Startups: On Being Your Own Customer

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Startups: On Being Your Own Customer

 


Many of the successful startups I’ve known or been associated with were originally started because the founder was looking to meet her own needs and requirements.  

The story is quite simple and goes something like this: 
  1. Technology person has some need (either personal or within her current employer)
  2. Looks to find a solution to this need
  3. Doesn’t find anything that’s quite right out there
  4. Develops software that fulfills the need
  5. Creates a startup/business around the software


So, what happens when this story starts to unfold is that the founder becomes her own first customer.  She’s defining the business requirements, designing the product and testing it.  Sometimes, all within her head.  Though this is a highly efficient way to do this (and overcomes many of the challenges of translating a user’s needs into a working software product), it has a few challenges. Some are obvious, others aren’t.  So, here are some thoughts on the pros and cons of being your own customer.

Thoughts On Being Your Own Customer
 
  1.  Solving A Real Problem: There likely really is a problem (i.e. it is not imagined).  I can’t tell you how many startups I’ve met that try to solve a problem that is later determined to either be non-existent or not of sufficient magnitude for anyone to pay anything to have it solved. 

  1. Passion For The Problem:  If you’re solving your own problem, particularly if it’s acute enough, chances are you’ll be more passionate about devising a solution.  Passion is a very important ingredient in the startup adventure as it will help get you through the tough times.  Most of the time, if you’re working on a problem you actually care about, even the long days won’t seem quite as long.

  1. Extrapolating From A Single Data Point:  When you are your own first customer, the tendency is to assume that many people have the same problem you do and that they need it solved in a similar way.  This is not always the case.  If you’re not careful, what can end up happening is the same trap that many consulting companies that want to be software companies fall into:  They build a product that works in a very specialized situation, but cannot be leveraged easily for multiple customers.  So, even if you are your first customer, it’s highly recommended to get some other customers as early as possible so you’re getting more than one perspective.

  1. No Loss In Translation:  One of the challenges in developing software is extracting from the end user/customer what the actual needs are (and developing a design around these needs).  Unless you have a lot of experience with this, it is easy to make mistakes as the customer is not used to describing his problem and things can get lost in translation.  By being your own customer, most of the early conversations are with yourself (and occur in your head).  This circumvents this problem.

  1. Undue Product Influence:  Once you start bringing on additional customers (other than just yourself), it may become hard to balance the requests from “real” customers vs. yourself.  There’s a tendency to work on the features you want instead of the ones that will please other customers.  It’s easy to rationalize this by thoughts along the lines of:  “The other users are simply not understanding this yet, but once I develop the feature, they’ll think it’s really, really cool!”.  


Example:  I am my own customer for my startup, HubSpot.  The OnStartups.com site is run entirely on HubSpot.  As such, I often have new features I would like to see added to the platform.  In a “normal” environment, I’d have to convince the supplier of the software that my feature was important and would be of interest to many of their other customers.  But, since I’m my own customer, I don’t have to go through this rationalization and I can just “go do it”.  This is both good and bad.  Good, because I get what I want.  Bad, because it’s not always what the remaining customers care about.  
  1. No Pricing Feedback:  An obvious downside of being your own customer is that your perception of the value of the product is not relevant.  Simply because you think you would have paid X amount of money for your product is usually not sufficient evidence that others will share your point of view.  


What about you?  Have you ever been your own customer?  If so, what did you learn from the experience?  Leave your thoughts and ideas in the comments area.

Posted by Dharmesh Shah on Thu, Aug 24, 2006

COMMENTS

It's pretty impressive that you managed to write this whole blog post without using the phrase "eating your own dog food" even once ;)

posted on Thursday, August 24, 2006 at 2:06 PM by Yoav Shapira


Dharmesh I can relate 100% to your latest article. Back in 1996 I was running my own small consulting firm. I constantly battled with collecting timesheet and expense data from my consultants out in the field in order to complete timely billing. I ended up creating a very simple web based application for my team to use. It greatly improved my back end processes and gave me more time to focus on more important items.

I thought others were probably suffering similar headaches so I beefed the tools up a little and in 1997 launched OnlineTimesheets.com and OnlineExpenses.com. Initially, we were our biggest customer and continued to dream up cool features we thought others would like...and hopefully attract more customers. Sometimes we hit the mark...and sometimes we wasted time on things our growing customer base could have cared a less about.

Over the years, we learned to turn to our customers and let them drive the feature set. We would solicit feedback, review questions, figure out why we didn't close a particular deal, etc. We would compile all this information and use it to help drive our product direction and feature set.

Ten years later our platform has evolved into a very well rounded suite thanks to the thousands of users we have listened to. We also use our customers as sounding boards for new features we are adding. Once we think we have the requirements right, we solicit feedback from our customers to get their valuable insights. Many times we think we have something nailed and then our customers offer a view or perspective we had not even considered. This type of feedback is very valuable.

As far as pricing is concerned, this is always a battle. You don't want to be too cheap...nor too expensive...finding that middle ground can be challenging and is always a moving target.

If I could do it all over, I think initially I would have offered our service for free to a limited customer base. This customer base could have been used as a beta and help drive our initial offerings prior to making our service widely available. If we had taken this route, I think our products would have had earlier success and a fewer growing pains...but hindsight is always 20/20!

Keep up the great articles!

Thanks,
Mike

posted on Thursday, August 24, 2006 at 2:16 PM by Michael Palavido


Another benefit of being your own customer is that you have a subject area expert at hand -- you. If you need something than you probably know a great deal of what is required to know to create it.

I've seen many projects resolving real problems, but with the developers having only a vague idea of the area knowledge.

posted on Thursday, August 24, 2006 at 3:21 PM by


A great article.

The idea cuts many ways but I think crucial is the Internet and especially blogging. In the traditional world you are pretty much stuck with the people you find. For a tool with limited demand you might never find anybody who really needs it.

With the Internet things are improving. You have a chance of connecting with a thinly spread group of like minds.

Maybe it's synchronicity but Eric Sink has just published an article about getting a high percentage of a small audience. This ties in neatly with your's.

posted on Thursday, August 24, 2006 at 8:37 PM by Mike Gale


Dharmesh-

I absolutely agree with this post. One of the reasons why we are launching I'm in! is due to the pain of trying to organize social group travel ourselves. Bringing personal passion to a problem you've experienced creates amazing momentum for a company.

Brian

posted on Friday, August 25, 2006 at 10:23 AM by Brian Harrington


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