DEV Community: Charlie from IdeaHub

How to build a top SaaS landing page

Charlie from IdeaHub — Thu, 19 Oct 2023 23:07:02 +0000

Hi there 👋

I'm Charlie, a Product Manager in B2B SaaS and today I'll share with you everything I know about how to build a top-converting landing page for a SaaS product.

The average conversion rate (CVR) for SaaS is ~10%, but most are 3-4%. At this level, just a 1% increase boosts MRR by 25-35%!

So it really matters!

Let's jump in 👇

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1. How to build a top landing page

For most new SaaS products, the landing page is just the website's home page. But 90% of the time, a dedicated landing page will convert better.

Here are the must-have sections for almost all SaaS products:

Hero

(See Unbounce’s full landing page

A hero has 3 things:

A clear headline
A justifiable sub-heading
A simple call-to-action (CTA)

Your headline is the first thing a customer reads. Its job is to get across the why of your product. If customers don’t feel it resonates with them, they will bounce (leave without interaction) immediately.

Your sub-heading should expand on the headline, adding more detail on how the customer can achieve their goal.

An image is optional, but they have been shown to increase CVR by supporting the statement in your headline.

Your CTA should be singular and tell your customers exactly what you want them to do. It depends on your specific SaaS model, but here are the most common ones:

“Start a free trial”
“See pricing”
“Book a demo”
“Get started”

Read this guide on CTA’s to figure out what’s best for your business.

Feature Spotlights

The next section of your landing page should tell your customers about your product’s key features.

For each, include a screenshot of the product and some short copy focused on how the feature helps solve the customer’s problem.

Here’s how Unbounce does it:

Testimonials/Social Proof

Landing page visitors don’t know or trust you. They need to know others have already achieved success. Include reviews, ratings, awards and customer logos.

Plus, tools like Famewall make it super easy to collect and display this on your landing page.

2. Boost CVR in < 1 hour

These tactics can easily boost CVR by 1%+:

Minimise links

Every link on your landing page is an opportunity for a visitor to leave without converting. So minimising the number of links will naturally increase CVR.

Remove all menus, chat widgets, newsletter sign-ups and footers. The only links you truly need are a privacy policy and terms of service. Everything else is take it or leave it.

Repeat the CTA

Research shows that repeating your CTA multiple times increases conversions. And near the end of the page is one of the best places to do it.

Why? Because those who make it to the end of the page are more engaged and likely to convert.

Track behaviour

Keeping customers around for longer increases their chances of converting.

Install tools like Hotjar for heatmaps and Simple Analytics as a Google Analytics alternative to spy on your customers.

Identify the biggest areas where customers are leaving your page and adjust them to fix the leak.

3. Awesome landing pages

How can we know landing pages even work?

A lot of the links below are from search ads. The big guys are putting money behind landing pages, so you should use them too.

That's all!

I hope this helps you convert more website visitors into customers!

🧠 The Newsletter For SaaS Founders

Every week discover the best growth, marketing, tech and product development strategies for your SaaS!

Join 1,100+ SaaS founders, indie hackers and tech entrepreneurs already reading!

Subscribe here.

🧠 9 ways to grow your SaaS

Charlie from IdeaHub — Fri, 13 Oct 2023 22:18:53 +0000

Hi there 👋

I'm Charlie, a Product Manager in B2B SaaS and today I'll share with you 9 strategies you can utilise to grow your SaaS products to $10K MRR and beyond...

Let's jump in 👇

🧠 The Newsletter For SaaS Founders

Every week discover the best growth, marketing, tech and product development strategies for your SaaS!

Join 1,000+ SaaS founders, indie hackers and tech entrepreneurs already reading!

Subscribe here.

1. Build a free tool

Building a separate free, but highly limited, version of your paid-for product is an underrated way for SaaS businesses to grow.

A free tool (with no signup) is a way to spin off a key feature of your product and get your value proposition directly in front of the customer the moment they hit your site.

Plus, customers are more likely to try out a free tool than sign up for a free trial, so overall paid conversions can be higher if you include a strong call-to-action.

This full guide explains why this strategy works and how to start using it for your SaaS.

2. Start a referral program

Offer your existing customers, ambassadors and social media followers the chance to earn rewards for referring customers to you.

Rewards are usually in the form of a revenue share for a fixed period (e.g. a 50% revenue share for 6 months). Or a fixed reward for each new sign-up (e.g. the customer gets $30 off their first month, and you earn $30 for referring them).

Referrals naturally have a low CAC (customer acquisition cost) as the hard work is done by the referrer, not you.

Platforms like ReferralRock and Reflio make this super easy to set up.

3. Socials

Building in public has always been one of the best ways to get your customers excited about your product roadmap. But in recent years social media has really taken this to the next level.

But it’s not just reserved for creator-first and B2C businesses. Sage, a B2B finance SaaS is killing it on TikTok, who would have thought?!

4. Engage in forums

Places like Reddit, HackerNews, FB groups, Discords, and Slack channels are magnets for solution-orientated conversations.

Contribute to discussions, help others and provide your product as a solution to someone’s problem. I have seen SaaS products generate hundreds of new signups or leads with just one post on Reddit!

This full guide goes into detail about how to find relevant subreddits and how to engage in a way that drives traffic to your product.

5. Blogging

Create informative blog posts around:

Pain points your SaaS solves
Comparisons with competitors
Product updates

Make sure to include a call-to-action to sign up in each post. Bonus points for applying to other sites in your niche to guest post - this is a great way to reach new customers.

