Show Notes
In this episode, we discuss how to identify, invite and recruit beta users for your product. Rick uses one of his ventures as an example, and Tyler helps him work through structuring a beta program for his software-enabled service idea. While we worked through a specific situation, the general concept applies often. Here’s the framework that emerged:
- Decide if you are ready for a beta program.
- Here’s how you’ll know:
- The minute you feel you can offer users something of value, you’re ready.
- If you aren’t there, you may need to do more customer interviews to validate your idea(s).
- Design your beta program.
- Ask yourself the following questions:
- What are you trying to learn / test?
- Is a closed or open beta more appropriate?
- What the profile of your ideal beta user?
- How can you position the program to these beta users?
- What is your differentiating theme?
- What is your offer / value proposition?
- Should you / do you need to incentivize participation?
- Launch the program and recruit beta users.
- Ask yourself the following questions:
- Where do the ideal beta users hang out?
- Can I find enough ideal beta users via my network?
- If not, how can I leverage other marketing channels?
- Execute the program.
- Ask yourself the following questions:
- How can I make my beta users feel like they are part of the journey?
- What incentives can I offer to reward users?
- How can I build a one-to-one relationship with each beta user?
- How can I improve the offering?
Takeaways:
- Don’t add too much structure to start.
- Start out with as little structure as possible and then iterate your way to more structure when it adds value or scalability based on learnings.
- Launch a beta as soon as you can add value.
- As soon as you can offer anything to anybody, get it out there and start testing it with real users.
- The productized service approach to MVPs allows a lot more room for error in the software because you can lean on the service component for immediate value.
- When looking for beta users, tap your network first.
- If you can't do it with networking, you're probably not networking enough or you’re not good at it.
- Alternatively, you can go out and use traditional marketing channels to find people who might be beta testers, but you have to go into it expecting a high investment, whether it's in time, or money, or whatever, because your pitch isn't refined yet, your product isn't refined yet, you don't even know who to target.
- Traditional marketing works, it's just you have to bring in a ton of people at the top of the funnel to get one good early adopter.
- How to get the most out of beta users
- Invite your beta users to be part of the journey.
- The people who do beta tests, a lot of times they do it because they see some big potential.
- Start with the why, and really get people on board with the mission and the reason you're doing it.
- The more you can let them in and not just tell them why you're doing it, but make them feel like they're contributing to it, the more engaged they'll be.
- Offer unexpected incentives like swag and gift cards.
- Spend time one-on-one with your early users to build real trust-based relationships.
- Do it in person if you can.
- Avoid offering incentives that could become the primary motivator for a user joining your beta program.
Context
Rick: So specifically with my health insurance app, I actually didn't expect to be where I am today, I'm ahead of schedule. I now have everything I need to actually launch a beta product. So I was anticipating having this be more of a hypothetical conversation, but I will actually have ... I can guarantee a product in the next couple of weeks that people can sign up for as beta users. So what I want to get out of this conversation is I want to brainstorm some ways to gain beta users for this product. I don't just want anyone on the internet to sign up. Because this is a health insurance thing, they need to be in Utah, because that's where I'm licensed. They need to be consumers of individual health insurance. So it's a very narrow focus. So anyway, it's not like I can just go post this on Google Ads or go invite all my best friends, because most of my best friends don't live in Utah. So it's difficult. So I want to brainstorm some ways to identify, invite, and recruit them. Recruit would mean them actually agreeing to the beta program. The second is once they've agreed to participate in the beta program, keeping them active and engaged, whether that's with incentives or with just guilt. That's what I want to talk about. I can add some context ... I guess any clarifying questions about what I want to get out of this?
Tyler: Yeah, well, it sounds ... I mean, getting a beta user, a beta tester is probably not radically different from getting a customer, but the goals are a little different. The goal is to learn instead of to make money, and the type of person you're looking for is someone on the very, very cutting edge of the adoption curve. But like a lot of concepts, this is going to be a specific type of marketing we're talking about here, I guess.
Rick: Exactly. I envision these people ... I want these people to be evangelists of the community. I want them to care about the problem I'm solving as much as I do. And they will get free access. I don't know exactly what the value of that is yet, but hopefully they'll help me figure it out. But I think that the right beta user for this particular product, which I'll go into, is someone who cares deeply about the problem that exists today that the app promises to solve eventually.
Tyler: Cool. So let's dive into ... we can talk generally about how to get beta users, but I think it's helpful to know what product we're actually trying to get. You said earlier there's three things you're doing. One is a thing with Sable, your wife. One is a
GroupCurrent thing. But that's not what we're talking about here. You have a specific healthcare, health insurance type of product. Can you talk about what that is?
