Xobni: Our Path from ‘Wrong Product’ to Killer App

Editor’s Note: This post is the second in a three-part series authored by Xobni’s VP of engineering, Gabor Cselle. Read a longer version (co-written with Marie C. Baca ) on Cselle’s blog starting Monday.

I run product development at Xobni, maker of an email application that helps you organize your Outlook inbox. My co-founders and I were fortunate to get seed funding from Y Combinator in the summer of 2006, and I now often speak with entrepreneurs that are applying to the incubator. And when I do, I give them this advice: The most important decisions are the ones you make in the beginning of the process, such as what product to build, and what market to serve. These will determine whether you’re headed for failure or a multimillion-dollar exit.

Xobni was extremely lucky in that even though we initially built the wrong product, we were always focused on our product-market fit. This helped us quickly correct our course, and eventually produce a product that is making Microsoft drool. I’ll explain how we turned it around.

The Wrong Product
Our initial product offering was a program called Xobni Analytics, an Outlook plug-in that analyzed email traffic in the same way that Google Analytics analyzes traffic on your web site. The plan was to sell this software to corporations, enabling managers to remotely monitor employee email productivity. We soon discovered why this model was a bad idea, however: Employees might feel like they were being spied upon.

But Xobni Analytics was the wrong product to build for another, more important, reason: It wasn’t a sticky application, one that tempted users to come back again and again. But when we presented the data in a sidebar it was completely different; it allowed us to display numerous features beyond just the analytics, like users’ contacts and current communication threads, or documents they’ve recently exchanged with one other. This added even more value for the user. Plus, the sidebar sits right next to the inbox, so users are exposed to it for the two hours they spend (on average) in Outlook every day.

So we incorporated what we learned into the product we have today. Xobni is successful now because it provides focused information about people, (see second graphic, below), not just statistics.

The founders’ lesson: Remember that you are serving an audience of individuals who need simple solutions to their everyday problems.

The Right Market
Unlike the initial problems with product development, Xobni made the right decision early on to target the Outlook market. There are 350 million to 400 million Outlook users out there and yet there is also major dissatisfaction with the program.

After Outlook, people most often requested that we build Xobni for Gmail and Apple’s Mail.app. However, both of those clients have much lower “pain points” than Outlook, and Outlook users are more likely to have business credit cards they can use to buy software.

Good Looks
Here are some mockups of how we originally wanted Xobni to look. The mockup on the right was our original choice. It blends nicely into Outlook, almost as if Xobni was built into it from the start. We created the third one almost as a joke, to show how the sidebar would look if we used a funky color palate.

We decided to go with the bright, saturated colors on the left, because we believed it would have the following effect: Jack would walk by Jane’s desk, and see a bright blob on the right side of her Outlook screen, and he would blurt out: “What the heck is that?” Jane would have to explain Xobni and what it does, and Jack would probably install it once back at his desk.

Xobni’s major differentiator is our software architecture. We don’t do the easy thing, but the right thing. For example, the data layer in Xobni is a platform for communications data in general, not just emails in Outlook. We can easily build new applications and build integrations into other email clients, as these leaked screenshots illustrate.

The Launch
How do you know when you’re ready to launch? That’s what I asked Gmail creator Paul Buchheit two months before our launch date. At the time, Paul was pretty skeptical, but he inspired us with an idea he later repeated:

“…find 100 happy users and then go for it.”
–Paul Buchheit, at Y Combinator’s Startup School 2008.

So we added the Are You Happy? box to the sidebar, and listened closely to customers via our support team.

The result? Let’s just say that since we launched on May 5, we’ve built a very popular product that we think users truly love.