ashmaurya

Founder-led sales

Pains and gains aren't enough without stakes

I'd like to subscribe to your formula as well if you can tell me how to repeatedly delight customers :-)

As I point out in the post, I'm not one for needless process... but beyond a certain threshold, I find predictability is needed.

Yes, but this kind of anchoring is "artificially" manipulative. It's possible you convince a customer to accept a higher price at first, but pretty soon buyer's remorse will set in and you're screwed.

I do believe you want to pick "valid" anchors and sometimes be more selective (as-in the iPad case) but the comparison has to stick.

In the next post, I'll cover my approach to not only how to test price with customers, but how to get them to want to pay.

Yes, pricing is a conversation but you need to lead the conversation because if you pause and think about it, there is no rational justification for your customer to offer you a fair price.

They are either clueless on value and don't know OR they'll low-ball you because they want a good deal.

"The fair price for your product is usually higher than what both you and the customer think".

I'd disagree and say with wine you'd have to explain a lot more (as you did). We know from the existing bottled water market (in the U.S.) that a viable market exists at both $0.50 and $2.00. $2 might be a ripoff to you but it's what some customers always purchase which leads to Principle 2.

The brilliance is picked an externally accredited source (pundits) for a product twice in price. Another alternative was positioning the iPad as a better (bigger iPhone) but that obviously would not have worked as well.

The context here is for products where one would sell a product or service directly to customers e.g. SaaS, enterprise. Crowd-sourcing is a different model. So are multi-sided and marketplace models.

Customer development is not billed as a customer acquisition strategy but there is an implicit expectation that because "customers hold all the answers", cust dev will reveal the path to customers.

I don't believe customers hold all the answers and the point of this post is that you can't be complacent about finding and testing that path to customers.

It's not the customer's job to know what they want. - Steve Jobs

Customers are great at articulating problems but whenever they start suggesting solutions, I try and get to the root problems whether it's before Version 1.0 or a feature request after.

Before launch I do talk to customers - the first is an interview, second is for feedback. The interview is to learn about problems and how they solve them today (existing alternatives).

Armed with that knowledge, I then build a "demo" (prototype, mockup, etc.) that I show to them once more to validate this "will" solve the problem before I build the real product/feature.

For a more detailed write-up: http://www.ashmaurya.com/2011/07/how-we-build-features/

- Ash

If you're interested in customer development / lean startups as applied to web products, also checkout the book roughcut: http://news.ycombinator.com/item?id=1977124

If you'd like early access to LeanCanvas, please drop me a line ash@wiredreach.com

Download link: http://www.runningleanhq.com/downloads/running_lean_rc.pdf

Thanks jefflinwood.

The book isn't a lead-in to LeanCanvas and I was/am conscious about not making the example in the book self-promotional. I wanted to pick a "real" example to which readers could relate and one that I had recently built. The software would most likely be bundled with the book. As a standalone it wouldn't cost $49/mo but more like $14/mo (still early to tell).

Thanks for the SEO tip.

Thanks...

The structure is something I've struggled with. There is certainly a battle in my mind between a chronological presentation of "the methodology" and building sufficient background context.

This is the first structure that made sense but your comments of poor navigation and too much summarization are right on. I will try and find a better flow for the next iteration.

Parts 2 and 3 are still being written. I wanted to put out what I had so far and really appreciate the detailed markup you did on crocdoc.

I've got 2 teflon jackets on... so don't spare any punches... looking forward to more.

cool - thx!

Thanks Shamiq. This is still a roughcut and I am anticipating additional refinement. At this point, quality feedback trumps tighter control.

I talk about the "No Uploading" change a little in my last post (Troubleshooting Free Trials) where I make the point of getting users to trial first and educating them later:

"...what I found in our case was that trying to educate people on how our product worked differently was a loosing battle. Telling people they could share their photos and videos instantly and without any uploading usually resulted in one of 2 reactions. They either got confused or didn’t believe us. We instead decided to focus on a more general “finished story” benefit and ushered the user to experience the product for themselves."

Granted our audience is typically less technical, but this was the case even with technical folks when I described the service to them.

The "personal" picture over a screenshot tested a lot better and has worked for us.

Nothing quite as usability oriented but I've also tried fivesecondtest.com, feedback army, and mechanical turk... and lately face-to-face usability testing (the best, if you can afford the time).

I agree. At the same time pre-mature optimization is waste. On it...

Sorry about the database error earlier... Yes the blog is running on a server beach hosted server using apache + wordpress. Today was the first time it ran into load issues which I guess is a good problem to have. In either event, I've addressed the issue for now but will be looking into some longer term tweaks.

Thanks.

I agree and hadn't really noticed the "Hire managers" text till now... Then again Steve is painting a picture for any type of business from a web startup to biotech.

My interpretation of this process for a Web startup is getting to transition using just the founders (plus advisors).

I think it feels "misleading" because there is no time scale attached to it and maybe the word "Scalable Startup" should be changed. Building a scalable startup is all about the things you highlight... getting to problem/solution fit, then product/market fit... Key is getting there with low burn.

Once you have product/market fit, you have the semblance of a business. You transition towards growth from there.

I think a blog is the perfect medium for a periodic roll-up announcing new and noteworthy items. This allows you to highlight specific themes that can appeal to both current and border-line users.

I agree real-time tweets would be too spammy (unless you have a twitter account just for releases) but a community forum might be better for immediate announcements.

patio11 - The reason a lot of people start with AdWords is exactly because the learning curve is low and there are some reports of success using it. However, as people have learned to work AdWords, I'm afraid such reports are getting far and between, and you can very quickly loose yourself in it.

Our goal was not to work AdWords to pull bunnies out of it, but rather to drive a little targeted traffic so we could test. We got much more utility out of usability testing and talking to real customers. I also think there is a lot more low lying fruit to be picked before resorting to working AdWords.

Don't care for Consolas but the blue/yellow color scheme is acceptable with Monaco.

We are currently searching for the right niche but one that seems to have some legs is the digital home market - partnering with ISPs to up sell higher bandwidth plans, and networked hard drive and appliance manufactures for value add service. We've also had some pretty good uptake with busy parents that want to share tons of photos (and videos) without a lot of work.

Thanks for the comments.

Thanks... I agree those bullets are painful and I'll be changing that very shortly here.