Jun 7, 2015

I'm hungry, and what I learned about startup investing: Is it time to eat?

It's not quite noon, and I'm hungry.  I debate whether to drum up a scramble and scour my fridge.  I'm not impressed; supplies are low.

There's a taco joint, a cafe, and a Whole Foods all within a five-minute walking distance (I'm lucky to be in a very central part of San Francisco).  But, I'm in middle of something.  Plus, I want to try something new.  Something convenient.

A meal from SpoonRocket is $10 bucks (including delivery and tips) and promises a fast delivery.  But what really gets me to submit an order is the humor.  Step 3 is "put on your pants."  Hey, how did you guys know?  (I wonder if I would be instructed to put on my skirts if I were a woman.)


I get a two minute warning text almost immediately, so I walk out to the curb.  A minute later, a SpoonRocket delivery truck pulls up, I grab a boxed lunch and I get back to my kitchen.  What did I have?  Grilled chicken apple sausage with BBQ chipotle sauce.  The meal was decent; the speed and convenience was superb.

Motivated by the positive experience and the promotion, I share the referral code on my social media and email a few friends.  My friends will get $10 bucks off when they make their first order.

Free Food

In fact, a few days earlier, my roommate had sent me an email, subject "free food."  I was invited to try Munchery and claim a $10 credit.  Whereas SpoonRocket's tagline is "Good Food Fast," Munchery promises "wholesome meals from the best chefs in town."  I guess I'll eat free tonight.

While at it, I decide to take advantage of promotions by Sprig ("Dine on Demand") as well.  And to fill up on my low running fridge, I try out Instacart.  After placing an order of groceries from a local Whole Foods (yes, the one that's three minute walk away), someone shows up in the evening with a bag of groceries at my door.  Call me a bit old fashioned, but I oddly feel obliged and sorry for the gentleman who delivered the grocery bag.  Is this how millionaires live?  Someone shops your groceries for you and cooks your meals for you.


Insight Into Food Startups

This foodscapade taught me quite a bit about this food startups.  For one thing, I began to be more attentive to the space.  It turned out one of my friends worked for a team that delivers corporate catered meals.  He was paid $25 per hour to pack food.  Not bad.  But, what did I really learn, though?

1. Logistics as core UX - These companies all have to get the logistics right.  Food startups have to assemble the food, manage perishable ingredients, and deliver on time.  These companies were more like Amazon than they were like LinkedIn; more analogue than digital.

2. Engagement model - Sprig's CEO Gagan Biyani often speaks in public about growth hacking.  I once watched him give a presentation about Sprig's user lifecycle.  It shows a feedback loop consisting of "before the buy -> first purchase -> repeat purchase -> referral."  The referral leads to another "before the buy" cycle.  My own story above reflects this business model.  And this gives you an idea about where key drivers and costs of the business are.  What is the drop off from first purchase to second?  From second to third?  What are some things that can go wrong?  Try out the service once or twice, and ask your friends, and you can gain a grasp of these metrics.

3. Expensive customer acquisition - And speaking of the repeat purchase to referral, this is an expensive way to acquire new customers.  Remember that free meal I had?  Well, it wasn't really free.  It's coming out of investor's pockets, and reflects the competitive pressure and pressure to scale quickly.  By contrast, consider Intercom.io.  When I click to download a 'free' e-book, I'm asked to share 2 emails to get the free book.  That friction will lead to something less than 100% conversion, but that's a much cheaper way to build virality in my book.

4. Huge market - So, with logistics as a constraint, and expensive costs, why all the fuss about food delivery services?  Well, as a friend of mine likes to say "I'm pretty good at eating.  I do it three times a day."  And so does hundreds of millions of others.

For me, taking the product or the service for a drive and a little digging helped me put my arms around the business.  For food startups, if I wanted to learn more about the team of executives, I would expect to see some logistics or operational excellence experience: someone from Amazon or Walmart, perhaps.  I would also be keen to pay attention to emails or promotions to assess whether the team can efficiently retain a new customer.

