Alpha sales and staged alpha customer usage

At last back from a long summer leave! Time for some new posts. Some of the upcoming topics are:

* Partnership agreement
* Code valuation and how to start a corporation without having to put in money.
* Strange ways of finding programmers

This post will be about alpha sales and staged alpha customer usage. Basically it´s a technique I have deployed for the last two weeks, since I got back from vacations, to get valid customer feedback for our alpha version of our online app SkrivaPå (skrivapa.se), before getting into real sales with the beta version. I want to write about it because I think the technique has worked out very well. If you don´t have an online app but you are into sales, the post might be interesting to you anyway, as it´s really a post about network sales.

Alpha Sales - step by step
1. You are past the stage where you´ve walked n talked to everybody you know about this app you are creating. You have done it so much that you are sick of yourself talking about it. You know exactly how you will start the pitch, you know exactly what questions you are going to get and then what your answers will be. Whenever the topic comes up you turn on the autopilot and start reflecting on how to change topic as fast as you can before you get bored to death. This is important because as you know the topic this well, you will be able to maximize the value of the feedback. You will be geared to really ask the right questions, better understand the doubts, distinguish the more important from the less important feedback and really find what iterations are needed in what prioritized order.

2. Also, you have managed to develop your app to minimum viability. This means, just enough features and just enough design, for the app to be useable. This doesnt mean its really desirable to use yet, but someone that is in great need and that likes you very much, could possibly imagine swallowing their pride and use it at least once.

3. Make a list of friends, people in your closer network and possibly some warmhearted business contacts that would be glad to help you out.

4. Think about an appropriate way to pitch. Do they need to use the app themselves or yould you demonstrate it to them? What techniques should you use? I could strongly recommend demonstration by Skype. I have used it for almost all my pitches and I love it! It´s almost as a real live meeting. But it´s way more efficient. No travelling time and low incentives to do too much social chattering (the latter is nice and even recommended in the pitch as its your friends and close contacts you are calling, but there is less risk of getting stuck for too long). Also it´s perfect for demonstrations, you can share the screen and guide the person with a firm hand through your application. Personally I think it´s better for you to guide them because you know exactly where you are going and you don´t want to waste to much time and create frustration with explaining and figuring out what buttons to press and what´s important to read.

5. Start with calling the nicest, closest and possibly neediest on your list. They will probably be the ones most inclined to really take interest in what you are doing, both from an egoistic and from a helping friends point of view. Which means they probably will dedicate more brainpower and time for creative feedback. As you go you can take people further and further away on the list. Btw, don´t call the ones who potentially could be the most heavy users, making you a lot of cash further on. They are too valuable for that. You want the small fish to see the crums. It wont hurt if some minor fish swim away. Their big value is the feedback they will give you, not the money. What you don´t want is the big fish to remember you as a crum. You want to present to them when there is enough for them to imagine a big tasty loaf of olive bread.

6. Start with some initiating chit chat, let it take a few minutes, remember that you are actually calling people that YOU LIKE and CARE ABOUT. Indulge for a few moments, it will give you both some good energy and make it a better day. A sad salesman is a bad salesman. Now, start the pitch with describing exactly what you are up to:
a. I´ve just starded this new company...
b. Describe what you do.
c. Say you are in alpha mode.
d. Say you are starting with some soft sales just to get good feedback and you thought of them because you know them and you thought they could be a perfect early tester.
e. If necessary recomfirm if you were right and they actually could have an interest in your app.
f. Ask if they would have time for you to demo the app.
g. If no: ask when. If yes: ask if they have Skype.
h. If no Skype: help them install it. Most people will actually be willing to do it. As it is an app you are proposing they are most likley to also have some level of computer knowledge. Some will ask you to get back when they´ve installed it. Don´t rush. Get back when they´ve installed it. If yes Skype: start the pitch.

7. Share your screen and guide them through the app. Be careful to make every step properly and write down all the feedback you find interesting. Don´t be afraid to stop and ask for specifications on the feedback, so that it becomes really concrete. What you really want are all the details. That you have misspelled this, that this button doesnt work, that that step in this process is not logic, that there should be more info somewhere and so on. Write everything down, even the smallest thing, only if relevant and interesting of cause.

