Internet Tech Boston

David Skok, five time serial entrepreneur turned VC, came to talk to the Lean Startup Circle Boston crowd last week. If you’re not familiar with David, then I encourage you to check out his blog, ForEntrepreneurs.com, where he regularly shares his expertise and lessons learned from successful companies such as SilverStream Software, JBoss, Tabblo, and Hubspot.

From optimizing sales & marketing funnels, to unclogging blocked funnels, David explained different types of sales models, and how to take advantage of the web to drive down the cost of customer acquisition and move from high-touch to touch-less sales models. Slides from the presentation are below. After his presentation, David stuck around for an additional 30 minutes of Q&A with the audience. After flipping through the slides, scroll down to find the audio recording and text-based transcript of the Q&A, which contains a ton of great, very specific, advice.

Slides from How To Build a Sales and Marketing Machine

In this Startup Lessons post, I talk with Matt Sullivan, a lead engineer at Boston-area SaaS startup VisibleGains and part-time entrepreneur. We discussed developing a pricing strategy for his fledgling Android App, LocateMyDroid. Previous posts in this series have discussed how to be a part-time entrepreneur,  tracking startup marketing efforts, and user acquisition strategies for startups.

In 2009, Sullivan’s iPhone died and he decided to replace it with an Android phone, unlocking a desire to use his “spare time” to learn everything about developing applications for the Mobile Android OS. In a week, Matt’s roommate built an application to find lost Android phones and Matt designed and built the accompanying web application. An unintended consequence occurred – the app actually got downloaded and used by strangers who loved it.

How a side project got covered in ReadWriteWeb.

LMD has backed into a seemingly ideal situation for a Lean Startup. The Version 1 / MVP was built quickly, with little risk, launched into a market, and proven that people actually want it. LocateMyDroid now has over 27,000 installations, with about half of those installations still active today. Feb 1st marked the launch of Version 2, which contains an improved method of tracking accounts. In early March, LocateMyDroid was included in an App roundup post on ReadWriteWeb.  New users are coming on at a rate of about 40 new installations a day with little effort being spent on customer acquisition. Sullivan has assumed full control of the product (IP and roadmap), and feels like it’s time to monetize his efforts.

How should I price my Android App? per download, per feature, per year, or what?

Matt jumped right in with the big question. Unfortunately, pricing decisions don’t come as an easy as that. We had to back up a bit to understand what problem this product solves for users. As with many hacker founders, Matt focused his messaging all on the features and technical advantages of the product he built. First, I advised Matt to understand as much about the perceived value (not tech features) of the solution to the customer and change messaging accordingly.

The first place I go to understand perceived value is the existing user data. With over 13k active installs of the product, LMD will should be able to develop a picture of the most common, happiest user. Businesses might be using LMD to track their fleet of company-issued phones. Parents might be using LMD to ensure the whereabouts of their teens. Twenty-somethings might be using LMD to help reclaim a lost phone at the bar where they left it last night. I recommended Matt spend more time understanding his users by quick phone calls, online surveys, and to integrate a free tool like KissInsights, GetSatisfaction, or UserVoice on the web site to solicit more detailed feedback.

How do I test my pricing hypotheses?

LMD doesn’t ask much information during registration for fears of decreased conversion rates. I reminded Matt of the advice from Eric Ries regarding MVP construction –  “When building the MVP, build in the tools and tracking to create your next product version.” Use A/B testing tools like Google Website Optimizer, Unbounce, or Performable to understand the actual trade-off in conversion rate when additional fields are added to the registration form. Use A/B test tools to present different pricing page options and test which ones convert new website visitors to new app registrations the most. At first, these price test might not even hook into an active eCommerce system. Simply test the customer’s willingness to click on a “Buy Now” button at the advertised price. After a few consecutive price tests, LMD should have an improved understanding of what customers are willing to pay.

