In theory I like this concept, in practice it blew up in my face.
After two years and two ideas that failed, (executed poorly, no traction, no market, trouble in cofounder paradise -- you name it, I've failed it), I decided to try a different approach: rapid exploration of niche products. In the course of a year I spun through about one idea per month.
I got remarkably good at (in)validating my ideas. (Hint: write down who you think your target market is and then pick up the phone. Have a conversation. Ask if they would pay $X dollars for your product where X is something that makes you cringe because you think it's too much. If it's worth pursuing they won't hesitate to say yes. Then tell them if they give you $X right now you'll start building it for them -- if they ask where to send the check you're golden, otherwise you need to rethink your assumptions. If you don't know anyone to call run some ads to a fake landing page, collect emails, then offer an amazon gift card or something for a 30 minute phone call. I wrote about it here: http://twosixes.wordpress.com/2010/05/29/tips-for-talking-wi...)
I finally landed on something, (and feel free to steal this) -- filtered google alerts for PR agencies. I had customers using the service and waiting for a bill. But I never implemented the billing system, I procrastinated it hard core. It wasn't because I was afraid they wouldn't pay, (they would have). It was because I was afraid of supporting the project. It was like I built myself a job I didn't want.
So for me the biggest pitfall of this approach was a total lack of vision combined with a drive to pivot to product/market fit at all cost meant I created something I had no passion about whatsoever.
Thank you. I cherish learning from such insight. These nuances can only be discovered after you've done something. I appreciate you sharing.
The "validate your ideas" advice is sound, yet throwing up fake landing pages, day in day out, until I hit gold, is just something I can't get excited about. My version of validation has been build a prototype and show it to people or, the much more dangerous, "I know people will want this because [insert something that has changed]." I'm certainly taking more risk by spending more time on each idea to, arguably, get worse data, but at least I'm enjoying doing it. Taking what you've said into account, there is also less of a chance that I end up with a product that I am not passionate about.
The "validate your ideas" advice is sound, yet throwing up fake landing pages, day in day out, until I hit gold, is just something I can't get excited about
Desperately trying out different ideas with fake landing pages is something that MVP/lean movement added later, but it wasn't described by either Steve Blank or Eric Ries in their early texts. As far as I've understood Blank's customer development model, it can be described as below.
Founders have a strong vision of a problem and product, but they don't necessarily know who are their best customers. Basically, they are unsure of their business model and target market. They get some funding and start developing the product (traditional 90s bubble model) but at the same time they start visiting and talking to customers, showing mockups, trying out different price points etc. (Blank's customer development model). There is parallel tech & customer development going on.
Note that under Blank's model pivoting doesn't mean that you start to execute on a totally different product, but that you adjust your product vision when you learn more about customers and possible target markets.
As an example, you start with a vision of cashflow estimation software for small 10-employee consulting companies (founders' vision, a self-identified need), but when you start selling and learning about markets, you noticed that bigger companies (let's say 100 employees or so) have similar problem. But what those bigger companies need from user interface and database integration are quite different than needs of small companies. However, this new target market is more profitable, so you adjust your product vision and business model to serve it instead of the original vision.
This is how I've understood customer development model.
Founders have a vision, start building product and finding a target market and scalable business model for that vision. It doesn't mean desperate random attempts in totally different products.
So it's really targeting people who are already mad keen to execute their exciting vision, and saying: hang on, before committing too much, just test out your assumptions in a low-cost way. It's validation, not search.
I think Ries has a story of three years building a fantastic exciting product that nobody wanted... and wishing to avoid that.
The rapid iteration/pivot approach makes more sense if you start with something you are passionate about. That's the key. Maybe try only testing your assumptions about your market? Try to describe someone who would use your product and then find someone who matches your description. If they are not interested it's only one aspect of your idea. If your passion for this idea wilts after one encounter like this then either you aren't cut out for this gig or you weren't that passionate about it. Probably the latter, because if you have the guts to make a phone call to some random stranger you're already doing something 99% of people won't.
How financially secure were you when you discarded this idea, and what did you work on instead?
My experience is that which idea is "interesting and motivating enough" largely depends on your financial state. If I had £10m in the bank, I probably wouldn't be doing GrantTree (as much as it is a worthwhile business).
Another point worth making: once you've systematised the work on your business, you don't actually have to keep working on it yourself. You can hire others to do the boring bits (if it's making enough money). That will decrease your profit, but also your time investment.
Agree. I meant to put a note about this. I was quite financially secure and did not need the money. I would have doubled down on this idea if this was my only option for paying bills. But it wasn't and I could easily find a job that paid more and was more rewarding, hence why I killed the business. I feel like many software developers are in this position. While I'm no fan of a JOB the kind of job I can get as a software developer sets the bar pretty high in terms of replacing it with a business.
That said I've never been in it for the money. It's easy enough to get a job as a programmer. If all I was going for was making money, entrepreneurship makes no sense at all. So all I'm typically looking for is to cover my bills so my wife doesn't stress out too much.
Well, in my experience most developers who are working at a job don't set the bar quite so high. In fact, if they can make about 1/3 to 1/2 of their salary without having to work at a job, that's already considered a victory, although of course people don't stop there.
And that's kind of the point... once you've built a business that successfully and reliably provides 1/2 your previous salary without working for someone else (i.e. building a product or productised service, not a plain service/freelancing), you can probably increase that to 1x, 2x, etc... whereas before, there's a hard glass ceiling above you.
Obviously that equation is less appealing if you're already well off financially - hence your distate of the business idea you came up with.
Which is fine - one of my friends who applies this method has in fact done exactly the same thing - built a small business, figured out how it would be profitable, then decided that it wasn't the kind of business he cared about building, and so shut it down and looked at another idea.
Product-market fit and idea-founder fit are equally important - at least when you have the room/comfort to make those decisions!
Interesting, not to get too off topic here but is there a reason you didn't use a 3rd party service for billing like Paypal or something? Sounds like you went 90% of the way and stopped at the last 10.
More like the last 1%. Implementing the billing system would have been trivial. It was a mental block. I just didn't want to completely commit to the business I created.
No license but I'll throw a BSD license on there later if anyone wants to use it.
Update: It's been a while but I think when I left off I was working on a bug in the Bayes module. The concept was new to me at the time and I was still wrapping my head around it. Also I'm sure the email parsers are out of date at this point.
Basically the whole project was an excuse to learn Bayes rule and use Lamson. Plus people wanted to pay me for it. But once I got the code out, I quickly lost interested as explained above.
After this I learned you need to price it for the entry level PR folks to pay for it. Honestly I learned so much after this I think your best bet would be to pick up the phone and chat with PR people to fill in the gaps where I left off on the blog.
After implementing the billing system I was thinking of pivoting out of the PR agency market and into small businesses (who do their own monitoring). I was also looking at ways of gathering alerts without actually using Google Alerts and blatantly violating their TOS.
So the question isn't "how can I make money?" but "how can I create the job I want?". An important part of this is "what the heck kind of job do I want?"
The response "I want to be independently wealthy" seems to circumvent this, but it turns out that you will want a job after all. (If you don't believe me, you may need to find this out the hard way, as I did.) A good example is the viaweb crew, who got rich, then turned around and started another business (YC).
So why not create the job you want in the first place? Though it's true that for some jobs (like being a VC), it helps to have a lot of cash, and a lot of hard-won experience - so creating the job you want might involve doing a lot of stuff you don't want to do. Actually, the nature of "work" is there is always some stuff you don't like. (Yet oddly, we seem to need that to be happy - like the failed Matrix's.)
On top of all this, there are so many unknown unknowns in the world, that it's not realistic to even be able to conceive of your ideal job. (nature's imagination is greater than your imagination; There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy).
This is the very idea of lean, that you can't know what will work, so you can't plan it. Instead, you try experiments to get that knowledge, where an "experiment" is a low-cost way to get information. If it costs too much, it is no longer an experiment, but something else.
So... you can see yourself as on a journey to find out what sort of job you'd like. You might as well begin with what you think you'd like (e.g. where your passion is)... but it's overwhelmingly likely that your ideal job will come as a complete surprise to you. So it doesn't really matter where you start, as long as you start.
"What color is your parachute" has some exercises about discovering what kind of regular job you'd like, which can guide you in creating that job for yourself - but I think it's flawed in that you don't know enough about the world or yourself to be accurate. Still, it's a starting point.
The same goes for finding your passion. You can't know what it is, so start doing stuff. You'll discover more about the world, and more about what you like.
