»
S
I
D
E
B
A
R
«
Agile Product Discovery in a Non-Startup Environment – Building MVPs
Nov 29th, 2011 by Joca

As mentioned in my first post about Agile Product Discovery, I’m trying to take the ideas I used in my lean startup experiment (phase 1, phase 2 and phase 3) in a non-startup environment.

Locaweb has almost 700 employees now. We ended 2010 with approximately $100M in revenue. We have around 130 people in our engineering group which include software developers, system administrators, user experience designers and product managers. We decided to use the SaaS team – around 25 people – as the group who will be part of the experiment.

In phase 1 we worked on figuring out what to do. The next phase is building the MVPs!

Organizing the team

From the 10 ideas we tested, 6 had enough traction to motivate us to build the MVPs, i.e., the minimal viable product. However, one of them was not simple enough to be developed as an MVP in 1 week so we decided to move on with 5 MVPs. The self-organized into 5 groups of 5 people each to work on developing the 5 MVPs. We wanted the groups to have focus during a whole week, so the groups were allowed to work in a different place so they ware not disturbed by daily work. Since we could not leave the company without anyone capable to deal with daily needs of our existing SaaS products, we decided to have 2 teams working during one week and the other 3 teams working during the next week.

Building the MVP

Building the MVP

Building the MVP

Building the MVP

Building the MVP

Building the MVP

Building the MVP

Building the MVP

Building the MVP

Building the MVP

Building the MVP

Building the MVP

The MVPs

And with no further ado, here are the MVPs:

Lessons learned

  • It was good to have the teams fully focused for a whole week.
  • Since we put in the same team people who are not used to work together, it was a bit difficult to estimate the effort and many times we under estimated the effort.
  • In some products we believe we didn’t get the M for minimal correctly. We may have built sub-minimal viable products that may require another week to get to the minimal level.
  • Back to the daily activities of the non-startup environment it’s a bit difficult put some energy, even a small amount, to the MVPs.

Next steps

Now we are measuring the interest in each of the MVPs. We intend to have another Agile Product Discovery week in Feb/2012. During this week we intend not only to discover new products, but also work on the existing MVPs, specially those that we believe are sub-minimal.

3 people like this post.

Lean startup experiment, phase 3: product launch
Oct 30th, 2011 by Joca

My lean startup experiment is an experiment I’m running to see if it is possible to launch a successful product (product = customer facing software system) without spending too much money and in a short period of time.

In phase 1 I had 5 product ideas and wanted to know in which should I invest.

In phase 2 I pick the idea with more interest from phase 1 and invested in creating the MVP (Minimal Viable Product), ContaCal, a calorie counter system.

My phase 3 objectives were:

  • website launch
  • online campaign (Google, Facebook, Orkut, etc.)
  • real users feedback!

Website launch

I officially launched ContaCal on Sep 4th sending an email to all existing users plus the people who showed some interested during phase 1.

Online campaign

I used Google and Facebook. Both generate leads, but Google generated 3 to 4 times more leads than Facebook for my specific web application. Today I’m running a $30/day campaign in AdWords ($1500/month) and I don’t increase it because ContaCal still doesn’t generate any revenue. As soon as I find a sustainable revenue source for ContaCal I’ll certainly increase this investment.

During a certain period my web site was out for maintenance and Google suspended my AdWords campaign. It took 8 days and many emails sent with one or two replies for Google to resume my campaign. This hurter my new user subscription rate.

Real users feedback

I received tons of feedback. Some asking for additional features, some with difficulties in using the system and some thank me for the system! 🙂

Based on the feedback, I used some additional development as well as adjustments to the site layout. That costed me around $1000.

Some statistics

Below you can find some statistics about new users and how this number relates to certain events.

ContaCal users

ContaCal users

Total cost and time so far: $9,025 – 2 months and 3 weeks

  • Phase 1 (idea funnel): $1,600 – 2 weeks
    • 5 product ideas pages in unbounce: $50
    • 5 Google AdWords campaign: $1,500
    • 5 Domain registration: $50
  • Phase 2 (MVP): $3,425 – 1 week
    • crowd sourced logo: $310
    • wordpress template: $35
    • wordpress template adjustments: $80
    • startup dev MVP development: $3,000
  • Phase 3 (Launch + campaign + feedback): $4,000 – 2 months
    • Campaign: $3,000 ($1,500/month)
    • Application and layout adjustments: $1,000

Stay tuned for the next steps

  • the search for a revenue stream!!!
2 people like this post.

#BoS2011 day 3 notes
Oct 26th, 2011 by Joca

Today was day 3 of Business of Software 2011, aka, #BoS2011. Checkout my notes on day 1 and day 2 if you haven’t done that yet.

Again good speakers and interesting topics, but again nothing really new for those who follow product management, agile software development and startup related feeds.

I guess the good thing of attending BoS is not exactly the content, that you can get through the net. It’s the opportunity to meet in person lots of people from the software industry and exchange experiences and opinions.

