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Lean Startup: Behind the Curtain

People love to talk about lean startups, MVPs, and fast iteration.  Since I quit my job at the end of January this year though, living it was a whole different thing.

This post covers the evolution of our product strategy from the idea to where we are today.

 

As you read through, though, here are some core tenets to keep in mind:

  • We are bootstrapped; this means limited runway, and we want to spend as little money as possible.
  • We wanted to launch and get feedback as quickly as possible.
  • Early customers are so important to us, so we wanted to have an experience that would delight them enough to work through any issues with us.
  • We tried to be as lean as we knew how.

 pop forms goal tracking and status workflow version 1 concept

Image:  The very first version, most of the design is just small customizations of Bootstrap (being a back end dev it took me a little while to get the hang of pretty UIs)

 

Building the V1

 

When I first started popforms, I had this vision around making performance reviews and status mails reflect the work people did.  I had an analogy that goals were like buckets and as you completed work it would go into the buckets; as you filled up the bucket, you got closer to achieving your ultimate goal. So popforms was going to be about making that process of completing tasks and adding them to buckets seamless and easy. I built plugins for Trello, Basecamp, and Jira, and made it simple to add completed work to your goals by just replying to emails.

 

However, as much as I thought this was a great idea (it sounds useful, no?) the reality was that once people started using it, their response was underwhelming.  Some people loved it, but most of the engineers said things like “it is just one more tool to track our work.”

 

Another piece of feedback I received from managers was what they wanted was more content and philosophy built in.  One guy said to me “I love your blog and content because it helps me do my job better. Can you put that into the tool?”.

Other people mentioned loving the weekly emails about their goals because it served as a reminder to stay on target.

 

I will admit that at this point I freaked out a bit.  I had been heads down since I quit my job to build the first version of the product, and the reality was that people weren’t very interested in using it, let alone paying for it.

 

 popforms goal tool design concept version 2

Image:  The next iteration, this version has the plugin integrations and new color scheme.

 

I knew I had limited runway, and I was really worried about building something that could start bringing in revenue before I depleted my savings.

 

At the wise suggestion of a smart friend and veteran entrepreneur, I started looking to raise money (since that would take financing out of the equation and allow me to do what I do best – execute). I spent a full week putting together a pitch deck, which involved lots of research, lots of feedback, and a bit of practice.

 

In the exercise of doing that deck, though, I also uncovered that the real opportunity wasn’t in workflow and making performance reviews less painful, but instead in e-learning and helping people be better leaders.

 

I started talking with investors and had two term sheets within a couple of weeks.  You can view the pitch deck we used below.

 

However, at the same time, I was also having more customer conversations, and reworking the numbers and financial models myself. And from those exercises my confidence came back.

 

 

How do you know someone is excited by what you do?

 

When I was building the workflow tool, people seemed interested and said they would be up for testing. But when I told people about the goal tracking and courses/content, nearly everyone’s eyes would light up.  People would throw out ideas and get excited, and it was actually substantially different emotions and feelings than with the goal-tracking tool.  I didn’t realize it until I had both conversations; it took the two experiences to really compare them.

 

After 53 customer interviews on the phone and in person, I knew that people wanted to pay for what I was building this second time.  In fact, I even had some of the people pay in advance.

 

I realized that if I just listened to what my customers were telling me, I could keep building a successful product on my own without taking financing.

 

So I decided to take a break from fundraising and move forward with this new vision and see how far I could go. I went back to building.

 

popforms goal tool design concept version 3

Image: This was the version in May, although the newest version is sooooooo much better, but that one I want to leave as a surprise :)

 

Building your audience and your product together

 

Once lesson I learned in the 3 startups I worked for before founding popforms (Delve Networks [acquired by Limelight], SEOmoz, and Decide.com) was how important it is to have an audience.  At my first startup, we had the best product on the market at the time, and we priced it the lowest too, but we couldn’t make sales.  At my second startup, we had a big audience, but not much of a product. In some ways, though, it was easy to build a product for our people by including them in the process. They told us what they wanted, and got excited as we included them in its creation.

 

When you start with your customers and you have their attention, you can bring them into your journey and create the product together.

 

As a result, I knew I wanted to get the popforms blog up quickly and start directing my audience there.  I wanted to build brand equity and traffic even before we had finished building the product (and in some ways before the product idea was totally solidified).

 

We started with an email list, and that is still one of the main calls to action on the site (since we are pre-launch). However, we are also trying to build community on Facebook and Twitter, too.

 

Once the website was up, we started posting blogs and you can see how those actions have been helping build our traffic.

 

popforms website traffic so far since launch

 

Leading with content

 

We knew that people wanted content as part of the product.  And we had some interesting ideas on transforming the traditional e-learning experience to be less like a classroom, and easier to fit in with a busy person’s schedule.

 

We came up with the concept of Leadership Sparks, which are structured, actionable advice for doing your job better, delivered to your email inbox. And we decided to launch them earlier than the goal-tracking tool.

 

Originally we hadn’t planned to charge for these. However, a wise friend and advisor said that we should charge, and shared some firsthand learning about course completion and satisfaction of paid customers in online education.

