Our team recently went through the slight agony of crafting something called a strategy and then making a plan on that basis.
I have four intentions in sharing this:
- To craft a strategy that is good enough we are not ashamed to post it publicly
- To make it obvious to you as users that we care enough to go through the exercise of translating our plan into a consumable format
- To create some added accountability about what we’re going to do in 2019
- To give you some additional confidence to invest in our crowdfunding campaign
Let’s see if I succeed!
A Quick Note About Strategy
If you asked me 3 weeks ago what a strategy is, I probably would have made up something smart-sounding, but the truth is I had no idea. Then I read Good Strategy Bad Strategy by Richard Rumelt, and I had my eyes opened.
Sidebar: If you aren’t sure what a strategy is, you would probably have your mind blown by reading the book. Strategy isn’t just for big companies, it’s for solopreneurs and freelancers and probably even students, too. Having a strategy means you align all of your efforts in a cohesive design so that your scarce resources like time, energy, and money all reinforce one another.
Most people’s “strategy” is something like “achieve these 94 goals”. They don’t account for the fact that simply working harder won’t necessarily achieve results and that doing all that work in the timeframe you’ve allotted probably isn’t possible.
According to Rumelt, a good strategy has
- A problem diagnosis, i.e. what is the most important or fundamental problem you need to solve?
- A guiding policy, which addresses the problem by leveraging one or more advantages, and simplifies complexity by defining an objective that strategically focuses efforts (think of guard rails on a highway – they keep traffic moving in the same direction but don’t force you into just one lane), and
- A set of coherent actions aligned with that guiding policy.
Once you have a strategy, it becomes much clearer what to work on and what not to work on. I think that’s useful for everyone, and it’s definitely useful for us, since no matter how hard we work, we can only finish so much work in a year!
Our 2019 Strategic Plan
Below, I’ll share our strategy and goals, which, together, constitute our Strategic Plan.
I’ve omitted some details (or made them intentionally vague) in cases where we think it’s more aligned with our strategy to keep quiet. Sorry. That might make for frustrating reading. But we figure it’s better to share a vague version than nothing at all. We know how badly you all want to know what we monkeys are up to (and why we haven’t built that feature you asked for!!) 😉
I’ve also made a few callouts to highlight useful non-obvious lessons about strategy.
Problem Diagnosis
Let’s keep this simple. The problem is we are losing money every month and do not have enough traction or validation yet to survive, or raise what venture capital investors call a seed round.
(For those uninitiated in the world of startups, this is not a bad problem: since we just raised money from venture capital investors, the ball is now in our court to show rapid progress.)
Guiding Policy
Our guiding policy will be:
- To test several potential market segments using Lean Startup Methodology, with a focus on paying customers, until we validate demand within 1 key market segment, and then
- To pursue product improvements and growth opportunities focused on that market segment.
In lay language, that means:
- We want to test several audiences that we haven’t tried yet
- We’ll direct our learning toward users who are willing to pay, since we need to generate revenue
- We’ll spend a lot of time and effort measuring things, and getting better at measuring the right things in the most useful way
- We’ll ship product improvements in the increments that allow us to learn, rather than assuming we know what needs to be built
The Advantage Our Strategy Leverages
The advantage that this strategy leverages is that we are first to market.
Many people assume that being first to market is a big advantage, but empirically this isn’t true.
The implication of being first to market is that the unknown vastly outweighs the known, and it is almost certain to make wrong moves.
This makes it even more important to learn fast and adjust quickly. It implies that learning is a goal in and of itself, i.e. designing an effective experiment is more important than whether the numbers that experiment spits out are “good” or “bad”.
We should assume we won’t “get it right” the first time, and shouldn’t be overly swayed by the first positive results we stumble upon.
Key Implications
#1 We must learn as much as possible from what we’ve done already, by talking to and understanding our existing users.
#2 Making it easier for us to learn and measure important things on an ongoing basis needs to be a top priority, even though that pushes out building new features (and that’s painful).
#3 We need to monetize this year, and ensure that the company survives even if we don’t raise more money.
#4 Internalizing the mindset and behaviors of Lean Startup Methodology is imperative. We need to think of goals and projects as hypotheses to be tested and experiments to be run, to mitigate risks and advance an ever-more validated plan.
This Might Hurt
One kind of non-obvious implication is what we won’t do. This is where strategy gets painful.
