- The speaker discusses how to go from having zero users to acquiring many users for a startup.
- They emphasize the importance of dedicating a significant amount of time to the startup, even if it means compressing that time into a few days per week.
- The speaker advises against keeping the startup idea a secret and instead encourages seeking feedback and user input early on.
- They share their own experience of making mistakes and pivoting multiple times before finding success.
- The importance of identifying and understanding the problem the startup is trying to solve is highlighted.
- Immersing oneself in the industry and becoming an expert is recommended, even if it means working in a similar role within that industry.
- The speaker emphasizes the need for obsessiveness and thorough research, including studying competitors and industry trends.
- Lastly, the speaker mentions the goal of building a product or business that is used by people worldwide.

- In the beginning, it is important to focus on a specific customer base and cater to their needs.
- Storyboarding the ideal user experience before creating the product is crucial.
- Building a minimal viable product (MVP) that solves the problem is essential.
- Getting the first few users can be done through personal connections, online communities, or local communities.
- Gathering customer feedback is important, both through surveys and in-person conversations.
- Tracking overall progress from a macro perspective is necessary.

- Tracking customer retention is a good way to gauge overall performance
- Collecting reviews, ratings, and Net Promoter Score can be useful leading indicators
- The honesty curve shows that feedback from close connections may be biased, while feedback from paying customers is more honest
- Manual processes and focusing on the core user experience are important in the early stages of growth
- Temporary imperfections are better than being paralyzed by the pursuit of perfection
- User feedback should be analyzed to understand the underlying problems, rather than immediately implementing suggested features
- It is important to launch and gather user feedback rather than waiting for perfection, as competitors may catch up
- The next step is to focus on different types of growth strategies.

The video discusses the importance of focusing on one growth strategy at a time when starting a business. It emphasizes the need for creativity in marketing and the three types of growth: sticky, viral, and paid. The concept of sustainability is also highlighted, along with the use of cohort analysis to measure customer lifetime value and retention. The video also mentions the importance of delivering a good experience and having a strong referral program for viral growth.

- Customer touch points for referral programs should be strategically placed after users have used the product and are highly engaged.
- Experiment with different program mechanics for referrals, such as offering different incentives or rewards.
- Optimize the conversion flow for when friends click on referral links and come back to the site.
- Paid growth involves spending money to acquire users, but it is important to ensure that the customer lifetime value (CLV) is greater than the customer acquisition cost (CAC).
- Break down CLV and CAC by customer segments to understand the differences and optimize ad spending.
- Payback time is crucial to ensure sustainability and avoid running out of money.
- When considering a pivot, evaluate growth, user retention, and the economics of the business.
- Have a growth plan in place from the start and monitor growth consistently to determine if a pivot is necessary.

- The speaker discusses the challenge of getting users to switch to a new product when they are already comfortable with a different one.
- They use the example of Homejoy, a cleaning service, and explain that it was easier to get new users who had never had cleaners before, but difficult to convince those who already had cleaners to switch.
- The key is to find moments where the new product offers clear advantages or differentiation from the existing solution.
- Examples of advantages include next-day availability, online payments, and convenient booking and scheduling.
- It is important to focus on 1 or 2 clear differentiators rather than trying to highlight multiple small advantages.

The speaker discusses the process of acquiring many users for a startup, emphasizing the need for dedication, seeking feedback, and understanding the problem being solved. They recommend immersing oneself in the industry and conducting thorough research. Building a specific customer base, creating a minimal viable product, and gathering customer feedback are important steps. Tracking progress and focusing on the core user experience are crucial. Different types of growth strategies, such as sticky, viral, and paid, are discussed, along with the importance of sustainability and referral programs. Paid growth should consider customer lifetime value and payback time. Evaluating growth and considering a pivot is necessary. Convincing users to switch to a new product requires clear advantages or differentiation.

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/Adora-cheung-lecture-4-building-product-talking-to-users-and-growing-annotated

So you have an idea. How do you go from zero users to many users? Adora Cheung, Founder of Homejoy, covers Building Product, Talking to Users, and Growing, in Lecture 4 of How to Start a Startup.

