You Should Learn From Their $100K Failure. They Did.

What can you learn from failure?

Joining me are two founders who say they blew through $100,000 of investors money and burned 12 months of their lives when they created Hurricane Party, a mobile app for spontaneous get-togethers.

René J. Pinnell & Eric Katerman then took what they learned from that experience and created Forecast, a fun & simple way for friends to share where they’re going.

René J. Pinnell and Eric Katerman

René J. Pinnell and Eric Katerman

Hurricane Party

René J. Pinnell & Eric Katerman are the creators of Hurricane Party, a mobile app for spontaneous get-togethers and Forecast, a fun & simple way for friends to share where they’re going.

 

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Full Interview Transcript

Andrew: Three messages before we get started; first, you might have noticed that many sites are using video, here it is on SnapEngage underneath the ‘Free Trial’ button. You might have noticed they are using video to increase conversions, here it is on Freelancer.com. What do you do if you want to try video on your site, but you do not have production capabilities in-house? You go to Revolution-Productions, that’s the company that created the two videos I showed you and many, many others as you can see on their portfolio site. Go to Revolution-Productions.com, talk to them about having your custom video created.

Second, if you need an online store, who do you turn to? Of course, you turn to Shopify. What happens when your friends need stores? The people at Shopify know that if you are listening to Mixergy, you are the influencer that all of your friends turn to when they have questions like, what platform should they build their stores on? They are suggesting, and I am suggesting that you refer them to Shopify. As you take a look at all of these beautiful examples of the kinds of stores that your friends can create on Shopify, I think you will agree that they can have a beautiful store and you know with the Shopify platform, they will have a platform that is made to increase sales; Shopify.com.

Finally, if you need a lawyer, who do you turn to? Of course, I am going to say Scott Edward Walker of Walker Corporate Law because I have been friends with him for years and he has been sponsoring me for months and months. You do not have to take my word for it, check out what Jason Calacanis, Neal Patel and many other entrepreneurs who you trust, they all say the same thing; Scott Edward Walker of Walker Corporate Law is the lawyer you turn to, especially if you are a startup tech entrepreneur. Walker Corporate Law.

Here is your program:

Hey everyone, my name is Andrew Warner, I am the founder of Mixergy.com, home of the ambitious upstart. What can you learn from failure? Joining me are two founders who say that they blew through $100,000 of investor’s money and burned through 12 months of their lives when they created Hurricane Party; a mobile app for spontaneous get-togethers. Rene Pinnell and Eric Katerman then took what they learned from that experience and created Forecast, a fun and simple way for friends to share where they are going.

I invited them here to talk very openly about the failure, the setback, what they learned from it, and then to also find out how they came up with a new way of thinking about their business that has helped them take this new company, Forecast, this new app, let us find out where?

First question is this; $100,000 through the last app, and we will find out where the money went. How much money have you spent on this new app?

Rene: The only money we have spent on Forecast is the money we have spent to send invite emails and to keep the servers running, so we are talking hundreds of dollars, not even thousands of dollars.

Andrew: Is this an app that I can go find in the app store right now?

Rene: It is. You can get it for Android, as well as for iPhone.

Andrew: OK, but it is Beta, which means what in this case?

Rene: We released Forecast in July, so about 2 1/2 months ago. When we released it, we pulled a fast one on Apple, we put it in the store, because we wanted to be in private Beta, it was really important for us to make sure whoever signed up for our app new that it was still rough around the edges. We really wanted to contain the size of our audience, so we made a little switch on the server, where whenever Apple would do the review process, we would quickly take it out of Beta and then we put it back in Beta as soon as they approved the app. They got wise to that two weeks ago though, so we are still in Beta, we are still calling it Beta, but it is no longer private Beta.

Andrew: OK. Can you say how many users you have on the new app? On Forecast?

Rene: We have grown to 35,000 users over the last 2-1/2 months, which again, we feel pretty good about considering we have been in private Beta for most of those 2 1/2 months.

Andrew: OK.

Rene: We have spent zero in marketing or P.R., or anything like that.

Andrew: Alright, that is this app, 35,000 in 2 1/2 months, zero on marketing and P.R., the previous app, the one you are going to tell us how you spent $100,000 on it, how many users did you have on that app?

Rene: We had about 3,000 users.

Andrew: 3,000 users. Alright, so you guys have learned a lot from that experience.

Rene: Yeah, about a factor of ten.

Andrew: I want my audience to learn that so they do not have to blow through $100,000, or even $10,000 in order to learn that and get where you guys are.

Let me ask you this, before I even start asking about this, why are you guys allowing me to call 12 months of your lives failures, why are you opening up here and coming in front of my audience and saying we spent $100,000 and it got us nowhere. Why are you willing to be this open?

Rene: I think there are two reasons. One is because we had to spend that twelve months and that $100,000 to learn how to run a company. This was our first time running a social mobile start up and without that twelve months, we would have never got to where we are now. And the second reason is that there are not enough young companies sharing. Sort of opening the kimono and sharing all of their data. It is really hard to understand where you stand against other people in your industry because people are so secretive with their data. So we made a decision early on that we wanted to be entirely transparent with almost everything we do in our company.

Andrew: Right, we’ll I’ve got to tell you. We’re going to get into the story but first I really appreciate that you are doing this. I don’t think it’s enough to do a program like I do here on Mixergy and only talk about the big successes because I think we give people only half a picture of how business works. We give them only half an understanding of what works and what doesn’t work. The only way we can get complete is if we talk about the failures, too. And the only way I can talk about failures is by having entrepreneurs on and are brave enough to do it and are willing to take, you know, willing to be vulnerable about it. So, let’s go back in time and see how you guys got there and feel the pain of it. Where did the original idea come from?

Rene: So, the original idea came from the idea of the metaphor of a hurricane, right? You have your hot air, your cold air, and that they have to combine in just this right way for this natural phenomenon of a hurricane to come into existence. And I was getting a Masters in design and I was looking for something for inspiration and I thought, you know, a hurricane is sort of like a party. You’ve got your friends, your drinks, your music, your alcohol and all those elements are lying dormant all the time and they’re just waiting for a catalyst to bring them together. And I was like, I’m going to make a mobile app that does that. That brings all these things together in that magic moment. And that was the idea for Hurricane Party.

Andrew: And Eric, how did you connect with Rene on this project?

Eric: So, Rene and I met at a local start up weekend event called Three Day Start Up.

Andrew: OK.

Eric: Which was started at the University of Texas maybe five years ago now. And he told me the idea of Hurricane Party in our small group Friday afternoon. But, the other two guys in our small group didn’t like it so it didn’t propagate up the start up weekend food chain if you will.

Andrew: OK.

Eric: So we didn’t end up working on it that weekend but it really resonated with me because years ago I started daydreaming about the day when people would have devices that they carried around that would give them some sort of signal when someone who they had co-located with in the past or they had similar ideas or interests walked by and, you know, pinged them and said hey, you know, Rene just walked by. You might want to connect with that guy. So, I’d been dreaming about social location, mobile-based things for a long time. And when Rene told me about Hurricane Party two years ago now, I was very interested.

