I've been brainstorming how I would build a new indie startup if I had to do it again in 2023. Here are 5 principles I’d use.
It's way easier to build something for a customer who is already in motion, searching for a solution.
For Transistor, one of the big benefits of the podcast hosting category is that every day, thousands of people wake up and type in "How to start a podcast" into Google. They have a desire, and they're acting on it.
You don’t want to have to convince customers that they have a problem and need to use your product;
As another example, Ben Orenstein (the founder of Tuple) doesn’t have to cold call developers to convince them they need a remote pair programming tool. Instead, customers find Tuple because they’re already looking for a product like his.
It's 1000x easier to target folks already in motion.
The best opportunities are where customers realize they have a need and are doing something about it: searching Google, asking for recommendations, trying out different options, etc.
Good ideas almost always emerge while you're doing something else.
Adam Wathan was looking to build his first SaaS and was exploring the idea of building a Gumroad competitor. He was livestreaming a lot of his coding sessions.
During those sessions, he realized that most of the people watching didn’t care about the software he was building – they were way more interested in how he was writing CSS. He decided to follow that trail, which led him to create Tailwind CSS.
(For more on Adam's story, read his excellent blog post.)
When I talk about “finding a good market,” I’m describing the sum of demand for a particular thing:
Number of potential customers
How much they spend
The frequency at which they buy
Their willingness to pay
Characteristics of a good opportunity:
Folks have a strong desire or need for a solution,
They’re applying effort (time or money) to solve the problem,
And they’re unsatisfied with their current solution.
Jason Fried and 37signals did this with the launch of Hey: it's a new take on email, that competes with Gmail, Yahoo Mail, and Outlook.
In an AMA, Jason talked about the response they received:
I didn't know so many people were so hungry for a revamp of email. We knew we were, but we didn't know so many others were. Over 150,000 people signed up in the first two weeks. It blew us away. The last time people were excited about email was 16 years ago when Gmail launched. It's long past due for something new. HEY tapped into that energy.
Derrick Reimer is doing something similar with SavvyCal (which he launched in 2020), where he competes with Calendly (founded in 2013).
Calendly, which has $350m in funding, was able to carve out a product category for "calendar meeting time software," Derrick was able to come along and bring a fresh product to the space.
My friends Paul and Jack did something similar with Fathom Analytics: Google Analytics had become this big, slow, bloated software. They were able to counter-position themselves as the simple alternative.
If you're considering pursuing this strategy, make sure that people are actually in motion (see my first point) in searching for something fresh.
When Jon Buda and I launched Transistor, it came out of decades of experience we had with podcasting, building software products, launching other projects, making key connections, growing an audience, learning skills, pursuing experiences, taking risks, and working in public.
Most good opportunities are not obvious (especially to outsiders). It’s unlikely that you’ll spot an opportunity in a space you’re not familiar with. You’re looking for evidence of unmet demand in a category you understand.
The remedy for “not having good business ideas” is to go out and create more experiences: start a podcast and interview people you admire, attend meetups and conferences, get curious about how different industries work, and run some experiments (and tell people about your findings).
Successful founders see an opportunity at the right time and have the skills, connections, and resources to take advantage of it.
I'm still adding to (and improving) this list as I prepare for my talk at Full Stack Europe.
If you have suggestions/ideas/comments, you can leave them on these threads: