Category Archives: Startups

Startups need to understand their core product value

The Lean Startup teaches us to roll out MVPs (Minimum Viable Products) as soon as possible and to iterate based on customer/user feedback until we find something that people want. That is a great methodology, however how often do startup founders really understand exactly why users are using their product.  Founders don’t spend time identifying what their users are gaining from their product and what their core product value is. The answers to these questions are far too often skimmed over and missed in exchange for optimization of users, revenue, k-factors or even new product/feature creations. Understanding exactly where you fit in the market, what value you are offering to users and how they are responding to it are important metrics to be measuring.

It is often very difficult to measure true product or market fit. How do you definitively identify why users are using your product as opposed to a competitor’s? How do you find out what users are gaining by using/purchasing your product? The key here is to truly understand your users by implementing surveys, customer cohort analysis and even speaking to users directly.

The first thing you need to determine is who you should be talking to. You want to find out who your most engaged customers are and why they are so engaged. To do this you can ask them this question:

How would you feel if you could no longer use “this product”?

  1. Very disappointed
  2. Somewhat disappointed
  3. Not disappointed
  4. N/A – I no longer use it

For this purpose you are interested in the people who select “Very disappointed”. This means for these users, your company and product is doing something right and they are gaining real value from what you are offering.

Once you have run this survey and identified who your most engaged users are, now it’s time to identify why they are engaged and what is engaging them. Segment your users to only the users who selected “Very disappointed” and get them to answer this question:

What is the primary benefit you received from “this product”?

You can start with an open ended question where users enter in their answer. As soon as you see some trends turn them into multiple choice answers and change the format of the question so your data will be a lot more meaningful. This will provide you with your “must have experience” and “aha moment”.

Once you have identified what people love about your product you can then go into why that benefit is so important to them. Ask your users this question:

Why did you select that benefit as your favourite? 

Leave this question open ended and the answers you’ll get back will provide you with huge insight into what you should be optimizing. It will tell you what type of users you should be optimizing for and what product changes you should be making to ensure you improve and maintain the “aha moment”. 

Social Commerce

I was talking to one of my friends the other day who is quite heavily involved in the startup scene. He was talking about social commerce and how he believes it just doesn’t work. He labeled people who influence other people’s buying decisions as taste makers rather than social connections. An example he gave me was if he was looking to purchase some good quality headphones he would not look at his social graph for suggestions or recommendations but would rather seek the opinion and thoughts of one particular person because he trusted their opinion about headphones. He saw this as seeking advice and following a taste maker rather than social commerce.

I on the other hand disagree that social commerce doesn’t work. I do agree that you put weight on different people’s recommendations and that different people can influence you in different ways. Social commerce has been a space that a lot of people have ventured into. It seems to be an area that should be “the next big thing” but just hasn’t taken off yet. In my opinion the reason for this is because no one has really sat down and thought about what social commerce really is. There are a lot of companies that facilitate having your very own store inside of Facebook on your own Facebook fan page. This would include beetailer, payvment and many others. This isn’t social commerce at all. It is just online commerce. These services allow you to create an online store on one of your Facebook fan page tabs. There isn’t anything social about it at all. Pinterest is a new player that has grown tremendously. Again it isn’t really that social. You simply scroll through pages and pages of stuff people pin and repin if you like it and possible buy it. This is more of a social wishlist which is close, but it’s not social shopping.

I think the closest thing to social commerce is Facebook connect. This sounds strange but let me explain it to you with an example. When I first came across Udemy I thought it seemed interesting and clicked sign up to check it out. I was not taken to a registration page with fields such as username, email, password etc but instead taken to a page with a big “Connect with your Facebook account” button. What was powerful though was since I was logged into Facebook I could see under the button the profile photos of about a dozen of my friends that are already registered with Udemy. This gave me strong social proof and prompted me to hit that connect with Facebook button which I did. I think successful social commerce will take this same principal. When online shopping and looking to purchase something you should be able to see your friends that have purchased that same item before. It’s very powerful when comparing two different expresso machines and seeing 3 profile photos of your friends next to one of them telling you that they have bought that one.

Here is an example of this on Quora.

In the offline world when you are looking to buy something, for example a new BBQ or a new TV one of the first things you do is ask your friends what they bought. I think social commerce will work in the same way allowing people to see what their friends bought.

Mobile Payments in Australia – CBA Kaching

Today CBA released their much anticipated mobile payments iPhone app Kaching. CBA have a strong technology team and the leading bank in Australia in terms of mobile payments. Their new app allows similar functionality to Google Wallet in that it uses NFC (Near Field Communication) technology to pay with the phone using paypass (linked to a CBA card). The only problem is that the iPhone 4s or any of it’s predecessors don’t have a NFC chip so in order to use the Kaching app in this way you’ll need to purchase a special iCarte case which is NFC enabled.

The app also allows mobile peer to peer payment. You can pay bills via bPay, pay friends via facebook and pay friends via email or mobile number. To my understanding how this works is if the recipient is a Kaching user it will simply add the funds to the user’s Kaching nominated bank account. If the recipient is not a Kaching user the funds will be transferred to a holding account and the recipient will need a unique code to access the funds. This code is given to the recipient by the person sending the money.  Once the recipient has the code they can transfer the funds to any bank account in Australia. So in essence Kaching, really does two things:

  1. NFC payments
  2. Pay people via facebook, email or phone (instead of memorising people’s account number and BSB number)

I think CBA are doing great things in terms of technology with their social campaigns and mobile initiatives. Kaching is a cool app and will definitely be new technology for a lot of Australian users however I don’t think Kaching is disruptive or innovative enough to make mobile payments mainstream in Australia. I say this for a few reasons:

  1. Kaching doesn’t allow you to link other non CBA credit cards to the app to allow NFC payment (for obvious reasons).
  2. Kaching should be or at least should also be an Android app. A lot of mobile phones that support the Android software have NFC chips built in and would allow CBA users a much more frictionless experience with NFC payments. iPhone users at this stage need to purchase the iCarte. I think CBA created Kaching hoping that the latest iPhone 4s/5 would have a NFC chip.
  3. It is a hassle for payment recipients without Kaching to access their funds. This is a similar issue with PYGG – there is no incentive for people to request others to pay them via PYGG or Kaching. Non Kaching users who get paid via Kaching peer to  peer are unable to use those funds to pay for anything unless they withdraw it. PYGG users who are sent money are currently not able pay for things in a retail environment. They can just transfer money among themselves. PayPal users on the other hand have much more of an incentive to ask others to pay them via PayPal. PayPal payment recipients also pay for goods and services using PayPal so the money can be conveniently used.

Here are some possible solutions in my opinion (may not have CBA’s best interests but would facilitate the growth and success of mobile payments):

  1. Allow users to link any credit or debit card to allow NFC payment
  2. Have the app across both android and ios devices (which I believe they are working on)
  3. Allow peer to peer payments to be sent to a prepaid card which can be used via NFC

I do think this is a good step for CBA as they are securing themselves as market leaders in mobile payments in Australia. Overall great innovation and a great app from CBA.