Lecture 7 - How to Build Products Users Love (Kevin Hale)

Lecture Transcript: http://tech.genius.com/Kevin-hale-lecture-7-how-to-build-products-users-love-part-i-annotated

Kevin Hale, Founder of Wufoo and Partner at Y Combinator, explains how to build products that create a passionate user base invested in your startup's success.

See the slides and readings at startupclass.samaltman.com/courses/lec07/

Discuss this lecture: https://startupclass.co/courses/how-to-start-a-startup/lectures/64036

This video is under Creative Commons license: http://creativecommons.org/licenses/by-nc-nd/2.5/

All right.

So when I talk about making
products users love what I

mean specifically is like
how do we make things that

has a passionate user base
that our users

are unconditionally wanting
it to

be successful both on the
products that we build, but

also the companies behind
them.

We're gonna go over tons of
information.

Try not to take too many
notes,

mostly just try to listen.

I'll post the link to the
slides on my Twitter account

and on that link, there will
be a way for you to

annotate the slide and you
can ask me questions.

And so if we don't get to
them,

I'll answer them after the
talk.

So, you guys have been.

Listening to and

hearing a lot about growth
over the last several weeks,

and to me I feel like growth
is usually fairly simple.

It's the interaction between
two sort of concepts or

variables.

Conversion rate and churn.

Right?

And the gap between those
two things pretty

much indicate how fast
you're gonna grow.

And most people, especially
business type people,

tend to look at this
interaction in terms of

a very calculated in a
mathematical sort of way.

And today, I sort of want to

talk about these things at a
more human scale.

All right, cuz at start up
when you're interacting with

your users, you have a
fairly intimate

interaction that you have in
the early stages.

And so, I think there's a
different way of looking at

this stuff in terms of how
we build our products.

And we'll look at a lot of
different examples of that.

And how it's executed well.

My philosophy behind a lot
of things that I teach

startups is the best way to
sort of get to a billion

dollars is to focus on the
values that help you

get that first dollar, to
acquire that first user.

If you sort of get that
right everything else will

sort of take care of itself.

It's a sort of faith thing.

So I came to be a partner at
YC by way of being alumni.

I went to the program in
winter of 2006, so

it's the second ever program
and

I built a product called
Wufoo.

Wufoo's an online forum
builder.

It helps you create contact
forums and

online surveys and simple
payment forms.

It's basically a database
that looks like it's

designed by Fisher Price.

Interesting, though, is that
because it was fairly easy

What's.

to use, we're had customers
from every industry, market,

and vertical you can think
of, including a,

a majority of the Fortune
500 companies out there.

Ran the company for five
years, and

then we were acquired by
SurveyMonkey in 2013.

And at the time,

we were a very interesting
acquisition.

We were only a team of ten
people at the time.

And, while we acquired
funding out here in

Silicon Valley through Y
Combinator we actually ran

the company from Florida.

We had no office.

Everyone worked from home.

And we're an interesting
outlier.

So, each dot here represents
a start up that was,

that exited through IPO or
acquisition.

And we're this outlier to
the left.

The bottom is the funding
amount they took.

And the vertical axis is,

the valuation of the company
at the time.

To sum it up,

the average startup rates as
about $25 million.

And they return to their
investors about 676%.

Wufoo raised about $118
thousand total.

And our return to our
investors is about 29,000%.

>> So a lot of people were
very interested.

And are sort of like.

What makes.

Wufoo a little bit different
or

how do we run the company
very differently, and

a lot of it was focused on
product.

We weren't interested in
building software that,

I guess that just people
wanted to use.

Right.
That reminding you that you

worked in a cubicle,

cuz it was database app at
its sort of core.

We wanted a product that
people wanted to love.

That people wanted to have a
relationship with, and we

were actually very fanatical
about how we approached.

This idea.

At the point where it's
almost sort of

sort of sciency sort of way.

So what we said was like
Okay.

What's interesting about
start-ups in terms of

us wanting to create things
that people love is that,

love and unconditional sort
of feelings are things that

are difficult for us to do
in sort of real life.

And at start-ups we have to
do it sort of at scale.

So we've decided to do is

just start of by just
looking at, Okay,

how does real relationships
work in the real world, and

how can we apply them to
sort of how we

run our business and sort of
build our product that way.

So we'll go over basically
these two metaphors,

find new users as if we're
trying to date them and

existing users as if it were
a successful marriage.

So when it comes to dating,
lot of the stuff that

we uncovered had to do with
first impressions.

all, all of you often talk
about your relationships in

terms of the origin story.

If I asked you to tell me
about the first kiss,

how you sort of met, how you
proposed,

these are the things that we
say over and

over and over again.

They're basically the
word-of-mouth stories of our

relationships, and they're
the same kinds of

things that we do with
companies.

Human beings

are relationship
manufacturing creatures.

We cannot help, but create
and anthropomorphize

the things we interact with
over and over again.

So, whether it's the cars we
drive,

the clothes we wear, the
tools and software's we use,

we eventually prescribe
characteristics to it.

A personality.

And we expect it to behave a
certain way.

And that's how we sort of
interact with it.

Now first impressions are
important for

the starting of any
relationship,

because it's the one we tell
over and over again.

Right?

And there's something
special about how we

regard that origin story.

I'll give an example.

If you're on a first date
with somebody,

and you're having a nice
dinner, and

you catch them picking their
nose.

You are probably not gonna
have another date with them.

