Situation: A company sells personalized content as well as a tool kit. The long-term plan is to monetize storage of personalized content. When they speak to venture capitalists, the VCs advise them to focus on just building their user base and not to worry about revenue. What would you do? Where should you focus – eyeballs or dollars?
Advice from the CEOs:
Take advice from venture capitalists with a grain of salt. Remember that their game is to fund companies that they like incrementally, taking a greater share of ownership of the company with each increment in funding. The more you lack revenue, the more you’re dependent upon them.
Gain traction by offering free content with up-sell opportunities for premium access.
The give-away strategy is a great model to build your initial user audience. Consider micropayment options for special features, content storage, and so forth.
Going slow and steady may not be the right model for this space. Company growth for a web-based platform is different from the typical bootstrap model.
It’s hard to get good advice for viral marketing opportunities from CEOs who have bootstrapped their companies. Look for other input. Seek the advice of CEOs who have been successful in the viral online marketing space and learn as much as you can about their business models.
Gaming is another opportunity – premium or virtual world sales.
Situation: A company is about to launch a Beta version of their web-based software. The CEO strives for perfection. What is sufficient for launch, and can the company tolerate imperfections in Beta version? When is “good enough” enough?
Advice from the CEOs:
Many successful software companies – think Microsoft – have realized that finishing the last 10-20% of a new release can be as expensive and time consuming as the first 80-90%. The challenges are often greater and it’s difficult to prioritize the final pieces. So they release when the software is 80-90% complete, prioritize the final pieces based on user feedback, and focus on quick response to user feedback.
You really have no idea how users will experience a new web-based program until you hear it from them. They will tell you what does and does not need to be fixed. They may even be able to help you fix it! Craig’s list stinks from a pure GUI perspective, but is highly popular and successful.
Get the Beta program out ASAP. What you perceive as imperfections may not appear as problems to young Beta users, and may in a way add a quirky appeal to the user experience.
Find a customer or group of customers who will pay for the program. Only this proves its actual worth. There can be conditions for a Beta release and discounts, but if nobody is willing to pay, where is the value?
Consider releasing your Beta version in a college campus environment and invite both participation and feedback. College students are very web-savvy, more tolerant of Beta programs, and crave the opportunity to contribute.
As an additional bonus, when you are ready to launch, college students are great at helping you generate buzz and early adoption because they talk to so many of their friends from both college and high school.
Interview with Luosheng Peng, CEO & President, GageIn
Situation: A fast-growing company is working to engage new users on their platform. They are leveraging ease of use, demonstrated ROI, and fit within an existing ecosystem as their levers to attract and engage new users. What have you found effective to attract and engage new users in a new platform or service?
Advice from Luosheng Peng:
The most important factors to attract new users are ease of use and a demonstrable ROI. It is important to address a complex value proposition simply and easily.
You must know, ahead of time, the single most important value for your target user. Your examples must be clearly tied to your target user’s most important need.
Quick, simple, visual and verbal illustrations are effective. For example, we used short and fun videos like Tracker the dog to explain our products.
You must demonstrate a clear ROI and increased productivity. Your ROI must be real if you want to gain users attention – particularly if you want to gain viral levels of attention.
In business intelligence, finding information is not a problem. The challenge is finding the right information, filling the gaps in information from standard sources, and delivering it at the right time. We spent a great deal of development time getting this part of our product right.
To improve understanding of your ROI, engage early adopters and get their feedback on your current features and how to improve your platform. Early adopters are more analytical and passionate than other users. They want to be acknowledged so be responsive to them.
Offer a freemium model so that new users can try you out and test your value proposition. If they like what they experience, offer a low cost limited premium model with incrementally scaled pricing for additional features or functionality.
Manage your ecosystem. Building a new ecosystem takes a lot of effort and expense. Most small ventures will want to compliment or fit into an existing ecosystem.
Existing ecosystems may already be crowded. Small companies have to be able to break through the crowd and be seen. We completed major integrations with Yammer’s Enterprise Social Network and Salesforce.com’s CRM. Your platform will have the most success if you address a gap or unmet need within the existing ecosystem.
Situation: An organization that provides an online network for senior financial executives has an immense amount of content on its web portal. To improve the user experience of their target audience, they want to simplify access to this knowledge. How do you simplify access to knowledge?
Advice from John Kogan:
We have a rich portal with an immense amount of content potentially valuable to senior corporate finance[K1] executives. We have many ways to access this content – perhaps too many. Our objective is to get the highest quality answers in front of the user with the least effort on their part. Google has done a very good job of pulling the best content to the top given a million possibilities to each query. If we can do this, we become the Google of finance and accounting!
Most people know what they want when they come to a site. We have started by creating a clean user experience to allow them that good “line of sight” to what they want.
Our objective is to help the user identify the right content with the smallest number of queries. From the user perspective, exposing the wrong content is a waste of time. We want to show them high quality, compelling content which directly addresses their need.
To develop quality content, you must have an open mind. It’s not about what we want to say, but understanding the user’s needs and addressing these. You have to be guided by the data to tell you what’s happening on the site and what the user wants to see, and then provide them relevant information.
Achieving this means that we must find people who are smarter than us in these areas and gain their input. In the end, your company is no better than the ideas that you can either dream up or gather from others. We constantly seek fresh perspectives from investors, advisors, users and potential users.
Finally, you must take action on the data you gather. Too many companies suffer from information paralysis. The solution is Vision plus Will plus Doing it!