10 Crucial Questions for B2B Startup Founders: A Workshop at Business of Software 2009
Published by Martin Kleppmann on 18 Nov 2009.
I have a confession to make. We started a company, developed
a product and got hundreds of people using it – but we still don’t know where
the product is actually going.
Ok, the elevator pitch is pretty straightforward:
Go Test It helps web developers to test automatically whether their site works
correctly in different browsers. The technology works well and lots of people are using it
But how much does that really tell us? Is it really the web developers who
need us, or should we aim at the testers, the user experience managers, the web content
administrators, or the sysadmins? Are those people in big enterprises, small web consultancies or
they use? Do they have a dedicated QA team or do the developers do the testing themselves? Does
their work have to be signed off by a client or are they doing it for themselves? How do they
currently test their application, and how would we fit into their workflow? Do they develop websites
for a particular industry, e.g. education, finance or healthcare? Do they need a big consultancy
contract, do they require the product to be customised, or do they just want a straightforward
self-service sign-up over the web?
It is simply not possible to serve all different market segments and niches at the same
time. You’ve got to choose: resources are limited, and you’ve got to pick your battles wisely. But I
am guilty of not properly thinking through the segmentation and figuring out the best way of
targeting a particular niche.
Business of Software 2009, Joel Spolsky
organised three startup workshops aimed at
covering the main areas of difficulty faced by software and web startups: marketing, product
pricing, and finding your first 100 customers. Exactly those areas in which I am guilty of
Neil Davidson and Simon Galbraith of
Red Gate were in charge of the “finding your first customers” workshop,
and they asked me to help them design the workshop. Since my startup is one of the companies in
Red Gate’s “accidental incubator”,
and it’s at the stage of finding the first 100 paying customers right now, Neil and Simon suggested that we use
Go Test It as a case study for the workshop.
What we wanted to do is to ask a number of key questions about the market
positioning of a product and aspects of the sales process – crucial questions for startup founders,
but also questions which are easy to ignore if you focus too much on the technology. By discussing a
case study in the workshop, the participants could practise thinking about and answering these
questions in a fresh and unfamiliar context, and develop tools and techniques which they can apply
in their own companies. We chose questions that are relevant to any early-stage B2B software
The workshops worked out really well, and so we would like to release the materials
we created for this workshop under a
Creative Commons license and make them available
to startups everywhere. You can
download the worksheet (PDF). I have also written up
how we structured the workshop and what we learnt in the process.
Below I have added some notes to clarify what
we mean with each of the questions. I give several illustrative answers for each, but please
remember that they are not multiple-choice questions. The whole point of the exercise is that
you come up with your own
Sales objective: what are you hoping to get out of your customers?
At first sight this seems a pointless question: of course you want your
customers’ money! However, think about it a bit harder. Maybe getting some great case studies
and testimonials is worth even more than the money, because they will help attract
more of the right sort of customers. Maybe you really want feedback to help improve the product
(feedback from paying customers is worth much more than feedback from free-riding users, because
paying customers really care!), or maybe you want to learn about the sales process – what does
your customer’s org chart look like, what are their key external relationships, and who are the key
people you need to get onto your side? The things you can learn from a customer are potentially
worth a lot more than the cash they hand over to
What is the pain point addressed by the product?
A standard question, but worth revisiting from time to time, because the answer
may not be as obvious as you think. In the case of Go Test It, the obvious answer is “needing to
make sure that the site works in all browsers”. But ask yourself: why does it need to work in all
browsers? To provide a good experience to all users, so that they continue using your site even
if they are using an obscure or buggy browser? Or maybe it’s a matter of meeting a compatibility
warranty given to a client, or passing certain acceptance tests? Is it a tool for people to
cover their back within their organisation?
Or maybe the customers currently do manual cross-browser testing, and their
real pain point is actually the release cycle duration (very slow in manual testing), or the
staff requirement (manual testing is too expensive), or staff motivation and turnover
(manual testing is repetitive and boring, leading to low job satisfaction)?
What is the sales process?
Startups often worry a lot about marketing (figuring out who to target and how to get on their
radar), but neglect the following step: now that you’ve got people’s interest, how do you convert
them into paying customers? Giving them a form to enter their credit card number is well and
good, but what about people who trial the product but never quite get round to signing up to the
paid version? Will some follow-up emails be sufficient, or do you need telesales people to get
on the phone and talk to the customers? Do the customers require help importing their data into
the system or even an integration project? Maybe you need to give demos or seminars at
customers’ premises, or even learn to play golf?
What do you want your marketing to achieve, and how could you measure it?
Your end goal is probably “get lots of paying customers”, but there are various
possible intermediate goals along the way. Depending on your strategy, different things may be
important. Do you want to maximise the number of free trials to which people sign up, or the
number of newsletter signups, the number of Twitter followers or community members? Or
would you rather focus on a small number of customers and optimise for high-quality leads and
maximise level of usage? Do you want to go “viral” and maximise the number of referrals from
each customer while minimising the time to referral?
Intangible but maybe equally important aspects of marketing might be promoting a
positive brand image, building a good reputation, and encouraging users to become
passionate evangelists for the product. You might still try to measure these kinds of things by
monitoring Twitter for keywords and informal surveys, but they are difficult to measure
quantitatively. Whatever you want your marketing to achieve, remember that your resources are
limited, and hence you should probably focus on two or three achievable and measurable
What will you do to achieve your marketing goals?
This is a question about marketing channels: how are you going to get noticed?
Social media and online communities, comprising blogs, Twitter, LinkedIn, Facebook etc. are
probably the most hyped these days, and for some market segments they are indeed an excellent
marketing channel. But you could also consider networking in the right circles, PR
(including connecting with influential bloggers and getting them to write about you), attending
conferences and trade shows, creating publicity stunts, competitions and much more. Hey,
even advertising isn’t dead yet.
How will you allocate money and time over the next 3 months?
This does not have to be a detailed budget, but a quick sketch of a pie chart will
help you to think consciously about your priorities and make them actionable. How much of your
resources should be allocated to engineering, sales activities, various marketing channels, learning
from customers, etc.?
How will you price the product?
It’s easy for engineers like me to spend a lot of time thinking about pricing,
because it’s more within our engineering comfort zone than most of the other questions on this
worksheet. Yes, it’s important (that’s why we included it), but only in conjunction with the other
answers. This is our only multiple-choice question, encouraging you to answer it quickly and move on.
Do you want to publish the pricing on the website for everybody to see, or do you want
prospective customers to contact you for a quote? Will you have a fixed price list, or will you
negotiate pricing individually per customer? And the most tricky: if you can’t do flat-rate pricing,
how will you split pricing into bands? By number of users? By length of tests? By level of usage? By
availability of features?
What will you change about the product?
Once you have settled on a particular market segment and strategy, certain
limitations in the product will become apparent: maybe some additional features are needed, maybe
the technology needs to be presented differently in order to fit with the users’ point of view,
maybe some unnecessary features can be removed. The important point is that product changes should
be informed by the market, not just a preconception of what users will want.
Top 3 things you must do in the next 3 months?
This could be anything: marketing, sales or engineering activities. The key is
just that these tasks must be actionable: it must be clear how they can be done and they must be
feasible now. “Build a community of 1,000 people working in this field” is not actionable, but
“set up a Facebook page, blog about it and invite all of our friends to it” is.
If your users are superheroes, what is written on their T-shirts?
As a final question, remember that users are human beings too. They don’t
particularly care about your product as such, but they probably care about things like doing a good
job, looking good with their peers or boss, having a sense of belonging, getting to go home early,
and making a difference. Your product should turn your users into superheroes: give them exceptional
powers which make them proud! So proud that they will want to wear your product motto on their
T-shirt. What will it say? (Hat tip to
Kathy Sierra, inspiration for this question.)
If you can answer all of those, you will have covered a lot of ground and will have a
pretty good idea of how your product fits into a particular market segment. And in case that wasn’t
enough, here are three bonus questions from our drafts which didn’t make it into our final
Which key factors determine whether a potential customer will convert?
This question complements the sales process (question 3 above). If the sales
process is about the actions you can take to convert interested people into paying customers, then
this is about setting the right environment for conversions. What do customers care about? Is it
the ease of integration with their workflow, the user experience, the amount of learning required,
the level of support, references from other customers, key features, integration with systems they
already use, reassurance that your company is not going to disappear overnight, or anything
What underlying need is satisfied by the product?
We have already talked about the pain point above (question 2), which defines why
there is a need for your product. However it can be insightful to look behind the pain point and
figure out why it exists: the "need behind the need" in the words of
Paul Kenny. When a customer buys this product,
are they really buying reassurance (security, peace of mind, covering their
back)? Or are they buying ego (competitive advantage, ability to overcome
difficult problems)? Are they interested in convenience (making their life
easier), saving money or reducing risk? This underlying
need should determine the light in which you present your product and how you pitch it.
What would you consider to be success, and how would you decide whether to
abandon the project?
This is an interesting one: not many people talk about criteria for success and
failure. Usually success is unbounded -- you always feel like you could do better, no matter how
well you are doing. And failure is something that is not talked about, as if merely contemplating it
would bring about a jinx or induce an unwanted pessimistic vibe. However, if you have a quantitative
criterion for deciding when to cut your losses, you avoid giving up too early just because you're
With all these questions, keep a few principles in mind:
- Resources are limited, so you should focus on the things which are likely to be
- “Just try it out” and “talk to our users” should be part of any strategy, but
they are not strategies in themselves. You’ve got to know what you are looking for and what
questions to ask the customer.
- Argue why the actions you chose are the most appropriate, given the product,
the market and any constraints.
Download the worksheet (PDF) and
an example we filled in (a contrived example based on
the fast food industry – not model answers, just to illustrate the kind of answers we’re looking
for). Please also see my
separate post on how we ran the workshop.
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John of Austin on Flickr;
Creative Commons license.
Update (2009-12-18): Added scanned example worksheet.