Right, but if you're married
to someone for

about 20 to 30 years,

and you catch on the Barca
Lounger digging for

gold right?

You don't immediately like
call your lawyer,

right, and then say like we
have a problem here.

I need to start drawing up
papers for divorce.

You shrug your shoulders and

say at least he has a heart
of gold.

So solving about.

First time interactions
means that the threshold is

so much lower in terms of
pass fail.

So, in software, and for

most products in internet
software that we use, like,

first impressions are pretty
obvious.

And they're the things that
you see a lot of

companies sort of pay
attention to in terms of

what they send their
marketing people to work on.

My argument for people who
are very good at product is

they discover so many other
first moments, and

they make those something
memorable.

Right, the first email you
ever get from a piece of

software.

What happens when you first
log in?

The links, the advertising,
the very first time you

interact with customer
support.

All of those are
opportunities to seduce.

So how did we think about.

Sort of like making first
moments on there,

and we actually took this
concept from the Japanese.

They actually have two words
for

how to describe things when
you're finished with them

in terms of saying like is
this a quality item.

And the two words of quality
are atarimae hinshitsu and

miryokuteki hinshitsu.

And the first one means,
taken for

granted quality, basically
functionality.

And the last one sort of
means,

enchanting quality, right?

Take for example a pen,
right?

Something has miryokuteki,
right, if the weight of

the pen, the way the ink
flows out of it, the way

it's viewed by the people
reading the handwriting from

the pen is pleasurable both
to the user of the pen and

the people who experience
the byproducts of it,

right, taking it to the sort
of next level.

Start with some examples.

So this is Wufoo's Login
link, and

it has a dinosaur on it,
which I think is awesome.

But if you hover over it,

the spec has the added
benefit of having a tool tip

that doesn't explain like
how to login or

what it does, but basically,
rawr.

And.

What we noticed about this,
like in early usability

studies as like this put a
smile on people's faces.

Like, hands down.

Right?

Universally.

And I think a lot of times
when we

are assessing products, we
never think about,

like, hey what is the
emotion on

the person's face when they
interact with this?

This is Vimeo's log in page
this is

actually a couple integr,
iterations ago.

It's one I find to be the
most beautiful, but.

It lets you know that when
you're starting out on

this journey with Vimeo,

that this is gonna be
something different.

They do this all over the
app.

If you search for the word
fart, as you scroll up and

down it makes fart noises as
you do this.

Right?

There's something different,

like this site interacts
with you.

>> Mm-hm.
>> It's a little bit

magical, it's a little bit
different.

And it's something that you
wanna talk about.

You don't have to always do
it with design.

This is a sign up form for

Cork which used to be a
social network for

people who loved to drink
wine.

On it, it says email
address,

it's also your sign-in and
has to be legit.

First name, what your mom
calls you, last name,

what your Army buddies call
you.

Password, something you'll
remember, but hard to guess,

password confirmation, think
it a, type it again.

Think of it as a test.

It's literally a poem as you
fill out the form.

Right?

And this is a kind of like
thing where you like,

oh, I like the people behind
this.

I, I, I'm gonna enjoy this
experience.

Now what does it say when
you fill out form like this?

Right.

On Yahoo, about what the
personality.

Of the site it's gonna be.

And what's disappointing to
me is like,

Yahoo forces every product
and

service under them to use
this exact same login form.

Flickr, I had thought,

had one of the best sort of
call to actions.

It was, get in there.

Right?

This is Heroku's.

I think this is an older
version.

Sign up page.

But, what's remarkable about
it is that, what you

start getting a feel for is
like, oh, scaling up.

My sort of server, and

back end services is as easy
as sort of dragging up and

down, different sort of nobs
and levers.

It's gonna be beautifully
used, and

it looks fairly easy to
scale.

Since we're in a room full
of computer science people,

I think you'll appreciate
this.

This is Chocolat.

This is a code editor, and

they only have one call to
action.

When the time limit is up,
they say, everything in

terms of all the pieces are
exactly the same except we

change the font.

To comic sans.

And what they're basically
saying is like hey

we know who our users are,
who our real customers are.

They're gonna be the people
who care about this.

This is Hurl, this is a
website for

checking htp requests, and
sometimes the places where

you get errors are
opportunities for

first moments,

you had a four of four this
is what you get it,

when we need help oftentimes
what we do is where we

create like really beautiful
mark, marketing materials.

But when you actually need,
like, documentation we sort

of like skimp out on sort of
design features.

And this is a point that,
like,

you see happen over and over
again.

A company that gets this
right is MailChimp.

And what they did was they
redesigned all of their

help guides so that they
looked like magazine covers.

And overnight, basically,

readership goes up on all
these features.

And customer support for
these things that sort of

help people optimize emails
goes down.

Speaking of documentation,
stripe.

What's interesting about an
API company is that there is

no UX.

The UX is actually just
documentation, right?

And there's opportunities
even in documentation.

Sort of the enchant and
amaze.

So one of the things that I

love about them is their
examples are wonderful.

But if you're actually,
like,

sort of logging into the
app,

one of the things that is a
super pain for most people,

when you're dealing with
most people's APIs, is,

like, grabbing your API
credentials and keys.

And what Stripe does is it
says oh,

if you're logged into the
app.

We automatically put

your API credentials into
the examples, so you only

have to copy paste once when
trying to learn their API.

When Wufoo wanted to launch
the third version of our API

we realized like, Okay, that
finally this is good enough

that we want people to sort
of build on top of it.