Rene: Not only that. Just to, not to over dramatize it but I like the story when I told Eric about Hurricane Party, he almost came to tears. Because this was something he wanted to work on so bad. So I think that.

Andrew: Is this true?

Eric: This is true. Yea, it wasn’t the first time that he told me about it but it was when we got lunch a few months after to figure out whether we actually, the two of us wanted to go forward and work on the idea.

Andrew: This is interesting. What did he say to you that made you so passionate about this idea that you actually came to tears about it?

Eric: That’s a great question. I don’t remember exactly. I, the situation was I was finishing up grad school at the University of Texas. So I was finishing a PhD in the math department and for a while I realized that I didn’t want to stay in academia, at least in the near term. And here was a guy that was becoming a close friend of mine, who came to me a few months after telling me about the original idea for Hurricane Party saying that he had really good ideas on how we could continue to work together on this project. And I forget if it was the way that he phrased it, maybe it was a problem that I found interesting. There were definitely some mathematics involved which piqued my interest.

Andrew: I see.

Rene: But the main take-away was that both of us felt this intense calling. So, and that sort of raises the stakes in terms of how much we cared about Hurricane Party.

Andrew: Intense, intense calling to do what? Don’t worry. People go around in the background. That’s all cool. I want you guys in your, where you’re comfortable. In your work environment and of course I understand that work’s going to happen there. But, I still don’t understand what the vision is. Like, what are you trying? Can you say like I’m about to interview John Biggs, the guy who wrote this book on blogging and one of the first things he says is it’s not a blog until you can express what it’s about in a sentence.

Rene: Absolutely.

Andrew: The original idea, not the one as it shaped over the year that you worked on it. What was it in a sentence?

Rene: The sentence was “We wanted to make social networking actually social.” We see this as a huge, huge, Orwellian oversight that social networking is not actually social. Most of the time you spend on Facebook is you and a screen. It’s not you and people. Our passion has always been how can we connect you, in the real world, with your real friends.

Andrew: So if I happen to be in Austin where you guys are I might look down at the Hurricane app, see that you guys aren’t doing anything this weekend and spontaneously get together for drinks with you, maybe Jason Cohen, maybe Noah Kagan who lived down there. And all of us together will have drinks.

Eric: That’s the idea. That’s the passion. And that’s the passion behind both Hurricane Party and Forecast. It’s been our motivating force for two years now.

Andrew: I can see how that would be exciting. Especially if I came into town and I should also throw in Allan Stern who I would want to get together with down there. So there’s the vision, you got a co-founder here who’s feeling obviously passionate about it. What do you do next?

Rene: So we were working on it on the weekends until we got in Capital Factory which is this great early stage accelerator in Austin. Like most of them, they’re modeled after Y Combinator. When we got in we were actually like “This is pretty legitimate. People are going to give us money to work on this idea.” So we quit our day jobs, he just finished grad school. I’d dropped out of grad school. We spent the entire summer working 80 hour work weeks. It wasn’t just the two of us, it was also our other two technical founders. So there are four of us just cramming on this thing non-stop for 14 weeks until the end of the program.

Then, like most of these programs, you get on stage for a demo day.

Andrew: Let me pause it before you get into demo day. I want to understand where you got the co-founders. I also want to know how much money did you get from Capital Factory that enabled you guys to quit your jobs and focus on this.

Rene: Not much, we got $20,000. Which was enough for us to take it seriously and, for me, to quit my grad school. I was just looking for an excuse. This is what I wanted to do.

Andrew: And this is $5,000 per co-founder, it seems like.

Rene: Pretty much. We were in a nice spot in that we all had nest eggs so the money could really go towards… It wasn’t go towards paying salaries it was really‚Ķ

Andrew: Going towards the business. I see.

Rene: Exactly, yeah.

Andrew: What kind of expenses would a business like this have over the months that you’re in Capital Factory?

Rene: We didn’t actually spend that much money over at Capital Factory. There’s a minimal server costs, buying hurricaneparty.com. Very, very small amounts of money. We saved most of that money until… We’ll talk later about exactly how we spent all of our money. But we spent it basically in one fell swoop in lots of fantastical, grandiose, extravagantly wasteful ways.

Andrew: OK, and I do want to find out about those. I appreciate you being open about them. What I’m understanding then about Capital Factory’s money is that it wasn’t so much the money that got you guys to quit your jobs and focus on this, it’s the belief that the guys at Capital Factory had in your product and the direction that they were going to help you guys take it in. With that you said, “Now we can quit our job. Now we have something real. We’ll live off our nest egg, not the money that they give us. But we know that this is going some place and it’s worth quitting for.”

Rene: Exactly.

Eric: That’s right, for me it was very much a validation of the idea and the team that we had not just come up with an idea that they were interested in at Capital Factory, but we were able to assemble a team that they believed in and that they believed would be able to work with as well.

Andrew: Got it. So now, the other two co-founders, Eric, where did they come from?

Eric: AT found us on Craig’s List. He setup a Google Alert looking for any Craig’s List ad looking for a developer and he looked for the keywords “Capital Factory.” So he was really interested in getting in the start up world in Austin with the Capital Factory Company. So he was actively looking for those companies who hire-

Andrew: What a clever way to look for a job!

Eric: Yeah, it was great.

Rene: Yeah, super clever. Yeah, and super specific, too. He had like one segment that he was looking for, anybody hiring for Capital Factory. So it worked out really well.

Eric: Richard, our lead mobile developer, we found him. We all met at Three Day Start Up, actually, the same start up weekend event that Renee and I met at.

Andrew: I see my video froze here on an odd spot. But, who cares? It’s all about the ideas, not about how good I look. Even though, I did, I told you, spend a moment putting on a nice jacket for you guys. Do you guys share equity equally, all four of you at that point? Or is it that they’re getting paid and the two of you could afford not to because you’re getting equity?

Rene: We’re all equal partners now. We all own an equal part of the company.

Andrew: So now you got the co-founders, and let’s see if we get the video back up here. There’s the video. Awesome. So now I see how you got the co-founders, I see how you got the money. What happens in this 80 hour work week insanely focused period of your lives? What do you guys do?

Rene: It’s a crash course for all of us. This is our first company with the exception of AT the first start-up that we’ve really worked at. We’d come from a lot of different backgrounds so when you have 20 mentors, 20 super successful, super smart people basically kicking you in the nuts once a week, tell you why your idea’s not going to work, everyone’s giving you conflicting advice – it’s like being tossed inside a blender and it’s very difficult to get oriented. At some point you start to figure out who to listen to, which of the mentors you really connect with and that’s when you start to really learn.

Andrew: Can you give me an example of one of the kicks? What specifically were you kicked to do differently? I like that I think a lot of entrepreneurs, a lot of people in general want to be kicked in the butt occasionally, but they want it to be done in a productive way, in a way that’s meaningful. What happened with you?

Rene: One of the big kicks that we got, from Jason Cohen, one of the smartest guys at Capital Factory. He was always harping on us to get out of the office and go talk to real users, real potential users. When you’re working in the high stress environment of Capital Factory you’re having to try to build a product, and in our minds we’re thinking “We have to build the perfect product so on Demo Day we can launch with this amazing product.”

