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$6M startup with 0 tech skills

To build a successful startup you don't need money, connections and fancy tech. Here's what you need. Michael has been fascinated with entrepreneurship since he was a child. It all started outside of his house growing up. As soon as his mom came home from the supermarket, his little improvised shop in the driveway was ready to go, freshly stocked with family groceries. Michael considered himself to be a successful entrepreneur — well, no one would argue with that, especially his family members who were the main source of his demand and supply, and the unbeatable margins. As he grew, Michael came to understand that building a business is a bit more difficult than he'd imagined in his childhood. But the passion to sell physical items, adopted in the early years, remains with him through his whole life. This passion basically led me to start SwagUp that has been recognised as one of the fastest growing American startups in August 2021. This is even more fascinating, knowing that SwagUp was built by Michael Martocci with zero technical skills and absolutely no investment. 1. Learn lessons and seize opportunities However, before SwagUp Michael made his share of mistakes that turned out to be a great school of entrepreneurship. The approach he used can be described as "learn from whatever experience you get and be open to new ideas". Being a non-techie founder, he did exactly what most non-techies do: he started with a social network (there's no statistical data on that but about 80% of non-technical startup founders who contact me are building a marketplace or a social network), though they are actually the toughest ones to launch and grow. Projects that require strong network effects to be feasible in the long-run are not the best play-ground for a first-time non-tech founder. But this is not what most of them are convinced of. Anyway, in 2013 Michael who was barely out of high school and not even 20, co-founded Clique – a social network or a community that positions itself as "a method for broadening horizons, connecting us with people in our community, and establishing life-long, meaningful connections through shared experiences". Michael was in charge of product design and marketing strategy, including social media marketing. Clique did not become huge (though it is still there, the project was not shut down) but Michael had a great experience in communicating with developers and project management. His next step was Weatherford Fit — a fitness app, where he, again, was in charge of marketing. This one was more successful and made $300K in sales in the first 4 months after launch. What did Michael actually do to get there? Basically, he learned to run experiments: created several landing pages for every fitness program and tested them, chose the winner and doubled down the effort. There was tons of email and Facebook marketing too. 2. Build it with no-code Eventually, Michael landed as a marketing analyst in a venture capital startup advisory firm. And if before that he was building his own startups but did not interact too much with the community, now he was touching grounds with many founders like him. That's when he came up with the idea of SwagUp. The original insight was this: 💡Startups love swag but there’s no service that makes it simple. On one side, there are large e-comm sites that push at least half of the work on the customer. And on the other side, there are agencies that deal with Big corps and don't care too much about bootstrapped startups on a tight budget. Michael decided he could automate a process a bit and deliver a more convenient experience to startup founders. That was the idea. And Michael could use his access to founders that he gained working in the venture capital firm. However, being a non-techie founder, Michael could not jump into coding exercises. What he did — he put together an MVP with no-code tool: A landing page on Wix Typeform for interaction with customers and receiving order details Zapier — for processing orders Trello — as a backend database where all orders were stored and manually processed. As soon as the MVP was ready, he ran some Google ads. Everything was done from Michael's mom's converted garage. Within days he started getting requests from the startups. Well, there was obviously a demand! Fast forward a couple of months of trial and error and he got reached out to by a New York -based startup looking to pay an order for 100 swag packs for their new hires, a concept that will still be a bit foreign in 2017. The order ended up being $10k, the biggest single order Michael had had in any business before that. That got Michael thinking: 💡 Swag is not only something you order for specific corporate events or as a Christmas gift for your partners. There are so many ways a startup can leverage a swag pack: new hires, onboarding, a way to say "thank you" to a customer. But the problem with these "little gifts" is that they are very time consuming: you have to brand them, place an order, wait for the delivery, then arrange the delivery to multiple receivers. Michael saw another opportunity here: build a one-window fully automated service where a startup founder could do the branding online, place an order and arrange the delivery — all from one app. SwagUp pivoted from "brand your swag" to fully integrated experience of swag pack creation and delivery. Why packs instead of single items? Well, there is an economics of the delivery process: obviously, dealing with one $300/pack is more economically viable than dealing with multiple $10 items. By the end of the calendar year Michael's enterprise did $3M in sales! Still operating on the Wix landing and a Typeform. 3. Build a team It was only then when he started growing the team and found a CTO — a technical talent who rebuilt the existing infrastructure turning it into a customised software solution. It went fast and smooth, no delays and budget overspending. How? because there was a clear visible example of how everything should work, and what weaknesses of the existing system should be removed. New CTO built an ERP and a new front-end for SwagUp. But also he created a new opportunity for the business. The backend was built as a modular API-system with a SwagUp just sitting on top of it. So, why not add other applications? Or arrange an integration with other apps? That's what API is for, right? So, when the backend transformation was completed (SwagUp was selling about $6M a year by then — all on no code), a new customer showed up. Rippling — a startup that provides hiring, payouts and onboarding services reached out to Michael with the idea of arranging a first in its kind integration for an onboarding process. Meaning, this time there would be no placed order. Just as soon as Rippling hired a new person, an API call would be sent to SwagUp and the cogs would start rolling, sending an automated order for manufacturing, branding, packaging and sending out the swag pack. All with one tap of a button. For that to become possible, SwagUp had to create an interface — and that's exactly what was done. Simple dashboard, MVP style. But it worked! Pretty soon, Michael decided to offer this service to other customers too. — What started as an arms and legs agency style business has transformed to a full fledged technology business, with over 50 engineers, PMs, designers, with 175 total employees and over 3200 B2B customers. — Michael Martocci, founder of SwagUp In August, 2021 SwagUp was included in Inc 5000 — the annual feature of America's fastest growing private companies among the top-30. The crazy thing? Michael is only 23. And he still doesn't know how to code. Building a tech startup being a non-technical founder playbook ❌ You don't have to be an engineer to build a successful tech startup ✅ Be open to every idea you stumble upon 💡Build lean MVP using no-code tools to validate your idea 👋 If you can't build it on your own, DM me on Twitter and I will hook you up with someone or tech you how to do it 🤓 Hire a CTO or look for a tech-cofounder after you validate your idea

12 rules of a customer interview

Little but important things that are not covered in The Mom Test Mom, look, I’m thinking of building this application with recipes. You can download it on your device and browse recipes that you like, tag your favorite, save and share them with your friends. Do you think it’s a good idea? — Well…hmmm… sure, honey. Sounds amazing! This customer interview gone 100% wrong from The Mom Test by Rob Fitzpatrick is probably known to every product manager, UX designer, and bootstrapped founder (if it’s not — stop doing what you’re doing right now, and go read this book). Rob has identified key problems with running a customer interview and offered some very useful hands-on advice on how to do it.
However, when it comes down to running a real interview there are some other important details that you should be aware of. These are tips and tricks covered in detail in a new book on customer discovery Deployed Empathy by Michele Hansen.
So, let’s dive in. The main purpose of an interviewer during a customer interview is to establish an atmosphere of trust so that a customer opens up and tells everything about their emotional, social, financial and other motivations. How do you do it? Rule 1. Use a gentle tone of voice Not too soothing but definitely not harsh. Make an effort to sound friendly — even if you’re talking to a customer that canceled a subscription, or left a negative review. Rule 2. Validate them but not encourage them This is a very important rule. In a friendly conversation, you might have with someone you’re inclined to encourage a person (“You did great!”, “That was a smart move”, “No worries, it’s fine”). Not during the interview.
A customer starts explaining why they did that mistake. Would you say “No problem, it’s fine”. No. An expression like this instantly puts you in a judgmental position (you’re the one who decides if it’s fine or not) and destroys trust. Say “I can see why you did it” or “It makes sense”. Just validate the actions without judging them. Rule 3. Leave pauses for them to fill When you don’t get an immediate response your natural inclination is to rush with suggestions or move to the next question because pauses feel awkward. But during customer interviews, you can keep them up to 1 minute! “Why did you close this tab?” — and wait. Don’t offer options (“because it felt like a right thing to do? or?”) Wait for what they say. Wait. And wait. If they are silent, prompt a bit “Is there something in my question that confuses you”. Rule 4. Mirror and summarize their words Mirroring and summarising is a great NLP technique that comes in handy in customer interviews. They both contribute to building trust. Also, they help to clear up the situation if you’ve got the answer wrong.
Example:
— I was so frustrated with this feature. We tried to implement it for 2 weeks but finally had to give up and switch to another solution.
— So, let’s make it clear: you made effort to implement the feature for 14 days and then chose another service provider? Rule 5. Don’t interrupt Even if you disagree. If you feel that customer is being too boring and detailed in their explanation. Let them talk. Don’t offer your advice, view, or personal experience. The only comment you can make while the customer is talking is “mmmmhhhh”. Or nothing at all. Rule 6. Use simple wording It’s not because your customers are not as intelligent as you. It’s because words tend to be multilayered. Have a hint of meaning. The simpler the words — the less space for a mistake in mutual understanding.
Example:
– What are your objectives? — complicated question.
— So, can you give me the big picture of what you’re trying to do? — simple question. Rule 7. Ask for clarification, even when you don’t need it It also contributes to establishing trust. And eliminates the chance for mistakes.
Say: — I just want to make sure I have this correctly. First, you open up a new browser tab, then you open your email in your browser, then you open the calendar in your browser? Rule 8. Use their words and pronunciations This rule imposes a fat big NO on every contradiction you might have. Even if you disagree with customer’s pronunciation, or any other mistakes they might make in their speech. Even more, to establish trust you shouldn’t ignore the mistake — accept it as the right way to put things. If they say “I prefer to do the search in Groogle”. Say “When was the last time you did the search in Groogle?” Rule 9. Don’t explain anything or get defensive This is particularly tough when you’re running user tests on the first prototype. You think that everything is so obvious, there’s no room for mistake, UX is easy enough for a 3 yo to figure out what to do. But you ask a customer to do something and they go in a totally wrong direction. And then say “Why it didn’t work as I expected, something wrong with this app”. It’s tough and frustrating but you can do it. Instead of telling what to do, say “Can you tell me how you expected it to work?” Rule 10. Build on what they say If you played impromptu games you’ll manage to do it fast. If not — take some time to practice. Here’s a rule: never say “No, but”. Whatever a customer says — accept it as a reality and go from there. They say “I’m an astronaut” wearing a cowboy hat — say “Would you mind telling me how it feels being an astronaut”. Rule 11. Let them be an expert Again, if they say “I’ve been using your washing machine to cook pizza”… Ask “Can you tell me more about your process of cooking pizza in a washing machine?” The worst-case scenario — they will realize their mistake. The best case — you’ll learn a new way to cook pizza. Rule 12. Ask about past or current behaviour not about things they would or could do This rule was covered in detail in The Mom’s Test but it never hurts to repeat. Never ask “If I build this app that solves your problem would you pay for it?” (I know, some actually make this recommendation but they have absolutely no scientific ground). Ask how they do things now, where do they look for solutions, and how much they pay for them now. If you want to keep this rules close by, I have a Comic book where all of them are depicted in a funny way to better remember them. It's free. The book is here. One of the pics from a book: If you need more information on this subject feel free to contact me on Twitter or LinkedIn (DMs are open) I'm also available on ProductHunt if you prefer this network. You can get additional information on customer interviews here: — The Mom Test by Rob Fitspatrick https://www.amazon.com/dp/B01H4G2J1U/) — Deploy Empathy by Michele Hansen (https://deployempathy.com) — How, When and how to conduct User Interviews (https://www.nngroup.com/articles/user-interviews/) — How to conduct user interviews that actually uncover valuable insights (https://www.shopify.com/partners/blog/user-interview)

