BottomUp - Skills for Innovators

008 - Preview & Review - Survey Monkey - Tools and Technology

 [00:00:00] Mike: [00:00:08] Hello and welcome to the BottomUp podcast. I'm your cohost Mike Parsons, and as always, I am joined by the Survey Monkey himself. Mr. Chad Owen.

[00:00:18] Chad: [00:00:18] Well, here we are in the fourth episode in the Survey Monkey series. We've given you an intro to why quantitative research is important. Talked about, what do you need to do before you even dive into Survey Monkey to prepare and create a research plan, talked a little bit about designing [00:00:34] surveys in the last episode, and here we are with the, my hand is hovering over the button.

[00:00:39] I'm about to launch it to get a thousand responses and oh wait, there's a missing question or a huge typo, or we forgot to upload the image.

[00:00:48] Mike: [00:00:48] Yeah. Hold the press. Just hang on a second. Because before, which will be in our next show, we talk about how to get people into your survey. A tried and tested warrior's advice from Chad and myself to all of our listeners. [00:01:08] Please preview and check your survey before you send it out.

[00:01:12] Chad: [00:01:12] And then check it again and then have someone else check it.

[00:01:16] Mike: [00:01:16] All right, so here's the thing, why this is a bit different to maybe publishing a website. Let's say you've got a typo on your website; you can update it and then you know from now on it's all fixed. The problem when it comes to quant research and doing a survey in Survey Monkey is you've often invited people to fill it out, and once you start changing the questions midstream through recruitment of people to [00:01:42] respond to your survey.

[00:01:43] You are basically invalidating the data because not everybody saw the same set of questions. So, you can't draw a really broad analysis of the data because you essentially have to split all the data up. Doubling down on this, Chad, the big booboo is when you've paid to recruit people in and then you realize you didn't preview and check your survey, and so it's not only cost you time,

[00:02:06] it's costs you some dollars.

[00:02:08] Chad: [00:02:08] Yeah. And if you're sending it to more than a hundred people and you're changing things, or you're getting back data, that could be a several hundred-dollar mistake. [00:02:16] The numbers only just go up if you're sending it out to even more people.

[00:02:19] Mike: [00:02:19] And more specialized people as well. You could easily find yourself spending a couple of thousand on recruitment, so you want to make sure it's right first time.

[00:02:28] Chad: [00:02:28] Yeah, and Survey Monkey actually gives you some really great tools to preview your surveys on not only just desktop computers but mobile and tablet. Mike, I think we probably get over half responses coming from mobile devices. So, there's a great way for you to check that out and preview it straight from within Survey Monkey.

[00:02:45] Mike: [00:02:45] Yeah, because the catch is you're often building this on a computer, on a laptop, but it's [00:02:50] actually often responded to via mobile as much the same in terms of, you know, newsletters and so forth that it's a majority mobile these days. I think the greatest thing to do, simple thing, take the survey yourself.

[00:03:04] And actually you should be in surveymonkey.com if you can be while we're doing this show, so you can actually see the area we're talking about, but there's actually a tab there that runs from left to right that says summary design survey. And then where we are right now is preview and score. Now when you're in your preview and score, you get to see the survey as it [00:03:24] would appear to a respondent, and you can actually do it as a respondent and you can do it on a PC tablet,

[00:03:31] or mobile and it's really good and right next to it, it has this survey score that we've talked about in the previous episode where they give you an estimated completion rate and your estimated completion rate is basically telling you, out of every hundred people that do this, here's the percentage of people we think will actually complete it.

[00:03:50] Because the thing to keep in mind, Chad, is the longer your survey gets, the [00:03:58] lower your completion rate is going to be because people simply bail on your survey, don't they?

[00:04:03] Chad: [00:04:03] Yeah. I mean, you start getting over five questions and that estimated completion rate can start going down pretty quickly.

[00:04:10] Mike: [00:04:10] Yeah. So, we have seen time and time again when a team is working on a survey, and particularly when you've got perhaps a broader team that includes maybe a client or a vendor. Before you know it, everyone's got a smart question and you're at 20, 22 questions. I would never, ever send out a survey with 22 [00:04:32] questions.

[00:04:32] If they were 22 amazing questions, I'd send out two different surveys a week apart because people don't want to fill out that many questions. I think that's been one of our biggest learnings, hasn't it? Chad.

[00:04:42] Chad: [00:04:42] Yeah, I mean, I'll say it again. Keep it simple, stupid. Find out exactly what you want to learn from the survey ahead of time, and then be sure that all of your questions are delivering on that promise of finding out what you want to learn.

[00:04:56] Mike: [00:04:56] If you're getting a really bad survey score, a prediction of your completion rate, I think the best advice we'd give you is, try and break your survey up into two [00:05:06] parts and do a second survey at a later time. Let's say you had 16 questions, which would be too many, okay? I would much rather do two surveys of eight questions,

[00:05:17] than risk sending a survey of 16. Eight questions. You'll have a really high completion rate. You'll learn some things from that. That maybe change some of the questions in the second eight questions. This would be a far wiser approach than that of just trying to cram as many questions into one go. There's plenty of chances to survey your customers and your users. Don't rush it.

[00:05:40] [00:05:40] Chad: [00:05:40] And one thing that we always love to do as well is send the survey to our colleagues first, before sending it out. Because every single time we've done it, someone has, you know, made a suggestion and how to improve it. Either adding or removing an answer, rephrasing a question to make it more clear what you're trying to learn and understand.

[00:05:58] It can only get better by sharing it with others and it just makes the user experience from the survey takers' point of view that much better.

[00:06:04] Mike: [00:06:04] One sort of last advance Ninja tip is that often advanced surveys, we'll have a form of logic in them, meaning that [00:06:14] if a respondent answers the question in a particular way. For example, if they choose answer A, you're going to send them to a different page or question than if they answer a question B.

