Designing a new product? The two most important features are…

Keith Schacht| June 29th, 2010
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It’s been a few years since I’ve been in start-up mode: dissecting great products to learn, generating lists of ideas, and meeting lots of new people. In undergoing this process I’m reminded of my fundamental approach to developing a new product and how unusual it seems to be among other entrepreneurs. I’ll share….

When I have a new idea that I’m intrigued by that I want to bring into the world, the two most important first features I stay focused on are: (1) simplicity, and (2) community.

Let me explain. 1) Simplicity. Too many people create too many features way too soon. The most important feature in the first version of your product is that it’s simple. In one sense this is the absence of features, but in a very real sense “simple” is a feature in and of itself. “Simple” is achieved by distilling your concept down to its essence, by including only those features which are absolute core to your idea. Achieving “simple” is a very selective cutting of features: you don’t necessarily leave the easy features and cut the hard ones, you leave the essential/core features and cut the peripheral ones. Why? Because the most important goal at this stage of product development is that when a potential customer sees your product, they “get” what it does. You want them to almost instantly recognize the problem and understand how this product can potentially solve it. This first version of the product is a conversation starter.

When you’re trying to teach kids what a mammal is, you don’t start with the egg-laying platypus as the example. Likewise, you want your first product centered firmly around a quintessential use case. Lots of features you’ll add down the road will be added to address edge cases, “real-world” scenarios, but they’re a distraction at this first phase where clear understanding is the first goal. It’s not so important that the first version of your product actually solve the problem, it doesn’t have to be ready for someone to dive in and start inputting real data and using it on a daily basis, the purpose of the first version of your product is that you can show it to actual customers and they “get it” and get excited about it.

This leads directly into feature #2, Community. There are lots of different forms that “community” can take at this stage: a forum, a regular conference call, group sessions; but the essential is that you create a regular on-going interaction between an early group of customers that you get to eavesdrop on and participate in. Note that this is not a bunch of people talking only to you, you want a  small group of real customers talking about your product among themselves, brainstorming ideas, hearing what each other think and disagreeing.

Your goal at this stage is to build an early version of your product that is distilled down to its essence and then get a group of vocal passionate real customers using it, and then, only then, do you start really building the product with them. You start listening and responding and iterating. This distilled essentialized  first version of your product is situated at crossroads. There are a lot of subtly different but significant ways you can take this product, but you don’t want to add the small  features that push it down one of these paths. You want it’s essentialized form to stand on it’s own feet, and then you want this early group of customers to push it in a particular direction.

What happens if you don’t achieve this? What happens if you build a first version of the product and no one really gets excited about it? Well, this means one of a few things. Either: 1) this is the wrong group of test customers, 2) this is the right group of customers but you’re wrong about their being a real underlying problem, 3) they’re not understanding how this particular solution solves their problem.

You’re allowed to try again with a slightly tweaked and modified version of a distilled product, but don’t make the mistake of thinking “my customers need more real working features” and start building, building, building. You’ll know that you’re making this mistake if, as you build more, your group of engaged passionate beta customers gets smaller and smaller. You’ll know you’re doing things correctly when you’re group of engaged passionate beta customers starts getting bigger and bigger, both because some of the initial people who weren’t quite clear on it start to really “get it” and get excited, and because those who are excited want to start showing it to their friends.

Some tips to increase your chance of achieving this:

  • Keep your product ugly, don’t get slick graphics involved at this stage. You’ll actually get better, more honest feedback if your product looks and feels a little rough. Implicitly this communicates that it’s a work in progress and they’re helping to shape it. If you show them a really slick product and they don’t quite like it, they feel worse about criticizing it so they won’t, or you’ll start to hear feedback like, “I can see how some people might like this…” which is code for “I don’t like it, but a lot of effort went into this so I hope someone out there does!”
  • If essential features are hard to program, use lots of screen shots, mock-ups, and fake data. Real customers generally have bad imaginations, so even though you tell them, “XYZ will happen when you click here”, and the customer says “oh yea, I get it” they’re either being nice and have no clue what you mean, or they’re imagining something but it’s very different than what you’re imagining. You don’t want an illusion of understanding. Create a mock-up with fake or static data, put the most weight on feedback to stuff they’ve actually seen and clicked on, not on stuff you hypothesized about with them.

Entrepreneurs change the world

Keith Schacht| June 25th, 2010
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Awesome short video about why entrepreneurs kick ass :)

The vicious cycle of working harder

Keith Schacht| June 17th, 2010
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I’ve noticed that over the course of a week that over-working and working smarter are both self-reinforcing. To put it another way: the less I work, the less work I have to do; the more I work, the more work I have to do.

