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Most Software Startups Blow It In Beta; Mobile Developer Apsalar Shows Another Way (Page 1 of 2)

A few months back, San Francisco-based developer Apsalar raised $5 million in venture capital,  bringing its total funding to $5.8 million from three investors.

While it's true that Apsalar is in a hot space -- mobile apps -- it's the firm's customer-centric focus that drives development as well as business planning, not to mention the very genesis of the product.

The problem with mobile apps, you see, is that about a third of them are downloaded and used once. Period. End of story. Apsalar provides user-level analytics to help software publishers avoid that two-thirds drop-off, and instead engage and build relationships with customers. 

Michael Oiknine, Apsalar's co-founder and CEO, says that if software startups want to succeed, they need to stop focusing on products, and start paying attention to customers.

Tip #1: Nail it before you scale it.

Founded in April 2010, Apsalar released their first free product in the Fall of 2010; that became a full product in February 2011, and a paid version was introduced in the Fall of 2011. 

The company has 13 employees, but Oiknine says he wants to increase that number to 20 as soon as possible. "At that point," he says, "we'll be at a plateau where we want to wait and see what happens with sales. 

"The fact that the people here had former startups and made mistakes in the past, part of our DNA is nailing it before we scale it," Oiknine says. "We think we've reached the first inflection point on the product, and we're now scaling. On the revenue side, we need to still nail it."

Tip #2: Beta testing is not market testing.

"The common principle among successful companies is being customer-centric," says Oiknine. "One of the biggest failures is being product- rather than customer-centric. 

"It may sound very theoretical, but it's actually very down-to-earth. We all have a tendency to be very excited about the product. We go out there and try to find beta testers, get a little a bit of feedback, then, boom!, we push the product out.

"Beta testing is not market testing; it is only to tell us that there's a bug in the product.

"It's really about understanding the customer and their pain points. Is this feature a must-have, or a nice-to-have? And if it's a must-have, how would they like it addressed? 

"You do minimum features, you go back to the core, you test your hypotheses. Is that change addressing the pain point that we discussed? That allows you to nail it before you scale it."

Tip #3: Business starts with a hypothesis.

"It starts with a hypothesis," Oiknine says. "If you don't have a hypothesis about a problem within a segment within a market, you shouldn't be an entrepreneur. 

"First, you put together a slide that says, 'Here is my hypothesis about all the problems you have.' Then the first thing that you ask is: 'In that list, what are the ones that are are real problems for you?' Second, you ask, 'Can you rank them for me?'"

Tip #4: There's no substitute for hustle.

All well and good, we said, but if you have no product (and maybe no company), how do you get in front of people to test your hypothesis?

"There is no silver bullet," says Oiknine. "You have nothing to sell, nobody knows you, you have no idea how to target the organization. It's a lot of hustle. 

"First, you tap your network. You are socially active. You ask people around you for introductions. Sometimes you are two or three or four degrees away from finding that right person, but  that shouldn't stop you. 

"The other thing I found -- for me it was something of a culture shock, because I am from France, where nobody big will take your calls -- what I found in the U.S., there is a business mentality that is extremely friendly here. 

"You don't have carte blanche to waste their time, of course. I'd start off by saying, 'I'm not trying to sell you anything, but your mentorship would be extremely valuable to me.' If you do waste their time, you're not going to get it again. 

"If I need to take them out to lunch, I'll do it, but from an efficiency standpoint you're not going to get as much out of them as having the conversation in their office."

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