Savage Thoughts

Impressive growth comes from impressive culture

Sun, 12 Feb 2012 09:44:31 -0500

We’ve been putting together a video series at Wistia called How They Work. In it, we go around and interview inspiring businesses about their company culture. Each How They Work is about three minutes long. They are designed to capture just a few of those sweet, sweet nuggets of culture that are drivers of success.

Clover Food Lab is the most recent company to be featured on How They Work. In the last year Clover has expanded from one food truck and 10 employees to five trucks, two restaurants, and about 140 employees.

My favorite thing about Clover other than their delicious chickpea fritter is that they have completely blurred the line between the food and tech industries. They’ve built internal software that runs on iPods to scale up and down with demand. They test and measure everything they do. They even change up what they’re selling on a daily basis by only having digital menus and whiteboards. If they were a software company their story would be incredibly impressive, but for a food business it’s completely mind boggling.

Watch the How They Work for the full story.

Two principles of highly productive teams

Thu, 26 Jan 2012 11:05:00 -0500

One of the major challenges that we’ve gone through in the last year is figuring out how to stay highly productive as our team grew from 5 to 12 people. While we’re still early on in this process, I thought I’d share some of the lessons that we’ve learned so far.

Communication between 12 people is very different from what it was between 6 people, which is really different from when it was between 4 people. Our internal communication mechanisms have had to evolve so that they are less disruptive, more relevant, and more helpful. It’s an ongoing quest to reach the same efficiency of communication we had when it was just Brendan and I in an apartment.

During the last year we’ve found two principles that have helped us to stay focused and productive: “ownership” and “authority.” It took some work to hone in on these two simple principles. Now we manage to achieve them on an ongoing basis.

Ownership
Defining question: Who is responsible for getting this shit done?

It seems like a simple question but I’ve actually found that it can be really easy to lose focus on this. Everyone wants to help solve the biggest and most important problems. While this is a great intention, responsibility needs to be focused so that the company can stay balanced. If you don’t know who is responsible, you haven’t clearly defined ownership.

Giving ownership of something to one person doesn’t mean that they are the only person who can work on a particular problem. It just means it’s their ass to get something done, whether they can accomplish it themselves or if they need to enlist the help of others. I’ve found that by giving complete ownership to one person it also forces more clarity over exactly what each person should own and that’s a good thing.

Authority
Defining question: Who is the decision maker on this shit?

She who has authority has the final say on an issue. Every team member who has ownership over something (hint. everyone should have ownership over something) should have the authority to act within the boundaries of their ownership. Err… what?!

This is the the anti-micro-management rule. Letting people make their own decisions can be scary. In fact, for the founder of a startup it’s often terrifying. What if they make mistakes? What if they make the same mistakes I’ve made before? Sometimes your team will make the same mistakes that you have, but by giving them the authority to make their own mistakes, you give them the authority to learn from them.

The result is that by letting people get up to speed very quickly, the business will move much faster.

A highly productive team
When I tell people about our approach to team building I often hear the questions like: So you really give up control like that? How do you stop someone from making a mistake? The answer is simple: trust. You have to trust that if you’re building a team of the right, amazing people you can trust them to operate within their own domain.

It doesn’t mean you can’t give feedback about the job they’re doing, you should of course help wherever you can, it just means that you should provide your input and let them make their own decisions. If you’re building a strong team they’ll take your advice, factor it into their own decision making and include it if it makes it easier for them to achieve the objectives of their ownership.

Please prescribe a best path for your product

Tue, 18 Oct 2011 14:06:52 -0400

Please tell me: What is the best way to use your product?

This seems like a simple question, yet there are so many great companies and well-respected entrepreneurs that absolutely fail to make it clear what the best path through their product is. These products continue to thrive because of strong brands, ad budgets, and momentum. But there is so much lost opportunity: the opportunity to create sticky customers, create new markets, and get anyone to pay attention.

How do you fix this problem? Establish a best path.

What’s a best path?
A best path is the way of using the product that is going to provide the maximum amount of value, least amount of stress, and most upside from investment (whether that investment is in dollars or time). It’s the way you’d use your own product if you were trying to solve the most fundamental problem that your product solves.

Why is this even an issue?
A best path is necessary for any product in an industry where there are different approaches to solving the same problem. This flexibility is an upside when taking on customers who already have an established way they want to solve a problem, but it’s a downside for those who don’t know how they want to solve a problem.

Here’s the secret: The reason most people use products is not to do exactly what they were doing before, it’s to take a current process and make it better, more efficient, or more fun. They’re looking for a new way of doing things. Enter the best path.

How do you establish a best path?
There are three basic ways to establish best paths through a product.