What we won’t do—what we can’t afford to do—is focus exclusively on building the features our loyal but small user base have requested. Honestly, we’re deeply tempted to do this. Both Mike and I feel a strong desire to make you all happy. And, as a power user myself, I want the same features you do!!
The reason we can’t do this is we simply won’t learn enough from doing it.
As an example of how this is playing out right now, our focus in January is developing a partnership with an existing community that has an interest in using Focusmate. We’re doing this to learn whether tapping into existing communities is a viable way to grow and monetize.
It also implies that, as a general rule, we should beware the sunk cost fallacy, i.e. the tendency to double down on what we’ve done so far. Instead we should consciously compensate for this fallacy by emphasizing experimentation across a relatively wide array of pathways.
In practice, this is hard, because what we’ve done already is deliver a product that has real users (that might be you!) who we care about and who want things. We want to give our users what they want but that isn’t always the “right” thing to do, in consideration of our strategy.
[Does this sound cold and heartless? I sure hope not, but I really can’t tell. If it does, you can tell me in the comments how you’re feeling and we can discuss more. Above all I want you to know how much we care and how hard we’re thinking about building this company right. We want you to be able to understand and empathize with our decisions, which we believe will serve you best in the long run, even if you don’t get that thingy you want right away.]
Our 2019 Goals
The third piece of a good strategy is “a set of coherent actions”. We’ll go ahead and call those our Goals.
We have written our Goals using the OKR framework. (OKR stands for Objectives and Key Results.) We are novices with this framework but have decided to use it because it nicely separates the “What” (objectives) from the “How” (key results).
What are OKRs?
Sidebar: I find most of the things written about OKRs frustratingly confusing, and still struggle with the definitions of Objectives and Key Results, so I’ll add mine here.
Objectives are the “What”, i.e. where you want to get to. They are deeply connected to the strategy, and in a way, they are the outcomes that logically correspond to the strategy. They are also written in such a way that there is no implication or bias about how you’ll get there. A well-written objective doesn’t care if it’s fulfilled by waving a magic wand or by working 100 hour weeks.
Key Results are the “How”, i.e. what projects you will work on to fulfill the objectives. Projects and units of work are annoyingly vague and flexible things to contemplate in a high level set of goals, so I think it’s necessary to modulate the specificity of the Key Results to match the timeline and capacity involved.
Objectives for 2019
Here’s what we plan to accomplish in the coming year.
S
I’m going to limit this to our Objectives and skip the Key Results, because I think they convey 90% of the meaning in 10% of the words.
#1 Implement a comprehensive feedback gathering and analysis system that effectively prioritizes product development work
As noted above, we need to institutionalize the Lean Startup Methodology feedback cycle pictured earlier in this post.
One Key Result, likely the first one, will be an analysis of our existing user base, designed to improve our knowledge of what our market segments are and what degree of product/market fit we have in them, and build a product roadmap on that basis.
[If you receive an email asking you to share your experience, please respond!!]
#2 Do a pilot to test whether a diverse set of existing “communities” will pay for Focusmate
Community is our term to describe an existing group of people who might want to use Focusmate together, whether that’s a user segment like students or musicians, an affinity group like Joe’s newsletter subscribers, the customers of product like an online course, or the employees of a company.
This objective is about testing our hypothesis that communities will value Focusmate due to relationships and shared preferences within each respective community, i.e. students will want to work with other students, and furthermore, that students of the same course will want to work with other students from that course.
We’ll be testing a diverse set of communities to help us learn more about how different types of users respond to Focusmate.
#3 Get our product ready to support multiple concurrent communities and a large number of end users
This objective is about doing the work necessary to fulfill objective #2. We want to test our hypotheses by putting Focusmate in the hands of the intended users.
#4 Show good retention within at least 1 key market segment
If you’re currently a Focusmate user, this is where your ears should perk up.
Improving retention is all about making a product that users come back to again and again and again.
This objective is also a simple way of saying that we’re going to act on what we learn (see objective #1)!
Note: The 5th goal, below, is predicated on achieving a level of retention we are satisfied with. We’re not sure yet what that level is—part of goal 4 will be to figure out what good retention means. The idea is to apply the 80/20 rule: figure out the 20% of things we can do that will make 80% of the difference to our retention metrics.
The reason we’ll focus on retention before growth is that having good retention makes it much, much easier to grow. We’d rather push a boulder downhill than uphill!
#5 Grow active users and revenue fast, within the key market segment
Having reached a level of retention we’re happy with, we’ll switch gears to focusing on growth. The idea is that, having validated who will pay for Focusmate, and improved the product to a point where they are sticking around, we can go and get more customers from within that “key market segment” mentioned earlier.
What Do You Think?
Was this useful for you? Can you feel the love? Do you have questions? Do you agree/disagree with something? Do you feel like sending us chocolates?
Get after it in the comments.
❤, Taylor
Focusmate Founder & CEO
I appreciate the transparency and effort spent in sharing all this with us!
What’s not clear to me from this post:
(1) After all this time, why is the product still free, especially for power users?
(2) What have you learned thus far about your power users — who are they, what are they willing to pay?
(3) What have you learned about your evangelist users?
I feel like you’ve done a good job up to now demonstrating your care for the user community. It helps a lot that you’re wiling to engage in the FB group!
Hey George!
(1) Why is the product still free?
The short answer is that a bigger issue than revenue is the overall size of the user base. Even if we charged power users, our revenue wouldn’t be very substantial, but we would in a way be more beholden to the needs of those users. We’ve largely validated what we wanted to validate—that y’all are happy to pay—by offering several donation options. And, we are immensely grateful to those, like you, who are donating. Bottom line, we have bigger fish to fry. With that said, part of our strategy, as noted in the post, is to monetize, so that we can see how key metrics differ between paid and free users.
(2) What we have learned thus far about our power users? Who are they, what are they willing to pay?
We actually just did a small research project on our users (you participated!) and learned quite a lot. (As an aside, the most valuable thing we learned is that the research methodology is very powerful, and as we expand the research we expect it to be very useful as a planning tool.)
#1 We were able to quantify how much our users love us. This may sound trite but it’s actually an actionable insight because it implies that we already have at least 1 market segment that we can aggressively pursue, once we get a better handle on what it is.
#2 We learned that, as self-reported by the initial respondents, Focusmate is most often or best used for writing and studying, and that there are literally dozens of other tasks users do as well (#3 is “admin”). We knew this, but were able to begin quantifying the frequencies.
#3 Power users are willing to pay varying amounts. Some of our most active users are students, who often email us begging us to stay free or keep flexibility. We also have evidence that power users are willing to pay substantial amounts, as suggested by the several donation campaigns we’ve run and our crowdfunding campaign, where users are contributing upwards of $1000, theoretically in part for the perk of premium Focusmate.
(3) What have we learned about evangelist users?
Not enough. We haven’t quantified this at all. We have an anecdotal idea that our users are highly evangelical, but that isn’t translating into the kind of growth we expect, so we have to figure out why.
Did I answer your questions? Glad to go deeper on this, and would value your expert views.
Helpful answers! Thanks Taylor.
A couple other options for monetization:
1. Promoting affiliate products / product deals like what AppSumo does. Things that FM users would likely love to know about / buy.
2. Ads (biz owners like me would love another place to buy ads to reach certain segments of FM users!)
3. A premium tier that allows a user to disable ads.
For evangelism, perhaps you’re already considering this — Ever paid user you refer gets 1 month premium free for you and your referred user.
Thanks George. We may look at affiliate partnerships in the future, but we want to be careful and deliberate about that for obvious reasons. I actually think there’s some mashup of ads and affiliate deals that could work well for us. Long term, I think we could even build a marketplace business, too.
Hi, Taylor,
As someone who has been in the rarified world of elite corporate strategy consulting for >20 years, my view is that what you’ve put together is a TACTICAL product plan, not a company strategic plan or a strategic vision. I deeply appreciate the very real need driving this—losing money every month—and the urgency of becoming cash-flow positive.
IMHO, I think you are missing the potential of being a large-scale ONLINE platform. Targeting paying B2B segments is perfectly reasonable, and consistent with how B2B technology products have been marketed since the 1960s.
But the genius of what you’ve created is that you have much more than just a piece of technology. I think what you have potentially catalyzed is a GLOBAL COMMUNITY OF PEOPLE WHO ASPIRE TO BE AMONG THE WORLD’S MOST PRODUCTIVE & EFFECTIVE AT WORK. If I were you, that is the “Must Have Value Proposition” (as opposed to “Nice-to-Have Value Proposition”—see https://www.amazon.com/Crossing-Chasm-3rd-Disruptive-Mainstream/dp/0062292986/ref=sr_1_1?crid=2IRKI7JRI5IVQ&keywords=crossing+the+chasm+by+geoffrey+moore&qid=1551370986&s=gateway&sprefix=crossing+the+chasm%2Caps%2C134&sr=8-1) that I would be launching.