On this reasoning, it might have given you interesting information to have built that billing system, to see if you liked the PR business. It might have lead to something else along those lines; or caused you to definitively go in the opposite direction. You could still close it down - or sell it (or give it away). But if it really is in demand, a competitor would emerge! (this happened to me). So you aren't stuck with it, if you don't want to be.
In a wider sense, the feeling of having to support the project forever transformed an experiment into a life-choice.
BTW: I don't mean this to be targeted at you; I think your one idea per month for a year is really impressive, requiring a lot of guts and gumption. Maybe you were just a bit burned out at the end (I would be - I see "gumption" as my most critical resource). It's just that your story helped crystallise my present concern on "creating a job I want".
I'm kind of curious how successful swombat is, and if he followed the strategies he's recommending to others.
What I see a lot is that a lot of startup people give startup advice in order to draw more attention to themselves and to their products/consulting gigs. When I see that swombat has two businesses and time on the side to do consulting, then that's a pretty big red flag.
I should really take the consulting thing out. I'm spending 95% of my time on GrantTree, half a day here or there on Woobius, and no time whatsoever consulting.
I've invalidated a few ideas via this approach, but right now I do have an idea that's "sticking ", so I'm following that one for now.
I should add that yes, I follow or have followed most of the strategies I talk about, and when I haven't used them myself, I say so!
My posts are based on direct personal experience. In some cases the "lesson learnt" may be anecdotal/deeply contextual, but I usually take pains to follow my own advice in http://swombat.com/2011/1/20/how-to-write-good-startup-advic... and make the context clear so that the reader can decide if this is useful advice for them.
He probably took VC money at some point. When you are bootstrapping on your own, you throw yourself 110% at the problemvand only after you've succeeded do you think about the next thing.
Great post. There's a "swing for the fences" mentality in the SV / startup community that I think has driven a lot of potential talent away from entrepreneurship in general.
The idea that entrepreneurship requires immense sacrifice to do well, or to be "worth doing at all" presupposes a set of romantic values that just don't map well to the relative size and frequency of market opportunities.
My Mac app nets me between $100-200 per month, every month, for noise-floor incremental time commitment. For anyone obsessed with becoming a Successful Entrepreneur, that's a 'how dare you even mention it' achievement. But you would be AMAZED at how an extra $100-200/month can improve a man's happiness at the end of the day. It's like an anti-aliasing algorithm for all those little bullshit expenses that, in aggregate, can lead to non-trivial stress.
If that $100/month (and the feeling of delivering value to direct customers) makes me 5% calmer and happier while I'm hanging out with my wife and son at night, it's an enormous win.
I've made the same realization. There's something incredibly satisfying about having built something that others find helpful. That's where most of the joy of entrepreneurship comes from. Optimize for reaching that goal first and then move onto secondary goals like becoming a billionaire or changing the world.
I couldn't agree more. To add to it, I think there is something to be said about the natural slow evolution of yourself and your business. There are many who are looking for quick paths that involve raising a boatload of cash, hiring a bunch of people and trying to storm the market. In actuality this is rarely how most real businesses are formed - even in tech. Most businesses are formed through a slow and very unsexy evolution over a number of years by doing relatively difficult things that others don't want to do.
I said this on twitter, but just realized that I never said it here ( > 140 chars this time):
Daniel, your blog is great! It has quickly moved on to my "must read" list. I don't know how you do it every day, between your own thoughts and the curation of so many others' great content, too.
I may not understand everything and it may not all apply to me, but believe me, enough of it does. Fellow Hacker Newsers should definitely bookmark you.
I also have a hard time understanding how someone could have such a high quality daily blog and get much else done. I struggle to post once or twice a month.
Keep it up. Your efforts have not gone unnoticed and are really appreciated.
I also have a hard time understanding how someone could have such a high quality daily blog and get much else done. I struggle to post once or twice a month.
I'm not quite sure how I do it either! I think there's a certain rhythm that comes out of writing something every day. It's like the anecdote about the pottery teacher who asked graded half his class on the weight of the pots... the more you do, the easier it gets to keep on doing it.
Unfortunately this last week I haven't quite kept to my daily rhythm... but I've got 2 more articles in the queue now, so the rest of this week is covered. :-)
Perhaps worth also noting that these days I wake up around 5-6am, and my first priority is usually to get a blog post written. That might take an hour or two, then I get on with my day...
I agree. Daniel consistently puts out rich, interesting and educating posts, enough so that I was just about to make my own comment stating so before I noticed yours.
