Idea Validation so that…
I can start a self-funded/bootstrapped software company, which can lead to proper income. ie a cash-machine
The Ladders of Wealth Creation is a journey I’m on from employee, own service business, productised service with fixed price, recurring monthly billing.. and towards selling products.
Find a small group of people and make them amazingly happy and you will make money.
Great… but show me a repeatable process of how to narrow down on markets where I may find a niche
Practice is everything… always keep shipping… and fail fast! Then do again.
These are all great pieces of advice.. but the subtext is much harder.. about marketing too and getting good at that. So perhaps ship, market, fail fast!
I find choosing and evaluating niches to be the hardest part of bootstrapping/entrepreneurism. There is so much to think about it becomes overwhelming, and the default is to fall into the trap of doing something comfortable eg programming.
Common mistakes developer bootstrapper entrepreneurs make (and I’ve done them all)
- Starting with our own list of ‘product ideas’ (this isn’t necessarily bad, but its about our customers not us)
- Just start to code up a proof of concepts without any forethought for market, marketing, product market fit
- Reading all the books and getting disheartened
- Writing blog articles and not following though (writing methods really helps me though to condense my thinking)
To make you all feel better (and for my future self) I’ve started writing many blog articles since June 2019. 3 years of research, 1 proof of concept (yes I spent many months perhaps a year on this as a hobby project) where I eventually didn’t really launch it. It’s not all in vain as
Time in reconnaissance is seldom wasted - Duke of Wellington / Rommell / John Ridgway
Becoming a student of a business ie reading books, talking to others is all an important journey. For me it is as enjoying as learning an new programming language eg Haskell, F#, Python or implementing new infrastructure eg Proxmox, Azure CLI, Building machines.
The joy of finding things out - Richard Feynman
Influential Books and Videos
Make: Bootstrappers Handbook now called: The Indie Maker Handbook Pieter Levels. Founder of Nomad List, Remote OK words most visited remote work job board. Used to be called makebook.io - search for this in my email as I bought it.
How to build a startup without funding Pieter Levels. Video of above.
Start Small, Stay Small: A Developer’s Guide to Launching a Startup by Rob Walling. Released in 2010, but the underlying principles are good. See Chapter 2 - Niches. Serial entreprenur. Created Drip See my article - unpublished Great podcast on Startups For The Rest Of Us
The Minimalist Entrepreneur: How great founders do more with less Sahil Lavingia founder of Gumroad. My blog review - unpublished
Video - Jason Cohen WP Engine 2013. Predictable acquisition of customers, of recurring revenue, with annual prepay, in a good market, creates a cash machine
Video - Rob Walling 2014 on Drip getting to $7k What this video is good at, is coming up with a strategy for the initial part of the SaaS based entprepreneurial process:
PDF - 8 Things You Must Know When Starting Your First SaaS. Study a little, ship a lot. Start small. Own your time. Recurring Revenue (but a long ramp to get there)
https://www.youtube.com/playlist?list=PLwcQbu9cKWclSZ5X1D2BFr3t4jBzpiSoi 11 videos including the 2 above
https://www.startupsfortherestofus.com/episodes/episode-589-finding-a-saas-idea-through-70-cold-calls story about senior place. He did a lot of research beforehand. Calling 80 different customers over many months. Asking about them and their day to day problems. Eventually pivoted to senior placements. Got 5 customers paying before any code was written.
https://www.indiehackers.com/post/how-to-brainstorm-great-business-ideas-ab51c3d51c IH Post of brainstorming great business ideas
https://hotjar.atlassian.net/wiki/spaces/REC/pages/269942884/Hotjar+Core+Values inspired from hotjar on the podcast StartupsForTheRestOfUs with David Darmanin
I like these core values which David and his company used to grow to be very very successful.
- Put our customers at the heart of everything
- Be bold and move fast
- Work with respect
- Build trust with transparency
- Challenge ourselves to grow
Find Niches / Ideas
So now we have a way to write and be transparent (blogging / writing), where should we start?
Build something people want
So they say
Shut up and take my money!
and make sure the structure of that product fits a small company ie low time input
From the research on where startup ideas came from:
- Problem I was experiencing 44%?
- Problem my customer was experiencing 30%?
- Friend or relative less
- Research much less
Commonality is to reach out personally to many customers before building the product. Husstle.
- Listen to them talk about themselves and what they do day to day
- Lean to see if can write software to help
- Take lots of notes
To see if there is a need (or are there well funded incumbents there already which customers have signed up to)
This really is validating before building anything.
Then do mock ups of proposed software
Then ask 5 people or more to buy it (3 months subscription) for a 20% discount for life.
- Big enough so first 150 customers ie 10k MRR is attainable
- Something I know about / connected with
- Something I enjoy ie people, technology
CS Allen notes
Going through these notes here is a run through of my auto-archiver product
- Problem first, solution last
What makes for a good problem?
- many people have this problem? maybe not in the niche of human rights investigators.
-like talking to these people yes!
-identify as a named group eg developers, teachers, nba fans human rights investigators, fraud investigators, journalists need to come up with more niches, and find how big these niches are.