See the slides and readings at http://www.startupclass.samaltman.com/courses/lec04

Discuss this lecture: http://www.startupclass.co/courses/how-to-start-a-startup/lectures/64033

So, today I am going to be talking about how to go from 0 users to many users.

I'm just assuming that you have many great ideas in your head at this moment and you're kind of thinking about what the next step is.

So I wrote this up early this morning and a lot of this is based off of mistakes I've made in the past.

So as Sam mentioned, I went through YC in 2010 and spent a number, 3 years basically, going back and forth, pivoting a bunch of times, starting over a bunch of times.

And have learned a lot about what not to do if I were to start another startup after Homejoy, if that should ever happen.

And so a lot of it comes from failure and just telling you about what you shouldn't do.

And kind of making journalizations of what you should do from that.

So, just a reminder that This is sort of, you know, all advice you should take as directionally good guidance.

Like it's all, it's like, it's kind of in the right direction, but every business is different, you are different, I'm not you.

And so just take everything with, you know, that in mind.

So, since this is a college course, you know, when you start a startup, you should basically have lots of time on your hand to concentrate on the startup.

And I'm not saying you should, you know, quit school or you should quit work.

What I'm saying is, you should have a lot of time, compressed time in a row.

Really dedicated to immersing yourself in the idea and developing problems, or developing the solutions to the problem you're trying to solve.

So for example, if you're in school, you know, it's better to have 1 or 2 days straight of, per week, on working on your idea versus, you know, spending 2 hours here and there every single day during the course of the week.

It's sort of like, I think this is engineering class, so it's sort of like coding, like there's a lot of context watching and, and just being able to really focus really, really focus and immerse yourself is very, very important.

So, like I said, I sort of first, when I wrote this up, was thinking what is What are, what are the things that most people, some people do or most people do that is not the correct way to do a startup.

And sort of the novice approach I think is what you see up here, which is, you know, I have this really great idea, I don't want to tell anyone about it.

And then I'm gonna launch it on, you know, I'm gonna launch it on TechCrunch or some, somewhere like that.

But what really happens is because you did not get a lot of that feedback and stuff like that.

You know, maybe you get a lot of people to your site, but no 1 sticks around because you didn't get that initial user feedback.

And then, you know, if you, you know, if lucky enough you have some money in the bank, you might go buy some users.

But sort of, it just whittles out over time and, and you just give up.

And, it's a sort of a visual cycle and, you know, I actually did this once and I did this while I was in YC.

And that was, you know, like, when I went through YC, I didn't even launch a product.

Like, I didn't even launch in TechCrunch, which is a thing that you should definitely do.

And, and so you don't want to ever get into that cycle because you'll just end up with nothing good.

So, the next thing is you know, you have an idea and you should really think about what the idea is really solving.

And so their problem statement should, you should be able to describe it in 1 sentence.

And then you should think, how does that problem relate to me?

Am I really passionate about that problem?

And then you should think, okay, it's a problem I have, is it a problem that other people have, and sort of verify that by, you know, just going out and talking to people.

1 of the biggest mistakes I've made is, you know, we started my co-founder and I, who is also my brother, he and I started a company called Pathjoy in 2009, 2010.

And our goal was basically to, you know, we, we had 2 goals in mind.

1 is to create a company that made people really happy.

And and, and create a company that was very, very impactful.

And so a good proxy for that is to just create a huge big company.

And so we thought, okay, here's the, here's sort of what we're gonna solve is, you know, make people happier.

And our, we first went to the notion of, who are the people that made people happy?

And we, you know, we came up with life coaches and therapists.

So it seemed kind of obvious to just create a platform for life coaches and therapists.

And what happened as a result though was that, you know, when we started using the product ourselves, we, we, you know, we're not cynical people by any means, but life coaches and therapists are just not people we would use ourselves, it was sort of useless to us.

