1. Lecture 3: Talking to
Users
Summary of Sam Altman's Class on:
http://startupclass.samaltman.com/courses/lec04/
1
Email: luke@ghacklabs.comTwitter: @GHackLabsWebsite: www.ghacklabs.com

2. What You Shouldn't Do
• The novice approach is thinking, "I
have this really great idea, I don't
want to tell anyone about it.
• I'm going to build, build, build and
then going to maybe tell one or two
people and then I'm going to launch
it on TechCrunch or somewhere like
that, and then I'm going to get lots
of users."
• What really happens is because you
didn't get a lot of feedback, maybe
you get a lot of people to your site,
but no one sticks around because
you didn't get that initial user
feedback.
2

3. What You Should Do
Immerse yourself in the industry.
What this means:
• One: become a cog in that
industry for a little bit. Take 1-2
months working in that
industry, see how it works. The
advantage, you will be able to
see and exploit inefficiencies.
• Two: Identify customer
segments. Choose a small
market within a big market.
Don't start with everyone first.
3

4. You Have to Be an Expert
You should be so obsessed that you want to know what everybody in that
space is doing. Google searching competitors, click on every single link from
0 to 1000. You should be come an expert in your industry. Their should be no
doubt when you are building this that you are the expert = customer trust.
4

5. Use Surveys to Validate Your
Idea
5
Here's a great link that explains it: http://
www.forentrepreneurs.com/surveys/

6. User Surveys -
Sean Ellis,
The 40% Rule.
Objective metrics, using qualitative data:
How would you feel if you could no longer
use this product?
1. Very disappointed
2. Somewhat disappointed
3. Not disappointed
4. N/A
If 40% of the people surveyed said they will
feel Very Disappointed, you have a winner.
Here's the link to the full article:
http://www.startup-marketing.com/using-
survey-io/
6

7. How do you get users
• The first users should be obviously people you are
connected with.
• You and your cofounder should be using it, your
mom and dad should be using it, and you're
friends and coworkers should be using it.
• Beyond this, you want to get more user feedback.
7

8. Getting More Users:
HomeJoy Case Study
• Went to a street fair, tried to chase
people down to get them to do a
booking = fail.
• It was a hot and humid day.
People were gravitating towards
the food & drinks area. An idea.
• They decided to hand out free
bottles of iced water. People kept
coming for water.
• People felt obliged to book a
cleaning. The result, the majority
of the people, kept using their
service after = a big win.
8

9. The 3 Types of Growth
• Sticky Growth: Is trying to get your users to come back and pay you
more, or use your more.
• Viral Growth: Is when people are talking about you. So you use a
product, you really like it and you tell ten other friends, and they like it.
• Paid Growth: You can use money to buy growth, As an example,
Google Adwords.
Extra Reading Viral Coefficient: http://andrewchen.co/viral-coefficient-
what-it-does-and-does-not-measure/
9

10. Now you have users.
What's next?
The first thing you should do is make sure there is a way for
people to contact you. Ideally you should have a phone with
voicemail.
Next, what you should be doing is going out to your users and
talking to them. Get away from your desk, and just do it.
This is where it is going to teach you what features you need to
completely change, get rid of, or what features you need to build.
10

11. The Honesty Curve
Some people will just lie to you.
These are degrees of separation
from you, and this is their level of
honesty.
• Your mom will be honest and
proud.
• Friends will be pretty honest too.
• Random people, they don't
know who you are.
• Honesty differs between free
and paid products for all people.
11

12. The
Frankenstein
Approach
Beware. Great you talked to all of
these users and they gave you a
bunch of new features. Don't build
straight away. Figure out what is the
actual problem behind their
suggestion. This means, more
testing.
12

13. Sustainable Growth
Don't be a leaky bucket. The money you put in has to
have a good return of investment.
13

14. CTV/ LTV
• CLV, some people call it TLV, is
a customers lifetime value. It is
basically the net revenue that
a customer brings in the door
over a period of time
• A 12 month CLV is how much
net revenue a customer pays
you over 12 months.
• At period zero, you are at
100%.
14

15. Customer Segments
• Cohort is another name for customer segments.
• For example, you might look at female versus male cohorts
in Atlanta, Georgia versus people in California cohorts.
The most common, is monthly.
• So in March 2012, 100% of the people are using your
product. Now one month later 50% of the people might
come back. Expect some initial drop off.
• Over time, what you want is your curve to flatten out. These
become your CORE customers. These are the ones that
will stay with you over time.
15

16. Program Mechanics = Referral Programs
The most common is $10 for $10. You get $10 if you invite your
friends, and they use it and they get $10. Extra Reading Upsell
Strategy: https://www.groovehq.com/support/upsells
16

17. Have a Realistic Growth Plan
What this means is an optimistic but realistic way to grow the business?
It might look like something like this, in week one you just want one user, in
week two you want maybe two users and so forth. And you keep doubling up.
It is when you grow it to 100 users a week, that's when you need growth
strategies to start working.
17

18. A Pivot
If you have 100 users per week and your product has not
grown in 4 weeks, it might be time to consider a pivot.
Extra Reading on Product Market Fit: http://www.startup-
marketing.com/the-startup-pyramid/
18