Six months later, teeth clenched and apologies at the ready, we released our website to the public. And then—nothing happened! It turned out that our fears were unfounded, because nobody even tried our product.
We Resort to Talking to Customers
Over the ensuing weeks and months, we labored to make the product better. We eventually learned how to change the product's positioning so that customers at least would download it. We were making improvements continuously, launching bug fixes and new changes daily. However, despite our best efforts, we were able to persuade only a pathetically small number of people to pay $29.95 for the product.
Eventually, out of desperation, we began bringing people into our office for in-person interviews and usability tests. Imagine a 17-year-old girl sitting down with us at a computer. We say, "Try this new product; it's IMVU." She chooses her avatar and says, "Oh, this is really fun." She's customizing the avatar, deciding how it's going to look. Then we say, "All right, it's time to download the instant messaging add-on," and she responds, "What's that?"
"Well, it's this thing that interoperates with the instant messaging client," we say. She has no idea what we're talking about. But because she's in the room with us, we're able to talk her into doing it. Then we say, "OK, invite one of your friends to chat." And she says, "No way!" We say, "Why not?" And she says, "Well, I don't know if this thing is cool yet. You want me to risk inviting one of my friends? If it sucks, they're going to think I suck, right?" And we say, "No, no, it's going to be so much fun once you get the person in there; it's a social product." She looks at us, her face filled with doubt; you can see that this is a deal breaker.
Of course, the first time I had that experience, I said, "It's all right; it's just this one person. Send her away, and get me a new one." Then the second customer comes in and says the same thing. Then the third customer comes in, and it's the same thing. No matter how stubborn you are, you start to see there is something wrong.
In response to the feedback, we created ChatNow, a feature that lets you push a button and be randomly matched with somebody else anywhere in the world. The only thing you have in common is that you pushed the button at the same time. All of a sudden, people were saying, "Oh, this is fun!"
Any effort that is not absolutely necessary for learning what customers want should be eliminated.
Then, maybe they would meet somebody they thought was cool. They'd say, "Hey, that guy was neat; I want to add him to my buddy list. Where's my buddy list?" And we'd say, "Oh, no, you don't want a new buddy list; you want to use your regular AOL buddy list." You could see their eyes go wide, and they'd say, "Are you kidding me? A stranger on my buddy list?" To which we'd respond, "Yes; otherwise you'd have to download a whole new IM program with a new buddy list." And they'd say, "Do you have any idea how many IM programs I already run?"
"No," we'd say. "One or two, maybe?" That's how many each of us used. To which the teenager would say, "Duh! I run eight." It started to dawn on us that our concept was flawed.
Our early adopters didn't think that having to learn a new IM program was a barrier. Even more surprising, our assumption that customers would want to use IMVU primarily with their existing friends was also wrong. They wanted to make new friends, an activity that 3-D avatars are particularly well suited to facilitating. Bit by bit, customers tore apart our seemingly brilliant initial strategy.
Was It All a Waste?
I wish I could say that I was the one to realize our mistake and suggest the solution, but in truth, I was the last to admit the problem. I had slaved over the software that was required to make our system work with other IM networks. When it came time to abandon that original strategy, almost all of my work—thousands of lines of code—was thrown out. That was really depressing.
I wondered, in light of the fact that my work turned out to be a waste of time and energy, Would the company have been just as well off if I had spent the past six months on a beach sipping umbrella drinks?
There is always one last refuge for people aching to justify their failure. I consoled myself with the fact that if we hadn't built our first product—mistakes and all—we never would have learned these important insights about our customers. We never would have learned that our strategy was flawed. There is truth in this excuse: What we learned during those critical early months set IMVU on a path that would lead to our eventual breakout success. Today, IMVU is a profitable company with more than $50 million in annual revenue and more than 100 employees. IMVU customers have created more than 60 million avatars.
For a time, this consolation made me feel better, but some questions still bothered me. If the goal was to learn important insights about customers, why did it take so long? How much of our effort actually contributed to that learning? Could we have learned those lessons earlier if I hadn't been so focused on making the product "better" by adding features and fixing bugs? I had created software to support more than a dozen IM networks. Was this really necessary to test our assumptions? Could we have gotten the same feedback from our customers with half as many IM networks? With only three? With only one?
Here's the question that kept me up nights: Did we have to support any IM networks at all? Is it possible that we could have discovered how flawed our assumptions were without building anything? What if, before building anything, we simply had offered customers the opportunity to download the product solely on the basis of its proposed features? Almost no one was willing to use our original product, so we wouldn't have had to do much apologizing when we failed to deliver.
In other words, which of our efforts were creating value, and which were wasteful? This question is at the heart of the lean-manufacturing revolution; it is the first question any lean-manufacturing adherent is trained to ask. Learning to see waste and systematically eliminate it has allowed lean companies such as Toyota to dominate entire industries. Lean thinking defines value as "providing benefit to the customer"; anything else is waste. But in a start-up, who the customer is and what the customer might find valuable are often unknown. I realized that for start-ups, we needed a new definition of value. The real progress we had made at IMVU was what we had learned over those first months about what creates value for customers.
