How GoodApril Used Balsamiq to Save Hundreds of Hours in Building its MVP

28 Feb

In a Startup, Speed Matters

When you’re just two guys with a big startup idea, you can’t afford to waste your time on “pretty good” product ideas.  You have to milk every ounce of value from an hour, and that extends all the way from deciding how to strip your product vision to it’s barest essentials (the “minimum viable product” or MVP) down to choosing the right development tools.

While building GoodApril, Benny and I chose to use Balsamiq as our wireframing tool because it’s easy, affordable, and most importantly, fast.  I can turn out high-level pages in minutes, and I can go back to add in greater levels of detail and precision quickly and easily.  Our designer loves its inherent “sketchiness,” which makes it clear that our output is merely a guide, freeing her to generate creative and beautiful pages using our content as a starting point.

Balsamiq Mockup of GoodApril Checkup
What we were Aspiring to

Two years ago, my Co-Founder Benny Joseph had one of those frustrating-to-the-point-of-inspiration moments that spawned the idea for GoodApril.  He realized that he had wasn’t going to be able to deduct from his taxes the thousands of dollars of student loan interest he’d paid off the year before by a tiny margin.  He could have deducted the interest and lowered his tax bill by hundreds of dollars had he just contributed 2% more to his 401K. If he’d just known that a few months earlier, he could have easily made the change – but how are he have possibly know his tax outcome before he filed?

Thus: GoodApril.  We will help people prepare for and pay less in taxes by providing in-year tax planning and advice, through an easy online service.  Our vision is to leverage financial data aggregation and tax savings algorithms to create an online “tax accountant” that follows you through the entire year (automatically, and unobtrusively), giving you a “heads up” when your taxes need your attention.

Building our full vision will take a bigger team, and time, however – we obviously couldn’t build it all at once.  We had to start smaller.

So how to pick the right FIRST product?

Balsamiq to the Rescue

After interviewing and surveying hundreds of taxpayers, we thought we knew what our first product should be: a real-time tax forecast.  We set to work building out wireframes in Balsamiq, and over the course of about two weeks, we had a solid vision for how it would work.

Before we invested hundreds of hours of development time building it, however, we went out to some of our target customers, to company advisors, and to a couple potential investors, to get feedback. Well, we discovered something pretty underwhelming: they thought it was “somewhat interesting.”

“Somewhat”?!  This was supposed to be our big “debut”!  This was the product that would prove that customers needed a solution like GoodApril.  “Somewhat interesting” wasn’t going to cut it.

Iterating, and Discovering the Tax Checkup

We went back to the white board, begin generating alternative wireframes, tested two new concepts, and discovered what we needed: people loved our new “Tax Checkup” concept.

Reactions to our Balsamiq wireframes showed that potential customers, advisors, and investors were much more excited by this new direction.  Knowing we were on the right path, we then sunk our teeth in on design, product planning, and development.

A month and a half later, we’re pleased to be on the verge of launching our Tax Checkup.  It’s powerfully simple: a customer sends us their 2012 tax return after they file, and we analyze it.  We generate a custom report telling them how much more they are going to owe in taxes in 2013 as a result of the 7 major tax changes coming this year, and identify several potential actions that they can take to pay less.  It’s doesn’t update itself automatically, it’s not exhaustive in its evaluation of possible tax savings, but we’re confident it’s going to save taxpayers $100s or $1,000s in taxes this year.  And that’s a pretty great start.

Check out GoodApril and sign up to get your own free Tax Checkup.

GoodApril MVP - Tax Checkup - Cropped

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Business Plans are Dead. Their Replacement? Startup Accelerator Applications.

21 Feb

Business planYou don’t hear people talking about business plans very often these days.  In my six months as Co-Founder of GoodApril (an early stage tax planning startup), I have yet to be asked to hand over my business plan to a potential investor, advisor, or employee.

…Which is a good thing, because we don’t have one. Or at least, not one of those 20-page Word documents that I created as an undergrad business student.

Listening to a recent Mixergy interview with Christopher Hurn of Mercantile Capital, he describes how the process of creating his business plan was helpful in forcing him to think through things like competition, how you’ll differentiate, and how you’ll acquire customers.

The very act of writing the business plan itself; it forces entrepreneurs to contemplate those things. Now obviously, today… you don’t see that as much in some of the high tech space because things are moving so quickly. Although I still think that idea, that thought process, is extremely important.

…Which got me thinking: we DID do those things, but not by creating a business plan.

Enter Y Combinator

GoodApril’s application to Y Combinator, the prestigious startup accelerator, was in fact the first time we were forced to put to paper the details of the business we had planned.  The application (which we have since learned is very similar to those of other accelerators, such as TechStars and AngelPad) asked the same critical questions any entrepreneur would include in her business plan, with the useful restriction of needing to keep it jargon-free, concise, and conducive to skimming (YC and other accelerators are known to spend less than 2 minutes reading most applications):

  • What is your company going to make?
  • What’s new about what you’re making?
  • Who are your competitors, and who might become competitors?
  • How do or will you make money?
  • How will you get users?

I’m glad our accelerator applications forced us to stop and consider these fundamental questions in a complete and formal way.

Does your startup have a business plan?

Are Product Managers Future Entrepreneurs?

1 Feb

I posted this answer today on Quora, in response to the question “Are Product Manager Future Entrepreneurs?

As a former Product Manager, recently turned Entrepreneur, I’ll say that several skills necessary to be successful in Product overlap, but certainly not all.

Skills in Common:

  • Cross-company collaboration – PMs must be able to work across business functional areas, including marketing, service, and engineering, in order to get great products built.  This flexibility and breadth of exposure is helpful as an entrepreneur
  • Focus on users – PMs tend to be highly customer-centric – thinking about the best user experience that a product or service can deliver.  This is even more important for an entrepreneur, who must even more actively seek out customer opinions to assess the merits of a specific product idea
  • Effort and priority assessment – PMs are required to constantly manage a backlog of priorities and keep tabs on the productivity of a finite number of resources.  These same skills are necessary to maniacally manage scope for startup projects where resources (namely your own time and that of your co-founders) is extremely limited
  • Market evaluation – PMs often find themselves in the role of assessing the viability of a particular market or product, and developing a business case.  This is obviously similar and even more exaggerated for an entrepreneur.

New Skills I’ve Found Necessary as an Entrepreneur

  • Sales – As a PM, I did not find myself having to sell, and certainly not to external audiences.  As an entrepreneur, I have had to learn how to sell others on my vision, on how our progress actually represents tremendous momentum, and how our barely-existent product is a solution for their needs.
  • Networking – As a PM, only rarely did I have to develop relationships outside of my business – much more important were my internal connections and clout.  As an entrepreneur, I am constantly looking to develop new relationships and connections with potential employees, advisors, and investors.
  • “Growth hacking” – As a PM, I certainly had to worry about user adoption, but mostly only the abstract – there was a marketing team that was responsible for delivering new users to “knock on the front door.”  As an entrepreneur, I have had to get very creative in finding ways to deliver users to my product with little or no budget to spend.

I’m answering this in the context of an online product manager transitioning to the role of the founder of an online-product-centric startup – other scenarios are obviously possible.

Looking forward to hearing the opinions of others.

An Unexpected Wrinkle in Preparing to Launch a Tax Business

25 Jan

Imagine preparing for the SAT, only to find out three days before the test that it had been struck down, and was no longer required for entrance to college.  That’s sorta what today felt like.

As Benny and I prepare to launch our tax preparation and advice startup, GoodApril, we have been prepping to take the Registered Tax Return Preparer exam with the IRS to help bolster our tax credentials.  While the test is really intended to ensure your local preparer knows their stuff, we thought passing it would help with fundraising and gaining customer confidence.

It turns out, however, that the United States District Court for the District of Columbia struck down the IRS’s registered tax return preparer program on Friday and is preventing it from enforcing the regulations.  As a result, the IRS today suspended the entire program, including its qualifying exam.

With the tax-filing season starting Jan. 30, hundreds of thousands of return preparers won’t have to register with the federal government, pass a competency test or meet continuing- education requirements.

So, it’s back to the drawing board on how to demonstrate that our product is being produced by financial technologists with legitimate tax “chops.”

I guess entrepreneurship is all about rolling with the punches.  In the meantime, you’ll just have to trust us: we know tax.

How to Improve the Y Combinator Interview

16 Jan

yc500Benny Joseph and I were thrilled to have our startup, GoodApril, selected for an interview with Y Combinator (YC) for the Winter class of 2013.  Getting into YC is competitive – acceptance rates were just 2% in Summer 2012 – so getting one of the final 250 interview slots to be one of the 50 companies accepted, was exciting unto itself. While we weren’t accepted, the process was a valuable experience, but could have been even more entrepreneur-friendly.

What We Got Out of our YC Interview

We’re glad we chose to apply to YC, and don’t regret the time we devoted to the original application and interview preparation.  We gained some real benefits from the experience:

  1. New friends – In order to prepare for the interview, we actively built many new relationships with YC companies and founders to better understand the program and selection process.  This new network of peers has already proven invaluable for introductions, best practice advice, and camaraderie in the ups and downs of being an early stage startup.
  2. Incentive to revisit the big picture – After working intensely on customer development (interviews, surveys, advertising tests, etc.) it was good to be forced to come back to the “30,000 foot view” of the business we were building, to put to the plan to paper, and practice saying it.
  3. Pitch practice – Paul Graham’s famed hatred of marketing speak forced us to figure out how to describe our business in real, simple language, and to practice delivering our messages in succinct ways.  We now feel quite comfortable in pitch settings, whether describing the business at a cocktail party, to a potential employee or vendor, or a potential investor.
  4. Enhanced credibility – Kudos to the YC team for their standing as the top-tier startup accelerator program.  Just being selected for an interview has earned us impressed “ohhhhs” from others in the Valley.

