Ask YC: "I would pay for that"
7 comments
Trying to shoehorn ideas into a specific type of business model is not going to get you anywhere.
I'd say don't even think about how you're going to make money at the initial stages of brainstorming. Look for a legitimate problem and solve it, make sure the people you're solving the issue for see value in the solution your providing, and on your journey to solving the problem you can then start positioning your company as far as what business model route you want to take.
That attitude is just going to lead to you rejecting a lot of good ideas because they'd be offered as free services, or you settling with a crappier idea just so you can start heading down the business model path you want to take, and you worrying more about the business than the problem is going to show in your product.
I'd say don't even think about how you're going to make money at the initial stages of brainstorming. Look for a legitimate problem and solve it, make sure the people you're solving the issue for see value in the solution your providing, and on your journey to solving the problem you can then start positioning your company as far as what business model route you want to take.
That attitude is just going to lead to you rejecting a lot of good ideas because they'd be offered as free services, or you settling with a crappier idea just so you can start heading down the business model path you want to take, and you worrying more about the business than the problem is going to show in your product.
The consensus here is that ideas aren't worth anything because they are found so easily. But if that's true, then there must also be ideas that meet all the requirements. Roughly: (a) solves a problem (b) fun to work on (c) meets a demand (d) people willing to pay for it.
For me it's impossible not to worry (or at least think) about the money. If I build a free web service and need to expand to more than 2 servers then money becomes a serious issue already.
Take Reddit for instance. It was a good idea in the sense that the founders got to a successful exit. However, I wouldn't be able to expand after the first 3000 or so users, and would have to shut down. I don't think Reddit has made any money in the first couple of years, and they burned through $100.000 (crunchbase) before they got acquired. And a website without graphics that basically displays a bunch of links... that's really inexpensive to build and scale.
For me it's impossible not to worry (or at least think) about the money. If I build a free web service and need to expand to more than 2 servers then money becomes a serious issue already.
Take Reddit for instance. It was a good idea in the sense that the founders got to a successful exit. However, I wouldn't be able to expand after the first 3000 or so users, and would have to shut down. I don't think Reddit has made any money in the first couple of years, and they burned through $100.000 (crunchbase) before they got acquired. And a website without graphics that basically displays a bunch of links... that's really inexpensive to build and scale.
But you're worrying about a problem you don't have and probably won't have. If that's your reasoning behind not doing "x" then I'd argue that you may not be cut out for being an entrepreneur. The entrepreneurs I know tend to be the ones who try to find the way to make it work instead of the type who pessimistically rejects an idea because of the types of reasons you give. Reminds me of a conversation I had recently about taxes - I groaned that it was tax time and the guy I was talking to said that he liked being in the lower tax bracket because he gets a tax refund every year.
I work in a small business, and we constantly run into problems that need a small but not trivial solution for a specific purpose that we assume should be fairly common in the market. We look for solutions, and then end up having to roll our own.
Examples: - We hosted a conference last year. We needed a web site to manage the conference materials and match them with the sessions that were being put on, which would allow presenters to manage/update their materials, and would be protected via passcode for attendees only. Seems like a common problem for conferences, but we found no off the shelf solutions for this, and had to roll our own. We would have rather paid a few hundred dollars and been done with it. - We need some software to handle recurring tasks, such as building/machine maintenance. It needs to easily accommodate specifying a resource and all the maintenance that goes along with it, and the intervals associated with them. The tasks should then be distributable amongst a pool of people, either through direct or automatic assignment. Pretty straightforward, but difficult to find something that isn't a big pile.
Maybe what is really needed is a web site that serves as a launching point for small business IT shops, where common problems are listed, and software is reviewed that serves to solve each problem. What happens though is that (1) it becomes ad dominated, so you can't trust the websites, and (2) it gets flooded with a million crappy solutions.
Maybe we're just especially bad at locating solutions, but I think if you really want ideas, just target small businesses that are growing, and ask their IT departments what projects they have had to develop that weren't really the company's core business. All those items would probably be target applications.
Caveats: - Price it reasonably. - Make purchase an option, rather than requiring month to month terms. Not all small businesses want to pay in perpetuity, nor can we afford to get stuck when a startup goes out of business and our service fails. Selling us the software lets us know it is going to keep working.