We didn’t really take it to heart at the time. It’s like “Yeah, yeah, yeah, we’ll go out and talk to a couple of people. We’ll bring them into the office. But really that’s just a waste of time. It’s distracting us from the real work of building the product.” So we did a little bit of that, but not nearly enough. Again, this will be a big part of the story later on.

That was a blow to the nuts that we got a lot, but not, evidently, enough. Because it didn’t sink in until about a year later.

Andrew: We will talk about that later. One of the things that I like about what you guys took away from this is that you didn’t just take these “fuzzy learnings” as we now say. You didn’t take fuzzy ideas away. You actually came up with a very structured, very measured approach towards launching the new product. I want to learn that approach and I want to see how you used it.

In Capital Factory when you were told to go talk to customers, did you take that advice? How many customers did you talk to?

Eric: We did. We talked to maybe 20 or 30 over the course of a few weeks. Especially when we were developing new features for a very early version of Hurricane Party. We also sponsored and event in Austin and we talked to some people essentially off the street about our product to get feedback on what they thought and what they downloaded.

During the Capital Factory summer I would say maybe anywhere between 50 and 100 people, but it was not very structured.

Eric: The main thing was not the quantity, but how we conducted those interviews and the timing in our developments cycles when we conducted those interviews.

Andrew: I see. Give me an example of that, an example of it done well.

Rene: I’ll give a quick example of it done poorly and then done well. So done poorly, you’re already assuming the outcome. Generally you’re doing interviews at the solution stage. So you’re showing people mockups, like “Hey, is this something you would use?”

Done properly, you assume nothing. You go in assuming all of your assumptions are incorrect and that you’re really putting the emphases on them proving that your assumptions are correct. Making sure that you focus on problems before you focus on solutions. I think that was the big disconnect we had at Capital Factory, that we were mostly doing solution interviews when you always need to start with a problem interview. Because you have to make sure that you’re solving a problem people care about. Or else the solution is irrelevant.

Eric: Related to that is during Capital Factory most of our interviews, the data that we collected was strictly qualitative We listened to what people said, we took notes, and we reviewed the notes after we did 10 or 20 interviews. But now when we do these interviews properly we collect data much more quantitatively in such a way that allows us to aggregate the data and learn from the aggregate very quickly and easily.

Andrew: I wrote a note here to come back and ask you guys about these solutions versus problem interviews and about how you collect data from them. So far, though, what I’m seeing looks great to me. You’ve got an idea that you guys are passionate about, you’re not just looking for a quick turnaround, or a quick flipping of the product. You’re passionate about it. You got four co- founders. Two of them, three of them are actual engineers. Are you an engineer too, Rene?

Rene: No, just a designer.

Andrew: Perfect. You got a designer on board. You got three engineers. No one is just an idea guy sitting back Everyone is a worker You go through Capitol Factory. They help you guys talk to customers. Not done perfectly well but, you are still doing it. Where does the first problem come up? Looking back, where is the first mistake?

Rene: I think the first mistake was played out twice. And the first mistake we made was building something for demo day. So, demo day is this big launch opportunity you have, right. And so from day one we were geared towards, you know, with a countdown on the wall. How can we build a product for demo day? And that puts all sort of artificial constraints on what you really need to be focused on 100% is how can I get the product market fit as quickly as possible? Without having it be, you know, how can I get to product market fit in a month? Because that causes you to cut corners. And you really can’t cut corners when you’re investigating and discovering a problem that people care about and figuring out a solution for it that people care about and then figuring out a solution that people care out.

Andrew: I see, you have to within a few weeks say I figured out a problem that my customers are really going to be passionate about. That they’re going to care about. That’s going to work for them. And so, with that need what did you create for demo day?

Eric: Well, we created the first version of Hurricane Party. One, another way that the Capitol Factory mentors encouraged us to do things against the way we were originally thinking was that they encouraged us to release early and often. So even if the code wasn’t perfect, if the app was perfect or polished, or if it was still buggy. Just get it out there, get it in the app store we learned how to do that early on .But for demo day, we put in a lot of features that through our qualitative interviews and the talking to the people on the street at these different events. We put in features that we thought that our early adopters would want and we made great video demos with that app. But, ultimately it was still a very buggy product on demo day so although we got a nice traffic spike, those people then stopped using the app pretty quickly because the product wasn’t… It was demo ready but not production ready.

Rene: And I’m going to interrupt Eric real quick. Because I think Eric was actually being a little too kind to us in that, we were relying on this qualitative information. Because that was sort of like, it influenced us but the main thing was we’d come up with a cool idea or someone else would come up with a cool idea and we’d just build the thing. It would be like oh we really need photos in here and we wouldn’t really validate if anybody really wanted photos. I would just get super excited about it and I would draw up all these pretty pictures and then I’d, you know, basically cram it down the team’s throat that they build this thing. Because I thought it was so cool, right? And that’s totally the wrong way to go about it.

Andrew: But, you know what? Let me challenge you on that because I want to understand why that’s the wrong way. I thought that you were supposed to just put something out there even if it’s buggy and if users interact with it then great. It means you have to keep improving it and knock out the bugs. If they don’t interact with it, then you kill it. And that kind of launch and feedback cycle is better than going and sitting with customers and saying, “Would you be interested in this? What do you think of this? And surveying and talking to them”. Why isn’t that better?

Rene: So, it’s not. If you were IBM and you had a giant company that had a bunch of engineers that could spend building out these features and releasing them. Because that is the final test, right? You build a feature, you put it in, maybe if you’re smart you do a partial roll out. You see how it affects your key metrics and then if it’s successful, you release it to all of your users, right? Like in a perfect world, if you had a bunch of developers that would be the way to go about it. But when you’re a four man team, you’re entirely constrained with resources. So what you ought to be doing is only building features that you have a high likelihood that are going to move your key metrics in the right direction. And you can learn before you code so much to validate those ideas. It’s not going to work 100% of the time but it’s going to work a heck of a lot more then me just coming up with an idea that I think is neat and then coding it.

Andrew: I see, I see, right. Because it takes a lot less time to talk to customers or survey them and get their feedback before you launch then it does to build the product and then get feedback on it.

Andrew: It’s faster to talk to customers then to program is what I’m saying.

Eric: Absolutely, certainly and to that point. And I think maybe we’ll come back to the problem and solution interviews later. But really quickly, one of our key take-aways from doing the solution interview process, where we show, once we’ve validated the problems and then we show our potential users some mock-ups or some wire frames. That allowed us to do some very early usability testing as well as customer development before writing a line of code.

So for example, we found in just the mock-ups just asking people to click on different buttons or different parts of the wire-frame, we figured out where people would get confused, where the hang-ups were and we were also able to tease out other features that we needed for that user to be happy with the product, before even building a real working app of a demo.

Andrew: All right, I want to just keep cramming so much into this interview, so let’s move forward. Rene, you said that there was another issue that you had another mistake, what was that? First mistake was adding as many features as you guys had ideas, and what was the second one do you remember?

