Lean startup experiment, phase 1: the idea funnel
Aug 7th, 2011 by Joca

Four weeks ago I started an experiment. I had 5 ideas of possible startups so I put together a simple page for each idea explaining how the service was supposed to work, how much it would cost and if the visitor has interest, she can inform her email address to receive news of the service. I’m not a web designer, so I needed help to put together a simple page for each startup idea I wanted to test. @dovb recommended a very good service named unbounce:

I defined a name for each startup idea and registered a domain for each one so each startup description page had its own URL.

I used Google AdWords to generate traffic:

I set $15 per day as the limit for each startup campaign. The startup description pages received a total of more than 2500 visits and more than 300 people shoed interest in the services described in these startup description pages. This hole experiment cost me $1500 including AdWords, unbound service and domain registration. $300 per each startup experiment. It could have cost even less since the interest (click through rate and sign up rate) was clear after the second week of the experiment.

Lessons learned

    Next time you have a startup idea, try running a startup validation experiment. It will certainly be cheaper than investing too much time and money in your idea and after launch realizing that there are no customers for your startup.

4 people like this post.

The new rules of marketing and PR
Aug 1st, 2011 by Joca

I’m reading a very interesting book entitled “The new rules of marketing and PR: How to Use News Releases, Blogs, Podcasting, Viral Marketing and Online Media to Reach Buyers Directly“:

I’m still reading it but its central idea is so simple and powerful that I wanted to share it here prior to finishing the book.

What is marketing and PR?

In the book, marketing is defined as the act of telling the world about your product, service, idea, art, belief, etc. to potential customers, volunteers, voters, followers, fans, etc. And public relations (PR) is the act of making the media talk about you and what you want to tell the world.

How marketing and PR are usually done?

Marketing is usually done primarily thorough advertisement in TV, newspaper, magazines and any other available media. PR is usually done sending press releases to journalists expecting to see a note in mainstream media.

How the internet changed marketing and PR?

People want to get more informed prior to any commitment to a purchase or an engagement with a cause or pursuing a new hobby or… People now have access to the internet and can search information. We normally buy or engage with who give us good information. Even journalists don’t wait for new information to come to them, they go after the information on the web the same way potential customers do, searching the web. And the journalism itself changed, since there’s much more than just the mainstream media as possible source of news and opinions.

The new rules of marketing and PR

And here are the new rules of marketing and PR as described in the book:

  • Marketing is more than just advertising.
  • PR is far more than just a mainstream media audience.
  • You are what you publish.
  • People want authenticity, not spin.
  • People want participation, not propaganda.
  • Instead of causing one-way interruption, marketing is about delivering content at just the precise moment your audience needs it.
  • Marketers must shift their thinking from mainstream marketing to the masses to a strategy of reaching vast numbersof underserved audiences via the Web.
  • PR is not about your boss seeing your company on TV. It’s about your buyers seeing your company on the Web.
  • Marketing is not about your agency winning awards. Its about your organization winning businesses.
  • The internet has made public relations public again, after years of almost exclusive focus on media.
  • Companies must drive people into the purchasing process with great online content.
  • Blogs, online video, e-books, news releases, and other forms of online content let organizations communicate directly with buyers in a form they appreciate.
  • On the Web, the lines between marketing and PR have blurred.
3 people like this post.

To freemium or not to freemium?
Jul 17th, 2011 by Joca

Some of today big companies offer their services for free (Google, Facebook, Twitter, Linkedin, Slideshare, Youtube, etc.). They generate revenue through ads, having a paid version with more features or offering paid add-ons to users of the free product. This is known as freemium.

Should my product have a free version?

In order to benefit from offering a free version, your product must benefit from having a huge user base because of at least one of the reasons below:

  • your product has many social features (Linkedin, Facebook, Twitter, Skype, etc.)
  • your product needs user generated content (Slideshare, YouTube, Flickr, etc.)
  • your product will attract a user base to whom you’ll be able to show paid ads (Google, Facebook, etc.)
  • your product will attract a user base to whom you’ll be able to sell something in the future (Linkedin, Slideshare, Skype, etc.)

