How to start a start up VIII (seconda parte)

Walker Williams, fondatore di Teespring, affronta la questione della scalabilità

La presentazione di Walker Williams inizia a 15’53”, clicca qui per andare direttamente al suo intervento.

Torna all’indice delle lezioni. Vai alla terza parte della lezione VIII

Il testo dell’intervento:

Sam Altman: Next is Walker Williams, founder of Teespring. He’s been working with YC for about a year and a half, something like that. I almost rejected him, which sounds like a dumb idea, but now they’re making hundreds of millions of dollars in revenue, so very luckily I did not. Walker is also going to talk about doing things that don’t scale.

Walker: Thank you guys for having me! My name is Walker; I am the CEO/Founder of Teespring. For those of you who don’t know what Teespring is, we are an e-commerce platform that allows entrepreneurs to launch products and apparel brands without risk, cost, or compromise. Today the company is about 180 folks and we ship tens of thousands of products each day. I want to talk to you about one of the most fundamental advantages you have as a start up, and that’s that you are able to do things that don’t scale.

I define things that don’t scale as things that are sort of fundamentally unsustainable; they will not last; they will not bring in the millionth user. Where they break, it’s usually time but it could be a number of other things. But it’s really growth strategies that won’t take you to a million users. There are three places I want to focus on today. First one is finding your first users. The second one is turning those users into champions, and the third one is finding your product/market fit.

So finding your first users: The first thing you have to understand is that there’s no silver bullet for user acquisition. You know, everybody, and this includes me when we got started, looks for that dream solution, that paperclip campaign that has tremendous ROI, some accelerating partnership that’s going to springboard you into the stratosphere, and affiliate agreement; something that solves it for you. But the reality is for the vast majority of companies and in fact for every company that I’ve had the chance to speak to the CEO of, that’s just not possible – those are unicorns. And most of the companies that from the outside look like they’ve had this dream growth curve, the reality is that those first users were impossibly hard to get. Let me tell you about the story about this ridiculously unsustainable business.

So this is Teespring in 2012 (PowerPoint). When we first launched, the business couldn’t have looked worse. It took days of meetings; we had to offer free designs, and days of revisions back-and-forth, we’d have to launch the product ourselves, we’d have to do the social media, all to sell about 50 shirts to a local nonprofit and generate about $1000 of revenue. Anybody looking in would’ve said, “You guys have to give up, this is a terrible idea.” But as time went on, those users started to add up, and I think something you have to understand is when you first launch a company, just by virtue of the fact that it’s a new product, you’re going to be bad at selling it right? You’ve got no idea what the pain points of customers really are. You’ve never sold that before. You don’t have any success stories to point to, or testimonials. Those first users are always going to be the hardest.

And so it’s your responsibility as a founder to do whatever it takes to bring in your first users. It’s going to be different for every company. The common thread that I hear is, founders need to spend personal time and effort, a lot of their personal time and effort to bring those users in themselves. It could mean a number of things – anything from sending 100 emails a day, getting on the phone and just calling as many people as you can, going through a network like Stanford or Y Combinator. Anything you can do to just get that first user. I really equate it to pushing a boulder uphill. And if you think of a smooth hill when you get started, the incline is the steepest and those first inches are the hardest. But over time as you get farther and farther, the incline steadies out, it gets easier, and eventually you reach a point where you’re at the top of the hill and the boulder starts to roll on its own.

And so for those first users, you cannot just focus on ROI in the sense of time. Do not expect to spend an hour and return thousands of dollars. Maybe Stanley was one of those unicorns – really incredible story. But for most of us, those first two users are going to take a lot of handholding, a lot of personal love, and that’s okay – that’s essential for building a company. The one caveat of that is, I don’t recommend giving your product for free. And there are plenty of exceptions to this rule, but in general, cutting costs or giving the product away is an unsustainable strategy I wouldn’t recommend. You need to make sure that users value your product. And you know, people treat products that are free in a much different way than a paid product, and often times it can give you a false sense of security like, “Oh we’re getting all these users; surely we can convert them to paid.”

The second aspect is what happens when you get those users? How do you turn those users into champions? A champion is a user who talks about and advocates for your product. Every company with a great growth strategy has users who are champions. The easiest way to turn a user into a champion is to the delight them with an experience they are going to remember, so something that’s unusual or out of the ordinary – an exceptional experience.

The easiest way to do this early, and again something that is completely unsustainable – it’s not going to scale forever – is to just talk to those users. People will say this all the time, it’s sort of the core tenant of Y Combinator, is talk to users. I cannot stress how important it is that you spend a large chunk of your time talking to users. You should do it constantly, every single day, and as long as possible. Today at Teespring, I’m still the catchall email address, so anytime anybody misspells “support” or writes an email address that doesn’t exist, I get that email. And so I still do about 10 to 20 customer service tickets every single day; I spend hours each night reading every single tweet, probably a little bit OCD, but that’s okay; I read through all the Teespring communities. You’re never going to get a better sense for your products than actually listening to real users. Especially in the early days, the product and the feature set you launch with is almost certainly not going to be the feature set that you scale with. So the quicker you talk to users and learn what they actually need, the faster you can get to that point.

There are three ways to talk to your customers. You can run customer service yourself. Up until Teespring was doing about $130-$140,000 a month, my cofounder Evan and I did everything in customer service. This is one where there’s going to be an instinct to quickly pass off, and that’s because it’s painful. Even today when I open our customer service portal, I have an emotional reaction where my stomach sinks because it sucks talking to so many users who have had a terrible experience, and it’s painful that something that you love and put so much effort into, to know you got it wrong or somebody didn’t treat them right. But it’s so important that you go through that and learn what you need to build, and what you need to fix.

The second step is to proactively reach out to current and churn customers. Churn customers are customers who have left. This is one that often falls by the wayside in the pursuit of new customers, but you want to make sure that your customers are having consistent good experiences; you don’t want to take your current users for granted. When a user actually leaves your service, you want to reach out and find out why, both because that personal outreach can make the difference between leaving and staying; sometimes people just need to know that you care and it’s going to get better. And even if you can’t bring them back, there’s a chance that you can learn from the mistakes you made that caused them leave, and fix it so you don’t churn users out in the future in the same way.

Finally, the one I’m probably most OCD about is social media and communities. You need to know how people are talking about your brand. You need to try to make sure that when somebody does have a bad experience, and they’re talking about it, that you make it right. Problems are inevitable: You’re not going to have the perfect product; things are going to break; things are going to go wrong. That’s not important. What’s important is to always make it right, to always go the extra mile and make that customer happy. One detractor who’s had a terrible experience in your platform is enough to reverse the progress of 10 champions. That’s all it takes, is one to say, “No you shouldn’t use those guys for X reasons,” to ruin a ton of momentum.

There are examples in the early days where we would mess up massive orders. We’d print out colors slightly wrong; it would be the wrong size, and it would be half of our GMV for that month. We would know we got it wrong, and the customer would be unhappy, and the instinct was to say that it was only a little bit off, not completely wrong, or that it would be fine. But the reality is you just have to bite the bullet and make sure it’s right. And the customers who are originally the most frustrated tend to turn into the biggest champions and the longest term users.

The last one I want to talk about is finding product/market fit. What I mean by that is the product you launch with will almost certainly not be the product that takes you to scale. So your job in those early days of a startup is to progress and iterate as fast as possible to reach that product that does have market fit. And as engineers your instinct is building a platform that’s beautiful, clean-code, and that scales. You don’t want to write a duct tape code that’s going to pile on technical debt. But you need to optimize for speed over scalability and clean code. An example of this is in the early days, we had a couple enterprise customers come in, sort of bigger nonprofits, and say “Hey, we really like your service, but you’re missing these fundamental things, so we’re not going to use it.” And we looked at what it would take to build out those features, and we weren’t sure if they were going to work out long-term, but we wanted to try it.

My cofounder Evan, who is our CTO and a million times better developer than I am, ran the math and figured out that if we did it the right way, it was going to take about a month to build out these features. A month for a startup – you live in dog years – a month is a year, and that just wasn’t going to do. So he actually went out and duplicated the code-base, duplicated the database, and was able to basically build a completely different product so that he didn’t have to worry about the existing users to serve these enterprise customers. We gave them the tool, they on-boarded, and generated a lot of revenue. Eventually we learned what features were core, and we integrated them into the core product. But what would’ve taken a month, we were able to do in three to four days.

A great rule of thumb is to only worry about the next order of magnitude, so when you have your tenth user, you shouldn’t be wondering how you are going to serve one million users. You should be worried about how you’re going to get to 100. When you’re at 100, you should think about 1,000. It’s one of those things where necessity is the mother of invention, so when you hit the breaking point (the Twitter Fail Whale is a great example), and in Teespring there were month-stretches where every single night the site would crash – every night. Every single person on the team would go to sleep with their phone on loud, under their pillows, so inevitably when their phones went off, we could quickly restart the server and go back to sleep; this would happen daily. But the reality is that it was worth it, and you’ll end up with these huge pain points and all this technical debt and regret, but it’s worth it just to get to that end goal and that product fit faster. You will make it work; you will survive. Those bumps are just speed-bumps, and speed is so so important early.

The lesson that I’ve been learning lately is that you want to do things that don’t scale as long as possible. There’s not some magical moment; it’s not Series A, or it’s not when you hit a certain revenue milestone that you stop doing things that don’t scale. This is one of your biggest advantages as a company, and the moment you give it up, you’re giving your competitors that are smaller and can still do these things, that advantage over you. So as long as humanly possible, as long as it is a net positive, you need to spend time talking to your users, you need to move as fast as possible in development, but don’t give it up willingly; it should be ripped from you.

To practice what I preach, I want to give you guys my email address. If you guys have any questions, if you want to learn about Teespring, or if you want to print some T-shirts (fingers-crossed), just shoot me an email. I’d love to help and I’d love to speak to you.

Walker@teespring.com

The last thing is, we’ve created an official “How to Start a Startup” T-shirt with Sam. All proceeds are going to Watsi.org. I couldn’t miss this opportunity to sell, so if you guys want to grab one of the official tees, just go to teespring.com/startup; it’s supporting a great cause.

Thank you.

Q: What convinced you to get into the market of T-shirt printing when there is so much competition in this business?

A: I think there are two factors to it. First, I completely agree. From the outside, people have been telling us that this is a silly idea since day one in every order magnitude we reach. People will come and say, “This is a terrible idea. Why are you doing that?” But the reason why we launched Teespring is because we ran into a personal pain point where we had a need and looked at the current solutions. I was a student at Brown trying to create a “Remember the Bar” shirt for a dive bar that got shutdown, and I realized that nothing matched my needs. And so because I knew that I had that pain point, and I knew there was market fit, and I had seen people adopt the product, I knew there was something there. And it was also one of those things where you could sort of feel the wind on your back where people were adopting the product quickly. The pain point was clearly there; it’s not a met need. So I would say that most times, great ideas start out by looking like the silly ideas, and then you can feel out whether or not there is a scalable business by how people are adopting it and whether it is possible to bring customers onboard.

Q: Are nonprofits your biggest customer base?

A: No, today our biggest customer base is entrepreneurs who are trying to build brands and businesses. We have a little over 1000 people who make their full-time living on Teespring today via brands they’ve launched. And the other side is influencers, so YouTube stars, Reddit communities, bloggers who want to add product merchandise as a way to create a brand and monetize that affinity. Those are our two biggest markets. We still work with a lot of nonprofits, and love working with them. They are still part of our business, but just not the majority.

Thank you.

Qui è disponibile la scheda dell’intervento precedente (di Stanley Tang, fondatore di DoorDash). Qui, invece, la scheda relativa alla presentazione successiva (di Justin Kan, fondatore di TwitchTV e Partner di Y Combinator) .

 

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