Inspiration -> Innovation
You have this amazing idea that hasn’t been done before, or at least, hasn’t been done well before. If you truly are the first in the world to be creating this new technology platform, how do you go from an idea in your head to an MLP (Minimum Lovable Product)? It is a fine line between innovation and Disruption, this will be defined in a later section, but if you ask yourself, how do you create something new that is simple enough to use, an early adopter can use it without any guides or support? In other words, how do you create and release the next iPhone, but as a Platform?
You are planning on bringing a next-generation idea to life that is either far superior to the current option or brand new. How can build a complex platform that is new to a User, but is simple enough that your CTS (Cost to Serve) is as little as possible? Especially when you are innovating or doing a new build, it is something that your Users may not expect or understand at first.
If you look in the world, there is inspiration for almost anything you plan on creating. If you’re building a new kind of marketplace for example, why not look to existing e-commerce sites that are custom-built, or even the top-10 Shopify sites because most of them have had unique changes to the cookie-cutter themes. Combine that online experience with live, in-person UX that you plan on becoming out-dated once your marketplace is live.
If your innovation on an existing site is all about solving major pain points, then there is a level of forgiveness that your early adopters will put up with and learn. The great thing about building a marketplace is that you’re building a community of users at the same time. Start creating social media site groups for your community to join and prompt them to serve each other. This will generate far more engagement and will create a new kind of community culture of helping each other.
There is an EdTech company that I’ve found that does this exceptionally well, Thinkific, which allows you to leverage its technology to create online courses to tech your own network about what you’re passionate about. They have a few Facebook groups that are basically ruled by the paying Users. If one User has a question, a more experienced User answers. If one User has negative feedback, another User comes to fight for Thinkific. It is this new kind of User-Culture that is almost impossible to have a monetary value associated with (CTS).
Creating this type of User-Culture will create your fanatic User-base and again, they will have a level of forgiveness because they are early adopters of your Marketplace. That means you have more room to innovate and truly bring your ideas to life.
Disruption VS New UX
Now, innovating on an existing product or experience by solving some core pain points is an amazing accomplishment, but you need to be careful to not go as far as creating a whole new UX that your User base is not expecting. An example of this is to look at a traditional e-commerce website or a marketplace, notice how most of the time, the payment or booking component is to the right of the product image gallery? I thought that it was time to change this common feature and put the payment/ booking component as a sticky footer.
The hypothesis I was attempting to prove correct was that this simple yet large change would increase the payment/ booking conversion rate. I am proud to say that I was completely proved wrong after re-releasing the page with the traditional payment/ booking component on the top right and running A/B Tests. In this case, traditional UX beat out Innovated UX because Users have been “trained” to look at the top right to perform the significant action. We found this out by watching screen-recordings, looking at heat maps, and funnels that the User’s mouse was always moving towards where they expect the payment/ booking button to be. With the minimalistic design, the sticky footer component essentially went unnoticed which increased our bounce rate.
This is a prime example of how sometimes innovating a certain part of a workflow sometimes causes more pain for the User even though the overall design and UX have improved.
Explaining The Transition From 0 to 1
Having the opportunity to bring your idea from 0 to 1 is essentially having a working prototype to test the viability of your new product to see if your Users love it or hate it. This is not an easy feat by any means, and most people will do it differently and in some cases the wrong way. What if there was a framework for you to follow that would allow you to test, validate, and build that doesn’t require a developer? One could say that the reason most people never get out past 1 to 2 is that they simply run out of money trying to build their idea.
I have made this mistake too, as I’m sure most founding Teams do, but we have learned from it and have completely adopted the Design Thinking framework to build and iterate on the design level, instead of in the code. Let’s use that same example in the above section; putting the payment/ booking component on the bottom instead of the traditional right side. If we would’ve followed Design Thinking at that point in time, we would’ve found out in the Validation phase that Users don’t see the component on the footer. In the case that I still strongly believe that it was the right thing to do, we would’ve created a high-fidelity interactive prototype to test with our real Users. I suspect that the results would’ve come back similar to the real findings, most people are trained to look to the right of the image gallery to proceed to the next step.
By practicing our listening skills, we wouldn’t have built the page with the component on the bottom, and that would’ve saved the business countless dollars and new Users. In a later section, we will drive into how you should listen to the data you’re collecting, but know when to still say no.
Required Reading
In the first few weeks of officially working for this startup, as a founding team member, we were reading anything and everything related to marketplaces, and the successful founding stories of entrepreneurs. We found that in general, most of these successful entrepreneurs had similar stories about learning from common failures to turning them into successes. In our case, we were entering The Sharing Economy by creating a rent-anything marketplace with a high level of sophistication that had not been done before.
The graveyard of failed Sharing Economy platforms is far and wide, but if you look at the Green Economy or the Circular Economy, there are many market indicators that you can have a successful and sustainable business. The main issue with creating a marketplace in this space is the time to wide adoption. Usually, the business will run out of money before the economics of the business are fully worked out and have built enough of a community that it starts to work.
The point of the above paragraph is in some cases to trust your instinct even when numbers and data are trying to prove you wrong. There is an excellent book by Malcolm Gladwell - Blink that talks about individuals who are able to predict outcomes by listening to their instincts, even against expert advice as well as people being able to make profound decisions in the blink of an eye. If you’re a founder or a founding team member, you will appreciate the learnings from it and will inspire you to think outside the box.
If you’re going the marketplace route, there are many excellent books to read or listen to, but try to find the ones that focus on the early days of the startup and the challenges they faced on a daily basis. The Upstarts by Brad Stone is another great example focusing on the lessons learned from feeling and experiencing the pain of a startup. An important lesson is that in the early stages of your business, it is okay to do things that won’t scale. Once you’ve created a manual process to for example curate postings on your marketplace to put in the Trending section, you can later build the technology to perform this task once you have other areas figured out.
