Pragmatic Marketing Framework Guide for Executives

Volume 8 • Issue 4 • 2010

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5 Lessons from

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4 5 Lessons from 150 Startup Pitches
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The Pragmatic Marketer • Volume 8, Issue 4, 2010 • 3

150
5 Lessons from

startup
pitches By Jason Cohen

4 • The Pragmatic Marketer • Volume 8, Issue 4, 2010

A re you starting a company?
Looking to grow? Many founders
turn to venture capital firms, angel
investors or incubators as a source
of funding. But obtaining hundreds of thousands or even millions of dollars
is not as simple as knocking on the door and asking for money.
It takes careful planning and a focus on presenting your request
in the best possible light. One that shows you have a serious
proposition deserving of the investor’s time and money.

I work at a startup incubator and review hundreds of pitches a
year. Most are on paper and video but some are invited to pitch in
person. Over the course of these presentations, some interesting
patterns emerge:

• Everyone makes the same types of errors
• The errors are not specific to raising capital but with the
business concept or the founder’s attitude
• Those who avoided just one of these errors stood
out from the crowd


Are you making these errors in
your business (start-up or not) ?
Invalid competitive advantages
“Superior SEO” and “unique features”
are not competitive advantages.

Lacking an unfair advantagE
You need one killer advantage no one can beat
beat
(because you might get beaten on everything else!).
everything else!).

No one said they’d buy it
You don’t need statistically significant studies, but it’s
studies, but it’s
astonishing how many blaze ahead before they’ve
before they’ve
found even a single person willing to give them money.
them money.

Incorrect positioning
against the competition
The two faults here are opposites: Believing that
Believing that
uniqueness means competition doesn’t exist, or
exist, or
defining yourself by the competition instead of
instead of
constructing your own message.

No significant route
to customers
If your marketing strategy is to run A/B tests
tests
and build RSS subscribers, you’ve already lost.
already lost.

6
• The Pragmatic Marketer • Volume 8, Issue 4, 2010

5 Lessons from 150 Startup Pitches

Error holdings. Every mp3 player uses
multiple patents, but that didn’t stop
passion? But in this context it’s like
saying, “My children are going to be
Invalid competitive advantages Apple from winning. more successful because I love them
more than you love yours.”
Every pitch I see has a section on
competitive advantages, and nearly We’re better at SEO
every time the claimed competitive and social media We’re cheaper
advantage is not, particularly when 80% of Americans believe they are It’s not bad to be cheaper. The
everyone else claims the same better-than-average drivers. Can’t be key is you cannot compete solely
advantage as you! true, right? Well 80% of folks I meet on price because all a competitor
tell me they’re better than average has to do is lower their price.
The following are not competitive at SEO, Twitter, and “building Established companies can destroy
advantages: communities” (whatever that means). you with the “loss leader” strategy.
Remember when Microsoft put
Social media and SEO is ever- hundreds of developers on Internet
We have feature “x”
changing quicksand. You’re on top Explorer and gave it away for
This is an advantage only until of Google today, gone tomorrow. free, destroying the market for
others copy it, so it’s not a long- Other companies being good—or web browsers?
term protection against competition. better—is completely outside your
Indeed, the next company can
observe what works and what
doesn’t, and then improve on
control, so claiming you have a
sustainable advantage is poppycock. LESSON
your innovation. So where does that leave us?
We have three PhDs/MBAs
We have the most features The landscape of successful You live in the era of a flat world
startups is littered with people where millions of people have
It’s common for older products to lacking post-graduate education. If
compete on having more features access to technology, education,
you’ve lived in the software world and a powerful sales, marketing,
than newer, competing products. you know what they teach you in
The trouble is, customers rarely and communication platform
school is often irrelevant, so who (the Internet).
want more features, they want the cares what degree you hold? In all
right features. As everyone adds the interviews you’ve read about
features, products reach critical mass You live in the era where the
founders’ success, how many credit most powerful programming
where all have 80% of the features their MBA program? How many
customers want, and then having frameworks and tools are free, local
even have MBAs? It’s not bad to broadband and high-availability
“more” is no longer an interesting have a degree, but neither is it a
selling point. servers are cheap, and world-class
significant advantage. people are willing to work 60
We’re patenting our features hours/week in exchange for free
We work hard food and the chance to be part
“No one can compete with my blog and we’re passionate of a cool new startup.
because it’s copyrighted.” Silly, right? You hear about guys working 30
hours per week (or less), so you There’s too much energy, availability,
That’s what it sounds like when figure if you work a “healthy” 70 intelligence and opportunity in
claiming a software patent will hours per week, you’ll win! But the world to hide behind outdated
protect you from competition. working harder is not, in fact, notions of intellectual property.
Except in certain industries (e.g. smarter. And even if you could
food, drug, medical), I’m unaware work 70 on-task hours per
of companies who stave off quality Almost anything can be copied. In
week, that’s still blown away by fact, I’d claim that anything of any
competitors through patent 10 developers at a well-funded value will be copied. It should be
company or even 10 passionate part of your business plan that other
open source developers working
part-time. And who doesn’t have people will copy you.