8. When all the details are done - usually all of this can take as much as one hour, let it take time, you are really digging gold with all the information and positive energy you get from your helping hand and you really dont want to ever stop as long as you are getting valid feedback - ask what the person would really require to start using the app. If you are actually solving a real problem for the person they will most likley give you the one to three things lacking they consider most important. Don´t miss this point as this is the closing of the sale and also the definition of what feedback they themselves considered most important! This is the real payoff. You make them really imagine using your app and then you get the answer what would make usage into a reality. Now, if you truely believe you will implement the necessary features, give them an estimate on when you think you will be done and say you´ll get back to them as soon as it´s implemented.

9. One very common problem is that they need to show and discuss the app with someone else before taking a decision to use it. Even if the implementation of the features are quite far off, invite them to a testaccount. This will make it possible for them to continue the process you started. They can continue thinking about your app, keep being updated on your progress and do some internal discussions with the people they know and work with. They might even demo it to some external person they consider in need and thus extend the sale you just made.

10. Send them the test account immediately. Say that they will get the app for free for x amount of time as a "thank you" for all the valuable feedback. This gesture is actually not costing you anything as you know they wont be heavy users and you are probably getting a loyal customer. Those will probably be very important for you in the future as they probably will continue to give you great feedback and possibly even evangelize for the app and thus extending the sale over a long period of time

11. Put all the obvious feedback in your global backlog. Put all the larger stuff to think about and the feedback thats interesting but that might not be implemented in the near future, in you customer feedback backlog. Also note in your CRM when and why to get back to the person. I use 37Signals Highrise (great app!) free version and put the reminder on status "later".

12. Show the new stuff in the backlog to you partners and talk through with your partners what stuff from the customer feedback should be put in the global backlog.

13. Implement the feedback put in the global backlog.

14. Get back to the customer when the necessary stuff is done. Probably they wont be fully satisfied. Do as many rounds as necessary to close the sale, but of cause only if the feedback and demands keep being valid.

15. Done.


So to sum up
With the method you:

a. Get great feedback.
b. Get great energy.
c. Test and correct your pitch on safe ground.
d. Close sales at a very high sucessrate.
e. Get more confident.
f. Get core customers that have a high probability of continuing giving great feedback and might continue to evangelize.
g. Also you will have some people that will have seen the app from its very first days and will have a historical perspective and will be able to tell you if you have been going in the wrong direction.

Phew, that was a long post. One can notice I have been missing the blogging during the summer =)

And dont miss this!
Anyway, I want to finish by recommending the best source of fantastic information on IT Entrepreneurship I have found so far. Check out This Week in Startups. It´s a weekly online independent TV show, broadcast from the Silicon Valley with the brilliant serial entrepreneur Jason Calacanis. The show is quite long most often, like 1,5-2h, but it´s really worth the time. Put on play, and do your cleaning or play some poker while watching. This is the latest show found on their webpage:

Sexy concept bring sexy people to make sexy business: should business aesthetics and interest by human capital be more emphasized in strategy planning

Business as a theatrical play
In theatre there is a plain fact: no play will ever be better than the sum quality of its actors. What is really Hamlet without the professional actors and directors? What could it ever be if it only could attract the mediocre creators? Maybe what really makes a play a masterpiece is its ability to attract the interest, intensions and passion of the best. The piece becomes a masterpiece as generations after generations of the best get inspired and want to create within that specific framework. What if the same could apply for business? A business becomes a unique success story as generations after generations of the best get inspired and join in with the creation within that specific framework. Somehow the founders succeeded in creating a great story that engaged the best over a sustained period of time.

More aesthetics for the connoisseurs?
Many large businesses indeed recognize this as a fact. They work hard and spend large sums of money on keeping and building their brand as an attractive employer. But when mentioned it’s often mentioned in passing not nearly as deeply analyzed as the business core strategy, competitive advantage and such. But what if the ability to attract top notch human capital is not really a peripheral concept? What if this is the core of why the successful companies became so successful in the first place? Then maybe the ability of a concept to attract the right people deserves more attention in the planning and analysis of business? Maybe instead of a superficial stating the obvious "we/they have the best", explain in detail "WHY we/they have the best". What are the underlying forces here? What is it in the businesses core nature that makes the best believe and want to engage? Or maybe why don’t they believe, why do they flee? Maybe we should talk more about beauty and aesthetics? HOW TO PAINT THE PICTURE? Not on the surface of cause: how do we lay the right foundations so that the aesthetics are deeply appealing to the right group of connoisseurs?

