My FailCon 2010 presentation on how not understanding your customers will kill your company faster than anything else. Want to better understand your customers? Read this and then sign up for http://www.uservoice.com

1. There’s a Customer Out There with a
Bullet for You
---
Understanding Your Customers
Evan Hamilton
Community Manager, UserVoice

2. Agenda
1. Listening failures
2. Failures of understanding
3. Success through understanding
4. Best practices
5. The importance of saying no
6. Q&A

3. Ideas Can Kill
1. Ideas you ignore
2. Ideas you don’t understand
3. Ideas you shouldn’t have listened to

4. Listening Failures

5. Listening Failures
Data: http://www.nytimes.com/2006/10/15/business/yourmoney/15friend.html

6. Listening Failures
Customers said: 30-second load times suck
Data: http://www.nytimes.com/2006/10/15/business/yourmoney/15friend.html

7. Listening Failures
Customers said: 30-second load times suck
Friendster focused on: VOIP
Data: http://www.nytimes.com/2006/10/15/business/yourmoney/15friend.html

8. Listening Failures
Customers said: 30-second load times suck
Friendster focused on: VOIP
Result: $30MM to ???
Data: http://www.nytimes.com/2006/10/15/business/yourmoney/15friend.html

9. Listening Failures
Data: http://blog.precipice.org/why-wesabe-lost-to-mint

10. Listening Failures
Customers said: We don’t want more work
Data: http://blog.precipice.org/why-wesabe-lost-to-mint

11. Listening Failures
Customers said: We don’t want more work
Wasabe focused on: Effort-heavy features
Data: http://blog.precipice.org/why-wesabe-lost-to-mint

12. Listening Failures
Customers said: We don’t want more work
Wasabe focused on: Effort-heavy features
Result: Mint $170MM, Wesabe $0
Data: http://blog.precipice.org/why-wesabe-lost-to-mint

13. Listening Failures

14. Listening Failures
Customers said: We don’t understand it

15. Listening Failures
Customers said: We don’t understand it
Google focused on: “Revolutionizing”
communication

16. Listening Failures
Customers said: We don’t understand it
Google focused on: “Revolutionizing”
communication
Result: Dead after one year

17. Failure to Understand

18. Failure to Understand
Photo: http://www.flickr.com/photos/like_the_grand_canyon/4649102556/ Data: http://en.wikipedia.org/wiki/New_Coke

19. Failure to Understand
• $4MM research
Photo: http://www.flickr.com/photos/like_the_grand_canyon/4649102556/ Data: http://en.wikipedia.org/wiki/New_Coke

20. Failure to Understand
• $4MM research
• 200k blind taste
tests
Photo: http://www.flickr.com/photos/like_the_grand_canyon/4649102556/ Data: http://en.wikipedia.org/wiki/New_Coke

21. Failure to Understand
• $4MM research
• 200k blind taste
tests
• 55% liked new taste
Photo: http://www.flickr.com/photos/like_the_grand_canyon/4649102556/ Data: http://en.wikipedia.org/wiki/New_Coke

22. Failure to Understand
• $4MM research
• 200k blind taste
tests
• 55% liked new taste
• 40k letters
Photo: http://www.flickr.com/photos/like_the_grand_canyon/4649102556/ Data: http://en.wikipedia.org/wiki/New_Coke

23. Failure to Understand
• $4MM research
• 200k blind taste
tests
• 55% liked new taste
• 40k letters
• 6,000 calls/day

24. Failure to Understand
• $4MM research
• 200k blind taste
tests
• 55% liked new taste
• 40k letters
• 6,000 calls/day
• Off shelf in 79 days

25. Failure to Understand
• $4MM research
• 200k blind taste
tests
• 55% liked new taste
• 40k letters
• 6,000 calls/day
• Off shelf in 79 days
• Was brand, not taste

26. Failure to Understand
• $4MM research
•200k blind taste tests
•55% liked new taste
• 40k letters
• 6,000 calls/day
• Off shelf in 79 days
• Didn’t understand
brand importance
Photo: http://www.flickr.com/photos/like_the_grand_canyon/4649102556/ Data: http://en.wikipedia.org/wiki/New_Coke

