Stanford course CS183B: How to start a startup . Started in 2012 under the leadership of Peter Thiel. In the fall of 2014, a new series of lectures by leading entrepreneurs and Y Combinator experts took place:
Second part of the course Kevin Hale: In general, we constantly conducted experiments on the support service in Wufoo, because we were literally “obsessed” with it. One of the experiments that we conducted was as follows: we heard someone talk about the lack of a connection between the emotions that we have when we need help, and satisfaction and the reaction we get from people when we help them.
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Especially often this connection is absent on the network, since we simply do not see these non-verbal signals. So, according to the author of this idea, there will never be a relationship between us and users until face recognition appears on the network.

We thought: "We are not experts in the field of facial recognition, but it seems to us that there is another way to see sympathy." Since we created form designers, we added a drop-down list called “What are you feeling right now?”. We thought that no one would use it and thought it would be a useless experiment, but we decided to see what happens.

It turned out that this field was filled in 75.8% of cases. For comparison: the field with the drop-down list "Browser Type" was filled in 78.1% of cases. That is, in fact, people told us: “In the case of my problem, what I feel is just as important as the technical features that you need to know in order to fix the bug.”
We did not prioritize tasks based on the emotions of those who approached us, so most clients could not “replay” the system in this way. We noticed that one of the interesting side effects of this experiment is that people began to treat us better. We went back to work and looked at the data, analyzed the text and realized that in written communication, for example, by e-mail, there are only three ways to express vivid emotions: exclamation marks, expletives, and capital letters. Definitely [according to the results of the experiment], each of these three indicators decreased when communicating with us through the support service. As soon as people had a way to express emotions, they began to reason more rationally and as a result made our work more enjoyable.

Another unexpectedly stunning result is that this approach helps you create better software. And this is confirmed by a number of studies. Jared Spool, a user interface designer (one of the largest experts in his field), argues that there is a direct relationship between how much time we spend communicating with users directly and the quality of the design.
He believes that the design process should occur this way. Communication should be open. It is impossible to draw conclusions solely on the basis of reports or graphs. You need to interact with customers in real time. Such communication should take place at least every six weeks and last at least two hours; otherwise, your software will deteriorate over time. Our developers communicate directly with users for 4-8 hours every week. This changes our view on software development.

Jared Spoole offers a different look at how we create products. Imagine that this spectrum [on the slide above] shows the whole amount of knowledge necessary to use the application. The extreme left value is the complete lack of knowledge, the extreme right is all the necessary knowledge. And these two transverse lines reflect the essence of your interaction with the user. The transverse line on the left shows the current level of user knowledge, and the transverse line on the right shows which level of knowledge you want to bring them to.
The gap between them, according to Spool, is called the “knowledge gap”. What is interesting, there are two ways to eliminate it. You either provide the user with more knowledge, or reduce the amount of knowledge required to use the application. And often we, as engineers, those who are working on the creation of products, think: "Let's add new functions." But new features only lead to an increase in this gap.

As for us, we have focused our efforts on another direction. We used 30% of the time spent on development to create internal tools to help the support team. But often this time was spent on the fact that people helped themselves. For example, we created pages with frequently asked questions, pop-up hints, made it so that by clicking on the Help link instead of going to the page with general reference documentation you would get to a specific page with information that is most relevant to what you are working on.

We changed the design of our documentation again and again, constantly conducting A / B testing. One of the iterations on the work on the documentation page reduced the load on technical support by 30% per day. This is one of those cases when the day for all who work on the product, suddenly became 30% less load.

What happens if everyone continuously works in technical support? I said at the very beginning that development is a function dependent on conversion and “turnover”. This is the Wufoo growth curve in the first five years [slide above]. The interesting thing is that we did not pay for advertising and marketing; all this growth was provided by the subscribers themselves.
The difference between the number of new users and unsubscribing from services is extremely small, and this is very important. Many still forget that there is almost no difference between an increase in conversion of 1% and a decrease in turnover by 1%; they have exactly the same effect on your height; however, the latter is in fact much easier and much cheaper to implement. And we very often neglect this, until the difference becomes too big. Typically, these tasks are not the most basic employees of companies.
To be honest, this chart is not one of those we are especially following in Wufoo, not even one of which I am proud of. This is one of those that I am proud of [slide below], because, despite the fact that we have a good, remarkable growth curve, this is what allowed us to scale, while remaining a small company with an amazing culture. And it required us to perform a variety of tasks aimed at fulfilling the needs of our users.