We were trying to figure
out,

like, how do we launch this
out to the world,

that sort of has our
personality behind it.

Because a lot of people,

they usually do things like
a programming API contest,

and they give out iPads and
iPhones.

And it makes you look like
everyone else.

And so, in our company one
weird value to

have it's a quirk of us,

is that the co-founders are
big medieval nuts.

And we take everyone out to
Medieval Times every single

year, on the anniversary of
the founding of the company.

And so, we said we have to
do something in that flavor.

And so we contacted the guys
at armor.com,

we said can you forward us a
custom battle-ax.

And what we said was if

you win our programming
contest you would win one.

The result is like people
wanted to talk about this.

It's something that people
wanted to work on cuz

they wanted to be able to
say it like I'm programming.

For a weapon.

And what's cool is we had
over 25 different

applications created for us
of quality and quantity that

we could not have paid for
on the budget and

the sort of time that we had
for this.

We got things like an iPhone
app and

Android and WordPress
plugins, right?

And all because what we did
was we changed how

people wanna talk about the
origin story of

how they're interacting with
one of our services.

And go like all day long of
going over these examples.

But I'm gonna short cut this
by saying,

you should just subscribe a
little bit of details.

It's just basically tons of
screen shots of software

that's just doing it right.

That shows that they're
being

conscientious of the user
and the customers.

When it comes to long term
relationships or

marriages, the only research
that we ended up having to

read was the stuff that was
done by John Gottman.

He's been featured in This
American Life,

in Malcolm Gladwell's books.

He's a marriage researcher
up in Seattle.

And he has an interesting
parlor trick that he can do.

He can watch a video tape of
a couple fighting about some

issue for 15 minutes.

And predict with an 85%
accuracy rate whether that

couple will be together or

not, or divorced in four
years.

If he increases that video
up to an hour.

And asks them to also talk
about their hopes and

dreams.

That prediction rating goes
up to 94%.

They showed these same video
tapes to marriage

counselors, successfully
married couples,

sociologists, psychiatrists,
priests, et cetera and

they can't predict with
random chance whether people

are gonna be together or
not.

So John Gauntman understands
something fundamental about.

How relationships work in
the long term.

And that basically how we
fight, even in a short term

period can indicate sort of
the whole system and

what it's gonna look like.

And one of the surprising
things he discovered,

it's not that

successfully married people
don't fight at all.

It turns out everybody
fights.

And we all fight about the
exact same things money,

kids, sex, time and others.

And others are things like
jealousy and in-laws.

To bring this around, right,
you can actually attribute

every single one of these to
problems that you see in

customer support when you're
building out your products.

Right, so.

This costs too much.

I'm having problems with a
credit card.

If you're building a service
that helps people deal with

their clients they're very

sensitive about anything
happening with that.

Performance.

How long you're up and how
fast.

Others are I said jealousy
and in-laws.

Right, so that's competition
and partnerships.

So anything weird happening
there,

people are gonna write to
you about.

And the reason I like to
think about this in

terms of customer support is
that in every ones that

are processing of like a
conversion funnel,

customer support is the
thing that happens in

between every one of these
steps.

It's the reason why people
don't make it

further down there.

It's the thing that prevents
conversion from happening.

Now, as we were thinking
through all these ideas and

as we were building up the
company,

we realized that there's a
big problem about how

everyone sort of starts
their company or

build up their sort of
engineering teams.

And that is that there's a
broken feedback loop there.

People are divorced from the
consequences of

their actions.

And this is the result of
actually the natural

evolution of how most
companies get founded,

especially by technical
co-founders, right.

Before launch it is a time
of bliss, nirvana, and

opportunity, right?

Nothing that you do is
wrong, right?

By your hand, which you feel
is like god, everything that

you write, every line of
code feels perfect, right,

and is ingenious to you.

The thing that happens is
after launch reality sort of

sets in and then all these
other tasks sort of

come into place that we have
to deal with.

Now what technical
co-founders wanna do is get

back to that initial state
and so what we often do,

and what we often see is
that companies start

siloing off all these other
things that actually is

what makes a start up or a
company sort of real, right?

And have other people do
them.

To, in our minds, these
other tasks are inferior.

Right?
And we have other people in

the company do them.

And so for us, what we're
trying to figure out

is how do we change software
development so that we

inject some values that we
don't talk about enough?

Responsibility,
accountability,

humility, modesty.

Right, and we called this,
like a lot of other people,

we had an acronym, Support
Driven Development, and

it's very similar to TDD or
other agile practice.

It's a way of creating high
quality software, but

it's super simple.

You don't need like, a
SCRUM,

you don't need a bunch of
post-it notes, all you

have to do is make everyone
do customer support.

And what you end up having
is

you fix the feedback loop,
right?

The people who build the
software are the ones

supporting it and

you get all these sort of
nice benefits as a result.

So one of them is, support
responsible developers and

designers and people who
build the stuff,

they give the very best
support.

Now we're not the first
person to think of this.

Paul English was a big
proporter of this at Kayak,

and what he did was install
a red customer support phone

line in the middle of the
engineering floor.

And they were just regular
customer support calls.

And people would ask him
often times,

why would you pay engineers
$120,000 or

more to do something that
you can pay other people

a fraction of to handle in
like a call center?

And he says, well, after the
second or

third time that phone rings
and the engineer gets

the same problem they stop
what they're doing, they fix

the bug, and we stop getting
phone calls about it.

It, it's a way of having Q-A
in a sort of

nice elegant solution.