27. Failure to Understand

28. Failure to Understand
• 500 votes for
OpenID integration

29. Failure to Understand
• 500 votes for
OpenID integration
• Customers disliked it

30. Failure to Understand
• 500 votes for
OpenID integration
• Customers disliked it
• We finally
understood that the
issue was signing up
for a new account

31. Failure to Understand
• 500 votes for
OpenID integration
• Customers disliked it
• We finally
understood that the
issue was signing up
for a new account
• Built simpler sign-in

32. Failure to Understand
• 500 votes for
OpenID integration
• Customers disliked it
• We finally
understood that the
issue was signing up
for a new account
• Built simpler sign-in
• 7x increase in
conversions

33. Success Through Understanding

34. Success Through Understanding
Photo : http://www.flickr.com/photos/tychay/513991272/in/photostream/ Data: Personal interview
• “A stupid idea”

35. Success Through Understanding
• “A stupid idea”
• 6 months building a
camera
Photo : http://www.flickr.com/photos/tychay/513991272/in/photostream/ Data: Personal interview

36. Success Through Understanding
• “A stupid idea”
• 6 months building a
camera
• Traffic “went off a cliff”
after 6 weeks
Photo : http://www.flickr.com/photos/tychay/513991272/in/photostream/ Data: Personal interview

37. Success Through Understanding
• “A stupid idea”
• 6 months building a
camera
• Traffic “went off a cliff”
after 6 weeks
• People said: “I want to
broadcast”
Photo : http://www.flickr.com/photos/tychay/513991272/in/photostream/ Data: Personal interview

38. Success Through Understanding
• “A stupid idea”
• 6 months building a
camera
• Traffic “went off a cliff”
after 6 weeks
• People said: “I want to
broadcast”
• Now 3MM visitors/month
Photo : http://www.flickr.com/photos/tychay/513991272/in/photostream/ Data: Personal interview

39. Best Practices

40. Best Practices
• Email doesn’t scale

41. Best Practices
• Email doesn’t scale
• Wastes your time

42. Best Practices
• Email doesn’t scale
• Wastes your time
• Wastes your
customers’ time

43. Best Practices
Solution: Aggregate and prioritize
• Email doesn’t scale
• Wastes your time
• Wastes your
customers’ time

44. Best Practices
Photo : http://www.flickr.com/photos/28096801@N05/4581041971/in/photostream/
• Avoid the vocal
minority

45. Best Practices
Photo : http://www.flickr.com/photos/28096801@N05/4581041971/in/photostream/
• Avoid the vocal
minority
• Not representative

46. Best Practices
Photo : http://www.flickr.com/photos/28096801@N05/4581041971/in/photostream/
• Avoid the vocal
minority
• Not representative
•May not be your best
or stickiest customers

47. Best Practices
Photo : http://www.flickr.com/photos/28096801@N05/4581041971/in/photostream/
• Avoid the vocal
minority
• Not representative
•May not be your best
or stickiest customers
Solution: Limit votes so everyone is at the same volume

48. Best Practices
• Avoid the J-Curve
Photo & Data: http://buildingreputation.com/writings/2009/08/ratings_bias_effects.html & http://youtube-global.blogspot.com/2009/09/five-
stars-dominate-ratings.html

49. Best Practices
• Avoid the J-Curve
• Y! properties:
average 4.5 out of 5
stars
Photo & Data: http://buildingreputation.com/writings/2009/08/ratings_bias_effects.html & http://youtube-global.blogspot.com/2009/09/five-
stars-dominate-ratings.html

50. Best Practices
• Avoid the J-Curve
• Y! properties:
average 4.5 out of 5
stars
• YouTube tried
like/dislike, still had
the J-curve
Photo & Data: http://buildingreputation.com/writings/2009/08/ratings_bias_effects.html & http://youtube-global.blogspot.com/2009/09/five-
stars-dominate-ratings.html

51. Best Practices
• Avoid the J-Curve
• Y! properties:
average 4.5 out of 5
stars
• YouTube tried
like/dislike, still had
the J-curve
• (Almost) nobody
rates badly
Photo & Data: http://buildingreputation.com/writings/2009/08/ratings_bias_effects.html & http://youtube-global.blogspot.com/2009/09/five-
stars-dominate-ratings.html

