Validate your startup idea by researching competitors, creating a minimal viable product, and talking to users to get honest feedback before launching it.

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  00:00

  Dedicate time to understanding your startup idea and validate it by talking to people before launching it.

  • Take my advice as directionally good guidance, but remember that every business and situation is different.
  • Dedicate large chunks of time to immersing yourself in your startup idea to avoid context switching and novice approaches.
  • Verify your problem statement by talking to people and launch your product on TechCrunch to get initial user feedback.
  • We spent almost a year trying to create a platform for life coaches and therapists, but it wasn't something we were passionate about and it wasn't a problem we had, so it's important to think before building a product.
  • Immersing yourself in an industry to understand its inefficiencies is key to disrupting it.
  • To gain a better understanding of a service, one should experience it firsthand by getting a job in the industry.
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  08:51

  Do competitor research, identify customer segments, create a minimal viable product, craft a one-liner, and get your first few users to test it.

  • Competitor research should be done obsessively, including reading all articles, financials, and earnings calls to uncover golden nuggets.
  • Identify customer segments, become an expert in the industry, and storyboard out the ideal user experience before creating the product.
  • Build a minimal viable product to solve a problem, talk to users, and have a simple product positioning.
  • We found that a one-liner is essential to describe the functional and emotional benefits of a product or brand.
  • Get your first few users by using it yourself and reaching out to online and local communities.
  • We tried Homejoy ourselves and convinced our parents in Milwaukee to use it, but we had difficulty convincing people in Mountain View and elsewhere to use it.
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  15:33

  We handed out freebies and got people to book cleanings, then went out to talk to users to get honest feedback.

  • We handed out free cold water bottles at a street fair and were able to get people to book cleanings.
  • Go to places where people are trying to ship products and try to get them to use your product instead.
  • To get the best feedback for your product, go out and talk to your users, send surveys, and provide a way for them to contact support.
  • To get honest feedback from users, make it a conversation and make them feel comfortable.
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  19:48

  Optimize for growth by manually doing tasks, implementing an online application process, tracking customer retention, and collecting reviews and ratings to get honest feedback from paying users.

  • Tracking customer retention and collecting reviews and ratings are good ways to measure success over time.
  • Be wary of the honesty curve when gathering feedback from people, as it can vary depending on the level of separation from you.
  • Friends will give honest feedback on your product, while family may be biased and give more positive feedback.
  • To get the best feedback before launching a product, make people pay for it quickly to get real feedback from paying users.
  • Optimize for the next stage of growth by manually doing tasks to understand what features you need to build.
  • We implemented an online application process to reduce the time spent on interviewing and increase our acceptance rate, while still being able to ask questions to identify good performers.
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  26:28

  Focus on creative strategies to acquire users at a lower cost and launch your product as soon as possible to get user feedback.

  • Don't worry about perfection and edge cases when building something, but beware of the Frankenstein approach when taking user feedback.
  • Don't pile on features to hide a problem, instead solve the problem before shipping the product.
  • Launch your product as soon as possible to get user feedback and avoid waiting for someone to copy your idea.
  • Focus on one channel for a week, iterate on it when it works, and revisit failed channels over time.
  • To succeed in growth marketing, you need to be creative and find the little things that no one else is doing to acquire users at a lower cost.
  • Sticky, viral, and paid growth are three types of sustainable growth strategies.
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  33:48

  Deliver a great experience and measure customer lifetime value (CLV) and retention to achieve sticky growth.

  • Delivering a good experience leads to sticky growth, which can be measured by looking at CLV and retention.
  • Cohort analysis is a way to measure customer lifetime value (CLV) by looking at the net revenue a customer brings in over a certain period of time.
  • In March 2012, 100% of people used a product, and 50% returned two months later.
  • Retention should flatten out over time, with more people sticking with you than dropping off, creating a core customer base.
  • To achieve viral growth, deliver a great experience and have a good referral program with customer touch points.
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  39:45

  Optimize customer touch points, program mechanics, and conversion flow to create an effective referral program, and consider paid growth to acquire customers and ensure a profit.

  • After signing up for a product, customers can be asked to invite their friends, or after they have used the product and are highly engaged, they can be asked to share it with others.
  • Optimize customer touch points, program mechanics, and conversion flow to create an effective referral program, and consider paid growth.
  • You should think of paid growth as investing money to get customers, with the goal of making more money than your customer acquisition cost.
  • CAC is calculated by dividing CPC by conversion rate, and CLV minus CAC should be more than zero to ensure a profit.
  • Aggregate customers by segment to ensure you don't mix different cohorts together when buying ads.
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  44:34

  Stick to a 3-month payback time for high-risk customers, focus on one or two key features to differentiate your product, and pivot if growth isn't seen after 3-4 weeks.

  • Businesses should be aware of the risks of unsustainable growth and should stick to a 3-month payback time for high-risk customers, or 12 months for those willing to take more risk.
  • Once you realize you can't grow, have no high retaining users, or the economics of the business don't make sense, you need to move on.
  • Start with a growth plan and if you're executing on your product and not seeing growth after 3-4 weeks, consider a pivot.
  • Wait two to three weeks and keep working hard to eventually see a trend over time, despite the switchover cost.
  • To get people to switch to your product, find moments where it is much better or very much differentiated from the existing solution.
  • It is difficult to convince users to switch to a new product, even if it offers many small benefits, so focus on one or two key features that make it stand out.