Perceived Value
Smoke, Mirrors, Websites, and Contests
Thoughts on the OS2 Lectures of Stanford’s CS183C
(ideas which resonated with me)
Part II of II
[Other topics from these lectures covered in Part I]
I loved Jennifer Pahlka’s entire talk, but her anecdotes about attracting early city-government customers through a combination of a slick website and offering CFA’s services through a contest/award system resonated especially. The former — while an awesome strategy — wasn’t necessary in Alation’s case, but the latter was absolutely integral to our ability to scale.
In the early days of Alation, we didn’t even have a website. That seems insane in an age where every business — even a local, mom-and-pop, brick-and-mortar one — does. We were pretty relentlessly focused on building our product and establishing high-touch relationships with a few major flagship customers. Some of our relatives worried we weren’t legit, and it could’ve been a massive impediment to filling a hiring funnel, but we wanted to keep burn low, so it was basically just us founders and for early hires we sought highly risk-tolerant folks in our personal networks (who’d be willing to hear the pitch rather than just dismiss a website-less posting as being a scam or a pack of losers). Sam Altman criticized founders who spend all their time projecting a good image instead of building something of substance. While we admittedly did obsess over our logo (a particular example he used) we were proud of avoiding the temptation of a vanity website prior to achieving some kind of product traction. And everything worked for a while.
Then one day, we got (mostly) great news. Our little pilot in a major Fortune 500 company had gotten onto the radar of some top brass, and an email intro was imminent. That meant someone important was about to see “@alationdata.com” which would lead them to what was then our domain. Lest they see a GoDaddy filler page, we dropped everything and I learned just enough CSS3 to prepare a landing page that would be only 98% sketchy (instead of the full 100). Education, ideation, and implementation took a couple hours end-to-end. We settled on a starscape with a constellation shaped like our logo. The logo itself pulsed from fully transparent to just barely visible (we didn’t want to beat people over the head with the message) over those stars, and a gradient of dawn appeared over the course of an hour or so. No one ever noticed the logo or waited for the gradient (except maybe by accident). But somehow — probably because the executives trusted the references from the evangelists on their teams and never even checked the website — we ultimately won over the account.
After that little frantic foray into web development we quickly forgot about our online presence. Which meant we left the content-free site up as we tried to expand the team. But an early step in the process of recruiting David, one of our best hires, came when his friend visited the sites of several potential employers and resized the browser window to test for responsive design, as a half-joking heuristic assessment of their quality. Each other site broke at some point, but ours — comprised of only two PNGs and one programmatically-defined gradient — didn’t. The rest is history (though not the kind that’s written down or that anyone cares about… at least yet :).
Given that we were able to find great early customers through face-to-face interactions and demonstrate value to them with early versions of our actual product, we didn’t need a slick website up front. But Pahlka’s notion of flipping the psychology of the interaction (where the customer “applies” for the vendor instead of the vendor lobbying the customer) was vital for us.
I’d learned in a class on cognitive psychology with Lera Boroditsky that people are generally so bad at assigning monetary values to things they sometimes don’t even know the sign (i.e. whether they should pay or be paid for something, like a missed lecture). But I’d never had the guts to test the principle in real life.
In my design classes, I’d been taught that you should pay users for the privilege of getting their feedback on prototypes of your product. But our CEO was wiser and braver than I, and actually got our early customers to pay substantial quantities to do a POC of our software and to have a seat at the table for our product roadmap discussions. I couldn’t believe we could be paid anything — let alone so much — (a) for a product so immature and (b) for user insights that we really needed if we had any hope of making something that could sell more broadly (those early requests were for fundamentals, not custom-development). I’ll never forget that real life lesson on framing effects.
Addendum (11/21/15):
Dianne Greene’s story about VMWare’s Preferred Hardware Vendor program was another example of the Pahlka approach: her sales team told each potential partner that the deadline was closing, that everyone else was signing up, and that they needed to find a dedicated support person, etc., right away to get enrolled. It worked—the house of cards stood, with each vendor coming on board basically simultaneously.
