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The One Step Every Entrepreneur Should Take Before Launching a Business

47 points by bslatkin 14y ago

6ren 14y ago
> It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them. - Steve Jobs But it depends on how new your product is; e.g. Macdonald's can calculate demand for new store locations.
ecaroth 14y ago
Didn't know this resource existed - Great article!
asuth 14y ago
FWIW, if I had done this before I launched Quizlet, Quizlet wouldn't exist. In fact, if I had even done a google search for the functionality of Quizlet, it wouldn't exist. Now it's 5x bigger than any of its competitors and a top 400 US website. Just sayin.. :)
- sparknlaunch12 14y ago
  Please explain. Why? Curious :)
  - asuth 14y ago
    Quizlet was originally for myself and then for my friends in school. It wasn't even a real business for over a year. I never did any market research or surveys. I just built features I wanted and features my friends wanted, and it turned out to be a thing that a whole lot of other people happened to want. Quizlet has grown 100% through word-of-mouth since it started. Not saying those things aren't useful, but nothing beats being your own customer. Since I'm not a student anymore and still work on Quizlet full-time, it's super important for me and the whole team to have exposure to our users' experience and mindset. So to hack it, we started a Spanish class at the office so we'd have to use the product. We've also been going on field-trips to various middle- and high-school classrooms around the bay area about once a week.
    - 6ren 14y ago
      If you don't mind me asking, what's your competitive strategy? It's possible to create something valuable for yourself, and then it turns out other people value it too; but that can attract competitors. Though serendipity can often creates value, it serendipty rarely seems to protect it - it's common that the person who sows doesn't reap. Competitive advantage seems to need a deliberate strategy (though I'm more comfortable creating than defending). Do you find this too?
      - asuth 14y ago
        I don't see our competitive position as different than any other typical company. We've got a great product that people love, and we build new things into it that our competitors can't predict or move fast enough to build. We've built a brand that students and teachers know and like. One deliberate competitive advantage is that we're a free, ad-supported site. Most education products go for a subscription model, and that requires enterprise sales (selling to districts, blech) and fundamentally limits the number of people who will use and enjoy your product. The ad model only works when you have scale (which we do). If we had been in a position where we needed to make money quickly, we wouldn't have grown into the size and scope we have now.
        calydon 14y ago
        I think this is great, but I'm still unclear about why market researching your idea would have caused you to not pursue it further. If you had asked users when you first started, or even now, "would you use an awesome flashcard/memorization service that is FREE" I would expect the results that came back would encourage the idea of going forward with the business, because I know flashcards are a popular tool for studying and lots of people study. Are you saying that the number of existing quiz/flashcard sites would create a research result that would discourage attempting another one? It seems like you knew while you were building Quizlet that you had something different in mind, so the only unknown was whether people would use it en masse. As it turns out, you were right, but, and this is a sincere question, was this vision or luck? Isn't it more accurate to say that the art lies in knowing what questions to ask the oracle, and how to ask those questions, rather than ignoring the value of prophecy?
- rooshdi 14y ago
  Congrats! Quizlet is Awesome!
jcc80 14y ago
This is good - .10 for non-demographic targeted and .50 to target a demographic. But, the fact that the question types are all multiple choice / ratings and don't allow respondents to give short answers like Pickfu is a downer. The insights from people saying why they chose an answer is the most valuable info.
sparknlaunch12 14y ago
Great product. Getting surveys filled out is an impossible task. After three months only 2 people completed our survey. You can offer incentives but you risk creating bias.
- bslatkin 14y ago
  You're referring to this survey? http://sparknlaunch.wordpress.com/2012/04/05/project-mackerel-please-sir-complete-our-quick-survey/ http://sparknlaunch.wordpress.com/2012/04/05/project-mackere...
  - sparknlaunch12 14y ago
    Yes, that's the one. We have tried various unpaid methods of promoting the survey link. It feels as online users are simply not interested. This is understandable given the only survey we would be likely to complete is one with an iPad on offer. We are now planning to call people and ask then a series of questions. The conversion rate may bee slightly higher.
jeza 14y ago
If I had any concern, it's that the surveys are used as a means to access premium content. This may or may not effect the quality of answers.
blklilligs 14y ago
I'm so surprised that this didn't get more coverage when it launched. This is one of the more innovative things to come out of Google in the last few years. I saw an example survey and the reporting interface is pretty rad. https://www.google.com/insights/consumersurveys/examples https://www.google.com/insights/consumersurveys/examples
pazimzadeh 14y ago
I think that the title should be: "The One Step Every Entrepreneur Should Take Before Launching a Business: Survey your customers"
- SkyMarshal 14y ago
  YES, thank you! I was just going to rant about tabloid titles like this on HN FFS people, stop it. Just title your submission exactly what it is about, stop using the language of supermarket checkout line tabloids to try to pique people's interest. If that's the actual article title, don't copy and paste it, but make a better one. An even more concise example for this one: "Google Consumer Surveys: survey your target market before launching" In other news, ironic how the article's header picture is a supermarket.
  - chmike 14y ago
    Agree. The question I ask myself is what truth do we get from such survey ? It depends on the people who are responding to the survey. This is just probing. What about product user feedback and product optimization based on the feedback ? As Ford said, if he asked people what they wanted, the answer would have been faster horses. So the question asked is of course important, and as much as the surveyed people. This may work only for particular ideas. And finaly only the execution will make the difference.
