July 28, 2007

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Interview #7 - Dharmesh Shah - OnStartups.com

I’m happy to present the next interviewee, Dharmesh Shah, who runs the stellar blog OnStartups.com. As the questions are specifically directed towards one of Shah’s recent articles, there is some required reading: Startup Marketing: Big Bang vs. Darwinian Approach. It’s a great read.

1. For those of us who are unfamiliar with you, could you briefly describe who you are and what you do?

I am a software entrepreneur based in the Boston area. My current startup, HubSpot, is a Software as a Service company that provides internet marketing tools for small businesses. I’m also an angel investor in several other technology businesses. Finally, I author a popular blog called OnStartups.com where I write about topics of interest to entrepreneurs. The blog gets thousands of visitors a week from around the world and currently has over 7,000 subscribers. It is a labor of love.

2. Have there been specific times and/or examples where the ‘Darwinian Evolution’ approach has significantly altered the original direction of one of your startups?

Absolutely. My current startup, HubSpot, followed this approach. Instead of spending several months writing a business plan, developing software specifications and planning a launch, we took the opposite approach. We started building a product immediately and refined it based on market feedback.

3. The fine fellows over at Viddler.com regularly post up screencasts of new features and let the users vote on which ones should be implemented. What other ways can startups gather feedback?

There are lots of ways to get market feedback. One is blogging, which is very popular now in the startup world. Another is building small, simple tools that are related to your core offering. We did this with our WebsiteGrader.com tool. Although not originally planned to be part of our offering, we built it because we needed something like it and released it to the world. Now, though the tool continues to be free, it drives great visibility for the company and helps us get feedback from users related to our larger, more sophisticated offering.

Another idea (which we did early on, and continue to do) is “guinea pig” sessions. This is where you invite real people that are prospective customers in to try out the product and witness first-hand what their reaction to it is. We’ve found these sessions to be immensely helpful. And finally, one thing that has really worked well for us (but which may not be applicable to all startups) is to have our own team use the product. This immediate feedback is exceptionally useful.

4. Can you elaborate on “release to the unsuspecting”? In other words, who should you initially release your product to?

I think it helps to have a general idea of who the target market is (though this will likely change over time). When I say “unsuspecting”, I’m referring to those that may not realize they have a need yet. It’s much, much easier to sell to someone that knows they have a problem/need (because then all you have to do is convince them you can help them with it). Although this is great, it’s much more educational to try and release the product to those that may not realize they have a need and see how they respond. This will give a startup early insight into how hard it is going to be to get a large pool of customers.

5. Should a startup up ever use the ‘Big Bang’ approach once they have achieved a certain milestone or should progress always be organic?

I think there is certainly value to larger, non-organic and non-linear goals (like a product launch). I just think in the very early stages, it is ill-advised to keep yourself separated from your customers for too long.

Once the initial product is “out there” and the startup has had a chance to iterate a few times and make releases, it is fine to consider doing a larger, more strategic “launch”. There are several benefits to this, not the least of which is that it can often catalyze the team as everyone has a specific “event” that they can rally around. It also makes it easier to give the product/company a stronger “thrust” from a marketing/PR perspective.

6. Entrepreneurs nurturing their baby startup(myself included) may have a tough time with the Darwinian approach because the startup becomes a part of them. What advice can you give us in letting our startups out into the wild before it’s perfect?

It is common to want things to be “perfect”. We have also grown up with sayings like “you only have one chance to make a first impression…”. But, I think perfection is your enemy. The thing to remember is that one of the biggest advantage entrepreneurs have is their ability to adapt. This ability to adapt to market conditions diminishes over time. So, though you could work in stealth, creating the perfect product, when you launch it, you’ll have likely lost much of your opportunity to change it. You’ll have invested too much already.

What has worked for me, and I think would work for lots of entrepreneurs is to resist the temptation to seek perfection and instead seek to learn as much as possible as early as possible as whether the market wants what you are building. Unfortunately, it seems very difficult for most people to know intuitively whether or not what they are building will actually succeed. If you spend a lot of time on it before release, it will likely be much more polished, it will likely work much better, have more features, etc. But, it may not be what people want. The only way to really know that is to give it to them and see for yourself. Personally, I’d rather know that what I was building was not what people wanted as early in the process as possible. That way, I have a chance to fix it and build what they really do want.

Thanks very much Dharmesh; your advice on iterative development has really hit home as I’m sure has with many other aspiring entrepreneurs.