$250,000 Site Sale on eBay, Killing Goats for 6 Hours, and a Healthy "No"

Richard White, Founder and CEO of UserVoice

Our latest ZURBsoapbox was a hit last Friday with Richard White of UserVoice. Richard joined us to share his story of how UserVoice was born, how it gained traction, and some of the lessons learned along the way.

You can listen to the entire podcast below or download it on iTunes. We've put together our favorite highlights below.

Listen to Richard's Podcast

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Genesis of UserVoice

A few years back Richard came across a group of folks in Cambridge, MA trying to build the first Ajax calendar (pre Google calendar timeframe). He instantly loved the functionality of the product, but the site looked like "s***!" They had gotten their TechCrunch post early on and were surprised to hear poor feedback. Richard ended up joining these folks and it turned into Kiko.com.

As the product developed, keeping track of customer feedback got real messy at Kiko. Customers left their suggestions in all sorts of ways: forums, emails, blog comments, and voicemails. It was really tough for the internal team to communicate with all the customers and understand their pain points. Richard was eyeing this service called Reddit.com which allowed people to vote stories up and down (similar to Digg).

Long story short, Justin Kan (Justin.tv) ended up suggesting that the team put Kiko.com on eBay to sell. After plenty of laughes, there was an actual auction and what do you know? The site was sold for $250,000! To date it has been the largest single website sale on eBay.

After Kiko was sold, Richard was inspired by combining the idea of Reddit and their troubles of customer suggestions at Kiko. Energized by Joel Spolsky's article, he decided to substitute points instead of Spolsky's $50 and open it up to all the users of the product. UserVoice was born.

Gaining Traction

"It's amazing what happens when you just talk to people" Richard says. There are a few things to remember:

1. Talking to people on Twitter early on really works! When you don't have access to influencers this is a best tactic to spread the initial word.

2. Reaching influential bloggers and writers is key to scaling your efforts. "You talk to one guy he gets you in front of 4,000 people—now that scales!"

3. Creating a brand through something like the UserVoice feedback tab or a "Twitter" logo on as many pages out there as possible opens up lots of doors. "After a while, people see the feedback tab everywhere, and they can say—yeah I've seen it! So when we come to large companies they no longer give us the cold shoulder."

4. People in California are extremely nice and hardly say no to a product demo. "We had all investors and entrepreneurs come over from Europe and ask, 'What's so special about CA?' My answer was that nobody says no to meeting or a demo."

Saying "No" the Healthy Way

Richard mentioned that the number one customer suggestion for UserVoice (ability to vote ideas down) will not be implemented. The reason is simple: the company is not about voting things down. StackOverflow, one of UserVoice's clients, declined 60% of their customer suggestions. "This is a key indication of how healthy the company is," Richard says.

"Saying no is great, but it's better to do it in public. Just say no publicly. It's more of a healthy kind of no. Customers understand why we are not doing it."

Innovations from Customers?

"Users won't give you major innovations. You have to get that one yourself. Users will give you incremental innovations which might prove pretty important." Richard said.

"What's the difference between Blackberry and iPhone? It's the last mile. Last 10-15% of the product. Both make calls, both do email, but that 1 mile of difference! That last mile is the innovation which comes from customers."

People have to relate to pain points in order to innovate. Feedback such as: "I've been killing goats for 5 hours on level 35 here" sparks a note with other users, they feel the pain point and want to innovate.

We had a blast and enjoyed Richard's talk—we hope you did, too! We'll be posting details of our next ZURBsoapbox shortly. In the mean time, be sure to check out the rest of the photos from Richard's ZURBsoapbox on Flickr. See you next time!

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Soapbox transcript

Richard: They had a little thing on their site which was really cool they had a little thing which says feed back. Yes, it was mainly that people were kind of accessible. our user would create [inaudible @00:18] which I think by and large is true. They're not going to know [inaudible @00:23] products. They're not going to know [inaudible @00:24]

Moderator : Before we start, I'd like to introduce Richard White and give you a little bit about him. He started in 2000, he founded Collective Core, he created a product for health care facilities to educate patients with video and television channels. He then went on to NetCentrics and was working on a project called Meeting Studio for planning and reviewing organizational meetings. After that he went to a company called Kadro where he worked on a food safety auditor program.

Richard: All very sexy productivity apps. There's no throwing sheep or killing vampires here, that's for sure.

Moderator : After he went over to Kiko.com and worked as a UI designer there designing CSS interfaces. He had some time after that to go create a rails plug that generates admin interfaces. Databases, right?

Richard: More sexy stuff.

