From a notebook to launching a startup
– Shane Mac is the co-founder of online job recruitment startup Hello There. He is also the director of marketing at Zaarly and formerly spearheaded marketing at Gist (acquired by RIM). This is an edited version of the original article that appeared on Quick Sprout. The views expressed are his own. –
About a year ago, I sat in a coffee shop pitching a new idea to one of the founders of Startup Weekend, Clint Nelson. Never would I have predicted that this one meeting would have such an impact on the next year of my life.
The entire concept was all on one page of my notebook: sketches, pricing models, tag lines and even people I should sell it to. I’ve put every idea from notes, books, speeches, and product sketches in an indexed notebook since I read a post by Tim Ferriss two years ago.
This is my best effort to share what it takes to get a (bootstrapped) startup off the ground, while also having a fulltime job. We launched three months ago, and I’m ecstatic. Here are the ups, downs, the good and the bad:
The 10 things we learned
1. What you think people should pay for, may be what they think should be free.
When I had the idea for Hello There (that’s the name), I was obsessed with video and the ability to display more effectively who you actually are.
I thought people would pay for a custom video page and that analytics would just be a cool added feature.
Wrong. Most people thought the video should be free. (Thanks YouTube)
What people perceived as “worth paying for” was the ability to make and unlimited amount of webpages for every job they applied for. In their eyes making a webpage was expensive, hard, and cost a lot of money. They also felt analytics was worth paying for because it helps a user track progress and sentiment. Both huge drivers in pricing psychology.
So, I was wrong yet also right. I believed we had a product worth paying for but I thought people were paying for different reasons.
In hindsight I understand. Hosting can be $10 a month (at its cheapest), add in a domain and then someone to actually code your site and I can easily see why people thought we were cheap.
2. Do not hide your idea. Ever.
I can’t tell you how many people want me to sign NDAs or are afraid to tell people their ideas.
Also, I once heard something from a friend, Beth Andrus. She said:
The only people that would steal your ideas are the people who have too many of their own ideas. Stop worrying about it.
The real reason to share your ideas is to find team members and people willing to help and join you.
I can’t tell you how many times someone has offered to help because I shared my idea.
Without sharing my ideas, I wouldn’t have the bad ass team that I have and I might have had mediocre players. Put yourself out there. Trust me. If your idea is good then someone else is working on it too, be sure of that. Don’t sweat it though, that’s what we call competition…the best part of the game. Ideas are worthless, execution is everything. Then there’s competition.
3. It’s all about the team and motivation.
I don’t outsource product stuff. (I actually have never outsourced) I am totally cool with splitting up founders shares and finding the best, most dedicated talent. I think this is more valuable than having total control and working with people who are not invested in the idea. This is just my personal preference.
Building something when you believe in it and being part of something bigger than yourself is more rewarding than going it alone. Teams, with the right skill set, help drive ideas forward. For me execution is key, and I find top players perform at their peak when it’s crunch time.
I also want to work with my friends. That’s another personal preference.
There were a few times when we lost a little momentum and I tried to figure out why.
It came down to progress and feedback.
Try to set hard deadlines and even if you don’t hit them, address it and set others. Meeting in person really does help drive a team. Working remotely is great when getting work done but inspiration doesn’t come from emails.
Also, share all customer feedback. Working with a lot of development and design-centric people, I’ve learned that what really matters is that someone is using your product. Someone has touched and found value in what you’ve built. I find that the best employees work this way and are not really inspired by the number on the paycheck, although that does figure in. Great feedback leads to motivation. Bad feedback will force a team to fix the problem.
4. Why do you need money? Bootstrap it damn it.
I’ve believed in Jason Fried’s philosophy ever since I heard his talk at Big Omaha last year.
We lived and breathed it with Hello There.
Kept cost at almost nothing, didn’t quit our other jobs, and made deals with third party vendors to get free stuff. Scrappy is the word I think.
For example, our developer did free work for our payment provider to get some free credits while I did some free product feedback to get free video hosting during development.
Saved over $200 a month.
I truly believe that the coming economy will be built by people who hold multiple jobs and incomes to survive. Having a job doesn’t mean you can’t work another. Sleep is overrated.
For all of you who are saying right now that you don’t have time, I don’t want to hear it. Time is all about prioritizing which is not easy. It takes sacrifice and often it takes sleepless nights.
If you are hungry then you will find a way to make food.
5. Build products that make other people look good.
Seriously, I could have never expected the amount of feedback that comes my way, it often sounds like “Thank you for getting me a job.”
With this economy it sure makes waking up everyday worth every minute, of every day.
Spend time making beautiful, simple products and people will love you for it most of the time.
This shows when you look at my awesome team who helped build, what we believe, is useful, simple, and helps people stand out. It has made the customer the marketer and evangelist for our brand. Customers are your greatest marketing resource, use them to spread your idea.
