Lecture 4 - Building Product, Talking to Users, and Growing (Adora Cheung)

Summary

In this insightful talk, the speaker shares the journey from zero to many users, emphasizing the importance of learning from past mistakes. They discuss the necessity of dedicating time to a startup, understanding the industry, identifying customer segments, and creating an MVP. The speaker also highlights the value of user feedback, tracking customer retention, and the art of pivoting when necessary. Strategies for sustainable growth, including sticky, viral, and paid growth, are explored, with a focus on delivering a great user experience and optimizing referral programs.

Takeaways

• 🚀 **Embrace Failure as Learning**: The speaker emphasizes the importance of learning from past mistakes, suggesting that understanding what not to do is as valuable as knowing what to do when starting a business.
• 🌟 **Identify and Solve Real Problems**: The transcript highlights the need to identify a real problem and ensure that the solution is something the founder is passionate about and that others genuinely need.
• 🔍 **Understand Your Industry**: The speaker advises spending time understanding the industry inside out, including getting hands-on experience if possible, to identify inefficiencies and opportunities for disruption.
• 📈 **Focus on Compressed Time**: For those starting a business, especially while in school or working, dedicating compressed time to focus on the startup can be more effective than spreading efforts thin.
• 🔑 **Start with a Minimum Viable Product (MVP)**: The importance of building an MVP that addresses the core problem with the smallest feature set is stressed to facilitate quick feedback and iteration.
• 🤔 **Storyboard the User Experience**: Before coding, envisioning the entire user journey from discovery to post-usage can help in creating a cohesive and effective user experience.
• 📲 **Leverage User Feedback**: Engaging directly with users for feedback is crucial; it helps in understanding what features to change or build, and how to improve the product.
• 🔄 **Iterate Based on Feedback**: The speaker suggests using feedback to make necessary changes to the product, rather than adding features just because users suggest them, which can hide underlying problems.
• 💰 **Consider Paid User Acquisition**: When having capital, consider using it for paid growth strategies, but ensure that the customer lifetime value (CLV) exceeds the customer acquisition cost (CAC).
• 🔄 **Pivot When Necessary**: If growth stalls despite best efforts, it may be time to pivot. The speaker shares their experience with Homejoy, which was the thirteenth idea they pursued, highlighting the importance of persistence and adaptability.
• 🔗 **Create Sticky, Viral, and Paid Growth Strategies**: Different types of growth strategies were discussed, including making the product experience sticky to retain users, creating viral mechanisms for organic spread, and leveraging paid channels for accelerated growth.

Q & A

What is the main focus of the speaker's discussion?

The speaker focuses on strategies for growing a startup from zero users to many, drawing from personal experiences and mistakes made during their entrepreneurial journey.

Why did the speaker emphasize the importance of having a lot of dedicated time for a startup?

The speaker stressed the need for concentrated, uninterrupted time to immerse oneself in the startup idea and develop solutions to the targeted problems effectively.

What is the 'novice approach' to starting a startup that the speaker warns against?

The 'novice approach' involves having a great idea, not sharing it, building the product in isolation, and then launching it with the expectation of gaining users rapidly. This approach often fails due to the lack of initial user feedback and understanding of real user needs.

Can you explain the importance of understanding the industry when starting a business?

Understanding the industry is crucial for identifying inefficiencies, potential areas for disruption, and gaining insights that can be exploited to create a competitive advantage.

What is the significance of creating a minimum viable product (MVP)?

An MVP is the smallest feature set that solves the core problem the startup aims to address. It allows for testing the product with real users and gathering valuable feedback before scaling.

Why is it crucial for the founder to be an expert in the industry they are building a product for?

Being an expert helps to build trust with users and stakeholders, and it ensures that the product being built is informed by deep knowledge and understanding of the industry's intricacies.

What is the role of customer feedback in the early stages of a startup?

Customer feedback is essential for understanding whether the product meets user needs, uncovering areas for improvement, and guiding product development to enhance user experience and retention.

How does the speaker suggest acquiring the first few users for a startup?

The speaker suggests starting with personal connections like friends, family, and co-workers, and then expanding to online and local communities where potential users might gather.

What is the purpose of tracking customer retention and how does it help in evaluating the success of a startup?

Tracking customer retention helps in assessing how well the startup is able to retain its users over time, which is a key indicator of product success and user satisfaction.

Can you describe the importance of storytelling in the context of the speaker's advice on startup growth?

Storytelling is important as it helps in creating a compelling narrative around the startup's vision and product, making it easier for potential users to understand and connect with the offering.

What are the three types of growth the speaker discusses and why are they important?

The speaker discusses sticky growth (retaining existing users), viral growth (word-of-mouth referrals), and paid growth (acquiring users through spending). These types of growth are important as they cater to different aspects of user acquisition and retention, ensuring a sustainable and scalable business model.

How does the speaker define 'sustainability' in the context of growth strategies?

Sustainability in growth strategies refers to ensuring that the efforts put into growing the business, in terms of time or money, yield a good return on investment without creating a leaky bucket scenario where more resources are lost than gained.

What is the 'honesty curve' mentioned by the speaker and why is it important to consider when gathering user feedback?

The 'honesty curve' represents the varying levels of honesty in feedback based on the degree of separation from the user. It's important to consider because it helps founders understand the potential bias in feedback and make more informed decisions about product improvements.

Why is it necessary to revisit failed growth channels over time, according to the speaker?

It's necessary to revisit failed growth channels because circumstances and the startup's position in the market may change. What didn't work before might become effective later on, especially if the startup has evolved or the market conditions have shifted.

What advice does the speaker give on how to handle the situation when a startup is unable to grow despite efforts?

The speaker advises that if a startup is unable to grow after three to four weeks of diligent effort, it might be time to consider a pivot. This involves reassessing the product or business model to find a more effective approach to user acquisition and retention.