Moderator : Then after that he founded the Slim Timer Company. A tool to time your tasks, make sure you're on time with things and following through on things and then finally over to UserVoice. Where the company just took off and he'll be talking about UserVoice, and lessons learned from the last two years and everywhere he's been so with that we'll start. We'll have about 25 minutes or so of discussion. I just urge you guys to think of questions and as he's talking just raise your hand, just throw them out there. We want to make it as interactive as possible, and then the last five minutes all of us will just be bombarding you with questions [inaudible @02:35]. It's very interactive, so let's just start like setting up like how did User Voice start? What was the idea, how did it start gaining traction.

Richard: If you don't mind I'm going to sit down actually for this, because other wise it feels awkward. This is a cozy little room and we can all sit around and talk about things. And I don't have to stand up for 30 minutes.

So how did we start UserVoice, really simple. We started doing start ups a couple of years ago. I was working basically on productivity apps, and was emailing these guys up in Cambridge who were working on one of the first Ajax calendars. Before Google calendar, just doing something with Ajax, made you feel like it was a real business. We did X, but it's Ajax, therefore it must be a business right? There's got to be a business around that right. I emailed those guys and said your project is really fascinating with all the sort of things you can track, and drag and drop, it looks like shit, it had all sorts progressive disclosure like if this, then this, then this menu item appears. And I remember emailing them that, and they were kind of surprised because they got their TechCrunch post. They were kind of surprised that people were like, your thing sucks.

It's really a good thing to say to people though. It's kind of like surprised that, that was Kiko. We put out a version 2 that did really well. It didn't do well enough because we all got kind of tired of it and went on to something else. But before we did, one of the other guys, Justin Cohen, who I thinks going to be here at some point, who does Justin TV, his brilliant ideas was to throw the whole website up on eBay. So to date I believe that Kiko.com is the largest exit on eBay, not buy eBay, but sold on E-Bay, put it up there for I think $1.00 and put a reserve price of 50 grand, and everyone was like it's never going to work, it's silly, and then it sold for a quarter of a million dollars.

And then about ten other people put their sites up there and no one made anything. So first mover advantage is important. It was my experience doing that, so I think when we were hanging out in the back room, I kind of mentioned that I'm a computer science guy. I'm a rails guy, as he mentioned but more of my interest has become kind of the design side of things. So I always feel intimidated coming to work, coming to places like this where you guys who I call real designers as opposed to me where I sort of fake it till you make it. But we were doing UI design on Kiko and it was three person team and what we found really early on was that the design guys the guy that gets all the feedback. I want you to do this not that.

And then the engineer like, well what do we need to do next, and the design guy in a small start up becomes the de- facto product manager in a way. And so we had message boards, we had emails coming in, this was pre Twitter, but we had all sorts of people talking about it. I remember spending a couple hours a day listening to customers. And at the end of the day they're like so what do we build. I think most people were asking about this, great, we have some questions for them about they want this feature what do they want, what does it actually mean how do they want to use it, how can we tell them when it's done. I'm like I don't really know some of them are from over here on the message board, some of them are over here on our blog comments so of them email me. I talked to this one guy on the phone.

And so it got really messy, because we were in the same room as these guys who do this site called [inaudible @06:09].com. Which is kind of a Digg style thing. And so right across the aisle were these guys who did really cool stuff with voting up and down. And so after Kiko kind of went it's way on eBay. I kind of sat down and scribbled out some ideas and one of them was, I was really inspired by this guy, Joel [inaudible @06:27] who's kind of a product development guru guy.

He wrote this whole article about a project management game you could play, where you try to prioritize features and you give all your developers, everyone in this room will get 50 bucks. Here's 20 line items we could build, I want to put $5.00 towards this, I think it's valuable. And so you create a market around sort of crowd sourcing to your internal team. And so kind of working on that working with the Reddit guys. And saying do this with users and to your internal team and that's kind of what the genesis for UserVoice was.

I don't want to have to listen to people all the time and figure out who's interested in what, and what's the most important thing they're interested in. Just create some sort of game mechanic that kind of roughly approximates this market, this kind of market economy of: Here's your currency, here's some votes, go spend it on which ideas you want most. And then if we have questions for you we can ask you direct questions and when it's done, you'll know when it's done.

So we built that in December of '07. We had a very strict rule, I was working with another guy. There were two of us to start off with. We had a very strict rule where we'd do three months of consulting and then we'd do six to eight months of start up, which is like enough time to do a version one, get it out there, see if it has any uptake. And so we cycled through a couple things but didn't pan out until we got to this. And this felt really good, it was kind of in the scope, we could build it in about a month and a half we [inaudible @07:51] out to an existing project. It kind of worked, threw a couple thousand people at it all the ideas came back that I expected because I'd between talking with people.

