When should you add a new feature to your product?

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One of the greatest (and most time consuming) problems a great deal of product companies face is whether they should add feature X to their product.  The gurus over at 37 Signals have a policy of saying no to new features by default. While this is a great strategy, and keeps their apps focused and much easier to manage, this is a very difficult stance to take as a new start up. Fear Of Missing Out (FOMO) will keep even the most steadfast of product managers from staying true to saying no when a potential customer is waving a Visa card at them.

On our feature request forums over at Staff Squared we receive new ideas for our app every week. I’m constantly reading through the feedback we receive, looking for features I believe will increase sign ups and keep us hitting our targets. Therefore it’s incredibly difficult for me to say “No” too.

Understanding this is a weakness of mine, I’ve put a simple checklist of questions in place that I run through for every new feature request.

The questions are separated in to three phases. If the feature doesn’t make it through phase 1, we don’t bother with phase 2. Similarly we don’t go on to phase 3 if the feature doesn’t make it past phase 2. This approach has saved us 1000’s of hours in wasted development time.

Phase 1 – will this feature increase purchases of our app?

  1. Will people buy because we have added this feature?
  2. Will people not buy because we lack this feature?
These two questions are designed to focus our minds on whether the addition of this feature will make a material impact in the number of people buying our app. Other stats are nice, but money talks the loudest.

Phase 2 – what is the benefit of this feature?

So if we’ve passed phase 1, we are now in a position to dig deeper in to what type of ROI we expect to derive from the work we plan to do. At this stage we need to make sure that if we’re going to add features we need to have a clear ROI story. For example:

  1. This feature will add more customers
  2. This feature will convert more existing customers on trials
  3. Our existing customers will pay more if we add this feature
  4. This feature will reduce churn rate
  5. This feature will allow us to gain more press coverage (and therefore more trial sign ups)
A good solid strategy to follow regarding the product development cycle is the Kano Model . It takes into account how leaving out a feature or adding it in affects value to the customer. A milk jug is a common analogy for this:
Adding a thermometer strip to a milk jug adds value to the customer, but leaving it out does not diminish value. Adding volume to the milk jug adds value, but reducing volume reduces value to the customer. Putting a small LCD Display on the milk label adds value, but adds more value than the customer is willing to pay for. Certain features a customer will be willing to pay a lot more to have incorporated, and certain features only have a limited amount of value.

Phase 3 – the devil is in the detail

Having successfully understood and demonstrated ROI on the new feature, we can now dig further in to the detail.

  • Does this feature resonate with our value proposition, vision and values?
  • Will this feature make my product better for my target audience? (Note that target is an important word in this question, you only care what the people buying from you think)
  • What metrics do we think this feature will improve? How will we measure it?
  • How long will this feature take to build?  (Very important to understand the cost versus revenue generated so that we don’t labour for months over a new feature that won’t generate significant revenue)
  • Does this feature overcomplicate my product?

What if we can’t answer some or all of the questions on our own?

In some cases it’s simply not possible to know the answers to the above questions. At this point your best bet is to reach out to your customers (or potential customers) and interview, survey or split test for demand. Personally I struggle with this type of work as it is laborious and I understand that I might be given feedback I don’t want to hear. However, good developers aren’t cheap, and this approach has saved my backside on a number of occasions.

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Stop press: we raised zero pounds

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It’s been over a year since I’ve had the chance to update this blog.  I’ve been too busy writing HR Software related blog posts over here for our new start up Staff Squared – which is taking on new customers at a comfortable pace. So much so it now affords me the time to take a few days out.

Today’s post is about being anti-investment, which in the tech startup world isn’t something you’ll read about very often.  The guys over at 37 Signals are big fans of bootstrapping a business, but their incredible success over the years (not to mention the fact that they now have Jeff Bezos on their board) unfortunately does them the injustice of making everything they do look way too easy, and thus their “screw investment just bootstrap it” philosophy has been somewhat watered down.  That’s not to say that I don’t watch them like a hawk, it’s just that it’s hard to marry such huge success from humble beginnings if you haven’t followed them since day one.

Anywho, I’ve flirted with the idea of taking outside investment for Staff Squared on a couple of occasions.  Usually the thought of taking an investment hits me when:

  1. I read about company X, usually on Hacker News, who have taken on hundreds of new employees thanks to their Series F funding, and as a result their customer acquisitions are off the scale and they’re going to smash this quarter’s targets.  They are, as the kids would say, “killing it”.  Ugh.
  2. I don’t feel like I’m making fast enough progress in the day to day development of my business. If I just had a few extra pair of hands to take care of  <insert job role here> we’d also be “killing it”.
  3. I’m somewhat insecure about my ability to execute and meet our targets, whether that be customer acquisition, deciding on new features, or much more importantly, implementing new features.

