Finding My Next Bootstrapped Business Idea(derrickreimer.com)
derrickreimer.com
Finding My Next Bootstrapped Business Idea
https://www.derrickreimer.com/essays/2019/05/28/finding-my-next-bootstrapped-business-idea.html
51 comments
You're exactly right, but I think the real world is even more more nuanced than that (particularly when it comes to software).
Some markets just don't exist, period. Think nail polish for pet turtles. It's easy to figure this out, because every pet turtle owner tells you "I wouldn't buy this". There's no two ways about it. You know exactly where you stand.
This is infinitely better than the alternative, which is selling a product that kind-of fits, to a market that kind-of exists. You've identified a problem, everyone is saying "great idea, love the design, etc" - but hardly anyone's buying. They all stall, or come up with excuses as to why they can't buy, even though they say the product is great.
Both are cases of "no market demand", but the former is an infinitely better place to be. You know exactly where you stand and what needs to be done - scrap everything and start over.
The latter is a very dangerous place to be. It's easy to give yourself any number of options - "maybe we just need a (UI redesign|new website|better marketing materials)". But fundamentally, the product is flawed. You haven't really found a market need. Odds are you've identified a market want. This is something that's nice for people to have (and that they might be happy to use). But it's not compelling enough to reach into your pocket and pay for.
This is an acute problem in software because
(a) we tend to be builders at heart, so we favour making things over identifying customer needs.
(b) it's relatively cheap to build something. Other industries have significantly higher barriers to entry, meaning you (usually) need to secure customers and funding before the production/manufacturing phase.
Some markets just don't exist, period. Think nail polish for pet turtles. It's easy to figure this out, because every pet turtle owner tells you "I wouldn't buy this". There's no two ways about it. You know exactly where you stand.
This is infinitely better than the alternative, which is selling a product that kind-of fits, to a market that kind-of exists. You've identified a problem, everyone is saying "great idea, love the design, etc" - but hardly anyone's buying. They all stall, or come up with excuses as to why they can't buy, even though they say the product is great.
Both are cases of "no market demand", but the former is an infinitely better place to be. You know exactly where you stand and what needs to be done - scrap everything and start over.
The latter is a very dangerous place to be. It's easy to give yourself any number of options - "maybe we just need a (UI redesign|new website|better marketing materials)". But fundamentally, the product is flawed. You haven't really found a market need. Odds are you've identified a market want. This is something that's nice for people to have (and that they might be happy to use). But it's not compelling enough to reach into your pocket and pay for.
This is an acute problem in software because
(a) we tend to be builders at heart, so we favour making things over identifying customer needs.
(b) it's relatively cheap to build something. Other industries have significantly higher barriers to entry, meaning you (usually) need to secure customers and funding before the production/manufacturing phase.
Great points here. It's very tricky to get accurate information from potential customers. The fact that there is demand for what you want to build is a necessary, but not sufficient quality -- you must dig deeper to make sure the pain is bad enough for someone to adopt your product / switch from whatever they are doing now. I have to remind myself of this constantly :).
I think it might be time to go beyond the idea that there are "markets" at all. That's just a vision inherited from mass-produced consumer goods that are all similar.
In reality, demand is much more malleable, and what people want and how those wants coalesce in different product categories is what defines the structure of those "markets."
People would do far better to start from first principles and understand what desires, wants and needs they want to serve, understand what products/"markets" serve those needs, and build products to satisfy them.
Unless of course you just enjoy the distribution advantage given by building something in an entrenched category. But then don't talk about your "tech" "startup" or about "innovation". You're just doing a cookie cutter product like everyone else.
In reality, demand is much more malleable, and what people want and how those wants coalesce in different product categories is what defines the structure of those "markets."
People would do far better to start from first principles and understand what desires, wants and needs they want to serve, understand what products/"markets" serve those needs, and build products to satisfy them.
