Microsoft truly hates its customers (or gives a flying f**k about them)

Recently my Hotmail account on Outlook stopped working. I got various messages (I think Microsoft just makes them up) but the most common ones were:

Task ‘AG Hotmail’ reported error (0x8DE00005) : ‘There is an error synchronizing your mail account. Please verify your account is configured correctly by first accessing your mail on the web. Error: 3219. Server. An error occured in looking up the user’s information in mserv. ‘

Task ‘AG Hotmail’ reported error (0x8004102A) : ‘Error with Send/Receive. There was an error synchronizing your folder hierarchy. Error : 80041004.’

I spent hours spread over several days trying to fix the problem. I Googled extensively and tried practically every solution that was suggested including a clean boot, deleting and recreating the account in Outlook, reinstalling, repairing and many more. Nothing worked. Of course, in the process I lost all my Hotmail messages from Outlook, although I could read them online (which is a pain). Finally, I wrote up a question on answers.microsoft.com and received this tip:

When you login to your mailbox via the web, do you see “Preview” in the top-left corner? If so, it means your mailbox got migrated to the new Office 365 platform for Outlook.com.

What!?! Anyway, turns out that “I have been migrated”. Scary sounding, isn’t’ it? I am sure some message appeared in Hotmail that warned me that I was being migrated, but I didn’t take it seriously. And why should I? Let Microsoft upgrade, migrate, find new businesses, just let me do my work, OK? Well, I was very, very wrong. Read on…

Anyway, that tip led me to a page describing Outlook migration changes. There I learned that I needed to recreate the account with a connection to the Microsoft Exchange server. I went ahead and did that, thinking it would be seamless – but that would be too much to expect from Microsoft, right? After a couple of error messages and repeating every step, I was finally able to do the needful. As I write this, Outlook is resynchronizing my account and some emails have appeared.

But the saga is not over yet. Apparently the process makes the Hotmail account and data file the default. So it is like a “first time use” of Outlook. What does that mean you ask? Well, for one thing, it destroyed all my rules! Not only that, some rules no longer work because of some change in the software.  Luckily I had a backup of the rules from a couple-three of months ago. Unfortunately, I was in the middle of completely reorganizing my rules and had made major changes a few weeks ago – all those were lost. As I connect with people, I add them to my whitelist, and all those people I had connected with over the last three months are gone from the whitelist! Another few hours of unproductive time as I fix that (Grrrrr!).  Not Microsoft’s fault, of course, but then what do they care? A company that cares about its customers would have explained the whole process and warned about the loss of data. My Hotmail account is rarely used (one need not wonder why), and I could easily have done without it or checked email on the web rather than put up with this!

There’s more, but in the interests of brevity, I’ll stop ranting here and just say this:

  • Why don’t the programmers and product guys at Microsoft understand that we don’t want upgrades? We’d rather have stability. I really don’t have time to fix all the problems you create for customers.
  • Continuing with that thought, Microsoft Office, of which Outlook is a part is supposed to be “Office Productivity Software”. Instead, it eats up days at a time, with some arcane bug or the other. I really, really beg for an alternative. (And no Google Docs doesn’t cut it, unfortunately).
  • I am pretty adept on the computer, having used Windows since 3.1, but what about the poor souls (like my wife) who aren’t really into technology? Why should they have to put up with loss of data, loss of time, loss of money and extreme frustration because of Microsoft’s inability or unwillingness to care about it’s customers.
  • This is just one example of the exasperating problems that Microsoft creates for its users. In its other software and even in the Operating System there are tons of more examples. Of features that don’t work right, or don’t work logically, or are simply counter-intuitive.

Microsoft really needs to sit and observe customers who extensively use its software and learn to not infuriate them. I could have a dedicated blog just describing my daily frustrations with Microsoft.

So, this was long overdue Microsoft joins the list of #CompaniesWhoHateTheirCustomers

Dear Facebook – We won’t get fooled again!

Facebook’s blatant attemptKill Facebook FreeBasics to kill Net Neutrality in India died last year when massive opposition from ordinary Internet users in India scuttled the project they called (sic) Internet.org. Now, resurrected right around Christmas (they should have waited till Easter J) under a different name – “Free Basics” they seem to have made inroads by signing up (according to them) over 800 developers and millions of ordinary users.

A number of very credible people have written very detailed and thoughtful criticism of Free Basics and the attendant double-full-page advertising campaigns.  Here are two of them:

Free Basics Is A Charmingly Seductive Do-Good Effort That in Reality is Sinister by Giridhar PaiGiridhar Pai, Sr. Vice President at National Bulk Handling Corporation Ltd.

Facebook is misleading Indians with its full-page ads about Free Basics by Mahesh Murthy, Marketer, Venture Capitalist, Corporate Speaker. Founder, Pinstorm. Co-founder, Seedfund

Microsoft too has criticized Facebook’s characterization of Free Basics (although that’s a little like Trump critiquing Hitler), saying that to describe Free Basics being compatible with Net Neutrality is misleading (Economic Times, Page 1, Friday 25th December).

I won’t repeat all the well-made arguments made in the articles I mentioned, but I do want to make three salient points:

  1. If Facebook really is interested in getting more people on the Internet, why are they limiting Free Basics to just their own site and a few others who have promised their fealty to them? Why not open up the entire Internet and subsidize access to those who can’t afford to access it otherwise? The answer is obvious – Free Basics and its predecessor are simply a naked attempt to shore up their bottom line, either soon or in the long term.
  2. Any kind of walled garden – no matter what/how good the intention, is anathema to a free, fair and democratic Internet. Even if (and I don’t believe it for a second) Facebook really is being altruistic, the moment any future manager at Facebook (Zuckerberg or anyone else) decides they have done enough “good” and want to cash in on the millions of users they have lured into their lair, they can. And it will be too late then.
  3. As part of their campaign on their own site, Facebook shares that 29 of my friends “…have sent a message to TRAI about Digital Equality in India”. TRAI, by the way is the Telecom Regulator in India, and so they make it look like my friends are part of a campaign to right a wrong in India. In fact, the wrong if any is being perpetrated by Facebook. There is no option to vote against the proposition, so to speak.

Bottom Line: Don’t support Free Basics or Internet.org; in fact let’s actively fight this and all other attempts on the fragile but important meritocracy of the Internet.

One suggestion: Use the form like I have to send the opposite message (see the graphic).

The Greatest Must-Listen Rock Bands of All Time

Soon to evolve into a List of The Best Rock Songs of All Time

I wanted to make a list of all the songs I want to own, so I could go out and buy them. I do, of course already own some of them. I have bought them on Audio Cassette and CD/DVDs.   I began purchasing on iTunes too, but somehow my buying there was too haphazard. Hence the list.

Incidentally, I have listened to many on this list first on a Record Player (most of you don’t remember that gadget, do you?).

I also wanted to share them with my two boys (and perhaps their friends) so that they would have a list to refer to when want to explore really great music that has stood the test of time. And who knows, listening to these might keep them away from that Heavy/Death Metal crap (Not Music in my book). Of course, they already listen to a lot of what’s on this list so I know they have good taste. But to me it’s important that I tell them what I loved – whether they end up liking it or not.

I do want to share with my friends, so they can give me suggestions and fill out the list. This is a work-in-progress (I may have forgotten some obvious ones) so feel free.

Of course the most important part of making this list is pursuing a labor of love. Looking for, and then listening to the music brought back some great memories and is an unimaginably enjoyable task. The joy of rediscovering the Moody Blues for example was a skin-tingling rush that left me with a s**t-faced grin for at least a couple of days!

The criteria I have used to select these and also to rank them are pretty tight, but at the same time very personal.   I didn’t include breakaways like George Harrison and Neil Young explicitly; I think listing their band will be enough to remind me to include their best work.

Now, the criteria. First, I decided I was going to only include those songs I had listened to – or at least remembered listening to. (The 70s and 8os are a little hazy). I have ranked them by how much I loved at least one of their songs – that’s why Kansas and Robert Palmer are so high up in the list (Dust in the Wind and Addicted to Love). Some are just one hit/one album wonders (Natalie Cole/Don McLean) but still worth including. Some, like Dylan (can you find him?) just barely made it to the list – I like a couple of his songs now, but pretty much disliked him when I was in college (sorry Nikki). Same goes for Michael Jackson.

I plan to make separate lists for other genres I like including Blues, Classical and Gospel, and even Hindi Music. But this list is about Rock ‘N Roll, consistently my favorite genre. I connect to Rock ‘N Roll at a deep, emotional place and so this is my Ventus Album or Dilectus Album (Favorite List or Beloved List in Latin). Ultimately, I will also list the songs I liked against each band, but this is a start.

Anyway, take a look and let me know what you think. Love to hear from you! If you suggest a band, please make sure to say which song would help add them to this list. If you can, please send links to where I can listen (legally) to that song/band.

  1. Beatles
  2. Led Zeppelin
  3. Traveling Wilburys
  4. Robert Palmer
  5. Jefferson Airplane
  6. The Moody Blues
  7. Police
  8. Simon & Garfunkel
  9. Eric Clapton
  10. Cream
  11. Bread
  12. Blind Faith
  13. Credence Clearwater Revival
  14. Fleetwood Mac
  15. America
  16. Eagles
  17. Country Joe and the Fish
  18. Muddy Waters
  19. Kansas
  20. Reginald Dwight ()
  21. Pink Floyd
  22. Paul Simon
  23. The Alan Parsons Project
  24. Rolling Stones
  25. Emerson, Lake & Palmer
  26. Supertramp
  27. Joe Cocker
  28. Don McLean
  29. Jackson Browne
  30. Buddy Holly
  31. Tom Petty & the Heartbreakers
  32. Crosby, Stills Nash & Young
  33. Steppenwolf
  34. The Who
  35. The Guess Who
  36. Traffic
  37. John Mellencamp
  38. Natalie Cole
  39. Foreigner
  40. Chicago
  41. ZZ Top
  42. Dire Straits
  43. The Allman Brothers
  44. Deep Purple
  45. The Doors
  46. Sugarloaf
  47. War
  48. Loggins & Messina
  49. John Denver
  50. The Drifters
  51. Steve Winwood
  52. B. King
  53. Ray Charles
  54. David Bowie
  55. Talking Heads
  56. Lynyrd Skynyrd
  57. Iron Butterfly
  58. The Beach Boys
  59. Phil Collins
  60. U2
  61. Uriah Heep
  62. Jimi Hendrix
  63. Bob Seger
  64. Boy George
  65. BeeGees
  66. Robert Allen Zimmerman ()
  67. Jethro Tull
  68. Santana
  69. ABBA
  70. Billy Joel
  71. <—Bryan Adams
  72. Carole King
  73. Cindi Lauper
  74. Elvis Presley
  75. Michael Jackson
  76. Eurythmics
  77. Three Dog Night
  78. Bruce Springsteen
  79. Kenny G

Here are some I definitely will not include, even though people call them “important” (meaning they owe then a mention even though they are crappy) or “well-known” (yeah, for their tattoos, not their music): Depeche Mode (their name was their best creation), Def Leppard, Metallica, Prince, Kiss and a lot of the 80s bands that are barely musical.

Update: How could I forget Clapton and Bread!  Thanx for the reminder…

Update 2: Also remembered Cream (White Room, Strange Brew, Sunshine of your Love) and Blind Faith.  Removed Nat King Cole – he belongs in Blues.  Still conflicted about Ray Charles.

Update 3: Thanx to friends who reminded me of Steppenwolf and Joe Cocker.  Also suggested were REM and Aerosmith, but I was never a fan – still  I am considering them.  Also under consideration, and more likely are the Kinks and the Monkees, but a little too Teenybopperish, na?

Update 4: Bryan Adams for Summer of ’69! The Guess Who! And Sugarloaf.  And who can forget Country Joe and the Fish (and by the way, if you don’t have the Woodstock Album, you got nothing baby!)

Update 5: Iron Butterfly is in! And the long forgotten Loggins & Messina.  I am trying hard to keep out the Grateful Dead, despite pressure from friends! :-)

= Messing with people…who don’t know these greats!

Microsoft shows it’s disdain for users again

MS Idiocy

Microsoft loves to do this – make changes that you don’t understand.  It has become impossible to keep control over what has become a complex and unmanageable system.  I’ve been with Microsoft since Dos 1.0 (It was IBM DOS then) and I have seen every version of Windows.  Back then, it was actually possible to tweak the system so that it did exactly what you wanted it to do.  And a lot of tweaking was not even necessary, because it wasn’t so complex.  Today, when I boot up my system, it is using about half of my 8 GB of RAM!  I really feel the need to kill certain processes, clean out unwanted stuff from my 720 GB hard-drive, but more and more the true purpose of files is hidden.  And, as illustrated above, Microsoft goes and does things to my system that I can’t even track down.  What if that software was something I wanted?  Something that actually improved the security or stability of my system.  After all I have a full-fledged Anti-Virus software installed and running.

Damn you, Microsoft!

Annie Times Four – A “chick-book” that men will like!

This is really a “chick-book”, but I loved it anyway. I read it at the behest of a dear friend, expecting to have to plow through it. But was I pleasantly surprised!

It is a little piece of life in the sixties, and that period fascinates me. I missed it because I was just a tad too young and more importantly in the wrong country. I feel like I should have been born a little earlier and that too, either in the heart of it all, say Berkeley or in a sleepy heartland town like Milwaukee. I did end up in Milwaukee by the way, and so I can relate even more to this story – that is where it all happens…

When I started reading, I was a little annoyed at first by the four different streams of the story. I generally don’t like “clever” literary tricks. But in this case it worked and made my engagement with the story more thoughtful. I won’t say too much at the risk of spoiling your experience, but do let me know if the format worked for you.

The writing is really evocative and vividly brings to life a generation grappling with massive changes, yet subject to the timeless emotions, mistakes and yearnings. The people are real and believable, especially Annie Spring. The fiction is woven around real events and the culture of the times and so it really comes to life.

If you lived in the sixties (or would have liked to) you will love this book… no, it will move you. I would go out on a limb and say that this book is in the top five I have read in the last decade (and I read a lot). Highly recommended.

What Investors Look for in a Startup

I have been on more than two sides of startup investments. Two of my companies have raised money and I have invested small amounts. Plus, I have been an advisor to investors. So, I feel adequately qualified to give some advice…

Less than 1% of startups get funding at the seed or startup phase. Of those that do, less than 1% get future rounds of funding. In other words, companies that raise multiple rounds of funding are literally one in a million. So, ideally you shouldn’t look for funding – read more here (http://blog.gupte.net/dont-look-for-funding-generate-revenue-instead/). However, should you decide you are going to pursue investors, read on.

A Passionate and driven management team – Notice that this one is first. A great management team will not only come up with winning strategies but also execute them efficiently and effectively to get the desired result. An important point to note here is that investors rarely invest in one-person companies. Not only is the risk too high (of the person quitting or worse) but it raises a red flag that the person is unlikely to be good at convincing people to support the idea (customers, partners, employees etc…)

At a talk that I attended, an investor gave the following reasoning. He said “that they rarely look at financials or look at them in great detail before a deal”. In fact they even give the business plan only a cursory look. He made a very important point, and here it is. He said essentially, that “An A team will fix a B plan or a B business. But a B team might screw up even an A plan”. Makes sense. In fact, I’ll take it further. An A team that is passionate about the business they are pitching will likely have thought about it carefully and chosen that business because it is an extraordinary proposition. A teams are made of A players and A players don’t choose ordinary opportunities. The rest of this article is about how you as an entrepreneur should identify a “great proposition”.

Return on investment – Your opportunity has to be a better option for investors than say, the stock market, gold, real estate or a dozen other opportunities that return anything from five to thirty percent annualized returns. They have to feel that they are placing their bets on a venture that has the potential to create disproportionate value within a relatively small timeframe as compared to other businesses. An obvious fact that many “green” entrepreneurs miss is that investors don’t invest because they like you, your idea or your company. Investors invest so that they can profit. Simple. This also has means it is very important that you present a believable and attractive exit strategy for investors.

A strong customer value proposition – this is really the basis of any company. In fact, it is quite simple – if customers are not clamoring for the value proposition your company represents, you don’t have a business. Even if you drive a taxi instead, you have better chance of being profitable.

A disruptive innovation – In a market that sees new ventures coming up every day, investors are always looking for that one idea that has the potential to change the landscape of that domain. It might be a radically innovative business model, or it could be founded on the basis of an incremental innovation – but one that will relentlessly change the competitive landscape.

Scalability – A great investment opportunity is not about earning peanuts. Plausible investment opportunities present a business that is anticipated to be a “rocket” performer. For the same amount of time and effort, they could invest in slow or small growth elsewhere that carries almost no risk in comparison. It is important for investors that the innovation or idea they are investing in has the potential to scale to a large size.

Leverage – Startups that leverage technology, knowledge of the marketplace, contacts, location or something else are attractive. For example, technology offers a competitive edge to any business that uses it effectively. From an investor’s perspective, if you are not leveraging, you don’t have competitive advantage. In fact, effective leverage is a common factor in all successful global companies anywhere.

Believe it or not, professional investors want to see all of the above, not just most. This is why only 1% make it.

The Very Lean Startup Method (Revised)

A Brief Introduction

The Very Lean Startup MethodTM or perhaps the Really Lean Startup MethodTM is but a natural extension of the Lean Startup Method. The latter approach to Entrepreneurship has been articulated exhaustively by Eric Reis in his book as well as by many others. In fact, there is now an industry around the methodology expressed in the Lean Startup book, and it has become a must read for any aspiring or practicing Entrepreneur.  One of the key teachings of The Lean Startup Method is the process of defining and creating the first functional product.

The Very Lean Startup Method focuses on identifying customers before an entrepreneur builds or perhaps even defines a product.

Why this is important

In reality, focusing on customers before a product idea is difficult, because most entrepreneurs and innovators work from passion first – they have an idea and they then try to make a business of it. In some cases they may not have an idea, but their experience, skills and interests determine what kind of products they are inclined to make. In fact, that last sentence carries the germ of success for the initial idea – experience and interest will often point an Entrepreneur to the problems that need to be solved in order to have a real business with real customers.

In fact, entrepreneurs often look for help when they have already built a product! They just want “Sales & Marketing Services” because they think their product or service is so great that all that is needed for a successful launch is to bring it in front of the customer. And very often, they will say in a self-deprecating manner “Oh, I am not a sales(wo)man, I am just an innovator…” Or worse “I am just an ideas person…” Those words and that attitude should be anathema to an entrepreneur.

Eric Reis has already talked in detail about the Lean Startup Method and how you create a Minimum Viable Product, so I won’t (re)address that concept here. However, the process he describes needs to dovetail into the process I am going to outline below.

The Very Lean Startup Method

Brainstorming and Informal “Research”

The rule is “Tell everybody about your idea”. This is a fail point and a possible innovation point. I say innovation is (only) “possible” because an idea may be so hare-brained as to defy possibility of any innovation to circumvent its fail point. Yet, the feedback received at this point is invaluable because it helps clarify the idea – sometimes the act of explaining alone can do that. It is important to understand that innovation, if possible starts as early as this point.

Identify possible customer demographics

The entrepreneur must identify several possible customer profiles for the product or service that s/he wants to create. This is fairly easy and at this stage since they can afford to be inclusive and broad. At this stage, because so little is known about the potential customer and product, the entrepreneur should not attempt to narrow the range of potential customer segments. In fact it is very likely that by narrowing at this stage, innovative business models will be overlooked. The exception is when an entrepreneur has significant previous experience of that specific market, and even then it is worthwhile at this time to be broad. This advice contradicts most advice to startups and perhaps may even seem counter-intuitive. However, keep in mind that the method being described here actually precedes the stages where typical management advice is offered. The goal is to test various customer demographics and find a “product-market fit”, and therefore no demographic should be abandoned before rational testing (described below) provides a clear negation.

Make Collateral

The next step is to create a brochure or website to engage the various segments identified. Depending on whether customers are mostly online or mostly offline a website or a brochure or both are appropriate. The collateral must provide details of the features you plan to provide but it is even more important to sell the benefits. Much has been written about this, so I am not going to go into too much depth on this. Suffice it to say that entrepreneurs (especially technologists!) tend to focus on features, whereas their customer will only buy when convinced of the benefits

Send out the Collateral

This has to be a broad effort. And here entrepreneurs shouldn’t get into the trap of asking friends or their mothers! They may not tell you the truth – only what you want to hear. Entrepreneurs must talk to strangers, both online and offline. They also shouldn’t hesitate to talk to potential customers in real life, even if the product is online.

It is important to be systematic at this point. There are hopefully a large number of segments that need to be analyzed now, and marketing programs should not overlap or taint each other. If that happens, you may end up choosing an incorrect customer segment and that could happen when it is too late, or at least too expensive to change your startup’s direction.

Send out variations with different pricing or offers

For each customer segment, the entrepreneur will have to experiment with various offering and price points – the equivalent of A/B testing. Sending out emails or other communication directing potential customers to a website is the quickest way to get results. The website can, for example, have landing pages that lead to different pricing for different segments. In fact, there can be multiple price points for a single segment; this is an opportunity to use that greatest of free market metrics – price discovery! Important: No public page on the website should link to these pricing pages. If that happens, potential customers will soon discover that different pricing schemes exist! That will obviously not have a very pleasant fallout.

An entrepreneur came to me for advice on starting a 3D Printing Service. I advised him to follow the Very Lean Startup Method. I asked him to begin asking companies, especially startups and incubators who could not afford their own machines if they would be interested in this service. We sat together and made a rough business plan focusing especially on what pricing would be needed to make it a sustainable business. However, when he went out and contacted people, he did not even discuss price – he simply presented the idea of using his machine for 3D Printing and ancillary services. To his surprise (and dismay) he found that no one responded to his queries. This was a fail point. Now he is rethinking the business model and meanwhile has also joined an accelerator. The latter gives him the opportunity to study startups close-up and determine their real needs.

The most important benefit of using the Very Lean Startup Method was that he didn’t invest any money, only some of his time, to find that there was no viable business. Other entrepreneurs would possibly have leased space and bought at least one 3D Printer before starting to offer their service. We put the marketing ahead of the product development and were able to save a lot of time, money and effort.

Identify the customers that respond and why

If an entrepreneur is lucky, some targets will respond. If not, it’s back to the drawing board – more on that later. It is imperative to find out why! Easy to say, harder to do! In short, it’s great that you got a few responses, but you need to know why you got those responses so that you can get more of them. Even at the expense of losing a few of them.

However, it is very likely that you won’t lose them. By engaging potential customers, you are more likely to create an unshakeable bond, because people like to connect to real people especially when they are spending their hard earned money. And it is surprising how many people respond if they are asked the right questions.

Find out why the non-responses didn’t respond

In business it’s perhaps more important to find critics than friends. The critics keep one grounded.  There may be many reasons or even a single small reason that some of the target audience didn’t respond. Maybe the message was not appropriate for that target demographic, maybe the timing was off, maybe the price was wrong and so on. But it could be that there is a very small piece of the puzzle that is missing and adding that could turn the tables, so to speak. This little piece may be easy for you to implement and may not even be a feature – it could, for example be financing, an external option.

Note that in any campaign to acquire customers, there are always many times more people who don’t respond than those that do, including those who want the product, but didn’t or couldn’t at that time. So, if one doesn’t go after this “silent majority”, one is missing out on getting some very valuable feedback.

 

Around 2009 Intuit introduced a product that allowed tax filers to photograph their W-2 forms (an earnings statement like the Form 16 in India required to be submitted with their tax filing) using their cell phones. The users could then transmit this to Inuit, who automatically associated this with their online tax filing application. The result? A big yawn from the marketplace. However, the team did not give up on the product. Instead (as quoted in the HBR Case Study “The Innovation Catalysts”),

[a] five-person team went “out in the wild,” [Carol Howe, a project manager and innovation catalyst] says, to observe dozens of smartphone users. It quickly narrowed in on millennials, whose income range made them likely candidates for the simplest tax experience.

They were told during casual conversations that users resented having to go back online to file, and these users wanted to be able to complete their tax forms on the smartphone itself (as long it was the simple 1040EZ). And thus was born the most successful product in Intuit’s stable in almost a decade!

Ask the responding customers to pay

This is perhaps the most important step in the entire process – this is where one gets to see whether an idea for a product or service can actually be a viable business.

Take this common life example as a parallel to what happens when people have to actually commit to some time or expense.

Let’s say you are putting together a trip to a holiday location with your friends or relatives. You are sitting talking about it and you all agree that it would be fun to go to the Bahamas or the Grand Canyon for a holiday. It’s not very expensive, but the cost is not trivial. Everybody is excited and they agree to go. Now you ask them to decide on a date and also ask them to fork out the money, so you can book the tickets and the hotels. Suddenly everybody finds an excuse, or they find another topic of discussion.

This is also true when people buy products or services. When someone presents an offering to people, they most likely are supportive and will agree that it makes sense to adopt or buy it. How many times do we hear, “Sure, I’ll buy that for $X!”. However, when asked to pull out their wallets and actually buy it, they have various excuses – “Let me think about it some more” or “Hmm, I’m a little short of cash right now, but maybe in a couple of months…”. Alternately, if the seller is lucky, they will start asking questions, for example about warranties, about specific features they want (and probably don’t exist in the current offering).

In fact, their objections, if real, are a great form of feedback that could significantly improve a product/service. Listening at this stage and asking more questions is a goldmine of market research information.

Do the math on cost of customer acquisition & pricing

Okay, so let us say people are willing to pay for the offered product or service. But wait! The next important question is this – is it priced right? Enough to make a profit? It’s easy to get customers if the pricing is artificially low. But that price may not be enough to make a profit. If there exists a business plan with some pricing (and cost) assumptions, it’s now time to revisit that. Is the promised service level doable in the cost structure previously assumed?

At this stage you also have some idea of how many customers you can acquire and at what cost. The current marketing campaign’s budget should be divided by the number of customers you actually acquired.

This is a crucial fail point and an innovation point.

Adjust the cost of feature development in the business model

This step makes use of the information in the previous step and rejiggers the business plan to take into account the additional costs of the features that customers want (or say they want). This is an important step and not to be glossed over – business models invariably need to be tweaked as new costs are recognized based on new features or changes to the business model.

Modify offering – product/price/placement/target customer

Now it is time to take a look at the big picture again and check if the business is still viable with the new costs. If not, the product and/or the target customer needs to be rethought. If, on the other hand, the business still makes sense, it is time to take the next step and actually build the product.

Repeat

…till you have a viable business model

Conclusion

Much of this paper is theoretical in the sense that the process has not gone through robust testing against facts. However, it should be treated as a set of hypotheses that need to be proven experimentally. Of course the hypotheses are derived from my extensive experience in starting and running my own companies as well as entrepreneurs I have advised and mentored. That several entrepreneurs have benefited from this approach is sufficient proof that there is some merit here. However, like the process itself, I am testing these hypotheses by approaching potential consumers of the concept!

 

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