Check this list for sites accepting guest posts in the SaaS space (make sure to sort by DA or ‘domain authority’).

Google "guest blogging in [your niche]" to find sites open to taking guest blogging applications.

6. Launch on ProductHunt

ProductHunt continues to be the holy grail of social proof for SaaS founders.

But for those that don’t know, it’s a launch site for tech products where the most upvoted products that are launched each day are given god-like status and can receive thousands of sign-ups in a single day!

7. Attend conferences

Meeting industry professionals or like-minded individuals is a great way to not only get some edge on how to improve your product but also to find new customers.

This is especially important if you’re in the B2B space (like me!) where relationships are key to closing sales.

MicroConf is by far the best conference for indie hackers.

8. Be a podcast guest

Podcasts are hot right now and being a guest is a great way to reach more customers.

Talk about your product, and why it solves listeners’ problems and ask the host to share a signup link in the podcast description and show notes.

This works best if you already have a personal brand as hosts are much more likely to want to collaborate with you.

9. List on SaaS directories

Listing and directory sites are trusted places that potential customers go to when looking for new or alternative solutions to their problems.

All of the following offer free listings:

SaaSHub
Startups.fyi
G2
Capterra

Some also offer paid listings to drive more traffic and get featured in newsletters.

That's all! Thanks so much for reading!

🧠 The Newsletter For SaaS Founders

Every week discover the best growth, marketing, tech and product development strategies for your SaaS!

Join 1,000+ SaaS founders, indie hackers and tech entrepreneurs already reading!

Subscribe here.

🧠 How to grow your SaaS by building free tools

Charlie from IdeaHub — Fri, 22 Sep 2023 20:24:45 +0000

Hey all!

Charlie here 👋

All SaaS businesses inevitably go through periods of stagnated growth.

An awesome way to combat this is to build free tools into new growth channels.

Today I’m going to break down how and why this strategy works.

Plus I’ll show you the top SaaS platforms using it to grow.

This week in IdeaHub…

The free tool strategy: How free tools are amazing growth channels.
Best ways to use free tools: How to use free tools to test new ideas and create SEO goldmines.
Free tools in action: The OG in free tools and one solo founder having massive success.

Let’s jump in… 👇

Join 600+ tech peeps learning to build SaaS products every week for free on IdeaHub.

1. The free tool strategy

It’s important to understand we’re not talking about free trials here.

We’re talking about separate free versions of paid-for products that require no signup whatsoever.

You might be thinking to yourself:

“How can that be of any use to my business?”

Well, to answer that, you have to understand two big reasons customers resist buying your product:

They don’t trust you and/or your product to solve their problem.
They can’t see results quickly enough to make a buying decision.

Building a separate free tool instantly breaks down both of these barriers.

Firstly, a free tool is much easier to trust as there is ‘no harm done’ if it doesn’t work out.

Secondly, having no signup, payments or onboarding means customers can see the power of your product much more quickly.

All this means you have a better chance of customers trying out your free tool than your core product.

The trick is to heavily limit the feature set of the free tool and include a strong call to action to drive customers back to your paid-for product.

This naturally means more signups overall than if you had no free tool at all.

2. The best ways to use free tools

Free tools can provide more than just a growth channel.

They can be real assets in a few different ways:

Testing new ideas

Say you’re at a crossroads.

You’re trying to decide whether to expand your product into a new niche or stay put and double down on your efforts.

It’s a big decision to make and could have a huge impact on your future success.

Instead of choosing to go all-in on one or the other, you could spin off your core product into a free tool and use it to validate the new market.

If it shows promise, fold it back into your paid-for product, or simply ditch it if it doesn’t work out.

Building SEO

Free tools have huge search volumes.

We’ve all searched “free tool for [X]” when we know what we need, but we just don’t want to pay…

Launching a free tool therefore provides the perfect opportunity to match searcher intent and start driving organic traffic.

Plus, if it’s on a separate domain, you can start creating backlinks back and forth from your paid-for product in all of your blog posts.

3. Free tools in action

Ahrefs

The SaaS that made this strategy famous is Ahrefs.

It’s the number one platform for marketers to research new SEO opportunities.

Almost every vertical feature in their paid-for product is also available as a free tool.

It’s especially important as their products are aimed at users who aren’t usually the buying decision-makers in a business.

So when the free tools deliver value, marketers can evidence this to the real decision-makers.

And Ahrefs get the benefit of leveraging the existing trust circles of the organisation to close deals.

Pally

Pally is a social media management tool built by solo founder Tim Bennetto.

So far he’s built 9 (!) free tools each focusing on one feature of Pally.

But he’s also taking a unique approach:

He’s acquiring free tools as well as building them himself.

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7 questions SaaS founders must answer

Charlie from IdeaHub — Sat, 16 Sep 2023 10:10:15 +0000

Charlie here 👋

This week I re-read Zero To One by Peter Thiel - the billionaire co-founder of PayPal and Palantir Technologies.

Today I’m sharing with you 7 questions that Peter thinks every founder must answer about their business.

Use this framework to continually validate your vision for your SaaS and you’ll keep yourself on the straight and narrow.

(Reading time: 5 mins.)

Let’s jump in… 👇

Join 500+ tech peeps learning to start and grow SaaS products every week for free on IdeaHub.

1. The Engineering Question

Can you create breakthrough technology instead of incremental improvements?

Think of it like this:

If your product currently saves a user $100 or 10 hours a month, find ways to deliver 10X that. Not 2X.

To stand out these days you have to be an order of magnitude better than the next guy.

