Building Products for Mass Adoption

Posted on Jan 25, 2010 | 94 comments


mr dursleyChris Dixon wrote a blog post last week titled, “Techies and Normals” in which he defined “Techies” as people who are not just “early adopters” but also have more of a geeky, technical, product bent.  Normals (or “Muggles” as Catarina Fake called them) are people who, unlike Techies, don’t just use products simply because they’re infatuated with them and with showing the world how cool it is that they’re using the latest tech product.  They use products because the products solve a need they have.

If you don’t already read Chris’s blog you should – it’s very well written, often takes a strong POV and speaks from an entrepreneur’s perspective but with a huge knowledge of the technology investors as well.  He is both.

Anyway, Chris’s blog got me thinking about Techies and Normals.  I think this is a perfect way to think about the world when you’re designing your product / company.  Quite honestly I see way too many company pitches that are designed for Techies but I only want to invest in products designed for Normals.  Here’s my take on the topic:

1. Start by defining the problem you’re solving – I see way too many early-stage entrepreneurs who start their companies with a product definition rather than a market problem.  You can always tell these companies because they come in talking product, product, product.  “And here’s how we integrate with Gmail, Flickr and Freshbooks.  Here’s how a user exports all of their data to a CSV file.  Here’s how we use oAuth to integrate the user’s social graph.  Here’s how users can show their friends what products they want to buy – let’s call that social shopping.”

Blah, blah, blah.  Now remind me, why TF would a person use your product in the first place?  It’s hard to get users to your website.  It’s even harder to get them to use your product.  As per Chris’s article, Techies will use your product.  Sometimes it’s to play around with new technology.  Sometimes it’s to brag to everybody else that they got the private invitation code.  I call the latter the “Emperor Has no Clothes” syndrome.

But either of these scenarios is part of the “TechCrunch bump” and it will come and go.  You will only build a sustainable company of you’re solving a real problem that people have.  I covered this a bit in my post about the market definition slide in fund raising

2. Explain how you’ll solve the problem.  Kind of the obvious next step.  Once you’ve defined a problem that exists in the market you need to talk specifically about how you plan to build a product that addresses the perceived problem.  “Problem: People don’t trust Craigslist anymore but still want to buy / sell goods to local people.  We solve that trust issue by A, B, C.  Problem: People using Service Magic are only given three potential vendors to do business with and each vendor has to pay whether they’re selected or not.  Our solution allows you to see many vendors and each vendor only pays if they are selected for business.  I talk more about this in my post about solving the problem in fund raising.

3. Assess your market size – Most investors care about the size of the market you’ll serve.  You should, too.  The tech world is obsessed with cool features, the investor world is concerned with how big of a return they’ll make if your company is successful.  For you it may not be all about the money.  But whatever reason you’re doing this crazy startup thing make sure you do basic market segmentation and know the size of the market you plan to serve.  I cover market sizing in this post entitled, “It’s the size of the wave, not the motion of the ocean.”

4. Show me the money - I think many companies naively think that financial modeling is no longer necessary.  It seems to be the meme of Silicon Valley these days.  Launch a product, iterate, fail fast.  Bollocks.  That’s called laziness.  If you haven’t thought about how you might make money some day with your product you’re being exactly that: lazy.  I’m not saying that you need a 30-tab Excel spreadsheet modeling out 5 year’s of detailed profit & loss accounts with gross and net margins that would be realistic for year 5.

But you do need to give some thought to economics.  It’s a very important part of explaining to yourself (and your investors) what features are commoditized and should be free, what features you believe could be monetizable and whether you believe the money will come from primary sources (e.g. the user) or secondary sources (marketeers, data analytics companies, etc.)  Zero thought = flying blind.  I cover the topic of financial modeling in this post.  I think so many Silicon Valley firms skip this step because when you’re a developer your core competence is building product and not thinking about markets.  Or as I like to say, “when you’re a hammer, everything looks like a nail.”

5. Make sure you know whom you serve – It’s one thing to define a market problem.  It’s another to understand the actual users who you will be serving.  This is an exercise savvy companies will go through in creating something designers call a “product persona.”  If you aren’t already familiar with this term please click and read the link I provided. It’s a very important concept in user created designs and too few companies do this.  You need to understand the mind of your potential user.  How they operate, what their needs are, what they do everyday.  You need to understand what other tech products they use and their technical competence.

