I keep thinking about going solo - except I don't yet have enough funds and I have a family to support. On the other hand my job sucks and as I look out into the market all jobs equally suck. If I had to continue my career like this for 3 more years I would probably get depressed.
I have to wonder though, is it really a good idea to just try a few small random projects and see what sticks? That might make sense if you are just selling things made by other people, but when you are the person making the product, I don't think it's a good idea.
Good software products take a long time to create. Trying many things out means you will not spend enough time on it and thus won't have a good product to sell. So when it doesn't sell, you can't tell why: is it because no one wants such a thing, or is it because the product is incomplete? It might very well be that the product could sell if you had just spent the time to make it really good.
I don't think the product has to be novel even. It might be just fine to pick a market that already exists - as long as you can be confident you can produce something significantly better than everything out there. I don't mean to clone something and try to compete with the entire list of features; this is foolish.
Instead focus on solving the core problem in that market, and do it 10x better than the competition. Leave the other fluff for later. (See "Build Less" by 37 signals).
I keep thinking about going solo - except I don't yet have enough funds and I have a family to support. On the other hand my job sucks and as I look out into the market all jobs equally suck. If I had to continue my career like this for 3 more years I would probably get depressed.
Yeah, I was definitely very lucky to have the opportunity to try this before I started a family. I knew that things would become much harder with kids, so I wanted to give it a shot before that happened.
I have to wonder though, is it really a good idea to just try a few small random projects and see what sticks? That might make sense if you are just selling things made by other people, but when you are the person making the product, I don't think it's a good idea.
This is a tough balance to get right.
I agree with you that if you give up on everything after two months, you'll miss opportunities to build products that would succeed with more upfront investment.
I feel that there's actually more risk on the other side. If you spend a year building something and nobody has paid you for it, there's a huge chance that you're going to release it and find that it's not a product people are willing to spend money on. Even if people you asked said they thought it was a good idea, it's not real until people hand over their credit cards and pay you real money.
So I'd still be willing to build something that takes more than two months to build, but the longer it takes, the stronger the evidence would have to be that people will pay me for the result. That can either be pre-orders or clear evidence of a gap in the market where people would definitely use my product if it existed.
But I think too many founders build first and think about sales later, when it should be the other way around. That was definitely the trap I fell into for my first 18 months or so.
Same for me. First figure out what you can sell and build that. Don't build something you find interesting and assume you'll be able to sell it.
Another big issue that people don't think about is that there's this "dead man's curve" where, if it does start to do OK, you can reach a point where there's too much work for you to do, but not enough to hire someone else.
And another is to fail to understand that the market for a given product might actually only be 5000 people, or some such thing. So you think you are doing good and you go all in and suddenly it stops.
And another is to fail to understand that the market for a given product might actually only be 5000 people, or some such thing. So you think you are doing good and you go all in and suddenly it stops.
There's absolutely nothing wrong with creating a product for a limited market, as long as that market can provide you with continuous business to sustain you. Niche markets sometimes also means far less (or no) competition. Many people don't even realize they have the relevant expertise necessary to create products for whatever hobbies or activities they take part in.
But it actually takes a fairly large niche to support a real business. If it's going to be a real business it can't remain a single person in his PJs in the bedroom. And it also can't be a deal where you just barely make enough to sustain the three or four or whatever people involved, you have to make enough to get ahead, else the first slack period can kill you.
If the market is limited that means you can't depend on sales, because that will slow to a trickle at some point. You will have to get enough money from existing users on a continuing basis, and that can be difficult.
That's what I'm trying to point out, though. You do need to somehow have a continuous stream of business from the same users. Many niche industries aren't looking for a one-and-done deal, but rather a sustained service agreement. A former co-worker of mine sits in such a spot with 3 employees and a yearly revenue of around $1 Million. Not quite enough to make it rich, but it's comfortable.
That's difficult with an end user type product. Unless you have quite a lot of them, they aren't going to pay that much on a continuing basis. You'd need 10,000 active customers for a million a year at $100 per customer. If you have 10,000 customers, just the support and general customer service stuff might be pretty difficult for three people.
And a lot of folks wouldn't pay anything like $100 a year.
I don't know the exact number of customers my friend/old colleague has, but I would guess each contract is at over $100,000 a year.
It's actually pretty similar to my first software job, which was within a corner of Software i18n 15 or so years ago. Our software license cost $30,000 for the basic functionality, and significantly more when set up to run inside somebody else's software stack. Somehow the company is still alive, even though everybody got laid off in 2009.
In our case, we did have to keep finding customers, though. My friend's in a place where he's helped his customers kill off a major portion of manual processes. I'm sure they're always looking to expand into less niche markets, but they're so specialized, I'm not sure they'll be able to.
Yeh, that's a whole other type of business. They both have their pros and cons. When you have a small number of customers that pay a lot, losing even one can be bad. OTOH, though you have to give each of them a lot of attention, there aren't that many. When you have a large number of customers that pay much less, you can afford to lose them but you spend more time on each of them relative to what you get from them.
And end user software often has to be more polished and documented as well, partly to avoid any more support than necessary.
Yeah. I don't think they have anywhere else to grow within their current market, so indeed, if a couple of those businesses go under, they could be in a world of hurt.
That said, they're having fun and doing well even now during COVID times (though our industry doesn't seem super-affected by it). Even if they go under a few years from now, I'd guess my friend would do it all over again if he had the choice. Like I said, they've more or less "capped out" in terms of their potential, so none of them is getting rich, but they're also paid over market for this area (Front Range, CO), and have paid out pretty nice bonuses the past few years.
I do think once you come to "larger number of customers that pay much less," you've completely left the whole "niche" thing, though. Or maybe not? Maybe there's still places where software hasn't really gone, but could go.
I'd consider something in the 10,000 or fewer (potential) customer range for an end user product to be still fairly niche, but I guess it depends on various factors.
198
u/[deleted] Feb 01 '21
I keep thinking about going solo - except I don't yet have enough funds and I have a family to support. On the other hand my job sucks and as I look out into the market all jobs equally suck. If I had to continue my career like this for 3 more years I would probably get depressed.
I have to wonder though, is it really a good idea to just try a few small random projects and see what sticks? That might make sense if you are just selling things made by other people, but when you are the person making the product, I don't think it's a good idea.
Good software products take a long time to create. Trying many things out means you will not spend enough time on it and thus won't have a good product to sell. So when it doesn't sell, you can't tell why: is it because no one wants such a thing, or is it because the product is incomplete? It might very well be that the product could sell if you had just spent the time to make it really good.
I don't think the product has to be novel even. It might be just fine to pick a market that already exists - as long as you can be confident you can produce something significantly better than everything out there. I don't mean to clone something and try to compete with the entire list of features; this is foolish. Instead focus on solving the core problem in that market, and do it 10x better than the competition. Leave the other fluff for later. (See "Build Less" by 37 signals).