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Bootstrapping a Software Product

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Re: Bootstrapping a Software Product

#21

Post by veesahni »

speg wrote: post #5
raphinou wrote: post #4

I will possibly bootstrap a software product in the near future, but the hard part for me is to decide in which market I can find a niche. I find it hard to develop a new solution in a crowded market. I want to develop a product I am convinced of, but doubt often gets in the way, especially if the market is crowded. I also wonder how these services get their first paying customers.

I am going through the same thing. Everyone says enter an existing market because you already know people are willing to pay for it. But I am afraid that the existing solutions have soaked up all the customers. How am I supposed to get those customers?

I've gone through this dilemma as a solo founder and experimented with both (existing & new market). I ended up choosing an existing market. Some thoughts:

Make sure that the market you're going into is growing and not shrinking. In a growing market, there will always be new customers.

People like choice. You don't have to compete feature to feature with your competitors. Stand out somehow. Identify how you truly differentiate and make sure that everybody knows this.

The good thing about an existing market is that people are already looking for what you're selling. All you have to do is be there, be different and be findable. The bad thing is that the competitors are mature and it takes a lot more effort to actually compete.

Re: Bootstrapping a Software Product

#22

Post by kmfrk »

garrettdimon wrote: post #10

Author of the deck here. I'm actually in the middle of evolving these into a book. http://startingandsustaining.com Happy to answer any questions anybody might have.

What did you use to measure and export your revenue so you could make the chart used in the presentation?

Re: Bootstrapping a Software Product

#23

Post by garrettdimon »

quizotic wrote: post #20

Wonderful! My favorite was the 1-month rise/fall in revenue (scary), followed by the context. So true! Questions re the pricing tier slides: (a) did you experiment with the prices & number of tiers? It would be interesting to hear your experience with that. (b) The lowest tier had the highest churn and demands ... but they were 25% of revenue ... which is too big to ignore, no?

There wasn't much experimenting. I've always been so heads down on the product, I've been terrible about running tests. I probably rely way too much on my gut feel with decisions like that.

That said, removing the $14 plan did not hurt us at all. Since the $14 plan was half the cost of the next plan ($29), we were simply hoping that 50% of the people that would have signed up at the $14 level would go ahead and be willing to pay $29. At that point, the decision means we make the same revenue on fewer customers. My theory was that would help me stay on top of providing sub-30 minute email response times to all of our customers without going crazy. :)

While I don't have exact numbers, based on our growth after the change, probably 75% of people that would have chosen the $14 plan simply signed up at the $29 level and the other 25% didn't sign up. So, the net effect was great for us.

Re: Bootstrapping a Software Product

#24

Post by garrettdimon »

kmfrk wrote: post #22
garrettdimon wrote: post #10

Author of the deck here. I'm actually in the middle of evolving these into a book. http://startingandsustaining.com Happy to answer any questions anybody might have.

What did you use to measure and export your revenue so you could make the chart used in the presentation?

It was just a matter of running some SQL queries and putting it into iWork Numbers to generate the graphs.

Re: Bootstrapping a Software Product

#25

Post by dishank »

I really like his point on the premature scalability having a big effect of a startup's failure proability. It's really a hard thing to make sure you are not growing too fast or too slow. It's much easier when you are bootstrapped, since you only scale when the profits tell you. The problem arises when dealing with startups that aren't bootstrapped and have that extra capital laying around that is supposed to be used for scaling, but there is no indication on when to start the process.

Re: Bootstrapping a Software Product

#26

Post by quizotic »

garrettdimon wrote: post #23
quizotic wrote: post #20

Wonderful! My favorite was the 1-month rise/fall in revenue (scary), followed by the context. So true! Questions re the pricing tier slides: (a) did you experiment with the prices & number of tiers? It would be interesting to hear your experience with that. (b) The lowest tier had the highest churn and demands ... but they were 25% of revenue ... which is too big to ignore, no?

There wasn't much experimenting. I've always been so heads down on the product, I've been terrible about running tests. I probably rely way too much on my gut feel with decisions like that. That said, removing the $14 plan did not hurt us at all. Since the $14 plan was half the cost of the next plan ($29), we were simply hoping that 50% of the people that would have signed up at the $14 level would go ahead and be wi…

Gotta love a happy ending... and the courage to put 25% of revenue at risk.

The sub-30 minute response time does feel good on the receiving end.

Re: Bootstrapping a Software Product

#28

Post by Mahn »

speg wrote: post #5
raphinou wrote: post #4

I will possibly bootstrap a software product in the near future, but the hard part for me is to decide in which market I can find a niche. I find it hard to develop a new solution in a crowded market. I want to develop a product I am convinced of, but doubt often gets in the way, especially if the market is crowded. I also wonder how these services get their first paying customers.

I am going through the same thing. Everyone says enter an existing market because you already know people are willing to pay for it. But I am afraid that the existing solutions have soaked up all the customers. How am I supposed to get those customers?

> But I am afraid that the existing solutions have soaked up all the customers

I used to think this aswell, and I was proven wrong. I think this assumption is almost always wrong. Unless you are building a facebook competitor, you will find customers, regardless how crowded the market is.

Re: Bootstrapping a Software Product

#29

Post by raphinou »

revorad wrote: post #13
speg wrote: post #5

Earlier quoted context omitted.

I am going through the same thing. Everyone says enter an existing market because you already know people are willing to pay for it. But I am afraid that the existing solutions have soaked up all the customers. How am I supposed to get those customers?

To both you and raphinou and others battling with the same questions, I cannot recommend Rob Walling's work enough. His blog [0], book [1] and podcast [2] address the exact concerns any new software bootstrapper faces. He also runs the Micropreneur Academy, but I don't have any direct experience of that. He also organises Microconf, and I really recommend watching his talk from last year - http://www.microconf.com/vi…

Thanks for the links! Do you know of communities of self-employed/micro-entrepreneurs? I'm not interested in a booming startup scenario, rather looking to build a sustainable business.

Re: Bootstrapping a Software Product

#30

Post by databus »

garrettdimon wrote: post #10

Author of the deck here. I'm actually in the middle of evolving these into a book. http://startingandsustaining.com Happy to answer any questions anybody might have.

Great deck! What business entity type (sole proprietorship, llc, ...) did you end up going with and has it changed over time?
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