If your product solves a big problem but is designed to be used by a small segment of users, that’s OK.  It means you won’t likely build a company for mass adoption, but not everybody has this as their goal.  My perfect example is delicio.us (which now apparently also has the domain delicious.com).  I first played with this product many years ago and immediately understood the value.  But I thought, “there is NFW that anybody other than a tech geek is going to use this product as designed.”  It was too opaque.  It wasn’t easy to figure out how you were supposed to use it and how to find other peoples’ lists.  I still wonder why nobody has solved this important problem for the masses.

6. Solve the problem, don’t “keep up with the Joneses” – First time entrepreneur’s often get swept up in the “keep up with the Joneses” mentality.  They read the press releases of competitors or see them at a trade show and race to keep up with their feature sets.  Or even more common they notice that everybody is implementing (insert: posting results out to Twitter, integrating social graph with Facebook Connect, an iPhone App, augmented reality features) and they feel compelled to do so also.  Don’t build features that will wow tech journalists, raise eyebrows on stage at a conference or make your competitors envious.  Build features that will delight your customers.  Obvious, I know.  But you’d be surprised just how many companies fall into this trap.

7. Design for the novice, configure for the power user – This is the last point and one that I’m going to cover in more detail in a future post.  This is one of my favorite topics on good product design.  It’s my view and not necessarily accepted wisdom.  But I shout it from mountain tops.  Technology products that want mass adoption should be designed for novice users.  “Normals” as Chris calls them.  Products need to be blindingly simple.  You take your User Persona and try to see the product through their eyes, not yours.

You then invite people who match this User Persona and watch them use prototype of your product.  There is only one way to really know whether you’ve achieved product nirvana: film users playing with your product and watch them interact with it.  I’ve seen this many times first hand and even your best attempts at designing “simple” products will surprise you when you see Normals trying to use them.

But my other point is that power users can always figure out how to configure your product to super charge it.  That’s what “Techies” do. So if you want to have lots of really cool product features that solve the problems of Techies make sure that they initialized using a tab or another configuration method.  Let them have the complexity they crave and are capable of using.  But then your core product isn’t bent to the needs of Techies at the exclusion of Normals.

Normals vastly outnumber Techies.  If you want mass adoption of your product you must serve Normals.

  • http://www.elieseidman.com Elie Seidman

    And they hype fundraising accomplishments as if they were real accomplishments instead of just selling off a piece of your company that you can never buy back. And for those that are fortunate enough to get written up in TechCrunch with Arrington saying you will do well, what's the track record of TechCrunch at predicting success? The next time you worry about what TechCrunch says about you, take a look at what they had to say about Yelp at launch: http://www.techcrunch.com/2005/10/12/yelps-loca

  • davidhattenbach

    Excellent post. I'm so pleased to see a VC thinking like a marketer instead of a technologists. It should always consumer insight first, technology second.

  • http://bothsidesofthetable.com msuster

    What if you launched your product and realized that nobody would pay for it? What if it cost you 1 year in lost wages and $50-150k of your friends & family money – or yours? Would you still feel the same way? I think it's imperative to have a working assumption of how you'll make money. I know that it will change 10 times and maybe all your assumptions will be wrong. But I think it's crazy to go into business without thinking about the economics.

    Imagine this: a new video store opens on your corner. You'd be thinking – are you crazy? All of that is moving online? There's no market in your future! Who would pay for that product. Would you advocate that they just launch and see whether people demanded video rentals?

    Think that example is too far fetched? OK, let's try restaurants. A new Indian restaurant opens on your corner. You're thinking – I don't know anybody in Witchita that eats Indian food. Or you're living in Palo Alto and you're thinking – there's already 4 on my block. Either way, would you think it was a good idea to open the store without thinking about the demographics, looking at competitors, understanding whether your Indian restaurant is going to be up-market or “cheap and cheerful,” and understanding what price points the market will accept?

    We have bred the wrong culture in Silicon Valley that emphasizes launching products rather than starting by thinking about market requirements.

  • http://bothsidesofthetable.com msuster

    Thanks, Austin. Yes, the 35-page business plan is mostly dead. I prefer Powerpoint (graphically explains to others what you do) and Excel where you focus on the economics.