Now, John Gotman talks about
the reason that we often

break up with one another as
due to four major causes and

their warning signs.

He calls them the four
horsemen, right?

Criticism, contempt,
defensiveness,

and stonewalling.

Now, criticism is basically
people starting to focus,

not just on the specific
issue at hand, but

on the overarching issues.

Like, you never, right,
listen to your users or

you never think about us all
the time.

Right?

Contempt is when someone is
purposely trying to

insult somebody.

Defensiveness is not trying
to take accountability

trying to make excuses for
the actions.

And stonewalling is
basically shutting down.

Stonewalling, to John
Gotman, is, is one of

the worst things that we can
do in a relationship.

Hold up.

And oftentimes, you know, we
don't worry much about this

in customer se, criticism
and contempt.

Right?
Defensiveness,

you see this all the time,
all the times in companies,

especially as they get
older.

But stonewalling, this is
something I

see happen with start-ups
all the time.

You get a bunch of customer
support sort of

coming in and you just think
I don't need to answer it.

I don't need to respond.

Right?
And

that act of just not even
getting back to

them is one of the worst
things you can do.

And it's probably some of
the biggest causes of

churn in the early stages of
start-ups.

This is how support worked
out with Wufoo.

When we were acquired we had
about 500,000 users on

the system, 5 million people
used Wufoo forms and

reports, whether they knew
it or not, and

all those people got support
from the same ten people,

and usually it was

only one person dedicated
support a day, or any shift.

Results in about 400 issues
a week.

That's about 800 emails.

But a response time from 9
a.m.

to 9 p.m.
was

between seven to 12 minutes.

Right?
And from 9 p.m.

to midnight it was an hour.

And on the weekend it would
be no longer than 24 hours.

And we carried this up all
the way up to the scale.

What a lot of people forget
about, and

often talk about with
Airbnb, is how, like oh,

they did this interesting
thing where they had,

went up to New York and
offered, like,

professional photographers,
and the founders would go

out there and actually take
pictures of

the people's apartments to
help them sell more.

Focusing on the stories
around conversion.

What most people don't
realize is a lot of

times when I saw Joe in the
early days of Airbnb,

he had a phone, sort of head
set stuck to his head all

the time, because he was
doing phone support nonstop.

Churn is a story we don't
like to talk about often,

all the time.

Airbnb's sort of growth
really started picking up

once they figured out

how to match capacity to the
demand, or the phone

calls that they were getting
into their support system.

At Wufoo we actually
constantly did experiments

around support, because
we're so obsessed with it.

One experiment we did was,
we heard Kathy Sierra

do a talk about there's a
disconnect between the

motions that we have when we
need help, and sort of.

The content and the
reactions we get from

people when we get help from
them, especially online.

Because they just don't see
all those nonverbal cues.

So she said unless there's
face recognition on the web,

we're just always going to
be

disconnected from our users.

Our feeling was,

like, well we're not face
recognition experts but

I think there's another way
of getting empathy.

So, as form builders, we
added a drop-down and

what we said was like, hey,
what's your emotional state?

And our hypothesis was

that no one was gonna fill
this out.

We basically thought, oh
okay, you know what the,

this is gonna be pretty a
lame experiment, but

we'll see how it sort of
goes.

And it turned out the
Emotional State

drop-down field was filled
out 75.8% of the time.

The browser type drop-down
filled just in

comparison was filled out
78.1% of the time.

All right?

So people were basically
telling us, for

my technical support issue
how I feel about this

problem is just as important
as, like, all the technical

details you need to sorta
figure out how to debug it.

Now we didn't prioritize
things or

triage things by emotion,
right, and for

the most part, people didn't
game the system.

One of the interesting
byproducts of it was that we

noticed that people started
being nicer to

us in the customer support.

It was something sort of
subconscious.

We just were thinking like,
wow,

users are so much better
now.

What's going on?

And we went back and looked
at the data and

we did some text analysis
and we realized is that, oh,

when it comes to only
communicating with

people over written words,
like email, there's

only three ways that you
show strong emotions, right?

Exclamation marks curse
words, and all caps.

And sure enough on all three
of those metrics,

they've gone down.

In sort of the way people
were talking to us in

the customer support.

Once people had a simple
outlet for their emotions,

right, people would be a lot
more rational,

and it made our jobs a lot
more pleasant as a result.

The other byproduct that is
awesome is that

you actually build better
software when you do this.

Far better software.

This is actually backed up
by tons of research.

Jared Spool, a user
interface engineer, which is

sort of the big players in
this space says like,

there's a direct correlation
to how much time we

spend directly exposed to
users and

how good our designs sort of
get.

He says it has to come in
this specific way.

It has to be direct
exposure, right?

It can't be something where

someone generates a report
or through a graph, you

have to be interacting with
them somewhat real time.

It has to be a minimum of
every six weeks.

And it has to be for at
least two hours.

Otherwise your software will
get worse over time.

Our developers, our people
who are on,

on Wufoo were getting
exposed to our users four to

eight hours every single
week.

And what it does is it
changes the way you sort of

build software.

Jared Spool has another way
of talking about how

we build products.

Right?

Let's imagine that this
represents all the knowledge

needed to sort of use your
app on a spectrum.

Right?
This is like no knowledge.

Right?
And this is

all the knowledge needed.

Right?
And

these two lines are pretty
much your interactions with

users what you're trying to
get them to.

This is currently where
their knowledge point is and

this is the target knowledge
point that you're trying to

get them to, to understand
that to use your app.