[00:06:25] And what happens is in the preview and score, you can actually preview the logic side by side as you go through the survey. In a side panel, Survey Monkey will show you the logic that's underneath what you see, and this is like really, really helpful, a...

007 - Designing the Survey - Survey Monkey - Tools and Technology

 [00:00:30] Mike: [00:00:30] Hello and welcome to the BottomUp podcast. I'm your cohost Mike persons, and as always, I'm joined by Chad Owen. Are you ready to design your survey in Survey Monkey Chad Owen?

[00:00:51] Chad: [00:00:51] Oh you mean I can finally go to surveymonkey.com and play around?

[00:00:54] Mike: [00:00:54] Good point. So for all of our listeners there, follow Chad's very wise advice. You are [00:01:00] very welcome to just enjoy the show in its audio form. But if you'd like to get the most out of this show, jump into surveymonkey.com, create a free account because we're going to be poking around in there and sharing with you some best practices on how you might design your survey and design it well. Now, as a way of introduction, as everybody is scrambling around typing in surveymonkey.com, I have to say the reason this episode [00:01:30] is going to save you time and money is, like many things in life, once you get into it, you realize it's going to take you a lot more time to do it properly than you first thought.

[00:01:38] Have you had this experience, Chad Owen?

[00:01:40] Chad: [00:01:40] Yes. I always get something wrong. I either ask the wrong question, I leave an answer out, I send it to the wrong people. There's always something that goes wrong.

[00:01:50] Mike: [00:01:50] I had a time once where I forgot to make a number of questions compulsory so that in the survey, they were skippable [00:02:00] and I remember I couldn't work out. There was like, I don't know, two or 300 people had completed the survey, but I would have like, any three-quarters of people answered a question.

[00:02:10] I'm like, this is the weirdest thing. And I realized that I had left the mandatory like the question must be answered, radio button. I hadn't ticked it

[00:02:20]

[00:02:20] and I was like, oh, no.

[00:02:22] They probably spent three or 400 extra dollars on those useless answers.

[00:02:27] So this ladies and gentlemen is why getting [00:02:30] the design right matters. Because if you think it through and do it rigorously once, there's a huge benefit here, isn't there Chad?

[00:02:38] Chad: [00:02:38] Yeah. My mantra with surveys is K.I.S.S.: keep it simple, stupid. So if this is your first one, try a survey with just two questions, that's it. You can always send out another survey later, but if you're just trying it out for the first time, I would say, you know, pick either one of Survey Monkey's templates. Which you'll see have very few questions.

[00:03:00] [00:02:59] So, the NPS survey is just one question that's mandatory, and then there's a follow-up. If you want to type in your thoughts or leave a comment, and even if you're not going to use one of the Survey Monkey templates, I did advise you to look through them because they have seen millions of surveys designed and know what a good survey looks like.

[00:03:18] And so you can use those as inspiration.

[00:03:21] Mike: [00:03:21] And so if you follow this line of thinking that we're on, what we're really saying is, look, getting a survey, right takes time. [00:03:30] But there's a great feature inside of surveymonkey.com. If you just go to the create a new survey tab, what you'll see is you're going to be presented with a couple of really important options.

[00:03:42] One copy a past survey. Now this one works really well. If you've got like a corporate branding in your survey and you design a nice template, you can just copy that template that you've made for a previous one, or you can just copy a survey and it picks up the questions, the look and feel and makes a new survey. [00:04:00] Saved you heaps of time.

[00:04:01] So this is one way to move fast with surveymonkey.com copy a past survey. If you want to be a bit more structured about it, the second option you have is start from a template. So you can actually build custom templates. So you say, use our corporate branding, use this branding or, whatever look and feel is appropriate.

[00:04:18] Chad: [00:04:18] Here's all the demographic questions we ask every single person.

[00:04:21] Mike: [00:04:21] Yes, and it's right there, Chad, that once you've rigorously built a template, you should have like warning signals going off. If you [00:04:30] hit the start from scratch button in Survey Monkey, you should just be like, hang on, Mike and Chad said, touch this as a last resort. 

[00:04:38] Chad: [00:04:38] Grab a coffee and be in it for the long haul.

[00:04:41] Mike: [00:04:41] Because it really, you have to rebuild everything to look and feel and the questions. Now I'm thinking to myself, okay, I followed Mike and Chad's advice. I opened up a survey. There's a couple of key things here when you're building a survey that I think we should touch on, and if you look down [00:05:00] the left hand side of Survey Monkey you're in a survey, you will see that you can click on the question builder and it gives you all these different choices.

[00:05:11] And I think it's important that we sort of call out what these are for. Invariably, I think you're going to find yourself going for multiple-choice as a starting point. Chad, wouldn't you say that's the survey classic, the good old multiple choice?

[00:05:24] Chad: [00:05:24] Yup. That and or the radio boxes where you can only choose one.

[00:05:29] Mike: [00:05:29] Yeah. Now [00:05:30] you can start to get a little bit more fancy. I think one of our favorites is the rating scale where you say to someone, one being terrible, 10 being great, can you please rate your customer experience for us? Now, what's interesting about that is that you get a little bit more nuanced than just, you know, click which option best describes your customer experience? Good. Bad, otherwise. You start to get more accurate statistical data, that can [00:06:00] be very helpful. Now, once you go beyond just asking questions, you can actually build into your survey stimulus. What we mean by stimulus is you could show someone a picture and say, tell us what you think.

[00:06:14] So you can actually embed not only images using the question builder, you can actually embed video, all sorts of content and so forth. And this is where you really started having like a rich quant survey where you're not only asking them about [00:06:30] themselves, but you're actually providing them with stimulus and starting to give feedback.

[00:06:34] Now, Chad, we've done a number of design thinking workshops where after the first day, we've actually put the workout to survey overnight so that when we come in on the second day, we already get like a global point of view. Do you want to maybe talk about what we've done and how we've done that? Because that's a great thing to design into your survey.

