I want to share in detail on my presentation that I have delivered last week in the Open Web Asia conference, elaborating on the 5 principles which I deemed important for those are planning to build a start-up. The talk is entitled “5 Principles for Agile & High Speed Development” and shared the Chalkboard story with the delegates there who come from all over Asia. In essence, I discuss how Facebook, Twitter & FourSquare have successfully evolved quickly with their platform and data, and how common principles can used to provide a guideline to most start-ups when planning for their new ideas and getting them to market quickly. I also discuss how Chlkboard have rapidly evolved from the start of launching a platform to moving towards fast growth via 3rd party applications.
Here are my five principles so that it can provide some perspective for those who are thinking of doing a new start-up and how to go to market in the fastest speed:
- “In my beginning is my end” by T.S Eliot: Traditional entrepreneurship text books seem to preach in a way where it is more important to pursue idea rather than the business of the idea. While I have been teaching this approach by following a traditional curriculum, I reversed the approach when I worked on Chalkboard with my co-founder, Saumil Nanavati. We started from the exit strategy and worked backwards all the way to the idea and conception. We also identified the potential risks and challenges in the mobile industry pertaining to location based services and mobile advertising on a whole. It is also important to think about Plan B, and if you don’t reach your exit strategy, the important question which most people have forgotten to ask, “Can I turn this venture into a sustainable business running on proper revenues?”.
- Make something Customers Need: It is important to have an sanity check on whether you are building a product for a customer or for yourself. Probably, most aspiring entrepreneurs know this mantra but prefer to fall in love with the idea. Ultimately, it is important to create a product about 70% ready and go to market to see if there is customer traction. In the early days of Chlkboard, we actually tested our hypothesis on whether our customers will need our product. We did this by offering customers free trials and also continued gathering feedback from them on what works and what don’t work.
- Less is More in Product Development: Don’t be afraid to kill features. In the design of the first prototype of Chlkboard, we thought a lot about whether users should register a username and password so that they can use our system. In the end, to shorten the time to bring the beta product to market, we dropped the normal way of registration and used the OAuth method of signing in via twitter. It made the registration process easier for those who have a twitter account. In fact, it also lowers the resistance if we made them just keying in a few short details we need to get them on the ground running.
- Iterate & Pivot based on feedback & analytics: This is the part where we gather the feedback and pivot if our initial product has failed. Thankfully, it did not. We focused more on listening to them on what they want. Originally we thought we made the product simple by having one twitter to one location for the advertiser. Instead, we learned later that some shop retailers will like to send promotions via one twitter account. We immediately took action and got the feature ready within a week. We also collected analytics to help our advertisers to understand their customers through the help of heat maps and number of impressions.
- Firehose Strategy – Open the Floodgates: When we opened the Chalkboard API to 3rd party apps developers, it sent us from 30K to 400K within a span of two months. While being open, we also manage to see how apps developers can use our data and deliver the ads in the best possible way such that it is not offensive or intrusive to the end-consumer. The firehose strategy has been practiced by successful companies like Twitter and FourSquare and it helps them to know which products they do and do not need.
In essence, looking at the success of Facebook, Twitter and FourSquare, the pace in which they are working is shortening by half within the past few years. Facebook took about 4 years to hit their 1st million users, Twitter within 2 years and FourSquare in 1 year. They all opened up their platforms and allowed creative developers to make interesting applications. It is also important that they slowly retain control and create an economy around their platform. While it is still early to talk about where Chalkboard is going (given that it’s my latest venture), it is important to remember one rule in entrepreneurship: you have equal chances of success or failure depending on how well you systematically eliminate risk and overcome challenges.