- The speaker discusses the importance of creating products that users love and are passionate about.
- They mention that growth is determined by the interaction between conversion rate and churn, and that this interaction should be viewed at a human scale.
- The speaker shares their philosophy of focusing on the values that help acquire the first user, as this can lead to success.
- They discuss their experience with their startup, Wufoo, which had a small team and raised a small amount of funding but had a high return on investment.
- The speaker emphasizes the importance of first impressions in relationships and applies this concept to product design.
- They provide examples of how companies can create memorable first moments for users, such as using creative design elements or engaging interactions.
- The speaker concludes by discussing the importance of conveying the personality and values of a product through its design and user experience.

- The video discusses the importance of understanding and catering to the needs of users and customers.
- Examples are given of companies like Mailchimp and Stripe who have successfully improved their customer support and user experience.
- The concept of support-driven development is introduced, where everyone in the company is involved in customer support to create high-quality software.
- The video also mentions the importance of accountability, responsibility, and humility in software development.
- The speaker refers to research by John Gottman on relationships, highlighting the relevance of communication and addressing issues in customer support.
- The video concludes by emphasizing the negative impact of not addressing customer support issues, and the importance of responding and providing support to customers.

- Wufoo forms and reports were used by 5 million people, with support from only 10 people.
- Response time for support was between 7 to 12 minutes during the day, an hour in the evening, and no longer than 24 hours on weekends.
- Wufoo conducted experiments around support, including adding a drop-down menu for users to indicate their emotional state.
- The emotional state drop-down field was filled out 75.8% of the time, indicating the importance of emotional support in technical issues.
- Wufoo focused on decreasing the knowledge gap in their app, using internal tools and improving documentation to reduce customer support.
- Wufoo's growth was driven by word of mouth, with a focus on increasing conversion rates and decreasing churn.
- The company implemented the WooFoo Alert System to inform users of new features and regularly sent handwritten thank you cards to show appreciation.

- The founders of a company wanted to show appreciation to their users during Christmas and decided to send handwritten Christmas cards to all users.
- In the second year, they had too many customers and couldn't send cards to everyone, so they focused on their highest paying customers instead.
- One loyal user expressed disappointment at not receiving a second card, which made the founders realize they needed to make appreciation a regular part of their culture.
- They read a book that emphasized the importance of focusing on the most profitable users and decided to make appreciation a weekly practice.
- The founders discussed the different paths to market dominance and concluded that being customer intimate is a viable strategy that requires humility and manners.
- They answered questions about building a product that appeals to different types of users, balancing product focus with marketing, and making decisions on product direction.
- They shared their approach of listening to user feedback, solving underlying reasons for feature requests, and experimenting with small versions of different ideas.
- They also mentioned a successful initiative called "King for a Day" where an employee was given the power to direct product improvements.
- The founders explained that they all work from home, but within the same area, and that remote working can be challenging.

- Remote working has its own efficiencies and benefits, such as saving time on commuting.
- At WUFU, a 4.5 day work week was implemented, with half-day on Friday for meetings and no external communications.
- The 15-minute rule was established for discussions, ensuring that issues would be tabled and resolved later if necessary.
- Prioritizing and focusing on important tasks during the 3-day work period resulted in enhanced productivity.
- Accountability was maintained through profit sharing, performance measures, and a shared to-do list.
- Hiring remote workers was assessed through side projects and evaluating their customer support skills.
- The experiment of implementing "crunch mode" before a company vacation did not work out as planned.

