Lean Startup member uses Facebook Group to validate product idea

Lean Startup member uses Facebook Group to validate product idea

 

Editor’s note: I am on the Lean Startup list-serve. People starting businesses, developing products, or simply looking for advice send an email to the group. Below is my response to a member’s question from last week. The member is validating a product idea using a Facebook Group. He is looking for advice on transitioning his 600 active users away from the Facebook Group and over to a website or web application.

Jonathan,

I pasted your comments below in bold text and numbered 1-5. My replies are in plain text.

You know more than I do about your process, how your users feel, and how they react to different things. If you find value in anything feel free to shoot me a message to discuss further and if you think anything is useless than just scrap it. No worries either way.

1. “Pretty soon, we are going to start customer interviews. We are selecting some customers for a group.”

The people I would question are those going through the actual trade process in real time. That’s the only time I’m going to get true answers. If I select a group of people by hand they (1) may or may not ever use my service again, and (2) may provide me with defective feedback.

You’ll have to be more patient and attentive, but the data accuracy makes it worth it. More importantly, when you work hands-on with each customer you’re able to develop trusted relationships which are cemented together by your product.

2. “First, refine our understanding about customer problems. I mean, we know there is some pain on products trading, but we want to understand it way better.”

I think it’s really good that you identify this as an important step.

At the same time, until you stick yourself in the middle of the transaction process and work one on one with customers to confront each pain point you’re only going to have your own assumptions about everything.

That said, as soon as you start tracking pain points I would pay attention to:

  • Pain points within each stage of the buying/trading cycle
  • Use a spreadsheet to categorize and catalogue the data. The way you set up the spreadsheet on day one will likely be very different from the spreadsheet you’ll use just a few days later. Once you see how the data comes in you’ll learn how to best setup your charts.
  • Create a mind map to visualize the process. Break down the process into smaller stages. Maybe stage one is how someone joins the group. If someone wants to join, what does that process look like?
  • Once you start mapping the pain points by stage and specific cause you’ll be able to make connections you wouldn’t have seen unless you had the process mind mapped on a piece of paper.
  • For example, a customer is 95% complete with the trade/purchase and they end up abandoning the trade before completion. Usually, we may blame that on bad luck or something happened at the end that scared them. Sure, both could be true. However, something might have happened in stage 1 that pushed the customer down the wrong path from square 1. The path they went down might be defective by nature. The user never had a chance of completing the trade and nobody knew.
  • IMPORTANT – these are the pain points that will cause a user to not want to use your product. They spent the time to go through 95% of the process, they’ve already imagined what life will be like with their new product, they trust you, they’re happy…then BOOM – everything gets pulled out from underneath them and they have to start the process over. Some may never start it again. Some may tell others about their negative experience.

Level of pain it causes

Once you’ve gotten a few specific responses to issues with different pain points you should be able to develop a scale of how painful something is for a customer. The first few customers will give you the necessary data to develop a scale.

Future customers will be gauged based on the levels of pain they assign to something
ALSO, future customers will provide new data that may warrant updating the scale.

3. “Then, make another round of interviews, showing up solutions for the group. I mean, mock ups and so on…”

I think once you get deeply involved with the customers on each transaction you’ll be able to have natural conversations with each person about things they might be struggling with. They will tell you what the problems are that matter because they’re dealing with it in the moment. Real-time.

Develop solutions to those problems by first asking the customer their advice on how to fix it, then reference your spreadsheet and mind map, and finally use your own creative capacity to iterate a synergistic solution to build into your mockup

Present the solution/mockup after the next set of customers deal with the pain point that particular mockup is meant to solve. When the customers are in the exact situation that calls for the solution in the future.

I would make sure to go back to each person I spoke with on an individual level to give them an update on what I’m doing to resolve their problem.

At the same time, you should be ready to inject yourself into the daily transactions of the group that are happening with customers you haven’t spoken individually with. So rather than thinking of it as a stop and go type of thing I would think it is a constant fluidity of feedback and iterations. You might be solving problem XYZ in today’s updated iteration, but person A hasn’t seen this update yet. Person A may tell you they noticed an annoying problem XYZ – little do they know you’ve already fixed the problem.

This is good for two reasons: (1) you can follow up with person A the next day to let them know you worked hard all night to make sure you fixed problem XYZ for her (meanwhile it was already fixed from the previous week), and (2) it further confirms that particular problem as something that needed attention.

I mention in (1) in the above paragraph that you can tell customers how hard you worked that night to get something ready for them. These are the types of things that convince your customers to stay with your company for life.

We want lifetime customers not one-time sales.

I’d keep this process extremely easy and ask for very low commitment from members in order to participate. You may get the most participation if you figure out a way to inject the question into the live trade process somewhere. As in, if you know of a specific pain point that you want to improve for the customer by offering the website maybe you can wait for that issue to arise again in real time – then as it’s happening you quickly ask the users involved in the trade a few questions.

