Customers Hate Your Product? Try This Lean Startup Technique And They’ll Love it. – With Eric Ries

If you’re reading Mixergy, I know you routinely work hours that most people don’t know exist. Imagine if you spent all that time building your business–plus risked your money–and customers hated what you built. Want to learn how to protect yourself from that devastation? In this program Eric Ries teaches you the lean startup ideas that saved his business when customers hated his product.

Video excerpt:

Get the full program:


About Eric Ries:

Eric Ries

Eric co-founded IMVU and is the author of Startup Lessons Learned.

Text excerpt:

Out of frustration that users weren’t installing Eric’s virtual add-on for instant messaging, he brought target users into his office and asked them to try his software. Here’s how it changed his business.

You gotta imagine a seventeen-year-old teenage girl sitting down with us to look at this product. She chooses her avatar and she says, “Oh, this is really fun.” She’s, customizing the avatar, deciding how’s she’s going to look, she gets into that. She’s like, “That’s really cool.”

Then we say, all right, it’s time to download the Instant Messaging add-on. And she’d say, “What’s that?”

And I’d say, “Well it’s this thing, it interoperates with the instant messaging client…”

And she’s just looking at us like, “I’ve never heard of that. My friends have never heard of that. Why do you want me to do that?”

I mean, it requires a lot of explanation. instant messaging add-on – it’s not a category that exists in her mind. But, since she’s in the room with us we can talk her into doing it. So she downloads the product, we have her install it on the computer, and we’re like “okay, it’s time to check it out, you know, invite one of your friends to chat.”

She says, “no way.”

We say, “Why not?”

She says, “I don’t know if this thing is cool yet. You want me to risk inviting my friends to a thing that I don’t think is cool? What are they going to think of me? If it sucks, they’re going to think I suck, right?”

And we say “No, no, it’s going to be so fun. It’s a social product…”

And the look of dubiousness, I mean, you can just see, this is a dealbreaker. And of course the first time you have that experience you say, “All right, it’s just that person, let em out, you know, send them away. Get me a new one.”

So then the second customer comes in. Same thing. Third customer comes in, same thing. You start to see these patterns and you’re like, okay. No matter how stubborn you are there’s got to be something wrong here.

The customers kept saying stuff to us like, “Uh, well, I want to use it by myself. So I want to try it out first, to see if it’s really cool before I invite a friend in.”

So we’re all from the video game industry, so we understood what that meant. That meant single-player mode. Right? So we built a single-player mode. So what’s single player mode? What that meant was after the customer would come into our office and customize their avatar – remember, they really liked that part – then they would download and we would let them decorate their avatar, and kind of show them the cool moves you could do and decorate their room, all their stuff by themselves.

So we have them do that, and then we say, “Okay. You did it by yourself, now it’s time to invite one of your friends.”

And you can see what’s coming, right? They’re like, “No way.”

We say, “Why not?”

They’re like, “This isn’t cool!”

And you can sense the frustration – we were like, “We told you it wasn’t going to be cool! You know that is the whole point of single-player..”

And they just look at us like, “Listen, old man. You don’t understand. What is the deal with this crazy inviting people before I know it’s cool, like, it’s just a total dealbreaker.”

And so out of complete desperation, we were like, “Okay, fine, we’ll introduce a simple chat now feature.” It was a matching thing where you could push a button and you would be randomly matched with somebody else from around the world – the only thing you have in common is you both pushed that button at the same time.

And we did that, and all of a sudden people were like, “Oh, this is fun.” And then – then here’s what happened. So we bring them in and they do the Chat Now, maybe they meet somebody new who they thought was kind of cool. They’d be like, “Hey, that guy was neat, I want to add him to my Buddy List. Where’s my Buddy List?”

And we say, “Oh, no, no. You don’t want your own Buddy List. You want to use your regular AOL Buddy List” because that’s interoperability, network effects, all this nonsense.

And the customer’s looking at us like, “Well, that doesn’t make sense. What do you want me to do exactly?”

And we said, “Well, just give that stranger you just met your AIM Screen Name so you can put them on your Buddy List.”

And you can see the eyes go wide – they’re like “Are you kidding me?! A stranger on my AIM Buddy List?”

And we said, “But – but otherwise you’d have to download a whole new instant messaging client! And then you’d have to have your separate Buddy Lists.”

They’re looking at us like, “Do you have any idea how many instant messaging clients I already run?”

We said, “No, what, like two or three?”

And the teenager responds, “Duh! I run eight!”

They were already running, like, fifty clients! I mean, I had no idea how many instant messaging clients there were in the world. And we had this preconception like, “Oh, it’s a challenge to learn new software, and it’s tricky to move your friends over to the new Buddy List,” and all this other nonsense sitting in our heads that just, for our customers, looked at us like we were crazy.