In general, when customer lifetime value (current value of all future purchases by that customer) exceeds the cost to acquire the customer, the business is making money.  Take Munchery, for example.  It took $10 to get me to try it.  If I spend more than $10 down the road (and I did), they come out ahead.  The more profitable customers a business has, the more valuable the business becomes.

Finally, these food startups have different goto market strategies and different market constraints.  For example, if Munchery limits itself to providing food by local chefs, expanding to new cities may challenge greater logistical complexities.  By contrast, a template model of assembly simple food in a kitchen and delivering could be repeated much more efficiently.

Have fun investing!  And don’t go hungry!


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Mar 8, 2015

Practical Personal Happiness and Success Tips

I hope you had a great weekend!  I published a book on how to be happy and successful in your daily life.  The book isn't about tech or product management, but I wanted to share the news with you!  It is available on Amazon.

How To Be Happy: 12 Powerful Steps to Boost Your Confidence, and Live a Happier Life Now

I wrote this book for you to share tips I have applied to move forward when life seemed at a standstill. 

I will show you how to be happy with 12 powerful, yet simple actions you can take. 

book image - how to be happy
How To Be Happy by David Kim

It will be available for a FREE kindle download for the next few days, and I would love it if you downloaded free of charge and read over it.  Also, for your sign-up on BetterAndHigher.com, you'll receive a FREE audio download to Tip #8. "You Say Yes, I Say And."

And, if you like it, then would you please consider leaving me a good review (i.e. five star review) about the book?  Thank you ever so much!

Mar 5, 2015

3 Book Recommendations to Help You Earn Respect from Software Engineers

Technical Background Needed?

Companies like Google are notorious for preferring technical product managers.  (How dare they forgo your talents just because you don't have a C/S degree!)

Yet, if you look under the surface, you'll find many exceptions.  For example, take a look at Google product manager Kamila Staryga, who used to run the (now defunct) Google Helpouts.  She does not have a computer engineering background.  Her prior career background was with companies like GlaxoSmithKline and Procter & Gamble.  

Lest you think this is an exception, take a look at Serena Keith.  Serena is heads product at Lovely, a mobile apartment hunting app (acquired by RentPath).  Serena graduated college in 2008 as a social studies major.  Then, she worked a handful of jobs in non-technical roles.

So, What's Going On?

You could assume that Serena or Kamila simply relied on their industry expertise and strategic prowess.  Perhaps you're right.  Or, you could give them the benefit of the doubt.  Perhaps they really studied up on technical matters.  People like Serena worked really hard to overcome their technical deficit to earn the trust of the mobile and web engineers on their team.

I have seen this humanist-turned-technologist narrative play out first-hand with people like Shanely.  Shanley used to work at Heroku, an uber-engineer kind of place.  The engineers there told me first-hand that when they worked with Shanley, they had no idea she was not from a technical background.

Meaning, basically, you get there by taking time to learn.  Big surprise!

Take Action and Read Up!

So, this is the part you've been waiting for.  Book recommendations that closes the technical knowledge gap.  That's right, you got to earn that respect from your engineering team. There's no free lunch, my friends.

I found a few books on Leanpub that should be worth checking out.  Best of all, they have a nice satisfaction guaranty.  So, hop to it and beef up your technical library!


Growing Agile: A Coach's Guide - This book is a collection of our workshops that will help you run similar workshops to create agile Release Plans. 

Inceptions, Starting a Software ProjectA professional software craftsman has many tools under his belt. Many are technical in nature, but many others are considered soft skills. This book focuses on one such soft skill; The Inception Workshop.

Talking with Tech LeadsA book for Tech Leads, from Tech Leads. Discover how more than 35 Tech Leads find the delicate balance between the technical and non-technical worlds. 

Feb 9, 2015

Lending Club Borrower Accelerated Payment Teardown

Lending Club

The Lending Club is a peer-to-peer lending juggernaut. It is "the world’s largest online marketplace connecting borrowers and investors." The company recently went public (December 2014).

Earlier, I wrote about a key competitor: Prosper.com, and its 1-click borrow flow.


Let's say you're a borrower with a $4,000, 36-month term loan on Lending Club. Your monthly payment is $130.47 (Figure 1).

