A design thinking approach: Observe extreme users 2

Continuing the learning from the Design Thinking training, figuring out who will be the extreme users of Bimotics is similar to the hypothesis of our early adopter customers. It is not a stretch to assume that those that are currently measuring and analyzing business would be the the most likely early adopter and positive extreme user.  On the other side of the spectrum, the extreme users that are least likely to use our products are those with either low data quality as poor quality adversely affects the effectiveness of analytics or hidden agendas that is not supported by the data.

The things I would like to observe from our extreme users that love our product and find value in our features include the categories of analytics that mean most to them.  Are they leveraging topics related to sales and marketing over supply chain and finance?  How are they using the customer flows we designed? To navigate to and from analytics and dashboards, are they taking necessary steps to get around? I have learned from other software entrepreneurs that small business “use copy” and paste more often than using “new” in order to avoid typing in the same information over and over. Finally, I would like to know on what devices they access our application. Our product is mobile enabled; and we have taken care to so that our infrastructure supports mobile.  I would like to know if it was worth it.

Something to observe related to the extreme users who don’t use or even dislike our product, it whether or not they go to their teams and applications and work to improve data quality.  Are there initiatives or trainings that makes their resources input better information?  For those whose agendas don’t have data to support their decisions, I would be very interested in seeing and understanding how communication is done to other team members and whether they get push back from the others with access to the same analytics.  

I’m sure there are other groups of extreme users.  And the identification of extreme users can extend past product users.  For example, those that read this blog would be not segmented by product customer.

A design thinking approach: Observe extreme users 1

I was excited for the training I attended this week called Design Thinking.  The trainer, Experience Point, based the whole session on the methodology of IDEO, one of the greatest design firms that have come up with innovative solutions that we use everyday.

A bunch of blogs and startup readings, have been about getting out of the building and talking to customers.  At Bimotics, we have constantly talked with small business owners of all types about our business idea, our tagline, our data sources we want to connect.  Sometimes we got an excited response and sometimes the person simply didn’t get it.  Getting to talk to anyone that will hear us out was always appreciated, but I can’t say the talks were always helpful. There was continued ambiguity on how to put what a business owner was saying in a context that made sense.

In the design thinking training, I learned the concept of observing the extreme users.  Extreme users are those that fall outside of the normal 80% if you are looking at a normal distribution. The extreme user is on both sides of the 80%. The first group represents the users that love and have completely adopted and live the subject you are studying. The other group represents the users that never use or care about the subject.  

Observing these groups is the key to getting real insight. You can see the difference between each extreme user. This can help provide context needed to get more quality insight. Being able to observe the right group requires a bit of profiling and a clear understanding of what you want to learn. Observing is not just having conversations with random users.  It is almost opposite, it is about consciously being objective and simply trying to understand how the user ticks.  When you have a conversation you may instill bias unintentionally.  

Sales Representative KPIs

In setting up a performance based sales organization, managers and small business owners can create KPIs for their sales representatives.  KPIs stand for key performance indicators which are measurements a business takes to monitor performance.   According to the KPI Mega Library, there are a few related to the sales representatives:

• Day-to-day sales activities:
• # of average appointments per sales representatives
• Time to answer a request by customer
• # of customers per sales employee
• Sales revenue measurements:
• Average sales revenue per sales person
• Total costs to gain a new customer
• Sales team performance:
• Average sales turnover per sales staff
• % of sales representative that met or are above quota
• % of sales representatives that have met sales target
• Total sales of sales staff / Total customers of each sales staff

It takes continuous measurements of these KPI to understand how well your sales team can performance as well as how much they can improve.  Trending over time, is the easiest way to analyze the performance and changes.

Deciding to keep our product beta private

This past weekend we decided that our first beta is going to be private.  This led me to really look into the difference between a public beta and a private beta.  What are the pros and cons of each.  In the past, many web apps declared a “private beta” because they were still buggy or not built to scale.  But although we have worked hard to address bugs and put in place structures to continuously deploy for scale, as a B2B we were concerned that opening our first product to the public and critics would inhibit our ability to finish the product per the vision.

We at Bimotics didn’t call our first sellable product an alpha either.  Through favorable circumstances we have a customer who is willing to pay to use our software.  It really didn’t seem right to have a selling alpha product, so private beta made more sense.  What sets this private beta apart from conventional thinking also is that our beta is not just missing certain features on our product roadmap.  Rather, there is still more to build before it is truly a subscription based analytics service for small business.

Other considerations taken in the decision to launch the private beta include the amount of customer support we could provide while continuing to develop our project, and more obviously, being able to preserve and defend the intellectual property awhile bit longer.  As the small business is our target market, we have know that providing a strong level of support will be key to making sure our customers continue to use the software but getting the positive word of mouth out to others.

Salesforce Profitability Part 3

This week I wrote about the analysis and types of insight you get from salesforce profitability.  I would like to devote one more post on the topic.

Salesforce can often be described as an advanced sales analytic because it enables more complex analysis such as sales forecasting, predicting churn and sales campaign analysis.  

In order to measure salesforce profitability, you must be able to merge three types of business data over time.  

1. Sales Representative Information
1. Name
2. Tenure
2. Sales Data
1. Sales
2. Sales Type (Product/Service/Deal Type/Quantity )
3. Volume of sales by sales type
3. Financial Data
1. Revenue
2. Cost of Sales
3. Cost of Goods Sold
4. Profit over time

This type of analysis requires more than a regular query of a database or the building of a standard report to influence strategy. To do the analysis you many have to extract or download the data from your data warehouse or applications.  MS Excel or other business intelligence software will then have to used to carry out the analysis.

A continuing look into profitability of your salesforce

Continuing with concepts related to salesforce profitability and how the analysis can lead to key decisions for small business owners.  Trending salesperson profitability over time whether it is monthly or quarterly can also enable key decisions.  

Seasonality is something that most business naturally observe, but through the lense of salesperson profitability a business owner can identify discounting rules or plan strategic time off.  For example, if there is a time when sales rep profitability dips and inventories are becoming low, then it may be a good time to conduct training or switch the sales focus to other higher margin products and services.  

Blending a salesperson’s tenure with your profitability analysis can also uncover insight.  Say you have two sales reps one that has been with you for 10 years and another that has just signed on this year.  The former sales rep is an expert in the industry and know just the discount a customer will pay for a product.  The newer sales rep on the other hand, may be taking a different approach while learning the market. Overtime, you will probably observe that salesperson profitability for you seasoned rep consistent and predictable.  


On the other hand, you may be looking for the profitability of the new rep to grow over time.  But what if the profitability of your new salesperson is outpacing that of your seasoned representative?  You may want to see if your seasoned representative has grown complacent and is used to providing deeper discounts than necessary.  Or if the new market discovered by your other representative is a sign of changing overall market conditions. The analysis then pays off.

A look into profitability of your salesforce

As the owner of a small business, deciding to hire a salesperson can be huge.  Adding personnel is not only a significant expense but also added responsibility to you to support them to get the most sales out of the investment.  Paying for salespeople is investing in increasing revenue; but it is important to know that how your sales is costing your business.

When implementing a sales team or sales program, measuring and tracking sales rep profitability can be key to learning what works and what doesn’t.  For startups, understanding customer acquisition costs (CAC) is essential.  Salesforce profitability analysis will help justify increasing the overall CAC and help you assess the health of that overall CAC.

What you will need for to do the analysis:

• Sales person
• Sales person monthly salary
• Monthly cost of the sales person including benefits, commissions, travel expenses and other overhead.
• Monthly revenue
• Monthly profit

The following targets will allow you to round out your return on investment analysis:

• Target profit on products sold by the sales person
• Target month where you expect: monthly revenue will equal the sales person’s salary
• Target month where you expect: monthly revenue will equal the total cost of business (breakeven)

This analysis can give you more insight than simply answering questions such as what is  the total sales for each sales person? And, which sales did each sales person make?

In that it goes beyond getting the numbers, and helps you understand if your return on investment is working as you believed.  And if you sales cost structures need to be tweaked.

A look at startup friendly workers

I have had frequent conversations related to resources for early stage startups this year.  Recruiting for a startup that is still being bootstrapped and surviving on a shoestring budget, can be a bit precarious.  Similar to go with the right kind of angel investor, it requires finding the right kind of motivated person.  My team has helped our business for a variety of reasons, but all of them really believe in our business idea and the competency of our founders. Here are three groups of workers that have been really startup friendly.

In looking for non-salary resources for Bimotics, the first place most founders look have been for student interns.  This is a great place to start, in that college students have the time for part-time jobs.  There are also win-win conditions in that interns can get exposure and experience to real-life work.  If you are lucky enough to get real go-getter then the business impact is definitely positive.  The obvious risk, is that often young adults need a lot of supervision and detailed explanation.

In the Femgineer session this week, Poornima mentioned that the retired and semi-retired can be a demographic with both time and experience.  Often because they have been able to retire, they don’t need to financial compensation that you can’t provide anyway.  I have friends that have had much success with getting sweat equity out of their parents.  At Bimotics, we have engaged with the semi-retired mostly in for business advice.  With our location in Florida, there is plenty supply of ex-executives and small business owners that will readily give you their two cents.  Most of the advice has been helpful but keep in mind some advice may be a little dated.

The final group of individuals that has proven to be startup friendly are stay at home moms.  With more and more women in the workforce and getting advanced degrees, I have found that there is a wealth of expertise and desire to “stay relevant” while they take time out to raise their kids. I have met many women who say they miss the intellectual stimulation when they leave work to stay home. So being able to do small properly scoped projects for a startup from home, can be a good thing.  As a founder, I don’t always have time to learn everything, nor actively manage a resource.  Working moms that have a wealth of relevant skill and can run with a project with little supervision has proved to be a plus.   

Delegation for startups

Yesterday, I had the privilege of attending my first mentoring session with Femgineer lead by Poornima Vijayashanker.  This particular session addressed the topic of delegation for entrepreneurs with early stage startups.  The discussion could not have come at a more timely, as this week it became increasingly clear that I needed to manage my team more effectively.  

Since my startup is still developing our first sellable product by bootstrapping, the “employees” on my operational team consists of three four part-time professionals that can donate only a few hours of their expertise a week. Because at this time I can’t pay them I have not felt comfortable pushing nor aggressively enforcing deadlines.  This has sometimes set us back or otherwise burned me out as I tried to pick up the slack.  

The mentoring session started out with the fundamental question to ask every perspective person that your work with: “Are you interested in my business idea?”.  In my case, most would find the B2B software space compelling as there is a lot of potential.  The next excellent points included:

1. Always be clear on what they will be working on whether it is a project or a specific task.
2. Start by asking if they can commit to 5-10 hour a week on a non-paid basis? Because if they can’t they may not be interested enough. And, they may not have resources to give 20 hour resources on a paid basis.
3. Make the first task very basic and see if the person takes charge. Note founders  don’t have time to check in with everyone everyday.  
4. Layout the expectation that you will only be checking in only once a week- unless of course if they are stuck them more frequent dialogue is fine.
5. Always attach deadlines to tasks. Ask the person to first give you an estimate.  Let them set the deadline.  Assess whether you think they are giving you an aggressive deadline or a doable one.  Ask what part of the task will be most at risk of not meeting the deadline. Then hold the person accountable for meeting the deadline.

Overall, the discussion was helpful.  In many ways I have already known these management skills, however, hearing them from another entrepreneur brought me back to basics.  

As for the shyness of being a good leader because I’m not able to pay for help at this time, I need to remember that we are really building a good thing that takes time and dedication.  All the pieces of my business plan make a very compelling argument for success.   And those that are there at the beginning and working because they believe in the vision and business idea need me to be a strong leader that demands delivery.  Those that stick it out also know that they will reap the reward as we grow together.

Do I have a disruptive technology?

Innovator’s Dilemma has made it to the top of several reading lists for business, strategy, and technology management.  When we were first pitching Bimotics, there were several potential investors that swore we needed to read it as we were challenged to further simplify the definition of our minimum viable product.  Their point was that when defining a product for the mainstream, the market is so underserved that even the simplest products could be useful.  We believe that our true value will be the integrated analytics that is when you can take data from multiple applications and blend them to get more meaningful metrics.  These advisers/investors said that just being able to demonstrate ease of use from one application was sufficient.  At first I didn’t get it.  

When it comes to analytics for small business, the market is not only underserved in getting affordable solutions, but also finding intuitive and user friendly applications.  I have heard complaints from several small business owners and have observed myself that Quickbooks was not exactly easy to use and getting reports out of it is not straightforward at all.  I ended up resorted to Quickbooks for Dummies, but finally paid someone to help me.  In the end, Bimotics has an initial product at the time of market entry that does bring immediate value in that we pre-build the analytics for our customers. I’m looking forward to proving that our simple and customer centric service can be a disruptive technology.

According to the Innovator’s Dilemma, if the trend continues for workers and users to demand applications that are also easy to use, Bimotics could potentially disrupt the business intelligence industry as a whole.  At this time, our best market for this technology is the the small business- a market that the large business intelligence providers cannot address because their existing infrastructure, build process, expertise and demand for growth.  I often meet skeptics that believe that small businesses make horrible customers and thus an unviable market.  But the case studies in this book points out that startups that first address these underserved markets not only have a safe point of market entry but also develop solutions that more lucrative customers will eventually demand.  

Looking at my established competitors through the Innovator's Dilemma's lense

Over the holiday weekend, I finally got to read Innovator’s Dilemma by Clayton M. Christensen.  This book has been a must read for entrepreneurs and has been on my own to-read list for months.  In trying to apply what I have learned, I was intrigued at looking at the large established industry players.  As someone who is breaking into the business intelligence space, the understanding of the fast paced disk drive industry should be interesting.  Interesting because I like the disc industry is technical and moved very quickly.   But the excavator example to me is more compelling.  

The business intelligence industry right now is dominated by the large hydraulic excavators with large bucket-size made for  big industry.  Gartner’s magic quadrant is dominated by large enterprise players such as Microsoft, SAP and Oracle.  And their products are really out of reach for smaller business that can’t pay hundreds of thousand of dollars in licenses and maintain IT organizations consisting of half a dozen technical specialists.  Finally, the expensive consultants to implement a business intelligence system in the first place.  

Although these behemoth players have moved to cloud technology and at times tried to simplify their enterprise products for the smaller company, my observation is that they are still serving their established customers- the large enterprise.  Concentrating on these large enterprises, at this time will continue to bring them the growth numbers they need to keep stock prices high.  And the larger margins for incremental technology improvements, continue to work for these big global companies.

Producing downstream to lower margins has seemed nearly impossible for these large enterprise business intelligence firms.  Perhaps this is because of their existing cost structures and investment in licensing operations does not allow them to easily change.  Another resource that would not easily accept selling down market are the extensive and skilled sales representatives, who have been paid healthy commissions on million dollar deals.

It will be interesting if their leadership will be able to address technology disruption through acquisition.

Live in the vision of your business

There is an unending sense of urgency related to getting a startup off the ground.  Lately it seems that all I ever do is work or think about working on either keeping up with investor documentation, evaluating pivot opportunities or marketing in general.  Getting the business off the ground with our first saleable product is grueling.  It isn’t just the intellectual brain power that is exhausted but also the emotional and psychological energy of keeping a thick skin to endure the sometimes unsolicited criticism and of course the word “no”.

Needless to say I am tired- really tired.  

I repeat the words from our executive advisor, Scott Creighton in my mind when I get burned out.  “Keep living in the vision of your business.”  And its true, when you get stuck with the frustration of today, you are going to give up or go crazy.  By living in the vision, you can see the progress you are making towards it and you actually feel like you are doing what you are meant to be doing.  

The next think I need to do is let loose a little.  So this 4th of July we are taking a mini vacation with the family to Key Largo.  We are staying at a dive but beat up beach cottages can be such a paradise. I’m looking forward to kayaking on the bay, snorkeling at the reefs and grilling burgers in the evening.  This is much needed as we have sacrificed quite a bit of quality time with the kids for Bimotics.  I may squeeze in a business book while I’m there, but in general I’m going to put an effort into recharging and reconnecting with the other things that matter in life.

Hunting for media images

In order to save money, I leveraged deals from the Startup America Partnership to keep my pre-seed funds in check.  Once such deal I leverage is getting really affordable images from Bigstock Photo.  When you can’t afford a awesome graphic artist, being able to buy images is the next best thing. I have learned enough about user experience to know that just putting words on a page will make a big group of the audience tune out.

Let me tell you though, sometimes I can’t wait until we can get a artist.  It would be nice to rely on someone who has good taste and an eye for what will work. Further, I use the Preview application from my map to edit and resize my pictures. Someone who knows photoshop and other advanced editing tools could be a great help.

So much time is spent looking for just the right kind of image.  It is almost wondrous how you can just turn page after page looking for an image for a keyword you find anything that resonates.

2 Ways to improve the experience of showing for images online:

• Provide filters based on cheesiness or styles by decade
• Offer services for someone to built the 5th type icon because your customer has just found 4 that they like (that actually may already be there but not advertised as such)

A Lesson on Growth Hacking

Spent the last couple of days learning about Growth Hacking from Aaron Ginn at Stumble Upon hosted by Refresh Miami. I honestly had to Google what it meant, but I was excited to get perspective from the Valley nonetheless.  I went in thinking that the principles sounded a lot like marketing so i figured it was just another buzzword going around the geeks to make the even more exclusive.  But I learned that the Growth Hacking was much more essential than that.  And indeed it has a place between product engineering and marketing that is focused on what matters most to investors- growth.

5 key takeaways from the event:

1. Growth Hacking relies heavily on Lean Startup Principles such as sprints and measures
2. User Accounting:  new users + reactivation - churn - deactivations = user growth
3. When performing experiments, aways solve for the down case. So if the test case didn’t work, then you have learned something.  You can learn why it failed.  True scientists are always trying to prove for the null
4. The goal is to find what are the people in your channel are thinking and how they are looking and interacting with your product
5. The data science role, assists product manager in determining areas to focus on by identifying new opportunities and communicating the long run effects of the A/B tests

For now, Growth Hacking is mainly focusing on more of the B2C business model and products that make money from ads and replay on shares and links.  However, the basic tenets and lessons such as creating a metrics oriented culture, running a lean organization and focusing on actionable metrics definitely apply to B2Bs as well.