3 Marketing Tactics To Get First 20 Customers For Your B2B Startup

Running Google Ads might feel like a good idea. But it’ll only get you leads, not customers. Here’s what will bring both. Getting those first 10–20 customers is particularly tough when you’re running a B2B startup. It’s not easy with B2C either, but at the end of the day, you can sweet talk your neighbor’s son or your younger sibling to subscribe to your $10/month service. With B2B when you have to go through several loops of decision making, talk to and impress a bunch of hard to impress people and end up convincing them to spend $200–1K on your product — well, it doesn’t sound like a walk in the park. However, 4 Guerrilla marketing tactics always work well and bring tangible results, even in the tough B2B startup industry. 1. Find a “big fish” to piggyback on its network The main idea is to find a partner you can join to utilize their network of customers. Remember the Business Model Canvas? There’s a sector called Key Partners (sometimes — Key Stakeholders) in the upper right corner. Think really hard to figure out what companies can partner with to get access to your future customers. The key reminder here: to build a strong partnership you have to bring in as much value into it as you expect to get in return. Give before you take. Real-life Example If you can’t think of a partner to impress your direct customers you might very well target the end-users. Let’s presume, you’re building a cyber-security product for banks. The main end-users would be Gen X. They are considered to be environmentally friendly (at least, more environmentally friendly than Boomers). A good idea would be to partner with an environmental program such as Earth Day or Carbonforest or any other. You might offer financial support (ex., every 1% of transaction goes to the environment protection fund), or technology support (you’d use your software to protect all private citizens contributions into the fund), or whatever you can come up with. As a result of this partnership, you get great exposure to environmentally-friendly end users. Then, with these numbers on hand, you pitch the bank saying that “1m of end-users already know us and support our vision”. What VP will have the guts to resist this offer? 2. Use old good cold walk-ins and emailing. The basic principle is B2B is to use direct outreach as much as you can. Good for you, if you have someone to arrange a warm intro. But in some cases, it’s not only impossible but also unimaginable. Think, B2B marketplaces. Like, Upwork, Fiverr or Vettery, or Roo. What if you know tons of companies that need these on-demand services, but the supply side is missing. And you just can’t hope to be introduced to all the veterinarians in town and convince them to onboard. That’s where direct outreach comes into play. Real-life example When Instawork — a marketplace that connects local businesses with hourly workers for temp and temp-to-hire shift work — began its journey, most of its early workers (they call them Pros) were acquired through direct outreach in person. — We would visit San Francisco restaurants in the morning and in the late evening, waiting outside the back door to recruit cooks, dishwashers, and servers who were taking the trash out or on a break. We would walk them through our onboarding flow (speaking Spanish if needed!) and help them sign up immediately. — Sumir Meghani, founder of Instawork. 3. Use word of mouth and initiate buzz If you work in the B2B industry you definitely know that, according to Nielsen research, 92% of buyers trust word of mouth over any sort of advertising — Trust, encouraged by social media, significantly affects intention to buy. Therefore, trust has a significant role by directly influencing intention to buy and indirectly influencing perceived usefulness. — M. Nick Hajili, International Journal of Market Research, There’s a clue here. Word of mouth is encouraged by social media. And using social media to create a positive “buzz” around your brand is the best way to get the attention of your leads. This strategy is akin to the “partnership for end users”, only here you use social networks like Twitter, Facebook, and Reddit as your strategic partners. The sequence of steps is the same: get end users’ attention, increase buzz and recognition, then reach out to your B2B customers with an impressive number of “followers” to support your market weight. Real-life example Uberconference — a conference calling service — did a great job of getting attention. They used hilarious on-hold music, written and performed by their CEO Craig Walker. It created a ton of chatter about the company offline, and online. It instantly skyrocketed Uberconference brand recognition and ended up with much more customers a company could hope for, as well as a pretty successful seed round where they raised $4.2 million from Andreessen-Horowitz.

30 useful marketing resources to get your from zero to hero

Best cheat sheets, guides and explainers on SEO, content marketing, emailing and more. If you’re a tech founder getting down to the marketing is tough. Because marketing is not at all like coding: where you just write a line of code, run it and get the predictable response. If the response is not what you’ve been expecting you either fix the bugs and run the code again. Or, if you're stuck – go to StackOverflow and ask the community. You get the answer, you fix the code — and the response is there. With marketing it’s totally different — no fast results, no predictable responses and most often, no one you can ask for help. Therefore, I've put together this List of 30 useful marketing resources — articles, cheat sheets and guides. As soon as you’re stuck with some specific marketing channel (emails low open rate, landing page is not converting, Google Ads are not working) just go to this list and check it out — hopefully, you’ll find your answer. Content marketing 1. The Ultimate Guide to content ideas Love this cheat sheet. It’s very easy to follow and extremely helpful when you feel that you’re totally out of ideas about what to write about in your blog, on Twitter or elsewhere. 2. 12 Things to do after you’ve written the blog post Awesome, you’ve written this post. Now what? What do you have to do to get more traffic to it? And as a result, boost your site rank, and perhaps even some customers for your product? 3. How to create smart content Let’s learn from the best, right? Canva’s blog is one of the most visited websites when it comes to design topics. How did they get there? Here’s the full story with explainers and step-by-step guides on how to do the same. SEO 4. Keywords research cheat sheet Cool, you want to move ahead with SEO but what does this “long-tail”, “short-tail” stuff even mean? What keywords do you have to optimize your website for and how to search them? 4. Keywords Research technique from Moz.com 2-page easy to follow guide on how to build your keywords list 5. Beginner’s Guide to SEO Well, this one is a lengthy one but if you spend 2-3 hours just reading it you’ll get all the major concepts — how Google algorithm works, tools, metrics — everything you need to move your website to higher positions. 6. 3 ways to monitor your ranking This is more advanced stuff — for those who want to dive deeper and constantly monitor how they are doing on the SEO side. 7. SEO for startups Great and insightful piece written by a genuine SEO-master Roberto Robles who managed to get dozens of websites to the top of the 1st page in Google. He’s now running his SaaS business too and knows first-hand what challenges tech-founders face. 8. Weekly SEO activities checklist This is a template that I have created for myself and I use it to improve my SEO. It helped me to get on the 1st page of Google with some long-tail keywords in 4 months! Just copy to your Notion account and use for free Emailing 9. Email marketing for SaaS This is a pain point for many SaaS founders – emails are not set up properly, the open rate is low, and as a result you’re loosing customers. Everything you should know about email marketing — on one page 10. Post-purchase emails 101 Yay! You’ve got yourself a customer! But wait, why do they cancel their subscription in a month? Why did they never even try to use your service? The reason is obvious — louse onboarding. To make it right with the simplest tools possible you need to learn how to craft post-purchase emails properly. 11. Free trial emails You have lots of free users but very few who convert? Check out this article about free trial emails — perhaps, they just need a little push from you? 12. Email retargeting This is more advanced stuff. And demands some special tools. But it can be crazy efficient. 13. Referral program in the emails You can definitely join one of the referral programs but why don’t you use people who are already on your mailing list? They already work with your product or know you personally. The trick is to write the email that will MAKE them recommend you to someone else. Here’s how Performance marketing (paid) 14. SMM check-list You’ve finally found some $ to spend on facebook/IG/Twitter ads. Make your you’ve done everything by the book to make your posts really performing. 15. Instagram cheat sheet Really useful for everyone who is just starting on IG 16. 9 Tips to create great social media ads I used them a lot. Helped me to get 10% conversion from Facebook ad campaign 17. Step-by-step guide to running experiments I love Trevor Longino’s technique that he uses to help SaaS founders grow their business to $2M in revenue. It’s all about small baby steps to prove the concept and then going all in. Here’s the guide, how his agency does it 18. Digital Advertising strategy Advanced but useful if you make performance marketing one of your main channel of customer acquisition. Copywriting 19. Do-s and Don’ts of Copywriting I’ve been in the content marketing business for 18 years and can tell you — some of these Don’t were my biggest mistakes. Definitely check it out before writing your copy for landing pages. 20. Copywriting cheat sheet All the important concepts to help you write better copy for ads, landing pages and emails Landing Pages 21. Ultimate check-list to create mind-blowing landing pages Oldie but goodie. Unbounce is definitely the leader in landing page automation business — now they have even launched a package where you can pay per converted customer, not per visitor or just per month. This is a guide they use to train their ML models that create top-performing landing pages. 22. Google Analytics and CRO Basics of using GA for conversion rate optimisation 23. Conversion rate formula “Hey, I’ve got 1000 visitors a day and 1 conversion! My conversion rate sucks” — if you have this or similar thoughts, definitely check out this article before trying to improve something. There’s a chance your conversion rate is where it should be and there’s nothing to improve. 24. Alternatives to A/B testing I constantly hear from founders: “We need to arrange A/B tests to get a better conversion rate”. I’m all for going along. But when they tell me their traffic numbers I say a definite “No”. It makes no sense to arrange A/B tests if you have less than 100K visitors a month. But the good news is that there are other tools you can use to improve conversion. Here’s an explainer 25. Hero Image on landing Page The crazy thing? Founders I work with sometimes pay agencies (or even me) to write a selling copy. But then they just slap a generic illustration from icons8.com that ruins the effect of the text. Please read this before adding the most important visual to your landing 26. Guide to create converting landing pages Short and cool and to the point. If you have to choose only one thing to read before jumping into building your landing page — go with this one 27. Behavioral science to improve the conversion rate One of the best articles from Lenny’s newsletter (and Free!) on how to use scientific methods to improve your pages 28. Use implicit values attributes to improve your landing page This is a framework that I use quite often and that has proved to get great results for founders I work with. 29. Emotional dimensions of the landing page and how to get them Detailed piece on how to create marketing personas and use the insights for crafting converting landing pages. Metrics 30. All marketing metrics cheat sheet This one is something that you would definitely use if you’re a novice in marketing — what parameters to track with your every activity.