Rene: The second one, the big thing we were messed up on is, our iteration cycles were too long. We had really good mentors at Capital Factory and they sort of gave us he nuts and bolts to work with, but we were doing iteration cycles were like two months long. So we had potential users come in, we’d do this problem solution interviews in sort of our sloppy way. But two months is just way too long. And part of why is because we were building features out that weren’t properly validated. So with Forecast we were able to get that cycle between identifying a problem that could be solved with a feature, to deciding if that feature needs to be implemented to actually implementing it to about two weeks instead of two months.

Andrew: I see. So long iteration cycles, big problem. Now you went instead of two months, to two weeks with your new understanding. So far though I’m not seeing a big wasteful start-up. In fact, I don’t’ know that you guys were waste full ever. You went through $100,000 not necessarily because of waste you made mistakes. But I don’t see any money being spent. What’s the first big thing you spent a lot of money on?

Rene: So after demo day and I said demo day was that first artificial deadline that we gave our selves. The second one was South-by-Southwest 2011. So after we go through demo day, we raise $75,000, so we have $95,000 almost $100,000 basically in the bank at our disposal.

Andrew: How do you raise that money?

Rene: [??] gotten a call from Angel List, one of the keynote speakers at Demo Day. He really liked our pitch, really liked our team and suggested we go on an Angel List. He was really great at pushing us out to a lot of people out there, and through that process we got introduced to some folks who invested a small amount.

Andrew: OK. I see. You got the money and what were you going to say?

Rene. So another big count down on the wall, 160 days until South-by… The big thing that we realized is we know noting about launching an app. We need to hire a pr firm. And we’re really lucky in that there’s an amazing PR firm in Austin called JDI. And JDI is very selective about their clients. We’re honored that they choose to work with us, and we started mapping out all these great plans for South-By. We come up with some amazingly ridiculous campaigns.

One of the campaigns was we got brass plates machine shopped. They were golden tickets, we were handing them to influencers like Gary Vaynerchuck, and Robert Scoville, and we came up with this whole SMS campaign where they could text a short code. We would physically show up and cover their tab. So it’s like a pop up part. Hugely expensive, each tab is costing us a couple hundred dollars, hugely expensive in terms of man hours. Another example that we [??]. Ice-cream Man, he driver around South-by, he hands out ice-cream, we pay for all of that ice-cream he hands out, and maybe people want to talk to him about why their getting free ice-cream. He tells them about Hurricane Party. So we came up with a bunch of these ideas, very expensive, and all the ideas I think are good. I think these are fun great ways to market an app or any kind of company at South-by, and they were really effective. We got tremendous press coverage, we were voted the hottest start-up at South-By, in Tech Cocktail. We got a nice piece in the New York Times, and we got a guest post in Tech Crunch. All that kind of stuff happened.

But the problem was we hadn’t gotten the product market to fit. We spent basically all the money we raised promoting an app that nobody wanted. And we didn’t go through the proper steps to validate that, before we sunk all this coin. So on the other side of South-By we’re sitting by after the first week, that was fantastic. Couldn’t have been better, then we started to watch the numbers, and they’re going the wrong direction. They go up at South-By, then afterwards they start to trickle down, until it’s just a few people coming in everyday and then you know you’ve got a problem.

Andrew: I see, you don’t want to pump marketing dollars and get people to use a product that’s not the right fit. Because they might use it for a short period of time, but if it’s not the right fit they’re going to stop.

Rene: Exactly, yeah, you need to.

Andrew: How much money would you say you spent at South Buy?

Rene: At South-By alone it was about a 50K investment. But we spent, you know, on either side of South Buy, enough money to basically eat through all of that investor money that we’d raised. It was incredibly.

Andrew: Oh, so South-By-Southwest took $50,000 for marketing, but also another $50,000 in other related costs?

Rene: Yeah, I mean, gearing up for South-By, and then following up with stuff after South-By. I mean it was a very, that was basically.

Andrew: Where did the money go when you geared up for South-By-Southwest?

Rene: To our PR firm, I mean very smart guys but they cost money.

Andrew: What did they do?

Rene: Well, so, you know, we’re new to this, we don’t know anything about promoting an app. They helped us figure out how to talk about the app, how to position the app, there’s all these deliverables that you need for the press.

Andrew: Do you have an example of something that they helped you, do you have an example of how they helped you talk about the app?

Rene: Yes, so they came up with a two page document that was sort of our branding and positioning document and, you know, I’d been talking about it off the cuff for so long that a lot of it was sort of already in my head, but it was tremendously helpful to have some people that are super familiar with the press and how to position yourself compared to competitors and all that stuff. It was basically something that we’d been so focused on product that the whole marketing, PR, all of that was entirely.

Andrew: What do you mean? How are you supposed to position Hurricane compared to competitors? Or, how are you supposed to explain it to strangers? How did you, here’s the thing, I want my audience to learn from your $100,000 experience, but I also want them to learn from however many thousands you spent on PR so that their PR becomes better because of what you learned by spending money on your PR.

Rene: Right, so, and the question was what was the big thing that we got before South-By.

Andrew: Yeah, give me an example of a way that you learned to talk about Hurricane that you didn’t know before. Of a way that you learned to talk about how Hurricane fits into the competitive landscape, that you wouldn’t have been able to do before you talked to this expensive PR firm.

Rene: So, this might sound silly, but a lot of marketing is based on the idea of getting like one word into the, your potential users or customers minds. So, I think, all that process can be boiled down to understanding that what Hurricane partly was at it’s essence, at least how we decided to boil it down, was spontaneous. That was the kernel of the app, and that was going to be the cornerstone and the bedrock of all of our marketing and PR and advertising and everything that we did for it. That was a long process to get to that one word.

It sounds like, it sounds kind of ridiculous to talk about it as that, we spent all that money to get that one word, but I’m not faulting our PR. I really don’t think our PR, and I think that process was OK. I think it was really good and I think we were working with some of the best people at it.

The problem was, was that we were doing it before the product had been validated in the market by itself, like the product has to perform all alone without pushing it at all. You know, people have to, especially when it’s a social nova app, like if you’re getting press, if you’re getting advertising, you’re going to get a false positive. You need to be able to, so with forecasts, not to jump the shark too much, we released it to 80 of our friends, and that was all we had done. So, from those originally 80 people that we gave it to, we’ve grown to 35,000. That’s enough proof point for us that now it’s time to start to think about doing marketing and PR again.

Andrew: I see, so marketing now is supposed to get you more seeds, like the 80 you guys had. You guys only had access to 80, or however many, friends. Marketing was going to get you more of those seeds who were going to push it out to their friends. Alright, I want to find out how you got from 80 to, what is it, 36,000 you said now. 35,000?

Rene: Yeah, it’s 35,000 now.

Andrew: Let’s stick with this for a little bit longer. In order to spend this much money, don’t you need to get an OK from the board? Don’t you need to go back to Jason, or anyone, over at Capitol Factory and say this is our plan, we’re about to spend all of this marketing money in order to promote this app that you guys helped us shape?

Rene: No, you don’t, it’s just.

