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The “Concierge MVP” – An Example: GoodApril’s Tax Checkup

8 Jan

Do you want to know if customers really want what you’re building? Try selling it to them before you’ve built it, and you’ll know for sure. That’s the idea behind the “Concierge MVP” or “Wizard of Oz MVP.” Unlike a simple “Click Test,” however, you actually deliver the value you’re promising to your customer, just not in the way you intend to when you build your full-scale software solution.

It’s one of the most powerful ways I’ve learned to test a product hypothesis and gain real customer insights quickly. I’ve used it in startups, like GoodApril, and even at a big company like TurboTax.

I’ll share two specific examples to help you learn how to create your own Concierge MVP test. You can also check out other examples of MVPs.

Background: What is a Concierge MVP?

An MVP is a “Minimum Viable Product”. It’s a fundamental concept in Product Management and software development. Build only the bare essential elements of a solution, otherwise you’re likely wasting development effort or worse, making your product harder to use by overloading it with functionality. There are two flavors of Concierge MVP:

Example of Wizard of Oz MVP: The GoodApril Tax Checkup

Wouldn’t it be amazing if your tax software would tell you if you could be paying less in taxes, or warn you if you were going to owe the IRS next April? My Co-Founder and I were pretty sure it was possible to build, and that people would pay for it if we could, but before we tried to raise investment in our startup, GoodApril, we needed to be sure. So we built a test to find out: The Tax Checkup.

The thesis behind the Tax Checkup was that if people actually cared about finding ways to pay less in taxes, they would be willing to pay to find out how. Rather than actually charge users, our currency would be asking them to provide us with a copy of their most sensitive financial document: their tax return. Not charging money also allowed us to avoid building any payments tools, a big time savings since we were just a two-man startup at the time.

Here’s how it worked: We generated some traffic to our site using traditional Growth Hacking approaches. One example was that I would find tax questions people asked on Quora, and link to our website in my answer as a way to find other savings tips. Our website:


Testing the value we would deliver: save money on your taxes

We would then lead them through a short online process of creating an account (so they could login and securely see their report later), and then uploading their tax return. To get users to create an account, we provided a quick demonstration the kind of analysis we could provide using three simple questions.


Providing value before asking for an email address or tax return

After someone had created an account, we asked for their tax return. While we did say that it could take up to 48 hours to get your report back, we never implied GoodApril wasn’t a fully software-based solution.


Asking for a user’s tax return

And that’s where the software stopped, and the people began.

Since we wanted to make sure it would actually be possible to build repeatable tax advice with software, we went ahead and built the logic and UI around a few savings opportunities for the Tax Checkup. We didn’t, however, invest in building the OCR technology that would be necessary to actually extract the data from the user’s tax return, to generate their report, or any kind of transactional email system notifying people when their reports were ready. That’s where the “Concierge” part really came in: my co-founder and I would read the necessary input values from the customer’s tax return, manually input it into our internal analysis tool, publish the report, and then email them that the report was ready. The user could then login and see the report we generated for them:

GoodApril Tax Checkup - Cropped.jpg

The GoodApril Tax Checkup – Example for a family earning $306K

Each report took us almost 10 minutes to generate, and that was only after we got into the rhythm of it. We were OK with that, however, because spending a few hours of manual work allowed us to launch many weeks earlier than we could have otherwise.

We ran the Tax Checkup for a few weeks, and received hundreds of tax returns. We shut it down once we felt we had the evidence we needed to prove to ourselves and to investors that there was real demand for the kind of service GoodApril would ultimately offer.

So, a quick summary of why this Concierge MVP test was so helpful for us:

  • It helped us prove demand for tax advice without building a fully functional site
  • It allowed us to test demand much faster than we could have otherwise
  • We gathered evidence of customer demand using real customer behavior (sign ups and uploads of tax returns), not just self-reported interest from a survey or interviews
  • We learned some of the challenges in building the ultimate solution we aimed to provide: for instance, how a tax return alone didn’t give us as much information as we needed to give many kinds of advice
  • We learned what it would take to acquire customers. Our growth hacking helped us drive a few thousand visitors to our site, and we got to start testing approaches to see what would work for us down the road

Do you have examples of how you’ve built a Concierge MVP to test a new software offering before launch? I’d love to learn about it!


