About a year ago, I sat in a coffee shop pitching a new idea to one of the founders of Startup Weekend, Clint Nelson. What we thought would launch in a month turned out to take us nearly a year. Through the ups, downs — the good and the bad — here are ten things we learned along the way:
1. Take a crash course in pricing psychology.
When I had the idea for Hello There, I was obsessed with video and the ability to effectively communicate yourself. I thought people would pay for a custom video page and that analytics would just be a cool added feature. I was wrong.
Most people thought that video should be free — thanks to YouTube. What people perceived as “worth paying for” was the ability to make an unlimited number of webpages for every job they applied for. In their eyes making a webpage was expensive, hard, and costly. They also felt analytics was worth paying for because it would help the user track progress and sentiment.
2. Do not hide your idea! Ever.
I can’t tell you how many people want me to sign NDA’s or are afraid to tell people their ideas. I used to be like that. Thanks to Brad Feld for telling me that was stupid. Most VCs won’t sign them anyway. The real reason to share your ideas is to find team members and people willing to help and join you. I can’t tell you how many times someone has offered to help because I shared my idea. Without sharing my ideas, I wouldn’t have the team that I have today.
3. It’s all about the team and motivation.
I don’t outsource product stuff. I actually have never outsourced. I am totally cool with splitting up founders shares and finding the best, most dedicated talent. I think this is more valuable than having total control and working with people who are not invested in the idea. Building something when you believe in it and being part of something bigger than yourself can be more rewarding than going it alone. Teams, with the right skill set, help drive ideas forward.
4. Why do you need money? Bootstrap it.
I’ve believed in Jason Fried’s philosophy ever since I heard his talk at Big Omaha last year. We lived and breathed it at Hello There. We managed to keep costs very low, didn’t quit our other jobs, and made deals with third party vendors to get free stuff. Scrappy is the word I think. I truly believe that the new economy will be built by people who develop multiple incomes to survive. For all of you who are saying right now that you don’t have time, I don’t want to hear it. Time is all about prioritizing which is not easy. It takes sacrifice and often it takes sleepless nights. If you are hungry — you will find a way.
5. Build products that make other people look good.
Seriously, I could have never expected the amount of feedback that comes my way, it often sounds like “Thank you for getting me a job.” With this economy it sure makes waking up everyday really worth it. Spend time making beautiful, simple products and people will love you for it most of the time. It has made the customer the marketer and evangelist for our brand. Customers are your greatest marketing resource, use them to spread your idea.
6. Your main feature may not be so important.
I love video. I love Skype. I get so much more from it than audio or text. Video is how my idea started. I am also an extrovert and I don’t mind being on video. However, I am also not part of the mainstream. I see how the youth interact with videos. Once I realized that making and recording a video was a hurdle, I knew I needed to rethink things. You will probably see the option for photo and PowerPoint in a future release. Human nature and psychology will always drive how we communicate. Sometimes it will revert back to it’s simplest form.
7. Your product can be in different markets but it needs different branding and pricing.
Hello There was meant for people looking for jobs. That obviously means they probably didn’t want to spend a lot of money. I wanted to make looking for a job affordable. In the process of trying to find bloggers to write about us, I pitched a blogger who said she would love to use this for sales.
I hadn’t even thought much about that vertical because I wanted to be extremely focused on the career seeker, but it sounded good. Sales people pay for stuff. So I told her that she could use it however she wanted since we don’t brand our pages. The lesson: perception is reality. If you think you can convince a sales guy to come to your homepage, which is all about careers, and believe in your product you may be nuts. However, you may also be onto something.
8. Freemium, freemium, oh freemium — It can work.
I like freemium’s or anything that I can try, touch and use before paying for it. I wanted to offer a product with all the bells and whistles so if the customer thought it was worth it then he or she could pay for another one, and so on. Therefore, we give every new customer a free first page. If you get value and like the product then you pay for the next one. It’s actually pretty simple and most customers appreciate a taste before they buy.
9. PR is much easier with a simple product and success stories.
Good luck with your PR efforts if it’s hard to tell someone why they should use your product, unless you pay that awesome $5,000 retainer for an agency. I’d rather find writers and try to build my own relationships with them, then work to give valuable stories to them. Do the work for them and you will be surprised what happens if you have a good product.
10. Don’t give people choices.
Almost 90 percent of people need to be told what to do, according to research. I believe it. It’s called the paradox of choice and a great book on this is Switch. Our product always had one path which guided the customer throughout the process. Remember, people can only do one thing at a time so only give them one thing to do.
Take these lessons, go buy a notebook and start writing down some ideas. Tell everyone about it and inspire people to join you. Keep everyone motivated with feedback and transparency and find the right markets. Launching a company — profitable or not, it will teach you more than you could ever ask for. Be an entrepreneur. Those are the people who change the world.
Photo Credit: © Iakov Kalinin[frame_left src=”http://yfsmagazine.com/wp-content/uploads/2011/09/MacS-196.jpg”]Shane Mac[/frame_left]
Shane Mac is the founder of Hello There. Mac is obsessed with creating technology that can connect people and change the world for the better. He spends his spare time speaking to college students across the country. Shane has been featured in The New York Times, Wall Street Journal, Reuters, U.S. News and World and more. Connect with him at thesquab.com, blog.shanemac.me and asksummit.org.