[00:06:53] Chad: [00:06:53] So essentially, we spent a whole day working in collaboration with customers to figure out what their pains and gains are and what they [00:07:00] want for a particular solution. And rather than just, you know, go home and sleep on it the first night, we actually have Survey Monkey do all this work for us. So at the end of the first day, we come up with an image and a headline to kind of represe...

006 - Preparing the Survey - Survey Monkey - Tools and Technology

[00:00:00] [00:00:00] Mike: Hello and welcome to the BottomUp podcast on your cohost, Mike Parsons and I'm joined by Chad Owen into this journey into the wonderful tool of survey monkey.

[00:00:21] Chad: I don't know about you, Mike, but I'm really enjoying these short, punchy information-dense episodes here on the BottomUp podcasts. It's a nice way to share.

[00:00:29] all of [00:00:30] our learning 

[00:00:31] Mike: It

[00:00:31] is. It's pragmatic. And I like this idea of punchy, so let's really throw some punches about how to think about preparing your survey for survey monkey. Now you're going to first think, Hey guys, on the last show, you gave me a bit of an introduction to surveys and quant research, and now before we open up the tool surveymonkey.com we're going to talk about a research plan, and you're like, [00:01:00] guys, this is a whole lot of planning and talking.

[00:01:02] Chad: Yeah. I just want to get in and create this survey.

[00:01:04] Mike: Right. Right, right. Exactly. But how important is it, Chad? Because if you don't think through a survey on survey monkey, if you don't think through your research, well number one, you're not going to get the most out of it, but it takes a fair bit of time to build a survey that works properly. So, you want to make sure that the plan, what you're hoping to learn from it is actually thought through.

[00:01:26] Otherwise it can be a long and somewhat expensive [00:01:30] process. Right. 

[00:01:30] Chad: Oh yeah, you can go down roads you'd never meant to go through. Going back to this story about doing interviews and in surveys in China, I was so worried on that trip because I was literally flying around the world and you know, a week beforehand, I kind of had an oh, no moment where I realized that I hadn't quite solidified everything in my research plan because I knew that once I started, I couldn't really stop. So,

[00:01:55] imagine knowing that you're going to talk to 50 different people [00:02:00] conducting 50 different interviews in 50 surveys. You have to know exactly what you're going to do ahead of time because you can't change it midstream cause that's going to affect the data and information that you're collecting. So, I can't stress how important it is to have a research plan in place because it really just makes the data rock-solid in the end.

[00:02:18] Mike: It does, and it's a survival tool as well. What's really important is it points out a very distinct. Difference between quant and qual research, because Quan, you need to always keep the baseline the [00:02:30] same,

[00:02:31]

[00:02:31] so you can't change the questions in the survey midstream because then the data doesn't match because the first half of the respondents answered these questions.

[00:02:40] The second half of the respondents answered different or slightly different. So, therefore, it's harder to compare them. So, I think our big piece of advice for this show make a research plan frame how you're going to think about your research. And I think one of the most important parts of a research plan is what [00:03:00] questions need to be answered.

[00:03:01] How many of our customers are aged 18 to 24 is a very legitimate key question to be answered. What interests do our customers have? How much do they spend on fashion every month? Just as an example, do they live in urban or rural areas? Just get that clear because often your survey is not a kind of isolated one-off event.

[00:03:22] It's part of maybe an effort to build a product, to do a marketing campaign to improve customer experience. So, you should have a research plan [00:03:30] that you share and present to your colleagues and or clients. And Chad, how beneficial is it when we get our research plans together and we share them with each other and our clients.

[00:03:39] I mean, when you've been in that process, how has this been helpful for you when you are like owning the strategy for a huge new product.

[00:03:47] Chad: The clients demand it. So, at the outset, it can really just be a Google doc and you start with like, what do we want to learn? What are our goals in conducting this research? Then you should have some important [00:04:00] questions to be able to screen your respondents to be sure that you're collecting data from the right individuals.

[00:04:05] So that can be demographic or behavioral psychographic.

[00:04:08] Mike: Can we talk about screens just for a second, Chad? Sorry to just capture you in mid 

[00:04:13] Chad: they're so important.

[00:04:14]

[00:04:14] Mike: But seriously thinking through your screening questions is a chance to say, well, who is our target audience here and who's not? Because imagine if you did this big survey and you forgot to have a location screener, and you [00:04:30] had people may be from a different country, or maybe you're just on the East coast of the US and you've now got people from California answering the questions.

[00:04:38] You're really diluting the data.

[00:04:40] Chad: And spending a lot more money.

[00:04:42] Mike: Right. And so screening questions, so they're only talking to people that you want to talk is really important. But you were saying goals and screeners, and then what's next in a research plan?

[00:04:52] Chad: How the data's going to be collected. You know? Are you putting it into an Excel spreadsheet that everyone's looking at? Are you putting it into a really awesome tool [00:05:00] that we use called Dovetail? You know, a database and just being sure that you have a plan to keep and store the data and be able to share it with everyone that needs to have access to it.

[00:05:09] Mike: Socially, because you know, so often people are like oh, where's the stuff? And they're like, all the data's in this place. Well do, I have access? Ah, no, you need a login. Oh, I don't have a login. And you just lost 48 hours. 

[00:05:23] So a research plan can be so practical like that. For example, if you're working with a virtual team, you're like, Oh, we're going to need to [00:05:30] give, you know, Joe and Jane access, because they're in a different market.

[00:05:34] And then, I think once you recognize that your quan survey is perhaps part of a larger series of efforts to get closer to your customer. We talked a lot about this in the previous episode. Why don't you share with us Chad like, how did you find it when you've been making research plans? What's the benefit of sort of mapping out the process and the context in which this survey's going to like happen in a broader program?

