Jul 31, 2014

2 most important principles behind successful startups

Over the last few years working for a couple of startups, I have learnt this important lesson -  For a startup to be successful, the following 2 principles are extremely important and in the same order as below:
  1. Focus
  2. Momentum
These 2 principles are crucial, especially in the initial few years when you are trying to establish your foothold.

I came across an interesting article this morning which reiterated my learnings. It talks about how Facebook in the initial years was relentlessly pursuing "growth" to be the key focus area, although many skeptics wondered how they would monetize or generate revenue eventually.

I believe - "A startup should have a vision that is so big, that it inspires everyone around you. At the same time, it should have a focus that is so clearly defined, that it serves as a guiding light to everyone around you."

Focus is even more important if you are entering a new product category. Yes, you will foresee multiple opportunities in different target segments, geographies, customer profiles etc. There could also be a scenario where these markets are not yet tapped by any incumbent players. And it creates an attractive push to go after all of them, from a business point of view. The end result - you go after all these markets with unclear vision, undefined targets, product strategy being pulled across different directions, more strain on limited and precious resources that leads to burnout and eventually, let alone win, you don't even make a presence in any of them.

If you have a solid vision, an empowered and motivated team and a validated product-market fit, the business strategy can be easily simplified by going after ONE specific target market and addressing a specific problem area in that market. The other opportunities / markets can be prioritized and executed based on the learnings from the previous experiences.

It's also important to define how much time is necessary to validate a market. Is it enough to just spend 2-3 months and conclude if a market is attractive? Or do you need more time? Can this exercise be carried out, without investing significant product and technology efforts?

Apart from the markets perspective, what is the ONE metric that you want to focus and improve upon? Is it growth/acquisition (number of users), engagement (number of active/engaged users), conversions (number of premium/paid users)? Decide on that ONE metric and ensure you focus on it for atleast a quarter. Iterations have to be faster but the core focus shouldn't change as much as the number of iterations you take up.

That leads me to the next principle.

The proliferation of different variations of lean startup principles is a concrete proof that emphasizes the importance of momentum/speed in a startup. Yet, there is no dearth of ego clashes and back-and-forth discussions/meetings that act as speed breakers to quick experimentation and execution. Opposite views are important though, to get a wide range of perspectives. But opposition/criticism for the sake of getting your ego elevated MUST be avoided at all costs.

When I attended Scott Cook's session a few weeks back, it was an "aha" moment when he talked about the importance of rapid experimentation and that decisions shouldn't be made through powerpoint, politics and persuasion.

How does a startup come into existence in the first place? The startup founder had a hypothesis that a certain problem statement exists which can be solved by him/her and that there is potential business if it's solved well. There begins the experimentation phase, through multiple rounds of iterations, quantitative and qualitative proof which results in defining the next set of experiments to run.

I attended a Google hangout on the concept of Lean Design. Eric Ries, the author of "Lean startup" said "A startup is an experiment. Focus on the best ways to learn earlier".

Time spent in debating or arguing takes you nowhere. With simpler tools and processes available at your disposal, why not run an experiment on a small scale and see how it works? Momentum keeps you on your feet and learn from your customers. The author of this article stresses the point even further - "Experimentation beats expertise".

I truly believe in the value behind these 2 principles. Whenever I plunge into the "startup" mode, I will ensure they are being followed diligently.

Jul 22, 2014

10 Best Practices of User Onboarding

One of the challenges I had faced as a product manager in an earlier job role was to ensure that my users are actively engaging with my product/app. When I looked at the numbers, I noticed there was a tremendous dropout after the first login. There wasn't any huge marketing budgets back then and so the users who were visiting our product/app were primarily organic. After a round of data analysis as well as talking to a few users, the conclusion was that the onboarding experience wasn't so great. We went back to the drawing board and redesigned the entire onboarding experience from the ground up.

I have been reading up and researching quite a bit on the best practices of onboarding since then and I have distilled it down to the following 10 points:

(1) Issues such as time constraints, short attention span and cognitive overload make it much more important to design a smooth and intuitive onboarding experience. In case of mobile apps, it is even more imperative, given the challenges of app discovery and contextual distractions that come with a handheld device.

(2) Onboarding is a guided path to enable the users derive the benefit / get the job done using your product. Ask yourself the following questions:
    - What benefits are users expected to get?
    - Which ONE of these benefits is most important?
    - Why is it important?
    - What problem does this benefit solve?
    - What is the job that gets done due to this benefit offered?

(3) Onboarding is not a way for you to unravel all the cool features that you have built in your product. Rather, you identify the ONE core benefit your product offers to the user and showcase that benefit in a quick, easy and interesting way. I like this phrase by Laura Klein in her article on why you should stop asking your users to explore -
"People want whatever your product promises to do for them, and they want it to happen as quickly and easily as possible"

(4) Understand the context in which a user discovers your product and design your onboarding experience accordingly. The context could be based on location (office or home), device (laptop or smart phone), time of the day (afternoon or late evening) etc.