Below are some tweets and references. And again from the number of tweets it’s easy to spot the talks that brought me more new stuff. 😛

Paul Kenny

  • Introverts think in order to speak. Extroverts speak to help them think. @PaulKennyOL at #BoS2011.
  • Introversion and extroversion are preferences, not boxes we are stuck in. @PaulKennyOL at #BoS2011
  • My close suggestion: is there anything we can do to help you make a decision? Inspired by @PaulKennyOL at #BoS2011
  • A nice close RT @GaryAres: #bos2011 For everything you have heard so far is there any reason we cannot do business?
  • Use the NOs in a sales closing as a learning experience and ask: do you mind telling me why? @PaulKennyOL at #BoS2011.
  • When you ask, wait for the answer. @PaulKennyOL at #BoS2011.
  • @paulkennyol A lot of businesses failed from not asking than from asking #BoS2011
  • There’s much more to learn from qualified no than from unqualified yes. Ask questions to work on closing that deal! @PaulKennyOL #BoS2011
  • Asking aids the decision making process. @PaulKennyOL at #BoS2011.
  • #BoS2011 @PaulKennyOL Closing is the natural progression in the conversation… Feels weird if you do not ask for a decision…
  • Closing is what you do for a customer and not to a customer. @PaulKennyOL at #BoS2011.
  • @PaulKennyOL “Sales Constipation could happen because your don’t want to hear what they have to say about your product.” #BoS2011
  • You can’t have delighted customers without customers in the 1st place. Techies- close your deals!! @paulkennyol #bos2011
  • We need to stop “unteaching” our kids on how to be entrepreneurs. @PaulKennyOL at #BoS2011.
  • Kids know how to close. @PaulKennyOL at #BoS2011.
  • We don’t like closing. @PaulKennyOL at #BoS2011 Google “Alec Baldwin ABC” to see how not to do it.
  • @paulkennyOL You are a founder therefore you are a salesperson #BoS2011

You can find more at Product Principles blog: The Art of Asking

Paul Kenny (@PaulKennyOL)

Paul Kenny (@PaulKennyOL)

David Cancel

  • A customer suggests you a feature. You reply “great suggestion, will cost X”. The customer says “oh, ok. I don’t need it”. @dcancel #BoS2011
  • Average conversion rate in the us is 2% (for Elephants or iPods) via @google #bos2011 via @dcancel (via @johnprendergast)
  • @ProductPrincipl you are amazingly fast! 🙂 #BoS2011
  • It’s not about the data. It’s about the learning so you can make your customers happier. @dcancel at #BoS2011.
  • @dcancel presenting churn, NPS and cohort at #BoS2011.
  • Shared metrics == clear feedback loops #bos2011 via @dcancel
  • “Go do it” “Do it faster” “Do both” #jfdi @dcancel at #BoS2011
  • Optimize your business for learning, not data. #bos2011 via @dcancel
  • “Data alone is useless” – thank God someone said it. #BoS2011
  • We have an strategic plan. It’s *doing* things. #JFDI. @dcancel at #BoS2011.
  • In God we trust; for the rest bring data. @dcancel at #BoS2011.

You can find more at Product Principles blog: Creating a Data-driven Business

Dave Cancel (@dcancel)

Dave Cancel (@dcancel)

Alexis Ohanian

  • “Your UX tells me how much you respect me.” – @kn0thing #BoS2011
  • How can you make the world suck less with software? @kn0thing at #BoS2011.

Alexis Ohanian (@kn0thing)

Alexis Ohanian (@kn0thing)

And to end the conference, chinese grab-and-go food. My chines fortune cookie says: “You income will increase.” with that typo! It’s not saying “your income…”. It says “you income…”. I wonder what that means. 🙂

I suggested @SGBlank, @Cagan, @JurgenAppelo and Roy Singham, ThoughtWorks founder and chairman, as speakers for next year.

Now flying back home.

See you in #BoS2012.

1 person likes this post.

#BoS2011 day 2 notes
Oct 25th, 2011 by Joca

Today was day 2 of Business of Software 2011, aka, #BoS2011. Checkout my notes on day 1 if you haven’t done that yet.

Beautiful day in Boston Seaport area

Beautiful day in Boston Seaport area

Full room at #BoS2011

Full room at #BoS2011

Again good speakers and interesting topics, but again nothing really new for those who follow product management, agile software development and startup related feeds.

I guess the good thing of attending BoS is not exactly the content, that you can get through the net. It’s the opportunity to meet in person lots of people from the software industry and exchange experiences and opinions.

