Early user acquisition & pivots

The first pivots are always the hardest because it feels like you’ve done something wrong

As mentioned, my first MVP was to email my friends and ask them to email me whenever they wanted to borrow anything. No one responded (at least with requests, plenty of people told me how cool the idea was and how they would be excited about using it). If I pitch my idea to 100 people, most of them will say they would definitely use the service, but they don’t. Three reasons why & solutions to each (in parenthesis):

1. People don’t borrow as much as they say, due to the “cheap mooch” effect (therefore, build a better product to overcome the barriers to borrowing)
2. People that are hearing about my product aren’t the ones who need to use it (therefore, target the right audience)
3. People don’t remember to use the product; it’s not part of their workflow (therefore, develop a unique marketing strategy that keeps the product, and borrowing, top-of-mind )

I discuss #1 in a different post that analyzes the psychological nature of borrowing. This post will focus on #2 & #3.

2. Targeting the right audience

My ultimate customer is the Millennial urbanite who is primarily interested in sharing among his/her network of existing friends. Why? Because:

Among friends, many barriers to borrowing are significantly reduced

• You (presumably) trust your friends more than strangers
• You already see your friends, potentially simplifying the exchange process
• You’ll do a great deal to try and not damage a friend’s stuff

This segment of the market is large & underserved

• For another 5-10 years, the majority of the population will not be comfortable sharing with just anyone (despite the sharing economy buzz, our culture of individualism takes time to change)
• Therefore, many will avoid traditional sharing economy sites that don’t solve their specific problems (e.g., “cheap mooch” effect) & have a brand identity that promotes share with anyone

Successfully enabling friend-to-friend sharing has much greater potential sociocultural impact

• Unlike with a peer-to-peer rental market, sharing with friends creates a deeper set of interpersonal & communal relationships where obligation doesn’t end with payment (as well, in sharing marketplaces based on payment/ rental income, there can be a counter-productive incentive to increase asset ownership)
• As people become comfortable sharing with friends, they may adopt other sharing economy services, expanding the pie & impact for the entire sector

Because of these reasons, I was 100% focused on this target—these people who experienced the greatest cognitive dissonance when it comes to borrowing. I figured if I could solve their problems, I could get the other market segments who had it easier. But this is the hardest group to reach because they have the greatest resistance to borrowing. Focusing on them meant sacrificing user input from potential early adopters, i.e., people who are more open to sharing with a broader network. I was making the same mistake that I believe many traditional sharing economy services do—focusing too much on one customer group at the potential exclusion of others.

Enough of my mentors mentioned this to me as well, and I realized the importance of starting a bit smaller—solving the problems people are already trying to solve for themselves today. This mean resolving the logistics and inventory challenge for people who are already sharing or want to share. If I get these “tablestakes” offerings right, it will also better prepare me to target the more reluctant borrowers (as well as giving me a network of promoters). The one thing I want to always be mindful of, is that I’m still keeping the ultimate end customer in mind.

3. Developing a unique marketing strategy

Despite research indicating that email is actually quite an effective acquisition strategy (with conversion rates better than social media) my email MVP was largely a failure. Two potential reasons:

1. My emails were ineffective (poor choice of: target audience, frequency, messaging)
2. Email is an effective acquisition strategy, just not right for me

The first is very likely possible (recall earlier discussion on poor target audience), and therefore I want to work on this as well. But it’s also quite possible, that the email is not the right strategy for me. Perhaps no one remembers to email me when they need something, because email isn’t a tool people generally use to acquire stuff.

Nearly 100% of my interviewees told me they go to Amazon.com—always—whenever they need something. Even if they don’t buy, Amazon is just where they look at options. As a result, I’m working on a browser extension that prompts users, after an Amazon search for an item that I have in inventory, whether or not they would like to borrow it instead.

Even if emails could be made more effective, the extension is likely a better priority. As I contributed to a FounderDating discussion thread, especially in the Bay Area, there is literally an app for everything. Email might be effective in promoting your app, but the challenges are much greater when every other start-up is using the same strategy. Those repeated emails start to fall onto deaf ears or get sorted into spam folders for people who can’t be bothered to unsubscribe (and therefore, signal that the approach is failing). More innovative ways are needed to wedge your product/ service into a user’s mindshare.

AirBnB and Stripe are lauded for their guerrilla tactics—knocking on people’s doors, crawling through Craigslist, or physically installing on someone’s laptop right then and there (I can’t find a source for this, but remember hearing that this is how Stripe got many early users, please correct if wrong!). When you’re looking for an apartment, if every Craigslist ad is sending you to AirBnB, you remember it. When you want to do payments and you see that you have Stripe installed, you remember it. (Friends, be forewarned, I’m going to install my browser extension on your computers!)

These tactics are especially critical because one of my fundamental challenges will always be that the marketplace for borrowing is infrequently used. It might take reaching out to 1000 people before 1 will actually be a user by necessity. This is also a key reason I started writing this blog, to build an identity for myself in this space and clear a path for the product to follow.

This blarticle was written in the context of building a product that helps people borrow occasional-use items (e.g., sleeping bags, electric drills) from their friends & neighbors. Check out the prototype here.