Category Archives: Tips

What to do the day after the launch of your company or announcing new features

There is always a sense of euphoria after a “launch” of any sort. Especially if you have been working on your product / service for many months and are not particularly sure how it will be received. Then you get a chance to go “public” with your features / product or company. It tends to be exhilarating, but brings its own set of things to do after the launch.

There are 3 major buckets of items that you will encounter the day after the launch.

They fall into the “do now”, “do later” and “do never” bucket.

First the “Do Now” bucket. I would put thanking people that supported you on the top of the list. Send personal emails to the reporter, initial users, advisors and mentors with a list of links (combine all coverage instead of sending multiple messages) that indicate the coverage your received for the launch. Even if all you did was launch it on HN, it helps to take a screen shot, or even provide a link to the comments. If you have a team, I’d highly recommend you collate all the links, and put them into a document to share and discuss when you meet. It helps to set context to something you have all been working on. Even if the feedback on the launch is negative or “meh”, I’d still recommend you put it together.

I’d also immediately put together a spreadsheet with the major items of feedback and perspectives, and put them into feature requests, comments, questions and general feedback. Some of them you can action and others likely not. Either ways, it is quicker and more helpful to capture all the feedback just after the launch rather than go back and revisit it later.

Finally I’d spend quite a bit of time providing customer support - helping answer user questions, addressing their issues (without coding new features immediately) and also documenting the bugs they encounter – maybe you might want to even fix the blockers or P zeros (priority zeros).

Second, for your “Do later” bucket. I’d write a blog post to collect your thoughts, and write about your experience overall – what were the highlights when you got your start, what the low lights were, what your journey was and how you made critical decisions. In that blog post I’d also add the links to the launch coverage.

I would also spend some time after day 1 on your traffic analytics - where did you users come from, where they spent time and finally what they did. These will help you prioritize the key elements of your go forward plan and help you target the right press or channels going forward.

This is also a good time (do later, not immediately) to check all your social channels – Quora, FB, Twitter etc. to capture your feedback. I dont put these in the do now bucket, because while you might get some feedback that needs immediate attention, they tend to be a big drain and time sink. You will end up responding to some of the feedback, but most of the response from your side will be emotional – either happy, because your launch was well received, or sad because you were panned.

Finally the “Do never” bucket. You will get a lot of email from potential recruiters – who have “a rock star ninja” who wants to join your team and mentioned your company by name, or potential partners who “want to set up time over coffee to talk about potential ways to partner” or other principals and associates at investment firms who “followed” your launch or were tracking you on angel list or tried your product and would like to setup some time to learn more.

These waste the most amount of your time. I’d highly recommend you push them all out by a few weeks and use it as a technique to buy some time and gauge their interest after 3-4 weeks. While I have learned that there’s some truth to the “strike when the iron’s hot”, these are rarely hot irons, but more “flat coal”.

I’d love your feedback. What’s been on your do now, do later and do never bucket after launch?

Vision, Execution and Communication, what makes entrepreneurial founders, great CEO’s

It is often said that the most important things a startup founder and CEO needs to focus on is setting the vision and communicating it effectively, hiring the right people and making sure there’s enough money in the bank.

In the early stages though, the vision is less clear for a company for many founders. What’s more clear (to most entrepreneurs) I assume is the problem they are trying to solve. Or, in many cases the solution they are trying to build.

If you over index on good or excellent execution but have not a clear, well thought out vision, the market, investors and employees will give you time and room to develop. Case in point, it was not always clear what Twitter’s vision was to most people (and probably is still not clear).

So, if you have a great, compelling vision for the future of how the industry (like Marc Benioff did with Salesforce.com), then it does make it easier to grow, fund and scale the company, but if you dont, I wont sweat it.

There are many forms of communication, but the 3 I am focusing on are public speaking, written communication and articulation in a personal setting.

Not surprisingly, if you are afraid of public speaking (which apparently is the 2nd most feared thing for most people after death), the market does give you some leeway. There are many entrepreneurs and senior executives who I know, personally, who are poor public speakers and are not at all charismatic. That usually does not seem to stunt their progress though.

If you are not great at written communication, (which can easily be fixed BTW, with practice), the world is not going to end. It does help, but you only have to keep in mind that over 80% of successful founders in the unicorn list have trouble writing something meaningful even with the 140 character limit that Twitter proposes.

If however you can’t articulate the problem you are trying to solve in 1-1 situations or answer the difficult questions about why your company exists, what it does and how it will solve a problem, then potential co-founders, employees, investors and customers will not give you much leeway.

There are certain situations when even poor articulation (which I have seen multiple times when folks come to pitch their product to us) is something we accept and assume we can help with.

That situation is when someone has executed very well. Whether it is building a compelling product, getting early customers, growing user base or raising funding rounds, doing beats telling 95% of the time.