Happy to say it seems like the baby got potenital
For my present baby business project SkrivaPå, an online contracting process management app, there is an open window of opportunity for only a short time to come. So time to market we believe to be an essential part of a potential success. To be able to have a short time to market we will need something extra, primarily in terms of human capital. So the questions mentioned earlier are part of our center of attention right now. I wont elaborate on this in length here but I´m very excited to say that it seems like we have some really good key selling points to attract some real talent and just a few days ago we got two new people engaged that started the very same evening (and possibly one more to come soon). Stefan Kanev, a great programmer from Bulgaria that is going to help us to speed up building the core app and Adam Altmejd that is going to help with design for starters and later hopefully engage more in marketing and sales. This will be really interesting out of a management point of view as we rarely will meet and mainly will work over Skype, Dropbox and Google Docs.

Also see this!
I have recommended it before but as it´s a good complement to this blogpost I want to do it again. Check out this excellent talk by Eric Ries in Stanford Ecorner. Part of it is on the topic of an adjacent concept to what´s in this blogpost, in stead of the "sexy concept bring sexy people to make sexy business" in this blogpost he talks of a concept with one step less, that is "sexy people make sexy business". Hope you´ll enjoy:

Skype conferences, real time iterations and entrepreneurship as a social process

Just finished a programming/design/translating session with Gracjan (my business companion) over Skype. Since Gracjan went back to Poland a few weeks ago we have been skyping our updates on the latest progress with our project skrivaPå. The skyping has been every second day at 9:00, just before I start working and 4h after Gracjan has started working (thats right he gets up at 5 am to start programming, he´s hardcore).

It´s been a good procedure. But something has been missing and I´ve felt quite alone in my work with skrivaPå, even though I know Gracjan is hacking some great stuff over in Krakow in Poland (i live in Stockholm in Sweden). I could first identify the feeling a few days ago when I got a really interesting link from my friend Martin Eriksson (by the way, I´m really proud that they closed a really big deal recently, INSPIRING! Check out Artilect). The link is a blogpost from the CEO of a lucrative IT biz with the programming team spread across the world. Even though everything was going really well they had some problems with inspiration. So the CEO summoned the forces in a 5 star hotel in Bangkok to spend a week or two programming together. Apparently the "vacation" was a real boost to the productivity of the business. Aside from partying, sightseeing and good food they got some really high quality programming time and all went home super inspired. So they decided to work in 6 month periods. 5 months from home and 1 month together at a 5 star hotel in a low price level country. Except from being a good story the blogpost tells something really interesting about the importance of human interaction. The importance to be a part of a community. A good business isn´t enough of a motivator. You need to do it together with others, that´s the real thrill, the sharing. Maybe it´s not true for everybody. But certainly for me. We are social animals.

This morning it so happened that Gracjan was still online at 10 so I Skyped him for a quick question and we ended up doing some collaborative iterations and paralell working. It was really nice to do it together so we decided to do some more hacking when we got back home at 22. And now I´m just done with the second and I´m really happy about it and all inspired. If you´re separated by space I recommend using Skype or some other co-lab tool to make some real time connection. Its great.

BTW

I´m realizing I haven´t blogged almost anything about skrivaPå. Quite strange as so much is happening and we are about to launch the beta in just 4 days. Next blogpost will be about skrivaPå. Stay tuned. And until then check out this great talk from Lisa Lambert at eCorner about Intel Invest and life as an A-type person with high ambitions.

Entrepreneurship: I don´t really believe that it´s about risk taking or calculating. It´s rather about the ability to believe in creativity.

Yesterday I was talking to my friend Therese Gedda over the phone. She had just come back from a TIE event in the Silicon Valley and was fueled with interesting experiences of the world wide indian entrepreneurship network. As we discussed her experiences we started talking about entrepreneurship in more general terms and at one point, in passing, the old entrepreneurship truism "entrepreneurs are not risk takers rather they take calculated risks" was stated. It was just a passage meant to build an other argument, but we got stuck there as I surprised myself with the following analysis:

"I don´t really believe that it´s actually about risk taking or risk calculating. I rather believe it´s about the ability to believe in and understand creativity. The ability to believe in the gut feeling that ones "brain-laboratory idea" could actually be better than reality. The problem is that most people believe that most good solutions have already been done and tested. They don´t trust that gut feeling that this might be a real challenger to common practice. Most people sincerely believe that the solutions adopted by the society today must be really good as they are so commonly used. The belief that proof of concept is the same as proof of a good and possibly the best concept. Well, out of that perspecitve it´s logical not to believe in creating something new and disruptive. Why challenge the best? You´re facing an obvious defeat, so why bother? It seems crazy and because people don´t want to offend anyone they name it "risky". If they are really nice they will call it "taking calculated risks". The entrepreneur instead keeps an open mind and has an unsentimental relationship to common practice. It can always be questioned and the question is always valid. And when stumbling upon something really interesting in his "brain laboratory of ideas" he is capable of taking that idea into serious consideration as a possible challenger to the real world common practice."