I mean, we’d be drawing them at the white board – the strategy diagrams – for why this was brilliant and they’d just be laughing at us. They’re like “What are you talking about?”

We’re in a mental model of how people use software and what it was about was years out of date. So eventually, painfully, after tons of meetings like that, it started to dawn on us that the IM add-on concept’s not working anymore.

And you’re looking at the guy who wrote the code to do the IM interoperability. I don’t know how many tens of thousands of lines of code that was.

It was a real revelation to me after my co-founders finally convinced me… I was very slow on the uptake, believe me… all the energy that I put into that software, despite all the best practices we had used to build it, was still waste. It was still a waste of time to have built it, and we had to throw all that code away. And it was actually very painful.

Luckily my co-founders were able to convince me against my better judgment to do it, but it became a real touchstone for me, a real lesson in really getting serious about what constitutes progress in a startup. What is waste, and what’s adding value.

To me the biggest source of waste in any startup is building something that nobody wants.

Full transcript (experiment):

In the spirit of the ideas we discussed in this program, I’m not going to pay for a transcript of the full program, unless at least 100 people request it. If you and 99 other people join Mixergy’s List (free), I’ll have a transcript made of this (incredible program) and give you an advance copy.

Name:
Email:

The full program includes:

  • Learn how charging for your product can help it spread.
  • How to do stealth mode that won’t destroy your business.
  • How to pick a name for your company.
  • Andrew becoming a Lean Startup fan boi.

[This interview happened because Kareem Mayan cared about what you and I are trying to learn here on Mixergy.]

Suggestions for your comments:

  • How can you use these methods in your business?
  • How can I use them here on Mixergy?
  • Who else can I interview about user experience?
  • I used ScreenFlow in the summary video. Is it clearer?

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  • http://mixergy.com AndrewWarner

    Sorry about the long excerpt guys. I hope I didn't overwhelm you.

  • Khuram Malik

    Dont be sorry. The long excerpt was great.
    Im going to watch the full video right now, and im gna FORCE my biz partner to watch it!

  • http://mixergy.com AndrewWarner

    Thanks. There's a movement here that Eric is at the forefront of.

    It's a movement with ideas like, “sell before you buy,” “build WITH your
    customers,” and “keep things lean.”

    I want to do more interviews around these issues.

  • Khuram Malik

    Great interview!

    Im definitely going to implement this in my business, in fact we have already agreed to make a start on this, so im working on the iterative process and customer interaction as of tomorrow.

    So i'll report back as to how things work out.

    Incidentally, i noticed you asked Eric why he is giving away so much of his time for free, and what is the higher purpose.

    So if its not too forward and presumptious, may i ask you (Andrew) what is your chief aim with Mixergy? What is it that drives you to labour hour after hour on the interviewing and video editing?

    (i hope the question does not sound ungrateful).

  • http://mixergy.com AndrewWarner

    I don't want to die without leaving my mark on the world. I want to leave a
    legacy.

    I get into it in more detail on the bottom of this post, where I showed my
    previous company's finacials:
    http://mixergy.com/my-financials/

  • http://how2livelife.blogspot.com NewWorldOrder

    Excellent interview. If you could get Steve Blank in an interview that would be pretty sweet too. I'm currently making phone calls to hypothesized customers to try to better determine they are in fact customers. Realizing that facts exists with the possible customers (not that they will always communicate it verbally) was and is a real motivator for having the guts to interact with the possible customers.

    An idea for you, is to offer to sell through your Website a consolidated version of your interviews, where you distill key lessons from each interview. Maybe it could be in ebook form. However, you'd sell it before you wrote it :o).

  • http://mixergy.com AndrewWarner

    So you're the one who submitted my interview to Hacker News. Thanks!

    Thanks for the suggestion on what I should sell. Great idea.

  • http://how2livelife.blogspot.com NewWorldOrder

    No problem regarding the HN submission. I feel like this whole blog was made just for me! There's truly worthwhile content here for anybody that's even slightly entrepreneurially inclined.

  • momob

    Again, a great interview. I really love when the people you interview just start talking on their own without always waiting for your questions after every 30 seconds. It nice to see people who can explain their stuff and time to time stop long enough to get your guidance on what to talk about next. The interview had a perfect timing to it. You are very good at sensing when the person needs some more questions because they have said what they wanted to say. That's very informative and cool to see!

    I have just finishing a Palm/Treo a very realistic F-16 flight combat simulator (mobile game) I was in stealth mode for one year! This interview (and other here) made me see how much that was wrong! Even so I had couple of alpha testers over that time, I still think now that it was big mistake. I was not able to get a complete feedback and mostly did it the way I thought it needed it to be done. I hope it will be a success but if not, I will know why… Thanks God, it is just an hobby of mine and I am not waiting for that product to put food on the table. No more Stealth mode for me!

