01 Nov 2013

6 LESSONS LEARNED IN TWENTY MONTHS

Since we started in the beginning of




01 Nov 2013

Since we started in the beginning of 2012, we’re reviewing all our start-up adventures, developments and even our mental health on a regular basis. This time we thought it’s helpful for others who are planning to run the same path as we did. We’d love to share some insights collected in “6 lessons” with you every first Friday of the month.

Co-Founders Steve & Alex

Steve Nitzschner (CXO and Co-Founder) and Alexander Bierling (CEO and Co-Founder of Compass.to)

1. VCs, thanks for turning us down in 2012. Start-Ups: Keep pitching but try to avoid to raise capital too early!
(by Alexander Bierling, Compass.to Co-Founder and CEO)

In 2012, right after the end of the financial crisis but in the middle of the Series-A/Angel money crunch, we’ve been approaching all kinds of investors to finance the next steps of our new venture. We spend a third of our time over the year on researching investors, building relationships, preparing pitch decks (executive summary and 15 page slider) and meeting and presenting. All while we’ve been working on the product at the same time. We thought we’re ready with a MVP (most viable product) and ready to launch with a bunch of features to improve life.

We had to downturn 2-3 possible investments. All between $300K and $1MN. Due to our focus on avoiding to get “dumb money” into this venture. It was hard but it played out in the end.

Biggest learnings so far: Reduce VC outreach to quality instead of quantity, approach A-investors at the same time like AA-investors. Limit time to 10% in case you’re not seriously trying to raise capital. Understand the outreach as relationship building and use the phrase “I’m reaching out to learn and understand about your investment focus and further procedure”.  But have an executive summary ready when sending an e-mail.
Compass.to has now raised $100K in cash and another $400K in ressources.

2. The Lean Start-Up idea needs to be refreshed based on its own approach of build-measure-learn
(by Steve Nitzschner, Compass.to Co-Founder and CXO)

A year full of 12h/day work on our eco system around Compass.to unveiled a cruel truth: Half of what we’ve been discussing, designing and developing cannot be used within the consumer product – the final iOS app. Why? Well, we’ve just figured out that Eric Ries’ idea of eliminating uncertainty in a Start-up was mostly right. Mostly!

After our regular bi-monthly reality check one of our advisors drafted us the way of a Lean Startup. After learning that we did almost everything “unlean”, we were lost and confused about the right way of continuing with business. We then digged deeper what it means to produce “lean”, we discovered that the amount of simultaneous features, our huge code library and the unlimited amount of ideas were definitely too much for a lean version of an app. It was also too confusing for users and finally not testable. We had to cut back on the features and on the pith, too. Now we’re leaner than before but not as the Lean Start-up Model would have told us.

No offense to Eric Ries, who’s formed phrases like “MVP”, “pivot” or “continuous innovation” – now enmeshed in tech culture. After trying to convert this approach we saw that there are a whole lot of things dead wrong. Here are a few of the problems we were facing:
The Lean Startup model encourages single features vs. whole products. We’re here to provide customers with a whole product to solve their problems. And this whole product should become something to love. Can someone do that when it’s just an MVP – a minimal viable product?

Tech guru Guy Kawasaki summed it best: “A great product is deep. It doesn’t run out of features and functionality after a few weeks of use. As your demands get more sophisticated, you discover that you don’t need a different product.”. This is exactly what we’re here for.

We believe the solution is somewhere in between.
Most of the time, the Lean Model fits in the earliest phase of the start-up’s life when money is tight and time to market is everything. Keep iterating! But not in a way that brings your team to the risk of burnout. Build your business to last, not to flip to the first company that comes calling.
Also users can deal with multiple features but just make sure you can test them!
And last but not least: Even a minimal product can get along with some lovely designs and interfaces.


3. Do not devalue architecture and scalability
!
(by Ralf Halgasch, CTO Compass.to)

Companies that focus on MVP tend to devalue efforts on architecture. Sometimes it makes sense if you don’t have time to build a whole product. You also won’t have the money to invest in architecture. But remember: No decision about architecture is a decision that will determine your success or failure as a start-up once you got little traction.