One thing I noticed is that there are many people attending BoS who are from the old software model industry, the one based on licenses and on-premise installation. Good to see they are at BoS looking to understand that software is moving into hosted based subscription model. 🙂

Below are some tweets and references. And again from the number of tweets it’s easy to spot the talks that brought me more new stuff. 😛

Patrick McKenzie

  • Advice from @patio11 at #BoS2011: don’t make desktop software.
  • RT @PaulKennyOL: A culture of testing is better than a culture of ask the boss Patrick McKenzie #BoS2011
  • Everyone ran your software for the first time. 30-40% second time users is common. First impressions are critical. #BoS2011
  • The last 5 man-years of development isn’t visible in the first 3 seconds. (So A/B test the headline.)
  • A/B testing often tells us things we don’t want to hear, like the design isn’t helping.
  • Your 100-man-years of engineering isn’t as important as wordsmithing your site’s headline copy @patio11 #bos2011
  • Systematic A/B testing prints money. @patio11 at #BoS2011.
  • Most common outcome of A/B testing: no significant change. @patio11 at #BoS2011
  • Did hiding extraneous settings behind “advanced” link improve conversions? Yes, by 16% #BoS2011
  • Simplify to improve conversion rates. Make advanced config optional. @patio11 at #BoS2011
  • Shorter is probably better in a web sales funnel. @patio11 at #BoS2011
  • “There are 30 words of Japanese that have made it into English.. 15 of them are meteorological events that can kill you” ~ @patio11 #BoS2011
  • @patio11 #BoS2011 Engineers see marketing as witchcraft… LOL
  • Math and Science always work. @patio11 at #BoS2011

You can find more at Product Principles blog: Engineering Your Marketing Outcomes

Patrick McKenzie (@patio11)

Patrick McKenzie (@patio11)

Laura Fitton

  • To find time for social media, find a problem you’re already solving another way and figure out how to solve it via social media. #BoS2011
  • “You don’t get a prize for getting the most followers or friends. You get a prize for growing the business.” ~@pistachio #BoS2011
  • “If you’re not blogging about your product or service you’re throwing money away” @pistachio at #BoS2011
  • Cool – the underwear gnomes cartoon. youtu.be/TBiSI6OdqvA #BoS2011
  • Get found. Convert. Measure what matters. @pistachio at #BoS2011.
  • And repeat! RT @JocaTorres: Listen. Learn. Care. Serve. @pistachio at #BoS2011.
  • Listen. Learn. Care. Serve. @pistachio at #BoS2011.
  • Don’t tweet the title. Extract useful info from the article and then tweet. @pistachio at #BoS2011.
  • We are moving from “one to many” to “any to many”. Anyone can be the root of a big message. ~@pistachio #BoS2011
  • Two word secret of social media – Be useful. @pistachio at #BoS2011

You can find more at Product Principles blog: Business of Social – What B2B and B2C Software Companies Need to Know About Social Media

Laura Fitton (@pistachio)

Laura Fitton (@pistachio)

Josh Linkner

  • RT @theospears: Brainstorming while pretending to be someone else frees you up to be creative ~@JoshLinker #BoS2011
  • RoleStorming as an option to BrainStorming. @joshlinkner at #BoS2011.
  • “Watch out for group-think. Group-think is that poisonous thinking that waters down your best ideas.” via @joshlinkner at #BoS2011
  • Mistakes are the portals to discovery ~@joshlinkner #BoS2011
  • Playing it safe is the riskier movement possible. From failure you learn. From success not so much. @joshlinkner at #BoS2011.
  • The five whys – Louis CK – hilarious youtu.be/4u2ZsoYWwJA #BoS2011
  • Because things that aren’t just can’t be. Ask “why?” to see where you can get. @joshlinkner at #BoS2011.
  • Being creative? RT @FastFedora: Why stop at standing desks? Practicing standing conferences. Join me at the back of the room. #BoS2011
  • Why? What if? Why not? – 3 qns to foster creativity #Bos2011
  • Metaphor for business shifts Symphony orchestra with conductor => Jazz where NOT taking risks is frowned upon. #BoS2011
  • Creativity is 85% learned behavior. @joshlinkner at #BoS2011.
  • Great metaphor for decline in creativity in today’s society by @joshlinkner at #BoS2011 – Lego toys. From fun to following instructions
  • I disagree that there’s a creativity crisis. Difficult times foster creativity, hence the huge startup and entrepeneurial movement. #BoS2011
  • When your head is up you notice things. @JoshLinkner at #BoS2011.
  • Josh Linkner livestreaming at #BoS2011 Encyclopedia Britannica was Google for 219 years before Google bit.ly/eQRD5g

You can find more at Product Principles blog: Unleashing Creativity

Josh Linkner (@JoshLinkner)

Josh Linkner (@JoshLinkner)

Checkout this funny video about asking why. I purposely set the video to start at 6m20s so you can jump directly to the why joke:

