5 Simple mistakes that could kill your product

You can crunch CAC and LTV and MAU and DAU all you want, but there are simpler explanations for why your product may be underperforming.  Noodle on these simple ideas with respect to your business or product.  Hope it helps!

1. Not going where the people are - 

I was among the early members on sites like Producthunt (member # 2921) and theGrid.io (was founding member 16207).  Grid is an AI-based website builder, and is touted as an evolution/revolution in how websites are built.  I agree, but I later realized that for a website to matter you need eyeballs.  And to get that today, you don't build your own website.  You post on Facebook or Instagram or Twitter.

If you are a single dude wanting to find a girl, you don't go to a bar full of dudes.  You join a yoga class full of single ladies.

So, I asked for my money back, and decided I didn't need an AI-built website.

Certainly, team Grid.io is building value, as I'm sure AI will better optimize clicks and impressions and replace many human SEO/SEM consultants.  That said, the technology might be better applied in helping people share on existing platforms.  Or perhaps it can help optimize SMB marketing.  For example, Buffer has become a successful tool first and foremost because people wanted an easier way to post on Twitter and share on social media.

2. Going where it's too crowded - 

Going where people are is a truism.  That's not to say go where the crowd is.  If you show up where all the cool kids are, the problem is you might look like a loser.  At any given four-year term, there's only one President of the United States (POTUS) no matter how talented and smart you are.

Remember #1.  I'm not saying go to an empty pond where you can be king.  But, for the love of God, don't try to be another big social network.  Apart from being annoying, you'll get crushed by Facebook and Google.  So, to be clear, I'm not advocating Blue Ocean Strategy.  Going for an uncontested market either makes you a visionary or a fool.

(Apparently, don't do as I do, but do as I say.  I should be blogging on Medium and Quora, not here.)

3. Differentiate or die - 

Which brings me to marketing 101: differentiate or die.  As the world gets more crowded and user time more scarce, you need to be remembered.  Out of sight, out of mind.  Which is why Hollywood stars know that any publicity is good publicity.  Worst thing is for people to forget who you are.

What are you doing to stand apart from your competition in the minds of your customers?

What are you doing to emotionally connect with your users?

I think one reason StartupDigest was/is so successful compared to other startup events lists is because it's memorable at many dimensions.  It achieved this partly by using local, human curator, who could express the relevant and important startup themes to the audience locally.  You couldn't do that with one global curator.  And even if you could, people appreciate knowing someone local, so you always lose that edge.  (Of course, the offset is cost, but the local curators were volunteers.)

4. Missing the feedback loops - 

This is just another away of saying don't build myopically.  Often, one piece of the puzzle is related with another, with another, with another.  And understanding how that little flame burns will either enable you to build a bonfire or end up flaming out.

With so many tools available to streamline communication (e.g. Slack) and process flows (e.g. Git), this should not be a big problem for most teams.

5. Not minding the culture - 

And building on that last point, it all comes down to your team.  Your processes and good communication will determine how effective your team can work.  But, ultimately, it's your team culture that makes or breaks your team and your product or your business.  It's the most important of the nodes in your feedback loops.  Mess up the culture, and everything else will fall apart.

No need to repeat stories of scores of startups that grew too fast, messed up its culture, and imploded across many dimensions of its business - Homejoy, Fab, WebVan, et al.

Prosper 1 Click Quote, Not Really 1 Click

Prosper P2P Lender

According to its website, "Prosper is is America's first peer-to-peer lending marketplace, with more than 2 million members and over $2BB in funded loans."

I've been a Prosper member for years, an early adopter since the first days before other competitors popped up.  I've also been a fan of Kiva.org (a similar, yet different kind of service where the loans are made interest-free to developing world individuals), where I have made over 100 loans.

1 Click Quote

I've only used Prosper as an investor, loaning out small micro-loans to various users - most of them consolidating debt, or paying off an auto loan, or borrowing money for home improvement.  I decided to see what it would look like to become a borrower.

I loved the simplicity of the trigger from the investor summary page, prompting me to consider borrowing a loan.

Figure 1

You are teased with a low APR, and big call to action "Get Rate" button.

