My first encounter with the Lean startup movement was last April at the Startup Lessons Learned. (BTW, according to Raymond Luk, Montreal had the greatest number of attendees!) I was amazed to say the least. It was Agile software development for startups! And while Dom & I practice an Agile approach to developing AnotherSocialEconomy, we weren’t doing so from the business side of things. To be fair, I’ve already lived through the highs & lows of a startup life back in the dot com days, so I do have a few of my own Lesson Learned, plus I’m a big fan of Guy Kawasaki. This time around, things are different. But now the question begs to be asked; “Are they different enough?”.
Last night I attended the first in a series of presentations to be hosted by YearOne Labs on the Lean Movement – this one presented by Ash Maurya. Ash’s presentation is based on his book Running Lean, where he describes the systematic approach he’s learned and practiced over the years. (You can download the first two chapters which help explain the slides above.)
OK, we didn’t do that. However, we did not completely live in a vacuum either and have actually Pivoted several times. And with each Pivot, we stayed true to the underlying value proposition: Save both consumers and retailers time, aggravation and money by connecting those who shop online and purchase locally offline.
I Regret Not Asking
The one question I should have asked Ash when I had the chance was: “How do you balance Customer Development with Defensibility?”.
In 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
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).
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.
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.
“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.
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).
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?