Feeling threatened

Watching how a company, industry, or individual responds to a threat tells you a lot about how much they understand the needs of their customers.

Recently, Squarespace announced a new feature that allows users to self-create their own logo, online, with simple tools.

The announcement generated criticism from professional designers:

“Hey Squarespace: Impressive how eager you are to destroy your standing with graphic designers. I have to ask how this is a good idea.”
Source

“This really bothers me. These guys should know better than to devalue what others in the same industry do for a living.”
Source

“At first I kind of thought everyone was overreacting about #squarespacelogo until I saw how much of a mockery it makes of my profession.”
Source

It’s natural to feel defensive when something threatens your livelihood. I understand that; it’s scary to think about.

But we really need to look at things from the customer’s perspective: the customer doesn’t really care about the design industry, it’s ideology, or it’s problems. They only care about their own problems.

Ultimately, if the customer finds a different approach to solve a problem (like Squarespace Logo), and it gives them the outcome they want, it doesn’t matter how we feel.

Really, the key to being successful is to eschew your own self-focus in order to stay hyper-focused on what the customer needs. If you’re good at finding (and solving) pain you’ll always be in business.

Squarespace originally built their brand by disrupting two industries: web development and web hosting. Instead of spending thousands of dollars hiring a web developer, a customer can create (and host) their website using self-serve tools, starting at $8/month.

Now they’re doing it again with logo design. Maybe the people who use these cheap, self-serve logos will experience adverse effects: maybe they’ll lose business, or lose the respect of their customers.

Or maybe… they won’t. Maybe these new Squarespace logos will fit their needs perfectly. Ultimately, that’s up to the customer to decide. If they like the results they’re getting from cheap self-made logos, they’ll keep using them.

If you’re going to rally paying customers around your cause, you have to show them what’s in it for them. You’re going to need to show them data: “a professionally designed logo will improve your brand’s perception by 150%”, “according to this study, a well designed logo increases the pride felt by employees”, or “a designer can save you money, by providing an identity that can live for decades.”

But instead of focusing on the customer, and where you might be able to offer more value, I hear rallying cries that come off as defensive and self-focused:

Shop local!
“Don’t outsource programming work overseas.”
“Hire a real designer to create your logo.”

Meanwhile, the customer is staring back at you and asking: “Why? What’s in it for me?”

I think we, as designers, developers, and business people, can ward off most threats by getting to know our customers intimately – and finding places where we can offer legitimate value. No self-defence necessary.

Regards,
Justin Jackson
@mijustin

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Believe in me

This post is part of this week’s Startup Edition to answer the question: How did you get your first customer?

Your first customer will come one of two ways:

  1. A person will believe in you, and buy
  2. A person will believe in you, and convince someone else to buy

People that connect you with new customers are invaluable. They’re called boosters: people who are so passionate about what you’re doing, that they’ll share it with everyone they know.

This reminds me: when I was 18  I decided to start a video production company. I thought I could make money making wedding videos in the summer, and could pursue creative projects in the winter.

My parents thought I was a little crazy; maybe I should just keep the job I had at the hotel?

But I had a friend named Rebecca who believed in me. Rebecca was a bit older than me, in her 20’s, and had friends who were getting married. She started telling everyone about me, and my service. She vouched for me, and said I would do a great job. Every time she introduced me to someone she would say: “Justin has just started a video production company.”

This is how Rebecca ended up getting me my first paying gig: she had two friends that were planning a wedding, who signed up for a wedding video. I didn’t have a car, so she drove me to the rehearsal. Her enthusiasm gave me the momentum and confidence I needed. After that first gig I was able to go out and get new customers on my own, but Rebecca continued to be my cheerleader. Once, I even forgot my video camera at home while on-site at a shoot; she happily picked it up and brought it to me.

The truth is, I don’t think I would have made it very far without that first believer.

Sometimes you’re not looking for your first customer, you’re looking for your first booster: a passionate believer who will promote you to everyone they meet and cheer you on when you’re feeling down. If you encounter someone like this, and they’re actually convincing people to buy, count yourself lucky! Thank them: let them know you appreciate their help.

Derek Sivers has a great video on this topic.

This post is part of this week’s Startup Edition to answer the question: How did you get your first customer?

Starting a business is easy

Do you know how easy it is to start a business?

I used to fawn over myself for having started businesses in the past. Everyone thinks starting a business is hard. But the truth is that starting a business is not that hard. Starting a business is easy; starting the right business is hard. You could start most businesses by choosing an idea out of a hat, filling out a bit of paperwork, and sending out a press release (bingo! you’ve started).