The gap between those is
called the knowledge gap,

Jared Spool called it, Spool
calls.

And what's interesting about
this is there's only two

ways, right, to sort of fix
this.

That gap represents how
intuitive your

app is, right?

You either get the user to
increase their

knowledge or you decrease
the amount of knowledge

that's needed to use your
application.

And oftentimes, as engineers
and people who build and

work on products, we think
let's add new features.

And new features only

means let's increase the
knowledge gap.

So for us we actually
focused a lot on

the other sort of direction.

And so what that meant we
spent a lot of time,

30% of our engineering time
was spent on internal tools

to help with our customer
support stuff.

But oftentimes it

was spent helping people
help themselves.

Things like frequently asked
questions, tool tips.

Things like, if you just
click the help link,

right, instead of taking you
to the generic help sort of

documentation page,

you go to the specific page
where you're looking at

is going to be most, sort
of,

appropriate for what you're
working on.

We redesigned our
documentation over and

over again, AB tested it
constantly.

One iteration of our
documentation reduced

customer support by 30% over
night.

It's one of those things
where,

like, overnight, all the
people that work on

the product immediately had
30% less work to do.

Now what happens if you have
everyone work on

customer support constantly,
and

thinking about it in terms
of a remarkable way?

Well, I talked a lot about,

in the very beginning growth
is a function of

conversion and churn.

This is Wufoo's growth curve
for the first five years.

Right?

What's interesting is that
we

paid no money on
advertising, on marketing.

All of it was done by word
of mouth growth.

Right?

And the interaction between,
like,

new users and downgrades are
this.

It's so slight what it
takes, that gap,

making that sort of work.

And what a lot of people
keep forgetting is that

there's almost no difference
between an increase in

conversion rate, 1% increase
and a 1% decrease churn.

They do exactly the same
thing to your growth.

However, the ladder is
actually much easier to do.

It's much cheaper to do, in
your apps, and

a lot of the times we
neglect this,

neglect this to way far
along.

Right?
And we usually have our

B team works on these sort
of projects and services.

This is actually not the
graph that we track most of

the time at Wufoo, it's not
even the one I'm proud of.

This is the one I'm proud
of.

Cuz even though we have this
sort of nice, awesome curve

of growth, this is what, how
loud is this scale?

Keep the company small, have
an awesome culture.

And that required doing a
lot of

these things to help people
sort of do what they need.

So John Gotman noticed there
was a different type of

behavior for relationships
and why people divorced.

Basically there would be
some subset of people who

would stay together 10, 15
years and

then all of a sudden they
divorce and

there was none of the other
indicators which sort of

show that this is what was
gonna happen.

And I was looking through
the data and

I realized oh, there's no
passion,

there's no fire between
these people, right?

When it comes to
relationships they

kinda follow the second law
of thermodynamics, right?

In a closed energy system
things tend to run down so

you have to constantly be
putting energy and

effort back into it.

Now the way a lot of people
sort of think about showing

people that I care about you
in products and in companies

is to do things like let's
have a blog, right?

Lets' have a newsletter?

The thing is, we look at
these rates and basically it

was such a small percentage
of our active users that it

was like, most of our users
have no idea all

the awesome stuff that we're
doing for them.

So we built a new tool.

We called it the Wufoo
system, and

what it allowed us to do was
just time stamp every new

feature that we're building
for users and

then every time they would
log in, we would look at

the difference between their
log in time or last log in

time and the new features
that were implemented.

And when you had this
message show up,

hey since you've been gone

here's all the awesome stuff
that Wufoo did for you.

Hands down this was the most
talked about feature I've

ever had every time I went
out to talk to users.

Right they'd say like dude I
love that since you've be,

since you've gone thing even
though I pay the same amount

every single month you guys
are doing something for

me almost every week and
it's totally awesome and

makes me feel, I'm getting
maximum value.

The other thing that we did
in

addition to having everyone
support the people that

paid their pay check is have
them say thank you.

And this was a large part
due to us injecting sort of

humility and modesty in to
sort of the equation.

Every single Friday we would
get together and

we'd just write simple hand
written thank you cards to

our users.

And I know there's tons of
people who would not be sort

of excited about doing this,
but it was a ritual that

made sort of all the
difference in terms of,

like, having a team that was
very tightly neat,

tightly knit, also.

And working on stuff that
they really cared about.

They always constantly knew
what the mission was for,

and why we sort of did what
we did.

These aren't fancy thank you
cards, right?

They're just simple,

like handwritten stuff on an
index card.

We threw in a sticker, and

slapped on a dinosaur on the
front of it.

And, what's interesting is
we started this practice as

a result of the early days
of starting Wufoo.

Chris, Ron, and I were
talking, and we're trying to

figure out, what are we
gonna do to sort of show

users that we appreciate
them around Christmas.

And he, Chris came up with
this idea where he said

hey guys, so a couple years
ago my mom, like, made me

write thank you notes to all
of my relatives.

For my Christmas gifts.

And I didn't really like to
do it but

the following year all my
presents were super good.

So, I think we should try
this for our business and

see how it goes.

So, that first year we wrote
handwritten Christmas cards

to all of our users that
first year.

Second year rolls around,
and

we have too many customers,
like, and

it's still just the three
founders.

And we were going like we're
kinda screwed,

I don't know what we're
gonna do.

And we read a book called
the ultimate question, and

in it he talks about hey,

just focus on your most
profitable users.

