How could Quora improve their onboarding flow?

Recently, I was going through onboarding flow for some of the websites that I frequently use. One of them was Quora. I had joined Quora long time back, and I wanted to see how the onboarding flow had changed since the time I signed up.

I will use the following framework to explain the onboarding flow for Quora and how it can be improved:

  1. Goals of a user on Quora
  2. Success metrics for Quora
  3. Current onboarding flow and improvements

1. Goals of a user on Quora

Quora is a marketplace that connects users in need of answers with experts who can provide those answers. In my own experience, I have found answers to questions on varied topics such as product management, Elon Musk, relativity theory, and even sports (cricket, football).

The users who are in search of questions are motivated by their curiosity to not only find answers to their specific questions but also browse answers to interesting questions in topics that they are interested in. The users who are experts in certain topics and provide answers are motivated to answer questions for the social recognition by establishing themselves as the thought leaders on a particular topic.

Both these points about motivations of users seeking answers and users providing answers are important to understanding the effectiveness of Quora’s onboarding flow for new users.

2. Success metrics for Quora

Keeping the user goals in mind, let’s focus on some of the metrics for new users. I assume most of the new users come to Quora through SEO (Google, Bing, Yahoo etc.) when they are asking questions on search engines.

  • Acquisition: Understanding the channels of their user acquisition will provide Quora an idea of the mindset of their users. Users coming from an organic channel might have a different expectation than users coming from an SEO channel, and Quora’s onboarding flow should reflect these expectations. For example, users coming from SEO might want to see the answer to their question before they are asked to do anything else.
  • First-time success: The success of the first time experience can be determined by understanding whether the first-time users coming from SEO get a satisfactory answer to their question and whether they derive enough value from the product to keep browsing.
  • Activation & Retention: Quora would want their new users to keep browsing other questions and thus adding more value to their experience as a new user. Once the new users sign up, the success of the onboarding flow can be determined by the repeat visits from these new users through email since Quora sends emails to their users based on the topics that they follow.

3. Current onboarding flow and improvements

Considering the user goals on Quora and Quora’s success metrics listed above, let’s take a look at the current onboarding flow and propose some changes that will help Quora to better satisfy their users as well as meet their business metrics.

The onboarding flow for Quora consists of the following 4 parts:

  1. Onboarding questions on interests and expertise
  2. Facebook connect feature
  3. Feature tutorial
  4. Gamification

Let’s look at each of these parts separately.

1. Onboarding questions on interests and expertise:

Quora would like to surface the most interesting and relevant questions and answers for new users. In that respect, Quora does a good job of asking users the right questions during their onboarding so that they can populate the news feed with questions that are relevant and interesting.

topic interests

To maintain the liquidity of the marketplace, Quora makes sure to not only ask the new users of the topics that they might be interested in learning but also ask about the topics that they are an expert in and can contribute to the answers on Quora. Asking new users for their interests and expertise helps Quora surface interesting questions for their users to read as well as to answer. This also helps Quora to send emails with relevant questions at a later time based on the topics selected by the user. This improves retention metrics for Quora.

topic expert

2. Facebook connect feature:

Quora has figured out that people usually trust the answers that are submitted or recommended by friends or family. So Quora asks a new user to connect their Facebook account with Quora. However, the copy is not enticing and does not provide a benefit for connecting Facebook with Quora. It just says “The average person has 34 friends with 17 answers on Quora.” Also, asking new users to connect at this point might be too much commitment too soon.

friends

Suggestion: I will suggest Quora to move Facebook connect feature to an appropriate part of the product. For example, when the user is reading answers, Quora can ask them to connect with Facebook with a value proposition “See if any of your friends have upvoted these answers”. Alternatively, providing a value proposition during onboarding around following/discovering topics that users’ friends follow, for example, “Find interesting topics that your friends are interested in.” will be interesting to test out. This will provide more relevant topics to follow in the onboarding flow, which will improve engagement and retention.

3. Feature tutorial:

tutorial

tutorial 2

The feature tutorial on Quora is pretty weak. Considering that today’s users know the paradigm of a social platform from their experience with Facebook, LinkedIn, and Twitter, I will recommend Quora to remove this feature tutorial that shows different parts of the website such as newsfeed, upvoting, pinned topics etc. It would make sense for Quora to showcase features when the user is mostly likely to use it. For example, the feature to upvote an answer should be highlighted when the user has spent some time reading an answer. Such kind of feature introduction seems more contextual, and relevant.

Suggestion: Introduce important features at the right time in the right context.

4. Gamification:

Finally, Quora uses gamification to get users to take actions that will add value to Quora and increase the liquidity of the marketplace such as following more topics, upvoting good answers, asking the first question etc. Quora strikes out the tasks that the user has completed, and gives the user a feeling of accomplishment.

gamification

I believe the implementation of this gamification feature could be better. It feels weird to upvote 5 more answers as a part of the account setup. It might make sense to ask the new user to upvote 4 more answers when she upvotes her first answer. Also, following topics and connecting with Facebook can be introduced in a better way. “Topics to follow” recommendations can be introduced in the news feed or on questions that the user is browsing.

Suggestion: Quora should bring the gamification aspect in the right context at the right time.

