Learn how to build what your customers really want

Part Three: Stop worrying about your competition and finally focus on your product

///This is the final part of the three part series: “The 10 most important things I learned, while building my first startup”. In part one, we talked about a strong founding team, the impact of your early hires and how to these influence the culture of your company. Part two dealt with the question: what to do before to scale your startup.///

The final part of this short introduction to startup life is dedicated to the most important tangentiale asset of your organisation: your product. Before we dive into that and discover a simple yet highly efficient way to actually know what your product should look like, I want to touch something every company is concerned about: competition.

Don’t care too much about your competition

When Homejoy closed down in mid 2015 we, admittedly, had a couple of stressful days. We literally just closed our A round days before. So understandably, our new VC wasn’t too happy about the overall market development and it took us a couple of calls to calm him down. After all, bad industry news is never good in the world of Venture Capitalists. We got a couple of interview requests from the Spanish press and spoke to some concerned customers, but overall we were less worried about this whole situation than you might think.

Mostly for three reasons: 1) we knew we had a superior product, 2) we are operating in completely different markets and 3) we frankly don’t give too much about our competitors in general.

How to build a product your customers love
Just closed a round of 1.5M€


This turned out to be somewhat of a repetitive thing. Our surroundings seemed way more interested in what our competitors where doing than we were.

So why didn’t we care? Well, first of all: we were way too busy with our day-to-day operations to really be on top of what might or might not happen around us. Sure, we read Techcrunch and other blogs but we didn’t spend hours trying to get the newest info before anyone else did.

The real reason however is: it does not help you in any way.

Think about it for a minute. What does it matter what your competitor is doing? How does it help you and your business to know how high their CAC is? The simple answer is: it doesn’t. Even if you are able to get access to this information, which you are probably not, it doesn’t make your business work better.

So better focus all your energy and resources towards building an amazing brand and product yourself.

Even though we started a year after Homejoy, we never tried to copy their approach for growth or customer acquisition. We knew, we didn’t have the $40M firepower to burn as much cash as they were and frankly, we also didn’t want to.

See, selling cleanings that are worth $85 for $19 doesn’t really make much sense. In the previous article I explained how we actually got rid of customers that didn’t contribute to our target unit economics.

So, this approach never really appealed to us.

Some Reasons for Homejoys Failure
Some reasons for Homejoy’s failure


Actually, the first time we really did look deeper into one of our competitors was when we acquired the Spanish division of Helpling, a Rocket Internet, company. We analysed their numbers and to our surprise, we found that even though they spend more than double the money, they served the same amount of customers. From a LTV point of view – we even had the better customers (as we got rid of uneconomical customers).

More funding does not mean more customers – and for sure not more success. Actually, I found more often than not, the opposite is true. If you don’t have the financial resources to run un-scalable and un-trackable marketing campaigns, you think twice about where to get the most bang for your bug.

The more money you have – the more pressured you are to spend it. And there are just so and so many meaningful ways for a startup to acquire high-value customers. So rather than looking what our competitors were doing and trying to run the same spray-and-pray campaigns we optimised our own channels to the fullest.

Your Product is Everything You Have

The second reason we weren’t really too concerned about this news, was because we knew the flaws of the Homejoy product. It turned out, as so often with well-funded companies, they were pressured to obtain a certain user growth. What that means is: high user growth (hypergrowth), month over month under any circumstances. That is a strategy that is fine if that growth is organic. If it is not, there are ways to achieve it by stimulating your potential customer base. And this works. For a short period of time.

If organic growth doesn’t catch up with the artificial one you end up in a vicious circle. Because every month you have to throw more money at acquiring more artificial customer than you already did last month. And to make things worse, most of those guys will churn. Because you only got them in the first place through incentives, like discount vouchers.

The only way to get out of this circle, is the make people really love your product. Therefore, you have to allocate a significant amount of your resources and time to actually improve your product.