    - zacharycohn 14y ago
      People often miss the point of that quote. If he had asked people what they wanted, they'd have said "faster horses." What they REALLY were saying was "I want to get places faster."
ricksta 14y ago
how do they keep people from filling in bogus answers just to get through the survey?
- jackhebert 14y ago
  (I work on the project) Some algorithms to detect users consistently giving bad answers, but in general it is easy enough for users to give correct answers. Check out the response time histograms on the example surveys. We also have a whitepaper here comparing our results to other survey providers and known results: http://www.google.com/insights/consumersurveys/static/consumer_surveys_whitepaper.pdf http://www.google.com/insights/consumersurveys/static/consum...
gavanwoolery 14y ago
Actually, not to be cynical, but the first step is to realize that your first ten ideas are probably going to be crap, and save yourself the time of even trying market research on them.
- Negitivefrags 14y ago
  If you have ten ideas and do nothing, why would the next ten ideas be any better? Unfortunately you don't get better at having ideas by simply having more ideas. You get better ideas because you have experience in trying to use them.
gbog 14y ago
Off-topic: Is it my tired eyes, my broken browser (Chrome on Ubuntu Linux) or a special javastrick: The screenshots appear "suddenly" when scrolling down the page, a bit like a lazy load of images or something similar. NB if you scrolled down to the bottom already, you have to reload the page to see it, and it seems less noticeable than at first load.
- Wilya 14y ago
  The page loads [0], which, given its name, probably means they do some lazy loading. I've seen it too. [0] http://www.minisprout.com/wp-content/plugins/jquery-image-lazy-loading/javascripts/jquery.lazyload.mini.js?ver=1.5.0 http://www.minisprout.com/wp-content/plugins/jquery-image-la...
melayan 14y ago
Has anyone had great success with Amazon's mTurk?
voodoochilo 14y ago
oh this one is funny! did i get that right? i will have to pay google this moneystuff to create even more market research data for them? (because as the survey is done on their site the data will end up on their servers) well, call me a greedy bastard, but in my opinion they would have to pay me, would't they?
meisterbrendan 14y ago
This is poor advice. Asking people if they would do something may not give you good data: people are finicky, and may not do what they say they will. Alternate solution: put up a kickstarter. Instead of asking people if they would do something, get them to put the money where there mouth is. Kickstarter is real market validation, not just a throw-away survey.
duopixel 14y ago
I'm wary of online survey results as users just want to get through them as soon as posible. Their motivation is not helping you, it's reaching the carrot at the end of the stick. I once had a prospective client who wanted to launch a health tourism website, he created a survey and came back to me excited about the results: people wanted to do travel tourism with four companions on average, one user even said he wanted to travel with 8 companions! Of course I was skeptical so I looked into the data. Turns out it was all bot filled data, the survey company would give a monetary incentive to people who filled the survey, which is an open invitation to game the system. Bad data is worse than no data at all, because it gives you false confidence in things that might be outright wrong. I know Google is not naive and they probably filter out questionable data, but I have lost track of all the times I've responded that I live in Afghanistan (first item of the country dropdown) just to get through a sign up form designed by the marketing department.
john_flintstone 14y ago
This doesn't impress me. You get far better and more accurate results from running a Google ad campaign on a mocked up landing page than a survey would deliver. An ad campaign gives you far more: number of impressions, click through rate, cost per click, key words and phrases potential customers actually use, etc. When it comes to surveys, people lie all the time (Would you hire someone from ethnic minority X? Answer: Of course, some of my best friends are...). People lie all the time, their Google search activity doesn't lie.
- dasil003 14y ago
  What bothers me about it is the claim "the one thing every entrepreneur should do". That's ridiculous hyperbole. To be accurate it should say "one more addition to your massive tool belt of lean startup methodologies". I could see some instances where this type of tool could be useful, but on the other hand maybe sitting down with one potential customer for 20 mins in a coffee shop could give you more insightful information.
- tomgallard 14y ago
  This is exactly what I do. Knock up a landing page, and stick up an Adwords campaign. Its a great way to find and engage some initial customers, who will be able to help you shape your product as it develops. Also gives you a great idea on how much it will cost you to acquire customers, and gets you a web presence nice and early. Oh- and I always talk to my other half about it- she's a complete non-techy so always has a different angle on things, which can be really useful. I've written out the details steps I use here: http://blog.crispyfriedsoftware.com/post/19774815792/6-steps-for-your-startup-before-you-start-coding http://blog.crispyfriedsoftware.com/post/19774815792/6-steps...
  - sparknlaunch12 14y ago
    Landing pages may capture email addresses and gauge some level of interest. However they don't properly validate your offering. Ash Maurya (lean cannas) writes about landing pages but also the importance of doing your market research. Http://www.ashmaurya.com/
iamgopal 14y ago
I didn't know this, thanks for the link. But why google is doing this ? Is survey business that big ?
derrida 14y ago
"Every Entrepreneur". Yeah right. What about when your making something people don't even know they want yet.
- jasonlotito 14y ago
  Well, they may not know what they want, but what you'll be selling solves a problem. You can still validate based on that.
handzhiev 14y ago
Every survey that asks "Would you pay for..." is flawed. I would pay for many things but I am not paying for them. The best way to really get some data is to set up a sales page, put your price there and count the clicks on the Buy Now button. Use Adwords or whatever to drive the traffic. This works much better than surveys.