The challenge isn’t starting a business; it’s starting a business that will give you something back. It’s running a company that won’t suck the life out of you. It’s building a product or service that people love and pay you money for.

Starting a business is like getting married

Have you ever had a crush on someone? You experience powerful romantic feelings, and day dream about spending your life with that person. Your crush is all you can think about. But if you asked that person to marry you (without getting to know them first) they would think that you were crazy. Why? Because marriage is for life (and your crush doesn’t want to marry a crazy person).

Starting a business is similar to marriage in that you need to:

  • choose the right thing (person)
  • invest time and resources to make it work
  • be committed for life

The difference, is that when you decide to start a business, the business (unlike a person) can’t say “no”. Even worse: while your friends would dissuade you from marrying someone you just met in Vegas, they will do the exact opposite when you’re starting a business. Instead of critically questioning your decision, they’ll encourage you with maxims like: “Yeah, you should follow your dream!”

The wrong business will give you pain every day

The wrong business will suck you dry. I should know: when I started my retail company, I was infatuated with my idea. But running my store was a different experience: I would invest time and resources, but wouldn’t get anything back. Instead of making money, it was losing money. Instead of giving me more freedom, I spent most of my time just trying to keep things afloat. Instead of enjoying my work, going into the shop became a sad grind.

Every time my business treated me badly, I dug in deeper, because I wanted to be a committed entrepreneur. But ultimately I was committed to a business that could never love me back: after 5 years, I pulled the plug (and lost over $80,000 in cash investment).

The Startup Stooge

5by5’s Dan Benjamin talks about “the corporate stooge” on his show Quit

You have to work relatively long hours and it’s thankless. And you go back and forth to work every day and it’s the same thing over and over again like Groundhog Day. And you say, “what am I doing? Is this what my life was? Is this what I went to college for? And it’s a soul-sucking job. It’s sad, and there’s no end to it.

Ironically, I’ve seen this same scenario played out with my friends that have started the wrong business. The idea of starting a coffee shop, software product, or service company sounded exciting so they jumped in. But soon they become the Startup Stooge. Every day they face a miserable drudgery: committed to a business they no longer enjoy, and that barely makes a living (or worse yet, continues to drive them into debt).

I’ll take my pain upfront, thank you

The mistake my friends and I made is this: we never paused to think about the huge life commitment we were making. We never asked: Who will my customers be (and do I like these people)? What do they desperately need? And can I market to them, and still make a profit?*

Before you get married, you probably want to take your future spouse on some dates. In the midst of dating, you might find out you’re not compatible; then you break up. Breaking up is painful (and so is letting go of your “brilliant” startup idea), but it’s way less painful than a lifetime in a miserable marriage.

I’m dating the customer, not the idea

Don’t get married to your startup idea. The idea itself is actually not that important. Businesses run on customers + dollars not ideas + excitement. In fact, you might be “dating” a bad idea right now. If so, you should break up.

When I asked Amy Hoy about building a product, she gave me simple advice: “Go spend time in communities that you’re a part of, that you like, and who spend money. Start observing their pain.”

So instead of dating a bunch of ideas, I’m dating different customers. I’m hanging out. Spending time with different communities, and seeing what they need. It’s going to take some time, and it’s going to take some work. But I’d rather do this work up-front, and really discover where I can add value, than have a messy “divorce” later on.

Want more?

You can listen to the audio version of this post hereI have also haven an email newsletter where I write about business, working smart, and marketing; you can subscribe here.

Special thanks to Amy Hoy who shared the marriage metaphor with me, and has been working really hard at helping me understand all of this. 

* These questions are straight from Amy Hoy and Rob Walling.

What the People of Wal-Mart actually want

Starting in 2008, Wal-Mart embarked on an ambitious project to improve the shopping experience in their stores. Code-named “Project Impact” the idea was to create a “better” Wal-Mart.

First, they sent out surveys. In the surveys, customers identified that they wanted cleaner, less cluttered stores. With this information in-hand, Wal-Mart began a huge multi-million dollar store refurbishment program. They slimmed down their inventory by 15%, redesigned shelves, and removed pallets from the aisles.

The result? Sales plummeted.

Phil Terry estimates that this experiment cost Wal-Mart at around $1.85 billion dollars. He explains what went wrong:

[Wal-Mart] relied on what customers said in a survey versus what they actually do in the stores. What’s easy to verbalize is not necessarily what’s important

People don’t want always want the “better” solution

The technology industry is obsessed with making things better: make it faster, create a better design, add more features, give the user more power. So it’s confusing to us when we build something “better” but customers don’t buy it. How many times have we heard: “I’m building a better Basecamp” or “I’m building a better email client”. These projects get released, but usually don’t get anywhere. Why?