How the Experience Could Have Been Better

In total, the application and interview preparation process was a substantial investment of time – writing and re-writing a tight, compelling application, filming a video, prepping answers to dozens of potential interview questions, practicing those answers, discussing tactics with YC founders, going through practice interviews, and more.  YC was top of mind and at the top of the to-do list for weeks.

While we definitely benefited, the experience felt one sided: dozens of hours invested for a 10 minute meeting.  Here are a few ideas on how it could have been better for us, as startup founders:

  1. More exposure to the partners – I still have never met Paul Graham or Jessica Livingston, the most prominent YC founders, nor seen them present.  My entire exposure to 5 members of the extended YC partner group lasted the 10 minutes of our interview, and the “thanks, but no thanks” email we received later that night.  YC hosts an event called Startup School, but not all YC interviewees gets invites – I did not. To give entrepreneurs a little more “bang for the buck” of the experience, I would challenge the team to host a lecture and networking event for invited interviewees the day before interviews begin.  Give us a flavor for the YC dinners we would enjoy if accepted.

  2. More constructive feedback – We received a couple nuggets of useful feedback in our rejection email, but mostly it boiled down to “we don’t believe customers want this product” and “we tried to think of a better, similar idea, but couldn’t.” There’s an opportunity to “pay it forward” to the rejected entrepreneurs by giving them a taste of the sage wisdom YC could provide as startup mentors and advisors.

    What made you question our evidence of customer demand for this product?  What approaches could we take to test market demand further?  Were there nuggets of the product concept, of the market, of the customer acquisition strategy, of the monetization model, that you thought had promise? I recognize this would come at some cost to YC: either more time invested per interviewing team and more days of interviews, fewer interviews, or longer delays in notifications of rejection. Nevertheless, if the interviewers invested 5 minutes post-interview brainstorming some tips for each team, these could easily be communicated by a single interviewer.

  3. Demonstrate your commitment to “The Team” – Little about the questions asked in our interview, nor the rejection email, reflected YC’s statement that their primary yardstick for inclusion is the quality of the team, not the idea.

    How do we choose who to fund? The people in your group are what matter most to us. We look for brains, motivation, and a sense of design… Your idea is important too, but mainly as evidence that you can have good ideas.

    The interview experience should reflect this. Ask us to bring screenshots or include links to our prior work if you want to see our sense of design. More importantly: address the shortcomings you saw in our team in your rejection – that way we can seek self-improvement and/or recruit to plug the hole.

Why Y Combinator Should Care

YC remains undisputedly the most successful startup accelerator program.  At the same time, competition is coming from many angles, including accelerators with similar models like AngelPad and TechStars, incubators with a more hands-on and resource-intensive approach like The HatteryRaj Kapoor‘s more intimate “operating advisor” model with CoFounder.co, and others.

For YC to continue to lead the pack, it must continue to have a disproportionate number of biggest startup successes coming out of its program.  The only way to do that is to keep seeing the best ideas and entrepreneurs.

The best way to ensure they see the best entrepreneurs?  Make sure YC has a sterling reputation both in the eyes of those who succeeded in getting accepted, and those who didn’t make it on their first try.  They should want to make sure they see not just GoodApril, but also my next startup, and those of the next generation of founders who ask me about my experience.

Closing

Let me re-iterate that we don’t regret our YC experience.  YC should keep innovating, however, to make the experience even better for the entrepreneurs.

Many thanks to BoDavid, and Jason (YC founders at FutureAdvisor, Bump, and Leaky), Brady (of Khosla Ventures) and the several other friends and acquaintances who helped us prepare for YC.

Appendix 1 – How our interview progressed:

Almost exactly 10 minutes total

  • Shake hands, get seated
  • Asked to close laptops with prototypes loaded (they never looked at it)
  • “How are you different from TurboTax?”
  • “Are you guys tax experts?”
  • “Who needs this?”
  • “What was the specific situation [Benny] had with the IRS [that inspired the idea]?”
  • “How much money can you save the average customer?”
  • “What are the top 3 tax saving algorithms?”
  • “You data do you need beyond what you can get from banks, and how do you get it?”
  • Thanks, shake hands, walk out

Introducing GoodApril

19 Dec

GoodApril Tax Services

GoodApril is like Mint.com for personal income taxes.

If you’re like most Americans, you don’t know how much you owe in taxes until you file in April, and what’s worse, you’re not confident you did the right things during the year to make sure you’re paying the least amount possible.

GoodApril plans to solve this by providing a web-based solution that aggregates your financial account data, just like Mint.com, to generate a constantly updating forecast of how much you will owe next April. Our algorithm can then identify specific actions you could take to reduce your tax bill.  At the end of the year, we can then enable you to file your taxes in a fraction of the time it takes today with TurboTax.

In the near term, GoodApril plans to offer consumer-friendly tax forecasting tools to help you understand your tax situation, and to prepare for your tax bill come April.  Visit GoodApril.com or email founders@goodapril.com to get on our launch news list.

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, Card.io [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

Others:

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, Authorize.net, or do-it-yourself.

Have you found a good solution you would recommend?