Tag Archives: Startups

Custom Experience Design: Lessons from Startups

28 Nov

From traditional management consultancies to boutique design firms, everyone seems to acknowledge the role customer experience plays as a point of differentiation in today’s increasingly competitive landscape. For the most part, thought leaders agree that customer experience management requires leadership alignment in order to foster a consumer-centric organization, as well as tools and processes to continuously measure and refine the customer experience. However, the key element that seems to be missing in today’s literature around this topic is how to actually design the customer experience.

So, how does one actually go about designing a compelling customer experience that builds a loyal fan base, provides a layer of differentiation and drives revenue growth? Ask a startup founder.

Identifying pain points in the customer journey

Interview just about any successful startup founder or CEO, and more often than not you will hear some variation on the following sentiment: “I was frustrated with the current offerings, and realized there had to be a better way.”

Trunk Club CEO Brian Spaly articulates his startup’s reaction to the shopping experience for men’s clothing: “The big challenge for most guys today is the overwhelming amount of choice on the internet and the unattractive environment of the retail store. We solve that problem by sending an edited, personalized assortment.”

For Dwolla founder Ben Mine, the customer experience of dealing with merchant interchange fees needed revamping: “I got really obsessed with interchange fees and how not to pay them.  Every time a merchant gets paid with a credit card they have to give up a percentage.  In my case, I was losing $55,000 a year to credit card companies.  I felt like they were stealing from me — I was getting paid and somebody was taking money out of my pocket. So I thought, how do I get paid through a website without paying credit card fees?”

In these cases – as well as myriad others in the startup world – a pain point in a customer experience led to a flash of insight, around which a business was designed to circumvent the pain point.

Defining the target customer segment

When identifying opportunities for improvement in a customer experience, regardless of the industry, you cannot forget about one crucial variable: the customer. One only has to look at the headlines for retailer JC Penney to see what happens when you ignore your core customer when designing the “ideal experience”.

After retail star Ron Johnson was brought onboard as CEO, he tried to revamp the storied brand of the struggling retailer and reinvent the customer experience. The problem, however, is that Johnson designed the new “ideal experience” for a higher-end, upper-middle class customer rather than for the value-seeking customers that had been loyal JC Penney shoppers for years. Johnson’s attempt to apply his magic from Target and Apple – retail experiences he previously designed – to  JC Penney illustrate the extent to which you must design the customer experience around your most important customer segments, or risk alienating those that delivered your success in the first place!

Again, startups provide a valuable learning experience in this regard. Men’s retailers Bonobos and Trunk Club offer experiences for fashion-conscious, time-starved men, while Daimler’s car2go is designed for on-the-go urban dwellers. These companies have thrived because their services solve the problems of a specific customer, instead of trying to be everything to everyone.

Redesigning Your Customer Experience

Who are your customers, and what does their customer experience look like today? As the startups previously discussed illustrate, customer experience design is not interchangeable with customer service improvement; instead, analyzing the customer experience can lead to insights that drive completely new services and businesses. If you want to drive loyalty and create a differentiated experience, borrow a page from the startups’ playbook and turn a pain point into a point of differentiation.


Startup Spotlight: ShopSavvy and iftt

28 Dec

Greetings readers, and welcome to a new monthly blog series where I will discuss all things ‘startup’ – from venture capital resources to analyses of innovative companies that I think are truly disrupting their industries, or creating entirely new ones.

I wanted to start by introducing two companies that I recently discovered, both of which leverage technology to simplify consumers’ lives and literally “put the internet to work for you”: ShopSavvy and ifttt.


ShopSavvy, a free smartphone application introduced in September 2008 by Dallas-based idea factory Big in Japan, allows users to do comparative shopping on the go. The application, which is available on Android, Windows Mobile and Apple’s iOS systems, uses smartphones’ cameras, the internet, and geolocation services to identify products and inform shoppers where they can find those products online or locally. The app can read traditional barcodes as well as QR codes, and has a slew of features that allow users to add photos and prices, post reviews, share products via various channels, stream deals aggregated from the web and other ShopSavvy users, and check the availability of products at local retailers.