47 points by bslatkin 14y ago

6ren 14y ago

> It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them. - Steve Jobs But it depends on how new your product is; e.g. Macdonald's can calculate demand for new store locations.

ecaroth 14y ago

Didn't know this resource existed - Great article!

asuth 14y ago

FWIW, if I had done this before I launched Quizlet, Quizlet wouldn't exist. In fact, if I had even done a google search for the functionality of Quizlet, it wouldn't exist. Now it's 5x bigger than any of its competitors and a top 400 US website. Just sayin.. :)

sparknlaunch12 14y ago
Please explain. Why? Curious :)
- asuth 14y ago
  Quizlet was originally for myself and then for my friends in school. It wasn't even a real business for over a year. I never did any market research or surveys. I just built features I wanted and features my friends wanted, and it turned out to be a thing that a whole lot of other people happened to want. Quizlet has grown 100% through word-of-mouth since it started. Not saying those things aren't useful, but nothing beats being your own customer. Since I'm not a student anymore and still work on Quizlet full-time, it's super important for me and the whole team to have exposure to our users' experience and mindset. So to hack it, we started a Spanish class at the office so we'd have to use the product. We've also been going on field-trips to various middle- and high-school classrooms around the bay area about once a week.
  - 6ren 14y ago
    If you don't mind me asking, what's your competitive strategy? It's possible to create something valuable for yourself, and then it turns out other people value it too; but that can attract competitors. Though serendipity can often creates value, it serendipty rarely seems to protect it - it's common that the person who sows doesn't reap. Competitive advantage seems to need a deliberate strategy (though I'm more comfortable creating than defending). Do you find this too?
    - asuth 14y ago
      I don't see our competitive position as different than any other typical company. We've got a great product that people love, and we build new things into it that our competitors can't predict or move fast enough to build. We've built a brand that students and teachers know and like. One deliberate competitive advantage is that we're a free, ad-supported site. Most education products go for a subscription model, and that requires enterprise sales (selling to districts, blech) and fundamentally limits the number of people who will use and enjoy your product. The ad model only works when you have scale (which we do). If we had been in a position where we needed to make money quickly, we wouldn't have grown into the size and scope we have now.
      - calydon 14y ago
        I think this is great, but I'm still unclear about why market researching your idea would have caused you to not pursue it further. If you had asked users when you first started, or even now, "would you use an awesome flashcard/memorization service that is FREE" I would expect the results that came back would encourage the idea of going forward with the business, because I know flashcards are a popular tool for studying and lots of people study. Are you saying that the number of existing quiz/flashcard sites would create a research result that would discourage attempting another one? It seems like you knew while you were building Quizlet that you had something different in mind, so the only unknown was whether people would use it en masse. As it turns out, you were right, but, and this is a sincere question, was this vision or luck? Isn't it more accurate to say that the art lies in knowing what questions to ask the oracle, and how to ask those questions, rather than ignoring the value of prophecy?
rooshdi 14y ago
Congrats! Quizlet is Awesome!

