Archive for November, 2008
Keys to Startup Success
Last week I gave a presentation to the Atlanta Web Entrepreneurs group on the story of Jungle Disk, and how it went from an idea to successful business and sale in such a short period of time. I’m not going to post the whole presentation, since I’m not a big fan of powerpoints without context, but I would like to share some of my “keys to success” for other startup entrepreneurs.
- Have a killer product
This sounds obvious, but lots of startup pitches I hear sound like useful ideas, but not killer products. The marketplace is tough and useful isn’t good enough – you need to have a product that people can get really excited about. The good news is that this is one of the easiest things to ensure before to build the product. How? Just tell as many people as you can find about your idea, and see how they react. If you get a uniformly enthusiastic response, you may be on to something. If instead people hum and haw and “don’t really get it” then you are either don’t have a great product, or aren’t doing a very good job pitching it. Which brings me to: - Learn how to pitch your product
Being able to explain the vision for your product in a clear and compelling fashion is a critical skill to have. This is one of the biggest reasons I believe that some startups never get off the ground – their founders may have a great idea, but they can’t figure out how to explain it to customers, partners, investors, or even employees. You should be able to give a 10 second pitch that provides enough information to convince anyone that you’re doing something cool and important (set the hook), and a 3-5 minute pitch that can really reel them in. Here in Atlanta there are a few great resources to help refine your pitch, including PitchCamp and Startup Gauntlet. - Communicate with your users
One of the reasons I believe Jungle Disk has such rapid users is that we’re always communicating with them, primarily through our forums and blog. Forum communication is great as it provides a real sense of community. Doing support through forums as we have done is always a bit risky – if your forums are popular, it can give the appearance that there are a lot of issues, but public forums provide a great troubleshooting resource to users as well as a great feedback channel. We use our blog primarily to communicate about news and plans for the product. We tend to be very open about future product roadmaps, as we feel it helps drive excitement in the user base and also acts as an incentive to our developers to meet our commitments. It also can help us prevent going down the wrong path, if we announce something and get a lot of negative feedback about it. - Make sure you can make money
Ok, so this one sounds obvious too, but the reality is that many startups aren’t really sure how they will make money, or have some pretty crazy expectations about pricing, ad rates, or adoption that are totally unrealistic. If you’re selling a product, make sure people are willing to pay for it, and find out how much they are willing to pay. How? The easiest way is to ask, or to propose a price and see what they think. That’s what we did, when we set the pricing for Jungle Disk. It’s also worth noting that in the case of Jungle Disk, it was never really a free product – even during the beta, we required users to sign up and pay for an Amazon S3 account, which meant that every customer we had was a paying customer from day 1. This proved to us that there was real value in the product/service we were offering, and I was never uncertain that people would buy the software. - Explain what your product does above the fold on your front page
Since the day Jungle Disk launched, we’ve used 5 basic bullet points front and center to explain what Jungle Disk is and why you’d want to use it. Don’t hide your killer product (you do have a killer product, right?) behind mounds of marketing speak that leaves visitors to your site wondering what in the world you’re selling. Just explain it, clear and simple. If your idea is bigger than your product today, sell the product you have today and your customers won’t be disappointed. - Clear, simple, public pricing wins (cheap helps too)
I’ll be the first to admit that we only got this half right with Jungle Disk – our pricing was cheap and public, but not necessarily clear due to the complexities of how Amazon charges for S3. In the end, we felt this trade-off was worth it for the other benefits we got from the arrangement. If you’re afraid putting your pricing front and center is going to scare off customers, it’s either too high or you aren’t doing a good job explaining your value proposition (see above). Also, don’t worry about trying to keep your pricing secret from competitors – if they want to know, they’ll find out. - Make it really easy to buy
There is a common thread among business products and services to push everything through a salesperson, hiding pricing from the site and making a contact form the only way to get more information. While I understand the lead generation / sales process, the fact is that a lot of folks land on your site and would probably just sign up for your product if you made it simple – show them the price, provide a form to sign up, and a contact form if they want their hand held. Otherwise they are going to go find a competitor that makes it simpler. With our business product, you can be signed up with billing information in about 3 clicks from the front page, with minimal information to fill out if you’ve already got an Amazon account. I wish every service I signed up for was that simple.
I talked about a few other things in my presentation, such as our focus on early adopters, and how we set our pricing intentionally low (”make it a no-brainer”), but those things were fairly specific to our product and goals. The 7 keys I’ve listed above apply to pretty much every startup, and if you follow them you’re going to be halfway there already. The last half is actually building a great product, which is an entirely different topic.