Andrew: You’re out there in the world, you had a demo day, you raised funds, now you guys are smart enough to take it from there.

Rene: Our company was small enough, I mean, you’re looking at the board right now, so you know, we did reach out to some of our mentors. There’s a great advertising agency that the head of that is one of the mentors at Capital Factory. We talked to them. It’s, I think we probably got some people cautioning us, but in retrospect I don’t remember that. I don’t remember that as much as saying it seemed like a reasonable thing. Nobody was cautioning against going out and spending this money.

Andrew: And your investors.

Eric: I was given…

Andrew: Oh, sorry, go ahead Eric.

Eric: Oh, that’s fine, yeah we did keep some of our key advisors from Capital Factory in the loop. We would circle back with them every two months saying, “Hey, here is where the product is. Here is our near-term vision.” A lot of those conversations did revolve around the plan for South-By-Southwest. We might not have spoken about specific numbers with everyone…

Rene: In terms of the spend.

Eric: In terms of the spend, especially with our PR firm. Our advisors were kept up to date; our investors were kept up to date as well.

Rene: Nobody was raising big red flags that we remember.

Andrew: Alright, I don’t know how this stuff works, I always just assume that if there is going to be a big spend, anything over a certain dollar amount, that you have got to go back to your investors and say, This is what we are planning to do.” But, I guess not.

Rene: In a larger company probably so. We are very small, like $100,000 in the bank is nothing for most start ups.

Andrew: Yeah. It is crazy that it is nothing, but it really is nothing.

Rene: Yeah, it is. It is totally bizarre.

Andrew: You know what? I spent once $300,000 on a web app. It went nowhere, it failed, and I had to shut it down. For months I was thinking about what I could have done with the money. Do you guys ever go through those moments where you say ‘Holy crap, I could have…and then start rattling off things in your head that you could have done?

Eric: Not really. I guess one of the reasons why I do not think about things like that too much is because we are using the Lean Startup method now, as our main process for developing forecasts and one of the main things that Lean helps startups do, is be less wasteful, but it is hard to appreciate eliminating waste without having been wasteful in the past. It is true, we did spend a lot of money, and we did waste a lot of money in a year building Hurricane Party, but without that experience, it is hard to appreciate the Lean process, which is what we are using now.

Andrew: I see. We talked about when you blew through $100,000, but you also burned 12 months of your lives. What happened to the rest of the time? What happened after South-By-Southwest?

Rene: Funny story, I fly out to the Bay Area, which is where you always fly when you are trying to raise money. I set up a lot of meetings, talking to a lot of VCs, a lot of angel investors, and the whole time, I am talking about Hurricane Party being the greatest thing ever. It is going to change the world. Then I come back to the office, the first day back to the office, Eric says to me, “Hey we have this new idea forecast, it is pretty cool, you should check it out.” I said, “Good one. Funny. Nice joke.” And they said, “No, you should really check it out, it is actually pretty cool.” It was at the same time that we started to see that slump.

We thought maybe this is just a temporary slump after South-By, people are a little hung-over after South-By, it is to be expected, but then it kept on persisting. I can draw a little diagram of how our numbers went down and how my interest and forecast increased until, it was not that long, it was about a week after I heard about it where we were like, “OK. Let us really start spending our time figuring out if this is an idea that has some legs to it, because Hurricane Party does not.” It became pretty clear pretty fast that it was not going to go anywhere and we did not have any money left in the bank.

Andrew: You did not have any money left in the bank, you were not enthused about it, and users were not using it. When we say 12 months, is that an exaggeration or are we talking about 12 months from the absolute beginning to the absolute end?

Rene: It is a little fuzzy. I started working on Hurricane Party in fall of ’09, so I had been working on it for far longer than 12 months.

Eric: I started working on it part-time in February 2010, then full time in May, so about 12 months for me.

Andrew: Let me ask you this before we go on to the new business, why do you even have the guts to start something new? I would feel, and maybe this is just me, when things do not work out, I suddenly start to feel like I am worthless. No, I do not feel like I am worthless, I start to question my sense of self. I start to question my abilities. I start to question whether I can go back out there into the world with another attempt. If anything, I may want to go small and hide. You know? I might say, “You know what guys, I think Austin is great and this is a great idea, but you guys are three great co-founders, you guys will do great. I need to go and work on something else, or give you guys room to do this without me.” Why did you guys have the guts to go and build something else?

Eric: That is a great question. For me, since I had been daydreaming about things like this for so long, I really thought that we were on to something, even if Hurricane Party, the first manifestation of sharing where you are going with your friends, even if that didn’t work out. I thought the kernel of the idea there was something there and the way I became really passionate about lean start-up method and I had a feeling that if we applied this new method that was very strict and using [ashmerized] framework from his running lean book — which came out recently, which we got an advanced copy of a few months ago — if we applied his framework to our basic idea then we would dramatically increase our chance for success. I just wanted to give it another go with that point of view.

Andrew: I see.

Rene: My answer is basically the same, but for me there’s no choice it’s like I can’t work for anyone else really, it’s like I’ve tried to have straight jobs, I’ve tried to go work at companies and I always end up going to do the same thing where I’m starting my own company, I have to be doing my own ventures. It’s very much in my DNA and in my blood, and I think a lot of entrepreneurs you talk to are the same way. There’s just not that other option. It would be certainly a lot easier if I could, if I could do that.

Andrew: We talked in the pre-interview about how our mutual friend, Noah Kagan asked you a question that opened your eyes to something about Hurricane. Do you remember what that question was?

Eric: Sure. Yeah. There were a couple questions. One was he asked, ‘Why are non-party people making a party app?’ This app called Hurricane Party. He recognized that a few of us that met with him for lunch, were not the biggest partiers, which was absolutely correct. That made us go, huh, you’re right, we’re not so why are we doing that? He also helped us question one of our key assumptions, which was that people are spontaneous and many people would use Hurricane Party because they are spontaneous, they see their friends are going somewhere downtown tonight, or there’s a concert they didn’t know about, then they would just pick up and go.

He helped us design an experiment where we reached out to ten people, very informally over IM, who may fit our target demographic and on a Thursday afternoon, we asked them, “Hey, do you have plans for this weekend? If so, are you booked most of the weekend or just part of the weekend?” What we found was really surprising and it really shook our foundation. It was that ten out of ten people that we informally surveyed, already had plans for at least half the weekend. We found that very interesting and maybe, just maybe people aren’t as spontaneous as we we’re hoping.

Andrew: I see. Right. OK. So now you’re starting to get your eyes opened to what is going on here. You don’t have much money so you’re desperate for a new way. You have all this learning that $100,000 bought you, much better than any college education. What’s the first step that you take on this new journey to create Forecast?

Eric: There were two main first steps. The first one that we took, technically was building a lean canvas, which is a one page, high level overview of your business model. You identify the top three problems that you think people will find interesting. You identify your early adopters and your customer or user segments and the solutions and your unique value proposition. Just fill it all out to get a high level overview, to get your ideas on paper and be able to look at everything.

That helped us identify the problems and especially the early adopters.

