How we celebrate the little things

Running a startup is definitely an emotional roller-coaster ride.  You are going to have really good days (like when you are featured on The Today Show) and a bunch of down days as well.

Your product development will always be much slower than you want;  you’ll put your heart into product changes you think are great but the customer balks at (or even worse, doesn’t notice).   You’ll put in an experiment “destined to win” until it meets the real world where it promptly loses by a large margin.  And as you go through the meandering customer development process of  learning what exactly the customer wants, it will feel like your  company is going nowhere.   Add that all up and if you are only waiting for the end goal it will feel  like it will never come.

So how do you stay optimistic and keep moving forward?

At Shop It To Me, instead of only celebrating the final goal, we make an effort to celebrate the little things.   We release new functionality weekly, and with every weekly release comes a mini-celebration (“Beer-Thirty”) — reveling in what was accomplished that week, the hard work that was put in, and the fact the product is (almost always) better than the week before.  We celebrate that we put the experiments in and found out the results even if they weren’t the results we actually wanted.

And we’ve been experimenting with another way of celebrating too — the “mini-milestone”.   Each product team comes up with a set of small milestones that are achievable in about a month’s time.  The milestones are not guaranteed to happen, but likely if everyone works hard (   examples include a set of features or experiments included or a metric goal that shows we are making some progress.) Each time we achieve a milestone. the team is given a small allotment ($250 or $500) to spend on the company and celebrate that milestone — they get to pick how.    The celebrations are usually not that big —  examples include a fancy brunch for the company or a Nespresso machine  — but so far the result has been super positive.  The team gets recognized for the work they have done, the entire company sees that progress is being made towards reaching our bigger goals, and after each celebration the teams are more motivated than ever to be hosting the next one.

How To Find Early Adopters For Your Internet Startup

I recently  came across a Brookings institute article on global happiness level.  The premise is simple (and well-documented from other books on the subject) — the human psyche towards happiness is incredibly adaptable.  People even in the poorest, most war-ravaged parts of the world have happiness levels as in the US because they have adapted to their environment.

The same is true with users of any software.   People have a fantastic coping mechanism to be “complacent”.  People “like” their existing email provider even though it might put 30-50 spam emails in their inbox each day because they have grown used to it.  They can’t imagine anything different.

But every once in awhile you’ll find someone pissed off with the status-quo.  They’ll either be doing something on their own to make it better, or just vocally complaining about it.  THESE are the people who are your early adopters — the unhappy people.    When you first put a new product, it’s not going to be perfect.  There are going to be major parts you’ll need to either add or change .  Don’t test it against the mainstream user as they don’t know there is a problem.  Ask your friends and check discussion boards and Twitter for the people who are not happy with the status quo and test your product with them first.  You’ll learn a lot more about the unserved problem and ways to fix it.

Then once you have nailed the solution, go after the mainstream “complacent” user and show them just how much  they are missing.

7 Email Marketing Mistakes Not To Make

In case you have not seen it yet, my article on the 7 Mistakes Not To Make In Email Marketing is now online at Inc.com!

 

I’m Back, Baby!

I’m Back, Baby!

Hi again!

As you probably can infer from the title, I am going to start blogging regularly again, my wife and I now are proud parents of a cute baby girl, and I am a fan of double entendres/puns.

The last year has been crazy, becoming a first-time parent and setting up a whole bunch of new initiatives at Shop It To Me,  some of which are now in our system, some we hope to launch soon, and some which will never see the light of day.   It has been a crazy-fun ride  and I hope to relay as many insights as I can in a nifty once-a-week format.

I’ll be writing about these experiences — starting and running Shop It To Me, a successful eCommerce company in the Internet-hot SOMA region of San Francisco, so expect posts on commerce, startups, product management, user-psychology, and being a dad.

Stay tuned!

Customize Your E-Mails and You’ll Avoid Getting the Spam Treatment

I just had an article about why and how retailers should be personalizing emails posted on Ad Age.

Comments are appreciated!

Website Checkout Best Practices and Credit Card Expirations

At Shop It To Me, we are always reading studies and articles on ways to help make shopping an easier and more fun experience .

I recently read a Ecommerce Usability study with some great insights on how to make checkout pages more efficient. If you haven’t read the summary of changes, I recommend it. A lot of the suggested changes are really small and at first counter-intuitive (which I always like).

Here’s one example on checkout expiration dates:

Many sites at checkout ask you to select the month of your credit card expiration from a list of names (i.e. They’ll be a list of months like “January”, “February”, “March”, etc… ) . At first, this just makes sense makes sense as people are more likely to think of “June” as a month than the number 6. Why confuse them?



The problem is that credit cards list the expiration as digits and not as a name (i.e. if your credit card expires June 2011, it will be listed on your card as 06/11 )

When a website asks you to select “June” as the month, they are actually forcing you to do the translation from 6 to “June” in your head. They are actually making you do extra work to check out. In the study, they found that just changing the expiration to two-digit numbers had a significant increase on completion rates.

You can see the remaining top 15 results from their report here, and the entire report can be purchased for I think about $80. Well with the investment if you are an ecommerce site with an existing checkout process.