The Compass.to team valued a well planned architecture from the very first beginning. And it didn’t took long to convince the founders Alex and Steve. It was easy to outline what will happen in case of success. All the hard work of the past year will dissapear within a week once you’re not aware what only a couple of hundred similtaneous users will do with your server infrastructure.

CATCH_vs_EVERNOTE
A good example is the competiton around Evernote. Lots and lots of companies competed with the Silicon Valley start-up in its early days. Some like Catch even came complete with a rich, colorful and promising user interface. But Catch is gone now. Why? In a word: architecture. Evernote built a whole product around enabling people to capture, store, and retrieve their Internet memories. Architecturally, the product was built to scale into multiple products and into a colorful ecosystem that targets independent software vendors to build on top of its platform through a program Evernote calls “Trunk.” Well done!

4. Don’t PR your product
(by Alexander Bierling and Steve Nitzschner)

Oh my god have we been exited about our Going Live. You have no idea! Just a month before we ending the alpha version we scheduled a marketing plan. We thought about mailing to friends, talking to journalists, presenting at TechCrunch (we were considered to present there) and running an ad campaign. Everyone on the team had big confidence to nail at least the top 10 of downloaded apps in the Apple App Store. Also because Apple’s art team contacted us with the request to promote the app once it’s out. We were delighted!

EPSON scanner image
We were (again) so deadly wrong about this waterfall principle of bringing a product to life in a company way. Hell no, we’re a Start-up with the highest level of uncertainty. This is not a company yet! Therefore the old way of building and marketing products doesn’t work.

Instead we turned our attention to a method of Customer Discovery & Validation (Ash Maurya‘s version of the Discovery step of Customer Development for a web startup) – testing social channels, exclusively targeting mobile users. As we launched new social campaigns, we targeted our core customer demographic of students, creative communities and New Yorkers as well as Brooklynites. Of all the social channels, Facebook supported both – the highest number of clicks and the highest install rate at the lowest CPA. User acquisition costs were now in the low single digits, around $1/install which felt much more sustainable.
We spend $10/day for 2×2 weeks. We tried different keywords and claims to check what attracts users more. Sometimes we just made “smoke tests” with not yet existing features (we’ll share some insights on that soon).

As we neared our planned ‘go live’ date when we would officially launch a press campaign, we were lucky enough to be rejected by a little number of journalists. This helped us to rethink the waterfall. And well, we ended up in a constant user acquisition concept of $5/day to test what drives user satisfaction.


5. What a designer should have known 20 months ago

(by Marc Jacob, Lead Designer Compass.to)

Bildschirmfoto 2013-10-18 um 23.59.10By designing the first version of compass.to we spend a lot of time constructing a perfect user interface.  Special, unique, outstanding. Every single icon was hand crafted, detailed illustrations were in place and we redesigned almost every iOS control, too. We strayed in our own universe. But this made us losing the big picture!

Details are great – especially when you get feedbacks from critics, saying “The best developed and designed mobile app that I’ve seen prior launch.”.
My advice, 20 months ag, would have been: Concentrate on the user journey first. User will only use an App if they know how and what for.
But what’s the right way to do it? We simply drew every little feature and even the details on a whiteboard. Then we killed almost every feature trying to find out what’s really important. It was a horrible and time consuming process. Also introducing other designers to team, not familiar with the App, helped us to focus on the right features.

Another lesson we’ve learned: Don’t fight for details whe they are holding you back in the long run. AN example were the round edge shaped pictures we liked so much. We really fought hard fights with the team to keep them. Then we figured out, it’s a waste of space. So we killed it along with some other UI elements for simplicity. Fighting about details like this costs you weeks, sometimes months!

user interface
Back to the drawing board. UI with pen and paper.

We also learned to start drawing a UI with pencil and paper instead of Photoshop. Making a scribble helps to get the idea across, being faster on decisions and being more flexible. Tools like Skala Preview are were helping us to see designs live on the device, ready to be discussed with the team.

So my summery from a designer’s point of view:  Don’t get lost in details, less is more, journey first, content is king, simplify!

6. A Word from our dearest advisors
(by Dirk Popp, Jonathan Kopp, Seth Weinberg and Marty Waters)

Advisors are busy. Please be patient and expect the final post somewhen in the year 2013.

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