Rick: Yeah. So on the last episode, I was a little bit hesitant to talk about it because it is in the same realm of health insurance as my previous company,
PeopleKeep. I do have a restriction on where I can play. I was kind of put on the spot on the podcast and I didn't feel comfortable talking about it without thinking about it more. So having thought about it, there is no issue. This is non-competitive. Not even close. I feel comfortable talking about it. So I'll kind of give you the general premise. Maybe I can work from the problem that I'm focused on and then work down to how I think the MVP will attempt to solve that. Does that work?
Tyler: Yeah, yeah.
The problem to solve
Rick: Okay, so there's a huge problem out there in that people who buy individual health insurance largely don't get any service in exchange for the commission that they get taken out of their premium. So every time you pay a health insurance premium, whether it's a group policy through your employer, or an individual policy, or even a Medicare policy, part of your premium is dedicated towards paying a producer. A producer is an insurance broker or agent. Whether you go through an agent or not, that premium includes this commission.
Tyler: So if you go on healthcare.gov and buy health insurance, who's getting that commission?
Rick: Either the insurance company if there's no broker or the insurance broker if you've selected a broker. You're not getting it back. So if you buy health insurance, you're paying it no matter what. So there's two ways people typically get private health insurance. One is through work and the second is on their own. There's a trend right now where more and more people are buying individual health insurance, less people are buying group health insurance. This is for a lot of different reasons that I won't go into on the podcast. But because there are more consumers now, especially Millennials who expect a lot out of health insurance, online access and that sort of thing, there really isn't a service model out there that meets the demands and provides value for that commission that is built into the premium. Most health insurance brokers out there, if you go search online to get a quote or get a health insurance quote, if you make the mistake of putting your contact information into one of these sites, you'll get spammed by like ten people and getting off that list is really hard. It's a sales ... most brokers in the individual market, and this is someone who's buying their health insurance on their own, doesn't have an employer, HR person guiding them, they are getting sold. Once they get sold, there's kind of three steps. There's hey, buy through me, there's the application, and then there's enrollment. Once they get enrolled and pay their first premium, that broker is gone.
Tyler: And all the ten people who are calling them are offering the exact same products with absolutely no additional services on top of that.
Rick: No, they're the same products. Typically what will happen is one broker will have more ... There's another problem, though, that some of those brokers may push different products based on how much they make. So there is some biased differentiation in services, but not in the best interest of the consumer.
Tyler: Cool. So the problem makes sense. So what are you going to do about it?
The hypothesized solution
Rick: So the hypothesis I have is if I focus on people with individual health insurance and I focus on the stage that happens post-enrollment, the underserved stage ... So the broker is gone after this enrollment, this person is paying this premium, and they don't have an HR person to go to when they have questions. They don't have anyone who is their advocate. If I can focus on post-enrollment, being the consumer's basically personal HR person through software and through service, then that individual, at the very least, might want to make me the broker of their policy. At the very most, maybe pay additional fees for products or services that are upgrade opportunities.
Tyler: Mm-hmm (affirmative). Is there a business here if all they're willing to do is make you the broker?
Rick: Yes.
Tyler: So they're paying the same amount either way, and you're saying you can go with some generic zero value ad person, or come to me, I'll add all these extra services on. Basically, the industry is just getting fat and you're saying let's actually bring some competition in here and make people work for it.
Rick: Let's actually add value to ... Broker commissions are recurring. It's not just on sold. Every time a premium is paid, a percentage goes to the broker. The idea the insurance company has is that you're going to service that person, renew them and keep them with the insurance company.
Tyler: So what services are you going to ... what's your actual product going to be?
Rick: So the original product is going to be basically ... I don't know if you have ... Who do you have health insurance with?
Tyler: United through work.
Rick: Okay, so do you have a portal through United where you can go check your deductible?
Tyler: Yes. We use Gusto, so there's some amount of information on Gusto and some amount through United.
Rick: Can you see your personal information?
Tyler: I haven't looked. I'm sure ... Yes, I think so.
Rick: So if you wanted to check your deductible on that, where do you go? Do you go to United Healthcare or do go to Gusto?
Tyler: I don't know, I haven't needed to yet, so I'm not sure.
Rick: Okay. So are you going to go to the doctor this year?
Tyler: I would probably expect United is where I go.
Rick: Okay. What about dentist, do you go to the dentist? I'm putting you on the spot.
Tyler: Yes.
Rick: So when you go to the dentist, do they take your insurance?
Tyler: Yes.
Rick: Is your dental insurance through United Healthcare?
Tyler: No.
Rick: Okay. So what we're finding is that on the individual market, there isn't a Gusto, there is a consumer out there who has multiple policies, maybe a dental policy, maybe a vision policy, and maybe a United Healthcare policy, and they don't have one place to log in to go see all of their policies, what their deductibles are, do a quick check to see what providers are covered, those sorts of things. So phase one is basically exposing basically a log in where an individual consumer can come in and add their policies and basically get a one stop shop for seeing where they are with deductibles, what their coverage is, and then having a chat bot ... a chat, me behind chat being able to help them understand it.