Error No, wait, I’m sorry, the real question
is: What are you going to do when LESSON
Lacking an unfair advantage there are four totally free, open- The only real competitive advantage
source competitors? is that which cannot be copied and
Fortunately there’s plenty of cannot be bought.
ways to have true advantages No, wait, I forgot, actually the
that competition cannot readily question is: What happens when Like what?
overcome. Unfortunately, they’re employee #2 makes off with your
difficult and rare. And you thought code and roadmap and marketing
creating and running a successful, data and customer list and starts Insider information
untouchable startup was easy? selling your stuff world-wide at The only way to consistently make
one-tenth the price? money on Wall Street is to have
How would you answer “What if a insider information! Although it’s
big company copies your idea and The good news: There are answers illegal (and people occasionally go
develops the same website as yours to all these questions! to jail for it), those in the know will
after your website goes public?” tell you it’s not uncommon. But,
using intimate knowledge of an
The bad news: Almost no one
industry and the specific pain points
Not the right question! The one I talk to has good answers, but
within an industry is a perfectly
you should answer is: What are they think they do. And that’s
legal unfair advantage.
you doing now knowing that a big fatal, because it means they’re not
company will copy your idea? working towards remedying that
situation. Which means when one Here’s a real-world example. Adriana
of the above scenarios happens, has been a psychiatrist for 10 years;
No, wait, the real question is: What
it will be too late. she understands the ins and outs
are you going to do when another
of that business. During a lull in
smart, scrappy startup copies your
her practice she got an opportunity
idea, and gets $10M in funding, and Anything that can be copied
to shift gears completely and
is thrice featured on TechCrunch? will be copied, including features,
ended up leading software product
marketing material, and pricing.
development teams. (Turns out that
Anything you read on
for big-business project management
popular blogs is also read
it’s more valuable to be a sensible
by everyone else. You
thinker and counselor than to be
don’t have an “edge” just
an expert in debugging legacy
because you’re passionate,
C++ code.)
hard-working, or “lean.”
Now Adriana has an epiphany:
In her opinion, traditional
practice-management software for
psychiatrists is not very good; she
knows both the pain points and
the existing software first-hand. But
now she has the vision and ability
to design her own software.

Adriana holds a unique position:
Expert in the industry and able
to “geek out” with her target
customer, yet capable of leading
a product team. Even if someone
saw Adriana’s product after the
fact, it’s almost impossible to find a
person—or even assemble a team—
with more integrated knowledge.
At best, they could copy. Of course
by then Adriana has moved on
to version two.

8
• The Pragmatic Marketer • Volume 8, Issue 4, 2010


Single-minded, uncompromising However it’s not enough for a To remain un-copyable, your One
obsession with One Thing feature to merely be unique because Thing needs to be not just central
A “Unique Feature” could be a it’s still easily duplicated. Rather, this to your existence, but also difficult
competitive advantage in some requires unwavering devotion to the to achieve. Google’s algorithm,
circumstances. Some examples One Thing that is (a) hard, and (b) combined with the hardware and
of a feature being a company’s you refuse to lose, no matter what. software to implement a search of
primary advantage are: millions of websites in 0.2 seconds,
Google has spent hundreds of is hard to replicate; it took hundreds
• Google’s search algorithm was millions of dollars on their search (thousands?) of really smart people
just better, therefore they won the algorithm, the single biggest focus at Microsoft and Yahoo years to
eyeballs, therefore they were able of the company even today, a catch up. 37signals’ platform—a
to monetize. Sure, others are good decade after they decided that was blog with ~140k followers and
now, but the advantage lasted their One Thing. They refuse to be a best-selling book—is nearly
long enough. beaten by competitors or black-hat impossible to build even with a
hackers, whatever it takes. full-time army of insightful writers.
• Photodex is a little company
you’ve never heard of where 37signals can build simple software Being “hard to do” is still a true
I worked in the 90’s. We made and earn three million customers advantage, particularly when you
an image browser with thumbnail because they absolutely will not devote your primary energy to it.
previews so you didn’t have to compromise on their philosophy
open each file individually to see of simplicity, transparency, and Personal authority
what it was. Our advantage was owning their own company, and Chris Brogan commands thousands
that’s something millions of people of dollars for a single day of
speed. Not the best, not the most
respect and support. consulting in an industry (social
stable, didn’t read the most
media marketing) where all the
formats, didn’t have the most
information you need is already
features, just “fastest.” For many online and free. Joel Spolsky
users of that product, speed wins. makes millions of dollars from bug
tracking software—an industry with
hundreds of competitors and little
innovation. How can you earn this
overwhelming advantage?