Wizards - The vintage approach
This is the most classic example. Long ago in the dawn of Duke Nukem, it became clear that simplifying options when possible would result in less errors and more value. Advanced options were always available, but your new user could easily progress through a wizard without screwing anything up.

Checklists (or gamification) - The vogue approach
LinkedIn popularized this simple and effective approach. Let people do whatever they want, but make it obvious what a successful use of a product looks like. The LinkedIn profile completion percentage provides the expectation that reaching 100 percent maximizes your chance of getting value out of LinkedIn. In their case, they let you do things in any order you like but you always know what the best path looks like.

Design - The hidden approach
Incorporating best paths into the design of a product is the most effective and powerful approach. By putting effort into the structure of your product you can force a best path by default. The iPhone is the most elegant example of a best path being built directly into the design of a product. Almost every single task on the iPhone encourages a best path first and advanced options second.

The best path as competitive advantage
Providing a best path is about taking away guesswork. It’s about encouraging your users to use your product in a particular way so they automatically reap more benefits from their time. Do that, and you and your users will be all set.

Please incorporate a best path into your product, so we can both solve our problems and I can give you some money or time.

Confronting entrepreneurial fears

Mon, 11 Jul 2011 16:48:39 -0400

Being an entrepreneur is all about fear: fear of failing, fear of missing out, fear of making the wrong decision, and even fear of success. The difference between succeeding and failing is how you choose to confront your fears.

The day you quit your job is going to be scary. The day you make your first cold call is going to be scary. The day you pick a price is going to be scary. The day you have to fire someone is going to be scary.

The secret is: It’s okay to be scared. You just have to be more scared of missing an opportunity than you are of actually failing at it. How do you think Obama felt before giving this speech in 2004? I’m sure he was terrified but how could he have passed up the opportunity to speak to the entire nation?

You have to embrace the fear. You have to try. And eventually, just trying matters. And suddenly you’re not afraid anymore.

Trust in t-shirts

Tue, 07 Jun 2011 09:00:06 -0400

In the past two years, Wistia has spent over $6,000 printing more than 400 shirts with our logo and sending them out to customers and friends. There’s no way to measure what the return for this has been.

Even though I don’t have any statistically significant data to prove it, I’ve always just trusted that sending out t-shirts is a good branding strategy. Don’t get me wrong, I’ve seen tweets, blog mentions, and flickr photos of people wearing Wistia shirts, but none of this comes close to justifying the cost. However, I still trust that if someone wants to wear the Wistia logo, we’d be crazy not to let them.

Last week, some anecdotal evidence showed me that my faith in the power of t-shirts is justified. Three people separately told me that they saw someone wearing a Wistia shirt in the wild. They were shocked and impressed by how big Wistia has become. I was blown away that people who already knew about Wistia are seeing our shirts out in the world.

Then Saturday rolled around. I was on the prowl for lunch, wearing my Wistia shirt, when I heard someone call out “Wistia!” I turned around to find an enthusiastic guy who proclaimed that, three days earlier, he had become a customer. I practically fell into the street. We’ve come a long way but having someone stop me on the street was still a pretty mindblowing experience.

Working at a startup, it’s easy to become dependent on metrics. And once you start depending on metrics, it can become much harder to make intuitive decisions that can’t be measured. We send out t-shirts because we trust that it will help spread brand recognition and give people a comfy shirt that actually like to wear. I still have no empirical evidence that sending t-shirts is a good marketing strategy, so I’ll just trust that it is and keep sending them out.

You can be an expert at anything

Mon, 16 May 2011 16:21:00 -0400

I like to think about learning new skills as a pursuit of happiness. Some skills are easy to learn and can provide a lot of joy, like playing ping pong. Others seem impossible to learn but if only you could learn them then you’d be happy, like being a successful entrepreneur.

Here’s how I’d graph out the fun generated by playing ping pong over time:

For the most part it’s a linear progression. It’s easy to make improvements when you first start playing. You learn to keep the ball on the table more often, you learn hit the ball with spin, the ball actually starts going where you want it to.

Every one of those moments is a rush. A rush that brings you back to the table. A rush that keeps the fun going. A rush that makes you want to practice. Over time the rushes come from more advanced shots.The cycle continues as more practice begets more fun, and now you’re a great ping pong player.

Great! But why are some skills so much harder to learn? Well, let’s go to the graph:

Learning to play the piano is hard. Most people never get past the valley of despair. That’s because to truly have fun playing the piano you want to be able to improvise, make up your own songs, pick up a tune by ear, and entertain yourself with your creativity. Just imagine how much fun it would be to create great music at any moment.

Here’s the secret: You can change the graph of happiness to skill learning if you can measure improvement in smaller increments, deriving joy from each achievement along the way.