I would prepare ahead of time to make sure whatever questions or presentation you give will disarm those naysayers. I would stay away from making large announcements with mockups and big changes because you could lose control of the crowd quickly. Spend time with the active users on an intimate level and learn from them individually so you can privately send them solutions. This should let you earn each customer with strong buy in.

It will also be easier to start asking for money if you approach it this way. Since you spent the last few weeks to months solving problems for your customers on a personal level you will have slowly got them to buy into the new site. They will already trust you because you’ve built the product around their individual needs.

Backing up a bit, once you find out the major pain points and slowly earn trust from each customer to the point where they understand the reason for the new website and they are excited for it to be launched you might want to think about asking each person how much value would that bring to you? How much would you pay for something like that?

In my opinion, if you have people worried about saving money by trading water sports gear it’s highly unlikely they will spend money on the service.

Exclusively trading vs. buying and trading

If people are able to buy things from each other through the group then that’s how I would generate revenue to make a profit for myself. Your site would act as an exclusive, local/regional, “Amazon.com for sea sports. Users would have their own profile page, user dashboard, and they can list as many items as they have to sell on their page. Perhaps they can have a “trade” value and “buy now” price. Let’s say I want your snorkel and you have the trade value is $25 and the buy now price is $15. If I don’t have any other product to trade you but I still want to buy the snorkel I can click buy now and pay you directly on the website.

As the site owner you would take a small commission percent from each sale. Maybe something like 2.5% to 5%. If you could offer this to your members it would be a huge value added for them. You’re facilitating the exchange of money, managing the social commerce, and the entire process is automated. You get paid and the customer gets paid automatically. You’d have to iron out the details for the seller to ship the product within a certain period of time, etc.

Why would they use your service over something like an Amazon.com? (1) Because you’re a local business trying to keep the communities connected by helping each other. (2) You’ve already grown the membership to 1,000 people. You’ve curated the masses.

4. “Later, build our MVP.”

I mention this above – start getting your hands dirty with one customer/user at a time. Get involved with all the trades/sales so you can see first hand when a problem arises or when there are too many steps involved in a particular aspect of the process. Once those issues arise first hand you’re in the perfect place to have a quick conversation with the user about how they see that process being improved.

5. “Based on current trades, I have a hypothesis about how we could offer something better on our platform. For instance…”

  • Users does not know if a item is still for sale…Users can not search items…As long as we validate it, we go ahead!

Validation should be one of the first things you do…which you’ve done by attracting 1,000 users to a common area with the sole purpose of using your service. Now you need to learn from each participating customer what they need built into the next version of your service.

Ash Maurya says, “Life is too short to build something nobody wants.”

That means, don’t spend any time or money until the idea is validated and you know exactly what features need to be built based on the customer feedback.

You already validated the idea

One of the greatest tips I received from a mentor years back was:

“Start with a service first. If you can figure out a way to get people to use your service the next step is turning it into a product.”

I find that people are never as excited about my projects as I am. If I start posting images of a new mockup that changes the status quo my users are naturally going to be against it.

Also, changing something that already works might create a jarring feeling to your users (even if the FB ground is not working to the best ability). Some people may say things like “Why do we need a website? We already have the group. The group works fine. etc.etc.etc”


Some ideas:

  1. you could charge each user a one time fee per year – you’d need a strong list of value added
  2. take a commission of each sale automatically
  3. charge each person to join the facebook group
  4. add a social commerce aspect by offering users an incentive to invite friends. Give users $$$ for each member they bring in
  5. maybe allow all users to post up to 1 item at a time for free. Posting more than one item at a time means they have to bump up to the monthly subscription $5/mth

Perhaps in the future you can have posts set to be held for moderation before the entire group sees it. This would keep you in complete control of each step. You could follow up with the seller, discuss pricing pain points, what’s lacking in the facebook group, ask them if they had a hard time posting the item to the Facebook group, is there anything you can improve? If you have some ideas for improvements feel free to mention a few of them. Your customers don’t know they need your product until you teach them why they need it.

As I type this right now I can think of some value added by using the website instead of Facebook:

  • Website allows members to save all their products for future listings. They can activate and deactivate items just incase they end up lending a product to a friend or if they want to bring their snorkel on vacation they can take it “off the shelf” until they return.
  • New members can sign up by themselves on the website – don’t need to ask to join a facebook group
  • You can set up the website to have Facebook Connect so users can login with their Facebook info (reduce barrier to entry)
  • Members can refer friends to their profile page for special promotions, coupon codes, discounts, etc.
  • Members can become affiliates/partners. They get a certain amount of money per new member that signs up through them. Or maybe offer them “flex cash” that can only be spent on other products on the website. Similar to an Amazon gift card
  • Member profile pages ensure no confusion of which products belong to which person
  • Member profiles allow people to see if a product is no longer for sale
  • Members can enter their PayPal, Stripe, or direct deposit banking information and automatically receive payment for any product they have listed

Talk with you soon.