Tyler: So that's what ... you said you secured this API partnership relationship thing, the API to get all this information from the insurance providers?
Rick: Correct.
Tyler: Great. So right off the bat, we're saying, hey, individual, you already have this insurance. For zero cost to you, you can look at it through a website. Because United's website is like the worst piece of shit website I've had to use in a long, long time. You're saying, if nothing else, I can log in to a website that's not terrible.
Rick: If nothing else, and have someone available who's knowledgeable and will help you figure things out, pretty much unlimited with my availability like they don't have right now.
Tyler: Cool. I mean, this sounds great. Now the point of this is not to brainstorm your idea here, so I think I've at least got the picture. So let's move on to how are you actually going to get beta users for this.
Initial idea validation
Rick: Well, before we go, I would like to have your initial reaction.
Tyler: I mean, it sounds like a slam dunk. Until this year ... this is the first year I've been on group insurance in my whole life. So for the last ten years, I was on individual plans. Yeah, I would have loved to be able to say ... The way you phrased it earlier, it's like you have an HR person, but you don't. I've never really had questions to ask, but just being able to log in and this website lets me have a password that's more that six characters. All that nonsense that all those antiquated tech companies. Yeah, I would have totally signed up for that. I guess it depends how hard the onboarding is, but that's the only potential concern I would have.
Rick: Do you remember when you were giving me crap about focusing too much on design?
Tyler: Mm-hmm (affirmative).
Rick: This is why. This is the idea that's been sitting in the back of my head right now. I see it purely as a design, a UX onboarding challenge.
Tyler: I don't mean that as much, but like what do I have to do to transfer ... to make you my broker of record or whatever it is?
Rick: Exactly.
Tyler: Can you do that through your interface?
Rick: Yeah, so there's basically ... So I can get pretty much all the information I need if you just enter the information on your insurance card.
Tyler: You can do it from there.
Rick: Yeah. Phase one would be you log in, you take a picture of your insurance card, and then confirm the numbers in there. Eventually maybe I can automate that. But you put your medical policy ID, your first name, your last name, and your date of birth, and then I can go get everything.
Tyler: They don't have to consent or ... like any broker with this information can steal this from someone else.
Rick: Yeah, you have to consent and check a box and say I consent to you ...
Tyler: Okay, but it's not a go to United Healthcare and consent there type of thing.
Rick: No, no. This is just for being able to get information about the policy. The next step would be, hey, would you like me to be your broker of records so I can help you out if you have any issues? That would basically be an electronic document on the insurance company's letterhead, they usually have agent of record forms that they would digitally sign.
Tyler: Okay, gotcha. Yeah, yeah. I think it sounds like a really, really good idea. I'm normally a pessimistic person, but I don't really see what about this would not ... it's a clear win for the customer and you've got a very clear path to monetize it without even charging anyone money. It seems great.
Rick: So I guess the question would be is what we just talked about, getting to this stage, you have some external validation that this may actually be a good idea before you invite beta users?
Tyler: Sorry, can you rephrase?
Rick: I could have not worried about what you thought and not even sought external validation ... Is this an important step what we just went through?
Tyler: No.
Rick: Is it an important step before you get after inviting beta users?
Tyler: I don't think so, because you know this industry super well. I think the fact that you worked in this industry for 10 plus years, you can trust your intuition more than some random ... like when I made a CRM, I had no idea what I was doing. Anyway, I think you're probably at a point where if I were you, I'd be building the product and trying to get beta users and skipping that idea validation step personally.
Rick: Cool.
The beta program
Tyler: Cool, so maybe we can start with what are you planning right now to get people to use this?
Rick: I have no plans. I came into this ... I can give you my thoughts of things I've thought about. I know that I need to have some sort of landing page that let's someone get on a beta list. I think it's going to be critical to have some sort of referral program that allows the beta people that I do know to invite other people, so creating some sort of referral tracking similar to Morning Brew where I incentivize with swag or an Amazon gift card or just maybe dinner. I don't know. So some sort of referral element. So that's the waiting list signup. I know it needs to look good and look real, and be why driven, purpose driven. I know that once they sign up, I'm going to need to have a process of inviting them to sign up. I want to have a formality around the beta program so that people who are invited to participate and accept know what they're signing up for. I want it to be a 12 month program, so calendar year 2020.
Tyler: So why is that versus just being ... because it's going to be a SAAS product ... or not even, people won't even pay for it. What's the downside to just letting everyone in and giving it a shot?
Rick: I think iterating towards a valuable interface ... I think a lot of this has to do with the interface and how easy it is to access data. I'm going to need some active, engaged users to constantly be willing to go check things out even if it's not providing a ton of value.
