Don't have an idea for a business? Good! You're doing better than most.
Warning: Long read ahead! Grab some popcorn
We treat this like it’s an easy question. How would you answer it?
People buy based on value, and pay based on how MUCH value... right?
But, if we dig deeper, this isn’t always the case.
One reason people buy is to support others that we care about. This is why building an audience is so insanely powerful. It truly is an unfair advantage, and can be the difference between mass adoption and falling flat on your face, as I’ll talk about more later.
(By the way - too many people forget this. When you’re taking advice from founders online, keep in mind if they have this unfair advantage. If they do, you need to realize that they had a very different path to success than you do, and you shouldn’t take their advice as absolute fact.)
The second reason people buy is because you make them aware that they have a problem, and that there is a solution to that problem. There’s a lot of hidden risk in building a product in this area, and it’s why a lot of products silently fail.
For one, you run the risk of building something that no one wants. If it’s such a painful problem, how in the world do they not know about it? Why haven’t they tried to solve it on their own?
Very rarely will an idea in this category have a satisfactory answer to this question. But when it does, we get to the next issue...
The second is more pernicious. If your users are stuck in their ways, they won’t be willing to pay for your product. To them, the relative increase in value isn’t worth the perceived effort and confusion in adoption.
When this is the case, it takes a massive marketing effort to get people to change. Think Apple and wireless headphones, or the iPhone itself. Both of these required massive investment in order to get people to rethink the way the lived.
The third risk - the least obvious of the bunch - is that users don’t expect to pay for this type of product. In every industry, there are the parts that we consider ‘paid’, and the parts that are considered ‘free’.
When you’re in the free side, you have to claw your way out to get a user to justify spending even a bit of money.
When you’re in the category of having a product that people aren’t aware is a problem, you need to spend a lot more time justifying your product. You need to:
A bootstrapper / Indie Hacker is going to have an incredibly challenging time succeeding in this category - that is, unless they have a large enough audience to drive adoption in that niche. Again, this is why you should be careful taking advice from people with a following if you do not.
The worst part about these risks is that they aren’t obvious. The idea might be good - an actual improvement over the current behavior that the user experiences. This is the worst of both worlds, since you’ll spend the time to build the app, and just never get the adoption you feel it deserves.
”So, how do I avoid this?”
The third and final reason people buy is because they are looking for a solution to a problem. I call this ‘pull’.
The process for selling a product that has pull is entirely different from one that doesn’t. Users search or seek word-of-mouth referrals for your product. They already know the problem is painful enough to warrant fixing it. You position towards a specific value proposition or niche in that market, making you the authority for the group that cares about that position.
Then, they buy.
Let’s take LessAnnoyingCRM as an example. As a company, LessAnnoyingCRM doesn’t have a great idea of what actions they can take to get business.
What they do know is that a large amount of their business comes through word-of-mouth and referrals. Lots, if not most, of their business looks like this:
Do you agree or disagree with the above? What thoughts do you have?
PS, I’ll be talking a lot about this on the First Time Founder podcast this week, if you’d like to hear more of my thoughts on the subject. You can find it wherever you listen to podcasts.