This pretty much describes exactly what I did. I worked on my idea nights and weekends for about 6 months (iOS app) before launching. 6 months after that I was profitable enough to quit my job and do it full time. Instead of going the typical startup route and seeking funding and hiring people, I decided to travel the world while building up my startup. After a year of doing this, I'm making many times what I was at my day job in silicon valley and really enjoying being my own boss. I think the army of one part-time idea really resonates with my personality. I like the idea of startups, but I have a family and am fairly risk averse.
The niche market accessible to one person working part time sounds very much like what Rob writes in "Start Small, Stay Small", and I think it's a great concept. In particular, one aspect of it that's good is that it works fine in "the rest of the world": you don't need to be in Silicon Valley or get VC or anything else.
That said, I'm not sure about parallelizing the process, that presents some risks if you're already spread thin.
It certainly is, and I've linked to several of Rob Walling (http://www.softwarebyrob.com/) 's posts in the past. Rob is a great example of a one-man-army type of entrepreneur. I know a few others who are successfully applying this model.
Re: parallelising, obviously you can only focus on one thing at a time, but many ideas take time to build out - as in, waiting time. If you've got control over your time, why not spend that waiting time testing out other ideas? In practice, I think most people who are still at the validation stage will in fact parallelise part of the process.
I'd not advice this for people that loves their comfort zone nor those who have a hard time unlearning things.
For the rest, it might be their hope.
If you can be hyperproductive you can do it. But you can't be that productive if the technology you use doesn't help you to achieve that by design.
In my case I've validated the product's idea with a prototype in ~15 days, then started to develop the product. Now, it's in full commercial operations since last august.
I'm glad you brought this up. It can be unhelpful/damaging to tell someone "this is the way." It could cause cognitive dissonance, confusion, and conflict for many between one's own previous experiences of what they are currently capable with and what is being stated they are required to do to be successful. I go through this very often. The latest being the push that's going to around, mainly that VCs and incubators perpetuated, that you need to find technical co-founders. This mainstream idea is promoted because it reduces the risk for those who will profit/benefit from reduced risk in their investments. Likewise, people who are, as you call them, hyperproductive, will probably have more successes from having more experiences and also be the personality to be vocal of their methods and will have more experience and success to be vocal about.
You can't "prove" anything about businesses until they either finally fail or finally succeed (whatever your definition of failure or success is).
However, you can get a pretty decent idea of how successful an idea will be if you push it further without spending anything like 2 years on it. Most ideas that are invalidated after 2 years of the founders working their bollocks off on the business could have been invalidated much sooner than that.
Ask experienced entrepreneurs (who have built profitable businesses) around you. I think you'll find that most of them already do this to some extent - they don't commit fully into an idea until they've tested the waters and found that this idea is worth committing into.
"What's the best strategy to get from having no startup to having one that provides you with income?"
I would argue that the answer to this question is to enter a market that has already been verified for you.
In the start-up community there seems to be a huge emphasis on seeking out and creating new markets and business models. While this is a fantastic thing, it is in no way a prerequisite for starting a business.
Everyday entrepreneurs the world over start successful businesses in preexisting markets. If you're a developer looking to start a business, you don't need to verify a market for mobile application development, you know it exists. The only barrier is your skill level and ability to attract clients.
I know this stuff is obvious, but I think the notion of validating markets has become overemphasized in the start-up community. There are plenty of opportunities where much of that leg work has already been done.
That's not a bad angle, and in fact to minimise the risk, a services business may be a good idea. However, services businesses come with their own bundles of problems, not the least of which being that you're still caught in the "sell your time for money" trap which stops you from doing other things. It's better than a job, but not as good as building a product.
I think in all cases where you're building a product, whether it's competing with existing products (better), or an entirely new thing (worse), there is some amount of market validation to do. Does anyone want your "accounting software with this extra feature"? Will anyone care about your "Basecamp but with a different look"?
Best to validate those before sinking lots of dev effort in them...
swombat, what mental framework would you apply when looking at a project and wondering if it is "the one"?
Or perhaps I should be taking from your post that unless you really are tackling a problem that takes full time over several years, then your plan probably should include running multiple businesses/sites at a time.
