Ep 18: How to validate the need for your product or service with Mike Potter

What is Rewind?

Rewind was founded in 2015 by Mike Potter and James Ciesielski. It is a service which protects data driving your business, from a simple side hustle to a successful venture. Their focus is on backing up data which lives in the cloud – specifically in apps like Shopify, BigCommerce, and QuickBooks Online.

The benefits of giving it away for free …at first

The one thing that Mike would share about his experience from starting Rewind is the benefit that they got from giving the product away for free at first. As a new company and in a market that was brand new to them, they needed to answer one specific question: is there a need for this product?

To validate the need, it’s easier to get more people if price isn’t a barrier.

Their solution was found in allowing the product to be accessible to as many different people as possible and pricing it at “FREE” let them do just that. Once they were able to answer that question, they were able to answer other questions: 

• How much should we charge? 
• What should we charge?

Mike and James avoided push-back from customers by being honest from the beginning. When they first started, they mentioned their product wasn’t going to be free forever. It was a time-limited offer, though they didn’t specify when they’d be charging for it. While they expected to lose a few customers, there was a set of customers (customers that were making money from their own businesses and needed the security given by Rewind) who Mike was focused on. These customers were their target market.

When they did move to a paid model, they made sure to give everyone two months’ notice. After the two months were up, it was required that all of their customers transition to one of their paid plans. Meanwhile, brand new customers (who joined after this paid model was set into place) were given a one-week free trial.

One of the biggest things that Mike and his business partner James has kept consistent is the need to both validate and learn from customers. 

Mike’s Key Tips for Building a Successful Business

Focus and always working on having great customer service. If you have a great product and if you provide great customer service, people will want to come back to work with you and they will pay you money for your product.

Early on (before we had a lot of revenue before we were putting a lot of money into marketing), that word-of-mouth, those reviews on the app stores (which created a super high ranking), that was all super important to us.

What are the other metrics that you track?

1. The time it takes to resolve cases
2. Customers review the support interaction 
3. The number of reviews in the app store
4. The rating of those reviews
5. Are the number of purchases/installs growing?
6. Why customers chose them over competitors

What other surveys can businesses run (aside from post-support-interaction surveys)?

There are plenty of other surveys that businesses can send to their customers, but Mike is hesitant to send some of them out to their customers.

One of these surveys that Mike stays away from is an NPS (net promoter score, which measures the willingness of a customer to recommend a product or service) surveys. In lieu of an NPS survey, Mike suggests starting a referral program. This is a more tangible and meaningful way of tracking your customer satisfaction.

How has the Shopify system changed since Mike started Rewind?

Shopify has certainly gotten bigger. There is also much more competition in the market.

What are some books and resources Mike recommends for listeners?

37signals/Basecamp has released a number of great books and resources for both burgeoning and experienced entrepreneurs who are looking to improve their management style and business practices. Mike also follows what Tobi Lutke (the founder of Shopify) posts online.

You can build a really successful company that grows really, really quickly (we’re one of the fastest-growing companies in the city) but you don’t have to kill yourselves and work all day and all night on it.

Mike’s Personal Mission Statement

Mike and his team are really focused on building a great place where people want to work. That is their number one goal in terms of building the company. Because of that, they’ve worked with some wonderful people and have found it to be a great way to spend their time: with people who they work well with. Along those same lines, they also believe that having a work-home life balance is important and is one of the keys to their success.