99. How To Start A Startup: How To Build Products That Your Users Will Love

24 important takeaways from this lecture:

00:00:54 Growth is the gap between conversion rate and churn. These numbers tend to be more mathematically based and measured, however as a startup user interaction tends to be more intimate than calculated.

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00:01:37 The best way to earn $1,000,000,000 is to focus on the values that earn you your first $1,00. Get this right and everything else will sort of take care of itself. 

00:03:20 In its early stages, Wufoo wasn’t interested in building softwware that people wanted to use that remind our users that they worked in a cubicle; we wanted to build a product that people wanted to love. “We were fanatical about creating meaningful relationships with our users.” 

00:04:33 First impressions. Ask a person about their relationship with their significant other, and usually they’ll tell you the story about their first kiss or where they first met. First impressions therefore are important in the starting of a relationship because it is the story we tell over and over again.

Pass/Fail first time interactions – opportunities to seduce – tend to fall under:

  • Homepage
  • Landing Pages
  • Plans/Pricing
  • Login
  • Signup
  • First Email
  • Account Creation
  • Blank/Starting Interface
  • Login Link
  • Ad Link
  • First Support

00:05:00 Whether it is the car we drive, the clothes we we wear, the software we use, the more and more we use it, we eventually ascribe certain personality and characteristics to it, explaining that it behaves in a certain way. 

00:07:52 Consider the emotion on your new user’s face as they interact with your product. Wufoo’s early login button below tested positive in early usability testing put a smile on people’s faces. Consider how the potential new user would describe your personality based on their first impression of your website/product.

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00:10:10 Knowing what to put on your call to action, how to sell to and how to speak to your new users also requires knowing the personality of your target user and knowing what will urge them to buy your product or service.

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00:10:40 Consider something as overlooked as your pre-sell marketing and your after-sales brochures and instructional phamplets.

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MailChimp invested the time to make all their manuals to look and feel like magazines. Their readership shot up and customer service went down.

00:12:00 Even competitions and contests are a way of showing your personality, earning free PR and distinguishing yourself from your competitors. Everyone offers Apple iPads and gift certificates.

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Change how people talk about their origin story of how they first met your product.

00:14:30 Everybody fights. Expect at some point your users will be pissed off at you. Typical business fights include:

  • Cost/Billing
  • User’s Clients
  • Performance
  • Roadmap
  • Others

00:15:00 Looking at your business’ conversion rate as a funnel, Customer support is the thing that happens in between each step (white arrows). Bad customer support is the reason why people don’t make it farther down your funnel and prevents conversion from happening.

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00:15:50 “Software engineers and designers are often divorced from the consequences of their actions.” Before launch, every line of code and software creation is ‘perfect’ and has purpose consumes 100% of your life.

[EDITOR’S NOTE: For more information on but one of the consequences of this divorce, refer to Dark Patterns: Fighting User Deception Worldwide.]

After launch, however, the realities of running a consumer-centric business creeps in, and thus entrepreneurs begin cyphoning off all that other ‘crap’ to other people to manage:

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Benefits of having software creators as customer support:

00:17:70 When customer support professionals receive complaints, those complaints are collected and perhaps never dealt with; or dealt with too slowly. However once the software creator has recieved the same customer service problem three times, they stop what they’re doing and fix that recurring problem and they stop getting phone calls about it. At Wufoo, every employee had a weekly customer support shift.

00:18:30 The four main reasons couple break up (and why users quit using your product or service) are: 

  1. Criticism – “You never listen to or think about your users!”
  2. Contempt – “You think you’re always right and you never listen.”
  3. Defensiveness – “You think you know what I want better than I.”
  4. Stonewalling – “You just don’t care and listen anymore.”

00:21:18 There is a difference in the emotional feeling of your user:

  • When they need help
  • After they have searched your FAQ, help pages and message board for the answer
  • After they have invested even more time contacting or calling your company to find their answer.

How your user feels about the problem is JUST AS important as all the technical details you ask of them for you to fix or debug their problem.

00:22:30 When communicating through a text medium, there are basically only three ways to express emotions:

  1. Exclamation points and emoticons
  2. Curse words
  3. ALL CAPS LOCK

Give your user a simple outlet to express their emotions, and they will be a lot less irrational and a lot more patient and empathetic, thus making your job a lot easier.

