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At Perfect Audience, we’re fascinated by the evolutions young companies undergo as they find their footing. So, we’d thought we’d talk to several to hear their stories through the theme of customers: getting your first ones, finding your best ones, and using their feedback to move your product forward. Think you’ve got a great story to tell? E-mail me at kiyoshi@perfectaudience.com!

BugHerd founders Alan Downie and Matt Milosavljevic

You’ve heard this classic startup story before: a team builds a product to scratch their own itch for a problem they’re experiencing internally, with the idea that others like them will want to use (and pay for) it.

But what if the type of customer you are turns out to be not an ideal customer at all — you know, the kind that probably wouldn’t pay for it?

That’s the problem the founders of BugHerd — Alan Downie and Matt Milosavljevic — faced, when they were struck with an unfortunate realization.

“How much would we pay?” Alan said of when the two talked over how to price their product. “And we both sort of shrugged and said, ‘Well, we probably wouldn’t pay.’ And then that’s when we had the realization that clearly if we can’t sell it to ourselves we wouldn’t be able to sell it to anyone else in a similar business. That was our ‘a-ha’ moment.”

Founded in 2011, BugHerd strives to be the simplest bug tracker built for web designers that lets them manage feedback from clients and non-technical users while keeping track of tasks and projects as you manage a team moving to fix them.

The “similar business” the BugHerd founders initially targeted their product toward was freelancers in the web design and development field — customers who mirrored themselves — to use as an internal tool to bridge the communication gap between designers and developers.

And while BugHerd received their first customers by leveraging their previous success on FiveSecondTest by advertising their new product on their existing one through self-made banner ads, they began the shift to find a new type of customer — a customer who would pay more.

“Once we made that sort of realization — sort of a customer pivot — then we had a bit of a challenge to find that sort of person,” Alan said. “It’s been a discovery process.”

The team then developed a hypothesis on who their customers might be and during the next year-and-a-half began testing this collection of personas that ranged from larger teams to site owners to web agencies.

During their process of aiming their product toward new types of customers, the product began evolving as well. While the core idea remained the same — making it simple to report bugs — BugHerd’s new customers needed additional features for project management. What began as a piece of JavaScript installed on your website soon featured an administrative interface.

“That’s actually been the biggest challenge,” Alan said. “What makes BugHerd, BugHerd hasn’t changed that much. But as you change who you’re targeting as a customer, that puts different stresses on different parts of the product that causes that to need a bit of a revamp.”

But the time and resources spent building on to the core hasn’t been for nothing; in fact, it’s produced a huge upside. Subscriptions and payments have increased as the number of users has grown, pushing for more demand on their product.

When it comes to customer support, all of BugHerd’s developers are responsible. It’s a big focus that allows their team to know what customers are asking for and helps accelerate their learning curve for responding to customer needs.

While some feedback leads directly to features — like a public feedback tool for sites — other customer feedback has reinforced ideas BugHerd had for future development or that were in the pipeline being built.

And through BugHerd’s journey through the Startmate program in Australia to being a part of 500 Startups‘ second incubator batch, Alan says the team is still learning from their customers to find new ways to offer the best value. He recounted one story of a web agency that’s completely changed how they interact with clients.

“Previously, they would get a request for work, design and build the entire site and get one iteration in the process,” Alan said. “Whereas now they do design and development on a lean methodology. In the end, they can charge more accurately for the work they’re doing because they get more feedback from the customer. … It’s been a dramatic change for their business in a positive way.”

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Do you have a fascinating story to tell about how you acquired your first customers or radically changed how you reach new customers now? Or maybe you had an epiphany from customer feedback that pushed your product in an exciting direction? We want to hear about it and tell others! E-mail me at kiyoshi@perfectaudience.com.



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