So it roughly approximates what I was doing manually. Showed it to some other people, and they said, yeah, we'll use that and so it kind of went from so we launched in April of 2008. We were really fortunate to get some good customers early on. Which is good because I don't know if you've ever seen the seen the product. It's very kind of viral B to B thing. If a large company is using a UserVoice forum it's kind of an interesting thing. And every ones like, oh, I want one of those.

So for example, we worked with a company called Stack Overflow, which is like a Yahoo answers for developers, when they were building out there app and they said we built a little version of Stack Overflow. Everyone go over here and go for what the next feature is. I think they went through something like 556 were completed. Basically built the whole thing with this. In the process of doing that 700 other account people signed up for accounts that were Stack Overflow users. And so we replicated that with different Twitter apps and we replicated that with different design tools.

So we really kind of bootstrapped our whole user base by basically latching onto these type of builder communities. Developers, designers, social gurus on Twitter. And so that kind of got us through some awkward moments of 2008 roughly speaking. And this year we launched some premium versions after doing some very awkward enterprising sales and realizing that's a terrible idea for us to do. But we learned some good feature differentiation.

And so we launched some premium stuff earlier this year. And then we raised some money about the same time. It's really good to raise money when you don't have enough revenue runway for anyone to do any real projections. People are paying money, and it's going up, I can't give you 120 days worth of data or anything, but you should get it now while it's exciting. So with investors that's a good thing to do.

So we raised about $800,000 from a lot of investors actually. It's kind of the new series A in the valley is kind of the $500,000 to the $1 million round. We did it from like seven different people, which is a little crazy. We had investors in London, New Zealand, New York, Phoenix, and San Francisco. And so now we're up here and we were in Santa Cruz for a little while now we're up in San Francisco, Union Square, seven of us kind of chugging a long. We have some really cool stuff on the web, but right now we're keeping up with 28,000 plus organizations that are putting those feed back tags on their site.

Moderator : So in the process of gaining traction there you get [inaudible@10:36] overflowing and a couple of big clients...

Richard: Non-paying clients.

Moderator : Non-paying clients. Talk about the process there. How did the gaining traction build?

Richard: It's amazing what happens when you just talk to people. One of the guys we brought in early, one of the other co-founders, Mark [Zelsen] was on Twitter and we were having this big debate where he was saying I want to talk to people on Twitter--this is like 2007, 2008. I want to talk to people on Twitter about what we do. I'm like that's retarded, why are you talking to individual people. All the stuff we had previously, I did blog marketing. You set up your Google alerts, people write about your competitors, you go to them and you say hey, this product, you don't write in the comments because that's spammy contact them and get them to write about you.

You talk to one guy and he gets you in front of his 400 readers, 4000 readers that's scales. Talking to individual people on Twitter, that's stupid like that was the conversation we had, I'll admit that. But to his credit, he didn't listen to me, and he went ahead and still talked to individual people, kind of without my knowledge, I was like whatever. Talking to individual people in that early stage, especially for us. If we were a B to C start up, you know if we were trying to get you to tend your garden, Farmville kind of thing, maybe talking to individual people wouldn't work.

But if we could go to the right people, and say hey would you use this and why, and we can get all sorts of referral loop of people seeing it work and it kind of works that way. So we did have some purpose to it. We said these are the people we want to get in front of. So we had special plans, we gave away all the Twitter apps, talked to every Twitter app we could and said you should be using this and talked to all the line developer guys. But it was mainly just kind of people are really accessible, especially in California.

When I moved out here two years ago, we had all these investors and entrepreneurs come over from like Europe and they're like what's so special about California? No one say's no to a meeting here. And like no one says no to like most anything. You should use my tool; can I at least tell you about it? Okay. It's amazing how much affordance you have from those sorts of things. So it's kind of basically what we did. We got it up there in a few places. Right before South by Southwest we had this idea. I saw on this site it was called, I'm in like with you. It's now called OMG Pop. I'm a closet gamer.

Audience Member: [inaudible @13:01]

Richard: But they had a little thing on there site, it was really cool, they had a little thing that says feedback and it was on top of their site. You click on it and it would pop up this contact form and I thought that was really cute. And we had a problem at that point, we had people using our site, but the presentation we gave in Norway, all the intention in the world of how to do what I call community driven design. How to build an app that's good for the community if not the individual user. It all doesn't matter if no one gets to it.

So we had people set up UserVoice forums and change the contact link in the footer to say, go to User Voice and five people show up there. So these guys have these tabs, [inaudible 13:44] South by Southwest banged it out on the weekend. We can build our own little tabs. And that was actually probably the best brand building, thing we ever did. So now we've to a widget on every ones' site that says Feedback, pop it up it says powered by UserVoice and I think today, the referral on the Stack Overflow or someone else is 45% of our new accounts come through [inaudible @14:03] that's either powered by Logo or actually seeing it on our forum.