4 hacks that will help you break all the startup building rules and still win

Plus profitable niches and trends to look for . Read it up to the end to see why you should start thinking reversely and notice things that you did not notice before They say “build something that doesn’t scale”. They say “do your user research before developing”. Patrick Collet and his 14 years-old daughter had done none of these. However, their winter educational project on the basics of entrepreneurship turned into a startup profitable from day 1 and brought them over 1000 paying customers within 2 months after the launch. What was the “secret sauce”? Why better is sometimes worse The idea of building a startup popped up 100% by chance. Patrick’s daughter was playing around with her cell phone camera and suddenly asked: — Look, Dad, I’ve heard in olden days people used films to take pictures. And they could not see the result until they got the prints. Is this true? Patrick, who knew very well what his daughter was talking about confirmed that this was, indeed, the case. There was a time when making a picture did not mean instant gratification of your curiosity and you had to wait for weeks to see the result. But it’s good that progress allows us to get what we want straight away without spending weeks in anticipation. Or is it? — It’s sad that we don’t do it anymore, — offered a surprising come back to Patrick’s daughter. — I wish we get back to this practice again, if not always but at least occasionally. Anticipation makes things more valuable for us. The MVP Woah! This unbelievably deep insight coming from a 14 years-old girl made her father’s active entrepreneurial mind rush. Next comes the idea of building an app that will allow young and no so very many customers to tap into the old-fashioned practice of making pictures without receiving immediate access to the result. — Unlike 99% of existing camera applications that focus on offering customers more and more tools for editing pictures, we decided to make an app that will do just the opposite: ban all the editing completely, — says Patrick. As soon as the user snaps a shot the image is removed from the user’s app and gets uploaded to the cloud. Photo printing facilities receive access to the set of pictures made by the user as soon as they make 24 or 36 shots (which corresponds to 24 or 36 virtual film rolls users are allowed to choose from). Users can’t see the end result until they get a set of printouts in an old-fashioned way: in an envelope, by mail. Patrick admits that the initial idea was not to build a successful business but to teach his daughter what startup is about. What is MVP? How to limit features to the absolute core? How to build a distribution? However, Pokadota.Photos app turned out not only to go against most common customers’ expectations of immediate gratification. But also, against the commonly admitted rules of building sustainable startups. Let’s see: Not-so-secret Ingredients As we can see, Patrick and his daughter went against all odds. Sounds like they were destined to fail? However, just after 2 months after a launch they had: over 1000 paying B2C customers, and a dozen of B2B contracts (travel services providers jumped on the idea to offer this service as a part of their luxury tour packages). Any ideas why this worked so well despite the unpopular approach?
There are several ingredients to Pokadota’s success, as far as I can see: 1. “IKEA Effect” or Betty Crocker Effect In the 1950 US food company General Mills launched a perfect new product, as they thought — Betty Crocker brand of instant cake mixes. All necessary ingredients for perfect pancakes were already there. Customers were supposed to do just one little thing — add water. Unfortunately, sales did not go very well. So General Mills management invited psychologist Ernest Dichter — the “father of motivational research” — and put him on the case. Dichter ran focus groups. And offered to change the recipe. Remove powdered eggs in the cake mix. And add the requirement on the package to add fresh eggs. — All-instant cake mix makes baking too easy. It undervalues the labor and skill of the cake maker, — concluded Dichter. Ironically, the answer to the sales problem was not to make a mix better but to make it worse. Make customers work a little — and it will give them more ownership in the final result.
Later, the same psychological trick was used by IKEA that made customization and customer contribution into the assembly process the core concept of its business. That’s why this effect is often called “IKEA Effect” in marketing literature. Sometimes, it’s even referred to as “a cognitive bias”. Anyways, the idea is simple and proven by studies and numerous successful businesses: consumers place a disproportionately high value on products they partially created.
By banning Pokadota users from editing shots they’ve made, Patrick and his daughter created an additional value of an extra effort. Unlike with regular camera apps, Pokadota users have to make some extra efforts to make a better shot — check out the light, choose a better angle, etc. It’s not a snap-and-forget experience anymore. It’s a tangible amount of work that should be done to get a better result. 2. “The Pandora effect” Pokadota’s workflow results in creating intrigue. As users can’t see their shots until they get a set of printouts they become curious about the result. And human curiosity is an extremely powerful motivator and driver of human actions. At an early age, we fulfill our sense of curiosity on the highest level — everything around us is unknown and we can explore away. As we grow older we encounter fewer and fewer things that look unknown to us. We become more risk-aware, more cautious — as a result, a natural way of releasing millions of endorphins and feel total happiness through exploration is almost lost to most of us. In their study entitled “The Pandora effect — The Power and Peril of Curiosity”, the American scientists Christopher K. Hsee and Bowen Ruan demonstrated that humans are willing to research new things, even if they can expect negative consequences. To give an example, test subjects voluntarily subjected themselves to electric shocks in order to satisfy their curiosity. Well, in comparison to electric shocks Pokadota’s offer — Every shot is an intrigue. Wait several weeks to find out the answer! — seems like a great deal. 3. Strong Product Management Patrick Collet admits that despite all the right psychological “buttons” their product pushes it would not probably work if not for his experience in managing complex projects. He did not work with mobile apps before but it doesn’t matter, he insists. Basic business rules are universally applicable. Nor he, nor his 14yo daughter were able to build the app on their own, so they had to hire an agency. How did it go? Timeline — the project shipped in 4 months. As expected. No delays Budget — spot on. No spending over the limit. Patrick says he used all well-known PM techniques to achieve these amazing results: ✅ Invest lots of your personal time in owning the product (set guidelines, specify the requirements, set priorities) ✅ Daily meet-ups in agile style “What are you going to work on today and is there something that’s blocking you?” ✅ Retrospectives that helped to improve overall velocity ✅ Being reachable 24/7 But he is sure what worked better than a net of controlling and pushing activities was the idea behind the app. The agency team was so impressed and captivated by the idea itself that they had no problem working long hours and at the weekends.
Passion turned out to be the key ingredient in Pokadota PM practices. 4. Focus on the business side While agency devs were coding away, Patrick and his daughter focused on the distribution: they reached out to the B2B segment (tourist agencies, hotels, event venues, wedding services) and offered integration with Pokadota. For B2B customers it was a great way to improve their value proposition and raise margin by offering a unique service. For Pokadota — a solid deal flow. Also, Patrick’s daughter took on herself a launch campaign and despite her young age managed to arrange several publications in the local (Montreal) papers and even a TV episode covering new service. Finally, Patrick personally went to pitch to the largest in Montreal printing service provider and managed to get the best prices possible for their printing services. It was the most important part because the Pokadota business model is extremely simple. No monthly/yearly subscriptions. Customers only pay for virtual film rolls (9.99 CA$ for 24 shots and 12.99 CA$ for 36 shots). Pokadota, on the other hand, pays provider + delivery fees. Therefore, the better the printing rate — the better for the business. By now, 2 months after the launch Patrick says that they started getting returning customers. And this is another piece of idea validation. Because for him and his daughter, despite the business success, it is still an educational project. A hands-on approach to learning startup business. Probably, it’s an old-fashioned way, no online lessons included. But as we can see, remaining old-fashioned sometimes might prove to be the best strategy. 3 takeaways from Pokadota case study There is no recipe for a successful startup. Even a recommended framework might lead you to failure. But the opposite is true too: going against the rules doesn’t promise certain death to your business. With crazy tech development the niche for “old-fashioned” products is also growing. Partly, not all users want to rush with the tech progress (and keeping in mind that the average age in the EU and US, as well as Canada is growing because of the global population ageing effect, the number of users who belong to this category will only increase). Partly, because apps in general are getting worse. Here’s a great article by Tim Bray that explains this phenomenon. Basically, because there’s no PM in the world who’d say “Looks like it works just fine, let’s leave it as it is”. Result — apps get more and more complicated and tougher to use. Thus, the need for simpler, back-to-basics apps grows. Managerial skills are more important for building a successful business in tech than coding. You can hire an agency for technical tasks. But you can’t hire a founder for your startup.