Unless of course you just enjoy the distribution advantage given by building something in an entrenched category. But then don't talk about your "tech" "startup" or about "innovation". You're just doing a cookie cutter product like everyone else.
Hey Derrick! I don't have much to say, except that I really enjoyed your site's design. Good luck!
EDIT: Now that I've read through your article: I'm the founder behind browserless.io. Your outline is great, and is the same rough rubric I've used before. If you ever want to chat about anything, let me know! You're totally right: this thing is hard, and having more successes/failures doesn't make it any easier sadly. Lot's of dice rolling and trying.
EDIT: Now that I've read through your article: I'm the founder behind browserless.io. Your outline is great, and is the same rough rubric I've used before. If you ever want to chat about anything, let me know! You're totally right: this thing is hard, and having more successes/failures doesn't make it any easier sadly. Lot's of dice rolling and trying.
Thank you!
I would like to know your opinion on "When to drop the ball when trying to build a business?" You need to persevere, but like playing poker, you invested so much energy that it might be hard to pull the plug. Success might be just around the corner...
Totally! To clarify, by the "drop the ball" do you mean knowing when to call it quits if something is not working out? I recently wrote about my experience with that: https://www.derrickreimer.com/essays/2019/05/17/im-walking-a...
My friend Justin Jackson also published a good article about this too: https://justinjackson.ca/giveup
My friend Justin Jackson also published a good article about this too: https://justinjackson.ca/giveup
Thanks to you, I finally read The Mom Test. It was extremely insightful alongside your written experience.
That's awesome!
You are referring to sunk cost fallacy.
Hi Derrick, looking at the criteria you listed I would say you probably could find some interesting ideas in the real estate sector. I created an open source real estate website builder and though that hasn't made me any money, it got me enough contacts and insights into the sector to make me realise how much potential there is there.
I am happy to have a chat if you want to know more. My plan is to launch a product in that space in the next 6 months
I am happy to have a chat if you want to know more. My plan is to launch a product in that space in the next 6 months
I worked for a real estate company for a number of years and have watched the behavior of agents over a longer period of time.
I'd advise anyone working in the software side of real estate to target anyone other than real estate agents (brokers, title, inspectors, etc) as customers. The churn is punishing, there's a lot of competition and many agents do a small number of deals/year.
I'd advise anyone working in the software side of real estate to target anyone other than real estate agents (brokers, title, inspectors, etc) as customers. The churn is punishing, there's a lot of competition and many agents do a small number of deals/year.
I'd second this. I've seen several people get their agent license in recent years, and most of them have additional jobs. (meaning they're not generating as much income as an agent as they'd need to do it full time) It's a very flooded market.
Agreed. Just launched my company to help the types of agents you're talking about: GeneralReferral.com
Brings technology to an underinvested corner of the traditional brokerage.
Could use some marketing help...
Brings technology to an underinvested corner of the traditional brokerage.
Could use some marketing help...
I work as an agent in the commercial real estate space. Usually referrals happen when one agent who let's say specializes in office (for example) finds a lead/listing in Industrial, multifamily, etc (That they aren't well versed in). Usually I've noticed 20% (of the commission) is about the standard fee if you get them a listing. Most often however referrals aren't concrete and no sale actually comes out of it. This is because you have to convince the owner to sign a listing with the person you are referring and they are probably already getting contacted by competing brokers who already specialize in the space. I've only had 1-2 referrals work out for me. You'd want some kind of way for agents to list their specialty and maybe a list of done deals (of that property type) to show experience. I've noticed on the commercial side that Generalists (Who do everything) NEVER get referrals. No one will refer for example the sale of an office building to an agent that lists everything, the refer to the office broker who specializes in it. I have an idea for a Real Estate site (I've put it on the back-burner) that nobody is doing right now because from my experience the tech savvy guys who can build this kind of thing are not privy to the high end investment sales market (Investment properties that are at least $2 million) There is a certain culture and way of doing things that isn't really easy to understand unless you've worked in it.