(5) Ensure the benefit can be achieved through smallest effort required from your users, which doesn't really demand either high motivation or high ability. BJ Fogg refers to this smallest effort required by the user as "baby steps".

(6) Based on data derived from the first-time interaction, design an appropriate trigger for the subsequent actions. The trigger should create sufficient interest for the user to return to your product/app.

(7) A first-time user is usually skeptical (go with this assumption always!) and doesn't have trust in a new product/app. Onboarding should help build the trust in a small scale. So asking a user to fill a long profile form or invite his/her friends as part of the first-time experience is a bad idea, unless your product depends on this information for showcasing the benefit (social apps are a slight exception in this case).

(8) Do not overwhelm the user with too much information in the first go. When I signed up for Pinterest long time back, I faced this overwhelming feeling when the home page bombarded me with pictures after signup. I never went back to the site for a while. I still am not an active Pinterest user. At the same time, if there is too little to do, the user loses interest and wouldn't want to return. Striking the right balance is important and can be understood by many techniques, primarily through A/B testing what works well with your target user base.

(9) Onboarding is not only applicable for the first-time login. Think through the stages of how your product benefits the users. Showcase the benefits in a phased manner in the user's initial stages of product usage. This can last for upto a week or even more, depending on the product context and complexity.

(10) If your product/app uses a freemium model to monetize, don't include the benefits of the premium product offering as part of the first-time onboarding flow. Let your users explore the free product for a few days (X), get comfortable with it and *really feel* the gaps which would get addressed if they upgrade to your premium offering. Identify the appropriate time frame (X) for your target audience and only then initiate a pitch for your premium product.

Hope these pointers were useful. I have found the following resources extremely helpful to get an in-depth understanding of onboarding practices.

http://insideintercom.io/strategies-for-onboarding-new-users/ => I love Intercom's blog for sharing such interesting insights on product design. This article talks about the successful strategies that other products have used, resulting in a great onboarding experience.

http://www.useronboard.com/ => This site has a very good collection of examples / tear downs on user onboarding , taking you through step by step of popular products.

Jul 14, 2014

7 lessons I learnt from a B2B market segmentation exercise

The last month has been a good learning experience in understanding how to perform a B2B market segmentation and sizing exercise. Though I have read about the best practices and frameworks in my marketing courses, getting the hands-on experience is extremely valuable. The whole exercise took about a month and 3 presentations and culminated with identifying a prioritized list of market segments to go after. Academic inputs and theories did provide the required direction and focus since market sizing can be a daunting task without it. Here are the 7 lessons I learnt that I would want to reflect back whenever I take up a similar project in the future. Hope you find them useful too.

1) Start off with a framework or structure
At the beginning of any market segmentation exercise, the definition of your market will be very broad. In order to identify your niche or specific target segments, you need a step-by-step approach to navigating the market space . The framework needn't be something from academic research papers. Rather, you draw up your own based on your needs and assumptions. It should serve as a guide with the objective of helping you identify the segments that make sense to your product/service. It could be a funnel diagram or a simple 10 step approach document that outlines how you plan to proceed further.

2) Identify the criteria you would use to segment the broad market
Start off with the basic parameters such as geography, industry, size, growth rates, annual revenue etc. At a second level, get into parameters that are directly linked to your offering. This depends on your target verticals (marketing, sales, customer support, operations etc) and pain points specific to that vertical that you want to address. List down the possible criteria that would help you to choose the attractive industry. Keep this list as exhaustive as possible at this stage.  For example, if your product is targeted towards customer support teams, a few criteria to consider:
- customer touch points from various sources
- team structure to handle specific types of issues
- processes related to escalation and resolution
- typical workflows and time spent in each stage

3) Include non-quantifiable parameters
Metrics such as annual revenue or number of employees help you to easily segment the overall market into distinct buckets. However, do consider investing time in understanding the non-quantifiable parameters that can be a good source of segmentation. For the customer support offering example, parameters such as complexity of the resolution process will help you identify if your product offering is suited to such requirements.

4) Identify your TAMs
The first insight that you might have to estimate is your "Total Addressable Market" - this is your universe and your total scope. If you eventually build and scale, this is the total potential you could reach for. The second insight that is more relevant for immediate action is your "Target Addressable Market". Based on various criteria that you have identified to understand the segment(s) attractiveness as well as your internal capabilities to effectively address the segment(s) needs, Target Addressable Market is identified for a short-to-medium term objective. You could further narrow down to identify a specific niche market to target in the next 3-4 months.

5) Data will not be handed to you in a platter
Unless you have access to expensive market research reports, you will not be able to get the required data easily. You might have to use multiple sources which can be conflicting at times. In such situations, you might have to triangulate the data points from various sources based on certain assumptions and back-of-the-envelope calculations.

