By Akash Mehta
April 18th 2008
Whether you're a freelancer or a 500-person development shop, client retention matters. With every new client, you have to explain your service offering, spend time discussing their project, and enlighten them on the possibilities of their project -- essentially, put resources into winning the client. Client turnover is especially high in the web service industry, where it is just about impossible to compete on price.
Now, wouldn't it be great if all your clients were repeat customers, and you could spend more time actually managing projects? In this article, I'll identify 20 ways to improve your client retention rates and keep clients coming back for more.
The importance of client retention
Client retention is a topic that Brendon Sinclair drills home in SitePoint's Web Design Business Kit (Psst: you can buy two kits for the price of one up until the end of April! --Ed.). Here's my take on it:
The best clients are your existing clients. When you're operating a business, even as a freelance provider, one of the best ways you can ensure you have a supply of ongoing work is to keep existing clients instead of finding new ones. You might be pleasantly surprised by the amount of work your existing clients can give you, and even if they don't have any future work for you, if they're happy, they're still likely to recommend you to a friend or business partner. Unfortunately, you can't take such recommendations for granted -- especially if you freelance.
I once did some consulting for a web development shop building simple web applications. Their work wasn't terribly innovative, but it did the job and the clients were happy with the output. Business was booming, and the work kept coming in, but there was one problem -- the company was constantly on the lookout for new clients. When I contacted a few past customers, most were happy with the work and had since had other projects, but they'd given them to the company's competitors. Why? One comment summed it up: “We wanted to try someone else."
Client turnover can be a serious problem, but there's a simple solution: invest in keeping your existing clients! If your clients are happy with the work you've done for them in the past, it's only logical that they will consider coming to you in the future. But it isn't enough for them just to be happy -- they have to be really impressed. To manage that, you have to carefully control your project -- a challenge to which there's quite a science.
20 Tips to Keep Them Coming Back
Let's look at the tactics you can use to boost your client retention rate. I've split these tips into three key areas -- tips around dealing with the clients themselves, tips around project management, and tips relating to the business side of the equation.
The client
When you're managing your business and dealing with all the work that's coming in, it's easy to lose sight of the actual clients. Here are some techniques for managing your clients and their satisfaction levels.
1. Pick your best bets.
This could be one of the best business decisions you make all year. As you stay in business over time, you'll find that 80% of your work comes from 20% of your clients. So take a broader look at your operations, work out which clients comprise that 20%, and focus on them. Don't neglect your other clients, of course, but concentrate your efforts on monitoring projects for this 20%, and make sure everything's running smoothly.
2. Drop the jargon.
When you're communicating with clients via email, instant messages, over the phone or in person, drop the jargon. Leave technicalities out of communications unless the client has specifically requested technical details. Using technical terms alienates the client, and can create misunderstandings that result in a breakdown in communication. I once spoke with a client who thought AJAX referred to the animated pulsing icons commonly used on Web 2.0-style sites (ajaxload.info, anyone?). Dropping the jargon puts you and your client on the same page, so you can communicate clearly and effectively.
3. Show that you've done your homework.
When you're building a web application for your client, chances are that the application relates to their field of expertise, not yours. They may be the expert on the area, and you could learn the background from them, but you'll really impress them if you do your homework. Research the area a little before your first meeting; Wikipedia is always a good place to start, while online articles can give you a good idea of the state of the industry. Interviewing existing customers is a great source of direction. By conducting these basic investigations, your client will appreciate that you're coming to the table with experience in the field, and will be more likely to trust you with further work in the area.
4. Involve them.
Even once you've done your homework, you'll need to use your client as your point of reference. You aren't an expert in the field; they are. And when you're planning your application, the best way to learn more about what the field involves is by talking to your client. Any non-technical project planning stage should involve your client significantly; briefly run drafts past them, fire off questions via email, and meet regularly to ensure you're on track.
5. Know your client.
It can really pay to get to know your client. I'm not talking about their business or industry (although that helps too), but the clients themselves. Find out a bit about them -- they might have an online biography, or maybe you can just tell what they're into. Sweetening their self-interest can go a long way, and by getting to know your client you can identify how to best appeal to them personally. For example, if they're into horse racing, maybe you can schedule a meeting with them at the local racecourse. Your thoughtfulness will leave a lasting impression, and they'll be glad of it.
6. Get feedback.
Your clients will constantly be forming opinions about your progress, your general performance, the quality of your service, and so on. So why not take advantage of those opinions? Next time you meet with a client, finish up by asking them what they think of your work on the project so far. It's a reasonable, non-threatening way to get some feedback from them, and it can help you to hone in on the areas that matter.
7. Make it fun.
At the end of the day, the best way to get results from your clients is to make sure they have fun. Make a meeting interesting and enjoyable. Humour always helps. Setting your clients at ease will help you to gain more insightful comments and useful feedback from them. Once your clients genuinely enjoy attending your meetings and discussing the project, you can really get moving.
The Project
There are a lot of project management methodologies in the world. Each suits different situations, management styles, and people. I say, if you want results, forget them all and work out what's best for you -- try out some of these ideas.
8. Overdocument the project
I can't stress this enough. Whatever you do in your project, overdocument it. Actually, there's no such thing as overdocumenting -- you can never have enough useful documentation. Don't keep churning out pages and pages for their own sake, but if something comes up in the project -- a major design decision is being taken, for instance -- record it in the documentation, and some kind of concise project log. Finally, give your client and staff access to this documentation and encourage them to use it. Your client will appreciate having access to this knowledge about their project, and you can avoid quite a few common problems when everyone involved knows where the project stands.
9. Stick to constraints.
There's a golden rule to project scheduling: you can only have two of “Good", “Fast" and “Cheap". I regard these as the three constraints on any project, and the key to successful scheduling (and happy clients) is working out what your client's constraints are. For example, a major multinational corporation might want a project done well and quickly, with budget blowouts kept manageable, whereas an individual might simply want the project delivered quickly and within budget.
