Kudos to Kudu !
This seems to be a great way to do MVP but I still have a few questions:
Isn't the point of MVP to test the idea that people will pay money for the provided service ? The blog post does not seem to mention if they are charging customers a price for their service.
Also, is it possible that the current users , who are being served manually, are viewing kudu as a "consulting" service rather than a SaaS
How do I test without building? How do I know they want Kudu or just the Kudu test?
The best I could do was make it VERY clear on the landing page at http://kudu.io that they were purchasing what is effectively 'early access' to Kudu and what this would involve.
(Note - We've now changed the page content as we've sold out of these early-stage seats.)
I hope you succeed. AdWords has become more complex over time, and I do think there is a market for a service that cuts through the confusion. I was priced out by high CPC's years ago, but my friends who have stuck with it and had success all say that it takes time to optimize your campaign - at least a few months. If you can shorten that period, your investment should pay off in the long term.
On a related note, I was looking at patio11's charts last week and noticed that he seems to have dropped AdWords in the past year. For 2012, BCC had $64k in sales and $29k in expenses ($13k of which was for advertising) yielding a net of $35k. In 2013, his sales dropped to $46k, but with little overhead it's almost pure profit.
I haven't dropped AdWords - we're just behind on bookkeeping for expenses. (Partly me being busy, partly due to some uncertainty as to how to alter our practices to be compliant with some Japanese requirements we'll be subject to from this tax year forward.)
It is interesting to see the complexity of strategies needed to play adwords increase over time. Big budget advertisers use predictive models and automated bidding to quickly react to changing conditions. I predict some years in the future we'll have crazy high frequency trading robots battling each other like in the stock market.
It's good to see people getting what an MVP should be. In this case it's proving that someone is willing to pay X amount monthly for a specific service. I guess the next thing to prove is that the company can deliver this for less than X monthly.
I assume they've some confidence they can create the technology or they'd have started with that side of things. No doubt there is still risk there but there was probably less there than on the market side of things. Good work.
This might seem silly, but on your homepage, you have a girl called Erin. Her 'website' is www.truelovecoffee.com - which is just a domain landing page. It's obviously dummy content, but I hope you will replace that sometime with a real customer.
If you have one employee and 4 users, it is easy to lose $300 per user per month. This isn't an issue.
If you have 1000 users and 10 employees This is a bad thing.
If you have 10k users this is a really bad thing.
Most startups in the pre-cashflow positive stage are losing pennies per user, not dollars. Few are losing $3600 per year per user.
It is hard to comeback from those kinds of numbers. It is harder to convince a VC that you will ever be able to turn that around.
Edit:
I also don't think that telling a VC that you trained people to do what you think you can build software to do will fly.
If I told you we were going to launch a new search engine, but until we got the formula's worked out we were launching using human edits to the results, you'd laugh me out of the room.
My initial reaction was that this does not meet the "viable" keyword.
However, in MVP, "viable" is from the customer perspective, not the business perspective. The MVP is viable for the customer to use, not necessarily viable for the business to continue providing in its minimal state.
The idea behind an MVP is that you build the bare minimum of what it takes to prove their is demand, and then you build out the rest of the features to make it awesome.
If you don't build an MVP you might never ship anything, and that makes VC's unhappy.
This is a really lousy way of advertising your project. If you're the author of this article, karma-- bro. Picking a few words to associate with a project/product/company/enterprise/whatever SEO buzzword you pick doesn't magically pull $300 or more out of your bank account unless you are paying someone else $300/user/month or more to pick out adwords -- in which case, why the hell are you paying for it yourself?
Does it really cost $300 a month, in any case? I have a hard time imagining that your company is losing ~$3600 on average per customer a year just for assigning keywords to their $SEO_PHRASE. This is not an informative article. It doesn't make anyone's life better. You're just inflating the value of your unnecessary service and trying to make like you're doing a huge service for everyone, when you're not.
You're really, really overthinking this. How much does it cost to assign a word to $SEO_PHRASE? Nothing. How much money magically flies out of their bank account whem they pick up the phone to talk to a customer? Nothing.
However, if they have someone on their payroll making $100k/yr and that employee spends a day with a customer gathering feedback about the product and what the customer would like to see going forward, that's going to be an opportunity cost of ~$300. It's just an investment. They aren't making money right now- they are spending money paying the (hopefully) right people to determine what they can do to (hopefully) maximize their viability later in the product's life.
