Don’t confuse hard problems with valuable problems
Loved this interchange between Joe Stump and Ryan King on the Business of Coding podcast. Joe starts it off with a question:
“A lot of engineers fall into the ‘build it and they will come’ trap. Have you found that?” – Joe Stump
Ryan King said he agreed, and went on to address a problem I’ve observed as well:
“People sometimes mistake hard problems (in the computer science sense) for valuable problems (in the business sense). Sometimes that venn diagram overlaps (like Google’s search algorithms). But there’s a number of cases where there’s a really valuable problem, but it’s not particularly hard on the technology side (AirBnB is an example of this).” – Ryan King
The whole episode is excellent, with lots of practical tips for engineers and business folks alike: you can listen to the whole episode here.Published on April 2, 2014
A simple way to validate your startup idea
Here’s a simple way to validate your startup idea: take a piece of paper, and write out the names of 5 people that need your product.
Just 5 people.
This is an effective test, because it makes it real. If you built this thing, who would buy it?
Can’t think of 5 people? That’s a red flag. Are you targeting a product at a group of people you don’t yet have a connection with?
“Having a connection with people is really important. A lot of people build tools without thinking about the people that are using them.” – Alex Hillman
Eventually, when you’re bigger and more successful, you might have anonymous customers – people that find you on the web and click the buy button without any social interaction.
But at the beginning, when you’re deciding what to build, knowing a few potential customers by name proves something. It shows that you’re involved in their community; that you’ve been listening to their problems. When you can name your first customers, the people you know need a solution, you can build your product with confidence.
(When I say “know people by name”, this includes the online personas of folks you’ve met through forums, Twitter and other online communities.)
Recently, Nathan Barry gave me some good writing advice that also applies to products:
“To write good content that people care about, write to one person. A specific person. My book Designing Web Applications was written to my brother-in-law, Philip. I wrote what I knew would help him. If your writing is truly valuable to that one person, your ideas will be valuable to many.”
Make sure your idea connects with a genuine human need. Before you get too excited about building something, think about who you’re building it for.
Quit trying to attract a crowd and just help people
Note: this post was originally published on Medium.
I recently had a great chat with Hiten Shah on my podcast, Product People.
At one point, Hiten brought up an idea I’ve been hearing a lot lately:
One of the key things we’re learning is that you need to build an audience before you build your product. Build your audience not for marketing, but for learning.
Too many of us are building products that don’t have a market. The idea here is that instead of starting with a product, we start with people.
As an example: you’re an Android app developer so you start building an audience of Android app developers. As you get to know these people, you can learn about their pain. It’s these pain points that become the seeds for new products.
I think Hiten is on to something here.
And yet, for anyone who’s never built an audience, this idea is hard to grasp. For one, many of us don’t know where to start:
How do I get started if I can’t even identify the niches that I belong to?
There are practical questions, as well:
How do I get people to follow me on Twitter, my blog, etc…?
How do I know if my niche will be profitable?
There’s also this nagging personal question I’ve had:
Isn’t it self-serving to build an audience, only so you can sell something to them?
Your mindset affects everything
Your mindset is a powerful thing: it has a strong influence over the outcomes you’ll achieve.
If you try to build an audience while you’re focused on yourself you’re going to get bad results. No one’s going to follow someone who’s self-absorbed and desperate.
Don’t build an audience; just help people
Derek Sivers makes a great point in Start Now: No Funding Needed:
Start by teaching someone something this week.
I love this. Instead of trying to build a big audience, or worrying about which niche will be the most profitable, just get started by looking for someone you can help.
This mindset is helping me move from being self-focused to other-focused.
When you focus on the needs of others, “finding your niche” actually takes care of itself.
Derek Sivers was a musician who had more programming knowledge than most musicians. When he started helping artists add a shopping cart to their websites, he “fell into” his niche. He was just trying to help people out, and it turned into a business.
The secret to a big audience
Hiten Shah has a big audience, but that didn’t happen overnight. He’s been focused on helping marketers since 2002. That’s his secret: he started small, 11 years ago. Look at his Twitter stream, look at his blog (where he freely reveals his real Gmail address): this guy is always looking for opportunities to help people.
After 4 years of helping marketers, Hiten and his co-founder Neil Patel saw the need for heatmaps, so they built CrazyEgg. Two years after that, marketers were asking for help managing funnels, so they builtKissmetrics.
We see the big Twitter follower-count, but we don’t see what’s behind that: looking for ways to help people every day.
Let’s return to our friend Derek Sivers:
Starting small puts 100% of your energy on solving real problems for real people.
Quit thinking about yourself. Seriously: stop focusing on your insecurities, your lack of experience, and your non-existant social network. It’s OK.