Anyway, more than my 2c.
Examples: - We hosted a conference last year. We needed a web site to manage the conference materials and match them with the sessions that were being put on, which would allow presenters to manage/update their materials, and would be protected via passcode for attendees only. Seems like a common problem for conferences, but we found no off the shelf solutions for this, and had to roll our own. We would have rather paid a few hundred dollars and been done with it. - We need some software to handle recurring tasks, such as building/machine maintenance. It needs to easily accommodate specifying a resource and all the maintenance that goes along with it, and the intervals associated with them. The tasks should then be distributable amongst a pool of people, either through direct or automatic assignment. Pretty straightforward, but difficult to find something that isn't a big pile.
Maybe what is really needed is a web site that serves as a launching point for small business IT shops, where common problems are listed, and software is reviewed that serves to solve each problem. What happens though is that (1) it becomes ad dominated, so you can't trust the websites, and (2) it gets flooded with a million crappy solutions.
Maybe we're just especially bad at locating solutions, but I think if you really want ideas, just target small businesses that are growing, and ask their IT departments what projects they have had to develop that weren't really the company's core business. All those items would probably be target applications.
Caveats: - Price it reasonably. - Make purchase an option, rather than requiring month to month terms. Not all small businesses want to pay in perpetuity, nor can we afford to get stuck when a startup goes out of business and our service fails. Selling us the software lets us know it is going to keep working.
Anyway, more than my 2c.
Thanks Turtle. Helpful advice.
IMO the best approach is to focus on value creation.
Creating 1million in value is a lot easer than you might think. Create 10$ in value for 100k people and your there. Focus the top 1% of the worlds population for whom 10$ is not a significant amount of money and we still have 600million people so you only need to help one out of 6000 of them. Or look for some need brings in 10$ in profit pr year from 10,000 people and your at 100k/year profit which is worth around 1million.
PS: If you got 10$/year from 1/10th of 1% of the us population your talking about 3million a year or ~30million in value.
Creating 1million in value is a lot easer than you might think. Create 10$ in value for 100k people and your there. Focus the top 1% of the worlds population for whom 10$ is not a significant amount of money and we still have 600million people so you only need to help one out of 6000 of them. Or look for some need brings in 10$ in profit pr year from 10,000 people and your at 100k/year profit which is worth around 1million.
PS: If you got 10$/year from 1/10th of 1% of the us population your talking about 3million a year or ~30million in value.
I'd suggest getting a job in the biz (if you aren't already in it), networking, have some fun, and let life take care of itself. The best cheap ideas come from an insider who tries to solve a niche problem for a group that they have intimate knowledge of. Go be a consultant for someone and figure out how to make their life better.
"Confusion creates opportunity" so I'd suggest, after a few years of working for someone else, to find something to streamline or make easier for that niche.
Lastly, bootstrap it by doing it in your spare time for 2-3 years until you build it up enough to support you.
"Confusion creates opportunity" so I'd suggest, after a few years of working for someone else, to find something to streamline or make easier for that niche.
Lastly, bootstrap it by doing it in your spare time for 2-3 years until you build it up enough to support you.
So I've been thinking about what kind of product to build. However, I realized that most people I know don't really pay for software. People just use free software and when the free software is no good... then well, bittorrent is an easy alternative.
And all of the YC startups on wikipedia (Biographicon, Anywhere.FM, Appjet, Parakey, Virtualmin, Weebly, Xobni, Justin.tv, YouOS, Loopt, reddit, Scribd) don't charge for their service. Everything's free. I don't want to compete with free.
37signals is profitable with their subscription-based software... but they're the exception that proves the rule. Their marketing and branding puts them in a unique position.
DHH advocated (during some YC event) that a good audience is a subset of the fortune 5.000.000. Small businesses, unlike regular consumers, are willing to spend money on software. But it looks like there's a _lot_ of software for small companies already, be it for accounting or CRM... competition is going to be really tough. My brainstorming session didn't amount to much here.
So what should I do?
And as a question to you all: have you ever built a product that people liked, but were not willing to pay a dime for?