This guest post is written by Nikolaus Sühr (CEO & Founder) and Matthew Wardle (CTO & Co-founder) of Kasko, a digital insurance service provider bringing Insurance as a Service to the market.
You’ll often hear about how brilliant Seedcamp Week is, and we can attest to that – it’s been a really helpful experience for Kasko and we’re in a much stronger position as a company because of it.
One of the reasons the week is such a great experience is down to the incredible mentors and investors you get to speak to. Each one of them has a wealth of experience either leading or guiding startups to success, and they’re all super keen to help provide feedback on your startup.
A mentoring session underway at Seedcamp Week Berlin
But this is where it gets tricky… with so much feedback from so many individuals based on their own varying experiences, you can receive a wide range of answers to the same question.
Here’s some of the feedback we received during Seedcamp Week:
Like reading the news, to form a full picture you sometimes have to listen to several points of view and read between the lines. So here are a few tips on how to filter that information for your startup…
1. Sleep on it. The energy and excitement these visionary, successful people can generate in you is fantastic, but it pays to sleep on it so the next day you can process what was said based on the facts rather than the energy.
2. Discuss it with people you respect. For every major decision we’ve made we’ve probably discussed it with ten people we consider very smart. This is why your board of advisors is key.
3. Discuss with your business partner. If you’re anything like us – where you work, eat, and live together – this is given. But if it’s not, then you should make sure you discuss with them; you decided to work with this person for a reason.
4. Make up your own mind. Listening to advice is important, but remember that most likely you understand more about the intricacies of your own industry/business than them.
5. If you still can’t make a choice, just pick one. The chances are that both opinions are valid. Ultimately a good decision is one you feel comfortable with when you’re making it.
6. Drink a beer. It’s always part of our process!
For us, the feedback we received at Seedcamp Week was the best and most difficult to digest advice we ever received. Thanks to everyone. We might not have liked it at the time, but we certainly needed to hear it!
This guest post is written by Ivan Soto-Wright, Co-Founder & CEO of Oinky, a personal savings companion. This blog post was inspired by feedback Ivan provided to a fellow founder during a Seedcamp Academy session.
The 500 Hats of Bartholomew Cubbins, Dr. Seuss
As an early stage founder, you will likely find yourself wearing many different hats. These hats come in all shapes and sizes and might be called things like admin, HR, operations, product development, marketing, sales, finance, or partnerships. Without context, wearing all these different hats can become overwhelming and make it difficult for you to achieve focus.
Colour is a powerful way to help contextualise your time. A handy technique that I picked up from working with a business coach at Shirlaws Group is to map weekly activities to Red, Blue, and Black (RBB):
Red = “Admin” activities that support the infrastructure and are non-revenue generating. Red activities are the back-office functions that must be done, but can distract you from the core drivers of your business. They include stuff like organising meetings, drafting employee contracts and updating cap tables.
Blue = “Revenue-generating” activities that deliver value in the form of products or services to the end customer. Blue activities include anything to do with marketing, selling and servicing whatever your customers buy from you. If the business is pre-revenue, most of this time can be classified as product development.
Black = “Strategic” activities that add long-term future value to the business. Black activities include things like developing market positioning, evaluating partnerships and formulating a fundraising strategy. This time can also be used to reflect and improve upon the business’ operational effectiveness (i.e. limiting Red time and increasing Blue time).
After completing the exercise, your iCal, Google, or Outlook Calendar should look something like this:
Unfortunately, there is no golden formula as to what percentage of time you should be spending on Red vs. Blue vs. Black, as it depends on the stage of the business. But here are three helpful tips for founders:
1. Do everything in your power to get Red time under control. If your calendar is unbalanced towards Red, you are sacrificing short-term revenue (Blue) and future revenue (Black). Delegate or consider outsourcing the Red if possible.
2. Schedule regular Black time. This will allow you to pause and reflect on the current state of the business. Are there areas where your team could be working more effectively?
3. Commit to monitoring RBB time. This will help you calibrate realistic targets for Red vs. Blue vs. Black. As the business grows, as a founder/CEO more of your time should be spent in Black.
