Jim Lastinger

Shameless Self Promotion Time

March 8, 2011 by jim · Leave a Comment
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Every now and then, starting today, I’m going to just come out and ask you to subscribe to this blog. It’s not easy shamelessly plugging my wares, but I’m getting better at it! If you enjoy what I’ve been doing here then I ask you to subscribe to my feeds, get on the newsletter list, follow me on Twitter and Facebook, whatever you want to do. I also crave comments and conversation right here on the blog, so please interact and keep it up.

You should also mention this blog to any of your business-minded friends out there. Call your mom. Tweet your friends. Bug your cousin. Inappropriately text your ex-girlfriend. Whatever it takes.

Thanks for your time… now back to the regularly scheduling programming.

Filed Under: Misc · Tagged With: facebook, membership drive, newsletters, rss, self promotion, shameless, subscribe, twitter

Case Study: Where Shrinking Went Wrong

March 7, 2011 by jim · 3 Comments
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We launched Shrinking, our weight-loss tracker webapp, about a year ago. The site is relatively simple in scope and was designed and built in about 3 months. The idea for Shrinking came about through a personal desire to lose weight and track my progress. At the time there wasn’t a service that offered the features and simplicity that I envisioned, so I set out to create my own app. I figured that if I build an app that I would personally use then it would necessarily be appealing to the masses as well. After all, the weight-loss market in the US is absolutely enormous. I was wrong.

The featureset, order of implementation, and interface were all devised and implemented by our team, with minimal feedback from outside. Once the app was completed we started marketing the app through our existing contacts, social media, etc. We did get traffic and signups early, but the results were nowhere near what I was expecting.

The goals going into the project were: 1) Have a conversion rate of at least 10%, 2) Have a paid account/free account ratio of at least 5%, and 3) Have consistently engaged users, with at least 10% of users logging into the site on a daily basis. Our conversion rate after the first year has average around 5%. That’s nowhere near the 10% goal that we’d set, but not unreasonable for a new webapp. Our biggest issues are paid accounts and engagement. Our ratio of paid/free accounts has been closer to 1%… a far cry from our goal of 5%. My belief is that the reason for the lack of paid conversions is the lack of user engagement. A large majority of our users create accounts and never return to the site. That’s where I believe we went wrong, and is where I believe that a better customer development strategy could have made a difference.

The lack of engagement with the site tells me that users aren’t finding the existing featureset compelling enough to return. Our webapp is heavily geared toward charting your weight and setting goals. Additional features added over the past year include tools for tracking your diet and exercise. We know that users do enter weights initially, but few return to the site to enter subsequent weights. Goals are less used, and the diet & exercise tracker is rarely used.

At this point we don’t know why our customers choose to signup for the product but disappear soon after. Are we pushing out an inferior product? Are we pursuing a market that doesn’t exist? Is our site turning off potential users? All of these are questions that should have been explored in detail in the development phase. Now I’m having to looking for the answers after the site has been live for a year, which is much more complicated because pivoting is going to be more difficult and time-consuming.

I plan to keep writing about Shrinking and it’s progress. It’s a great example of how things rarely go as you would expect them to. I’m going to go through the steps of customer development for an existing product and update you along the way. Hopefully I can learn some things that other struggling webapps can apply and benefit from.

Filed Under: Case Studies, CustDev, Features · Tagged With: case study, custdev, customer development, shrinking, what went wrong

Why I Love FollowUp.cc

March 5, 2011 by jim · 4 Comments
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Followup.cc Emails

FollowUp.cc is a dead simple email reminder service that helps me keep on track and stay organized. The premise couldn’t be simpler. If you need to be reminded to followup with a client in a week you would just send an email with the details to 1week@followup.cc.

You can set the time when you want to be reminded by choosing the email address that you send to. You’ll automagically get your reminder email at the appointed time. You’ll even have the opportunity to snooze on the reminder email, thereby having FollowUp.cc send you another email at your newly specified time.

The screenshot above is actually from my Gmail account and shows several of the different followup.cc emails I’ve used recently. I’ve basically stopped using task management software and use my Gmail account for everything. FollowUp.cc gives me the ability to be reminded about everything I need to do without cluttering up my inbox with countless messages to myself.