Chances are you will be pushing one of these constraints by the end of the project, and smoothing things over with your clients is much easier when they can afford to be flexible in that area. Most can handle a slight delay in project completion, while some would rather pay to hire some freelancers and get the job done on time. Either way, you avoid pushing clients to their limits in ways that hurt them.
10. Secluded planning.
Project planning is tricky. If multiple people will contribute to the final product, avoid allowing them to discuss the project planning with each other. Everyone's opinion counts, but the moment your developers start discussing a project, their opinion will start to drift towards the collective opinion. Different developers have different ideas; some may be good, some may be bad, but they all count. Have your team members plan separately, then approach them individually to discuss their thoughts so that you can pick out the best ideas.
11. Underpromise, overdeliver.
Give clients just a little bit extra. There are few better ways to impress a
client than by beating a deadline, adding bonus functionality to the software, or just providing extra useful documentation. Going above and beyond, if only a little, will show to your clients not only that you're on top of the work and capable of managing the project, but that you're doing it so well that you can even offer some extras within budget.
However you want to set out your day, leave time for meetings. Whether you're a two-person shop, or you have an entire floor of developers, meeting regularly helps the flow of information and makes sure everyone involved knows where the project stands. Meet twice a day -- early in the morning and right before the end of the day are good options -- and ask everyone to spend a minute discussing what they've done during the day, any decisions they made along the way, and where their part of the project is at. Meetings don't need to be long or even formal; they simply need to bring everyone together and keep everyone informed.
13. Developers are the stars.
If you're a project manager, chances are that you won't do much work on the actual product or service you're selling -- your developers do. So when it comes to discussing initial requirements with your client, why should you be the one helping the client make decisions? For any meeting that involves design decisions -- such as how the front end of the application will look, how administration can be managed, or what menu items are available -- bring along one of your developers, even if they only drop in for five or ten minutes.
With their current, real-world experience, your developers know what is and isn't possible, and what works. They can share this knowledge with the client to really get the project's planning off to a good start. Chances are that your developer's suggestions will seem so obvious to them that they would be implemented anyway; this way, your planning gives you a clearer picture of the final product. Your clients will also appreciate having a helping hand with their side of the project planning.
14. Talk to everyone.
More often than not, your client is only a contact person -- a representative of a larger organisation, and a larger user base within that organisation. If you know a particular department or group of people will be using your final product, talk to everyone involved about what they want to get out of the final product. It's preferable to meet with everyone, but for larger groups, you might need to send a brief questionnaire. Don't write a single line of code until you've got feedback from most of the eventual user base. Detailed, comprehensive surveys of the user base help you identify what users really want, which features are important, which usability aspects matter, and so on.
The business
At the end of the day, of course, you're selling a product or service to a business. Be it someone's personal business, or a thousand-employee corporation, the goals of this business should be paramount in the product or service you're developing. If what you're providing furthers their business goals, the client will be much more likely to come back to you for further work, as they'll know you're worth every cent.
15. Quality first, best practices second
Contrary to popular belief, clients will pay for high-quality web services, but first you have to make sure they can value that quality, and best practices don't count. If what you're providing will function exactly the same as a product from an offshore outsourcing firm, why should the client hire you? Your client can't appreciate that you had a strict variable naming convention in your code -- that's meaningless to them. However, they can appreciate that your interface is easy to use, or your pages load quickly. Often they may not recognise quality work -- make sure you point out useful features of the final product in a project debriefing. It's important to draw the distinction between quality and best practices -- there are many best practices that are helpful, but for small, one-off projects, some will be unnecessary and a waste of time, especially if they're new to your developers. Give your clients quality in a way they can appreciate, but make it clear that you're doing so.
16. Remember who's the boss on each side of the equation
There are two sides to every project: the development, and the business. There are experts on each side: in general, you're the expert on development, and the client is the expert on the business (their business, actually). Keep this in mind while you're planning out your project. Have the client identify what the business needs while your developers work out how to implement it. A project manager can be the middle man, deciding what will make it into the final product and what won't.
The key here is to avoid blurring the line. For example, your developers might suggest you integrate the project with existing systems, but unless there's a business case for doing so, it may be a waste of time, and create its own problems. On the other hand, maybe the client wants to add AJAX for the sake of AJAX -- steer them well clear unless you can see it's worthwhile. Let your client and project manager decide what the business needs, have the developers decide how to implement it, and leave it at that.
17. Tight control over costs
As a project manager, you need to maintain tight control over the project. Many, if not most, software projects take longer than expected or require budget increases if they are to be completed on time. The key to avoiding such problems is to plan the project in detail and monitor the project to ensure it's following the plan as closely as possible.
For example, get regular status reports. When you're planning your project and identifying subtasks, break down those tasks so that your developers can give you some kind of status update at the end of each day. Just a brief line will do -- an “FYI, I've finished task 39" email is enough. The moment something isn't going according to plan, make sure you know about it, and do something about it. If you encounter a delay and soon find that you aren't catching up, you might be able to cut out a little here and there, or outsource certain tasks. No matter what, if you see a delay, don't leave dealing with it until it's too late.
Delays and cost blowouts can seriously damage a client's faith in your business. Take control and keep a project within the constraints as closely as possible. This will boost your client's perception of your ability to manage future projects.
18. Keep talking.
You're in an industry here. And it isn't a static industry. It's a dynamic, constantly moving industry and one that, more often than not, your clients have very little idea about. So keep talking. Whenever you discuss the project with the clients, let them know of the state of play; while planning designs, for example, mention what the current interface design principles are. From background information to success stories, keeping your clients informed will help them work with you while planning, and reinforces the impression that you truly are an expert in your field.
