Guest Column | December 4, 2018

The Key To Start-Up Success: Value Your True North

By Finn Faldi, TeamViewer

Sales Success With Reviews

What is your software company’s true north? When the going gets tough and the confusion swirls, what is the axis of orientation that helps you find your way forward? This time, it’s not about following your heart — it’s about following your product. For software startups to be successful, they have to make a product that’s intriguing and substantial enough to go a bit viral. You need users to talk about it and get others to pick it up.

The best and lowest cost marketing in the world for a startup is grassroots adoption and word of mouth (or Twitter, as the case may be). Once your product is out there, you need to track it. A million downloads are great news, but those people need to actually use it, love it, and share it. The reality check is how many users are still actively engaging with your product 90 days after downloading? What about 180 days? You want to see continuous usage, not EKG spikes in your trend line. You want it to become a part of you users’ daily routine, so much so that your product becomes a verb or household name.

For example, TurboTax is mostly used only four months out of the year, but when spread over twenty years, has shown regular use and regular growth with deep roots. While many of us have to force ourselves to “decide” its time to do our taxes, we don’t have to decide about how we’ll do them. We simply pull up last year’s return in TurboTax, sigh and grumble, and start crunching the numbers.

Obviously, it takes some time to get that far. Younger companies can look for and cultivate positive virality. If you’re offering your solution on a freemium model, look at how many convert to paid versions. For a license model, how many upgrade to a new license or add users? For subscription model, what is your renewal rate? How often do you get customers to jump on board without having to be “saved” by discounts? Easy renewal without discounts is gold standard.

What about the other kind of going viral? What do you do with buzzy momentum generated by blogs and social media? Make sure you understand who is talking, texting, and tweeting. Are they actually using your product? What kind of business are they in? What keywords they are using to describe your product? Adjust your messaging to fit the story these fans are telling about your product because they are already doing great marketing for you. Go a layer down. What types of devices, operating systems and usage patterns (time of day, day of week, etc.) are you seeing? These are breadcrumbs that could lead you to a treasure trove of users.

If your app is being used on Galaxy, not iPhone, that paints a picture of your demographic. Build personas around what you find and move your marketing in that direction. For example, if your product has really taken off in a certain geographical region and you understand why, you could shift efforts to focus on those core users and expand from that strong center. Don’t forget to pay attention to the negative messages, blanks spaces, and fizzled launches as well. For example, maybe there’s a fixable reason the iOS app is not performing.

In software entrepreneurship, the self-awareness test is critical. This is why I say “value your true north” — your product should represent your strengths, the best you have to offer. You need to believe and trust that, because things can be heady and confusing in the early days. Customers may look at your product differently than you do. You might have a different user base than you expected. The Law of Unintended Consequences may come into play. Look at usage patterns, be curious about what doesn’t make sense, keep an open mind, and reach out to customer groups to hear how they talk about using your product. Be really careful about forming blind spots based on what you initially planned — you’ll end up wasting time and money building things for the wrong audience.

I often remind early stage software leaders to promote a feedback page or email and make sure they read it consistently (and make sure their teams are following it, too). Look between the top 10 percent and the bottom 10 percent of positive and negative comments. Spend time on the middle 80 percent — these are the experts on your product. Find the connective tissue among user experiences by reading between the lines. Keep it as objective as possible; it’s all too easy to interpret it in a way that bends it to what you want to hear.

Part of valuing your true north is acknowledging you’ll never solve for everything. Push development in your strongest areas…stay focused on the components that are doing well and jettison the rest, even if you irk a minority of your users. Don’t spread your developer talent too thin. Iconic companies become known for one or two special somethings because they obsess over them and their users’ experiences.

To stay around until your product becomes a verb, remain skeptical about spikes of success, be pragmatic about leveraging your strengths, and listen carefully to the people and patterns that form your user base. Follow your true north, and you’re more likely to find a path that grows steadily upwards to success.

About The Author

Finn Faldi is president of TeamViewer Americas and an active investor and advisor to several early stage and growth companies. He previously held senior roles at Lifelock, Datalogix and Yahoo and has a BS in finance and management from UPenn’s Wharton and an MBA from Pepperdine University.