 

We decided to do a little experiment to verify that data with our audience. We started out charging for the courses, but gave away some sparks for free to compare results.  Overwhelmingly, the people who paid were more engaged and gave the course higher ratings.  It was a stark contrast, and with the other data, provided enough evidence to convince us to charge out of the gate.

 

One customer even said:

“Honestly, even going through the act of spending $10 and committing myself to thinking about my personal brand has been good for me. It makes it real in my mind, and spending a little bit of money on it helps me feel more comfortable spending time on it (funny how we value things more when we are charged or we get paid, but free is a totally different game). I’m really glad you charge because I don’t think I would’ve taken the concept and calls to action seriously if I hadn’t paid.”

 

But besides the psychology (and the revenue) another key benefit of charging, though, is that we also pre-qualify leads.  If someone isn’t willing to pay $10 to take an online course, it is unlikely they are going to pay $50 per month to track the goals of their team.  We are filtering for the people genuinely interested in this content, and in this way we can speak and cater to the enlightened leaders.

 

By asking users to pay for our product now, we are better able to determine who will pay for our bigger product later.

 

Surveying people who paid for courses, on topics they want to learn about it, is way more useful than surveying the random people in the audience.  People who have already paid once are much more likely to make a second purchase than a regular visitor to our site.

 

No one ever says they launched too early.

 

We weren’t sure anyone would pay for Sparks.  And since we didn’t see it as a core part of our revenue we didn’t want to overbuild a whole system unless we had enough volume.

 

In addition, because we wanted to launch quickly, there were a lot of cut corners prior to launch.  Things like email scheduling and some email automation was put on hold – since we were a little worried about spamming users with extra emails early on.  The admin tools were lacking at best (like to change someone’s email address – which required writing a little SQL).   And some of the emails were missing nice images and formatting.

 

We made the decision to do a soft launch.  We didn’t want to do press or anything to crazy because we knew we cut corners and were testing an idea (although in retrospect I think this may have been founder insecurity in a big way – I felt so vulnerable and endured so much criticism from people early on, I still get gun shy about telling people about my business – ugh, I clearly need a thicker skin).

 

In retrospect this was actually pretty smart.  The night before releasing Sparks I elected to move hosting providers.   Well it turns out there was an issue with dynamic IPs and their “website accelerator” that caused all sorts of DNS issues.  Oh and they only showed up during load – i.e. after I emailed our whole list with the announcement.  Doh.

 

Despite the hiccups though, signups were strong, and so I have been working non-stop (12-14 hour days are back with a vengeance) since.  I did have to institute a “no-coding late at night” rule though, since I seem to write crappy code after 10 hours of brainpower.

 

Besides the technical issues, launching Sparks early did set us back a little bit.  We are now about a month behind where we would have been launching the goal-tracking product first.  Of course, the Sparks are great because we are really able to start a dialog with our paying customers, so this is not a bad place to be.

 

Solving the onboarding empty state

 

Another great benefit of having the Sparks launched before the goal-tracking tool is that when someone who has taken a Spark before starts using the goal-tracking product, we can seed their initial state with the work they have completed in their Spark. This is great because the empty state of the tool was really underwhelming initially (we were faced with adding a lot of friction at sign-up to set goals, or making it easy and them empty once they were in the tool).

 

Much of the benefit of the goal-tracking product is garnered over time, with the weekly emails, and feedback that can only come from usage. So with Sparks we can seed the initial state with Sparks in progress. We have even created a Goal Setting Spark for every user to start with, that takes them through setting goals over the course of 2 weeks.  Essentially using our own medium, we extended our onboarding to two full weeks, teaching and entertaining in the process.

 

To be successful, you must make it as easy as possible for people to start using your product and, in our case, start accomplishing their goals.

 

Making our dialog a conversation

 

Going forward, our focus is to add new Sparks in different topics and see how they resonate with our audience.  We are also testing free Sparks, and partner Sparks with other content creators, though at the end of the day we see these as lead generation and lead qualifiers for people interested in the larger team-based tool.

 

Of course, the upside is that now that we have all these people and their email addresses, we are able to engage with them, ask them questions, and bring them into our process.  They have become part of the popforms’ charter team.  And we want to keep them feeling special and reinforce that message as much as we can, because they are so important to our future success.

 

Hopefully, when we do launch the goal-tracking tool our charter team will be excited about it and be able to help us spread the word.  And between now and then we will keep building the audience, creating more great content and adding value, and iterating away on the product.

 

 

You should be a member of the popforms charter team.

 

We are so grateful for the early adopters who have already signed up for Sparks, who engage with our launch list, and who help us share our content by spreading it across their networks on Twitter, Facebook, and even offline by referring their friends to us.

 

We have been blown away by the thoughtful and brilliant feedback we’ve gotten so far, and would love to hear from even more of you!

 

If you want to want to help us shape the future of Popforms (and if you liked this post, where you got a little look behind the scenes), I would encourage you to sign up for our Launch List where I share what’s going on in the company every couple of weeks.

 

And if you haven’t had a chance to check out a Spark yet, drop by our Sparks page and see if there’s one that strikes your fancy. We add new content every week, so hopefully there is (or will be soon!) a topic that you think could make you a little bit smarter, happier, and better at your job.

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