After looking at the Quora’s onboarding flow, I believe the most effective part of their onboarding flow is their feature to let users follow topics that they are interested in. This essentially is the crux of their platform where users can find answers on topics that interest them. Quora has a lot of interesting information on a variety of topics, and surfacing the right information to the right person is key to showing value to new users.

What could be the next big bet for Quora?

As discussed before, Quora is in the business of providing interesting and relevant answers to questions written by an expert who the user can trust. Liquidity of answers is very important for Quora to function effectively as a marketplace. In addition to the liquidity, the quality of answers is very important, since the quality of answers provides the stickiness for a user to keep coming back for answers.

Quora has done a wonderful job so far by investing in recommendations for surfacing the right questions to the right user and features like upvoting, top writers program and collapsed answers to make sure that a high-quality answer given by the right expert is surfaced to the top. All these features and more provide Quora the liquidity that a marketplace would need. One of the biggest risks for Quora, though, is to maintain the quality of this liquidity.

If cost or time wasn’t an issue, I will take a big bet on making the quality of answers better beyond just top writers program, and collapsed answers. I will take a big bet on providing some kind of incentive for experts to answers questions that don’t have any quality answers or no answers. There is a risk in replacing an expert’s intrinsic motivation with monetary value, and this possesses a risk of losing the experts who answer questions out of their goodness to help people or to build social recognition. You can get around this issue with building an army of in-house experts to answer questions on topics that have a lot of demand, but not enough supply. Quora can form a team of publishers who can answer these questions. Since cost is not an issue, this will provide a supply of quality answers that Quora might be at risk of not having enough.

Here’s to all the crazies in this world!!

MUSKsum_2778344b

I recently read the biography of Elon Musk, and what an inspiring story, I must say. Elon Musk has surely joined the elite group of other crazies in this world, who have dared to envision a different world – Steve Jobs, Henry Ford, Bill Gates. The tenacity and perseverance that these guys have is unmatched or even unimaginable. But more important, the quality of clearly seeing a world 10-20 or maybe 50 years from now is the quality that distinguishes these crazies from the mere mortals.

I know the naysayers will bring up stories that will show how these people have built companies on others’ ideas, and how I am just drinking the kool-aid or being a blind follower. However, there is a big difference in the people who invented these things, vs. who either envisioned a future or dared to take steps to make this a reality.

  • Though the idea of operating systems originated at IBM, they did not have the vision to make personal computing a reality. Who would have given this dream to Bill Gates, if there were someone from IBM who believed that computers will be at every desk at offices and homes?
  • While Microsoft made personal computing possible, Apple made it usable. Though Xerox built graphical user interface, Steve Jobs was able to see clearly the future where every person on the earth will be able to use this powerful machine without any technical knowledge. (Note: Microsoft also licensed GUI license from Xerox for building Windows)
  • Similarly, I am sure Henry Ford had this crazy dream of putting cars in the hands of every person on this earth.

I personally believe that those who dream and finally dare are the ones that make it possible. At the same time, I believe that there are certain inventions and technological advances that need to happen to make this dream a reality. This is what some of us call ‘timing’ and most of us call ‘luck’. There are some industries where this timing seems right.

  1. Transportation: Technology has advanced enough for us to dream about automated cars. Every car company has been adding small features such as automated parking, automated brakes, etc., while Google has taken the giant leap of actually working on fully automated cars. Someone at Google has the vision that automated cars will be a thing in the next 10-15 years. Maybe, driving cars manually will be illegal then, similar to driving under influence.
  2. Energy: While it seems like every other energy company is still trying to milk their cash cow, aka coal and oil, it took a few visionaries to step up and build solar companies that might make us independent of oil and coal. I agree that the technology has advanced enough, and the costs have reduced drastically to make electric cars and solar energy viable, but it still takes vision and guts to go out and say – “I believe electric cars and solar energy is the future, and I am going to invest my hard earned money and rest of my life to make this possible.”
  3. Space travel: I always fathom how it would be if we get to go back in time and tell someone from 1800s the technological advances that we have had so far. Forget about air travel, they wouldn’t even believe us if we told them that you can get to the next town 100 miles away in less than 2 hours. But there were people who dreamed about cars and airplanes and made it possible to travel long distances. Similarly, space travel for leisure and human colonization on other planets seems like a joke right now, but if we were to be alive in the next century, I won’t be surprised to see a weekend leisure trip to moon. It just takes that one crazy person to make it possible.

Similarly there are other industries, which are showing signs of disruption.

  1. Banking: Are traditional banks the right approach for the future? Are they on the brink of extinction in the face of Paypal? Has technology disrupted enough that the next set of companies will just topple traditional banking?
  2. Education: Is institutional education too overrated? Companies like Khan Academy, Udemy, Coursera, Udacity have taken the first steps towards democratizing education? Is there a visionary out there who will just make institutional education outdated?

You have to just ask – “what if?”

DREAM. ENVISION. DARE.

What should Facebook build next?

fb

I was speaking to a friend of mine one morning and we started discussing about what should Facebook build next. Though we had a good conversation, the thought didn’t leave me. I kept thinking what I would do if I was the head of product at Facebook. I thought about giving a framework to approach this question.

Facebook essentially is a social network and operates in advertising space for its business model. The number of users on its platform and the strength of its network i.e. the amount of time these users spend on Facebook differentiate Facebook.