During various low points in my self-employed career I’ve skirted dangerously close to actually landing investment.  One particular time, when I was at an all time low, I put together an incredibly detailed forecast for Staff Squared and touted them around the various people I’m fortunate enough to know who would consider investing in one of my hair brained schemes.  This potential investor asked his accountant to come over to my office and grill me, which he did, thoroughly.  I felt like I’d been examined, re-examined, and then cross-examined…I was asked about my:

  • marketing strategy
  • my ability to execute on the marketing strategy based on the investment amount I’d requested
  • likely customer attrition
  • my competition
  • my key hires (for the record I wanted a dedicated product manager, sales person, and a head of marketing.  A QA would also have been nice, but I like to make sure i’s are dotted and t’s crossed so would have been happy to keep that position)
  • profit margins
  • when the investor can expect to see a return on his investment
  • and much more
So you know, all the usual stuff.

I felt like I’d answered most of the questions really well, and just a few days later I received an e-mail from the investor’s accountant.  Good news – they’d agreed the investment was viable.  Bad news.  They wanted 35% of the business to make it worth their while.  My immediate reaction was one of relief, and it was then that I knew that I would never take outside investment.

You see, it’s all very well talking about raising £x investment, but it’s not a free buffet, it’s a business transaction.  And in return for the investment you have to be prepared to give away a sizeable chunk of your business, and I’m not. Sure I could pull down a million pounds and delegate the crazy number of jobs I’m doing to a handful of new staff…but the moment I do that, I’m no longer my own boss, and Staff Squared is no longer mine to do with as I please.  From the day those funds clear in to my business bank account I have to report to somebody, and having been the master and commander of my destiny for over seven years now I simply can’t give up that control.  It would be equally true to re-write that last sentence as  “and given that I’m a complete fucking control freak, I simply can’t give up that control”.

Despite the fact that I’m starting to see competitors to Staff Squared arrive late to the party (if that’s you…Hi! Welcome, you’re late) I’m incredibly confident that there’s enough of a market for me to dominate that I can take a sizeable monthly recurring revenue from my product almost ad infinitum.  Our overheads are very well managed, we don’t squeak when we walk but we do review our cash flow every week.  We don’t need (or want) big Facebook style offices, and we have a small yet ridiculously focused and efficient group of people working here, so we get an awful lot done.  Our freedom can’t have a price tag put on it.

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The EU cookie directive must surely crumble

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A forum post has popped up on the Federation of Small Businesses forums about the EU cookie directive.  With the hype surrounding it starting to grow as the deadline for adherence to the directive arrives on the 26th May, it’s clear that businesses really do only have a couple of options.  Stick their heads in the sand or spend money implementing changes to their website that will render any customer tracking software, such as Google analytics, useless.

As if all of this wasn’t bad enough, the UK government have not yet taken steps to make their websites compliant with this new legislation.  All the while the ICO has still not issued clear guidance on how they intend to coerce businesses in to adhering to the new cookie rules.  All we know for now is that from Saturday they have the power to impose a 500,000 GBP fine on any business that does not comply with the directive.  Pretty scary stuff.

At first I have to admit I panicked about this new legislation.  I contacted my colleagues on various committees in an attempt to get them on board.  I couldn’t understand why nobody was protesting online about this latest piece of EU garb.  After a time it dawned on me that this legislation is in fact so absurd, that it’s just not going to stick.  There’s no way the ICO are going to pursue thousands of small businesses with their legal team.  Even the wording in the directive isn’t clear, which means that until the ICO sets a precedent by taking somebody to court, it’s not clear how far businesses need to go when they adapt their websites.

So unlike me, you shouldn’t panic.  I’m inclined to believe that this is one of those few occasions where for now you can ignore a change in the law.  If you are risk averse – just make sure your site isn’t doing anything that could be considered foul play by your visitors.  Check your privacy policy is up to date, and keep an eye on the news.

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10 Best Startup Books

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Having read 100’s of business books over the years I’ve compiled a list of my favourite 10, along with a short review for each.  Hopefully some of these will help others looking to get stuck in and start their own businesses.  If you have any books you’d like to add drop me a comment below.

1) How to Win Friends and Influence People, by Dale Carnegie. The book itself primarily deals with how to build good relationships between people, how to sell people without selling to them, and how to get people to do things. The primary focus of this book is not necessarily business, but it would facilitate any business person to increasing their performance.

2) The 4-Hour Workweek, by Tim Ferriss. This highly acclaimed book is less about starting a business than it is about not getting trapped inside of it.