After using the application for a few weeks, I have been amazed by its potential to change the way consumers shop and its broader impact on B2C product-centric business models.  Especially during such times of economic uncertainty, consumers are increasingly arming themselves with information to make smarter purchasing decisions, and ShopSavvy provides a clearly defined benefit in the form of immediate savings. For merchants, however, the application is more of a direct affront to profit margins, as they must become more aware of and responsive to competitors’ pricing schemes – a challenge that is especially daunting to smaller, less flexible retailers who cannot purchase on the scale of larger, big-box competitors. Continue Reading»

If This, Then That (iftt.com)

It seems that every week we are inundated with a new app, social network, or some other innovation served up through digital channels, but after awhile, managing all of these elements becomes almost a second job. Surely there’s a way to consolidate our tech lives, and make our online worlds more proactive, right? Enter ifttt.com. ifttt (pronounced like ‘sift’, minus the ‘s’) “puts the internet to work for you” by triggering actions when users define and implement conditional “recipes” across various channels. In November, ifttt announced a partnership with Buffer, a social media scheduling application that will expand the scope of potential recipes that users can create.

For example, you can create a recipe in which you receive a text message anytime that the forecast calls for rain, or one where favorite tweets are automatically saved to your Evernote account.  Currently, the most popular ifttt recipe is one in which every time you are tagged in a Facebook photo, the image is automatically saved in a Dropbox folder.

I have long been intrigued by the broader shift from content and product aggregation, to more proactive recommendation-based models, and If This, Then That certainly takes a leap in that direction. After a 9-month beta test that began in December 2010 and included over 100,000 tasks that triggered more than 25 million “actions”, ifttt is now open to all users.

Celebrity Venture Capitalists: A-Round Investments from the A-List

2 Nov


Leonardo DiCaprio at Mobli’s office (Image via Mashable)

A hallmark of American culture has been the extent to which we have been able to squeeze every dollar of celebrity out of our star athletes, musicians and entertainers. From the eponymous Air Jordans to Joe Namath’s 1974 advertisement for hosiery and Britney Spears’ perfume, merchandise and endorsements have been a great way for stars to supplement their (and their agents’) incomes, and expand their marketing reach.

A more interesting phenomenon as of late has been the foray of celebrities into the world of Venture Capital. Leonardo DiCaprio and Ashton Kutcher are some of the biggest names to handover cash to promising startups, but other notable stars such as MC Hammer and even tween heartthrob Justin Bieber are reported to be scratching their entrepreneurial itch by way of VC investments. Can you imagine the Silicon Valley headlines? “It’s not a bubble, it’s Bieber Fever!”

Are Kutcher and DiCaprio really as adept at identifying emerging technologies and talented entrepreneurs as the veterans at Kleiner Perkins and Andreesson Horowitz? I doubt they can model cash flows or advise on go-to-market strategies as well as the true VC players can, but apparently the Ven”star” Capitalists are doing fairly well for themselves. Kutcher, through his investment partnership called A Grade, was an early investor in such hot startups as Foursquare, Path and Flipboard, and was even part of a group that bought Skype in 2009 before selling it to Microsoft in April for more than three times the purchase amount. Yesterday, social video and photo platform Mobli announced that Leonardo DiCaprio was one of a handful of investors that had participated in its latest round of funding – a $4 million seed round – and in April, MC Hammer announced he was joining as an investor/mentor in a tech incubator in Silicon Valley called NewMe.

Is this phenomenon a brilliant move on behalf of prescient celebrities with an eye for “companies that solve problems in intelligent and friction-free ways and break boundaries,” as Kutcher replied in a May interview? Or are startups realizing that celebrities can increase the brand awareness many times over, seemingly overnight, as in the case of Justin Bieber earning more than 1,700 followers within an hour of posting his first picture on Instagram?

Whichever the case, I appreciate the entrepreneurism exhibited by these celebrities. I never thought I would be giving props to anyone appearing on Perez Hilton, but I can’t help but applaud the Kim Kardashians and the Olsen twins of the world who appear to be testing out the waters of the business world by using their brains – okay, their checkbooks might be more accurate – to diversify their careers. My question is, how long will it be until there is a fund we can invest in that only manages portfolios of star-backed startups? Or what about a VC training camp for the rich and famous? Now that’s innovation!

Digital East 2011 Conference: Relationships and Customer Experiences

3 Oct

Last week, I attended the second annual Digital East conference in Tyson’s corner. The two-day event, attended by digital executives, senior marketers, entrepreneurs, web strategists, bloggers, investors and consultants such as myself, explored the latest innovations and trends in the social media, mobile, cloud, analytics, e-commerce and online advertising worlds, among others. Panels and presentations were often peppered with subtle sales pitches and data points highlighting explosive growth and success of various companies, but the two things that struck me as the biggest takeaways were the acknowledgement of a shift from anonymous online profiles and strictly digital engagement towards real-world, local relationships, as well as an emphasis on creating compelling customer experiences.

