We Should Hang out Sometime

Sorry for the lack of articles lately.  Pick any of the following as an excuse:

  1. Been busy building stuff
  2. Been busy testing stuff
  3. Been fighting with my parole officer over the definition of “recreational” drug use

That said, I’ll be at the following events and if you will be too, coffee is on me.  It would be my pleasure to treat for caffeine and chat about lean, customer dev, and anything else that suits you, since I haven’t been of any help here in the last couple months.

Lean Startup Machine Seattle: Nov 2nd – 4th

Lean startup machine logoAs I’ve mentioned before, LSM is an incredible experience.  I highly recommend it to anyone serious about starting a company.  The lessons you’ll learn over a weekend will literally save you months of time.

If that endorsement isn’t enough, here are two more reasons you should go:

  1. LSM will pay for you to attend a Startup Weekend.  That means you’ll learn how to test your business model assumptions during LSM, and use that knowledge to build a product customers actually want at a Startup Weekend – all for the price of one LSM ticket.  Double the learning and double the experience for the price of one LSM ticket.
  2. There are a handful of 50% coupon codes left.  If this link still works, it’ll get you admission to Lean Startup Machine and Startup Weekend, for $149.  I previously said LSM alone was worth $500, so to get LSM + SW (plus food & drink) for $149…it’s really…amazing.

I’ll be there helping teams test their hypotheses.  Really, there’s no reason you shouldn’t be there.

NWEN Entrepreneur University Seattle: Nov 9th

NWEN Entrepreneur UniversityNWEN’s got some big names speaking at their Entrepreneur University.  If you’ve ever heard of Cranium, Molly Moon’s Ice Cream, or Jawfish Games, you’ll know the keynote speakers.

You may have also heard of some of the lesser known speakers.  Mark and I will be doing a breakout session on “Interviewing Customers the Easy Way.”  It will be a live version of our How to Interview 100 Customers in 4 Hours with Mechanical Turk post.

We’ll pick a couple startups out of the audience, learn a little bit about their target customers, and then see if we can interview a couple of them during the session so everyone can see easy and powerful interviewing customers is.

Founder’s Institute Seattle: Nov 27th

Founders InstituteIf you’re a member of the Founder’s Institute Seattle session, I’ll see you for a talk on Product Development.  More specifically, we’ll be narrowing down the definition of MVP (which runs the gamut depending who you talk to).

If you’re not a member of FI, I think they’ll record the talk so if possible, I’ll post a link here afterwards.

And certainly not least…

Lean Startup Conference San Francisco: Dec 3rd – 4th

Lean Startup ConferenceI am nothing less than humbled and honored to be speaking at this year’s Lean Startup Conference with the likes of Steve Blank, Eric Reis, Ash Maurya, Patrick Vlaskovits, and on, and on… (oh, how clumsy of me. I just dropped all those names…)

My talk, “Crowdtesting: Using Crowdfunding to Test an MVP” will be only 5 minutes of what’s bound to be a day of innovative ways to build successful companies faster.  It feels like a combination of TED + Ignite dedicated to Lean Startups.  Come if you can.

Huge Thanks

To Ramphis CastroMarcos Polanco for getting the speaking ball rolling, and to Mark Horoszowski for not only his encouragement, but his enthusiasm, coaching (and videography) during the Lean Startup Conference application process.

I’m Serious

With this much yapping, I’m may not be posting much over the next couple months, so like I say, please hit me up if you’re attending any of the above.  I’d love help however I can.

Join the experiment – I’ve got killer data for our next post (testing your startup’s name). Subscribe via Email or RSS to make sure you get it.

How to Pick your Customer Segment

We all know, “everyone” isn’t a customer segment.  But what do you we do when we’ve got a bunch of potential customer segments?

It’s an issue we all face at one point or another, in fact, as we previously noted, Bounce has a pile of potential customers:

For Real Estate agents, sales people, event planners, founders, general contractors, etc…
We could offer appointment reminders plus Salesforce integration!
For florists, caterers, utility installers/repairers, plumbers, electricians, etc…
We could provide on-time metrics for each employee! 
For long distance commuters, van pools, people who commute over a bridge, etc…
We could make an alarm that lets you sleep in or wakes you up early based on how bad traffic is!
For single people who are dating, busy parents, the “chronically late”….
We could gamify punctuality so they’re late less often!
For fusiness travelers, people who have just moved to an area.
We could offer additional information about sporting events, concerts, etc. that could be causing worse than normal traffic congestion.

If we target all of these customers, not only will it take forever to build this product, it’ll be a complete mess. So which group of customers are our ideal targets?

We could interview 20 of each group, but I think there’s a more efficient way.

