1. Business First, Product Second
Or rather, “a product is not a business.”You’ll find this all over the startup literature and yet almost all first-timers seem to get it backwards, including ourselves. And it was by far our most costly error. Mark, more of the coder between the two of us, quit his consulting job about six months before I did, so he got a huge head start on AskMeEvery. And it looked great, worked great. We even started a partnership discussion with an established company that would have paid us food/rent because the product had such a good reputation. Sounds good, right?But what were we selling? What was the value proposition? We couldn’t have told you then! When I finally started trying to make sales (for the first time in my life, too), we quickly realized not many consumers were willing to pay for text-based reminders. They loved what we had built, spread the word for us all over social media, and some even voluntarily wrote entire articles about it without us asking (including a Polish blogger, where we had to translate it to make sure it wasn’t disparaging). Then the partnership fell through and we realized we were in trouble.We pivoted. Then pivoted again. And I wish I could tell you we never made this mistake again but if I’m being honest, it took us another 5-10 products (not pivots) before we really tried going after the first dollar on day one.
2. Do Simple Arithmetic
For months we expected freemium to work for AskMeEvery. We were receiving lots of positive feedback from users. Only problem though, as I mentioned above – no one was paying. After a while we decided to do some arithmetic:In order to make food/rent money in Chicago of $2k/mo, we needed $5k/mo of net profits to account for taxes. Each paid user generally cost us $1.50/mo due to high text-message charges, and there wasn’t much we could do about it – we were too small for twillio to bother with a discount and not big enough to spend a week or two switching to a competitor for a 20% cut in expenses. Anyway, at $5/mo per paid user that’s a profit of $3.50/mo, so our goal for freemium was $5000/$3.5 = ~1500 users. Easy peasy! So we took a look at our conversion funnel and based on our users, our homepage converted about 5% and then 3% of those users upgraded to paid plans. We hadn’t “optimized” the flow so it could have been improved, but at the same time these were the most engaged people – they were our early adopters. So to get 1500 paid users we needed 1500/.03 = 50,000 free users. Hmmm, we had 2-3k at the time, so we needed some CRAZY growth to get there. But wait, to get 50k users we’d need 50,000/.05 = 1M home page views. Even when we made the front page of r/lifehacks we only got a couple hundred visits so this instantly became a seemingly insurmountable task. All for what, food/rent? We needed to look elsewhere.Months later, after a few pivots and then abandoning the product for other ideas and freelancing, we decided to take a peek at our user growth:I dare you to tell me when we abandoned development from the graph above. You can’t tell and neither can anyone else. So then what was our work accomplishing?? Turns out – not too much.
3. Building >> Reading
One of the funner debates we had throughout our partnership was whether reading is a valuable enough endeavor to spend 1-2 hours per day on relevant books. I was always pushing us to read a book per week each; Mark wanted us to always be building products and testing ideas.On one hand, reading some of the books like The Lean Startup completely changed our approach and saved us months of frustration by giving us a system to prioritize our day-to-day tasks. On the other, as I sit here I can’t think of another valuable book I read over the 8-month period we were completely broke.At the end of the day, I have to admit I’ve changed my point of view to mirror Mark’s. While reading is 100x better than watching TV because it forces you to use your imagination, building products is 100x better than reading because it forces you to use your creativity. And don’t worry, you’ll somehow still find time to read the occasional book that will blow your mind.This doesn’t just apply to coders, either. All of us have run into “business” guys who don’t have any sales but “need” a developer. Or designers without a portfolio, or marketers who don’t have a facebook page. As Jessica Livingston says in this wonderful article on what goes wrong at YC, they tell startups to focus on just three things: “building things, talking to users, and exercising.” Which leads us to the next point…
4. Get In Front of Your Customers
I’m well aware of how much everyone says this so I’ll just skip to the stories.Bar none, the most productive thing we did professionally was take over Chicago’s Quantified Self meetup. We had struggled so much with user stories and archetypes until we plugged ourselves smack in the middle of our target market. We were lucky – Chicago is a huge city, and the QS group wasn’t too active yet, and the original founder was traveling/living in California so after some harassment Mark and I were running the meetups and super plugged in. A few emails later we were friends with some of the major QS influencers worldwide, and we had 5 people a day asking us about self-tracking. We didn’t even mention we ran AskMeEvery for the first few meetups and it still proved invaluable. Fast forward a few years, and we’ve now spoken at Chicago Ideas Week, UChicago, and even got featured in a Chicago Reader front page story feature.One more story…Six months into AskMeEvery we pivoted into serving life coaches. As a quick aside, life coaches were the most vocal supporters of AskMeEvery on social media and were always reaching out to us looking for potential partnerships. Anyway, like good entrepreneurs we noticed this trend, interviewed everyone we could, and asked a few to pay up right away and started tweaking our product to suit their needs. We even plugged ourselves into a national professional organization with 50,000 life coaches, or should I say 50,000 target customers! Wooohooooo! I was especially proud of this, and in my pride dragged Mark to the first live meetup I could find. We drove to the suburbs, sat down, and within five minutes knew this wasn’t for us. First and foremost, we had nothing in common with these people. It didn’t excite us. And we knew that immediately, and talked about it as we were walking out of the building. Secondly, every single person there assumed we were rookie life coaches and tried to SELL US on their services. The first conversation was weird, the second one was questionable, but by the tenth it was obvious that our target users didn’t need help becoming better life coaches – they needed marketing help. Combine 1 & 2 together and we knew this product/vertical combination wasn’t for us. All from 2 hours at a meetup. Nothing against life coaches, by the way, but you have to pick your businesses like you pick your hobbies, and not everyone plays basketball.By going to our target customers, we turned theories into facts.