How we get rid of Resume Spam

At Shop It To Me, we recently posted some new job openings on our website (for a Ruby Engineer, an Office Manager and some interns).

Unfortunately, when we post the jobs on job boards or public networks, we usually get a few great candidates and hundreds of people who send us what I call “Resume SPAM”.  These are usually people who are either not qualified for the job, and/or not interested in us in particular — they’re interested in a job.  They make a generic version of their resume and cover letter and blast it to every job opening. We actually have had a few who have accidentally sent us a cover letter saying “My dream job is to work for…”, but forgot to change a competitor’s name with ours…

If you are currently helping out with hiring, you probably have seen the same thing — a couple interesting candidates who take the time to show interest in your company, and a whole bunch who are basically looking for any job and basically sending out resume SPAM to every job.

Here’s how we handle it:

Rather than having a team of people weed out the SPAM, we post a puzzle or question on every application, and ask the candidate to solve it and put their answer. The question has three qualifications:  it can be done in about 15-20 minutes, it is relevant to the job, and ideally it is fun to do for the right candidate.   The answer not only tells us whether or not they are qualified, but also whether they care enough about working for us (or like the puzzle enough) to apply.   We can quickly select out the good candidates from the quality of their answers.  Anyone who does not answer the question or does not answer adequately is removed from consideration.

To give you a few examples,  our Office Manager must be able to be a self-starter and figure out complex issues,  so the question on the application is:

Please research and tell us:  What are the minimum employee benefits for a 15 person company located in the city of San Francisco? How does that change for a 25 person company? And, for a bonus, how is that different from a 125 person company?

On our Ruby Software Engineer job posting, we make them both solve the  Ruby puzzle below and an assignment (which is too long to list here). A good Ruby developer should be able to do both in under 15 minutes.

you=%W(SMART RUBY RAILS DEV LOOKIN FOR FUN TEAM COOL PROJECTS MILLIONS OF AVID FANS CHANGE THE WORLD );
answer = you.sort!.inject(you[12] + " "){|a,b| a+(b<"FREE"|| "REDUCE" < b || b.length < 3 ? "": b.gsub("AI", "ACE").gsub("ON","CAFFEINE").gsub(/E.T./,"UFO")[4-a.length..4-a.length])}
puts answer

If you are applying for a job (particularly with Shop It To Me), here is how to get noticed.

1) Write a custom cover letter to us that talks about things unique to our company.  We always read the cover letter and can tell if it is generic. Do some research on us and see if this is the right place for you to work.

2) Spend time to solve the puzzles in the application if they exists.  It shows you care and will be somewhat similar to the challenges you will have on the job.  If you don’t like the puzzles, don’t apply.

3) If possible, network your way into the company via a friend you know here or a friend of a friend.  Referrals are always the best ways to get into a new company. (You still need to do the puzzles though!)

4) And if you are applying for a job at Shop It To Me and are reading this, good for you!  Tell us  “I am excited about Friday waffle and fresh juice breakfasts”  somewhere in your cover letter.  That way we’ll at least know you are doing some research on us…

 

Actual Value vs Perceived Value II

In a previous blog post, I chatted about the differences between the actual value people get from your service and the perceived value they have when they are considering using it.

In this post, I’ll talk about some steps to attract customers when your product’s Real Value is greater than it’s Perceived Value.

Let’s say you have a product that your current customers love but you are having a hard time getting new people to buy it. How do you get people over the hump and understand the real value?

Here are a few steps you can take:
1) Make it both free and easy for people to understand the actual value.
Some people try to have “videos” explaining the benefit, but the only real way to feel the benefit is to experience it. If you have a paid service, offer a free trial with enough time to use the service that you can get its full experience. DropBox’s Fremium model fits this perfectly. They give you 2GB free, which is enough for you to start feeling that it’s indispensable, but not enough that you won’t need to buy more after you’ve been hooked. The key is to offer enough time for someone to understand the service. A one month trial alone is usually not enough to get people hooked. If you can afford it, give them 3 or 6 months to start.

2) Make just trying your service super compelling.
When I was just launching Shop It To Me and pitching new users (and when I was single and needed a cocktail topic!), I would make a bet with people I met. Specifically, I bet them a drink of their choice that they would not unsubscribe after a month. If they unsubscribed, I would buy them a drink. If they did not unsubscribe, they owed me a drink. The strategy worked as from their perspective they could not lose: they either got a free drink or they discovered a free  service so valuable they would be willing to pay money to keep it.   I ended up a bunch of free drinks and new users and actually never had to pay.

3) Get a trusted authority to vouch for it.
If you want a quick jump in customers or user growth, get an authority to sing it’s praises. Sites like ShoeDazzle and BeachMint get celebrities to show why the site is trustworthy, and sites like Gilt spend millions in PR getting the highest magazine editors and famous stylists to say good things about them.

