With this post I'm starting a series where I'll be writing about how to apply lean startup methodologies when revamping a complex product that already has a lot of customers (though not necessarily happy). I'll be expressing my personal opinions on how stuff work and may be completely wrong in many cases. My aim here is to work through this problem for my own gain, but with your help, and at the same time share the experience for others to gain from as well. So here it goes...

I'm not going to go in to the specifics of what a lean startup is but here's a crash course.

1. Be efficient with your capital. Operate with as little waste (of time) as possible.
2. Don't reinvent the wheel - use open source solutions that fits your needs
3. Extreme customer centric, rapid iteration, agile develpment process. (see Customer Development by Steve Blank)

These tips seem pretty fair and I got extremely interested in this considering my experience with Tablefinder.com where we were probably as far from customer developed as possible, even though we were agile (in some ways).

A little background

Now I'm part of a much larger company, about 50 people, working in the travel industry. The company is 10 years old, but our CEO still considers it a startup, and I agree in some ways. The way I see it the company is extremely customer oriented and has been since the start - developing a destination packaging system for the first clients. We are now the market leader in Scandinavia and have most destinations as our customers.

Imagine developing a web solution over 10 years where each new customer says "Yeah, I want to buy this... if you make these modifications so it suits our needs". Our customers, Destination Marketing Organisations (DMOs), are all very different in terms of business models and financing and so on. This is why we have had to make our system extremely flexible and dynamic, and also very specific for our customers needs. One problem with this is that some solutions for one customer is directly the opposite of what another customer need.

I guess one could argue that this is Customer Development, but I don't think so. This is Customer driven development which is in some ways completely different. A client says: "I want this feature in the system, and I'll pay you X to do it." Running after all X:s will soon create a chaos in the product and 100% of resources will be busy maintaining the system. Each new improvement of the system will take extremely long to implement and test. And many times, the feature that a client want to pay for may be something that their board has decided that they absolutely need. IE no end user verification what so ever.

We recently acquired a company that delivers free downloadable travel guides for over 400 destinations world wide in up to 22 languages. I'm now the acting CTO and have a mission to develop the new arrivalguides.com site. The main product of the company is a downloadable PDF guide which is free (includes a few local ads for the destination). But the product is much more complex than that. We have a large partner network including partners like Ryanair, SAS, and other big travel related sites, where users can download the guides. Then we have the DMOs, our paying customers, which pay to control (parts of) the content of the guide. And finally we have the local advertisers on each destination, which are paying for each download made.

The problem with both products mentioned here is that due to the complexity of the systems (especially the first, Citybreak DMS) implementing a new customer takes very long time and involves a lot of costs.

So Arrivalguides is also a very complex product that have many different requirements that still need to work after we revamp the product.

How to start?

My goal is to implement the new arrivalguides.com using lean startup and customer development techniques even though this is a complex product already in production.

The problem is... where do I start? I honestly don't know. I'm all for feedback here but I will go down the path that I think is best taking decisions as I go along. People say that I'm bad at planning, and I agree, but it's on purpose :). As in a startup, there is no point writing a 5 year plan, if that delays getting your product out there. I like to call this Reactive Planning. But please do comment on all the things I'll be doing wrong. This is a work in progress.

Analysis

Analysis step 1: Identify problems with existing product

• new partner integration is too complicated
• the system consists of too many parts in different programming languages
• the system is not focused
• the system is used in different ways for different partners
• Many different "customers"
  • End users
  • Partner sites
  • DMO partners
  • Guide Advertisers
  • (Site advertisers)
• Slow databasemodel
• Slow administration system
• We don't have metrics for everything end users do

Analysis step 2: Identify the stuff that is working

• End users must like something since we reach over 500 million travelers every year. Problem is that we don't know how many we are missing/not converting
• The guides are great, once people have downloaded the PDF they usually love it.

Actions

The first thing do to here must be to evaluate what features people are using, and then set up a couple of different MVPs (Minimum Viable Product) for those and test it out. But how can you test an MVP when the system has so many demands from existing customers?