Access Your Audience Profitability

Profitability assessment is a part of Audience Discovery framework that helps us build startups profitable from day 1. To cap up, in my previous blog posts I talked about Ways to define your affinity (if you missed it - here's my blog post on this) How to test the affinity (the quiz) How to search for communities you want to serve using social platforms and tools like SparkToro (here's a link to the list) How tp make a slightly deeper research on every community by assigning tags and running some basic data analysis (see how we did it here) How to research alternative solutions and assign an opportunity score (in the same article ☝️) ​ Now, it's time to decide is there actually a business for you within these communities. In other words, are they paying customers. Or, to put it in an even different way, are their pains in this community that are strong enough that people would be willing to pay you for a solution. Getting back to your probable manual for this journey - Arvid Kahl's Embedded Entrepreneur — what does he recommend? There are obvious signs to look for when you have to decide if there are paying customers: Purchasing Agency. Can the people you're going to sell make their own decisions when it comes down to paying for your product? For instance, you want to draw a series of cartoon books. Does it make sense to target 3-5-year-olds? Probably, yes, because they will be your readers. But they don't have a purchasing agency — meaning, you'll have to target their parents as well. That leaves you with 2 target audiences = a higher marketing budget. Make sure you have it before diving in. Budget scope. What kind of budget do people in your audience spend? It's pretty easy with the B2B segment as you know exactly how much HubSpot subscription costs. So if you want to build another CRM you already know the pricing policy. You can make it slightly higher but not x2 or x3 higher without making sure your product is x10 times better which is almost impossible to achieve. As soon as you figure out these two parameters, start drawing a very basic budgeting plan. How many customers would you need to build a comfortable living keeping in mind that they will not pay more than the market average? For example, you're thinking of building a product for no-code developers. You're not sure what exactly it would be on this stage, but you've found this audience and more or less analysed their pains. You know that most of them pay $5-15/months for various products that help them build no-code apps faster (UI/UX kits, plugins, etc.). Let's presume you need $10k/ month to feel comfortable (can be any number, I've taken it as an example). Add about 35-40% in taxes plus your own expenses on the infrastructure, email automation, sales, marketing, etc. = about $19K. Meaning, you'll need 1900 paying customers every month if we presume the average price for a service to be $10. How likely is it? It's all very general. The average can be not $10 but $17. Also, taxes in your country can be 6% or 46%. You might need $2K, not $10K for a comfortable living. But you've got the idea. Do this very crude Math to figure out your odds of living happily on the income you're about to generate by serving this audience. Sometimes, you'll have to admit that the odds are very low. The next step, as usual, is to assign the Profitability score to every audience. From 1 to 5 where 5 represent your highest odds to live on this business and 1 - your lowest. But hold on a sec! Personally, I would not recommend whooshing over this stage so fast. In my experience, there are so many points where you can take a wrong turn or assume the wrong things. You see, your mind is biased here by several aspects: you like the audiences you're researching and you want to find something you can build your business on the platforms you've been researching are biased on their own. How so? Let me give you an example. Here's the data I've got while analysing the Audience that got to the top of my list - Parents of picky eating kids. Let me just backpedal a bit. I'm a mom of 2 very picky eating kids, so I feel a strong connection with this audience - this is why it got maximum points on my Affinity score list. I analysed the market, and found that there are several interesting solutions with paying customers there: First, there are several paid for newsletters on this subject that claim to have up to 10K subscribers. Secondly, there's a subscription based service where you can get a weekly list of recipes for picky eating kids for $9/month. Thirdly, there are plenty of apps in the App store that address this problem. Where did I see an opportunity? All of the apps target parents with kids that are 4+ yo. They allow kids to track their progress, gain scores, whatever. You can't offer something like this to a toddler. While parents with picky eating toddlers are actually the ones that suffer the most. First, when parents are on maternity leave they are more involved in the feeding routine than when their kids are in pre-school. Therefore instances when they experience feeding drama are more numerous at an early age. Secondly, when parents only get this problem on their hands they are surprised to say at least and presumably try to find the solution. In 2-3 years, by the time their kid is 4, they find something to deal with, and stop looking for anything else. This was my working hypothesis that I was about to prove or disprove. As you can see, the data told me a different story. Parents of toddlers (I tried to run a research on their posts) were mostly concerned about social aspects of this problem. They were sharing wins and mostly ranted how exhausted they were, how much they needed moral support. What insight would you have drawn from the data above? 1. Does it mean that I should start thinking of a solution that would provide mental support and offer the sense of community to the parents? Like a Facebook group but better? A community on Circle, perhaps, where parents would share their wins and there would be votes and badges for the Parent of the month, and the parent who managed to feed their child more times with healthy food would be praised and awarded with something? And add a 24/7 service with volunteers who would provide mental support? Plus tons of recipes and simple search over all resources. 2. Or, perhaps, the data just tells me that people come to Facebook and Reddit to rant and rave. They ask professional advice from their doctor, not on social media. That's why I have this heavily biased data from social media. How do we find out which presumption is correct? We run customer interviews! You can refer to my article here to find out how to run customer interviews on a low budget. Also, you can get my free Comic booklet DO's & DON'Ts Of Customer Interview based on the amazing book Deploy Empathy by Michele Hanson. To make the long story short: I ran 10 customer interviews with parents of picky eating kids. My group was of a diverse demographics: 90% Females (admit it but in my experience most of dads just follow the list it's hard to find a different attitude on a $100 budget) Location - USA and Canada Household income (annual) - $80-100K, $100-120K, $120-200K Working/ Stay at home First child/ Not the first child The results were unambiguous: having a picky eating kid is an IMPORTANT but NOT URGENT problem according to the Eisenhower Matrix. It is historically focused on productivity but I found that it works well when you try to decide what people are actually ready to pay for. Mostly, people pay for solving Important and Urgent problems. With Not Important but Urgent it works more or less too. But everything from the right side is a swamp for effort and energy — you won't be able to build a profitable business on it. More on Eisenhower Matrix here​ Let's cap it up Though there is a purchasing agency and a budget scope parents of picky eaters are an audience with a low Profitability score. Customers are very vocal about their problems but they don't look for a solution and are not ready to pay for them, as customer interviews have proved. ​

Audience discovery. Find Affinity

Audience Discovery comes down to defining 4 major areas. In this post, I'll deal with Affinity or Belonging. How: This is an easy one. People gather into communities because they are united by something they care about. Think of areas that you would like to explore. What are your interests? What personal experience do you have? Are there any pains that you're trying to solve? Not necessarily, professionally. How about your hobbies? Your lifestyle? Perhaps, there are communities that your parents belong to but you also care about? Don't thing high-tech! Think, what makes you personally tick. Examples: For example, @DanHeld was actively embedding himself into the cryptocurrency holder community when he came up with his first startup idea. While Molly Wolchansky launched @theagentnest because she was genuinely trying to help her mother with running a real estate agency business. Result: make a list of at least 10 communities that you belong to. Next Step: give a score to every community in your list where 5 is the highest score (highest sense of your personal belonging) and 1 is the lowest score. Affinity stress test Great! Now, you've come up with a list of at least 10 communities you'd like to serve. However, there's one more quick exercise I'd like you to do. Imagine you're from 5 years from now. And the level of technology has leaped to the Moon (like, literary everything has changed). Community you have tagged in your list has a totally different approach to their problems now. Now, answer yourself honestly to the following questions: — Would you still want to help it? — Would you still be inspired by these people? — How technological change might impact your Affinity? If all answers are positive and in favour of your affinity level - let this community sit in tour list. There is a set of other questions you have to ask yourself and answer before moving on to the next stage of Audience Discovery. I have put together a small quiz for your convenience, you can access it here:👇 ​https://forms.gle/WAEvmw4gDSjyg4yD6​ How to read your scores? Score 10 to 12 => leave the community in the list. Your affinity is strong and if you manage to build a startup serving this community it is more likely to last Score under 10 => you should probably overthink your approach to this community and replace it with another, a less controversial one. 🤔 Now, are there other things to consider? In his book Embedded Entrepreneur @arvidkahl suggest to ponder over a bus factor - it describes how small teams can implode when just one of the founders or a team member leaves — for whatever reason. If you can do it — go ahead and think it over. But being a non-techie you probably have no idea on this stage, what technology you might or want to use to solve your community problem. Will it be a low code? A no code? A high-tech solution? What kind of expert would you need for this? I think that going down this rabbit hole on this stage is dangerous — it will prompt you thinking technology-first, instead of audience-first. Don't get yourself attached to any tech platforms on this stage. However, if you want to go over this path there are plenty of tips to be found in Embedded Entrepreneur book. In the next episode of Robust Founder Bootcamp we'll get down to methods and tactics to research the Opportunity. In the meantime, I'd love you to do some homework. ​ 📖 Homework You can go ahead with gathering data on your audience "locations". Where do they hang out? Please find below a link to the list of tools and platforms that you might want to use for this research. ​https://www.notion.so/Platforms-Tools-For-Audience-Discovery-49dddc6d82b247579f0718173f816fdb​ (It is a Notion page. Don't forget to Duplicate it in your Notion account, if you are going to use it later). As soon as you go over these platforms and make a research, complete the table with your communities, adding the links to corresponding tabs. Don't dive deep into the conversations, just skim them to decide whether it is the community you're looking for. Good luck with the homework!

Audience discovery. Find Market Opportunity

Audience Discovery comes down to defining 4 major areas. Let's figure out your market Opportunity. In the previous blog post, I described the ways to define your affinity, test it and finally, search for communities you want to serve. We also went through some useful tools and platforms that you should use in your discovery journey. By now, you probably have a list of 5-7 communities and a file full of useful links to groups in Reddit, Facebook, accounts in Twitter, Instagram, Slack channels, etc. If you don't go through the exercise from the previous issue to make the most out of this one. So, how do you decide if there's a business opportunity for you within this community? At this stage, you have to dig deeper! ​ 1. Set a timer for at least 2 hours for each community Go through all (!!!) the posts and write down problems or pains that are mentioned there. At this stage, you don't have to write down specific quotes, what words people use to describe their discomfort (though as soon as you single out the community to proceed with you'll have to do just that). 2. Assign simple and general tags for every pain Use Excel to put down the number against each tag. For instance, if there's a UX designer complaining about Figma features, tag "Figma features". If you see a post from another one saying "I can't figure out how to use this feature in Figma" - tag it "Figma education", not "features" because the pain is not enough knowledge, not the technical issue. 3. Draw a chart As soon as your 2 hours are over, create a simple chart (I like bars, but you can use whichever you feel more comfortable with) that will visualize the results of your research. Here's what I've got after 2 hours of research in subreddit on startups. From this bar, I clearly see that there are 2 groups of founders: the ones who haven't launched their startup yet (aspiring entrepreneurs). And the ones who have. They obviously have different pains and attention focus. And I see what bothers each group most of all. There's a common denominator, though - cash. Everyone is bothered about where and how to get funds to support their startup. By the way, if you're bothered by it too, here's my article where I summarize all available resources for pre-revenue startups within the US and worldwide (not all of us are located in SF, after all 😁). ​ 4. Research solutions Take the top 5 most common and widely discussed problems/pains in the community and move to the next step. Search platforms for interesting and creative solutions for these problems: ​ Product Hunt - pay maximum attention to this platform if you're researching a professional community in the tech industry (engineers, developers, designers, marketers, DevOps, SEO specialists, etc.) 90% of products that are launched here are aimed at these communities. Do a simple search with the Search bar typing in your tags from Step 2 (ex. "raise easy" or "Figma education"). Add links to interesting products to your Swipe file (template is here). Google - we shouldn't forget this obvious option, right? Don't focus on it too much. Google can give you a million hits or none - depends on the way site SEO is done. Spend less than an hour on Google search and add the links to interesting products in your file. Udemy - this global platform contains thousands of courses on almost every subject. However, you should not expect to hit many promising results if the community you're researching is non-professional but rather circumstantial (like Moms of skinny kids, for example, or Robusta beans lovers). Also, if your community members are over the age that embraces online learning (for example, I wouldn't expect to find much on the subject "how to get read of annoying elderly caregiver" on Udemy). Of course, if your community has very low access to online resources (like children in rural Africa) there won't be much for them, too. But these groups are unsearchable online by default. Ah, don't forget to save the links that you have fished out. Amazon - even if you're not going to build a plant and manufacture flying cars, it makes sense to give Amazon a shot. At the very least it will broaden your perspective and let you see more approaches to solving problems. Anyway, spend 20-30 minutes searching your tags = keywords on the Amazon website. App Store/ Google Play — check out what applications available by the keyword search. Are they paid? Are they free with in-app purchases? ​ 5. Assign opportunity score Final step - assign opportunity score to every community on your list (remember, the first column was affinity, this one - opportunity). How to assign the scores? Arvid Kahl in his book Embedded Entrepreneur suggests assigning 5 to communities that have interesting problems, and 0 to those that don't have them. You definitely can use this approach. However, I prefer the one that is more data-driven ("interesting problem" is a bit foggy expression to me). I suggest assigning 5 to communities where the problems you have tagged have at least 5 possible solutions on the platforms you're researched (PH, Google, Amazon, Udemy). And 0 - to communities with problems that have no existing solutions yet. If there are over 5 solutions - assign scores from 1 to 4 (the more solutions are there, the less will be your score). Why do I choose this framework? If you failed to find solutions it might mean 3 things: a) you failed your research, b) the community doesn't consider this to be a problem that needs to be solved, c) the community wants to solve this problem but is not ready to pay for it. In any case, you still can build a startup serving this community but you will spend much more resources than needed to educate, find the right message, create e demand. This will NOT land you in a startup profitable from day one. You'd want to avoid as many complications as possible. 😁 Awesome! If you're ready - go ahead and do your research. I'll follow up the next week.

Content marketing examples: Hypefury vs FeedHive

Two competing post scheduling apps widely use content marketing in their marketing mix but in a totally different way. The results are very different too. There's years-long discussion about content marketing: is it only about quality SEO or beyond? Some agencies still use content marketing as an extension of SEO activities. Meaning, they go from the keywords, analyse what are the phrases they can get more traffic with, and write articles on those subjects. I am a strong believer that content marketing is far beyond SEO and also the company's activities on social media, as well as influencer marketing — that is, relationships with influencers. Why do I think so? I believe it's reasonable to include any content that is produced by the company or consciously engaged by the company as a part of content marketing strategy. But let's explore it deeper with specific content marketing examples, how it works in real life. Meet my teardown candidates: FeedHive.io (Switzerland) A scheduling app, operates as a SaaS. Offers scheduling and posting to Twitter, Facebook, LinkedIn, Instagram. Features: Allows to schedule, choose your own time, tag the posts. Don’t support evergreen posts (but probably would pivot to it as well). AI-generated inspiration templates. Best time predictions. Positioning: all-in-one hustle free scheduler Launched: March 2021 after being developed and build in public in 63 days Got first paying users in 48 hours. In 1 months - $500 MRR. September, 2021: $5MRR (according to microacquire.com ) HypeFury (incorporated in the US, founders are in France and Netherlands) A scheduling app with a focus on Twitter. Still, a Premium plan allows scheduling and posting on Twitter as well as Facebook, Instagram, LinkedIn and OnlyFans for 5 accounts simultaneously. Features: best time for post predictions, Evergreen posts, automatic retweets, AI-based tagging system (your posts are tagged automatically), personalised inspirations based on the account's previous posts (the best performing ones). Positioning: an app to monetise Twitter audience Launched: September 2019 after being built in public for 2 months. First paying customers — days after launch. By November, 2020 reached $10K MRR September, 2021: $23.5K MRR. Products feature and content marketing comparison Both products are very similar in features. However, they are very different in positioning, target audience and adopted content marketing strategies (though, both heavily based on social). As a result, they have absolutely different growth rates and dynamics. So, let's dive deeper. The "locomotive" for FeedHive marketing strategy is a founder, Simon Høiberg who's also the company's CMO. Simon has a strong personal brand and a wide presence on social media (66k followers on Twitter, 6.5 subscribers for his personal YouTube channel, 15K followers on inkedIn). Simon consistently creates high quality content for all three platforms and grows his audience pretty fast. HypeFury's both cofounders — Yannick Veys and Samy Dindane — are also influencers on Twitter though with much smaller following base (16.5K and 7.5K followers respectively). Hypefury's YouTube channel as of September 2021 had 116 subscribers. There's also a Hypefury Presents podcast but I can't access the number of its listeners. Still, overall we have to assume that though Hypefury has been around longer and has two co-founders, they can't personally provide the product with the same level of social outreach as Simone Høiberg can for FeedHive. Will all that said, Hypefury is growing faster. Hypefury and FeedHive: compare MRR, users, traffic sources In the first 6 months from November 2019 to April 2020 Hypefury's growth was x12. FeedHive in the same time frame slightly small growth (x11.5) but nothing critical. The spped is very impressive, right? Let's see how both brands get their traffic. Most of it, as you can see, comes from social media. I did not manage to find any Facebook ads for both apps. Hypefury and FeedHive Content marketing strategies: how do they differ However, the way HypeFury and FeedHive use social media is quite different. FeedHive uses Simon Høiberg's personal brand as a main driver for brand awareness. Also, it cooperates with several big account on Twitter (like Francesco Ciulla (50K followers), Oliver Jumpertz (46K followers), Prasoon Pratham (92K followers), Pratham (126K followers). All the accounts that support FeedHive are developers. They post tweets from time to time endorsing FeedHive or offering social proof (stating that the app helped them grow the audience on Twitter) Hypefury, on the other hand, actively engages many small communities on Twitter in order to spread the word. Hypefury's team constantly comes up with ideas how to leverage the community presence: — In August 2021 they ran ##hypefurychallenge where everyone on Twitter was encouraged to start growing their audience by following simple guidelines offered by Hypefury and consistently posting content with the above mentioned hashtag. — Hypefury actively engages micro- and nano-influencers (like @HeyArunima who's got less than 5K followers but with very high engagement rate (over 10%) — Finally, they rolled out an affiliate program where every influencer on Twitter is encouraged to use Hypefury for free while recruiting others to use it. Influencers can use personal referral links while mentioning Hypefury in their posts, recruit other affiliates and receive a commission for every new paying user who signed up for Hypefury after following the affiliate link. While Simon Høiberg focuses all his content efforts on bootstrapped developers and engineers, Hypefury recruits micro-influencers from illustrators, writers, creators, developers, marketing experts, data analysts — as many roles as possible. The main message is focused and valuable: — You can be anyone, still you can become an influencer on Twitter and monetise this status. The only thing you have to do is to post valuable content and be consistent. Hypefury will help you with both these tasks. — As the message is delivered via influencers it resonates a lot with every audience they address. It reminds me a lot of the strategy Nathan Barry used to get users on ConvertKit: he recruited micro-influencers first, and then reached out to their followers with a message that sounds like "look, a person you follow is already here, on ConvertKit, why don't you join them?" It definitely brings in great results and a high level of conversion rate for Hypefury, especially taking into consideration the fact that it refuses to compete in pricing with other similar services (FeedHive starts with $9/month, Typefully (another popular Twitter scheduler) has a free plan, Pro plan is $10/month). Hypefury's pricing, that starts with $19/month, is definitely off, and as soon as the features are more or less similar to FeedHive, it all comes down to positioning, messaging and attracting the right audience. On the other hand, Simon Høiberg messaging is much less "niche" — he positions FeedHive as an app for everyone, all-in-one while addressing, at the same time, a very niche audience (developers). I won't question how developers might be the only audience that gains the most from FeedHive functionality — hopefully, Simon's team had run dozens of customer interviews and focus groups before going all in with developer-focused content. But from the outside, there is a definite gap between a broad messaging and a focus of marketing effort on one particular audience. I believe the only reason for that is that FeedHive is less than a year old, they have a great head-start, and eventually they will figure out right positioning, messaging and ROI for content marketing efforts. Let's cap up — Hypefury with pricing that is twice higher than nearest competitors grows not slower but slightly faster. — The main focus of marketing efforts for both Hypefury and FeedHive is content marketing. — The difference is that FeedHive is using 2-3 big accounts to spread the word among the developer community. While Hypefury actively engages a wide net of nano- and micro-influencers to engage totally different communities. This is what content marketing can do for your brand. It can basically drag you out of the price competition game and boost growth across different channels. References: — Growing in a Crowded Niche: Hypefury Growth Story — https://baremetrics.com/blog/hypefury-growth — Hypefury on Indie Hackers https://www.indiehackers.com/product/hypefury — How Twitter Automation platform went from $0 to $4K MRR https://growthlessons.co/how-twitter-automation-platform-hypefury-went-from-0-to-4-4k-mrr-in-4-months/ — $11K MRR Growth Strategy https://www.youtube.com/watch?v=s4dtUrQJVbAhttps://www.producthunt.com/discussions/my-saas-product-has-made-3-650-already-but-there-s-a-flip-side-to-the-story — Simon Høiberg on IndieHackers https://www.indiehackers.com/post/feedhive-is-closing-in-on-500-mrr-after-being-public-for-only-1-month-4c96a5ef3f If you need more information on this subject feel free to contact me on Twitter or LinkedIn (DMs are open) I'm also available on ProductHunt if you prefer this network.