And just tend them and

take care of them, then
it'll work out.

So we're like, all right,

that, that makes sense,
that's scalable.

So that year we

only write to our highest
paying customers.

And the January rolls around
that second year and

one of our long time loyal
users writes us and

he's basically like, hey
guys I, I really loved

that Christmas card you sent
me the first year and I just

wanted you to know I haven't
received my second card yet

and I'm just looking forward
to it.

I know you didn't forget
about me.

Thanks a lot.

So we're like, fuck, because
the best way to sort of

exceed expectations is not
to send any to begin with,

so we were like sort of in
this conundrum.

And what we decided, after
thinking about it for

a while, is that we need to
stop doing it,

you know, just one time a
year.

It needs to be something
that's part of the culture.

Happens every, every, every
sort of week, even.

And even though we'll never
catch up to all of

our customers.

Just the practice of

doing it will make all the
difference.

I talked a lot

about a bunch of like
lovey-dovey stuff and

sort of like touchy-feely
things that I think a lot of

engineers don't like to
think about too often.

And so I'll end on some sort
of hard business

data or research.

There's an article that was
put out by

the Harvard Business Review
several years ago by

Michael Treacy and Fred
Wiersema and in it they

talk about the discipline of
market leaders.

They say there's only three
ways that you

achieve market dominance and
depending on how you want to

achieve that market
dominance you have

to organize your company in
a very specific way.

Best price, best product and
best overall solution.

If you want to be

the best price out there you
focus on logistics.

A Wal-Mart, an Amazon.

If you want to be the best
product out there you

focus on R&D.

Apple's usually

a quintessential example of
that.

Best overall solution is
about

being customer intimate.

And this is the path that
you see followed by

luxury brands and
hospitality industry.

What I love about this path
towards market dominance is

that the third one is the
only one that

everyone can do at any stage
of their company.

Requires almost no money to
get started with.

Usually just co.

Requires a little bit of
humility and some manners.

And as a result you can
achieve the success as any

other people in sort of your
market.

That's all I got.

Thank you very much.

Yeah, let's take some
questions if you guys

have any.

Right in the back there.

>> Building products that
users love?

You might have multiple
different types of users.

How do you build one product
that all users love?

Maybe there is a feature
that one really likes but

detracts value from one
that.

>> All right.
So what do you do

when you have a product with
lots of

different type of users,
right?

Some users will love one
thing and

another will, will another.

And I agree, there's

a interesting fine line for
that.

What I always, usually tell
people,

is focus on the people who
are the most passionate,

especially in the early
stages.

Right?
Whoever's, whatever niche

it's gonna be, that's who I
focus on completely.

Things that a lot of
different projects did.

I think Ben Silverman of

Pinterest started off with a
designer bloggers, right?

Curtail your thing for

them and eventually you'll
figure out sort of universal

values that will appeal to a
lot of other people.

So, just start one at a
time.

And.

The, a lot of the examples
that you see up there,

a lot of people make the
mistake is like, oh,

I'll just make my app funny.

But, humor is like really
difficult to do.

Right?
What you wanna shoot for

is something sort of witty.

And, quite honestly,

you have to get
functionality right.

So like the Japanese
quality.

If you don't have a on
there, right, don't try to

do anything witty, right,
cuz it will backfire on you.

So hands down, our number
one focus is make it as

easy to use as possible for
and

anything else on top was
polish.

Right here.

>> So so everybody says that
to focus on your product.

I'm also good at that.

I love to do a project and I
love to make it the best.

But we are to that certain
point that we are focused on

our product but we don't get
like constantly right?

Sorry.

So second thing so how much
we should focus on product?

But because we should do now
marketing.

We should get somebody
customers and

like and like start talking
to customers but

when you are too focused on
your product.

Like users online have them.

Right, so what exactly do
you guys mean when you

are saying like focus only
on your product and

give the best product?

>> Okay.

So the question sort of is
how do we balance this

sort of thing where we wanna
be obsessed with

working on product.

Yet.
But all the other skills,

and sort of tasks that are
needed by a company,

like marketing and branding
and

all that stuff, and how, how
we sort of balance that.

And the thing is, like, it
starts off as you juggling,

like, tons of things
constantly in the air.

The thing is, if you're
working on products, like,

you should also always have
this flip side as

when you're talking to
users.

Right?
And for

us inside of Wufoo, the way
we got people to talk to

users is they just did
customer support.

And they got to see
firsthand, right away.

Whether that feature sucked
or not,

and also impacted everyone
else in the company,

because everyone had a
customer support shift.

So you have this sort of
social incentive to sort of

make everything work.

And so, like I said, there
should be no point where

you're only focused on
product.

You should always have time
where you work on product,

and then you see sort of
what users say, say to you.

And you should always have
this virtual, like,

feedback loop on there.

So be careful when you don't
have that.

Usually what ends up
happening, if you're lucky.

In terms of marketing and

sales, like, usually my
feeling is like, you have to

spend money on marketing and
advertising, all this stuff.

It's usually a tax you pay
because you

haven't made your product
remarkable.

Right?

Word of mouth growth is the
easiest kind of growth, and

it's how a lot of the great
companies sort of grow.

So figure out how to wait,
how to like,

have a story that people
want to tell.

About your product.

Where they're the most
interesting person at

the dinner table, right?

And then that person is your
sales person, right?

That person is your sales
force for you.

Right here.

>> like, where do you find
crystal clear customer or

user need and the demand is
there is the right solution.