Just look for opportunities to help people. When the person in the cubicle next to you is cursing at their computer that’s an opportunity. When you notice a question in a forum with no answers that’s an opportunity. When someone approaches you for advice that’s an opportunity.
Eventually, you’ll stumble on a trend: you’ll notice that a common group of people have a common problem.
Suddenly, you’ll have an audience.
And suddenly, you’ll have an opportunity to help those people with a product.
“Never worry about numbers. Help one person at a time, and always start with the person nearest you.” – Mother Theresa
PS: I’m writing a new book called Marketing for Developers. You can download a 21 page sample here.Published on May 17, 2013
It’s not enough to build a product that people want
In 2013 I 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 software 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 launch a startup. He did everything from the coding to the marketing. During that time he built five different products, but nothing got traction.
It wasn’t until he purchased an existing app (called DotNetInvoice) that Rob had his first taste of success. He realized that the most important thing isn’t the code, or even solving a particular 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 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 use and pay for it.”
Get to market as fast as you can
Rob spent the first five 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.
In 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.
PS: My book, Marketing for Developers, can show you how to build something people want and help you get your first customers. Download the sample chapter here.Published on January 17, 2013
What Amy Hoy taught me about starting a business
I first heard about Amy when I saw Twistori. Soon after, I started following her on Twitter. It didn’t take long for me to realize that Amy could teach me a lot about starting a business and building products. Since then we’ve interacted on Twitter and through email. I haven’t taken her 30×500 class (yet), but I hope to in the future (maybe once all of our kids are in school).
In the meantime, I found an interview that I think illuminates her business philosophy perfectly. In Founder’s Talk episode 6 (witih Adam Stacoviak) Amy describes her best advice for building a product [42:00]:
First: Define what you want to achieve
This involves setting goals for you and for your business. I love that she mentions the personal goal. It’s important to ask: what do you want to achieve for yourself? Amy says: “Get really concrete about it. How much do you want to earn? [Something like] ‘I want to bring in $200,000 a year,’ is a great place to start.”
When you launch into a project without first identifying what you want to achieve, how will you know if you’ve succeeded? Having a goal of earning 200k is a lot more achievable than “I want to make a lot of money”. It gives you something to shoot for but also leaves you accountable if you fail. That’s the point.
Second: Forget ideas; study a market
This is Amy’s best piece of advice. We’re all holed up in our caves, with our notebooks, trying to come up with great startup ideas. Amy says: “Forget ideas. Go actually spend lots and lots of time with people”. What are you doing while you’re spending time? You’re searching for their pain not pitching them ideas. It’s actually better to not have ideas; instead just walk yourself into a room, plunk yourself down, and just listen to what people are complaining about. What problems does this market have that you could solve?
Update: Amy recommends listening for pain online (in forums, etc…) rather than interviewing people in real life. The risk is that “in real life, people will bitch, just to have conversation”.
Third: Target people with money
Amy continues her thought: “[Spend time with people] who obviously like to pay for things.” This is our second problem as founders: we often target people with no money! We go after teachers, consumers, non-profits, students, and hobbyists. Meanwhile, there’s an office manager somewhere in Winnipeg who loses $3,000 worth of productivity to paperwork every month. That person is dying for help and would gladly pay $300/month for an app that solves her problem.
Fourth: Make sure you like your customer
So you’ve identified a market that has money, and where you can create value; time to get started, right? Not so fast. Think about this: you’re about to start a business serving this niche of people. This could become your life’s work: would you be OK interacting with these folks every single day, for the rest of your life? “[These have to be] people who you like, and can imagine doing business with”, Amy says. She also put it this way: “If you don’t like drunk frat boys, don’t open an Irish pub”.
Fifth: Identify where you’re going to provide value
Now you have a market, and you have a list of things that are causing them pain. Now it’s time to narrow it down: where can you create real value that they’ll pay for? “Be very pragmatic”, Amy cautions:
Don’t say: ‘How can I change their lives?’ Instead, say: ‘You pay me $30, and I’ll save you $60 a month or earn you $60 month’. Make it about the math.
This is why you want to target folks who can pay. A college student might want software to organize their homework, but they can’t afford to pay anything. A business owner, on the other hand, will gladly pay $30/month if you help them save money or earn more income. This is why Amy built Freckle (a time tracking app): if you can track your time, minimize waste, and invoice your clients easier, you’re going to earn more money (and waste less time).
Finally: Build it and charge for it as soon as possible
Once you’ve checked off the previous five items you’re ready to get to work. “When you find that [place where you can create value], build it and charge for it as soon as possible” Amy concludes. It’s not easy to build a product, but your chances of success are much greater if you build the the right product for the right market.
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