How To Make It as a
First-Time Entrepreneur

Getting feedback on early versions of your prototype is crucial to a startup’s success. You’ll learn more the first day a user tries out your product than the previous 2 months you’ve spent thinking about it.

But, aside from getting user feedback, we really benefited from getting the chance to show Yipit to experienced entrepreneurs and investors.

We would often come back from those meetings and make major changes to our initial prototype plans.

But, it’s hard, especially as a first-time entrepreneur, to get their attention. Their time is their most valuable asset and they can’t meet with everyone.

Plus, even if they do meet with you, it doesn’t mean they will spend real time thinking about your product — the kind of time it usually takes to yield breakthrough product and marketing ideas.

So, how do you get their attention? Well, it seems like one answer is to get into TechStars.

TechStars Mentors

This is my first year helping out with TechStars as a mentor and they have been emphasizing that what makes TechStars different from other programs is their impressive list of mentors.

At first, I was definitely skeptical that the list of mentors was just that, a list.

I’ve come to see that the program, spearheaded by David Tisch, does a fantastic job of getting mentors involved.

They organize one-on-one meetings with the various companies in the program and get mentors to pick a specific startup to actively mentor.

I fully realized the power of the program when I get an email from one of the startups asking for feedback on their prototype.

I opened the email and the ”to” field blew me away.

When I had sent a similar email about the first version of our prototype, it was to five college friends, my brother and my mom. His “to” field included:

• Fred Wilson, partner at Union Square Ventures
• Andy Smith, co-founder of Daily Burn
• Michael Galpert, co-founder of Aviary
• Rachel Sklar, Editor at Large of Mediate
• Josh Stylman, co-founder of Reprise Media
• Nate Westheimer, NYTM organizer and formerly head of product at AnyClip
• Eric Friedman of Foursquare and former associate at Union Square Ventures
• Amish Jani, founder and managing directory of FirstMark Capital
• Matt Galligan, co-founder of SimpleGeo
• Jeremie Miller, inventor of Jabber

Seriously?! That’s a ridiculous list of people to send over your initial prototype.

Aside from getting great feedback from them (both on the product and vision), if some of them start using the product in ernest, they could bring many more additional users.

I wish we could have sent Yipit to a list like that.

Traffic Bumps via Chartbeat

Last Saturday, we woke up to a surprising alert from Chartbeat, we had a new record for most active visitors on our site Yipit.

It turns out that CNN had run a two minute segment profiling Yipit. By Sunday, they had aired the segment four times and we easily had our best ever two-day stretch across all key metrics including user sign-ups.

Did we get it because we had raised money, crossed 100,000 users or hired an expensive PR firm? No. The following is how it happened.

(If you’re having trouble with the video, try refreshing the page)

Listening to Our Customers

Yipit’s primary product is to aggregate the best daily deals in your city (Groupon, LivingSocial, BuyWithMe, Yelp, Scoop St and 160+ others) and email the best ones to you based on preferences you set.

Since launching Yipit in February, we’ve had a policy to reach out to users that unsubscribe to collect feedback. We send them an email explaining that we’re a startup and offer them a $10 amazon gift card to get on the phone with us for 10 minutes and explain what happened.

I know that sounds like a lot of work, but we actually use a virtual assistant to handle the entire process of setting up the call. We just have to do the calls and everyone on the team does the calls.

In June, we got an unsubscribe from someone with a gmail address. We reached out to him and he explained via email that he had unsubscribed because he lived in Connecticut and didn’t think he would be able to use the New York deals we were recommending. But, he also explained that he was an executive producer for CNN’s Money Unit and wanted to set up a call with us.

Customer Development Process Got Us Profiled

It turns out that he was really impressed with two aspects of how we were running Yipit:

• We were reaching out to our unsatisfied customers to get their feedback on how to make Yipit better
• We had pivoted from an overall deals and coupon aggregation service to just focusing on daily deals based  in part on those user feedback calls

After the call, he said they wanted to feature us on a series called “The Turnaround” that focuses on a business that makes a change that leads to more success. As he was telling us about the series, I was thinking to myself that the series really celebrated successful pivots, a key tenet of the customer development process popularized by Steve Blank and Eric Ries. We were getting profiled because we were following the customer development process!

