CS419 Info. Technology Entrepreneurship

CS419Info. Technology Entrepreneurship Fall 2012 – 2013 Emre Oto Building a Lean, Scalable Startup www.CS419online.com Follow on Twitter: @CS419Bilkent

«Get Out of the Building» • Do we really understand the customer’s problem? • Do enough people really care enough about the problem for this to become a huge business? • And will they care enough to tell their friends? • For web/mobile product development time is shorther and feedback comes faster: • Develop low-fidelity MVP website or mobile app • Later test with a high-fidelity MVP

Design Tests and Pass/Fail Experiments • Design experiments, run them with speed, tempo and fast cycle time. • What is the simplest pass/fail test I can run to learn? • Example: Assume your hypothesis is you can acquire 5M users spending $1M on AdWords. Then yout pass-fail test should be to spend $500 in AdWords, and test if you can get 2,500 clicks for 20 cents per click • Test for 3 different landing pages • Also test how fast you can get there

Build Your Low Fidelity MVP • Once again, goal of the Low-Fi MVP: • Do you understand the customer problem or need? • When you do, do lots of customers care? • Low-Fi MVP can be as simple as a landing page with: • You value proposition • Benefits summary • Call to action to learn more • Answer a short survey • Preorder etc. • It can even be a quick website prototype in PPT or built with a landing page creation tool or wireframe prototype • Very basic page without anything fancy

Build your Low-Fi MVP • Get the MVP live as quickly as possible, often the day you start the company • Start with a low-fi website that: • Describes the problem’s severity in words or pictures («Does your office look like this?») • Describes the problem, encouraging users to «sign up to learn more» • Shows screenshots of the solution («Pay your bills this way») • Consider other simple MVP components like, a YouTube video showing or discussing the problem, a short online survey on the issue, blog asking visitors their opinion

Build Your Low-Fi MVP • Invite consumers to respond as thoroughly as possible, giving them several options for doing so • Start by asking for a response as simple as signing up to learn more • Next most importnat measure is whether they will rush to tell lots of their friends, which tests the visitor’s view of the importance or magnitude of the problem • Invite more detailed feedback via an e-mail or a survey tool, ask if the user would welcome a phone call to discuss product/company

The Low-Fi MVP • Key idea: Have the simplest response mechanism: • «Sign up to learn more» • The more you ask, the less likely the user will respond • How to Build a Low-Fi MVP (for coders): • Pick a website wireframe prototyping tool (e.g. JustinMind or Balsamiq) • 99 Designs for «good enough» graphic design • Themeforest has ready-to-go templates • Create wireframes and simulate your Low-Fi website • Create a fake sign-up/order form to test customer commitment

How to build a Low-Fi MVP (cont) • Alternatively use LaunchRock or KickoffLabs to create a «viral» landing page • Embed a slide show on your site with Slideshare, or embed a tour video using YouTube or Vimeo • Do user interface testing with Usertesting or Userfy • Don’t underestimate the long-term value of design and the importance of user interface, but at this stage you do not need UI perfection.

Using Multiple MVPs • Try multiple landing pages to test different problem descriptions • Example: say you have a payment management website, test as fastpay, ezpay, flexipay • Address different problems: Speed, ease of use flexibility • Buy Google AdWords for each URL, and present the problem three different ways in the AdWords space and langing page • Rotate listings so each is on top of the Google stack exactly 1/3 of the time • Which approach generates the most clicks/sign ups/referrals?

Low-Fi MVP Problem Test • Start inviting people to experience the MVP, at most a few hundred at a time • Follow the plan outlined in your «get customers» hypothesis, accelerating the pace of customer acquistion slowly • Watch every action or inaction closely • Three basic ways to invite people to engage on your site: Push, pull or pay

Low-Fi MVP Problem Test • Push people toward your site or app by using e-mails, their friends, or social media • Pull them with SEO and pay-per-click or other devices • Pay: Buy lists, clicks or other tools that deliver eyeballs.