Rory Sutherland

  • The “IBM at terminal 5” video presented by Rory Sutherland at #BoS2011: http://www.youtube.com/watch?v=_F1NVxmsa9I
  • “All models are wrong, but some of them are useful.” #bos2011
  • R. Sutherland “In most cases we act and then just post-rationalize our decisions” #BoS2011
  • Rory Sutherland (wonderful speaker): “If your restaurant has the slight smell of sewage around it–don’t try to improve the food.” #bos2011
  • “Absorbing information contradicting our prejudices registers in the same part of the brain where we feel pain” via @rorysutherland #BoS2011
  • RT @dharmesh @rorysutherland “people aren’t aware of their own heuristics. They will derive to rationalize they’re maximizers. ” #BoS2011
  • Rory Sutherland explains the importance of communicating with the “lizard’s brain” at #BoS2011
  • Videoconferencing shd have been positioned differently. instead of poor man’s airplane it she have been “rich man’s telephone call” #Bos2011
  • Don’t end up as the cheap inferior substitute for something else. #BoS2011
  • Our perception of everything (including value), is “relativistic” (sic) and contextual. #Bos2011 Rory Sutherland
  • R. Sutherland “people aren’t aware of their own heuristics.” #BoS2011 they will derive to rationalize they’re maximizers
  • Problem with market research: people don’t behave as usual in a market research. #BoS2011
  • The default option is “do nothing”. Rory Sutherland at #BoS2011.
  • People look for things that satisfices than maximizes. If not, why people go to McDonalds? Rory Sutherland at #BoS2011.
  • The here and now really matters to our lizard brains. Rory Sutherland at #BoS2011.
  • Praxeology – Austrian term for human behavior and decision-making. @RorySutherland at #BoS2011
  • Break tasks into sub tasks to increase probability of completion. #chunking explained by Rory Sutherland at #BoS2011.
  • “What’s bad about waiting for a train isn’t waiting. It’s uncertainty.” #BoS2011
  • “Creativity is policed by rationality, but rationality goes unpoliced.” Rory Sutherland is a trip. #BoS2011
  • If you think creativity is expensive, you should try logic. #BoS2011

You can find more at Product Principles blog: Praxeology – Lessons from a Lost Science

Rory Sutherland (@RorySutherland)

Rory Sutherland (@RorySutherland)

Checkout the IBM’s Wimbledon Lotus T5 campaign presented by Rory at the end of his talk:

Lightning Talks

  • Lightning Talks really exceptional. Well done @coreyreid @kjtreier @justingoeres @patrickfoley @tylerrooney #BoS2011
  • Congrats @JustinGoeres! “@JocaTorres: Justin Goeres won the Lightning Talk contest at #BoS2011.

Justin Goeres (@JustinGoeres)

Justin Goeres (@JustinGoeres)

Michael McDerment

  • “I think you should be developing benefits, not features.” @mikemcderment at #BoS2011.
  • Pristine code without customers is a pyrrhic victory. @MikeMcDerment #BoS2011 #prodmgmt
  • Name tiers based on customer type? (funny/cute names vs descriptive) Lost a million dollars. Clever names won. @mikemcderment #BoS2011
  • Video convert 20% LESS than screenshots as demo tools. @mikemcderment at #BoS2011.
  • Slide after slid of exponential product growth curves. Lesson: launch early. #BoS2011
  • I guess you meant 2004? RT @dharmesh: Freshbooks has grown to over 3.5 million users since starting in 2044. #BoS2011

You can find more at Product Principles blog: A Litany of Product Management Mistakes at FreshBooks

Michael McDerment (@MikeMcDerment)

Michael McDerment (@MikeMcDerment)

Peldi interviews John Nese from Soda Pop Stop

First, you need to watch this video:

Obsessives: Soda Pop from CHOW.com on Vimeo.

  • If you quit, you defeat yourself! John Nese #BoS2011
  • It’s very easy to make decisions when you are broke. John Nese at #BoS2011.
  • John Neese – a man who loves what he does is inspiring at #bos2011 – please support sodapopstop.com
  • John Nese is a fantastic example of gentle competition and democratization of decision on products (resisting statu quo) #BoS2011 #hatsoff
  • I’m sitting at a software conference listening to John Nese talking about craft sodas sodapopstop.com @bosconference #BoS2011 #awesome
  • RT @admarsenal #bos2011 @Balsmiq to John Nese at sodapopstop.com. Question: What kind of metrics do you collect? Answer: What kind of what?
  • Peldi: “You’re the CEO”, John Nese: “So, that’s just three letters!” #BoS2011
  • We should not be creating jobs. We should be creating wealth. John Nese at #BoS2011.
  • +1 RT @AriH: Conversation with the guy from the Soda Pop Shop is putting a smile on my face. #BoS2011
  • John Nees thinks people need to pay their dues – no starting at the top, you need to understand it through experience at all levels #BoS2011
  • Don’t be afraid to fail cos you are going to do well – John Nese @ SodaPopStop #bos2011
  • John Nese summarizes Cincinnatus bit.ly/vXbUSY “You have to do what you have to do” #BoS2011
  • I never work. I go there everyday and play! John Nese at #BoS2011
  • RT @mitmads Thanks John Nese for your advice “You own your shelf space” #BoS2011
  • I love the contagious enthusiasm of this guy when he talks about artisanal soda pops. Great to see people who love life. #bos2011
  • RT @MichaelNozbe Fantastic testimonial by John Nese of SodaPopStop. Amazing story 🙂 #BoS2011 instagr.am/p/RchP8/
  • The biz world needs more people like John Nees. #BoS2011

You can find more at Product Principles blog: An Interview with John Nese

Peldi and John Nese

Peldi and John Nese

4 people like this post.

#BoS2011 day 1 notes
Oct 25th, 2011 by Joca

Today was day 1 of Business of Software 2011, aka, #BoS2011. This is my first time in this conference suggested to me by Dov Bigio (@dovb).

Good speakers and interesting topics, although nothing really new for those who follow product management, agile software development and startup related feeds.

Below are some tweets and references. From the number of tweets it’s easy to spot the talks that brought me something new. 😛

Clayton Christensen

  • Look at Netflix and Quikster through a “job to be done” perspective.
  • Wise words to financiers – best way to measure profitabilty is not by ratios, but by tonnes of money on bottom line.
  • Do not need traditional marketing – need to understand the “job” completely to create pull rather than push.
  • You need to invest when you don’t need the results of the investment. Innovation is a long term investment.
  • When you aggregate feedback, you wind up with “one size fits none” products.
  • “The customer rarely buys what the company thinks it is selling them” – Peter Drucker quoted by Prof. Christensen
  • The unit of analysis is job, not customer. It’s not what cust. thinks he needs, it’s what job needs to be done.
  • @ClayChristensen explained that the customer is the wrong unit of analysis. It’s the job the customer needs to get done.
  • Christensen on competing: Pick a fight where the giant is motivated to flee rather than to fight you.
  • If you make something affordable and simple, the market will be much larger than your competitors.
  • Disruptive innovations have different measures of performance. (We tend to forget that).
  • When competing against non-consumption, you just have to be better than nothing.
  • Extension of the Innovators Dilemma – If we could build a company that would disrupt our company. How would we do it?
  • Focusing on profitable customers can blind you as to long term market changes @ClayChristensen’s Innovator’s Dilemma.
  • On sustaining innovation: “If you do everything we teach B.School, you’ll fail in the long term”

You can find more at Product Principles blog: Highlights: Clay Christensen at Business of Software 2011

Clayton Christensen (@ClayChristensen)

Clayton Christensen (@ClayChristensen)

Jason Cohen

  • @asmartbear talks about honesty in business at #BoS2011. Does honesty makes more money for businesses? Short answer: yes!
  • Great talk on genuine honesty by @asmartbear #BoS2011
  • In a biz interaction, ask yourself, “why did you lie?” Is small immediate benefit offset by larger loss of trust. #BoS2011

You can find more at Product Principles blog: Naked Business – How Honesty Makes Money

Jason Cohen (@asmartbear)

Jason Cohen (@asmartbear)

Honesty

Honesty

Alex Osterwalder

  • Having fun filling out a business model canvas at Alex Osterwalder’s talk at #BoS2011
  • The right business model is the difference between success and #failure. #bos2011
  • Explore and create new business models. You may design one that suits your business better- Alex Osterwalder #bos2011

Alex Osterwalder (@business_design)

Alex Osterwalder (@business_design)

Business Model Canvas

Business Model Canvas

Dharmesh Shah

  • #BoS2011 is an interesting conference for companies willing to make the move from license model to the online subscription model.
  • I have never ever met a successful software company where the early team didn’t work their asses off. Not once.
  • “We are not a family. We are a team.” From Netflix culture.
  • New price model: “cheapium”!
  • You need humans to sell when product is complex, market is new or price is somewhat high.
  • That’s the future of software business model: RT @MarkDalgarno If you’re not on a subscription model now, get on it!
  • CHI – Customer Happiness Index – is better than churn because it measures customer’s success.
  • Negative churn rates = more upgrades than cancelation.
  • Types of churn: customer, revenue, discretionary and involuntary.

You can find more at Product Principles blog: Building Bad-ass Software Businesses

Dharmesh Shah (@dharmesh)

Dharmesh Shah (@dharmesh)

Jeff Lawson

  • @jeffiel just lightly touched the consumer SaaS biz model topic. Basicaly: ads. #BoS2011.
  • I wonder if someone will talk about software for consumers, specially pricing for consumer SaaS. #BoS2011
  • The 3 “mating calls” of SaaS companies: “(1) tour, (2) pricing, (3) sign up and get going” #BoS2011

You can find more at Product Principles blog: Pricing that Hot Saas

Jeff Lawson (@jeffiel)

Jeff Lawson (@jeffiel)

Tobias Lütke

  • Don’t start a company with the purpose of making money. @tobi at #BoS2011.
  • Agree 100% RT @stephenmedawar: Success doesn’t make you right – @tobi #bos2011
  • Our responsibility is to build companies that don’t embarrass us in 100yrs time. #bos2011

Tobias Lütke (@tobi)

Tobias Lütke (@tobi)

4 people like this post.