When done with my analysis I really wondered, where did that idea come from? I was quite happy about it. Of cause the reasoning is really simplified. I don´t state it here as my ultimate belief. Just an interesting thought possibly worth sharing. Thanks Therese always nice to talk to you.

Google Apps free email hosting through MX-records (in Loopia)

For the skrivaPå project I bought the domains of skrivapa.se and skrivapa.com through Loopia. But because the project has some special requirements for security, for hosting Haskell-code and because we consider speed essential their hosting solution doesn´t really match the criteria. So far I have handled all the business in the startup phase through my private email but as our beta launching date is approaching quickly it was time to set up some real email accounts for skrivaPå. As I didn´t want to buy hosting just for the email I started to look around to find a way to host our domain-specific email-accounts for free. The obvious choice fell on Google Apps with their excellent spam protection and reliable email-service. This is how to do it:

1. Choose a cheap registrar and register the domain. For swedish domains Loopia is one of the cheapest. For international accounts GoDaddy has good prices.

2. Go to Google Apps Standard Edition (the free version) and set up your account.

3. Verify ownership of your domain through the following steps:
a. Go to "Domain Settings" in your Google Apps account
b. Choose to verify by "CNAME records" you should see some instructions plus a code
with something like googleffffffffeef5c1c0
c. Open a new tab in your browser and go to your registrar and go to "Domain
Settings". Depending on your registrar you do differently. For more detailed info
see Google Help for creating CNAME records. For Loopia try this: choose subdomain "*".
Press "DNS" and choose "CNAME". Copy the verification code that´s something like
googleffffffffeef5c1c0 to define your CNAME record at Loopia. Rewrite the code to
something like googleffffffffeef5c1c0.yourdomain.com. Press save. Now further down see
"Skicka vidare till extern URL", in swedish that is "forward to external URL", write
http://google.com. Press save.
d. Now go back to your Google Apps account and press "control and configure
email-delivery". Now you should see instructions about how to configure your MX
records. You can also find the instructions at Google Help.
e. Go back to your registrar. For Loopia you do this: Go to the button "E-mail" in
your admin account. Press "E-postval för domännamn", that is "email choices for
domain names". Choose "Hantera e-post med extern server (MX-pekning)", that is
"handle e-mail through external server".
f. First remove all existing MX records. Now you start adding the MX serveradresses
given in your Google Apps account (or found at Google Help)and the priorities in the boxes
and you have to press save after each add.
g. Go back to your Google Apps account and press "I´m done with this step"

4. Voila! Now wait for up to 48 hours for the changes to take place.

If you already have an email account that you want to move be aware that you wont be able to recieve any emails during in the meantime, though when its all done you will recieve the emails from the past days in your inbox. They should be accessible for your server for up to 4-7 days. So if you dont go over that time you should be safe that no emails get lost in cyberspace.

If you have problems in Loopia try this:

1. Go to "Domäninställningar".
2. Choose your domain and press "DNS editor"
3. Post the code given from Google Apps as your subdomain for example
googleffffffffeef5c1c0
4. Choose "type" CNAME
5. Put "TTL" 3600
6. Put "Data" google.com.

Passion, Entrepreneurship and what is really worth doing

I´m in the middle of a tough thinking process. Since I sold my last company SpokenWord AB to my ex-companion I have been working on an idea of a TV-format combined with a lottery and a board game. From the start I´ve had a VC backing the concept and one of Swedens most known celebrities has agreed on a lunch to hear more about the concept. With those key players interested I´ve felt that this could really take off once all pieces of the concept are in place. The working name of the project has been Bull Shit Bingo and the two cores combined in one concept are bingo and storytelling.

