by Frank Gruber
Washington, DC–based startup Social Tables initially wanted to create a seating chart for weddings that was public and connected to Facebook profiles so that guests could see who else was at their table. But they didn't talk to customers until after launching the product and didn't do market research to see if there was competition. They launched and acquired 3,000 users, but none of them made their seating chart public—they just used it for personal reference.
Social Tables cofounder and CEO Dan Berger admits, “I did everything wrong. I didn't know what lean startup was…I didn't know customer development, so I did every mistake possible in the book.” Then, rather than talking to the customers about their problems, Social Tables spent a year and a half adding features the customers requested—eventually realizing that they had the wrong customers! They finally understood that it would be much more profitable to sell to big corporations instead of individuals, so they killed off their direct-to-consumer product.
Today, Social Tables is building meeting planning software for hotel catering teams and corporate meeting planners—a totally different business than what they started with. They used their customers as a course corrector to guide them to the enterprise space, after a few years flying blind with their own product development ideas and assumptions.
When Blake Hall started TroopSwap, the company was a daily deals site targeted at military personnel and veterans. But soon after launching, Hall and his team realized that brands were much more interested in how TroopSwap verified military identity. They had spent three months building a deals site when they could have used off-the-shelf, white-label technology and discovered the real problem faster.
“In the beginning…it's hard to parse the symptoms of a problem from its true root cause,” says Hall. “We could have found product-market fit a lot faster.” The story does have a happy ending: TroopSwap eventually evolved into ID.me, which handles identity verification of groups such as veterans and students for more than 60 national brands. And it won a $2.8 million grant for the president's National Strategy for Trusted Identities in Cyberspace.
TappedIn's story doesn't have such a happy ending. It was a Washington, DC–based startup cofounded by Zainab Zaki that was looking to create meaningful conversations at events via its application. If you knew more about attendees before or during an event, the founders thought, then you might be able to find people you wanted to meet and have more meaningful interactions. The idea had merit but, as Zaki explains, instead of talking to customers and launching an MVP, they spent more time on brainstorming, wireframing, drawing product road maps, and talking to investors, advisors, and peer groups.
She looks back and says, “If we had gotten the product out the door sooner, we would have collected valuable feedback and clear directions on where to take the product next. That was a huge mistake.” After a few changes in direction and two and a half years, they reached the end of their road. “We struggled with finding product-market fit for the entire existence of our company. I would go so far as to say, not being able to find product-market fit was the primary reason we had to close TappedIn's doors,” says Zaki.
The biggest issue for the lean startup methodology is its very popularity. These concepts are complex, and any summary (including this one) isn't comprehensive and nuanced enough to explain everything. Instead of blindly following the lean startup hype, take the time to educate yourself and figure out which aspects work for you.
Celebrate: Enjoy the Journey
That moment of truly finding your customers and product-market fit can be one of the most rewarding moments of the startup journey. Even if it's just the first meaty breadcrumbs on the path to real validation, this is an accomplishment to acknowledge! When Cachette was on the phone with her first client and they said, “I'd pay for that,” she got them to prepay for a few months. “It was exciting,” the ConsumerBell founder explained, “because it's what investors were looking for (subscription-based revenue) but also it meant that we had a high bar set for losing them and had a couple months to really figure it out and provide excellent service.”
And remember, you may have to refind your fit at multiple points throughout the life of your company as the market and competitors evolve or as you release new products. Enjoying this process is all in the approach and attitude you take.
For example, conducting customer development research and interviews doesn't have to be boring for either side. Colorado-based UrgentRx was working on turning typical over-the-counter drugs into fast-acting powders. To interact with customers, they wanted to make a big splash and differentiate themselves from staid pharmaceutical companies, without spending a lot of money, so they decided to get creative. Founder Jordan Eisenberg recounts:
We have had a lot of fun playing the “Jester” brand and doing crazy stunts to disrupt the category. We've dressed large men up in tutus and fairy wings and dubbed them the “Pain Fairies” and had them running around New York doling out pain to people on the street. We had a blast interacting with people on the street, getting their feedback in real time, and creating a genuine connection with the public while telling them about our brand in a fun way. As a small startup, you have to be willing to shake things up and take calculated risks.
You can also create your own voice in your prototypes and carry that voice through everything you do. Customer development doesn't have to be something you dread. Use your creativity and have fun doing it; in the end it will help you stand out while you search for product-market fit.
Final Thoughts
inDinero's story might seem idyllic, but it really wasn't. While at Y Combinator, they decided they wanted to be the first startup from their accelerator featured in TechCrunch. So they went after press, got a ton of buzz, and saw some sign-ups. But it was too early for a big launch—people signed up, complained about bugs, and disappeared. Mah says she wishes they had waited longer, focusing on talking to early customers instead.
