The Startup Egg-Basket Principle

Friday, February 28, 2020
By dreeves

A basket of eggs with a bee flying around it. And a butterfly but we don't care about butterflies.

The startup egg-basket principle is: put all your eggs in one basket. Be laser-focused on the one thing you’re best at. If you’re scrambling for survival, focus only on the one most promising thing for making the startup sustainable. For example, most startups should focus exclusively on their premium plans and not have a free plan. So much complexity and extra work is added by having to deal with the distinct kinds of users that try a free plan compared to the ones who are ready to pony up on day one, not to mention all the code you need to handle the transition from free to paid.

It took us a long time to get the egg-basket principle through our heads and we had one near-death experience from violating it. Namely the Beekeeper program. It was so tempting, when a user told us they’d happily pay a couple hundred dollars a month for more hand-holding and accountability, to take them up on that. So tempting that we actually did it, and hired someone to run what amounted to a lifecoaching subsidiary of Beeminder. The numbers seemed so persuasive but of course we massively underestimated the time and attention and energy it would take. And thus Beekeeper almost killed Beeminder but fortunately we killed it first.

(There’s now a brilliant startup that focuses just on personal hand-holding and accountability — Boss as a Service — which we highly recommend and which complements Beeminder beautifully.)

“… never introduce premium plans to Beeminder”

Here’s a more controversial example. If very hypothetically we had a time machine it probably would’ve been prudent to never introduce premium plans to Beeminder. It was a form of diversification from our existing monetization strategy — exactly what startups should never do. Again, that’s hypothetical. We’re not planning to kill premium plans. But the amount of time and effort and confusion that premium plans have caused has plausibly exceeded the revenue they’ve brought in, especially if you count the additional revenue we could’ve created with all those hours of our lives.

(It’s also true that we made it all way more complicated than we needed to with auto-canceling and half a calculus book’s worth of math in the discount slider, but those are very much the tip of the iceberg in terms of aggregate confusion for us and users, UI complexity, bugs, etc, compared to the universe where there just was no such thing as premium.)

If we ever wanted to actually consider scuttling premium plans it would be a pretty huge amount of work, even just deciding for sure that it was a good idea in theory, let alone in practice, with making things fair for people. E.g., what’s the value of being able to say we have a charity option, how much do we save in support costs by paywalling confusing features, etc, etc.

Of course the daunting difficulty of walking back something like this is all the more argument against doing it in the first place. You have to be really sure it’s worth it, and if it’s diverting your attention from the one thing you’re best at, the thing providing the core value of your product, then it’s likely not worth it.


 

The ideas here originally appeared very buried in a forum thread.