The best way to do this, is to ask your active user base. Ask what they like about your product, what they dislike about it and which features they would like see. By feeding their input back to your engineering team, you make sure to actually build what people want. Thus, retaining your current customer base and also attracting new customers organically.

Let me rephrase this one more time: if you are busy opening new markets or testing new marketing channels every week you can’t really focus on getting the product right. But, if you do want to attract the right kind of customers and show sustainable user growth you do have to realise that your product is really everything you have.

If you fail to create this “WOW” effect and make your customer base love your product, you, as a company, will fail. Maybe not today or tomorrow, but in the long run you will run out of growth hacks that stimulated your growth in the first place.

In fact, your goal should be to make your product so good, that your users go to a bar and tell their friends about it and make them buy it. If your customers act as ambassadors of your brand you know that you are onto something.

The good news is: it doesn’t have to be perfect from day one. In fact, it most certainly will not. And that is ok. The key is to build a minimal viable product that from day one amazes a small group of people. This gives you traction and time to expand and make your user experience better – day by day.

Don’t try to build a product you created on the scrap book. What people want is often so far away from what you think they want. Build a small MVP, get it into the hand of real people as soon as possible and expand it with the most requested features first. As always: data is your friend. Evaluate what your users want to have in a data-driven way and let the rule of big numbers decide what you build and when you build it.

As the product guy, I know how hard it can be to say goodbye to your own ideas. But really, when it comes to building great products there is no space for solo trips. Swallow your pride and do the right thing.

Remember: it is much easier to make a small group of people love what you do, than sell a product that is not convincing to a larger crowd.

Building a company is a constant rollercoaster ride

Founding a company is not a sprint. It is a marathon – followed by an ironman. For the sake of staying physically and mentally healthy this is the single most important learning. And if nothing else, this should be your take away from this article.

You can’t try to wing a startup. At least not if you are in it for good. You have to eat well, sleep well, exercise, meet your friends, and get out of the office every now and then and be part of social life.

Especially when things are not going as you wish, it is very tempting to stay even longer and work harder. While this shows your commitment, it harms you, your company and everyone who is involved in it.

Founding a startup is a rollercoaster ride
Found this some time ago. Quite accurate


If stuck with a problem I used to pull an all-nighter up until I found a fix. I forgot to eat (at best some fast food), drunk way too much coffee and neglected my girlfriend even more. At a certain point during the night I realised I wouldn’t be able to fix the issue and went to bed, just to find that I couldn’t fall asleep as my thoughts where still centred around my work.

I slept bad, woke up in a bad mood and didn’t resolve a single thing.

Today, when I am stuck at a problem, I leave the office and go to the gym. Or I cook a meal or talk about something completely different over a nice Rioja with my friends. It doesn’t really matter. The important thing is: I actively try to avoid thinking about the problem for some time. I train my brain to enjoy the time out.

And I really mean train. It still is very hard for me to disconnect, as I always treat it as a kind of failure. So nowadays, I make sure my brain doesn’t end in this dull overdrive mode where it is proven to be extremely inefficient. I like my brain to be efficient and my body in a good shape. I force myself to a certain work-life balance (still far away from what other people associate with that term).

And what I realised was: whenever I did that the most amazing thing happened. The next morning, even before I had my first coffee, I already had at least four new approaches in my head on how to tackle the problem. And more often than not, one of them worked.

Just accept it: everything will look broken at any given time. You will run around taking out fires half of the time. And if you feel bad about it, don’t. Because that is what you are doing. You are building something out of nothing. And you knew it wouldn’t be easy. But really think about it for a minute. You are literally building something out of thin air. You are creating things, people didn’t even consider being possible. Of course things will look broken. That is in the nature of building a company. The fascinating part is not having something working from day number one, but creating something great out of chaos just by your own work and persistence, despite the backfalls and all the people telling you it won’t work. And that, my friend, is the true definition of building a startup.