[00:06:00] [00:05:59] Chad: The best thing for me actually was because I had such a detailed research plan, I could recruit a partner to help with the research. So, imagine having to source your own survey and interview subjects in four different global locations. That can be pretty tough if that's not your daily work. But because I had the research plan, I could share that with a third party, and they helped recruit the right

[00:06:22] i...

005 - Survey Monkey - Crash Course - A Quick Intro

 [00:00:00]Mike: [00:00:08] Hello and welcome to the BottomUp podcast. I'm your cohost Mike Parsons, and as always, I'm joined by Chad Owen.

[00:00:17]Chad: [00:00:17] Hey Mike, I'm really excited to bring a hyper practical series here to all of our BottomUp listeners, and why don't you introduce the subject of this next series. [00:00:30]

[00:00:30]Mike: [00:00:30] Yeah, so episode five of the Bottom Up podcast, and we are taking a turn away from our WeWork series, which was a lot of fun. And we're going deep into the world of a tool that we use all the time. It's Survey Monkey. You can find it at surveymonkey.com and this opens up a world of surveys and surveys open up a world of quantitative research.

[00:00:55] And Chad Owen, I've got to start with, there is no better way. If [00:01:00] you want to get a quick baseline on what your customers are thinking, what your potential customers are thinking, what your employees are thinking. Knocking out a good survey is like a fast way to get going on your journey of design thinking and just trying to understand what users want.

[00:01:16]Chad: [00:01:16] Yeah. As far as like a reward to effort ratio, it's kind of hard to beat surveys oftentimes.

[00:01:23]Mike: [00:01:23] Yeah,  that's true, isn't it? I mean, we get surveys, of all different sorts and flavors. I mean, customer feedback after you've bought [00:01:30] something, maybe as an employee, you have an NPS, maybe it's market research. We're probably all familiar with those. But what I love about surveys, and particularly what I love about Survey Monkey is they've made it very easy.

[00:01:43] And in particular, if you're like us, Chad, that you're either working with customers that are not geographically close to you, like in your city. Maybe they're on the other coast, maybe they're on another continent, Survey Monkey, stands above all because you can [00:02:00] quickly knock out a survey and get to people without having to get on planes, buses, and boats and all that good stuff.

[00:02:07] But the killer thing, Chad, I propose to you is, if you're after consumers, they will even help you recruit consumers and you can literally send your survey out at night and come in the next day, and all the answers are in. They've done the recruiting. I tell you what, creating user experiences, trying to just find out what people want from a [00:02:30] product,

[00:02:30] this is a must-have tool, right?

[00:02:32]Chad: [00:02:32] Yeah, but it's not the only tool in the research arsenal. I come to the table having much more experience in the qualitative side of things, doing things like interviews. But, you've kind of unlocked this magical one, two, one, two, jab, hook, jab, hook, 

[00:02:51]

[00:02:51] sort of sequence here where we're combining the quantitative data that we get from surveys and then can follow that up, [00:03:00] investigating themes, you know, through qualitative interviews.

[00:03:02] And so there's this really amazing cycle, that you advocate for where you go between surveys and more qualitative, research to really just, exponentially increase the value of the information that you're gathering.

[00:03:16] Mike: [00:03:16] Yeah. So let's just try and quickly debunk what you'll hear a lot of people, talk about like Quan and qual research. In its essence, doing a survey is quant research. It's data-driven. [00:03:30] It's often very, strict question answer, and you want very statistical outputs, right? 10% of people like this, 90% of people prefer that.

[00:03:39] That's quant research, and that's what a survey is. Its sister field is qualitative, and this is rather than hardcore data. Qualitative is really like, a discussion. So it starts with, rather than having, structured Q&A, you just have a discussion guide. You conduct an interview, it's often over [00:04:00] Skype or maybe even in person, and you're looking for themes.

[00:04:03] And the biggest difference between a survey and an interview is often in the interview, you're more likely to be asking, tell me why. Explain more, why is that? How does that work? Whereas with the survey, you just need a statistical baseline. So I want you to imagine those two things. You've got your quant and you've got your qual.

[00:04:23] Something you and I have done a lot together, Chad, is in an order to work out like what's a great product, [00:04:30] to go and build, perhaps what's a good MVP? Or even if you're really living up to BottomUp thinking, what's a great prototype we should build? I want to come back to this one, two, one, two punch. If you conduct quant as a step one, you can get, a baseline, sort of what I call a deep mapping exercise.

[00:04:49] And, this gives you just an anchor point, a foundation like, who the hell is our user? What do they need? What's bugging them? [00:05:00] And Chad, we've done this together a lot of times. It's so powerful, isn't it? When you can just create that first step, that baseline, like who is our customer.

[00:05:09]Chad: [00:05:09] Yeah, and it's kind of like the top of a marketing funnel. We kind of cast the net wide just to understand who exactly is a potential target customer and what are some of their pains and gains, and once we get a little bit of signal from that first round of quantitative surveying, we can feed that

[00:05:27] information and insights into the [00:05:30] qualitative interviews that are done so that we're already kind of pre-qualifying the people that we're talking to, getting closer to the ideal customers. And again, kind of peeling the layers of the onion to understand, what our customers are thinking, feeling, and doing when it comes to the offers that we're making.

[00:05:46]Mike: [00:05:46] Exactly, and that step two often becomes a chance in one on one interviews to go much deeper on what you've learned from your first round of quant. And then at that point, you're really starting to dimensionalize how your customer feels. So the [00:06:00] third round, okay, this next round, you go back to quant and you start proposing solutions.

[00:06:05] You start proposing new ideas, new concepts on how an idea might help them get a job done, relieve some pains, create some gains. And then after you've done that, you can close the entire loop with this last round of qual where you're actually really starting to understand the constraints of this solution.