It’s not enough to copy an existing product and charge $10/month less.

How long can that last? How long can you keep up?

The message is clear: always be doing something fresh and innovative.

2. The Timing Question

Is now the right time to start your particular business?

If your landing page even remotely contains the letters A and I, then pass GO and collect $200 in MRR…

For the rest of us, pay attention to what’s happening in your solution space right now.

As a solo founder, it’s unlikely you’ll be too early, but you could be too late.

If googling “alternatives to [X]” returns a smorgasbord of competitive sponsorship, you’re probably too late:

3. The Monopoly Question

Are you starting with a big share of a small market?

If your plan is to go head-to-head with Canva, Shopify or any other massively successful SaaS then I wish you luck but it’s going to be very tough indeed.

Instead, focus on starting small and monopolising a niche.

Build a reputation that you can later leverage when branching into new customer segments.

Last week I wrote all about how to do this effectively by niching down.

4. The People Question

Do you have the right team?

The fantastic thing about this era of SaaS is that small teams are more empowered than they ever have been.

Anyone can build an MVP, launch a product and start collecting payments within a couple of months.

But that doesn’t mean you have to do it on your own.

If you can find like-minded, driven people who excel at something you don’t then you should embrace them.

But at heart, you should all be technologists driven by solving problems:

“[a suit] was a real red flag, because real technologists wear T-shirts and jeans.” - Peter Thiel, Zero To One

5. The Distribution Question

Do you have a way to not just create, but deliver your product?

A “build it and they will come” mentality is just not enough.

You need a clear strategy for finding customers.

It’s okay to still be figuring this out, it’s massively experimental.

But it doesn’t have to mean paid ads.

There’s plenty of organic traffic out there, you just have to find it and position your product effectively.

A few things to try:

Repurpose your blog posts
Dev.to, HackerNews and IndieHackers are obvious places to start in the tech sphere.
Experiment with Reddit
Gummysearch is a great tool for researching subreddits where your customers might be hanging out.

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6. The Durability Question

Will your market position be defensible 10 and 20 years into the future?

Building something just to ride a wave is basically gambling.

You might as well take that money you’re gonna spend on AWS and put it all on red.

This was recently abundantly clear with the LK-99 superconductor craze.

I think we can all agree it’s more difficult than ever to stay focused on our mission without getting distracted by hype.

But those that do are uniquely rewarded for perseverance:

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7. The Secret Question

Have you identified a unique opportunity that others don’t see?

Yes, it’s much easier to start a SaaS now than 10 years ago, but that also means more competition.

The best marketing strategy cannot stop customers from churning if your product doesn’t do something that few others have thought of.

Consider what unique knowledge you have that sets you apart from those who are positioned against you.

Share the ideas, but keep the details to yourself…

Join 500+ tech peeps learning to start and grow SaaS products every week for free on IdeaHub.

🧠 Are all the good SaaS ideas already taken?

Charlie from IdeaHub — Fri, 08 Sep 2023 21:59:49 +0000

Hey all 👋

Charlie here!

Today I’m going to convince you to just go ahead and build that product or feature you’re thinking of.

Even if you’re up against strong competition.

This week in IdeaHub…

Competition is a good thing: Beehiiv shows us it never hurts to be late to the party…
Niching down: How to start small and differentiate your product.
The underrated differentiator: One thing every big SaaS is failing at that you can guarantee to beat them on.

Let’s jump in… 👇

Join 400+ tech peeps learning to build SaaS products every week for free on IdeaHub.

1. Competition is a good thing

When Beehiiv launched in 2021 war had long been raging in the email marketing space.

MailChimp had already amassed more than 10 million customers and been acquired by Intuit for $12 billion.

Plus - ConvertKit entered the race in 2013 and was already delivering over $2 million in MRR.

And countless other smaller platforms either failed or were acquired along the way:

ExactTarget, TinyLetter, iContact, Campaigner, Constant Contact, Vertical Response, Emma, Mad Mimi…

Would you build an email marketing platform knowing this is what you were up against?

If you’re like me - probably not! But if you’re Tyler Denk and the Beehiiv team, you make it work…

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So the moral of the story is:

No matter if you’re up against the likes of MailChimp or a handful of $1K MRR bootstrappers…

…build something people love and nobody can stop you.

2. Niching down

Say you have some experience in email automation, maybe you’re a fan of what Beehiiv are doing…

You can’t go head to head, so what do you do?

Pick an underserved customer segment
Refine the core features to solve a specific set of problems
Market your solution to the nichè

For example: ‘Beehiiv for Indie Hackers’.

With unique integrations to communities like ProductHunt and revenue visibility platforms like BareMetrics.

This would help us share our #buildinpublic journeys, and celebrate when we cross new revenue milestones or launch a new product.

But you can also nichè down through features, keeping the customer base the same, and focusing on solving a smaller more specific problem.

For example:

Email Marketing → Cross-promotions → Finding cross-promotion partners.

You could build a platform that allows creators of any guise to find and collaborate with others and grow their audiences.

3. The underrated differentiator

As big SaaS platforms grow, they all encounter one problem at some point or another:

It’s difficult to scale customer service.

It’s why so many incumbent SaaS platforms get a bad rap from their customers.

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So whatever you’re building - obsess over your customer’s experience.

Forget transactional emails and write everything from scratch.

Engage with as many as you can on X and create a relationship where they feel like they can reach out whenever they want.

