All posts tagged startup rules

Customer Service – The Missing Link

by Wells Riley on September 21, 2011 in Entrepreneurship with 2 Comments
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My brain is going to explode.

I’ve been reading Delivering Happiness by Tony Hsieh, CEO of Zappos. Having spent a VERY small amount of time in ‘product’ companies, some of his anecdotes and wild apartment rave stories are somewhat hard for me to relate with. Thankfully, 99% of his book is general “how to make your business totally kickass” advice rather than product advice, and it has profoundly changed the way I think about my business, my employees, and the companies we choose to do business with.

For one of the largest online retailers, Tony spent very little time talking about retail. The primary message was about company culture and customer service. I thought I had a fairly decent understanding going into this book, but no. I absolutely did not. Then I remembered my most recent interaction with Zappos (a pair of Blue Onisuka Tigers) and I understood the genius behind their customer service. I ordered free 7-day shipping, but was upgraded to next-day for free. What.

Zappos has 10 Core Values. #1 is “Deliver ‘WOW‘ through service”

Wow, indeed. Upgraded shipping is a small gesture, but it has such HUGE meaning. I mentally prepared myself to wear new shoes a week after buying them. Finding them on my doorstep the next afternoon was just unfathomable. I felt really special. I felt like Tony Hsieh himself was looking out for me and my blue shoes. Not only was I sold on the footwear, I was sold on Zappos. How could I ever shop elsewhere when such a magnificent company has my back?

And why the hell am I gushing about a shoe store? I’m a man. And a quite manly one, at that. There’s clearly some sort of witchcraft going on here.

So I started thinking. If a shoe store can make me weak in the knees, why not any other company?

And I kept thinking. Well? Why the hell NOT anyone else? Seriously! What is Zappos doing that even my favorite brands aren’t doing? How are they converting people from prospective customers to loyal customers in a flash? Is customer service really that blindingly powerful? How did Zappos get it so right?

I think I’ve narrowed down three things every company should understand to get some of that customer lovin’.

1: Be simple, fast, and easy to talk to

Another great example here is Amazon. When you call their Customer Support line, there are no phone trees. The interaction goes something like this:

Amazon: Thank you for calling Amazon Customer Service. A representative will take your call momentarily.
Amazon Rep: Thank you for calling Amazon. Are you calling about the order for bright blue socks you placed two hours ago?
Wells: Why yes. Yes I am. Can you change the shipping address to the other one I have on file?
Amazon Rep: One moment. Yep, all set. Is there anything else I can help you with?
Wells: Nope, thank you!
Amazon Rep: Thanks for calling Amazon! Have a great day!

iPhone: Call ended. Total call time : 58 seconds.

Anywhere else, I’d have to traverse a complex phone tree with “recently changed options”, clumsily punch in my order number, press #, wait on hold, then tell the CSR my order number, name, address, and credit card number. Again.

Why is this so difficult? Amazon isn’t special – almost every retailer I interact with has my phone number on file. Why can’t they use Caller ID to determine who I am and automatically look up my record? The chances someone stole my phone to hack my order for blue socks is pretty slim. Amazon gives me the benefit of the doubt and I save 20 minutes. I also write a fairly long blog post evangelizing them because of it.

The takeaway: Don’t waste anyone’s time. Technology makes mundane tasks blisteringly simple if you can use it right, so use it. Customers will be unbelievably delighted that you took the time to not waste theirs.

2: The ROI on Kindness is always higher than the investment

While shopping on HP’s webstore, you might be greeted with a popup asking you to take a brief survey. Personally, I hate surveys. Why can’t HP do their own research without blatantly annoying prospective customers with market research?

One time I decided to take the damn survey.

It took me 10 minutes, and after the last question I was offered a big “Thanks!”…. bye. What? No coupon? No raffle? Nothing? I find it hard to believe an interaction like this would fly in person. If you stopped a customer in your store to fill out paperwork, would a “thank you” suffice?

This person is GOLD to your company. They care enough to hand you research with no prior incentive. You need to pamper this customer because they’re at the tipping point of mind-blowing love for your company. Chances are that, if you gave this person a 20% coupon for their time they’d not only make a purchase, but they’ll probably tell their friends how great you are. You invested maybe $50-100, but that small investment could turn into thousands of dollars worth of sales.

