How to build product campus week

Peter Nixey @peternixey peternixey.com
Peter Nixey &Taavet Hinrikus
THINGS I’VE LEARNED ABOUT HOW
TO BUILD GOOD PRODUCT

POTTED HISTORY OF PETER
• PhD in ComputerVision (left to start company)
• Raised fromYCombinator (2007, same as Dropbox)
• Moved to San Francisco. Sold company 18 mths later
• Now Rails Engineer, Product lead and CEO at Copyin

THINGS I USEDTO DO

THEN I WENTTOYCOMBINATOR

ACQUIRED BYYOLA

VEGAS WITHYOLA

SO OBVIOUSLY I QUIT

LAST 10YEARS
• Written, designed and sold software myself
• Paid and managed remote contractors (bad idea)
• Been part of 40-person product / engineering teams
• Been project / product lead in 3-10-person teams

TAAVET HINRIKUS

TAAVET
1ST EMPLOYEE
CO-FOUNDER

TAAVET
Good price
Easy to use
and transparent
Fast

• Solves your customer’s problem
• Is built in reasonable time at reasonable cost
• Delivers sufﬁcient strategic or ﬁnancial value
GOOD PRODUCT

MOST PRODUCT
Is a mutant chimera
Costs too much and
takes too long
Destroys company
value

GOOD PRODUCT
HAPPENS WHEN...
1. People want it
2. Your construction process is sound
3. You can build very quickly

WHAT WE’RE GOINGTO COVER
1. How to build product people actually want
2. How to build quality product that works
3. The processes that make you 10x faster or slower
4. (Why you need to embrace your inner Craigs)

MAKING SOMETHING
PEOPLE WANT
PART 1.

• The Golden Rule ofTrafﬁc
• 10 numbers that tell you whether your project is daft
• How to interview potential customers
WHAT WE’LL COVER

THE GOLDEN RULE OFTRAFFIC

IFYOU BUILD IT
THEY WILL NOT COME

SEARCH & SOCIAL WON’T SAVEYOU
...& of 134,000 visits to peternixey.com last year...& of 134,000 visits to peternixey.com last year
Twitter 6.7%
Facebook 2%
Google 1.5%
500 page Q&A service => 500 Google visits/day

10 numbers that can tell you
whether your idea is viable

1. GOLDEN RULE OF SOCIAL
http://www.avc.com/a_vc/2011/09/the-logged-out-user-continued.html
- 90% of people consume
- 10% of people curate
- 1% of people create

2. RULES OF ENGAGEMENT
Registered users / installs:
- 30% will use it each month
- 10 % will use it each day
- 1% will be use it concurrently
http://www.avc.com/a_vc/2011/07/301010.html

3. FREEMIUM CONVERSION
1% of your signups will pay
(normally 1-5%)
http://readwrite.com/2013/02/20/6-ways-to-make-freemium-work-for-b2b-
products

4. EXPENSIVE IS PROFITABLE
“50% of our revenue comes from only
11% of our customers..”
- Ryan Carson, Founder Carsoniﬁed
andTreehouse

5. CHEAP IS EXPENSIVE
“It is our universal experience that the support load for cheap/free
customers crushes the support load for the higher plans”
- Patrick McKenzie
Cheap accounts cost more in support
(7x)

6.ADVERTISING REVENUE
Social network CPM ~ $1
Times Newspaper ~ $10
CPM = cost per 1,000 page views

$1M/year in revenue == 1Bn page views
(good luck)

7. EMAIL SUBSCRIPTIONS
Open rates = 20-40%
Clickthrough rates = 1-5%
~ 1 sale per 3,000 emails

8. CHURN DETERMINES SAAS SIZE
If you have 10,000 customers
and 5% leave a year
then you need 500 new ones just to stay level
(so your signup rate determines your company size)

9. ISYOUR MARKET SIZE SANE?
360M people in the US
Firm size # ﬁrms (US) Avg. # employees
1-100 6M 7.24
101-500 6M 10.1
501-10,000 17,000 1,672
http://www.census.gov/econ/smallbus.html

10. DOYOU HAVE 10 ITEMS?
Only a fool would have 9 items in a 10 item list.

CUSTOMER DEVELOPMENT

INTERVIEWEES
MAY BE
SEDUCTIVE

DON’T
PITCHTHEM

YOUR JOB
ISTO LISTEN

THEY MAY
ASK FOR
SOME FREAKY
SHIT

KEEP LISTENING

STILL
DON’T
PITCH

AND DEFINITELY
DON’T ARGUE

YOU WIN WHEN THEY VISUALISE
YOUR PRODUCT IN THEIR LIFE
NOT IN SOMEONE ELSE’S

TAAVET
Speaking the language of your customers and
key message development
person to person currency exchange
vs
money transfer
analyzing your customer feedback

TAAVET

THE HARSH REALITY
OF YOUR PRIVATE FANTASY

• The Golden Rule ofTrafﬁc
• 10 numbers that tell you whether your project is daft
• How to interview potential customers
WHAT WE COVERED

HOWTO BUILD HIGH QUALITY,
RELIABLE PRODUCT
PART 2.

