I won’t buy Cryptocoins to use your service (1/2)

3 minutes

cryptocoins bitcoin eth litecoin

A few weeks ago I was at a startup conference and the inevitable happened: I met a talent-marketplace (hire-a-freelancer) startup that planned to sell their own crypto-coins to be used as tokens on their platforms before launching their product…

Me: Why would I buy your coin / token?
Founder: To use the service and pay for the freelancers
Me: But, why can’t I pay in dollars?
Founder: But that’s the whole point…
Me: I don’t get it. Why would I use your service if I need to buy a specific coin and carry the burden of all the exchanges…

and it’s true, I won’t. Nor will anyone else.

The craze of crypto-currencies is in it’s peak; there are over 1,500 coins listed on CoinMarketCap. It doesn’t make sense for an individual to have a wallet full of coins and tokens lying around in case they need to use one or the other, add to that the accumulated cost of moving the coins and exchanging them.

In the example above the founder was hoping to use his token as a currency, but had forgotten one small glitch: the user. A talent marketplace requires a high adoption rate to survive as it makes money from taking a small percentage of payments and occasionally advertising (other revenue streams apply, but these are the most straightforward). For that, the founders need to aim for high adoption and retention rates, and decrease barriers of entry.

As a first time user, the need to buy a token to access the service is an immediate obstacle.

  • How many companies/individuals that hire freelancers have access to crypto-wallets, coins, etc?
  • How many are willing to buy coins that they may or may-not choose to convert back to ETH or BTC later.
  • You have already lost the client to thinking of how they’d get into your service, instead of placing the solution to their outsourcing problem at the core of your offering.

adoption rates for common technologies today, the cyrpto one is yet to show up

Major tech companies and upcoming ones are, will, and have considered ICO (Initial Coin Offering) as an alternative funding method to traditional investors or IPOs (with their lengthy processes). However, we are in the peak of hype over crypto-currency, and it’s still a super high risk enviroment. As an idea stage startups, the odds are already against you, so unless your startup’s core function is crypto-related, maybe it’s best you focus on your business.

There are many technologies that will disrupt the market and the rate of change will only increase in the next few years. Founders have to embrace changes and adopt new technologies on the go, but they also need to take calculated steps that they won’t regret.

Are you considering launching an ICO, considering the following:

  • How will this affect my core business?
  • How will this make the consumer experience on my platform better?
  • Am I forgoing potential venture capital support (financial and non-financial) that could help grow my business?
  • Can I withstand an un-forseen drop in overall crypto-valuation?
  • Do I understand how this technology works well enough or will I be at the mercy of my developers. Can I hire, retain and grow the right team to help me on this path?
  • If I’m paid in crypto-coins by my network, how do I plan to pay my existing non-crypto liabilities? Can you liquidate?

My two cents: Most people will pay for your service or product in their respective currency, your system will token-ize that value and run the service as needed. The average consumer will not need to know how, where and why. Your system will need to be optimized for the customer’s most seamless experience and your products best productivity. 

P.S. I do own some cryptocurrency (BTC and ETH). I’m not against crypto-currencies, I just see that the hype is deluding startup founders’ attention a tad too much.

Dear Startups: It’s OK to call your clients, It’s not OK to keep them holding

4 minutes

We’ve all been through it, you sign up for a fresh service, for one reason or another you don’t use the service and forget about it. A few month later someone from service’s side gives you a call to check why you have abandoned the service or up-sell features. You pick up the line as it’s a strange number in the middle of a busy day, meetings, or roaming and ask them to call back…

…and they don’t.

Below are three common mistakes I have faced that early-stage services (and established ones) in calling clients:

The Ignorant

I have two very similar stories on this one.

I got a call from a startup service in Dubai on my Lebanese number to explain what their service does and what features would “make my life easier”. I politely asked the lady on the line if their services are available in Lebanon, she was baffled and answered “no, not yet”, and then I asked if she’s aware that she’s calling me on a Lebanese phone number, which made her stutter a little.

Second time, my ISP called to let me know that they are rolling Fiber Optic in my area and find out if I was interested. I said yes and asked them to kindly send me the packages on my email so I can review them. The person on the phone asked for my email (which they had), and sent the email with the packages and required documents. The second step was quite baffling, by email, I was asked to share the google location on whatsapp to check if the service is available in my building! I sent the location to the email, only to receive an email apologizing that the service is not available to my building.