What type of entrepreneur are you?
Oct 5th, 2011 by Joca

Some time ago Rafael Rosa (@rafaelrosafu) presented me the concept of lifestyle startup in opposition to the growth startup everybody knows.

Growth startups vs lifestyle startups

Growth startups – or companies- are startups that have one main objective, accelerated growth so it can make founders, investors and shareholders substantially rich when the startup is acquired or make an IPO. When you are focused on accelerated revenue growth, all your actions are driven by this goal, which has top priority on top of all other matters, including products, customers, employees, suppliers, quality, etc. Normal product question you hear in this type of startup is “how do we make this product sell more faster?” or “can we create another product or add-on feature to charge some extra money from existing customers?”. In this type of startup you tend to have people passionate about money.

Lifestyle startups – or companies – are startups where revenue has the objective to sustain the company and it’s founders and employees lifestyle. As soon as this issue (company sustainability as well as founders and employees lifestyle sustainability) is solved, the company can have full focus on product, customer, employees, suppliers, quality, etc. Normal product question in this type of company is “how do we make a great product that solves real customers problems?”. In this type of startup you tend to have people passionate about the product.

Sometimes it can be difficult to identify what type the startup – or company – is, but normally a conversation with the founders or some key employees around the topic of company purpose and people’s passion have good potential to help you identify the type of startup you’re dealing with.

Thinking as a customer and another comparison with the medical world

Moving the point of view from the startup founder to the customer, i.e., use your customer hat and think as a customer. What type of startup do you think would you, as the customer, prefer to solve your problems?

People who read my posts knows I like to make comparisons between business world and medical world:

So here goes another analogy using the medical world. Move again your point of view and suppose you are a patient who received the news that you have a certain issue that requires surgery. What doctor would you choose to do this surgery, one who’s primary purpose is to get rich with medical practice or one who is really passionate about medicine and about making other people’s life better? Again, sometimes is difficult to identify the type of doctor we are talking to, but normally the way she describes your case and how it could be solved will give you hints on what type of doctor she is.

Conclusion

Ok. So back to my original question: what type of entrepreneur are you?

2 people like this post.

Agile Product Discovery in a Non-Startup Environment
Sep 15th, 2011 by Joca

I mentioned here about my lean startup Experiment (phase 1 and phase 2). I’ll post an update on this topic soon.

Here I want to share another experiment I’m running. I’m trying to take the ideas I used in my lean startup experiment in a non-startup environment.

Locaweb has almost 700 employees now. We ended 2010 with approximately $100M in revenue. We have around 130 people in our engineering group which include software developers, system administrators, user experience designers and product managers. We decided to use the SaaS team – around 25 people – as the group who will be part of the experiment.

I presented to the group my lean startup experiment and proposed that we experimented doing the same.

So we now have 4 phases for the Agile Product Discovery:

  • Phase 1: figure out what to do
  • Phase 2: specify the product
  • Phase 3: implement the product
  • Phase 4: monitor the product performance

We decided to break phase 1 into 3 steps domes in 3 different days in small chunks of 3 hours each. However, we realized that it would be more beneficial to work on the 3 steps in one full day instead of breaking it into 3 separate sessions in different days.

Phase 1 – Step 1 – Product Ideas

First phase of the experiment was to brainstorm product ideas. We used 2.5 hours for this phase. We divided the group into 5 groups of 5 people each and the groups have to come up with product ideas or feature ideas for existing products. The only constraints were that the idea should be targeted to SMBs, the target segment for Locaweb. Should not be targeted to niche groups such as lawyers or medical doctors. Should be possible to develop an MVP (Minimal Viable Product) in 2 days with no interruptions.

Each group come up with 10+ ideas so we were able to generate a total of 50+ ideas. Each group had to filter the ideas down to 5. Then each group presented the ideas to the rest of the team, who made questions and decided what ideas to move to phase 2. At the end of the session we decided not to included any features of existing products, only new products should go to the next phase. We end up with 13 products in our list!


Phase 1 – Step 2 – What Is The Problem?

For phase 2 we got more 3 hours. During 2.5 hours the 25 people self organized to define for each product what was the problem that the product was solving, for the problem will be solved and why it is worth to solve this problem.

From the 13 products that came out from phase 1, we dropped 4 and kept 9.



Phase 1 – Step 3 – Creating Pages and Ads

In step 3 we created the pages using unbounce and the campaigns with Google AdWords.


Final remarks about phase 1

This is it for phase 1 – figuring out what to do.

It’s a bit harder to do product discovery in a non-startup environment. Even if you have full support from senior management, it’s difficult to get away from day-to-day tasks. For this reason, as I mentioned earlier, I suggest doing the phase 1 in a full day and not divided into 3 steps in different days as we did.

Other than that, the creative process from idea generation to single page plus ad implementation was quite fun and engaging. The team was really energized. 🙂

In future posts I’ll comment on the results of phase 1 and the work done in phases 2 and 3. Stay tuned!