Tyler: Okay, so one thing I want to pushback on that you've said already, the referral thing. I think that makes sense as a marketing strategy for the next phase. Based on the other things you're saying about the beta period, it seems premature to be thinking about that, because even if someone goes out and wants to refer a thousand people to you, you wouldn't even accept them. So it seems to me like maybe there's benefit in building an audience, which I would view almost separately from this. Go write blog posts and make a name for yourself in this space. But how many beta testers do you actually want?
How many beta testers do you want?
Rick: Yeah, that's the key question. So I want 20-25 passionate, young as in sub 40.
Tyler: Why sub 40?
Rick: I want them to be technologically savvy. I shouldn't make an age discrimination there. Pardon me. I want technologically savvy-
Tyler: Tech savvy.
Rick: Yeah, individual health insurance consumers in Utah.
Tyler: So what I would say is personally, you have a big network of people, you're very good at networking and going out and meeting people and stuff like that. You're going to get 20-25 people just through pure personal hustle, no problem. You don't need anything scalable about this to get 20 people.
Rick: Now the reason I go to the referral program ... I think I agree with you on the 20-25. I think what I'm worrying about is a future problem. I want to get to 100 by the end of next year. So sometime by July, I want to be at 100.
Tyler: So I think a referral program sounds great, but I would-
Rick: Wait on that.
Tyler: ... that's what I said. Yeah, it's what I was saying at the beginning of this. I had all these things I thought I had to do. Then I was like, yeah, I have to do all those, but do I have to do them before I launch? No.
Rick: Mm-hmm (affirmative), yeah.
Tyler: So I would remove referrals entirely until you've got those 20 people, personally.
Rick: I think that's a good idea. A referral program is not necessary to launch a beta program. So I think what I'm realizing is launching the beta program and the product are priority number one. Scaling ... So yeah, I guess if I broke this down into steps, step one is launch the beta program, step two is recruit people to join the beta program. If I can't get enough recruits, then I start figuring out how to get more. Maybe a referral program is necessary for that, maybe it's not.
Tyler: Yeah. Yeah, I think that's right. So let's talk about the really ... obviously this is hopefully somewhat applicable to people listening, and they're not building the exact same app as you and all that, but many people might find themselves in this situation where they don't need a thousand people on an email list, they need 10 or 20 people that'll actually try it out. I think you're good at this, but what do you think you can do to go out and find those people?
How to structure your beta program
Rick: I think finding them is not the issue, to your point. I think I can find 20-25, or at least 10 who know another person. I think my major concern is around what to offer them. How do I make sure that I provide them ... because I want them engaged for enough time for me to iterate towards value. I want them to be committed to that. I'm willing to give them something in exchange to make that worth their time, I just don't know what that exchange of value looks like.
Tyler: Right. So a really clumsy version of this is you would literally pay them. You'd say, I'll give you $100 a month and you have to ... or whatever the ...
Rick: Yeah, exactly. Is that okay?
Tyler: I think it is, although prior to this in the little show notes that we shared, you sent me some links to people talking about how to get beta users and stuff. What a lot of those articles said is there's all these websites you can go to ... I forget what they're called, but BetaList or something like that, where you can basically pay money or not, but get beta testers for your product. As I was reading those, I was just like, this is a waste of time and potentially money.
Rick: Yeah, and that is not what I'm talking about here, I think. I'm talking about people who I know or I have a connection with, I trust, and who are passionate about the problem.
Tyler: But I guess what I'm saying is that the more you are compensating them, the less likely it is that they're participating for the right reasons. Let's say you paid $10,000 a month. Hell, I'll do it. Anyone would do that. At that point, they're just trying to get paid. I think the compensation to be to thank them so they don't feel like you're taking advantage of them, but it shouldn't be enough of an incentive that they-
Rick: Are doing it for that reason.
Tyler: ... would do it just for the money. Yeah, exactly.
Rick: So yeah, I guess the money needs to be an unexpected benefit, but not the primary driver.
Tyler: This is the same thing as the referral topic I was talking about. One way around this is to give them something that is valuable to someone who likes what you're doing and completely worthless to someone who doesn't, like branded swag. Someone who loves
Less Annoying CRM would view a t-shirt from us as a really valuable gift, but someone who doesn't care about us, whatever, I'm not going to wear that.
Rick: I like it. By the way, I don't know if you have time for this or if you have a recommendation of someone who can help me, I need someone to help me figure out the right ... I'll figure out the positioning and name and that sort of thing, but I'm going to need someone to help me get the right color scheme and what do you call it? I don't know what to actually call it.
Tyler: Like the brand, basically?
Rick: When people say brand, I think positioning. Less Annoying CRM is the brand, and Less Annoying CRM says a lot about your company. Then what you do in your culture guide is more about your brand. Then there's these creative design elements that express the brand in different ways, different mediums. I don't have that and I don't have the ability to create it.
Tyler: Yeah, I've never worked with anyone to do that before. I would just go to one of these websites like ... I forget all their names, but where you can just put up a job and people will kind of bid on it, basically.
Rick: Yeah, you're saying no. You're saying you can't help me. I see how it is.
Tyler: I can't. Well, because I've always done it myself. If you just want a crappy logo, I'm happy to make it for you, but I'm not great at this. Good enough that I wouldn't hire someone, but I'm not good enough that anyone would hire me.
Rick: Okay, got it. Yeah, I need something ... if swag, for example, is going to be a part of the offer, it can't be Rick designed logo swag.
Tyler: Yeah, yeah.
The Art of Product podcast, who, by the way, that's assuming things go according to the plan, one of their co-hosts will be a guest next week on this podcast. You can ask him about it, he just went online on
99designs or one of those things and had someone design it for like $50 and apparently it's really, really good.
Rick: Just the Art of Product logo or something?
Tyler: It's for his company
Tuple ...
Rick: Tuple... okay, cool. I may just ping him then. Let me write that down.
Tyler: But I don't think he ... he didn't hire a designer, he just put up this job and some generic person ... like anyone can do it and he just took the best one, I guess.
Rick: Remind me his name?
Rick: Ben Orenstein
Tyler: Yeah, anyway. This is riveting radio for people.
Rick: Yeah, when you mentioned him as a possible guest for the next episode, I looked him up and I saw a picture. He looks like he's really, really tall.
Tyler: He is. He talks about it sometimes.
Rick: Yeah, okay. He looks like he's like seven feet tall.
Tyler: But anyway, so back to getting beta users, I think giving them some kind of swag. Then also one thing they'll get that not everyone will get forever is I think you could offer them really concierge advice in a way that ... like one day people will go on and do a live chat and be like, "Hey, what does deductible mean?" and you'll point them at a help article. But I'm talking about if you do the beta program, I will sit down with you and do a full audit of not just your health insurance, but your whole insurance situation. I'll make sure that your deductibles match... like all this stuff you're great at. I think that would probably be enough to compensate someone for this.
Rick: Yeah, interesting, like almost ... I love it, actually. Through that, I'll be able to ... it's mutually beneficial. I'll be able to make them feel more confident about their situation and I'll also learn more information about their situation so I can figure out more ways to add value. I really like that.
How do you position the beta program?
Tyler: Cool. Now I have a follow on that you might not like as much, because it involves you catering to a type of person that you might find distasteful. But if you want to serve tech savvy people who are using individual health insurance, a lot of these people are going to be people who really, fundamentally hate a free market for health insurance, because most Millennials and Gen Z are going to be that way. So one way I can imagine positioning this is like you kind of saying, "This entire thing is a shit show. Until we have universal health care, I'm going to get you through it," basically.
Rick: That's interesting positioning. I have a really hard time going with political positioning. I think I would like to find a positioning message that rings true regardless of political affiliation, but rings to the problem.
Tyler: Well, regardless of what you ... I think a lot of people would say this isn't exactly political. First of all, whatever side of the aisle you're on...
Rick: Universal health care is a very political phrase, a politically charged phrase.
Tyler: It's politically charged, I guess. Every country in the world except us has it.
Rick: You are a liberal. Listen to you.
Tyler: I know, I know. But I'm just saying you could say this in a way that's not taking a side so much as just being like, "This is a disaster, everyone knows that. It's pretty clear what direction it's heading in."
Rick: Oh, totally. Yeah, so that's exactly what I meant. So positioning it like, "Hey, we're in this transition phrase from private individually medically underwritten non-guaranteed issue policies to universal healthcare. There's no doubt that at some point we're going to be in a situation for some kind of Medicare for all. That being said, we don't know when. It could be 5 years, it could be 10 years, it could be 20 years. In the meantime, we're here to be your personalized HR person."
Tyler: Right, exactly. This has a lot of parallels to the Less Annoying CRM branding, which is I think any business can do this where you're basically picking a fight with the status quo. You can do it in a more or less political way, but basically saying, "Everybody hates the healthcare system in America." So you're going to get them on your side immediately if you kind of make that your rallying call, I think.
Rick: I totally agree. I'm hesitant on some of this stuff because I went too far at
Zane Benefits back in the day. I think one of our phrases was group health insurance is evil, which most people don't agree with that statement. So I think if you do that, there's a balance between speaking to ... really making the status quo players and the people who like the status quo not feel like they're evil.
Tyler: It depends. The reason you ran into that problem at Zane Benefits and PeopleKeep is because you were being regulated by the insurance commissioner of various states. Less Annoying CRM picks this fight. We don't do anything to make the status quo people feel comfortable, because fuck them. They have absolutely no power over us.
Rick: Hmm, interesting.
Tyler: I mean, you're in a regulated industry now, so maybe you'll have that problem again.
Rick: The other interesting thing here is that I'm not ... this isn't a major zero to one thing where Zane Benefits was, "Hey, we're going to totally change the way you think about employee health benefits." This is more of a, "Hey, this is what you got on group health insurance. You're already on individual health insurance. This is a new way of doing individual health insurance within the same framework." It's not like zero to one, it's just a slight improvement.