19. Get that maintenance contract.
Of course, while worrying about the client's business, you also have to keep your own in mind. Every application requires some kind of maintenance, be it minor updates, feature additions, or content changes. Before you close the project, bring up the issue of a maintenance contract. I usually find that an email works best. Let the clients know that you believe the product will require maintenance, and that you can provide this maintenance, briefly mentioning your payment structure. A flat fee per year for general “quick fixes" can create additional revenue streams for minimal work input. More importantly, however, once you've built the original product and are handling the maintenance, the client will be more inclined to hire you for future work.
20. Keep selling.
Finally, keep selling your products and services. Many clients are interested in future purchases, and if you follow these tips they'll be perfectly happy to task you with them. The problem is that so many clients don't know what they're after. For example, now that they've got a client management system, maybe they'll need a project management system to go with it? Make sure your client knows not just which services you provide, but what they could hire you for.
You may find your clients have a problem that could easily be solved with a software application, but they simply don't realise that you can help them solve it. If you see an opportunity, mention the potential project to the client; if you've built a similar system in the past, check that it's working and offer them a test drive. If they see something that's genuinely useful, you could just have another sale on the cards.
Keep 'em Coming Back
Keeping your clients coming back for more is really the best thing you can do for your business. Repeat customers are easy to handle, and they “know the drill", so to speak.
Keep the tips we've discussed here in mind when you're managing your clients, and you'll leave a lasting impression. When you've worked with a client once, you'll understand how to best manage that client and their projects, and you can deliver results -- and a higher profit margin. Get your client retention right and you're set for success!
Tuesday, 21 April 2009
Thursday, 16 April 2009
Start-up tips
I came across Gideon Greenspan some months ago (http://www.gidgreen.com) and he's done some very interesting things. On his website he offers some very useful tips to start-ups:
© Gideon Greenspan 2009
How Do I Find Good Ideas?
Here are three common approaches to coming up with new ideas, with some of my own examples listed alongside:
- Solve your own problem (Google Alert, Email Merge). If you need something which doesn't exist yet, you're probably not alone. Just make sure you're not too focused on a tiny niche you happen to be in. For example, the world of people who research online is big enough, but the world of Web 2.0 developers is probably not.
- Listen to user feedback (Copyscape, NameCleaner). If you offer one product for a particular market, its users will often suggest the need for something related. This will only happen if the first product works well and invites user feedback. If you don't yet have a product, create something simple and see where its users take it.
- Spot emerging markets (Web Sudoku, Carbon Catalog). New markets lack hefty established players, so there's a lower barrier to entry. You can learn about breaking trends from tons of free online sources. But it's also worth subscribing to top international publications such as The Economist, BusinessWeek and The Wall Street Journal.
Where is the Real Money Online?
If you look at web startups building real businesses, and not just praying for an "exit", three models appear time after time:
- Vertical-specific aggregation. Collect information from multiple sources relating to a topic, then re-present it to users in a more useful way. This will attract highly targeted traffic, to which you can advertise and sell products or services. In some cases, you can sell the content itself. You'll probably need to build a data mining and content analysis system which is tailored for your needs. In some cases you can leverage a community of people which is willing to help. Some examples: Farecast (flights), Fixya (tech support), Mint (personal finance), Octopart (parts), RetailMeNot (coupons), Retrevo (electronics), Seeking Alpha (markets), Trulia (real estate).
- Tools for website owners. Create something that makes life easier for site owners, or helps them earn money. You can then upsell a subscription-based premium version, or take a cut of money changing hands. These products are automatically viral, since sites which use your tool advertise it to their visitors. Some examples: Conduit (toolbars), Copyscape (plagiarism), JotSpot (wikis), Ning (social networks), OpenX (ad serving), WuFoo (forms).
- Peer-to-peer e-commerce. Create a platform and marketplace for direct buying and selling of a certain type of good. Take a percentage of transactions and/or charge for advertising or premium listings. Once you've tapped in to a community, word will spread fast. A key challenge is building trust via appropriate reputation mechanisms. Some examples: Associated Content (content), Betfair (bets), Etsy (handmade), Prosper (loans), StubHub (tickets),
Naturally there are many amazing companies, like SmugMug and LinkedIn, which don't fit in to these groups. But I wouldn't go building yet another social network, and hoping that the people and profits will come. Even the mighty Facebook is struggling to make money from its users.
Combining 2 or 3 of these categories can make for an amazing business. For example, Google aims to aggregate "all the world's information", the largest vertical of them all. Google also offers dozens of tools for website owners. One such tool is Adsense, which facilitates peer-to-peer commerce in traffic between sites.
Does my Startup have "Technology"?
The world of software and web startups has become brutally competitive. Ideas on their own are worthless - if you've had a great idea, you should expect that many other people are working on it already.Technology isn't enough to make your startup succeed. But it's a great way to gain an edge over the competition. Having technology means you have solved a difficult problem. This makes your product hard for others to reproduce.
Most startups claim to have technology, but few actually do. A ton of code is not technology, no matter how well-designed and bug-free. It only becomes technology once it solves a tricky, sticky problem.
Below are some common types of problems that can be solved with technology: (technical terms ahead...)
- Complexity. It's not easy to represent the complexities of the human sphere in the binary world of computers. How do you identify a spammy email? Recognize the faces in an image? Create an enjoyable Sudoku puzzle? Identify the most relevant content on a web page? This stuff is deep, and goes beyond undergraduate Computer Science. Common approaches include Bayesian Networks, neural nets, Markov models, clustering, heuristics and support vector machines. You can get started with Programming Collective Intelligence (book).
- Scalability. Many tasks are easy to perform for small cases, but become dramatically harder at large scales. Storing and retrieving 100 small images is easy. Providing random access to satellite imagery for the entire Earth is not. The same goes for routing messages between millions of IM users, or keeping a record of billions of cellphone calls. Common methods include data partitioning (horizontal and vertical), replication, synchronization, indexing, failovers and load balancing. For a detailed example, check out Inside LiveJournal's Backend (PDF).