How do you communicate with
engineering and

designing team to make sure
that because sometimes

people in the team come up
with ideas, and but

still at the end of the day,

how can you make a decision
with where to go?

>> Oh, so how do you make a
decision on product?

And communicate that with
your sort of

engineering team when
there's like lots of

different directions to go?

My feeling is that.

So for us we just looked at
support.

It was really easy cuz

you often just saw what are
things that

people are having the most
amount of problems with?

Or people asking all the
time.

You cannot help but get
feature requests from

people no matter like
whatever opening or

orifice you have in your
product or app.

Like, people will like jam
feature requests in there.

So you're easily going to

know sort of what they sort
of what.

Your job as a product person
and

engineer is to not just do
what they say, because that

way, you'll just be a slave,
is to figure out,

sort of deeply, what are the
reasons why underlying those

things and sort of solve
that deep underlying reason.

The thing is that everyone
wants to

have a different way of.

To sort of go, then
ultimately it comes down to,

like, someone's gonna figure
something out.

But I also make the smallest
version of each little idea.

No longer than a week or two
weeks to build it out there.

And you can try them out and

see sort of what works and
don't work.

I think it's dangerous to

have multiple different
product directions that

requires lots of time to
sort of figure out.

Sam.

>> Related to that can you
tell the story of

how the king for a day thing
>> Yeah.

Okay.
So

so I don't like hackathons.

I think they sort of suck in
terms of ones done inside

of companies.

Because.

You spend like 48 hours
working on something really

hard that you're sort of
passionate about and

99% of them never make it to
production right, and

it's sort, sort of real like
super sad.

So for us we like flipped it
on it's head and

we came up with an idea that
we called king for

a day and it actually worked
over the weekend.

But how it worked is someone
randomly in the company got

drawn and they got to be the
king, and the king got to

tell everyone else what to
do on the product.

So everything that was
bothering them about Wufoo.

About the customer support
stuff, or

some feature they really
want to have built.

They've got the engineering
resources, the market

resources, the advertising
resources of everyone inside

of the company, to make it
sort of happen.

And of course, we'd work
with them to

figure out like what can be
actually done in 48 hours.

But we would do this one to
two times a year.

And it was like a huge hit
and

it was a boost to morale,
cuz what people most love.

It is like working on things
where it's like, oh,

I made a difference to the
app.

Right?

And so, for us, that's one
way that we would like

sort of divide time for like
product direction.

It's like some times the
people that work for

you, they have a strong
opinion about where it,

where it should go.

And it's a good way to sort
of democratize it

a little bit, by rotating it
around.

Yes.

>> You said you guys all
work from home.

Usually seems like a
nightmare.

In that office, how do you
make that work?

>> Okay, so we all work from
home.

So, I will tell you this.

We all still work within the
Tampa Bay area.

We would allow anybody to

work from any where but
usually.

As we tried to recruit
them,they sort of

meet our team, and they just
decide,

okay we just want to come
and move here anyway.

Remote working, is
especially tricky,

a lot of people like to
romanticize it,

especially people, who are
like employees.

But the thing is, An office
gives you a lot of, sort of,

benefits, right, and
efficiencies that you now

have to compensate for when
you remote working.

But remote working also has
these other sort of

efficiencies in place, for
example,

I don't have to worry about
my employees losing two

hours of their day to
commuting, for instance.

So the biggest thing that we
had to do for

remote working is to respect
people's time.

And so the way we had it set
up is we actually had

a four and a half day work
week at Wufoo.

Half day on Friday was for
all the meetings and stuff.

We said like no business
deal,

meetings, no talking with
other outside parties.

They all have to be done on
Friday, on that half day.

It couldn't be done in the
middle of the week.

And then also one day of
everyone was

already dedicated customer
support.

So everyone in our company
effectively only had

three days each week to
actually build or

work on whatever they were
doing.

But I actually firmly
believe that if you

have three solid days,
right, eight to ten hours,

where you are only working
on what you need to build,

you can get a ton of shit
done.

And so what we said was,

you have to respect
everyone's time during that

three day period, if they're
in that three day period.

And what we came up with is
a 15 minute rule and the way

it worked is you can have a
discussion like a chat or

a phone call or whatever
with someone but it could go

no longer than 15 minutes so
if you have some complicated

issue that you couldn't
figure out we'd say,

at 15 minutes you are to
immediately table that item.

Right and have us discuss it
on Friday and

you'd move on to the next
item on your list right,

the enhanced productivity.

More often than not I, I
would say 90% of the time

the item never got brought
up on Friday because usually

what would happen is people
would sleep on it and then

they'd just magically say
like, hey I found a solution

or like hey that's not a big
problem whatsoever.

Because most problems inside
of companies,

they don't need to be solved
in real time, or right away.

The only things are like
when the site is down, or

payments aren't working.

Right?
Everything outside of

that is basically kind of
luxury, so

focus on your primaries as
much as possible.

And, as a result,

our ten person team did far
more than many,

many other companies, as a
result.

But, it takes extra work to
make remote working happen.

We are an extremely
disciplined sort of team.

And I would have to say

there's almost not many YC
companies that actually have

been able to replicate sort
of what we do.

I think there's only two
other companies in YC that

sort of have the same sort
of discipline working style.

It takes more work in a very
different fashion.

Right?

An office allows you to be a
little bit lazier, right,

in terms of all these things
around productivity.

Okay.
Over here.

>> Right.