Gut Check Prioritization

Lowest priority customers
Lowest priority customers

Let’s just gut check prioritize the segments we know about:

  1. First, add each customer group as a column in Excel
  2. Assign each group a value of 1-3 (1 = low, 3 = high) for the following criteria:
    1. Market Size – how “many” of this type of customer exist
    2. Pay for value – how much we think they’ll pay for this value
    3. Accessibility – how easy is it to find, contact and sell customers in this segment
  3. Multiply the scores together and sort them from highest score to lowest
  4. Start testing hypotheses with the highest scoring segment, and work your way down until you’ve got something people are dying to pay you for
Highest priority customer groups
Highest priority customer groups

Why I love this process

  1. It’s fast. Takes < 10 minutes.
  2. It’s okay that we don’t know the real values, we’re going to test our guesses anyway. This is just a way to prioritize our customers so we don’t get stuck in Lean Startup Paralysis, or start building a product that does everything for everyone.
  3. We don’t need to interview everybody. If our first couple rounds of  testing reveal a lot of interest from our top “gut check” customer segments, but in reality “VP of Sales” were the ones most willing to pay for a product, I hypothesize they’ll make themselves known once the product is launched.  No need to stress out testing all of our potential revenue sources – find one that meets our minimum success criteria and go with it.
  4. I was wrong. Before I did this process I had thought initially thought “VPs of Sales”, the “Chronically Late” and “Regular Commuters” would all be ideal customer segments.  This quick process hinted otherwise.

What’s Next?

This is Part 1 of our series of on Interviewing Customers:

  1. Which Customers Should you Interview (The SPA Treatment)
  2. How to Find Customers to Interview
  3. Getting Customer Interviews with Cold Emails
  4. How I Interview Customers
  5. You’ve Interviewed Customers. Now what?

Join the experiment – follow along via Email or RSS for updates on our next post: Help Investors Believe you – show them Customer Quotes.

Customer Development Made Easy…

Using mTurk to interview 100 customers (in 4 hours)

This has to be one of my favorite customer development tips: using Mechanical Turk to do customer interviews.

Nick Soman, Founder of LikeBright, and I discuss how he used Mechanical Turk to interview 100 customers in 4 hours, and how that got him into TechStars Seattle.

If you haven’t heard of Mechanical Turk (mTurk), here’s what you need to know:

  • it’s a website were lots of people, do small amounts of work, for small amounts of money
  • Who does work on mTurk? Although a bit stale, these stats indicate a fairly representative cross-section of the population.
  • Why would they do work for such little $? Something to do during free time. It’s a replacement for solitaire, not a replacement for a job.

Since Nick and I talked, I’ve done a couple dozen interviews this way and the results have been fantastic. Nothing like “getting out of the building” at home, at midnight, with an ice cream sandwich in hand.

[Update – 5/29/2015]

There’s an easier and faster way to do everything listed here. Our friends at Customer Discovery Ninja have automated this entire workflow below and made it easy for folks outside the US to access Turkers.

Feel free to familiarize yourself with the steps below if you like, but the fastest way to talk to customers is going to be Customer Discovery Ninja.

Sample interview and instructions:

1. Write the interview script

To make sure I accurately test my hypothesis, and so I don’t forget any questions, I always write up my interview script ahead of time.  Coming up with good interview questions is another post on its own, but here’s the intro I use:

Hi there, my name is Justin.  Can I get your first name please? *

Great, thanks ______.  Like I said, my name is Justin and I’m here in Seattle doing a little research.  I’m happy to tell you about the project I’m working on, but so that I don’t accidently bias any of your answers, I’ll wait until we finish the survey.  Is that alright?

Great.  So that I don’t have to slow us down to take notes while we’re chatting, is it okay if I record this call?  Great, here we go.

*Note: about half the time, people hang up after my first line. My assumption is that the hangups were expecting an automated phone survey, as opposed to a personal interview.

2. Get a (new?) Google Voice number

You’re going to post this number on mTurk, and strangers are going to call it so if you’re not down with that, create a new Google Voice account and grab a new number.  I’ve been using my actual Google Voice number and haven’t had any negative affects so far, but do what makes sense for you.

Outside the US/Canada: Google Voice is restricted to US/Canada so if you’re not there, here’s a great blog post on how to borrow a Google Voice number. (Note: may be against Google’s TOS. Use your judgement.)

3. (Optional) Forward Incoming Google Voice calls to your Gmail

I like answering my interview calls via GTalk within Gmail for a couple reasons:

  1. The gmail interface makes it easy to record the call
  2. It’s easier for me to talk hands-free with my computer

Instructions on forwarding Google Voice calls to your gmail are here: http://support.google.com/chat/bin/answer.py?hl=en&answer=187936.