Unfortunately all this “authority”
takes years of expensive effort, and
even then success is probably due
as much to luck as anything else.
So is it worthwhile? Yes, exactly
because it takes years of effort
and a little luck.

Authority cannot be purchased
You can’t raise VC money and then
“have authority” in a year. A big
company cannot just decide they
want to be the thought-leader
in their field. Even a pack of
hyper-intelligent geeks cannot
automatically become authorities
because it’s not about how well
you can code.



But how does authority convert In each case, the founders were As a company becomes successful
to revenue? super-smart, had complementary it gains momentum, which means
skill sets, worked well together (or it’s going in one direction with
Here’s a personal example: I well enough to reach important one philosophy. Like physical
give talks on peer code review success milestones), and as a team momentum, change becomes
at conferences. My competition represented a unique, powerful, and harder to affect.
pays thousands of dollars for a (in retrospect) unstoppable force.
booth, then spends thousands Of course the world is changing,
advertising to attendees begging Of course that’s easy to see in and in particular your customers
them to visit the booth, then retrospect, and retrospect is a are changing. Normally this leaves
gives sales pitches at the booth terrible teacher, but the principle room for the next competitor, but if
to passersby who are also being can work for any startup, especially you’re already entrenched you can
bombarded by other pitches and when your goals are more modest leverage your existing status, insider
distracted by the general hubbub. than being the next Google. knowledge, and revenue stream as
long as you’re willing to change too.
Whereas, because I’m a known Of course a Dream Team doesn’t
authority on code review and guarantee success but it significantly You have more money, you’re
software development, I get to talk reduces the risk of a startup, and better known, you have existing
for an entire hour to a captive, is difficult for the competition happy customers to help spread the
undistracted group of 100 people, to duplicate. word, you have employees to build
self-selected as interested in code new things, and you have more
review. After the talk, many people This is especially true when experience with what customers
want to chat one-on-one. Some head someone on the team is already actually do and need, which means
straight to the booth to get a demo; successful in their field, e.g. with you should have the best insight.
for many I give a private demo of a massively successful blog, or big
the product on sofas in the hallway. startup success, or a ridiculous Any new competitor would kill
It’s not unusual to get several sales Rolodex. Since those are the kinds for just one of these advantages.
over the next three months from of competitive advantages that can’t If you’re not using them, how silly
people who saw me speak. be bought or consistently created, is that? Companies don’t get killed
having that person on the team is by competition; they usually find
Now add to that the effect of a blog by proxy a killer advantage. creative ways to commit suicide.
that tens of thousands of people
read? And the effect on sales of my Existing customers Imitation might be the sincerest form
book on code review? Everyone you’ve ever sold to of flattery, but it still stings when
possesses the most valuable market someone does it to you.
Earning authority is expensive and research imaginable, and it’s the one
time-consuming, no doubt. But it’s thing a new competitor absolutely Of course you can still battle it out
also an overwhelming, untouchable will not have. in the marketplace, but you need
competitive advantage. something that can’t be duplicated,
This is kind of a cheat, because something they could never beat
The dream team everyone says “I listen to my you on, then hang your hat on that
The tech startup world is littered customers,” which (nowadays) is just and don’t look back.
with famous killer teams: Gates & as overused as “We’re passionate,”
Allen, Steve & Steve, Page & Brin, but it’s true that if you’re actively
Fried & Heinemeier Hanson. learning from your customers and
you never stop moving, creating,
innovating, and learning, that puts
you ahead of most companies in
the world.