So if I were a product manager at Facebook, I would see the opportunities in these two areas:

  1. Acquire as many users as possible
  2. Get them engaged as much as possible on the platform

Let’s discuss each point:

  1. Acquiring users:

I wouldn’t spend too much time discussing this, but will talk about a few innovative ways that Facebook is already taking to acquire new users.

Facebook has people from most of the developed countries and parts of developing countries on its platform. It has over 1.3 billion out of 7 billion people on this earth on its platform. The challenge now is getting people who are not online or who don’t have computers.

Facebook has been solving this problem with some innovative ways:

  1. Sending low orbit satellites in the space to make internet available to remote areas of the world
  2. Creating light apps such as Facebook lite to help users with low bandwidth and not as advanced smartphones get easy access to Facebook. (Note: Phones have higher penetration than computers in developing countries.)
  1. Engaging users:

This is an interesting problem to me as a product manager. A lot of new product features are built to get users engaged on Facebook. A few examples are Facebook Messenger (to replace your text messages), Facebook Paper (to replace your news apps), Facebook Pay (to replace your online payment platforms aka PayPal, Venmo) etc.

As I said earlier, Facebook would want their users to use the platform for anything and everything and would want them to visit Facebook every day i.e. increase daily actives. Some of the recent features that they have launched to make this possible are “Memories this day from the past years”, recommending articles/videos in the news feed based on what you view, Facebook Pay etc. The way I see it is, ultimately, Facebook would want to be its users’ digital identity and would like all of its users’ online activities to route through Facebook. If you think about 8-10 years in future, Facebook will be in a strong position if people thought their Facebook profile as their digital identity, basically replacing phone numbers, replacing personal email, integrating with all activities done online etc. Think about it this way – you meet a new person, and instead of exchanging phone numbers, you exchange your limited Facebook profile; instead of asking for email address, now you can communicate with this person directly on Facebook messenger with your limited profile; instead of paying online using your credit card or Paypal, you pay with your Facebook profile. Essentially, you will maintain different profiles on Facebook based on the activities that you do.

I know it’s a big task for one company to do all of these, and hence acquisition might be one of the ways to make it possible.

Some of the immediate features that I can think about to get people more engaged with Facebook are:

  1. Video calling
  2. Recommending purchases/gifts based on the events that the users are planning to attend
  3. Creating limited Facebook profile as a start to creating Facebook online identity for everyone

Some ways to know what to build next will depend on the way the users are using the existing features:

  1. Facebook pay: I assume people were already talking on Facebook messenger about exchanging money. Performing quick analytics like word cloud would have given Facebook an idea about other tools that their users use the most outside in a given context.
  2. Video calling: Similarly, it will be easy to understand how many people initiate messaging on Facebook Messenger to follow up with a phone call. This will provide some insight into users’ behavior. This can be coupled with user research to hone on the problem that Facebook would want to solve, and if video calling is the right feature to build.
  3. Purchases: Again, Facebook can do user research to understand the buying pattern related to the Facebook events that users attend.

Along with running analytics on the existing features and user behavior, understanding the opportunity will be critical to deciding what features to build – either the feature can make the platform more engaging or it can make more money for Facebook.

As a last point, I personally believe making experiences tighter based on users’ online activities will make Facebook a stronger platform with high user engagement. There are a lot of smart people working at Facebook, and I am excited to see new products from Facebook. To start with, I am thrilled about Oculus Rift, and waiting to see their first product.

Update: Facebook has already started building features that will replace your phone numbers. Here’s an article that mentions this – http://www.pcworld.com/article/2998367/software-social/facebook-message-requests-wants-to-replace-your-phone-number.html

Thinking about starting a company?

ideaI have had two failed attempts at building a company; one of them where we raised a seed fund, but were not able to prove that the product works.

So I was thinking the other day – if I have to start another company, what would I do differently? What would I consider before taking the leap?

Here are 3 aspects that I would consider before I would jump into starting my own company:

  1. Not a feature, but a product
  2. Not an idea, but a company
  3. Audacious goal

Let me explain each of these:

  1. Not a feature, but a product

Every now and then, when I am in the Caltrain or taking a walk, I get an idea, which I consider brilliant (obviously! just kidding). I could actually go and test each of these ideas by following the lean startup methodology. But would it be feasible to test each one of these? Maybe not. When I think a little more about it, the idea seems more like a feature rather than a product. Most of the times, these could be just product features that can be added on existing apps. For example, we tested a service that can help taxi drivers to deliver packages in their spare time. In hindsight, it seems like an add-on service for companies like Uber or Lyft. In fact, Uber is already experimenting with this service to see if there is any sustainable business model there. If your idea seems like just a feature and not a product, I recommend thinking hard about your idea, and see if there is a bigger problem that you can solve.

  1. Not an idea, but a company

Many a times, people fall in love with their ideas without considering the business model involved. Their justification – “Facebook did not have any revenues for a long time. Instagram still doesn’t”. But business model does not just mean making money. It also means how you are going to build a company in a sustainable manner. And it includes other things like

  • Unique value proposition – Do you have a path to create strong network effects quickly like Facebook, LinkedIn? Do you have IP and patents like Google or Apple?
  • Strong partners – Do you have an exclusive deal with a big company such as Walmart or Google that will help you launch?
  • Distribution channels – Have you figured out unique distribution channels that are not easy to crack for other companies or your competitors?

These aspects make an idea a company. An idea is a great start, but if you don’t think about it from building a company perspective, it will most probably fail.

