I attended a panel discussion (or meetup) sponsored by Lifograph titles “How to Turn Software into Products”, which had three panelists, Rich Mironov, Sue Raisty, and Rashmi Menon, hosted at the Procopio law firm, who has a practice to guide startups through the process.
The panelists brought a wide range of experience and knowledge to the table, and were quite willing to share that experience. Starting with a brief overview of their careers, all of them had touched (or continue to touch) the product side of business, with Rich and Sue being consultants to startups and related companies (although not exclusively), and Rashmi being a professor at Stanford teaching a course on entrepreneurship, they were without a doubt a most engaging panel.
The audience was lively, and many good questions were offered, and answered, often focusing on specific topics. One thing that became apparent was that from the experience of the panelists, and the questions asked, was that there is a significant difference in how to approach many of the hurdles in getting to the first customer, and how to design/test your hypotheses.
From my notes, I captured:
- Validation of Assumptions – one weakness brought up and debated was that when working with a founder, and they claim that they had validated their market assumptions (that there was a problem, and that people see the need to solve it, and that their proposed solution is likely to be accepted), that often isn’t the case. It was reiterated that formal validation of a representative group of target customers be performed before writing any code.
- In B2B space, you need to build something to validate – while this seems counterintuitive to the bullet above, it was more of a statement that the early test cycles advocated in The Lean Startup often don’t work in enterprise environments. You need something to show that works. It can be crude, it can be incomplete, but to get access to the early innovators who are willing to gamble on your product, there has to be some meat.
- Don’t be too polished early – targeted more at the B2C world, use rough sketches of your proposed product/UI rather than pixel perfect. The rationale provided by Sue was that if you are doing A/B testing, and have pixel perfect mockups, the interviewee believes that the product is done, when really it is just a pretty picture. Use a tool like Balsamiq that has a very pencil on paper feel. This will communicate to your test subjects that you are early, and open to constructive feedback (and really, you are.)
- Pricing – ah, one of the joys of product management, the setting of price, and the agony. This indeed came up, and while it was acknowledged that this could be a long discussion that is out of scope for a 90 minute panel discussion, there were some helpful tips. In B2B space, particularly for enterprise customers, that your initial price is what you can sell it for. But, if you are targeting a certain role in the organization to approve the purchase, learn what their purchase authority is (average) and price it just below that. I can attest that if a person has to get approvals from senior management to buy something, that is a HUGE hurdle.
- But what about ad supported for B2C – a very good piece of advice from Rashmi on this, was to create a spreadsheet model with your costs, and scaling expectations, with an honest appraisal of the number of users it takes to monetize, and then truly assess whether you can achieve that. This kept coming back, as some people in the room clearly wanted to believe that it was a viable option.
- Freemium business models – this came up as well, and was quickly handled. If this is your intent, plan up front for it, and create triggers that would entice people to upgrade. There are enough case studies in this to draw upon to build a model, but don’t give too much value away, and make the triggers or limits of free something that enough people will hit to want to remove that friction.
Overall, it was a quite good session, and I made a few contacts, including Lisa Winters, a product manager I have known via social media for a long time.
One thing I would have liked to see was an idea of who the attendees were. From the intro by the sponsor, it appears that the target audience was new or inexperienced entrepreneurs, looking to do a startup, and not so much product managers.
One last piece of advice by Sue was to look beyond your bubble of problems for ideas, with an off-hand remark about how many startups are focused on reducing friction of life for the 30ish male tech worker in San Francisco (parking, food delivery, etc), and think towards other demographics that could be served.