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".
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.