  1. Audacious goal

I personally like lean methodology. It gives some structure to an otherwise chaotic process. But I have seen people taking it to the other extreme. Lean methodology advocates on focusing on your primary use case and asks you to be laser focused on solving problems for that use case. However, this does not mean you shouldn’t think about the ultimate goal. Without audacious goals, you wouldn’t have a company. Without audacious goals, you won’t have a vision, and for sure, you won’t be successful in the long term. If you cannot grab 80% of the market share, you will most probably fail and guess what, it is audacious for a startup to think about grabbing 80% of the market share. So I would say – “Be Bold. Be Audacious.”

I would recommend everyone to read “Zero to one” by Peter Thiel to learn about how to think about business ideas. And if you think this is just another book on entrepreneurship, Peter Thiel is the founder of Paypal and Founders Fund that has invested in moonshot ideas such as Facebook, Airbnb, Lyft, SpaceX, Oculus, Stripe, ZocDoc etc. and all of these companies have been wildly successful.

Crossing the chasm – A high-tech marketing guide for every entrepreneur and marketer

I have constantly heard and read online that every entrepreneur should read ‘Crossing the Chasm’ by Geoffrey Moore. I finally got a chance to read it a few weeks back. I think it’s a must-read book, not only for every entrepreneur, but also for every high-tech marketer.

I have attempted to summarize a few points from the book for those who haven’t had a chance to read the book. I will still advise to read the book, as the book has a lot of good examples that relate to today’s world.

To start with, ‘Crossing the chasm’ talks about strategies and frameworks that a high-tech marketer can adopt to make her company’s technology get adopted in the mainstream market. I will explain shortly what mainstream market means.

According to Geoffrey Moore, any new technology goes through a technology adoption curve. It breaks the users into five major categories along this technology adoption curve. I won’t get into too much detail into these categories, as it is pretty obvious from their names. The goal of any marketer is to understand the motivations and concerns of each type of user and develop marketing plan to cater specifically to that user type. The five major categories of users are –

  1. Innovators (Technology enthusiasts) – Users who love innovative technology and can do anything to get their hands on it. E.g. users who are ready to pay $1,500 for Google Glass. They represent approximately 3.5% of the market.
  2. Early adopters (Visionaries) – Innovators are visionaries and represent customers who want to use the new technology to get a competitive advantage and ready to piece the solution together to make the new technology work. They represent approximately 12.5% of the market
  3. Early majority (Pragmatist) – The early majority customers have a pragmatist approach to adopting the technology. They will adopt a new technology if there is enough support in the market for the technology. They are risk averse and usually buy from the market leaders who have a whole product to offer. They represent 34% of the market.
  4. Late majority (Conservative) – The late majority are generally afraid of new technology. They usually don’t like to change, and will only change when most of the market has already adopted the technology and the product has become a commodity. They represent approximately 34% of the market.
  5. Laggards (Skeptics) – The laggards don’t participate in the technology market, except act as a hindrance to block the adoption. For the skeptics, a marketer needs to think about solutions that won’t give the skeptics a chance to block the adoption of their technology. They represent approximately 16% of the market.

crossing the chasm - adoption curve

As you can see, between each user category lays a chasm that any company with a new technology needs to cross. The early majority and late majority make up the mainstream market (78% of the market) that I was talking about earlier and the biggest chasm lies between early adopters and this mainstream market. A lot of companies fall through this chasm and never surface again as they don’t understand the differences between these two markets. The strategies that worked brilliantly for the early market would never work for the mainstream market. Companies that fail to understand this are the ones that get lost in the chasm. As mentioned earlier, the book ‘Crossing the chasm’ mentions strategies to cross this chasm.

The author, Geoffrey Moore uses the analogy of England invading France to explain crossing the chasm.

crossing the chasm - invasion

Imagine you are in England (market with early adopters), and want to capture Paris (mainstream market), but there is a big chasm represented by English Channel. It will be foolish to attack Paris directly. A better strategy will be to identify a point where you can start the attack (Normandy). This represents beachhead segment in the mainstream market.

The following are the four steps that Geoffrey lists to cross the chasm.

  1. Target the point of attack – In this step you will identify the beachhead segments in the mainstream market (Normandy) that you can target to get your foot in the door.
  2. Assemble the Invasion Force – At this stage, you will identify what you need in terms of product to fulfill the promises that you made to the beachhead segment. This might come in terms of partnering with other companies or building it yourself to come up with a whole product.
  3. Define the Battle – Here you identify your competition, and take market-centric approach (as against product-centric approach) to market development and position your product for success.
  4. Launch the invasion – At this point, you will identify the distribution channels that will help you reach the mainstream market and decide on pricing based on the value you provide to this market.

In the next post, I will talk about the process that will help with the first step mentioned above – targeting the point of attack. I will share the frameworks I built based on the book that you can use to identify the beachhead segments. I will highly recommend this book to every entrepreneur and high-tech marketer.

Why Internal Ventures are Different from External Startups

Steve Blank

Henry Chesbrough is known as the father of Open Innovation and wrote  the book that defined the practice. Henry is the Faculty Director of the  Garwood Center for Corporate Innovation, at U.C. Berkeley in the Haas Business School.  Henry and I teach a corporate innovation class together.

