PRODUCT IDEATION SAAS ACADEMY

Transcription

1 PRODUCT IDEATION SAAS ACADEMY

2 PRODUCT IDEATION Perhaps you re a development agency or a design agency, and you ve been doing work for other people for awhile now. In the process you ve probably found opportunities to build a software tool or product that you could bring to market. Maybe you could even charge your current customers a monthly fee, or find similar companies to yours that would buy it. But the biggest question is: How do you know that if you build it, people are going to pay for it, and that you don t waste your time? In other words: HOW DO YOU KNOW IF IT S A GOOD IDEA? The good news is if you do it right, software is an extremely powerful and predictable way to build revenue because of the nature of the recurring revenue. It creates what s called Monthly Recurring Revenue (MRR). It also has an evaluation base because of the predictability that can sometimes be 10x larger than a traditional business. Some of the biggest companies like Salesforce, Slack or Basecamp are doing hundreds of millions of revenue every year off the same product they built many years ago. I first learned this building my company Flowtown. I came from an agency prior to this, so I built a technology agency called Spheric Technologies. We grew to a 30-person company over a four-year period and eventually got acquired. I always had the motivation to build software, so when Spheric was acquired I packed up my bags and my mountain bike - and moved to San Francisco to give it a go. After many different projects and iterations, I decided to build a product called Flowtown. I started here because it passed all the different filters that I m going to share with you today. That company eventually got to ramen profitable (about $25,000 a month in revenue) in a short period. Then we raised $750,000 in venture capital, grew it to 50,000 customers and within a three-year period, got acquired by Demandforce. (Which is now part of Intuit.) 1

3 THE BEST IDEAS HAVE THREE CORE COMPONENTS: 1. PAIN A pain is required because you need to make sure that not only does the market exist, but that the market also shares in your belief that the problem they re encountering is frustrating enough to be willing to pay for a solution. THE KEY POINT OF PAIN IS THAT THEY RE WILLING TO PAY TO SOLVE IT. You also have to have a motivated market to sell into. Sometimes you find problems that are painful, but the market s not motivated enough to actually change anything. If the incentives are not aligned, it makes it really tough for you to sell into that market. CAN YOU REACH THAT MARKET? CAN YOU DO IT AFFORDABLY? There s gotta be some aspect of your marketing plan that figures out how to get in front of that market. If there s no data about them and you only THINK you know who they are, it makes it really tough to get in front of them. 2

4 2. PASSION PASSION MAKES SURE THAT WHEN MOST PEOPLE WOULD GIVE UP, YOU WON T. Passion also makes you curious. You re willing to learn and study and become a student of the market that you re going to be building your solution in. It also, hopefully, means that you re passionate about your customers. I ve seen customers build technology products just because they could, and then find out after the fact that they actually don t like the customer for that product or the market they were serving. Having passion for a great software idea becomes contagious. When it comes to building a team and getting early customers to believe in your vision, that passion really brings across your excitement, and that can be quite contagious. Your passion will help with your confidence. When you have passion for an idea, when you ve researched, you become super curious. You can communicate that passion. The confidence comes along to make big decisions, scary decisions, to pick up the phone to call the customers to ask for the sale, all these things are super important. Passion plays a huge position in coming up with the right idea. 3

5 3. PERSPECTIVE Perspective can show up in a few different forms. Generally this process requires that you have some kind of experience or domain knowledge in the market. Maybe it s an area that you studied in school. Maybe it s an area that your family has been involved in. Maybe you had an internship. Something from your background should indicate that you have a certain perspective that s different from what s out there. The other thing that perspective brings is a network. It brings people from within that industry that you might be able to quickly validate, quickly iterate with, quickly bounce ideas off of, and it makes the whole process easier. The other thing is that it gives you the ability to come out with a unique angle for your solution, and that s super important as you try to figure out a way to enter the market. So, key experience, network, and a unique angle. 4