Customer Interviews 101

When is the right time to use customer interviews, how to run them and how to use the insights gained from them? I am totally aware that customer interviews is such a big topic that I could write 3 books on it and probably those would not cover it all — all the techniques and methods that can be used, all small biases that we should remember about, etc. However, I needed an accumulated piece of content that I can refer founders to — hence, this article. If you need more details on every subject covered below, don't hesitate to reach out to me via Twitter. When to use customer interviews The short answer will be: all the time 😅 Honestly, I can't think of any other type of market research or even wider, data extraction, that can produce as much value per effort as customer interview if it's done right. Google Analytics, traffic data analysis, heat-maps — it's all very useful. But nothing can beat the voice of real people. Founders should definitely use customer interviews early on, on the idea validation stage. I have an article that covers this subject in a more detailed way and explains why data analysis based on the data you can extract from online resources is not enough. In a nutshell, when you research data online you should be aware of the fact that this data is heavily biased: it will follow the mood of the platform, so to speak. People on social media will exaggerate the size of the problem they have just because social media is a great place for rave and rant. Only conversations with real people (aka customer interviews) might reveal that the problem people are complaining about is neither important, nor urgent. Thus, you will be spared from investing your time and energy into solving the problem no one actually cares about that much. Founders should definitely use customer interviews on the product launch stage while working on the landing page. I have another blog post where I explain how to use customer interviews to create buying personas and find out your customers' implicit motives to buy. In a nutshell, your landing page should drive emotional response from your customers, therefore you have to find out what values resonate with them the most. The best way to do it — is to run customer interviews. Founders should definitely use customer interviews when the product is launched at beta to get insights on what features are more useful for customers and what are not so much, how they move through the onboarding process and what customers' expectations are. There are cases when founders pivoted to a totally different product due to customer interviews during the beta stage. One of the best recent examples here — Nira. Hiten Shah, co-founder of Nira, previously cofounder of Kissmetrics (an amazing analytics tool that connects all data to a real person), was working for almost 2 years on an app that helped with document search. The product was already in beta, and Hiten Shah and his team were running user interviews, talking to executives who were using the tool. During one of the interviews, the exec opened the laptop and went pale: "Why do I see these people? Who do they still have access to my docs if they are not working here for ages?" Product team quickly explained that he was seeing the current state of his documents and if he sees some people who the document is shared with then indeed, these people can still get this doc despite the fact that they don't work for the company anymore. It was a shock for the exec. The next day, he told Hiten Shah that he’d been up all night using Nira to find people with access to his documents, then going into G Suite to remove them. — This one conversation changed the course of our business, — explains the founder. As a result of this one interview Nira was turned from the document search tool into the tool that helps companies track people who are not supposed to have access to some documents and block this access. Founders should use customer interviews later, when the product is up and running, to identify new opportunities and features customers would be happy about. How do you interview customers to validate the problem? When a VC asks you: "Did you talk to someone before building your product?" they refer to customer interviews. And almost every founder would give a positive answer to this question. However, 8 out of 10 founders I mentor presume that "talk to someone" means they show the prototype of their product to their friend, get feedback that sounds like "Wow! Wonderful idea!" — and that's the validation of their concept. Here's a big surprise: this is not a validation and the prototype demo is NOT a customer interview. These are my favourite quotes from The Mom Test, a book that every startup founder should know by heart: The conversations where you talk about our product only give us rope to hang ourselves Whenever I hear a customer compliments me I hear alarms going ”you’ve messed it up” People know what their problems are but they don’t necessarily know how to solve them. If you go to Google and start researching the subject of customer interviews you'll stumble upon fancy techniques like "Jobs-to-be-done framework", "4 lists formula", "Stages of awareness differentiation" etc. My suggestion is: when you're on ideation stage — forget all these fancy words. Just go and interview people that you consider to be your potential customers. But follow those simple rules: NEVER ask a person what they think about your idea or product. NEVER ask them if they would pay someone for solving their problem. Instead, ask them to describe their existing process of solving the problem you think they have. Ask them yo walk you through their thinking process and the way they look for a solution. If you're building a solution to the problem based on the tools that already exist and that you presume customers are unhappy about — ask, what exactly are they unhappy about. What "work around" have they found to deal with inconveniences they see in the existing tools. Never ask a customer a straightforward question like "What are your existing problems?" Or "What do you feel stuck at?" People are horrible, indeed, with identifying their problems — if they were better at this , psychologists would not make a fortune helping people with finding out what their problems actually are. During customer interviews you have to be this psychologist: ask about current emotions, reactions and workflows. Never ask about future or probable actions. I have a little e-book with illustrations about customer interviews. It explains 12 rules of customer interviews, what you should do and what should not be done under any circumstances. In a nutshell, those rules will help you build a conversation that is focused on the customer and their real problems, instead of you and your product. How to identify a viable problem Now, let's presume you have run 10-15 customer interviews (by the way, here's a useful article for you if you are not sure how and where to find participants for your interviews). How do you read the results? In some cases the results can be very straightforward — it's when you get about 90% of respondents reporting the same pattern. Sometimes, the split is closer to 50%. This is a reason to get suspicious, as 50/50 split tells you that what you're seeing is totally random results. You could flip a coin — and get the outcome with the same level of reliability. The answer to this might be: — either the participants pool is too small — or you have identified the wrong segment — it's too wide, customers show ambiguous behaviour, you have to narrow down the segment. In any case, every interview should be recorded and transcribed (you can use Otter.io for that). In every transcript highlight important quotes (adjectives and verbs customers use to describe their problem) and patterns (tools/ways/techniques they use to solve their problem now). Mark where people report that the problem you're trying to solve is not urgent or important for them (more on it below) Sort positive and negative patterns — this will give you an insight on what market segment you're not supposed to target and where you'd have more luck. After every interview try to place a customer perception of the problem you're trying to solve, within the Eisenhower matrix. If you're not familiar with it - it's a beautiful concept that is used to increase productivity but I like to use it for problem differentiation too. If you place all existing products within this matrix you'll see that mostly, people pay for solving Important and Urgent problems. With Not Important but Urgent it works more or less too. But lower right squire is a dump for effort and energy — you won't be able to build a profitable business on it. After a set of interviews and a thorough analysis you will be able to come up with a clear understanding of the following things: — your customer segment (who has this problem you're trying to solve and perceive it as important and urgent or at least one of those) — what are the competitive alternatives for your product? Competitive alternatives are wider than competition because they also include an option of doing nothing or doing something manually. For instance, you offer a fancy SaaS for budgeting — all the problems that you're offering to solve can be solved using Excel. If you're going to market it as a B2C solution you have to understand that thousands of people out there don't do their family budget at all and feel very comfortable with it. How to estimate the size of the problem and if it's big enough to build your business on it Now, knowing what you're up against and what will be the prize (total addressable market = your customer segment) you can calculate if this product worth your effort and energy. Let's take an example of a founder I was working with in May, 2021. He is building a platform that is very similar to AirBnB. It offers renting services for short-term stays. The basic difference is that it targets the commuting workforce — sales reps, consultants and other roles that have to spend 50% of time on business trips. Looks like a well defined