Were We Just Lucky?

Clearly we had been very fortunate that one of the users that unsubscribed happened to be an executive producer at CNN. But, maybe we weren’t as lucky as it seems.

Isn’t the job of journalists to try out new services and report on them to their readers? I would expect that your earliest customers consists of not only early adopters but also a handful of influential tech journalists, magazines editors and executive producers.

In other words, aside from the many benefits of getting feedback from your early customers, yet another reason to talk to customers is an opportunity to have more meaningful conversations about your startup with the journalists who are trying it out. If you have good and meaningful conversations with them, they will probably be more likely to tell their audience about you.

Odysseus resisting the Sirens

On my three year startup journey that lead to Yipit, I had over 30 other completely unrelated ideas. Each time I got the idea, I would immediately start sweating profusely for three straight hours in a ridiculous state of unbridled excitement and optimism. Sounds great, right? Not really. Those new ideas and the emotional frenzy were a serious distraction.

To be clear, the “ideas” I’m referring to are the ones that have nothing to do with your current startup. Switching your startup’s focus to a related area based on what you’ve learned (i.e. pivoting) is a winning strategy and one that Yipit employed twice.  This post also assumes that you are and have been actively working on an idea.  If you haven’t started yet, experimenting with new ideas is a great way to start.

In our case, Yipit had always been about organizing local information and we had been working on it for a while. But, along the way, we spent significant time on other unrelated ideas including:

• Social version of delicious (summer of 2007)
• Tool to recommend the best version of the online video you were currently watching (spring 2008)
• 140it.com: Bookmarklett that smartly shortens your tweet to less than 140 characters. Over 350K tweets shrunk (spring 2009)
• UnHub.com:  2-minute personal website creation using your existing third party profiles. 10K accounts, 40K monthly unique visitors (spring 2009)

I now think of these new ideas as the Sirens of the startup journey. If you listen to their call, your startup journey will cease to make progress. Each of these projects were serious distractions from our initial vision of organizing local information.

The Temptation

To understand why these new ideas can be so tempting, I refer you to the incredibly insightful startup transition cycle.

The gist is that when you have a new exciting idea, you are in a state of “uninformed optimism”.  As you spend more time on the idea and start learning about all of the issues, you get into a state of “informed pessimism”.  This is a bad state that eventually leads you to a “crisis of meaning” where you either turn the corner into “informed optimism” or crash and burn.

Most startups are in “informed pessimism” and heading to a “crisis of meaning”. And, that’s when the Sirens start calling with new exciting and unrelated ideas.  Those new ideas are tempting because they are still in the “uninformed optimism” stage and seem so much better than your current idea.  I fell for it several times.

The Danger

Your ability to become a successful entrepreneur is about taking your current “informed pessimism” idea and turning the corner into “informed optimism”.  If every time you get to the disappointing “informed pessimism” stage, you impatiently hop back to a new idea at “uninformed optimism”, you’ll get caught in a never ending cycle. You have to be patient long enough with your idea to see if you are able to turn the corner.

The Solution

I finally learned to resist these new ideas after reading Tim Ferriss’s post. I now see those ideas for what they really are, “uninformed optimism” ideas. They may seem amazing but you just don’t know about all the issues associated with them.

So, if you are in the “informed pessimism” stage, either plug your ears or tie yourself to the masthead like Odysseus and keep working on your current idea.  Don’t be seduced by the Siren call of that exciting but shallow unrelated idea.

thegongshow:

When I talk to startups about the benefits of constant, iterative user testing in product design cycles, many people think that cost is a hurdle.