And so it wasn't even a problem we had, and certainly wasn't something we were super passionate about building out, Yet we spent, you know, almost a year trying to do this.

And so, if you just start, you know, from t equals 0, just like think about this before you even build any product, I think you can save yourself a lot of headache down the road from doing something you don't wanna do.

So, say you have a problem and you're able to state it.

So the first thing you should do is think of what the industry that you are getting yourself into.

Whether it's big, whether it's huge, you should really immerse yourself in that industry.

1 is, you know, to really become a cog in that industry for a little bit.

And so it might seem a little counterintuitive to do this, because most people say, you know, if you really want to disrupt an industry, you should really not be this, you know, player in it.

You should, You know, it, it, you know, someone who's spent 20 or 30 years in an industry probably does, you know, sit in their ways and is just used to the way things work.

And really can't think about what the inefficiencies are or the things that you can quote unquote disrupt.

But, However, as a new, like, coming into the industry, you really should take, you know, 1 or 2 months just really understanding what all the little bits and pieces of the industry are and how it works.

Because it's when you get into the details, that's when you start seeing things you can exploit, things you can really, things that are really, really inefficient and provide, you know, huge overhead costs that you can cut down.

And so an example of this is, you know, when we started Homejoy, we, we, we decided to go, we started with the cleaning industry.

And when we started, you know, we just were cleaners ourselves.

And we started to clean houses and we found out really quickly was that we were very bad cleaners.

And so as a result, You know, we said, okay, we gotta learn more about this.

We learned a little bit more about cleaning supplies.

But it's sort of like basketball, you know?

You can watch and you can learn, or you can watch and read about basketball, but you're not going to get better at it if you don't actually, you know, train and, you know, throw, throw basketball around and throw into the hoop.

And so, We decided 1 of us basically had to go and learn how to clean.

And so we went or get trained by, you know, a professional, some sort of professional training program if that existed.

And that meant we actually went to get a job at a cleaning company itself.

And the cool thing was that, you know, I learned how to clean from, you know, training for the few weeks that I was there at the cleaning company.

But the even better thing was that I learned a lot about how a local cleaning company worked.

And in that sense, you know, I learned why a local cleaning company could not become huge like Homejoy is today.

And that's because they have, you know, they're pretty old school and they have a lot of things.

Just, just from, anywhere from booking the customer to optimizing the cleaner schedules was just done very inefficiently.

And so, there's, so, so, so, so when you go, if you are in a situation like mine where, you know, there's a service, there's a service element of it, you should go and do that service yourself.

If your thing is related to restaurants, you should become a waiter.

If it's related to painting, become a painter and kind of get in the shoes of your customers from all angles of what you're trying to build.

The other thing is, there's also a level of obsessiveness that you should have with it too as well.

Like you should, you should be so obsessed to know like, what everybody in the space is doing.

And it's things like, you know, running a list of all the potential competitors or similar types of companies.

Google searching it and clicking on every single link and reading every single article from what, from like search result number 1 to 1,000.

You know, I, I found all potential competitors big and small and if they're public I would go read their S1s.

I would go, I would go read all their quarterly financials.

I would, you know, sit on the earnings calls.

There's, you know, most of these, you don't get much out of it, But there's just these golden nuggets that you'll find once in a while and you won't be able to find that unless you actually go through the work of, you know, getting all that information in your head.

So, yeah, you should become an expert in the industry.

There should be no doubt when you're building this, that you are the expert so that people trust you when you're building this product.

The second thing is identifying customer segments.

So, you know, ideally at the end of the day, in the end game, you've built a product or a business that everybody in the world is using.

But realistic, like in the beginning, you kind of want to corner off a certain part of the cu, of a customer base so that you can really optimize for them.

And that's just, you know, it's just a matter of focus and a matter of, you know, just, you know, catering towards whether it's teen girl, teenage girls or whether it's, you know, soccer moms.

You'll just be able to, you know, like I said, focus a lot on, on their needs.

And lastly before, you know, before you even create the product, before you put code down, you should really storyboard out the ideal user experience of how you're, how you're gonna solve the problem.

