Adora Cheung, the founder of Homejoy, a professional house cleaning and home service, explains what’s needed to build product, talk to users, and grow your startup:
Like any normal project, you as the creator will have to complete necessary tasks before youbegin. One of the most important things when you begin planning your startup is to make sure that you have the necessary time to devote to getting your idea off the ground. Cheung said that, on average,you’ll need to be able to put in at least one to two days’ worth of work in a week to your project. This is so that you can make sure that the work needed to get the startup launched can be completed in a timely fashion.
Just like there are to-dos, there are also not to-dos when working on your startup. Some of those include: building your product in secret; having an exclusive press launch; waiting for users to find and use your product;and buying users and losing money, which leads to you eventually giving up. By doing any or all of these things, you could start a vicious circle that will only hurt your startup, and possibly your bank account.
The very first thing you need to ask yourself after you’ve come up with your startup idea is, what problem is my product solving? You need to be able to answer what it is, how it relates to you on a personal level, and if other people have this problem, too.
Once you can verify and answer all of those questions, then you need to identify the industrythat your product is going to fall into, and immerse yourself in it. You need to read as much information as possible and find out as much as you can about that industry so that you’re an expert in it. By doing this, you’ll be able to truly identify that your product is going to benefit the industry and those in it and/or who are using it, and know who to gear your product towards.
You’ll want to identify what group(s) of people want and need a product like yours, so that you have a focus area. Another thing you’ll want to do is create a story board that will show you, step by step, how you want your customer’s experience with the product to go. Doing this will help you as the creator to be able to show how you’d want your experience with the product to go, if you were on the other side as the customer.
Next, you’ll need to identify your V1, or minimum variable product. This is the smallest feature of your product, and is the first thing that you should build in order to start solving the problem. However, make sure that you know what other products and/or startups are out there already, so that you’re not redoing something that’s already been done.
Another important thing you should be able to do is describe what your products does and/or provides in a single sentence. A customer isn’t going to read through paragraphs that describe what all you’re able to provide and/or do: they’ll want something simple and to the point.
The first users of your product are most likely to be you, your friends, family, co-workers, online communities, local communities, niche influencers, cold calls and emails, and the press. Depending on the type of product, but more often than not, you’ll be able to have people in online communities use your product; for example, networks such as HN and Reddit. Then, inyour local communities, you can target those on a mailing list, and as for niche influencers, it could bloggers on particular subjects or in your industry in general.
Once you have these first users using your product, you’ll want to get their feedback. This can be done in a couple different ways; for example, you could supply the customer with a support email address or domain. Choosing that option gives the customer(s) the chance to give you written feedback on what they liked and/or didn’t like about the product. You could also conduct surveys and interviews to ask customer(s) specific questions about what they did and did not like about the product.
There are two different strategies that you could take: quantitative and qualitative. Quantitative, is based on retention, ratings, and NPS. Through NPS, you could collect four and five star reviews, or by seeing how many customers would recommend your product to a friend. On the qualitative end of things, you’d simply be asking your customers why, why, why?
Although customer feedback is important to knowing how well your product is working, you should also be aware of the honesty curve. Not everyone who you will talk to is going to give you his or her honest opinion about your product, but don’t worry- there are ways to help prevent this. Cheung said that to get better feedback, start by offering something that deals with your product for free, and afterwards, collect feedback as a sort of basis for your future reviews. Then have your customers pay for the product and collect their feedback.This feedback will most likely be more honest, because if a customer is paying for the product, they’ll want it be as good as possible.
Another thing to keep in mind with user feedback is that, just because they offer suggestions about adding a new feature or changing how something works, don’t incorporate the changes immediately. These suggestions may actually be beneficial to your product; however, you should make sure to take the time to problem-solve and trouble shoot first, to make sure that you can find the absolute best solution. You want to make sure to explore all of your options, because if you don’t, you could end up choosing the wrong solution to the problem and hurt your product.
Some things to keep in mind while designing and creating your product are to build fast, but optimize for now.Manual work should come before automation, and temporary brokenness is better than permanent paralysis. You want to build your product for optimal use in the future; however, don’t forget to make it able to be optimized currently. For manual before automation, process is always important.Therefore, you should learn how to build and use the product yourself before including machines and robots. And as for temporary brokenness compare topermanent paralysis, Cheung says that perfection is irrelevant and to worry about maintaining the generic case.
So what do you do once you’re startup is ready for a lot of users? Well, you’ll need to learn to do one channel at a time, iterate working those channels, and eventually revisit failed channels. You should work on one channel for a week, and if it works and/or pans out, then continue to work with it until it caps out. To iterate channels, you should continue to work with the channels that have been successful for you, and changing up or coming up with new ideas for them, as needed. As for revisiting failed channels, you should do so over time to see what went wrong and to try to fix it, or just simply try the idea/channel again to see if it works for your product this time.
When dealing with your startup and its product, you’re going to see three types of growth: sticky, viral, and paid. They’re similar, yet different. When dealing with sticky growth, good experience with the product wins. The ways to track this growth is with CLV (customer lifetime value) and retention cohort analysis. The CLV is how much revenue any particular customer brings to your startup over a period of time – the most common measurement of time being 12 months. On the other hand, a cohort analysis is looked at monthly over the course of a year. With this analysis, you’ll have a retention curve, which you want to flatten out over time, because it’ll show you your core customers. However, you’ll also want it increase overall over time, as well to show that your product is indeed growing.
For viral growth, your startup is looking for that wow experience and good referral programs. With these your main focuses will be customer touch points, program mechanics, and referral conversion flows.
Your customer touch points are where users are learning to tell other people about the product. This could be by showing a link after the customer is highly engaged, or having a leave-behind or other memorable platform.
As for program mechanics, you can also offer customers or users incentives for paying for your product; for example, doing a $10 for $10 deal where, if they use it, they get $10 and they get a friend to use it, then the friend gets $10, too.
On the other spectrum of things, paid growth is simply what the name implies. For paid growth, your startup pays for your product to have SEM, display ads, Facebook ads, groupons/daily deals, street marketing, B2B sales, and/or direct mailers. However, with all of this, there are simple and advanced methods. The simple method is CLV>cac (customer acquisitions cost), and the advanced method is clvijk>cacijk. The simple method is used for the product overall, and the advanced method can be geared to a particular part of the product. You should also keep in mind your payback time and sustainability, because if you don’t, you can end up bankrupt. Cheung said that the most common and least risky payback period is three months.
In order to make sure your growth is on track from the beginning, have a growth plan when you first start out. That way, if you have three to four weeks of little to no growth, you can pivot and switch tactics. Cheung also mentioned that even if you do hit a spot of no growth, you shouldn’t completely start from scratch, because that only makes more work for you in the long run.
Cheung also talked about switch-over cost, and said to find the moments where your product is better and different than what the customer is currently using. She used the example of someone throwing a party and needing to have someone come and clean up: the person’s normal cleaners can’t make it, so they turn to your cleaning services instead.
There are a lot of things that go into a startup and its product. By having some insight on how to build your product, talk to users, and grow as a company, you’ll be able to succeed more easily. Take the advice from Adora Cheung, she knows what it takes to get a startup off of the ground.
Image credit: CC by Steve Jurvetson