You need to make the graph of learning those difficult skills look like this:

You have to measure smaller elements of skill learning that will generate joy for you, so that you can forge right through the valley of despair.

Instead of starting off trying to write a bestseller, start measuring how many daily visitors you can get to a blog. Can you get five people to read your next blog post? As traffic begins to grow, move onto weekly and monthly visitors. Instead of going into a startup thinking you’re going to sell the business for $50MM, measure how many new people you tell about the company in a month. Then move on to measuring the number of leads you get. Evolve the measurement so that you have attainable goals that bring you joy, but so that you’re also marching forward.

Life is nothing but skills waiting to be mastered. You just need to pick the ones you want to master and start finding ways to get joy out of the journey.

What new skills are you trying to master? What do you want to be the best at?

Build a great brand experience

Thu, 05 May 2011 14:32:00 -0400

It’s really hard to build a brand. It’s hard to get the attention of others, it’s hard to get people onto your website, and it’s hard to create something that people will buy and use. We realized early on that the best visitors we get hear about us through word of mouth. Word of mouth is driven by happy people who have a great brand experience.

This is how we’ve focused on building a great brand experience:

Trust: A great brand experience needs to establish trust between the business and its customers. We establish trust by giving surprisingly honest feedback to customers (such as sending them to a competitor if they’re not a good fit), making it easy for anyone to get in contact with us (by putting a phone number on our website), and focusing on coaching instead of selling.
Do the work for the customer: We try to do as much work for the customer as possible. This means spending extra time designing a product to simplify the first time experience, asking for the least amount of information needed to solve a problem, and putting the onus on us to do the work.
Creating a genuinely useful product.
Surprise people with greatness: Give people unique and useful things that they’ll actually use. Give out the best quality t-shirt you can find instead of settling for the standard Hanes. Give people unique things they couldn’t get anywhere else. Give people something that will make them feel proud to support you.

Brand is everything. It’s every interaction with someone outside of your business. It’s your company culture. It’s your production process and the way you deal with a bug.

The secret to brand building is to start early and often. Your brand is not your logo or color scheme, it’s how people think about you. It’s the way that you represent yourself.

10 Ideas For Those Critical Early Startup Sales

Tue, 26 Apr 2011 10:06:00 -0400

This post initially appeared on Dharmesh Shah’s excellent blog, OnStartups.

Closing your initial sales at a startup is one of the most challenging parts of building a company. Many startups die before they ever close a deal.

Unless you’re entering a well established market there will be uncertainty with your product, approach, and timing until you have enough customers to prove that you have a good business model.

When Brendan and I started Wistia, we had questions about how the sales process should work, what kinds of documents we needed in place, how long things should take, and where we should look for potential customers. Through sheer will, conviction, and lots of failure, we found our way to where we are today. Here are the 10 principles we learned along the way.

1. Don’t wait to sell

You should start selling as early as you possibly can. Do not wait until your product is polished and launched. We changed direction and started heading towards Wistia about a year into startup life. How’d we know to head towards Wistia? Because we had a real potential customer that was interested when we had NO PRODUCT. We talked to them about what we thought Wistia could be. They liked the concept and we built the first version of Wistia in two weeks. A month later and we had our first customer.

We had just spent seven months building a portfolio website and four months trying to get people on board while our bank accounts shrank and our time to live decreased. In the course of a month we sold our first customer, decreased our burn, and realized that selling early was possible.

2. Do things that don’t scale

We learned an enormous amount from our first customer. That first sale gave us a benchmark for what people were willing to pay, how long it would take to close a deal, and how easy it was to use the product.

We made a point of going to our first customer’s office every couple of weeks to talk about the challenges that they were seeing and how we could make the product better suited to their needs. We could never spend as much time with every customer as we spent working with customer numero uno but we magnified all the extra learning upfront across the customer base.

Trying things that seem like they can’t scale is not just okay, it’s imperative as long as you are actively learning from every interaction.

3. Get inside your customer’s head

What books and magazines would your customers read? What conferences would they go to? What search terms would they use? Who would they follow on twitter? Once you have an idea of where your customers hang out, you need to go there. The more time you spend where your customers are, the more you’ll learn about how they think and whether or not you’re focused on the right group.

We thought some of our early customers would want to use Wistia for training, so we went to learning conferences. When that didn’t work we focused on talking to people from big companies that went to tech events. As we got better at figuring out where our customers could be we had more opportunities to learn from the right audience.

4. Focus on the buyer

Sometimes, especially with enterprise sales, the buyer of your product will be different from the user. That’s why it’s critical that you focus on the buyer.

CRMs are an excellent example of this phenomenon: a product is sold to the VP of Sales that will be used by the sales team. If you focus only on making an amazing experience for the sales team while ignoring the high level dashboards of how the sales team is doing, the VP of Sales will have trouble buying.

