The year is 2004. A seventeen-year-old girl is sitting in the office in front of a computer. A group of anxious entrepreneurs is standing behind her. They work for IMVU, a start-up technology company that allows people to create avatars when Instant Messaging.

The girl chooses her avatar and customizes it, deciding how she will look. She says, “Oh, this is really fun,” IMVU’s Chief Technology Officer Eric Ries recalls in The Lean Startup.

So far, so good. “All right, it’s time to download the instant messaging add-on,” Eric suggests.

“What’s that?” the teenager responds. 

“Well, it’s this thing that interoperates with the instant messaging client.” 

The girl looks puzzled. “She’s looking at us and thinking, ‘I’ve never heard of that, my friends have never heard of that, why do you want me to do that?'”

But since she’s sitting there, the entrepreneurs ask her to download it anyway.  

Next, Eric says, “Okay, invite one of your friends to chat.” 

“No way!” she says.

“Why not?” 

“Well, I don’t know if this thing is cool yet,” she says. “You want me to risk inviting one of my friends? What are they going to think of me? If it sucks, they’re going to think I suck, right?” 

She looks at them, baffled.  

Afterward, Eric and the other entrepreneurs discuss. “It’s all right,” Eric tells them. “It’s just this one person. Send her away and get me a new one.” 

So, the second customer comes in and says the same thing. So does the third. And the fourth. This is a pattern.  

The problem? Eric and his team had spent six months developing technology allowing users to connect avatars to their existing Instant Messaging networks.

At the heart of their business plan was the idea that customers would bring their friends with them. “In fact, we thought this last point was essential,” Eric remembers. “For the add-on product to be useful, customers would have to use it with their existing friends.”

Except customers didn’t want to do that. “Listen, old man, you don’t understand. What is the deal with this crazy business of inviting friends before I know if it’s cool?”  

“Out of further desperation, we introduced a feature called ChatNow that allowed customers to push a button and be randomly matched with somebody else anywhere in the world,” he writes. “The only thing you have in common is that both people pushed the button at the same time.” 

Suddenly, they’d hit upon something. “Oh, this is fun!” customers were saying. Then, they’d ask, “Hey, that guy was neat; I want to add him to my buddy list. Where’s my buddy list?” 

And we’d say, “Oh, no, you don’t want a new buddy list; you want to use your regular AOL buddy list.” 

“Remember,” Eric writes, “this was how we planned to harness the interoperability that would lead to network effects and viral growth.”  

We’d say, “Just give the stranger your screen name so you can put him on your buddy list.” 

Their eyes would go wide, and they’d say, “Are you kidding me? A stranger on my buddy list?”

It was a deal breaker, Eric recalls. “We had a mental model for how people used software that was years out of date, and so eventually, painfully after dozens of meetings like that, it started to dawn on us that the IM add-on concept was fundamentally flawed.”

IMVU’s teenage customers wanted a stand-alone IM network for their avatars. “They did not consider having to learn how to use a new IM program a barrier; on the contrary, our early adopters used many different IM programs simultaneously,” he recounts.

“Even more surprising, our assumption that customers would want to use avatar-based IM primarily with their existing friends was also wrong,” writes Eric. “They wanted to make new friends, an activity that 3D avatars are particularly well suited to facilitating.”

Bit by bit, customers tore apart the founders’ initial strategy.  

In time, thousands of lines of code were thrown out. Months of work for nothing. “I had committed the biggest waste of all: building a product that our customers refused to use,” Eric recalls. “That was really depressing.”

However, an important lesson emerged from this setback that eventually would make IMVU a breakout success.

More tomorrow!


Reflection: Consider a time when my assumptions or those of my team were dramatically off-base. What did I learn from the experience?

Action: Discuss with a colleague or with my team.

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