6 people like this post.

Lean startup experiment, phase 2: building the MVP
Aug 24th, 2011 by Joca

My lean startup experiment is an experiment I’m running to see if it is possible to launch a successful product (product = customer facing software system) without spending too much money and in a short period of time.

Actually the name startup is a bit misleading because this process could and should be use not only by startups but by companies of any size. This process integrates quite well with Agile Software Development and with Continuous Delivery. For this reason, instead of lean startup, I prefer to call it agile product discovery.

Phase 1: idea funnel

I already mentioned about my lean startup validation experiment in a previous post. In the first phase I had 5 new product ideas and used unbounce to build a simple page describing the service and asking people to provide their email address if they wanted to be notified when the service. Then I setup a Google AdWords campaign for each product idea in order to generate traffic for the product pages.

Cost so far, $300 for each product test, total $1500.

The product with most interest was a calories log system where the user informs the food she ate during the day and the system calculates the total amount of calories, also informing how many of those calories were red (we should eat only 10% of red calories per day), yellow (up to 35% is ok) and green (at least 65%).

Phase 2: MVP – Minimal Viable Product

Ok, now that I have a product idea with potential demand, I should build an MVP (Minimal Viable Product) to better understand this demand. In order to do that, I need a logo, a visual design and a system.

For the logo, I decided to use a Brazilian service named We.Do.Logo, a crowd sourcing system where you describe why you need a logo and many designers present you with options. You get to interact with them and eventually you pick one. The name of the system is ContaCal. Conta means count in Portuguese. The winning logo is:

ContaCal logo

ContaCal logo

I paid $310 for the logo.

For the system, I decided to use a service called Startup DEV. With an agile style planning meeting plus 48 hours of coding, they deliver the MVP. I hired them, send them my wireframe:

I also selected a WordPress template from themeforest to be the guide for design. The cost of the template was $35 and the Startup DEV service cost $3K.

The result was great. The Startup DEV team did a great job and now I have an MVP to test. I’m still finishing the web site and will probably launch the service o during the next weekend. By launch I mean sending an email to all the people that showed interest during phase 1 and resuming the Google AdWords campaign.

But meanwhile I want to invite you to use ContaCal. The system was made in Portuguese and I still don’t have plans for an English version. Next steps will depend on demand. 🙂

To use ContaCal, please visit http://app.contacal.com.br.

Total cost and time so far: $5,025 – 3 weeks

  • Phase 1 (idea funnel): $1,600 – 2 weeks
    • 5 product ideas pages in unbounce: $50
    • 5 Google AdWords campaign: $1500
    • 5 Domain registration: $50
  • Phase 2 (MVP): $3,425 – 1 week
    • crowd sourced logo: $310
    • wordpress template: $35
    • wordpress template adjustments: $80
    • startup dev MVP development: $3000

Stay tuned for the next steps

  • website launch
  • online campaign (Google, Facebook, Orkut, etc.)
  • real users feedback!
5 people like this post.

Agile Product Discovery
Aug 21st, 2011 by Joca

I recently posted and twitted about my lean startup experiments.

The word startup in lean startup may be misleading because startup gives the idea of a new company creation. However, the concept on lean startup fits very well within established companies, no matter its size. I believe that instead of using the startup word, I’d rather name it as Agile Product Discovery, an iterative process of discovery of a problem and its best solution that can be turned into a product.

I’m reading now The Entrepreneur’s Guide to Customer Development: A cheat sheet to The Four Steps to the Epiphany:

The book’s cover is a cheat sheet by itself:

Here’s an excerpt of the book to give you motivation to read it all:

First, draw a map of your ecosystem.

  • The entities involved. Draw a box or a circle representing each entity in your ecosystem. Entities include users, customers, channel partners, technical partners, strategic partners, advertisers, your customers’ customers, etc. Include all entities that either provide value to you or receive value from your product. Value can be derived from money or the use of a product. Value can be direct (what a user receives from using a product) or indirect (money an advertiser gets from product user eventually).
  • Flow of currency. Draw lines or otherwise show your assumptions regarding the flow of currency. Who pays whom?
  • Product Distribution. Show your assumptions regarding how the product moves through channel(s) to reach end users.

Questions to consider:

  • Are you relying on third party technology that requires a formal partnership?
  • Are you relying on channel partners that will help you bring the product to end-users?
  • If you have a “free” business model and are looking to scale users, who will you eventually earn money from?
  • Are you partnering with a manufacturing firm?
  • Will you sell data or leads to third parties?
  • Does your product benefit your customers’ customers?

Second, define the value proposition for each player.
Each entity is only a member of the “ecosystem” if it will receive benefits by participating. For each member of the ecosystem, what benefit do they gain and what are they willing to trade in exchange? These value proposition statements will evolve into your core C-P-S (Customer-Problem-Solution) hypotheses that you test during Customer Discovery. For now, however, provide a concise description of the value you presume they will receive.