Action Step 1: Get metrics for how users are using the product

In order to know what metrics to collect I guess I need to know what goals we are trying to accomplish. One revenue stream that is easy to measure is downloads of guides. Of course we already have metrics for the number of guides downloaded per partner site etc. But I want something more where I can track the exact funnel and see where we are loosing downloads.

Action Step 2: Prepare for a continous deployment development environment.

We are going to develop the new site in C# ASP.Net MVC 2, and probably use MongoDB as the database engine. For other projects we use the awesome TeamCity product from JetBrains and will do so for this as well.

Action Step 3: Prepare for a good A/B testing environment

This has been one of my main questions for a while; what are the best practices for setting this up in an MVC solution? I guess that in the end it is just a matter of switching views for a certain number of visitors, and keep the underlaying controller logic the same. Please give me feedback on this if you've done something like it before. I'm also looking forward to a KISSmetrics beta invite to use to be able to track the stuff I want in a way that is more difficult to do with say Google Analytics.

Being lean?

We have all the technical skills we need to execute this project, but one thing we don't have is time. This is mainly due to how other products have been developed in the past, and we are only a couple of guys running this. Isn't this the perfect setting to try and be lean? I mean in a way that we need to absolutely optimize our time and not spend any time developing something that our customers don't want.

One big problem here is the organization. We have very talented sales people that sign new deals everyday selling stuff that we will develop, which is nice on a financial view. But I don't think this is the right way to go. (I hope I don't get fired for writing this though...) We need to have better focus on our existing product and analyze how people are using it. This sounds easy in theory, but how can we do this when we are dependent on the cash flow from paying customers?

I think I'll leave this for part 1 of this series, and it's time to take the first steps. My mission will be to try and force this type of product development strategy in the organization by proving that it works. So again, I need all the help I can get, and if you're a pro in this area, don't hesitate to leave a comment or contact me directly.

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As you might have read in my previous posts, I tend to speak very highly of Seedcamp. Still now, some 3 years after attending Seedcamp week as a participant and later winning the whole thing, it was the most eye-opening, developing, and the best learning experience in my whole life so far. It's not the idéas that make a company, not even only the people running the company. What truely makes a difference, is the people around you. Feel free to contact me if you have any doubts about applying or otherwize need help/support. You need to follow me on twitter. Below is information about the Seedcamp applications for this year.

Seedcamp Week 2009 applications are now open for the next wave of European web-tech talent to apply

Seedcamp Week 2009 is a weeklong programme from 21-25th September that connects 20 early stage web tech startups with over 400 highly experienced and sought after entrepreneurs, investors, marketers, product and developer experts.  The 20 teams do compete for seed funding, but most importantly, garner world-class connections and recognition in the European entrepreneurial ecosystem. At the end of the week Seedcamp will invest up to €50K each in 5 teams for a small equity stake (5%-10%).

Applications are now open and being accepted till August 23rd. More details are on our website (www.seedcamp.com) and blog (blog.seedcamp.com).

Best regards,

Anders - hopefully mentoring this year again.

When I was pitching Tablefinder.com to investors I always ended my pitch with:

-Do you want to leave this market fragmented?
Or...
-Do you want to help us change the world?

As of today, I'll be helping out to organize the event here in Gothenburg. So take the opportunity to meet new friends in the social media sphere here in Gothenburg and have a glass of wine while we donate money for a good cause.

The event will be held at Soho (http://www.sohogothenburg.com) and start at 7pm. You can buy tickets at http://www.amiando.com/twestivalgothenburg.html

Soho is sponsoring the event by providing a place for us to meet and all ticket revenue will go directly to charity:water.

If you don't want to buy tickets now but are planning to attend, you will be able to buy tickets at the door. But please send me a message either here of dm me on twitter (http://twitter.com/andefred) . Apparently you actually have to buy tickets before the event. See the comment below.

I was at the first ever Twestival last fall in London and it was an awesome event. I'm really looking forward to this one, and I hope all of you are too.