52. Best Practices
• Avoid the J-Curve
• Y! properties:
average 4.5 out of 5
stars
• YouTube tried
like/dislike, still had
the J-curve
• (Almost) nobody
rates badly
Solution: Only allow up votes, don’t default to top ideas
Photo & Data: http://buildingreputation.com/writings/2009/08/ratings_bias_effects.html & http://youtube-global.blogspot.com/2009/09/five-
stars-dominate-ratings.html

53. Best Practices
• Avoid steep on-
ramps

54. Best Practices
• Avoid steep on-
ramps
• Domain aliasing:
12% engagement
increase

55. Best Practices
• Avoid steep on-
ramps
• Domain aliasing:
12% engagement
increase
•Logo: 25%

56. Best Practices
• Avoid steep on-
ramps
• Domain aliasing:
12% engagement
increase
•Logo: 25%
•Custom design: 55%

57. Best Practices
• Avoid steep on-
ramps
• Domain aliasing:
12% engagement
increase
•Logo: 25%
•Custom design: 55%
•SSO: 124%

58. Best Practices
• Avoid steep on-
ramps
• Domain aliasing:
12% engagement
increase
•Logo: 25%
•Custom design: 55%
•SSO: 124%
Solution: Integrate your ideas tool completely

59. The Importance of Saying No

60. The Importance of Saying No
• Don’t forget your
vision
Data: UserVoice internal & http://mixergy.com/stack-exchange-joel-spolsky-interview/#transcript

61. The Importance of Saying No
• Don’t forget your
vision
• StackOverflow had a
clear vision
Data: UserVoice internal & http://mixergy.com/stack-exchange-joel-spolsky-interview/#transcript

62. The Importance of Saying No
• Don’t forget your
vision
• StackOverflow had a
clear vision
• Completed 30% of
ideas, declined 62%
Data: UserVoice internal & http://mixergy.com/stack-exchange-joel-spolsky-interview/#transcript

63. The Importance of Saying No
• Don’t forget your
vision
• StackOverflow had a
clear vision
• Completed 30% of
ideas, declined 62%
• 0 to 6.5MM
monthlies in 2 years
Data: UserVoice internal & http://mixergy.com/stack-exchange-joel-spolsky-interview/#transcript

64. The Importance of Saying No
• Don’t forget your
vision
• StackOverflow had a
clear vision
• Completed 30% of
ideas, declined 62%
• 0 to 6.5MM
monthlies in 2 years
• “educating
customers”
Data: UserVoice internal & http://mixergy.com/stack-exchange-joel-spolsky-interview/#transcript

65. The Importance of Saying No
• StackExchange let
anyone create a
StackOverflow
Data: http://mixergy.com/stack-exchange-joel-spolsky-interview/#transcript

66. The Importance of Saying No
• StackExchange let
anyone create a
StackOverflow
• For every 1
successful site, there
were 20 sites with 3
users
Data: http://mixergy.com/stack-exchange-joel-spolsky-interview/#transcript

67. The Importance of Saying No
• StackExchange let
anyone create a
StackOverflow
• For every 1
successful site, there
were 20 sites with 3
users
• The vision was
missing
Data: http://mixergy.com/stack-exchange-joel-spolsky-interview/#transcript

68. The Importance of Saying No
• StackExchange let
anyone create a
StackOverflow
• For every 1
successful site, there
were 20 sites with 3
users
• The vision was
missing
• New sites have to
prove themselves
before launching now
Data: http://mixergy.com/stack-exchange-joel-spolsky-interview/#transcript

69. Conclusion
You have the tools to win:

70. Conclusion
You have the tools to win:
1. Actively solicit feedback

71. Conclusion
You have the tools to win:
1. Actively solicit feedback
2. Avoid the vocal minority and the J-curve

72. Conclusion
You have the tools to win:
1. Actively solicit feedback
2. Avoid the vocal minority and the J-curve
3. Spend the time understand what people
are really saying

73. Thanks!
@evanhamilton
evan@uservoice.com
understanding.uservoice.com