4 posts categorized "your product"

March 12, 2012

Once Is Not Enough: Optimize Repeat Before Trial

Think about how often you check Facebook. Some of us spend more time on the site than others, but 50% of users go back every day. When you’re building a new product, that kind of addictive experience has got to be your goal. You’re facing three challenges: awareness, trial, and repeat. You’ve got to make sure people know your product exists, and then you’ve got to convince those people to actually try it out. Then you’ve got to make those people repeat using it - as often as possible.

I recently met with a new app company that’s absolutely crushing that first challenge. A chart of their new user trial looks like a hockey stick, curving up and to the right - a kind of rapid growth that’s very impressive, and very hard to achieve. The company was successfully using Facebook and Twitter to virally spread awareness, and the idea of their product was interesting enough to get people who became aware of it to try it.

There’s just one problem: Only 1 out of every 5 people who tried the product would come back to use it again. And those who did repeat were doing so sporadically, at best.

I asked them about those repeat numbers, and they said they were focusing on driving trials right now. They were celebrating. I wasn’t.

It’s really hard to get people to try something new. To lose 80% of the people who actually care enough to check your product out is tragic.

Trial is important. But I’d suggest focusing on what will get people to keep coming back before you spend a lot of time getting them to show up once. Repeat users create value. Facebook’s addicted user base is the reason its valuation is sky-high. I saw Twitter’s repeat recently, and it’s confidential, but let me tell you, it’s stunning.

You’ve got to understand what drives repeat for your product. Why are users not coming back? What characteristics do repeat and non-repeat users have in common? Are repeat users doing something different with the product than one-time visitors? If you’re able to show strong repeat rates and gather useful data about that cohort of visitors, you’ll definitely be able to get people to try out the product -- and you’ll be able to raise money to help make that happen.

What other products are you aware of with fantastic repeat rates?

March 02, 2012

Car Sharing: Disrupt Hertz (please!)

The car-sharing companies that I have met are quick to point out the size of the rental car market, and the number of hours our cars are just sitting around, waiting to be driven. And by any analysis, it’s certainly a huge market. Tapping into that market could be a huge opportunity - but there are challenges. For one thing, we know that it’s really hard to change consumer habits. And creating a liquid market for cars in many small locations is a big challenge, too. If I need a car, but there isn’t one available where I am, the model has failed. If I have a car sitting around ready to rent, but there’s nobody there to rent it, the model has failed.

Here’s an idea for a solution that I’d love to see someone try. You’d hijack an established consumer habit - airport car rental - and get around the supply-and-demand problem by focusing on a few major airports to start.

Short-term parking is always much easier to get to than long-term parking, and it’s often easier to access than rental cars. I travel a lot, and the short-term lots are always full. Business people use them to save time, and expense the cost. Families use them because it’s too much hassle to schlep the kids and the luggage all the way to long-term parking.

But short-term parking is costing me (or my business) $35+ a day, and my car is just sitting around. What if I could rent out my car while I’m away? I’d save the cost of parking, and make some extra money.

Here’s how it could work: When I park my car in short-term parking, I enter the location in an app (as a bonus, it’ll help me remember where I parked). I also enter how long I’ll be away. The worst case scenario for me is, I pay for parking the same as always. In the best case, I cut my parking costs and earn some money on the side.

When you want to rent a car, you can book it ahead of time. If there’s no car-share available when you arrive, your reservation automatically gets kicked over to a traditional car rental company. (This doesn’t hurt our business’s bottom line, because we don’t have to pay for reservations or for not showing up for a reservation.) In the worst-case scenario for you, you rent a car from a national chain, just like you always used to. In the best case, you rent a car parked in a more convenient location that’s probably better than the cars offered by the national chain.

What do you think? What other challenges do you see with this approach? What solutions can you think of?  Interested...let's talk!

