Cartoon: This Family Has Certain Standards

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[Excerpt] Earlyvangelists: The Most Important Customers of All

Develop the Product for the Few, Not the Many

In existing companies, the goal of traditional product management and marketing is to develop a market-requirements document (MRD) for engineering that contains the sum of all possible customer feature requests, prioritized in a collaborative effort among Product Management, Marketing, Sales and Engineering. Marketing or Product Management hosts focus groups, analyzes sales data from the field, and looks at customer feature requests and complaints. This information leads to the adding of requested features to the product specification, and the engineering team builds the features into the next product release.

While this process is rational for an established company entering an existing market, it's folly for startups. Why? Startups aren't small versions of large, existing companies where there's plenty of customer knowledge and input. In established companies, the MRD process ensures that engineering will build a product that appeals to existing customers in a known market, where customers and their needs are known. On a startup's first day, there's limited - if any - customer input for creating a formal product specification.

In a startup, the first product is not designed to satisfy a mainstream customer. No startup can afford to build a product with every feature a mainstream customer needs all at once. The product would take years to get to market and be obsolete by the time it arrived. Instead, successful startups solve this conundrum by focusing development and selling efforts on a very small group of early customers who have bought into the startup's vision. These visionary customers will give the company the feedback necessary to add features to the product over time.

Earlyvangelists: The Most Important Customers of All

Enthusiasts who spread the good news about your product to friends, family or co-workers are often called evangelists. But a new word is needed to describe the early adopters - the visionary customers - who buy unfinished and untested products, because they want to be 'first,' whether it's for the sake of gaining a competitive edge or winning bragging rights.

We call these early adopters earlyvangelists. Unlike 'mainstream' business or consumer-product customers who want to buy a finished, completed, tested product, earlyvangelists are willing to make a leap of faith and buy an early product from a startup. Every industry has a small subset of visionaries willing to take a leap of faith on an early product.

One of the mistakes that startup founders make is to give away or heavily discount early alpha/beta products to blue-chip customers. In single-sided markets (where the user is the payer), earlyvangelists will be happy to pay for early access to the product. If they won't, they aren't earlyvangelists. Their willingness to pay is a critical part of the customer discovery process. You'll use it to test the entire buying process.

In Web/mobile apps, where multi-sided markets (separate users and payers) are often found, earlyvangelists can be users or payers. But even as nonpaying users, these earlyvangelists are willing or eager accelerators of your viral growth.

In both physical and Web/mobile channels, earlyvangelists display these common characteristics:

• They have a problem or need.
• They understand they have a problem.
• They're actively searching for a solution and have a timetable for finding it.
• The problem is so painful that they've cobbled together an interim solution.
• They've committed, or can quickly acquire, budget dollars to purchase.

Think of earlyvangelists' characteristics along a scale of customer pain. Earlyvangelist customers will be found only at the top of the scale - those who have already been looking for a solution, built a homegrown solution (whether in a company by building a software solution or at home by taping together a fork, a light bulb and a vacuum cleaner), and have or can acquire a budget.

These people are perfect earlyvangelist candidates. They can be relied on for feedback and initial sales; they'll tell others about the product and spread the word that the vision is real. Moreover, they can be potential advisory board candidates.

Build a Minimum Viable Product (MVP) First

The idea that a startup builds its product for a small group of initial customers rather than devising a generic mainstream spec is radical. What follows is equally revolutionary.

On the day the company starts, there is very limited customer input. All the startup has is a vision of what the problem, product and solution seem to be. Unfortunately, it's either a vision or a hallucination. The company doesn't know who its initial customers are or what features they'll want.

One option is to start developing an entire full-featured first release of the product, with every feature the founders can think of. We now know this results in wasted engineering effort, time and cash, as customers don't use, want or need most of the features developed without their input. Another path is to put product development on hold until the customer development team can find customers who can provide adequate feedback. The risk here is lost time and no product for customers to provide feedback against.

A third, more productive approach is to develop the core features of the product (incrementally and iteratively with agile engineering methods), with the feature list driven by the vision and experience of the company's founders. This is a minimum viable product.

The goal of customer discovery is to test your understanding of the customer's problem and see if your proposed solution will prompt him to use or buy the product based on its most important features alone. Most users want finished products, but earlyvangelists are the perfect target for the MVP. Tailor the initial product release to satisfy their needs. If no one thinks your MVP solution is interesting or sufficient, iterate or pivot until an adequate number say 'yes.'