Do this often and I find you will begin to adopt “RBB thinking”. In my case, it has helped justify decision-making around using a food delivery service for lunch:
Red: Preparing a healthy lunch Blue: Doing focused work at my desk Black: Outsourcing food delivery to Pronto when I need a productivity boost…
Aside from helping you achieve focus, I hope that adopting Red, Blue, Black time will lead you to similar moments of clarity.
This article is written by Taylor Wescoatt, Entrepreneur in Residence at Seedcamp. Taylor’s background spans 20 years of Product and UX having held key positions at successful startups like Seatwave and CitySearch, and larger brands like eBay and Time Out. This is the first of two articles on Roadmaps for Startups.
I speak with a lot of startups and often hear variations on the following;
I have the vision in my head, but I don’t know how to get it into the heads of my growing team so they can execute what and how I want them to — Startup Founder/CEO
This sucks for everyone. It stresses out the Founder, it frustrates the new marketing person, and the newly hired design, product, and UX folks feel at sea because they feel like they’re not delivering what’s expected and they don’t know how to.
Its easy for team members to rally ‘round the grand 5 year Grand Vision, but when they get back to their desk, then what? Work on that list of features, I guess, but they’re not quite clear on how they achieve the Grand Vision they just listened to. Its also frustrating to work on something when they don’t know where its headed.
As a startup, you’re constantly going to have to answer the question, “Who Are We?” By developing a clear, step-by-step, segment-specific answer, you will;
I picked this up at eBay, where we used something like this for our 6-monthly Seller Releases. Each phase of a “Who are we to these people?” is a “Proposition” which is a step toward a full Vision. The format was subsequently very well received at (mid-sized) Time Out and at (small) Emoov as well.
The question “Who Are We?” should to be answered for each Segment (eg early adopters, followers, partners, etc) at each specific stage en-route to your full Vision realisation;
The goal of this format is to allow you to render the roadmap between now and fully realising your vision. You recognise that your business will transform in stages over time, and this helps you focus on achieving those stages.
This works nicely in an agile world where the lighthouse stays the same, but the tactics evolve as we build, test, and iterate toward the vision — Bill Watt, Product Director, GoDaddy
So, for example, let’s say you’re building a mobile app for at-home car-washes & services, “Hogwash”, and your Vision is “Car washing, servicing, and overall management all on your phone”
How does this help?
I liked the proposition approach to (1) diverge vision from product development, and an evolving sales strategy, and (2) a way to manage customers’ expectations — Didier Vermeiren, Founder, Rial.to
This doesn’t take long to do; You and your Co-Founder can rip it out in an hour or so. If it takes longer than that, all the better because you’ve identified what must be a serious hurdle in realising your Vision. Your team will thank you as they dive back to work re-energised with a clearer sense of purpose and stronger connection to the Vision. Follow it up by asking them to give you a revised execution plan against this clearer vision. Drop it into your deck, it will be a nice touch to drive that next investor meeting in the right direction. Let me know if you have any questions, taylor[at]seedcamp[dot]com.
NOW READ PART 2: Building the 90-day Behavioural Roadmap for what to execute against
…or listen to the accompanying podcast!
This guest post is written by Philippe Laval, founder of Evercontact – a cloud mining service that extracts contacts hidden in email and shares and updates them automatically. Evercontact joined Seedcamp in 2009 and has pivoted its product (and name!) several times since. An older version of this article first appeared on wework.com.
I’ve been an entrepreneur and a geek since the early 90s, but after spending 15 years building an enterprise search company (Sinequa), I decided I was ready for a new challenge. In early 2009, I launched a new startup: Kwaga.
Right as I got back into the swing of creating, Eric Ries started blogging about “lean startup” methods. My co-founders and I wholeheartedly embraced this approach, and created four minimum value products (MVPs) over the next 2 years. That led to our current automated contact mining service, Evercontact.
Philippe and the Evercontact team
Based on my own experiences, here are five lessons that clearly show how pivots, aka early failures, are important on the path to success.
Our first product, a Firefox plugin which we called a “magnifying glass for emails,” identified actionable requests, contacts and calendar appointments. We didn’t invest a lot in the UI or design, because we wanted to get it out there and see how it would be received.
