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Constraints, Creativity, Startups, Funding

When options are limited, people produce more solutions  – not less.

When people are limited they try to improve and optimise.

 

The opposite is true.

It is known as Parkinson’s Law :

“Work expands so as to fill the time available for it’s completion”

 

Well, seems like what is true for time budget is also true for financial budget.

The more money there is available the more money you will use for your project.

 

Introduce Juicero – a startup that has come under heat recently for doing just that.

Juicero sells a machine that makes juice.

They have also received some nice juicy VC money too (investment) of $120 millions.

That’s a lot.

Especially, to make a juicer.

Even more, when this juicer also costs $700 when they launched.

Today, they have cut the price down to “only” $400

Yet, it remains expensive.

So expensive, than Bloomberg went to investigate.

As you can see for yourself – the all Juicero machine sounds like a scam by now.

But honestly, creating a hardware company, raising $120 000 and working for 2 years to build a product is not the smartest way to set up a scam to get rich quick.

The reality is simpler.

And a bit sad.

Ben Einstein (yes, it is his name… no I don’t know if he is related to Albert – but in any case he sounds like a smart guy) did some research on the over-expensive juicer (full piece here).

What he found is simple:

The engineering team had too much money.

(Remember they rose $120 000)

What they have build is a wonderful machine.

A solid piece of engineering.

But an expensive one.

Teardown of Juicero juicer by Ben Einstein

The Juicero Press can :

  • connect to your WiFi network (via TI’s CC3200 chipset, purple arrow),
  • has optics/camera assembly for scanning QR codes on the juice packs (green arrow),
  • to illuminate QR codes – equipped withLED board (blue arrow)

Juicero press teardown – by Ben Einstein

 

I am just going to quote Ben here:

“It is exceptionally rare to see a custom power supply on a first-time hardware startup’s product as these are inspected very carefully as part of UL/ETL certification, creating additional cost and risk.”
Notice the motor (blue arrow, part number JQ42-1210N1) which is manufactured by Jiaai Motor Company, a common supplier of cordless drill motors. Like many of the other systems on this product, the motor is seemingly custom to account for the exceptionally high rated power (stalls at 5A at 330V DC, which is hard to believe, possibly even a misprint on the motor casing) and sports a custom encoder system designed by Juicero (yellow arrow)”

If you read the whole piece, you will see it goes on and on and on.

The amount of customisation these people went through to make a machine that just press juice is quite amazing – and expensive – and possible stupid.

It is like they have tried to make a Apple computer version of a juice machine.

If apple had done this product and call it iJuice,  I am not sure anybody would have been that surprised.

The only difference is that Apple is making product that people buy.

Juicero not quite yet.

So, there is that.

Time will tell.

But one things comes to my mind, when we have all these investment in startup land and these companies keep failing.

The core of the problem might be the same thing that we try to use to enable innovation: resources.

If we give too many resources to a team, you might not see this team actually succeed.

Because of the lack of constraints.

Food for thought.

 

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So you want to sell stuff online

Selling online has the highest profit margin.

It’s also one of the cheapest way to sell direct to consumer at scale.

That’s also why it is growing rapidly over the past 5 years, and it will keep growing as the world is going increasingly digital.

So, if you want to make the jump to ecommerce and sell online, let’s have a look at what you want to consider before you build anything.

 

ecom-00

Product

First what do you sell? How many products are we talking about? One, a dozen, a few thousands?

The quantity of products type will impact the choice of your system. The more products, the more complex the design, and the more robust the system you will need.

Then how about your inventory? How much inventory do you need to manage? Do you need to integrate inventory management into the ecommerce system, or you will deal with it manually?

Then shipping, who pays for it? The customer or yourself? Do you need to calculate the price of shipping in real time or is it a fixed price?

Or maybe, you just don’t have inventory at all, and you sell informational products? Maybe online courses? Or ebooks?

Putting this together will help you to get a better picture of what you need.

Anything can be sold online, some people even sell hugs in a box 🙂 you just have to package it properly and build the right system behind it.

Price

Once you have wrapped your head around products, and delivery, it is time to have a look at your how the pricing is working? :

  • How do you handle discounts?
  • Do you sell world-wide?
  • How about currency? Do you sell in one or in multiple currency?
  • Have you a different price policy depending on the country in which you sell (geo-pricing)?
  • Do you collect VAT ?

ecommerce-prices

Customers

Do you have customers? Well, you better have some at some point!