How to Trend on AngelList: GoodApril’s Success

6 May

AngelList is now a critical part of the startup toolkit.  It helps emergent companies attract talent and investors, and apply to incubators.  Learn how GoodApril was able to “trend” on AngelList, and the benefits of doing so.

Trending on AngelList

Why “Trending” on AngelList Matters

Attracting a large following on AngelList is helpful for raising money, hiring employees, and gathering the “social proof” that other startup-insiders think your idea is compelling. There are thousands of startups listed on AngelList, but only a few are highly visible at any moment – these are either “featured” (curated by the AngelList team) or “trending” (adding lots of followers in a short period of time), and are listed on the website and in a weekly email to users.

Partially as a result of being featured as a trending startup, GoodApril was able to attract 175 followers on AngelList, the majority of whom had no prior connection to us, within one week of listing on the platform.  The talent service found a match of mutual interest between us and 21 job candidates, and gave us exposure to at least 100 more over the next month.  While GoodApril has not pursued external funding, when we do, we already have several investors who have pre-emptively expressed interest through the platform.

How to Get Your Startup Into the “Trending” Section

The basic key to trending is to add as many followers in as short a time period as possible.  It’s not formally stated, but we believe that AngelList also considers how “popular” the people are who are following you – so it’s most valuable to add followers who have a large number of followers themselves.

Ironically, the most effective way to gather new followers for your startup is to be listed in the “trending” section of the website in the first place.  What it takes to be successful at growing your follower base, therefore, is to rapidly harvest your own network, and then ride the wave of new “organic” followers as you begin to trend to stay there.

How to Get Prepared:

  1. Find all your allies already on AngelList – If you use other social networking tools like LinkedIn, it is very easy to find your network on AngelList.  Click your profile, then “Find Friends,” and connect your social network profiles.  You are presented with a list of people in your network already on AngelList – comb through this list a bit and begin following people you actually know or whose updates you might find interesting.
  2. Prioritize your allies for outreach – Now go to your own profile, click the number of people you are “Following”, then “All [XXX] following.”  This presents a full list of the people you just added or were already following.  Take this list and move it into a spreadsheet.  Put the number of followers each of these people has into a second column and sort.  This is your prioritized list for outreach.
  3. Ask your most prominent non-investor advocate to be your “referrer” – Using your new “allies on AngelList” spreadsheet, you now have a hit-list of potential “referrers”.  It’s not publicly stated how this person influences your listing, but they are prominently listed on your profile page.  I recommend contacting and getting a commitment from this person in advance.
  4. Get your non-AngelList Allies Listed – Ask any advisors, employees, investors, lawyers, or other advocates who aren’t already on the service to create a profile in advance of publishing.  Ask, in particular, that they include a photo – a profile page full of photo-less profiles is shady.

Begin your Outreach:

  1. Begin building your profile in “draft” mode – You can add your advisors, lawyers, investors, and referrer while your company is still in “draft” mode.  This enables you to get all your loose ends together before publishing.
  2. Go “live” and individually email your allies – While it is tempting to send a blast email to ask folks to follow you, refrain.  Individual emails, with some thoughtful work put into crafting it to your relationship and most recent conversations, are critical to driving up the number of people who actually take the trouble to click “follow.”  So bust out your prioritized list of people in your network, and start emailing.  Pro tip: draft these emails before you go live so you can just click “send” on launch day.
  3. Publish to Social Media – This should be obvious, but it’s also a good idea to send out a call for help to your friends on Facebook, Twitter, and LinkedIn.  Tell your friends that you’ve debuted on AngelList and that their “follow” will help you get noticed by potential investors (this message seems to be easily understood by people even unfamiliar with tech startups).  We found that this was a helpful way to have a second “touch” with our network to remind them about the individual email we had sent earlier in the day.
  4. Do follow-ups 3 days later –  Even writing individual emails, it took us nearly 200 emails and a social media blast to reach ~75 followers.  We pulled in another 10 or so by going back through our list of new followers, cross-referencing that to our Allies list, and sending a follow-up to the folks we thought were likely to support us.