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Error “I’m scratching my own itch.
Since I’m my own target
“My customers can’t understand
mock-ups. I have to build it first.”
No one said they’d buy it customer, I already know You shouldn’t need screenshots or
what to build.” slides to convince someone in your
Of hundreds of startup pitches I’ve
heard, almost none had unearthed Oh! I didn’t realize your typical target market that what you’re doing
ten people willing to say, “If you customer is observant enough to is compelling. If your concept is so
build this product, I’ll give you $X.” recognize monetizable pain, creative esoteric you can’t describe it in 30
enough to invent products, able to seconds, it’s either too complex or
convince others to work for free and you don’t understand it yourself.
Meditate on this: Hundreds of
invest money and time with you,
people ready to quit their day jobs,
and passionate enough to quit their Even if I concede that some folks
burn up savings, risk personal
job to pursue unproven ideas. can’t grok mock-ups, remember
reputation, toil 70 hours per week,
absorb as much stress as having a that your first customers will by
baby (believe me, I’ve done both).... By definition, if you’re a startup definition be early-adopters who are
all without identifying even ten founder you’re explicitly not OK with alpha software. If you can’t
people actually willing to pay for your customer. find a few of those and get them
what they’re peddling. excited about your product, maybe
“Scratching your own itch” is just your product isn’t exciting.
Short-sighted, no? If you can’t find a start. It’s the spark of inspiration,
ten people who say they’ll buy, your not the strategy. It’s the grain of “I’m not good at sales/marketing;
company is dead before it starts. sand tickling the oyster, not the I need to build a product so
pearl. In fact I challenge you to find compelling it sells itself.”
one founder of a real business who The world is filled with decent
thinks “I’m the customer” is the only products that make no money!
market validation you need. If your goal is a business (not a
hobby), building charming, novel
“There are millions of potential software isn’t enough.
customers, so it doesn’t matter
what only ten of them think. You and I know you have the ability
I need to just start; later I can to build cool new software. We
survey and learn something agree that will be fun and exciting.
statistically significant.” But that’s not going to create
If there are millions, it’s trivial a business.
to find ten. If you can’t find
even ten, then either there’s not Writing code is what you love, so
millions or those millions aren’t you myopically decide that’s what
interested in you. you’ll do. But what you should do
is just the opposite: Attack the part
Businesses don’t start with millions of the business you’re least sure of,
of customers, they start with one, you’re least qualified for.
then ten, then a hundred, and
then a thousand. But most don’t If you’re still not convinced, think
get past ten. of it as project risk management.
In a big software project do you
If you haven’t gotten ten to tackle the high-risk, ill-defined stuff
at least say they’ll buy, where first, or do you postpone that to
do you get your hubris to the end? Obviously you address the
proclaim that thousands unpredictable stuff first—most of the
actually will buy? project risk is due to the unknown,



so the earlier you can sort out
uncertainty the more time you have
to deal with the consequences.

I’m making the same argument,
except the “high-risk unknown” is
“everything that’s not code.” Your
code will be good enough; it’s the
other stuff that will probably sink
your ship—unable to find customers
or unable to convince the target
audience they should open their
wallets.

No sense in postponing it.

“My friend/brother/co-worker/
dentist thinks it’s a great idea.” Error • “No one is doing it like we are.”

Your mother thinks you’re smart Incorrect positioning Of course you’re going to position
and good-looking, but that doesn’t against the competition your company with a unique
mean I do. offering: exclusive features, a
After seeing hundreds of startup distinctive culture, a refreshing
It doesn’t matter what non- pitches, I can tell you the two most pricing plan, an innovative sales
entrepreneurs think because common errors in positioning a strategy, etc. But uniqueness
they’re not versed in product/ company against competition are, doesn’t imply lack of competition!
market fit or squeezing blood strangely, opposites:
from evanescent budgets. In fact • “There’s no competition because
it only barely matters what real this is an industry that has
entrepreneurs think, because they’re • Claiming you have no competition
never used software to solve
not expert in your problem domain, • Defining your company’s offering this problem.”
they might have outdated notions,
and positioning by combining “the
they might be biased against certain I know that sounds like a good
ideas and technology, and they best” traits of six competitors.
thing, but what this also implies
carry baggage from good and bad This isn’t just a problem when is you’ll have to convince people
experiences (due as much to timing pitching—it’s a problem with you to trust software, and that’s a
and luck as anything else). defining who your customers are, disadvantage. You’re competing
what they want, and your role in the against the status quo.
LESSON marketplace.
• “There’s no competition
Let’s break down the ways these because people haven’t realized
The only thing that matters it’s a problem.”
is that people are willing to fallacies manifest and what you
give you money! can do instead.
If they don’t already know they
have the pain, the sales process is
Business “experts” can argue all There is no competition
going to be excruciating. There’s a
day that it makes no sense to buy Here’s what I hear and think: word for that—evangelism—which
shoes over the Internet, but as long conjures other words: Expensive,
as people give Zappos $1 billion • “I have no competitors.” difficult, time-consuming.
per year, it doesn’t matter what
experts say. Either you’re ignorant of
direct competition, or you’re
When ten people say they’ll give not considering alternate solutions
you money if you build this thing,
like “build it yourself.”
that’s the only validation that counts.