Rene: Or what we thought were the problems. Again, this is something you make before you validated anything. It’s really just a break down.

Andrew: What are some of the things that you thought were the problems?

Eric: We started with a list of about six or seven problems. Renee, maybe you can help me remember some of them.

Rene: I don’t but I do remember what they [??] too, so the three main problems were; I want to be able to see where my friends are going, I want to be able to tell my friends where I am going, and check-ins are a hassle, basically. It takes too long to check-in and sometimes it’s socially awkward to check-in and sometimes I forget to check-in.

Andrew: I feel that way, too. All those things you brought up about checking-in, I thought I was the only one that felt that. I said, “I must not be cool enough to get the whole check-in thing, I’ll leave it alone,” but you’re right. So socially awkward, you get to an event and the first thing you do is take out your phone instead of talking to someone, you check-in‚Ķ

Renee: It’s going to be that socially charged moment. You’re going to be like hand shaking and introducing people . . .

Andrew: Hang on, let me tell my followers that I’m in here. You said that it [??] out to you that it came out to three but first you wrote seven. How do you go from the big list of assumptions to the three short list that’s not an assumption anymore, that’s validated? How do you validate it?

Eric: Through a series of so called problem interviews. Typically in our experience and we have not very much experience doing this yet, but in what we’ve seen so far, typically in the first two or three problem interviews that you do, you can take a list of six or seven problems and fairly quickly, the top three will rise to the top.

Andrew: Just by having conversations with people?

Eric: That is right.

Andrew: OK, that brings us to the interviews. Who do you interview?

Eric: That is a great question. To start, we had everyone in our company and in other companies that we work with in our office, we had everyone generate a list of 20 or 30 friends or acquaintances that we knew, that met our early adopter criteria for forecast. Those were power Foursquare users, people who were fairly social, who went out with friends a few times a week, and people who Tweeted about where they were going. For example, maybe Rene would say, “Eric and I are going to happy hour at 6:00 p.m., come join us” on Twitter. We generated a short list of people that we thought met those criteria, and then we used those as introductions over email and said, “Hey, can we meet up for coffee? We are working on this cool new thing called Forecast. I would love to tell you about it.”

Andrew: How many people did you need who fit that criteria?

Eric: It was really interesting, what we found was that there were two main take-aways from the problem interview process for me, on how to conduct those interviews and what to do. The first was, conduct them in such a way that you collect the data that you need to meet the exit criteria for the problem interviews, in particular, it is really important to get the people you are talking to to rank each of the problems one through three, and also tell you if each problem is a must-have problem, a nice-to-have or a don’t need, depending on the pain level that the interviewee feels.

The second was to try to get, at least five good referrals from each person that you interview. What I found was that A’s refer A’s and B’s refer C’s; meaning, if you find someone that meets two or maybe three of your criteria, they are going to be much better at referring friends of theirs or people that they know fairly well, who also meet those criteria. So that group of 20 that we started with, maybe 5 people were A’s, in terms of our early adopter criteria, but those people were able to refer us to many more people who fit the criteria well.

Andrew: I see. If someone was just a desperation play, you need to interview people so you were a little bit forgiving about what you were looking for when you were searching for an interviewee, they were not going to refer you to other people who were your perfect potential user. I see. OK.

So, it does not take that many interviews. It could be just sitting down over coffee, and you have given us a sense of how you have those conversations. Now is a good time to talk about solution versus problem interviews. Tell me in a nutshell before what you would do and now what you would do, and I know you just described it, but I want to see the before and after together.

Rene: When we were starting out the company, the way we would do these interviews is, the very first thing is, I would come up with a brilliant idea in my giant head, and then I would spend a lot of time making these high resolution mock-ups, like this is exactly what it is going to look like. Then we would show them to people and be like, “Is this something you would use?” Or, ‘How would you use this?’ That was really missing the whole point of problem/solution interview, because they would look at those mockups and they would give me feedback. They would be like, “Yeah, this button should be there. This should be there.” That is all just user testing, that is not going to make you make a product that is actually good that people actually want to use, it will make that bad product more usable but you are still going to be solving the problem in a way that is either not addressing the core problem, or addressing it in a way that is not interesting to them. I will let Eric handle how we do it now.

Eric: Sure. Now we really do divorce the problems from the solutions and it can be very difficult, especially for a developer to focus on the problems without thinking about the solutions, or brainstorming with the person that you are interviewing about the solutions. We try really hard to do that. Now, instead of starting with mockups, in particular, instead of starting with high resolution mockups, we take two steps back and we identify the problems, whether it is for developing a new product, like Forecast, the problems that Rene identified like sharing where you are going with your friends and all of that, or now we do a similar process where we come up with new features, we try to identify what problems for the user those features are addressing, and focus on the first set of problem interviews for these new features, on those problems.

Andrew: Are you then asking users, “Do you have this problem?” Or are you coaching them? Are you guiding them?

Eric: It depends. It depends on the situation. If the feature that we’re thinking about is addressing a problem that our current users have, for example, maybe we’re thinking of a future that only our activated users, meaning people who have forecasted and checked in at least once, and maybe they come back to the app every so often. Maybe, the feature is addressing a pain that those users have. Our power users, maybe. Other times, we’ll come up with features that are more interesting to a general audience and depending on the situation, if coaching is necessary, if I have to put someone in a certain situation to say, hey, let’s say you log in and you do this, this and this and this is where you end up, what would you do next? Then yeah, we’ll do that as well.

Andrew: OK.

Eric: But that poor, sorry, I guess I was jumping the gun a little bit, that’s more of a solution interview type thing, because if we are showing them a mock-up like you land on this screen what you do now, I guess that’s what I was referring to.

Andrew: OK. Right, so you have these conversations, you have a sense of the problems that you’re customer has, you have a sense of the way you can solve them. What do you do next?

Rene: So, we sort of view the problem interview thing as sort of the field research. We go out into the field, we actually talk to people. When we come back from that we hopefully, like the exit criteria for us personally is that we have insight. Right? That’s what we need to have once we finish these problem interviews. From that insight, then you go through, that’s when you close yourself up a bit in your office and you throw a bunch of ideas out there for, how do we address this problem, potentially. We validated that this is a problem that people care about.

How do we solve it? We come up with a couple basic ideas for that solution through rapid proto-typing, through mock-ups. That’s when you go back for the solution interview. When you can actually show those mock-ups and those ideas to the same group or at least a similar group of people.

Eric: Do you remember, what the‚ĶTypically what happens is, during the first three or four interviews, you get a lot of strange signals, you have to refine your problems, the way that you’re addressing or stating the problems, a little bit. Then, the real exit criteria for us, for those exit interviews, is once we stop learning new things, like we’ll typically ident, some patterns will emerge, and then we’ll continue to see those patterns over the next few interviews.

Then, when you finally have that “Aha” moment, like if somebody says, this, this and this, then I know the way that they are going to answer the next five questions. When you have that understanding, then you can move on to making mock-ups and you have a similar process. Then, once you know what your users are going to say during an interview like that, then, that really gives you a lot of confidence to go ahead and build a future and at least roll it out partially.

