A customer wants me build a product which has lots of competition.
I got words from customer 1 for an idea which has lots of competition. It's already a solved problem but the customer is reluctant to use other options available and instead is willing to use mine (for $20-25/mo) with few of his tweaks added if I build it. I'm confused where to go from there. Has anyone experienced something similar? Any suggestions how to take on this challenge?
Tell him “No thanks.”
Assuming it’ll take you 20 hours to build it and more to service it, you’re basically building a product with a guaranteed user count of 1... ie. you’re providing very cheap dev time for the promise of finding more customers who are willing to pay you for it. Your break even will be likely closer to 50-100 customers at that price. So for you to receive the better deal, you’ll need to ask yourself whether you can readily find 50-100 customers who might use your product instead of the others in this crowded space.
tL:DR is that your customer will spend $240-300/year for a full time developer to make this tool for them
I can build it, I see other competitor products having lots of customers too but I have no idea where to start about marketing or finding customer number 2, finding 50-100 customers is way out of my comfort zone.
This happens but is rare. Usually, you handle this by asking the customer to commit for $XXX for next 2-3 years. This will lower your costs and risk.
So you ask company XYZ to pay $300/mo for this tool for unlimited package, put it on paper to guarantee that once you release it, they will use it for at least 3 years. In exchange, they can send suggestions and be a watcher of the development process.
For $25/mo I would really be careful - it all depends on the market and actual product also.
Thanks for this point of view.
why are they reluctant to using something that would already solve their problem? There sounds like something is off about that.
Yes, I was thinking same.
tbh I see that as a red flag and would probably chose not to work with that customer (if I could only judge based solely on that information).
I can also ask you to invest X months of your time and create something I like to have to then pay you $20/month for support and fixes after that but why would you like to do this?
You can do the following:
Ask yourself, is this your idea, are you passionate about it and do you see this as a business?
Yes? -> Ask your customer if he wants to invest $k to make this happen (to make sure he is serious), and find more customers with the same problem to validate the idea.
No? -> Either work as a subcontractor for this customer to create it for him when he likes it (for hourly $$) or turn him down.
I find this idea worth a shot. Asking upfront about investment is great suggestion, thanks.