Make them feel special and reap the rewards. You’ll see:

Increased organic feature suggestions and feedback
Word-of-mouth will become a measurable growth tool
You’ll learn 10X more than just watching your Stripe dashboard…

That's it folks! If you found this interesting, check out my newsletter below:

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🧠 8 ways to leverage AI in your SaaS product

Charlie from IdeaHub — Sat, 02 Sep 2023 23:26:22 +0000

Hey! Charlie here 👋

This last month I’ve surveyed over 50 products that use AI and compiled a list of the best strategies I’ve seen put to use that aren’t yet another (😩) chatbot.

Let’s get straight to it… ⬇️

Join 400+ tech peeps learning to build SaaS products every week for free on IdeaHub.

1. Augmenting data

A common use-case of generative AI is to simply take existing data, and make more of it, optimising for a goal.

TweetHunter uses this strategy to generate new tweets from its customers’ account history, based on what’s performing best.

But in practice, this approach would work well in any SaaS product where the customer’s goal is to optimise content.

2. Intelligent search

If your product manages text, image, audio or video content, then adding a generative search could help users find what they’re looking for quickly.

Nuclia is offering an as-a-service solution for AI search across multiple mediums where you can upload your own data, and use their SDKs to query it.

3. Complex form completion

Any SaaS product that requires users to use a “long enough to be a bit annoying” form could benefit from an AI integration to take some of the pain away.

Working on risk management SaaS myself, I’m particularly excited about the idea of having AI fill-in insurance forms for accidents in the workplace - a huge time saver!

4. Summarising data

We’ve all seen the hundreds of SaaS products endlessly offering to summarise our meeting notes.

But there’s actually so much more value in this concept if applied to your niche correctly.

Take AppRadar, which uses AI to summarise reviews for mobile apps.

It allows its users to keep tabs on competitors without trawling through reviews themselves.

Often the value gained from this kind of AI solution is in time saved, so think about where this might be of most value to your customers.

5. Predictive generation

The use case for AI in predictive generation is literally endless, but here are 2 of the best practical examples I’ve found that you could take inspiration from.

Sentry, an application performance monitoring tool, uses AI to suggest solutions to errors that are detected in its customers’ applications.

SocraticWorks uses predictive modelling to forecast how long projects might take to complete based on their massive data set of completed tasks.

6. Data visualisation

If you’ve ever added an analytics dashboard to a SaaS product, you know that defining exactly what customers want to see can be challenging.

Cumul.io are building an ‘insights miner’ based on GPT-3 that allows you to simply generate a dashboard from an existing dataset.

In a nutshell, you could expose data to a pre-trained model and have it generate charts and metrics that are optimised specifically for each customer.

7. AI recommendations

The ability of AI to suggest a user’s next action is already prominent on social media platforms, video streaming applications and E-commerce websites.

But since the explosion of AI, this wave has started to hit many more markets.

Recombee is a big part of this with its AI recommendations-as-a-service engine that is already serving multiple industries like gaming, music, travel, marketplaces etc.

8. Roll your own!

If you have an idea for an innovative AI integration for your product, then there’s no reason you can’t build this yourself.

Plus, you don’t need any advanced AI knowledge, just a prompt and an integration with an LLM.

Here’s the simplest way to achieve this:

Design a prompt (guide)
Enrich the prompt using your customers’ specific data
Hook up your SaaS to ChatGPT using Pipedream or Zapier
Interpret the output in your product

That’s it for this week! 👋

Join 400+ tech peeps learning to build SaaS products every week for free on IdeaHub.

🧠 How to build an awesome SaaS onboarding flow

Charlie from IdeaHub — Thu, 24 Aug 2023 21:37:58 +0000

Hey all, Charlie here! 👋

Today we’re talking about at onboarding.

First impressions matter - so ensuring your customer’s first few steps with your product are legendary should be a top priority.

Plus, it’s rare that a customer will fully grasp what your product can do for them from just your landing page - there’s likely plenty of value they are still unaware of even after signing up.

This week in IdeaHub…

Tailored onboarding: Allow customers to choose their first product experiences based on their specific use-case
Product tours: Show your customers how to get started using your product
Onboarding checklists: Ensure your customers have everything they need to start succeeding from day one

PLUS - the 3 best tools to start building a rock-solid onboarding process this weekend.

Let’s jump in… ⬇️

Join 350+ tech peeps learning to build SaaS products every week for free on IdeaHub.

1. Tailored onboarding

It could be the case that your user base will be made up of segments of customers using your product in different ways.

By giving new customers an option to choose their preferred path through your onboarding process, you make it more personal to their specific needs which can greatly decrease the chances of them churning.

HubSpot is an awesome example to learn from when you’re considering how to approach any product feature, but for onboarding in particular - they do a great job.

Take a look at how HubSpot asked me about my use case before letting me into the platform when I signed up this week:

Then, I was asked how I would like to get started, ensuring I only go through the onboarding steps that matter the most to me.

I chose to get started with HubSpot’s sales tools:

This not only personalises my experience, but it allows HubSpot to collect more data on me, something they will no doubt use to analyse my behaviours and suggest new products.

2. Product tours

A product tour is a way of showing your customers around your product just after they complete the signup process. This can help you convey the purpose of your product and help your customers start using it to its full potential from day one.

You know your product better than your customers ever could, so this is your opportunity to show them its power!

Here’s the tour I got in HubSpot after I chose to set up sales tools:

(link to video)

Here are the key takeaways if you just want the TLDR:

I was guided through a worked example of using HubSpot that relates to the reason I choose when tailoring my onboarding experience - to track new leads.
I was shown how HubSpot integrates with my existing processes, like sending emails to new leads - something that I might find difficult to visualise just from a sales page.
The tour featured my personal details, including the company name I set up as part of the signup flow. This naturally led to a more engaging experience.