The shift in thinking to an incremental and iterative MVP as opposed to a fully featured first product release is important. Engineers tend to make a product bigger and more perfect. The MVP helps them focus the most important and indispensable features. Your goal in having an MVP is not to gather feature requests to change the product or to make the feature set larger.

Instead, the goal is to put the MVP in front of customers to find out whether you understood the customer problem well enough to define key elements of the solution. Then you iteratively refine the solution. If, and only if, no customers can be found for the most important features of the MVP, bring customers' additional feature requests to the product development team. In the Customer Development model, feature requests to an MVP are by exception and iteration rather than by rule. This eliminates the endless list of feature requests that often delay first customer ship and drive product development teams crazy.

MVPs for Web/Mobile Are Different

Web/mobile businesses conduct customer discovery differently from those in the physical channel. They can reach hundreds or thousands more customers by combining online and face-to-face interactions. They place a greater emphasis on customer acquisition, activation and referrals.

Web/mobile minimum viable products can be developed faster and delivered earlier, accelerating the discovery process. When delivered, they can conduct more tests with customers, with more granular customer-response data. This results in a faster iteration of the problem statement, the proposed solution and the MVP itself.

Use the Business Model Canvas as the Customer Discovery Scorecard

Often there's a lack of a shared and clear understanding of the business model throughout the company. This customer discovery step uses Alexander Osterwalder's business model canvas to diagrammatically illustrate how a company intends to make money. The canvas represents any company in nine boxes, depicting the details of a company's product, customers, channels, demand creation, revenue models, partners, resources, activities and cost structure.

In addition to using the business model canvas as a static snapshot of the business at a single moment, frozen in time, Customer Development uses the canvas as a 'scorecard' to track progress in searching for a business model.

[Video] Surface vs. iPad: Microsoft's Getting Rusty At Stealing from Apple

Microsoft Finally Has A Tablet Business Model With Surface

Apple has proven that the best computers ' which rely on tight software integration more than ever before ' are made when one company is in charge of designing both the hardware and the software, so they're built in harmony and just work. Microsoft seems to have figured this out, too, via the Xbox and now this Surface tablet. That's why the Surface is able to ship with a cool cover with a built-in keyboard. Could you imagine if Microsoft left that integration to a company like Acer to perfect?

But Microsoft has also learned that the best business model in today's mobile industry ' tablets and smartphones ' is to the sell the actual hardware to consumers, not just license an operating system. Given today's economics, the only way to potentially earn a profit of more than $100 per tablet is to sell the actual tablet. There's no way Microsoft could earn that just selling Windows licenses to HP. Especially as it's primarily competing with Android, which is sort-of free.

Will this thing be a hit and make Microsoft a lot of money? Enough to compensate for any potential decline in the Windows-for-PC business? Who knows. I don't see any reason yet why most people would buy this thing instead of an iPad. Perhaps some will, especially if they think Office means something to them. But I expect the iPad to continue its dominance of the tablet industry.

But it sure looks like a better strategy for Microsoft than only trusting the Samsungs of the world to design great Windows tablets, and only trying to generate mobile revenue from Windows sales.

Sure, Microsoft may now alienate some of its Windows partners by competing with them. But as those partners have gone into the mobile industry, they've already strayed from Windows to Android, anyway. (Although the future of Android is anything but certain, too, as Google swallows up Motorola.) Plus, competition or not, as long as Dell wants to make PCs, it's not like it has any real OS alternatives to Windows. Chrome OS? Please.

Microsoft is unquestionably late to this market, though it didn't intend to be: Recall Steve Ballmer showing off those lame HP Windows 'slates' at CES 2010, weeks before Apple announced the iPad. But give Microsoft credit for evolving with the times, both in terms of product design and business model. It may fail, but it's at least learning to play the right game.

I wouldn't be surprised if Microsoft did Surface phones next, especially if this thing is even remotely successful.

Disclosure: Late last year, I performed a brief, unrelated consulting gig for Microsoft. It hasn't affected my opinion on Microsoft's mobile comeback, which has been mostly skeptical. But you might want to know.

How to Craft Your Own 'Startup Legend'

As a journalist who weeds through hundreds of startup pitch emails a week, here are my tips on the elements of an effective startup legend and how can you develop one. And I'll even address the possible ethical issues involved in crafting your own legend.