jcc80 14y ago

This is good - .10 for non-demographic targeted and .50 to target a demographic. But, the fact that the question types are all multiple choice / ratings and don't allow respondents to give short answers like Pickfu is a downer. The insights from people saying why they chose an answer is the most valuable info.

sparknlaunch12 14y ago

Great product. Getting surveys filled out is an impossible task. After three months only 2 people completed our survey. You can offer incentives but you risk creating bias.

bslatkin 14y ago
You're referring to this survey? http://sparknlaunch.wordpress.com/2012/04/05/project-mackerel-please-sir-complete-our-quick-survey/ http://sparknlaunch.wordpress.com/2012/04/05/project-mackere...
- sparknlaunch12 14y ago
  Yes, that's the one. We have tried various unpaid methods of promoting the survey link. It feels as online users are simply not interested. This is understandable given the only survey we would be likely to complete is one with an iPad on offer. We are now planning to call people and ask then a series of questions. The conversion rate may bee slightly higher.

jeza 14y ago

If I had any concern, it's that the surveys are used as a means to access premium content. This may or may not effect the quality of answers.

blklilligs 14y ago

I'm so surprised that this didn't get more coverage when it launched. This is one of the more innovative things to come out of Google in the last few years. I saw an example survey and the reporting interface is pretty rad. https://www.google.com/insights/consumersurveys/examples https://www.google.com/insights/consumersurveys/examples

pazimzadeh 14y ago

I think that the title should be: "The One Step Every Entrepreneur Should Take Before Launching a Business: Survey your customers"

SkyMarshal 14y ago
YES, thank you! I was just going to rant about tabloid titles like this on HN FFS people, stop it. Just title your submission exactly what it is about, stop using the language of supermarket checkout line tabloids to try to pique people's interest. If that's the actual article title, don't copy and paste it, but make a better one. An even more concise example for this one: "Google Consumer Surveys: survey your target market before launching" In other news, ironic how the article's header picture is a supermarket.
- chmike 14y ago
  Agree. The question I ask myself is what truth do we get from such survey ? It depends on the people who are responding to the survey. This is just probing. What about product user feedback and product optimization based on the feedback ? As Ford said, if he asked people what they wanted, the answer would have been faster horses. So the question asked is of course important, and as much as the surveyed people. This may work only for particular ideas. And finaly only the execution will make the difference.
  - zacharycohn 14y ago
    People often miss the point of that quote. If he had asked people what they wanted, they'd have said "faster horses." What they REALLY were saying was "I want to get places faster."

ricksta 14y ago

how do they keep people from filling in bogus answers just to get through the survey?

jackhebert 14y ago
(I work on the project) Some algorithms to detect users consistently giving bad answers, but in general it is easy enough for users to give correct answers. Check out the response time histograms on the example surveys. We also have a whitepaper here comparing our results to other survey providers and known results: http://www.google.com/insights/consumersurveys/static/consumer_surveys_whitepaper.pdf http://www.google.com/insights/consumersurveys/static/consum...

gavanwoolery 14y ago

Actually, not to be cynical, but the first step is to realize that your first ten ideas are probably going to be crap, and save yourself the time of even trying market research on them.

