Why it’s not enough to build a product that people wantWritten by Justin
I recently interviewed Rob Walling for the Product People podcast.
Rob is the man behind products like HitTail, DotNetInvoice, and Drip. But he also helped start a movement of micropreneurs: solo-founders, who launch their own products. These small startups don’t take venture funding and don’t hire employees. Instead they use Virtual Assistants and outsourcing to build and market their products.
Between 1999-2005 Rob tried (unsuccessfully) to build and launch his own startups. He did everything from the coding to the marketing. He built 5 products during this time, but nothing worked.
It wasn’t until he purchased an existing app (called DotNetInvoice) that Rob had his first taste of success. It was then that he realized that the most important thing isn’t the code, or even solving a specific problem:
“Building something people want is not enough”, says Rob “you have to be able to market it at a cost less than what the customer will pay you back over time.”
Subsequently, Rob honed his craft acquiring small web properties (like CMS Themer and Just Beach Towels). He looked for products that people wanted, but that also ranked high in Google.
The challenge, says Rob, is that entrepreneurs, developers and designer are creators. They get an idea and want to jump to the fun part, which is building, design and code. “People naturally love their own ideas” comments Rob.
But instead of coming up with ideas, and spending 12 months to launch them, Rob advocates a different way.
Solve a real problem
For his new product, Drip, Rob emailed 17 founders (like Hiten Shah of Kissmetrics). He said very specifically: “I don’t want you to tell me that you think this is an interesting idea; I want to know if you would actually use and pay for it.”
Get to market as fast as you can
If you can avoid it, don’t build and launch your products yourself. Rob spent the first 5 years of his entrepreneurial journey wasting time on ideas that didn’t go anywhere. But when he purchased and re-launched existing products (like Wedding Toolbox) he could get to market faster.
Customers have to give you more money than they cost
Spend less money getting customers than they will cost you over their lifetime. For example, if it costs you $100 to get a new paying user, but their CLTV (customer lifetime value) is $80, you’ll be losing money. This is one reason why mobile app marketing is hard, as a $2 lifetime value makes it difficult to market the product.
At the beginning, focus on small wins
Everyone wants to build a big SaaS app as their first project. Rob’s story shows us that product people need to start small, and experience little wins first. Until you can learn to how to identify a good opportunity, and how to market it, you’re not going to have the chops to build something big.
Hear more from Rob
You can listen to my interview with Rob here. You can also subscribe to the Product People podcast in iTunes,Stitcher or with Instacast today. You can follow Rob on Twitter here.