Criteria For The Right Idea at the Right Time

Discussions
#1

Hey everyone-

Been thinking a lot about this lately so I wrote out my personal criteria for picking the right idea vs. just any idea that comes along.

Here’s my list:

  • B2B …duh.
  • Serves people like me and/or a group I empathize with
  • Directly impacts the customer’s bottom line …Clear ROI
  • Does one thing exceptionally well …doesn’t have to be 100% unique, but it excels at solving one problem for one group better than anything else.
  • Delivers longterm value …essential tool or service. Can’t be easily discarded/cancelled after a couple months.
  • $99/month …good target price point. Lower is harder to hit viable revenue targets quickly, much higher can require higher-touch sales, which is generally OK but not for me personally right now.
  • An accessible, large, growing market …there may be a market there, but can I reach them easily and predictably?
  • Plays to my strengths …I don’t necessarily have to be the one who codes it or delivers the service (those can be delegated) but I should know this problem/solution inside and out.
  • Can be delivered manually …Helps to get the product in the hands of paying customers quickly. Also opens up the possibility of a value-added productized service + software combo.

Here’s my full article on this:
http://casjam.com/right-business-idea-right-time/

Would love to hear your thoughts

10 Likes
#2

That definitely sounds like an ideal list of things to have :smile:

The problem I’ve found so far is that it’s hard to have them all. Either it’s something I’m not personally interest in, or I don’t know much about, or I don’t know how to target customers, or it isn’t something I’m sure offers enough value, etc.

1 Like
#3

That’s a great list Brian–agree with all the points you have above. I’d add two more essential points:

  • The product or service is not one that is a fad or something that will go out of style quickly (e.g. MySpace)
  • The product or service is not something that a large player could simply add a core feature and put your completely out of business (e.g. You make a Twitter add on and then Twitter adds your feature for free)

The “can be delivered manually” aspect I think is helpful, but I’m struggling to see if it’s essential or not. Take Ian’s HelpSpot for example–he could do that via email, but that would be worse for the customer (and probably what they’re doing now). Aside from that, I don’t see how he can make that a manual process per se. Some other examples like Patrick’s Appointment Reminder are obvious for manual delivery (hire someone to call clients and remind them about their appointment), but I’m not sure it’s universal.

1 Like
#4

What about cheaply too? What use is a $99 price point if it costs you $500 to acquire the customer? :wink:

2 Likes
#5

An often overlooked but IMO very important criteria for product ideas and pricing models: the pricing should scale/increase with the value the customer gets.

E.g. base the price on the number of users customers have for a team-based product such as help desk software, sales management app, dev tool and so on. This way it’s much easier to grow customer accounts to higher subscription fees as they get more and more value out of your product. It’s also much easier to sell a product for $50/month and grow this to $500/month over months/years as the customer gets more value out of the product, instead of selling a product for a higher price from the start.

3 Likes
#6

Yes, making sure you have a pricing model that ensures additional revenue growth from existing customers is crucial. I came up with a few of these numbers from my Microconf talk last year.

I looked at HelpSpot’s first 100 customers. They paid around $90,000 in licenses. Since then, they’ve paid $207,000 in additional licenses for their growing teams and support contracts. And that’s without being SaaS or having any true lock in mechanism since HelpSpot continues to work even if you don’t pay support.

2 Likes
#8

[quote=“CasJam, post:1, topic:2652”]
B2B …duh.[/quote]I wouldn’t rule out a B2C idea if you can also come up with an indirect funding model for it. Just make sure it’s built to sell.

[quote]Serves people like me and/or a group I empathize with
[/quote]I would lean toward the latter because of the sentiment behind this quotation: “Find a problem not experienced by mid 20s single men in urban centers & your competition drops by ~2 orders of magnitude.” --(@hackernews) There’s likely to be much less competition in problems you are interested in than in problems you experience as a boostrapper.

2 Likes
#9

The “can be delivered manually” aspect I think is helpful, but I’m struggling to see if it’s essential or not.

I wouldn’t call it essential to have success. But given my current personal position (non-dev, self-funded), I wouldn’t want to pursue an idea that can’t deliver any value until it is coded and automated. Point being, take your own circumstance into consideration.

#10

I hadn’t thought of it in those terms.

I am a developer; I know where developers hang out, what developers read and what they listen to. I know the market very well because I am that market.

I wouldn’t know any other market quite as well, and I’m interested to know whether you think that the relative lack of competition makes up for the relative lack of knowledge of your target market.

#11

@CasJam has built an audience/customer base, so it makes sense for him to continue to mine it for repeat business, build his reputation in that area, etc. I think the situation is different for people just starting.

Then you are familiar with reading a developer news website and finding out some college kid has just open-sourced some powerful tool which does the job of some existing, expensive tool. Or you’ve seen Apple/Google release a version of their developer tools which Sherlock existing third-party tools. Or you’ve seen an ad for a tool and dismissed it, thinking “I could build that.”

[quote]I wouldn’t know any other market quite as well, and I’m interested to know whether you think that the relative lack of competition makes up for the relative lack of knowledge of your target market.[/quote]I think it’s a rare case one would build a business without incorporating a lot of feedback/suggestions/ideas from customers. In the case of a business you are interested in but not knowledgeable about, that knowledge transfer starts much earlier in the process. Perhaps you take on a partner who knows the market, or have a pool of early adopters who get discounts in exchange for guiding you in the market.

I’ve worked in a number of different industries as a developer, and the needs of each application have varied from straightforward to insanely complex. If you have an interest in some industry, talk to people in it, see what pains they have. Perhaps you’ll find something sufficiently straightforward for which you can build a solution.

Whether you choose dev tools or something else, the odds are the first several attempts won’t be that successful. If you’re learning how to learn about other industries during that time, you’ll be building a valuable skill in the process.

3 Likes
#12

I think there’s an interesting flip side to this though. Since you’re a developer, you can bring a lot of value to a space that lacks the tech that we see every day in our bubble. Plus, going into a “foreign” market can be a massive learning experience, especially when you’re not launching and testing stuff to your peers.

#13

Let’s just amend that original list:

  • Never, ever, under any circumstances, build a dev tool or social network.
1 Like
#14

I don’t know about not building dev tools. There are people making dev tools and being successful, although i don’t have statistics about it.

Good criteria list @CasJam thanks! I think for a bootstrapper there’s a tension between “delivers longterm value” and “lifestyle” criteria (doesn’t figure in your list, but basically “is building the product helping to create the lifestyle i want”). If the product is absolutely critical to the business operations, then it has impacts in terms of downtime expectations, support etc. which can be difficult for a bootstrapper.

#15

This isn’t good advice.

The dev tool market is a great market. There is a reason I pay $800 for database comparison tools instead of using the open source alternatives…

Why do companies pay 5 figures for DNN installs when open source alternatives exist?

Why do companies pay 6 figures for Sharepoint installs when open source alternatives exist?

Its about support, peace of mind and quality.

And just for food for thought, here is what ycombinator says about “programming tools”:

Software developers are shaping more and more of our daily lives. The products they use to make software are a powerful lever: they have a dramatic impact on the quality and kind of software being built.
We’re interested in helping developers create better software, faster. This includes new ways to write, understand, and collaborate on code, and the next generation of tools and infrastructure for delivering software continuously and reliably.

We believe it’s especially important to build products that make software development accessible to the widest part of our society. In fact, we’re especially interested in new ways to program. There are probably much better ways for people to program, and figuring one out would have a huge impact.

The frameworks are better, the languages a bit more clever, but mostly we’re doing the same things.

One way to think about this is: what comes after programming languages?

https://www.ycombinator.com/rfs/#program

3 Likes
#16

Wonderful point, that’s what I was about to say.

Most of the services and apps I pay for are dev tools. Those are the most expensive software I own to date and I’d never go back without them. That says long about the subject.

Exactly.

#17

Oh I know you didn’t just reference YC from bootstrapped.fm!

http://ct.fra.bz/ol/fz/sw/i52/5/4/26/frabz-OH-NO-YOU-DITTENT-2e3af8.jpg

It was somewhat tongue in cheek.

I’m sure you could make arguments either way. But developers building tools for developers is easily one of the biggest pitfalls that software bootstrappers fall into.

4 Likes
#18

I’d never say never, but building tools for devs is generally something I’d shy away from as well. Ultra-competitive, often winner take most. On the upside, things that are tangentially related to geeks can be good. As geeks are highly connected online so it can make marketing a little bit easier as geeks have the ability to spread the word. It is a fine line.

I don’t really think of Sharepoint type products or IT in general as dev tools so there’s also some clarification needed there. To me it’s more specific. Programming tools, bug trackers, etc. Still, even those things can work as new technologies make new possibilities available such as Honeybadger and BugSnag and things like that which have shown up in recent years.

1 Like
#19

I hear what you are saying Ian about Sharepoint, my point was that quality and support are value’d a little more highly by developers.

Nothing is worse than fighting with a tool. :rage:

And I don’t think posting to YC should be considered such a shocking thing… Aren’t they very smart people who have done very well in business?

But developers building tools for developers is easily one of the biggest pitfalls that software bootstrappers fall into.

I guess I just don’t see this.

1 Like
#20

There are ways to get validation without having an actual product (or something that can “simulate” it).

For example, I thought there was no way to validate our new [speech therapy website][1].
Now, I did have 19 years experience making speech therapy software on the PC.
BUT a big unknown was “will they use it over the internet”?
I.e., they will need to have hi speed internet to use it.

Just as we’re preparing to launch the pay version I have been researching “validation” for a course I’m working on.
I thought "we could have made speech therapy videos and sold that as a subscription service for a small fraction of the price we’ll charge the full deal.

That doesn’t give us perfect pricing testing BUT it does tell us whether they’ll pay for something over the web.

#21

DNN and Sharepoint are not products a bootstrapper can create.

1 Like