So getting some real estate in other peoples like you've seen the Tweet this stuff like the Tweet [inaudible @14:14] guys. Like if you can get some real estate on someone else's' site, and it's very clearly yours--Oh, I don't want that; I want that--the sentiment we got was kind of we talked to larger customers. Like larger companies would come to us. Originally we went to larger they were like who the hell are you. Talk to this guy or whatever. By the time we got to the end, they're like I've seen this like eight different places, it must be legitimate you can skip past step A where we beat you up about how legitimate you are as a company. So it's great for creating an impression, even if you're only on, if you were only on 100 sites but we're probably on 100 sites that everyone's seen. Because it's that kind of that network growth. So that it looks like, wow, you're on every site that I know. Like, I want to go to TechCrunch and [inaudible @15:02] and stuff like that.

Audience Member: How do you [inaudible 15:07], a lot of their thought is about only doing things that come out numerous times with the customers, right? [inaudible 15:22] some of you had the same philosophy and it seems to me that you're exposing everything to everyone. Have you learned anything in that process? What's your thoughts on how they approach customer driven [inaudible @15:38]?

Richard: There's a couple of thoughts. The Stack Overflow which I think by far they the most aggressive users of UserVoice to kind of do what I call co-creational product. And even there they declined 60 some odd percent of ideas. And actually that to me is like the biggest metrics for how healthy is the company with how transparent is it being. Most ideas aren't going to work. So I completely subscribed to, it's a good thing, we can't do this and here's why. The number one idea on our form is about to be declined. [inaudible @16:16] It's about to be declined because it just doesn't make sense. It's about can we vote things down, and we're not going to let people just vote things down.

It's just our opinion that we want to create an atmosphere where it's not about what you don't like, it's about what you do like. And we find that voting things down is more of an export user thing any way. So here's why were not to going to allow you to do this. We might give you some other options. The [inaudible 16:37] single thing, I have a lot of respect for those guys and I do think that with a lot of things they've been. They've become so polarizing that when the say no, they say no to everything, it just becomes a little over the top.

Saying no is great and I think saying no in public is actually better. All of use email you individually and say you should build this and you tell each of us no. And then my usual thought is you have no idea how many people want this, you just don't get it. People are going to see that he number one idea for them, there's 2000 people who want this thing and we're still saying no. So it's a different kind of no. It' a more healthy no. It's not that we don't get them that a lot of people need this. We understand that, but we're still not doing it. And I just think that's a healthier way to do it. Plus it also save you a lot of time having to say it 2000 times in a row.

Audience Member: Have you seen [inaudible @17:28] customer, and going back and forth with them and yet people actually started implementing the themes from the community and have they actually participated in that discussion and actually used the data for their users?

Richard: Absolutely the other deck I have is going through all the sites and showing what are the innovations to come out of there. By in large a lot of innovation comes out of is incremental innovation. And I think that's fine, your users wouldn't give you the major renovations. Which I think by and large is true. Because they're not going to know it as well as you are. You've got to make the major renovation, but what's the difference between the Blackberry and the iPhone? It's the last mile of the product; it's like the last 10 to 15%.

They all both make calls, they both check email, what's the difference. The difference is the last mile and you usually can help you with the weird idiosyncrasies of the last mile. We do see people do like the major innovation is through things they get really well like pricing, or in gaming. People get the gaming mechanics some times often better than the companies themselves. We've had a couple examples where we worked a company called 99 Designs, which is kind of like, might be heresy around here but they do like what ever you want to call it. Spec work, crowdsource or what ever.

But they had a whole thing which was the user said people aren't paying for their contest we want to have pre-paid. We had a thing were we didn't have a plan that was cheap. Our cheapest plan was $200 a month because we were dealing with larger companies. And we'd all just show up and say, we want a sub-100 dollar a month plan that does this, this and this. And then only a couple of hundred people sign up for that and we guess that we didn't want that plan. So that's a fairly major innovation, but it has to be some thing that users are so close to that they get it.

I get what my needs are and what I can pay for. I've been on level 35 killing goats for six hours this is really annoying right. People get that, right? That's the kind of stuff where you can lose a lot of like, like at level 30 you want to kind of take care of it. The gaming stuff is fascinating as an aside. We look at the best we can the active users, what the [inaudible @19:48] rate is of active users giving feedback, or engaging the community. And regardless of the company, gaming obviously [inaudible @19:58] more a more engagement. Those guys they get in to it. Their on those forums like for very specific things. The goats in this plane are not dropping as many diamonds as the ones over here. It's funny I want to do kind of like a [inaudible @20:18] like a stumble upon [inaudible @20:20] those ideas, because we occasionally get things like what's this thing spiking on our metrics, because we don't know. I don't know all the things [inaudible @20:30].