This experience and many others taught Mah that there's no such thing as an overnight success. Many times she thought the next release, the next launch, would be the thing that would rocket them to glory. But it never did. At some point, she reconciled herself to the fact that growth would be long and iterative and slow—she wouldn't suddenly have an epiphany about what her customers needed. She had to keep learning.
Still, she has an advantage over many startups—she loves her customers. Many entrepreneurs complain that their customers are unintelligent, not tech savvy, and clueless. Instead, Mah is happy to spend her days interacting with the small-business owners who use inDinero, who are entrepreneurs themselves. “I'm really proud to say that our customer base is really smart, really tech savvy. They get it, and they're really fun to talk to,” she says. And according to Blank, that's a great sign.
Chapter 6
Launch
The beginning is the most important part of the work.
—Plato
What is a product launch? Technically, it's the debut of your product or service to the world. Although I've orchestrated a number of launches of my own products, from startups to blogs to products at AOL for millions of users, I marveled at watching serial entrepreneur Tony Conrad launch his various products. His different launch styles should help set the stage for how to approach and eventually master the art of the launch.
Conrad invested in a company called Oddpost and its cofounders Ethan Diamond and Iain Lamb. Oddpost launched in 2002 as a Web-based e-mail product that leveraged Ajax to mimic a desktop e-mail client, revolutionary for its time as other e-mail services were primarily simple HTML interfaces.
To launch the product and gain exposure, the Oddpost team raised funding and hired a public relations (PR) agent to get them in front of journalists. They even paid $15,000 for a time slot on stage at a conference called DEMO to showcase their product. That was how you launched a product in 2003. In the summer of 2004, Oddpost was acquired by Yahoo! for an unconfirmed amount, rumored to be around $30 million.
/>
Conrad's next product was Sphere, which he cofounded and launched in 2005. Sphere started out as a blog search that promised strong filtering and the best blog search results in the market. At the time, blog search was how you navigated the blogosphere, and Sphere was offering a better way to do so.
At this point, the launch techniques of 2003 no longer applied. Personal and professional blogs had changed all that. No longer did you have to pay $15,000 to get on stage to be in front of journalists at conferences like DEMO. You could approach bloggers like myself, Michael Arrington of TechCrunch, Om Malik of GigaOM, and Pete Cashmore of Mashable and get us to test out your product and (in some cases) use it every day.
To get people to try out Sphere, Conrad shared his product with as many bloggers and new media journalists as possible, then moved on to larger and more traditional publishers. Eventually Sphere was everywhere on the Web, powering the content recommendations of larger sites such as AOL, the Wall Street Journal, and GigaOM all the way down to the personal bloggers.
One of the lessons that Conrad learned was the power of personal bloggers and their social capital online. The blog post that stands out the most from Sphere's launch was not by TechCrunch, GigaOM, or the Wall Street Journal but on the personal blog of WordPress founder Matt Mullenweg. It was a simple post that said, “Sphere is cool, check it out.” According to Conrad, Mullenweg's post had as much impact on Sphere's business as a TechCrunch article at the time. Sphere eventually changed its business to distributing content recommendation widgets on sites around the Internet and was acquired in 2008 by AOL.
A year later, Conrad was back at it with another startup. Once again, times had changed, and now you could launch a startup by leveraging the power of the social graph. With the launch of About.me, Conrad worked with 25 strategically selected advisors. These were people he wanted to be strongly associated with: folks like the current Twitter chief executive officer (CEO) Dick Costolo, Digg founder and now investor Kevin Rose, technology and gaming-centric video host Veronica Belmont, and more. Conrad asked himself, “Who's my posse? Who's my entourage?” And he launched his product with those people on his side: they created profiles on About.me and shared them via their Twitter profiles and e-mail signatures.
While About.me was still in beta, the influencer strategy worked and user adoption skyrocketed to hundreds of thousands of users. The product was quickly acquired by AOL just a few days after its public launch in 2010. It was eventually reacquired by Conrad and a group of other investors to give it additional life outside AOL. They've been iterating on it ever since.
Conrad's three stories illustrate how quickly the cost of launching a startup changed, as did the channels to launch. They also demonstrate some of the strategies used in successful launches. But nothing remains the same for long, and successful strategies must continue to evolve over time. You, like Conrad, must be able to recognize how things are changing and adjust to get your message out and build interest in your product.
Kickstarter
Launched in 2009 by Charles Adler, Perry Chen, and Yancey Strickler, Kickstarter lets you crowdfund your creative projects, such as video games, movies, apps, and technology. You set a goal, backers pledge money in exchange for rewards, and you have to meet your goal by the deadline in order to get funded. More than 55,000 projects have been funded successfully, for a total of $828 million. (The success rate exceeds 43 percent.) More than 50 of those projects have raised in excess of $1 million, led by the Pebble smartwatch (more than $10 million), OUYA video game console (more than $8 million), and Veronica Mars movie (more than $5 million). Kickstarter is based in Brooklyn.
