Last time, we talked a bit about what we do for entrepreneurs that come to us with an idea for a consumer web or mobile start-up. Today, we’ll quickly go through the process we use to get to BETA.
First, it’s important to remember that there are usually two challenges that most startups face when they start building their BETA.
Having blurred product vision is pretty common. This comes in many shapes and forms. For instance, we often see a fairly decent vision, but a long list of features. Parts of the product may have been worked out, but other key parts, such as the user experience is full of holes. This is OK. It is often the reason why entrepreneurs come to us in the first place.
Having limited capital is a given. Sometimes though, there are also limited resources available as an entrepreneur may not have the time available to put 100% into the startup and often is not familiar with the large work load that comes with starting something from ground up. This is where our process comes in handy.
The basic steps are:
This is the quick and dirty work flow. In some cases, we have to work hard on concept development while other times it's more a matter of focusing on key user experience challenges. There are two rules we always follow:
Keep it simple and focus on the one thing you have to get right for users
Get your BETA up fast!
Once the BETA is up, we start working on the Product / Market fit, which is really just all about user feedback loops and product iterations. In our experience, this is really the hard part, but it's also the fun part. There's nothing as exciting as getting real people to give you feedback on your invention!
Next time, we’ll look at what kind of documentation we are looking for when we start working with you (hint: it’s not your business plan).
For the past few months at Fabric, we've seen several entrepreneurs pitching Internet/Software concepts in the idea stage. They have brought investment decks, paper drawings, wire frames, and product descriptions. (Thankfully no business plans). They are all pre-Seed and they are all meeting with investors. Some of them have started building their product, but 50% have not.
The few that have not started building their product give different reasons for this. Common excuses are:
While these reasons seem to make sense, they raise a few flags with our team. Here's what we worry about:
You don't need to raise money to start to build your product
If you are committed, then you should put all your cash into product development now. That includes your credit cards and whatever you can borrow from anyone. We've seen Wordpress “products” built for $2k to test a hypothesis. The first version of Groupon was a Wordpress site. Why? Many investors won't even see you unless you have something live. That's a fact. (More reasons below).
Product development is different - and much harder - than sketching
We've had many people come to us with hand drawn wire-frames with very little detail. We're happy to see these things - it's better then nothing - but it's not enough. When you work on the details of your product through flows and mock-ups, you are forced to make decisions that you don't have to make when you are in sketch mode. For instance, you have to settle on database structure and priorities. You have to make left or right decisions in areas of your product that will impact other decisions down the road. You have to be super clear on your product description and you have to communicate the nuance of your thinking. You can avoid all that when you are in sketch mode. It's different. Very different. Who's telling you this? Dennis the Foursquare founder.
Learning fast is important
Many of your assumptions are wrong. (Einstein was wrong most of the time!) The trouble is, you won't find out until you put some part of your product in front of users and test. The longer you wait, the longer you stay in never land. It's nice in never land, but you'll have to get testing sooner or later. It should always be sooner because when you learn which of your assumptions are wrong you can correct - which of course is critical to progress. This is basic science and it's shocking to see so many people get this wrong.
Strong social products RULE the world and social products are different
To win today, you need to learn how to build social products. Building social products - or community products - is really different than building, for instance, a direct marketing product. You'll need to think about how to build context into your interface and, in many cases, where your growth model is dependent on viral coefficient you have to build loops - essentially social loops - into the core fabric of your product. The challenge? It takes time to learn how to build a solid product - a social product - for your users. You'll need to start as early as possible on this journey since there are many lessons to learn.
But what if my product requires infrastructure and complex architecture to work? What if it's a transaction product with a deep back-end?
It doesn't matter. Some of the coolest products was started without a backend. You don't need any of that stuff to prove some level of product/customer fit. Besides, never put a large part of your budget into tech until you are certain that you NEED that tech. You should test, test, test, before you invest in tech. If you worry about scale, just limit growth by capping your Alpha to x users. Also, you don't need real transactions to show investors that users would likely go through with a transaction. Be creative.
Most of the entrepreneurs we work with go after consumer Internet. They all need to raise more money to get past their next milestones and most investors care about traction. It's simply impossible to show traction without a product. To get traction, real traction, you have to figure out what makes your early adopters tick. You have to understand your different user segments and you have to identify your key users - the ones that drive viral growth. To do this, you have to build, test, learn, and iterate. You have to build a culture for rapid development and you have to train your product, design, marketing, and development team members to work on the most important aspects of your product. This all takes time.