From time to time, we (potential employees, customers or investors) get enamored by a good story, articulated by a charismatic, passionate and visionary founder, and it may happen more than in exceptions than the rule.

The thing is though, you can’t argue with execution at the partner meeting or at the customer review or when you are talking to your friends about a company you want to join.

Either they did what they did or did not – either they got users and growth or not. They have customers or they dont. They have a product that users like or they dont.

They executed or they did not.

Which is why, even if you being told you dont have a great vision or that you are poor at telling your story or you have bad communication skills, take heart.

If you out-execute and show the proof in the pudding, by numbers, metrics and growth, the market and the participants will let you get away with your “weaknesses” or perceived faults in vision or communication.

Counter Intuitive: To have a successful customer development process startups should qualify out prospects

There are many counter intuitive things that happen during a startup’s life. Many have been out there already – a) initially do things that dont scale b) focus on culture more than skills when recruiting, etc.

When I was in sales early on, I used to get this advice from my manager all the time – the objective initially was to qualify out customers.

That seemed rather bizarre. The whole objective of customer discovery is to find the right customers for your product. Or did we all get it wrong?

Turns out before customer discovery, there is actually a problem discovery step.

Before you find the customers for the problem you are trying to solve, you are trying to find out if the problem really exists.

There are many contours of the problem, and one of the best people I have seen articulate this is Manu Kumar of K9 ventures – he talks about Frequency, Density and Pain

To find a problem worth solving these 3 criteria are important.

So when you do find a problem, your next step is to find the contours of the problem along these dimensions. Are potential customers having this problem, how much of a pain it is and how often is this a problem?

Now the hard part of customer development and qualifying potential problems is that we all have cognitive biases which makes us want to fall in love with our idea. Instead, the best way is to try and find ways that you should not do this (idea) versus something else.

This is why I maintain a to-dont list. (pdf) Apply that to your problem discovery process.

The entire goal of customer development (after problem discovery) is to ensure that you only get those customers who have the 3 qualifying criteria of frequency, pain and density.

You will find initially that to make the problem “solvable”, you will need to focus on one feature or one part of the problem which is the “most painful”. Your potential customers are willing to sacrifice scale, failure, lack of bells and whistles, etc.  because it solves the one piece of the problem which is the most excruciating.

Deciding which is the most excruciating part of the problem is hard and tricky. You will get many head fakes from many of the people you talk to who could be potential customers.

If you are an introvert and don’t like talking to new people (which is most of us), then your initial customer development list is relegated to colleagues, friends, family and acquaintances.

Most of them don’t like to disappoint you, so even if your product is not solving the problem or not solving the real problem they will likely say things to ensure you are not discouraged. Which leads to you thinking that you are actually solving a real problem.

Which comes back to customer discovery and the goal of meeting every potential customer – it should be to qualify them out as a potential early user. The problem you are trying to solve may not be as relevant, as painful, as intense or as immediate as others.

You want to qualify them out. Early, often, quickly and constantly.

That’s very counter intuitive.

A data driven approach to dispelling the myth that planning for #entrepreneurs is “old” school

There is an ongoing meme that keeps popping up ever so often among tech entrepreneurs and gurus. That the “business plan” is dead and there is actually no sense in planning at all.

After all they say “Hands-on Entrepreneurial Action is all that is required to create a Business”.

I have enough curiosity to keep finding out which of these truisms are valid and which are not. Fortunately I also have a position that allows me to try these experiments given that I run an accelerator program.

TLDR: This is absolutely false. Poor or any planning is better than no plan at all for over 80% of startups. In fact, the earlier the stage of the startup, the more is the value of that planning.

Here is the data:

Over the last 3 years, I had the opportunity to identify, select, coach and help 87 entrepreneurs for over 4 months each. I spent about 1.3 hours per week with each entrepreneurial team. In the last 3 years, and in 6 cohorts, there have been a total of 4834 applications we have received and reviewed. Of these my team and I have talked to about 450+ (about 10%) and have met with (for atleast 15-30 min) about 250 of these entrepreneurial teams. A total of 87 of them made it into our accelerator and that’s the sample size. Of these, 89% were from India, and 11% from the US.

There are between 10-12 sprints we run at each of our 4 month acceleration programs. Customer development, technology, product management, design, go-to-market, sales, partnerships, and others. One of the sprints we also run is called the “Operating plan” sprint. I instituted this after the first cohort, when I learned that most investors did not care so much about the “demo day pitch” as much as what the company was going to do with their investment for the next 12-18 months.

So, I put together an operating plan template. Think of this as your blueprint for execution. It would spell out what you were going to do to hire, sell, develop, fund and grow your startup. I put together a template as well to help the companies think through the plan.