Lessons for founders:

  • Don’t waste your resources. If you are about to hire an intern or dedicate time from your team to call potential clients, dialing international calls for with no potential ROI is a waste of money and time.
  • Do your research. There are many CRM tools that can teach you alot of prospect clients, and whether you should be pursuing the lead or not.
  • Know your clients. In the case of existing clients, you already have lots of data about your clients that can help target your services without wasting your sales team’s or your clients time. I find it impossible to comprehend how my ISP doesn’t know where I live, they installed my service and show up for maintenance whenever I call!

The Flake

You get a call (again) in the middle of a meeting and ask the caller to call back after showing your interest in their service.

One, two, three weeks, no call. They call back about a month or two later, you ask them to send an email with further details. They don’t. Another person from the same entity calls you back a month later, and disappears again.

Lessons for founders:

  • Respect commitments. If you tell a client you will be calling at a specific time or day, please do call. It’s only basic professional courtesy. You may be forgoing a potential client.
  • Diversify your communication. When calling a client that is hard to get a hold off, or seems always busy, send them an email with your query or proposal. You’ll may be pleasantly surprised how efficient emails are (and still high conversion channels).

Mr (Ms) Right

This is my favorite type!

“The client is always right” is not always true, but accepting feedback is a vital part of client servicing!

I signed up for annual service that grants you discounts on F&B and entertainment outlets two years ago, in the hopes that it would cut down on my beach expenses (private beaches are quite expensive in Lebanon). I ended up not using the card the whole year, except once where it was rejected. I got home and sent an upset email to the service provider, who never replied. I checked their social channels which seemed quite, so I assumed the company had shut down. A few month later I get a call from the same service provider asking if I’d like to renew my service, which I declined. The caller asked to give them a second chance and said he’ll send an email with more details and new offering. I explained what happened with my negative experience and no one answering my email, etc. Of course, the caller said it’s “impossible” they didn’t receive any complaints and he’ll look into it. Needles to say I never got a follow up call nor an email. That was about September

A few weeks later I get a call from another team member with the same repeated scenario, ofcourse she was also shocked no one responded to my claim. She said she’ll send an email. I never got the email. That was November.

Lessons to founder:

  • Respect your commitments. If you say you will call, call. If you commit to an email, send it. If you say you’re going to look into it, your client will be expecting a response.
  • Take feedback. If a client signed up and paid for your service in your infancy, they are a valuable client that has put their faith in you. People are forgiving of mistakes if treated correctly. Try it.
  • Convert dissent to loyalty. This leads us to the most important lesson that transcends all ages and platforms. If someone has taken the time to write you an email, tweet or message complaining, they want to talk about. They are disappointed and the correct way to handle it is to win them over to loyal clients. Yes, some clients go to social media ranting just to get freebies, but knowing your clients and doing your research can help distinguish between leeches and clients.

As a small business, startup or solopreneur, your first clients are important to validate your market, test your product and get feedback to grow. As an established business, your clients are your revenue stream. While Venture Capital and Investors helps you take your startup forward and expand, your users are what keep you going. Listen to them.

Do you have other customer service disaster(s) and types to share? Please do so below and add what would have been your preferred response.

How to impress investors and not get *eyerolls* from juries — on competition and target markets

4 minutes

I’ve been working on startup business plan competitions for over 6 years, and have connected with countless competition organizers, accelerators, incubators, and programs across the world. One of the most common *eye roll* moments for us all is the lack of market validation and understanding of competitive landscape by startup founders.

As the entrepreneur (also known as CEO) title becomes the hip thing to be, it seems a fewer percentage of people understand how to validate their ideas and benchmark competition. No matter how innovative, unique or ground-breaking your product or idea seem market validation and competition are vital to your business plan.

Your target audience can NEVER be “everyone with a smartphone”
It’s not true that you have “no competitors as my idea is very new”

Below is a list of ideas old, new, borrowed (and blue) and how to look to start addressing your competition & market.

Something New:
I want to launch a housing service for humans wishing to relocate to Mars.