After discovering the problem the customer is using your product to solve (Families managing their household’s average of 4 phones), and knowing the value your solution provides to the customer (replacing an average of 2 lost phones per year at an average cost of $200), it’s a lot easier to begin to position the product in the marketplace. The Price Testing should show some trends – e.g. people click on the buy-it now button more when it’s an annual up-front $9.99 as opposed to a monthly fee. Now, the important question, can LMD build a profitable business around that market at that price point. Is the cost to acquire those customers less than the lifetime value received? For more (better) information on CAC and LTV see David Skok.

Build. Test. Iterate.

I left Matt with the mantra of The Lean Startup. Come up with your best guess hypothesis around pricing based on the data you have. Test it in a variety of channels to accumulate new data that helps prove or disprove your hypothesis. Rinse and Repeat.

How about you, reader? What advice do you have for a first-time entrepreneur struggling over pricing strategy decisions? Leave them in the comments below.

The last meetup of the Lean Startup Circle in Boston featured both authors of “The Entrepreneurs Guide to Customer Development,” Brant Cooper and Patrick Vlaskovits. As someone who has seen the “What is the Lean Startup” presentation by a number of folks, I appreciated the way they approached their presentation – a little differently. Brand and Patrick discussed the reasons why you WOULDN’T want to use The Lean Startup approach in your company. The drawback to this approach to the presentation was that it clearly left a few people in the dark. It was more of a 2nd level Customer Development course. With that said, those guys did a tremendous job in the question/answer period that followed the presentation to both set the context for the folks who are new to the methodology, but also provide tactical advice to those who already understood the concepts, and were looking for ways to get started. Presentation below, enjoy!

Ubiqi Health is a new company building tools to track migraines, triggers, and treatments online or on your mobile phone. Their current biggest challenge is acquiring new users that match the same eagerness and intensity as their early-vangelists, in a low-cost manner. As a startup marketing guy, I felt I could help out. In Part One of our conversation we talked about how to setup a user acquisition tracking system. This post recaps our discussion of driving new visits and users through the system.

Ok, once we build our AARRR dashboard, how do we attract new users?

Ubiqi is still attracting new users by building partnerships with people who can recommend the product to chunks of people – moderators of online user groups, influential doctors, and offline communities. While that’s a great way to get some early hypotheses validated around your market and MVP, I recommend that Ubiqi start incorporating an Inbound Marketing Strategy (Lite). Doing Inbound Marketing “the right way” requires a huge time commitment that won’t pay off for a startup before the money runs out. However, the inbound, digital channel shouldn’t just be ignored.

Ubiqi uses their blog to talk about the product and their Facebook page to talk about the problem their product solves. I recommend to flip that approach. As David Meerman Scott so eloquently puts, “Nobody cares about your product, except for you.” Take the content that people are more likely to be searching for, and put that in a search optimized, frequently updating, publicly accessible blog.

The definition of “Frequent Updates” to the blog is always murky – especially for a startup where time is the scarcest resource. There are a lot of great ideas on how to train yourself to regularly update your blog with an editorial calendar, or get others to blog for you by asking for guest authors, and more. Start by agreeing on to an editorial calendar that has the whole team committing to 4 total posts per month. If there’s at least four people in your startup, that’s 1 post per person, per month. Have each person write about the “problem” from their unique prospective of their functional role.

Should we experiment with PPC?

Grabbing lots of users by investing in a daily PPC budget that you can “set and forget” is a trap that many startups flirt with, at some point. From my experience, the steps that are required to setup a Google Adwords campaign and get it running require all of 5 minutes. Don’t let that fool you, the steps required to correctly setup a PPC campaign that results in something other than just handing over your money to Google, are a lot more involved. Tread lightly. Poorly configured PPC campaigns can waste the two most scarce startup resources – time and money. Properly tuned PPC campaigns require banners and ad messaging that truly stand-out from the pack, stellar landing pages designs, crisp value propositions specific to the Ad content, and accurate data that demonstrates your campaigns’ effectiveness through a series of A/B tests, and dedicated time out of your schedule to monitor your campaigns every day.