The plugin brought us in contact with a number of early adopters, and helped us move quickly past this first MVP and into our first pivot: identifying “important emails” and providing real-time notifications.
Users found our first plugin helpful, but not essential. In early 2010 we pivoted towards a greater pain point, and launched a second app for Mac and PC (called Kwaga BirdsEye), which notified you when you received an important email. Our traction was much stronger this time around. We knew we were onto something, and what happened next proved that point: by the end of the year, Google released its Priority Inbox feature, clearly demonstrating the pain point and a great solution. It also forced us into a second pivot.
As a startup, you’re competing against the world, against Goliaths, and against anyone else who can solve problems better than you. That’s why you have to focus on what’s most unique about your technology, team, and how you can leverage that to come out on top.
Our second pivot didn’t take this into account perfectly, but thanks to lesson number one (constant interaction with your users), it brought us to our third pivot.
My two co-founders and I are computational linguists, and when our early adopters of Kwaga Context began to find greater value in maintaining up-to-date contact information in their address book, we turned back to our skills in NLP (Natural Language Processing) to solve a contact management pain point. Evercontact (formerly Write.That.Name) came out in 2011 and has had steady PR, traction and growth since then. We’ve already been adopted by over 100,000 users.
Since its first iteration, Evercontact has evolved, with automated contact solutions for Chrome, Outlook and Gmail, and CRM systems including Salesforce and Highrise. And with all of these developments we have kept the focus on our core strength, solving contact management pain by intelligently automating mining and updating of contact information.
As an early-stage startup, it’s easy to focus all of your attention on your “baby,” so let’s be honest: objectivity isn’t on the cards. That’s why having an outside point-of-view, especially an entrepreneurial one from someone who works a lot with startups, is priceless. Acceleration Funds like Seedcamp and investment funds like Kima Ventures, are great ways to have that third tier of perception beyond your own creation and inspiration.
Eric Ries’ concept of a sticky engine demonstrates how a truly valuable product becomes something that few users leave. Once you hit this point, the real analytical hustling starts; you’ll work on improving website conversion rates, developing internal virality, rolling out PR or encouraging word-of-mouth — the art of growth hacking.
Because Evercontact was our first product to grow and retain clients in a scalable way, our next “pivots” were marketing-oriented. When you reach this stage, I highly encourage you check out what Neil Patel is writing at Quick Sprout. Solid gold. We have tested out lots of ways to grow our business even more, like content marketing, referral programs and PR, but at every step we pay close attention to user feedback and results to make sure we are constantly improving.
Evercontact in action
In the early 90s, I was the CEO who had to sweetly coerce his team to check their email at least once a week. Now, I’m developing solutions for the same platform that our power-users check over 25 times per day.
Who knows what comes next? You do. The entrepreneurs of tomorrow — and what a joy it is to be a part of this creative ride. That said, the entrepreneurial industry is becoming increasingly mainstream and “glamorised”. If you or your friends get in the game, do it because you’re passionate, hungry, and enjoying the ride.
If you’re not, maybe it’s best to pivot to another profession, because there’s nothing easy about entrepreneurship… but there is a whole lot of fun to be had!
This guest post is written by Ivan Ramirez, Entrepreneur, Investor, Advisor and restless Product Guy. He is the Former VP of Groupon Goods for APAC and Director of Global Product at Groupon.
I’m often asked, “What’s it like to be an entrepreneur?” Those who ask, ask the question in a way that makes it feel like being an entrepreneur is glamorous and always tied to wealth. Let me tell you, there is nothing glamorous about being an entrepreneur, and it’s not for everyone.
Here is some advice and some of the truths of being an entrepreneur:
1. Being an entrepreneur doesn’t guarantee success. You will fail! If you don’t fail, it’s because you’re not taking enough risk.
2. In the effort to be supportive, most people won’t tell you the truth about your ideas. So be careful not to let this feedback drive your decisions. If you’re not getting negative/challenging feedback, be concerned.
3. Nobody but you or your co-founder(s) will care about your idea until you have something to show for it. Less talking, more showing. Give them a reason to pay attention.