John Gottman noted that there is another kind of behavior in relationships that leads to divorce. In essence, it turned out that there is a subgroup of people living together for 10-15 years, and then suddenly filing for divorce. None of the indicators suggests that this will happen. Gottman looked through the data and realized: "Hmm, there is no passion between these people, there is no fire." Relations in some sense follow the second law of thermodynamics: in a closed energy system, everything tends to destruction, so you constantly have to apply energy and effort to return it to its original state.

Many people think that it’s necessary to show people how “they are dear to companies” by creating, for example, a blog or a newsletter. We evaluated our performance, and it turned out that the percentage of active users, generally speaking, was small; and most of them had no idea about the amazing opportunities that we could provide them.

Therefore, we created a new function and called it the Wufoo Alert System [Eng. Wufoo Alert System]. It allowed us to mark in time each new function introduced for users, and each time they opened the application, we looked at the time difference between the moment of their authorization or the last connection and the moment of introducing new functions, after which users received the pop-up message: “Hello, while you were gone, there were great opportunities in Wufoo.”

Without a doubt, this innovation was the most discussed, and I heard about it every time I talked with users. They said something like: "I like this feature," Hello, while you were away ... ". Even though I pay the same amount every month, you do something for me almost every week. It's just amazing, I just feel that I get the maximum benefit from the service. ”
Besides the fact that everyone supported those who paid their bills, everyone also said “thank you”. And this was mainly due to the fact that we put an equal sign between the variables "moderation" and "modesty". Every Friday we gathered together and wrote words of gratitude to our users on ordinary cards. I know that many would not be delighted if they were engaged in such things; This was our tradition, which played the greatest role in creating a very cohesive team and in working on what is important to us. Everyone constantly remembered what our goal was and why we did what we did. Those were plain cards: simple handwritten words, we still attached dinosaur stickers to them.

Interestingly, this practice is fixed from the first days of the creation of Wufoo. Chris, Ryan and I tried to figure out what we needed to do to show users how we appreciate them during the Christmas holidays; Chris came up with this idea, and he said: “Guys, a couple of years ago, my mother made me write letters of thanks for Christmas presents to all relatives, and I really didn’t like to do it, but next year I received very cool presents ... therefore I think we should try it in our business and see what happens. ”
Thus, for that first year, we wrote by hand Christmas cards to all our users. It was the second year, and we had too many clients and only three founders. We thought: "We are at a dead end, we do not know what to do." And so, we read a book called “The Ultimate Question”, and in it the author says that you need to focus on the users who bring the greatest profit; if you take care of them, everything will work out. Then we thought: "It should work, we can do it." In fact, we wrote only to users who paid us more than others.
January came, and one of our long-time loyal users wrote to us. He wrote: “Hello everyone, I really liked the Christmas card you sent me that year, and I just wanted you to know: I still haven’t received my second card and am looking forward to it; I know that you have not forgotten about me. Thank you very much". We were greatly discouraged. The best way to exceed expectations is to not give them a reason from the very beginning, so we are in a difficult situation. After thinking carefully, we decided to stop doing this only once a year; this should happen every week. And even if we do not reach all of our users, this habit itself will mean a lot.