00:23:05 There is a direct correlation to how much time we spend directly exposed to users and how good our designs get. Adding too many layers between your software designers and customer service causes your software designers to lose touch with your user’s reality and your software will get worse over time.

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There is a knowledge gap between what your users currently understand about your product or service and what you want them to be able to understand about your product or service. This ‘knowledge gap’ represents how intuitive your application/product/service is. 

This leaves you with two options to decrease this knowledge gap:

  1. Increase the amount of knowledge your users need to understand and use your product, or
  2. Decrease the amount of knowledge required to use your product or service

Adding new features only means increasing the amount of knowledge your users must have to use your product, and investing massive amounts of time monitoring and crafting a perfect FAQ page or a message board to help users navigate the problem doesn’t get to the root of the problem and there is no guarantee your user will take the time needed to try to find the answer before they pick up the phone and call you.

[EDITOR’S NOTE: For more on ineffective business models, watch This Is Broken by Seth Godin.]

00:27:00 One way brands try to keep the relationship going over the long-term is by running a blog or a newsletter. Truth is most of your users will have no idea all the awesome stuff that you’re doing for them.

Instead, build into your user’s administrator dashboard a time-stamped ‘How we’ve improved your product since the last time you logged on’ updates feature lets the user see first hand how their experience is improving rather than you hoping the user will find your blog and read through your blog. 

From this perspective the user thinks “Even though I’m still paying the same monthly subscription amount, It’s incredible to see all the awesome improvements you are making; it’s great seeing how you’re spending my money and that I’m getting maximum value.”

00:31:50 There are only three ways you can achieve market dominence, and how you want to achieve market dominence dictates how you must organize your business:

  1. Best Price – focus on logistics like Walmart and Amazon
  2. Best Product – focus on R&D like Apple
  3. Best Overall Solution – focus on being customer intimate like luxury and hospitality brands such as Chanel and 5-star hotels

Q&A Session

00:33:21 When you have a product with lots of different types of users with varying and perhaps conflicting needs and wants, focus on the people who are the most passionate about your product; at least during the early stages.

So again, make your product as easy as possible to use, and any feature or anything else you add to it must be well-polished.

00:35:48 Word-of-mouth growth is the easiest kind of growth and how a lot of the great companies grow. Look at marketing and advertising and public relations as a tax you have to pay because you didn’t make your product remarkable. That being said, there should be no point where you ONLY focus on product. Ideally, devote time where you work on product and then see what your users have to say about it to you – a constant virtual feedback loop.

But you can’t just cater to every whim and request for new features and changes your users ask for. So focus on the underlying reasons why they are asking for that specific feature.  It’s dangerous to have multiple different product directions that require you to spend a lot of time to try and figure out.

[EDITOR’S NOTE: For more information on building a product that benefits from word-of-mouth, watch the lecture How To Start A Startup: Growing From Zero To Many Users.]

00:38:40 Rather than having a “Hack-a-thon” where your coders and designers create features and ideas that, in all reality, 99% of the ideas will never be incorporated, twice a year Wufoo  held “King for a day,” where a person’s name was drawn from a hat and that person was granted full authority to make whatever changes to the product that they didn’t like. This turned out to be invaluable because:

  • 99% of the ideas weren’t thrown away, rather 1-3 relevant pet peeves with the product were addressed.
  • It democratized the company policy more so everyone felt more equal, regardless of their station within the company
  • It boosted morale because the ‘king’ know how s/he had improved their product.

[EDITOR’S NOTE: Running a project like “King for a day” requires the owner have full faith in the competence and leadership skills of your employees. For more on finding employees you trust, watch the lecture Human Resources Management: Attracting And Selecting The Best Candidates.]

00:39:40 A lot of people like to romanticize it, but remote-working is very tricky. An office space gives you a lot of benefits and conveniences that you’ll have to compensate for when all your employees are working remotely.

00:41:30 Issues such as your site is down or the payments aren’t working, require immediate attention, but most problems within your company don’t need to be solved in real time or right away.

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