4) Social proof: Get their friends to sell it.
iPhones and iPads are selling not because everyone just loves the Apple logo. They are selling because a small set of avid Apple fans and technology early adopters seeded the market and evangelized it to everyone else. Most people who now own iPhones only did so because they had a friend who owned one and LOVED it. Word of mouth is probably the best way for any product with a low Perceived Value and high Actual Value to grow quickly. PR and ads will only get you started — if you can’t get people to tell their friends, your user growth will likely spike and then die down completely. But getting people to tell their friends about your site is a lot of work — often as much or more development and creative efforts as getting your site to appear in the top Goggle search results or optimizing advertising campaigns.

5) Sweeten the perceived value.
Try reshaping your messaging in a way that makes the perceived value better.   Whether you like them or hate them, Groupon and LivingSocial have done a very good job in their advertising emphasizing the Made To Stick elements in advertising. Look at any of their ads, and you understand almost at an emotional level. They have taken a very abstract concept –coupons on local venues near you — and made it very tangible and concrete, oferring “up to 90% off a burger in your area”.  The more concretely you can express the benefit, the better.

And three things not to do:

1) Invest in Search Engine Marketing or Optimization (SEO or SEM).
If your product is hard to explain and must be experienced, chances are someone is not trying to search for it. You may spend months optimizing your site for SEO or optimizing ads, but likely you will get only a little traffic and even less conversion.

2) Blast people in an unsolicited way.
Sending an unsolicited email or a blast email without context is as likely to get you results as sending an email trying to convince a staunch Republican why Obama is the best US president ever. People tend to commit and won’t easily change their minds so you’ll have to do more work than just a pure email blitz.

3) Prematurely invest in a huge PR blitz announcing your product.
A big PR launch is a great way to get an initial spike in traffic, but if people do not understand the value of your service, you’ll just see a spike in traffic and not necessarily new customers. You generally have only one shot to get the press’s attention. Use it wisely. Wait until you have resolved some of the steps above (like getting an authority or optimizing word of mouth) before making huge dips in your coffers for PR. Instead, first focus on smaller PR investments and smaller hits and use those hits as a way to experiment and tweak your messaging until you have figured out what works. That way, when you finally do get that full page New York Times article on your company, you’ll be able to fully maximize its potential.

Actual Value vs Perceived Value

Here’s the scenario: You’ve got an amazing paid or free product or service. Everyone who is using it loves it. You know your market is huge! And yet it’s the hardest thing in the world to get a new person to join or buy.

Don’t despair. This scenario is much more common than you think.

The problem is that the actual value people get from using a new product can be very different from the value they thought they would get — what I call its perceived value.

This happens all of the time for some of the most successful products. Almost anyone with an iPhone or Android will tell you that the phone has changed the way they live and they could not imagine living without it. Yet almost everyone except extreme Apple early adopters had hesitations when the first iPhone came out. Ask people who love the iPad and they’ll tell you that they had no real reason to buy it, but they can now not live without it. And it took years for people to realize that getting a Tivo would reduce the amount of time they spent watching TV, not increase it. In all these cases, the product had a huge actual value but a small perceived value.

Products can have a huge perceived value but little actual value as well. Think of all the kitchen appliances you own that you rarely use — the bread-makers, fancy steamers, food dehydrators, etc. If you have a smart phone — how many apps have you download thinking you would use but are now collecting electronic dust? In fact, the angel investment industry runs for the most part on perceived value; each year hundreds of companies get millions in funding based on the hypothesis of a problem they are trying to solve (perception) as opposed to really showing one exists.

Any entrepreneur, product manager, executive involved in launching a new product needs to be acutely aware of your product’s actual and perceived values and if/where there is a discrepancy — keeping in mind that the values could be different for different customers. If you don’t make the distinction, you may end up canceling a product that could be have been the next Facebook, or spending months or millions on a service that is never going to get off the ground.

How do you know if your product has a strong perceived or actual value? Try out the answers to these questions (1-3 address perceived value and 4-6 address actual value):

1) When you describe your service or product to your target audience, what percent are ready to buy / sign up on the spot?

2) When you describe your service or product to your target audience, how do they describe it? Is it “interesting”, “sounds cool”, or “OMG I need this now!”

3) Put up a sign-up page on your website or email people and ask them to buy or sign-up. What % sign up for it?

4) Of the people who are currently using your product and are not friends or family members, what percent would definitely tell friends about it? (You can also use a Net Promoter score here)

5) Of people using your product, what % of them are using it more frequently now than previously 3 months ago? (or 1 month ago if you just started)

6) If your service has ever stopped working, what % of your users complained?

For questions 1-3 , you’ll never get 100% of people ready to buy, but if out of 30+ people, 25+% either sign up or are jumping at the bit, you’ve likely got strong perceived value.

For questions 4-6 , if you get more than 30% to tell friends or use your product on a more frequent basis, you know you have a good foundation of actual value to build upon.

In another post, I’ll talk about tips for success (and things I did early on at Shop It To Me ) for when your product has actual value but little perceived value.

The Beginning….

We’re live!

After about a month of waiting, iamcharliegraham.com is now live. As some of you have requested, here are my rants and raves about entrepreneurship, Product Management, Shop It To Me, and eCommerce. Enjoy and please join in the conversation!

–Charlie