I treat Bionic Hippo customers to free coffee, lunch, or drinks – often. It’s really expensive. I worked up an $80 tab with a client a few weeks ago and paid straight out of my own pocket. Have we received more than $80 worth of referral work with new customers gushing about how much their friend loves Bionic Hippo? You bet. I always wince at a high bar tab, but I know the personal touch is worth it. They’re my customers, and I love working with them. As a thank-you for a great relationship and spreading the good word, it’s the absolute least I can do.

3: Great customer service is more important than the product

Blasphemy! How could that possibly even be true? Wells, you are wrong and a liar.

Hear me out… it’s really obvious. Products and services are relatively straightforward, and there’s probably a handful of companies doing the exact same thing as you. Assuming you can’t create a technologically superior product than the competitor with $20m in funding and a three-year head start, how can you differentiate yourself? How can you beat a giant at their own game?

Let’s talk about Groupon.

Groupon is the undeniable leader in daily local deals. They OWN the market. But there’s a problem. Small businesses HATE Groupon because they’re slimy bastards. Groupon is completely self-serving and has no interest in the welfare of the small businesses they market themselves as trying to protect. They’ve created an unrealistic expectation for consumers – is 80% off even possible for a fledgeling business? No, absolutely not. That’s obvious, but what do you expect consumers to do? Ignore cupcakes at 80% off? It’s a vicious cycle, and Groupon takes it straight to the bank.

Google, Facebook, LivingSocial, Yelp, LevelUp, etc, etc, etc, have tried to replicate this exact model and all have failed. LivingSocial and LevelUp have pivoted to niche markets or different business models completely. Groupon completely owns the small-business-killing daily deals space. But Groupon has an expiration date. It won’t be long before small businesses ditch Groupon entirely in lieu of something more stable, lucrative, and honest.

The winner of the daily deals space isn’t going to have the highest discounts. It’s going to be the company who can offer excellent customer service to their bread-and-butter customers – the small businesses. To make a nod back to #2 above, kindness goes a long way. Rally behind local businesses, and they’ll rally behind you. Make them gush over how great it is to work with you, and everyone on Main Street will jump ship from Groupon. The expectation of ridiculous deals will die with their horrible service, sharky tactics, and bogus marketing. Once every local business is on your new deals service, consumers will have no choice but to buy deals through you. You’ll hit critical mass before Groupon can even pull it’s head out of it’s own ass.

The product doesn’t matter. It doesn’t matter if you’re selling shoes, hedge clippers, or 20% off falafel at the shwarma place down the street. Customer service seems to be a lost art in this age of digital impersonality. Just because a customer is on the other end of a phone line or webpage doesn’t mean you don’t have the opportunity to delight and surprise them – WOW them, maybe? – with excellent service. The fact that companies with ‘excellent’ customer service is so rare really speaks to what businesses have become lately – but it also presents a fantastic opportunity to rise above the scruff and delight your customers.

I know it’s working here, anyways.

Startup Study: Watching the Big Boys Compete

by Wells Riley on May 20, 2011 in Entrepreneurship with No comments
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“Ignore the competition.”

“Know your competition!”

“Outdo the competition.”

“Underdo the competition.” *

There’s a lot of talk about competition when it comes to startups.

And it’s all a lot to take in. It’s overwhelming – if you don’t believe me, try starting a company. Competition becomes real very quickly and the fear of competition (or more directly, the fear of failure at the benefit of someone outside of your control) has the potential to destroy even the most brilliant startups.

When I started Bandzu in early 2010 with Ian and Kevin, we knew we struck gold. The music industry was sexy and our product was going to revolutionize their convoluted and slapdash system. We were going to fix the lazy musicians! Power tools for the proactive ones! Yeah!

Until we found out that over fifteen companies were not only executing on the same idea, but their software was almost identical to our vision. Some had already been around for three years. One has pictures of their sweet warehouse loft office on their facebook.

Nooooooooooo!

Ian grabbed my shoulders and shook me. “Get a grip man! Competition doesn’t matter!”