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There is a reason why the economic downturn has not affected internet startups in the same way as traditional businesses. The internet just passed 1 billion users and bandwidths are continuously increasing at the same time as online advertising and e-commerce is still growing strong. Simply put, the overall market is getting much bigger. Launching a new internet service today is so cheap and easy that it can be done literally for free and in just 24 hours. But putting together a product in as short time as that puts even more focus on measuring what the users actually are doing with the product. You will probably have one idea, but your users might have another. Through simple real time tracking of defined user metrics it is much easier today to make rational decisions based on actual user behavior.

After seeing a presentation by Dave McClure at Seedcamp this fall I got really interested in metrics for startups. According to Dave there are five different areas that are important to measure when it comes to a new internet service or product. In this post I will try to go through and give tips on how they apply to your business. The five areas are:

• Acquisition
• Activation
• Retention
• Referral
• Revenue

Acquisition

This one is quite basic when you first look at it. Let's face it, if you have a website you'll want users coming to your site. But how should you measure the differant ways you get them. The first single most important thing is also the most obvious. You should have a killer app. Focus on creating a service with one really crisp functional feature that works really good that your users love. But before we go into that let's focus on the acquisition metrics. Try and find your different marketing channels may it be SEO, SEM, PR, Facebook, Email, Widgets or campaigns. Measure volume, cost per acquisition, and best performing conversion. Find your top 10-100 keywords that you should buy adwords for and use Google Analytics extensively. Set up goals and look closely at clicks vs. CPC vs. conversions of each goal.

Activation

Once you have your users coming to your site you need to get them to do something there. This has to do a lot with clear communication of what they can expect to do at your site. Here you need to measure any type of activation that seems logical for you, but keep the different metrics low in the numbers. Things to measure could be, clicks on links, sign ups, low bounce rate, pages per visit, and even mouse movement or eye tracking. Concrete tips on improving these metrics could be A/B testing which you can do with Google Website Optimizer, experiment with many different landing pages, and literally watching over the shoulder of a user when they enter the site. A great tool for this that I recently ran into was UserFly where you can record and playback the users' sessions with mousemovements and clicks and everything you need. Crazy Egg is another good resource for heat maps of user clicks. The best way to start is to make a lot of dumb guesses of what might work and then iterate really fast on those that work.

It just struck me that you might be able to apply genetic programming techniques for the A/B testing. Create 20 different versions of a landing page. Then take the best performing 2 and combine them into 15 new versions that are similar to them, then create 5 that are based on them but include some sort of mutation. Do this for a couple of generations and you'll probably have a pretty good view of what works or not.

Retention

How do you make your users come back to your site over and over again? Even if I usually don't like when services sends me emails, it is still working because I go back to their site. Take facebook for instance. I get maybe 10 facebook mails per day which takes me back to the site because there is something I'm interested in there. Automated email marketing and alerts should not be underestimated. The only really important thing here is to make it easy for the users to unsubscribe. Emails could be sent quite often in some cases, but in others it only makes sense each month. Subjects could be the status of a user's account, best of lists, or interesting news where something has changed. Just remember to keep 80% of the message in the subject line, and 20% in the body text. Other than email, blogging and news feeds are crucial to keeping your users incentive to come back high.

Key metrics here are to measure the distribution of visits over time. That is how many times a visitor comes back over a period of time and how fast the decay of visits is. This will show you how a full customer life cycle and measure its effectiveness. When it comes to email and news feeds, it is important to measure how many people actually open the email. You can do this by including server loading html or tracking images. You should measure the CTR and the total number of users coming to you through your emails. This can be done with for instance campaignmonitor.com. Relevant levels for this is of course dependent on your site and users, but goals could be 20% open rate with 2% CTR. You should use this tracking to try and identify you fanatical users that will actively promote your service. These are the users that can get virality going and you should pay close attention to them. With Google Analytics you can easily measure visitor loyalty and session length as well as conversions once you've set up your goals from landing pages.

