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  3.9. There.com and IMVU Revisited (5 min.)

It seems disarmingly simple, but by taking a “road trip” and talking to real customers, you will find that the truth can be surprisingly different than you imagined it from within the four walls of your office.

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This was precisely the case at There.com. The company believed that virtual worlds would revolutionize online interaction. Because many of the engineers at There.com were also future users, many of the initial insights regarding what customers desired came from the founders and early engineers. As engineers and product managers began to develop the product, they became more confident about the value of what they were building. As the There.com management segmented the potential market based on demographics and Internet-use habits, the team became even more convinced that they understood how their customers acted and what they desired. Layered on top of this, There.com was operating in "stealth mode," purposely trying not to give away information about their plans. The result was a comfortable but insular development culture in which the company developed a product for a customer they felt certain they understood. The reality was that despite their best intentions and their collective intelligence, the founders and engineers didn’t understand the customer very clearly. The result was a product that fizzled rather than launched into orbit.

Contrast this with IMVU: the founders purposely spent as much time as possible in the field, talking to customers early and often, as well as throughout development. They didn't operate in "stealth mode." Getting into the field and sharing their product and ideas revealed many important facts to the IMVU team. For example, although the team thought they understood their target customers, they found that in fact two different customer segments emerged: an older group of online professionals and a younger group of teenage instant message users. A typical startup might never recognize this or try to serve both segments. Alternatively, most entrepreneurs without deep information would focus on the customers who could pay: the older professionals. In fact, even IMVU was tempted to go in this direction. But because the IMVU team was focused on interacting with customers and observing their behavior, they realized that teenage users had an unusual passion for the product. In fact, the teenage users were so enamored with IMVU that although they couldn’t make credit card payments to buy virtual goods for their avatars, they regularly sent hand-written notes with checks or cash attached (see the photo to the right). This kind of intense customer devotion signaled to IMVU where the real growth opportunity was.