——

Thanks to Steve for the opportunity to share my thoughts with you all.  This post follows directly on Steve’s earlier excellent post, Why Companies are not Startups.

The question of how corporations can be more innovative is one I have wrestled with for a long time.  For those who don’t know, I wrote the book Open Innovation in 2003, and followed it with Open Business Models in 2006, and Open Services Innovation in 2011.

More recently, Steve, Alexander Osterwalder and I have started sharing notes, ideas and insights on this problem.  We even ran an executive education course last…

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3 examples that will get you off the couch to test your ideas – Part 3

Yellow_cabs_2

This is the third and final part of the blog series that details my experience with lean startup methodology. I think this is a great framework (there comes out the MBA in me) for entrepreneurs who wants to quickly test their ideas.

Read example # 1 here and example # 2 here.

Example 3:

My co-founder, Amy Vaduthalakuzhy and I were scouting for business ideas last year. Based on our experience with Jobbertunity, we decided not to put any effort into building a product. Read about the lessons I learned from my previous failed startup.

Last year when we were brainstorming ideas, we read about how startups such as Postmates, Taskrabbit, etc. were disrupting the instant delivery market. We were excited by this opportunity and wanted to see if we can bring something to the market that would be disruptive and still be different from the existing services. We came up with an idea! We thought – why not use taxi drivers to deliver whatever people wanted delivered. Our differentiation was going to be number of taxi drivers that were available for delivery. While other startups built their own army of delivery guys (hiring, training etc.), we had tons of taxi drivers at our disposal.

Since our demand was already proven by companies such as Postmates, we focused on supply side (drivers for delivery) for this idea. Below were our 3 assumptions for a service that used taxi drivers as delivery guys –

  1. Taxi drivers have a lot of idle time when they are circling around to find a passenger.
  2. Taxi drivers would like to make extra money in their idle time. We based our price at $5 per delivery at par with other delivery services.
  3. Trust will be a critical component to our delivery service, as taxi drivers will be apprehensive about accepting packages from strangers.

So instead of building a delivery app prototype and spending time to get a few drivers onboard to start the service, we decided to implement it without a product.

This is how we tested our hypotheses in a day. Amy and I wrapped packages of different sizes and weights, varying from a simple envelope to a big box (this was to test hypothesis # 3 regarding trust) and decided to hand them out physically to taxi drivers. We wanted at least 8 out of 10 taxi drivers to deliver our packages at a flat price of $5.

Amy approached taxis in the Castro area, while I flagged down cabs in the SOMA area. This is what we learned in 4 hours.

  1. Taxi drivers drive 9-hour shifts and have tons of idle time. They spent a lot of time looking for passengers. However, we learned that they usually circle around the same area, rather than venturing out to other areas. Our plan was to use this idle time to deliver packages to other areas of the city, but clearly taxi drivers weren’t interested.
  2. We had a few taxi drivers who were interested in delivering the package, but only for the fare that their meter would read, rather than a flat $5 per package. We even told them that there is no urgency in delivering the packages, and it was perfectly fine to deliver the package by end of the day. However, the taxi drivers did not know their schedule ahead of time and did not want to take on additional responsibility if they weren’t going to be around the place where the package was to be delivered.
  3. Not even a single taxi driver asked about the contents of the package irrespective of its size and weight. The price and the distance were the deal breakers.

Eventually we got only 2 out of 10 taxi drivers to deliver, only because they were heading to the place where the package was supposed to be delivered. We quickly learned that we would get taxi drivers to deliver packages only if the price was higher i.e. at par to the price when they would actually have a passenger. And we wouldn’t get enough demand if we charged that high, especially with the existing services charging $5 per delivery. So we decided to drop the idea, as it was not a viable idea economically.

As you can see, rather than trying to get ourselves buried in developing an app as a MVP, we decided to get out of the building and test our idea. I am sure we saved ourselves tons of hours of work and disappointment by following this quick test.

A friend of mine, Abhas Art Agrawal, did a similar setup for his startup, Your Mechanic, which is a marketplace to bring together car mechanics and people who need mechanics to get their cars repaired. Before he got into Y Combinator, he contracted some mechanics on his own and then placed his service details and a phone number on Craigslist for people to call. When calls started trickling in from people who needed a mechanic, he decided to build a website. Rather than creating a website or a landing page or an app, he was able to quickly validate his idea.

Quick tip: I have recommended this to a bunch of my friends who had a marketplace idea (where two people come together to buy/sell products/services e.g. eBay, Fiverr, etc.). Instead of trying to build a website, you can use Google docs (spreadsheet) to test your idea. Put names of people who need the service and names of those who can provide the service and match them against each other manually. See if you get any traction. Or another option is to arrange one side of the equation by yourself (mechanics in case of yourmechanic.com) and find a way to reach out to your target customer providing this service (craigslist in case of yourmechanic.com). In my opinion, it is easier to arrange for supply (mechanics) and then try to attract the demand (people requiring mechanics).

3 examples that will get you off the couch to test your ideas – Part 2

This is the second post in a 3 part series. The intent of these posts is to give you enough examples where you feel comfortable to start executing your ideas with simple tools that are easily available. I sincerely hope this inspires all of you to execute your ideas and, at the least, start testing your assumptions regarding the problem and the solution.

Please read example #1 here and I will put example # 3 in a later post.

