Robert Ollett
October 24, 2016
7 min read

The four crucial lessons we learnt from working with our beta customers

This was originally published as part of the Business Zone “Deep Dive” series at http://buff.ly/2eJgpF1

One of the toughest challenges faced by early-stage startups is getting that initial traction, which is all important for so many reasons. But here are two of the main ones: Firstly, if you want to create a great product or service it’s vital to get as much feedback as possible from your target market early on; and secondly, if you want for investment for your startup, you’ll need to show that people are using your product, or at the minimum want to use your product.

I’m certainly no supremo on the subject of early-stage traction, but as co-founder of co-working space software startup Habu, I’ve definitely learned a few key lessons along the way.

Lesson #1: Get your product out there as soon as possible (aka when it doesn’t completely suck)

Some startups get mega traction before even making a screenshot or writing a line of code. I’m thinking Dropbox here, with 50,000 signups based on just a landing page. But, that wasn’t us, and it probably won’t be you.

We learned it’s best to get your product out as soon as you can. That’s harder to do than it sounds. If you’re a founder with perfectionist tendencies, try to curb it (at least in the early stages!).

The key thing is to focus on getting that core benefit or feature right so you can open it up for people to use asap. Working that bit out is where your early interviews, research, and instincts come in. If you’re building a complex product, as we were, focus on what you can do that offers the maximum benefit to your potential customers with the minimum development from yourself.

Trying to making the perfect product or making it do everything from the outset will hold you back. After all, that direct user feedback is a critical element unless you’re Henry Ford or Steve Jobs…

Lesson #2: How we found users

So, you’ve created a product which just about doesn’t suck. Now it’s all about finding ways of getting people to use it.

Gabriel Weinberg’s Traction is a pretty useful starting point. One of the key points is to think creatively and think about what might work for your particular market. Sometimes that means doing things that take you well outside of your comfort zone, but that’s just part of the journey.

We decided to create a beta group framework to build traction and generate feedback. This meant providing free access to Habu. Making Habu free at this point made sense as it meant that there was a lower barrier to entry for an unfinished product, i.e., we could get more people on to the beta and they’d be more forgiving of any flaws because they weren’t paying. More on this later…

As we’d already done plenty of in-depth interviews with people in our market we started with them first. We also got on the phone to a list of local targets — definitely getting us out of our comfort zone! Emails went out to targets. Attending events and having meetings also led to word-of-mouth beta signups.

We managed to get a reasonable amount of success with this approach, but it was slow and regional. And a little bit by hook or by crook. Further down the line, once we developed more effective social media skills — which for us was primarily indirect marketing — we moved both faster and more internationally, building up beta users in the US, Europe, South Africa, Nigeria and beyond.

You’re unlikely to hit upon a scalable strategy early on with that almost non-existent marketing budget, but that’s not the point. Testing different channels will give you insights into what might be fruitful in the future.

This is how it worked for us, but it ultimately depends on your product or service, and if you’re thinking locally, regionally or internationally from the outset.

Lesson #3: Find the best way to get feedback

We had a rather hands-on approach to building up our beta group. It involved setting up a meeting, interviewing the potential beta user, demoing our software and then providing them with a free account. Though time-consuming it was a great way of doing in-depth market research.

The key point for us was that we wanted high-quality feedback on the product. That meant getting people to actually use their free account rather than just signing up to the beta. We needed to know what worked and what didn’t as well as what things were need-to-haves and what was more of a nice-to-have. And, we just weren’t getting enough of that.

That was partly because we were trying to achieve too much with our limited resources (building a complex product with one developer) to get another precious resource (investment). Good ol’ hindsight point back to lesson #1. And partly because we were hoping our beta users would find the time in their busy days to email us all of their thoughts and feelings about Habu and tell us exactly what they needed. That wasn’t happening, so we looked for ways to make providing feedback easier and quicker, and explored various tools to help with that.

We set up a Slack group for our beta users, which was pretty useful. The transparency it offers encouraged engagement with our beta users. They could see what others were thinking and saying. We also found that because Slack feels less formal than emailing there was a greater sense of ease and immediacy. The downside of transparency is that people quite rightly expect you to deliver. But that’s something for lesson #4…

Lesson #4: Dealing with requests and expectations

This can be very challenging. You’re all out committed to getting as many users as you can manage with your limited resources to step up to the next level. And you’ve now got people giving you feedback telling you what exactly what they need. Things now become about feature prioritization and expectation management.

You’ve got your vision of where you want your product to be, where your users want it to be and then what you can actually do.

When someone tells you they need something or they’ll walk away from your product what do you do? Promise something that’s not going to happen for a long time? Bump it up the list? Or just be transparent? It’s by no means a trick question, and we’ve done all three.

Clearly promising something that isn’t going to happen for a long time is a rubbish approach for lots of obvious reasons. And, losing a customer isn’t the end of the world, but it might feel like it if they’re just one of two. Bumping something up the list of priorities can be pretty useful as it has a direct response feel good factor; someone asked for something and you delivered. Pats on the back all round right? But it’s only good if it’s in line with your goals. If it’s not, being transparent is the best option. You can’t be all things to all people.

What we learned from our experience

Firstly, lesson #1 — get your product out there as soon as possible — is fundamental. Move fast, move quick and be decisive. After all, you can change your mind later and pivot if you need to.

We spread ourselves too thinly by trying to do everything a complex co-working platform needs to do from the outset rather than concentrating on that one most important things and doing it fantastically. The downside was that we didn’t get as much traction and feedback as we wanted early on, and we moved slower than we wanted to as well. The upside was that we were never distracted from knowing, broadly speaking, what our product was going to be. We felt that Habu would have a great product-market fit based on our research, along with seeing a gap in the market, upcoming trends, and following our instincts.

Secondly, since we launched last month, we’ve learned that having paying customers as soon as possible is best if that’s your model. It is by no means a finished (if that concept even exists with software development!) and polished product, but it does enough of the essential things in great ways to makes Habu a valuable proposition to our customers.

On the paying customers front, I’m thinking more about the quality of feedback rather than cash in the bank here. And we’re getting lots of that feedback now. When people are paying for something they’re much more likely to use it because they value it — otherwise they wouldn’t be paying. They’ll also give lots of feedback because they’ve made a financial commitment and they’ve got a stake in seeing your product improve. We had a high level of success for people signing up to be on the beta, but with a few too many instances of zero feedback and no active use on free accounts.

With launching your product and becoming a revenue-generating company, there’s a wonderful change of consciousness that happens alongside new learnings. So do it as soon as you can!

© 2017, Habu Spaces Ltd.