Customer validation: from lean startup to craigslist

By Hayden Williams , written on July 28, 2013

From The News Desk

This is the fourth in a PandoDaily weekly series that chronicles the experiences of a young entrepreneur as he bootstraps his startup. Read Part 1,  ”The less-than-glamorous life of a young entrepreneur,” Part 2, "How to survive co-founding a company with a friend," and Part 3, "Starting a company and having a girlfriend isn't easy." Come back next Sunday to read the next installment.

I had just quit my corporate job. After the requisite reading of “The Lean Startup” and a few blog posts by Steve Blank, I was getting out of the building and conducting customer interviews. I was feeling pretty good about myself. First, I was having better luck getting strangers to talk to me than the guy wearing cargo jeans and a tank top skulking around Washington Square park with a “Free Hugs” cardboard placard. Second, everyone was saying that Treatings, which at that point was only an idea, was something they’d use.

After reading some ominous blog posts about the pitfalls of ignoring the Lean Startup doctrine, all I could think was: I sure as hell don’t want to be the poster-child for Wall Street guys who poured a bunch of time and money into building a product that no one wanted. Our goal was (and still is) to create a professional network of people open to sharing career experiences over coffee. A community that values what members know, not who they know. So we started to complete our interpretation of “Customer Development” to make sure there was actually a need for the product we wanted to build.

We interviewed 300 friends, past coworkers and strangers (hence the Washington Square Park shoulder-tapping). We chose Washington Square for its proximity to NYU, since students (especially graduate students) are likely to have an immediate need for a platform that helps them explore different career paths. Unfortunately, we were doomed to drown in false positives from the start, asking questions like, “Would you use a platform where you could meet interesting professionals over coffee?”

How many people are actually going to say, “No, I don’t want to meet interesting professionals.” That could make them seem uninspired at best, close-minded at worst. Furthermore, someone saying they’d be “interested” is a lot different from reaching out to strangers and proposing an in-person meeting.

Washington Square Park isn’t the only place to avoid if you aren’t interested in being subjected to Treatings-related questions. We typically work in coffee shops in the mornings. It’s debatable whether we do that to surround ourselves with potential users who enjoy working and meeting in coffee shops, or because we have a caffeine dependence and no office.

For better or worse, we followed no interview script. One of the memorable coffee shop conversations Paul, my co-founder, had didn’t start off as a customer interview. He approached a nearby patron who was drawing in her sketchbook. Intrigued, he asked about what she was working on. When the conversation “organically” turned to Treatings, he asked “Why do you work in coffee shops?” She said she enjoyed it because people frequently approached her about her work, just as Paul had done.

You can imagine Paul’s delight. This is what startup gurus tell you to do...capitalize on existing behavior! She enjoys sharing her work in coffee shops, but right now it depends on someone peering over her shoulder and having the nerve to approach her. If only there was a site to display your work and broadcast your openness to share it.

We pocketed the positive feedback from all of our conversations and, hewing to the lean startup playbook, built a (warning: buzzword approaching) Minimum Viable Product. That's just a fancy way of saying a piece-of-shit demo to see if people will want to use it. Since we’d asked the interviewees what types of people they’d want to meet, we located individuals with relevant experience. We asked whether they would be willing to offer an informational meeting, which individuals could request by explaining their interest. For those who agreed, we promoted these meetings on a simple webpage. At the end of the specified time period they chose one person to meet.

Needless to say, we quickly realized the challenge of building a two-sided marketplace. While people were requesting the offered meetings, few desired to offer any.

“Did you see the link you can click to offer meetings? Is that something you’d be interested in?” we asked one of our users, an investment bank analyst.

“Ya right, people don’t give a shit what I have to say,” he replied. He was at the bottom of his company's totem pole. People at work weren’t interested in his insights or advice. There was also the tacit understanding that he didn’t want to risk offering a meeting that no one would request.

So, we had demand for meetings but scarce supply. Back to the drawing board.

I wasn’t ready to go back to the park and wade through pigeons to conduct a few misguided customer interviews. Asking a couple of leading questions wasn’t going to get us anywhere. Instead we realized that we had to rethink our framework. Having recently seen Einstein’s quote, “The secret to creativity is knowing how to hide your sources,” we studied other online-to-offline platforms. Online dating seemed like the logical place to start.

As I briefly (in 1,000+ words) mentioned last week, I have a girlfriend. So, it made sense for Paul to handle the online dating due diligence. He signed up for an OKCupid account (because it’s free...we’re not Rockefellers over here, can’t be paying $9.99/month) and began his “academic” study. While I’m sorry to say this experiment did not significantly enhance Paul’s love-life (that could easily be blamed on our living situation), it did prove instrumental in changing how we thought about facilitating informational meetings.

Paul found that he was surprisingly comfortable messaging “strangers” because he knew everyone on OKCupid had opted into the site. Of course this didn’t mean everyone was guaranteeing they’d accept his date request (a fact he has the evidence to support). But, just knowing that everyone was open to receiving introductions eased his fear of reaching out.

We realized that Treatings didn’t need to be a traditional two-sided marketplace, where users opt into one of two distinct groups - those seeking out informational meetings and those offering them. We could replicate the model of dating sites. Instead of relying on users feeling that they have valuable insights and proactively offering meetings, we wanted to make it possible for users to reach out to anyone they wanted to. Similar to online dating, it would be up to the “information seeker” to explain why the meeting could be mutually beneficial, or pique the other person’s interest in some way.

This change in our framework has opened up lots of potential connections. The question now becomes how to facilitate them. We’ve realized that Treatings profiles, as they currently stand, are essentially static resumes. The problem with resumes is that they are backward-looking, not indicative of future interests. I sold knives in high school, but that doesn’t mean I want to grab coffee with someone at Williams-Sonoma. On the other hand, Paul studied electronic music in graduate school (think computer code and sound installations, not Swedish House Mafia). Although this sits at the bottom of his resume (and Treatings profile) in the education section, it’s a passion that he’d love to talk about over coffee.

The idea, then, was to give people more control over their profiles to surface the things they’re passionate about, even if it’s outside of their profession. To test before building, Paul turned to Craigslist.

"Electronic music composer looking to speak with musicians over coffee," read the title of his ad in the New York City community section of Craigslist. He included a bit of his background and what he focused on for his graduate thesis, just to see what kind of responses he'd get.

In one day, he received replies from a dozen musicians, and the responses kept coming in. He spoke on the phone with a few people who didn’t live in New York and met several people who lived nearby. One of the interactions memorably culminated in an invitation, and immediate acceptance, to come to a late-night party at a midtown rap studio. (Paul’s rap career was short-lived, but if you asked he might tell you the rapper pseudonym he was bequeathed.)

The high number and content of the responses gave us comfort to make Treatings profiles more customizable and build a new feature that let users broadcast who they’re looking to speak with at any given moment. We are currently working to build out these new features.

I was recently heading to a treating at the Starbucks in Union Square when I realized there are three locations within a few blocks of one another. To my dismay, recent tweaks in our site had rendered the mobile site inoperable, meaning I had no way to figure out which Starbucks I was supposed to go to.

No sooner had we made it easier to propose and schedule meetings, we made it difficult to find them.

And so the startup whack-a-mole game continues.

So here we are at yet another juncture. Do we funnel our limited resources to make Treatings compatible across browsers, or pray this mobile thing is just a fad?

[Image Credit: WikiMedia]