So, get started on your product now. You'll need all the time you have.
On Monday, we launched Bidzilla - a new entertainment auction site from a Florida start-up. We always knew it was going to be a challenge. Of course, that's partly why we did it, but we really got our hands dirty on this one.
Auction sites are tricky to architect and build. Here's why:
1. “BETA” is not available
You can't do a “BETA” and make excuses as you fix bugs and errors. Why? People don't like to pay for BETA products. You can Alpha and BETA all you want with small-time applications such as Twitter - but this is about money.
2. Good experience = conversions
Your user experience and interaction design has to be really good. Unless it looks and works really well, people won’t trust you and they won’t be excited about getting into it. If you look at a lot of the penny auction sites out there, you'll see what I mean. For instance, look at Bidblink. That looks a bit cheap to me. You’ll notice the same problem here Edubli. The design does not breed confidence. That's a big problem for conversions. Keep in mind, people will look at five sites at a time. You want to stand out as the most trusted brand. You can't let design get in the way.
3. Web auctions are mission critical business systems
If your content management system fails, you just republish. Had a misfire in your video player? Just fix it and people forgive you. People are a bit more sensitive about their money. Once that credit card is in, you have to deliver.
4. Your system must scale
Auctions are real time and every second counts. Data processing is high volume. The system needs to be efficient and it must scale. Your profit is probably going to be on volume, so you'll want to serve a lot of users. What happens if you get hundreds of users entering any one auction at one time? You have to be prepared or you go out of business.
We’re excited to have built Bidzilla. It was a real test for the Fabric development team. Thanks to everyone who made it happen!
It was my turn to read Eric Ries' (Ries's?) The Lean Start-Up. The very first thing that wrapped me in was his definition of a start-up. I think we all know what a start-up is, or at least have a vague idea, but there is a lot of gray area. It reminded me of an argument I would get into with an old roommate: he would always say that his company is a start-up, but I never thought that it was. I could never place my finger on exactly why. My arguments were weak: your company has many employees. Your company has been in business for six years. Your company makes a profit. MY company at the time, see, WAS a start-up; we had few employees, just started business that year, and were operating on rounds of investments much less making any profit. Needless to say, my angry blubbering hardly made for a convincing argument.
Mr. Ries describes a start-up in this way:
“A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.”
This old friend's company was not delivering a new service as it had been in business for six years (when something stops being “new” I guess is subjective, but six years doing the same thing isn't even in question), nor were they operating under conditions of extreme uncertainty: they knew exactly who their customers were and how to communicate with them. So pfft. Four years later, and I'm still right. (Or should I say, four years later, and I finally figured out why I'm still right?)
Two of my biggest takeaways from this book:
Here's to a new strategy and growth. Cheers!
Working with entrepreneurs before they launch their first product is often exciting and challenging. For many, the most difficult part of building the first product is launching. Pushing the button. Saying “OK, this is it, now we'll put this in front of people today.” It's hard because your vision of what the product should be and what you've built in that first version will be far far apart.
You fear that the product won't work. That no one will use it. You fear that people will talk about you and your product in some negative way. You believe you won't get a second chance. That no one will care.
Of course, on some of these points, you are right. Few people will care. Most of those who see your product will maybe use it once and never again. Some people might even tell other people that your product suck (although few will remember to do so since they are too busy to be going around complaining to friends about this Alpha product they tried once.)
The fear of launching to “the market” seems reasonable enough. However, we've seen this fear of launching even with closed Alphas. For instance, we've seen weeks of tinkering with the first version of a product before pushing it in front of just 30 users. Yes, even at that stage, people are afraid of what users will think. They choose to hold off on user testing until the product is “in better shape.” We've seen products be in 100% stealth for six months. Most of the product works fine and we have 3 tests we could run with users right now, but because the design or experience is not “good enough” the product/user testing never begins.
This is human nature. Many entrepreneurs, especially successful ones, are perfectionists. They want the product to be really strong before they show it. They want to be proud of it. They want the design to be smooth, the experience to flow seamlessly, and they want optimized technical performance.