4. No employee, even if they have some equity, will ever care about your company as much as you do.
5. Be careful with the whole raising money thing. It’s not as easy and glamorous as you think. Make sure you let the business organically bring you to this crossroad, and be careful to not get ahead of your self with this.
6. Luck will play a big role in your success. Just remember that you can create your own luck by working tirelessly at what you’re passionate about.
7. MVPs (minimum viable products) can give you false positives or false negatives. Make sure your MVP is properly defined and that you’re properly interpreting the results.
8. Get the co-founder equity stuff out of the way at the beginning, and be careful in being egalitarian.
9. You will have to make hard decisions, like firing your best friend or removing a co-founder. Whatever you do, make them fast and don’t let the heart get in the way of these decisions. Just make them and move on.
10. You will have long nights, work weekends and may even have some days where you don’t sleep at all. Work while your competitors sleep to get ahead!
11. Revenue is KING and you need to generate sales to keep the lights on. As an entrepreneur, you will have to put your sales hat on, and knock on some doors or make some phone calls to drum up business.
12. It’s okay if your business idea is not a BILLION dollar idea. There are many of those out there right now, but remember they’re just valuations – it doesn’t mean those companies are generating that kind of revenue. Remember FAB.com? $250+ million in revenue with a $1B valuation. Where are they now? Build intrinsic value in your business!
13. There will ALWAYS be haters! These are folks that don’t have the courage to become entrepreneurs and are hating because you took the risk. Ignore them and just keep charging forward.
14. There are days you will want to QUIT and go back to a corporate job. Don’t think you have lost your entrepreneurial spirit when you have these days. It’s normal. Every entrepreneur has these days.
15. People will think you’re crazy!
16. Risk everything in business, except Family, Health, Friends and Spirit.
17. It’s OK to look up to another entrepreneur and have a “healthy” jealousy of what he has accomplished, just make sure this drives you harder and doesn’t take away from your plans to push ahead.
18. There will be days where you feel burned out and unproductive. Walk out of the office, go hang with friends or family, take a nice hike, or simply take a few days off. It’s OK, you will come back stronger.
19. Entrepreneurs aren’t RICH (abundantly supplied with resources), we’re constantly risking it all. Those that have sold companies, will take the proceeds and start new companies, or invest it in other companies. Entrepreneurs always have the desire to create and be part of something bigger than yourself.
20. No matter your level of success, always be humble and willing to help a fellow entrepreneur.
Seedcamp has teamed up with JAG Shaw Baker (a technology focused law firm based in London) to produce a series of short articles highlighting some of the key intellectual property (IP) issues that affect startups. By underlining some of the common issues and providing practical advice, this Understanding Intellectual Property series will touch upon the protection of IP, ownership, data protection and privacy, infringement and web / domain name issues.
In this article we continue our overview of key IP rights, this time focusing on copyright. In the UK, copyright is probably the most far-reaching IP right and can protect everything from computer software to photographs, films to buildings and many other works in between. In particular, three primary features distinguish copyright from other IP rights:
a) copyright protection arises automatically, as soon as a work is created. In other words, there is no registration requirement. This is particularly useful for startups as no expenditure is needed to obtain protection;
b) the duration of copyright continues for a very significant period of time and often well beyond the commercial value of the work; and
c) copyright protection covers a broad range of subject matter.
As copyright arises automatically, businesses frequently overlook the importance of its protection. In fact, one of the biggest challenges is understanding and appreciating that copyright will subsist in all manner of works and is particularly useful to stop counterfeiters and copycats encroaching on your commercial patch. Indeed, every business will, to some extent, benefit from copyright protection (although businesses in the creative and software industries will invariably benefit most). Copyright protection is, therefore, an incredibly useful means of protection for startups.
The following points provide a brief overview of copyright and will assist startups to recognise and appreciate the significance of copyright:
What does copyright protect? Any work that falls into one of the following categories will automatically be protected by copyright in the UK:
a) original literary works. Examples include written documents, software programs, marketing plans, reports, etc.;
b) original dramatic works. Examples include performances, stage shows, etc.;
c) original musical works. Examples include jingles, music, sound effects, etc.;
d) original artistic works. Examples include technical drawings, logos, paintings, sculptures, photographs, architectural plans, etc.;
e) sound recordings, films or broadcasts; and
f) the typographical arrangements of published editions.
