Live Demos might Save Your Startup

Paul Graham recently wrote a blog that suggests we should be doing more things that don’t scale. Live demos with customers is one of those things. Here’s why I think you should be doing them.

Why You Need Live Product Demos

1. Your trial-to-paid conversion rate sucks.

– Some apps just drop you into a dashboard and send you on your way to figure out how to use it to solve your problems. They convert horribly to paid accounts and can benefit greatly from live demos, where someone can take the customer through a perfectly curated product experiences that matches the features of the product to the problems the customer wants to solve.

– You don’t have scent detection set up, or a failproof automated demo /video, or a scripted tour like Patrick McKenzie wisely recommends. Even then, I’d still recommend giving demos to customers who requested it, but maybe I wouldn’t push as I hard.

– Your initial product experience is like a Choose Your Own Adventure novel rather than a well-lit tunnel with only way through.

2. You’re small.

How small is hard to say. I’d say if you’re getting less than 500 new sign ups a month, then you’ll have the capacity to do the demos without expanding your staff. This assumes you have atleast 2-3 programmers, 1 marketer / salesperson , 1 customer support person, and 1 product manager. This is trading time for dollars but it’s better than most other time-trading activities. It’s certainly much better than most other ways your non-programming staff could be spending their time.

It also has a valuable halo benefit for your marketers as they get value product experience, user feedback, and immersion experience that they’ll never get otherwise. Force it on them. Trust me, it was pseudo-rush-forced on me and I’m thankful for it. I’m a much better marketer now and I have a lot more ideas for content whereas previously I felt like my mind was a barren wasteland for how to come up with interesting articles for IT Directors and System Administrators.

Product managers, customer support staff, and sales team are all great candidates to poach in for demos. Just train ‘em up, put them on support duty for a week, have them sit in on 3-5 demos with a technical person and voila they’re ready to demo.

3. You need to do some product research / customer focus groups.

A product demonstration is kind of like a 30 minute focus group. Ask the attendee how they found you? How’d they hear about you? What problem are they trying to solve? What other solutions are they trying? Get them talking, you’ll learn a lot by stepping out of the ivory tower and getting on the ground with your users.

This is especially helpful for those who were hired into the company and not part of the initial research process that went into building the product.

4. You like things with massively positive ROI.

Our demo participants convert to paid at 5x the rate of our non-demo participants.

Now, some of that is just a subsidy where a demo is like a freebie we’re giving to a customer who would’ve bought anyway, but some of it is, maybe a lot of it, a real conversion increase (it’s hard to parse out the true percentage lift unless you do one month cold turkey without demos which we’ve never done since launch).

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In the next blog, I’ll discuss how to get new customers to actually attend your live product demos.