3) The Lean Startup by Eric Ries. The Lean Startup approach fosters companies that are both more capital efficient and that leverage human creativity more effectively. Inspired by lessons from lean manufacturing, it relies on “validated learning,” rapid scientific experimentation, as well as a number of counter-intuitive practices that shorten product development cycles, measure actual progress without resorting to vanity metrics, and learn what customers really want. Rather than wasting time creating elaborate business plans, The Lean Startup offers entrepreneurs – in companies of all sizes – a way to test their vision continuously, to adapt and adjust before it’s too late. Ries provides a scientific approach to creating and managing successful startups.

4) The Art of the Start, by Guy Kawasaki. It’s a quick read, and gives a no-nonsense set of recommendations for how and why to start a company.

5) The Toilet Paper Entrepreneur, by Mike Michalowicz. This book is incredibly applicable to any small business, it’s motivating and it’s very easy to read. The author does a great job hammering out details for you so you can implement them quickly. Business books are often too full of “strategies” and not enough practical advice on how to actually do things. This book breaks that down.

6) The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, by Michael Gerber. The author dispels the myths surrounding starting your own business and shows how commonplace assumptions can get in the way of running a business. He walks you through the steps in the life of a business from entrepreneurial infancy, through adolescent growing pains, to the mature entrepreneurial perspective, the guiding light of all businesses that succeed. He then shows how to apply the lessons of franchising to any business whether or not it is a franchise. Finally, Gerber draws the vital, often overlooked distinction between working on your business and working in your business. After you have read this book, you will truly be able to grow your business in a predictable and productive way.

7) Blink: The Power of Thinking Without Thinking, by Malcolm Gladwell. Blink is a book about how we think without thinking, about choices that seem to be made in an instant-in the blink of an eye-that actually aren’t as simple as they seem. Why are some people brilliant decision makers, while others are consistently inept? Why do some people follow their instincts and win, while others end up stumbling into error? How do our brains really work-in the office, in the classroom, in the kitchen, and in the bedroom? Blink reveals that great decision makers aren’t those who process the most information or spend the most time deliberating, but those who have perfected the art of “thin-slicing”-filtering the very few factors that matter from an overwhelming number of variables.

8) Good to Great: Why Some Companies Make the Leap… and Others Don’t, by Jim Collins. This is an older book (published in 2001), but it should be required reading for any business owner, regardless of the size of their company. The author studied what qualities could turn a good company into a great company, and his book has become a manual in how to run your business the right way. Even if you’re running a one-man (or woman) operation, there’s a lot you can learn from Jim Collin’s research and advice.

9) Made to Stick: Why Some Ideas Survive and Others Die, by Chip and Dan Heath. How do you make an idea unforgettable? Become a storyteller with a creative narrative. The authors highlight six principles (simplicity, unexpectedness, concreteness, credibility, emotions and stories) that can help you to create an idea with staying power, or to revolutionize your current idea into something unforgettable. This book is full of examples and quick lessons from teachers, scientists and more, and is one of most popular and widely recommended business and marketing books, four years after its original release.

10) The 7 Habits of Highly Effective People, by Stephen R. Covey. In The 7 Habits of Highly Effective People, author Stephen R. Covey presents a holistic, integrated, principle-centered approach for solving personal and professional problems. With penetrating insights and pointed anecdotes, Covey reveals a step-by-step pathway for living with fairness, integrity, service, and human dignity–principles that give us the security to adapt to change and the wisdom and power to take advantage of the opportunities that change creates.

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Must see movies for business owners

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As fashionable as it is for entrepreneurs to fail and learn from their mistakes, it’s much easier (and less expensive) to learn from somebody else’s mistakes.  To that end here’s a list of films all entrepreneurs can learn from.  Have a I missed any?  What was your favourite?

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Unwritten written rules to live by in 2012

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There are a whole bunch of unwritten rules that I live by. I’m not referring to age old rules that haven’t stood the test of time such as “two wrongs don’t make a right”. I’m talking about actual day to day rules that I believe if everybody followed would literally make the world a brighter place. So, in my post Christmas partying haze I’ve decided to commit some of my unwritten rules to the Internet so that they’re no longer unwritten and maybe just one other person will read this and join me in my self-righteous endeavours:

  1. Never break more than two laws at once
    Laws are sometimes broken, just not all of them at once okay?
  2. When you’re about to change direction in your car and there is more than one possible path your car can take, INDICATE!
    Yes, indicate like your life depends on it, and then the rest of us won’t be sat wasting our time attempting to second guess where you’re heading you moron
  3. When you’re approaching somebody in the street and a head on collision is imminent, step to the right!
    Nothing is worse than an awkward public dance with a complete stranger.
  4. Always be a little kinder than necessary.
    This particular quote is from our friend James Barrie, author of Peter Pan.  It’s simple really; people like nice people.  Unless you’re Alan Sugar or Donald Trump if you’re an arsehole don’t expect to get far in life; and you wouldn’t want to be either of them anyway right?
  5. Google is the most useful thing ever. If you need to know something, type that shit in on Google instead of wasting people’s time.
    You can pretty much Google anything.
  6. Say thank you.  Better still, if you can muster up the courage to pay somebody a compliment then do so.
    Manners maketh man and all that.  Not only that, you might just make somebody’s day.
  7. Two e-mails is enough.
    If you haven’t bottomed out your conversation in two e-mails pick up the phone, life is too short.

