We are in Barcelona working at a client site and on the way back to our company apartment, we got a bit distracted talking about software and, as we walked down the stairs at the Plaça de Catalunya station, we realised that we were on the wrong platform. We had gone down to the railway station instead of the metro. We walked upstairs and as we tried to exit through, the ticket validation machines didn’t allow us to get out, it displayed “ticket not validated at entry”. Now, we were getting confused since we had purchased our tickets that morning, we had been able to get in. After a couple of tries, we walked towards the station master and quickly explained to him our situation. He looked at us and immediately took two “exit tickets” out of his pocket and told us “yes, that’s normal, you cannot exit in the same station you entered”.

Exit Ticket

Now, someone must have created that rule, right? Mauricio and I could immediately think of many user stories that would see a client exiting from the same station that they entered and we couldn’t understand under which circumstances you wouldn’t want someone to be able to exit (remember we were using a valid ticket that had been accepted to get in and we had a valid ticket when trying to exit through machines). The most amazing thing is that a decision was made to create an exit ticket, print it, modify the systems to accept it, instead of fixing the system. Why would one put such a restrictive rule onto a user that holds a valid ticket?

Our next step is now to try this exit ticket at other stations. Could this be a master exit ticket that allows us to exit from any station? That would be even more interesting :) If you have any ideas about this system and why it’s this way, I would be very interested in your comment.

Long Answer – It depends (doesn’t it always?), and don’t under estimate inertia.

When you’re starting a new product you start with no customers. You have to go and get your first one. OK, the first one is you, then your colleagues, then your friends, then your family.

Some will try you because they love you, but the real test with this crew is if they stay. That’s when you’ve earned them.

At some point (unless you’re Trib with 1 million ‘friends’) you have to find some strangers, get them excited and get them to try you out. There are generally two options with potential users. Those that have no existing solution or those that have a competitive or substitute existing solution. Both pose problems.

No Existing Solution

If someone isn’t using anything to solve their problem then maybe they don’t think the problem is really worth the trouble. Or it’s not worth the cost if there is an expensive or major hassle solution. Just because they look like they have a big need, and even if they say “Yeah, it really sucks that I can’t ______” doesn’t mean that they care enough to spend money or time to get up off their comfy couch of doing nothing and have it solved.

Time and time again I see new apps on Read/Write Web, try them, like them and know that if I used them my life would be just that little bit better. But I don’t. The little bit better isn’t worth the mental weight of yet another little bit better app.

So how much will get someone off the ‘using nothing right now couch?’ – we’ll get to that later.

Using Competitor/Substitute

In a lot of ways, someone using something already is a better prospect. At least they care enough to use something.

But, instead of apathy costs, you’ve got switching costs. Obviously some types of apps are very easy to switch from because their is nothing invested or locked into it. I can watch videos on any app all day long. I really don’t care as long as it plays. However, uploading my own vids or commenting may form a more long term relationship/archive making it worth my while to hang around. Email is the same. Blogging is the same. Feed readers too.

So how much does it take to get someone to move from one product to another? Let’s look at it now.

Breaking Customer Inertia Formula

I’m going to see if we can try and solve this mathematically just to really mess it up.

Of course this maths is done in the blink of an eye and the click of a mouse. But it is done.

It’s the reason why you can’t just be better than the existing apps. Or you can’t just be really useful. You have to be insanely, grossly, massively, obviously, simply and wonderfully useful.

It’s why I say to the startups we work with at Pollenizer Why don’t you start by charging people $100 a year for your app? “$100, no way anyone is paying that?” Well, if no one is going to pay $100 for your app, there is very little chance 1 million people will use it for free.

I’m serious. Start off aiming to make it $100 worth and worse case, when you offer it for free, people will be lining up in droves. Start off thinking it’s free, and you’ll get what you expect them to pay for it.

So the answer to the question – how hard is it to get a new user? Very easy if you create seriously significant value. Impossible if you create marginally good value.

The idea came to Posse CEO, Rebekah Campbell, when she was struggling to sell Evermore tickets in Perth. Recruiting the fans to work for the band quickly fixed that problem and planted the seed for a new web business.

Here is the first lesson for new web businesses: this idea was tested before the technology was envisioned, before the architecture was laid down, before the team was hired. There was simply a question: “If we gave fans the tools to sell tickets for the band, can they do so?”

If you can find a way to test your hypothesis simply and manually before you start, like Posse did, you can soon discover if there is a business behind it.

Now Evermore are touring again and we chose to gently launch Posse around the band that started it all. Now you can buy tickets for Evermore from me! I am going to the Sydney gig with some mates so let me know if you are coming and buy your ticket from me. :-)

Now begins the hard part – building a web business.

Our approach to this is highly iterative. We have defined a series of tests, each of which must be passed before we move on to the next. For example, 80% of users that start to register to be an agent must be successful. Or, average agent sales must be 5 or more tickets. With these objectives, we watch the stats closely, hypothesise about certain behavior and make changes to the site quickly before starting the cycle again. This is the core mechanical heart of the business and if it works poorly, the business will work poorly, no matter how large it grows.

As Rob Antulov (3eep’s CEO) says, “We want to make great burgers before we try to open McDonalds”

It is common for start-ups to have a feature based approach in which the blind hypothesis is that the next feature will bring the users. Rarely it does and usually the same teams are not noticing that registration is not working well, or invite emails fail to reach their destination.

We hope you will give Posse a try. Become an agent and try to flog some tickets to your mates. Help us learn how to make it a better service that is truly useful.