6 THE THREE KEY AREAS AGAIN ARE: Find a pain in the market that s reachable, with motivated buyers who are willing to pay money for it. Have passion so that you can be curious and really research the market. That passion will be contagious and also bring you confidence. Perspective and knowledge of the area, experience in the industry, network, and unique approach and angle. So that s the first set of filters any idea needs to pass before moving forward. DOES YOUR IDEA PASS? If so, let s move on to the next steps for developing the ultimate idea... 5

7 1. MARKET RESEARCH. The act of reaching out to potential customers or companies in the industry. You tell them that you re an entrepreneur looking to build a technology in that market and you re studying companies that you admire. You d love five minutes to just ask them a few questions about some of the frustrations that they re having in their world and how they might like to see those frustrations fixed. It s literally reaching out, asking for five minutes, and just talking about the different products they use. What frustrates them about their work? If they could wave a magic wand, how would they see those problem solved? This is how you do deep market research. 2. ONLINE RESEARCH. Actually using the information that s being published out there to guide your thinking around your ideas. One way is to actually search Twitter or Facebook for the term, in double quotes, is there an app and then colon. What that ll show you is thousands of people in real time posting the question, Is there an app for... in a certain scenario. Now, there s a lot of things that will come up that are fluff and may not be a great software tool. There are usually some diamonds in the rough though. If you re in a certain industry, you can look at some products or companies that have public forums where customers can provide feedback. 6

8 That s a great opportunity for you to learn where certain products fall short for meeting their customer s demand. So online searching, social networks, Linkedin, Twitter, Facebook are incredible ways to find those opportunities. 3. PROXY SEARCH. Proxy means by way of somebody else. The proxy search allows you to reach out to companies that currently serve your market. If you want to be in the restaurant industry, you can actually ask restaurateurs, Who do you hire to customize your software that you use at your business? What you ll learn is that there are companies that specialize in that specific industry, and many times, they will tell you what customers have already paid them to build custom software around. It could be integrations, it could be custom features, it could be full custom solutions that they don t plan on ever bringing to market, but they have experience with so that you can learn from them and potentially bring it to market. Proxy research also has the added benefit of a potential partnership with them if you feel like they have the technology and experience to actually build the solution for you. So, those are the three ways to bring some research to the market. 7

9 WHAT YOU RE LOOKING FOR IS A PRODUCT HOOK. If there s a market you re going after, you want to build a little slice that s got these little hooks that passes all your filters of pain, passion and perspective. While also allowing you to scope a simple solution that solves a pain in the market. Instead of trying to be everything to everybody, you need to say to yourself, I m going to focus on this one customer in this market (a slice of a bigger market) and build a product hook that is simple, but really solves the customer s problem. If you bring this trifecta of pain, passion, and perspective with the discipline of going to the market to do your research, and focus on developing something simple (that solves a real pain), that is how this all comes together to build a great product. 8

10 PRODUCT IDEATION WORK SHEET PAIN WILLING TO PAY MOTIVATED REACHABLE PASSION CURIOUS CONTAGIOUS CONFIDENCE PERSPECTIVE EXPERIENCE NETWORK (PEOPLE) UNIQUE ANGLE PAIN PERSPECTIVE PASSION GREAT PRODUCT IDEA! 3 WAYS 1. MARKET RESEARCH 2. ONLINE SEARCH 3. PROXY SEARCH PRODUCT HOOK SLICE SIMPLE SOLVES 9

11 PRODUCT IDEATION PAIN WILLING TO PAY MOTIVATED REACHABLE PASSION CURIOUS CONTAGIOUS CONFIDENCE PERSPECTIVE EXPERIENCE NETWORK (PEOPLE) UNIQUE ANGLE PAIN PERSPECTIVE PASSION GREAT PRODUCT IDEA! 3 WAYS 1. MARKET RESEARCH 2. ONLINE SEARCH 3. PROXY SEARCH PRODUCT HOOK SLICE SIMPLE SOLVES 10