Dear founder,
A business is an ever-evolving thing. Luckily, you will be at the steering wheel as the founder of your business. You will adjust your processes as needed along the way, and you improve your product over time.
Often, inspiration strikes at the most random times. You read an article on an industry blog, or you listen to a podcast with someone who fits your customer profile. Other times, your users reach out to you and tell you that they need an integration for another service, or that they had to change their workflow due to a new law that came into effect.
At any given time during the course of your business, you will have a long list of things you could build: new functionality, improvements, bug fixes, optimizations. In short, you have a collection of features that don’t yet exist.
Often, that list contains work for weeks or even months. But your day only has twenty-four hours. And if you want to get anywhere, you need to start working on something today.
There are several proven frameworks to help you prioritize which features to build for maximizing your outcomes. These are systems that businesses have developed to deal with features in a structured and methodical way. All these approaches attempt to remove uncertainty and quantify desirability in a way that works for every business.
We’re notoriously bad at quantifying effort; we’re mostly guessing when it comes to estimates. Cognitive biases make it even harder: our willingness to build something makes it feel more achievable, while features we don’t want to work on feel like they require more effort.
Another thing we often discount is how easily we get excited. Entrepreneurs are life-long learners, and we’re curious about things that are new and challenging. Projects that we have pondered for a long time start losing their appeal when something new and shiny enters our vision.
That’s why prioritization systems can help us overcome our prejudices and biases. I have written at length about many such systems on the blog in an article called First Things First. Today, I want to spotlight one of them, which I believe is one of the most easily implemented and quickest to produce actionable results: Feature Scoring.
Many companies use some sort of scoring to prioritize their feature development. For that, a feature is looked at from several perspectives, and given a number. A final score is then aggregated to balance out all the component factors.
Intercom uses the RICE method, which scores Reach, Impact, Confidence against Effort.
• Reach is measured directly from product metrics, expressed as a number of people or events over time. “Customers per quarter” or “transactions per month” are the units for this score. It expresses how many users this feature will affect.
• Impact quantifies how much a given feature enables you to reach a business goal. How much does the feature move the needle? As this is not easily expressed as a continuous number, use normalized figures to represent anything from “massive impact (3)” to “medium (1)” down to “minimal impact (0.25)”.
• Confidence is a percentage that expresses how confident you are in your estimates about this feature. Do you know exactly what awaits you? 100%. Is it a wild guess? 20%. The more you know about the complexity and expectations related to this feature, the higher the score.
• Effort is the time needed for a feature, in “person-months,” the time a single needs to work on the project to complete it.
To compute the final RICE score, multiply Reach, Impact, and Confidence, then divide by Effort.
The uncertainty of this model is that Impact and Reach are hard-to-come-by data points. There is a lot of guesswork involved still, and that is common to feature prioritization frameworks: in the end, they are making guessed about the future. They might be educated guesses, but they remain guesses.
Baremetrics uses the DIE method, scoring Demand and Impact against Effort in a publicly available spreadsheet.
• Demand: On a scale of “High (1)” to “Low (3)”, how much pull does the market exhibit? How many customers need this feature?
• Impact: On a scale of “High (1)” to “Low (3)”, how much will this feature move the needle?
• Effort: On a scale of “XS (1)” through S, M, L, XL to “XXL (6)”, how much work will this take?
The DIE score is then calculated by adding all the numerical values together. The lower the score, the better.
In almost all systems, scoring usually boils down to comparing the potential gains versus the possible effort in creating the feature, weighted for risk. This is an excellent choice for bootstrapped businesses, as including development effort is a real requirement for a company that doesn’t have funds for extensive R&D exploration.
There are many other systems to prioritize features: the Kano Model, Story Mapping, Affinity Grouping, Opportunity Scoring, “Buy a Feature,” “Value vs. Complexity Scoring,” and many more. Just make sure to stick to one system once you have found it to be usable for your business. Switching around these methods will lead you to prioritization confusion, which will impact your capability to make sound, consistent product evolution choices.
In the end, try to limit the effort you put into prioritizing features. If you spend days working on what you should be working on instead of building features, you won’t be able to do any real-world validation. It’s tempting to play with the numbers to see which kinds of priority lists you can come up with, but the goal of this process is not to get a perfectly legitimated checklist. Feature prioritization is a guesstimate at best, fed by intuition, preliminary assumptions, and a few metrics. Treat it as a potentially fallible activity.
Spend a few hours on this task, consistently revisit your choices every few weeks as a form of Continuous Validation, and spend most of your time actually working on your product. Incrementally improving a flawed product is better than not having a product at all.
