Summary of Building Product by Michael Seibel

https://www.youtube.com/watch?v=C27RVio2rOs

Love the way Michael distills the thought process on building your product ??. He is someone who built his startup to $24 Million valuation in 5 years, then sold it for around a Billion Dollars after another 3 years.

Here are some notes from the talk he gave. Link is above

-------------------------- Start of notes (only first 28 minutes) --------------------------------------

Important to remember, you can break some of the rules if you have the following 3 things

• The founding team is extremely good technically, meaning, they can figure of quick wins that work
• Keep costs down, at twitch.tv, they did not spend a lot of money, only around $4000 per month to cover for rent and walking around money
• At twitch.tv, their ego was highly tied to the product, it meant everything to them

Start with

• What are we doing? What problem are we solving? Is this a problem I am facing?
• What do we expect the result to be?
• For Twitch.tv, the question was

1. Is anyone watching?
2. Pivot: allow other people to broadcast
3. Never pivot till you have done enough iterations on the original idea

• What is the actual problem you are solving?
• Can you state the problem clearly?
• Can you speak the problem in 1 to 2 sentences?
• Have you experienced the problem yourselves?
• Can you define this problem narrowly?

1. Who can we help first?
2. What can we address immediately?
3. How can we get the first indication immediately?
4. Don’t try to solve the mega problem initially!

• Is the problem solvable?

1. Poppy (https://www.meetpoppy.com/), Uber for babysitting
2. Will parents trust you with their baby?
3. Can you have rotating babysitters?
4. Talent pool might not exist?
5. Etc.

• Who is your customer?
• Understand who you are solving your problem for?

1. Is it people buying cars online?
2. Is it dealerships selling cars?

• Who is the ideal first customer?
• How often does your user have the problem?

1. What if your customer loves you but they will only come back after 7 years?
2. For example, the case of selling cars directly to your customers

• o  Look for high-frequency problem
• o  How intense is the problem?

1. In the case of Uber, I have to go to work? I have to get to this important meeting?
2. Look for high-intensity problems

• Are customers willing to pay?

1. If you think you have a really good product, it helps to sometimes make it harder for your users to use it, see if they use it anyways, will work well if the problem is extremely intense
2. Starting with a price is almost always better than offering it free initially, almost always
3. Talking to customers is good, but, talking to the wrong customers is very bad, don’t let them hijack your product

• How easy are they to find?

1. For example, in a B-to-B product, you can go to LinkedIn and find the customers so you can email/contact them
2. If your customers are ridiculously hard to find, you better have a solution upfront on how to find them

• Does your MVP actually solve the problem you want to solve? You can easily lose your way in the challenge of building your MVP ??

1. Does it do the thing you promised?
2. Does it do the thing you want to do?
3. Can you build your MVP quickly, within 2 to 6 weeks?
4. Can you give your MVP/Product to your customers to use?
5. It is not a painting or a piece of art, a lot of people want to be artists, startup world is very unforgiving to artists

• Which customers to go after first?

1. Don’t go after the hardest customers
2. How do you find people who are willing to use a bad product, considering that MVPs are often pretty bad?
3. Find the customers who are the most desperate to use your product
4. If you are trying to sell a $1000 product license to a company and you are 6 months of negotiations, then, that is not a desperate company, move on
5. Whose business is going to go out of business without using you?
6. Avoid talking to friends to get product feedback, they are just being polite, they don’t have the problem you are solving
7. Don’t use investors to get feedback, they don’t have the problem you are solving

• Which customers you should run away from?

1. Try early to identify bad customers, then fire the customer
2. For example, if you had to refund the customer 4 times consecutively, then they do a 5th task on the product
3. These are people who are blasting your support
4. They are constantly complaining
5. Look for people who are trying to exploit your product

• o  Should you offer a discount or start with a super low price?

1. No!
2. In B to B, you can structure the discount into your sales pitch if you understand the value, you are getting
3. For example,

·      I can offer you this discount for the next 30 days only, since my third party / partner company is giving me discount on the volume,

·      I can pass it on but only if we close the sale in next 30 days 

·      We have offered a deadline, based on some third party providing the benefit 

·      We know that every time this would be discussed internally, the deadline would be brought up and the discount would be brought up

·      The discount was backed into the price, it was priced 15% higher, for example

Some of the above items might seem like contradicting each other, but they don’t. It is a balancing act and you need to figure out the balance on your own. That is the hard part.

No one said building a product is going to be easy. Not for the faint-hearted.

Thoughts? Would you recommend some other MUST WATCH talk by Michael?