Lean Is Better But Not Everyone Gets It
The Lean Methodology was partly designed to tackle such issues, but it has been met with some resistance. For instance, in the past few months, we heard from one seasoned Internet/Mobile entrepreneur that this lean methodology is just hype. They don't buy it. They think “it works with some products, but not with ours.” Some believe that you have to build most of the product before you put users in. Some have even mentioned Steve Jobs as proof that the way to go is to have a vision and then build exactly what you want - not what users say they want.
This is bullshit. First of, Steve Jobs was entirely in tune with the customer. He listened to users all the time. He was the user. He was also more in tune with design, product, and marketing then anyone else alive. He knew exactly what was needed to bring about success, but remember the first version of many of “his” products? Even he had to go through a lot of trial and error. It won't be any different for you.
So if you build 80% of your product before you bring users in, you are in deep deep trouble. The point of lean is not to build a poor product fast and launch it. The point is to figure out which of your core assumptions are right and wrong. The point is to learn - fast and early - what to build and how to build it, where to focus your resources, and what not to build.
To minimize waste and get answers from users - you must launch early. You have to get one version of your product in front of one group of users so that you can get to testing. Something magical happens when you talk to people who are using your product for the first time. You'll discover that they won't behave the way you intended. You'll find that people will do things that you didn't even think of. They will ask for features that you don't have on your product roadmap.
The fear of launching is irrational. Once you launch, you'll realize that most people won't care. They won't care because you didn't get the product right. There is only one way to get the product right: Launch early, test, measure, and iterate. Repeat. It takes time, but it's the only way.
If you care about the environment, check out GoodGuide. It's an excellent guide to healthy products. Here's what I like about it:
They stick to the basics. Design is clean with enough white-space to let the eye rest.
The “Quick Product Picks” section is really useful. I imagine they did a study on what 90%+ of their audience look for most often - then they designed the “get recommendations” engine. I used it right away.
Immediately under “Search” they mention that they have “61,041 products.” It makes sense to do that. I would make sure that number is updated frequently (ticker-style) to ensure that people are reminded that the product selection is growing. That's an easy thing to do.
Good people at GoodGuide: Cool product!
We get a lot of questions about this, so we thought we should just do a quick summary of what we’ve done and what we’re interested in doing for you entrepreneurs out there.
First, we’re just really passionate about start-ups because we enjoy the process and we love to see new underdogs challenge the big boys. Some of the people on our teams have done their own start-ups in the past including the fun task of raising capital from investors. Some would say we’ve learned the hard way. You can take advantage of all that learning so you don’t make the same mistakes we made. (Good right?)
We are mostly focused on consumer web start-ups because that’s what we know. For instance, right now, we’re working with three consumer web start-ups in BETA. Through our agency business, we’ve learned how to work with big brands and we understand how small start-ups can become valuable to potential acquirers or partners – such as big media or publishing.
Our Product Group has years of experience developing actual web products and this experience has made our team a perfect partner for two different scenarios:
In most cases, we come in to build the Alpha – or first release (BETA) version of a web or mobile product. Fabric’s Product Group adds what is needed to the mix and usually delivers a complete product. During our process, we work with the Entrepreneur from the initial concept stage, through experience design and development and into Alpha or BETA. Once the first release is out, we often help entrepreneurs get to their first 1,000 or 10,000 users.
Next, we’ll go through our process in more detail and we’ll tell you what we look for when we consider new projects:
For the past year, we've spent most of our time focusing on a new path - a new strategy - for Fabric.
Today, we announce (officially!) that we are 100% committed to helping entrepreneurs, brands, and media build new digital products and drive key usage metrics for those products.
So why would a Startup or brand work with Fabric and not just hire it's own team?
It's fairly simple. Most startups or brands that come to have two key challenges:
What we offer is a faster and less costly route to market for those who do not have their full teams in place. We are focused on the first 6 months of the product cycle - taking a product from zero to 100,000 users. Fabric's teams and process is focused on driving key usage metrics from fast learning and rapid product iteration.
At the product development level, we bring:
We know that the most challenging aspect of bringing a new product to market is to get initial traction and drive usage. Therefore, in addition to our Rapid Iterative Product Development Process we also offer go-to-market services for new products and Startups:
If you have a new Internet/mobile consumer or SaaS product, we want to talk to you. Right now, the product we build sits within social, mobile, geo-location, and SaaS, but we're open to any project that is utility based and/or is attempting to solve a real problem. Call us!