Have you used FollowUp.cc? How has it changed your workflow?

Filed Under: Tips and Tools · Tagged With: followup.cc, productivity, reminders, task management, tools

Lean Startup IS About Saving Money

March 3, 2011 by jim · 7 Comments
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You always hear lean startup advocates say that it isn’t about saving money. That may be true in a very direct way, but, applied correctly, lean startup SHOULD save a startup money. Lean startup is all about reducing waste during the development phase. Waste can take many forms, including time, manpower, and opportunity cost… all of which have a direct impact on the bottom line.

The True Cost of Unwanted Features

Developing features that customers don’t care about is a surefire way to lose precious development time and money. You have to pay your developers for the time they spend building the unnecessary features. This is especially crucial in bootstrapped startups where salary budgets are tighter or non-existent.

It’s important to make sure that development time is spent on features that are highly-valued as identified by your customer development process. Not only will this make sure that you’re working on the right things, it’ll save you precious money in the short-term. You can never get your feature-set correct 100% of the time, but each pivot or iteration of your product has an associated cost that you need to minimize.

There is also an opportunity cost associated with each pivot. The difference in revenue that you would have earned if you had your product perfectly fitted to your market versus what you actually earned is an opportunity cost. Understanding that lost revenue potential can be an important motivator to continue pushing so that you can find the right fit.

What are your thoughts? Does lean startup actually save a startup money?

Filed Under: CustDev, Features, LeanStartup · Tagged With: #custdev, #leanstartup, finance, opportunity cost, savings

We Need Alpha Users For Our New Startup

February 28, 2011 by jim · Leave a Comment
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We’re currently in stealth mode for a new startup that we’re moving on. We’re building a tool that will help you find highly-targeted Twitter followers for your industry. It’s a tool that we’ve used in-house for a while that we’ve decided to go public with.

We need your help! We’re going to follow the customer development process for this startup (which is pretty exciting itself). If you’re interested in being an alpha user and helping us choose the direction of the app then please contact me. We’re looking for about 100 users to help us get off the ground and start testing things like the features, user interface, overall direction, etc.

Filed Under: Misc · Tagged With: alpha users, startups

Quick Primer on Lean Startup

February 27, 2011 by jim · Leave a Comment
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Note: This article originally appeared on our MediaLeaf company blog. I’ve adapted and updated it.

An entrepreneurial trend that has been gaining popularity and notoriety lately is lean startup. Lean startup (#leanstartup on Twitter) is the method of building a new business by focusing on customer development, reducing waste, and pivoting often. You can think about lean startup as the new business cousin of lean manufacturing.

I’m kind of late to the lean startup party, but I plan on using the ideology for the next MediaLeaf company. The basic tenants are simple, straightforward, and apply to any new business, not just online ventures. Here’s a very quick and high-level intro to lean startup as well as some links for further exploration.

Customer Development

Customer development is a method of using constant customer interaction to continuously refine your product and business model. Having a few potential customers early in the process that you can frequently check in with regarding your product is a way to gain invaluable insight into how much utility your product has and its ultimate potential. See my other articles on custdev.

Reducing Waste

In the software world waste can take several forms, including unnecessary features. Features that aren’t critical to your product or heavily used by customers are most likely wasteful; they have a cost in terms of development, support manpower, and time. These features can also draw interest and focus away from your core product. This ties in closely with focusing on a MVP (minimum viable product).

Pivoting vs Optimization

Pivoting is the process of refining your product’s feature set and function to increasingly improve user experiences or to better suit the customer’s needs. Pivoting is a completely different mentality than optimization. Optimization is taking what you have in place and improving it. A good example of optimization would be changing the color of a button on your signup form and A/B testing to see the improvement.

Pivoting is more about making functional changes, such as changing the focus of an entire business or feature. An example of pivoting might be a general contractor deciding that it would be more profitable to focus solely on building gazebos. Optimization would have that contractor trying to figure our ways to be a more profitable general contractor. This is an example of the “local maximum problem” or the “hill climbing problem”. Optimizing your current situation is all well and good, but you should also consider whether or not bigger opportunities exist.