I talked a lot about touching moments that developers don’t like to think too often, so at the end I will share more accurate data. There is an article [and also a
book ] written by Michael Trisy and Fred Virsema and published in the Harvard Business Review several years ago; in it, the authors talk about the direction of the market leaders. They argue that there are only three ways to achieve market leadership, and depending on how you are going to achieve it, you should organize work in your company in a certain way: you should strive for a better price, a better product or a better overall solution.
To achieve the best price, you focus on logistics, like Wal-Mart and Amazon. If you want to produce the best product, focus on research, the most vivid example of this is Apple. A better overall solution means that you should be closer to the client. You may notice that this path is followed by elite brands, as well as the hotel business. What I like in this way to achieve market leadership is that the third is the only one that can be realized by anyone at any stage in the development of their company. He almost does not require money to start. As a rule, he only requires a bit of moderation and good breeding. As a result, you can achieve success in your market, no matter who your competitors are. At this I have everything, thank you for your attention.
Questions from the audience:
How do you create one product that will eventually fall in love with all categories of users?Hale: There is an interesting fine line here. I usually advise people to focus on those who like your product more, especially in the early stages. Whatever it is a niche, it is on them that I will completely focus.
I think Ben Silverman from Pinterest started his business by working with design bloggers. Adjust your product to these users, and ultimately you will determine the universal values ​​that others will share. So just start to consistently work out such groups one by one.
There are many examples of how companies made mistakes in an attempt to "make their application fun." Humor is very difficult to implement. If you want to implement something witty, you have to adjust the functionality. As with the Japanese concept of quality: if there is no atarimae, do not try to think of something funny, as this will have the opposite effect.
So, without a doubt, in Wufoo we were striving first and foremost to make the service as easy to use as possible, the rest was not so important.
How to maintain a balance between an obsession in working on a product and other tasks like marketing, etc.?Hale: When you are developing a product, you should always see the other side of the coin - communicate with users. For us in Wufoo the technical support service was the way to communicate with users. They must see first, whether the function was successful or not.
This approach influenced everyone in the company, because everyone was in the role of a technical support employee, and everyone had a social incentive to make things work. In no case should not dwell only on the product. You should always have time to pay attention to the product and then find out what your users are saying to you - this is a kind of continuous virtual feedback. So be careful if you do not have it.
My opinion on marketing and sales: I think marketing and sales are the tax we pay for not making our product outstanding. Word of mouth is the easiest method of development, and this is how the best companies develop. Find out how to make up a story that people would like to tell about your product. So the person who learns about it will become your seller. This person is your sales manager.
How do you make a decision with a team of engineers about product development in one direction or another?Hale: We turn to the support service - it's very simple, because this way you can see what problems people face most often. We always receive from our customers suggestions for improving the service.
No matter what your product or application will be, people will definitely want new features from it, so you will be aware of what they need. As a programmer, representative of a company, you should not just follow their instructions - otherwise you would be a slave - you have to find out what users really want, find out the basic reason for their need.
If everyone wants to move in different directions, someone should clarify the situation. In addition, create a smaller version of each small idea, the development of which will take no more than 1-2 weeks, so that you can try it and understand what happens and what doesn't. It is dangerous when you have a lot of areas for product development that take a lot of time to figure out.
You can tell a story about the role of “Caliph for an hour” [eng. The King for a Day] played for Wufoo?Hale: Yes, I can. So, I do not like hackathons. I think that they are useless (I mean those that are held within companies), since you spend 48 hours working hard on what is most interesting for you, and 99% of this never comes to realization. This is very sad.
Therefore, an idea came to us, which we called “Caliph for an hour”. It was implemented during the weekend. It turned out like this: a random person was selected in the company, and he became a “caliph”. "Caliph" had to tell the rest what to do with the product. This was all that worried him in Wufoo, any function that he wanted to implement: he had in his hands development, marketing, advertising, the resources of each employee of the company - everything to implement his ideas.
And, of course, we (the management) worked together to understand what we can do in 48 hours. We conducted such a “hackathon” once or twice a year. It was a huge push and served to boost morale, because people most of all liked to develop what they thought would play a big role in business development.
So for us it was a way to allocate time to one of the directions of product development. At times, people who work for you have a strong opinion about how the product should develop. The ability to swap places is a good way to easily democratize.
You said that everything works remotely. But usually this is a nightmare. How did you manage to succeed with this approach?Hale: We all work remotely, and we all work near the Tampa Bay area. , , , , () .
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