Example 2:

I was in Austin last year to participate in the Lean Startup Weekend. The concept of such workshops is to form a team, come up with an idea and quickly test problem, solution & customer assumptions over the weekend by talking to prospective customers. I decided to team up with a startup that wanted to help busy parents by providing an easy-to-use online calendar for their kids’ activities. This calendar would be an aggregation of their kids’ schedules from schools, after-school activities and weekend games/events.

The startup had already learned a little about lean startup methodology before this workshop and had put up a landing page for parents to sign up for their service. While this works some times, it is very difficult to attract users to your landing page. I recommend talking directly to your customers first and understanding their main pain point. A landing page can be a great tool once you have validated at least your assumptions about the problem and the solution.

We used an online tool named Validation Board, to systematically test our hypotheses regarding the problem, the solution and the target customer.

Quick Tip: You can also use excel to put together a tracking tool for your validated and invalidated assumptions.

We started with validating our customer and problem hypotheses. Without validating these two, we wouldn’t know what our solution would look like. So we decided not to focus too much on the solution. We used the five whys technique to get to the root cause of our customers’ problems. Then we decided to work on our problem hypothesis (our riskiest assumption).

Problem hypothesis # 1: “Parents are wasting time organizing kids event schedules, hence looking for a solution.”

As you can see, we had a strict minimum success criteria that at least 9 out of 10 parents will give us $1 to solve this problem. I have talked about minimum success criteria in my previous post.

validation board version 1

So, with this assumption, we set out to find parents that we could talk to. These were our findings –

  1. Parents did not have any problem with organizing schedules on paper and then put it up on the fridge.
  2. Some parents even said that they loved doing this activity with their kids, with colored pens.
  3. Some parents also loved showing off the schedule on a fridge since it was easily accessible and they could share with family members.

While we found that our initial hypothesis was invalidated immediately, we probed more to understand the pain points around kids’ activities. That’s when we hit the jackpot.

Every parent mentioned that they spent a lot of time driving kids from one place to another for activities and would rather have someone do it for them. While the main games/events were important for them to attend, they wanted someone to chauffer their kids for practice games.

Problem hypothesis # 1 invalidated.

That’s when we changed our problem hypothesis. This time we were confident about our problem, so we decided to test out our solution.

Problem hypothesis # 2: “Parents wasted time driving kids to the activities”.

Solution hypothesis # 1:  “Shared van with a driver that will pick up and drop off the kids for games/practice”.

When we went out to test this problem and solution hypothesis, our problem hypothesis was validated with 100% of parents expressing their pain regarding driving kids to activities.

However, our solution was dismissed as parents expressed their concern with trusting the drivers. Our solution of providing a van service to drive kids around would need a lot of work to prove trustworthy. So we killed that solution.

Problem hypothesis # 2 validated & solution hypothesis # 1 invalidated.

We actually stopped our experiments at this stage as the weekend was over, but we identified the next solution based on what we learned from parents during our second run.

Solution hypothesis # 2: Carpooling app as a solution for parents within the same neighborhood to coordinate car-pooling.

For this solution to be viable, we needed to have enough parents in the same vicinity whose kids went to similar events. So we identified the next riskiest assumption to be – “There should be enough kids in the same vicinity/neighborhood that go to same activity to build a car-pooling app for parents”.

validation board version 2

As you can see, within 2 days, we were able to validate and invalidate many assumptions. The ones invalidated were thrown out, but they told us what features we need not build in the product. The ones validated gave us a clear picture what we needed to build in the app to make it successful. For example, as you can see in the validated column, the product required kid meals as part of the solution, which meant we would need to create a feature to let parents share dietary requirements for their kids to the parents responsible for carpooling at any given day.

We were selected as winners out of 9 teams at the Lean Startup Weekend. I highly recommend going to a lean startup workshop at a location near you.

This example clearly shows how an initial idea was changed completely based on interactions with target customer and learning from that customer.

Quick tip: If you are in Austin, you have to try the southern style barbeque at Salt Lick.

3 examples that will get you off the couch to test your ideas – Part 1

In my previous post, I listed the steps that you can take to start executing your ideas. In this post, I will give you examples on how to easily test ideas without investing too much time, energy and money in making a prototype.

I will talk about my own examples when I tested and validated/invalidated my ideas. While my earlier post talked about validating all parts of a business model, this post will focus mainly on validating problem and solution hypotheses.

I will post example 2 and example 3 as separate posts later.

Example 1:

We always faced a challenge when we were trying to find quality leads for Talentology. We had heard about content marketing and how blogs and content creation in the public domain such as Quora can get you quality leads. We weren’t investing in writing a blog yet, but we decided to answer relevant questions on Quora to showcase our expertise. But during the process, we realized that trying to find relevant questions on Quora wasn’t easy. This was primarily because of two reasons:

  • There is no easy way on Quora to track what questions were dismissed or answered earlier. Mostly, I would revisit the same question multiple times to realize that I had already answered or dismissed that question, thus wasting time.
  • There is also no easy way on Quora to know what questions, out of a long list of questions, you should answer first since you don’t have an immediate knowledge of how many people have viewed the question and how many people are following the question. I wanted to answer popular questions that were viewed and followed by a lot of people. You get this information only when you click on each question one by one. You can see how this can get tiring when you are going through 300+ questions for just one keyword. I had 10 more such keywords that I wanted to search questions for on Quora. That puts it at 3000+ questions.

