Building Software Through Idea Extraction

[Tiago]

My plan of attack now is (ranking for priority):

1. Get a development team (1 backend and 1 frontend dev).
2. Break down the whole project in two week blocks and start the development.
3. Create a landing page and start creating an email list.
4. Figure out the 3 most viable ways to get targeted traffic to my landing page.

 

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[Tiago]

I've found my first developer!

He's a really humble person, has the technical skills, was a programming teacher in a university, just moved into my city to work in a great startup and is a person whom I could learn a lot from. I'm very excited about this!

So far I've had about 20 interviews, and it's a fun process! I've received so many suggestions, different angles and ideas I couldn't have thought of on my own. Truly showcases that interactions = value.

One major thing I'm doing today is setting the Values of my company with these questions:

• Why do we exist?
• What difference do we make in our clients lives?
• What do we believe in?
• What DON'T we believe in?
• How do we want a client to feel about us?
• Who are our ideal clients?
• For whom are we not the best solution?
• How are we different?

This practice is making me think very hard about the exact direction we're going. It will be helpful once we have decisions to make, to use this as a guideline.

I opted instead of building a long landing page (while I still don't have anything to show for), I will create a simple, but powerful beta signup landing page. This guide here helped me a lot.

Also I must mention @MJ DeMarco's to-do list helps immensely. It's great for building momentum and moving forward.

 

[MTF]

@Tiago, I urge you to read The 7 Day Startup by Dan Norris before you start the development. Dan explains with brutal honesty why what you wrote in one of your previous posts ("So I went on and called them with the solution, and out of 35 people asked, 33 said they would use it and pay for it. This is amazing news!") doesn't mean anything and how to properly design and launch an MVP.

I have a feeling you're about to spend a lot of money and time on an unproven idea. Values, getting the perfect developer, etc. isn't important at this stage. There's only one thing that's important - making sales. It's the only vote that your business is going to work.

Keep in mind I will probably never launch another software business as I've learned the hard way why a person who can't develop software has no business running a SaaS company. These experiences can make a bit more apprehensive about SaaS than an average person.

 

[Tiago]

@MTF I know my "validation" means nothing, that's why when I pitch my idea I say "I'm not 100% sure this will work yet".

That's the reason I'm building the landing page, to see if people actually engage it.

And I've found ways to cut costs dramatically, so launching a MVP won't be too pricey.

Plus, there is another company in another country that is doing the same exact thing as I am, and they are having great success. I know this doesn't have to apply to my case seeing as different countries have different cultures, but that gives me a bit of extra validation.

I am 100% sure I can offer great value to my clients, and in a very, very simple way. I'm obsessed over simplicity, that's why I left all the fluff features out and am focusing on the core.

 

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[Tiago]

@MTF you know what, I'm going to follow your advice.

I'm not sure I got deep enough in my idea extraction. While my software has 3 core features, I don't 100% know they will solve their problems, or if that's actually what they want or if my clients will pay for it.

The next 3 days I'm going to be dedicated to this:

Call clients and ask them this: "How was your week like? Where did you have problems?", try to dig really deep to the root of the problem, and ask straight away if they'd pay x dollars to have this problem solved. This way I have more concrete feedback and can generate revenue right from the start.

 

[smoove001]

@MTF you know what, I'm going to follow your advice.

I'm not sure I got deep enough in my idea extraction. While my software has 3 core features, I don't 100% know they will solve their problems, or if that's actually what they want or if my clients will pay for it.

The next 3 days I'm going to be dedicated to this:

Call clients and ask them this: "How was your week like? Where did you have problems?", try to dig really deep to the root of the problem, and ask straight away if they'd pay x dollars to have this problem solved. This way I have more concrete feedback and can generate revenue right from the start.

Hey Tiago I really, really advise you to read Running lean by Ash Maurya.
And good luck with your venture, it's gonna require a lot of that but also a lot of patience !

 

[Tiago]

Thank you @smoove001 the book has already proved itself valuable. Lots of good, hands on advice there.

 

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[Tiago]

I got my first 4 signups on the landing page!!

I know it's not much, but at least it's progress! I'll be asking those who signed up if I can have a talk with them to better understand their problems.

I'm having some trouble with my developer though. I really really like him and think we could work great together, but he said he's not interested in a salary. He wants to be part of this because he really believes in it.

I've only met him though, and I know that now it all sounds good and well, but how will we cooperate once the business has it's ups and downs, once there is money involved? I've always been against sharing equity if I don't know the person for at least 5 years and have worked with him before.

