We recently found out about the AppSumo Lean Challenge for startups and thought that entering via this blog post would be a great opportunity to share lessons we’ve learned, connections we’ve made, and resources we’ve discovered at Monkey Island over the past 5 years.

Monkey Island began around a basement card table, with 3 childhood friends sharing conversations about technology as a tool for changing the world. Our first offering was visionary but plump - old school business planning gone wild. We’ve achieved failure, pivoted many times, and now sit on the verge of launching our most promising product, having already proven product/market fit and signed paying customers.  

PLUMP. Our first offering was www.buythechange.com – classifieds with a conscience. A hyperlocal social commerce platform with the aim of building community through commerce and giving back to non-profits. We did everything by the book (unfortunately the book wasn’t “The Lean Startup!”)

  • We wrote a 40 page business plan with detailed financials out 5 years. Made the semi-finals of the Minnesota Cup  competition twice. Have since learned that a 10 slide deck is all you really need. (Thanks @VentureHacks and Jawed Karim)
  • We raised investment from friends, family and angels
  • We successfully spent the funds as planned, on development (and lawn signs, coffee sleeves, legal fees, a promo video design services and copywriters and more)
  • We were on TV
  • Even Tim O’Reilly thought it “could be the start of a significant trend”
  • Rebuilt the service from the ground up 3x so we’d be ready to scale
  • Had a knack for continuing to add “essential” features before launch
  • Failed to achieve critical mass. Despite its flaws, Craigslist has liquidity that’s hard to beat.

LEANER. While buythechange began with a focus on cause-based connections it evolved into a local play based on user feedback. Neighborhoods and location became a much more important point of connection than cause affiliations. Around this time in late 2008 Twitter came on our radar (thanks @philiphotchkiss!). As we began exploring Twitter we couldn’t figure out how to find local connections and saw an opportunity to create a local Twitter directory. So we built LocalTweeps – the ZIP code level Twitter directory, which was leaner by necessity. Running out of money will do that.

  • www.LocalTweeps.com is the leading ZIP code level Twitter directory with over 60k users in all 50 States
  • We launched 3 weeks from the initial conversation, using a PowerPoint UI and no reporting.
  • Simple registration via Twitter included a viral feedback loop. Launched with 3 tweets from us and went viral, registering over 750 users an hour in the first few days
  • We have continued to get registrations every day since
  • Began to implement advanced features of selective status updates, DM notification of new listings, events and specials creation, city-specific feeds Twitter feeds, and the ability to follow other users.
  • Had lots of users, but were unable to bring in enough revenue to continue to fund development and customer support.

LEANEST. In order to generate revenue to continue to fund development we began consulting on social media for small business, with a focus on Twitter. We found that the greatest challenge our customers had was growing an audience of engaged local followers who could become customers. Not finding a tool that solved the problem to our satisfaction, we set out to build one. We’ll soon be launching SMBtweet, the easiest way to grow your business with Twitter.  It’s targeted at the 20 million SMBs (Small and Medium Businesses) who are increasingly turning to social media for customer engagement and acquisition. SMBtweet contains a proprietary algorithm that takes into account location, relationships and keywords and other Twitter data to simplify and automate follower growth. This time our go to market strategy has been leaner and more effective:

  • Our vision began as a more comprehensive Twitter for Small Business tool but has been boiled down to the MVP of high quality follower acquisition. >Focus<
  • We created and tested landing pages using Unbounce and doubled our conversion rate to get over 200 customer registrations in advance of launch
  • We sold the service to local businesses and provided it manually while the software has been in development.
  • We’re going to market with a validated monetization strategy
  • Rather rent an office on our own, we're operating from the 3rd place, the Lean Coworking space we founded in Jan. 2010

Summary of lessons learned (and still learning)

  • Surround yourself with good people. Get the support of family and friends. Find cofounders you trust. Get involved in the local and national startup community.
  • You’re not in business when you have an office or a business card. You’re in business when you have a customer.
  • Ask yourself what you’d do if you had “the money” and why can’t you just start doing it anyway?
  • Sell it before you build it. Let the customer tell you when they need more (information, functionality) in order to buy
  • Constraints are powerful, whether they relate to money, time or character count.
  • Direction and trends are more important than volume. Data converges surprisingly quickly, even when you don’t want it to.  
  • Don’t be afraid to share your ideas. They’ll get stronger (not stolen) and execution is where the true value lies.
  • Cash is king. It’s not so much about how much time you have, it’s how many iterations you can achieve in however much time it is. Speed matters.
  • Get it as far as you can with your founding team. People are more receptive to help/join when they know you’ve done all you can.
  • Just get started. When you build, you learn.

Resources we’ve used and recommend:

Resources we’ve discovered via the AppSumo Lean Startup Bundle and look forward to using:

Why we need funding
Funding = focus. We’ve done everything from raking leaves and moving furniture to selling cars and consulting to fund product development. We’ll do whatever it takes, but the money we win from this competition would go straight to development. No Aeron chairs.

Are you starting something? We'd love to hear from you. Now, back to work!