[00:06:27] If it's a product or the story, if it's more marketing [00:06:30] based, you can really start to find out how this all comes together as a complete set of user insights.

[00:06:39] Chad: [00:06:39] You could even make like customer propositions in that fourth round of qualitative, you can almost begin to try and sell the customer or even have the customers, you know, tell the story and advocate to another customer.

[00:06:50]Mike: [00:06:50] Now we're getting to the highest form of qual interviews and testing. Why don't you kind of explain a little bit more, I mean, I remember [00:07:00] when you recently went around the world testing for one of our clients. You actually had user to user testing. Do you want to just explain that as we...

[00:07:07] Chad: [00:07:07] It was not only user to user testing; it was user ...

004 - WeWork Case Study - Profit

 Mike: [00:00:01] Hello, and welcome to the BottomUp podcast. This is episode four. I'm your cohost Mike Parsons, and as always, I'm joined by the man with the plan himself. Mr. Chad Owen.

Chad: [00:00:13] Here we are at the profit-focused WeWork case study show Mike, and we're going to talk all the numbers big and small, negative and positive, the ups and the downs. I'm like real excited to, pick apart why I think, WeWork failed ultimately. And that was really just a lack of fundamentals, in their profit, aspect.

And, and when it comes to breaking down businesses in the four P's.

Mike: [00:00:40] Totally. It's such a powerful lesson. And I know if you've been tuning into the earlier episodes, we've had a lot of positive, things to say about WeWork despite what everyone is saying these days. The truth really is they did build a good culture. They did build a great product. It did disrupt a category.

They really did a thing there. But the truth is, when we look at the numbers, there is like a huge distraction in the numbers and that is the ridiculous growth of this company. Let me put it into perspective for you. So, we've got a slide on our case study that you can get at bottomup.io and this is it.

In, 2015, they had 40,000 members at WeWork. By 2019, they had over 400,000. So, it's like a 10 X increase in a very short time. That is one steep line of growth as the same thing with their locations from over 50 to over 500 and year on year from 16, 17 to 18 they enjoyed 100% growth in their revenues each year.

Now, any company that can grow 10% a year is happy on the top line. These guys were growing 100% so you did a million on year one. You do, 2 million on year two? That is so, so off the charts. it's, really, Tremendous growth, and that's when you've got a great product and you've got great promotion.

These things do tend to work out, don't they?

Chad: [00:02:18] Yeah. WeWork opened half of all of their total locations in the last 10 months. They were opening four or five locations a week across the globe.

That is. How quickly they're growing. Imagine having to open up, you know, a hundred thousand or 200,000 square feet of office space, fully staffed and furnished and built out.

Not every week or every month, but every single day.

 Yeah, the growth is, mind-boggling.

Mike: [00:02:51] Yeah. And to put them in perspective, you know, when you've been in the office and someone says, let's change the office, or let's move to a different floor. This is a massive. Like undertaking. Just something we can relate to. So when you think about the build-out of a new place, the utilities, the furniture, health, and safety, or the facilities, employing the staff, getting all the fobs to work, like the amount of things that can go wrong on a new office build is incredible.

But somehow, they grew like crazy. And as I said earlier, total distraction because, in a culture where everyone was looking for hyper-growth companies. Investments came quick and fast to WeWork. However, there was already a publicly listed company that we compare in this case study is called IWG, and many of you might know this largely from a brand they have in market called Regis, who technically were in market,  quite a time before WeWork.

But the crazy thing is that they had a business similar to WeWork. They weren't promising to be a tech company. Many of their fundamentals were actually significantly better.

Chad: [00:04:01] They turned a profit. How novel

Mike: [00:04:04] Should we start with; they actually made some money. but they did really smart things. Chad, they had what we call recession clauses in their leases.

So, if, their property experiences recession, then they are actually able to renegotiate their lease down. Now, which competitor of theirs not only took leases at the top of the market but did not include any recession clauses? Can you name to me which company? It starts with W and ends in work

and this is the problem right.

Chad: [00:04:39] there's an interesting, a chart that just shows the fundamentals of both of the businesses and the biggest ones that stand out to me is they have similar square footage. They have a similar number of workstations, but the biggest two differences is WeWork has lost billions of dollars, and IWG has made some money.

But this evaluation of WeWork at the time was $47 billion and IWG was just shy of four. So WeWork was getting tech company like, you know, priced earnings valuations that a tried and true, hospitality real estate company just could never, get. So going back to this promotion, the previous episode, you know, WeWork was definitely selling themselves as a new kind of company, a new tech-focused company, so that they wouldn't be put in the same category as a company like IWG that actually has sound business fundamentals.

Mike: [00:05:37] Yeah. So, this is what I talk about, the distractions. So, the growth of WeWork distracted everybody. and once they actually filed their S1 and people could see the real numbers, things just simply didn't add up. And, what's interesting about this is it really challenges us to find, the rigor to go deeper than just like, are we growing, or I can imagine a lot of startups are like, do we have a bunch of customers?

How many new customers did we get? Because those are good questions. But I think what WeWork illustrates is a far bigger learning. And in order to get into that chat, I want to share with you what I think the big problem with WeWork was. Are you ready?

Chad: [00:06:31] Lean on me.

Mike: [00:06:32] All right, here we go. Here we go. So, what's really interesting in the S1 filing, if you look at the revenues of WeWork, between 2017 and 2018 they went up. $1 billion. So, any company that can sit there and say, Hey, our revenue is up $1 billion year-on-year, you're like, awesome. Right? Party time, or as in Adam Newman's case.

Bring on the tequila. Now, what is really interesting is if you look at their cost structure and cost base at the same time, I think we can uncover the real problem. So, in the same period that the business grew by a billion, they actually increased their losses by a billion. So, what this means, Chad, is if you get $1 billion in growth, is it costs you $1 billion to get.

Therefore, what was the point?

Chad: [00:07:28] They had negative margins. Like how crazy is that? For every dollar they make, they spend two. So, you have negative a hundred percent margins. It's not a business that's a money pit.

Mike: [00:07:38] It's, one of those situations, Chad, where like you see these top line of growth, but if you actually have the capacity to go rigorously, almost forensically, it brings you to this big idea. I think this is the biggest learning, not only for this episode but of all the four episodes that we're doing on WeWork, I think this is where it comes to, it's called customer acquisition costs.

Okay, it's a very simple formula, but the real truth here is that WeWork, were totally preoccupied with the number of new customers, but they never address that through the lens of what are the total costs of our sales and marketing operation and how man...

003 - WeWork Case Study - Promotion

Mike: [00:00:00] Hello and welcome to the BottomUp podcast. This is episode three. I'm your cohost Mike Parsons. And as always, I'm joined by the man from New York state, Mr. Chad Owen himself. Hey, 

Chad: [00:00:13] Mike. We're, in the middle of our WeWork case study, podcasting here. What's your biggest takeaway so far? 

Mike: [00:00:21] Well, you know, for all the criticism WeWork have had, they did some good things and I just don't want us to lose sight of those.

How about you? 

Chad: [00:00:29] Yeah, I mean, certainly here at the end of 2019, they're getting tons and tons of bad press, but I think that's why you and I are sitting down here to catalog. Both the positive things that we can learn from, WeWork as well as maybe some of the missteps in the lessons we can learn from that.

And so today we're going to continue the discussion talking about the third P, the promotion, of WeWork and what they did wrong and what they did right and what we can learn from that. 

Mike: [00:00:55] Exactly. So, this is all about decoding a business under the four P's. So so far, we've done the product, we've done the people, we're in promotion.

Now the next show will be all about profit, which is the big, stinky, hairy one. Let's just. Get it out there. and we really hope that on this show today that we can share with you one insight that you can take away a bite-sized, compressed, a little practical tool or tip, that will help you build better products or a better business.

So, promotion, well, you know, it's fitting that we use promotion as our third P because WeWork with the grandmasters of self-promotion. Chad, who rivals. WeWork, particularly Adam Newman, the founder over the last few years. Do you think there's any company? Maybe Elon Musk is a great self-promoter. I mean, Adam did an amazing job.

Chad: [00:01:52] I would put Elon above Adam, but yeah, Adam Newman's was certainly giving Elon Musk a run for his money. 

Mike: [00:01:59] and there's so much to unpack here. not only on a positive side, there are some very critical learnings. and I think we're going to start with a great little tool that we love to do when we're working on projects.

It's a free tool, Google Trends where you can look and quantify, you know, generally awareness or some version of intent by comparing, different search queries. So, here is a massive insight. WeWork is actually bigger as a brand than the entire category of coworking. Keeping in mind that it popularized and brought to life this world of coworking.

But if you put into Google Trends, so just. Typing Google Trends into your search engine, you'll get there. But if you type in WeWork and compare the search interest with the term WeWork and the term coworking at its peak, WeWork with almost 10 times more popular as a search query than that of coworking.

I find that ridiculous.  Chad, this is enormous. 

Chad: [00:03:12] It's the Holy Grail for brands, right?  Becoming synonymous with, right. You don't ask for a tissue, you ask for a Kleenex. You don't ask for a, you know, sparkling, sugar water. You ask for Coke. 

Mike: [00:03:23] Right?

Chad: [00:03:24] And yeah. You don't, talk about, Oh, doing, coworking.

You talk about WeWorking. I think its kind of the brand Holy Grail to get there. Where 

Mike: [00:03:31] yes, 

Chad: [00:03:31] you've overcome the category in which you're in. 

Mike: [00:03:34] So for me, that's just a great little tool that anybody can use. So, if any of our listeners just, it's so fun. You can do your Pepsi versus Coke.

you can do new England Patriots versus the San Francisco 49ers whatever you like. and compare that data and it gives you a really good sense of what moves the needle on search activity, which should be a proxy for awareness and intent, of your product. And, I think that this is where we should also credit, not only the company but particularly Adam Newman, their founder.

In the previous episode, we mentioned that he was the one that went out and got the first, investment, from SoftBank. And, he played a massive part in, getting so much press, so much awareness and conversation going around the brand. It was a credit to him, and I think, the fact that they were bigger than the category is a big idea.

But I think Chad, this is where we kind of pivot into some of the cautionary tales. I think the second idea that we want to bring you around promotion, building a brand and marketing, is that you need to be very careful of the promises you make, and they had a big promise at WeWork. What was it? 

Chad: [00:04:50] To elevate the consciousness of mankind?

Mike: [00:04:54] I think if we were looking at Maslow's hierarchy of human needs, I believe that might be at the top, Chad. 

Chad: [00:05:00] Yeah. But I think you can lose sight of the fact that you know, their business fundamentals, make them a business that's in real estate, right? So how do you get from real estate to elevating human consciousness?

Mike: [00:05:14] Right? And that's where we talk about being careful of the promises you make, because not only did they say they were elevating the world's consciousness, that they also said that they were a tech company. And the truth really is that when you make a big brand promise, you will be held accountable to it.

So, one of the things that happens is there becomes a reality distortion when the things that you say don't match the things that you do. And we've got this great, data, from CB Insights, which produce a lot of really good work. And they actually studied over the course of three or four years, the volatile new sentiment that was around WeWork.

And what you see are there, these peaks where they do interesting things such as new offices, partnership with MasterCard, something like this. But then what you see is how fragile that is because it's so big. You're really held to a very high account. And, what you see is that the sentiment in news shifted from.

Positive two incredibly negative in just a few months. The first news that really started the avalanche was that WeWork disclosed that their founder, Adam Newman, had taken loans from WeWork, had then bought buildings, and then leased those buildings back to WeWork.

