Actionable Takeaways from the Business of Software Conference, Boston 2012

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Guest blog post from Alex Czartoryski, the co-founder and Chief Innovation Officer at Fresh Air Educators who attended last week’s Business of Software Conference that we ran in Boston and got one of the first write ups in…

To encourage your customers to spread your product via word-of-mouth, your product should make your customers “badass”.  Don’t focus on making your product awesome, focus instead on making your customers awesome.  This may seem like a small semantic difference, but what triggers the word-of-mouth snowball is when your customer can impress his/her friends because of something you did.

This is one of the powers of Instagram — it allows average people with no photography skills to start taking awesome pictures that can impress friends and family.  Spend some time thinking about what your customers are doing AFTER using your product, because that’s when the word-of-mouth happens.

One exercise to figure out features that can make your customers awesome, is to write a fictional product review WITHOUT mentioning your product or company.  Write it solely with a focus on what your product allowed your customer to accomplish.

The Power of Simplicity
+ Scarcity of Cognitive Resources

Cognitive resources are scarce and are easily depleted.  If you present multiple choices to your users early on, they eventually run out of resources at a later date.  Simplify the things that are not important and save the complexity only if the task is critical.

For example, a complex registration process can impact the ability of your user to successfully accomplish tasks later on in your workflow (payment?).

Another very interesting item related to this, is that your Willpower resources share the same part of the brain as your Cognitive resources.  By depleting cognitive resources, you are also depleting willpower resources.  This theoretically means that if you are selling Vices or guilty pleasures, there may be an evil strategy where you hit your customer with complex tasks in order to weaken his willpower in order to then push them into one-click buying a guilty pleasure.

Gamification

Although “gamification” is hot right now, it is generally NOT the type of behaviour you want to encourage.  It is a behaviour that triggers similar brain functions to those experienced during slot machine use and is not something that promotes long-term loyalty in your customers.  Gamification works only in very narrow verticals and in general will not produce sustainable or desired results.

A/B Testing

When running an A/B Test, ALWAYS start with a theory and then use the A/B test to try and prove or disprove that theory.  Don’t just run random A/B tests that show and hide various elements, hoping to stumble upon a magical winning combination.

To find out if your test results are statistically significant, don’t trust your A/B Tool.  Instead use this formula: Don’t trust your A/B testing tool to determine if your test is statistically significant.

Instead use the following THREE STEP formula:

  1. Define N as the total # conversions in A + B
  2. Define D as the difference in # conversions between A and B divided in half
  3. The test result is statistically significant if D squared is bigger than N.
  4. Act on it: Badasscode13

[Update 26th September. This is it but sadly someone else got there first - we have to make these harder... Your search isn't completely in vain though. If you're quick - first three people to use this get $1,000 off.]

Thanks to Jason Cohen at WP Engine for this formula

The Idea Factory:
Nurture Entrepreneurship in your Organization

This is a framework (un-polished and in need of improvement) to nurture entrepreneurship in an organization (mainly geared towards developers, but not necessarily):

  • Allow employees to submit an idea for a new product
  • Allow employee to work on this “Alpha” version during nights/weekends.  No company resources are allocated.
  • Every 2-3 months, employees get to demo/pitch their Alpha product (in various stages of completeness)
  • If a product is “promoted” to Beta, then the employee becomes CEO for that product and is “fired” from his real job in order to work full time on his product.
  • Once the product is “launched”, then the parent company becomes a VC investor in that product and provides funding, resources, etc… (in exchange for ownership)

Company Culture

As an owner, if you don’t “design” your company culture, your employees will do it for you.  You shouldn’t let  your employees do this, because they usually suck at it.To design your own company culture:

  1. Decide what you care about
  2. Hire people that care about the same thing
  3. Remember the things you care about.

In terms of scaling company culture during rapid growth, “transparency” is a big help.  A by product of transparency is that it is very difficult to do stupid things because everyone will call you out on it.

Profit Sharing

Here is the profit sharing strategy that is implemented at Balsamiq.com

  • All employees have a base salary that is better than market value
  • 10% of all profits are shared with employees
  • 25% (of the 10%) is divided equally among all employees
  • 75% (of the 10%) is divided based on seniority (with the more senior employees receiving more)
  • Additionally, 2% of all profits are divided equally among employees for them to donate to the charity of their choice

Customer Service

Customer service should be like a “par 3″ golf course:

  1. A problem is reported/collected
  2. The perfect answer is developped
  3. Customer says thank you

If there are more interactions than this, then you are not spending enough time either understanding the problem or finding the perfect solution for the problem.

How our jobs are killing us

Sitting down for more than 3 hrs a day decreases your lifespan by AT LEAST 2 years on average. Try to stand up and move around for a few minutes at least once every hour, or consider getting a standing desk.

Salesmen and the Art of Selling

Turns out that contrary to popular belief, the best sales people are NOT extroverts.  They are NOT introverts either.  They are “ambiverts” — which is the majority of us: those that are not on either extreme of the scale.

Interesting Sales Pitches

The Question Pitch: If you ask your customer a question, and you know what answer they will come up with in their head (and it’s a favorable answer), then this is much more compelling than just telling them in the first place. (Should landing page headlines be questions to our customers?)

The Rhyming Pitch: Rhyming messages trigger a cognitive part of the brain that makes them more memorable and seem MORE TRUE.  ”If the glove doesn’t fit, you must acquit”

The Pixar Pitch: All pixar stories are fundamentally structured like this:

Once upon a time __________________
every day ________________
until _______________
because of that ____________ and because of that _______________
until ___________________

(Think of Saving Nemo or any other Pixar movie).  Apparently a sales pitch like this is very effective.  Should you consider a story like this on your About Us pages?  Or perhaps below the fold on your landing pages?

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