On the other side, I really believe we can build great things together. I'll talk to him and offer this deal:

Let's work for 6 months together, with him received payments for delivered features. After those 6 months, we can discuss this matter again. I can still say no though, I'm going to be perfectly clear. This gives us both time to evaluate how we work together.

 

[MTF]

I got my first 4 signups on the landing page!!

I know it's not much, but at least it's progress! I'll be asking those who signed up if I can have a talk with them to better understand their problems.

Awesome, that's a solid number of people to learn more about their problems!

he said he's not interested in a salary. He wants to be part of this because he really believes in it.

It's good and bad. Good, because he's probably not a mercenary who doesn't care about the outcome as long as he gets paid. Bad, because sharing equity is not a good idea, especially if you don't know him well.

Your solution is a good one. Just make sure to, as you emphasized it, make it perfectly clear you can still say no.

As a side note, when your business starts growing, you WILL need a dedicated developer in your team and he's going to be your best fit. Perhaps you can offer him a revenue share, but not equity.

 

[Tiago]

So, I talked to him and unfortunately it didn't work out.

But we will still be in touch, we got along really well, it was just that our goals weren't aligned. Maybe in the future we can work together.

Well, back to interviewing clients and developers!

 

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[Tiago]

This is what I have been doing lately:

Manually sending out emails to prospective clients. This is a slow method, but it has already given me 10 new leads in my landing page! Every progress is something.

But then I realized I needed to start getting the "10x mindset" on. So I hired I developer to create a script, which scrapes off email addresses of businesses in any given city, for the first 20 pages of google. This way I'll save tons of hours and get on with the more productive stuff.

I'm going to start on content marketing right away. It's the new way of advertising and it's come to stay. Google is giving more and more attention to high quality content and it naturally boosts SEO for valuable content out there. And I have a very good angle on a blog that has a strong USP to my audience.

But truth is, I suck at writing. I was born in Brazil, lived in Germany and now am back in Brazil, and my language still isn't 100% native and there is lots of vocabulary that I'm missing. But I see that as a great opportunity. Starting to write will:

• Improve my communication skills
• Improve my language knowledge
• Directly result in sales and the biggest of all...

Start my copywriting career.​

I've always put copywriting off, I don't know why. But sooner or later, you're going to need it. You're always sending out emails, doing tweaks to better the conversion of your website, selling your product.

I'm excited about this!

P.S.: I got to do a very extensive interview with a client yesterday, it gave me very good insights about their real problems. My goal is to interview 20 people before creating a solution. Thanks @smoove001 again for the book, it is helping me a lot.

 

[Tiago]

Short update

I found two developers I'd very much like to work with. When explaining my idea they challenged my assumptions, proposed ways to validate it as fast and cheap as possible, both have an entrepreneurial spirit and coding knowledge. After interviewing almost 40 developers, I found both in one day!

I am still interviewing prospective customers. Trying to find out their real pains and my early adopter ideal demographics to target my marketing better. The response has been great and soon I will show them a demo to see if they like it and make improvements before the development begins.

 

[tafy]

Nice progress, keep at it

 

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[Tiago]

So, my validation process is done.

And my assumptions were wrong. What I though would be the #1 problem turned out not to be a problem at all. But I have uncovered new problems and one in particular was voted as the biggest problem by a large majority of the people I interviewed.

I created a mockup using mockingbird.com and am now in the process of sending it out to all the people I already talked to, to see a few things:

• Which features do they like
• Which features could they live without
• Which features are missing for them
• Test pricing. I will start at what I think the price should be. I'll fine tune it either up or down accordingly to their reaction.

Until mid next week I'll keep doing this. Once I have a strong product with a desired feature set at a good value for the money price I'll start the development.

I'd like to thank @Silverhawk851 for his post about systems. I have a very simple one, but it drives me forward day by day, non-stop.

One piece of my system is to find out 30 prospective clients email addresses and contact them. No excuses, first thing in the morning.

This may not sound like much, but by doing so I've contacted over 300 clients in the last 10 days. Do this for 3 months and I'll have reached almost 3000 clients.

 

[Silverhawk851]

One piece of my system is to find out 30 prospective clients email addresses and contact them. No excuses, first thing in the morning.

This may not sound like much, but by doing so I've contacted over 300 clients in the last 10 days. Do this for 3 months and I'll have reached almost 3000 clients.

That's Beast man, I love it.
Rep +++

Keep it up dude,
imagine in 6 months you've talked to 6000 people.
Mathematically impossible for you to not have atleast 30+ clients.