“Can’t we use technology for something better than a coupon?” asked a Gowalla developer. In his presentation titled “Telling Better Stories”, Gowalla’s Director of Business Development, Andy Ellwood, discussed a macro shift “from relevance to relationships” that is driving change in the industry. The internet and technological innovations allowed us to create a thriving digital world, but now we see a resurging interest in engaging in the real world around us, enabled by powerful mobile devices, geo-location services, and creative – albeit unproven – business models.

The growing emphasis on relationships, rather than anonymity, manifests itself in various ways: Gowalla and Foursquare create a social diary out of everyday urban adventures; startups Banjo and Sonar enable users to identify and connect with others in their networks in real time; and myYearbook emphasizes the fact that in social games, WHO you play is as important as WHAT you play, and that gaming has moved beyond entertainment, towards a platform to build relationships.

It was also really interesting to hear everyone from Capital One’s VP of Digital Marketing to LivingSocial’s Marketing Director discuss the importance of creating compelling, “non-brokered” experiences for your customers. The emphasis on customer experiences is especially relevant to advertisers, who acknowledge that they no longer hold their audiences captive through forced viewing, but instead must provide an environment of choiceful, on-demand experiences. Consumers are seeking content, not commercials. Especially in an increasingly competitive environment where a seemingly infinite number of marketers must compete for the increasingly limited attention spans of consumers, creating compelling and engaging customer experiences will be the key to success in the digital marketplace.

It was exciting to see such growing interest in this sphere in the DC area, which, given the federal government’s role in the local economy, hasn’t exactly been known as a hub of technology and innovation. I don’t think Digital East will rival SXSW anytime soon, but I hope it continues to grow in both the number of attendees and the quality of the panelists and presenters.

50% Off – Overvalued Business Model

21 Jul

Another day, another daily deals site.  At the DC launch party for Atlanta-based Scoutmob last week, I found it almost comical how hard these start-ups try to differentiate themselves. Much like the Williambsurg-bound hipster who scours vintage markets high and low in an effort to craft an identity wholly his own, only to emerge as a mustache-bearing, prescription-less glasses wearing caricature of a stereotype, Scoutmob cannot escape the fact that at its core, the company is just another coupon peddler.

Scoutmob launch party in DC

The formula is simple: line up local restaurants and service providers to offer one-off, loss-leading deals promising savings of 40-90%; hire copywriters to craft quirky and witty descriptions of said local businesses; fund aggressive and expensive digital marketing campaigns with revenues from prior deal sales; parade growth charts in front of VC firms to attract tens of millions of dollars in additional investments; expand to other cities by hiring local sales staff and launching expensive marketing campaign.

“But we’re different,” they say.  The hundreds of daily deals sites might be able to create unique brands and tweak the underlying business model (i.e. don’t pay for the coupon until you use it, or $5 from every deal sold goes to a charity), but the consumer doesn’t care who his drug dealer is, he just wants to get high. There is absolutely zero brand attachment to a daily deals site, because 50% off your local sushi joint saves you the same amount of money regardless of the company paying the liberal arts grad who wrote the cutesy email or designed the banner ad that inspired you to “buy now”.

The fact that Living Social and Groupon are expected to reach valuations of up to $15 billion and $30 billion, respectively, after IPOs this year is completely irrational. It will be especially interesting to see how the traders on Wall Street and in hedge funds react to the IPOs; I’m sure the “greater fool” theory will be as easy for analysts to explain to their portfolio managers now as it was 12 years ago.

An interesting Business Insider interview with a former LivingSocial salesman made me breathe a sigh of relief, as the commentariat and the interviewee shared my point of view regarding the insanity around the daily deal model.  Daily deals will continue to flood our inboxes as long as VCs keep throwing money at them and salesman convince restaurateurs to give up weeks of profitability for a little bit of cash up front.

It’s impossible to predict when exactly the proliferation of daily deal sites will end, or at least reach a sustainable equilibrium, but you can mark my words that some point in the future, we’ll see the following headline in the Wall Street Journal:  “50%-off Daily Deal Stock: Investors Flee as Bubble Bursts”

(See more about the daily deals bubble on the Motiv blog: http://motv.st/pl6KX5)