Building a Business — Validation Through Payment

User feedback is an incredibly important part of building a product. With the help of a small beta group and Lean Canvas we defined the problem we were solving and how to tackle it. Together with our first users, we created Arc and launched it in the Slack App Directory.

Since those early days, we’ve gained thousands of users and received hundreds of emails and /arc-feedback messages suggesting features, giving feedback and saying thanks. But, those messages were just words. Valuable words with potential, but still just words. Up until the end of August, we didn't have a way for our users to act on their positive feedback.

In mid August, we released the first Paid Plan for Arc.

All our positive feedback was a great signal, but a paying customer would be clear evidence that we are making a product that matters. Our $9 monthly subscription fee was high enough to reinforce our decision to keep working while still being accessible for all our potential target markets.

Thinking back, we honestly thought that if we released payments, people would pay. Our service hadn’t changed but we were getting great feedback, so why wouldn’t we get customers? We were even making guesses on how long it would take. One week? Two weeks? THREE WEEKS? ya right, too long.

One hour passed. Nothing
One day. Nothing
One week. Nothing
Three whole weeks passed. Still nothing

We didn’t have illusions of getting tons of users right away. But, we thought we’d get one. From the ~40 new sign ups every day and the thousands of active users, no one was upgrading. The user experience was rough. There were still a million things to do. But people ‘loved’ Arc… just not enough to upgrade.

Feedback received.

Arc was clearly a concept that people liked, but we weren’t executing well enough. We had users, but not customers. We went through our feedback with our target market in mind and started to make small improvements.

In September, we got our first paid user. Sadly, 1 minute later, they were also our first cancellation.

We got in touch with our 1 minute customer and immediately offered a refund. All three of us agreed that if someone cancelled because they didn’t get what they wanted from Arc, they shouldn’t get charged.

During the exchange, we also learned why they cancelled and what specific features would convince them to come back. This was a big moment for us. This was real feedback from someone who took action and was willing to spend $9 in hopes that Arc solved their problem. It didn’t, but that was a small issue that could be corrected quickly! We had found a clear path to getting our first customer.

A week later, we were releasing small features with our first paid user in sight.

Our new strategy brought new customers. First it was one. Then it was two in two days! Then it was multiple sign ups in a single day! Then, two weeks later, we got that very first user to enthusiastically upgrade their account. Our users had responded to our work by upgrading. They backed up their words with the most valuable action possible; they became our customers!

I wanted to write this post to talk about validating a product with actions instead of words. But it’s also a thank you post. Thank you to that first customer who canceled after 1 minute. There’s never been a time that I’ve gone from such a monumental high to a cataclysmic low. But from that, Arc’s matured and every day more users are validating it through their actions.

Image by Fabian Blank

Originally published at blog.unioncode.com on October 17, 2016.