I think when people can complete a task or do what they set out to do then it drives a sense of accomplishment within and in return drives their emotion towards your product, your company and ultimately your brand.
6. Your main feature may not be so important.
Video is not (may never be) socially mainstream.
I love video. I love Skype. I get so much more from it than audio or text. Video is how this entire idea started.
I am also an extroverted whore and don’t mind being on video.
However, I am also not part of the mainstream. I see how the youth interact with videos. In a sense I am very bullish when it comes to some of the ridiculous things video does nowadays.
Once I realized that our product wasn’t the hurdle, but rather making and recording a video was… I knew I needed to rethink things.
You will probably see the option for photo/PowerPoint deck in a future release.
As for video, I’m not sure we will ever get there. I watch trends over time. I think about how we went from the letter, to the telegram to the phone. Then I think about how I used to talk on the phone all the time, and how I text (telegram) instead now.
I mean, I get it. It’s passive, more direct and faster. It’s hard for people to express themselves via text. However, text allows us to share large quantities of information at a rapid rate.
That’s why I have my apprehensions about video. Human nature and psychology will always drive how we communicate. Sometimes it will revert back to it’s simplest form.
7. Your product can be in different markets but it needs different branding and pricing.
Hello There was meant for people looking for jobs. That obviously means they probably didn’t want to spend a lot of money. I wanted to make looking for a job affordable.
In the process of trying to find bloggers to write about us, I pitched (using my own product) Heather Huhman, a career blogger, who actually commented back to me and said:
I would love to use this for sales. Can I use it for that?
I hadn’t even thought much about that vertical because I wanted to be extremely focused on the career seeker, but it sounded good. Sales people pay for stuff.
I told her that she could use it however she wanted since we don’t brand our pages.
I then reached out to a bunch of sales guys I knew and asked them to try our product. The main feedback I got was:
This is a career tool?
No, well yes… but it’s also….
The lesson I learned is perception is reality ..if you think you can convince a sales guy to come to your homepage, which is all about careers, and believe in your product you may be nuts. However, you may also be onto something.
Our solution was to create new marketing and branding. The new product would be called, Say Hello Sales. It would be the same product, but would have different messaging and pricing.
And I have to say, it worked really well. The only issue was, the pricing was a little tricky.
See, the career seeker mainly wants a per page basis (hence the 5 pages for $10). They don’t want to think they need unlimited pages because they believe they are going to get hired at the first job they apply for. At least that’s the hope.
Sales guys, on the other hand, don’t want to think about buying, and then buying more and then buying…. Repeat that and expense it every time.
They just want to set it and forget it. (oh if we never had that infomercial)
So that’s all we gave them: One unlimited monthly price. Most think it is too cheap so we will probably raise it soon. But, that’s a good problem to have I guess.
So, we have two markets with the same product with slightly different pricing.
8. Freemium, freemium, oh freemium – can work.
I like freemium or anything that I can try, touch and use before paying.
I don’t like feature freemium. Not that it doesn’t work but it’s just not my preference.
I wanted to offer a product with all the bells and whistles so if the customer thought it was worth it then they could pay for another one and another one… etc.
Feature sells usually just annoy me. I typically buy a product for one feature, but I get four in the process.
So, we give everyone a free first page. If you get value and like the product then you pay for the next one. It’s actually pretty simple and most customers appreciate a taste before they buy.
9. PR is much easier with a simple product and success stories.
Good luck getting PR if it’s hard to tell someone why they should use your product, unless you pay that awesome $5,000 retainer for an agency. If you’re pay 5k these days then you’ve already lost if you’re a small startup.
I’d rather find writers and try to build my own relationships with them, then work to give valuable stories to them. Do the work for them and you will be surprised what happens if you have a good product.
10. Don’t give people choices.
I heard a stat one time that almost 90 percent of people need to be told what to do. I believe it.
If you give people, even me, a bunch of choices then you will always see a drop off rate. (it’s called the paradox of choice and a great book on this is Switch)
Our product always had one path which guided the customer throughout the process.
Remember, people can only do one thing at a time so only give them one thing to do.
So, my advice?
Go buy a notebook and start writing down some ideas. Tell everyone about it and inspire people to join you. Keep everyone motivated with feedback and transparency and find the right markets. Finally launch a company…profitable or not, it will teach you more than you could ever ask for.
I am still learning and always will be. Thanks to everyone who has helped me along the way. I am no better than anyone else and only as smart as those who I am around. I usually learn something new everyday and that is what this game of life is all about.
Be an entrepreneur. Those are the people who change the world. I don’t consider myself an entrepreneur yet. Entrepreneur to me means employing others, not just myself. Here’s to hiring our first employee… I hope it’s my dad.