Chad: [00:06:45] If that's not self-dealing, I don't know. It is. 

Mike: [00:06:47] Yeah. And you can make these fine nuanced argument between, was it legal or not? And you might even find ways of saying, Oh, actually I didn't break any laws. But when you've gone out to the world and said, we're raising the world's consciousness, you know mankind's consciousness.

When you behave in such a self-serving way, it's so contradictory to that promise. You can see an enormous downside in new center. People started getting very upset with WeWork because of this lesson that we're sharing, which is, be careful what you promise to the world. And if you're out there self-promoting and getting yourself on the front of every maga...

002 - Case Study - WeWork - People

Mike: [00:00:07] Hello, and welcome to the BottomUp podcast. This is episode two of the BottomUp podcast. I am your co-host Mike Parsons, and as always, I'm joined by the man with the plan, Mr. Chad Owen himself.

Chad: [00:00:22] Hey Mike, and I just wanted to say thank you, listeners, for continuing to join us here on this journey into decoding and understanding WeWork. We've got part two of a four-part case study here. that comes straight from a case study that we've put up on the BottomUp.IO coursework. And, Mike, I’m curious, 

if we couldn't just get right into the second P or people, and break down kind of, WeWork's successes and maybe failures when it comes to, people and their business.

Mike: [00:00:55] Totally well, much like the product side of the business that WeWork, the people side is a big tick. They got it right in a big way. And the interesting thing here is that obviously their employees were really happy up until very, very recent times, but there's a bigger learning in this, Chad, which is, and this is one of our tenants in BottomUp thinking, which is that great teams build great products. And,

if you don't have a great team, we really believe it is impossible to build a great product. And we've heard many great entrepreneurs talk about, the fact that if you want happy customers, then your customer support team need to be happy themselves. How can you imagine? Like calling up a call center.

And if everyone's very, very unhappy, there's no magical thing. that will instantly mean that they give a great customer experience. So, there is a direct, correlation. You may even say causation between great culture, great people, they make great products. And I think the story is what we have here with WeWork that the employees were really happy.

Don't you think Chad? 

Chad: [00:02:05] Yeah. They certainly got, all of the benefits of working at a typical startup company. And I would say even beyond, all employees got perks, like insurance, wellness programs, unlimited sick days, which, I don't know many people have. And you know,

their work experiences would culminate in these, annual retreats that were often treated like summer camp.

I think they actually called them WeWork summer camps, but you know, places like Big Sur in California and, the coasts in England. And of course, with every startup comes your stock options and equity plans, that I'm sure you know, padded out to everyone's compensation packages.

Mike: [00:02:47] Yeah. And I think, the truth here is that. You've got to create great underlying wellness and culture in your organization. If you want to do big and ambitious things in the world. I mean culture and wellness are the things that keep everything together when it's tough. Culture and wellness are the things that when you face adversity, those are the things that get you through that stopped people quitting when it's tough times. and I think that the comprehensive nature of what they gave to employees was remarkable. Now, I think the lesson here is that you need great people in order to make great product. I think it's also fair to say that. You could argue with the unlimited cash that WeWork had for several years.

 They were in a position to give so many perks. And so, I'm not going to argue that, but I think that the really positive learning here is if you take good care of folks, they will go out and build a great product. And I think we've established; they've got a great product right.

Chad: [00:03:48] Yeah. I think many of these benefits were even offered all the way down to people you know, that were, the community managers and people in charge of, operating and keeping the buildings going. So, this wasn't, things that were just offered to the leadership teams or management.

Mike: [00:04:03] Yeah, and so these benefits and perks. You could say, well, they cost a lot of money. But, if done in a proportional way, you can create really great sense of wellness. and Chad, you and I have just worked on a project with a client, which was all about creating employee wellness through design thinking.

And you can see how much people yearn to work in an environment that not only respects them and takes care of them but gives them. the benefits to have some sort of harmony in their life. And if you provide these things, it creates enormous loyalty, doesn't it?

Chad: [00:04:47] Yeah. And I think, my experience of people that are former employees, current employees, they have their own accord, have kind of created the WeWork family to support one another, both to find new jobs and opportunities within WeWork. But then when someone's ready to leave the company also, be very helpful

in, you know, going through their networks and being sure that they're also landing in a good place once they leave WeWork. And as you're saying, you know, these types of cultures, they don't just kind of happen by accident. It's very intentional and I think it speaks to the types of individuals and hard workers that WeWork has been able to recruit over the years.

Mike: [00:05:25] Yeah. So, one of the great ways that you can measure your company's culture and wellness is, doing some form of NPS, or net promoter score, asking folks how likely they would to recommend. the company to family and friends. And that can be a very good indicator of where you stand with culture.

So that's called NPS. I've done that several times in my own organizations or with clients. Very, very good. And in the case of WeWork, you can actually go to Glassdoor and there are hundreds and hundreds of reviews. Have been done by employees themselves of WeWork. And this gives you a really good, insight into actually what's going on in a company.

So, if you want to know how things are going inside of your company, this is a really good tool to use. The other thing you can do is, you know, for those of our listeners that are considering going to a new company, I would strongly recommend that you check out things like Glassdoor to see what people are actually saying.

The more informed you are about the environment, then I think it's all about your own empowerment there. And you can see here the recommendation rate. You can see an evaluation of the leadership, not only for, WeWork for thousands and thousands of, companies. I think this is an invaluable tool, don't you, Chad?

Chad: [00:06:49] I do, and one thing that we've maybe overlooked up to this point. But it would be remiss if we didn't talk about is the importance of the founding team and, or the founder, and leadership of the company. And I don't think anyone would argue, that there have been some issues with Adam Newman, one of the cofounders of WeWork.

And, so maybe lapses in judgment and good businesses stewardship, that has probably, likely led to, you know, some of the reasons why their IPO, was met with such resistance and skepticism when it was announced in August of 2019.