Now, I'm already logged in as a user ... meaning my basic info is available.  Too bad, then, when I click on Get Rate, I'm routed to this page.

Figure 2

Prompting me to provide the purpose of loan and some other basic info.  It still like the clean UI, but my problem with this is, why make me repeat the same information?  (Figure 1 and Figure 2 essentially duplicate information).  Why make me do this?  

Further disappointment then, when I am routed to the next page, where I am told "Get a Custom Rate in 1 Click."  This is my 3rd click, so I feel this is bit mismatched from meeting expectations point of view.

Figure 3

Understandably.  Many of this has to do with the regulated nature of lending and borrowing industries.  Often, the business constraints are such, that the end goal is not the most streamlined user experience (UX).  Sometimes, it makes product sense to create some friction for the user.  That said, I think there's clearly a room for improvement in conversion and user experience here.

Anybody home?

As another example of UX issues I found with Prosper.  When I go to my investor profile page, I see something like this.  This is me (figure 4).

Figure 4

 What happens when I click on the "View" hyperlink?  I get a broken link.  Page Not found (Figure 5).  Which is not bad.  The page reroutes to the summary page shortly.

Figure 5

However, look at a different Page Not Found message by another product - StackExchange.  There, you see clearly more humor.  It is a way of empathizing with the user.

"You didn't find what you were looking for?"

"We are sorry, let's see if we can at least make you smile while we help you."  That seems to be StackExchange approach (Figure 6).

Figure 6

You Might Also Like ...

If you enjoyed this product teardown, you may also enjoy:

• Taking Assembly for a Test Drive
• Hotel Tonight Room price trigger
• Lending Club borrower teardown

And a product teardown is intended to help you become a more effective product manager by improving your acumen.  There's a whole lot more to this profession.  Check out this book:

Take Charge Product Management: Take Charge of Your Product Management Development

Keep on building!  Good luck!

What Is Your Approach to Product Management?

A product manager at Radius asked what my approach or philosophy about product management is.  My answer wasn't very interesting.  I subsequently read a post by Ernest Kim that was.

Certainly, getting the build, measure, learn cycle can be a key part of the iteration necessary to walk toward building anything good.  Are you getting analytical in your product management?  Click the link for some great articles on building with data.

Additional Reading:

• WTF is a product manager by Ernest Kim
• Hierarchy of product love by David Kim

Or if you want to get more nitty gritty on actual product management, Marty Cagan goes into ton of details, including how to staff and work with your engineering and designer teams, what product manager really does, etc, etc.  

Inspired: How To Create Products Customers Love

Marty worked at Netscape, among other places, where he worked with luminaries like Ben Horowitz.  So, some of his experience is a little dated (in my opinion), but the wisdom and the principles hold true, because those are timeless!

Hierarchy of Product Love

How Good is Your Product Anyway?

Recently, I had a chance to sit next to a tech executive during lunch. Our brief chat meandered to the topic of what makes Startup Digest special.

You may be aware, there are dozens of email newsletters in the startup space. Some are good, some suck. And Startup Digest is king.

Why is that so? The question made me think about what it is that any given product does for its users.

How does a newsletter, a product, or a service (or a person) win the hearts and minds of users?

What Need Does it Fill?

What kind of a model do you apply to address a question like that? The model that came to my mind was the well-known Maslow’s hierarchy of needs.

Source: “Maslow's hierarchy of needs” by J. Finkelstein - created using Inkscape. Licensed under CC BY-SA 3.0 viaWikimedia Commons.

At the base of the pyramid are basic necessities for physical survival. Keep walking up the slope of this pyramid from food to safety, to community, and you eventually end up self-actualized. (I don’t know about you, but the word amuses me, and evokes an image of someone sitting like Buddha in the middle of the day at Dolores Park.)

When I started googling for “product hierarchy of needs” I came to a Smashing Magazine article called Designing for a Hierarchy of Needs.

You might have seen innovation thinker Clayton Christensen apply a similar idea to businesses: Jobs to be Done. Here’s a rationale from Christensen’s institute:

“Customers rarely make buying decisions around what the “average” customer in their category may do — but they often buy things because they find themselves with a problem they would like to solve.”