- The speaker emphasizes the importance of creating products that users love and are passionate about.
- They discuss the interaction between conversion rate and churn and the importance of viewing it at a human scale.
- The speaker shares their philosophy of focusing on the values that help acquire the first user for success.
- They discuss their experience with their startup, Wufoo, which had a small team and raised a small amount of funding but had a high return on investment.
- The importance of first impressions in relationships and applying this concept to product design is emphasized.
- Examples of creating memorable first moments for users are provided.
- The importance of conveying the personality and values of a product through design and user experience is discussed.
- The video emphasizes understanding and catering to the needs of users and customers.
- Examples of companies improving customer support and user experience are given.
- The concept of support-driven development is introduced, involving everyone in customer support.
- The importance of accountability, responsibility, and humility in software development is mentioned.
- The relevance of communication and addressing issues in customer support is highlighted.
- The negative impact of not addressing customer support issues and the importance of responding and providing support to customers is emphasized.
- Wufoo's growth was driven by word of mouth, focusing on increasing conversion rates and decreasing churn.
- Wufoo conducted experiments around support, including adding a drop-down menu for emotional state.
- Wufoo focused on decreasing the knowledge gap in their app and improving documentation to reduce customer support.
- Appreciation and regular communication with users became a part of Wufoo's culture.
- The founders discussed the different paths to market dominance and the importance of being customer intimate.
- They answered questions about building a product that appeals to different users, balancing product focus with marketing, and making decisions on product direction.
- Their approach included listening to user feedback, solving underlying reasons for feature requests, and experimenting with different ideas.
- The founders mentioned a successful initiative called "King for a Day" where an employee directed product improvements.
- Remote working has its efficiencies and benefits, but also challenges.
- WUFU implemented a 4.5 day work week and prioritized and focused on important tasks during the work period.
- Accountability was maintained through profit sharing, performance measures, and a shared to-do list.
- Hiring remote workers was assessed through side projects and evaluating customer support skills.
- The experiment of implementing "crunch mode" before a company vacation did not work out as planned.

How to Start a Startup is a series of video lectures, initially given at Stanford in Fall 2014.

Lecture Transcript: http://www.tech.genius.com/Kevin-hale-lecture-7-how-to-build-products-users-love-part-i-annotated

Kevin Hale, Founder of Wufoo and Partner at Y Combinator, explains how to build products that create a passionate user base invested in your startup's success.

See the slides and readings at http://www.startupclass.samaltman.com/courses/lec07

Discuss this lecture: http://www.startupclass.co/courses/how-to-start-a-startup/lectures/64036

All right, so when I talk about making products users love, what I mean specifically is like, how do we make things that has a passionate user base that our users are unconditionally wanting it to be successful, both on the products that we build, but also the companies behind them.

Try not to take too many notes, mostly just try to listen.

I'll post a link to the slides on my Twitter account.

And on that link, there'll be ways for you to annotate the slides and you can ask me questions.

And so if we don't get to them, I'll answer them after the talk.

So, you guys have been listening to and hearing a lot about growth over the last several weeks.

And to me, I feel like growth is usually fairly simple.

It's the interaction between 2 sort of concepts or variables, conversion, rate, and churn, right?

And the gap between those 2 things pretty much indicate how fast you're going to grow.

Most people, especially business type people, tend to look at this interaction in terms of a very calculated and a mathematical sort of way.

And today I sort of want to talk about these things at a more human scale.

Because at a startup, when you're interacting with your users, you have a fairly intimate interaction that you have in the early stages.

And so, I think there's a different way of looking at this stuff in terms of how we build our products.

And we'll look at a lot of different examples of that and how it's executed well.

My philosophy behind a lot of things that I teach startups is the best way to get to sort of a billion dollars is to focus on the values that help you get that first dollar, to acquire that first user.

If you sort of get that right, everything else will sort of take care of itself.

So I came to be a partner at YC by way of being an alumni.

I went to the program in winter of 2006, so it was the second ever program.

BooFoo's an online form builder, helps you create contact forms, and online surveys, and simple payment forms.

It's basically a database app that looks like it's designed by Fisher Price.

What's interesting though, is that because it was fairly easy to use, we had customers from every industry, market, and vertical you can think of, including a majority of the Fortune 500 companies out there.

Ran that company for 5 years and then we were acquired by SurveyMonkey in 2013.

And at the time we were a very interesting acquisition.

We were only a team of 10 people at the time.

And while we acquired funding out here in Silicon Valley through Y Combinator, we actually ran the company from Florida.

We had no office, everyone worked from home.

So each dot here represents a startup that was, that exited through IPO or acquisition.

The bottom is the funding amount they took.

And the vertical axis is the valuation of the company at the time.