Timing your Listing (and Trending) on AngelList

The only real benchmark for success for a company is ultimately growing a large base of customers who value and pay (directly or indirectly) for your service.  Despite knowing this, it is very seductively ego-boosting to watch your company’s base of followers grow.  Try not to get too distracted by it.

As I mentioned at the start, we saw many quantifiable benefits of trending on AngelList.  Other incredible benefits included getting noticed by some folks in the accounting industry, who provided the first bit of press attention for us.  An investor spotted us and introduced us to the executive team at a major player in our industry, which led to valuable business development meetings.  Finally, we saw significant traffic to our site and dozens of prospect customer signups.

There is a cost to trending, however.  It takes valuable time and attention from the founders – you have to do the cost-benefit analysis yourself on that one.  It’s also hard to sustain, and you more or less have one good shot at it (until your product and/or investment news is powerful enough to bring on a second or third wave).  Others have written that you shouldn’t post until you are already mid-way into your fundraising cycle.  In our case, we listed before we were even seeking funding, and we’re happy we did.

That’s our story, but if you want to hear another entrepreneur’s experience, check out Justin Thiele’s article with his advice and experience with trending on AngelList.

Do you have an AngelList success story of your own to share?  Please leave a comment!

API-Based ACH Payment Vendors for Web Developers

26 Oct

While there has been tremendous progress in the world of plug-and-play online credit card payments providers for web developers (see: Stripe, [now PayPal], Braintree, and others), as well as the introduction of some exciting alterative payments platforms (e.g. Dwolla), it is shockingly difficult to find a robust API-based solution for accepting ACH payments online [and apparently has been for a while].  I have spent the last couple months looking for just such a solution while leading Product management for an online small business lending platform, Endurance Lending Network.

Quick overview of the Pros/Cons of ACH:

ACH PaymentsACH (Automated Clearing House), also sometimes called “eChecks” or “electronic bank transfers”, is an old-school framework for inter-bank money transfer, governed by NACHA. There are two kinds of ACH transactions – a “push”, where a user instructs their bank to send money to another bank (that of your business), and a “pull”, where a user authorizes one bank (i.e. that of your business, through your web application) to request money from another bank.

  • Pros: It’s cheap (per transaction costs can be as low as $.10 per transaction), it’s scalable (it’s typically charged per-transaction, not as a percent of the transaction amount), and it’s reasonably common and therefore not “scary” to customers
  • Cons: It’s fraud-prone (while you will receive an NSF  (insufficient funds) error within 3 days, a customer can walk into her bank up to 60 days after a “pull” transaction has occurred and claim she never authorized your payment. Her bank will then claw back the money they sent you, and you’re left with little recourse outside of a lawsuit, if you can even find the customer), and the rest of this blog post as evidence, it’s hard to find a good plug-and-play provider.

Given we’re building a lending product, and have a solid legal contract in place with all of our borrowers, we’re not worried about fraud, we are moving high volumes of money per transaction, and so ACH seems like an ideal solution.  So what providers are available?

“Next Generation” solutions:

  • ZipMark – utilizing the framework for Digital Checks (think: photo deposit of paper checks) and layering in security features to guarantee ACH transactions in real-time (they take the hit in the event of insufficient funds). Solid technology, nice team based out of New York, and fixed per-transaction fees – great! Problem is, they cannot yet offer web developers substantial customization of the user experience. Your users interact with ZipMark through a “context-ignorant” Facebook-connect-like modal window.  That means that while my web application is collecting SSNs, DOBs, and other information from my users, they have to re-enter these into ZipMark to make a payment. Similarly, using ZipMark requires that users create a username / password with their service – they cannot yet handle single sign on with our application. So, overall very promising technology, but not yet about to deliver the user experience what we are looking for. 1% per transaction, capped at $5.
  • BancBox – offers a robust set of payments capabilities, including Credit Cards, ACH and PayPal, through a single set of APIs.  What’s more, they’re able to create “eWallets” within your app for your users, helping you keep their money within your marketplace vs. having to send it back out to an external bank account.  Problem is, they charge for ACH on a percent-of-transaction basis (~1%), which is far to expensive than other solutions (at ELN, we’re sending loans of up to $500K here – it’d be cheaper for me to fly to our customer’s house with a suitcase of cash than send it through BancBox). 1% per transaction, no cap.