Look at Salesforce .com; their application can be an ardous one to setup. In fact, there are companies like OpFocus, whose main business is working with companies to optimize the Salesforce.com system already purchased. But Salesforce.com does have a great set of dashboards for the executives. The buyer, the VP of Sales, is happy and Salesforce is a $18B company with a product that has a terrible UI. All because they focus on the buyer.

5. Don’t price against cost

Cost matters when markets are mature and products are well defined. All that matters to customers is value. Should we charge our customers based on how many servers they’re using or how much video bandwidth they’re pushing because those are our costs? No.

Our customers don’t care how much we’re paying Slicehost or any of our other providers. They want to know if their videos are effective, they want to close more deals, and they want to provide a better experience for their customers. These needs could not be more divorced from our costs.

6. Position against complementary products

For some reason, competitive startups tend to think that they need to position themselves against each other. But as my good friend David Cancel likes to say:

I believe a startup only has one real competitor, indifference.

People not caring enough about your product is your true competition, not some other startup.

- David Cancel

When you’re thinking about how to position yourself, look at the complementary products, not the competitive ones. Ask yourself two questions: How much value can I create for my customer? And how much value are they getting from the other products they use?

Say your customers are spending $50 a month on Mailchimp, and they get an email platform they use every week that allows them to design, manage, and market to 5,000 recipients. Don’t try to sell them a video hosting solution for $1,000 a month that they’re going to use once a quarter to train 200 people. We made this mistake, and it’s an important one to learn from. Be honest about how much value you create and how much value your customers are getting from other products.

7. It’s only the beginning

When you first start selling a new product every new customer feels hugely important, and they are. It becomes easy to put a crippling amount of pressure on yourself to close deals and get people interested. While this can be a good motivator, it can also cause you to make mistakes.

When we were first getting going sometimes we’d say things like “Maybe we should wait a bit until feature XYZ is launched. Then they won’t be able to say no.” or “If we can just get company ABC to sign up, then it’ll be way easier to get that other guy too.” Here’s the problem with this: unless you’re dealing with a market in which there are less than 100 customers, the customers you’re trying to sign up should only be floating on the surface of your pool of potential customers.

You should not be afraid of scaring people away with a high price, the wrong messaging, or an initial email that’s too short. You need to try all of these things and more to figure out what’s going to work for your sales process. You need to be able to take risks and push forward quickly. This can be impossible if you structure your plans around closing each and every individual potential customer.

8. Focus on every customer

Even though no one customer should define your business model, you should leave yourself the flexibility to cater to each individual customers in specific ways. The most likely way to get customers to close is to spend a little time on each individual target. You need to personalize the correspondence as much as possible. This is true if you’re sending an email or if you’re meeting with someone in person. Figure out why they’re successful, what their hobbies are, and what conferences they like going to. The more you can understand them the more likely you are to speak in their language.

It takes time to prepare and learn about every target. But as you get more customers you’ll quickly learn what similarities and differences your customers have. It becomes easier to figure out where to focus and how to craft your message.

9. Act your size

When you’re first getting started it’s easy to fall into the trap of trying to act bigger than you are. Common pitfalls include trying to demand exorbitantly high prices, positioning to have more customers than you have, and promising more than your product can deliver. Yes, I’ve made all these mistakes.

When you’re trying to act big, it often highlights just how small you are. Pretend like you have more customers than you do and when someone asks you who your customers are you’ll be left speechless. Position your price too highly like your more entrenched comparables and people will stop responding to you.

The secret is: the right customers will gladly pay startups for services. They’ll think they can get a deal because they’re early to the party, which is likely true. They’ll be excited about using cutting edge technology to get a leg up — again true. And if they pick right and your product rocks they get to tell the world that they were first — how can this benefit even be measured!

10. Just keep going

The hardest part of bootstrapping your sales is sticking with the process. It can take a very long time to get your first deal. But each deal comes faster with practice and more information.

Your initial hit rate will probably be terrible. If it isn’t, you’re doing something right. I have some friends who run a company called Usable Health that just closed their second deal in a complex and emerging space: kiosk-style self checkout at mid-sized restaurant franchises. They’ve been selling for one and a half years and pivoted three times in the process. Now they have a pattern, happy customers, a model that looks like it could scale, and real tangible revenue.

Not giving up is the most important part. Give yourself time to build your business model. Once you’ve done that, you’re golden.

What do you think? Any tips on getting those early sales?

Dear Continental Airlines,

Fri, 18 Mar 2011 12:39:00 -0400

Brendan and I flew back from Austin on Tuesday having just finished an exciting and invigorating weekend at SXSW. There had been much talk of conversions, funnels, and improving metrics. That’s when I realized; I was sitting right infront of a broken conversion funnel: your in-flight DirecTV.

