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:

• We need to raise the cash first
• We have not “figured out the product yet” (read: we are in sketching mode)
• Our product requires a full build out to work and we can't afford that now

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.

Traction

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.

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.

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:

1. The entrepreneur is technical, but needs help with product, user experience, and design
2. The entrepreneur lacks the product or technical team to build the BETA version of her dream

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:

Start-up Series (Part II): BETA Build Process

Start-up Series (Part III): Where is your business plan?

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 spend a lot of time working with web/mobile entrepreneurs and we're super lucky to be working with amazing people with cool ideas, tons of energy, and a lot of passion. For the past six months, we've tried to pull our clients, both startups and brands, into following our methodology: Lean Product Development. The benefits with Lean are clear: better products from a science/testing approach, less time to market (or less time to get in front of users), and less waste.

For our clients, the “trouble” with Lean is that you never really know “what you will get.” You don't know what you will eventually build even when you've spent 25% of your budget. You cannot, and you should not, estimate the “entire” project up front and you should not spend time on specs and documentation of “features” that you may or may not build.

This can be unsettling to clients. We understand why. The traditional model, most often used by agencies is very clear and straight forward. It goes like this:

1. You make a range of assumptions - maybe 20 - about your users needs and then create a list of “features that fulfills those needs”
2. You build a detailed spec, estimate, and schedule of the exact hours/cost and timeline to build “it”
3. You then start by wiring up the experience, design the screens, develop the features, before you launch “it.”

In the traditional model, because you “know what you are building” up front - you can tell how much it will cost and “what you will get.” This is a great feeling. It seems less risky. I can touch it. It's a “deliverable.”

The problem is that this “method” does not work at all for consumer web/mobile product development of any kind today. The reasons are many, but the main one is: You will most certainly be wrong about “what you need to build” and you can be sure that what you build - the whole thing - won't really work or connect with users until you are well into future releases.

Despite this, this “waterfall” model, is the standard among most agencies and many development shops. Most of our clients who have interactive or agency experience are familiar with this model. We understand why it seems to “work.” The problem is: We cannot build products that way, because it is wrong. We know that it doesn't work.

The truth is that you never know what you will build

You don't know what you need to build in the beginning of the project and you don't know what you have “left” to build when you are 50% “there.” It is wasteful to do big estimates and loads of documentation up front - before you get users engaged. It is wasteful to spend time on spec writing and requirements that does not center on specific assumptions, test cases, data from learning, and/or user feedback.

It is true, neither you nor we know “what it will cost” and exactly “how long it will take.” You don't know when you will be “done.” In fact, being “done” is not a possibility. You will never be done. (Unless you sell your product or exit in some way.) You have to get used to it. There are no “complete estimates” and no “complete specs.” You don't need it.

You should focus on what matters. That is not documentation. That is not estimates. Those are wrong always. What you need is what every scientist spends her time doing every day: EXPERIMENTS. Well structured experiments.

This is what we try to do with every client. We do it because we have tested the traditional model vs the Lean model and Lean wins hands down every time. We hope you do it too. Do you?