Be the opposite. If every tech entrepreneur who's getting publicity is a man from Silicon, you can stand out simply by being a woman, or a pair of twins, or being from an unknown foreign country. During the first dot-com boom in the late '90s, 'I dropped out of Harvard to start a tech company' was a great startup legend' the first 20 times I heard it. When 95% of startup pitches began coming from Harvard dropouts, the story lost its effectiveness.

Work the human interest angle. Reporters (and customers) are busy, busy, busy, so think like a Hollywood exec in a pitch meeting and create a memorable startup story in a single sentence.

Think American Idol: Did you overcome a major challenge to start your business? Maybe you were inspired by your blind brother's struggles to shop online, or you taught yourself to code while living in a homeless shelter. Don't be shy about playing up a sob story.

Create visuals to cement your startup legend. Why do you think Mark Zuckerberg never takes off his hoodie? Or Steve Jobs stuck to his minimalist uniform of jeans and a black turtleneck? Their visuals play up their image (college student makes good/Zen perfectionist, respectively). And if you're a woman, it doesn't hurt to be hot. (Face it: Have you ever seen a woman on the cover of Fast Company NOT wearing a slinky outfit?)

How True Is Your Legend?

OK, so what if you don't have a sure-fire hook for your startup legend? Should you embroider the truth to add spice to your startup story? Before you decide, consider these famous startup legends that turned out to be, well, just that:

• The Pez dispenser that launched 1,000 bids: One of eBay's first employees got tired of getting rejections from reporters to whom she pitched founder Pierre Omidyar's story. So she 'romanticized' the auction site's launch by saying Omidyar had started the site to help his fiancée find the Pez dispensers she collected. Everyone loves Pez, and everyone took to the Pez story, revealed only years later to be false.
• Garage, sweet garage:  HP might have started in a garage, but Google didn't. Despite a widely spread myth, the company was actually two years old when it moved to a garage (partly in homage to HP's humble beginnings). 
• Nobody here but us girls: In more recent years, flash sale site Gilt Groupe has grabbed headlines like this one, touting co-founders Alexis Maybank and Alexandra Wilkis Wilson as 'the women who changed the landscape of e-commerce forever.' Conspiciously absent is mention of Kevin P. Ryan, who Forbes reports actually got the idea for Gilt Groupe but recruited Maybank and Wilson because, unlike him, they could be role models for customers.

There are undoubtably others that haven't been exposed yet.

In the end, it's up to you how much you want to embellish your startup story. Of course, you have to be prepared for the blowback if you're found out - if anyone even cares. The truth hasn't soured the legends of the companies listed above.

So, what's your startup legend?

Why We Need Firefox (and Chrome) on the iPad

"If you look at Safari on the iPad, it's a pretty miserable experience," said Alex Limi, a Firefox product designer. In response, Mozilla is designing a tablet browser from the ground up, discarding traditional user interface elements and conventions to craft an experience that's better tailored to tablets. No tabs. No needless chrome. Just the Web, full-screen and accessible through a user interface that's about as bare-bones as they come. 

Before Junior lands in the App Store, we will likely see an iPad browser from Google, which is rumored to be working on Chrome for iOS. This is another positive development. The iPad represents a rapidly growing segment of consumer computing. Users deserve choices when it comes to  doing something as fundamental as browsing the Web.

Mozilla's new project, which is only a prototype at this point, isn't without challenges. For one, Apple won't allow non-WebKit browsers into the App Store, so Junior can't use Firefox's Gecko rendering engine. That's probably better for developers, since it's one less browser into which one needs to wrangle their CSS layouts. 

Apple's Obsession with Control

The biggest obstacle to Mozilla (or other third-party iOS browser makers) achieving meaningful market share is the fact that Apple won't let users change the default browser on iOS. You can tap open Opera Mini, Dolphin, Skyfire or Junior all the livelong day, but any time you follow a link from an email or another app, guess which browser is going to launch?

This is an area in which even the most ardent Apple defenders have to admit that the company isn't doing users any favors. Yes, Apple likes to control the user experience, and most of the time that's a blessing. It's why my 2-year old niece can pick up my iPad and immediately find her way around the home screen. But this control sometimes works against the interests of users, who also want some degree of control. Whenever that tension arises - and no strong argument exists that Apple can save users from a nightmare experience - it's time for Cupertino to lighten up and let users craft their own experience a bit. 