You can read the full article called First Things First: Feature Prioritization Frameworks on the blog.
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Links I Found Interesting
The wonderful folks at MicroConf have opened the floodgates. They have released all MicroConf videos on Youtube, bringing the collective wisdom of hundreds of successful founders into the bootstrapped community. The talk I gave with Danielle at MicroConf Europe in October 2019 is also available there. You can find playlists of all the talks from past conferences on the MicroConf website.
Channing Allen wrote a fantastic piece about how People are learning how to build new businesses in lockdown. Full of examples like You Probably Need a Haircut or MailThis, the post showcases what great results ingenuity and drive can produce even in these dire times. The post is great, the comments are interesting, and it’s quite uplifting altogether. Check it out!
[SPONSORED]
Over the last week, I have been totally absorbed in finishing the first draft of my book on bootstrapping a sustainable business. I spent many hours writing every day, editing, and writing again. After a day of this, I noticed that I had utterly forgotten to engage with my followers on Twitter. I opened up Twitter only to find that a lively discussion was happening around a Tweet I had scheduled a few days before through Hypefury. It’s an incredible feeling to know that I can be in the zone writing while Hypefury sends out my tweets reliably. It’s not just a time-saver: Hypefury is a focus-saver. I recommend it to anyone who wants to do deep work and engage with their audience at the same time.
You can start your free 14-day trial here — it’s absolutely worth it.
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A video that appeared on my radar again this week was Jason Cohen’s “From Burn-Out to $100M in ARR”, where he talks about one of the worst struggles a founder will go through: being trapped in an unhappy place without a way out. On some level, I have experienced this myself in the last years. Some degree of depression seems to happen all the time, during the lifetime of a business and even after selling it. Jason shows what kinds of tough choices you will have to make to be prepared for this. If you’re serious about being an entrepreneur, you will want to learn as much as you can from people who went through this. Start with Jason’s talk.
Recently, an old post by Paul Graham resurfaced on Hacker News, and while the original article is from 2006, many of the points are still valid, and some significant assumptions have changed. If you’re looking for an idea for a business or want to learn something about fragility, read through this list as an exercise and do these two things: 1) find the things that changed and research the businesses that were left behind, and 2) find the things that didn’t change and examine the services that stuck around and continued to help founders overcome the obstacles. You can learn something from both.
Since we all hate churn in our subscription businesses and want to fix it, take a look at this post on the Baremetrics blog about Churn Analysis. The article shows how to segment your churn actionably, find out why churn happens, and how to reduce it. Since churn is the silent killer, any insight can help you keep your business afloat during the looming recession. And this article comes from Baremetrics, a business that has insight into thousands of SaaS businesses. I recommend listening intently to their advice.
Also, as a small gimmick, take a look at this CSS framework that allows your interface to look like Windows 98. If you’re building tools for developers who have lived to see those days, it might be a cute easter egg to hide in your product. Or use it for an internal line-of-business application. It’s a quick way to tape some level of joy onto a dull tool. Just saying.
Bootstrapping Success Stories I Noticed
Carlos from Conmute, a virtual workplace for distributed teams, missed their Y-Combinator interview due to an off-by-one error in their manual calendar scheduling process. While it’s back to bootstrapping for them — which is a good thing, I would say — this highlights that there are many challenges and obstacles in running a business, some of which are self-inflicted. And the article shows one thing in particular: even when you fail, you can always get some positive publicity if you’re honest about your mistakes.
Anđelo of AdWhistle, a tool that tracks your competitor’s Facebook ads, had his first five paying subscribers this week. Having your first monetary validation is a significant milestone, and the opportunities that come with it are manifold: he can start reaching out to customers about the problem/solution fit, he can begin researching their water cooler locations, he can start measuring real-world usage of his product. That fun has just begun.
Finally, Marko of Plausible Analytics reports a massive week for his business after publishing a blog post critical of Google Analytics: 48.000+ visitors, more new trials in one week than in the last quarter combined, and actually being featured by Google in Discover (which I find most hilarious). Good content can make a difference, and if you want to see an example, check out the article called Why you should stop using Google Analytics.
Thank you for reading this week’s edition of The Bootstrapped Founder. If you like what I wrote about, please forward the newsletter to anyone you think would enjoy it too.
If you want to help me share my thoughts and ideas with the world, please share this episode of the newsletter on Twitter or wherever you like, or reach out on Twitter at @arvidkahl.
See you next week!
Warm Regards from Berlin,
Arvid