Defining your company • “We’re just like competitor X, So how do you look inward to
by the competition only we’re Y.” establish your company, contrasting
Your company is defined by its own with the competition but not letting
strengths, values, customers, and In this case you’re betting your the competition dictate your identity?
products, not by how it compares future on the fact that Y is
with other companies. You need overwhelmingly compelling to a • We’re targeting the market
a strong position, something large market segment. X segment defined by X, Y, and Z.
that would be equally clear and automatically has advantages over We’ve spoken with 20 potential
compelling even if competitors you (brand, customers, revenue, customers who match at least two
didn’t exist. inside knowledge, a team, of those criteria, and they agree
momentum), so Y had better be our product is exactly what they
Here’s some ways this mistake brain-exploding awesome. Oh, need and none of our competitors
manifests: and it’d better be impossible are doing an acceptable job
for X to implement Y—or even addressing their issues.
• “We combine the best traits of our one-third of Y—themselves. Talk
competitors, letting them show the about putting your fate in others’ • Our company has core value X
way to our success.” hands! that we exude everywhere from
our SEO to our tech support to
I like the idea that you can learn our product. (Example value:
• “We’re the same as X, only cheaper.”
from the mistakes and successes Simplicity. A simple product with
of similar companies, but Being cheaper is a strategy, but few features, low-cost, pain-point
“combining the best” misses the it can’t be your only strategy. It’s obvious, not tackling complex
point. There are specific tradeoffs too easy for competitors to change problems, focused on making
each of those companies are price or offer deals. Typically life easier rather than on saving
making; things you see as “not the best customers aren’t price- money.) We own this value
best” might in fact be best for their sensitive anyway, so you’re because we’re completely
target market. Why are you so actually biting off a less desirable committed; this is the one point
sure your notion of “best” will segment of the market. Often this on which we will never
result in enough customers who claim is paired with “We’ll do 70% compromise. Our customers know
not only agree with you, but are of the features for 50% of the it and value this too, which is why
so convinced they’re willing to price,” but supplying less for less it doesn’t matter what features,
switch to you? is not inspirational. prices, or advertisement our
competitors have.
• The rubric.

A chart with one row for each
“feature” and one column for each
of six “competitors.” There’s
checks and X’s everywhere, except
of course a glowing, highlighted
column representing your
company which just happens to
be full of checks. Do you really
expect someone to believe this?



• This is the competitive matrix.
Note that each player in this space LESSON • Our target customer has
traditionally solved this pain
is targeting a different market If you’re tempted to argue that themselves or just lived with the
segment, as is clear from feature you’re the exception, here’s how pain rather than paying for relief.
selection, pricing, and advertising/ to elucidate the advantages you’re A combination of newly-available
messaging. We, too, are targeting seeing, but in a way that actually technology and modern mindset
a niche; as you can see our makes sense as a business strategy: makes this the right time for a
offering is consistent with owning new software play.
that niche, and doesn’t overlap • We’ve carved out a niche specific
enough that no one is actively • It’s true this industry hasn’t yet
significantly with competitors. It
would be difficult for any of them targeting. There are similar seen a software solution, but that’s
to “switch” into our niche, because competitors A, B, and C, but not because they hate computers,
as you can see they’d have to they’re not targeting this niche but rather that it hasn’t been
change the product, pricing, and because of X, and would be possible to address that market
their company’s persona; that’s a hard for them to switch into this with software. Now it is because
risk we’re willing to take. niche because of Y. In fact, it’s (pick one):
quite possible that we’d end up − We’ve built an improbable team
• We’re going after competitor X. partnering with or being bought
We know they already have a that spans geeks and industry
by A, B, or C because our idea is insiders.
ton of advantages over us— similar but out of their reach.
well-known, well understood, and − New hardware/networks have
a deep feature list. However they • We’ve identified a market too just appeared which makes this
haven’t done anything new in small for the large, established possible.
three years and we have evidence players to address, but big enough
their customer base is not happy. to build a company. Because the − New attitudes enables new
Not only that, they’re famous for 800-pound gorilla is inefficient at workflows (e.g. ubiquity of
annoying attributes A, B, and C building new software, it can’t go Facebook even among
(Examples: buggy, slow, confusing, after a market unless there’s a traditional technophobes).
expensive, bad tech support). We billion dollars at stake. We think
− This industry is commoditized
see huge opportunity in their there’s a solid business to be
so giving a player the slightest
wake of destruction, vacuuming made in this hundred-million-
edge is a big deal.
up their customers with our dollar market. However, where
overwhelming advantage. They the giant can’t afford to build this − This industry is just now
can’t do this themselves because from scratch, if we show good starting to show tangible signs
they’re too big to turn the ship, growth and profits we would of embracing technology.
and anyway the past three years be an obvious acquisition
target for them. − We have three lead customers
have shown they’re not
able to change. signed up as alpha testers;
• We’ve created technology so if we make them successful the
different from the incumbents that case studies will be all the
we’re changing the conversation evangelism we’ll need.
about how people solve this pain.

Though it’s different, your solution
is very easy to describe and use
(e.g. the way Netflix changed
movie watching at home).