To sum it up, the average startup raises about $25 million.

And their return to their investors is about 676%.

Wufoo raised about $118,000 total and our return to our investors is about 29,000%.

lot of people were very interested in sort of like, what makes Wufoo a little bit different or why do, how do we run the company very differently?

We weren't interested in building software that, I guess, that just people wanted to use, right?

That reminded you that you worked in a cubicle.

Cuz it was a database app at its sort of core.

We wanted a product that people wanted to love, that people wanted to have a relationship with.

And we were actually very fanatical about how we approached this idea at the point where it was almost sort of, sort of sciencey sort of way.

So what we said was like, okay, what's interesting about startups in terms of us wanting to create things that people love is that love and unconditional sort of feelings are things that are difficult for us to do in sort of real life.

And at startups, we have to do it sort of at scale.

So we decided to start off by just looking at like, okay, how does real relationship work in the real world?

And how can we apply them to sort of how we run our business and sort of build our product that way?

So we'll go over basically these 2 metaphors.

Acquiring new users as if we're trying to date them, and existing users as if it was a successful marriage.

So when it comes to dating, a lot of the stuff that we uncovered had to do with first impressions.

All of you often talk about your relationships in terms of the origin story.

If I asked you to tell me about the first kiss, how you sort of met, how you proposed.

These are the things that we say over and over and over again.

They're basically the word of mouth stories of our relationships.

And they're the same kinds of things that we do with companies.

Human beings are relationship manufacturing creatures.

We cannot help but create and anthropomorphize the things we interact with over and over again.

So, Whether it's the cars we drive, the clothes we wear, the tools and softwares we use, we eventually describe characteristics to it, a personality, and we expect it to behave a certain way.

And that's how we sort of interact, interact with it.

Now, first impressions are important for the starting of any relationship, because it's the 1 we tell over and over again, right?

And there's something special about how we regard that origin story.

If you're on a first date with somebody and you're having a nice dinner and you catch them picking their nose, you are probably not going to have another date with them, right?

But if you're married to someone for about 20 to 30 years and you catch them on the barking larger, digging for gold, right?

You don't immediately like call your lawyer, right?

And then say like, we have a problem here.

I need to start drawing up papers for divorce.

You shrug your shoulders and say, at least he has a heart of gold.

So something about first time interactions means that the threshold is so much lower in terms of pass fail.

So in software, and for most products in internet software that we use, like first impressions are pretty obvious.

And they're the things that you see a lot of companies sort of pay attention to in terms of what they send their marketing people to work on.

My argument for people who are very good at product is they discover so many other first moments and they make those something memorable, right?

The very first email you ever get from Lisa's software, what happens when you first log in, the links, the advertising, the very first time you interact with customer support.

All of those are opportunities to seduce.

So, how did we think about sort of like making first moments on there?

And we actually took this concept from the Japanese.

They actually have 2 words for how to describe things when you're finished with them.

In terms of saying like, is this a quality item?

And the 2 words of quality are atarime hinshitsu and midiokiteki hinshitsu.

And the first 1 means taken for granted quality, basically functionality.

And the last 1 sort of means enchanting quality, right?

If the weight of the pen, the way the ink flows out of it, the way it's viewed by the people reading the handwriting from the pen is pleasurable both to the user of the pen and the people who's sort of going to experience the byproducts of it, Right?

So, this is Wufoo's login link and it has a dinosaur on it, which I think is awesome.

But if you hover over it, the spec has The added benefit of having a tool tip, that doesn't explain you how to log in and what it does, but basically, rar.

And what we notice about this, like in early usability studies, as like this put a smile on people's faces.

And I think a lot of times when we are assessing products, we never think about like, hey, what is the emotion on the person's face when they interact with this?

This is actually a couple iterations ago.

It's the 1 I find to be the most beautiful.

But It lets you know that when you're starting out on this journey with Vimeo, that this is going to be something different.

If you search for the word fart, as you scroll up and down, it makes fart noises as you do this, right?

There's something different, like this site interacts with you.

And it's something that you want to talk about.

You don't have to always do it with design.