• How to avoid making the same mistakes twice
• Why releases matter more thank you think
• How to know your metrics
WHAT WE’LL COVER

THINGS WILL GO WRONG

DOESN’T
HELP

5-WHYS
helps a lot

WE WERE SENDING EMAILS
If people didn’t get them they freak out

SO ONE DAY WE ACCIDENTALLY
SWITCHEDTHEM ALL OFF...

WHY DIDTHIS HAPPEN?

Emails aren’t arriving
Switch them on
We were using a different DB in
production to development
Use the same DB in development as
in production
Symptom
Fix
Cause
Cure
AND IN LARGER FONT...

5-WHYS GIVESYOU
CURES NOT
TREATMENTS
(and avoids blame)

RELEASES MATTER MORE
THANYOUTHINK

WHEN RELEASES ARE HARD...
• People avoid them
• Features back up
• You learn slower
• Everyone feels worse

q

#2 Can you do a release in a single step?

SO IMPORTANT
1. Makes sure your releases don’t break things
2. Make sure that everyone releases and it’s not
one person lumped with it
3. Avoid backlogs of unreleased product
4. Speed up feature time-to-market

DO IT

ANALYTICS

I AM ADDICTEDTO STATS

I’VETRIED ALLTHE
STATSOPOPS

I’VE EVEN BUILT MY OWN

BUT I LIKE HARD NUMBERS

I want to see my own data

GET INTOYOUR OWN DATA

GOOGLE SPREADSHEETS FOR ANALYSIS

HOW LIKELY AREYOUTO
RECOMMEND OUR COMPANY/
PRODUCT/SERVICETOYOUR
FRIENDS AND COLLEAGUES?
0-10
TAAVET

•5-whys for cures not treatments
•Why good releases matter
•Get freaky with your own database
WHAT WE LEARNED

HOWTO MANAGE A PROJECT
TO BE 10X FASTER
PART 3.

THEY FUCKYOU UP
YOUR PLANS

BIG PLANS MEAN BIG CHURN
You will spend time...
• designing features you may never build
• discussing features you may never build
• avoiding useful features because you
“need to get old stuff done”

THIS IS BAD

THE LARGERTHE PROJECT
THE GREATERTHE CHURN

YOU MAY NEVER BE ABLETO
COMPLETEYOUR PLANS

SMALL IS BEAUTIFUL

WAYSTO LIMIT CHURN
• Do it in 2 weeks or delete it
• Keep a separate feature wishlist
• Ban discussion on things which aren’t on the
plan

THINK FAR
BUT PLAN CLOSE

HEALTHY BALANCE
BETWEEN PREDICTABILITY
ANDTIME SPENT PLANNING
TAAVET

SHIP FAST

YOU’RE A STARTUP
YOU WANTTO BETHE BEST

You dream of one day ringing the NASDAQ bell

But then your buddy headbutts the cockpit :(

STARTUPS LIVE
ON BORROWEDTIME

•Time
•Money
•Momentum
YOUR ASSETS WILL EXHAUST
QUICKLY

YOU MUST BUILD FEATURES
IN DAYS

Embrace your
inner Craig #1

Saw this feature on Monday...

took her for a drink onTuesday.

We were making love by
Wednesday...

...and onThursday...

...Friday...

...Saturday...

Chilled on Sunday.

BUILD FEATURES FAST

DON’T COMPLETE EVERYTHING

DON’T FIX EVERYTHING

COMPLETE FEATURES
ONLY WHENYOU HAVE TO

DOINGTHINGS COMPLETELY
TAKES 4X LONGER THAN
DOINGTHEM SUFFICIENTLY

ALSO...
IFYOUR ENGINEER SAYS IT’S GOING
TO BE INTERESTING...
TRYTO AVOID IT

DESIGN

GRAPHIC DESIGN ISTHE
LAST PART OF DESIGN

GRAPHIC DESIGN
COMES AFTER
PRODUCT-MARKET FIT

EMBRACEYOUR INNER
CRAIG #2

BUTYOU STILL NEED UX
...AND CSS :(

DON’T PAINTTHESE WALLS

TAAVET
$320 @ Hatchwise.com

AVOID PROCESS GAPS

MOST PRODUCT DELAYS
ARE DUETO QUEUES
NOT BOTTLENECKS

MOST DEVELOPMENTTEAMS
AMASS ROTTING INVENTORY

REMOVE QUEUES. SPEED DEVELOPMENT.

MINIMISE PEOPLE
MAXIMISE CROSS-DISCIPLINE
CULL YOUR BACKLOG RUTHLESSLY

• Work in genuine 2 week sprints
• Don’t settle for slow product development.
• Don’t spend time unless you have to
• Don’t spend time on graphic design until after ﬁt
BUILDING FAST

TO CONCLUDE...

TO GET GOOD PRODUCT
1. Make sure the numbers make sense
2. Make sure people want it
3. Give yourself sufﬁcient process to be
reliable
4. Maximise your speed to be useful

QUESTIONS?
PeterNixey.com @peternixey

How to build product campus week

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