- Performance. This is about making a system more efficient, without altering its fundamental design. The goal is often to reduce the response time for a task. The motivation may also be economic - to save on memory, disk space and CPUs. Optimizing performance is an incremental process of identifying and removing bottlenecks. Common techniques include profiling and rewriting code, compression, caching and preloading. Leveraging multiple platforms can also help, e.g. by replacing a critical section of PHP with some C++ code which uses bits and pointers. For an extreme example, read chapters 17-18 of the Graphics Programming Black Book (online).
- Compatibility. Most mature products interface with pre-existing data and systems, and support diverse groups of users. An instant messaging service connects to AIM, ICQ, MSN, Yahoo Chat and Google Talk. A word processor checks spelling in dozens of languages. Websites are viewed in multiple versions of Explorer, Firefox, Safari and Opera. A price aggregation website scrapes content from hundreds of other sites. In each of these cases, a lot of work goes into supporting all the variations. The deeper challenge is to find an appropriate abstraction to minimize the work required. For a concrete example, read Joel Spolsky on Where there's muck, there's brass.
At the other end of the scale, compatibility is about dealing with piecemeal, nitty gritty issues, so programming experience really counts. As for performance, look for hacker whizz kids who have a deep understanding of processors and operating systems, and who know how to think in assembly language.
Some examples of the technological issues solved in some well-known products:
| Product | Complexity | Scalability | Performance | Compatibility |
| Amazon | personal product recommendations | stock millions of products | serve complex pages fast | integrate with diverse suppliers |
| spam-free page ranking | store billions of web pages | provide instant search results | support hundreds of languages | |
| Photoshop | photo-realistic image filtering | edit images larger than memory | support SIMD processors | import/export dozens of formats |
| Skype | efficient voice compression | handle millions of concurrent users | keep down CPU usage | work under any network setup |
You don't need to start out with all four types of technology. If your product succeeds, the others will probably spring up along the way. But if your startup has nothing that would fit into this table, I would start to worry. If you're a technology company, but not solving something difficult, competition is rapidly on its way.
What's the Point of Investors?
So you've had a great idea for a real business, and have hooked up with a co-founder. Time to seek out investment, right?Wrong.
Unless you have a strong track record, or personal connections with investors, you'll get nothing at this stage. You'll spend months making the rounds, and have nothing to show for it at the end.
Instead, spend this time working on your product. Create a prototype, gain some exposure, and learn about the need you're trying to address. If you're a student, take advantage of your freedom. Otherwise, work in the evenings or at the weekend. Keep improving and working at it until you can honestly say you've achieved something real.
At that point, and only at that point, consider seeking investment. You'll already have proven three important things:
- Execution. You are capable of building a good product.
- Market. There are people in the world who are interested in it.
- Frugality. You are able to get by on limited resources.
You should still avoid raising money for as long as you can. Finding investors is a long hard slog. In a good case, it will take around 6 months. During this period you'll be distracted from building your business.
But what if your idea needs lots of money, just to get off the ground? What if you want to hire developers, buy equipment, and fly around the world to meet potential partners? In this case the solution is simple: change the idea. Barring extraordinary circumstances, investors won't be willing to bankroll your expensive dreams.
There is however one good reason to take investment: to accelerate your company's growth. If you have a small but profitable business, an investor with deep pockets can help you take it to the next level. In this case, you have an opportunity, rather than a need. This changes the dynamics, and gives you a stronger position when negotiating terms.
Tips for Killer Websites
Many successful websites, from Google to Wikipedia, have applied these principles to build an empire.
- Instant gratification. Give visitors value within 5 seconds of arriving at your site.
- The Web is about words. Write good copy, check spelling, label fields and buttons clearly.
- Users hate waiting. Optimize, compress, cache. Do whatever it takes to achieve speed.
- Build for search. Search rankings will make or break any new website.
- Content is king. You can't fake good content. Create it, buy it, or automate its production.
- Remove barriers. Visitors are selfish and goal-oriented. Give them no reason to leave.
- Feedback is gold. Collect it, analyze it, act on it. Be humble. You don't know best.
- Measure everything. Integrate deep analytics. Constantly test alternatives.
One last thing: Great engineering is integral and crucial to your success. If you're coming from the non-web world, these O'Reilly books on back-end and front-end development will help you get started. But if you're not a developer, and can't get one on board, think of something else to do. Outsourcing is not an option when you're scrambling to scale.
© Gideon Greenspan 2009
Third day at Mash
The end of another long day, sees the near completion of a web design for a comparison site, which soon will be in the portfolio. Went along to Open Coffee this morning and had a couple of great conversations and meetings which have led to some interesting projects which I will hopefully be able to share in the near future.
For reasons including IP and NDA adherence it's not always possible to post the detail of the projects until post launch.
The unique approach to our business seems to have really captured the imagination and the potential number of projects we are involved with obviously increase.
The challenge for any business, is balancing working in the business as well as on the business. With careful time management it is possible to get the balance right and it's a nice problem to have, being so busy!
For reasons including IP and NDA adherence it's not always possible to post the detail of the projects until post launch.
The unique approach to our business seems to have really captured the imagination and the potential number of projects we are involved with obviously increase.
The challenge for any business, is balancing working in the business as well as on the business. With careful time management it is possible to get the balance right and it's a nice problem to have, being so busy!
Wednesday, 15 April 2009
One of my favorite blog posts
Apologies if you've already read it but below is one of my all-time favorite posts from Guy Kawasaki about launching a company. Written in June 2007 (a lifetime in internet land it is still as relevant today as it was then)
http://blog.guykawasaki.com/2007/06/by_the_numbers_.html
By the Numbers: How I built a Web 2.0, User-Generated Content, Citizen Journalism, Long-Tail, Social Media Site for $12,107.09
Because of
http://blog.guykawasaki.com/2007/06/by_the_numbers_.html
By the Numbers: How I built a Web 2.0, User-Generated Content, Citizen Journalism, Long-Tail, Social Media Site for $12,107.09
Because of
, I’ve learned a lot about launching a company in these “Web 2.0” times. Here’s quick overview “by the numbers.”