So how do you plan to manage your customer relationships ? Do you have a CRM? Do you plan to use one? Do you want to integrate it automatically with your ecommerce website? Do you want to offer a signup process and maybe a membership area for returning customers?

All your customers speaks the same language or do you need a multi-lingual site?

How do plan to handle transactional emails (confirmation emails, welcome emails, etc.)? Do you want your brand in there? What system do you use today to email your customers? Can you integrate it with your ecom platform?

Marketing

ecommerce-marketing

You don’t have customers? Or you want more? Get your digital communication in order: set up a landing page, make a marketing map, launch a paid campaign on social media, analyse your conversion, there is plenty of things to do to get your marketing together.

Set up the marketing campaign is not a requirement when you work on your ecommerce platform, yet it is quite important and might have an impact on how you build your ecommerce site, so think about it now, even if you don’t execute on it yet.

 

 

Choose a platform

ecom-platforms

Use a marketplace

Not even a shop yet, but a place where you can put your products up to sell and find customers. It’s not optimal but it is an option you might want to consider in some cases.

We are talking here about Etsy (https://www.etsy.com/) or Facebook Marketplace, Ebay or Amazon.

It provides a solution for you to sell your product, but it is very transactional, not much place for building up the perceived value of the product. Also, you sit next to the competition.

So, it is cost effective but you don’t get much in terms of features and options.

Might not be the best solution, but if you want to bootstrap with zero overhead, it can be a good way to get started.

Hosted solutions

These solutions do not require to have your own server, or to care about payment solutions, they deliver you a site working out of the box. The main benefit is speed and simplicity, good for small projects and can provide a good temporary solution until you build the cash you need to upgrade your site.

Big Cartel 

Website: https://www.bigcartel.com/

bigcartel

Built for makers, around for a while now, affordable, especially for small sellers, free up to 5 products, and can a be a good starting environment if you are just starting out.

Wix Ecommerce

Website: http://wix.com

wix

Already well known for its tool to build your own website in a few minutes, Wix has an ecommerce version which starts at 17 euro a month, not to bad has a great range of option for small stores.

Shopify

Website: shopify.com

shopify

A really good platform, if you are ready to give up some control on the platform hosting. Relatively quick setup, start at $29 and features includes unlimited products, 24/7 support and a website and a blog.

The design is really slick and we can do a bunch of customisations, but indeed you don’t get full control on the beast, it’s all into Shopify infrastructure which can become pretty limiting depending on what you want to do.

Self-hosted Solutions

When you want to get serious with your ecommerce solution, or that you want to get more control over you growth or your development, then it is time to get to a self hosted solution, which you totally own.

Woocommerce

Website: https://woocommerce.com/

woocommerce

WooCommerce is a free, open source ecommerce extension for WordPress. WooCommerce runs around 35% of all eCommerce sites, so it is quite a popular solution. It works well on small and large size stores (easy to set up for 1 product but will work with up to 25 000 products as well). It’s a pretty mature and very well supported solution by a large community.

By far one of the best solutions available, giving you all the flexibility of WordPress, a massive community of developers and designers and bunch of plugins to do nearly anything you want – and for the remaining things that would not come out of the box, you can add them to your system, since it is entirely customisable.

 

Other self-hosted solutions

The world of ecommerce has a large amount of solutions, so while Woocommerce is everyone’s favourite, you have other alternatives :

Magento – Enterprise ecommerce solution

A powerhouse for ecommerce, probably the leading products for major ecommerce projects, works well for major projects and large budgets.

Website: https://magento.com/

PrestaShop

PrestaShop is just an other open source solution on the market, with a relatively small community, but it is well and alive.

Website: https://www.prestashop.com/

Budget

Once you have a clearer view about what you want from your site, and somehow, you have given some thoughts about the platform you want to start on, then it is time to give a go at budgeting.

You get what you pay for. But you can pay with time, and do things yourself, if you feel you can or you can get someone to do it for you. (Side note: yes, I am potentially interested in your project, but that doesn’t mean I am not trying to give you my best advice here. I have no interest in you making bad decisions).