  • http://www.appwhirl.com Richard Jordan

    It's funny how the VCs whose blogs are on my must read – you & the two Freds for example – are outside of the Bay Area. I noticed this when looking at who to reach out to outside of my network of personal relationships, thinking that I'd start with VCs who are known quantities because of their sharing their philosophy in blogs and finding less of those locally than I'd expect. But I digress…

    Great post. I think you highlight a lot of issues that so many startups run into, as always.

    One thing I think is valuable to me is to revisit these points now we've got a draft of our pitch deck we're about to go present to some VCs (one down, one on Weds). When one starts out building a deck you get all the input and advice but it's easy to drift away through many iterations and find that your latest version has lost some of these points…

    This post is, therefore, well timed for me. We're in that place right now where a couple of our competitors are talking early to the tech press while we're quietly working away to get it right – and it's amazing how much of the media conversation with the early tech bloggers, about our space, is still tech-focused, feature-focused and not really thinking about the world where everyone is using services like ours. I appreciated your naked-in-the-mirror posting previously on this topic and direct our team to it when they see a TechCrunch article about the competition :-)

  • http://bothsidesofthetable.com msuster

    Re: seed stage assumptions – yes, you're right. I don't care if assumptions change as you iterated. I mostly care that you've thought about it and that your thoughts are sophisticated enough and sensible.

    re: Google / Twitter. To a degree Google got lucky. I know that sounds crazy, but before / around them was Alta Vista, Yahoo!, Excite, HotWire and many others. Google stumbled onto their business model by emulating Overture (an investment of GRP Partners), for which they initially swore they wouldn't do. Google deserves all credit for out executing and building the world's most successful businesses. But in different days, with a little bit less VC money, with a smarter competitor, we might never have heard of them. re: Twitter – they also have been fueled by enough VC money to find an appropriate market. The founders had already exited a business (Blogger.com) and had money, which gave them a different perspective on innovation.

  • http://bothsidesofthetable.com msuster

    Thanks, Norris. I think very young entrepreneurs who are also developers can get away with the “just build and trial” mentality because the cost for them to build is low (they develop themselves) and they don't have expensive cost bases. In this situation I could understand people just experimenting – no problem. But a very small percentage of would-be entrepreneurs fall into this category.

    Thanks for your input.

  • http://bothsidesofthetable.com msuster

    There are various ways to estimate potential revenues. The sin is not doing any estimating at all.

  • http://bothsidesofthetable.com msuster

    Everyone has their own preference – here are mine: I prefer to see your main emphasis on your “first act” and talk about how you will execute on this. I like to see some thought as to what the “second act” will be but I dislike when people come in and show their 8 revenue models and how they're all viable. I find this unfocused.

  • http://bothsidesofthetable.com msuster

    For sure – outside input in invaluable.

  • http://reecepacheco.com reecepacheco

    Breaking it up into “acts.” Very LA. ;)

    I figured it was something similar. I think I'm on the right track then -
    our projections show potential in some key areas, but they aren't
    scattered…

    Thanks Mark.

  • http://www.gawrilla.com/blog pruett

    points well taken. making money is obviously the ultimate goal of any business, nailing down proper demographics and revenue models are extremely important, but i find most financial projections to be absolute garbage (admittedly, i probably lack the skills to compile a viable model).

    i tend to subscribe to the notion of building the minimum viable product for a relatively low amount of money and gauging user/customer statistics from there. i guess i've seen in the past where financial projections without foundation can lead to trouble; atleast with real customer interaction, coming up with these figures becomes less guessing and more true to form.

    P.S. the restaurant biz is tough and i can say with 99% confidence that i will never visit another video store for the rest of my life :)

  • http://www.gawrilla.com/blog pruett

    i understand that google and twitter represent rare cases and that their stories should be taken with a grain of salt so to speak. but i definitely see value in this type of approach.

    it's just so easy to come up with hockey-stick-shaped, $50MM+ three or five year projection. i guess for me, actual hard statistics speak much louder than anything any projection may state. i really like the iterate and repeat mantra which mark refers to as “laziness.”

  • http://giffconstable.com giffc

    Agree on everything. I am thankful that we no longer have to waste huge amounts of time crafting a 35 page document that no one will ever read, however an entrepreneur still should go through the exercise of thinking through the topics. You shouldn't just obsess about your product — you should be obsessing about your *business*.

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  • http://www.elieseidman.com Elie Seidman

    Amen! great post. We will come to see that the fail fast, build it cheap, model that has been so strongly advocated is great at what it suggests you should do – fail. If you build something fast and cheap that no one cares about, you've built nothing. It's still hard to point to many – if any – examples of large companies that were built with tiny amounts of money. This is particularly true in large competitive markets – the market opp is large but the barrier to entry is often large as well and just because you can build “something” cheaply does not mean that that something is going to be any good and take customers away from the incumbents.

    The “minimum viable product” model needs to be rethought – it should be minimum viable better product model. You don't have to build everything in your V1 but your V1 still needs to be far better than what it is competing against – good enough so that your first customers tell their friends and then eagerly wait around for your V2.

    Just because you can do it, does not mean you should. Modern website tech infrastructure has made it so that it's possible to build websites cheaply (it can be done) but most of them should not be built.

  • http://twitter.com/jeroenjeremy Jeroen Fransen

    Concise, helpful, insightful. What I miss in a lot of these discussions, though, is attention for apps that can actually monetize from the beginning thanks to the fact they solve a real problem for a large group of people.

  • http://www.victusspiritus.com/ Mark Essel

    Thanks Mark, Chris just pointed me here and I haven't stopped by in a week or so. But this post really gets to the heart of startup value: solving a real problem. Will make sure to keep the design of the intelligent media manager (IMM) as easy to understand as possible.

    Self diagnostics:
    what real problem is the IMM (yeah we need a nicer name) solving?
    Monetization: Provide relevant personalized ad content for hosts, leveraging a users social stream (business problem).

    Information Overload: On the user side there is an overload of great content available in social networks like Twitter (our chosen platform now). We find topics that a user is interested in, build connections to other users in our database, and match them to the best trending links.
    Social Gravity allows users to jump into conversations on topics of interest, without requiring a well populated follow stream. We also allow list visiting at a glance, bringing up a populated tag cloud compressing the previous couple of hundred messages into an interactive cloud.

    Some of these features are in the next dev push.

    Good post, plan to incorporate into our future design decisions.

  • http://www.victusspiritus.com/ Mark Essel

    I believe the primary focus of any startup is providing real value. Balancing income versus wealth created is a big deal as a business grows. Appreciated your comments, elicited great feeback from Mark.

  • http://www.victusspiritus.com/ Mark Essel

    Great reminder (add functionality button that leads to …)

  • http://bothsidesofthetable.com msuster

    I'm just saying that I think it is intellectually lazy to launch a business without thinking about how you might monetize.

  • http://bothsidesofthetable.com msuster

    touche

  • http://bothsidesofthetable.com msuster

    Thanks, David. It's true that when we hang out together often we can be subjected to “group think” which gets us excited by the latest gadgets.

  • http://bothsidesofthetable.com msuster

    Thanks, Richard. Appreciate the kind words. Re: the press – they're as guilty as any (actually, more so) of hyping up technology features over financial traction. But I think features / gadgets drives readers so I can't blame them. re: PR – I always say it's better to wait for your product to be ready for prime time before you market it too widely. Good luck in your pitches.

  • http://bothsidesofthetable.com msuster

    thank you. more articulate and concise defense of my POV than I could make.

    re: MVP / launch products – I remember in 2006 when there were 10-12 companies launched online calendar companies. Everyone was so excited about this space. Now how many startups have built successful businesses there? I think it's because the economics weren't right. Google could do it because they had other motives and are building an integrated stack.

  • http://bothsidesofthetable.com msuster

    Jeroen, you're right. I didn't talk much about that. I'm a believer in monetizing early to prove value. That seems to be what LA has been good at historically.

  • Aviah Laor

    Great post. Frequently overlooked issue is that to understand the mind of the customers in a non IT domain the team needs an experienced founder in this non-IT area. A founder who is – by definition – non geek (and not necessarily MBA). But this is traditionally under-valued.
    Ah, and my product seamlessly integrates with something. Always integrates, always seamless. This is why you can't find the bugs – they are seamless.