Another great way to find important pain points is to read the “most critical” reviews of a mobile app. For example, the earliest critical reviews of the Airbnb mobile app on the App Store were about missing functionality and random crashes. These two simple pain points can easily be awarded to many apps today, the app isn’t a mirror image of the website, or vice-versa. That is how we knew that we needed to put as much focus on the mobile app first as possible and then follow it up with a functional website.
Active Listening While Saying No
There have been countless companies that have built their MVP without listening or evening having their target personas in mind. This without a doubt will result in a ton of technical debt of legacy code needing to be re-worked at some point which inevitably stunts growth. The trick is to listen to any piece of feedback, critical or positive, and keep it in mind when building.
This is why when you’re designing or prototyping, you need to create the personas to represent who you’re building for. This is incredibly important, especially with a marketplace model where you need to capture the needs of both supply and demand.
There are times when you will receive feedback from a User that is negative about a feature, idea, or process. It is important to keep in mind and possibly re-work your personas to incorporate that POV. The hard part is to determine when the Users are actually wrong and providing feedback that you should not listen to. An example of this is was at the rent-anything startup, we created a highly-secure signup process to ensure a safe and secure experience for all members of the community. We received countless requests and negative feedback about our core workflows that there were either too many steps/ clicks to complete, or we were asking for too much sensitive information.
This will be explained in more detail in the next section, Intentional Friction, but the lesson is that we listened and heard the Users complaining about these areas. What we decided to do instead of giving in and fulfilling their requests, we tried to educate the Users on the WHY. Why are we asking them to put in sensitive information? Why are we making such an important workflow with so many steps and clicks? Why wouldn’t we make it easier and boost our signup conversions?
The answers to these questions were all decided upon when we wrote our first version of the Terms of Service. We added a section in the Terms on Community Standards and our company’s promise to the community. It is because while we were drafting the Terms ourselves that we needed to think of the business pillars or foundation that we would base everything on. We determined that Trust & Safety would remain number one at all times and it was something that we could never compromise on. This would have a tremendous impact on many areas of the business and UX, but we will willing to lose conversion points in order to keep our community safe.
When creating an account on our marketplace, we would ask you to enter the following:
First name
Last Name
Date of Birth
Registered Address
Phone Number
Email
Profile Picture
With that information, we could run criminal background checks immediately at the point of creating an account. We could set a risk-score threshold that Users were required to meet in order to successfully create an account. Having the same process that every User had to go through was also creating a level of quality that most marketplaces don’t have. Users who took the time and effort to enter this information are more likely to adopt and use the platform, as opposed to a User that can just click a social signup button to create a profile.
Intentional Friction
We decided to focus on the fact that these workflows were intentionally long and asked for sensitive information because it created a higher quality community with Trust & Safety at the center of it.
In the early days of the startup, when creating our MVP (Minimum Viable Product) which is a lot different than the MLP I mentioned above, I hypothesized that if a User is willing to invest the time required to post an asset for rent, they were more likely to respond to a rental request. Even though during testing, or in production we received feedback saying that 10-steps were too many, we kept it the same for 3-years while we built out other areas of the platform.
In many ways, one could argue that we were both right and wrong because we went against common UX/Design best practices, and didn’t listen properly to feedback. We had great response times and conversions from our Owners that went through the process, but our actual Posting Process conversion was so low that we lost thousands of unconverted assets. The friction in this process was to qualify the Owner and ensure they care about the asset they’re posting for rent. The feedback was simply it was too many steps, and the funnel proved this to be true.
We decided that the Posting Process would be our second feature that we create version 2 of during the process of moving an MVP to an MLP by leveraging the Design Thinking process. What we found was that many of the questions during the process only needed to be answered on the first posting, or could be defaulted to an answer. Along with many other improvements, we brought it from a 10-step process to 4-steps and increased conversions from ~25% to ~75% in the first 60-days.
What we learned was you can have your cake and eat it too because we were still asking the same questions, but with a drastically improved UX workflow. We could have listened too much and removed a lot more questions and created a bare-bones process, but that would have compromised the integrity of our Community Standards that were decided upon before we even had a single User.
Writing Your Terms of Service
I highly recommend that you either be heavily involved in the creation of this document and the related agreements and policies. There is so much to be learned by performing the research of similar companies and reading their Terms and Agreements and it makes you think of the possible gaps you need to fill or pain points to solve with your business.
We created our first draft of the Terms before even having our first User, and it was an excellent exercise that helped drive our Business and Product Vision years later. Another benefit of writing the first draft yourself is the money saved on a lawyer using a cookie-cutter template for your unique business. Do not misunderstand, you absolutely need to have it reviewed and approved by your lawyer, but they do not need to write or be the ones to think of the unique business cases you’re solving or need to protect yourself on.
For the first time writing your business’s Terms of Service or Terms & Conditions, you will end up with a Frankenstein document of copy and pasted sections from other similar companies. This is a perfect place to start because you’ve been inspired by others who are currently running a business and have potentially faced these problems. Therefore thinking of those edge cases that you haven’t thought of yourself or haven’t come across yet.
We recommend that you simply start with the outline of the document and then fill it in later by adding the main section/ clause headers in first, subsections next, and then the words last. If you start at the end of the document and work your way to the start, you will unknowingly think of it differently and add new sections as opposed if you went the traditional route of start to end. Think about your Terms as the User Journey, User Standards, Quality of Service, and Protection for both the business and the User.
In the end, you will have a masterpiece of a document that will help evolve your Business & Product plan.
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