- 0. I wrote 0 business plans for it. The plan is simple: Get a site launched in a few months, see if people like it, and sell ads and sponsorships (or not).
- 0. I pitched 0 venture capitalists to fund it. Life is simple when you can launch a company with a credit-card level debt.
- 7.5. 7.5 weeks went by from the time I registered the domain truemors.com to the site going live. Life is also good because of open source and Word Press.
- $4,500. The total software development cost was $4,500. The guys at Electric Pulp did the work. Honestly, I wasn’t a believer in remote teams trying to work together on version 1 of a product, but Electric Pulp changed my mind.
- $4,824.14. The total cost of the legal fees was $4,824.14. I could have used my uncle the divorce lawyer and saved a few bucks, but that would have been short sighted if Truemors ever becomes worth something. Here’s a breakdown of what I got for this amount of money.
- $399. I paid LogoWorks $399 to design the logo. Of course, this was before HP bought the company. Not sure what it would charge now. :-)
- $1,115.05. I spent $1,115.05 registering domains. I could have used GoDaddy and done it a lot cheaper, but I was too stupid and lazy.
- 55. I registered 55 domains (for example, truemors.net, .de, .biz, truemours, etc, etc). I had no idea that one had to buy so many domains to truly “surround” the one you use. Yes, I could have registered fewer and spent less, but who cares about saving a few hundred bucks compared to the cost of legal action to get a domain away from a squatter if Truemors is successful?
- $12,107.09. In total, I spent $12,107.09 to launch Truemors. During the dotcom days, entrepreneurs had to raise $5 million to try stupid ideas. Now I’ve proven that you can do it for $12,107.09.
- 1.5. There are 1.5 full-time equivalent employees at Truemors. For me, it’s a labor of love.
- 3. TechCrunch wrote about Truemors 3 times: the leak, the leak with a screen shot, and the opening. I wish I could tell you I was so sly as to plan this. Michael Arrington thought he was sticking it to me. Don’t stop, Michael!
- 261,214. Much to my amazement, there were 261,214 page views on the first day.
- 14,052. Much to my amazement, there were 14,052 visitors on the first day.
- $0. I spent $0 on marketing to launch Truemors.
- 24. However, I did spend 24 years of schmoozing and “paying it forward” to get to the point where I could spend $0 to launch a company. Many bloggers got bent out of shape: “The only reason Truemors is getting so much coverage is that it’s Guy’s site.” To which my response is, “You have a firm grasp of the obvious.”
- 405. Because some people had nothing better to do, there were 405 posts on the first day.
- 218. We deleted 218 of the 405 posts because they were junk, spam, inappropriate, or just plain stupid. Interestingly, half the bloggers complained the site was full of junk. The other half complained that I was deleting posts. :-)
- 3. A mere 3 hours went by before the site was hacked, and we had to shut it down temporarily. I was impressed. The hacker who did this might be the next Woz. Please contact me if you are.
- 36. A mere 36 hours went by before Yahoo! Small Business told us that we were inappropriate for this service because of our traffic.
- $29.96. Our monthly break-even point was $29.96 with Yahoo!
- $150. Because Yahoo! evicted us, our monthly break-even point quintupled to $150. If you’re interested in buying a monthly sponsorship for $151, you’d make Truemors profitable. :-)
- 2. A mere 2 days went by before Truemors was called the “worst website ever” by the Inquirer.
- 246,210. Thank you God for the Inquirer because it caused 246,210 page views. Yes indeed, there’s no such thing as bad PR.
- 150. A week before we launched, if you typed “truemors” into Google, you would have gotten 150 hits.
- 315,000. Eleven days after the launch, “truemors” had 315,000 hits in Google. I can’t figure out how this can be, but I’m not arguing.
- 4. I learned four lessons launching Truemors:
- There’s really no such thing as bad PR.
- $12,000 goes a very long way these days.
- You can work with a team that is thousands of miles away.
- Life is good for entrepreneurs these days.
mash's second day
So here we are the second day and it' been frantic!
There always a lot to do and never enough hours in the day. There's been a fantastic response to what Mash are trying to do as a company:
work differently - focus only on great design, be helpful, useful, transparent, develop great relationships and add real value not excessive cost - make clients happy.
It may be naive, it may not work, my girlfriend and others think i'm mad to want have a business model that invites you to pay what you can afford after you've got the work you're happy with.
But I think it will work, think about it, there are many people you give their expertise, time and experience away for free through joining various networks, http://www.meetup.com/opencoffee/ and http://dreamstake.ning.com/ are two I use.
Their motivations for doing so vary, from advertising their own products or services on the back of their post (nothing wrong with that in my book!) through to genuinely wanting to help someone else succeed.
Though it's true the time it takes to write an email is not substantial, they are still giving away valuable insights and the sum total of hours if not years of time it took to 'know' that stuff!
Most entrepreneurs want to start in business for many reasons, they have a great idea (hopefully!) , they've been made redundant, they want to make a difference and many more. It's rare that one person has all the skills and money to do it all on their own.
Now there are many freemium and open source apps that can help entrepreneurs race to prototype, if not scale to the level of category killer but when design, advertising and marketing strategy are missing from the team mix, progress is slowed if not halted.
The need for professional level design services is vital for a new business's success in our opinion. Most entry level start-ups can't afford professional level services. So that's where mash come in - professional services, effective communication, bespoke not stock-one-size-fits-all design. We want your success to be ours, we recognise it's not easy starting out, you need all the help you can and money is always in short supply, if Mash can have happy clients, mutually beneficial relationships and actually make a difference whilst paying the rent, we'll be happy too!
