February 11, 2011

Startup 101: Put the product first, revenue will follow

Social activity in Manhattan from The Hotlist, a mobile startup.


Advice from three startups on the digital creation process

Jessica ValenzuelaIn any project you decide to embrace, there are key ingredients that must fall into place to build a solid foundation for success. We caught up with a number of new mobile and Web app startups and a user experience design expert from the agency side to pick their brains on the key ingredients needed to make that perfect risotto. That is, to build a startup from the ground up.

After years of working with brands and startups, it amazes me how great ideas get muddled when it reaches the execution phase. When I was part of a product management team, it was a challenge to convince executive management how design needs to be an integral part of the process. $3 million down the drain later, they’ll circle back and say, “Jessica can you show us those architectural sketches again?”

Here is a summary of the advice from all three startups with perspective from my personal experience in the digital creation process.

Timing is everything

When the visual search startup Search Me launched in 2005, the tech world was excited! $43.6 million later and only 1.8 million users to show for it, they had to shut down. The world was not ready for visual search at that time.

However, timing has worked very well for Tango.me, a free mobile video calling service with 6 million users available in 135 countries and on 45 different mobile devices. Uri Raz, founder and CEO, adds that “the improvement of smart phones and video was excellent timing for Tango.me. Why limit video calls on the PC when improvement in mobile technology makes it more accessible and convenient.”

In the million and one ideas that you have in your “ideas” folder, look for one that the market is ripe and ready for. Observe the changes in the space that you would like to service, do your research, find the gap and improvements you can implement, then make your bet.

Find your product’s focus

Most startups don’t find the sweet spot of their product the first time they launch. It takes a number of prototypes, many days of testing, collaboration and iteration to get to the phase where it is finally ready for public consumption. Uri adds: “When your product is able to provide something useful to a massive group of consumers, you won’t need to convince them about its usefulness — they will make sure you succeed by supporting your product.”

A powerful example of this experience is when Tango.me first launched in Korea. “Korea is one of our first adopters,” Uri says. “When we first launched, there was a flaw in our platform. Our system was not working with the structure of Korea’s phone number system. A user discovered a way around this and posted it in his blog. The next day Tango had 120,000 downloads. We’ve fixed that issue, yet this memorable act of love from our users is a testament to how our product is connecting lives.”

It should be a natural expectation that after you release a product to the general population, changes will occur. There will be user improvements that you will unearth by carefully observing how your community is learning about your site, mobile or Web app. Combine that information with your understanding of the market, and you’ll be able to make a solid decision around your product strategy. Often you’ll steer away from the original idea, but if your community loves it, then just go with the flow.

User experience and design

User experience and design is key to a product’s success. Design in a product regardless of whether you are building a website, a mobile app, a restaurant or a supermarket is integral to how well your product will perform once you open its doors to prospective customers.

I asked a dear friend and colleague his opinion on the matter. Peter March, a professional user experience and design professional, adds: “In my experience, the basic methods and practices of UX still apply in pretty much the same way as they do for regular websites. Make sure you know the platform specifics for the mobile platforms you’re developing for (Blackberry, iPhone, etc.), and be careful not to design anything that the platform isn’t capable of supporting.” The same rule goes for screen gestures and interface actions.

Execute with focus

Next, build, test and see how your consumers are responding and listen. Assess, evaluate and execute on the changes that will strengthen your product’s core. Research and data are cornerstones of your product’s success.

The Hotlist, a location-based startup, is a learning platform for events, venues, meeting and making new friends. (Disclosure: I work for The Hotlist as their community manager.) Their first success came when they won the NYU Stern Business competition with $25,000 in cash to start their company. Today the Web app has grown to 160,000 users and financing led by Centurion Holdings. Giann Martirei, co-founder and COO, shares these tips: Build something people want, make sure you are not the only customer of your product. Apply agile development. Deliver something new to your users every six weeks. Move fast.

If they come, then you can think about revenue

Once the core of your product shows longevity in the marketplace, then you can start pushing your business strategy. Brainscape is a learning platform from New York-based Bold Learning Solutions that integrates well with any topic or medium. Andrew Cohen, CEO and founder, says, “Building my idea into a product meant I had to go back to school to learn new skills in education technology.” The first Brainscape prototype was built during his studies while studying for his masters in education and technology at Columbia University. Today, the platform has more than 70,000 users and was briefly No. 1 in its category on iTunes without any marketing spend.

Obviously, revenue is a consideration you need to think about during the early stages of the process, yet it should not be the focus of your energies. Keep it in the background until your product is embraced and supported by a strong and growing consumer base. Andrew’s advice is this: “We always have to make decisions whether we care about making some revenue now, or instead focus on the long-term platform creation that will lead to lots of revenue in the future.  We believe that this will pay off in the long run.”

Do you own a startup or are you thinking of launching one? What did you learn from the experience?

Jessica Valenzuela is a tech-media strategist who works with global brands and startups throughout their product lifecycle in the areas of design, development and communications (marketing, PR and social media). See her business profile, contact Jessica or leave a comment.

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2 thoughts on “Startup 101: Put the product first, revenue will follow

  1. Great information, loads of supporting items and a lot of learnings. Every article in the net should always be like this not the crap that you get to be lead into when you go for the search engine. This is a great article for starting business and businessmen alike. Just a good read. Thanks!

  2. I found this article very useful too. Also, I agree with you: it is very important to focus on the product. That's what we did at RazWar. http://www.razwar.com. I would be happy that you review this brand and the website: clear example of your message. We are selling very qualitative products. I would say, however, that the “revenue will follow” side of the story is much more difficult in Europe than in US. But, for sure, quality of the products is key.