All it takes is time . . . and money

After talking for an hour or so, the meeting ended with lots of notes on the page. I felt that I was able to help outline a decent user acquisition strategy in broad brush strokes, but felt at times I was overwhelming Jackie with just a bunch of to-do’s that might have gotten lost without overall context. How about you? What other advice would you give to the team at Ubiqi Health to get started on a robust user acquisition campaign? Leave them in the comments below.

Last week, The Lean Startup Circle Boston hosted Eric Ries, the creator of the Lean Startup methodology and the author of the popular entrepreneurship blog Startup Lessons Learned.

As a co-organizer of the Lean Startup Circle Boston, I’ve seen a few Lean Startup presentations. As you can imagine, Eric’s is one of the best. I won’t try to recap the salient points of the video in a blog post. Instead, I encourage you to actually take an hour and 47 minutes of your day or evening to watch this video from beginning to end. Sounds crazy, but trust me – it’s worth it.

The assembled crowd at Microsoft’s N.E.R.D. building consisted of roughly 1/2 lean startup “newbies” and 1/2 “experienced” lean startup practitioners. This made it a little interesting from Eric’s point of view. He needed to cover off the basics of the Lean Startup and Customer Development methodology so the new folks understood what the hell he was talking about, while also getting into some detailed topics and Q&A so that the others wouldn’t be bored. He did a great job.

Your Marketing Automation System

This past summer, I recorded a series of startup profiles. Since then, two of the companies (Baydin and Peekaboo Mobile) have gone on to receive funding. I wanted to get an update from the others as well, so I had coffee with Jacqueline Thong, CEO at Ubiqi Health. Since we last spoke, Ubiqi’s Alpha phase finished successfully – users loved it. Jackie told me that she was pleasantly surprised at the number of people who really stepped up to become evangelists for the Alpha product (aka MVP). To me, this reinforced the importance of finding what Steve Blank calls, your “earlyvangelists” – people so eager to try the solution to their problem your product offers that they’re willing to slog through an MVP to get there. Now Ubiqi is open to the public. Their current biggest challenge is acquiring new users that match the same eagerness and intensity as their early-vangelists, in a low-cost manner. As a startup marketing guy, I felt I could help out. Here is Part One of our conversation where we talked about how to setup a user acquisition tracking system. Stay tuned next week for Part Two where we talked about driving new visits and users through the system.

Force the entire team to focus on team goals, not individual or departmental goals.

Acquiring users for your startup SaaS product is a problem that should be solved by the whole team, not just the “marketing person.” In my experience, the first step toward product/dev/marketing team alignment is sharing the most important metrics that the whole team is accountable for. Jackie was already sharing the new user signup and the number of retained/active users per week with the whole team. That’s a great start, but I recommended Jackie build out a full AARRR Dashboard to provide deeper insight user metrics from the top of the funnel all the way out the bottom. I’ve found that the mere process of choosing which are the most important metrics within each phase of the AARRR funnel, and as a team agreeing upon their importance, clarify the mission of the team. It takes time. Start by putting them on a whiteboard – you’ll need to erase and redraw as you refine your approach. When the idea of measuring AARRR metrics fully bakes in within your team, move it to a page on your wiki, or a spreadsheet in a network folder – someplace that everyone can see.

Where do users come from today, and which are most active?

Jackie told me that Ubiqi’s first users were found through typical Customer Development methods – respondents to surveys about migraine problems, connecting with the leaders of migraine user groups, and pure WOM. There were also some PR “blitzes” in the form of helpful comment son NYTimes blog posts and others. I like to setup systems that tag every user by referral source as they signup, so that you can follow cohorts of users through their AARRR lifecycle. This referral source should be part of their user record in your application database. Don’t rely just on external third party tracking tools or you’ll never get a complete picture of channel ROI. Your user tracking “system” doesn’t have to fancy. Just some quick javascript to store the standard Google AdWords referring variables or the referring website address with the user record when they get created.