Here are a selection of comments from our second day:
Hi Doug
I'm the founder of Strawberry Diva, a social strategy game aimed at
young women. I'm pretty excited by its prospects, both in terms of
creating compelling gameplay, and revenue potential.
Your mail on the meetup mailing list really made an impression with
me. I'll be at OpenCoffee tomorrow, if you're there I'd love to have a
chat and see if our interests might be aligned.
Best regards
Paul
PS I look like this http://www.meetup.com/members/8016354/
Doug,
Just a quick note to say this is awesome, and I wish you all the best.
I spent a while a year or two ago thinking about a web hosting service that worked on the same principle, but I think I was focused on 'cheap' hosting service at the time, and felt that it was just too open to abuse, and generally not a good fit. I did however end up thinking about systems to manage the pricing level; for instance, if there are 20 people using the same amount of my service, and 18 decide to pay $10 per month, 1 pays $2/month and 1 pays nothing, an automatic application could calculate an average, and strongly communicate to the low payers that they're not paying the community standard. Or make the payment/usage information publically available to all users. The 18 people paying a good rate might put social pressure on the other two.
Anyway, kudos for giving this a go, please post some updates on the Open Coffee list.
Regards,
James Lewis
Doug
I read your post on London OpenCoffee Meetup.
I like the approach of clients agreeing to pay what the work is worth, but I think you need to agree a target price up front. In a good relationship the client wants value for money but also for the supplier to be making a reasonable profit, so up front both need to agree what sort of amount this should be to avoid disappointments on either side at the end. But yes, the client should then be free to pay less if they are not satisfied, or even more if it exceeds expectations.
Since I started my marketing consultancy five years ago, I have tried to operate on payment by results, setting goals up front with payment tied to these goals. I want the goals to be tied to real business results but that has not always been possible. Currently one of my projects is to improve the marketing and hence sales and I only get paid if the sales increase.
Here’s to partnerships between suppliers and clients where each side realises the need for the other side to do well and so fosters an open, constructive relationship.
Regards
Roger
Hi Doug,
I just wanted to say that i like the service and concept you are creating with Mash.
If ever you are in North London , visit a restaurant called, 'Just Around the Corner' which does not have a menu price list. The concept is the same as yours in that it is a payment according to what you think it is worth. The reality is that people tend to pay more than the worth of the same food is similar outlets. The reason is something to do with human psychology .. perhaps, if we are treated well, we want to treat others the same, or we are too embarrassed to give less in front of our guests.
The concept will pay off and help to attract others through word of mouth. So i am glad you got it through and past the bank manager under the present circumstances.
Take care and i may look to use you guys in the near future.
Regards, Asif
Doug,
interesting business model. Reminds me about my favourite doctor/chiropractor/healer/medicine man in a far away barrio in the Philippines. After receiving their treatment, patients simply went to a corner of the room, where they, at their discretion, put money in a bowl. If you have nothing, you're not expected to pay anything. If you are rich, you can still pay what other people normally pay, which is about 60-70p per treatment. Nobody steals from the bowl, that's completely unheard of. He simply collects his money at the end of the day, and treats everybody with the same professionalism, no matter their payment ability. I doubt this is a very profitable business for him generally, but he's more interested in helping people than maintaining his own personal wealth. He's actually a really good doctor, with vast experience and a fantastic use of native medicine instead of commercial ones where possible, and the result is that sometimes, after he has cured some rich people, he may suddenly receive major gifts out of the blue, sometimes anonymous.
So it actually works in his case, but one important aspect is that the initial "donation" is made cash on delivery. Plus, he has something you don't have - everyone he treats are local, or can be recognized somehow, so not paying their share would be shameful. Here in London, you'll never achieve that effect.
One thing that may become troublesome here in the UK though is that some people seem to use you as a bank, pushing out the payment date so long they forget what you did for them. Are you going to demand quick payment, of whatever amount they are willing to pay, or let them use you as their ow personal credit facility?
Another potential problem is how much time you spend on each client. For example, if someone is planning on paying you £150, because that's what they think it will cost on 99designs, and they don't see the difference, should you spend as much time with them as the ones that are prepared to pay £3k? Do you agree the amount they pay up front?
Or are you prepared to give away work to unethical and rouge players? I'd love to hear how this goes, and I'm tempted to offer the same, and in some cases I have - to a degree, but I have expenses to pay, both fixed and variable, and I'm not sure if the UK market is ready for this business model.
Good luck, though!
~Ronny.
PS: I'm starting up a project now. Do you accept a £1 initial donation and a major contribution when the project has become successful? You see the problem, I've now pushed the risk over to you without feeling very guilty - because I will pay you, but it depends on the project's success.
Avoid becoming a bank, unless you have lots of money and are prepared to accept some defaults...
There always a lot to do and never enough hours in the day. There's been a fantastic response to what Mash are trying to do as a company:
work differently - focus only on great design, be helpful, useful, transparent, develop great relationships and add real value not excessive cost - make clients happy.
It may be naive, it may not work, my girlfriend and others think i'm mad to want have a business model that invites you to pay what you can afford after you've got the work you're happy with.
But I think it will work, think about it, there are many people you give their expertise, time and experience away for free through joining various networks, http://www.meetup.com/opencoffee/ and http://dreamstake.ning.com/ are two I use.
Their motivations for doing so vary, from advertising their own products or services on the back of their post (nothing wrong with that in my book!) through to genuinely wanting to help someone else succeed.
Though it's true the time it takes to write an email is not substantial, they are still giving away valuable insights and the sum total of hours if not years of time it took to 'know' that stuff!
Most entrepreneurs want to start in business for many reasons, they have a great idea (hopefully!) , they've been made redundant, they want to make a difference and many more. It's rare that one person has all the skills and money to do it all on their own.