It stems from your top level goal first, which depending on your stage could be – get product shipped, get customers to use it, increase usage, drive sales, increase revenue, etc. The only constraint I put was to ensure that you had one goal only. Not 3 or 5, just one.

Then you want to tie in various parts of your company to achieve that one goal.

If you had to hire engineers to build product, then that needed to be spelled out. If that then requires funding, you need to spell that out as well and so on.

So each operating plan will end up having 7-9 sub “plans” for product, development, hiring, sales, marketing, funding, etc.

This planning cycle begins in the 3rd month of our program and lasts 2-3 weeks for the entrepreneurs. During this time, many entrepreneurs are busy trying to get funding and meet investors, which means they tend to have little time for “all this other planning stuff”.

Which makes for a perfect experiment with a control group and a treatment group.

In the last 5 cohorts, I have asked and then politely urged all the entrepreneurs to participate actively in the operating plan sprint. But 50% of the cohort would get another 30 min pep talk from me on its importance.

I’d urge them over a lunch or coffee the importance of doing the plan.

I would not discourage the others from doing it, but the other group I did not spend the 30 minutes with on taking the operating plan seriously. Some of them took it seriously without my urging and cajoling and most ignored it.

Now that I have the data for 3 years, I can confidently tell you that just the act of putting together an operating plan – however poor it is, increases your chances of funding and raises valuation.

I went back to the data to look for my own biases and see if the ones that I urged were “somehow better suited to raise funding and be successful regardless of my urging” anyway, and I think I have no way to really check that at all, but I am confident that the sampling error, if any, was minimal.

Of the companies that I did the extra selling to, 69% of them raised funding within 6 months of the accelerator, compared to 31% who did not.

Even the companies that took the operating plan seriously and put what I consider a poor plan, beat the ones that did not take the operating plan seriously at all by a margin of 20 basis points.

I totally understand that funding is a weak (and only one) measure of achievement (and not of success), but I also realize that it is the metric most entrepreneurs judge an accelerator by.

So, the bottom-line is this.

If you want to achieve any form of success, creating an operating (or business) plan, even if it is poor, is better than not having one at all.

Surveys or open questions – What works better for initial product validation

Over the last few weeks, the new batch (fourth) of 16 companies at the Microsoft accelerator has been getting started with customer development. Some companies are fairly advanced, doing hundreds of thousands of dollars in revenue, but most are early stage. Last week our CEO-in-residence from the Israel accelerator, Hanan Lavy, came by to lead them through our customer development framework. The first thing I gathered from many entrepreneurs after that session, was that they were surprised at how it helped them revisit some of the assumptions they had made when they had the first idea about their product.

There’s an old saying that good sales folks are used to quoting “Always be Qualifying” (as opposed to the more popular ABC – Always be closing”, which never quite works, but is popular). The “lean startup” generation has its own version of that at the early stages of the startup – Always be validating – your assumptions, your plan, your pricing, your offering, etc.

Customer validations, early on, start by asking questions of customers, mostly in face-to-face meetings and then “graduate degenerate” to emails and phone conversations when entrepreneurs are unable to scale. I dont think there’s only one way to validate though – a good product manager uses all techniques to get in front of her customers / users as often as possible.

There are pros and cons to each of the techniques to validate your idea and assumptions, so rather than focus on all of them and their efficacy, I thought I’d take some time to share what I learned from 5 of the startup founders who have been trying 2 techniques over the last week with both Indian and US customers to validate their problem statements, ideas and positioning.

Think of this as A/B testing the format of communication as opposed to the medium or the message.

The medium most of them chose was email, given that they had to provide a quick turnaround back to Hanan (they were given 2 days to speak / connect with at least 10 customers. They could have chosen face-to-face meetings or focus groups using Webex / Skype, in app questions or real-time in-app chat, but they all chose to email their potential and few existing customers.

Now that most chose email, the next question I asked them was how many of the sent customers open-ended questions versus an objective survey with 3/4 choices for answers.

Turns out 2 of them used an online survey tool with 5 questions and 3/4 choices per question and 3 of them chose to send and email with 4-5 open-ended questions. Response rates varied from 40% to 60% I was told (fairly high given that their potential customers had only 24 hours to response). The survey’s got more responses than open questions.

What I did learn was that for companies that were earlier (had started building product, but did not have a prototype) the survey format worked better since they were able to get specific answers to questions and make decisions on 3 features they had to drop so they could ship quicker and gain more feedback quickly.

The open questions format worked for those that had worked longer with their customers and prospects since they got good qualitative feedback and a suggestion or two, which they had not considered before.

I have a personal bias against survey questions, since the choices are predetermined. Survey’s tend to be much better when you want a quick pulse to make feature decisions, not direction decisions. Surveys also work when you have a large pool of responses. Open questions on the other hand work just as well with 5 people as 50 – but at 50 people you have a hard time collating the responses. Open questions also requires you have a better relationship with the folks responding since their commitment of time is more.