Figure 1

Problem Summary

What happens if you want to pay off your loan faster, or wonder what happens if you change the monthly loan payment amount? How would you approach this problem as a product manager?

Possible Solutions

First of all, as a product manager, your job is not to do the user-interface (UI) design work.  You have design experts who would be insulted if you thought you could do their work for them.

Rather, your role as a product manager is to explain what the goal of the feature is: explain the benefit to user and to the business, and help the team understand why it's important.

That said, I don't have a designer, so by way of communicating, I'm going to share a few screenshot mockups to illustrate a few possible solutions to the problem.

When possible, you want to think in terms of common design patterns.  Be creative, but not too creative.  A common UI-pattern for changing prices is a slider (think Kayak).


In figure 2, I borrow Kayak's price slider to let the user perform a "What If" analysis on the summary page.

The bordered box and the fonts clarify to the user that the loan term has not changed.  This is simply a what-if calculator for informational purposes.

An alternative to leaving the UI as is, would be to make this kind of calculator a pop up, or placed on the side navigation bar (below the referral incentive, for example).

Figure 2

Payment Spinner

Perhaps another way to solve the problem and keep the UI clean would be to add a spinner to the Next Payment line.  In figure 3, you can see the up and down spinner, and next payment dollars in brown font.

It goes without saying that the amortization calculator in the backend would adjust the due date accordingly.

Figure 3

FAQ Approach

Now, I am not a Lending Club product manager, and therefore do not have a broader view of the problem and its impact.  Let's suppose I have access to customer support calls, and this happens to be a frequently asked question, and something that is not yet automated.

The best first approach to this problem might simply be to provide the user more information (it'd be worth parsing some of those customer service calls) and provide a self-serve page explaining the impact.

All you really would need is a hyperlink that answers "Can I pay more?"

In figure 4, I visualize what this could look like.  I added a red dot with question mark as a way to create a common UI pattern within LendingClub site itself.  Whenever we find a common question, we can insert it within the default screen.  It acts as a supplement to the "Common Questions" already found in the side navigation bar.

Figure 4

Stepping Back and Advocating for the User

It is the product manager's job to advocate for the user, and understand the business goals.  If the user wants to increase the monthly amount (in the slider example), it could be a signal of financial strength.  However, if the user wants to decrease the monthly payment, it could be a signal of some problem.  For the business, this presents an opportunity to deliver user delight, and at the same time mitigate business risk (for example, by providing pertinent information or options that mitigate default risk).

On the whole, I think there are other small improvements that can be made to the summary borrower screen.

For example, as a borrower, I really want to know what the overall amount of money I am paying is going to be, interest and all.  Rather than purely text-based rendering of that information, a progress-bar type of visualization could be much more effective (and would be relatively easy to implement).

And as a borrower, I might be confused to see the lenders of my loan.  Thus far, nothing in this space has shown me I have any incentive or useful interaction with the lenders.  It's a distraction, unless it were clearer to me what I am to do with that information (figure 5).

Figure 5

Testing, Revenues, Summary, etc

Let's suppose that the user actually wants to pay off the loan faster.  The first task is to work with the designers to design some possible solutions (as we did above).  Next,  we would want to consult engineering (or communicate to them) to ensure that the implementation is feasible within time or other resource constraints.  

I can say that all of the changes suggested above are mostly cosmetic, and would not take long to implement.  The thing is, you don't actually know a priori whether it is going to help or harm your business.   


You already know that I'm going to tell you you need to test.  Since the changes are relatively easy, I would opt for having multiple versions of possible solutions and running A, B, C tests in different markets and segments to see which ones perform the best.


Moreover, for those borrowers accelerating payment, you want to convert that intent to a new call to action.  For example, "would you be interested in becoming an investor?"  Why not, you have money spare.

Here, Lending Club has a potential weakness.  Unlike on Prosper.com, on Lending Club, you need to create separate accounts to lend and to borrow.  Why?  Why can't I be both a lender and a borrower from the web product perspective (never mind the regulations for a second)?  The answer is, no reason at all!

As it is, Lending Club will need two separate email addresses from you for you to be both a borrower and an investor.

Figure 6

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