Referral

Once you've found your fanatics and cheerleaders you need to have tools that allow them to easily refer their friends and followers to your site after they've had a happy experience visiting. This can be done with simple social "share this" buttons, or widgets that can be embedded on other sites and blogs. There is a really simple formula for measuring the Viral Growth Factor.

X * Y * Z

• X = % of users who invite other people
• Y = average # of people that they invited
• Z = % of users who accepted an invitation

A viral growth factor that is > 1 means that your organic growth of users is exponential.

And finally Revenue

This part is where the general tips stop to be important and you have to look at the combination of all of your other metrics to figure out what each new user is worth with your business model may it be AdSense, Freemium, Subscription, or Lead generation. For tips on business models you can have a look at The Business Model DataBase. There is a reason why this is the last area of measurement. It might be wrong to start with the revenue model when you develop your new service. Don't let that hinder your progress in acquireing, activating and retaining users. It doesn't matter if you have the best most innovative business model in the world, if you don't have any visitors.

Keep your costs low, focus your development 80% of improving existing features and 20% on new features, all based on your super detailed metrics. And to cite Dave McClure:

Features don't matter... Usability + [Measured] Conversion Matters

My whole purpose for creating a GTD tool was that I felt a need for this type of service my self. Other services like Remember The Milk and just didn't do it for me. My main inspiration has been the excellent program Things which is perfect and do it just right, with a few things (no pun indended) that I'm missing.

The most important step for Getting Things Done is that there is absolutely no friction when collecting an idea. There is a reason why most computer geeks still have a pen and paper right next to their computer as it is a really fast way to get stuff out of your head. My approach to solving this problem is to offer as many fast and simple methods as possible for collecting ideas. I started implementing the one I thought was most useful - collecting by SMS, since I've at times been sending an SMS to my self to remind me of something.

The problem in everyday life with many different collection methods is that all those collected ideas end up in a bunch of different places or at best in one of many inboxes you might have. Having one inbox with everything is in my case the key to success. Well that is if I empty it of course, and even more importantly, actually do the stuff that was in the inbox. Because emptying the inbox is a good start but only half way there.

A key factor for me starting to use the system is that I create a system that is complete and that my brain really trusts is a better storage area for ideas rather than the brain itself. We'll see what happens. Firstly I must get rmindr to the next level where I can start trusting at least parts of the system, and then keep on working on it until I'm all the way there.

For me it was an absolute relief just to have somewhere to unload my brain of ideas when I first starting using GTD. In my case I used Things and mostly my Someday/Maybe list which by now is very long. I've implemented Inbox Zero with my email which works great for me even if I don't get super amounts of email (around 50 per day) but my inbox is empty now and is every night.

How would you like to collect ideas? I want to create a small app for OS X and Vista and others that run in the background and listens to a shortcut and opens a collect box from what ever application you are in. When clicking save, the message will be stored in your rmindr inbox. So if you are good at Cocoa or .Net and want to use my soon coming API, feel free to contact me here.

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Image by dead_squid via Flickr

Ok, he really take things to a whole new level. Talk about having an organized desk. Look at this video for some tips on how to implement your own system. That's really what this is all about - implementing your own system. Your mind have to be confident that things will not be forgotten once they're put into your system. With my new service productivity tool I want to give you an opportunity to build a system that you can trust.

One of my biggest problems implementing GTD has been that I have so many different inboxes, and it has been difficult to carry around all the different lists that need to be used. That was the reason I built rmindr.com - it gives me one global inbox that I always can access, and through RSS always access my lists from any phone or other device with an RSS reader.

Yesterday at 12 noon the first 24 hour business camp ended. I participated with my Getting Things Done service rmindr.com that I first wrote about a while back.

My 24 hours consisted of everything between 4-hour-dig-downs in weird php errors (later saved by a Hjalmar php hack), and taking a soothing bath outside in 40 degrees water overlooking the snowcovered rocks in the Stockholm archipelago spa Hasseludden Yasuragi.