Let’s take a look at the current state of your funnel. My reactions are in bold.

The flight attendant at the gate announces that we’ll have inflight DirecTV
Awesome!
Flight attendants hand out free headphones on the plane.
I have my own, but I appreciate the gesture.
DirectTV is playing on the screens.
Hmm… What should I watch?
An announcement is made that to access DirecTV will cost $6. A 15 minute countdown begins.
What the hell? I have to pay for this thing?

The result: 34 people of the approximately 180 in coach decided to swipe their cards. That’s an 18% conversion rate. If you haven’t already guessed, Brendan and I were not in the aforementioned group.

Your numbers are not good
Ask one of your employees to go for a ride on a Jetblue flight and check out how many people are watching TV. You’re going to find much more than 18% of people tuning in.

Total in-flight TV revenue for the flight was $204. Given how many planes you expect to be DirecTV enabled this year and your current conversion rate, we’re talking $2.3-9MM a year on this initiative (Check the math).

You have a positioning problem
When purchasing in-flight DirectTV from you guys I’m faced with a $6 purchase. This is after I just paid $5 for water, $7 for a sandwich, and $25 on a cab. All of these feel like travel necessities as I would like to stay hydrated, nourished, and get myself to the airport. The DirecTV does not feel like a necessities, it feels like an extra I’m gouged to enjoy.

You can solve this problem
The solution is simple: Raise everybody’s ticket price $3 and make DirecTV “free” for everyone.

You have the opportunity to completely re-frame the purchasing process so that people feel like they are getting a deal. All things being equal, I will pick the flight with free TV instead of the paid TV. Watch from minute 11:11 on of this excellent talk with Dan Ariely to learn why:

Just imagine. What if people picked Continental for the free TV in addition to the enormous number of airports you serve. Sounds like a compelling proposition to me.

Food for thought.

Sincerely,
Chris Savage

Update:

Continental has responded on twitter.

What's in a name?

Thu, 10 Mar 2011 18:25:00 -0500

People frequently ask us why team members at Wistia have formal titles even though we’re such a small company. This is a great question and something that I’ve asked myself. Let’s see how we decided to go with the titles we use now.
Over time, through trial and error, I’ve discovered the secret to a team getting tons of work done: give people autonomy, ownership, and the power to make change.

Autonomy - freedom from external control or influence; independence

Are you more excited to do what you want to do or what you’re told to do? What kind of problem do you find more motivating? Giving people autonomy to find the problems that they think deserve to be solved and to solve these problems their own way is incredibly motivating.

We want everyone who is at and will be at Wistia to have the freedom to solve problems the way they see fit. One reason we opted to “round up” on titles instead of “rounding down” is so that everyone understands that each team member has this autonomy.

Ownership - the state or fact of being an owner

The biggest challenge of running a startup is deciding what to do next. What should we do tonight, tomorrow, next week, or next year? We’ve handled a part of this decision making process by making sure that one person has ownership over each critical part of the business.

When we make decisions about which feature, partnership, or marketing strategy to pursue next, we always have someone fighting from the perspective of each aspect of the business. This helps us keep all the parts of the company balanced and make smarter decisions. Using this approach, people end up fighting pretty hard for what they believe in.

Power to make change - the capacity or ability to direct or influence the behavior of others or the course of events

Our approach would not work if we had a crew of people generating ideas and one person enacting them. We need everybody to have the power to make change. This can mean having the authority to push “send” on a newsletter, sign a partnership, or commit code. (Side note: Jeff, our Director of Customer Happiness, decided it would be a good idea to commit his code in his first week on the job helping people with support. He wanted to fix a recurring support issue by improving the product instead of creating a canned email.)

Where does this leave us?
We have a team of people fighting to get things done, make the right decisions, and having fun. If that means that our titles are a little more formal than you would find elsewhere, that’s fine with me.

Surprise and Delight: The secret to creating evangelists

Tue, 04 Jan 2011 11:45:00 -0500

I have come to expect that when I call a company for customer support, I am subjecting myself to frustratingly long hold times, mazes of prerecorded soundbites that have nothing to do with my problem, and customer support reps who speak from a script and can’t do anything to help me. I know I am not alone. But, our low expectations do provide companies with an opportunity: the opportunity to surprise and delight consumers with truly positive customer service experiences.

Earlier today I unboxed a brand new espresso machine: The Nespresso Citiz. The Citiz is a stunning espresso brewing champ. You can turn around a flawless shot of Ristretto with the push of one button. But first I had to prep the machine for its inaugural brew.