The framework is simple: each of those projects is basically throwing something on the wall to see if it sticks. Your definition of "it sticks" may vary, but basically, if you're seeing enthusiastic responses from target potential customers, in a tangible way that means you're fairly confident that money will be forthcoming, or even better, if you're seeing money coming in, then it probably counts as "sticking".
The exact definition depends on the type of business... I'll write a follow up post to explore that in more detail.
Thanks, and I'd love to hear more as you mentioned.
For example "money coming in" could be:
* $100/month (ok, we're getting something)
* Or $2,000/month (still not enough to live off, or whatever is less than your living expenses)
* Or $5,000/month (ok, I could live off this)
* Or $10,000/month (from my perspective would be a comfortable income).
I guess one part is one would have to look at the acceleration of the growth. If it's $800/month after 2 year's work it doesn't sound like you're really on to "the one".
However, I'd say if your business helps you move one rung up the ladder (from zero to survival, to comfort, and then to wealth) then it's "successful" at least on the financial level.
In terms of figuring out if the business is "sticking" early on, that can't be ascribed just to money - it really depends on what you're building. You need to figure out the core metrics that drive your business and see whether they're going somewhere good. In some cases, the metrics are money, in others they might be user growth, or something else!
And what if it is a social idea whereby monetization comes only with traction? IE: Dropbox, etc, and a initial invest of time, say at least 6 months is needed to the product ready, what should I do in a case like this?
You've been around here for quite a while, but other than recognize the name, I knew little about you.
I want to say that I just finished reading your account of the London bombings - and how close you were that day - and was quite moved. Recognize this coming from a 5 year infantry vet that often sees stories about "how I was 5 km from a bombing!" as much ado about nothing.
I'm glad you took the time to share, and I hope that the action helped in your healing. Cheers.
I think that this theory applies to highly scalable markets combined with common-purpose products, such as a web app for a certain hobby (e.g., learning to play the guitar). An ad-supported Android app ought to have a userbase of 200.000 - 500.000 users to confidently reach 1000$ of montly revenue - in this case I would say it is highly unlikely that you will ever reach 100.000$ of monthly income (except you write Angry Birds, of course - but they built upon the success of the game on other platforms, a thing an army-of-one could not do within the required timespan). For this exact reason, I consider quitting Android development for the time being.
Many times over, although it seems like everyday I hear of an affiliate marketer who is killing it online and I wonder how.
Having interacted with that world somewhat in the past, I can say that there are some very rare affiliate marketers who are making a good chunk of cash - but those are people who have invested a lot of time and energy into building vast mailing lists of followers who sign up to stuff they recommend.
If you're willing to spend years building such a mailing list, you can make a few thousands a month jumping between various MLM opportunities. Personally, I'd find that deeply unsatisfying work.
I suppose many here work on multiple projects, in fact is there anyone who doesn't? It's just that people don't usually brag about their failures (or non-successes). Personally i start a new project every 2 months, usually minor ideas or things i couldn't find online. It doesn't take that much time anyway ...
I think so. You don't need to focus on all your ideas at the same time, you can take turns with them. The more important take-away is to test multiple ideas until you find one that actually works, before committing to it.
After two years and two ideas that failed, (executed poorly, no traction, no market, trouble in cofounder paradise -- you name it, I've failed it), I decided to try a different approach: rapid exploration of niche products. In the course of a year I spun through about one idea per month.
I got remarkably good at (in)validating my ideas. (Hint: write down who you think your target market is and then pick up the phone. Have a conversation. Ask if they would pay $X dollars for your product where X is something that makes you cringe because you think it's too much. If it's worth pursuing they won't hesitate to say yes. Then tell them if they give you $X right now you'll start building it for them -- if they ask where to send the check you're golden, otherwise you need to rethink your assumptions. If you don't know anyone to call run some ads to a fake landing page, collect emails, then offer an amazon gift card or something for a 30 minute phone call. I wrote about it here: http://twosixes.wordpress.com/2010/05/29/tips-for-talking-wi...)
I finally landed on something, (and feel free to steal this) -- filtered google alerts for PR agencies. I had customers using the service and waiting for a bill. But I never implemented the billing system, I procrastinated it hard core. It wasn't because I was afraid they wouldn't pay, (they would have). It was because I was afraid of supporting the project. It was like I built myself a job I didn't want.
So for me the biggest pitfall of this approach was a total lack of vision combined with a drive to pivot to product/market fit at all cost meant I created something I had no passion about whatsoever.