Brands and startups tend to compare Fabric to other development shops. Some of this is fair. Often, we add engineering resources or act as an extension of existing in-house teams. Much of our work is in user experience, design, and almost always front and back end development. This is what we do, but it is not the core of the value we bring.
Let's talk about startups. While Brad Feld, Fred Wilson and other VC's are right when they say you should have your core product team, your engineers, your experience designers, and your designers in-house, the truth is that most pre-Seed stage startups cannot find quality talent in all these positions. From the pool of startups we've worked with, most are somewhat inexperienced entrepreneurs and often lack deep product development experience. Often, startups that do have technical co-founders often lack customer development experience or user experience design knowledge.
Most importantly, it is very difficult for startups to hire and develop strong teams fast and to adopt a solid grasp on the chosen development methodology instantly. When founders are young, as they often are, many product development mistakes are often made. This “learning on the job” can be very expensive.
These are some of the reasons Fabric is a good collaboration partner for many pre-seed stage startups. Unlike most development shops, we contribute experience and talent in several areas:
We Add Complete Product Focused Teams With Experience Working Together
Everyone on our teams have worked together for at least one year. That means they have strong communication and faster execution paths than a new team. They are strong collaborators producing more output per Sprint than a new team who just met or have never completed a project together before.
Proven Methodology = Successful Products
You don't have to buy into everything we preach. We're still wrong about stuff all the time. That said, we have spent years optimizing our Product Development process and, if you follow along, you're guaranteed to learn more faster with less waste. We've also seen what happens when you don't have a solid process. Very expensive.
We've probably made more mistakes than you - we'll help you avoid all those
We can spot mistakes early. We've seen success and we've seen failure. We have been “in” failure and we've been “in” success. Our teams have made 100's of mistakes and learned from it. You will also make mistakes, but with us, you will not make the mistakes we made. This can save you 500 hours of programming time or 100 hours of design time. Fewer mistakes also is less expensive.
Development shops build what you want them to build not always what you should build
We ask hard questions. We challenge your assumptions and push hard on the edges of your idea. Will it stand up or fall down? What are the major assumptions that have not yet been tested? How many customers have you talked to? Throw away your feature list. Throw away your spec. Now, let's start over: what is the minimal product we can build to test the #1 assumption?
One question we always ask is: How can we do that for LESS? It seems counter-intuitive right? Shouldn't we just build and bill? No. That is what most development shops do. That is what agencies do. That will not help you raise money, which for most of you, is what you need to do. To raise money, or get to profitability for some of you lucky bastards, you need product/market fit and traction. To get that, you need to spend the minimum amount possible on things that don't matter. What are those things? (Polish your design… probably. Feature #13? Definitely.)
Venture Development and Startup Experience
We have raised capital and pitched VC's. We've run our own businesses and we've started several companies between us. We've been through the hard times, we've run out of money, and we've been in “partner fights.” We have created business plans, 100+ pitch decks, financial plans, and jockeyed CAP tables. When you work with us, you tap all this experience. You can get it from others too. Incubators, accelerators, and entrepreneurs all add this value. You won't get it from most development shops. It's not in their “wheel-house.”
Deep Brand, Media, and Agency Relationships
Most other development shops are deep on the engineering side. That's great. However, they have limited or no relationships with brands, media, and agencies. We've spent 10 years working with some of the biggest brands in the world: IKEA, Toyota, Redbull, and Hachette. We understand selling to these brands and agencies. For all our startups in our family, we've been able to make direct introductions to C-Level contacts sometimes enabling the startups to win major contracts - a major value add for any early stage startup.
We're different. To find out how different? You should call us now.
For the past few years, we've worked with several startups. Most of our work has been from idea/concept stage. Our team is passionate about this work. We love working with entrepreneurs. We love the energy of it.
So, what kind of startups are we looking for?
Our expertise area is consumer web and mobile. We've built social networking sites, transaction/commerce applications, and self-help products.