The event itself was without a doubt one of the best and most productive entrepreneurial events I've been to. The location certainly added to the excitement, but mostly it was the people's attitude towards entrepreneurship that made an impact on me. When the event ended, the participants were asked if they would want venture capital for their idea, and only about 3 out of 90 put their hands up.

I don't want to put too much into that because it is normally not 24 hour ideas that get funded anyways, but it shows that starting a service or product on the internet has never been easier or cheaper. These services will not likely be the next Google's or Amazon's, but it can easily be services that bring in some revenue for their creators. This type of "minipreneurship" is really starting to boom, and events like 24hbc is proof of that. You can easily start something in 24 hours if you put your mind to it and make sure to focus your idea.

Learning from my Seedcamp experience "focus" and "metrics" are the two most important words I've brought with me. So based on that this is how I focused by 24 hours at 24hbc:

• Step 1: Make my development setup work on the production server. (to enable fast deploy during the development)
• Step 2: Define basic functionality for the site to be valuable. For rmindr.com those features were:
  • Create actions with tags and notes
  • Access context lists through a private rss feed
  • Move actions to different focuses (inbox, next, someday/maybe, scheduled)
  • Collect ideas by sms from a cellphone
• Step 3: Define advanced features that can be included if there is time left
• Step 4: implement

I managed to get all of step 1 and 2 done to a level where they could be released in an alpha version. I never managed to get into the very necessary but quite advanced feature of organizing actions into projects in an infinite number of levels. That will come in the beta release. Maybe in another 24 hours... or not.

I've had this idea for almost a year now and I did the interface design this summer. So an event like 24hbc was exactly the push I needed to get it out there.

Thanks for any input regarding rmindr.com and feel free to vote for my project at http://www.24hourbusinesscamp.com.

As of lately I have been quite into the "Getting Things Done" methology. I'm very bad at implementing it myself, but I'm quite good at telling other people how and why they should use it. I just found this interview by Robert Scoble on fastcompany.tv where he interviews David Allen to get some of the core stuff of GTD out from him. http://www.fastcompany.tv/video/david-allen-on-getting-things-done

As I have been listening to one of David Allens seminars I've been completely sold on the idea of GTD. Although I've only implemented a small portion of the system I really feel a lot less stressed. Earlier I had problems sleeping because there were so many ideas floating around in my mind that I had to keep track of. Now I'm using a tool called Things to keep all those ideas for me. A huge relief not having to remember everything at all times.

The next step for me is to get really good at the weekly review. Because without having a good routine for that, everyone will fail to fully implement the system. I'm not saying that because David Allen says so, but because I'm 7 months into implementing the system, and I've noticed that I look at my lists far to seldom nowadays. If I do the weekly review, I will put the right stuff on the right list at all times and will probably check the lists more often.

That leads me to the biggest problem I have with the system. How do you keep your lists? It's quite good when I'm by my computer, but then at the store and so on there is no way that I would carry around a bunch of paper lists just to see what's on there. Now with the Iphone, there are a lot of new tools for keeping those lists, but in some ways I think it's a bit too complicated since it is still a platform specific solution.

Enter rmindr.com, my main on-the-side project. It's an online GTD app much like any other GTD app out there. With one big difference. The userinterface just works. It is highly inspired by Things (mentioned above) because that fells natural for me. I don't really think this service will make me rich or anything, but what it does is that it solves a problem, in particular My problem. With rmindr you get all of your context lists avaliable on any device through RSS. Collaboration is really simple with drag-n-drop ease to delegate tasks. Collection is really simple through the API where collecting a new task through any medium or tool will be possible, and as easy as a HTTP Post to a specific URL, or a MMS/SMS/Phonecall to a specific number.

With the RSS context lists I'll be able to see my grossery store shopping list with any phone while I'm in the store.

The service will be launching shortly as I'm putting the last bits and pieces together. Stay tuned for more info. I won't have a beta sign up page unfortunately, but if you subscribe to the rss of this blog you'll no when it opens.