Error
No significant route
to customers
Ask a technical founder about his
startup, and he’ll proudly describe
his stunning software—simple,
compelling, useful, fun. Then he’ll
describe his cutting-edge platform—
cloud-based, scalable, distributed
version control, continuous The obvious problem is every new buttons. Buttons are good—but
integration, one-click-deploy. startup on Earth says exactly these they don’t make your product
Maybe you’ll even get a things. Nowadays the “strategy” intrinsically viral.
wobbly demo. above sounds like:
Which is OK—not all products need
“Great,” I always exclaim, sharing “We’ll have a website so people to be viral! But if it’s not viral you
the thrill of modern software can read about us.” still need a killer method of finding
development, “so how will people customers, and if it is supposed to
find out about this brilliant product?” “We’ll have an email address so be viral it better be encoded in the
people can communicate with us DNA of the application, not bolted
Cue silence… Then a smile breaks without picking up the phone.” on as an afterthought.
across the founder’s face:
Yes, you’re going to do those things, Frightening honesty
“We’re going to A/B-test AdWords but since millions of other people Balsamiq Mockups is a popular
campaigns until we discover are doing that too, you’re still wire-framing tool. What sets
our hook.” invisible. No visibility = fail. them apart isn’t prescient feature
selection or bug-free releases, it’s

LESSON
“We’re going to A/B-test our their startling transparency. Revenue
landing pages until the right figures are published even when
message appears.” they were still pathetic. The founder
So what can you do to rise above pledged loudly and eagerly to give
the cacophony that is the Internet? away lots of free copies to non-
“We’re better than everyone
else at SEO.” profits, and he revealed all his
Infection built-in, not bolt-on (remarkably effective) marketing
WhenBusy lets people schedule strategy even though it meant
“A friend of mine knows how
meetings in currently-available competitors would learn them too.
to get popular on Twitter.”
time-slots without having to share
your calendar. Instead of trading He didn’t just have an “authentic
“We’re going to get reviews emails with lists of available
on blogs.” voice,” he made public promises.
time-slots, you send the link That’s compelling.
to your calendar page and the
“We’re going to start with our other person uses the product to
own network and grow it He didn’t just “tell it like it is,”
schedule a meeting. This is the he gave up his marketing secrets
from there.” viral step: Having trialed the tool, and opened his company books.
the stranger might use it herself, That’s newsworthy.
“We’re going to use an affiliate then more people find out about
program so our customers sell it, and so forth.
it for us.” This isn’t merely “being human”
it’s almost too much honesty!
Note that at no point did I say “a
“We’re putting a ‘Retweet’ button button lets people ‘like’ this on
inside the product to encourage In a world where everyone and their
Facebook.” I know of no companies
viral growth.” brother is “joining the conversation,”
who have “gone viral” because of
you have to truly bare your soul
if you want to compete on the



transparency front. It’s not for better lead quality, a more efficient It’s always fun to tell a journalist
everyone, and I’m not suggesting conversion rate, and straightforward like you that we enable software
it ought to be, but there’s no sense trials with minimal tech support. Of developers to review each other’s
in going half-way. course it’s not quite that simple but code because your reaction is
it’s a step in the right direction. always: “Wait a minute, you’re
Tell a story seriously telling me they don’t
The number one mistake founders At first when someone asked do this already?” The idea
make when trying to generate press what my company’s tool suite was, of editing and review is so
is talking about what the company I would say: embedded in your industry you
does rather than telling a compelling can’t imagine life without it, and
story. Without a powerful narrative, Smart Bear makes data-mining you’re right! You know better
your chances of getting big tools for version control systems. than anyone how another set of
press and enthusiastic users who eyeballs finds important problems.
spread the word are somewhere It’s a description so esoteric that,
around zero. although accurate, not even a Of course two heads are
hardcore geek would have any idea better than one, but developers
It took me five years to figure out what it is, much less why it’s useful. traditionally work in isolation,
(a) I needed a story and (b) what mainly because there’s a dearth
the story was. It’s hard. But one Years later, when it was clear that of tools which help teams bridge
story beats a pile of AdWords code review software became the social gap of an ocean,
A/B tests. our sole focus, I got better at integrate with incumbent tools,
describing it: and are lightweight enough to
still be fun and relevant.
Advertising [transmogrification] Revenue
You know how Word has “track
changes” where you can make That’s what we do: Bring
I know that nowadays marketing is
modifications and comments and the benefits of peer review
about “relationships” and “authority”
show them to someone else? We to software development.
and other things which cost time
but not money. But don’t be so do that for software developers,
quick to throw out the idea of integrating with their tools instead Now the reason for excitement
spending money to make money. of Word and working within their is clear: We’re transforming how
Advertising isn’t dead; you can standard practices. software is created, applying the age
still buy eyeballs. I’m not talking old techniques of peer review to an
about “triage” strategies like Better, yes, and for a while I industry that needs it but where it’s
buying AdWords linking to a page thought I nailed it, but still no traditionally too hard to do.
of ads, I’m just pointing out that press. Eventually (thanks to helpful
most companies don’t depend journalists) I realized I was still just
on “joining the conversation” to describing what it is rather than
That’s a story!
acquire customers. why anyone cares. I left it up to the Follow these simple guidelines and
reader to figure out why they should set yourself apart from the masses
It sounds simple: The average get excited. who continue to make the errors
cost of acquiring a customer is $C identified in this article. With a little
(advertising, sales, support, doing Eventually I developed stories like time and careful preparation, your
demos) and the lifetime revenue you the following, each tuned to a pitch for funding should impress
get from that customer is $R, so if certain category of listener. Here’s investors and hopefully you get the
C < R you have a business. C can the one for the journalists: financial support to begin the next
be driven down with cheaper ads, phase of your company’s plan.