The amazing thing about systems is,
Once you stick with it,
Over time,
you'll start to realize you're getting better.
What took you 30 tries to do,
You can now do in 5.

What took you 6 hours to do,
you can do in 30 mins.

You skill level rises,
and so does you competency.

Systems > Goals.

 

[Tiago]

Guys, I'm having doubts in my mind...

The process is going great, should start development this week.

But there is one thing that is bothering me:

Should I aim for a bigger market?

My market size has 85.000 potential customers. My price would be 40$/month. I'm not sure if I should go aim at a larger market size because hey, I might not get to the moon, but I will sure travel further than if I were aiming at the treetops.

What are your opinions on this?

 

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[smoove001]

Guys, I'm having doubts in my mind...

The process is going great, should start development this week.

But there is one thing that is bothering me:

Should I aim for a bigger market?

My market size has 85.000 potential customers. My price would be 40$/month. I'm not sure if I should go aim at a larger market size because hey, I might not get to the moon, but I will sure travel further than if I were aiming at the treetops.

What are your opinions on this?

I don't know what you mean by aiming at a larger market size, shouldn't you be doing that from the beginning. But if you mean changing your whole solution, I say don't do it and focus on the 85,000, that's enough to make a great living if the product you're building is valuable to them. Imagine 1000 customers paying $40, that's like 1.2% of your potential customers and $40,000 in MRR which I think is highly feasible.

You find a solution to a problem, build it and sell it to as many as you can, no need to worry about a big market right now.

 

[tafy]

There's other countries in the world too btw, market is 100 times what you think

 

[MTF]

Should I aim for a bigger market?

No, you shouldn't. It's your first business started this way, don't try to make it perfect. Moreover, don't forget that this product is only the first step in this market. You can offer more products and services, so each client can be worth not $40/month, but several hundred.

There are three ways to grow a business:

1. Increase the number of clients - this one is limited in a smaller market.
2. Increase the average transaction - this one would be the best route for you by adding new products and services.
   
3. Increase the frequency that the average client buys from you - not really applicable in software.

 

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[Tiago]

Thank you for all your insight.

I will focus on getting the MVP out and getting that first paying client.

 

[Tiago]

Hey @wolfie, could you introduce me to that friend of yours?

I have a developer that has the necessary skill set, and actually knows stuff about building companies. When telling him my idea he countered with good questions and I think he would be valuable to the company.

I can see some communication problems already though. When asked two questions in a sentence he only answers one, forgets to answer a question sent on Facebook, says he hates typing on the cell phone. This is making me uncomfortable already because communication is also very important to me.

Is it possible to change the habits of a person and teach him good communication?

 

[Tiago]

Time for a quick update.

Lots of things have been happening lately.

• Things didn't work out with my prior developer. He was too involved in a project of his own and couldn't dedicate the time necessary.

• But I found someone much better! His communication skills are amazing (He has worked over 8 years as a remote developer), has very strong developing skills, contributes to the project with User Experience, copy writing and behavioral psychology. He's truly engaged on the project as it's finally something where he can contribute other ways beside developing. He is a bit more expensive, but can accomplish the project in half the time.

• Starting the development this Monday.

• Decided to unpublish my first blog post as it wasn't directly delivering value to my customers. Wrote a new one that is going to help me tremendously. Going to push it out tomorrow as I'm still setting up my homepage and Wordpress site.

• Optimized Wordpress site with AppSumo's tools for building email list.

• Continuing to contact over 30 new clients a day. I've been able to gather very good insight on what their real problems are and they are very excited about this project. When asked about price it was accepted without hesitation.

• In the process of creating my real landing page. Before I had a beta test landing page. Fixing the copy and designing the structure.

• Videos are going to play a very important role in the software. Have been talking to companies that can shoot and edit these videos, prices have been outrageous though. My brother is flying in in a couple of weeks and he's a hobby photographer. I'm probably going that route to launch this product as cheap and fast as possible.

• Organizing the workflow of the shoot so we can do maximum footage time in a given period of time.

 

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[Tiago]

Published my first blog post! Sent them to my email list, let's see how they engage

 

[Tiago]

So much has been going on. I absolutely love it, working on something I truly care about. The day doesn't have enough hours in, so I'll keep this short.

• Started development!

• Constantly growing my email. Right now I have 78 subscribers. I know it's not much, but we all start at something!

• Got quotes from different video agencies to create the videos I need for the software.