Examples:

  • Users will be entertained
  • Advertisers get the attention of thousands of users
  • Buying influencer is happy to choose “green technology”
  • Customer’s customer gets highly qualified leads
  • Channel able to sell services on top of product
  • Customer will save money, mitigate risk, or increase market share

Third, posit a final MVP
As defined above, an MVP is “a product with the fewest number of features needed to achieve a specific objective, for which users are willing to ‘pay’ in some form of a scarce resource.” The reason the definition is somewhat obtuse is that we wish to differentiate between a “final” MVP and one or more intermediate MVPs. Final MVPs ostensibly test the business model. Intermediate MVPs test high risk components of the business model.

To develop assumptions regarding your final MVP, think of what you need to provide to each entity with whom you have a direct relationship in order to achieve the value you identified above. What are the basic features of the product each user requires to get the ecosystem functioning? What does each entity pay – whether money, attention, resources or some other currency? Describing what your final MVP looks like establishes an end point to the Customer Discovery process.

  • Currency = what the user/buyer “pays” for using the MVP
  • MVP Metric = what you are measuring to determine viability
  • Value Determinants = what the user/buyer requires (minimally) in order to spend their currency, such as features

Fourth, where’s the risk?
The goal for laying out a path for your Customer Development efforts is to prioritize and test your gating factors. If you validate key assumptions, you have proven critically important aspects of your business model. If you hit unexpected roadblocks and points of failure, then you have increased your odds of success by catching these issues early.

Think of critical near-term risks. Does your technology represent a significant risk? In other words, can you build what you believe the market needs? If your technology is difficult or costly to produce, what market-testable milestones can you build that would result in sufficient evidence to induce you to pivot or move forward? A proof of concept? A prototype? A demo?

If your risks are predominately marketing ones, what minimum set of features will result in paying customers? Or: What minimum set of features will result in a minimum of X number of users?

Time and money risks may affect intermediate MVP decisions. If your MVP will require $XM to build, but you only have $X/1000M, an intermediate MVP might be the answer to “what must I prove in order to acquire additional funding?”

Think of dependencies. If your final MVP requires that X happen, then can you build an intermediate MVP around X? What does X depend on? If possible, go to the root of the dependencies.

Fifth, create your Value Path
Your value path is the journey of Customer Discovery that takes you from where you are today to your proposed final MVP and includes both intermediate MVPs and core assumptions to be tested. From the risk table you created, map out the set of core assumptions you need to test for each identified gating factor. For each intermediate MVP, you will likely have a set of assumptions to test through direct customer interaction, in addition to a version of the product to build and test through usage.

1 person likes this post.

The difference between a product and a project
Aug 15th, 2011 by Joca

Here’s a brief definition of a project:

A project is an endeavor with a clear definition of what needs to be delivered and the date when it needs to be delivered.

At first sight it may seem that a product is a project, but it is not!

A product is not a project because:

  • There’s no clear definition of what needs to be delivered. We saw in a previous post that a product in the software development industry is any customer facing system. Since customer needs evolve over time and new technologies are made available, the customer expects that the software she uses evolves as well, hence there’s no clear definition of what needs to be delivered. There’s no use to have a one year planning of all features to be delivered in a certain sequence if requirements may change every month or even every week. A product development process needs to be adaptable to this change in customer needs.
  • There’s no clear definition of the the date when it needs to be delivered. As customer expects that the software evolves in alignment with her needs, she doesn’t want a new version one year from now. She expects new features every month or even every week. For this reason, a product can not suffer the burden of the project management process. The product development process must be much leaner than the traditional project management process, because delivering new functionalities to a product is always the same project for each new feature: discovery, design, implementation, test, deploy. A project is used to manage occasional endeavors. The product development process is not an occasional endeavor. It’s a continuous process of improvement of the product through the delivery of new features.

A product needs a more adaptable and continuous development process than traditional project management delivers. Agile Software Development, Lean Software Development and Continuous Delivery are process that present these characteristics.

Agile software development is a group of software development methodologies based on iterative and incremental development, where requirements and solutions evolve through collaboration between self-organizing, cross-functional teams.

Source: Wikipedia

Lean software development is a translation of Lean manufacturing and Lean IT principles and practices to the software development domain. Adapted from the Toyota Production System, a pro-lean subculture is emerging from within the Agile community.

Source: Wikipedia

Continuous Delivery aims to make software production-ready throughout its lifecycle, so that potentially every good build can be released into production and run effectively. The goal is to “…Minimise the cycle time from idea to delivery, and allow that cycle to be repeated frequently and reliably.”

Source: Wikipedia

Lessons learned

  • The difference between a product and a project is that while a project is used to manage occasional endeavors, it doesn’t fit with the continuous improvement demand of a product.
  • A product requires more adaptable and continuous development process such as Agile Software Development, Lean Software Development and Continuous Delivery.
14 people like this post.

»  Substance: WordPress   »  Style: Ahren Ahimsa