Jason Cohen has started four companies (including WPEngine
and Smart Bear), both funded and bootstrapped, ran three
to millions in revenue, and sold two. He is the author of Best
Kept Secrets of Peer Code Review. A geek-turned-entrepreneur,
he now blogs about startups at http://blog.asmartbear.com


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Plan Plan

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Win/Loss Distribution Buy, Build Buyer Customer
Analysis Strategy or Partner Personas Retention

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Competitive Product Launch Sales Presentations
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USER EXPERIENCE
UX
The Third Objective By Larry Marine and Sean Van Tyne

Observe Persona Triggers Desired Tasks Metaphors Two
Outcomes Words


3
UX
Conventional wisdom holds that Business, marketing, and UX Define your user
the true measure of your product objectives are complementary and experience objective
success is in how well it meets support each other. Marketing
your business and marketing objectives directly impact UX To create your user experience
objectives. But what about the objectives in that marketing objective you must first have
third objective—user experience? strategy defines target markets, a clear understanding of your
Apple, for example, has developed which includes target customers business and marketing objectives.
a reputation very different from and users of the experience. There are plenty of books and
Microsoft. Which one would Moreover, UX objectives help articles on this subject. Decide on
you say succeeds at setting and refine the target market. And as one key business objective and
meeting successful user experience much as business objectives guide one key marketing objective when
objectives? marketing objectives, they guide defining your first user-experience
UX objectives, too. In many cases, objective.
How is a user experience objective UX objectives refine both business
different from a business or and marketing objectives. User experience objectives must
marketing objective? Common align with your users’ needs.
business objectives focus on For example, we conducted Successful UX objectives are borne
increasing revenue or decreasing research with a client to uncover from a deep understanding of
costs. Marketing objectives focus ways they could attract their your users’ environment. Applying
on increasing market share and competitors’ customers and proven user-centered design
deepening existing relationships. identified a more lucrative and methods provides a straightforward
While necessary objectives, they unmet need within the customer approach to gaining insight that
focus more on the business and organizations, but not in the IT accurately defines your objective.
product. User experience is about department, where all of the
managing the customer side competitor products were focused. There are seven steps in defining
of the equation. This new opportunity was closely your user experience objectives.
related to the existing product While the insight that defines your
User experience (UX) isn’t a warm offering and merely required a objective can occur in any of the
and fuzzy superlative such as “easy focus on a different user group. following steps, you never know
to use,” or “delightful.” A good This new insight transformed which step it will be, or if separate
UX objective needs to be much both business objectives (reduce insight from each step combine to
more specific and measurable, like costs) and the marketing objective form your objective. So you must
business and marketing objectives. (attract competitors’ customers). commit to the whole process. But,
The company was able to change don’t go into analysis paralysis.
business and marketing direction, At this stage, all you want are
increase revenue by expanding an insights, words, metaphors, etc.,
immature market-base, and now that suggest what the key users’
dominate their market. desired experience is or should be.