This is the sign up form for court, which used to be a social network for people who love to drink wine.

On it, it says, Email address, it's also your sign in and has to be legit.

Last name, what your army buddies call you.

Password, something you remember but hard to guess.

Password confirmation, type it again, think of it as a test.

It's literally a poem as you fill out the form, right?

And this is the kind of like thing where you're like, I like the people behind this.

Now what does it say when you fill out a form like this, right, on Yahoo, about what the personality of this site is gonna be?

And what's disappointing to me is like Yahoo forces every product and service under them to use this exact same login form.

Flickr, I had thought, had 1 of the best sort of call to actions.

But what's remarkable about it is that what you start getting a feel for is like, oh, scaling up my sort of server and back end services is as easy as just sort of dragging up and down different sort of knobs and levers.

It's going to be beautifully used and looks fairly easy to scale.

Since we're in a room full of computer science people, I think you'll appreciate this.

When the time limit is up, they said, everything in terms of all the features are exactly the same, except we change the font to Comic Sans.

What they're basically saying is like, hey, we know who our users are, who our real customers are.

And they're gonna be the people who care about this.

This is Hurl, this is a website for checking HTTP requests.

And sometimes the places where you get errors are opportunities for first moments.

When we need help, Oftentimes what we do is we create like really beautiful marketing materials, but when you actually need like documentation, we sort of like skimp out on sort of design features.

And this is a point that like you see happen over and over again.

A company that gets this right is Mailchimp.

And what they did was they redesigned all of their help guides so that they look like magazine covers.

And overnight, basically, readership goes up on all these features and customer support for these things that sort of help people optimize emails goes down.

Speaking of documentation, Stripe, what's interesting about an API company is that there is no UX.

The UX is actually just documentation, right?

And there's opportunities even in documentation, sort of the enchant and amaze.

So 1 of the things that I love about them is their examples are wonderful.

But if you're actually like sort of logged into the app, 1 of the things that is a super pain for most people when you're dealing with most people's APIs is like grabbing your API credentials and keys.

And what Stripe does is it says, oh, if you're logged into the app, we automatically put your API credentials into the examples.

So you only have to copy paste once when trying to learn their API.

When Wufoo wanted to launch the third version of API, we realized like, okay, that finally this is good enough that we want people to sort of build on top of it.

We're trying to figure out, like, how do we launch this out to the world that sort of has our personality behind it?

Because a lot of people, they usually do things like a programming API contest, and they give out iPads and iPhones.

And it makes you look like everyone else.

And so, in our company 1 weird value they have, that's a quirk of us, is that the co-founders are big medieval nuts, and we would take everyone out to medieval times every single year on the anniversary of the founding of the company.

And so we said, we have to do something in that flavor.

And so we contacted the guys at armor.com and we said, can you forge us a custom battle axe?

And what we said was, if you win our programming contest, you would win 1.

And the result is, like, people wanted to talk about this.

It was something that people wanted to work on, because they wanted to be able to say, like, I'm programming for a weapon.

And what's cool is, we had over 25 different applications created for us of quality and quantity that we could not have paid for on the budget and the sort of time that we had for this.

We got things like an iPhone app, an Android app, and WordPress plugins.

And all because what we did was we changed how people want to talk about the origin story of how they're interacting with 1 of our services.

We can go like all day long, I'm going over these examples.

But I'm going to shortcut this by saying, you should just subscribe to the little big details.

It's just basically tons of screenshots of software that's just doing it right, that shows that they're being conscientious of the user and the customers.

When it comes to long term relationships or marriages, the only research that we ended up having to read is the stuff that was done by John Gottman.

He's been featured in This American Life and Malcolm Gladwell's books.

He's a marriage researcher up in Seattle and he has an interesting parlor trick that he can do.

He can watch a videotape of a couple fighting about some issue for 15 minutes and predict with an 85% accuracy rate whether that couple will be together or not or divorced in 4 years.

If he increases that video up to an hour and asks them to also talk about their hopes and dreams.

They show these same videotapes to marriage counselors, successfully married couples, sociologists, psychiatrists, priests, etc.