5. Know your Skills; Pay for Everything Else
One of the biggest internal conflicts I had was the lack of transferable skills from my previous consulting life to the world of web development. Excel and Powerpoint suddenly became useless tools, I had minimal sales experience, and no professional experience whatsoever in our quantified self vertical. I went to school for power generation, and my consulting was wholly spent in the energy world. So, I naturally tried to learn everything from scratch, which was a mistake.It didn’t help that we were broke, but we finally ponied up some cash and hired Veronika to do our logo and a basic outline for the homepage. We were, or rather are, horrible designers and just tried to get better at it over time. It was never going to happen. Sure, we can now at least speak the prose pretty well, and both of us have gotten decent at user experience, but I still build black/white pages unless a designer tells me otherwise. Hiring Veronika sooner would have not only saved us weeks, but we would have had a vastly better product too.
6. Team Composition – Crazy and Detail-Oriented
7. Have Savings
We both planned ahead and saved 6-9 months of cash that we were both prepared to spend while building out our ideas. Sure, we spent every last penny of it and have little to show for it other than these lessons, but let me tell you, the freedom we had was unparalleled. We picked our directions at will. We wrote guest blog posts. We picked our advisors and booted them when some of them stopped being helpful.By the end, we tried 23 different products. Some of them lasted a day, some of them took the course of a year. We did everything from The Starter League to applying for TechStars (which we spent an all-nighter on, and then almost forgot to submit).It was really a year of child-like learning. We’re incredibly fortunate to have had the resources and time that allowed us to stumble around so much. If you really consider how many projects we started and never finished, you’ll question our sanity.Maybe we could have hired sooner (and built a better product) with some angel funding. Maybe the no’s from investors would have pushed us into a different direction sooner. Maybe a strategic investment would have given us another six months of runway and we would have figured something out. You never know. But for our situation, the fact that we had savings allowed us to pursue whatever we chose.
8. Avoid Repeating Mistakes
This could be titled “Be Honest With Yourself” or “Expect to Fail But Never Accept It”.After we moved on and started rapidly testing new ideas, we wrote up a bunch of mistakes we kept making and put it on the rubric we used to evaluate opportunities:
- avoiding the first dollar.
- not focusing on the riskiest part of the plan or even worse, not identifying the riskiest part.
- misunderstanding the target audience. No guessing allowed – understand the habits, terminology, and tendencies.
- creating a business from complete scratch. Find a similar successful business and pivot.
- building a product before writing the content. Really understand elevator pitch before building.
- focusing on small problems. Focus on major issues people have, and therefore, will pay for.
- postponing on getting something live ASAP (ie, landing page or a sale).
- not telling a personal story where a narrative is required (ie, a presentation). A deep, personal, human story that people can connect to.
Yes, I recognize how meta it is to post an unexplained list of lessons learned within a post discussing lessons learned in detail.
9. Have Fun
All life is an experiment. The more experiments you make the better.
– Ralph Waldo Emerson
The best things we did, we did because we wanted to. We posted a funny daily GIF to try our hand at internet marketing. We went to the global QS conference in Amsterdam. I actually met my girlfriend there, which could be an entirely separate Lessons Learned post.Along the same lines, I was newly single at the time so I spent a lot of time browsing okcupid and worrying about paying for dates. Mark chose the opposite approach and deferred dating until we “made it.” By that definition, we never made it, still haven’t and probably have a long way to go. In reality, even if you’re doing a startup that you’ve fully bootstrapped and it may feel like it’s the only thing that matters, you still have to live your life.It’s funny looking back. Day-to-day, we were always busy and serious. In retrospect, none of it was as important as we thought. The whole experience now seems more a process of self-exploration than entrepreneurship.
10. Do Cool Stuff
Now that I’m approaching 31 and am a dinosaur in the startup scene, the one piece of advice I give over and over again is to do cool stuff. All of our success thus far has come because we continue to try to be true to ourselves.And what’s cool? For that, I like to reference my longtime friend Ake who likes to say, “the coolest people in the world do what they want.” For a few years, Experimentable was just that cool thing to us.