While this is all relevant to HubSpot’s particular features, the core strategies are relevant to your products too. It’s all about conveying your product’s mission.

Filling in this template will help you define the story to tell to your customers during your tour:

“My customers struggle with ____ and use my product to solve it by __. Without features _, ____ and __, my product would be useless and without setting up __ first, my customers would struggle to get started.”_

3. Onboarding checklists

Lastly, when your customers enter your platform, consider adding an onboarding checklist to gain better control over their first few steps.

Even if a customer doesn’t feel that all the steps are necessary for them right away, having a checklist gives them the first place to look for how-to’s and guides when they want to try out a new feature.

Here’s the checklist I got in HubSpot after my product tour:

This is successful for a number of reasons:

The checklist is split into sections making it seem more palatable
I’m told up front how long each section will take to complete
I’m incentivised to setup my key account data like my contacts and teammates first, which without, I would struggle to use HubSpot
I’m able to track my progress through the completion bar at the top of the checklist

The best tools for onboarding

Obviously, HubSpot’s onboarding flow is super-optimised from experience with their many thousands of customers!

But really, if you break it down like we have today, and implement the 3 strategies above, you can create a really good starting point.

What’s more, it doesn’t need to be difficult nowadays - so there is no excuse!

There’s plenty of options that allow you to get started without writing any code if you're happy to pay for an onboarding-as-a-service platform:

UserGuiding
✅ Support for tailored onboarding, tours and checklists
👨‍💻 No code required
❌ Expensive…
ProductFruits
✅ Cheaper than other full-service platforms
👨‍💻 No code required
❌ Not as many integrations
Dopt
✅ Start for free!
👨‍💻 Some code required
❌ Missing some features

If you’re bootstrapping and are happy to write a bit of code yourself, then I’d go for Dopt.

You will miss some features that the bigger platforms offer, but with excellent JavaScript SDKs and documentation, you can easily get started in a weekend.

You’ll want to read this…

How to tailor onboarding with Dopt - A guide from the makers of Dopt on how to create a tailored experience
How onboarding reduces churn - Neil Patel writes about the importance of churn and how onboarding is essential to keeping it under control

That's all for this time!

Hey! Charlie here 👋, thanks for reading this article! I hope you enjoyed it and learned something new.

Each week I send out discussions like this to over 350 tech peeps interested in building their own software products.

Being a Product Manager in B2B SaaS, I built a lot of software and share my lessons learned that you can apply to your own building journey.

If that's something you're interested in, click below to sign up to IdeaHub!

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🧠 Your first SaaS - A Marketplace App

Charlie from IdeaHub — Mon, 21 Aug 2023 22:11:40 +0000

Hey all!

Here I’ll discuss app marketplaces. I’ll take you through why they exist, validate the opportunity they represent and take a look at how to get your own app to market successfully.

Let’s jump in…

Why they exist

According to Statista, the average number of SaaS (Software as a Service) applications a business employs has grown from 8 in 2015 to 130 in 2022. That’s a lot of software and a lot of embedded processes to go with it!

Anyone who has even briefly worked in tech will be acutely aware of this as the number of ‘work management’ platforms grows seemingly every quarter. The majority of work is moved through a development cycle online using a platform like Jira, Monday or Asana.

During the 2000s and 2010s, these platforms did well to build up a large customer base across SMBs and enterprises. In order to protect their IP and bring more of their customer’s work onto the platforms, vendors continued to look for ways to integrate with other commonly used work management tools.

This resulted in just about every work management tool worth its salt launching an ‘app marketplace’ and asking developers from far and wide to build their own integration solutions in return for a cut of revenues.

It helps software vendors to widen their ‘moats’ by making it more difficult for customers to move away from a platform as more of their internal processes become tied to the software. This is often referred to as increasing the ‘switching cost’ or ‘stickiness’ of a product.

This is also however great news for us, as it means we’re free to build an app to integrate just about anything we like! But app marketplaces don’t just serve as hubs for integrations, they also allow developers the opportunity to enhance and provide extra value to the core product they are building into.

SaaS vendors are happy to accommodate developers building these apps as they would rather focus on building upon their core value proposition whilst letting third parties (that’s us!) build out the features that perhaps only a niche segment of their customer base may want or need.

It’s worth mentioning that it’s not just in work management that this market evolution has occurred. Most notably, marketplaces like Shopify’s are rising in popularity as the ‘gig economy’ has taken off post-COVID.

Our opportunity

As Atlassian is one of the largest app marketplaces, we’ll focus on that platform for now but in theory, the following validation and considerations would apply to any platform you’d look to build on top of.

To date, Atlassian’s marketplace has over 5300 apps built by over 1700 developers ranging from individuals to Appfire who buy up successful marketplace apps across multiple platforms and who now own over 85 apps and counting.

Since its launch in 2012, total revenues generated by the marketplace have exceeded $3 billion with app developers taking anywhere from 75% to 95% of that. That sort of revenue wouldn’t look out of place if it was listed as its own company on the NASDAQ!

Part of what’s driven this growth is allowing app developers to leverage Atlassian’s existing customer base. Apps are advertised on the marketplace to all customers which can make it easier for high-quality apps to gain those initial few customers and gain traction.

Take a look at one of the most popular apps on the Atlassian marketplace, Tempo, which for a team of 100 comes to over $400/month on the Cloud version. And that is not uncommon as Atlassian serves some of the largest corporations of any work management platform.

What’s more compelling is that Atlassian has done a fair chunk of the initial work for you to build your marketplace app. They released Forge back in 2020 which is an out-of-the-box development platform for building (amongst other things) marketplace apps.

This will get you hosting, authentication, and access to Atlassian's UI kits plus libraries to make it easy to work with data residing in each customer’s account.

Because of this, now is a great time to be building a marketplace app! However, here's a few things to be aware of...

The first is that marketplaces tend to be crowded places. If you're going to build an app it better either target a specific underserved niche or solve a really common problem much better than the competition.

However, this is true of any business - so don’t let it stop you!

The second and perhaps more obvious problem is that by choosing to build on top of one particular platform, you lock yourself in.

Your revenue will be largely decided by how well the vendor itself does in a particular year. This can be a good thing in times of boom, but can also be detrimental if they start to lose market share.

How to get to market

First, pick a marketplace!

Here are the ones I think are best suited to starting individual ventures based on the quality of the tooling provided, the size of the potential revenues and the maturity of the platform as a whole:

Atlassian Marketplace
The enterprise nature of the customer base makes for a very attractive opportunity and is likely to result in lower churn from smaller businesses that may turn over quickly on other platforms.
Shopify App Store
The needs of a Shopify merchant touch so many different industries such as inventory and logistics management that there are so many unique problems to solve. Also, your first $1M dollars in revenue is free from commission!
Monday.com App Marketplace
Monday is a growing work management platform challenger to the likes of Atlassian with over 180,000 customers to leverage. The suite of developer tools on offer coaches you on how to best serve the market, and even where to start looking for ideas.

It’s very achievable for a single developer to build a marketplace app provided the tools are up to scratch. You're not going to need to raise any money or build a team to get started - just a laptop!

Finding initial customers could also be straightforward as you already know exactly where and how to reach them - on the marketplace! Most offer paid advertising which you can leverage to wade through the competition.

Generating ideas for apps is going to come down to having a good knowledge of the market. Start reading reviews of apps that have an established user base and see if the developers are keeping up with their customer’s requirements. If not, it might be time for a new entrant…

Also, try to look at apps that enrich the customer’s processes in a unique way and see if the same concepts can be applied to another process or a different segment of a customer’s data.

That's all for this time!

Hey! Charlie here 👋, thanks for reading this article! I hope you enjoyed it and learned something new.

Each week I send out discussions like this to over 300 tech peeps interested in building their own software products.

Being a Product Manager in B2B SaaS, I built a lot of software and share my lessons learned that you can apply to your own building journey.

If that's something you're interested in, click below to sign up to IdeaHub!

Subscribe here

🧠 Are you charging enough for your SaaS product?

Charlie from IdeaHub — Fri, 18 Aug 2023 11:59:46 +0000

This week is all about how to evaluate your product offering and decide on a pricing strategy that goes hand-in-hand. Failing to keep the two in sync as your product evolves can lead to a lot of revenue being left to fall between the cracks.

This week in IdeaHub…

Pricing models explained:
The most common SaaS models with examples to help you decide which fits your product best
How to price your product:
Practical steps in maintaining an effective pricing strategy as your product grows
Supercharging your pricing:
3 strategies to increase total revenue without any new customers

Let’s jump in… ⬇️

1. Pricing models explained

Software products are notoriously difficult to price. The main reason being that there is a lot of variation in the cost base of the vendors that sell it.

Corporations that spend millions every month on providing a service for their customers have a very different set of challenges when it comes to pricing that say, a bootstrapped indie hacker does.

So when we’re looking for comparisons in the marketplace, it can seem challenging to know who to lean on.

I’ve chosen the 3 most common pricing models to look at, so let’s get the rundown:

Value-based pricing

This is my area of operation.

As a product manager and tech lead in the risk & compliance industry, I build a lot of solutions for customers with the sole purpose of saving them from hefty fines if they fall out of compliance with a particular regulation.

This is great as it allows us to assign an intrinsic value to the software based on a potential cost-saving (which can reach seven figures! 😬).

If I sell something for $100, I want to provide at least $1,000 in value to them… at least.

The 10X rule - Lincoln Murphy of SixteenVentures

But this also proposes challenges for us as a vendor as different customers exposed to varying levels of risk may be willing to pay different amounts to save their skin.

However, this can be applied to almost any software where the customers purchasing intent is outcome driven.

For example, if selling a marketing automation tool means a customer can save $100K a year, they will be willing to pay more than just your average $99 a month!

Consumption-based pricing

Vendors that adopt a consumption-based model tend to be those whose costs have a direct correlation to platform usage.

One of the best-known examples is Google Maps. Customers that want access to data for everything from route planning to address validation pay a cost that scales with the number of units of work they request.

Here’s 3 other examples across the tech stack that you could research if you think a consumption model is for you:

Amazon Web Services
Riddled with complex pricing matrices, most AWS services offer a ‘pay-as-you-go’ option - here’s an example
Stripe
Payment provider that takes a percentage of the total transaction value to cover costs associated with managing the infrastructure required to make it possible
HubSpot Marketing Hub
Marketing automation and campaign tools for businesses where pricing scales with total contacts

Consumption models can be particularly favourable for low-usage customers who often pay next to nothing so for SaaS vendors who operate in this way, that cost is usually made back with enterprise deals.

Attractively, however, a consumption model can provide agility to vendors who are free to tweak pricing to maintain a healthy margin as costs fluctuate.