4. Create a HIT on mTurk

Create a new HIT on http://requester.mturk.com

Select "other" template
Select “other” template

Describe the HIT

Describe the HIT
Describe the HIT

Super Important:

You must turn off “Master Turkers.” Master Turkers are a pre-screened, and very small, subset of the MTurk population. We want any folks on MTurk to be able to contact us, as long as they meet our qualifications. Here’s how to do that:

Pick a Price

Pick a price
Pick a price

Write up the HIT

Write up the HIT
Write up the HIT

Feel free to copy and paste this HTML:

<p><span style=”font-family: Arial;”>If you are a parent who picks your kids at day care at least once/week, please call us for a 5-10 minute phone survey.</span></p>
<p><span style=”font-family: Arial;”>Please dial the following number:</span></p>
<ul>
<li><span style=”font-family: Arial;”>*67&nbsp; [your google voice number]</span></li>
</ul>
<p><span style=”font-family: Arial;”>Note: dialing *67 before the actual phone number will protect the privacy of your phone number. &nbsp;</span><span style=”font-family: Arial;”>If you reach voicemail again, please wait 10 minutes.</span></p>
<p><span style=”font-family: Arial;”>&nbsp;<b>Required after Calling</b>&nbsp;- after we finish the survey, we will give you a password to confirm you successfully completed it. Please enter it below:</span></p>
<p><span style=”font-family: Arial;”><b>Password:</b>&nbsp;<textarea rows=”1″ cols=”80″ name=”answer”></textarea></span></p>
<p><span style=”font-family: Arial;”>Thank you very much! &nbsp;We really appreciate your help! &nbsp;</span></p>

*Note: the “password” is a word you tell your interviewee to type in once the interview is complete.  You’ll see what they type in before you approve the HIT (i.e. pay them) so you can ensure only the people who successfully completed the interview get paid.

Outside the US – mTurk needs a US address to sign up.  I’ve heard of people using any US address to create their accounts if they’re outside the US. Again, may be against TOS. Use your judgement.

5. Publish the HITs

Create a new batch
HIT it!

6. Get an ice cream sandwich

Now it’s time to wait for your first call. When it comes, answer it with your intro and once you have permission, record the call so you can share it with your team or review it later.

Incoming call
Incoming call
Record call
Record call

When you’re done, you can review the calls on Google Voice

Review recording
Review recording

Video Walkthrough

Using mTurk for the first time can be a bit confusing, so here’s a video walkthrough of the mTurk steps above:

Conclusion

If your target customers are on mTurk, which is likely if you’re building a B2C company, this is an awesome way to get lots of interviews in a short amount of time.

Thoughts, questions, or other suggestions for quick customer interviews? We’d love to hear ’em.

Big thanks again to Nick Soman from LikeBright for sharing this tip, Andy Sack for making him do it, and Dan Shapiro for teaching all of us the power of mTurk for customer development.

Outside the US? Or Don’t want to Mess with Mechanical Turk?

There’s an easier and faster way to do everything listed above. The guys at Customer Discovery Ninja have automated this entire workflow, which also makes it easy for folks outside the US to access US Turkers.

What’s Next?

Join the experiment – follow along via Email or RSS for updates on our next post: Prioritizing Customer Segments with Excel.

Customer Development Made Easy…

Threatening Puppies (kinda) Works

The results from our email interview experiment are in and, thank goodness, our customers saved the puppies.

* I didn’t get a chance to send follow-up emails for either of these emails.

Note these results include two new emails that weren’t detailed in the original blog post.  The “French Vanilla” email was the result of a friend telling me I had done everything wrong and that he could do a much better job:

French Vanilla

The Why? Email was inspired by my friend Adam Loving at Linksy who sent out an email to his customers asking for 2-3 words about their online marketing challenges:

Why?

Interesting stuff:

  1. Follow-up emails produced the most interviews.  Each person who didn’t reply to my first email got another email a couple days later repeating my request for their time.  Doing that more than doubled the number of interviews I got to do. Highly recommend FollowUpThen.
  2. Overall, the interview conversion rate was low.  7% on average, with the “winning” email converting at 12%.
  3. Sample size was probably too small to claim anything scientific, but “Rocky Road” generated “3x” the interviews “Vanilla” did.
  4. The “Why?” email performed well, but didn’t really let me dive as deep as I would have liked into my customer’s pain.
  5. Our readers are smarter than I am.  I thought “Chocolate” would win, but ya’ll were right:

”Results

Looks like this experiment provides two takeaways:

  1. Be sure to follow-up on requests for interviews.
  2. Being humorous/unique/edgy helps. Not a lot, but it helps.

Join the experiment – follow along via Email or RSS for updates on our next post: Customer Interviews using Mechanical Turk.

Customer Development Made Easy…