How do you find beta users?
Tyler: Yeah. Okay, let's ... I think this is all really interesting, but let's get back to getting beta users here. So let's say you find a way to position yourself. You can go out and just meet people one at a time, maybe reach out to people on LinkedIn, ask your network for, "Hey, do you know anyone that has individual health insurance?" This to me, though, feels like just good old something like sales, basically.
Rick: Yeah, I'm not worried about that. I guess my plan would be to reach out to a lot of my former coworkers, because I know the people who work at PeopleKeep do not offer health insurance. I could also find some people who work for companies. If I can find a couple of people who work for different companies and have their own health insurance, it's likely that their coworkers probably also don't have health insurance.
Tyler: Yeah, I bet it wouldn't be that hard to figure out what companies in Utah don't have health insurance, like big employers around you, and then just-
Rick: Go after them.
Tyler: Yeah, go on LinkedIn and say, who works there? The other side of this I referenced earlier, do you want to ... Yeah, go ahead.
Rick: It's funny, I keep spreading things down and-
Tyler: You don't need to.
Rick: Yeah, I don't need to.
Tyler: Do you think that building an audience is a part of what we're talking about here or is that kind of like future marketing that is unrelated to the beta test?
Rick: I think one objective ... I think building the size of audience does not matter, but if I do this the right way, success looks like 20-25 people by maybe end of March next year who are huge advocates for what we're doing, evangelists for the problem, and actively trying to identify new people to join the community in terms of referrals or helping me improve the software.
Tyler: Okay, if that's by March having 25 of those, I think you can remove even another thing from your list for right now, which is you were kind of saying you want a way for people to be able to put their email in, get on the waitlist, and then you'd have some system for figuring it out. To me, if your goal is in the next five months to have 25 people, you don't even need to build the signup process at all, I don't think. You'll meet each person one-on-one and then when they're ready you'll say, "Hey, I just created an account for you. A password reset link just got emailed to you that'll let you log in."
Rick: I can't argue with you.
Tyler: Now, there's a reason to do that other thing, which is if you're trying to market for past the beta period. I'm not saying you shouldn't, but that's almost a different thing.
Rick: Yeah, I think that's the key. I know there's sort of two things I need to test with this business. One is can I provide enough value for someone to switch their broker of record to me, and then the second is can I find enough people profitably enough? Can I acquire users profitably? I think with this type of business, if you're not ... if I focus exclusively on product value, I'm going to be in a tough place come March when I try to grow those. So I think for me in this business, because it's not going to be a sales driven business, it's going to be highly marketing, word of mouth driven business, it's probably worth putting some amount of time into testing some word of mouth efforts.
Tyler: Okay, so I agree with word of mouth. There's a different type of marketing that I feel like you used successfully in the past, which is things like blogging and content, like building a newsletter. The more I think about it, the more I think that won't work very well here for the same reasons it doesn't work for Less Annoying CRM, which is no one Googles CRM stuff. No one's like, "I want to be a newsletter getting CRM tips every month." Nobody ... individuals especially are not interested in reading about health insurance unless they're in the process of buying health insurance, I think.
Rick: Yeah, I think it's going to be heavily driven by referrals. I think for this to work, I've got to figure out a user multiplication formula where getting one user equals getting more users.
Tyler: Yeah, but you can't do that until you have some. So once again, I think that's really valuable, but I would just completely put that out of your mind until you've got 20 people and then say, "Well, okay now ... " Once again, you might learn something that's ... you might pivot entirely, at which point any investment you put in here would be a waste of time.
Designing the beta program
Rick: Yeah, I think you're right, it's probably best to just focus on designing the program and recruiting users so that I feel good that I have a solid 20-25 ASAP and then start working on delivering value.
Tyler: Yeah. Let's move to that, because you said there was two parts to this. One is getting the users, and I don't think we've said anything particularly insightful here except strip away all that stuff you thought you had to do and just go out and talk to people. But then the second thing that you said was that once you have these beta users, how do you run the actual beta program to make sure they're engaged and happy and getting value in all that? So what's your product going to do a month from now?
Rick: You'll be able to log on. You'll be able to chat with me. You'll be able to enter your insurance policy information individually for each policy. Then I will provide some minimal level of information back to you about that, whether it's plan information or specific details around utilization. I don't know yet, but some amount of information. Then probably some sort of monthly summary email of whether anything has changed with your health insurance.
Tyler: Okay. So basically, something like showing someone how much of their deductible they've used is the value that the software itself will provide. Then probably most of the value here has to come from us as a service.
Rick: Yup, yup. Probably part of it's going to be one to many content, or one-on-one content that's in an email format, whether that's a notification, a chat window when they log in, or a newsletter type email. Then in person or over the phone slash video chat conversations.
Tyler: Mm-hmm (affirmative). If I were you, I would start this with all in-person, specfically because you're going to find out ... I've had this experience with employees here at Less Annoying CRM. I've talked about health insurance with people, because we didn't use to have it until earlier this year. Talking to people, you find patterns where, for example, a number of people thought that they potentially would not be able to get individual health insurance due to preexisting conditions, which my understanding is that is a total misunderstanding that everybody now can get health insurance. I'll bet you talk to people and have five conversations and be like, they are all confused about the exact same things.
What are you trying to learn / validate?
Rick: Yeah, I totally agree. So that's the base ... that's what I would launch with, what I just described to you. Then I have a lot of ideas to expand on value that I don't feel comfortable launching with until I talk to people and get some feedback on that initial thing. Education is a huge part. The whole idea of when you start with us, you may not know anything about health insurance, but next year we're going to give you the ability to fire us and never need to use a broker again, because we're going to empower you through education and support. How to do that, I don't know.
Tyler: So from a product standpoint, I would make it so they need to enter their insurance information, just because that's a hurdle that if they won't pass it ... even if you provide no value to them, it's like, "Thanks for your insurance information, goodbye." It's a way to validate that they're willing to put in that level of effort. But beyond that, I think your beta program is just one-on-one conversations with people for your first 5-10. Do you agree with that?
Rick: I guess I don't understand the difference between what I said and what you said?
Tyler: I'm just kind of saying it again, I guess, but like-
Rick: If you're saying something different, I don't follow the nuance to what you just said.
Tyler: Sorry, what I'm referring is back to the product side, that earlier in this conversation we were kind of saying how much time do you focus on product development versus this and that. If you want to spend time learning no-code and stuff like that, go for it, but I think that you could, in theory, run this entire beta program with no product.
Rick: That's the point you're making, okay.
Tyler: Yeah, yeah.
Rick: When you say no product, I don't understand. You mean no software?
Tyler: I think there's a spectrum between product and service. I think you can offer personal service and not ... like to be a product is something that's manufactured and created and then sold as a packaged thing. So it could be software, it could be a physical product, but what you're validating is how much value do you provide by having a conversation with somebody?
Rick: Yeah, that's not what I'm validating, actually. I'm validating I can, through a conversation with someone, get them to enter in their health insurance policy and then I can turn that into some sort of valuable insight to them. That's the core.
Tyler: Okay. I haven't heard it yet, I guess. It'd be kind of nice to see your deductible somewhere, but as a consumer for me, the reason I sign up for this is because I get to talk to Rick.
Rick: Yeah, but that's not ... I understand that that might be why they sign up as a beta program, but I'm disagreeing with not that's maybe why they're signing up initially, but that's not what I'm testing. I'm pretty confident that I could sell my time for free.
Tyler: Yeah, yeah. But-
Rick: So the nuance here is one thing I want to test is can I get them to enter in their policy information online without me helping them, just because they're willing to help me out or get access to me. Then two, the thing I'm going to test after that is okay, I've got all this data because of the information they gave me, how can I mix this together in a way that adds value? That's probably going to be driven a lot based on working with the data and testing different things and then conversations with those five people. Do you disagree with that?
Tyler: No, I don't disagree with that, I guess. I think we're just saying the same thing in different ways.
Rick: Okay, cool, cool.
Tyler: There's a lot you don't know yet that you'll find out from these conversations and then you'll build a product based on that.
Rick: Yes. I do believe that the thing that would have me walk away from this is if I can't leverage software and data in some way to do something unique outside of after the enrollment period, I'm probably going to walk away from this. So that's the key element that I need to figure out. If I can't, then I can't. If I can, then I'm excited.
Tyler: Well, so that gives you a really, really specific goal. We're calling this a beta test, but I guess part of what I'm getting at is that it's half beta test, half still customer interviews, I think. The key thing from the customer interview is what value can you provide? Maybe just showing someone their deductible with a better website is enough, but maybe you need something way beyond that you don't have access to the data, you don't ... maybe you do, but no-code can't get you there.
Rick: I think that for this particular situation, I think you're absolutely right. I think this is just going and doing customer interviews at this point isn't going to tell me anything I don't already know. I need to do those customer interviews while offering something and learn from the offering, because that is what I need to ... Yeah, totally agree. It's a combination of customer interviews and ... I don't even want to call it a beta, but I guess it is a beta, because by definition it's a beta. It's basically like using a beta assisted with customer interviews to quickly iterate that beta into something of value or to give up.
Tyler: Yeah, great.
Rick: That's helpful.
Takeaways
Tyler: So yeah I wonder ... so maybe we should takeaways, but in this case I'm also interested in pulling back and saying what can someone else who's not in your exact situation takeaway from this, because a lot of this was very specific to you, which is good, but ... Does that sound like a good plan to do takeaways and then that?