  • http://giffconstable.com giffc

    just to be clear (since touche is often used in a debate), I think your post is spot on, Mark. I joked today on twitter that it's almost getting irritating that you don't write much to disagree with. I particularly love the expression “'Emperor Has no Clothes' syndrome”.

    I believe it was Caterina Fake who was similarly talking about how you can have very rich functionality, but you want to be very discreet with it in the UI so that it remains accessible to the power users but not a distraction for the normal user.

  • Phillip Morelock

    Keep up with the Joneses!!! Such a great point. The only Joneses you should be keeping up with is the million Joneses that you want using your product.

    I do think, however, that sometimes tech/product folks in fact dismiss all too easily the competition's feature sets. I think the core point between your post and Chris' is it's very, very hard to react appropriately to coverage of competitors and other products; “Oh crap, should we be doing that?” is a perfectly natural question that you should at least take some time to answer (most times, your answer will be 'no').

  • http://www.elieseidman.com Elie Seidman

    The question I would have asked the entrepreneurs is: who has ever been paid for calendaring software and how do you plan to build a product that is not only better than those competitors but good enough that you will get paid for it.

    I field meetings with and questions from a fair number of early stage entrepreneurs looking for advice or money. The vast majority have fallen for the BS that has been sold to them that they will be able to build a successful business for a few hundred thousand dollars. “I just need to get 50 from you so I'll have 500 total and then I'm ready to get going”. When I tell them that to be successful in their category they will likely need many millions if not tens of millions, they look at me like I am from Mars.

    The entrepreneurial press has sold a lot of naive entrepreneurs a lot of nonsense. It was perhaps the defining thesis of Web 2.0 after all: the cost of tech infrastructure has decreased so dramatically that it's now possible to build the next great company with no money. But server software and hardware was – for the most part – never the driving cost of a technology or web startup. We have a large – for a startup – datacenter deployment here in NYC. How much did it cost? about 20K. That's – if you got a cheap one – 3 months of salary of a good engineer. Linux vs Microsoft OS? 300 bucks give or take or about a day of an engineers's time. Some would argue that it's open source databases that made it possible because you no longer had to shell out big dollars for Oracle or SQL Server and could use MySQL instead. But that's not true either – I used Oracle for years for free without ever paying for it. We only ever had to pay the Oracle bill – in 2004 – after we had lots of revenue. And Oracle started running on X86 years ago so the cost of Sun servers has been a non factor for nearly a decade.

    I don't know if we will see any fallout from this false thesis that so many have bought into. The dollars invested in startups with the “built it damn fast” are spread out among thousands of companies and diffuse as a result – the angel investments having come from so many people that no one entity ever really feels the pain (and Paul Graham has so few total dollars at stake and so much equity that the economics still make sense for him regardless of the high failure rate).

    Human beings are prone to extraordinarily poor assessment of very unlikely events – it's why people bet on the lottery. Our minds are just bad at statistics. Everyone thinks they are going to be that startup that only needs 500K and ends up like Facebook. Someone does win the lottery, yes – but that does not mean you should play.

  • http://www.elieseidman.com Elie Seidman

    And they hype fundraising accomplishments as if they were real accomplishments instead of just selling off a piece of your company that you can never buy back. And for those that are fortunate enough to get written up in TechCrunch with Arrington saying you will do well, what's the track record of TechCrunch at predicting success? The next time you worry about what TechCrunch says about you, take a look at what they had to say about Yelp at launch: http://www.techcrunch.com/2005/10/12/yelps-loca

  • http://billbar.posterous.com Bill Barhydt

    Amen brother. Problem first.

    By the way, in light of this being “Apple week” in silly valley: I’ve had several people try to tell me that Apple, the holy grail of the digital consumer age, doesn’t solve problems, they just build great products. That’s nonsense.

    Jobs, in a keynote he gave before the iPod was launched a few years ago gave a keynote describing the problems/opportunities to be faced in the digital age and how Apple would address these problems. Of course no one really understood what he was saying then as no one had the insight that Jobs had. But in hindsight it was all there. The digital lifestyle problem means: massive amounts of digital data that needs to work where ever you are: music, photos, video/movies, email, personal documents, etc. That meant multiple connected devices with killer software connecting to each other via the cloud. (mac, macbook, ipod, iphone, aTV, iSlate, etc – all digital all the time).