Booking 10 in-person sessions in a rented listening lab with a one-way mirror and screen recording in NYC can get pricey: $100-$200 per *qualified* candidate, plus ~$1000 fixed-cost of lab rental… or, as an even more deluxe option, an all-included engagement with a user testing consultant can run a startup from $5,000 – $15,000. That kind of bill is not feasible when you’re trying to get ramen profitable. But, cost is no excuse for not doing regular user testing in the early stages of a startup. So, for the bootstrapped startups, here’s five inexpensive ways to start doing user testing right now:

1) UserTesting.com – This is a slightly more upscale solution (relative to the other 4 choices below), but for $29 you can get a user to do a 20-min screencast for you while they talk about their thought process outloud. If this sounds confusing, this demo of a screencast explains the value of UserTesting.com well. UserTesting.com has the advantage of providing candidates that are qualified to your specifications (such as: age, sex, social-economic characteristics) and you can have users do very specific tasks you request.

UserTesting.com was developed by an ex-co-worker of mine at Homestead who did some user testing with me on our site’s splash page. He is a sharp guy and great at iterative design, so I’m glad he’s making a tool he finds useful for user testing available to the public.

2) Camcorders and friends – This is perhaps the most economical solution, but also the most time-intensive solution on this list. Schedule family, friends, or even strangers of craigslist to come in and sit down in front of your computer and record their actions performing tasks with a camcorder and some simple consumer-grade screen recording software. It will take time to schedule, prepare, perform and analyze all these tests, but the value of having testers live, in-person is often underestimated. The best benefit of live, in-person testing is the ability to ask follow-up questions when you see users stumble in order to best comprehend their frame of reference and expectations at the time of the incident. If possible, try to get a friend who does not work at your startup to be an independent facilitator. Users are more honest with their feedback when they don’t think they’re talking to someone who works on the site day-to-day. [Update: wow, forget the camcorder.  Chris posted in the comments about Silverback, and it looks amazing.  Do that instead!]

3) Feedback Army – Get direct answers to questions about your site. This is a far more low-fidelity solution than the first to options, but it’s simple to setup and super cheap. $10 buys you one paragraph of feedback from 10 people. This type of testing won’t help much with usability (ie workflow issues), but FeedbackArmy is helpful in determining how your overall value proposition to users is received and how users self-report their user experience (ie how much they enjoy the site).

4) PickFu – How many times have you gotten into an argument with a developer or product manager over the size/color/iconography of a simple button? End those arguments quickly with evidenced-based experimentation. With PickFu, you can immediately A/B test stuff like images, buttons, wording, etc with 50 peoples opinions for $5. This isn’t for full-blown user testing, it’s more for making quick, one-off, informed decisions. PickFu doesn’t have the benefit of A/B testing directly in the context of your site, but it’s the ability to run A/B tests without the messy overhead of site integration is a reasonable trade-off.

Side Note: Both PickFu and Feedback Army are arbitrages on Amazon Mechanical Turk, so if you’re an MTurk ninja you could do this type of testing even cheaper by scripting MTurk directly. But, for 98% of tasks/purposes you should just pay one of these services to do the work of creating the MTurk HITs for you instead of re-inventing the wheel.

5) Starbucks – Seriously. Go down to your local Starbucks with two experimenters during coffee rush hour. Go to the person at the end of the line and tell them that if they’re willing to sit with you in front of a laptop and do a user testing session for 7 minutes, the other experiment will wait in line and buy you the drink of your choice. The person at the end of the line has nothing better to do than to wait in line, so they’re very likely to say “yes.” And, a $5 latte for 7 minutes of genuine in-person user testing is a bargain.

Another advantage of the three virtual solutions mentioned above (FeedbackArmy, UserTesting.com, and PickFu) is that they save you time too. Live user testing in-person takes time in preparation, executing the tests, and then creating actionable conclusions and analysis. All these virtual solutions significantly cuts down or eliminates these time requirements. Of course, you sacrifice impactfulness by not doing a lot of this work yourself, but oftentimes this trade-off is appropriate.

I’m sure I missed other useful software and web services, so please add your favorite ways to bootstrap user testing in the comments. So, stop reading blogs and go user test your site.