We had a problem with Analytics . . .

Like most startups practicing capital efficiency, Ubiqi was using the free Google Analytics tool. I find that using GA for all types of web tracking from blog post popularity, to new user funnel effectiveness, to user interaction within the product itself can be unwieldy. Yes, it’s free. But it can be a bear to setup and it’s 24 hour lag before showing data can be a pain – especially if you found out you need to change your setup. Eventually Ubiqi found themselves in that spot, and lost some data. I recommend that startups understand that Google Analytics is great for web traffic analysis for up front Acquisition analysis, but tools like KissMetrics are better for User Activation analysis (conversion funnels) and MixPanel for Retention and Usage metrics (user interaction within the product). Art Van Kilmer has more great detail on these packages here.

Continue on to read Startup Marketing Lessons: Ubiqi Health Part Two where we talk about driving new visits and users through the system.

Really excited to post that EditMe, the startup I’ve been working on, has been been acquired. You can read all about it on our blog.  For this post, I wanted to write about  five lessons I think we’ve learned throughout this process. If you’re a superstar, or have a success story, don’t bother reading – you’ll probably find this post trivial.  This one’s for the dreamers, the wanna-be’s, the unheard-of entrepreneurs – toiling away in obscurity, driven by your vision & passion. I’m with you. I am you.

5. “Fuck the naysayers ’cause they don’t mean a thing”

There are no such things as “experts.” There are only those that have had success, emerging stars that haven’t succeed quite yet, and cynical d-bags that know they don’t have the brains or guts to succeed and want to drag you down to their level. Listen to those who’ve had success, and partner up or hire the emerging stars – but avoid those cynics at all costs, lest you find yourself actually believing them.

4. Invest in your core value – outsource the rest.

Free up your time by outsourcing as much as you can. At first, you’ll feel it’s a “waste of money” to outsource menial bookkeeping tasks that you could clearly do yourself. Or, you’ll wonder why paying for a 3rd party service to manage email delivery inside your social media app makes any sense when you could just build it yourself. But as the company or product achieves even the slightest bit of scale/momentum – you’ll be glad you’re spending your time on building your secret sauce, and not the ancillary services required to keep the operation afloat. At the end of the day, the value in your product or company is not about how well you’ve been able to send “password reminder” emails.

3. Automate yourself out of a job – then redefine your job.

Early on, start investing in ways to streamline the stuff that needs to be done, and automate as much as humanly possible. This will help conserve your most precious commodity (time).  You can use Google Mail’s “Canned Responses” to automate the most common tech support replies. You can hack MailChimp’s Email Marketing Autoresponder capability to build a poor man’s artificial intelligence to communicate with customers.  Use Amazon Mechanical Turk to outsource deactivating obsolete user accounts. Use a wiki to keep detailed notes on steps required to accomplish tasks that need to be done on an infrequent schedule so that you can quickly recall and get them done without having to waste time remembering how it gets done.

String together enough of these “automations” and you’ve got yourself a pseudo-employee – a collection of scripts, canned responses, templates, and rote memory that do some job function “good enough” so that you can free up your time to tackle new and more important challenges.

2. Mine customers for information – there’s gold there.

The most important exception to the “Cynics Rule” are those that pay you money. Remember those folks, the customers? They have every right to tell you how much you suck, or are just plain stupid. In fact, you want to setup a relationship between you and your early customers where this dialog is fostered, even expected of them. The importance of listening to customers is discussed in great detail, and much better than I can relate, by the Lean Startup guys like Eric Ries, Sean Ellis, Dave McClure, and others.

Short version of this story – do what ever it takes to get a candid, truthful dialog between you and your customers. That’s where the answers are to most all of the questions you’ll face early on. Questions like: is this product valuable? Where do I find people to buy this thing? How should I message it and market it? And, if you find yourself giving excuses about not wanting to talk to customers because “they don’t get it,” then slap yourself hard across the face – you’ve started to believe your own BS. You need the type of reality check that only listening to customers can provide.