Often a product or creation will fall into more than one of these categories. Where this happens more than one copyright will exist. For example, a song will often benefit from five or six copyrights: literary copyright in the lyrics; musical copyright in the musical composition; copyright in the sound recording; film copyright in the music video; artistic copyright on the album cover, etc. Businesses too will benefit from several important copyrights – for example: literary copyright in its proprietary software programs; artistic copyright in its distinctive logo; literary copyright in its marketing plans; film copyright in marketing videos; etc.
Does a work need to be original? It is a requirement that literary, dramatic, musical and artistic works be original in order to qualify for copyright protection. A work is ‘original’ if it is an intellectual creation of the author (or is created through his own skill, judgment and effort. Note that the law is uncertain in this area) and is not copied from another source. Originality is not concerned with the work being new or novel and it does not matter if the work has no or little artistic merit. Sound recordings, films and broadcasts do not need to be original (otherwise a film based on a book would not qualify for copyright protection, for example).
Does the work need to be written down? Under UK law, yes. Copyright does not subsist in literary, dramatic or musical works unless and until the work is recorded in some way (whether in writing, by computer program or otherwise). Sound recordings, films and broadcasts will, of course, be recorded by their very nature.
Who is the owner of copyright? Generally speaking, the author of the work (i.e. the person(s) who created it) will be the first owner. There are some exceptions to this. Notably, copyright works created by employees during the course of their employment will be owned by the employer, not the employee. For further information on ownership, please see our ownership article.
Joint authorship: Where more than one person has created a work, the work may be classed as a work of joint authorship if the contribution of each author is not distinct from that of the other authors. Subject to certain exceptions (including works made in the course of employment), joint authors will own the copyright in the work jointly.
As has already been mentioned, copyright arises automatically. In the UK and Europe there is no copyright registration system at all. In the US, however, the position is slightly different. Although copyright arises automatically, it is beneficial to record copyright ownership at the US Copyright Office. Benefits include additional remedies in the event of infringement (statutory damages and attorney’s fees) and simplicity in pursuing infringers. China also operates a similar copyright recordal system. Businesses – and in particular, early stage, high-growth businesses where the US / China is a key market – would be well advised to register key copyright works in the US / China as soon as possible.
How long does copyright protection last? The answer depends on the nature of the work:
– For literary, dramatic, musical and artistic works – copyright expires 70 years following the end of the calendar year in which the author died. For works of joint authorship, copyright will expire 70 years from the end of the calendar year in which the last known author dies.
– For computer generated literary, dramatic, musical or artistic works (i.e. when there is no human author) – copyright expires 50 years from end of the calendar year in which the work was made.
– Sound recordings – copyright expires 50 years from the end of the calendar year in which the recording is made.
– Films – copyright expires 70 years from the end of the calendar year in which the death of the last to die of certain specified persons occurs.
– Broadcasts – copyright expires 50 years from the end of the calendar year in which the broadcast was made.
– Typographical arrangement of published editions – copyright expires 25 years from the end of the calendar year in which the edition was first published.
Special rules apply where the author or director is unknown.
At the heart of copyright are the economic rights (also known as the exclusive rights). These economic rights grant copyright owners the right to exploit the work for the duration of copyright protection and are intended to encourage innovation and creativity. The economic rights include, amongst others, the right to copy, lend, perform, adapt, distribute and communicate the work to the public.
What does copyright protection allow me to do? A copyright owner can exploit copyright in two main ways (in addition to exploiting the work himself): (i) he can ‘assign’ it (that is, sell all, or any part, of the economic rights to a third party); or (ii) he can license it (that is, grant permission for third parties to make use of one or more of the economic rights). For example, a business may want to license its software platform by charging customers for access. Alternatively, copyright can be used protectively to prevent third parties from disclosing commercially sensitive documents.