    Thanks Eric, thanks Andrew!

    Mo.

  • Allen

    I loved the first 10 minutes of the talk. I haven't been able to see any more than that because the flash video player always cuts out. After that, I get infinite spinning wheel of doom. I've tried reloading the page, and the video cuts out after 5 minutes. There is also no way (that I can figure out) to skip forward into the video.

    I'd really love to see the whole talk, but iff you're going to use a sub-standard flash player, at least give me the option to download the video in quicktime or whatever.

  • http://www.keywordintent.com Jacqui Jones – KeywordIntent

    This was a great interview with Eric Ries. Great questions… excellent responses.

    Not too many people correlate the waste of human capital (time, energy and intellect) with the demise of the economy, however in my mind, it has contributed quite heavily towards it.

    I look forward to the day whereby corporations, big and small, operate sustainable business practices.

    Thanks for all the learnings… there is much I can take on board with my own startup.

  • http://reasonablyopinionated.com Alan Pinstein

    Wow, man, excellent interview. Really drives home the point that Agile development isn't about making it easy to iterative development, but easy to iterate the *product* in rapid succession with customer feedback.

    Very well done.

  • momob

    Hello Allen,

    You should try then the MP3 file. I have listen to the all thing and no problem on that format.

    I hope this helps.

    Mo.

  • http://lispt.com Akshat

    Simply fantastic. I have read all of Eric Ries' blog posts, and even then I found this interview useful.

  • http://www.gtbooks.net marvinythomas

    Another great interview, I wish I had thought like this about 2 years ago when I building in stealth…eventually failed to launch. My next project will be way more agile and iterable.

    I have heard that Zara is a great example of clothing company that its quick to iterate upon a failure…they put a product out and take it off the shelves if it doesn't sell. Unlike Gap who has to leave unwanted discounted clothes lying around.

  • http://mixergy.com AndrewWarner

    Thanks! I'll keep it up.

  • http://mixergy.com AndrewWarner

    Thanks.

    I'd love to hear about your past company. Any time you're ready to talk
    about it, email me.

  • http://mixergy.com AndrewWarner

    Thanks Akshat.

    One of my challenges is keeping my interviews helpful and new for people who
    already know the interviewee.

    When I interviewed Tim Ferriss, for example, I could have asked him about
    the 4 Hour Work Week, but everyone already knew everything bit of that. So I
    asked him to show us how he made the book such a hit.

    BTW, I like the concept behind your site.

  • http://mixergy.com AndrewWarner

    Doing the interviews by video Skype makes it hard to get into a good rhythm,
    but when it happens, it's a thing of beauty.

    Thanks for sharing your app experience.

  • http://mixergy.com AndrewWarner

    I just had blip.tv re-encode the video for you. They say it won't keep it on
    their servers for long, but you should have plenty of time to grab it (if
    you still want it).

    http://blip.tv/file/get/Mixergy-EricReisMixergy

  • http://mixergy.com AndrewWarner

    When he talked about waste, he reminded me of my interview with Tom of
    TerraCycle, who doesn't believe garbage is natural. His company's products
    are all made of waste.

    Once he stopped taking waste for granted, Tom said his margins shot up.

    Here's the interview I'm referring to:
    http://mixergy.com/inspire-passion/

    Thanks for the comment Jacqui!

  • http://mixergy.com AndrewWarner

    Yup. That should always work. Thanks for helping Mo!

  • http://www.evolutionofbpr.com Greg Y

    This is one of most educational interviews I have seen in a long time. It's very unfortunate that I could not attend Eric's workshop in SF. I'll gather my courage and “walk” the minimum acceptable product path. I also subscribe to Lessons Learned and follow Eric on Twitter. Great work!

  • http://mixergy.com AndrewWarner

    Thanks Greg.

    It really can be a rough road.

  • TaeFitz

    Another excellent interview and in my case very timely.

    Beta launched 1 week ago and decided last night to kill a major feature and speed up a feature set I was planning for in 6 months based on feedback. I realized that I misread the market and what I thought I had more time to develop is far more urgent and the seemingly easy entry point was already clearly dying.

    Couldn't have made such a hard decision quickly if it wasn't for all these interviews.
    Thanks, Andrew. Although I can't attest to the value of your work by being a success story, I can definitely say that these interviews are extremely influential in the process of.

  • http://mixergy.com AndrewWarner

    Those are some tough decisions. Glad these interviews helped.

    Lately I've been picking my interviews based on requests from entrepreneurs.
    Let me know if there's anyone I can bring to Mixergy to help you with your
    business.

    And I'm looking forward to hearing how the new feature set you're working on
    goes.

  • http://venturehacks.com Nivi

    Thanks for a great interview Andrew.