I’ve found that during periods where I have a lot I need to get done, I work harder. I dive in right away, take less breaks, and put in more hours. Often this is necessary for a short period of time, but it can be dangerous. By over-working the first thing that gets cut is time for reflection. By cutting this thinking time I’m less apt to see those smarter ways to get things done. I don’t cut off tasks that drag, I miss an opportunity to delegate, I miss a clever solution that solves a problem, etc. All of this ends up causing the work to take longer creating more total work for myself, which makes it more likely that I’ll over-work the next day beginning a vicious cycle.

The same pattern is true for working smarter. By taking a step back from my work I review what’s on my list and figure out how to cut things, I delegate early to get a project in motion, and I reflect on hard problems to find shortcuts. All of this ends up reducing the overall amount of work, which gives me more time the next day to work smarter. It’s a virtuous cycle.

Have other people had this same experience? I make a point to try and be cognizant of either cycle happening to me so I can work to break or embrace it, but it’s not always easy to catch myself.

The genius of Facebook & Twitter: reply-optional

Keith Schacht| June 17th, 2010
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There is one aspect of Twitter and Facebook that I think makes the services very powerful, in fact, I think it’s core to their value, but I don’t often see it discussed: the power of reply-optional communication.

Before these services were popular if you wanted to let all your friends know about something new in your life, say you just got a new job, you’d probably send a mass BCC email. When you did this you knew you were being a bit of a nuisance to people, and the reason is because when you yourself receive these same kinds of messages, how did you feel?

It’s in your inbox right along side extremely urgent messages that actually need your attention and a reply right away, but this mass email is in an awkward email category. It’s coming from a friend of yours so you feel bad just deleting it, but at the same time, you know they probably don’t want everyone to actually reply and flood their inbox in return.

That’s the power of having a new communication channel that everyone knows is reply-optional. It eliminates the awkwardness both for the sender and the recipients and ultimately leads to a lot more communication and sharing.

I’ve seen a number of web products these days that are adding a “feed” feature to the site that shows you the activity of your friends, but in many instances this is blind copying of a feature without understanding the intent. If you understand the root, that Facebook & Twitter are alleviating the awkwardness of a category of communication, then you can figure out how it’s best to truly adapt it to your site’s concept rather than just filling a feed with data from your activity log. People have a desire to communicate with others, figure out how to help them do it.

Restarting my blog

Keith Schacht| June 17th, 2010
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A few years ago I spent about a months blogging but quickly gave it up cold turkey. I had a few interesting thoughts during that time, and rather than let them drift into the ether I’ve imported a handful of the more interesting posts below (note the 2007 post date). I’ve been itching for a place to share my thoughts on business and web trends, so here it is.

In addition to this blog I recently started a second one, Taste of Tomorrow, which you can get to from the tabs at the top: BusinessKeith and GeekKeith, the two sides of me, my two biggest passions. :) This Taste of Tomorrow blog will be a more disciplined endeavor to catalog and share technologies that I discover, we’ll see where it takes me!

Bet on process over outcome

Keith Schacht| June 5th, 2007
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If you walk into a casino and–on a whim–bet your entire life savings–and you win. Was it a good decision? No. Even though most would congratulate you on a job well done, it was a bad decision. Or the opposite example of simple expected value. You make a decision that has a 90% chance you’ll lose $5, but a 10% chance you’ll receive $1000. Each time you make the same decision, the expected value of that decision is $95.50, even the times you lose!

Any individual decisions can be badly thought through, and yet be successful, or exceedingly well thought through, but be unsuccessful, because the recognized possibility of failure in fact occurs. But over time, more thoughtful decision-making will lead to better overall results, and more thoughtful decision-making can be encouraged by evaluating decisions on how well they were made rather than on outcome.

The above quote is from this section of a book, Be The House, that a friend sent me. I’ve been thinking this way for awhile, although I would not have said it quite so eloquently.

The swing for the fences success in Silicon Valley get a disproportionate amount of attention but I’m inherently skeptical of the jackpot scenario. Over the years I’ve been surprised at the number of very successful entrepreneurs I’ve met who quietly make a million or more in profit a year or have had a string of small to medium business that they’ve sold. This doesn’t mean, “don’t think big,” just be diligent, focus on facts, and tip the odds in your favor–be the house.