February 01, 2012

MiFi 4G = Fail ....Here Is How To Fix It

The Verizon MiFi 4G hotspot is a fundamentally broken product. Its blazing fast 4G wireless connection shuts down whenever you plug it in. That means you can only use it for about two hours, while its battery is charged - and then you have to go without internet access for a few hours while the damn thing charges. As a MiFi 4G hotspot owner, let me tell you, I wanted to torture and hang the designer when I figured this out. And I’m not the only one: The unlucky owners of this product are basically in revolt

Mifi 1

If you’re one of those unhappy people, I’ve got good news: I figured out a hack that lets me get uninterrupted 4G service with the MiFi - and stop cursing the name of the moron who designed it.

Basically, when the USB cable is connected, the MiFi sees an open data connection and shuts down its wireless connection, possibly because it’s expecting a firmware upgrade. So what you’re going to do is to make it see a closed data connection. You’ll need the USB cable that came with the MiFi and a razor blade.

Step 1:

Using the razor blade, cut away the black plastic cover and metal strand protective wrap to expose the green, white, red, and black wires.  Obviously, be careful not to cut the wires.  I made my incision near the USB connection end, but you can do this anywhere along the cable.   

Wires 2

Step 2:

The white and green wires are the data wires. Cut them, but be sure to leave the red and black power wires intact. 

Cut wires 3

Step 3:

On the USB side of the cable, strip the white and green wires.  

Exposed wires 4

Step 4:

Connect the white and green wires by twisting the exposed metal together.  You can hide the exposed wires with a piece of tape.  Since the green and white wires do not carry current, you won’t shock yourself as long as the red and black wires are covered and protected.

Wire connect 2

Congratulations!  Now your Mifi will see a closed data connection and stay on when plugged in.  Happy web surfing!

January 18, 2012

Fire your customers and shut the doors… or be a services firm forever

I recently spent some time with a company that successfully overcame a huge challenge: Changing business models. ProdNotServ started out as an outsourced software development service company, run by a very talented small team – three engineers, a designer, and a product manager. For two years, things had been going great. They had more demand for their services than they could handle. They were working with big-name startups and celebrities. They were getting rave reviews
from clients.

So why make a change? They decided that because they weren’t building a product themselves, they were missing out on a chance to grow revenues faster than their billable hours and staff.

Sure, as a service company, they had some advantages. They had the engineering and design talent that so many early-stage companies need these days. There were startups flush with VC cash lining up to pay this team to help develop their products. Plus, they enjoyed steady cash flow, control over their own schedules, and minimal risk. Working with different clients added some variety to their days.

But if they successfully made their own product, they’d not only get the feeling of ownership that comes from creating something entirely new, they’d be giving themselves a chance to make a lot more money.

ProdNotServ was able to make this difficult transition because its CEO made two key decisions. First, he created a cash reserve by taking only his salary, instead of distributing the firm’s net earnings to himself and the other owners. Next, he led his team to shut their doors for a year – stop taking on new business, and just use the cash reserve they’d built up to keep paying everyone their current salaries. They’d spend the year they’d bought themselves brainstorming, designing, and perfecting a product they’d come up with as a group.

It’s also important to note what the CEO did not do. There were a few common mistakes he managed to avoid: He didn’t try to keep building the service business, just putting a fraction of the company’s time and money towards building the product. Instead, he focused all of his team’s energy on the new idea. He didn’t steal the best ideas from the product design process to drum up more easy cash from the services business. Instead, he stuck with his new vision for the company’s future. And he didn’t doubt himself or lose sight of that new vision when team members questioned his strategy, or when product development hit snags.

One year later, the team has just launched a third version of their product, and it’s selling pretty steadily. They’re about to close their first round of VC funding. In other words, they’ve done it.

You can’t develop a successful product part-time. Can anyone name a product launched by a company still mostly focused on services? What about one that doesn’t suck?

Alex Kinnier

Alex Kinnier is a Venture Captial Partner at NEA. He's an Xoogler, a passionate product developer (from ad servers to air conditioners to Febreze) and a fan of NYC pizza. He is a father of 2 angels.

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