Why people buy software

You want to build software that people will use, and that will make you money.

How do you find opportunities?

One trick is to listen to the things people say (and think) when they’re struggling. I call these the “inner thoughts of customers”. Listening and identifying pain are the keys to finding great product ideas.

Listen to customers’ “inner thoughts”

These are examples of inner thoughts people have before going out to find software to solve their problem. Expressions like this are opportunities for creating a marketable solution. Note: Most of these have a B2B market in mind.

“I wish I could hire someone to do this for me.”

“I wish I understood this.”

“Why is using this so frustrating?”

“Why can’t I make this do what I want?”

“I want to impress my boss.”

“I wish there was an easier way to do this.”

“I hate doing this every month.”

“I never remember how to do this.”

“Why is this process so complicated?”

“I don’t trust myself to do this properly.”

“I want this project to make me feel good about my career.”

“I don’t know how other people manage this so well; I can never make sense of it.”

“I feel stuck; I can’t move forward until I figure this out.”

“I wish I was better at this.”

“I don’t have time for this.”

“I don’t want to manage this.”

“Why are there so many steps?”

“Why is this so slow?”

“How do I make this automatic?”

“Working on this is stressful.”

“I always forget that step and mess everything up!”

“I have to set this up every time.”

“I know this is important, but I never have time to deal with it.”

“Every time I use this I get lost.”

“I want to manage my time better.”

“This is boring.”

“This makes my work look like crap.”

“I want to feel creative.”

“This process feels clunky.”

How do you hear a customer’s inner thoughts?

Be attentive! Customers will let out these “inner thoughts” almost accidentally. It might be on a support call, in an email, in a forum, on Twitter, or during a customer development interview. You’re looking for those things people utter under their breath while using software or trying to accomplish something.

What do you do next?

You dig deeper: find out what is causing them to say these things. For example, every time Patrick Collison tried to accept payments online he felt overwhelmed, and that the process was too complicated. This led him to build Stripe.

Keep asking the customer to “tell you more”. Write down the notable things you hear. Talk to more people, and see if they complain about the same things. Draw out the strongest pain, and build your app’s prototype based on that.

It takes practice, but once you learn to identify these undercurrents, you’ll be on your way to creating products that people love.

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No one wants to buy my sneakers

In product development, it’s a mistake to assume that other people want what we want.

Let me tell you a story.

I used to own a couple of retail shops; we sold snowboards, skateboards, and clothing. One day I was reading Adbusters magazine and heard about their new project: Blackspot Sneakers. These were shoes “made with hemp, recycled tires, vegan leather and produced in fair-trade factories”. The idea was to create a grassroots brand, that produced a sustainable product. This was right up my alley: I loved the idea. Normally, making buying decisions for a retail store is something you do carefully: you’re essentially risking your capital on the hope that someone will pay retail prices for what you’ve ordered. But in this case I was so passionate about their mission, that I instantly called them to place an order. I didn’t even balk at the 25 pair minimum, or the high wholesale cost.

The shoes arrived. As my co-founder looked at me quizzically, I set-up a display with all the shoes, and a description of their social and environmental benefits. I featured them right at the front, as customers walked in, and promoted them in advertising. I started wearing a pair myself, and would hype them to whoever would listen.

No one wanted to buy my sneakers. It turns out, our customers didn’t really care about shoes that embodied social justice and sustainability. Those might have been my values, but our customers had a completely different set of criteria: what expresses me as an individual? What will look good at school? What brand do I identify with? What skateboard pro do I look up to? Furthermore, they had a certain perception of value: to them, Blackspots just looked like expensive Chuck Taylors.

Nothing teaches you the value of finding out what customers really want better than trying to figure out what kind of clothes they’re willing to buy.

The lesson

When building software products, the risk is the same: just because I like something, doesn’t mean my customers will. I need to sacrifice my own desires, and find out what my customers truly want. I can do this by observing them (and how they actually buy and use our products), and by listening. The key is to find their underlying motivation. To quote David McClure: “Customers don’t care about your solution. They care about their problems.

Postscript

The funny thing is: I love my Blackspot sneakers. I’ve had them since I originally ordered them in 2005. My buddy Keenan was the only other person who bought a pair, and he loves them as well. We’ve both been wearing them continuously for the last 7 years, and they’re only now starting to fall apart. I recently discovered a brand-new, un-opened box in my basement. It was like Christmas. In my case, these sneakers were exactly what I was looking for

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Forget the Valley: bootstrap founders can live wherever they want

When it comes to venture funded startups, the script is clear: you need to move to Silicon Valley. This is the epicentre for meeting the “who’s who” and raising money for your tech company. Jason Calacanis trumpets this on his podcast:

“Yes, location, location, location. If you want to be in the internet business, immediately leave Tulsa. You need to run like a melon farmer to Silicon Valley, Los Angeles, or New York. That’s it. That’s where the startups are.”

– Jason Calacanis, TWiST #297

Here’s the problem: not everyone wants to move to Northern California. There are start-up minded people, like me, who want to stay in our hometowns. Many of us have families, and deep roots where we live; we want to grow profitable businesses, and make our communities better.

I think our hope is in bootstrapping. Take a look at these popular bootstrapped companies, and where they were founded:

  1. 37signals, Chicago
  2. Envato, Melbourne, Australia
  3. MailChimp, Atlanta
  4. Club Penguin, Kelowna, Canada *
  5. Freshbooks, Toronto, Canada
  6. Litmus, Manchester, UK (now in Boston)
  7. Treehouse, Bath, UK (now in Portland) *
  8. WooThemes, Cape Town, South Africa
  9. Campaign Monitor, Sydney, Australia
  10. Beanstalk, Philadelphia
  11. Grasshopper, Boston
  12. Shopify, Ottawa, Canada *

* no longer bootstrapping (they were profitable prior to taking funding, or being sold)

You can start a bootstrapped company almost anywhere.

MailChimp is one of the world’s largest email service providers. They also happen to be privately owned, and headquartered in Atlanta. Ryan Carson started Treehouse (originally Think Vitamin) in the city of Bath, UK. This is a city of only 84,000 people. Club Penguin was sold to Disney for $350 million, but continues to operate out of its founding city: Kelowna, BC, a tourism town with a population under 120,000.

These companies have proven that you don’t need to move to Northern California to start a profitable, tech based company. In most cases, the founders just stayed in the town where they were living; places like Cape Town, Philadelphia, or Toronto.

What do you think? Is it possible to start a fulfilling, profitable business no matter where you live?

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Related reading: Yale School of Management study

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Building a better mousetrap? It had better catch more mice.

Mousetrap Cars by Ben+Sam, on Flickr
How is your mousetrap better than the one I already have?

If you’re building a better mousetrap, it had better catch more mice.

Ultimately, the products we build have to provide value for our customers. This means that if we’re trying to build something better than what exists, it should represent a superior benefit to our customers.

When you’re selling to businesses the overriding factor is utility: does this mousetrap help me catch more mice, or not? Does your software help me to get more done, in less time? Does your service earn or save me money? These are factors that represent value to a business.
Continue reading

What is real work?

“Hey kids, don’t bother daddy, I’m working.”

“But dad, you’re watching YouTube!”

It should be obvious, but we’ve all rationalized work activities that aren’t real work.  Furthermore, we get caught up doing too many maintenance tasks that don’t earn revenue. What we need to do, on a regular basis, is realign ourselves with work that provides value for our customers.

For me, it’s been helpful to sort my work into 4 categories: Continue reading