And they can't predict with random chance whether people are gonna be together or not.

So John Gottman understands something fundamental about how relationships work in the long term.

And that basically how we fight, even in a short term period, could indicate sort of the whole system and what it's gonna look like.

And 1 of the surprising things he discovered is not that successfully married people don't fight at all.

And we all fight about the exact same things.

And others are things like jealousy and the in-laws.

To bring this around, right, you can actually attribute every single 1 of these to problems that you see in customer support when you're building out your products.

I'm having problems with the credit card.

If you're building a service that helps people deal with their clients, they're very sensitive about anything happening with that.

Performance, how long you're up and how fast.

Others are, I said, jealousy and in-laws, right?

Anything weird happening there, people are going to write to you about.

And the reason I like to think about this in terms of customer support is that in everyone's sort of processing of like a conversion funnel, customer support is the thing that happens in between every 1 of these steps.

It's the reason why people don't make it further down there.

It's a thing that prevents conversion from happening.

Now, as we were thinking through all these ideas and as we were building up the company, we realized that there's a big problem about how everyone sort of starts their company or build up their sort of engineering teams.

And that is there's a broken feedback loop there.

People are divorced from the consequences of their actions.

And this is a result of actually the natural evolution of how most companies get founded, especially by technical co-founders, right?

Before launch, it is a time of bliss, nirvana, and opportunity, right?

By your hand, which you feel is like God, everything that you write, every line of code, feels perfect, right, and is a genius to you.

The thing that happens is after launch, reality sort of sets in, and then all these other tasks sort of come into place that we have to deal with.

Now what technical co-founders want to do is get back to that initial state.

And so what we often do, and what we often see, is that companies start siloing off all these other things that actually is what makes a startup or a company sort of real, right?

In our minds, these other tasks are inferior, right?

And we have other people in the company do them.

And so for us, what we're trying to figure out is how do we change software development so that we inject some values that we don't talk about enough.

Responsibility, accountability, humility, modesty, right?

And we call this Like a lot of other people, we, we, we had an acronym, support driven development.

And it's basically very similar to TDD or other agile practice.

It's a way of creating high quality software.

You don't need like a scrum, You don't need a bunch of post-it notes.

All you have to do is make everyone do customer support.

And what you end up having is you fix the feedback loop, right?

The people who build the software are the ones supporting it, and you get all these sort of nice benefits as a result.

So 1 of them is, support responsible developers and designers and people who build this stuff, they give the very best support.

Now we're not the first person to think of this.

Paul English was a big purporter of this at Kayak.

And what he did was install a red customer support phone line In the middle of the engineering floor.

And it'll just ring with customer support calls.

And people would ask him oftentimes, why would you pay engineers $120,000 or more to do something that you can pay other people a fraction of, they handle in like a call center.

And he says, well, after the second or third time that that phone rings and the engineer gets the same problem, they stop what they're doing, they fix the bug, and we stop getting phone calls about it.

It's a way of having QA, and a sort of nice, elegant solution.

Now, John Gottman talks about the reason that we often break up with 1 another as due to 4 major causes and they're warning signs.

Criticism, contempt, defensiveness, and stonewalling.

That criticism is basically people's starting to focus, not just on the specific issue at hand, but on the overarching issues.

Like, you never, right, listen to users, or you never think about us all the time, right?

Contempt is when someone is purposely trying to insult somebody, defensiveness is not trying to take accountability, trying to make excuses for their actions, And stonewalling is basically shutting down.

Stonewalling to John Gomm is, is 1 of the worst things that we can do in a relationship.

And Oftentimes, you know, we don't worry much about this in customer support.

Defensiveness, you see this all the time, all the times in companies, especially as they get older.

But stonewalling, this is something I see happen with startups all the time.

You get a bunch of customer support sort of coming in, and you just think, I don't need to answer it.

And that act of just not even getting back to them is 1 of the worst things you can do.

And it's probably some of the biggest causes of churn in the early stages of startups.

See all Y Combinator transcripts on Youtube

How to Build Products Users Love with Kevin Hale (How to Start a Startup 2014: Lecture 7)