I work in R/E Analytics, email me: [email protected]
This ^
I have a couple of real estate apps on the market one of which has been out there for over 10 years. They did really well before the bust and are still profitable but it is a really tough market. I have since moved to other sectors and am happy I did.
I have a couple of real estate apps on the market one of which has been out there for over 10 years. They did really well before the bust and are still profitable but it is a really tough market. I have since moved to other sectors and am happy I did.
Can I get in on this chat? I’ve been looking for a home in Chicago and have found at least one tool that people seem to despise - I.e., market exists, someone is trying to service that market but doing a bad job at it.
To everyone who has expressed interest in exploring business ideas around real estate, please send a WhatsApp message to +34 672 550 305. I will add you to the group and we can take it from there. The objective will be to find an idea and people suitable to take it forward.
Count me in too! I've been growing more and more frustrated with the tools in the marketplace.
Interested as well. I'm a smaller investor in the Chicago market with a few ideas I've been wanting to flesh out or bounce off of others in the space.
mmm, wondering how to progress this. Would you guys be comfortable joining a WhatsApp group to discuss this?
Let me know how to get my contact information over to you.
I would like to join the chat, if there is still room!
I'm interested also.
Any platform works for me. Let me know if there’s anything I can do to help.
Count me in. Let’s start with WhatsApp since a lot of folks have it. I can pm you my #. Just need to get in front of a real computer.
I'd be interested to chat as well. I've looked at phrets in passing and I like the industry overall.
Hey @intheclouddan, send a WhatsApp message to +34 672 550 305. I will add you to the group and we can take it from there. The objective will be to find an idea and people suitable to take it forward.
Also interested in this group chat. I am exploring a new idea in the real estate space as well.
Hey Derrick,
Thanks for the great posts and for responding to comments!
Would love some feedback on choosing to raise money or not. I read this post (and many others) about having those filters ready ahead of time. The filter on raising money unfortunately I don’t have, I keep going back and fourth on that.
I have been working on an app, cross platform iOS and Android, that lets people listen to articles from the web. It uses great sounding AI ML to convert the articles to audio you can listen to in seconds.
I have been working on it for a few months have some good traction and a few paid users, working on it part time as a side project. I can’t help but feel that raising money would allow me to go full time and really concentrate while still affording my bills. The issue is VC money comes with strings.
(Shameless plug for anyone interested, the product is here https://articulu.com )
Thanks for the great posts and for responding to comments!
Would love some feedback on choosing to raise money or not. I read this post (and many others) about having those filters ready ahead of time. The filter on raising money unfortunately I don’t have, I keep going back and fourth on that.
I have been working on an app, cross platform iOS and Android, that lets people listen to articles from the web. It uses great sounding AI ML to convert the articles to audio you can listen to in seconds.
I have been working on it for a few months have some good traction and a few paid users, working on it part time as a side project. I can’t help but feel that raising money would allow me to go full time and really concentrate while still affording my bills. The issue is VC money comes with strings.
(Shameless plug for anyone interested, the product is here https://articulu.com )
You're welcome! There are some alternative funding sources for bootstrappers that could be interesting for you:
- TinySeed (https://tinyseed.com/)
- Earnest Capital (https://earnestcapital.com/)
- Indie.vc (https://www.indie.vc/)
Each works a little differently. My friend Matt Wensing did a comparison of them: https://medium.com/swlh/alternative-funding-calculus-a-quant...
Hope this helps!
- TinySeed (https://tinyseed.com/)
- Earnest Capital (https://earnestcapital.com/)
- Indie.vc (https://www.indie.vc/)
Each works a little differently. My friend Matt Wensing did a comparison of them: https://medium.com/swlh/alternative-funding-calculus-a-quant...
Hope this helps!
Your website looks great. I didn't try the product. Can I ask how you did the design and UI of your landing page? Did you do it yourself or contracted someone to do it?
Thanks for the feedback, we did everything ourselves. Two of us on this with developer backgrounds.