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I soon realized that there should be other startups out there that might be facing the same problem. I decided to work on a side project that would help Talentology as well. I wanted to build a quick solution that would list questions along with the number of views and followers that each question has. I got in touch with a few startups to validate my assumptions. These startups were already answering questions on Quora to get traffic to their website.

I manually copied list of questions from Quora in to excel for keywords that aligned with the businesses that these startups were in. I also clicked on each question and copied the number of views and followers for these questions manually into this excel. Then, I shot an email to these startups sharing a preview of this excel to see how many of them would be interested to pay to get the entire listing. I also offered to provide new questions for these keywords on a weekly basis.

qsnag excel

Soon enough, I got 3 startups paying me a monthly subscription to get relevant questions from Quora in an easily digestible format. The payment was a huge validation for the idea.

However, it started proving difficult to manually copy questions from Quora for 20 keywords (~3000 questions) across these 3 startups. I decided to create a web scrapper that would scrape the information for me. I decided to automate this part only when my manual solution started breaking down. I was still providing the questions in an excel at this point.

After I did this for a couple of weekends, it was difficult to manually keep a tab of all versions of my excel files that I created. My customers were also asking for ability to track these questions and mark them as answered or dismissed on a website rather than in excel. That’s when I decided to put it on a website which you can check at qsnag.com.

Please note that I could have put this excel on a google doc with a password, and that would have sufficed at this point. However, I wanted to learn Ruby on Rails for a long time, so I used this opportunity to learn a new programming language. I will write about my experience with Ruby on Rails in a later post.

I was able to validate my problem and solution hypotheses by using a low fidelity MVP i.e. excel. The startups were open-minded to accept this solution, as I was solving a painful problem that they had. I don’t know if this is a multi-million dollar idea in itself, as I would have to validate other parts of business model (as detailed here in my previous post). As of now, it looks more of a product feature, rather than a business by itself. I would love to see this feature on Quora, as it will help businesses to participate easily on Quora.

Hope this example inspires you to build a quick manual solution that you can use to validate your idea. Now you wouldn’t have an excuse to not execute your idea.

Quick tip: Try to do everything manually initially. Don’t invest any time or money in building a product, until you cannot do it manually anymore, which is a good problem to have. This will happen when you have too many customers or it takes too long to do a certain thing manually.

6 step guide to start executing your awesome ideas

I have been a culprit of discussing a lot of ideas, without ever executing them. And now I understand the reason why.

6 years ago when I heard a garbage truck backing up right below my bedroom window every Sunday at 4 AM, I had an epiphany (pun intended!) – there should be a rating on each apartment rather than the entire apartment complex as a whole. This time I was adamant that I was going to execute it. At this point, I hadn’t really built any websites, but I had done tons of programming (C++) and databases (don’t worry if you don’t know what databases are, I am going to talk about it in a future post), but no websites. So I naturally started sketching out the database design for this idea. I thought I was at the least executing, but I never went beyond that stage since I didn’t know how to design or make a website. My efforts stalled. I think this is the single most common reason why ideas remain as ideas and never get executed. A lot of people think the next step after you have an idea is building a website/product, but most of us don’t know how to do it.

So here is your next step. Drop all the tools and hammers, laptops and website for dummies books. You don’t need them at this point. You don’t need to build a product right away. What you need is a structured approach to know if you need to build the product in the first place. That structured approach is lean startup methodology.

What the hell is lean startup methodology?

At the core, lean startup methodology is all about validating each guess that you have about your startup and learning as you invalidate some of these guesses to change your assumptions and keep moving on.

Steve Blank, Eric Reis, Ash Maurya and all proponents of lean startup say that your startup is nothing more than a collection of guesses.

  1. You have a guess about a problem that your customers are facing (problems)
  2. You have a guess about the solution that will solve that problem (solutions)
  3. You have a guess about who your customer is (customer segments)
  4. You have a guess about where you are going to find this customer (channels)
  5. You have a guess about what value your product will provide (unique value proposition)
  6. You have a guess about how you will make money (revenue)
  7. You have a guess about how much it will cost you to make the product and get customers (cost)
  8. & 9. You haven’t even started thinking about who to partner with (partners) and how you are going to prevent competition from trashing you (unfair advantage).

That’s right, there are too many guesses! You can see here that I have mapped out 9 areas that should work together to make your startup successful. These are all guesses and you need to work systematically to validate each guess. These 9 areas collectively is called business model canvas and you have to go through the process of validating/invalidating each guess or in scientific terms, hypothesis using data driven approach.

Quick Tip: Forget about writing a business plan, instead focus on validating assumptions in your business model

Here is an example of business model canvas of Facebook based on Alex Osterwalder canvas (Author of Business Model Generation). Every one of us should relate to this Facebook example.Image

As you can see, the business model is composed of 9 parts as mentioned before. Certain things are different here, solution is defined as key activities, and unfair advantage is defined as relationships. While the above business model canvas works well, I prefer Ash Maurya’s (author of Running Lean) version of business model that lists problems and solutions directly.

Here is an example of Ash Maurya’s business model canvas as comparison to the business model canvas shown above:Image

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Example using Ash’s business model canvas – Cloudfire, an easy way to share photos of young kids with family & friendsImage

(Click to enlarge)

OK! I get this. Where do I start?