audience, right? Let's see how he goes around with calculating the market size: Americans make more than 405 million long-distance business trips per year. This means about 1.1 million people are traveling for business every day in the U.S.. TAM = 1.1 x 365 = 401 million people annually. Companies spend an average of $799 per person per day. About 34% of this amount is spent on accommodations (all this data is widely available online. Like here . TAM value = $108.9 B The founder I work with wants to begin with the big cities and in particular, New York because that's where they are located. Target market value for NYC for business traveler in 2019 was around $60M (it is just the rough calculation of expenditure on the accommodations) Now, the penetration rate. In case of apartment rentals this rate is basically the % of rooms that are occupied full year round. If you're dealing with, say, beekeepers of NJ your penetration rate would be for beekeepers that use applications like yours to improve their operations. How do you get this data? It obviously needs some creativity. The founder I work with joined Facebook and Reddit groups where AirBNB apartment owners discuss the downsides of their business and followed closely every conversation where occupancy rate is mentioned. We took the number 65% as a rough estimation (obviously, it was lower for 2020). Therefore, the SAM will be $70.7B. What other paths can you pursue to come up with this number? If you're thinking of a native app — check out how many times similar apps have been downloaded. Look up the app you want to check, tap on it when it appears in the search results, and it will take you to the download page. The number of downloads will be above the Install button and next to the app's size and age rating. Install the app and check it out. If it looks professional, with great features (you've been thinking of them yourself) and decent UX but download rate is very low — it is a reason to be worried. Perhaps, your target audience is not that tech savvy as you think. Reddit and Facebook — again, can't stress enough the value of a proper research. You should have gone through this stage when doing initial discovery. Now, go back to the groups that you have found and see if people mention any software at all. Google Keyword Planner — free option to figure out how often people look for solutions like yours. If you have not used it before — create your Google Ads account. In the Tools and Settings tab in the upper left corner you'll see Keyword Planner. Choose it, then follow the guidelines (specify the area of your search and language). Actually, I recommend doing this exercise anyway. Here, you see that the search for pitch decks is not so high in Canada. So if I wanted to build a service that provides customised pitch decks for Canadian startups, I would start thinking of adding something else to my product line. Because, I won't probably survive on a $5 service that is interesting to 1000 customers, taking for granted that there's someone else who wants to serve them and I won't get 100% of my addressable market. Also, if you're dealing with physical products I have a great hack from my not very long DTC experience (yep, I've been doing Amazon sales too😂 ) Find a website that offers a product like you're planning to offer. Place an order. Record the order number. Place another order in 24 hours and record the order number again. Contact the service and say that it was a mistake and you'd like to get a refund. What is it for? Most online stores use a direct system to generate order numbers: they go one by one. Meaning, if your order #123 in the morning and #125 in the evening — it tells you that the company gets 2 orders a day. Add the average order size (usually, slightly less than the limit to get free delivery) — and it's a very rough and hacky way to evaluate the prospective revenue. I'm not sure something like this can be done with subscriptions but there are obviously some numbers there. You can very well investigate using the same technique. It is generally agreed that getting yourself 10% of the target market is a good bet. If we take my AirBNB-like service founder, it will be 10% of $70.7B = $7B. So, getting their business to $7B ARR is the best case scenario for them. But honestly, growing the business on a competitive and lucrative market like business travel to 10% of the market share is impossible if you're not backed up by very strong VCs. Therefore, the probable scenarios as I saw them were: — total failure because the level of competition is too high. What keeps AirBNB from copying the offer? They have infrastructure, strong market presence, billions of dollars to run experiments. — limit the market to a smaller niche where competition is not so strong and the maximum level of revenue is more humble (this will, theoretically, prevent big players from investing into aggressive efforts to monopolise this market). My suggestion was to retarget the product to small cities with less business travel and where general attitude to AirBNB is not so good. How to determine that you're qualified to solve this problem This question is always asked by founders during the mentoring sessions, though I always presume that when you start building a solution to the problem you already consider yourself to be qualified However, in a general, philosophical sense, and to maintain a holistic approach to product development it is recommended to choose a market segment and a problem that you have affinity for. In other words, your odds will be higher if you're scratching your own itch . Having a strong affinity for the audience and a problem helps to keep a founder motivated and charged longer — and this is something that you will need, because early stage startup is a rollercoaster. Successful early-stage startup is a rollercoaster minus gravity — if you get a product-market fit you'll be growing like crazy and the risk of a burnout is very, very real. When there's a higher goal and implicit values, it definitely helps to maintain mental health. I have a little quiz that will help you to evaluate your affinity level, in case you're still hesitating if you've chosen the right audience to serve. The recommended framework is to take what you know, combine with what you're good at, and add market demand. The intersection works perfect for "productized" skills — you can see it pretty often with SaaS launched by agencies or professionals. For instance, Logology — a service that helps with creating unique yet not very expensive logos — was launched by a designer who had worked as a freelancer for years prior to this attempt of "productization". Classic example of super successful productization is Basecamp — a tool that the company was using for internal needs and when it was turned into SaaS became a huge success. However, I'd say it is a recommended but not a necessary framework. There are multiple examples when founders managed to build a product or a service in a field where they had no first-hand expertise. For instance, Microacquire — a platform for selling and acquiring startups — was built by Andrew Gazdecki. He's never been in the SaaS business or in sales. He's just a person who sees trends and has a good network of partners. Tools to track the voice of customer Finally, let's cover what software you can use to stay up to date on the voice of your customer. In other words, how to avoid the "innovator's dilemma" and keep on solving the problems customers have. First of all, why is it important? To answer this question let's just name a few companies that were on top of their game but ended up being complete losers: Nokia — was one of the leading cell-phone manufacturers in early 2000. Completely shut down their phone manufacturing facilities several years ago. Blockbuster Video — home movie and video game rental services giant, was evaluated over $500M in 2000. In 2010 they completely lost the game because of Netflix. ToyRUs — one of the biggest US-based retailers that sold toys. It was supposed to feel great because in 2000 they signed a deal with Amazon that limited toy sellers on the e-comm platform to just 1 player - ToysRUs. However, in 2004 Amazon decided that it would be better to sue with retailers and pay the fees but let other manufacturers and retailers on the platform. ToysRUs was so focused on the contract with Amazon that it completely ignored the move of the customers online and did not make any attempts to build an e-comm branch. Had to file bankruptcy and close all the stores by 2018. There are many others in this row — GM, Kodac, Compaq, Polaroid, Tower Records, etc. They all have the same reason for their failure — they stay ignorant about trends and the voice of customers. What tools can you as a founder use to avoid thus fate? There are dozens of software solutions, most of which are enterprise level (like Medallia, Clarabridge, Qualtrics, etc.) As an early stage startup you don't need any of those. My recommendation for the founders — keep tracking Reddit subs, and influencers in your space. Whatever product you're dealing with there must be influencers on social media who cover this subject. Influencers are very responsive to change in customer demand and habits — if you see a change of narrative start getting worried. Also, every tool that will help you to collect user feedback — forms (Typeform, Tally, Google forms, Reform) chats, surveys — use everything you can. And obviously, keep on arranging customer interview sessions to assess how your customer natural workflow has changed and what improvements your product need to resonate with these changes. If you need more information on this subject feel free to contact me on Twitter or LinkedIn (DMs are open) I'm also available on ProductHunt if you prefer this network. Useful links and resources: 1) https://cxl.com/blog/customer-interviews/ 2) https://cxl.com/blog/voice-of-customer/ 3) http://www.procarton.com/files/file_manager/press_0109/limbic_english.pdf 4) The Mom Test by Rob Fitzpatrick 5) Deploy Empathy by Michele Hansen 6) The Embedded Entrepreneur by Arvid Kahl