Hey listenandlearn. I like your site and app - I think they both look great. I tried out the app a few weeks ago and I liked it, although I didn't really enjoy the English accent of the reader's voice. Are you using Google's WaveNet? I slowed it down by 80% or something because I think the full speed is too fast. Amazon Polly's "Matthew" has been my favourite so far - less high frequency artifact IMO, although he sounds a little sedate.
I've been working blogreader.com.au, which has a very similar concept to articulu for the last few months, but I have recently given up trying to turn it into a business. I ended up stopping because of a pretty underwhelming response from potential users. Most people I've talked to in-person don't really care about it - they might say "oh that's cool", but they're not beating the door down to use it. My site has a _horrible_ bounce rate as well - but this could just be a problem with my landing page, rather than an intrinsic issue with the product. I've found the marketing really hard, which has been a positive experience. My primary concern is that our services solve a small problem for a large group of people. Don't get me wrong, I listen to an article every day using my own service, but my friends and family don't care enough to create an account, submit an article, etc. Meanwhile, people on Google don't appear to be searching for "listen to web articles", so finding motivated users online seems quite hard. I can't comment on your marketing because I found your service in my reddit thread or /r/podcasts. I will note that Audm and Curio are also both trying to get into the "listen to articles" space. I now look back at my napkin math of "if I can get 1000 users to pay $1/month..." and realise how naieve I was to assume that getting so many users was easy.
Another issue is that when a service only solves a "small problem", then people will only put up with so much bullshit - ie. the UX has to be pretty good. I struggled with this, although I found your app prety nice. In particular I like that you hijacked the "share link" functionality in chrome to allow a user to convert an article.
Finally, I've found that people hate paying for content - who knew right? Perhaps your freemium model will get around this, whereas mine was a little more aggressive about getting people to pay. I'm interested in the economics of your app though. If you're paying for the text to speech service (I assume you are - if not let's talk about that!), then you're operating at a loss. What's your end game? How many subscribers do you need in proportion to your free users to make this profitable? What's your model? I think it's a really interesting problem because you're providing a nice UX wrapper around a paid commodity service, and so if you charge too much you'll be undercut or lose users to free content, but if you charge too little you're losing money.
In summary I found the following problems with this kind of service:
- many potential users + small problem = lots of marketing effot required
- small problems = relatively high standard of UX, low friction required
- people hate paying for content, but the content costs money to produce
I'm really interested to hear your input on what I've said. Did you have the same issues? Do you agree with the problems I identified, or do you have a different perspective?
I've been working blogreader.com.au, which has a very similar concept to articulu for the last few months, but I have recently given up trying to turn it into a business. I ended up stopping because of a pretty underwhelming response from potential users. Most people I've talked to in-person don't really care about it - they might say "oh that's cool", but they're not beating the door down to use it. My site has a _horrible_ bounce rate as well - but this could just be a problem with my landing page, rather than an intrinsic issue with the product. I've found the marketing really hard, which has been a positive experience. My primary concern is that our services solve a small problem for a large group of people. Don't get me wrong, I listen to an article every day using my own service, but my friends and family don't care enough to create an account, submit an article, etc. Meanwhile, people on Google don't appear to be searching for "listen to web articles", so finding motivated users online seems quite hard. I can't comment on your marketing because I found your service in my reddit thread or /r/podcasts. I will note that Audm and Curio are also both trying to get into the "listen to articles" space. I now look back at my napkin math of "if I can get 1000 users to pay $1/month..." and realise how naieve I was to assume that getting so many users was easy.
Another issue is that when a service only solves a "small problem", then people will only put up with so much bullshit - ie. the UX has to be pretty good. I struggled with this, although I found your app prety nice. In particular I like that you hijacked the "share link" functionality in chrome to allow a user to convert an article.