What I also learned was that while there are pro’s and cons to both mechanisms, the decision you are trying should guide your choice of format, not the speed of the responses.

There are many types of decisions one takes at the early stages of the startup. Product direction decisions are rarely going to be resolved with surveys or email. Those are the type that many people leave to gut, data and lots of soul searching.

On the other hand, validating assumptions is always better with open questions is what I have learned.

Tip on being a good manager – Saying the same thing differently #startup #entrepreneur

One of the things I have figured out that I am not good at is being a great manager. I am largely bad at managing people. People that work for me like “hanging out with me” as a friend or a colleague, or even working on projects with me. Most people like working with me, but working for me as a direct report is a pain. I go between the two extremes of being a micro-manager to completely hands-off.

This is an extension of my personality. I am a known control freak, I prefer to be direct and am less of a consensus builder. I really value high intellect and have little patience (that’s is the biggest drawback in India as a manager) for people that dont articulate well or speak up. I do listen, (I am told) but I rarely acknowledge that I have listened.

This works in specific situations (running a sales team) or being a product manager (when the engineers report to another person), but works very little elsewhere.

I realize that most entrepreneurs with a technical and product background face a fairly similar situation. Not have too much experience in being a “manager” hurts your in retaining good people. Here is a rule of thumb if you will that I was taught early in my career at Cisco and then at HP, that have shaped my management “style” Ed. It is a joke I call it management style, when there’s no real style at all.

You have to adapt your communication style to the different people in your team. This was the biggest problem for me. I dont like the effort it takes to change my communication style. I am very direct, brutally honest and dont mince words. That does not work for most people. You cant change as a person much (I think) so you have to work hard at communicating the same thing differently to different people in your team. Let me give you an example.

In 2009, after 4 months of working on our product and getting feedback from customers that the product was not quite there, we knew we had to pivot. Communicating that pivot to the team was a bigger challenge.

One of the folks in my team is very numbers driven and a “give me the facts, so I can form my own opinions” . For her, I had to give the basic facts of our user engagement and customer feedback before I could convince her to pivot.

The tech lead was a young developer (with about 3+ years of experience) and had worked on the product from the start. He was a lot more emotional about the product being “his baby”. Giving him the facts only made him defensive. So the approach I had to take with him was to get him on a trip to meet 13 customers in 5 days to listen to the feedback for himself. More expensive, but worth it.

There was yet another person on our team who tended to be the group’s excitement barometer. When she was in a good mood, everyone’s spirits lifted and when she was cross, most people wont answer even the most basic of questions. It was pretty surprising given that she had no one reporting to her, but she was the team mascot. With her we had to make her feel “involved” with the process and the decision.

For her I had to take a dramatically different approach. I knew if we communicated the pivot incorrectly, there would be a week of unproductive nonsense at the office. Done right, I knew we could get a superhuman effort from the team.

To involve her, we put her in charge gathering feedback from all our customers. She had to put together the survey, let customers know, collate the responses and then come up with her recommendations to communicate to the team. Worked like a charm. She suggested that we “pivot” but did not use that word.

As an entrepreneur, one of the big challenges you will face is hiring people. The next big challenge is to keep them motivated and focused.

Communicating differently to each of your direct reports is one way to do that effectively.

Startup idea: Product attribute database

There are over a million online retailers in the US alone and over 2.5 Million worldwide. Many are in categories that are large and well defined (apparel, electronics, books, etc). If you are a online buyer one of the many things you want to do is to research a product well – understand the features, options and compare it to other similar products.

These are defined by what I call product attributes.

Comparisons & reviews are largely subjective and prone to long tirades and endless sentences without getting to the point. Here’s an example. Notice that current attributes that are already stored by Yelp include time the restaurant is open, expected attire, etc.

Those are some of the things I’d like to know.

A large number of things I’d like to know are not really comparable.

They are mentioned in the 88 reviews provided by end users. Taste of the food, visual appeal of the food, softness of the bread.

Reviews that are unstructured are a pain – to sort, filter, compare and review.

There are many who claim that the product attributes for products such as cameras and mobile phones are fairly complete and those are problems already solved.

I think that’s broken thinking.

If you look at how people search for cameras, many (not all) “lay people” dont search for HD pixel density, dual core Snapdragon processors etc.

They search for “how to take good pictures in the dark with your <favorite phone>” or “how to record a live band in <favorite phone> without the background noise”.

The attributes that customers want are those they use the product for. Unlike the specifications and features that manufacturers (or producers / service providers) build them with.

I think if you build a product to classify the attributes that matter for every product (start small and build by category) with a combination of technology and crowd sourcing (or any other mechanism), you will build a valuable company. 

Not to mention that its highly likely that Google, Yelp, Microsoft or others will buy you.