So before going freemium you need to understand why you are offering a free service. Then you need to figure out…

How do I make money to pay the costs of the free product?

After you figured out why you intend to offer to free service, you need to know how to generate some revenue because offering a free product will cost you money. All of the companies cited here had to figure out how to make money from their huge user bases. Here are some ways they used to generate their revenue:

  • you can sell the attention of your users to advertisers (Google, Facebook, Twitter, Youtube, etc.)
  • you can convince part of your user base to buy the paid version (Linkedin, Slideshare, etc.)
  • you can convince part of your user base to buy one-time add-ons (Skype is the only example that comes to my mind with Skype credits)

Tip: If you decide to go freemium, don’t forget that you can only offer a free product if your marginal cost of adding another user to the product user base is as close to zero as possible, otherwise it won’t be a sustainable product and your urge for revenue may kill your freemium product.

Lessons learned

Freemium is a viable business model but before offering a freemium product, you need to figure out:

  • why offering this product as a freemium might make sense
  • how you intend to make money to cover this product costs
  • the marginal cost of adding another user to this product user base must be as close to zero as possible
4 people like this post.

What is Product Management?
Jul 3rd, 2011 by Joca

DDD (Domain Driven Design) has a very powerful concept, so powerful that it is the first concept presented to anyone who is initiated in DDD, Ubiquitous Language:

A language structured around the domain model and used by all team members to connect all the activities of the team with the software.

source: http://domaindrivendesign.org/node/132

It’s a way to guarantee a shared understanding of the main terms used in a domain.

I’ll start to write more about Product Management here, so I felt the need to define Product Management prior to writing more about it.


Prior to defining Product Management, let me define product in the software development industry:

Product is any customer facing software system.

A customer facing software system is not necessarily a system which drives revenue through subscription or on-demand use. A system like a newspaper portal can be considered a product. The revenue from such a system probably will come from ads. An internet banking is another example of a customer facing system who would benefit from product management. It doesn’t drive direct revenue but it helps decreasing cost of physical bank offices.

Product Management

And here goes the Product Management definition:

Product Management is accountable and responsible for everything from high-level objectives to the details of the user experience of a customer facing system. It’s the connection between the business strategy and the customer through a software system.

3 people like this post.

Do you work to earn money?
May 31st, 2011 by Joca

Do you work to earn money? Or do you work to solve someone’s problem and earning money is just a consequence of the good work you did solving someone’s problem? Earning money is one of many indicators that you’re doing a good job, but you need to know what problem are you solving and why.

4 people like this post.

Revenue is like food
May 19th, 2011 by Joca

Recently I read a very interesting post written by Martin Fowler on the three pillars that serve as direction to ThoughtWorks. The three pillars came from Ben & Jerry’s mission statement:

Ben & Jerry's mission statement

In his post, Martin used the phrase “revenue is like oxygen – you need it in order to live but it isn’t what you live for” as a metaphor to explain the sustainable business pillar. I really like this metaphor but I would like to propose another one to help explain the sustainable business pillar:

Revenue is like food:

  • you need it in order to live but it isn’t what you live for and;
  • eating too much or too fast or the wrong food can make you ill.

Too much revenue: how come too much revenue is bad? Well, there are many ways that too much revenue can be harmful. If you sell at a price too high, a person may buy one time, but she’ll have the feeling that she paid too much and she probably won’t buy again. Or if you sell more than what your able serve, your customer won’t be happy. Or you sell something you are not capable of delivering, again you won’t make your customer happy.

Growing revenue too fast: how come growing revenue too fast can be bad? If you are not prepared to sell fast, you may hurt your business by providing your customer with poor product or service. They won;t be happy, they won’t return, they won’t tell their friends good things about you.

Wrong revenue: is there such a thing as wrong revenue? If you have revenue due to the causes explained in the two items above, they can be harmful to your business. Besides this, other examples are revenue from an unethical sale or revenues that can create cash now but many operational problems in the future.

