Question: How do you know if you’re making your product better?
Eric’s answer: Many people answer this question by talking about additional features or bug fixes when those don’t really answer the question. Instead, the answer should be that you ran experiments to see whether more people bought in one configuration or another. Track what you changed, track user behavior, do cohort analysis.
VCs do pattern recognition. If you look like someone who’s made them money in the past they’re more likely to invest in you.
This one kind of scared me but I see the point. Not something that I’m too concerned now with since I’m not pitching for funding.
Look at these possible ways of how your company shows that it has value:
- Viral growth. It’s grows from word of mouth quickly.
- Pay for attention. That you can get people to your product through paid ads but can make more from them than the ads cost.
- Stickiness. Do people get addicted to your product, like World of Warcraft etc. Their obsession can then lead them to buying stuff for the game.
The other thing I noticed is how hard another startup friend of mine and I were both laughing. So many of the things Eric talked about were mistakes we had made. But for anyone in business, as long as you are actively learning, you shouldn’t keep making the same mistakes again and again. It’s at least time for new ones…