Rick: Well, there's one direct question I want to ask you. We've kind of danced around it. I think I know the answer that you're going to bring. How structured should your beta program be? How structured should your beta program be? I get the impression that you feel that it should be pretty unstructured.
Tyler: I think at first it should be. Do you know the company
Superhuman?
Rick: No.
Tyler: They're an email program. It's like $30 a month to get basically an email client that connects to Gmail. They require every single ... they've been around for a few years. I don't know how long, but a long time. They still require every new customer to call them up and ... it's almost like a beta program even though they're this really high growth startup at this point. If you hit this point where you've got a product, you have product market fit, but you're still beta testing, at that point having structure ... I'm not opposed to it in general, but I'm just saying, you're so early on here. Every piece of effort you put in that hasn't been validated by a customer interview is potentially wasted effort.
Rick: Okay, so I think that answers that question. So starting out, you need to start out with as little structure as possible and then iterate your way to structure as structure adds scalability on something that works. Another question was, we kind of covered this, but when is the right time to start recruiting beta users? It sounds like as soon as you're past the point of general idea validation and you need to get some value proposition use case feedback.
Tyler: Yeah. I think if what you're doing is pure product ... like what I was doing with Less Annoying CRM. It was just a product, there was no service element to it at all. You kind of need the product before it's worth finding a beta tester. It's more like what you're doing, which is a hybrid at least to start. The earlier you can go, the better, because you can start offering that service even if you don't have the product ready.
Rick: Yeah, totally. Yeah, so the productized service approach to MVPs allows a quicker ... a much lighter product in the beta program.
Tyler: Yeah, I think the question for the beta test, to generalize that, when can you provide value to somebody? If you've just spent a weekend hacking together some software product, it's probably not valuable yet, but as soon as you can offer anything to anybody, get it out there and start testing it with real users.
Rick: Yup, yup. The other question is how to find beta users. For my case, it's probably going to come from my immediate network just given how much time I spent in the space, but it seems like generally networking is the best approach. If you can't do it with networking, you're probably not networking enough. It's going to be really hard. Would you have any other suggestions for getting initial beta users if the network can't supply them?
Tyler: Well, I didn't do it with networking, because I'm terrible at that. I think the big thing is ... so I used Google AdWords. This was 10 years so, so maybe things have changed, but the key is I paid probably $1000 for the first person who would talk to me on the phone. You can go out and use traditional marketing channels to find people who might be beta testers, but you have to go into it expecting an incredibly high investment, whether it's in time, or money, or whatever, because your pitch isn't refined yet, your product isn't refined yet, you don't even know who to target. So traditional marketing works, it's just you have to bring in a ton of people at the top of the funnel to get one actual good early adopter.
Rick: Whereas if you do it in person, you know someone, you could really qualify them.
Tyler: Yeah. If you can do what you're doing, do it. If you can't, either just because you won't or it doesn't work with your product or whatever, there are other options, I think.
Rick: Yeah, but it requires higher numbers. All right, then we talked about this a little bit, but not clearly how to get the most out of beta users. The two suggestions I took away was that I'm going to apply are swag and definitely what I would call just basically spending time one-on-one and leveraging my service to spend time with them. The service I provide actually will result in more information, so basically giving free services.
Tyler: Yeah. I'll add a third one here, which is to let them in on the journey a little bit. The people who do beta tests, a lot of times they do it because they see some big potential. You said you're going to start with the why, really get people on board with the mission, the reason you're doing it. The more you can let them in and not just tell them why you're doing it, but make them feel like they're contributing to it, the more engaged they'll be, I think.
Rick: Totally agree. That one is key. Then we kind of pooh-poohed incentivizing users outside of swag, because the negative consequences of having the incentive be the primary motivator versus what we just talked about, them caring about the why and caring about the brand, them actually getting value out of whatever service you're providing.
Tyler: Yeah. It almost cheapens it. If they do believe in the why and you give them $100, they'd be like, is that all this is worth? Am I just a mercenary here and I'm not really a partner with you here? So yeah, totally.
Rick: Totally changes the dynamic. Okay, well, I think ... Did you have any other takeaways?
Tyler: No, I think that seems pretty good.
Rick: Cool. Well, I appreciate it. I obviously have a lot of notes that I was taking unnecessarily, so I'm actually going to get a lot of value out of this. I'll go ahead and sign us off. Hey, everyone. Thanks for listening. You can join this conversation on
startuptolast.com.
Tyler: You're crushing it, Rick.
Rick: What's that?
Tyler: You're crushing it.
Rick: I'm crushing it, yeah. I'm going to let you sign us off.
Tyler: Oh, no. Anyway, sorry, I didn't mean to be a backseat driver here. Yeah,
startuptolast.com say hi, talk to us, tell your friends, go rate us on iTunes. All that stuff.
Rick: See you, man.
Tyler: All right, bye.