Does this product have legs?
Honest questions before you even get started.
When I was in my agency back in the day, we often ended up having to buy our clients’ domains on their behalf, set up their email, hosting and even social media presence. Our CTO pointed out how annoying and time-consuming it was, and the idea for a product was born. We called it GetDash and it used a lot of clever tricks to pretend to be a human and get everything set up for you: all you had to do was enter the name of your company or product and GetDash whirred away in the background setting it all up for you. It took about a year to complete the product build. And guess what? When we finally launched it, nobody wanted it.
I’ve since understood the value of product validation. And while validating your product with real customers is incredibly important, there are questions you can answer yourself before you even write your first line of code. If only we’d read this post first, we may have saved ourselves that year of wasted effort.
(I should say here, I’m talking about B2B products.)
Question 1 : Will it make the customer money; save them money; or keep them compliant?
In B2B, a product has to do one or more of these 3 things to succeed. If it doesn’t, then it’s a ‘nice to have’. And if your service is going to make or save people money, it has to be significant amounts.
You could add ‘attract and retain great staff’ but that arguably falls within the Holy Trinity above. Having great staff will make you more money and keeping them will save you money.
GetDash did none of these things. Possibly it saved half an hour of someone fairly junior doing some admin. But was that a significant saving? Not really.
Question 2: Does the CEO of the company lie awake worrying about the problem your service solves?
It might not be what the service does, but what it unlocks. When I used to present our end of month sales figures to my agency, it was obvious nobody cared. We thought that if we could dynamically show our sales numbers against budget in real time on a public screen in the office then this would motivate people to sell and complete more projects. It was what sparked the idea of ScreenCloud. Did I lie awake worrying about the fact we didn’t have content on the screens on our walls? No. Did I lie awake worrying that the team didn’t care about our numbers and this was significantly impacting sales? Yes - I really did!
GetDash on the other hand.. well, I doubt there has ever been a CEO who couldn’t get to sleep because someone in their company had to register a domain and configure the nameservers and MX records for their new business or service.
Question 3 : What are the unit metrics?
Not saying you have to do deep pricing strategy before you commit to starting your MVP, but you should at least have an idea of how you’re going to get paid.
If GetDash was for new companies who wanted to get their domains and hosting set up easily then that sounds like a one-off cost. How much would someone pay to save themselves some admin hassle one time? How much would you pay? $10? $5? Anything at all?
If GetDash was for an agency who was doing this all the time on behalf of their clients then maybe this is a subscription product. But likely only one licence per agency? Maybe a handful if it was a huge agency. Or maybe it was on a usage basis. So how much per month per agency on average?
Question 4: How big is the market?
I’ve talked about TAM, SAM and SOM before. If GetDash’s addressable market was every new business or service that needed a website, then that’s huge. If it’s every web design agency, then that’s smaller but still huge. Full marks here, GetDash!
But if your product is only really valuable to a niche within a niche within a geographic location and at a certain size, and you’ve worked out that the most you’re going to sell it for is $5 on a one-time basis, then you have to do the math and work out whether it stacks up for you.
Question 5 : What are they currently doing to solve this problem instead?
Just because you’ve worked out a smart way to do something differently, it doesn’t mean that people will want to pay you to use it. It could be that there is strong competition out there and whilst that in itself confirms a market exists, you need to know that you bring something better to the table (and btw that can’t just be better UX or cheaper - they are not differentiated features).
But it could be that they are doing it manually or using spreadsheets. In terms of GetDash, people were just filling in the forms online themselves. We should have been honest with ourselves about whether our customers would see significant value in transitioning from manual form filling to automation.
Because it may have been that our very clever idea was just a bit of a gimmick to the people who we wanted to use it.