Per-seat pricing

Being able to predict platform costs ahead of time is the most significant advantage of a per-seat (sometimes called ‘per-head’) pricing model for your customers.

It’s simple to determine that if headcount grows by X, costs increase by Y which can increase a customer’s willingness to purchase compared to complex usage-based models.

But this works both ways, if a vendor’s business scales directly with active users, then it makes sense to make that metric your customer’s primary cost lever and incentivise them to turn it.

Here’s 2 examples of rigorously tested per-seat pricing models:

GitHub
As tech companies usually scale headcount to grow, it makes sense for GitHub to employ per-seat pricing
Slack
A communication software provider that uses a nuanced model in that they only charge for active users, reducing wasted subscriptions

Beware though, as high-growth customers can be averse to this model if headcount grows rapidly. So if startups are your market, maybe avoid this if you can!

2. How to price your product

Keep it simple, stupid

In reality, most established vendors employ a combination of models to service their entire offering.

But when your product is early, pick one model and stick to it. Focus on improving your core value proposition and don’t muddy the waters by introducing complex pricing just for the sake of it.

You also need an element of competitive pricing for early products. If you're offering a new or alternative way of solving a problem, customers need to be convinced to be early adopters.

You should know who the closest three competitors are to your product and what they charge for a similar service. If you want to attract their customers to use your solution instead, consider pricing roughly 10% lower.

The right way to use pricing tiers

Pricing tiers look sexy on a landing page, but in reality, their purpose in SaaS should be to provide a more tailored experience for a segment of your customers.

Each tier should aim to maximise the value those customers can derive from your product whilst ensuring all customers are paying the correct price.

When you do this, you can start to really turn your pricing model into a pricing strategy.

By gating advanced features only required by power users, you also create a clear staircase of pricing that your customers can climb up as they grow.

Knowing each segment’s specific needs is therefore essential to creating an effective tiered pricing strategy and therefore it should only form part of a product once that learning process has taken place.

Trial periods

Used to increase adoption, limited-time access to your product can reduce the barrier to entry for new customers.

However, tempting as it may be to use trial periods for new products and get them off the ground quicker, I personally prefer to keep them paid-only for as long as possible.

Forcing customers to pay for a product is a perfect way of validating that you have actually built something they desperately want to use.

At the end of the day, anyone can sign up for a trial, use a product for a week, and then leave at the end of it - it doesn’t mean they really needed it in the first place and can leave you feeling muddled as to why they churned.

Instead, once you have some traction and feel like you have a good understanding of your customer profile, introduce a trial period to widen your sales funnel.

But free trials don’t work for every product. Neil Patel summarises this well, so I’ll leave that up to him!

3. Supercharging your pricing

Nobody’s product extracts 100% of its potential revenue from its customers, it’s a complex equation with too many variables. But there are ways of increasing its efficiency without acquiring any new customers.

Here’s 3 ways you can start doing this with your products:

Increasing perceived value

By continually releasing features that benefit your customers, essentially by either saving them more time or more money, you increase the value that your customers feel like they are getting from your product.

If currently, your product can save a customer a $10K yearly overhead, think of ways to 10X that to $100K.

Ensure that you’re openly marketing this to your customers and making them aware of the new value they can redeem by continuing to use your product.

Once your customers perceive this, increasing prices becomes more of an exercise in reaffirming new value rather than a traditional (and sketchy…) yearly price bump.

Read how Shopify increased prices by 33% for the first time in 12 years, solidifying the new intrinsic value built into the platform over that period.

Identify customer pain points

Recognising the most critical features that each segment of your customer base relies on, and then gating these behind specific pricing tiers is a great way to ensure customers continue to pay more as they grow.

By giving away too much value straight out of the gate, you leave money on the table and let your customers take advantage of you.

Yes, it’s important to overdeliver on your value proposition, but not to the extent it’s costing you precious revenue.

Ensure you tie your price to your customer’s revenue/headcount/usage so that you both succeed as they grow.

Upsell upsell upsell!

Be continually conscious of your customer’s businesses, what their objectives are and how they plan to achieve them.

Customers will never be as hot on what your product can do for them as you are, so speak to them once or twice a year and hear what challenges they are currently facing.

Doing so gives you ample opportunity to not only pick up on new features but also for “well that is actually possible with X…” type interactions - where X is a key pain point you’ve identified and gated as above.

Once you have that first interaction that leads to unlocking new revenue with just a conversation, you’ll want to be talking to your customers every day!

Hey! Charlie here 👋, thanks for reading this article! I hope you enjoyed it and learned something new.

Each week I send out discussions like this to over 300 tech peeps interested in building their own software products.

Being a Product Manager in B2B SaaS, I built a lot of software and share my lessons learned that you can apply to your own building journey.

If that's something you're interested in, click below to sign up to IdeaHub!

Subscribe here

🧠 How to get more customers (Building 101 #4)

Charlie from IdeaHub — Sun, 13 Aug 2023 00:04:03 +0000

Hey all,

Welcome to part 4 of Building 101 🎓, this time we’re looking at how you can drive more customers to signup for your products and therefore increase your MRR.

Iterating like a startup: Learn how top startups deliver growth and how you can apply this to your own products
Keeping customers engaged: Engaged customers are more likely to keep purchasing than those left alone
Building in public: Success drives more success - how telling your product’s story can lead to increased growth

1. Iterating like a startup

When most of us decide what to build next, we generally make assumptions based on what we think our customers want. But in reality, this can be very different to what they actually need.

The last few decades of VC-backed tech have ushered in a new way of “validated learning” that we can all apply when building our own products.

