Did you know that only a prospect in pain will buy a solution from you?
It’s true.
The more pain they feel, the higher the price they will pay, and the more they crave your solution if you can show them that you understand their pain.
If you have a warehouse full of widgets to sell, or a professional service that is hard to change, then the following advice is not going to work for you.
You need a clean slate for the following to work.
So, have you just been made redundant? Or maybe you’re considering a career change?
Great!
Congratulations!
You have the blank slate you need. The world is full of opportunities and you have everything you need to take advantage.
The following 6 steps will show you how to build a software business for yourself, from scratch.
Don’t worry, you don’t even have to know any code. All you need to know is how to ask questions.
Can you do that? Can you ask questions?
Step #1: Identify An Industry
It doesn’t matter which one! You don’t have to have experience in that industry, or a passion for it. Every industry has unmet needs that you can serve. Eg:
- Real estate
- Property development
- Cafe’s
- Lawyers
- Accountants
- Forestry
- Farming
- Banking
- Logistics
- Dentists
- Doctors
- Tourism
- Transportation
- Logistics
- Entertainment
- Vets
- …
Step #2: Interview People In Your Chosen Industry
Interview 3 or 4 or 5 (or 10) managers in businesses in this industry.
For an introduction just say “Hey, I’m just doing some research into your industry, I just want to understand some of your painful problems, and find a way to improve your life”
In your interview include the following questions:
- What’s the most important activity in your business? Is there pain associated with that activity?
- What problems are costing you the most money in your business right now?
- What are the tasks that you do on a day-to-day basis? For each, how do you feel when you do that task? If you could wave a magic wand over that task what would you change?
- What are some pieces of software that you use that make you want to punch your computer?
- If you need to, focus their attention on different stages in the sales process: Pre-sale, during sale and post-sale. What are all the tasks at each stage?
- Keep asking “What else?” and “Tell me more!” until they are exhausted 🙂
Your goal here is to understand the problem better than the customer, better than the competition, better than anyone else.
Once you have narrowed it down to a couple of problems, ask “Have you tried to solve this problem in the past?”. Their response may give you price point ideas.
Step #3: Calculate How Much The Problem Costs
Once your identified the pain/problem, calculate specifically how much the problem costs them every year
For example, if a mundane task takes 15 minutes a day and your time is worth $50/hour then automating or eliminating that task is worth $3,062.50 per annum (0.25 hours x 5 days a week x 49 months a year x 50 an hour)
Another example, if you are a pool cleaner and 5% of customers are disputing their bills then that problem could be costing you $5,000 a year (0.05 of customers x 500 customers a year x $200 disputed).
Step #4: Pitch Your Solution
Once you have defined the problem clearly and accurately, the solution becomes obvious.
“If I had an hour to save the world I would spend 59 minutes defining the problem and one minute finding solutions” – Albert Einstein
And, even better, they’ll trust you to solve it: “If you can define the problem better than your target customer, then they will assume you have the solution.” – Dane Maxwell
Your prospective customers might think they need an all-inclusive solution but actually they don’t. Firstly, it’s impossible to build anyway. Secondly, they won’t buy it if you build it because it will cost them too much to implement and create too much change in their organisation. Your solution must not require them to change their behaviour too much.
Just deal with one problem and it’s one solution.
Next you ask them “So if I could create software that could solve problem x for you and it cost you $200/month, would you sign up?”.
Get pre-orders and pre-payment.
If you can’t get money from them in advance, then you haven’t discovered a painful enough problem so you’re going to have to ask more questions or interview someone else.
Step #5: Keep Selling. Don’t Build Yet
Don’t be tempted to start building the software yet.
Keep building up your pre-orders, keep selling. Keep building interest until you are getting emails every day from customers begging you to finish the software.
If you can get 100 customers signed up at $200/month that’s $20,000 per month ($240,000 per annum) you have to pay for sales calls and software development (and your salary).
Step #6: Build
Now it’s time to start building the software.
Build it lean. No bells and whistles. Make it solve a single problem.
To find a developer try elance.com.
3 Things You Can Do Next
- Pick an industry and book in your first interview tomorrow
- Attend a StartUp Weekend in NZ
- Tauranga StartUp Weekend is on 5,6,7 September 2013 and there are other StartUp Weekend’s in Auckland, Hamilton, Palmerston North, Wellington
- Sign up for more articles like this one: