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Pricing your product: it doesn't have to be so complicated
In the last week I’ve talked with a few early stage startup founders about...
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Peter Thiel’s CS183: Startup - Class 9 Notes Essay
Here is an essay version of my class notes from Class 9 of CS183: Startup. Errors and omissions...
Photo credit: Claudio Cicali
Recently I started researching on different ways to keep customers for SaaS companies. Among the other things Churn rate stands out as the most critical metric for a SaaS company.
The term “churn” is used in many contexts, but is most widely applied in business with respect to a contractual customer base. Churn rate, when applied to a customer base, refers to the proportion of contractual customers or subscribers who leave a supplier during a given time period.Wikipedia
Customer churn rates range from 7% to 40% in various industries. Slowing this customer churn rate is crucial to the success of your company.
Customer acquisition is more expensive then to retain them so its crucial to pay attention to the customer churn rate and find ways to retain your customers.
Below are some quick tips to reduce the churn rate:
- For a B2B offering one of the ways to reduce churn rate is to offer 2-3 year contracts with annual billing. This will help grow revenue too.
- If your product is accumulating and manipulating lots of data the switching costs to another vendor would be high and your customers will less likely leave.
- Do not target very small companies ( 1-10 employees ) as your main customer base. They regularly fail and go out of business.
- Always have something to up sell to your current customers. This will engage them with your company in a stronger way.
Are you following any other way to keep your customers? I would love to hear your thoughts on how you are working towards reducing the churn rate.
Thanks to Stephen P. Anderson for his answer. I thought this should be a blog post as it is full of good information.
UI elements:
- “Sticky” headers/sidebar content - critical elements stay fixed as you scroll down the page (the way the gMail header stays fixed as you scroll through an email, lots of “share” functionality on blogs/magazines stays with you as you scroll down the page). See also http://fab.com/inspiration/ main nav. The text formatting options in Quora and Basecamp Next stay with you as you write longer posts, like this one!
- Infinite scroll (mentioned in question)
- Responsive layouts. ‘Nuff said about this!
- Form elements that don’t look like form elements - look at www.tomorrow.do or www.moredays.com
- Direct manipulation of objects (vs toggling between CRUD states). See howminutes.io puts you directly into the meetings page
- Web fonts - especially more humanistic/geometric typefaces like Proxima Nova, Museo Sans, and (soon) Gotham. See http://www.fastcompany.com/
- More “discoverable” controls (for better “cleaner interface” or worse “how do I do x…!?”); the Metro UI from Microsoft is able to produce cleaner screens because secondary elements are “hidden” in corners and edges (see:http://msdn.microsoft.com/en-us/… )
- Appropriate use of 3D effects - see http://selection.datavisualizati…
- Circles! Google + circles, or course. But also things like http://branch.com/featured# and the circle avatars in Basecamp Next
- The ‘+’ that changes to an ‘×’ (and vice versa) - see Path mobile app andhttp://www.teehanlax.com/work/ (sidebar navigation)
- Drop down options loaded with information and even pictures (modern drop downs often aren’t based on an actual UI drop down controls)
- Bigger type sizes, hit areas, buttons and white space - so that Web apps might also be touch friendly w/o a lot of refactoring
- Options that resemble “cards” (think Pinterest.com and all the clones)
- A move away from noticable gradients and drop shadows (still used, just in a much subtler way)
- “Fake” drop shadows or borders - the ultralight 5 pix shadow that doesn’t “fade” away (Google apps do this a lot). Look at the Quora border when you’re adding a comment.
- What I’ll call “As you need it” functionality - instead of functionality being exposed by default, it’s presented in a series of sequenced moments (clicking on “add a comment” link or box turns into expanded box with more options, OR rating something exposes a comment field
- Direct manipulation of default data, vs wizards to set things up
- Auto save functionality (vs big “Save” button)
- More drawers and slideouts from the top, bottom and edges.
- Inline expanding areas for additional information/actions
- Very, very subtle textures, to draw light contrast that guides the eye through a page. See http://subtlepatterns.com/ as a resource for these. See Pinterest, Basecamp Next, and Branch.com as examples of sites with this subtle background that draws your focus to the content (focus area)
- Flat, monochromatic, small icons for common actions. Seehttp://twitter.github.com/bootst…
- iPhone like notifications - see LinkedIn or Quora.com - little number next to nav label
- Addition of illustrated elements
- Search boxes that “expand” (width) on click
- “Kiosk style” buttons - rather than present 4 radio buttons options, sites opt for the more visual display of text in rounded corner boxes (which actually aids in spatial recall and creates a bigger hit target)
- Conversational UIs - rather than a form label and drop down, you see a phrase with the drop down options worked into that phrase. For an extreme example of this (and the “kiosk style” buttons mentioned above) check out http://ifttt.com/ (go create a “recipe”)
More general patterns:
- A move away from tabbed navigation (in Web apps). This follows the “focus on content, not chrome” argument put forth by folks like Luke Wroblewski — applies to Web apps as well. Notice how the revamp of 37 Signals Basecamp Next dropped tabbed navigation in their redesign
- Fun or delightful elements - thank you Mailchimp.com,http://photojojo.com/store and many others!
- More white space, padding (for reasons of touch, see above)
- Bauhaus, minimalist design - Google redesign, Microsoft, Amazon redesign (header area); this “minimal” styling uses grays or desaturated colors, so that when a bright color is used, it’s used to draw attention.
- …and yes, Skeuomorphic design elements, too! (I credit this to the popularity of the iPad)
- Single page apps - lots of different “states” on a single page no longer feels like moving through linked “pages”
- Very open layouts - less boxes and more lines/spacing to visually group areas; boxes still used on core content, but not as much for chrome/layout
- Single column layouts - less distracting and mobile ready
- More friendly, conversational language around form elements
- Content being given proper information design treatment (varying type sizes, caps, shading, etc. to aid in understanding
- Increased focus on nice, legible typography - see https://medium.com/p/8d6e7df7ae58 as an example
- Immediate immersion vs laborious registration processes- see medium.comhomepage (pre-account); this comes from the game design world where you follow with account info after someone’s “played” or interacted with you service.
The death of my old LG VU. Funniest error ever!
File: Dog : UI
What is that?
Here is an essay version of my class notes from Class 9 of CS183: Startup. Errors and omissions are my own. Credit for good stuff is Peter’s entirely.
Class 9 Notes Essay—If You Build It, Will They Come?
I. Definitions
Distribution is something of a catchall term. It essentially refers to how you get a product out to consumers. More generally, it can refer to how you spread the message about your company. Compared to other components that people generally recognize are important, distribution gets the short shift. People understand that team, structure, and culture are important. Much energy is spent thinking about how to improve these pieces. Even things that are less widely understood—such as the idea that avoiding competition is usually better than competing—are discoverable and are often implemented in practice.
But for whatever reason, people do not get distribution. They tend to overlook it. It is the single topic whose importance people understand least. Even if you have an incredibly fantastic product, you still have to get it out to people. The engineering bias blinds people to this simple fact. The conventional thinking is that great products sell themselves; if you have great product, it will inevitably reach consumers. But nothing is further from the truth.
There are two closely related questions that are worth drilling down on. First is the simple question: how does one actually distribute a product? Second is the meta-level question: why is distribution so poorly understood? When you unpack these, you’ll find that the first question is underestimated or overlooked for the same reason that people fail to understand distribution itself.
The first thing to do is to dispel the belief that the best product always wins. There is a rich history of instances where the best product did not, in fact, win. Nikola Tesla invented the alternating current electrical supply system. It was, for a variety of reasons, technologically better than the direct current system that Thomas Edison developed. Tesla was the better scientist. But Edison was the better businessman, and he went on to start GE. Interestingly, Tesla later developed the idea of radio transmission. But Marconi took it from him and then won the Nobel Prize. Inspiration isn’t all that counts. The best product may not win.
Rand Fishkin - Inbound Marketing for Startups: How to Earn Customers Without Paying
As usual I enjoyed Rand’s talk. I recommend this video to everyone. You will not be wasting your time.
About Video:
Rand Fishkin is the CEO and co-founder of SEOmoz. He spoke at a rather impromptu Hacker News Meetup, held at Forward in Camden.
This video was produced by Keyone Productions. keyoneproductions.co.uk
I have been reading the book Running Lean from Ash Maurya. He has some excellent points on why the Startups are hard.
1- There is a misconception around how products get built.
Those of us who are following the tech blogs see that many products launch every day. Some of these products become really successful. We often think that the success came overnight which is not true. It takes a long time of hard work and some times many iterations until a product is a success.
Steve Jobs on IPad:
“Years in the making”.
2- The classic product-centric approach leaves most of the customer validation until after the release
We are all passionate about developing the product and often times skip the customer validation and jump on to development. We focus on the solution more than the problem and end up adding unnecessary features to the product. The end result may not be what customers actually want. For this reason we need to involve the customers in both idea validation and product development. Steve Blank calls this feedback loop “Customer Development”.
3- You can not ask the customers what they want
Ash quotes Henry Ford:
“If I had asked people what they wanted, they would have said faster horses”
—Henry Ford
Customers may have all the answers to your questions about the problem they are having but it is our job to find the solution for them. Like Henry Ford we need to think beyond our time and out of the box and come up with the best solution.
Favorite salad - with Avocado and Mango
Great observations from Steve Blank