Just to go off that question
as the leader of the team

how did you manage to
instill a company culture

but and also the count,

accountability the employees
especially cuz.

Working space.

>> Okay, how do we, how do
we set up accountability for

employees?

As, as a manager.

Alright, so, at Wufoo we
were profitable nine months

after launch, so, we had
profit sharing, right?

And so, it makes pretty
simple and clear.

It, it would be a multiple
of whatever bonus pull that

we sort of had, and

the performance measures
would be based on sort of,

how they did in customer
support.

All right, on their duties
there, and sort of

what they said they were
wanting to accomplish or do.

I don't like process, and I
don't like lots of

tools to help get people to
be productive.

So the only thing that we
had for

helping people manage, like,

sort of their projects, is
to-do lists.

And that is, like, simple
text files that we

shared in our Dropbox
account.

Each person had their name
on it, and you got to

see every time somebody
updated their to-do list.

What we said is every single
night just

set everything that you did
that day.

Right?
And then on Friday,

we would just go over.

Okay, this is what you

said last week that you're
gonna do.

This is what you actually
got done, or

the sort of the problems at
hand.

And it's super simple,
right?

It creates this like nice
written trail for

how to sort of handle stuff,
right?

And I don't have to worry
about managing them, right?

They sorta set the tone for

how they want to be sort of
assessed.

And it makes it really
simple.

And for people who are
excellent at what they do.

Right?
It works very, very well.

And then when you actually
have problems,

it's very easy to fire
people.

I was fortunate that I

never had to fire anyone at
Wufoo, right?

But we were able to correct
a lot of

people's behavior very, very
quickly.

Cuz we just kinda look at
this, and

it's like look, this is your
pattern of behavior.

You finish a fraction of the
items on your list.

You do most of

the items at the last second
right before Friday.

That's a problem, you've
gotta manage your time

better and this is evidence
that you've provided to us.

All we have to do is sort of
describe it back to you and

because everyone in the
company sort of sees it,

right, there's social
pressure that's put

into place that helps make
it all sort of happen.

Right here.

>> How did you hire people
that, you know,

you felt would be able to
work with in this kind of

environment that's, that's
>> So,

how do you hire people that
can work, remotely?

And then sort of work in
this sort of fashion.

So, pretty easily,

you have them work on a side
project for you.

So you contract them out,
and

they have to work remotely.

As such, usually, the
projects I like to

have them work on is about a
month long, right?

I could do things much
faster for a week.

But usually get a good sense
of,

like, how well people sort
of manage themselves, and

work on things from a
project like that.

So that was always the first
assessment.

Like we never did anything
just by interviews.

The other thing we had to,
sort of, screen them for

is their ability to do
customer support.

Because not any,

every engineer sort of has
the empathy skills to

handle that stress.

So sometimes I would have
people write breakup letters

to me, right, in an
interview, just like hey,

pretend you have to break up
with me you have 15 minutes

to write in on there and you
can only write it by hand,

what are you gonna say?

And so you get a good sense
of sort of their writing

skills, because like 90% of
what you do in customer

support is tell them bad
news, like, oh, we don't

support that feature, sorry
that's not gonna work, or.

It's not gonna be available.

And so people have to have
sort of tacked at that.

>> How 'bout one more
question?

>> One question, right here
the glasses.

>> So, since Wiki has all
these like tricks and

experiments that have really
helped the company.

Do you INAUDIBLE] of ones
that didn't work out?

>> Have all these tricks and

experiments to help the
company,

are there any ones that
didn't work out?

All right, I'll talk about
one.

So one of the things that we
did early on to try to

motivate ourselves was try
to get,

like we understood this idea
of like crunch mode and

that it's really bad for
people.

Like if you're doing the
subscription business you

need people to last for the
long term, and

video games a lot of times
they like crunch people.

All, all the time.

For like a specific deadline
or

have multiple sprints every
two weeks and

you have to shoot up to this
deadline and

it's like exhausting.

And so, because, when it's
happening it's like you

might get an increase in
productivity but

the recovery period that you
need for people is

always greater, right, than
the productivity you gain.

And at a company where you

need everyone doing customer
support and

being on their game and
constantly put, pushed out

features you don't have time
for recovery.

So, we were thinking about,
okay, we want to build like,

a company vacation into how
Wufoo sort of works to

reward our users every
single year.

And we said okay,

if the vacation is sort of
built in there for

the recovery, we could have
one crunch period, right,

before that vacation set up.

And we'll just only do
customer support that will

just sort of scale with
people.

So.

The way we did the very
first crunch mode

is that it was just between
the three founders.

And we had each of us draw a
ten-item to-do list.

That would be fairly
aggressive.

And the first person to

get through seven of their
items would win.

And the the last person to

get through seven of their
items.

Would become what we called
trippage.

And trippage meant that you
carried other

person's luggage and got
people drinks when you're on

the company vacation.

So we did that and during
that period,

everyone was like pretty
excited about it and

motivated, and only the
winner got to

choose the next company
vacation the following year.

And then all the sudden Ryan
had basically poorly

estimated the items on his
list.

And he realized very quickly
I'm going to fucking lose.

And so he was just like I
give up.

And he just sort of stopped.

So crunch mode turned out to
be blah mode for

him because he knew he was
gonna lose and

became pretty demoralized.

So as a result of doing
that, we

decided not to do it in that
similar fashion anymore.

So, good idea that we like
to talk about.

But is one that we, we never
did again.

All right, guys.

Thanks a lot.

You can email me at kevin@