Step 1: Fail
I turned on the machine and it quickly heated up. I was t-minus three minutes from the delicious union of South American and East African Arabicas. My plan was to down the coffee and then dash off to the gym. Unfortunately, I hit a snag. The Citiz did not work.

It turned on, but there was no water flow. I re-read the instructions and carefully checked the steps. I had followed the instructions perfectly. My frustration was beginning to brew.

I called the Nespresso helpline and was prepared for pain.

Surprisingly a real person picked up the phone within 20 seconds. Carol introduced herself and quickly apologized. She explained that she thought that there was an air bubble in the system but that there was a manual workaround. The Citiz is designed so that the top of the system can be used like an old fashioned water pump. I needed to pump water through the Citiz to push out the air bubble.

I began pumping the Citiz but nothing happened. We tried five variations of pumping the water while holding down the espresso, lungo, and on/off switch. After 10 minutes it was becoming clear that I was not going to have any espresso today.

I had two options: Carol would overnight a replacement machine or I could unplug the machine, wait an hour, and push out the air bubble again. If the latter option failed I could call her back and she would overnight a replacement Citiz. There would be no need to recount my tale to another rep. I was delighted that they were willing to send a replacement so quickly and that I wouldn’t have to waste any more time. I picked the second option hoping that the Citiz would magically start working in the next 60 minutes.

I hung up the phone and tried the water pump action one final time before my 60 minute wait. Suddenly, steaming hot water was flying through the Citiz and I was ready to brew! A minute later and I was enjoying my Ristretto. It was even better than I remembered. I called Carol back and thanked her for her help.

My Takeaway
The Nespresso support process was wonderful. They treated me with respect by explaining why the problem was happening instead of just prescribing a solution, they gave me clear and concise options so that I felt like I had control of the situation, and it was clear that they were genuinely concerned that I was not going to enjoy a coffee that morning.

By the end of the call, I would have been fine with a new Citiz arriving tomorrow because it was so clear they were willing to go the extra mile to make sure I was happy. But the fact that Carol actually helped me solve the problem made the coffee taste that much better.

There is no better way to create an evangelist than to surprise and delight someone during the support process. So get out there and help your customers to brew their first coffee.

The value of time in pricing

Tue, 21 Dec 2010 13:53:00 -0500

We’ve changed the pricing for Wistia probably 20 times in the last three years by listening to customer feedback. During the feedback process we monitor how similar groups respond to new pricing. What do videographers think of the pricing? How are medium sized software companies responding? What about life sciences? The funny thing is that we consistently see polarized reactions to pricing within every segment we look at.

We’ll always find a portion of the group who thinks that Wistia is either really cheap or really expensive while their cohorts find it the exact opposite. This was confusing. Then we found one question that helps us calibrate feedback consistently: How do you value your time?

It turns that how one values their time is an amazing indicator across all segments. You’d expect normal purchasing behavior to look something like this:

But if consumers value their time highly then they’ll happily pay for something that saves them time. It turns out that the opposite is true for businesses that don’t value their time highly. Companies that pay employees very low salaries (like fast food chains) or companies without any money (read: early stage startups) will see business prices and jet in the other direction.

A perfect example of this is email. Consumers don’t really pay for email….it’s just something that they use and it works. Flip this to the business side, however, and businesses are more than willing to pay for email marketing tools to help them design emails, manage lists, and track email performance. These are tools that, for businesses, save time and help them make more money. However, this is not something that the normal consumer is willing to pay for.

Once you start segmenting pricing feedback based on the value of time it becomes much simpler to manage pricing. Then you can optimize pricing for the kind of benefit and type of buyer you sell to.

Making Ideas Work

Tue, 16 Nov 2010 10:33:00 -0500

I hear great ideas for new companies all the time. Unfortunately, the vast majority of these ideas never mature into startups, and even fewer become lasting companies. This is ironic because most people think building a startup is all about having a great idea. (I believe the phrase goes “if only I had thought of Facebook, I’d be rich!”) The truth is that while a good idea is essential, it’s only the first step in creating a viable startup.

I see three problems that prevent an entrepreneur from following through on an idea: a person doesn’t recognize when the idea is viable, ideas aren’t given enough time to evolve, and there is a lack of commitment to turning the idea into a real-world success.

1. Viable Ideas

There are tons of viable startup ideas that get stopped before they get a chance to start. These ideas get left un-executed for a multitude of reasons including fear, money, and time. But, the most common roadblock I see is overestimation of the competition. The process goes like this: come up with an idea, google to see if it’s been done, find someone doing something similar, and give up.

As it turns out, this is the exact process we went through when trying to start Wistia. We’d think we were onto something exciting because our idea was so unique, then we’d find a company doing something similar and we’d give up on that particular approach. We continued this vicious cycle for 4 months until we realized that absolutely no one else had heard of the ‘competition’ we’d found. It turns out that it’s actually really, really hard to get people to pay attention or use anything. After this epiphany it was easy to forge ahead.

