Fan Bi, the founder of Blank Label, has an interesting post up at his blog. The original tweet announcing the blog post was captioned as “a perspective on the dangers on going lean.” From the blog post:
We were getting more and more customers, but most of them were what Geoffrey Moore would describe as innovators or early adopters. The people who are okay with working with a less than perfect website, can deal with product delays and willing to give you a bucket-load of feedback, and order again just to see if you’ve taken the feedbac
May 17 was a turning point in the history of Blank Label. It was a great day, and a terrible day all the same. We had a half page feature in the New York Times and our focus on innovators and early adopters, and being lean, were blown completely out of the water. There were some early signs of things going wrong. By 10am that Sunday morning, our site had pretty much stopped functioning. We migrated servers midday, it took about 4 hours. We were getting phone calls asking us how they could order via the phone because they didn’t understand this “web stuff”. Yikes! And by 6pm, we had collected more orders on the day than we had from October 31 last year to the previous day. Chaos!
I think that this post is less about the risks of being a Lean Startup than it is about re-capitulating the many dangers and pains of premature media attention. Brant Cooper agrees. As Eric Ries writes:
A marketing launch establishes your positioning. If you don’t know what the right positioning is for your company, do not launch. Figuring this out takes time, and few entrepreneurs have the patience to wait it out, because the business plan does such a good job of explaining what customers are going to think. The problem is that customers don’t read your business plan.
When you launch with the wrong positioning, you have to spend extra effort and money later cleaning it up. For example, we did some early press (in Wired, no less) for IMVU that called us the next generation of IM and compared us positively to AOL. At the time, we thought that was great. Now, I look back and cringe. Being compared to AOL isn’t so great these days, and IM is considered a pretty weak form of socializing. When we finally launched for real, we had to compensate for that early blunder.
I wrote a little bit about the epic launch we had at a previous startup in my post Achieving a failure. We really did it well, with a great PR firm and great coverage. New York Times, Wall Street Journal, CNN, the works. But it turned into a crushing defeat, because we couldn’t capitalize on all that attention. The product didn’t convert well enough, the mainstream customers we were driving weren’t ready for the concept, and the event fed expectations about how successful the product was going to be that turned out to be hyper-inflated.
Nivi of Venture Hacks revisits the same post and adds:
If you ask most entrepreneurs why they want to launch, you’ll get an answer like, “So people find out about my product — are you stupid?” But a thoughtful founder who read Eric’s article recently asked me,
The New York Times wants to write about my company. It will take me no time or money to get this press. What should I do?
You should still consider the downsides of launching:
- Launching a product that doesn’t solve a real customer problem establishes the wrong positioning in the minds of customers.
- You can only launch once. If you launch the wrong product or you have an un-optimized funnel when you launch, you just wasted a one-time opportunity to harvest and generate demand.
Launching isn’t the only way to harvest demand. You can reach customers through customer development: AdWords, search engine marketing, online ads, contacting prospective customers through LinkedIn, et cetera — get creative. Don’t launch just because everybody else is doing it — be thoughtful.
It is fascinating to actually witness Blank Label struggling to keep up with the demand created by the New York Times article. Demand by people in some segments that Blank Label really doesn’t want to serve! (i.e. “We were getting phone calls asking us how they could order via the phone because they didn’t understand this “web stuff”.)
The article, however well-intentioned, may have wrought serious damage to Blank Label as early adopters, the people who, according to Fan,”who are okay with working with a less than perfect website, can deal with product delays and willing to give you a bucket-load of feedback, and order again just to see if you’ve taken the feedback” might feel a bit alienated as they bear the negative externalities of this premature media attention, as evidenced by the message currently visible on the Blank Label site.
Hopefully, this new demand is sustained, the early adopters stick around and Blank Label can pull through and emerge even stronger, but it would behoove all of us to ruminate a bit on this. BTW reading the NYT article, it is heartening to see that Fan Bi, like entrepreneurs Giff Constable and Hiten Shah, appears to be a what I have come to calling a “Relentless Customer Developer” and does everything he can to talk to his customers on a daily basis.
One goal was to communicate directly with customers. The Web site commands: “Call us. We like to talk.” Depending on the time of day, Mr. Bi answers the calls himself. When he is awake, he also activates a feature that sends instant messages to customers who have been on the site for more than 90 seconds.
Need help? he asks. For several hours a day, he and his partners chat with customers about what they like and don’t like on the site.