Traditional ACH providers, with APIs:

  • PaySimple – offers an API, but it’s from a 3rd party, meaning they don’t have the expertise to support it if you run into trouble.  Overall, they just don’t come across as being very developer focused – their primary solution is a white-labeled payment interface hosted on their site.  I asked, and no, you can’t just iFrame this into your site (or at least, they won’t support you if you do).  $35/month + $.55/transaction
  • ACHDirect – same deal. Another web developer who used them told me “they sucked, but they seemed to suck the least.” — needless to say, I didn’t rush to sign a deal with them. $20/month + $.35/transaction


I’ve heard about these offerings, but when I reached out to them, they didn’t get back to me.  So… while they seem to have the capabilities, they haven’t exactly won me over yet:

Build it Yourself?

Interestingly, I have read in a few places the idea that it’s actually still easier to build your own ACH capability.  Until recently, I wasn’t really clear what that meant.  Randal Lucas recently tipped me off to this:

  • AirBnB’s Do-it-Yourself ACH Guide – AirBnB apparently went through a similar process to mine, and ended up building a simple mechanism to generate a daily dump of all the transactions that needed to be processed, would login to their bank’s portal, and upload the list.  This required daily, manual work, and manual error-handling, but as you’ll read, they think it’s the best solution available.

Hopefully this has been helpful.  Unfortunately, I can’t yet provide you a recommendation since we’re still figuring this out.  I’m leaning towards ACH Direct,, or do-it-yourself.

Have you found a good solution you would recommend?

Performance-Based Acquisition Marketing

12 Jul

Zecco Logo

I recently completed a year-long period managing acquisition marketing for online brokerage firm  One of the most important changes that I brought about during that tenure was to transition our markting focus from being purely CPA-based to consider not just cost of an account, but also its resulting quality.  Recognizing that different channels, and even specific partners within a channel, could yield dramatically different kinds of accounts was an important insight that led me to drive for this change.  Additionally, I recognized that a multi-year focus on getting as many, cheap accounts as possible had yielded an unbalanced, unscalable marketing machine.

In order to justify spending in more expensive channels like online banner display advertising, we had to be able to prove that the resulting accounts were “worth it” and generated sufficient revenue to justify the acquisition cost.  In order to do this, we had to overcome a lack of tracking and reporting tools to evaluate new account value based on acquisition source.  We had to solve this on two fronts: First, through the development of a reasonably comprehensive data warehouse which brought together account-level trading details to the website user-level at which we could track the original source of a new account. Second, through the adoption of tracking technologies that enabled us to more definitively attribute a specific new account to one of our multiple marketing channels.

Once we had established a way to track performance, we had to settle on standardized measures of account quality.  With input from our Finance team, we settled on using the average of an account’s first three months of account activity, extrapolating that average out to a year, and dividing that annualized revenue figure by our cost of acquisition.  If the average “payback period” on the accounts from a particular channel (ultimately, we got this down to the publisher and affiliate level), was less than one year, we considered that a success since the average customer lifetime of new accounts was a multiple of that.

While we only had a short period of time running this new approach at full-speed prior to Zecco’s acquisition by TradeKing (I apologize I can’t therefore share robust figures to demonstrate the impact), it proved to be an exceedingly valuable marketing management tool.  We could quickly evaluate a new display advertising partner’s promise, and re-allocate spend to the partners that were outperforming the others.  We were also able to identify specific affiliate partners were substantially under-delivering on account quality and remove them from our network.

I’d be happy to get into more detail to help other online marketers understand this methodology and approach.  Get in touch!