• Have been talking to owners of the locations I want to shoot the videos. Their price is much lower than I thought!

• Have been working on my network too. I'm one year in this city and don't know many people. This will change! Saying yes to lots of events, introducing myself to the neighbors, joining a sports club. Business isn't the only thing that matters to me.

Next I'll:

• Scout the locations to find one that fits all the requirements.

• Continue on growing my potential client list by emailing 30 a day.

I don't want to focus on too many things. On top of my To-Do list I always have written "Sales Fix Everything" so I always keep myself on a straight line. If it generates sales, I do it. If it doesn't, I won't.

 

[Tiago]

Hit a milestone!

100 blog subscribers​

And the good news is, there are some subscribers that have come from searching on Google! By the way, if you're running a blog, check out Welcome Mat. One of the most amazing SumoMe features, I'm getting 12% email conversion rates.

Today I went scouting for locations to shoot. I had them all mapped out so I didn't waste time driving to the wrong spots. There were a few that were OKish but one really stood out. It's pretty amazing, and talked to the owners and they are interested in renting it out to me. Let's see how much it's going to cost.

The developer is working pretty fast. He has an apprentice that is helping on the project for free, just to gather more knowledge, which is speeding things up even more.

Contacting more and more people through LinkedIn. Trying to personalize my friend invites a bit, because LinkedIn has a maximum of 3000 invites. Once you hit that, they either allow you to connect to more people or not, based on how many declines you had. So if anyone is growing their client list through LinkedIn, here is an useful article.

 

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[MTF]

Contacting more and more people through LinkedIn. Trying to personalize my friend invites a bit, because LinkedIn has a maximum of 3000 invites. Once you hit that, they either allow you to connect to more people or not, based on how many declines you had.

Be careful. It's very easy to get your account banned (or at least the option to invite more people) if you get too many declines.

 

[Tiago]

Finished the first part of the development. It's going much faster than anticipated and working with this developer has been great so far. We understand each other very well and have the same vision for how the software should work and how it should deliver value.

Thursday I'm meeting up with him to discuss a few details about how the mobile version is going to work and how to deliver great UX. Also, we're going to sign a contract of confidentiality and IP.

By the way, if anybody is doing a project with more people involved, I strongly recommend using Basecamp. It's really simple and straightforward to use, and we can keep the whole communication centered.

Found a place to do the videos! At first the owner wouldn't give me a straight answer and would delay things. I gave him a quote and accepted it, so that's out of the way

I think I'll have a product ready for launch in about one month. My list clients who directly expressed interest in trying out the software is growing steadily, currently sitting at 110 prospects. I would've never thought that being possible a few months ago, but systems are great for continuous action. Thanks again @Silverhawk851 !

But other than that it's been a rather slow week. Had my brother come visit and I decided to take my mind off of things for a little while.

 

[cyoung]

Tiago,

Awesome reading about your journey. It's good to see that things can get done with consistent work.

Best of luck in your new venture!!

 

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[Tiago]

Tiago,

Awesome reading about your journey. It's good to see that things can get done with consistent work.

Best of luck in your new venture!!

Thank you!

 

[Tiago]

Short update!

What I did:

• Email list growing to 143 clients.

• Had a meeting with the developer, discussed a few details and signed a contract of non-disclosure and IP.

• Launched my 2nd blog post.

• Removed Disqus from my blog and added a very simple comment system. Disqus is a barrier for people to get and comment on the post.

• Talking to a model to work on the video shoot.

• Created the mockups for the mobile version.

• Updated the script to my sales interview.

• Joined a co-working space for 30 hours/month to get out of the house and socialize a bit.

• Added a new feature to the software that was being requested by everybody. I will only add features that are an absolute must, I want to keep it simple.

• Applied for Microsoft Azure Bizspark Program that gives you free cloud services for 3 years for startups. I've got no affiliation with Microsoft, might be very helpful for new companies that need those services.

What I'll do next:

• Send out email trying to figure out how my clients measure their success and how they intend to benefit from the software. This will be used to create an optimized customer onboarding experience, so they can convert from free trial to paid user faster and at a higher %.

• Talk to 30 clients every day.

• Send out email about the mobile version mockup and get feedback.

• Create a better sales cycle. I've got a friend who's going to help me with this.

• Talk to a designer to help me with the landing page. I've got it roughly done on Instapage, but it needs some work still.

• Close the deal with the model and location and proceed to do the video shooting.

Launch of the software will be in about 6 weeks! Will test it with 10 clients at first for a month to see how they like it, catch any bugs and then release it.