UX
3
User Experience: The Third Objective

Observe Observe Persona Persona Triggers Triggers Desired Desired Tasks
Outcomes roles cute
Outcomes
STEP 1 STEP 2 Give the described user
Don’t ask, observe Define your key users names to help keep the design team
focused. In e-commerce projects,
Listening to your customers’
(persona) we’ve found three basic user roles:
suggestions may lead to incremental Based on your marketing objectives,
improvements instead of real you should have a clear idea of Browsing Betty—who, without any
innovative market solutions. Rather where to find your target users. specific objective, ambles through
than asking your users via focus Personas are a common tool to help the mall looking at various shops
groups, interviews, or surveys, you define your key users. Personas and items.
will have much better results going are a stand-in for a unique group
out and watching them perform the who share common goals. They are Surgical Sam—who knows exactly
tasks related to your product. It’s fictional representatives—archetypes what he wants, where it is,
even better when you observe them based on the users’ behaviors, its cost, etc.
performing the task without your attitudes, and goals.
product as their task process may be Birthday Bob—who has 40 minutes
modified to conform to your specific You need to be more specific than left on his lunch hour and $40 to
solution. All you end up doing, then, your typical demographic-based buy a birthday present for his 6-year
is automating their frustrations. customer description. You should old niece. He doesn’t know what
be able to not only describe 6 year-olds like or what his niece
When users perform a task, your users in terms of their wants specifically, but he’s got 40
not every action is verbally demographics, but also be able minutes and $40 to find something.
communicated to the observer, to describe their cognitive and
often because users perform tasks behavioral attributes. It’s not uncommon for users to
unconsciously, or don’t see them as start in one role and then switch
important, or think they, the user, Another way to think about your to another, thus switching hats.
are the problem. For example, your users is in terms of the various and Betty may find a pair of pants and
users may have created special more specific roles they perform. then realize that the belt she saw
information “cheat sheets” to do We all wear different hats. With at another store would go perfect
their job. These cheat sheets each hat, we endeavor to achieve with the pants, so she switches from
indicate something in the task different objectives and bring being Betty to being Sam.
domain is missing or too difficult varying degrees of task knowledge.
to perform. Instead of looking at your users as The task objectives and knowledge
a single person, describe them more basis of each role is different
Sometimes when we solve a specifically by the roles they assume enough to warrant a different design
market problem, our solution when performing separate tasks. perspective and therefore a different
may completely eliminate existing UX objective. But you cannot design
workflows, activities and tasks with for all three simultaneously. You
a better process. In many cases, must focus on a single
customers only know their way of user role (for now,
doing things while we possess a anyway).
broader perspective across many
customers’ processes and a deeper
understanding of technology
capabilities. An individual
customer does not have our
aggregated view of the larger
market problem across
multiple customers.


User Experience: The Third Objective
3
UX
Persona Triggers Triggers
Persona Desired
Triggers Desired Desired Tasks Tasks Metaphors Metaphors
Tasks Metaphors
Outcomes
OutcomesOutcomes
STEP 3 STEP 5 STEP 6
Define your customers’ triggers Define tasks Understand your
Every task begins with a trigger Users perform a series of tasks in
customers’ metaphors
event. Wouldn’t it be nice to know order to achieve an objective or People typically use shorthand terms
your target customers’ triggers? desired outcome. While this step to discuss their tasks. Rather than
That’s why observation is so much can be rather involved, you need to telling someone to “open up the
more informative than self-reporting describe the key steps of the task
Two TwoTwo
word processor, choose the XYZ
Words WordsWords
mechanisms. Most users are not domain from a 10,000-foot level to Corp Memo Template, using Times
aware of what triggers an activity. get a handle on how users’ perceive New Roman, 12 pt. font, write a
They more often describe what their tasks. memorandum to the engineering
triggers them to use your product, group regarding this decision.”
but the real trigger event often You should be able to describe They simply say “draft a memo to
occurs much earlier than perceived. their tasks without specifying your Engineering.” These shortcuts are
solution, again to avoid automating often metaphors and metaphors
Good design is about managing user their frustrations. Too often we suggest objectives.
expectations. Expectations are a see high-level task analyses
key component of the trigger event justifying a company’s solution Understanding your customers’
and may point to a user experience rather than describing the user’s metaphors helps you understand
objective. The appropriate focus on problem domain. their objectives from their
this objective allows you to manage perspective, in their language.
your users’ expectations. For example, our first step in Knowing their language is
designing what has become a very especially important in
successful online florist website the next step.
involved observing men buying
Triggers Desired flowers at flower shops, not Metaphors
Tasks
Outcomes
STEP 4 online. What we learned from our
observational research of the high-
Understand your customers’ level tasks was that the triggers,
desired outcomes outcomes, and task drivers were
Users turn to your product to solve very different from what was
a problem and have a solution in supported by the online florist sites
mind. Typically that solution is just at that time. This ensured we were
not going to merely automate the Two
a part of the desired outcome. For Words
example, buying flowers online is current frustrations.
not the desired outcome. Getting
out of the doghouse because you That observational insight led to the
forgot your anniversary is. These design approach that supported the
end-result outcomes are one of highest average conversion rate on
the more predominant factors in the web!
defining your user experience
objectives.

The desired outcome rarely has
anything to do with your product.
It is more likely related to something
generic to the users’ needs. The trick
is identifying what those needs are
and how your product can serve
those needs.


Pragmatic Marketing Framework Guide for Executives

Pragmatic Marketing Framework Guide for Executives

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