Today is a good day to code

Deciding When to Implement Features in a Startup

Posted: April 26th, 2011 | Author: | Filed under: Companies, Programming | Tags: , , , | No Comments »

20110426-102416.jpg

Over the weekend I have been thinking about which features should be implemented and in what order. I realized that it didn’t make sense to try to prioritize each possible feature, as there are thousands of them, because that would take too long, and not necessarily result in a reasonable prioritization. I started to think up a framework for deciding which feature would be implemented when.

One of the first things to think about was the framework of the startup, or which development strategy the organization is using. In my case, we are using a lean-agile approach. This approach suggests that feature decisions should be based upon whether or not the implementation of a feature will affect positively any of the key metrics of the startup. An example would be, if you have a freemium product, conversions to paid from free.

What I would add to that philosophy, is that it isn’t enough that it move one of the metrics, but that it move the right metric for your startup at it’s current growth stage. If you are raising money, then gaining some sort of traction is likely more important than long term customer retention. If you already have product market fit, and you earn revenue through use of the product, then it makes sense to focus on making your software more pleasant to use.

To clarify this for myself, since I tend to obsess about usability a bit, I thought back to when I switched from PC to the Mac. I was telling myself that it was largely because I liked the usability of the product better, while this was true, it wasn’t why. I had just received a video camera at the same time and was playing around with various low-end PC video editing software, it basically sucked. Then I found out that the Mac came with iMovie. iMovie was far from perfect, but it was really good and gave me a capability that I didn’t have before. I could now edit long home movies easily, and burn them to DVD.

I realized that Apple got me to convert on a first order feature, and retained me on a second order feature. That is they gave me a capability that I didn’t have before, thereby converting me from a non-Apple user to an Apple user, and I created mainline revenue for them.

Apple has always been about this, when thinking about the iPhone 1, what did it do for me. Well, it didn’t have a ton of features, some of the ones that it did have were missing obvious things that it needed, like copy and paste, and it took a long time to get them, at first I didn’t understand why, but later it made sense. Apple was optimizing for that initial conversion, the product gave me the capability to use the internet and share photos in a minimal, yet useful way. That was what made me convert. If Microsoft had done that then I would have bought a Microsoft phone that day.

So what I decided was that I needed to figure out what the startup needed, right now we are fund raising and trying to acquire customers, so to me that means that we need to have features that get people to buy. Those would be first order, first priority features. Those things, that would make a material difference for the startup, and answer the question for the customer “what fundamental thing can I do with your product, that I can’t already do.” That is the question you must answer to get people to convert.

Second order features, the features that make your product nicer to use, are all features that are incredibly important. However, depending on your business model, you may be wasting time based on your organization’s goals working on second order features when you haven’t figured out the first order ones. Frequently when you see startups die, this is the reason. They are working on things like performance, or some trick usability thing that is really awesome and hard, so it is sucking up time, meanwhile you aren’t adding users because you have failed to answer the critical question. Maybe you know what your product will do in the end that is transformative, but your prospective customers don’t know. You must work on transformative, game changing, disruptive features first.