Negitivefrags 14y ago
If you have ten ideas and do nothing, why would the next ten ideas be any better? Unfortunately you don't get better at having ideas by simply having more ideas. You get better ideas because you have experience in trying to use them.

gbog 14y ago

Off-topic: Is it my tired eyes, my broken browser (Chrome on Ubuntu Linux) or a special javastrick: The screenshots appear "suddenly" when scrolling down the page, a bit like a lazy load of images or something similar. NB if you scrolled down to the bottom already, you have to reload the page to see it, and it seems less noticeable than at first load.

Wilya 14y ago
The page loads [0], which, given its name, probably means they do some lazy loading. I've seen it too. [0] http://www.minisprout.com/wp-content/plugins/jquery-image-lazy-loading/javascripts/jquery.lazyload.mini.js?ver=1.5.0 http://www.minisprout.com/wp-content/plugins/jquery-image-la...

melayan 14y ago

Has anyone had great success with Amazon's mTurk?

voodoochilo 14y ago

oh this one is funny! did i get that right? i will have to pay google this moneystuff to create even more market research data for them? (because as the survey is done on their site the data will end up on their servers) well, call me a greedy bastard, but in my opinion they would have to pay me, would't they?

meisterbrendan 14y ago

This is poor advice. Asking people if they would do something may not give you good data: people are finicky, and may not do what they say they will. Alternate solution: put up a kickstarter. Instead of asking people if they would do something, get them to put the money where there mouth is. Kickstarter is real market validation, not just a throw-away survey.

duopixel 14y ago

I'm wary of online survey results as users just want to get through them as soon as posible. Their motivation is not helping you, it's reaching the carrot at the end of the stick. I once had a prospective client who wanted to launch a health tourism website, he created a survey and came back to me excited about the results: people wanted to do travel tourism with four companions on average, one user even said he wanted to travel with 8 companions! Of course I was skeptical so I looked into the data. Turns out it was all bot filled data, the survey company would give a monetary incentive to people who filled the survey, which is an open invitation to game the system. Bad data is worse than no data at all, because it gives you false confidence in things that might be outright wrong. I know Google is not naive and they probably filter out questionable data, but I have lost track of all the times I've responded that I live in Afghanistan (first item of the country dropdown) just to get through a sign up form designed by the marketing department.

john_flintstone 14y ago

This doesn't impress me. You get far better and more accurate results from running a Google ad campaign on a mocked up landing page than a survey would deliver. An ad campaign gives you far more: number of impressions, click through rate, cost per click, key words and phrases potential customers actually use, etc. When it comes to surveys, people lie all the time (Would you hire someone from ethnic minority X? Answer: Of course, some of my best friends are...). People lie all the time, their Google search activity doesn't lie.

dasil003 14y ago
What bothers me about it is the claim "the one thing every entrepreneur should do". That's ridiculous hyperbole. To be accurate it should say "one more addition to your massive tool belt of lean startup methodologies". I could see some instances where this type of tool could be useful, but on the other hand maybe sitting down with one potential customer for 20 mins in a coffee shop could give you more insightful information.
tomgallard 14y ago
This is exactly what I do. Knock up a landing page, and stick up an Adwords campaign. Its a great way to find and engage some initial customers, who will be able to help you shape your product as it develops. Also gives you a great idea on how much it will cost you to acquire customers, and gets you a web presence nice and early. Oh- and I always talk to my other half about it- she's a complete non-techy so always has a different angle on things, which can be really useful. I've written out the details steps I use here: http://blog.crispyfriedsoftware.com/post/19774815792/6-steps-for-your-startup-before-you-start-coding http://blog.crispyfriedsoftware.com/post/19774815792/6-steps...
- sparknlaunch12 14y ago
  Landing pages may capture email addresses and gauge some level of interest. However they don't properly validate your offering. Ash Maurya (lean cannas) writes about landing pages but also the importance of doing your market research. Http://www.ashmaurya.com/

iamgopal 14y ago

I didn't know this, thanks for the link. But why google is doing this ? Is survey business that big ?

derrida 14y ago

"Every Entrepreneur". Yeah right. What about when your making something people don't even know they want yet.

jasonlotito 14y ago
Well, they may not know what they want, but what you'll be selling solves a problem. You can still validate based on that.

handzhiev 14y ago

Every survey that asks "Would you pay for..." is flawed. I would pay for many things but I am not paying for them. The best way to really get some data is to set up a sales page, put your price there and count the clicks on the Buy Now button. Use Adwords or whatever to drive the traffic. This works much better than surveys.