Happy Wednesday everyone!
To catch you all up on what’s happening with the Iterative community, we’ve had a great kick-off (major thanks to Jonathan Chan and Wilson Sonsini Goodrich & Rosati for hosting us!) with serial founder, Philip Fung, as our guest speaker talking about his experience transitioning from being the number 15 employee at Facebook to founding three companies.
Fun fact: did you know that Zuck used to sit outside of his shared office back in 2006 with a sign that he is looking for builders? And what’s even more interesting is that no one really stops by to talk to Zuck.
Hindsight is always 20/20.
There is one key takeaway from Philip’s talk and that is that founders need to have grit. It won’t be easy and it’s a game of survival.
And at the end of the day, entrepreneurship is a privilege.
Inaugural Workshop: Figuring out what to build by Zack Hendlin
In our inaugural workshop session, former product leader and founder of Zing Data (an app for mobile-first analytics) Zack Hendlin, shared his experience in taking up his company.
Originally the idea came about when Zack was in a group meeting of executives and everybody had their phone and nobody had their computer. He realized that ubiquitous data access - particularly on mobile - was an unsolved problem for anybody in the field, from executives traveling to salespeople or warehouse workers. These personas need access to data at all times, without the lag of waiting for a data team or needing to write SQL. So, why not build it?
This is where the question comes in: if you build a mouse trap, will customers come? Well, it turns out, not always.
Thus begin the iterative process of figuring out what users actually want and need.
In this, Zack prescribed a set of questions to accompany the process of coming up with a thesis, testing the thesis, defining MVP, building the product, and establishing a go-to-market approach.
Namely, it is important to avoid questions that are overly general where the responses are binary (yes or no) and “Do you think this is cool?”
Rather, to drill down deeper, Zack suggests asking questions such as:
Is X a problem for you?
Why is X a problem for you?
What would it mean to you if you could solve this?
How do you solve it today?
How urgent of a priority is this for you?
What would you pay for it to be solved?
The above question sets are designed to help founders understand:
The enterprise workflow - how people work today and what solutions are in place
Whether the problem is urgent enough for corporations to pay money for.
A useful analogy here would be the vitamin vs. painkiller analogy where painkillers are something that people urgently need and have lots of pain – and will pay to ameliorate. On the other hand, a vitamin may be good, but there isn’t the same pain (or urgency to find a solution) for a vitamin or ‘nice to have’ product.
Additionally, Zack went over what product-market fit (PMF) actually means: very sticky users and willingness to pay (or other ways to monetize) at sustainable margins.
What does this mean?
What Zack is trying to caution is against cases where:
Your time may be worth $200, but you are really lowballing to get customers (bad margin) and charge them $5
You run negative margins - buying growth by selling $10 of goods for $5, but ultimately burning through money without the prospect of improving margins over time
You have a customer that you are doing a project for and that project will go away eventually (not sticky)
A customer is using the product but we don’t think that’s repeatable (not sticky)
In essence, idea validation is an iterative process - customers very rarely just come automagically.
By iteratively seeking user feedback, going to market, iterating on the product, and refining his ICP, Zack discovered there was another set of people who were out in the field – not typical ‘business intelligence’ users who had an even greater need than the initial segment he targeted. From this, he and his team were able to adjust the product, go to market, and find new and more responsive segments to target.
Keep iterating 💪