-valuable problem https://www.indiehackers.com/post/why-do-some-entrepreneurs-earn-more-than-others-dc81985afd?commentId=-M0t2SddC3EwBGMmLGAO people will pay money to solve it.. good money easier sell! charge more
Finding a problem if money is changing hands then it is a valuable problem yes for auto-archiver for CIR
Avoid fatal mistakes -start with a solution in mind -ruling out already-solved problems
ie it is a good thing is there is competition -be afraid to solve high value problems $10k per year per customer? -not having a specific customer in mind
dont skip distribution -how am I going to reach my customers eg channels -seo -press -content marketing -social media -sales -partnerships -ads
first should be direct outreach 1-1 conversations with customers yes!
- Boring problems, innovative solutions
- build from first principles yes
- Start Small yes can I sell via someone else’s distribution channel?
From The stairstep approach to bootstrapping he advises to
- Start very small and ship it. Simple product and simple marketing plan.
- Maybe sell an addon to an existing ecosystem eg WordPress, Shopify App, Heroku add-on.. built in discovery through app store. Dupal, Photoshop, WordPress theme, ebook or a course. SaaS Marketplaces
From Rob’s book:
look at all people you know, then their work experience or hobby then talk to them.. what pains you in this then could this be solved with software?
From Jason’s Cohens Video
Predictable acquision of customers, of recurring revenue, with annual prepay, in a good market, creates a cash machine
He got out there are contacted 40 potential clients
From Pieters book Chapter 2
- Solve your own problems
- Start from the problem not the solution
- Start small
From Shails book:
- If I talk who listens
- Where and with whomn do I already spend my time online and offline
- When am I most myself
- who do I hang out with
See what people are complaining about - and research these ‘competitors’ to see how much revenue they generate.
Idea Generation Articles
This was nice as it promoted: walking, coming up with 10 ideas per day, talking to many people,
Analyze Existing Businesses and Markets
I want to find a niche in a good market so I can create a cash machine.
Predictable acquisition of customers, of recurring revenue, with annual prepay, in a good market, creates a cash machine
So here are a my current list of niches and problems which haven’t been validated yet. I’ve put my favourites at the top, purely based on gut:
Write a technical pdf/book on dot net examples. Customer: dotnet developers. Problem it solves: lack of worked proper examples. A great starting point for applications. Learn from the best in the business.
Broken Link Checker. Customer: bloggers, webmasters. Problem it solves: Fixing up site and saying what is wrong.
auto-archiver: Customer: Human Rights Investigators and organisations. Problem it solves: manually having to go to facebook, twitter, youtube and extract images/video. Then save them securely then hash them.
Beer Labels. Customer: home brewers, micro breweries. Problem it solves: Having a great quality label for your beer is part of the drinking experience!
Traffic calming solution in my village. Customer: Parish Council, Problem it sovles: Calms Traffic, Software
and some other ideas:
Evaluate - get out the building and talk to people!
- Rob Walling (Drip)
- Jason Cohen (WPEngine)
- Jason Buckingham (Senior Place)
Rob Walling put out this email when researching drip to his friends and acquaintances:
then a follow up email was something like this:
and Jason Cohen did something similar for WP Engine:
Evaluate / Validate in the market
Market testing and validation - IH - an excellent article.
Is there demand? seomoz competitors reddit / stackexchange - niche forums
Is this a smart niche to be in?
- Describe value (ie what problems does it solve)
- For whom
- How easy is it to get in touch with these people?
Is the niche too broad?
- Use Google Ad Words trick to see how much it costs
- Use magazine full page article trick to see how much a full page advert costs ie >£5k is a problem
Is this niche for me?
- Do I want to be surrounded by these people?
Is this on the stairstep approach ie
- If I’ve got no revenue coming in just now, then go for quick wins. non sexy boring?
- build in public
- SEO, write copy
Appendix ie What to Do Next
find a mentor or 2 join communities eg
market, marketing, aesthetic, product
After choosing a niche and taking a leap, lets look at our values and be transparent
- Put customers at heart of everything ie make sure email list (launch list) is setup and we’re regularly communicating and listening
- Write blog articles about how we’re doing this
- write for PC Pro or… (Lewes connection)
eg https://www.typeform.com/ is what Pieter Levels used.
With an email sign up
Launch list - ideal to have many.. eg many 1000
Go and speak at conferences, etc … get people excited and signed up!
podcasts get on
write content a lot for seo (so broken link checking would be great) as would programming
https://workflowy.com/ allows lists to be edited by many people. He used it to allow people to give him feedback on chapters (after they had paid for access)
Google docs to write in public
Twitch live stream writing process.
Every time he finished a chapter he sent it out to all pre-order customers. And they could review it again in google docs.
What not to do
Like programming I endeavour to learn from the best, and not make the mistakes everyone else has made. I am making those mistakes, but perhaps recovering more quickly as I realise that signs such as:
- Don’t build a POC (Proof of Concept) and assume your customers will just come!
- Get out of the building (and talk to customers)
- Look after customers
- Be customer driven
- Do research but get on with it asap
- Just Ship It
As of 9th June 2022 I’ve got 125 unpublished blog articles. This is crazy! But I’m not worried as I like writing, and the focus at the moment is on evaluating a niche for making money.
Writing blog articles is cathartic, cements knowledge, is a wonderful resource to look back on, and is my way of becoming calm about a subject which is overwhelming.
Like Making Money.