that you should celebrate, regardless of whether or not
you’ve already obtained your first 100 customers. And although completing this guide is a huge
achievement, there are surely other pressing matters waiting in the wings for your attention. As
you’ve probably gathered by now, the work of a successful product owner is never done. We just
hope that you’ve found value in our time together, and that the questions we’ve asked have
inspired new thinking about your business, products, and goals for the future.
And seriously, give yourself an A. You’ve earned it.
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