2. Evolving Ideas

One of the first questions that I’m always asked when discussing Wistia is “How’d you come up with this idea?” To which I answer: I didn’t come up with the idea for Wistia. I could never have imagined where we’d end up today and I have no idea where we’ll be in four more years.

Our initial “great” idea was hosting filmmaking competitions. We started on this path and began building product. It became clear within a month after launching, that our approach would not work. We couldn’t come up with any good models for attracting new users or making money. Let’s just say, we had problems.

We took what we had, a platform for sharing and managing videos, and started seeing how else we could apply our technology. As luck would have it, a medical device company reached out to us. They were looking for a way to privately share videos in clinical trials. This was a completely unexpected use of what were building from a completely unexpected type of company. We pitched them on paying a monthly fee. They bought. A week of building later and we delivered the first version of what we now know of as Wistia. The light bulb went on. Help companies who don’t regularly use video.

3. Seeing Ideas Through

Now in startupland, we like to say “it’s not the idea, it’s the execution” which is definitely true. But execution isn’t enough. If you execute well for a month you’re not going to get anywhere. You need to be committed if you want to make it through. You need to be obsessed with surviving, obsessed with thriving, and obsessed with doing your idea justice by giving yourself enough time to execute.

Brendan and I started Wistia in June of 2006. We quit our jobs and went in fulltime. It took us almost one year to the day to get our first customer. It took us another year to get to 6 customers. It took us another year to reach 60 customers. This past summer, 1460 days after starting Wistia we crossed 350 customers.

It takes time to build companies. It takes time to learn from customers. It takes time to be lucky. Without commitment, you have no time and with no time your ideas won’t matter at all.

The question is: Do you have what it takes to commit 365, 730, or over 1460 days of your life to your idea? If you do, you may just make it.

Just another average drive (Taken with instagram)

Wed, 03 Nov 2010 20:20:21 -0400

Just another average drive (Taken with instagram)

Three critical areas that will fall flat without a strong company culture

Thu, 28 Oct 2010 16:34:14 -0400

Every company has a culture of some sort but when it’s clearly defined it makes decision making better, makes hiring easier, and acts as a marketing tool. Defining company culture early can be the difference between success and failure.

Decision Making

A company is built by making an incredibly large number of small decisions over time. At the beginning, when the team is small it’s possible to have an influence over every decision. But as your company starts to grow and there are more streams of activity, more decisions need to be made.

Dealing with dispersed decision making is challenging unless you have a consistent rubric for problem solving, a.k.a. a strong company culture. A strong company culture can help every employee learn how to categorize a decision in a couple of basic ways.

For example, at Wistia everyone knows how to prioritize the current task based on:

How the decision will effect the customer experience
How the decision will effect the support process
How the decision will effect revenue growth

Hiring

Bringing more people onto your team is one of the riskiest things you can do. The wrong hires will suck up time, resources, and will certainly damage the customer experience through bad decision making.

Having a strong company culture makes it much easier to screen applicants so that you can stop the hurt in advance. If defined properly, it will also help the right people find you.

Example: Zappos’ $2,000 to Quit campaign.

Zappos’s offers new employees $2,000 to quit after they’ve been with the company for two weeks. If the employee values the money over the work environment then they know they’ve hired the wrong person. Zappos’ hack helps determine the commitment and value system of new hires. It also highlights to the outside world that everyone who works at Zappos wants to be there. Sounds like a great place to me!

Marketing

People like to work with companies they can trust and understand. If you know how a company is run, you’re more likely to predict their actions and understand your place in their world.

If your business is obsessed with delighting customers, prospects will be more likely to give you a try. For further insight here, see point 7 of Joel Spolsky’s post on customer service (hat tip to Paul Farnell).

Example: Hubspot customer happiness index

Hubspot, the marketing software company, has such a laser focus on customer happiness that they publish a customer happiness index. Hubspot’s emphasis on customer happiness is so strong that it’s spilled over the company wall for the world to see. Ever wondered if Hubspot customers are happy? Now you know they are.

Finally, how do you know when your culture is strong?

You know your culture is strong when people understand what you mean when you say, “that’s a very COMPANYNAME thing to do” or “this should be more COMPANYNAMEish.” Think about the companies that you look up to for design inspiration (Apple), customer service (Zappos), or small business acumen (37Signals). Their company cultures are so strong that they permeate company walls and you and I now know what it means to handle a support request the Zappos way.

For us, it took us about 2 years before we started saying “that’s not a very Wistia thing to do” and about 3 years before we started saying “if only COMPANYNAME was a little more Wistia, then we’d definitely sign up!”

