Saturday 24 February 2018

Code to nowhere: Why I'm writing newsletters instead of software

Startup diary

Stock image
Stock image

Richard Rodger

This is the third instalment of my weekly column. I'm writing about doing a B2B startup in Ireland and the catch is I have to do it in real-time, preventing me from sugar-coating my decisions.

This week I'm going to justify my decision to not write a single line of code (yet).

My startup is an enterprise tool to help conference speakers and organisers connect with each other. A software minimum viable product (MVP) would be an app where you can register, sign up for conferences, get lists of speakers, get reminders for upcoming events, integrate with your calendar and share your trips on Twitter.

I could be writing the code to do that right now.

Instead, I'm writing a newsletter for conference speakers that helps them become better speakers. It's a lot of manual effort and takes about a day to put together. I try to source high-quality content and I even pay for some of it. The newsletter lets me connect directly with potential users, and lets me do real market research. Although the content is free, your attention is not. Deciding to subscribe and then read a newsletter is a deliberate expenditure of your precious attention and your willingness to do that is a real measure of the viability of my business idea.

For all these reasons, I choose to write and publish a simple newsletter as my MVP rather than write an app.

I do this, despite being a software developer by trade, which grants me something of an unfair advantage in the startup game.

To understand why, let me tell you what I tell a number of early-stage companies who retain me as a technology adviser. I give them all the same advice: don't build software. Find a different way to validate your market. This is what I'm doing with a newsletter and I'll take you through my numbers and results in a moment, so you can judge whether it's working.

The development of a prototype system, a working demonstration of your idea, as a website, or a mobile app, seems like something you just have to do. All the advice out there tells you to be lean and agile. You must build the smallest, simplest version of your idea and get it into the market to validate your business hypothesis. Then you can iterate and improve, to find that most precious of startup goals, product-market fit. You've finally built a better mousetrap and people will beat a path to your door.

But here's what actually happens.

If you can code, and if your co-founders are also coders, you end up writing a lot of code, building a lot of features and ignoring your customers' needs. You stay in your comfort zone.

When things aren't working and your product has no traction, what do you do? You write more code and more features.

This is what happened to me in my very first startup 15 years ago. My product, a processing engine for very large data files, was so perfect and full of features that I had a bug bounty programme - I would pay you a prize if you found a bug. I only paid out three times in two years.

The great advantage that coders have when doing a startup is that they don't need to worry about finding or paying somebody to build the system. But this is also a great weakness, because it allows you to fool yourself into thinking you are building a business when all you are doing is acting like an employee in your own company.

If you can't write code, you face a difficult choice. Do you spend most of your seed funding paying contract developers to build your first version, or do you give up a great chunk of equity to an unproven senior developer who wants to have a go at being a CTO?

I've spoken to so many teams over the last year that are in this position. My advice is always the same - just don't write any code. Find a way to prove your business first. A MVP is something that you can do manually if you have to, it does not need to be automated. Put up a simple website with an email link, and take orders by hand. If your product is supposed to make something cheaper using the power of software, do it the manual and expensive way yourself to get the show on the road. Find a way to provide value that eases the pain of your potential customers, even if it makes you life more painful.

The problem of building a software MVP remains. It is a problem you must solve eventually, but it is a problem you can push down the road. The founding team at Airbnb is a great example. They pretended to be professional photographers and took all the early apartment photos themselves, manually uploading them. The back end software to manage apartment onboarding came later.

So how is it all going? I've promoted it via personal email, Twitter and LinkedIn, while this column helps a little too. I publish every Wednesday at 6pm and there have been four editions so far (you'll be about a week behind reading this).

Why send out the newsletter at 6pm? This seems like a good balance between the US and Europe. People who like to read in the evenings can do so on Wednesdays while people who like to read with their morning coffee can do that on Thursday. This is pure speculation on my part - if the newsletter is successful I'll invest effort in validating my assumptions. I use mailchimp.com to write and send the emails. They have fancy reporting but you have to pay for it. I will pay for it when it pays for itself.

I've included a chart so you can see subscriber numbers. These are growing at about 20 a week. At the time of writing I have 109 subscribers. I think success will be 500+ subscribers by the end of this quarter (Q4 2017). Although these numbers are pathetically low when compared to an established business, they would mean that there are enough conference speakers out there that care enough about conference speaking. (If you are subscriber I promise to keep the newsletter the way it is - just for speakers - I rather enjoy writing it that way as well).

There is one other number that matters - the open rate - how many subscribers read the newsletter when it arrives in their inbox. At the moment I'm at about 35pc, which by all accounts is pretty good. It will go down, but that's to be expected.

From now on, I'll report the subscriber count and open rate each week, and you can track the success (or failure) of the newsletter MVP as it happens.

Richard Rodger is the founder of Metsitaba. He is a former co-founder of Nearform, a technology consultancy firm based in Waterford

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