Next time you are chasing a new revenue, remember the analogy with food – your business need the revenue to live, but it doesn’t live for the revenue. Is this revenue enough for your business or are you trying to put too much food in your mouth? Are you acquiring this revenue at the right pace or you are being too fast and your company won’t be able to cope with the demand? Is this a good revenue or it may hurt your company in the future even providing some cash now?

P.S.: If you like this post, you may like Purpose Beyond Profit. And if you like analogies, you may like Leading is similar to being a doctor.

5 people like this post.

Story map is a great tool for agile product management
Mar 30th, 2011 by Joca

Jeff Patton, who defines himself as agile old-timer, UX practitioner, good product evangelist and family guy, presented in his blog the concept of story maps, a replacement for backlogs that helps people see the forest and not only the trees.

The basic idea is that in order to understand your system you need to break it down to user activities. Jeff gives the example of an email system:

If I was building an email system (which I’d never be foolish enough to do) I might have an activity called: “managing email”, and “configuring email servers”, and “setting up out of office responses.”

Then you break those user activities in user tasks:

That story [managing email] breaks down into other stories like “send message,” “read message,” “delete message,” “mark message as spam” – stuff like that. I call these user tasks.

A story map may look something like this:

Story map diagram

Story map diagram

Story maps were brought to Locaweb by Alexandre Freire. We’ve been using it for months and we can testify it is quite helpful! You should give it a try! 🙂

Some photos of our story maps:

Story map

Story map

Story map

Story map

Story map

Story map

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Responsibility, accountability and authority
Mar 18th, 2011 by Joca

In last 2 weeks I had a chance to review and reinforce my understanding of responsibility, accountability and authority.

One can only be responsible and accountable for something she has the required authority to deal with.

For instance, a product manager cannot be responsible for defining revenue projections of a product if she doesn’t have the authority to drive the revenue generation strategy and tactics, which normally falls under marketing and sales. Note that I’m not talking about authority in the sense of being the “boss”. I’m talking about the authority a product manager uses to lead her product. The product manager has the authority to drive the product strategy and tactics even not being the boss of anyone. This is part of her job description.

1 person likes this post.

That’s the way it is
Mar 16th, 2011 by Joca

The longer someone uses a product the more likely she become “blinded” to the small failures all products have. This happens not only with regular users of a product but also with the product manager who manages the product and has the means to correct these small failures. It’s not unusual to hear the phrase “that’s the way it is” in such situations. This is the reason why it’s always good to bring fresh eyes to fight the “that’s the way it is” inertia.

1 person likes this post.

Extreme Presentation
Mar 10th, 2011 by Joca

Giving presentations is one of the items of almost any Product Managers job descriptions. I just got another interesting link from Jason Yip, the Extreme Presentation method.

He has an interesting definition of two styles of presentations and when to use each style:

  • Ballroom style presentations are what most typical PowerPoint presentations are trying to be: colorful, vibrant, attention-grabbing, and (sometimes) noisy. They typically take place in a large, dark room—such as a hotel ballroom.
  • Conference room style presentations are more understated: they have less color, with more details on each page; they are more likely to be on printed handouts than projected slides, and they are more suited to your average corporate conference room.

The biggest single mistake that presenters make—and the root cause of the PowerPoint debate—is confusing the two idioms, and particularly, using ballroom style where conference room style is more appropriate. Almost all PowerPoint presentations are given using ballroom style—yet most of the time presentation conditions call for conference room style. Ballroom style is appropriate for where the objective is to inform, impress, and/or entertain a large audience and where the information flow is largely expected to be one-way (presenter to audience). Conference room style presentations are more suited to meetings where the objective is to engage, persuade, come to some conclusion, and drive action. This covers any presentation where you want your audience to do something differently as a result of your presentation. It includes: making recommendations; selling; training; communicating the implications of research; and raising funds. Information flow in this idiom is expected to be two-way—it’s more interactive.

He has a 10 step process for designing a persuasive presentation:

Extreme Presentation Method

Extreme Presentation Method

And here’s an interesting advice on the flow of the presentation:

There are other videos about the Extreme Presentation Method.

2 people like this post.

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