1. Execute. Execute. Execute.

There’s no such thing as a silver bullet. You’ll need to release several features to address one user experience problem, or run a series of A/B landing pages to fix a broken user acquisition funnel. But know that every thing you ship that is meant to address a problem brings you one step closer to actually solving it. There is nothing to be gained by standing flat on your feet and hoping everything turns out for the best.

A Call to Arms

On Monday Nov 29th, I took part in a panel discussion at the MIT Enterprise Forum, Software Special Interest Group, titled “Marketing II – New Market or New Product.” We were to share our experiences in bringing new products to existing markets, and/or creating new markets. Then, we were asked to impart our wisdom to the assembled crowd in the form of advice on which direction to take.

Definitely not the smartest guy in the room.

The audience consisted of 30 successful entrepreneurs, Sloan candidates, and HBS candidates.  The panel included Ken Rugg, formerly SVP & GM  of Enterprise Business Solutions at Progress Software, and Kathryn Roy, Managing Partner of Precision Thinking . . and me.  I had never set foot inside an MIT building before Monday, and here I was inside an MIT classroom at the spot usually reserved for the teacher.  I felt that I was the least qualified guy in the whole room, let alone the panel.

So what does a UMass Amherst grad with no MBA, a couple of small wins, and a couple big losses have to say that anyone in this audience would care about? I was playing the part I love the best – underdog.  I volunteered to go first. I spoke from the heart about what I felt I learned from my (limited) experiences.

New Product -> New Market

I talked about my time at PermissionTV, bringing a new product into a new market. I don’t recommend it to other startup marketing folks. Creating a category, placing your product in that category, generating demand where there is no existing demand . . . all while building a product that will (hopefully) satisfy the demand. All with the Investors, and Board, and competitors breathing down the back your necks. Not easy stuff. But, if you’re a funded company building a new product/new market, chances are you’re part of a wave of something new and exciting. It’s easier to get attention from press and early-vangelists.

Existing Product -> Different Market

I discussed our current challenge at EditMe, executing a pivot that will take  an existing product into a different, but existing market. Speaking solely with my startup marketing hat on, I would say it’s not nearly as difficult as the new product/new market challenge. You can compare your product to things that already exist, which makes it easier for potential customers to understand how you’re better than the competition. On the downside, EditMe technology is “old” by the standard of the VC and Tech Elite, so less people care about it.

A great time had by all

It was a great event hosted by the Software SIG committee, and special thanks to Vineet for inviting me come down and speak. Hopefully I didn’t annoy the other panelists . .. too much. Below are some slides I discussed.

Here’s another take on a web startup – one that comes with a 7,000 sq ft storage facility and a fleet of delivery trucks. Meet Fetch Storage. Ok, it’s not really a web startup. As cofounder Jesse Mastro puts it, the team at Fetch is seeking to bring new technology, like personal online inventory management, into “old models” like the property storage market. Just like SaaS products storage your digital stuff in the cloud and allow you to select what you need, when you need it, so Fetch does for your physical things utilizing, a personalized web based control panel and a fleet of delivery trucks.

The team is currently looking for funding, and is doing so along with the many teams participating in the Mass Challenge. They’ll need that funding if they ever hope to grow beyond their initial Boston-based geographic location. But it’s not just the physical infrastructure they’ll need. . In order to make this work, a smart automation of the way items are checked in, stored, requested, scheduled for delivery and arrived on time is not something for the faint of heart. Actually, I’d say that getting cheap storage space and delivery trucks is probably not one of their largest problems.

But the cofounding team of Jesse along with Brij Patel and Christian Baxter are off to a great start, with a few employees and over 100 paying customers, including several local businesses such as the Boston Metro Newspaper, that uses Fetch to store the paper’s back issues. I met up with Jesse and Christian at WorkBar Boston, who were kind enough to let us record our meeting in their lounge during one of their free co-working days.