Andrew: Let’s talk about the first thing that you created based on all the research that you did, you told me about it in the pre-interview, tell my audience. What was that first, I guess we’ll call it, single viable product.

Eric: Sure. Yeah, yeah, that’s a good thing to call it. We, so after we made this lean canvas, which is a high level overview of our business, and we were all excited about it. Some of us, like AT, and Richard and myself, we all wanted to start coding but we had to discipline ourselves not to do that. What we did in the meantime was we used an existing piece of technology, mainly Beluga, a group messaging app. We used Beluga and we made a pod where we set up specific rules for the messages that people could post to it.

In particular, the messages could be of the form, either a time and a place. Indicating that you would be going to that place at that time. Or, you could check into a place. So, we used to, among the four of us and we have about five other buddies, so maybe about ten people total in this Beluga.

Andrew: This pod essentially is a group chat place, right? It’s only you guys. What did you say, about six, eight people of you people all together?

Eric: Yeah, yeah.

Andrew: And you said, we can send any message in here. We can say, hey, I just scored tonight. Or, I’m still drunk from the night before, or, you can send any kind of message, but what you told them was guys, only have these two kind of messages. Only have check in, or only have, what was the other one?

Rene: Forecast.

Eric: Making a forecast.

Rene: Which is a place and a time. Yeah.

Andrew: Got it. OK, and so people used it and what was the feedback?

Eric: Yeah, qualitatively, people enjoyed using it. You know, we all enjoyed it, our friends. We were all happy with it. Quantitatively, we went back and analyzed the number of messages that went out on the Beluga pod every day and it turned out that on average, each of us posted a message twice a day, during the couple of weeks that we were playing with it.

Rene: A couple of important points here, is that, I am sure everyone in the audience is thinking they are the most biased people possible, right? We have the most self-interest to see this thing succeed, right?

Andrew: You know, you’re right, I hadn’t thought of that, but of course you guys would use it, you guys created it.

Rene: Right, and so we’ve gotten this when we, because Eric’s given this lecture before, how we transitioned to lean. Our point is that; sure, we’re the wrong audience to be a real validation point. But if you can’t make a basic mockup that interests even you. If it’s not fun for you to use, then it’s probably not going to be fun for that next audience. What we’ve tried to do is always enlarge that audience. “OK, it works for us, now is it going to work for our close friends? OK, it works for our close friends, it is going to work for all power Foursquare users?” And then you can see how it keeps on enlarging.

The other important point, Andrew, is that this is a great example of rapid prototyping that is not a mockup. I think a lot of people in the tech world do wire framing as their main bedrock. I think it’s so much more interesting if you can hack something that already exists, that you’re not coding it, into doing a rapid prototype. Because what you can do with a rapid prototype that you can’t do with wire frames as easily is get that quantitative data. We can actually go back and count stuff. That’s much more useful.

Andrew: I see. So next time I have an idea for a product, first I have a conversation with potential users, identify the problems that they’re looking to solve with this product that potentially I could create, I then look for the simplest version that I could create of it. Possibly, in fact preferably using somebody else’s technology and limiting what can be done on that technology just to see it works. Now I get a sense of what people like, how do I know if I should just create a Beluga pod with limited functionality or create a whole new product? How do I know what to do with that information?

Eric: That’s a great question and I don’t have a really good answer. My answer would be, I guess it would be based on experience. We took that qualitative and quantitative learning from the Beluga pod and then we did the problem interview and solution interview process.

Andrew: With the same people?

Eric: Well with many more people. I guess we started with the same people, but by the end we conducted interviews with over 50 people, we spent 30 hours doing the interviews over the course of a couple weeks.

Andrew: And what did you learn with those interviews? With that batch?

Eric: I guess we learned that those three problems that we landed on. The sharing where you’re going, seeing where your friends are going, and fixing check ins Those three problems really resonated with people who met our early adapter criteria power Foursquare users tweeting about where they were going and so forth.

So we learned that those people really liked the problems. Then we showed the solutions, then mockups which we used, the [??] mockups to show them a very basic iPhone app solution for. We showed them the mockups and after a few iterations we landed on something that those people found Intuitive intuitive enough to use, so we thought “OK, now we should build something.”

We built the first version in four days and we put it out to maybe 20 or 40 people that we had interviewed just to start gathering data, seeing how people were using it. Then circling back with them to gather more qualitative data like “Do you like this? What do you like most? What does it need? What did you hate?” Things like that.

Andrew: What’s one thing you learned from those conversations?

Rene: We’ve gone through so many of these cycles it’s hard to remember the specific‚Ķ

Andrew: OK, let me ask you this instead. What did you create based on those conversations? You told me the Beluga pod was the first version, was the first product, what’s the second?

Eric: Our 0.0 version of our iPhone app mapped pretty directly to our wire frames and according to Ash’s book “Running Lean” he suggests using a one-to-one correspondence. Trying to setup a one-to-one correspondence between your problems and your solutions. So for each problem, for example sharing where you’re going with your friends we mocked up a potential view of an iPhone app that would solve that problem.

So we had views for each of the three problems that we identified. Those were the three views that we built first.

How do you share where you’re going with your friends? Well, you make a forecast, you pick a place and a time and that’s it. How do you see where your friends are going? You get to see a list of anyone who’s forecast it. Then finally how do we fix the check in problem? After you make a forecast you hit a button and you check in with one touch on Foursquare.

So that process helped us really refine our feature set for our minimal viable products and that was the first time that I really appreciated what minimal meant in MVP. Because I do think that we built the smallest thing possible. Like I said, it took us only four days to build a complete iPhone app that solved these problems in some way.

Andrew: Did you put that in the app store?

Eric: No, we didn’t.

Andrew: What did you do with it?

Eric: We used Test Flight to get that app out to, I think we started with between 10 and 20 people. Over the course of the next two months we iterated about once a week. We released 0.1, then 0.2 about once a week. Every week we added between five and 10 more beta testers on Test Flight.

Rene: Until we got up to about 80.

Andrew: When you ran it through the first group of people, the first version of the actual app. What was their feedback?

Rene: I think it was mostly positive. I mean, again, through the course of this whole thing if you are a power Foursquare user who also uses Twitter to shout out stuff, like the correlation between that and you liking Forecast is incredibly high. So if you meet those criteria then you’re almost guaranteed to like Forecast. That’s been consistent since the very beginning

The thing that’s different, though… or the learning that we get is that there’s always clear things. Like “I love this app, it’s great, but it really needs to do X, Y, and Z.” When we had those 80 beta testers a lot of that was difficult to assess out the signal to the noise, because it’s only 80 people. But you do your best to count up “OK, these are how many people want to have multiple forecasts in their streams as oppose to one.” That looks like it’s probably going to win out the day. But, again, since you’re dealing with such small numbers it’s hard.

That game changes once you release it into the app store and now that we’ve got tens of thousands of users and we’ve got a nice big feedback button that qualitative feedback becomes a lot easier to count, it becomes a lot more clear which features are must have features for the majority of your users.

Andrew: Was there one thing that stood out when the first version went out using Test Flight?