Take email, for example. Apple's default Mail app for iOS is plain in its design and sports only the most basic, essential features. By comparison, Sparrow has a well-designed UI with fluid, subtle animations that make it a delight to use. For my money, Sparrow offers a far better way to read and manage my Gmail account than Mail. So when I jailbroke my iPhone, one of the first things I did was make Sparrow my default mail app. The user experience of reading my email on my iPhone didn't suddenly spring a leak and hemmorage its inherent usefulness everywhere. The system works perfectly, and I get to use my email client of choice. My experience has improved to an extent that Apple's rules don't allow. 

Why Apple Should Let Users Change the Default Browser in iOS

Swapping out the default iOS Web browser would have the same effect. The way pages render would be identical, thanks to the WebKit requirement. But the UI and the way people interact with the Web could be improved. The user experience would be degraded only to the extent that Apple allows hideous, unusably buggy third-party apps into the App Store - which is to say, practically never. 

Apple would remain very much in control even If it allowed users to change their default browser. It would still have the App Store guidelines and approval process, as well as the requirement that browser developers use WebKit. It could reject any third-party browsers that didn't meet its rigid standards. It would be ceding only a modicum of control to users, who might or might not choose to use it.         

Perhaps that day is coming. After all, it wasn't long ago that third-party browsers were forbidden on iOS all together, as were other apps that mimicked native iOS functionality. Apple has relaxed its restrictions in some of these areas as the ecosystem continues to evolve and grow. Maybe it will relax a little further.

Big Data Helps ID Who's "Stealing" That Song

TuneSat, a New York-based company with roots in the music and entertainment industry, has a very simple business model: Put information in the hands of music rights holders so they can obtain the royalties that are lawfully theirs.

Beating the PROs at their Own Game

Performing rights organizations (PROs), like ASCAP and BMI here in the U.S., are the organizations typically charged with gathering performance information about members' musical works. The PRO monitors public performances of works to make sure that royalties are getting to the artist or other rights holder. They also work to prevent unlicensed performances of a work.

On television, however, things get a bit more dicey. The performance of music in this medium is governed by synchronization rights, and is often self-reported. Whenever a TV show wraps up production, someone on the crew (usually a low-level production assistant or intern) is tasked with filling out a cue sheet that specifies what music was used in the show, for how long, and how it was used. Such reports often come in late and rife with errors.

TuneSat, according to founder and COO Chris Woods, fits right inside this lengthy, centralized process. Instead of relying on large, cumbersome organizations and self-reporting media outlets to obtain performance and synchronization information, TuneSat uses digital fingerprints of music to actively monitor more than 300 television channels in the U.S. and Europe - and makes reports available on when and how music is being used.

Inverting the Old Copyright/Royalty Model

TuneSat's model completely inverts the old copyright/royalty model. For a nominal subscription fee (starting at $10/month for 10 tracks of music), any artist or music publishing organization can actively track their music across a wide range of media outlets.

Once enrolled, clients submit digital masters of the songs in question, which TuneSat then records and analyzes to create a digital DNA, Woods explained.

With so much variation in musical performances, one would expect TuneSat to require a back-end infrastructure that used Hadoop or some other big-data tool for unstructured data. But Woods said that what's ultimately stored and used to track and find songs is a very structured digital signature, which can be stored and analyzed with a PostgreSQL database and analyzed using a custom data processing tool.

Beyond the use of open-source technology to drive yet another startup to operate at a minimal IT cost, TuneSat decentralizes and automates a formerly cumbersome data-gathering process. What used to take months now can be done within the hour.

The result is yet another way big data and advanced analytics disrupt existing business models by quickly and inexpensively revealing information either actively hidden via intentional secrecy, or passively buried in the depths of bureaucracy and tangled processes.

Potential Controversy

When it comes to monitoring TV, that may not cause much trouble. But TuneSat's Web Monitoring Service uses a similar approach to track millions of websites. Many of those sites may not fully understand their legal obligations when using music, or believe that they're too small to worry about licensing issues. They may be unwilling or unable to pay royalties.

TuneSat doesn't enforce copyright, Woods emphasized, or compete directly with ASCAP/BMI. Its job is just to provide clients with the information they need to make informed decisions. A PRO would still be needed to enforce royalty collections.

Still, as big data allows services like TuneSat to look deeper into the Web (the service can identify music clips as short as three seconds), it could spark potential friction between music users and rights holders.

World TV image courtesy of Shutterstock.