So there you have it.  Feel free to add or correct my rules in the comments, and in the meantime if you’ve read this far thank you and here’s to an awesome 2012 for everybody.

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There’s no enforceable law to stop companies spamming other companies in the UK

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The ICO is in charge of amongst other things managing spam complaints here in the UK.  It’s a government organisation funded partly by businesses paying them an annual fee.

I was recently subject to some spam from a recruitment company.  After numerous requests for them to stop sending me their generic “we’ll find you the best employees in the world for the bargain basement price of your left arm and a leg of your choosing” I’d had enough and wrote off to the ICO to complain about them.

I was diligent and carefully submitted evidence of the spam to the ICO and waiting three weeks each time for them to respond.  On both occasions they advised me that my attachments were not getting through and suggest I used snail mail.  So I printed them off and sent them via recorded delivery.

Another three weeks passes and I finally receive a response.  Here’s an excerpt:

Firstly, I must clarify some information given on your complaint form. When asked about the email account that you are receiving the marketing messages to, you have stated that the email address that these emails are being sent to is your own private account not that of a limited company. Can you confirm that this is correct, I will explain below why this is important.

Uhoh…this isn’t going to end well…

…if you work for a corporate body, such as a limited company, and are receiving unsolicited marketing emails to your work email address, there is no enforceable opt-out right provided by these regulations.

So basically, the ICO is powerless.  Mind. Blown.  What’s most annoying about this is that due to spam a large number of e-mails I actually wish to receive are automatically junked while the e-mail I don’t wish to receive fills my inbox.  Which leads me on to the subject of my next post due next week entitled – why did you spend a fortune writing your new web app if the e-mails your site generates are getting spammed?

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Using Twitter for business – the basics.

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I see a lot of newcomers to Twitter using a dedicated Twitter business accounts.  While this is great, the people behind these accounts make lots of mistakes.  So here’s my Twitter do and don’t list, send this to everybody you know and let’s make the world a better place:

Don’t:

  • Start each day with a tweet commenting on the weather, your breakfast or even worse tell me you’re going on holiday or you’re glad to be back.  I don’t care.
  • Some new twitter clients (I’m looking at you Tweetdeck) allow for tweets longer than 140 characters which are difficult, nay impossible, to read on my mobile twitter client.  Don’t do it.
  • Don’t tweet or retweet random charities from your business Twitter account unless of course your organisation publicly endorses said charity and better still donates money to said charity from time to time.
  • Retweet the nice things people have tweeted about you to you.  I know you’re amazing, that’s why I’m following you, so this much we already know.  The 2010 apprentices were incredibly guilty of this behaviour.
  • Request a retweet, it’s annoying and the people who accept these requests are breeding this behaviour.  Stop it immediately.

Now with those basics out of the way, here’s things you should do

  • When you follow somebody new, talk to them.  I presume you’re already interested in that person because you followed them right?  So ask them about something you always wondered about them and stand out from the crowd.
  • Talk about what you’re doing in a professional capacity.  Who’s your latest client?  What’s the latest idea you’re working on?  What’s the last project you completed and launched?
  • By all means start a poll.  Ask people for their opinions.  For Atlas, a software company, I might ask what really pisses people off about web developers.
  • Ask your employees (to their face, or Skype if you have to, definitely not by e-mail) what they’re up to.  What cool stuff did they find out recently that you can tweet about?  Better still, get your employees on Twitter.
  • By all means retweet useful and relevant information, add additional commentary to it if you can and if it doesn’t take you over the 140 characters limit
  • Engage with other people.  Challenge their opinions, stir things up.  You’re not on Twitter to be liked, it’s not a talent contest – make some enemies.
  • Finally, use the twitter search facility, to find people who are talking about topics of interest and relevant to your business.  If overall their timeline of tweets is interesting, follow them and introduce yourself.

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Welcome

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Hi, my name is Simon.  I run a business or two.

I originally used flavors.me for my personal website but as with all content management systems it was too restrictive and didn’t give me a good enough platform upon which to moan – which let’s face it makes up 90% of the content on the Interwebs.

For example, today a large number of people are moaning that Amazon EC2 is down.  The cloud rained down a shit storm of pain on a wide range of businesses just when everybody thought cloud computing was infallible.

Anyway – welcome, check back often.  I plan to update fairly regularly with business insights, tips, tricks and generally leave a trail behind me as I move forward in my quest for world domination success.

While you’re here why not follow me on Twitter?

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