    1. I think another reason people go into stealth-mode is “Apple Envy.” The idea that we know the problem, know the solution, and we should release a perfectly polished jewel that solves the problem for a lot of people.

    Stealth mode may make sense for teams that (1) already have deep domain expertise (they know the problem) and (2) are creating a solution for an existing market (a faster, better product) where the competitors are likely adapt quickly. But that's a guess.

    2. The take-away from the naming story is that while you're experimenting on a micro-scale, your name doesn't matter. You can experiment with some customers, throw away the product, throw away the customers, get a new name, and start over very quickly and cheaply. Disposable names and micro-scale experimentation go hand-in-hand. Names matter when you are doing a marketing launch and you are positioning your brand to lots of people.

  • http://socialchemy.com Cliff

    Bless you, Eric. Smart guy, great speaker, generous teacher. We all benefit and Eric will do just fine. This is part of the old school hacker ethic applied to entrepreneurship.

  • http://mixergy.com AndrewWarner

    Thanks. Your work helped me research this interview. (And others.)

  • http://mixergy.com AndrewWarner

    Really smart teacher.

    Nivi does a good job of following him around with a tape recorder for
    VentureHacks.com. But I bet you already know that site.

  • http://twitter.com/ericnsantos Eric Santos

    Great interview Andrew!
    Funny thing is that a few weeks ago I came to realize that I was trying to follow too many blogs about entrepreneurship, and that just wasn't working. So I got rid of many of the feeds, but kept the ones about Customer Development and only a few more, Mixergy included. ;)
    It was a great surprise to see you guys together chatting.
    Keep up with the good work!
    Eric
    Ps. Steve Blank is an excellent suggestion indeed!

  • KHPatel

    As a 17 year old high school student, I find this site to be one of the most valuable resources on the web. I've tried print media (ie. Entrepreneur Magazine, Forbes, etc.), and even the web versions of the afformentioned publications, and found them to be virtually useless compared to Mixergy.com. The content that you come up with, Andrew, is just packed with rich information that really gets me on the exponential learning curve.

    When (not if) funding is secured for one of my future projects, I will definitely be implementing this. Equally important, in my opinion, is getting the message of captial efficiency across to all levels of the company. I'm eons away from being an expert, but I'd go as far as saying have this objective in your mission statement!

    Cheers again, Andrew!

  • http://themikemonty.com MikeMonty

    Like what I'm hearing so far :) I'll be applying it to my projects haha. BTW andrew, I sent you an Email from MIKEWM(at)gmail(dot)com and if you have time, I'd love to talk with you about it :)

    Mike

  • KevenDones

    Keep pumping that good content. Andrew you are doing an amazing job. One of my favorite interview so far.

  • untenable

    Andrew, you do a great job speaking/keeping the video moving. Why haven't I heard of you before? Where have you been all my life?

  • http://mixergy.com AndrewWarner

    Don't wait for funding.

    Let's get you started.

  • http://mixergy.com AndrewWarner

    Thanks!

    I'm going over my interview list for next week. I think you'll like what I
    have coming up for you.

  • http://mixergy.com AndrewWarner

    Thanks Mike.

    You should have my response in your inbox.

    Let me know how I can help further with your idea.

  • http://www.carecrunch.com Lincoln Nguyen

    Sweet interview. Super important to build product around marketing from get go. Hope to see you tomorrow at the UCLA entrepreneurs event!

  • http://mixergy.com AndrewWarner

    Thanks. I'll see you at tomorrow's UCLA conference. I'll be speaking about
    bootstrapping.

    Let's chat after.

  • http://www.promotinglinux.com/ Dill Nates

    You should have open sourced that code instead of throwing it away. Software wants to be free.

  • http://mixergy.com AndrewWarner

    Thanks for that suggestion.

    I hadn't thought of that when I shut down my invitation business.

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  • briteguy

    This is the best interview I've listened to, hehe. In fact, other interviews are just as good anyway.

    The best part is that it points out what a technical person should always keep in mind — customer focus.

    As a technical person myself, I find it is very easy for me to be carried away by some fancy technology but not knowing that it is not what the customer actually wants.

    Andrew, thank you so much for making this interview and it is a great lesson to learn.

  • http://mixergy.com AndrewWarner

    What I keep hearing from the successful tech companies that I interviews is
    that their developers will often sit in on customer service calls/emails so
    they can stay customer oriented. I can see how that would help.

  • http://www.latamconnect.com/ Jorge

    I wonder why this interview doesn't have more feedback! It's very good, and specially for web developers.

    Great work Andrew! Keep 'em coming :)

  • http://www.latamconnect.com/ Jorge

    I wonder why this interview doesn't have more feedback! It's very good, and specially for web developers.

    Great work Andrew! Keep 'em coming :)

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