Eric: Using Test Flight? Yes, this is a fun story. We employ A/B testing, or split testing for not just optimizing and bumping up percentages by a little bit, but also to test large new features. So, for example, we did a fun experiment with a lot of our early beta testers. Like maybe the [??] where we were trying to figure out if we should only allow people to have one forecast. Like only allow our users to say where they’re going next. Or should we allow them to set up multiple forecasts and say “I’m going to lunch at noon, and then I’m getting coffee at 3:00, and then I’m going to happy hour at 6:00 or whatever.”

So what we did was we rolled out the multiple forecast feature to about half our users and the single forecast feature to the other half. We gathered feedback qualitatively and quantitatively. We did that for about a week, then we switched it. So the people who had single forecast mode got multiple forecast mode, and vice versa.

Qualitatively, the feedback was overwhelming.

Rene: And a lot of expletives. The people who started with multiple forecasts and then went to single felt cheated, and there were many expletives in that qualitative feedback. Conversely, people who got the added benefit, if you will, of being able to set up multiple forecasts, they were very happy. They used words like “Love,” like “I love this feature so much.”

So qualitatively, it was overwhelming and quantitatively the two versions performed about the same on our key metrics. So we decided to go for the multiple forecasts. That was one experiment that we did very early on in the Test Flight beta that gave us a lot of learning.

Rene: And there’s an interesting thing, too. Because, again, the qualitative data was like- they both performed about the same. It would be interesting to know if we did that same thing now if there would be a bigger noticeable difference in our key metrics. I think there would be. I really think it was a factor, the fact that we only had 80 people using it. So early on it becomes harder to get that quantitative, you have to rely a little more on the qualitative Once you get to a larger scale it becomes a lot easier to count stuff.

Andrew: It’s all viral growth and no marketing now. What’s the one thing that gives you the biggest viral boost?

Rene: Super easy. It’s how many friends you have on Foursquare when you join.

Andrew: Because when you check in with your app, it automatically checks people in on Foursquare. Why does that lead to more viral growth?

Rene: Because it means that’s how many friends you have to invite. So a power Foursquare user has, on average, 200 Foursquare friends. Whereas across their whole 10 million plus users now the average is only seven. So big disparity there. So if we’re getting power users coming in, they have potentially 200 friends that they can invite to the platform.

Andrew: How do you get them to invite their friends?

Rene: This is also the biggest viral boost that we’ve done. Super recommended to anybody is that we have as the on-boarding experience you have a nice big screen that pops up and it says invite friends. There is a nice invite all button at the top and the individual ones. You see that a lot in apps but often you don’t see them popping that screen up when they are logging in for the first time. It is something that is in the profiles to where you do an add it or the way Foursquare does it now once you are a new user you get plopped down to their main screen and there is a thing on the bottom that says add new users. It is still not as in your face as having the whole screen in your face and that has been huge for our virality. Having that be part of the on-boarding experience.

Andrew: I see. I have got one other question, that is kind of a selfish question. I want to know how you guys can use what you have learned or how I can use what you have learned on my site and I think other people might have similar issues to what I have.

But first let me tell the audience that if you want to take this to the next level, we have got a premium service on Mixergy. Just go to mixergy.com/premium. If you are already a member you get every single interview that I have done. Hundreds of interviews and more importantly every single course that is created on Mixergy including, and I recommend this to all members it is part of your plan just go in and watch this, Cindy Alvarez course where she is the woman from KISSmetrics who had conversations with users before KISSmetrics built their first products. Cindy, not only shows how she found users to sit and do these interviews with similar to what you guys did. She gives you the questions that she asked and she shows how she used it to create the first version of KISSmetrics. How she, Hiten Shah, and the co-founders of KISSmetrics used it. Highly recommend it if you are a premium member go and watch it right now.

If you are not a premium member I hope you go to mixergy.com/premium and join. I have been getting a lot of positive feedback ever since I started to talk about this. Apparently people have gone for months not knowing that this was even there. Once I start talking about it. They checked it out, they signed up, and it feels great to see it.

So here is the question, right now after someone joins, I ask them three questions. I say why did you join? I forget the second question but basically it is why did you join and what do you want to see from us? I am getting answers that are all over the place. How do I focus those questions so that I can get more useful answers?

Rene: I have got an idea and then Eric can chime in. So I would start by looking at the edges of the bell curve. This is a technique that is used a lot for designers. You learn the most by looking at extreme cases. What I would do is look at all of your users, all of the people that go to your site a lot, and try to figure out a small subset, maybe 50 people that are totally obsessed. They are like your uber power users. Then find another 50 people that used the site once and never used the site again. I would go conduct very high touch interviews with those people. Not a hundred interviews but maybe 10 or 20 in each of those categories and learn what their problems are. I think that you are going to learn a whole lot more by looking at the edges of that bell curve than looking at some sort of random sampling, or looking at the people who are right at the peak of the bell curve.

Andrew: I see, talk to the most active and the least active users.

Rene: Yeah, or people that are using your site in bizarre ways. A way that you can learn a whole lot is by looking at someone that has bizarre requirements. Maybe there is someone that uses your site before they go into a board meeting every time and they have to have it on their phone in a particular way. If you look at people who have these weird use cases, often you can get this insight, this little kernel of understanding of how these people are going about this in a way that gives me these idea of the larger problem that would affect all of our users. That would be one recommendation I have.

Eric: If you are using that feedback to guide what you do on your website for example, then one thing that I would recommend based on what I have done as community manager, Mr. Community Manager for forecast. It turns out that about 95 percent of our feedback emails out of the thousands of emails that we have gotten, 95 percent of the features requested or the bugs reported fall into one of 10 buckets. I didn’t know what those buckets were going to be ahead of time but pretty early on we started to see these strong signals. So I made a text document with standard responses to each of those feature requests or bug reports.

The one thing you could do is to review the answers to the questions that you do have now and figure out what the top five or the top ten most common answers are and make it multiple choice. Then you would be able to collect it in the spreadsheet which then would allow you to aggregate and say that 50 percent of my users are actually saying this. You know I might have changed the language, it may not have been exactly what they would have said, but it shows that answer because that is what they were thinking.

Andrew: That is really helpful. I appreciate you guys doing this interview and being so open about your experiences. I hope people learn form this and don’t have to spend as much money as you guys did to get similar education. And also, if they connect with you, if they go beyond just watching this interview but do what you did with Noah Kagan, do what you did with Jason Cohen, they just connect with you. So what is a good website for them to go to and find out more about you guys and maybe say hello and thank you for doing this interview?

Rene: Our email addresses are pretty easy to guess. It is just rene@ … well let me back up, our URL is one of those wacky URLs that is in some random country. So it is forecast the word and there is a period between the a and the s. So it is foreca.st.

Andrew: Our audience is smart enough to know how to do that.

Rene: I wasn’t for awhile. So it is just rene@foreca.st and eric@forecast. We’ve some nice graphs and diagrams and some of this digested in a more easily presentable format. If anyone would like to reach out to use we would love to help out however we can.

Andrew: Well cool, I appreciate that. Thank you all for the interview and thank you all for watching.


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