Low-Fi MVP Problem TestPush, Pull, Pay • Push Contacts Need Referral Sources: • Reach out to friends and contacts usng e-mails, texts, FB, Twitter, and LinkedIn • Encourage them tto reach out to other people • Goal is to obtain the longest possible list of e-mail addresses, you can worry less about the details • Provide a draft messaage your friends can use when reaching out on your behalf

Low-Fi MVP Problem TestPush, Pull, Pay • Pull strategies: • Can be ads, textlinks or AdWords and natural search driving people to the MVP, app, or site. • Solves three problems: • No need to nag everyone for e-mail addresses • Only people interested in the issue, problem or need will respond • People who are pulled are more likely to respond, perhaps repeatably

Low-Fi MVP Problem TestPush, Pull, Pay • Pull strategies(examples): • Google AdWords • Display ads or textlinks on social networks or relevant websites • Press releases with links to a survey or site about the problem • Getting bloggers to blog about the problem and invite commentary

Low-Fi MVP Problem TestPush, Pull, Pay • «Pull» Strategies: • Google AdWords • Display ads or textlinks on social networks or relevant websites • Press releases with links to a survey or site about the problem • Getting bloggers to blog about the problem and invite commentary

Low-Fi MVP Problem TestPush, Pull, Pay • «Pay» for Contacts: • Typically the least attractive startup option for $ reasons, but the fastest option • E-mail lists: Buy permission-based e-mail lists • Online survey tools: Buy a package of respondents, survey design and implementation and a guaranteed number of taget responses from providers like Markettools • Hire a publication: Some publications can survey their readers for you at a cost

Missteps to avoid when testing the Low-Fi MVP • Customer discovery slips from the hands of founders and becomes a task for specialists (consultants, employees etc) • Comments are summarized, averaged, amalgamated etc. to blur or hide «outlier» comments that often lead to iterations and pivots • Understand laws on messaging and privacy • Online tools provide very little chance for context and idalogue that «drill down»

Missteps to avoid when testing the Low-Fi MVP • As a rule, people pay less attention filling out online surveys than they do in face-to-face conversation • Online feedback is not a substitute for leaving the building and talking directly to customers, some of whom can be initially identified online • People lie on the web • If you are depending only on web data you’ll never know it

See their pupils dilate for real data • You don’t have real data unitl you have seen their pupils dilate • Interview some of the sources of your web data in person • Interviews also test how well your MVP is explaining the need or problem • Can the customer «play back» the value proposition or problem statement? • Do they get excited, or do they politely meander through the discussion?

See their pupils dilate for real data • Talk about how extensively this problem affects their friends or coworkers • Would they be willing to buy a product that solved this problem? • Be on the watch for outliers and comments like: • It would be much more important if you did this • Isn’t that the same as procut x, which never works right? • You are most likely to find pivots and comments in these one-off comments

Drive traffic and start counting • Use web analytics to track hits, time spent on-site and source • Once you move beyond your initial, simple MVP, consider a more advanced analytic platform than Google Analytics: • Kissmetrics, Mixpanel, Kontagent etc. • Create an account to measure user satisfaction: GetSatisfaction, UserVoice, etc • Measure how many people care about the problem or need, and how deeply they care • How many people register to learn more?

Drive traffic and start counting • How many people share? • Include widgets for forwarding, sharing, and Tweeting the MVP • Focus on conversion rates • If the MVP got 5,000 page views and 50 sign-ups, stop and analyze • What percentage of people invited to the test actually came? • What percentage of people in each test: • Provided an e-mail address? • Referred or forwarded the MVP to firends? • Egaged further in a survey, blor or other feedback activity? Of those who answered, how many declared the problem «very important» vs. «somewhat important»?

Drive traffic and start counting • Questions like these yield richer customer feedback: • Is there anything preventing you from signing up? • What else would you need to know to consider this solution? • Collect e-mail addresses so you have away to contact people for more in-depth conversations • Use the «Net Promoter Score»: Guage customer interest in the problem or need • Asks custoemrs to answer a signle question on a 0-10 scale where 10 is «extremely likely» and 0 is «not at all likely» • Example: «How likley is that you would recommend our comapny to a friend or colleague?»

Drive traffic and start counting • People fall into three groups: • Promoters (9-10 rating) • Passives (7-8 rating) • Detractors (0-6 rating) • The percentage of detractors is subtracted from the percentage of promoters to obtain an NPS. An NPS of +50 is considered excellent

CS419 Info. Technology Entrepreneurship