Today, we're looking for big ideas from passionate entrepreneurs. For instance, we're frustrated by the inefficiencies in every day life. We look at food, waste, energy, transportation, and the endless data silos - left over by legacy systems - just making our daily life a pain. We focus on startups that go after problems we understand.
For instance, right now, we are working on a smart dating product (sort of the anti-eHarmony), a useful recommendation site for parents with young kids, and a crowd-sourced fashion site. All cool stuff!
We also like simple B2B stuff, like what Basecamp did for project management and collaboration. Game changer. Simple. Solved a lot of problems for millions of people. Complex? Not really. Hard to execute? Yes, but mostly because it required dedication and focus on user problems.
We like simple ideas. Solve one problem. Keep it focused.
In short, we want to build kickass products that solve real problems we understand and care about.
Feel as if you should call us? Do it. Ask for Erlend.
We got a ton of questions on how we work with start-ups so let's just break it down into some highlights:
When we meet you for the first time… this is what we care about:
We don't care about
We don't hold on to you. We want to let you go. We just want to give you wings. Then go. If you get to that stage, we're happy! Now, call us today. Free advice guaranteed.
Recently, entrepreneurial consultant Eric Reis published his book, The Lean Start-up as the culmination of his lean start-up experiences and a summary of the tenets of the lean start-up movement.
Here at Fabric, we've been following our own lean philosophy for years. We advocate Minimum Viable Products (MVP) - I'm still baffled that this is now a “buzz word.” We encourage iterative testable development in small batches. We encourage our clients to change direction when they or their product have hit a wall; in lean, this is called a “pivot.” I like to call repeated pivots “walking”
We're big believers in lean thinking and the lean development framework. Each of its central tenets are both common sense business practices and productive guidelines for building a successful business.
There are dangers lurking in lean.
There is a certain evangelical thread that permeates Eric's book and the Lean community. When I'm faced with evangelism for any system, I immediately grow skeptical. Generally this behavior tends to blind one to the faults in a given system or behavior. This danger lurks in lean development.
Learning for Learning's Sake.
Central to the Lean Start-up belief is that learning is, in and of itself, the goal of building your product. “Our goal in building products is to be able to run experiments that will help us learn how to build a sustainable business” (p201, Reis, The Lean Startup).
Is it really our goal in business to simply learn how to build a business? This message pervades the book; that learning is the ultimate goal. While I appreciate this high minded approach, it is a fundamentally flawed message. Learning is an integral and inseparable component, but a step on the path nonetheless. The goal of your product is to build a sustainable business, not simply to learn how to do so.
I'll venture to guess Reis wants you to build a sustainable business, and that learning is what gets you there. However, that's not how the message is framed. Instead, it seems he's battling bad start-up behavior so strongly, that his message is a little right (or left) of center in an attempt to bring people back to the fold of good business practice. Ironically, this behavior is something he addresses specifically in his book in regards to individual developers and teams.
The book contains one other example of a mis-framed idea - that the experiment is 'movement.' In this context, movement is defined as progress towards your goal. If you assume learning is your goal, then indeed, any experiment that results in learning is progress and hence movement. But, since learning by itself isn't our goal, that it is movement doesn't necessarily follow. Remember, our goal is to build a sustainable business, not to learn. Instead, think of your informed, validated decisions that result from the experiment as movement.
Perhaps I'm splitting hairs. This is, after all, potentially just an issue of semantics. But, there is a simple way to validate: test it. Go up to your potential clients - in our case start-ups and businesses with new products - and ask them if they are in business to learn or to build a successful business. I've done this. Unless your respondent is already a lean evangelist, their answer is universally to build a successful business. Now, follow up by telling that same client they're wrong, that they are in the business of learning. When the client gives you that look - you know, the “you're crazy, did I really hire you” look, you'll have your answer. Of course, don't do this with clients you want to keep… mis-framing scares your clients for no reason.
While it's true that every decision made about a product should be a validated one, the central goal of our business is not to learn. That goal is reserved for academia. Instead, our goal is to build a sustainable business. What we learn along the way is crucial to informing our path to that goal. But we must be careful not to frame learning as the goal itself. Else you risk alienating potential clients who aren't initiated, or falling into the trap of learning for learning's sake.
Remember, we want a lean business, not an anorexic one.
What's better than a basket full of kittens? One puppy. That's right; just one. Not a litter. No, that's too much love and awesomeness for anyone to contain. Just one cute, adorable, fuzzy puppy.
