Hello!

Congrats Ms. Founder, you’re ready to rock-and-roll and there’s nothing stopping you from building that universe denting application you’ve been dreaming about for the last year and a half. We wish you good luck, and offer you a simple lesson from our past - don’t be building no tree houses. No customers allowed Remember being a kid, building a secret fort with your mates and hanging a sign on the door ‘No girls allowed’? Startups sometimes do the same thing only the sign says ‘No customers allowed’. This is what we did with our first company Servidium.

We bunkered ourselves in and built the best web development framework in the world (this was way before Struts, Spring, and all that other fancy stuff kids have today). It had database abstractions, security and templating mechanisms for separating presentation and business logic. It made tea and buttered your toast and even gave us a patent. It did everything - except sell.

You see, in the early days of Servidium we weren’t exactly customer focused. We got so caught up in the genius of our very own framework that we forgot to include the customer as part of the process.

The price we paid for this was the creation of a product no one wanted. By the time we realized the error of our ways, it was too late. The product never sold and we were never more than a wannabe product company kept afloat by professional services.

Customers = good

While we were too thick to get it at the time, engaging customers early in your startup is a very good thing. Look at all the good stuff customers do for us:

• Customers validate whether you have something of value. The only time you know if you have anything worth selling is when people are willing to pay for it.
• Customers force us to release software. When you’re working on something that isn’t released, problems are intriguing. When it’s out there they become alarming. [Paul Graham - The Hardest Lessons for Startups to Learn]. If you want customers to buy your product, you must release software. This is a good thing even if your software is incomplete or imperfect.
• Customers give invaluable feedback. Here are the features customers liked. Here is what they didn’t like. Here is what you nailed. Few products end up looking like their initial concept. Early customer feedback gives you time to adjust.

Mind the Gap

So how do you stay out of the tree house and get customers engaged early?

You force it.

You sell them something - anything.

Build the most compelling feature of your product and get it out there. Just build it and see if you’re meeting an unmet demand. If no one is willing to spend any credits on your product or service, you’ve got your answer.

Make the gap between product development and revenue as small as possible.

At Cambrian House we figure the only way to know if a product has legs is to get it out there and see who’s willing to pay for it. This is what we did with Prezzle. Prezzle started off as an all encompassing gift giving service. It had heaps of functionality and would have taken months to build.

Instead, we ignored all the grandiose scope and delivered a few compelling features. Three weeks later we released the first version followed by revenue just days later. Even better, customers started to articulate the demand we were meeting and not meeting.

Bake customers into your DNA

Customers are demanding son-of-a-guns. They want software that works, bug free, yesterday.

But customers (the good ones) can also be extremely helpful. Some will help you debug your application. The best will even send you code.

Baking customers in early is also going to affect how you operate. You are going to answer phones, return calls, respond to e-mails, and do things you wouldn’t normally do if you didn’t have customers.

Most importantly, baking customers in early helps highlight unmet customer demand and new opportunities, things you were unaware of when you started the company.

Most startups don’t end up doing what they first envisioned. Apple stumbled into desktop publishing. Thomas J. Watson (founder of IBM) thought there was maybe a world market for five computers. The same will happen to you and your idea.

You don’t need the treehouse - burn it

We understand the allure of wanting to squirrel away into a treehouse and work on the software. Just remember, by engaging customers early you will:

• know whether you are building a product anyone wants
• validate that your product has worth
• improve the customer experience incrementally

This is so much less risky than:

• guessing what the customer needs
• hoping that your product has worth
• releasing everything all at once

As counter intuitive as this may seem, taking the effort to include your customer at the beginning will give you a serious leg-up on the competition, while ensuring you build something of value.

This entry was posted on Wednesday, September 6th, 2006 at 2:14 am and is filed under Startups / Entrepreneurship. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.