“Yeah it does! They’ve got all the customers already!”

“WHO CARES? We can still build Bandzu to be awesome, and we know the competition doesn’t have everyone. People will use our product, and ours can still be better.”

“Yeah but–”

You get the idea. Ian eventually calmed me down, but this argument came up weekly. Sometimes it was reversed, but it always nagged at us. It ran us down and eventually made us apathetic about the whole company. Not even six months in we shelved the idea.

Bionic Hippo has competition too. There are some awesome design and dev agencies in Boston alone – people who do fantastic work and whom I respect very much for their accomplishments. Look beyond Beantown and there are thousands of people doing exactly what I’m doing. Many are probably even writing blog posts right now too.

Stay cool.

This is totally backwards. Bandzu had maybe 15 competitors we knew about. Bionic Hippo has hundreds – if not thousands – competing in the exact same niche of web / application design. You’d think I’d be a nervous wreck… but I’m not. I’m confident, aggressive, and cool. Bionic Hippo gets a lot of great projects, and we create great work without breaking a sweat (sometimes).

After Bandzu, I observed an interesting phenomenon. I am an iTunes addict – I buy my music, listen on my computer, and sync with my iPhone. It fits into my workflow and makes music management effortless. I started using Lala and Grooveshark to sample artists I didn’t want to commit $10 on iTunes to. I started buying songs on Amazon MP3 to save a few bucks. I snuck my way into Spotify and paid for a subscription. My obvious loyalty to one service was fragmenting due to the unique value props of each service. iTunes is extensive, Amazon is cheap, Grooveshark is easy. Google now has their Music Beta service, throwing their hat into possibly the most crowded consumer market of all time.

“What’s the point?” I thought to myself. iTunes is the de facto standard for music purchasing. They have the highest volume of sales and profit by an insane margin. Why would anyone enter a space dominated by the most powerful brand in the world?


iTunes wears the pants in the Music Industry. (Courtesy of The Oatmeal)

Grooveshark, for example, is a total underdog. Unlike their competitors, their entire business is music streaming, and they have the most to lose. Why does everyone talk about them? More importantly, why do people use Grooveshark?

It’s unique, it has a clear value prop over iTunes and Amazon, and it’s easy to use. Moreover it is different. In a good way. A way that, at times, makes Grooveshark more useful and better than iTunes.

My point…

I realized something interesting about competition that wasn’t apparent at the micro level my company was at. When you’re small, competition seems like an impassable barrier. Observing companies like Google, Amazon, Apple, and Microsoft battle over dominance in various markets (and most importantly, the small companies that squeeze in and manage to take a moderate chunk for themselves) shows that competition is okay. Chances are you won’t be the next Facebook, but maybe you’ll be the next Grooveshark. And that ‘aint a bad thing at all.

Competitors aside, Grooveshark is doing damn well and they have a great product. I’m certain that iTunes is a constant monkey on their backs, and they will never have the luxury of being complacent in their industry. They fight for every user by building the best music platform they can imagine… competition be damned. Their product is awesome because they have no choice but to be awesome.

These guys are proof positive that, even in the most competitive digital consumer market, competition can’t stop you from creating a great product.

My advice: Be mindful of competitors – find out what they’re doing right, how you can do better, and don’t let any of it cloud your vision and your goals.

One last thing to think about:

“Be afraid of our customers, because those are the folks who have the money. Our competitors are never going to send us money.” – Jeff Bezos, Amazon

* An excerpt from 37signals’ excellent book “Getting Real“. Read it all.

Four Reasons People Hate Your Startup

by Wells Riley on April 13, 2011 in Entrepreneurship with 11 Comments
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Startups are fun, exciting, and incredibly sexy. It’s a wild and crazy party just like The Social Network, right?

Right?

Well no, not usually. Not to say startups aren’t fun and exciting, because they definitely are. It was through Bionic Hippo that I realized my passion for starting my own business, and through Bandzu that I learned how to experiment, network, and put myself out there as an explorer and tinkerer publicly. I’ve met some amazing people and been a part of some even more amazing projects.

