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How Bad Products Happen to Good Startups

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This is the presentation I gave at the Products Are Hard 2013 conference in San Francisco, CA.

This is the presentation I gave at the Products Are Hard 2013 conference in San Francisco, CA.

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  • 1. How Bad Products Happen to Good Startups Charles Hudson SoftTech VC @chudsonFriday, April 5, 13
  • 2. About Me • General Partner, SoftTech VC • CEO and Co-Founder, Bionic Panda Games • VP Biz Dev, Serious Business (Zynga) • Biz Dev, Gaia Online • Founder, Virtual Goods Summit (WEBM) • Biz Dev, Google • In-Q-Tel (CIA VC) Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 3. Bad Products Happen • Nobody sets out to build (or launch) a bad product. • Not every bad product launch is preventable; sometimes the market changes. • There are some consistent patterns Ive observed around bad product launches. Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 4. 4 Ways Bad Products Happen to Good PeopleFriday, April 5, 13
  • 5. #1 Too Much M in the MVP • Never forget the real goal of an MVP - it should allow you to learn about your product and market. • You wont learn much from launching a broken product - people wont use it. • Speed matters, but it isnt everything. Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 6. Investors and MVPs • Investors and outsiders are often poor judges of what your MVP should be. • Investors often push companies to launch so you (and they) can get feedback on the product as quickly as possible. • Launching a poor product too quickly can lead investors to lose faith in your product organization. Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 7. #2 Focus on Wrong Metrics • Prior to launch, identify the metrics you think really matter for your product or service. • On launch, you will get a lot of data about usage, not all of which actually matters. • You can fool your investors and the press, but dont fool yourself. Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 8. Investors and Metrics • Some of your investors will be enthralled by vanity metrics. Don’t be surprised by that. • Part of a founder’s job is to help investors understand the few numbers that really matter. • Spend the time required to get alignment around what really drives the business. Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 9. #3 The Weight of Expectations • Raising money and announcing your company to the press raises your public profile. • A brighter spotlight increases the pressure to have a successful launch. • Pivoting in public is hard and really ugly. Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 10. Managing Pre-Launch Expectations • Keeping your team on an even keel as you head toward launch requires finesse. • If launch is not going as planned, let your investors know sooner rather than later. • Beware of fanning the hype flames too heavily in the press - it can come back to bite you. Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 11. #4 Failure to Launch • Launching is a very, very scary thing for many companies. • You can always make the product better - thats not a reason not to launch. • If your gut is telling you that the product hasnt yet hit the mark, listen to your gut. Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 12. Dealing with Investors • Few things undermine investor confidence in product teams like a failure to launch a product. • Do not let investors pressure you into launching product prematurely if you know the product isn’t ready. • If something about your products or the market has changed, communicate that early. Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 13. What Can Work (YMMV)Friday, April 5, 13
  • 14. Build the Smallest Satisfying Experience What reasonable constraints can you put on your product to prove that it works? • Constrained domain or use cases • Constrained geography • Constrained platform availability Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 15. Build Product Release Rhythm • Launch is a singular event and one of several times youll release product to the world. • Build a product organization that releases product on a regular basis. • Develop standards for what feels right for your company. Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 16. Obsess About the Flow, Not the Launch Launch is a singular event - focus on the total product experience: • Distribution and Discovery • Registration • Activation • Usage • Re-engagement • Monetization Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 17. Only a Few Stats Really Matter • How frequently should your active users use your product? • Whats your conversion / activation funnel? • How important is viral / network distribution for success in your category? • What small set of metrics will give you a sense of overall product health? Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13
  • 18. Have Conviction About Your Core Beliefs • Identify the core beliefs you have about your product or market and stick to them. • Not everything worth doing lends itself to testing or analytics. • Make sure you work with investors who share your core beliefs around your product. Products Are Hard 2013 #PAH2013 @chudsonFriday, April 5, 13