The analogy here annoyed me. If I were running a farm (big 'if', etc) I would never buy a service that involved burning a ton of fuel just to give me some analytics. Something low carbon, like a drone, would be a much happier proposition.
I am aware this isn't the point of the post - but the point is lost if the example "quick hack" involves a three-order-of-magnitude increase in CO2 emissions. This shouldn't be a socially acceptable suggestion to make in this day and age.
The analogy was excellent and appropriate. Your objection to it is, like its social acceptability, utterly irrelevant to both the analogy and the rest of the article.
manishsharan|12 years ago
Isn't the point of MVP to test the idea that people will pay money for the provided service ? The blog post does not seem to mention if they are charging customers a price for their service.
Also, is it possible that the current users , who are being served manually, are viewing kudu as a "consulting" service rather than a SaaS
lukekennedy|12 years ago
How do I test without building? How do I know they want Kudu or just the Kudu test?
The best I could do was make it VERY clear on the landing page at http://kudu.io that they were purchasing what is effectively 'early access' to Kudu and what this would involve.
(Note - We've now changed the page content as we've sold out of these early-stage seats.)
..and yes, we're charging just $30 p/m
nhebb|12 years ago
On a related note, I was looking at patio11's charts last week and noticed that he seems to have dropped AdWords in the past year. For 2012, BCC had $64k in sales and $29k in expenses ($13k of which was for advertising) yielding a net of $35k. In 2013, his sales dropped to $46k, but with little overhead it's almost pure profit.
patio11|12 years ago
babs474|12 years ago
lukekennedy|12 years ago
And thanks for patio11's stats you've encouraged me to have another look at them.
robinwarren|12 years ago
I assume they've some confidence they can create the technology or they'd have started with that side of things. No doubt there is still risk there but there was probably less there than on the market side of things. Good work.
lukekennedy|12 years ago
dutchbrit|12 years ago
drakaal|12 years ago
If you have 1000 users and 10 employees This is a bad thing.
If you have 10k users this is a really bad thing.
Most startups in the pre-cashflow positive stage are losing pennies per user, not dollars. Few are losing $3600 per year per user.
It is hard to comeback from those kinds of numbers. It is harder to convince a VC that you will ever be able to turn that around.
Edit: I also don't think that telling a VC that you trained people to do what you think you can build software to do will fly.
If I told you we were going to launch a new search engine, but until we got the formula's worked out we were launching using human edits to the results, you'd laugh me out of the room.
robobro|12 years ago
kbutler|12 years ago
However, in MVP, "viable" is from the customer perspective, not the business perspective. The MVP is viable for the customer to use, not necessarily viable for the business to continue providing in its minimal state.
meritt|12 years ago
lukekennedy|12 years ago
Our current manual process is for our discovery process only.
We want to create a service for those who can't justify hiring PPC managers or third-party consultants.
danexxtone|12 years ago
lukekennedy|12 years ago
At the end of the test period (which will be at least 2 months) our users will have early access to the Kudu product.
dredmorbius|12 years ago
drakaal|12 years ago
The idea behind an MVP is that you build the bare minimum of what it takes to prove their is demand, and then you build out the rest of the features to make it awesome.
If you don't build an MVP you might never ship anything, and that makes VC's unhappy.
robobro|12 years ago
robobro|12 years ago
Does it really cost $300 a month, in any case? I have a hard time imagining that your company is losing ~$3600 on average per customer a year just for assigning keywords to their $SEO_PHRASE. This is not an informative article. It doesn't make anyone's life better. You're just inflating the value of your unnecessary service and trying to make like you're doing a huge service for everyone, when you're not.
MSM|12 years ago
However, if they have someone on their payroll making $100k/yr and that employee spends a day with a customer gathering feedback about the product and what the customer would like to see going forward, that's going to be an opportunity cost of ~$300. It's just an investment. They aren't making money right now- they are spending money paying the (hopefully) right people to determine what they can do to (hopefully) maximize their viability later in the product's life.
tehwalrus|12 years ago
I am aware this isn't the point of the post - but the point is lost if the example "quick hack" involves a three-order-of-magnitude increase in CO2 emissions. This shouldn't be a socially acceptable suggestion to make in this day and age.
RokStdy|12 years ago
The actual product wouldn't involve burning a bunch of fossil fuels.
lukekennedy|12 years ago
JasonFruit|12 years ago