Build It and They Won’t Come

February 25, 2011 by jim · 2 Comments
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I’m certainly guilty of it. I’ve built several apps and sites based solely on my own intuition and needs. Apparently my intuition is wrong about 60% of the time; no customers were beating down the door for the new products. I naively thought that building apps was like building a baseball field in Iowa… you just build it and people start showing up.

I was lucky enough to be successful with the first 2 companies that I started. With that experience in hand I believed that I would surely be successful the third time if I followed the same formula: Get some traffic and people will pay you. I wasn’t so lucky with my 3rd company… the old formula wasn’t working and I didn’t know why.

The Old Formula

In the past, when advertising was relatively cheap, you could afford to advertise/optimize yourself into a success. It was vastly cheaper to advertise with Google Adwords 5-6 years ago. I distinctly remember bidding $1.00-$1.25/click on highly competitive keywords that would now cost $5.00-$8.00/click. At the current rates it’s difficult, at best, to keep CPA (cost per acquisition) at a level that’s profitable.

When PPC advertising was more affordable you could buy hundreds of targeted clickthroughs per day. For most companies 200-300 visitors per day is enough to grow and be profitable. I’m not taking into account things like customer retention rates and target audiences, even though those are certainly key factors in determining how profitable a company can ultimately be. For a product that can have a mass-market appeal, having lots of traffic generally equals success.

Enter CustDev

Now, with the drastic cost increases for PPC, you have to start looking at alternative methods for reaching your targeted audience. Customer development (or #custdev on Twitter) is all about helping you find your targeted customer, whether that customer is a business or a consumer. It’s a “scientific” process that will help you hone in on exactly who your particular product is the most attractive to through iteration and constant contact with customers.

The information that you learn from your early customers (early adopters, alpha-testers, whatever term you like) is invaluable in helping you find the right marketing methods and audience for your product. If, for example, you create an email delivery service targeted to small businesses you may find that something unexpected, like churches, may be your best customers. Those learnings can help you re-focus your product, advertising, or marketing efforts.

Customer development, when used properly, helps you identify that market segments best suited for your product. Compared to the wide-band approach of PPC advertising, custdev is inexpensive and yields more targeted leads, which is increasingly crucial as the number of web companies continue to grow and competition for a user’s attention grows exponentially tougher.

Resources

There are many great resources for customer development out there already. If you’re interested in custdev then take some time looking through the following highly recommended sites.

What is Customer Development by Eric Ries

The Four Steps to the Epiphany (Affiliate Link) by Steve Blank

The Entrepreneur’s Guide to Customer Development: A cheat sheet to The Four Steps to the Epiphany (Affiliate Link) by Patrick Vlaskovits

Why CustDev?

I plan on writing a lot more about custdev in the coming weeks, getting a little more in-depth along the way. Custdev is a way of laying a scientific approach on top of traditional business problems like customer acquisition. These methods speak very clearly to and my mathematical background. I only wish I would have utilized customer development principles in my last couple of projects. It’s not a perfect solution, or a one-size fits all solution, but it’s generally far better than the build-it-and-hope-for-the-best strategy.

Filed Under: CustDev, Features, Marketing · Tagged With: advertising, adwords, custdev, formula, google, marketing, ppc, startup

OMG, Not Another #custdev Blog

February 23, 2011 by jim · 3 Comments
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I’ve been pretty successful as a web entrepreneur over the past 10 years. I think it’s high time for me to start putting some of my experience to use benefiting all the entrepreneurs out there. This blog is going to be about all things related to starting and running your web based businesses. I’ll write about what I know and what I’m interested in. I’m currently thinking there’s going to be a lot of talk about customer development and lean startup, since they’re both hot topics and very interesting to me.

So that’s what’s waiting for you here. Read more about me to get acquainted. Contact me at any time if you want to talk. I want this blog to be as conversational as possible.

Filed Under: Bootstrapping, CustDev, Features, LeanStartup, Marketing, Misc, Tips and Tools · Tagged With: custdev, customer development, getting started, leanstartup, medialeaf, social media

Jim Lastinger

Case Study: Where Shrinking Went Wrong

Why I Love FollowUp.cc