Now there are many freemium and open source apps that can help entrepreneurs race to prototype, if not scale to the level of category killer but when design, advertising and marketing strategy are missing from the team mix, progress is slowed if not halted.
The need for professional level design services is vital for a new business's success in our opinion. Most entry level start-ups can't afford professional level services. So that's where mash come in - professional services, effective communication, bespoke not stock-one-size-fits-all design. We want your success to be ours, we recognise it's not easy starting out, you need all the help you can and money is always in short supply, if Mash can have happy clients, mutually beneficial relationships and actually make a difference whilst paying the rent, we'll be happy too!
Here are a selection of comments from our second day:
Hi Doug
I'm the founder of Strawberry Diva, a social strategy game aimed at
young women. I'm pretty excited by its prospects, both in terms of
creating compelling gameplay, and revenue potential.
Your mail on the meetup mailing list really made an impression with
me. I'll be at OpenCoffee tomorrow, if you're there I'd love to have a
chat and see if our interests might be aligned.
Best regards
Paul
PS I look like this http://www.meetup.com/members/8016354/
Doug,
Just a quick note to say this is awesome, and I wish you all the best.
I spent a while a year or two ago thinking about a web hosting service that worked on the same principle, but I think I was focused on 'cheap' hosting service at the time, and felt that it was just too open to abuse, and generally not a good fit. I did however end up thinking about systems to manage the pricing level; for instance, if there are 20 people using the same amount of my service, and 18 decide to pay $10 per month, 1 pays $2/month and 1 pays nothing, an automatic application could calculate an average, and strongly communicate to the low payers that they're not paying the community standard. Or make the payment/usage information publically available to all users. The 18 people paying a good rate might put social pressure on the other two.
Anyway, kudos for giving this a go, please post some updates on the Open Coffee list.
Regards,
James Lewis
Doug
I read your post on London OpenCoffee Meetup.
I like the approach of clients agreeing to pay what the work is worth, but I think you need to agree a target price up front. In a good relationship the client wants value for money but also for the supplier to be making a reasonable profit, so up front both need to agree what sort of amount this should be to avoid disappointments on either side at the end. But yes, the client should then be free to pay less if they are not satisfied, or even more if it exceeds expectations.
Since I started my marketing consultancy five years ago, I have tried to operate on payment by results, setting goals up front with payment tied to these goals. I want the goals to be tied to real business results but that has not always been possible. Currently one of my projects is to improve the marketing and hence sales and I only get paid if the sales increase.
Here’s to partnerships between suppliers and clients where each side realises the need for the other side to do well and so fosters an open, constructive relationship.
Regards
Roger
Hi Doug,
I just wanted to say that i like the service and concept you are creating with Mash.
If ever you are in North London , visit a restaurant called, 'Just Around the Corner' which does not have a menu price list. The concept is the same as yours in that it is a payment according to what you think it is worth. The reality is that people tend to pay more than the worth of the same food is similar outlets. The reason is something to do with human psychology .. perhaps, if we are treated well, we want to treat others the same, or we are too embarrassed to give less in front of our guests.
The concept will pay off and help to attract others through word of mouth. So i am glad you got it through and past the bank manager under the present circumstances.
Take care and i may look to use you guys in the near future.
Regards, Asif
Doug,
interesting business model. Reminds me about my favourite doctor/chiropractor/healer/medicine man in a far away barrio in the Philippines. After receiving their treatment, patients simply went to a corner of the room, where they, at their discretion, put money in a bowl. If you have nothing, you're not expected to pay anything. If you are rich, you can still pay what other people normally pay, which is about 60-70p per treatment. Nobody steals from the bowl, that's completely unheard of. He simply collects his money at the end of the day, and treats everybody with the same professionalism, no matter their payment ability. I doubt this is a very profitable business for him generally, but he's more interested in helping people than maintaining his own personal wealth. He's actually a really good doctor, with vast experience and a fantastic use of native medicine instead of commercial ones where possible, and the result is that sometimes, after he has cured some rich people, he may suddenly receive major gifts out of the blue, sometimes anonymous.
So it actually works in his case, but one important aspect is that the initial "donation" is made cash on delivery. Plus, he has something you don't have - everyone he treats are local, or can be recognized somehow, so not paying their share would be shameful. Here in London, you'll never achieve that effect.
One thing that may become troublesome here in the UK though is that some people seem to use you as a bank, pushing out the payment date so long they forget what you did for them. Are you going to demand quick payment, of whatever amount they are willing to pay, or let them use you as their ow personal credit facility?
Another potential problem is how much time you spend on each client. For example, if someone is planning on paying you £150, because that's what they think it will cost on 99designs, and they don't see the difference, should you spend as much time with them as the ones that are prepared to pay £3k? Do you agree the amount they pay up front?
Or are you prepared to give away work to unethical and rouge players? I'd love to hear how this goes, and I'm tempted to offer the same, and in some cases I have - to a degree, but I have expenses to pay, both fixed and variable, and I'm not sure if the UK market is ready for this business model.
Good luck, though!
~Ronny.
PS: I'm starting up a project now. Do you accept a £1 initial donation and a major contribution when the project has become successful? You see the problem, I've now pushed the risk over to you without feeling very guilty - because I will pay you, but it depends on the project's success.
Avoid becoming a bank, unless you have lots of money and are prepared to accept some defaults...
Sunday, 12 April 2009
Start-up tips
So here it is, the first post, Pretty tired as there’s a lot been going on, later today sees the launch of the mash website. There’s still loads of content to add but we wanted to launch the site sooner rather than later.
It would be great to hear any feedback on our approach, collective wisdom and feedback tends lead to better things!
Being a new company we obviously trawled the net for tips and advice and was educated and inspired by the post from Dan Martell:
When is it too early to tell the world about your idea? What if someone steals it? Might someone copy it?