Mike: [00:07:28] Yeah. I think the founders bring so much to an organization, but the best teams that they put around themselves will be teams that not only do the things they ask but who will challenge them. And, I think there is perhaps too little challenge of Adam Newman too late. He's no longer with the company, but Cha...

001 - Case Study - WeWork - Product

Mike: [00:00:08] Hello and welcome to the BottomUp podcast It's a very fresh a very new episode one of the BottomUp podcast I'm your cohost might pass ins and as always, I'm joined by the man in Brooklyn himself Mr. Chad Owen 

Chad: [00:00:24] This is a it's feeling a little different here isn't it Mike 

Mike: [00:00:28] This is a brand-new podcast Chad and I am so excited about this How are you feeling embarking on this new journey together

Chad: [00:00:37] Great. So, if those of you have been following Mike and I and the Moonshots podcast this is our second venture into podcasting And what we want to do here on the BottomUp podcast is get very practical And transfer some of the skills that Mike and I have been picking up over the years doing design thinking and working with clients and deliver some short less than 10 minute episodes With some bite-sized skills practical tools and tips all so that we can work in this new B world 

Mike: [00:01:13] Absolutely And we have collected so many methodologies frameworks and tools what we really hope for everyone that listens to this show is that they can get one practical thing from each short compressed episode That they could literally press pause on the podcast and start doing at their desk so that they can create better products And Chad we've got an absolute cracker today It's based on one of the case studies that you can find on bottomup.io But where shall we begin this adventure Chad

Chad: [00:01:49] So we're in November, 2019 and one of the startups that's been in the news the most recently has been WeWork and We're going to spend the next four episodes going through four different areas of WeWork's business a decoding it to figure out what we can learn about WeWork's product what we can learn about their people their promotion as well as their profit or lack thereof As I'm sure many of you have been reading about lately 

Mike: [00:02:24] yes So this this show is not only our first in the BottomUp podcast but it's solely gonna deal with the WeWork product So let's jump straight in I think Chad the thing I want to propose to you that without question we're not going to think about the fact that they had buckets and buckets of money we're just gonna focus on the product itself And the truth really is WeWork is a great product Right 

Chad: [00:02:52] Yeah I'm recording right now from a lovely conference room here in the dock 72 WeWork building in the Brooklyn Navy yard and I've been a member for almost four years now And as a consumer I must say I do enjoy working here much more than working up from my cramps tiny Brooklyn apartment 

Mike: [00:03:14] Well not only that I think it's a far cry from how we were all working just 10 20 years ago I mean if you think about how almost industrial age factory like workplaces have been really up until the creation of WeWork It was all about being in a cubicle It was all about a lot of gray and I'm hardly the most inspirational place but right now we live in a world that is firmly in the digital age firmly in the knowledge age And if you want the best knowledge the best insights the best ideas from your employees then you've got to create a great work place And what I propose to you Chad is I think the big product insight that we can take away from WeWork is they found a very old dusty industry that was all about the gray cubicle and they went in and totally disrupted it is exactly the same as Uber did to an old dusty industry called the taxi industry WeWork in this case went in and totally re-imagined The workspace and I think at the core of this and this is something I mean you're such a great test case because you've actually been working in these spaces and you're in one of their premier showcase properties Now what I propose to you is that from a product insight They discovered that people have different modes in the journey during the day or the week in the office Sometimes it's about focus sometimes about learning or collaboration or socialization and they designed very intentional spaces to that And this is why it was so radical In contrast a stark contrast to the world of the gray cubicle So tell us Chad you use this product every day Tell us about these modalities Because I think what we know is that it was this that created such an exceptional product 

Chad: [00:05:22] Yeah So even some even a creative like myself would be you know stuck at the kitchen counter and essentially have you know only one place from which to work But I would say one of my favorite parts of the WeWork buildings is There's no fewer than a dozen and sometimes even 20 different kinds of workspaces that you can work at So whether that's by the cold brew taps working at kind of a high top bar or it's like a cozy little booth next to the eating area or it can be you know an enclosed conference room And then of course you've got your private office spaces as well But when this building first opened it was fun for me just to go and explore all the different types of workspaces and it can be subtle things is as simple as in a conference room Why not have a standing high top table as opposed to a you know a seated table So even just the standing and working in in discussing versus sitting I think they've done a really good job at diversifying those different workspaces 

Mike: [00:06:27] So a massive really a massive change in an industry that had essentially been the same for close to a hundred years But the there was another big part of what was so radical about the WeWork product which is it liberated companies from these massive 10 15 sometimes 25 year Corporate or commercial leases it liberated them from the idea of at a minimum in traditional leasing of commercial property you would have to take an entire floor which means that if you're not at 30 40 or maybe 50 people you were in a no man's land And they came along and offered this idea of fractional ownership meaning share your space With many others so that you could enjoy all the perks of a large company even though you're small Now this next thing about fractional ownership is really big because by doing so not only were you able to get a really nice space with all these modalities that made you more productive but what WeWork could in turn do is offer you effectively a lease That was 66% less than the standard lease which included like the build out in the operating of the space So they literally came along to the world and said you know what You can have an amazing space and you can have it for 66% the less than what you would normally do I mean Chad 

Chad: [00:08:05] it's month to month You're not locked in for five 10 or 25 years Just have to give 30 days’ notice 

Mike: [00:08:12] Exactly I mean that is like I can't say no proposition so often one of the things I think about is that when your proposition is so good everybody like can't say no but they almost want it to be true Great.

Office A third the price and month to monthly so that if things change you can shrink or expand exactly how you like no waste whatsoever Now we're going to put aside the fact that WeWork as a business It's profits paid a huge price for offering this That's in a that's going to be an episode four so a little teaser but this is an amazing offering 

Chad: [00:08:55] It's a no brainer Like you said it's like irrefutable Like again you ...