*cough* cats suck *cough*
Fabric recently finished designing and developing a new beta site for Dogasaur, a social site aimed at helping dog lovers improve their dogs' lives.
We started with a few simple goals: create a site that placed the best, most pertinent information on dog products, services and health at dog lovers fingertips; give dog owners a place to rate and review these things; and develop a home for canine experts to get their information out and available.
But, we quickly found in our discovery phase that ratings and reviews just weren't enough. Dogasaur needed a place for dog lovers to express themselves, to add their own personality (and their dogs' personalities) to their profiles. And, not only just dog lovers but the businesses serving them. We discussed options with the client and out new profile layouts were born.
We've had a ton of fun creating Dogasaur with our client and we're not finished yet. On the horizon: bigger and better tools for businesses to reach (and help) the Dogasaur audience; videos, pictures and dog breed information; more robust interaction tools with dog shelters, rescues and charity organizations; and other social tools to engage our user base.
Lean start-ups are like playing a special type of Plinko.
For those of you who aren't familiar with Plinko - see Plinko
In Lean Start-up, the process of building a sustainable business involves two primary types of movement, the test - involving a hypothesis and a testable, actionable metric (Really, the test isn't movement. Instead the action taken as a result of the test is the actual movement. See my post The Anorexic Start-up), and the pivot - a change to a core philosophy about how the product works, who it serves, etc.
Generally, a start-up takes an informed idea - something pre-validated with some level of interest by potential customers and builds an MVP (minimum viable product) to prove that product will build a sustainable business.
The business proves, validates, by testing their MVP against a set of base hypotheses with a set of desired actionable metrics. These base hypotheses are called the leap of faith hypotheses, the ones without which, the product as it is envisioned is doomed to failure.
Should some of those hypotheses prove false, it may be time for an immediate pivot, but that's not the subject of this post.
Once the initial concept is proved viable and their is evidence of some traction, the team begins iterating. During this phase, the team works to improve the product by bringing it more in line with the desired metrics. This is accomplished by creating experiments consisting of a central hypothesis against a set of actionable metrics. E.g. Changing the messaging on page x will result in higher percentage of behavior y. These tests are carefully constructed to ensure the results are verifiable and repeatable - generally by a/b testing.
Eventually these tests start producing diminishing returns. When it becomes clear the ultimate business goal will not be reachable with the given product, it is time for a pivot.
The price is right.
Instead of a ball or round disc, your product is a slinky. It's sitting at the very top of a special Plinko board. That board is design so that instead of pegs, their are platforms just big enough for your slinky to rest on that each pivot around the peg as an axis. When you start iterating, you drop your slinky onto the top platform. It draws out quickly from the start, generating big results. But, as the rear of the slinky starts to compress, so too does your progress towards your goal - a particular metric set at some stage down the Plinko board. Now, for most businesses, you're still not where you want to be and you make the decision to pivot. At this point, the platform rotates, launching your product or decision process in a new direction, allowing you to add value in different ways.
The crux is that YOU are in control of when your platform rotates. If you rotate too soon, you risk losing potential gains, throwing your slinky into a wild swing (banging into other platforms, etc) with no clear path. If you rotate too late, you've let your product stagnate and lose momentum. Just right, and your product moves like, well, a slinky down stairs.
Eventually, you reach your goal.
Or do you?
Most businesses don't end up quite where they imagined they would. On the great Plinko board, there are a lot of different platforms to land on, each a different business model with a different level of success. Remember, your goal is a sustainable business - it just might not be the one you thought.
Relax. We would never ask that question. Why? We just don’t believe in writing business plans – especially not web or mobile products of any kind. The reasons are simple:
A few other things we don't care about:
So, what kind of documentation can be useful when you come see us? We like to see wireframes or concept drawings focused on the core user experience. So, if you are a “mobile coupon start-up” – we’d really love to see how you think about the core user experience. How does an actual customer move through the application? What are the exact steps you lead them through? How does your product clearly solve the problem? Those things are important to us.
It’s also nice to see the core business model – in visual format. All that stuff about how you will make money and some ideas on how you will convert customers.
Passionate entrepreneurs: Send us your napkin ideas. Let’s get to work!
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