I am, by no means, a seasoned veteran of entrepreneurship – I don’t think it’s really possible to ‘learn everything’ or experience every contingency of the startup experience. Instead I believe that it is every entrepreneur’s duty to share their experiences, spread wisdom, and help others. Here are a couple words of advice.

1. No one wants to sign your NDA

Google wasn’t first to search, Microsoft wasn’t first to PCs, and Apple didn’t invent the MP3 player. ‘First to market’ is total crap, and the sooner you stop coveting your idea as some sort of godly divination, the sooner people will be more interested in what you’re doing.

It is an undeniable fact (I am going to coin the phrase “Law of Entrepreneurship”) that sharing your idea with others generates invaluable feedback necessary for your company to thrive. It is highly unlikely that someone is going to ‘steal your idea’ – wait, no. Let me clarify. Your idea is irrelevant, and no one cares about it. Dogsleds for soccer moms? Whatever.

Execution is the most valuable aspect of your business. It is, quite literally, what you do and how you do it. If you know your market, your customer, and your product well enough to generate a successful product, then you don’t need to worry about NDAs and secrecy. What can anyone do with your idea if you’ve got the passion? What are the chances you’ll be talking to someone who’s willing to drop everything they’re doing and start working on a competing product with the same level of passion and expertise as you?

And if you’re even thinking of asking an investor to sign an NDA, just slap yourself in the face right now.

2. You market, but don’t communicate

Elevator pitches are nice, but if I need to use unsuck it to decipher your barrage of buzzwords and technical jargon, then you’re not communicating, you’re marketing. It has its time and place, but it’s critical that you know when to turn on the buzzword machine and when to speak frankly with your peers and share ideas, not “ideate dynamically in a real-time cloudspace.”

Ugh.

It might feel good and empowering to use buzzwords, but almost everyone can see right through your act. Be yourself, know your product, and speak humbly. Not only will people be more receptive, but you’ll gain their respect.

3. You think you’re Mark Zuckerberg
(or rather, Jesse Eisenberg)

I’m sorry, but you’re not “The CEO… bitch.” No one is. Not even Mark Zuckerberg. Perhaps it’s just a personal pet peeve, but I absolutely cannot stand when startupers take themselves too seriously. You’re starting a company… just like the rest of the entrepreneurial community. You’re special, but no more so than anyone else. You’ve achieved nothing that someone else out there hasn’t – unless you’ve raised $41 million for a worthless iPhone app (in which case you’re STILL not special. Rovio, producer of Angry Birds, did a $42 million round a few months ago). Pwned.

As much as people hate marketing speak, they also hate cocky entrepreneurs. Be humble, realistic, and confident. The perfect blend of those three attributes will never lead you astray. Never forget where you started, where everyone else is starting, and all of the people who helped you along the way.

The golden rule: Be yourself. Always.

4. You still think you’re a startup

I realized about five months ago that Bionic Hippo is a ‘startup company’, and realized shortly afterwords that it isn’t. The difference is that startups focus on research, exploration, and creating a product.  After the honeymoon (and a few hundred dollars worth of champagne), you’re left with a business kicking and screaming on your doorstep. You’ve got customers, money, death, and taxes to worry about, and it’s scary.

I love attending entrepreneurial events, but I hate seeing ‘startups’ that have been around for a year (or more) with no substantial progress, no user base, and no revenue. You can’t stay a startup forever! You’ve got a business to run. Yes, like, with a tie and a briefcase. Sort of. ish.

Don’t let go of your principles, though! If you like being small and agile, stay that way. If you are driven by exploration and invention, never lose that drive. Bionic Hippo creates web services and products amidst our busy workdays, but it’s because we still do what we love. We may be a company, but we still act like a startup. The important distinction is the lack of the word “beta” anywhere on our site, and the generation of revenue that allows us to keep doing the projects that inspire us.

5. F*ck  your email signature (bonus!)

  • I care about the environment, but your “Please consider the environment before printing this email” signature makes me want to choke Captain Planet.
  • Is that seriously a legal disclaimer in your email? Shit, I’m scared. I also didn’t read it.
  • Protip: If your email signature is longer than 4 lines, you’re trying too hard.
  • Bonus tip: Don’t put your email address in your signature. I already uh.. know your email address. You sent me an email, remember?