One big change, for example, is that startups inspired by the lean startup approach are devoting less time and attention to a big, orchestrated, champagne-popping launch. You might just quietly launch your MVP, get feedback, and iterate, opting instead for a big announcement when you hit a large milestone. On Kickstarter, products “launch” before they even exist—they're just an idea in the founders' minds that needs some funding to get off the ground. So the tips in this chapter aren't just about the big launch—something that's happening less and less. The ideas of building community, timing, and good PR also apply to every big milestone in your company when you want attention: from launching to updating your app to hitting a big number of users to raising funding.
Launches and announcements are your opportunity to share your new baby with the world and to build interest and momentum. Media will give you only a limited amount of attention, so your goal is to get as much exposure as possible in that short period, building a strong foundation to grow upon rather than a momentary spike in interest. Here's what the process looks like.
Strategy
First, you need to think about what's right for your product and build a strategy. Are you a social product that needs to garner as many users as possible to gain any traction? Would your product, like About.me, benefit from having influencers involved in the rollout? Or do you have a marketplace that requires filling the supply funnel before you go in search of customers who will make purchases? Are you targeting businesses, which may require different tactics altogether?
There is no one-size-fits-all strategy around launching, so it's important to think about what your most important outcome of launching is, before the fact. You might find it's more important to solidify some big partnerships and then put a lot of PR power around announcing those deals. Or like About.me, perhaps it's a slow roll—building up huge usage and buzz during a beta period so that by the time you actually launch in the press—opening it up to anyone to use—you have thousands of users and a great story. In other situations, your primary goal might be simply generating huge awareness and getting as many mentions and links out in the press as possible. Or you might take the lean startup approach mentioned earlier.
The point is, put some thought into how you want to debut your product or service to the world. Think about the outcome you want and what you don't want. There are many ways to go about this, so be a student—look around at other launches and learn from them.
The following tactics are exactly that—just tactics. They're meant to get you thinking about the possibilities as you strategize about what's right for your company.
Launch Stages
You may have heard a startup being referred to as an alpha, private beta, or public beta product. Here's what those terms actually mean:
Alpha: Very early and basic; bugs are still being worked out. Most alphas are private, tested only by internal employees or a small group of selected alpha testers.
Private beta: The public, or a targeted group of users, can sign up, but someone needs to approve them before they start using your product. Google made the use of private beta mainstream by launching beta products like Gmail, which had an extraordinarily long beta period. In April 2004, it was invitation-only; a year later, users could sign up via SMS; the following year, some countries had open sign-ups; and finally, in August 2007, it was open to everyone. The popular Mailbox e-mail iOS app was briefly in private beta and showed you your number on the waiting list, which grew to 800,000 people long!
Public beta: The product is still being tested, but anyone who signs up gets access. Public beta periods can be quite long and open-ended.
All told, your beta testing period should be on the order of magnitude of months, not weeks or years. After your public beta, you can eventually remove the beta label, indicating that the product is supposed to be higher quality and have fewer bugs. Some startups never make it out of beta, whereas others scrap all the labels and just go right for launch.
Build a Community
Testing phases are important to product development but also to your marketing, so think about how you communicate with testers—they are your first community members. Ask them for feedback to drive product improvements. That will help strengthen your connection with them, as they see that their ideas make a difference. These early-stage users are the ones you want
to make advocates of your brand, and they will be important through the entire life of the product. After developing initial relationships with this community, you might ask them to help you spread the word.
Partners
The power of solid partnerships is something often overlooked by startups when they launch. Conrad did this through bloggers and other mainstream media distributing his Sphere widget across the Web. He did it with advisors who were social influencers during the launch of About.me. You can do it, too.
When thinking about launch partners, look for other people, products, or services that would benefit or complement your product offering. You might need to do some industry research to explore your options. Don't force it if it doesn't make sense, but if there's an obvious fit and benefit, it can be very advantageous. For example, Dwolla, a payment network that allows any business or person to send, request, and accept money, launched its new Dwolla Credit product with more than 40 partners in 2013 (more about that later). This was smart in not only building buzz but also demonstrating trust, which is critical when attracting merchants to new financial services.
Public Relations
Launch is an obvious time to start thinking about PR. Back when Oddpost launched, using a PR agency was how you got the word out—and many startups still think this way. If you're an early-stage, prerevenue startup with no funding, your limited dollars would probably be better spent elsewhere. To be totally honest, you can do it yourself. I'm not saying PR agencies are a waste of time for startups—they can be incredibly beneficial if you can afford it. If you get traction and funding, then you can bring on a PR agency to help you further spread your message.