That is one confused gentleman.

Tue, 26 Oct 2010 16:08:54 -0400

That is one confused gentleman.

Invisible bike helmet inflates before impact.

Mon, 25 Oct 2010 07:28:00 -0400

Invisible bike helmet inflates before impact.

rcoleman: A helpful venn diagram regarding privacy and the...

Sun, 24 Oct 2010 09:20:57 -0400

rcoleman:

A helpful venn diagram regarding privacy and the Internet.

So that’s how it works.

5 ways to ride the inbox zero train

Tue, 19 Oct 2010 09:28:00 -0400

Inbox Zero: The mysteriously wonderful feeling on an empty inbox.

I’m riding the inbox zero train - well actually it’s about inbox 4 or 5 right now. I’m often asked how I do it, so in the interest of sharing and learning more here are my rules of thumb.

Keep your emails short

Nobody wants to read long emails. Keeping emails concise will accomplish more through less correspondence.

Format emails for easy reading

Emails are read the way they’re written.

If you jam everything into a single block paragraph it’ll be harder to pick out action items from sentiments and sentiments for meaty comments.

An email that’s easy to read will be responded to faster.
Pull out action items so it’s effortless for the reader to make decisions.

Hit the snooze button - This one is a new arrow in the quiver

Snoozing emails let’s you respond at a time that’s good for the reader. If your pen pal is traveling until next month you can snooze their email until they’re back in the office. I use FollowUp.cc which allows me to control the snooze period by changing the beginning of the email address. For example, to snooze an email to next month I can forward it to Nov15@followup.cc. On November 15th I’ll get my email back with a reminder.

Separate tasks from emails

Many emails are discussions of tasks that need to be completed. If the goals of the task are already established then archive that email and move the task to your to-do list. I use Remember The Milk to stay on top of all of my tasks. I can sort tasks by priority, category, due date, and into separate lists. When I complete the task if an email is needed I’ll blast one back out.

Pick up the phone

I find it surprising how out-of-vogue the phone is — so much stuff is just faster on the phone! Anything open ended, go to the phone. It’s hard to discuss complex topics by email. Often, items without defined constraints go unanswered. IMHO, 15 minutes on the phone is better then 15 minutes writing an email.

To get rid of the unnecessary emails used to schedule the call I use tungle.me. The other person on the call can pick a time that works for them on my calendar and then schedule the call.

Those are my core five. What are you doing to stay at inbox zero?

Customer Experience Should be King

Mon, 11 Oct 2010 16:56:11 -0400

It really bothers me when it’s clear that a startup has prioritized their company’s experience instead of prioritizing the customer’s experience.

Let’s look at two scenarios out of the support world.

Scenario 1: Company’s Experience is Prioritized

a customer has a problem
they submit a ticket with an unfamiliar support system
they receive an automated response from the system
they receive a manual response that prompts them to re-enter the support system
they enter back into the system, figure out how to reply, and send a follow up
repeat until issue is resolved

Benefit to the company: The company doesn’t need as many first responders. Analytics on support are baked right into the system. A web interface keeps everything organized for the support team. Automated responses ‘buy’ time for support team to respond.

Downsides for the customer: They need to use an unfamiliar system. They know that they are interfacing with a system first and a person second. There is more opportunity for error. This system is more arduous to use when on a mobile device.

Scenario 2: Customer’s Experience is Prioritized

a customer has a problem
they send an email to support@company.com using their own email system
they receive a response by email
they reply from their email
repeat until issue is resolved

Benefit to the customer: There is no learning curve. They know that they’re interfacing with a person.

Downside for the company: Managing inquiries can be arduous. Customer expectations are higher. Tracking and routing issues is more time consuming.

But these don’t seem that different!
Whenever a company prioritizes their experience, they’re betting that the decrease in customer satisfaction is worth the increase in company efficiency. Every time a customer interacts with an unfamiliar system, there is risk. They don’t want to screw something up. They want to explain themselves properly and make sure they don’t miss an important checkbox. Multiply these moments of risk across a customer base and you’ll have higher churn, less word of mouth, and a multitude of other issues.

What’s the solution?

By using systems customers already know well, like email, you can take away all the risk and barriers so that you get more feedback and can solve more problems. This doesn’t mean that you shouldn’t have systems in place for a customer optimized experience. It just means that you need different systems than the off-the-shelf options.

In our case, we’d love to have an email based system that routes emails to the team, knows when someone has responded, records interactions, pulls out analytics, and creates more value for the company while being optimized for the customer experience.

The next time you’re thinking about how to make things easier for yourself, think about how you can make something easier for your customer. The best products will help your customer first and your company second.