6) State your assumptions clearly
Once you have identified the target market segment(s) based on the defined criteria, you might have to make certain assumptions regarding the willingness to purchase your product/service. You could use certain metrics as proxy. For example, overall IT spending in the last 3 years has increased in this specific market segment. Or this specific market segment is seeing a significant increase in funding activity in the last year. These assumptions have to be further validated by understanding the criticality of the problems you plan to solve for this target market.

7) Use lateral market data
Understanding the end-to-end workflow of a specific process helps you to analyze the dependencies on other products or solutions. For example, if you are building a marketing automation product, you could use CRM market data as a reference to understand industry dynamics. market shares and growth trends.

Do comment/reach out if you have any questions. I'd be glad to address any specific ones focused on your industry/offering.

Jul 7, 2014

The mystery of the snack box

D has been going to a play school for more than a year now. Since she wakes up quite late, she usually drinks a little milk or a tiny portion of her breakfast. I usually pack her breakfast for her mid-morning snack break and she has been eating without a fuss so far (touchwood!). I used to wonder what her friends/classmates bring in their snack boxes. When I ask D, she usually says "biscuits" or "grapes" :-)

Early April, we enrolled D in a new school for a summer camp programme. Being a new school, I accompanied her for 3 days and sat next to her, to get her settled in the new place. During the 10:30 AM break, it was so cute to see all the tiny kids open their snack boxes and eat together. Snack breaks are a perfect time to bond and get to know each other. Yes, it applies to 3 year olds as well. I quickly glanced around to check out the various snacks that kids have brought along. Some of them were the usuals like parathas, cheese sandwiches and bread+jam.

A 3 year old sitting next to us was eating dosa with sugar. The teacher asked him, "Do you like to eat your dosa with sugar?". The boy replied in an innocent tone, "No, I only like sugar". What a cute response!

There were a few snack boxes with store-bought cookies, banana chips and most enticing of them all, Lotto Choco-Pie. The kid with the paratha was staring longingly at the Choco Pie in a colorful pack. He wasn't too keen in eating the rest of the paratha. I was thinking about his mom who would have spent time making a healthy home-made paratha in the morning.

Kids can be easily influenced. They observe their peers, brands, logos, ads, messages etc etc. Food industry is well aware of this fact.

I'm not completely against packaged food products but I believe they should be consumed in moderation. Would I have my meals everyday in a restaurant because it is convenient? No! I apply the same rationale when it comes to giving packaged foods to my daughter.

The goal of big corporations is to make profit. They are not concerned about making healthy choices for their consumers. To get higher margins, they would cut their costs in numerous ways than we could imagine. They not only want you to consume their packaged foods but they want you to consume more of it. A ketchup or a jam bottle is readily available in most of the urban households in India but the food industry want you to consume 3 bottles in a month instead of one. No wonder, they advertise their products by advocating a generous spread of ketchup on a chapati to feed a fussy kid.

The West has woken up to the fact that these packaged foods are destroying their health and creating obesity related disorders. So now the food corporations are extending their wings to target consumers in developing countries like India.

Taste enhancers, preservatives, artificial flavors, loaded sugar and salt - all are awaiting yours' as well as your kids' attention in the aisles of the supermarket.

My intention of this post is that you be "aware" of your food choices. Read the nutrition labels and ingredients. Ensure moderation of processed foods.

I believe in following the 7 rules of eating by Michael Pollan. Out of these rules, the following 2 are my favorites

"Don't eat anything your great grandmother wouldn't recognize as food"
"Don’t eat anything with more than five ingredients, or ingredients you can't pronounce"

In the next post, I plan to share a few healthy and quick snack box ideas so we don't have to send a "Choco Pie" in our kids' snack box when we are short of time.

Jul 3, 2014

2 principles behind successful products

I had the opportunity to attend a master class on Entrepreneurship couple of days back by Scott Cook, Founder of Intuit. It was fascinating to hear about his experiences of building Intuit in the 80s. He is an amazing speaker with perfect clarity of thoughts and words. He spoke about 2 principles of creating successful products.

1) Keep looking for insights from customers
If you are building products just for yourself and for your friends/family, insights may not be that relevant. But in most of the cases, we build products for a larger community. The only way to learn is through deriving insights. Insights can be obtained using data gathered on product usage. But the most useful source of insights is "observation". During the session, Scott demonstrated the power of observation through an airplane making exercise. You tend to gather a lot more insights and surprise elements by observing how people use your product rather than asking/interviewing them about how the product experience was. Surveys or focus group discussions falter because what people say may not be what they do. He brought up an interesting point - "Trust behaviors more than words".

During "observation" process, keep yourself open to surprises and note down the actions that weren't expected.  Don't go with a "validation" mindset as it would bias your thought process and you will eventually prove right what you had set out to validate in the first place. Instead, take a "discovery" approach and be open for surprises.

2) Engage in rapid experimentation
Scott stressed about the power of iteration through experimentation. He stressed the fact that decisions shouldn't be made through powerpoint, politics and persuasion (loved this phrase!). Rather, decisions ought to be taken through experimentation with real users. Experiments help you in understanding the actual behaviors.

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