The Yin Yang of Techie Start Ups

yin yangIn Chinese philosophy, the concept of yin yang is used to describe how polar or seemingly contrary forces are interconnected and interdependent in the natural world, and how they give rise to each other in turn… Yin yang are complementary opposites within a greater whole. Everything has both yin and yang aspects,.. constantly interacting, never existing in absolute stasis.
Yin and yang – Wikipedia

Background

We’ve reached our techie milestone. We have quality code running in the Google AppEngine clouds. We’ve validated our concept with as many people that will listen to us. We’re at the point now where we have to validate with the market. We need users. More specifically, we need Consumers and we need Retailers. We need marketing & we need public relations (PR).

Challenge

So while the real techie – Dom Derrien, can breath a little easier, the other – me, with my techie background, has to go out and market the crap out of Twetailer. But, I’m not really a marketing kind of guy. While I absolutely love demoing and presenting and evangelizing, I’m not particularly strong at finding the right people to get in front of. So, I need to find myself a marketing guru. But being an ultra-light start up (read “living of my wife and kids”), I need to find a marketing guru – preferably one shooting for the social networking sphere, who’s willing to drink the Kool-Aid. Fortunately, Marc Bienstock likes Kool-Aid.

Lesson Learned

Twetailer was conceived and originally targeted for techies like ourselves – cube dwellers. Which is fine, since we never planned on using the line “If only 1% of China…”. So demoing to techies was never a real problem, despite some minor usability issues. But in order to get to the next level, we had to demo to prospective partners, prospective CEOs, prospective Consumers and prospective Retailers. And the further away we got from the cube dwellers, the greater the usability issue became for those higher up in the org chart – tower dwellers. Thankfully, everyone got the true value of Twetailer’s service:  “Brokering Consumer Demand with local Retailers’ available Supply – via simple messages, for f(r)ee, or, Reverse Retailing”. But even our own accountant and lawyer turned on us with comments like “Can’t I just have one button to press? I’m not very comfortable with all this texting stuff. Hey, I have a great idea! How about an app for my Blackberry?”. Not bad for tower-dwellers, eh? 🙂

So now I think I understand. While I originally intended to service techie consumers, I needed non-techies to help me get that service to them. In other words, my techie solution had a non-techie dependency.

Time to Pivot

It pays to get out of the basement. Last April, I attended the Montreal venue for the Startup Lessons Learned Conference where among other gems, I was introduced to what Steve Blank calls Customer Development process and Eric Ries calls the The Pivot:

“Pivoting” is when you change a fundamental part of the business model. It can be as simple as recognizing that your product was priced incorrectly. It can be more complex if you find your target customer or users need to change or the feature set is wrong or you need to “repackage” a monolithic product into a family of products or you chose the wrong sales channel or your customer acquisition programs were ineffective.

Modified Business Model

Originally, the fee plan was to charge both Consumer & Retailer a transaction fee similar to that of Amazon Flexible Payments Service fees (about 3%). But after speaking to several people, it became clear we couldn’t build a sustainable business like that. The common thought was the best idea is to solve a real business problem and charge money for it. So we’re going to charge a monthly subscription fee for registered Retailers. And because Marc felt Twetailer was too generalized and people needed a sense of urgency to use it, we’ve also introduced a Reseller distribution channel with our first one being targeted towards golfers & golf courses. (Congrats to Marc for being our first Reseller!) And to address usability issues, we’re offering a Managed Service for those non-techie Retailers out there.

Modified Development Roadmap

As much as I didn’t want to go down this route until there was actual income to pay for it, I seem to be in a Catch 22: If we don’t build it, they won’t come. If they don’t come, then I can’t afford to build it. So we re-prioritized some things & built it – an Android app targeted for the Golfer (Consumer) wanting to find a local Golf Course (Retailer). And since Twetailer is vertical agnostic, we’re making the app open source so other’s out there may be encouraged to built their own vertical, or, reseller market using our open application programming interface (API). Oh and by the way,  for those of you like my good buddy Rick Boretsky who think only techies have Android mobile devices, I encourage you to take a look a the First quarter 2010 information from The NPD Group’s Mobile Phone Track which reveals a shift in the smartphone market, as Android OS edged out Apple’s OS for the number-two position behind RIM.

Golf Pivot Videos

Please take a look at our pivot trilogy (less than 10 minutes) and let me know your thoughts. The first is intended to address our target audience with the second identifying their pain and the third illustrating our solution (for non-techies and techies alike).

Reflection

What do you think? Am I setting a bad precedence? Am I clouding my inability to market/sell my start up by throwing more code, time & energy at the problem, as opposed to, finding/solving the root-cause? Or, do you think this is a step in the right direction?

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