And that, and that's not just meaning, you know, the website itself.

It's meaning, you know, how does the customer find out about you?

You know, whether it's, you know, could be through an ad or through a word of mouth or whatever, so they find out about you.

They come to your site, they learn more about you.

So the actual, when they sign up for the product or they purchase the service, what are they actually getting?

To after they finish using the product or after they finish using the service.

What's, you know, there's, there's sort of like an evaluation period, like they leave me a review or, or they leave comments or what not, And just being able to go through that whole flow and, and visualize in your head, like just envision what the perfect user experience is.

And then put it down on paper, and then put it into code, and then start from there.

So, you have all these ideas in your head now.

You kind of know what the core customer base you want to go after is.

And you know like everything about the industry.

And you know, the common phrase that most people use these days, like, you should build a minimal viable, the MVP, minimal viable product.

And I underline viable because I think a lot of people skip that part.

And they just go out with a feature and then the whole user experience in the very beginning like is flat.

So, middle of the line product, viable product pretty much means, you know, what is the smallest feature set that you should build to solve the problem that you're trying to solve.

And I think if you go through the whole storyboard experience, you can kind of figure out that very quickly.

But again, you have to be talking to users, right?

You have to, potential users, you have to be seeing What is, what exists out there already and what you should be building to solve their immediate needs.

And the second thing is, before you put in, things in front of a user, you should really have your product, a simple, you know, product positioning down.

And what my, what I mean by that is that, you know, you should be able to go to, you know, a person, and you should be able to say, hey, you know, this does X, Y, and Z within a sentence.

And so for example, you know, at Homejoy, we started off with something actually super complicated.

We're like, we're an online platform for home services.

We started with cleaning and you can choose, you know, blah, blah, blah, blah.

And it just went off for paragraphs and paragraphs.

We present and we want to, you know, potential users to come on our platform.

They just get, kind of get bored after the first, first, first, first few sentences.

And so, what we just, what we found out was that, you know, we, we really need this 1 liner.

The 1 liner is very important, and it kind of describes the functional benefit of, of what you do.

You know, In the future, when you're trying to build a brand or whatnot, you should be able to describe what are the emotional benefits and stuff like that.

But you're starting with no users, you really need to tell them what they're going to get out of it.

So we simply, after we changed our positioning to get your place cleaned for $20 an hour, then everyone got it.

And we were able to get, you know, users to, users in the door that way.

Now, how do you get your first few users to start trying it?

So, your first few users should be, you know, obvious people, the people that you're connected with.

You should use it obviously, you and your co-founder should be using it.

Your friends and co-workers should be using it.

Beyond that you want to get more user feedback.

And so you, and I've listed here kind of some of the obvious places to go to and depending on what you're selling, you know, you can take your pick of the draw here.

So online communities, there's, on Hacker News now, there's the Show HN, that's a great place.

Especially if you're building tools for developers and things like that.

Local communities, so if you're building a consumer product, there are a lot of influential local community mailing lists.

So those are places you might want to hit up to.

Okay, so when you go to, by the way, Homejoy, we actually tried all of these.

So we used it ourself, that was fine, cuz I mean, we were on a cleaner, so that was pretty easy.

And then our parents lived in Milwaukee, so we were based in Mountain View, so that didn't work.

Friends and coworkers are kind of like in San Francisco and elsewhere.

So we didn't have too many of them use it.

So we actually ended up in a dead end of not being able to convince many people to use this in the beginning.

So what we did was, because we're in Mountain View, some of you guys might know, on Caster Street, they have street fairs there during the summertime.

And so we'd go out and basically chase down people and try to get them the book of cleaning.

Until 1 day we just took advantage, you know, it's a very hot and humid day.

And what we noticed was, you know, and this is like an any, any fair.

People, you know, there might be arts and crafts and things like that and random people will, you know, gravitate towards that.

But everybody gravitates towards the food and drink area, especially on a hot day.

So what we did was, okay, we need to, we figured we need to get in the middle of that.