Life is like a game of pool

Keith Schacht| May 22nd, 2007
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A good friend gave me this piece of advice about choosing your next career move or business to start:

When you’re playing pool, there are always a number of shots you can sink on any given turn. To win, you have to not only pick a shot that you can sink, you have to pick the shot that puts you in the best position to sink the next shot.

Pick a job or a business by thinking about what you can do well and learn something from, but more importantly, think about where it’s going to lead you, what you’d like it to tee you up for next.

Jeff Bezos: The anti-trendsetter

Keith Schacht| May 18th, 2007
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I attended the Web 2.0 Expo out in San Francisco. One of the highlights of the conferences was a Q&A with Jeff Bezos.

I’ve met Jeff a few times, he is one of the entrepreneurs I most admire so I’m always keeping an eye on Amazon to see what they’re up to, and I wasn’t expecting to learn a whole lot new from the Q&A… But, just like re-reading a good book and catching something you missed the first time, there was a real gem.

Jeff was talking about their web services strategy (S3, EC2, etc) and said something to this effect:

(paraphrasing from memory)

Many people are always trying to figure out what’s new–what is going to be the latest trend. We like to focus on what is not changing–what is going to stay around and be needed regardless of what the latest trend is.

AJAX, social networks, video… even if all of those trends pass and are replaced by new online trends, data storage and computing power are still going to be needed.  This is just like the entrepreneurs who sold mining supplies during the San Francisco gold rush, and the shipping companies (UPS, FedEx) who delivered all your purchases regardless of which e-commerce company you buy from; it’s great to be at the foundation.

If you’re interested more in Jeff Bezos, there is a great interview with him at the Academy of Achievement.

Chicago vs the Bay Area

Keith Schacht| May 15th, 2007
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I’ve thought a lot about the tradeoffs of starting an internet company in the Chicago vs the Bay Area. I love living in Chicago, but I want to have a good understanding of what, if anything, I’m missing by not being in SF to know if it could ever justify moving there.

I just heard one of the most interesting answers to date. I was listening to an interview with Scott Rafer, CEO of Feedster and MyBlogLog. Toward the end he touched on what he thinks makes the bay area unique for entrepreneurs.

I’m paraphrasing from memory:

In San Francisco, social pressure is on your side. In other cities, if you are involved with a start-up, you’re a bit of an outcast. People often think your crazy before they even hear the business idea because the very concept of starting a company is out of the norm. In the Bay Area, on the other hand, there is an immense social pressure towards start-ups. Lots of people working for big companies are made to feel that they’re “missing out.” And when it’s the norm rather than the exception, people give you the benefit of the doubt. Nearly everyone has heard some business idea that sounded crazy and ended up making it big.

I think this really gets at the essence of the culture. It’s a great explanation as to why you see a lot of what you see out there. I have experienced this “culture” every time I visit, but I had not identified it and put the words to it. It’s this “benefit of the doubt” that makes it easier to convince others to join you, raise money at early stages, convince your spouse/parents/relatives that it’s okay for you to quite your great job and give this idea a chance, etc. It’s like your swimming downstream.

However, I think this social pressure is a consequence rather than a cause of all the start-up activity over the years. There is something more fundamental about the geography or the culture that originated the phenomonen in the first place.

Paul Graham has a great essay on why Silicon Valley came to be

Personally, the jury is still out for me. I love Chicago.

Please discriminate

Keith Schacht| May 11th, 2007
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After attending dozens of business events in Chicago, I have an open request to organizers: please discriminate more.  Decide who the target audience is, make it as narrow as possible, and exclude everyone else. Focus on a particular industry, age group, company size, experience level–whatever it is, just focus on something. Don’t worry about offending people, don’t feel bad that you will have to say “No” to a few people who, personally you like, but don’t fit the profile of the event. In the end, everyone will thank you for creating a more value. It’s better to resonate perfectly with a narrow group then to fall flat with everyone.

I’ve had a couple valuable meetings and conversations at Crain’s Chicago Business events, a few more valuable connections at Illinois Technology Association events, and received tons of valuable from Chicago Beta events.

Sure, I’m a Chicago Businesses (ala Crain’s), I’m even a Chicago Technology Businesses (ala ITA). But most accurately, I’m a Chicago Technology Internet Start-up Business (ala Chicago Beta).

This is one of those principles that applies well beyond just events. Take a new web application. The more narrowly you focus on a particular customer segment, the better you can solve the problems of those customers. You can have default inputs that are more relevant, iterate the product more quickly because you’re supporting less features, talk with a greater number of target customers to understand their needs.

In business, focusing is a virtue, being “all inclusive” is a vice.