You can see why psychological underpinnings of the hierarchy of needs model is so powerful. It strikes at a deeper truth. We do stuff because we need to satisfy our desires and needs, not because of some cosmetic marketing.

Applied Psychology - using FeeX as an example

Let’s apply it! Take a product like FeeX, for instance.

FeeX helps individual investors by showing your hidden fees (the stuff that mutual fund companies make incomprehensible with words like ‘deferred sales load’ and ‘12b1 fee’) so that you know how big the hit is, and hopefully take action to save.

The old product focused on the fee saved in dollars.

That appeals to the rational mind, to the part that says, save and you’ll have more left over for food. This is the bottom of the pyramid of hierarchy of needs.

If you happen to have some money socked away in retirement savings (and you’re not a CPA), do you ever think like that? “Gee, I am paying too much on my hidden fees!”

I don’t. And ironically, I have a CPA.

During a conversation with a team member, I suggested, why not link it to something with stronger trigger, something closer to home.

For example, “save $X and you’ll have saved enough to fly to go see your [loved one].” Or “Fly to Hawaii for free, with money saved on your 12b1 fee.”

That’s higher-up on the pyramid: need to belong, family, love, etc.

Click image for full-sized view of hierarchy of product love

Back to Startup Digest and the House of Startup

So, what is Startup Digest, and what makes it special?

Why should a user rely on Startup Digest curated events as opposed to, say using CrunchBase Startup Calendar?

1. Startup Digest solved an archetypical founder’s problem. Chris McCann started the digest so he could figure out what was going on and meet new people as a newbie in Silicon Valley.
2. Startup Digest connects with its audience very personally. Chris shared the story of how in the early days, he used to make waffles for the readers in his apartment, then at VC offices. (The larger and slightly more scaled version of this is having local curators be the ‘faces’ of each city edition. While not scalable, sometimes thing that don’t scale can represent a competitive advantage, like personal relationships.)
3. Startup Digest benefits from strong network effects. You all know that when there is a successful incumbent, often the bar for surpassing it is high.

Changing an existing user behavior requires not 2x improvement, but a 10x improvement (borrowing from Andy Grove’s book about paranoid survival).

Far better, therefore to go after a new base with a new twist of the service.

These observations point to how the Startup Digest resides beyond the utilitarian in us. It helps us connect to a community and gain a sense of belonging.

Escape Velocity

This brings up another question. At what point do you lose the glues that hold a community together?

If you could (potentially) make waffles for 350 people, what can you do with 350 thousand people? Brute force will not work, and you have to look for beneficial intersection between technology and the human users.

What would be the digital equivalent of a handshake or making pancake for a friend, or seeing a familiar face on a digest each week?

Time for Action

More pragmatically, few things that Startup Digest or CrunchBase Startup Calendar could do (and should regularly do) include:

• redraw core user persona - in this case startup founder/early employees persona, to understand the way the user thinks
• re-align user success to business success - for example, Crunchbase is aimed at creating a world’s best dataset of startup activity and people. Does events align at all with that business goal?
• use technology to work smarter - this is something Startup Digest could do much better. We remain very human-driven.

Building the right tools to empower the enthusiastic users takes lot of resources, but it is absolutely the right path forward. Does your product roadmap reflect that truth?

A strong community is one that scales itself.

At Startup Digest, we are pushing beyond our comfort zones by digging deeper into what we want to grow into. We are testing where our audience wants to go while diagnosing what they need most.

We are doing that using a mix of data-driven decision making (slides) and building new value through partnerships (for example, recent offer through ZenPayroll) and observing how our audience reacts.

As noted, we are behind when it comes to applying technology to help our community scale itself.

Peter and I liken the journey to climbing a mountain. You want to set your sights on a peak, and start testing different routes up, frequently changing when you get closer to the terrain and see new obstacles.

Often, the peak is shrouded in fog, and weather conditions and fatigue may impact your performance and progress.

Here’s how you can train your climbing legs. Think of ideas to improve your product. Anything. Then, pick and prioritize a few you could implement within a reasonable period of time.

Then take some small step forward toward that goal. Try it! I would love it if you shared your story in future!