Don't let your startup do one-night stands! What love and user adoption have in common.
We recently made a bold decision in Everplaces not to do one-night stands. As a company I mean. Let me explain.
We’ve been looking at strategies for spreading the product when it is launching in September, and had a number of ways we felt we could get users fast. For a short while this was tantalizing until we looked each other in the eyes and reaffirmed that we want to build an excellent product for particular kind of people, rather than an average product for everyone. So we decided that loyalty is more important that fast adoption for us.
For the fun of it we call it our True Love value. We know there are about 20-30% of smartphone users who’ll fit exactly in our demographic. These people are likely to love the product and then spread the word. So for us, 1 of these are more valuable than 10 one-night-stands (the user equivalent of one-night stands is random people who try your product because it is new to them and then never come back. They are simply not compatible with the product.)
So why are people chasing fast adoption? Because it is excellent for what Eric Ries calls “vanity stats”. Stats you get to impress your investor or competitor but which are essentially worthless. Like “1 million downloads!” - when you actually know that half have never even logged in and the rest are never using it.
Compromise is death for software I believe there are quite a lot of parables between love and user adoption. There are just some people, or users, that your product isn’t compatible with. So don’t try to please them by building features for them. Instead, chase the 20% which have the potential to become true loves. I am a firm believer in that doing a little bit for everyone means doing it perfect for no one.
Do you have the balls to do things right? It is a very tough call to sacrifice fast adoption for loyalty, especially if you need traction to raise money. So it takes balls.
Dont believe me, get it straight from the horses mouth Here is a post and a video where @EricRies talks about why you should grow slowly, but surely . I have also posted it in the post below.
I was just reminded of an excellent technique to make your pitch structured and memorable, the 4 Things technique. Here’s how:
So, before you start creating your slides, you write down the four major points you want to get across to the investor (or client, or partner etc). These are the overall things you want him to think about you after your meeting.
An example. Here are my 4 Things on the presentation I am working on.
1) Vision. I want him/her to think “wow, that could be huge” 2) Team. To feel that this team has the drive and expertise to actually make it happen 3) Money. To understand that there is a sound business model to Everplaces (unlike many other consumer web services) 4) I love simplicity so I’ve scrapped the fourth thing:)
Your 4 Things could be something else, for instance that the technology is groundbreaking, the time market is critical etc. I’ve based my Things on what I perceive as our competitive advantages over other startups in the same space. Remember that I am fighting to be remembered by a guy who gets pitched five times a day within the same industry.
You then build your deck/presentation and go through each slide, looking at which Thing every single slide supports. Make sure there is a roughly evenly amount supporting each Thing. And change all those slides that don’t support any of your 4 Things to make them do so.
Why it works? Because, us entrepreneurs tend to be so excited about our product that we go into way too much details and cover way too much ground. The result is that the VC walks away remembering nothing in particular. Also, it prevents technical founders from talking too much product and tech. It keeps it tight so to say.
If you want to create a place where entrepreneurship thrive then dont forget space. A close proximity to other entrepreneurs is a vital part of building a strong startup.
"One of the most important, and underrated, aspects of entrepreneurship clusters is location. Entrepreneurs don’t need "teaching" so much as space. A place to gather, share ideas, experiment, fail, and settle on an innovation." says Naeem Zafar from the University of California Berkeley. Here’s why:
Proximity to talent brings on innovation. If you put the right people in a room together they will automatically start to innovate. Entrepreneurs that sit together help each other, give feedback, suggestion and both technical and business assistance to each other. You just have to make it possible.
Faster development time. Because you get instant feedback, you reiterate faster (you tend to be to close to your own product to be able to see many issues). But more importantly, because you help each other with technical problems and choosing the right infrastructure and software you save time researching and learn from others experiences and mistakes instead of waiting to having made your own.
It’s a smoother ride. Creating a subculture where everything is possible makes you more optimistic and happy during the process. Especially when things are rough it is important to have people around you who still applaud you for having taken the risk.
You think bigger. Every time a startup close to you achieve a milestone you will be propelled to work harder and faster yourself. Entrepreneurs are competitive by nature. And they constantly raise each other’s level of ambition, just by being close together (if they can get a million users, so can we!)
It’s easier to attract talent. Hubs attract talent. Rockstars want to work with rockstars. Being in a cool space with lots of other startups will make people want to be a part of the overall atmosphere, including talent you weren’t hot enough to attract on your own.
Along the same lines: This piece on the difference between Silicon Valley and the rest of the world: http://www.theatlantic.com/business/archive/2011/08/the-5-secrets-of-silicon-valley/242958/
(non) disclaimer: I am a co-founder of Founders House, a co-working space for tech startups. My own startup Everplaces sit there. I’ve also been a part of creating Copenhagen School of Entrepreneurship. This is why I know this stuff works. Founders House is full (packed in fact) so I am not writing this to attract tenants. We simply don’t have to do that, startups come to Founders House because it works.
The art of making tough calls - a must-learn skill for Founders
The biggest challenges in the transition from being an employee, executing someone else’s decisions, to becoming a good Founder/ CEO/ CTO is perhaps learning the arts of prioritization and that of decision making.
This often takes a lot of effort as these two roles require largely different strengths. It is human nature to want to be liked. This makes us compromise, diffuse tension and want to say what other people want to hear. But being in charge, you need to make tough calls for the sake of the business, even when it means people won’t like you.
Key areas with tough calls:
- Firing. Hire slow, fire fast. An under-performer or a bad team member rarely improves sufficiently. Every day you let the person stay you are jeopardizing the work environment the rest of the team has to work in.
- Saying no. Dont wait, just say no if that is going to be your decision. It will save you so much hassle to be upfront. And no one likes having their expectations risen for no reason anyway.
- Managing expectations of clients and team members. If you become aware clients or team members are expecting something you can’t deliver, tell them asap so they can get used to the thought.
- Killing your darlings. A tough one. But if the world doesn’t like the same features /products you do, then you have to stop working on your own likes. No matter how much you’d like to move in that direction!
From where I am sitting I see a lot of entrepreneurs postponing these tough decisions till last possible moment. Perhaps hoping the problem will just go away. Maybe it’s just me, but I have never experienced this to happen. So it is up to you!