I have a great opportunity to test out some theories and to follow the principles advocated by the likes of Eric Ries, Andrew Chen, Sean O’Malley, Dave McClure and Sean Ellis. I thought I’d keep a running blog on our progress.
I won’t name the company until the time is right, but I’ll tell you a little about it:
– Company is self-funded. This is a good thing. Not only is it a bad time to seek funding, it’s a great time to prove the business model prior to funding.
– Product is barely started. This is a good thing, as well. This should enable us to run customer development principles in parallel with development. The days of figuring out who your customers are after product completion (often after funding) hopefully will soon be over.
– Team of 3: vision guy, domain expert and business development (CEO); developer; marketing guy (me, FWIW).
– Business plan assumes a Freemium model, with additional revenue from highly targeted advertising, lead selling, and a la carte purchases.
Week 1 Tasks:
- Document Business Hypotheses – market segment, customers, pain, acquisition methods, etc.
- Identify 100 potential users to interview.
- Identify 50 potential partners to interview.
- Create interview process and objectives.
- Create MRD based on “vision.”
- Identify key metrics for proving model.
- Prepare blog launch using company domain.
Comments welcome
Good luck – starting with the customer dev process already gives you an advantage. I’m additionally stoked that you’re in San Diego; lord knows my hometown startup scene needs some support.
I’ll be tuned in…
Thanks for stopping by, Luke. I do sometimes feel lonely down here in San Diego. ; )
Can you offer some insight as to why you chose to go with the Freemium model? I personally like the 37signals model of offering their bare-bones services free, and beyond that charging low monthly fees. Thus I’m curious about your decision in those regards.
Jamey,
Thanks for the question.
I think product and business objectives go a long way towards determining the model. Our product (into which I can’t go just yet), lends itself well to tiered subscriptions. We suspect the target customer is a tough nut to acquire and convert, so a free level is in order.
Further, the founder believes he will eventually need to raise capital to scale the business (I tend to agree), and an ad-only based revenue model is difficult to fund.
I hope I answered your question.