And by getting in the middle of that, we just took water bottles, froze them, and then we started handing out free, free bottles of water that were cold.

We, I think we basically guilt tripped people into booking cleanings.

But the proof in the pudding was that I figured most of these people were guilt tripped into doing it.

But when they went home, they didn't cancel on us.

Some of them did, but majority of them did not.

And so we felt, like I thought, okay, that's good.

I gotta go clean their houses, but at least there's something we're actually solving here.

So, and I don't, I think showing up to fairs, or I know another startup in the last batch, I forgot their name right now, but they showed up, they were selling shipping type products.

We're trying to replace shipping products or, or the content of the mailing stuff.

And so they would show up to the US postal office and just like find people who were trying to ship products.

And just take them out of line and try to get them to use your product and have them ship it for you.

So, you just have to go to places where people are going to really show up and, you know, your conversion rate is going to be really, really low, but to go from 0 to 1 to 3 to 4, these are kind of things you might have to do.

Now, what do you do with all these users?

So, 1, the first thing you should do is make sure there's a way for people to contact you.

And if you put a hook up a phone number, 1 really good idea is to make sure that you have voice mail or something like that so you don't have to be picking it up all the time.

But in any case, a way for people to get inbound feedback is good.

But really what you should be doing is going out to your users and talking with them.

You know, get away from your desk and just get out and do the work.

It's, it seems like a slog and it's going to be a slog, but this is where you're going to get the best feedback ever for your product.

And this is going to teach you on what features you need to completely change, get rid of, or what features you need to build.

And so, 1 way to do this is to send out surveys, you know, to get reviews after they've used the product.

This is okay, but generally, you know, people are only gonna respond if they really love you or they really hate you.

So kind of get the in between and not get all the extremes is to go out and actually meet the person that is using your product.

And it's not a good idea to, you know, I've seen people go out, meet the user, and they sit there, and it's like a laboratory, and it's, it's like an inquisition almost.

You're kind of just like poking and poking and poking at them.

Like why don't you do that, why don't you do that.

That's not going to give you the best results.

What you should really do is make it into a conversation.

Get to know them, get them to feel comfortable.

Because you want to get them at a level where they are, they feel like, you know, they should be honest with you to, to help you and, and, and improve, improve things for you.

So I found that actually taking people out for drinks and stuff like that was a very good way to do that.

Not sure if all of you are old enough to do that, but you can take them for coffee.

So another way, another thing you should be tracking is, how are you doing in general, from like the macro perspective?

And the 1 way to do that, the best way to do that is by tracking customer retention.

That is, the number of people that came in the door today, how many are coming back tomorrow, the next day, and so on and so forth.

Usually over time, you're kind of looking at monthly retention.

So people who came in the door today, are they still using it next month and so on and so forth.

The problem with that metric is that it's, you know, it takes forever to collect that data and you don't have, sometimes you don't have a month or 2 months or 3 months to, you know, to, to figure that out.

So good leading indicators actually collecting reviews and ratings like 5 star, 4 star reviews.

Or collecting some notion of NPS, which is Net Promoter Score.

So you're basically asking them from a rating from 0 to 10, how likely are they to recommend you to a friend?

And so over time, what you'll see is, as you're building a new feature, is you should be able to see that the reviews or the retention is going up over time, which means you're doing a good job.

If it's going down, you're doing a bad job.

And if it's kind of staying the same, that means you probably need to go out and figure out what new things you, you, you should be building.

The other thing is, I'll get to the qualitative thing later.

But the 1 thing you should be wary of is the honesty curve, which is, some people will just lie to you.

So I was gonna just, just do, so I mean, this is like degrees of separation from, from you, and this is like level of honesty.

Like, so here it's, here this is your mom.

So I don't know if you can all see this, but.

So your mom is going to be, you know, they, she should use your product, but she's gonna be proud of you anyway.

And so she'll like maybe be honest like this much.

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Building Product, Talking to Users, and Growing with Adora Cheung (How to Start a Startup 2014: 4)