Here’s a great quote that always puts this into perspective for me:
“Don’t worry about people stealing an idea. If it’s original, you will have to ram it down their throats.” ~ Howard Aiken
I’m of the opinion that it’s never too early to start soliciting feedback from potential customers, advisers, or partners regarding your company/product idea.
Here’s a few best practices I have used to launch companies in the past.
If you have an idea, make a list of 10 people who might buy it. This does not include your friends or family. Seek real potential customers: call them up (a call is better than email), explain what it is, how it works, then ask:
“Is this something you would pay for or find useful?”
That being said, here’s the trick: don’t let them discourage you! Use the feedback to modify your approach or delivery (elevator pitch).
I would suggest spending the 20 bucks to get a web site: buy the domain, set up a splash page, and start collecting emails. You’ll get potential customers, fans, even partners that will want to be notified when you launch.
Here’s the minimum information you should list:
* Name of the company or product
* Description of your solution or services
* Email form with a subscribe button
Everything else is optional and not as important as you think (e.g., logo, About Us). Just get the web site up.
Try and get something put together ASAP; this might include a visual design (screen mockup or wire frame), a working prototype (even if it’s ugly), a PowerPoint or something equivalent—the concept is to get something in front of these people (The 10 List) yesterday.
If you’ve put your idea out there and engaged people in the iteration of the concept, then you might already have a list of emails from the web site. Invite this group to an early alpha of your product or service. The trick is to make it extremely simple for them to offer feedback. Email works; consider adding something in the user interface (applications) or a comment form (services) in the on-boarding process—that would be ideal.
I’m a big fan of getting something out there ASAP and delivering value in order to iterate on the idea, get feedback and implement changes. Here are some ways you can do this:
* Offer the alpha version at a discount or for free, even if you plan on charging down the road.
* Provide your service and take notes for improvement along the way.
The trick is to be honest with your customers. Remember that your goal is use their feedback to help improve the concept, marketing message, even the branding.
If you plan on charging for your product or service, I wouldn’t recommend offering early customers free service/product. Their feedback for a free service or product will be dramatically different than for one they have paid for. You want feedback from customers who have paid—it will be more honest and specific, and it will hold you accountable to deliver more value than the price you are charging. That’s how business works.
“It doesn’t take money to make money, it takes creativity and adding value to make money.”
The best ideas come from personal need. The best feedback comes from real customers, not the ones you made up in your head :-). Share your idea with everyone. Get feedback from people who work in the industry your solution benefits.
Do you have any other tips or suggestions for why you should launch early & often? Any tips on how to get your idea out there and iterating on the feedback?
Mash can help with getting your idea out and you’ll only pay what you feel it’s worth to your business or what you can afford.
Get in contact and let’s get started!
It would be great to hear any feedback on our approach, collective wisdom and feedback tends lead to better things!
Being a new company we obviously trawled the net for tips and advice and was educated and inspired by the post from Dan Martell:
Starting a Company? Launch Early & Often
When is it too early to tell the world about your idea? What if someone steals it? Might someone copy it?
Here’s a great quote that always puts this into perspective for me:
“Don’t worry about people stealing an idea. If it’s original, you will have to ram it down their throats.” ~ Howard Aiken
I’m of the opinion that it’s never too early to start soliciting feedback from potential customers, advisers, or partners regarding your company/product idea.
Here’s a few best practices I have used to launch companies in the past.
The 10 List
If you have an idea, make a list of 10 people who might buy it. This does not include your friends or family. Seek real potential customers: call them up (a call is better than email), explain what it is, how it works, then ask:
“Is this something you would pay for or find useful?”
That being said, here’s the trick: don’t let them discourage you! Use the feedback to modify your approach or delivery (elevator pitch).
A Web Site
I would suggest spending the 20 bucks to get a web site: buy the domain, set up a splash page, and start collecting emails. You’ll get potential customers, fans, even partners that will want to be notified when you launch.
Here’s the minimum information you should list:
* Name of the company or product
* Description of your solution or services
* Email form with a subscribe button
Everything else is optional and not as important as you think (e.g., logo, About Us). Just get the web site up.
Iterating Your Idea
Try and get something put together ASAP; this might include a visual design (screen mockup or wire frame), a working prototype (even if it’s ugly), a PowerPoint or something equivalent—the concept is to get something in front of these people (The 10 List) yesterday.
Prelaunch (Alpha)
If you’ve put your idea out there and engaged people in the iteration of the concept, then you might already have a list of emails from the web site. Invite this group to an early alpha of your product or service. The trick is to make it extremely simple for them to offer feedback. Email works; consider adding something in the user interface (applications) or a comment form (services) in the on-boarding process—that would be ideal.
Launch & Iterate
I’m a big fan of getting something out there ASAP and delivering value in order to iterate on the idea, get feedback and implement changes. Here are some ways you can do this:
* Offer the alpha version at a discount or for free, even if you plan on charging down the road.
* Provide your service and take notes for improvement along the way.
The trick is to be honest with your customers. Remember that your goal is use their feedback to help improve the concept, marketing message, even the branding.
If you plan on charging for your product or service, I wouldn’t recommend offering early customers free service/product. Their feedback for a free service or product will be dramatically different than for one they have paid for. You want feedback from customers who have paid—it will be more honest and specific, and it will hold you accountable to deliver more value than the price you are charging. That’s how business works.
“It doesn’t take money to make money, it takes creativity and adding value to make money.”
The Big Take Away
The best ideas come from personal need. The best feedback comes from real customers, not the ones you made up in your head :-). Share your idea with everyone. Get feedback from people who work in the industry your solution benefits.
Do you have any other tips or suggestions for why you should launch early & often? Any tips on how to get your idea out there and iterating on the feedback?
Mash can help with getting your idea out and you’ll only pay what you feel it’s worth to your business or what you can afford.
Get in contact and let’s get started!
Subscribe to:
Posts (Atom)