The D.I.Y approach

If you want to do it yourself, then you should probably use a marketplace or a hosted solution.

The Zero overhead Solution – go for marketplace

If you are really trying to save money and don’t have a penny to spend, then ebay can be a good fit, or amazon. But you do not get much space there to show case your products, so really the next best thing you can do, to get some exposure online to explain about your product is to get a free Wix website, and make the sales happen on Amazon. Keep in mind that having a website with no custom domain but a wix subdomain (like I-sell-donnuts-on-amazon.wix.com) is likely to affect perceived customer value and therefore lower your conversion rate, but hey, you need start somewhere, so it will do! When you make some money, try the hosted solution, and as soon as you can go and get the help of a professional.

The hosted solution – Shopify is your friend

So, in the case you don’t need much, you can probably learn how to use Shopify yourself and get started there or on Wix, use a template and make it happen on your own. Then time is the only asset you will need.

Your costs will be limited to buying a domain, paying for the package you take on the ecommerce platform, and the time you will have to invest.

A more professional approach

The DIY mentality is great when you start, but if you are a profitable business you need to take care of your growth and that will not work very long if you keep hacking your way around your online shop but never nail the job.

Worse even: you might think you have nailed the job, but you are doing a terrible job and you do not see what you are doing wrong.

I met not long a ago someone who owns a Chinese antiquities business, which he sells in store and online. The store is a perfect polish antiquities shop, very well designed and attractive, but it is empty 95% of the time. The online shop is thriving, actually bringing money but is run on a non-mobile friendly, old design done using tools that do not exist anymore (some old version of Microsoft FrontPage – a piece of software you can hardly find anymore) – his business could easily double in volume if he were able to see what is wrong with his site.

And he is not alone, the amount of ecommerce websites with bad design is incredible. As if people do not understand design is not just scrapping-some-pretty-photos-on-a-page-and-call-it-a-day, design is to reverse-engineer what your customer think, so you can build something that will help them make the decision to buy.

Anyway, if you are still reading, you probably want to know how much you will have to spend on professional services.

It depends where you come from, if you were in the previous scenario and you run a hosted website on Shopify, Wix or any other hosted platform, you might want to

  • stay there but improve the design.
  • Upgrade to self-hosted

Improve the design

A design project on Shopify usually starts around $1000 but count more in the $2000 minimum and for a good project, and it is totally okay if it runs into the $10 000. Of course these prices I am giving you are just a

Going self hosted

For a Woocommerce website, you will not find anything decent under $3000, unless your project is a really a no-brainer and you have all the text, images, and design ready and you just want it set up, then it’s just a technical job, but from experience, it is rarely the case.

So be aware that while making more preparation before your project will help you get a better price, and save you some bucks, trying to make the project looks simpler than it really is can lead to a bad evaluation of a project at the beginning, kill the project with you losing some money and some time.

Take the time required to be clear about what you think, and have a conversation with the person that will work together with you, so you can both align mutual visions on the project and make sure everything is understood.

How much should you spend?

This is more a business question, but I think it needs to be addressed in here as well. Ecommerce is here to make you money but you have to invest in the infrastructure.

How should you invest is really a question of how mature is your online business.I would advice to put around 10% of your annual gross margin into the  project, not much more, unless you are planning a strategic shift.

But that’s something to see in details, either in a separate article or in a chat.

Wrapping up

That’s it. I hope it helped. We have covered most of the aspects you need to think about when you plan your online store, in terms of products, prices, and customers. We have covered different platforms, and discussed budget. Next, I’ll make a guide for ecommerce project planning. Sign up to the newsletter to get an update when it is done.

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Design like you care

design-like-youcare

Design is at the core of everything you do.

The piece of hardware you are using to read this post has been designed.

The website you read is the result of a design process.

 

Design is about creating the experience that will allow your audience to enjoy from what you want to give them.

 

As a kid you’ve designed carefully this present for your mum on mother’s day.

As a teenager you designed your outfit/personal image to fit in the way-too-harsh world of highschool…

As long as you’ve cared about something you did your best, and it came out some way. It didn’t always work but you’ve learned from it and moved on.

 

Poor design

 

Poor design happen when we look for a shortcut. Something that can sorta ass the job but not quite.