Direct Competitors: Space X, RedWorks, Mars Ice House.
While none of the mentioned have dominated the market nor fulfilled the projects yet, they are quite ahead in research and funding. That does not mean you should not pursue your idea, but it’s important to be aware of what’s going on, even if only to use their fall-backs as learning.

In-direct competition: Earth. A planet that has relative perfect habitability for human beings with solid supply of oxygen and water. While planet earth is becoming more polluted, overpopulated and mismanaged, it remains your №1 competitor.

Market: 2 categories:
For sales: High-net-worth Individuals that are educated, technology-forward and space enthusiasts.
For marketing and mass-awareness: General space fans.
Actual size of these market-segments is to be determined through actualmarket size research exercises: identifying individuals that follow space fiction movies, books, popular websites like space.com or NASA. A survey of the target sales audience is also needed to identify perception, interest and potential pit-falls (e.g. I would not live on Mars if 5G internet is not available)

While the above is rudimentary, it’s a good base to BUILD upon to develop your product. A further developed and researched edition is needed to initiate a conversation with any potential investors.

Something Old:
An app that connects smartphone users with emergency centers to create faster response to crisis and save lives

In humanitarian startups the founder always assumes the target audience is everyone, since this service is “crucial to save lives”. While the founder hopes to have a universal reach, to develop a product they’ll need to start with an identifiable target.

Direct Competitors: Emergency+ (Australia), British Red Cross, Red Panic Button, iOS’s native Medical ID and more.
Also, all mobile devices have a emergency call feature that helps owners and people with access to the devices reach the police or ambulance faster, that features works on the dumbest mobile phones as well as the most sophisticated.

Market: Who will download this app?
How many healthy, young and active individuals (with low perspective / non-chronic conditions) would download a (perceptively) ominous app to their phone to use just-in-case?
I understand why someone with a chronic condition would find such an app handy. Within that category what are their actual needs, how does the app fill the potential gap in the existing services and what is the size of this audience? What devices do they use? etc.
How sophisticated, yet user friendly the application is is critical to understanding the target market as well (or vice versa). There are 100s of devices and cracking usability across all devices is a laborious and expensive mission.

Again don’t walk into a meeting with investors without the numbers. If you’ve done your work right it will reflect on how serious you are about pursuing your product’s development (or not).

Something Borrowed:
There’s no Uber in my city and I will launch one (+become a unicorn ofcourse)

I’m all for localization of services and addressing market needs. Lets be very honest, if Souq.com had not built an empire in the MENA region would Amazon have taken upon itself such a massive investment in a faraway land? A little unlikely. Local copies have a higher probability of getting acquired by their international players if done right and look like safe bets for investors.

Direct Competitors: This is very city specific. For example, Uber didn’t pick up in Tokyo as cabs are super easy to find and abundant. Many cities have cab companies that are reliable and one phone call away, public transport or owning a car is affordable and convenient.
Also, if Uber, Yandex or Didi were to add your city to their roaster (with their marketing power and robust infrastructure) would your business survive? It’s important to identify what your competitors are blind to in the local market and address that to keep your edge. Careem had scheduled rides, cash-on-delivery and business accounts long before Uber rolled them out as they addressed their local market needs.

Market: Everyone transports from point A to B. But many already use some form of transportation to get there. Who would be your primary target market? Maybe youth that don’t own cars yet, connected and technology savvy, looking to try something new? Or hard working Executives that would prefer to spend their commute working than frustrated at traffic?
You’ll need to research: the ratio of car ownership, daily commute routes and distances, cost of transportation, public transport and taxi mechanism in the city.
Also, do people use their devices to order … anything at all? How much consumer education is needed. Do you see a pivot in the near future that would spike people’s interest in ordering services via an app?

These are some of the straightforward questions that potential investors are bound to ask.

This post stems out of genuine shock at the disregard to research that I’ve seen (and others) from founders approaching competitions (who’s juries are generally investors) and using that opportunity to it’s full potential. Starting your own business is hard work, a lot of hard work! Treat every opportunity you embark on with value.

Your research should not stifle your ambition but it would help you avoid blind spots and make more educate pivots, it may even spare you a few sleepless nights and frustrated rejections.

This post originally appeared on Medium on Jan 25, 2018