Drive emotional decisions with your landing page

6 out of 10 founders I work with don't create buying personas. From those 4 who do only 1 add an emotional dimension to it. And this one always becomes a winner. How to add emotions to your buying personas and increase conversion rate? Buying persona: what is it? First of all, if you belong to those 6 who don't create buying personas, let's begin with them (if you do — skip this part) Buying personas is a cumulative image. It is an "average" portrait of a person whom you consider to be your perfect customer. It probably doesn't exist in real life but it bears most important features of different persons who you believe would be interested in your product. It sounds pretty easy, right? But in reality, it's not. When I first started creating buying personas 6 years ago, I did it all wrong. Here's an example of the first buying persona for cooking-related app: Mommy Mandy Demographic and Background Data: Mandy is a 30+ years old. Lives in the suburbs. Stay-at-home mom. — Knows how to cook. She does not need basics. She needs advice on specific aspects of cooking. It obviously turned out to be an absolutely useless exercise because it did not help me to understand who "Mandy" really is. What her challenges are, how does she solve her cooking-related problems, what options does she have to solve them and how does she feel about them. Why I could not do it properly? Very easy — I've never talked to real "mandies". Everything I knew about my customer was very fragmented data retrieved online (from social media) plus my personal experience and expectations because I was scratching my own itch with the app I was building, so obviously I presumed all other potential users were just like me. Again, it's a totally wrong approach and I paid a price to learn this lesson. Two years later when I was pretty good at doing customer interviews my buying persona looked like this: Looks much better, right? Already here you can see why it's useful to create buying personas. Quotes — the quote here is taken from a real customer interview. This is definitely something that can be used later in the copy on a landing page. "Cook not because you're supposed to but to get rid of the stress" — looks like a great motto for the app and directly addresses specific needs of a group of customers. There's some demographics but it will matter later, when the Facebook ad campaign will be rolled out. It's useless on the first stage where you have to decide what features to implement for your app, and equally useless when you have to craft a landing page. What's important now are Needs and Frustrations. For the product stage obviously Product/Device sections are of great importance. Also, Goals and Scenarios. They are also super important for the stage when we start crafting the landing page: just from looking at this oic we can say that we'll need "Search by emotional state" as a shortcut but also as a highlighted feature. However, with time I noticed that this Buying persona I created still missing some important information that will help me create a really compelling landing page. The only emotion that is mentioned here is "STRESS". It's useful but stress is a pain that presumably my buying persona is trying to get rid of. In your case it can be boredom, fear, uneasiness — whatever emotion-related state you're trying to address with your app. However, looking at this profile I don't see what Mandy's PERSONALITY is about. Is she an introvert or an extrovert? What her values are (aside from the obvious one — family)? And if I don't understand all these important things, how can I create a copy and visuals for the landing page that will be compelling and convincing for my Mandy? Emotional categorisation of Personas Limbic Mapping Framework About a year ago I stumbled upon an approach that was popularised by neuroscientist Dr. Hans-Georg Häusel in early 2000. As I always vouch for science-based approaches I decided to give it a try, and it has shown tremendous results so far. This framework is called "Limbic categorisation" (the name is derived from the limbic system where 20 years ago scientists used to locate emotions — it has been proved since that that it's not the case and that emotions are formed all across our brain, but it doesn't really matter because the framework deals with customers emotions, not the parts of the brain). Basically, Dr Häusel made a thorough research and mapped the majority of human motives and values into something he called the Limbic map. Create emotions-driven buying personas using Limbic framework during customer interviews How does Dr Häusel suggest using Limbic Map? Simple: Talk to your customers and ask them what they think their basic values are. Then put them as dots on the map — the value that gets more dots than others is the most important emotional dimension for your buying persona. I don't believe that it's a great method though. Asking people what their values are usually produces very biased results — we tend to give the answers that we BELIEVE are correct, they are not necessarily correct. So, what I also do: During the customer interview where I want to get more understanding about my buying persona, I ask a person to name me their favourite web-site (or a physical product) and tell me why they love it so much. If they can't come up with anything I offer them some examples that are NOT related to my product but related to their current tasks. For instance, I ask what they are going to do after the interview. Let's presume they say "I will do the dishes''. Then I ask them to go to the Tesco website and tell me which dishwashing solution they would buy. Why TESCO? Because, 100% of non-UK based customers have never been to this website and most probably are not familiar with UK-brands. If it's a UK-based customer I offer to visit the Wal-Mart website. The main idea is to get from a customer an explanation of WHY they would choose a product by looking at a product or WHY they love something so much. The words and adjectives they use to describe their choice are crucial for understanding what their values are. I also take 3-4 values from each sector and ask customers to explain what their associations are about these values. I carefully listen for positive or negative vibes. For instance, I ask: "A word "Humour" — if it was a person, can you describe it to me, how it would look like?" Or "When I say "Duty" — what your first association is?" I mark only positive associations. This might seem random. But if you take 20-30 customers and map all this stuff — you'll see that there are clusters of positive associations in specific areas. You can even do the "heat-maps'' to show what values are shared with most of your customers. This are already very valuable insights — you see what values are the most important for your customers and can address them on your landing page. Mind you, it's not something they have DECLARED to be valuable for them . It is something that ACTUALLY drives their decision making. But it gets even better! Dr. Hans-Georg Häusel has also created a framework of Persona Types based on their values. He identified 7 different types of Personas based on the values that guide their decision making. Harmonisers Traditionalists Free Spenders Disciplined Hedonists Performers Adventurers He also has calculated how many personas of each type an average market consists of. Here's a little useful visual for you. Emotional types of buying personas and their core values All seven types are different in terms of their values. What does it mean for the topic of this article — the landing pages? It means that there are no "good" landing pages and "bad" landing pages. If you personally don't like it — you're probably just not the type it appeals to (I presume we're talking about the page where most core UX design principles are at place and we don't see something really ugly and out of 90th). Here's a chart that I use to figure out who my buying persona really is. Let's get back to my Mandy example. As soon as I added the emotional dimension to my persona it all became very clear what kind of value proposition does this persona expect and what will be more compelling for them. (What's happened to the Goal and Scenario? It's been moved to the User Journey — see here) Create a landing page using buying persona's emotional dimension Based on our discoveries, the best copy for buying persona like Mandy would sound like this: — The most efficient way to bond with your loved ones while cooking. ✅ — Safe and Efficient way to find stress-relieving recipes ✅ — Your world of culinary creations to connect the whole family ✅ Copies that will NOT work for Mandy: — Hustle-free way to become a chief ❌ — Get 1000 recipes for $1 a month ❌ — Get access to unique recipes from the talented chefs ❌ Those are not bad copies. They will work great. But for a totally different persona. Mandy's personality and values will also impact the visuals that will be chosen for the landing page and the necessary blocks of content. This is actually a very important aspect. Some marketers would insist that social proof is a must-have on any landing page. Social proof can be presented in the form of "wall of love" (reviews of the actual users) or just the brand names of the companies that you cater. I would argue that this is not the case. Social proof is important for several types of buying personas (traditionalists and harmonisers, I'd say it's important for performers as well as social proof symbolises their affinity for elite status — performers have to be sure they get what other elite persons get). But Adventurers, Free Spenders, Hedonists — they don't care so much for social proof. Does it make sense to send them the message they will not read? I don't believe it would be a good idea. An A/B test that I ran for one of my customers who had Spenders and Hedonists as major buying personas proved this hypothesis: the conversion on the page without social proof was 10% higher than on the page with social proof. Why startups need to create emotionally-focused landing pages As a startup founder, you probably think that you don't have time for all this stuff. Probably, you're right — there're tons of things on your plate that need immediate attention. But to think of it: this emotional personas-based approach doesn't require too much. It is based on the things you have to do anyway: running customer interviews to identify the pain points, then to create the buying personas. You have to figure out who you are selling your product to, right? So why not take one extra step and add some emotional depth and values to this persona? Especially, if it can make a real difference? In a classic case study by André Morys of KonversionKraft the conversion from the landing page that was designed with emotional dimensions in mind was 79% (!!!) higher than on the generic well-designed landing page. But what if you've been wrong with your research and your buying persona is not the one you've been crafting so carefully? First of all, you have to be thinking of creating several personas anyway. Though as a startup you should be very niche, your customers will be different emotionally anyway. And you're not really sure until you start operating which group your product will resonate with the most. What if you ran 30 interviews and most of your candidates were Traditionalists but 5% were also Hedonists. Should you focus all your effort on Traditionalists? Hell, no! You should craft landing pages for ALL types of buying personas you have captured during the interviews and start sending traffic to them all with different targeting. As soon as you find the winning one (that provides better CTR and also brings better conversion) — go all in with this buying persona. As a startup you can't afford serving different types of customers at once, you have to focus on winning only one first. But you can't do it without understanding what your options are and which group resonates better with your product. More on running experiments and slightly different approach to landing page copy and visuals you can read here: https://crowdtamers.com/creating-good-positioning-tests-3-ways/ https://crowdtamers.com/use-these-50s-positioning-tricks-to-nail-your-go-to-market-copywriting/ If you need more information on this subject feel free to contact me on Twitter or LinkedIn (DMs are open) I'm also available on ProductHunt if you prefer this network. Useful links and resources: 1) https://en.ryte.com/wiki/Limbic%C2%AE_Personas 2) https://cxl.com/blog/empathic-design/ 3) http://www.procarton.com/files/file_manager/press_0109/limbic_english.pdf 4) https://www.notion.so/Emotions-for-Landing-pages-f7c00ce018924f3ebdfa25f4f4ebbe7b#2ce11b763db7445a9425102489f68292 5) https://crowdtamers.com/use-these-50s-positioning-tricks-to-nail-your-go-to-market-copywriting/ 6) https://crowdtamers.com/creating-good-positioning-tests-3-ways/ 7) https://youtu.be/pPVIjeX4Mmw

Emotional purchases

If you're honest with yourself you'd have to admit that a part of your purchases are impulsive. It's a lie — in reality, all your purchases are emotional. In 2007 two scientists — Brian Wansink and Jeffery Sobal — ran a study on 140 people and established that 99% of food related decisions they made were kind of...automatic. They did not even notice the very fact of deciding anything. While the average person thinks they make 3-4 decisions about food/day in reality it's over 220 decisions. This research created the whole new movement in behavioural science and marketing. More and more studies piled up that proved that most if not all of our decisions are based on the processes that are run by our subconsciousness. Though it is a tough philosophical question that is directly related to the question of the existence of a free will (how free are we in our choices if most of the decisions we make are not based on reasons), still most of behavioural scientists now agree that consumer decisions are heavily biased by emotions and that they make them most often without consciously realising, why. In 2011 Nobel prize winner Daniel Kahneman published "Thinking Fast and Slow" where he came up with a theory of 2 Systems that is still one of the most influential in behavioural marketing A classic puzzle that is used to demonstrate how these 2 systems work: A bat and a ball together cost $1.10. The bat costs $1 more than the ball. How much does the ball cost? If your answer is 10 cents — your System 1 speaking (correct answer is 5). In a nutshell, System 1 is a part of your mind that is responsible for fast, automatic, intuitive decisions. System 1 controls our behaviour most part of the day. It is also a system that kicks off when a specific type of behaviour moves from the learned one to automatic. Think about the walking process. Babies are very awkward with walking. First, when they only start to walk, they wobble, spread their hand for balance. It seems like before taking every step they make a conscious effort, remembering how this walking thing is done. But the more they walk, the more confident they are. Eventually, a baby starts to walk with ease as this newly learned behaviour becomes automatic. Most people don't think about how to walk when they do it. System 1 defines the walking process, the way we put our feet, the way we choose the direction and scan the environment trying to assess if it's safe enough before we place out foot on a new spot. We do all that without thinking. System 2 is based on reasoning. It is also active all the time but its voice is muffled by reactions to stimuli we receive every second, because visual, auditory and tactile stimuli are first being processed by System 1. As soon as System 1 arrives at a decision based on the inputs it receives from the outside world, the role of System 2 is reduced to rationalisation of this choice — we have to explain to ourselves why we decided this way, and not the other. If System 1 has not made a conclusive decision because the inputs deliver some new information that is not consistent with what we've got used to — then the "analytical" system kicks in and we start reasoning more consciously. What does it mean in terms of marketing? In general: — Irrelevant aspects will impact consumer's decisions more than relevant. For example, a post of an influencer will have more impact on a customer decision making process than a review in a magazine. — Context is a king. Meaning, trends, location, adopted norms, etc will define the decision more than the most accurately crafted features — Immediate goals more often are more important for a customer than long-term plans. In practice, it leads to the following behaviour: the services that are not used regularly every month will not be renewed no matter how big the discount is for an annual subscription. However, if the need arises, the customer will pay x2 for the monthly fee. If you need more information on this subject feel free to contact me on Twitter or LinkedIn (DMs are open) I'm also available on ProductHunt if you prefer this network.


Useful links and resources:

1) Mindless Eating: The 200 Daily Food Decisions We Overlook — https://journals.sagepub.com/doi/abs/10.1177/0013916506295573
2) Thinking, Fast and Slow, Daniel Kahneman 3) https://www.youtube.com/watch?v=CjVQJdIrDJ0 4) The multiplicity of emotions: A framework of emotional functions in decision making — http://finzi.psych.upenn.edu/journal/bb1.pdf