    Even if you can’t monetize right away, the bigger the problem, the bigger the potential for a payoff. Problem = pain and pain always has a price.

  • http://brettryckman.com/blog/product-strategy/launching-software-products-niche-vs-mass-market brett ryckman

    Great post! I also think it is greatly important for entrepreneurs to understand the difference of launching niche products vs. mass market. The lure of mass market revenues is so great that many software companies cannot resist. Unfortunately, mass-market products typically require vast resources to develop and market. http://brettryckman.com/blog/product-strategy/l

  • http://arnoldwaldstein.com awaldstein

    Mark. Smart, straight talk here. I'm on your side on this one all the way.

    Only point of clarification. A 'problem' is not always something the market expresses, but the next step for a genre. For example, figuring out how to use video socially is a 'problem' that begs to be solved, that can have a monetization scheme wrapped around it and a distribution strategy. But it is not something that there is a beating drum to resolve.

    You agree?

  • http://www.logicalconsensus.com Lucas Dailey

    Great post, I definitely agree that this is one area many startups fall short. To me, this illustrates one of the reasons I’m less bullish on Twitter than is fashionable. In a tweet today you linked to a great case study by Duncan Malcolm analyzing the first Twitter experience by a Normal. I’d submit it might be appropriate to link as an example somewhere in your post.

    http://www.duncanmalcolm.com/2010/01/26/experim

  • http://brettryckman.com/blog/product-strategy/launching-software-products-niche-vs-mass-market brett ryckman

    Great post! I also think it is greatly important for entrepreneurs to understand the difference of launching niche products vs. mass market. The lure of mass market revenues is so great that many software companies cannot resist. Unfortunately, mass-market products typically require vast resources to develop and market. http://brettryckman.com/blog/product-strategy/l

  • http://arnoldwaldstein.com awaldstein

    Mark. Smart, straight talk here. I'm on your side on this one all the way.

    Only point of clarification. A 'problem' is not always something the market expresses, but the next step for a genre. For example, figuring out how to use video socially is a 'problem' that begs to be solved, that can have a monetization scheme wrapped around it and a distribution strategy. But it is not something that there is a beating drum to resolve.

    You agree?

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  • http://www.logicalconsensus.com Lucas Dailey

    Great post, I definitely agree that this is one area many startups fall short. To me, this illustrates one of the reasons I’m less bullish on Twitter than is fashionable. In a tweet today you linked to a great case study by Duncan Malcolm analyzing the first Twitter experience by a Normal. I’d submit it might be appropriate to link as an example somewhere in your post.

    http://www.duncanmalcolm.com/2010/01/26/experim

  • http://twitter.com/shapirosteve Steve Shapiro

    Mark – #1 really hits home for me. When you interview entrepreneurs, instead of asking “how do you differentiate yourself from your competition?” phrase it as “what problem are you solving that your competitors fails to solve?” It amazes me how many people stutter when I ask this question. The standard “we have this feature and they don't” answer that entrepreneurs are used to giving doesn't answer this question and a product-focused guy is caught off guard while a problem-focused guy breezes right through it.

  • http://twitter.com/shapirosteve Steve Shapiro

    Mark – #1 really hits home for me. When you interview entrepreneurs, instead of asking “how do you differentiate yourself from your competition?” phrase it as “what problem are you solving that your competitors fails to solve?” It amazes me how many people stutter when I ask this question. The standard “we have this feature and they don't” answer that entrepreneurs are used to giving doesn't answer this question and a product-focused guy is caught off guard while a problem-focused guy breezes right through it.

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  • cnh

    Awesome post Mark.

  • cnh

    Awesome post Mark.

  • http://twitter.com/pigeonflight David Bain

    Excellent points, I'm going to book mark this blog entry. BTW… what's wrong with financial modeling PLUS! fail fast?

  • http://twitter.com/pigeonflight David Bain

    Excellent points, I'm going to book mark this blog entry. BTW… what's wrong with financial modeling PLUS! fail fast?

  • http://twitter.com/pigeonflight David Bain

    Excellent points, I'm going to book mark this blog entry. BTW… what's wrong with financial modeling PLUS! fail fast?