We need to redefine what we mean by “better”

Let me quickly share a fishing illustration: let’s say you’ve set out to build the best fishing lure ever made. You craft an aesthetic design, source high-quality materials, and design the hook so the fish is less likely to get away. You’ve done all this work but you’ve made a huge mistake: you haven’t gone to see what fish are actually biting at. It doesn’t matter how much “better” your lure is: if the fish aren’t biting, you’ve wasted your time.

It’s the same for customers. Instead of setting out to build something “better”, we need to watch and see what customers are actually doing. Where are the fish biting? Some examples:

“I just need an easy way to share big files.” Boom! Dropbox.

“I like sharing my photos and making them look cool.” Bam! Instagram.

“I want to edit my business website myself.” Kapow! WordPress.

But people “should” do it my way!

The hardest part of this is resisting our urge to tell people what to do. “But this is the best way to do it!” It doesn’t matter. We need to follow what people are doing as opposed to what we want them to do.


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What Amy Hoy taught me about starting a business

I first heard about Amy when I saw Twistori. Soon after, I started following her on Twitter. It didn’t take long for me to realize that Amy could teach me a lot about starting a business and building products. Since then we’ve interacted on Twitter and through email. I haven’t taken her 30×500 class (yet), but I hope to in the future (maybe once all of our kids are in school).

In the meantime, I found an interview that I think illuminates her business philosophy perfectly. In Founder’s Talk episode 6 (witih Adam Stacoviak) Amy describes her best advice for building a product [42:00]:

First: Define what you want to achieve

This involves setting goals for you and for your business. I love that she mentions the personal goal. It’s important to ask: what do you want to achieve for yourself? Amy says: “Get really concrete about it. How much do you want to earn? [Something like] ‘I want to bring in $200,000 a year,’ is a great place to start.”

When you launch into a project without first identifying what you want to achieve, how will you know if you’ve succeeded? Having a goal of earning 200k is a lot more achievable than “I want to make a lot of money”. It gives you something to shoot for but also leaves you accountable if you fail. That’s the point.

Second: Forget ideas; study a market

This is Amy’s best piece of advice. We’re all holed up in our caves, with our notebooks, trying to come up with great startup ideas. Amy says: “Forget ideas. Go actually spend lots and lots of time with people”. What are you doing while you’re spending time? You’re searching for their pain not pitching them ideas. It’s actually better to not have ideas; instead just walk yourself into a room, plunk yourself down, and just listen to what people are complaining about. What problems does this market have that you could solve?

Update: Amy recommends listening for pain online (in forums, etc…) rather than interviewing people in real life. The risk is that “in real life, people will bitch, just to have conversation”.

Third: Target people with money

Amy continues her thought: “[Spend time with people] who obviously like to pay for things.” This is our second problem as founders: we often target people with no money! We go after teachers, consumers, non-profits, students, and hobbyists. Meanwhile, there’s an office manager somewhere in Winnipeg who loses $3,000 worth of productivity to paperwork every month. That person is dying for help and would gladly pay $300/month for an app that solves her problem.

Fourth: Make sure you like your customer

So you’ve identified a market that has money, and where you can create value; time to get started, right? Not so fast. Think about this: you’re about to start a business serving this niche of people. This could become your life’s work: would you be OK interacting with these folks every single day, for the rest of your life? “[These have to be] people who you like, and can imagine doing business with”, Amy says. She also put it this way: “If you don’t like drunk frat boys, don’t open an Irish pub”.

Fifth: Identify where you’re going to provide value

Now you have a market, and you have a list of things that are causing them pain. Now it’s time to narrow it down: where can you create real value that they’ll pay for? “Be very pragmatic”, Amy cautions:

Don’t say: ‘How can I change their lives?’ Instead, say: ‘You pay me $30, and I’ll save you $60 a month or earn you $60 month’. Make it about the math.

This is why you want to target folks who can pay. A college student might want software to organize their homework, but they can’t afford to pay anything. A business owner, on the other hand, will gladly pay $30/month if you help them save money or earn more income. This is why Amy built Freckle (a time tracking app): if you can track your time, minimize waste, and invoice your clients easier, you’re going to earn more money (and waste less time).

Finally: Build it and charge for it as soon as possible

Once you’ve checked off the previous five items you’re ready to get to work. “When you find that [place where you can create value], build it and charge for it as soon as possible” Amy concludes. It’s not easy to build a product, but your chances of success are much greater if you build the the right product for the right market.

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