Considerable thought and attention should be paid to the exploitation of economic rights. With careful thought and strategy, it is possible to reap significant rewards from copyright ownership for a substantial period of time. When it comes to contractual negotiation, the devil is certainly in the detail!
In addition to (and separately from) the economic rights, authors of a copyright work are granted certain ‘moral rights’. Moral rights protect the author’s interest in the work and grant certain rights over the work, even after ownership of the economic rights have been transferred to a third party. In particular, moral rights allow authors to:
a) insist on being named as the author of the work; and
b) object to certain derogatory treatment of the work, where such treatment amounts to a distortion or mutilation, if it harms the authors reputation.
In the UK, moral rights cannot be assigned to a third party. Authors can, however, agree not to exercise their moral rights (by way of waiver). Startups would, therefore, be well advised to ensure that they obtain irrevocable and unconditional waivers of moral rights from all creators of copyright works (including employees, consultants and third party contractors). If you operate in markets such as France and Germany, the law in connection with moral rights is very different and specialist advice should be sought.
As the name suggests, copyright protects against copying. In other words, if a third party performs one of the economic rights (see section 5 above) in relation to all or a substantial part of the work without the copyright owner’s permission (or without a legal defence), he will infringe copyright. Entirely independent creation without reference to the copyright work will not, therefore, infringe.
As you may expect, there are a number of exceptions, defences and limitations to infringement. If you suspect that your business infringes a third party’s copyright or you suspect that a third party is infringing your copyright, it is advised that you seek immediate legal advice.
What if somebody has stolen my ‘idea’? It is a common misconception that copyright protects ideas. In fact, copyright protects the form of expression of ideas (i.e. the recorded expression of that idea) not the ideas themselves. Although confidential information might protect an idea, copyright will not.
In the UK (and elsewhere in Europe), there are a number of very narrow exceptions to copyright infringement. For example, the two most important exceptions allow third parties to: (i) use a literary, dramatic, musical or artistic work for non-commercial research purposes provided that it is accompanied by a sufficient acknowledgement; or (ii) use any copyrighted work for the purpose of criticism or review provided that it is accompanied by a sufficient acknowledgement.
In the US, copyright exceptions are much broader. Generally speaking, an otherwise infringing activity is allowed if it can be shown to be ‘fair use’. This is very different to the law in the UK and, in practice, means that US copyright law has been better at enabling innovative products (such as data aggregation businesses) than UK law.
To properly understand the level and extent of copyright protection, it is advisable that startups:
– review the key documents and works that might benefit from copyright protection;
– keep a written record of who created the copyright work and the date on which it was created;
– ensure that your business has full and unfettered ownership of all copyright;
– ensure that irrevocable waivers of moral rights have been obtained from all employees, consultants and other content creators;
– consider recordal of copyright of key works in the US / China / other key jurisdictions which operate a registration system; and
– check whether: (i) your business’s copyright is being infringed; and (ii) whether your business is infringing the copyright of a third party.
JAG Shaw Baker is a firm dedicated to advising entrepreneurs, companies, and investors in high-growth industries. The firm advises on all aspects of venture and growth capital, as well as other corporate finance transactions, corporate structuring, intellectual property and growth and exit strategies. It also acts as general counsel for high-growth companies.
Seedcamp is Europe’s leading Acceleration Fund, and provides its startups with an ongoing Learning programme, known as Seedcamp Academy. Sessions are provided on a variety of topics; from marketing, to product development, to fundraising, to legal. Ambitious startups with disruptive products/services and global aspirations are invited to apply.
This article contains general information only. It does not constitute legal advice. You should consult a suitably qualified lawyer on any specific legal matter or issue.
This guest post is written by Stuart Logan, Co-founder & CEO of Clowdy, a platform that gives creatives an identity to start their career and the network to grow. Clowdy joined Seedcamp in early 2015 and have been attending our Academy learning sessions. In this article, Stuart shares his learnings from a recent workshop.
During Onboarding Week we were lucky enough to have Malcolm Bell speak about ‘Your customer, positioning and finding product market fit.’
Malcolm has been working on the ambitious start-up, Mailcloud, for the last year and is about to release the first version; you can read about this here. Malcolm had an awesome experience with his first company Zaggora.
The following is my decoded version of what Malcolm taught us, with a few other things I’ve learned during my time with tech.
Hotpants™ – Zaggora’s flagship product – was initially created as a quicker way to burn calories for people wanting to get more out of their exercise time.
They were hugely successful, creating more orders than they could keep up with – 100,000 products sold within 10 weeks of website launch. This was cleverly engineered for positive cash-flow but that’s another topic altogether. Malcolm and the team thought they were doing an awesome job; they were targeting the fitness community, particularly women, and had a huge backlog of orders.
When they began trying to improve their marketing, they surveyed their customers with outstanding results. They had been assuming their customers were avid fitness fanatics but what they actually discovered was their customer wanted to lose weight. Their whole business had been focused around fitness so this changed everything; their customers didn’t climb mountains or run marathons, but went walking. Their website messaging, their imagery, their brand, their company focus had to completely shift. When they did this, their sales conversion massively increased too.
My key takeaway was that even when you have users, if you don’t speak to your customers and explore their needs, your focus could be all wrong.
Everyone wants growth, right? That hockey stick curve that investors drool over. That’s certainly something we’ve focused on at Clowdy – a lot. The logic behind this is that if we continue to grow, build our network, and reach critical mass… then boom, we’ve won at life.
Wrong, well kinda.
Growth isn’t a bad thing but Malcolm argues that you need to find advocates and retention first – those evangelists who love your product and just keep on coming back. Think of those people who queue outside Apple stores each time a new version of the iPhone is launched, or how every Call Of Duty game breaks pre-order records before anyone gets to play it. If you find these evangelists for your product you have a massive opportunity.
If you segment these users then you can really study them and build up a persona. This persona will be your ‘perfect customer’ bible. When you learn this, you can then start looking at their retention. Why? There’s nothing more important than retention of your customers.
Think of it this way, if you have a bucket with perfect water retention, and increase the amount of water in there, it will fill up. If you have a big hole in the bottom, it’s retention will be shit and it won’t matter how much water you pour in, it won’t fill up. That fill rate is your growth. It’s impossible to have 100% retention, but if you have just a really small leak, you have the perfect platform for growth. If you have a big hole, you will struggle to grow.
How do you retain your evangelists? Solve their problems first and focus on them.
You now have your perfect customer mapped out. You know who they are, where they are, what they like, what they don’t like. Everything gets easier. You’re focusing on retention and it’s working.
It can still feel like a burden, all the different parts you need work on: product, customer, go to market and funding. Malcolm introduced us to the concept of Kaizen. Kaizen means “continuous improvement”. It comes from Japanese words 改 (kai) which means “change” or “to correct” and 善 (zen) which means “good”. Toyota are a famous advocate and it’s worked really well for their company culture. Iterate in small steps, monitor the feedback, change, test, rinse, repeat.
With these small improvements for retention, you’ll be changing your marketing channels, your tone, your imagery for product, your brand identity and a whole lot more. But understanding the full map of who that advocate is helps everything come together. The other great thing about this segment of your users is their patience. You will be able to test more with these folk than you can with others, so give them your beta tests.
When you’re testing you need a reason or purpose for that test and you need to track it. Sending out a test without some way to prove its success is completely wasted. When you’re tracking you can test new features and see what works, but be wary of wasting time on the wrong features. The graph below shows that you want to aim for the top right, a feature that all your target segment use all the time. Avoid the top left, features that serve the few within your target segment – even if it’s all the time. Basically, don’t make a feature that only one person will love – even if that person is you.
This is exactly what Burbn did. Burbn let users check in at particular locations, make plans for future check-ins, earn points for hanging out with friends, and post pictures of the meet-ups. There were a lot of features. They tracked the usage of the feature-set and found no one was using the check-in features. Their users were using the app’s photo sharing feature. They doubled down on this an Burbn became Instagram. Look at your core. Remember kaizen.
When you’ve figured out all of the above and have your evangelist segment and retention, only then can you get that hockey stick growth. Your product-market fit makes traction so much easier.
Thank you Malcolm for an inspiring talk!
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