If you have a business idea, take a crack at business model canvas (either version should work).  You can also build it online using Launch Lean Lab or Lean Canvas. Both have 30-day free trial period.

Step 1: Fill in problem, solution and customer segments

Write your top 3 problems, top 3 features that will solve this problem and customers you are targeting on this business model.

Step 2: Fill in remaining parts on the business model

Try to fill in other areas as much as you can, but don’t spend too much time. You will probably over-think this, but trust me, fill this out as quickly as you can.

Step 3: Validate your riskiest assumptions

Then focus on validating your riskiest assumptions. Start with problem statement, solution and customers. I feel these are the riskiest areas for most businesses, but they can be different for other businesses. While identifying your customer that you can talk to, make sure you really understand what your customer looks like. Is it a disgruntled mom with a baby stroller in one-hand and grocery bags in another, shopping at 3 PM at Wal-Mart when she would rather be doing Yoga? Yes, it should be that specific! This is called building customer persona in lean startup methodology. Learn here about how “Food on the Table” followed their initial customers to grocery store to understand them. I talk about my experience with Lean Startup Weekend in this post on how we went from being an online scheduler for kids’ activities to a car-sharing app for busy parents in just 2 days by validating/invalidating our problem and solution hypotheses.

Step 4: Iterate until you validate your riskiest assumptions

When you invalidate any of your guesses (i.e. your guess was wrong), you learn from what you hear, and then change your guess to this new finding. You haven’t validated this guess yet, so you should set out to validate this new guess now. This is called a pivot in lean startup methodology. For example, for an online shopping startup your guess might be that your target customer is young female between 20-30 who have disposable cash, and no time to buy clothes. After you got out of the building and talked to your target customer, you found that this is not your target customer, but almost everyone talked about how their moms will love it. Now your target customer has shifted to 40-55 year old female and you will have to validate all your hypotheses with this new customer segment. This is an example of customer pivot. I will write a separate post on what questions you can ask your target customer based on my experience with Jobbertunity.

Step 5: Build your first MVP

Once you get through validating your problem statement, solution overview and target customer, you can think about building a small prototype. Again, this prototype need not be programmed, you can use excel, Powerpoint, Photoshop, sketches etc. to show your user what the solution looks like. The idea is to get something in front of users to get their initial reaction and iterate on it. Big companies like Zappos and Groupon used low-fi MVP in their early days to validate their assumptions (see details below). I talk about how I used excel as a MVP and got 3 paying customers with this MVP in this post.

Zappos:

  • Took photographs at a local shoe shop and put the pictures online
  • Got emails from customers confirming orders (huge validation!)
  • Bought the shoes at the shop & shipped them physically

Groupon:

  • Launched a WordPress blog for a pizzeria coupon
  • Validated the idea through redeeming 20 pizza coupons

Step 6: Validate other assumptions on the business model

Finally, after going through these three areas – problem, solution and customer, which in itself will most probably change your business idea, you will have to start working on other areas. Again make sure to identify the riskiest assumptions and work on those first. For example, a startup, Outbox, that was set out to digitize physical mail went out of business because they underestimated partnering with USPS, which was the riskiest assumption in their business model. They validated the problem, got a lot of people to sign up and provided them the solution, but their riskiest assumption failed and they shut down after raising $5 million. The details are here. So make sure you identify the riskiest assumptions first.

This might feel like a lot of work, but believe me, if you take one step at a time and focus on 2-3 hypotheses that are your riskiest assumptions at a time, then you will see the progress.

One final thing – you need to build a business that’s profitable. So make sure you plan to make more money than it costs you to run the company. The general VC rule is that your life time value of a customer (money you will earn off one customer in his lifetime) should be more than 3 times the cost of acquiring that customer. Also you should recover your money that you spent to acquire a customer within 12 months of acquiring that customer (through the revenue you generate from that customer).

General recommendation

When you conduct an experiment to validate/invalidate your assumptions, have a strict discipline. Decide on what will determine if the experiment was successful or not. Don’t budge on the success criteria. It’s called minimum success criteria in lean startup methodology. I have discussed an example of minimum success criteria in my previous post. For example, if you decide, 70% of people you talk to should rate the problem as “very painful”, and if you get only 65% people, your experiment has failed. How do you come up with 70% as minimum success criteria? Well that’s something for you to figure out. You can say we will still be excited to work on this problem if at least 70% people say this is a “very painful” problem. That becomes your minimum success criteria. In practice, this will be a little difficult to determine, but you will get closer with a few initial mistakes.

Quick tip: Be careful about confirmation bias (thanks Bhal for suggesting) as you would get into the trap of looking at data to make yourself believe that you are seeing positive signs. That’s why I say above, stick to your minimum success criteria and don’t budge on it.

Books & Resources

Below are the books that I have referred to in my post. The books are arranged in order of detail that they provide. Business Model Generation gives you a 10,000 ft. level view of lean startup methodology, while Running Lean and Lean Analytics provide more of tactical advice. The resources below are online tools that you can use to build your business model canvas and measure the progress.Image

Hope this gives a start to everyone who hasn’t gone beyond the idea stage. Please leave a comment below if you want me to deep dive into any of the steps or if you want to brainstorm your business model with me.

Quick Tip: Some of these online resources need subscription beyond 30-day free trial. If you don’t want to pay, create a mock-up in excel or Powerpoint and you will be good to go.