Something “that’ll be good enough for now.”

And it is ok. Sometime a business need shortcut. Deadline are real. Your customers’ experience can wait.

It is true. But it is dangerous.

It is like when poor management decision become normal in an organisation, you just create an horrible culture for your company.

Poor decision happen from time to time in an organisation, and you cannot micromanage your team leaders, so everyone can survive for an other day.

But when it becomes the day to day of your company, the best people will leave, and inner politics will start to cripple the core of your organisation. So you try to fix it.

Same for your product & communication design habits.

If you keep doing what’s easy instead of what’s right, you will lose customers, and you will damage your reputation. It is a game you will lose in the long run.

Examples

No need to go very far.

We all browse the web, and stumble on these every single day.

 

Example 1: Sliders

 

Sliders don’t help end users.

It’s common knowledge.

 

0.11% of your audience will ever click on anything that is not the first slide. (Actually just 1% is expected to even click on this slide).

Yet, we still see them everywhere.

 

Why?

 

Because it was the easier not to make a decision to answer the following question:  “What should be the first thing your visitors will see when they open the site?

 

So you chose this abomination from a forgotten past.

 

While a you know it is just a bad idea…

 

 

And even without having the top designers telling you that on every venue available (like here, or here), you could have know for youself by simple reverse engineering your own personal experience.

You know you do not pay that much attention to these massive sliders, what you do? You just go to the next thing on the site.

So why expect something else people browsing your own website?

 

Example 2: Modal popup

Popup are evil since the beginning times.

Popup blockers were the first thing we invented to block spammy popup everywhere on our computers.

Today, we have this fancy thing called a modal popup.

Ah, and for those who don’t know what I am talking about a modal popup look like this one:

spamy modal popup

 

It usually will popup after a few second spent on a website, and shamelessly asking for you to:

  • Signup to a newsletter
  • Buy something
  • Download something

So while all these things (newsletters/downloads/purchases) are totally ok in itself, how dare you interrupting, like a total jerk, the person reading your site right now.

If you took the time to put content there (on your site that it) and  you expect it worth other people’s time, let them read it, FFS!

 

And if what you say in your popup is sooo vital and sooo important, then please, make it the first content item on the page. You don’t need to go full screen modal on your audience.

 

What is the point to harass your user with useless crappy gimmick that probably won’t convert anyway…

Be logical and pragmatic. The fact that you can technically do it, doesn’t mean you should.

 

Think about your users, about what they think when they see you annoying design choice… Designing is making  decisions on how people will interact with your product or with your site. It’s not a buzzword. It is the essence of the delivered experience and therefore, it shapes the perceived value to its core.

So, lets wrap it up:

We now know that sliders and unwarranted modals are to be use with care. (while that wasn’t the point of the article, I very much wanted to say this.)

But it goes far beyond some web usability.

Design is a core activity for every entrepreneur, business person, and everyone who is creating something to be used by other people. Be it a service, a product, an organisation.

What you do influence other people’s life.

 

Design should therefore embed the will to serve other people for their best interest. Because in the end, it is what is right, not necessarily what is easy, that matter.

 

Still don’t believe me. Read on.

How designers destroyed the world

I didn’t say it. That’s the title of Mike Monteiro talk. Watch it.

 

Tools don’t matter

Can you design iOS with Microsoft Word? Well maybe you never thought it was possible, have a look at the video and then let’s talk…

When you know what you want to create, when you have a clear vision of the result then tools are merely a way to get there and you will get to the result you want.

In the video above, you can see a perfect execution of someone executing the iOS design into Microsoft Word. So while this is really an interesting approach, I have meet along my way designers doing webdesign with InDesign, or directly in CSS.

Some years ago, you could still find designer who would design your website with color pencil and a drawing table.

And you will find web developper who use Angular JS to make your site happen, while some would use perl, or python and some work with WordPress or Drupal.

You want to know the difference?

NOT A FUCKING DIFFERENCE.

Because it is not about the tool, it is never about the tools. End users don’t know nor do they care how the sausage was made. A tiny majority have opinions about it should be done, but the reality is simpler. As long as you solve the problem at hand in an elegant and affordable manner, no one will really care about your tools of trade.