The problem
In the middle of the process, some time about early february, while sitting and chit-chatting at my neighbours place he (Jan Zakolski), he gave me an idea I just couldn´t resist. I got totally obsessed and event tough studying 150% and working 50% and doing the BS Bingo I couldn´t hold myself to fill all blank minutes with doing research on the idea. The more I found the more exciting the idea became. With an unexploited market on the European side of the Atlantic and some really successfull high-growth companies on the American side this really looked like a perfect gap on the market. The idea was to provide a simple signature application for B2B, B2C and C2C.

Once I found firm proof of concept I started to engeneer the business strategy and to identify the core competences needed. Being a real suit with really limited tech competence even though very interested in these issues, the natural competence needed was a developer. I have some good friends that are really talented programmers also having their own code-squad teams such as Artilect and Apogo. So I had some people that would be natural to ask. The problem though was the time frame. My main concern with the idea was that the gap on the market wouldn´t last for long and all of my friends were busy with their own techie projects untill atleast early summer. I needed someone faster. Doing some wild shots contacting programmers in the far outskirts of my network I was extreemely lucky to find a top-notch programmer that got fired just a few days before I presented the idea to him. I screened him with my techie-friends and he didn´t just get an OK, ge got standing applause and one top notch programmer basically fell in love with his level of competence. So now, since more than one month back we are together developing the app now named skrivaPå and everything is looking really good.

All this isn´t really a problem, rather something really good. The problem though is that the BS Bingo really has been waning into the background more and more as the skrivaPå project has evolved and the 27th of april there is supposed to be a lunchpresentation with the celebrity, the investor, some people from the gaming industry and me of cause. And I´m not really sure about this anymore. Specially as I´ve had some tough time getting the concept together.

Meeting with the VC strange things happened
Last thursday I met with the VC to present the last version of the BS Bingo concept. We met in the eventing and after having seen his horse win in a Swedish national horse race (on TV) we went and had the most pleasant pitch evening ever. We started off with watching the former Head of the Swedish Military Flight Force having a lecture about a world known swedish wood-sculpturing artist. Then a prolonged discussion about Swedish ship-craft with his 70 year old father and finally the presentation which was made with his father as the concept judge. I didn´t get a thumbs down but they were not very convinced of the draft.

Going home something strange happened. I asked the VC how he could manage being involved in so much business and at the same time manage his private life with wife and children. His answer was stunning: there was no problem in having a perfectly functional private life, his main problem he though was the frustration of not being able to give time to all those wonderful new ideas. One of two main ideas turned up to be exactly the same as skrivaPå. (!!!) I was jumping of over-excaltation. In my portfolio, in my right hand I carried the busines plan of the project that I had printed just before our meeting in order to hand it over to him in the end. As I wanted to hand it over just between me and him, I decided I would give it to him on our walk home. So now was the time, I immediately handed it over to him and an intense discussion ensued. Finally we decided we had to meet again as soon as possible to discuss a potential investment and I also got a home assignment: over the weekend, think through if I really want to present to the celebrity or if we should call off the lunch.

The assignment
So I have been thinking. I have been lying awake until 4 am trying to get new angles of the BS Bingo and doing some deep soul searching. What is an opportunity? What is really worth doing? Is it really worth to do an opportunity for opportunitys sake? Here are some of the thoughts:

I do have a wonderful project (skrivaPå) that I´m really passionate about. Still BS Bingo is a very interesting concept and an interesting opportunity. Though I have really been frustrated with having to devote time to the BS Bingo when the only thing I want to do is to dedicate all time awake to skrivaPå. Is is worth diluting my passion with something that is just an interesting opportunity? What is the real motivation behind continuing the BS Bingo? Maybe it´s just fear of loosing an opportunity to cash in. If yes, that´s not really a good motive. One thing I´ve thought alot about is what a good friend of mine Therese Gedda once said: "There are two main motivators: fear and passion. Try going for the passion."

Maybe this is such a moment. I thought about the possibility of handing over the project to someone else but it´s really to late, there are to few days left. I have a new draft. But that´s not really the main problem anymore. To get some good input I´ve been watching some videos and listening to some podcasts from Standford eCorner. Jeff Hawkins "inside the mind of a reluctant entrepreneur" was some very interesting listening. He really is on fire:

About stress

"One is so used to stressing that its stressful not to be stressed!"
- Timo Rinnevuo, reflecting over life in a short business schedueling phonecall


Picture by Timo Rinnevuo