To me, the FocusMate co-working software is like the video codec in YouTube or the conversation threader in FaceBook. It’s great technology, but it’s not really the product that people are buying. It’s an essential part of it.
I feel like you need a name for the FocusMate *community* that is aspirational and compelling: Something that every highly-driven, Type A person would want to be invited into. A name that is about the aspiration to be highly productive, impactful, balanced, innovative, effective, generative. A couple crude examples: “The Franklin Society” (in homage Ben Franklin’s mastery of time management) or “Productivity Avengers” (like the Marvel superheroes). Whatever the name is, think of what YouTube is to Videos or Twitter is to short messages or Instagram is to photo sharing: You want your global community to be THAT to personal productivity.
As a community (rather than a software product), your business model could become infinitely extensible. It would not just be about the FocusMate tool, which is great. It could become a whole world of sharing tools, experiences, classes & other programs in broad groups or sub-slices… all about doing more and doing better work, with less stress and more fun.
Some very successful models for marketing & scaling aspirational online communities are virtually the OPPOSITE of how B2B technology is marketed. Their approach is often to create scarcity & barriers—rather than abundance and openness. When Facebook, Google+ and other aspirational communities launched, you could only participate if you were invited by another user. If you combine that idea with the notion of a community that is truly inspiring (doing superb work while having fun), I think you would have a nice model for something that you could scale to millions of subscribers. I assume your primary target would be people working at home, with students as secondary. You could provide a 3-month intro “experience” membership for free, then have a monthly fee (discounted for full-time students) kick in after that.
Those are some thoughts for you… based on my own experience and not validated with any real-world market research. I think you are onto something awesome here. I’d love to see you be highly successful with it.
Hi Jonathan, thanks for taking the time to share your thoughts! Glad to have you in our corner!
I think Jonathan’s comment is quite insightful. Anyone could theoretically have a list of people (even strangers) they co-work and focus with over skype/facetime/facebook etc. The game changer and the value you have is the large community of people who have self selected to want the same thing.
Well said, thanks Jon!
Kill 2 birds with 1 stone: Offer a revenue model where if the user doesn’t show up for the reserved session within 3 min of start, then the user must pay X dollars. Focusmate gets money, the user has increased motivation to show up via negative reinforcement. I’d do this. I’d actually prefer this to free. 10 bucks a pop is enough to make it sting for me.
New member, done 2 sessions, liking it so far. Wish you much success on the business side of things!
Thank you Oleg! Thrilled to have you in the community!
Hi Taylor, I am using FocusMate and I’m feeling that this is a real big major breakthrough for me in terms of helping me just be productive, especially during these corona times.
Your company should really grow from everyone needing to work from home and and not finding the will to do it.
I always had big dreams in my head, but I’ve been kicking myself for not working and procrastinating for years now. Sometimes I can feel quite depressed and down. Not just because I don’t do what I want to do, but because of life and me thinking about it. But just being able to work really hard because of this platform makes me cry tears of joy that I might find the willpower I need, here, together with a focus mate. This brings structure to my life, it makes me accomplish my dreams and goals and it makes me feel better about myself.
Being able to work means that there is less time to be depressed and being happier that I am no longer falling through the mechanical wheels of life because of procrastination.
Even the human contact aspect feels good during these corona times. I feel less alone.
This focusmate-thing feels like one of the greatest gold treasures I have ever found!
Please keep up the good work. I feel that many people are relying on this website to work and can thus lead a more structured, fruitful and happier life together with this community
Many thanks!
Wessel
Hi Wessel, wow, thank you so much for sharing these beautiful words and sentiments. I am so happy to hear that Focusmate has had this effect for you, and so grateful to have someone like you in our community.
Are u guys out of the lurch yet? I want to pay more money. Is there a place I can still donate some? The crowdfunding link circled back around to this page I think. Being totally selfish. I need this sh*t to stay around for the next 30 to 50 years (based on my life expectancy). 😉
Ha, thanks so much Jack! We do have a Patreon page where you can donate, here: https://www.patreon.com/focusmate. We’re not going anywhere!!