Finally, I've found that people hate paying for content - who knew right? Perhaps your freemium model will get around this, whereas mine was a little more aggressive about getting people to pay. I'm interested in the economics of your app though. If you're paying for the text to speech service (I assume you are - if not let's talk about that!), then you're operating at a loss. What's your end game? How many subscribers do you need in proportion to your free users to make this profitable? What's your model? I think it's a really interesting problem because you're providing a nice UX wrapper around a paid commodity service, and so if you charge too much you'll be undercut or lose users to free content, but if you charge too little you're losing money.
In summary I found the following problems with this kind of service:
- many potential users + small problem = lots of marketing effot required
- small problems = relatively high standard of UX, low friction required
- people hate paying for content, but the content costs money to produce
I'm really interested to hear your input on what I've said. Did you have the same issues? Do you agree with the problems I identified, or do you have a different perspective?
Completely unrelated...
When developer makes a blog, and it has UX well done, it is amazing. Site looks good from the outside, as well as inside the source, nothing insane, but you can see quality.
I am inspired now to make my own, that lays neglected for long time.
Oh, now I see that he is using Elixir, Elm, Phoenix etc... All the good stuff. :) Clearly a person with great taste.
When developer makes a blog, and it has UX well done, it is amazing. Site looks good from the outside, as well as inside the source, nothing insane, but you can see quality.
I am inspired now to make my own, that lays neglected for long time.
Oh, now I see that he is using Elixir, Elm, Phoenix etc... All the good stuff. :) Clearly a person with great taste.
Thank you! It happens to the best of us, I haven't been super consistent with writing regularly. Trying to change that!
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This is a great article. I’d advise any entrepreneur to read this, including myself 6 years ago.
I'm trying to launch a graphql hosting business on gqlengine.com .. validating whether there is a "market" is too hard for me to figure out it seems! If anyone is interested to partner and work with me on this, shout out at me @ak_kim0
Good luck! Love listening to you and have been following your journey for a long time. I'm here to listen and watch what you build next. Who knows maybe I'll be a customer.
Thanks! Glad you are finding it helpful!
Thank you! I also added a redirect from the previous URL.
Fixed above. Thanks.
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I find articles like this deeply disingenuous. The OP wants to basically find some problem that he doesn't know anything about, and apply whatever knowledge he has gained in hopes of building a "company" which appears to me is just a facade of a company until he can flip it to someone else who actually cares more.
The idea that someone with presumably no knowledge or even any passion can dip their toe into a problem space and try to create a "company" isn't very appealing to me at all. Everything about it feels so superficial and contrived with no passion.
Even the list he came up with is so low-hanging-fruit, it reads to me "I want something that is easy to build, easy to sell and makes me lots of money before I flip it to someone else, and then I can start the process again."
The lack of commitment and conviction screams to me that I shouldn't become a customer because he will abandon the project, and end it with another "Thanks for following me on my journey, I'm abandoning all my customers but join me on my next adventure soon!"
The idea that someone with presumably no knowledge or even any passion can dip their toe into a problem space and try to create a "company" isn't very appealing to me at all. Everything about it feels so superficial and contrived with no passion.
Even the list he came up with is so low-hanging-fruit, it reads to me "I want something that is easy to build, easy to sell and makes me lots of money before I flip it to someone else, and then I can start the process again."
The lack of commitment and conviction screams to me that I shouldn't become a customer because he will abandon the project, and end it with another "Thanks for following me on my journey, I'm abandoning all my customers but join me on my next adventure soon!"
Ouch. That's not at all what I'm trying to do. I have no shortage of passion, but passion alone does not make a viable business.
My hope is that my post will help others think about choosing an idea that fits with their goals, so that it will work out for the long haul.
My hope is that my post will help others think about choosing an idea that fits with their goals, so that it will work out for the long haul.
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I didn’t get that sense at all. His last bullet point is “The market should overlap with my existing audience”.
And when "no market need" is the most common reason startups fail [1], this seems to be often overlooked.
[1] https://www.cbinsights.com/research/startup-failure-reasons-...