Instead of guessing, we treat our products like science experiments. We continually talk to customers, measure how they use our products and collect data points that we can learn from to decide what to build next.

There are generally two main ways you can start putting this into practice with your own products:

Conduct customer surveys

If customers really love your product, those that get the most value from it will likely be happy to help you improve upon it.

Arrange calls with these customers every few months and ask questions like:

“What’s the one feature you use every day?” - direct
“Did you know about feature [X] that we just released?” - direct
“What’s something you wish the product could do for you?” - indirect
“Explain to me how you would do [X] using the product.” - indirect

Asking direct questions gives you instant feedback on how well your product is communicating its intentions to solve the user’s problems. (It also gives you a free upsell opportunity…😉).

Asking indirect questions helps you continue to gain a deeper understanding of your customer’s needs and if the assumptions you are making are in fact correct.

🚨 Spoiler - they’re probably not…

There’s no better feeling than coming away from a user interview with a list of features you know that, if you build, you can add revenue with a snap of your fingers!

**Hint: **Offer customers an Amazon gift card for participating in your surveys. This just gets them on a call - once they’re on, they are yours to experiment with…

Use product analytics tools

User interviews are great, but we still need to understand how the other 90% of our customers use our products - otherwise, we’re flying blind!

With every change we make, we should also release analytics features that are designed precisely to give us instant feedback on how users are getting along with it.

The best solution for newcomers to product analytics is MixPanel. But in general, for any analytics tool, the approach will be:

Integrate the platform’s SDK into your product’s code.
Write code to trigger events when users visit specific pages or click certain buttons that you consider meaningful.
Include customer attribution data in your tracking events.
Use the platform’s analytics tools to track customer behaviour over time.

Regularly review the data you’re collecting and see if the features you worked so hard on are being used to their full potential.

Being data-driven in your decision-making is the best way to build things customers will actually pay for over the long run.

2. Keeping customers engaged

Keeping customers engaged with your product from the moment they sign up is not only key to preventing them from backing out soon after (or ‘churning’) but also to improving conversion rates when it comes to upsells and add-ons you offer.

Here’s 3 things you can do to increase engagement:

Communicate with your customers

Outside of your product, the best way to achieve this is to start a newsletter. You already have your customer’s email addresses, so tell them about all the cool things you are doing!

For every product update, send out the following emails:

“Here’s what’s coming soon…” (pre-release)
Include high-quality screenshots and short-form demo videos alongside a limited-time promotional event for early adopters.
“It’s live…” (immediate post-release)
This lets customers that didn’t convert know that they missed out.
“It’s not too late…” (one week later)
If your changes were successfully adopted by some of your users, share the analytics you collected and give those that missed out a second chance to convert.

Tip: You can also host yearly online customer conferences where you discuss all the improvements coming in the next year and when customers will be able to get their hands on them.

Start applying gamification

There are also strategies you can apply inside your product to increase engagement on a daily basis.

I always refer to Todoist Karma as the best example of this. At a high-level Todoist is a task tracking tool and ‘Karma’ is a points-based system the platform uses to incentivise users to keep creating and completing tasks.

In reality, this can be applied to any product. You decide for yourself what you want your users to optimise, whether that is ‘do more’ of something or ‘minimise’ a statistic relevant to them. Then incentivise them to do so.

It plays right into the wheelhouse of Todoist as their free plan is limited to 5 projects, so incentivising users to create more projects pushes them into a position where they feel they need to upgrade.

Leverage product psychology

The more customers feel like they can see your product evolving, the more you’re convincing them that they are buying into a platform that continues to work for them.

By including a button to manually update to the latest version of their app, Todoist again keeps customers engaged and communicates that the team is constantly at work improving the product for them.

This is again a strategy all of us can add to our products with minimal effort (even if the button doesn’t do anything for now other than just refresh the page! 😉).

3. Building in public

Driven by modern media, there is a growing trend among almost all creative sectors that creating content documenting your journey striving towards a goal can make the effort all the more worth the while when you eventually get there.

For us builders, creating content as we build out our products is a great way for us to get the word to the wider building community, and our customers.

Here are some of the best places to do that in the tech space:

Twitter

Examples like the one below are rife in the #buildinpublic community - not only does this create hype for your product, but as you can see an established account can use Twitter as a top growth tool:

// Detect dark theme var iframe = document.getElementById('tweet-1602174486610169857-336'); if (document.body.className.includes('dark-theme')) { iframe.src = "https://platform.twitter.com/embed/Tweet.html?id=1602174486610169857&theme=dark" }

Reddit

We all know the action is in the comments so leverage these niche communities to drive traffic to your own products.

Ask Redditors to roast your landing pages and post status updates asking for feedback.

But also post useful discussions in targeted niches where your customers are likely to hang out to try to find some more users. GummySearch is awesome for researching niche subreddits.

Take a look at this post on Reddit (link) that, while not entirely related to tech, generated 90 upvotes and 23 comments whilst getting to the top of r/Entrepeneur:

Blogging

If socials aren’t for you, you could post on IndieHackers or Dev.to and start writing about your product journey.

Doing this for a while will naturally improve your SEO and provide all the content you need to send those all-important product updates to your customers!

While getting started creating content can seem hard going at first, it pays off in the long run - the sooner you get started the sooner that day will come.

Round up

That's it! Hopefully the discussions I've gone through can help you when looking to grow your customer base for you next product.

If you enjoyed this post, let me know in the comments!

IdeaHub is a newsletter for tech peeps who want to learn about building their own tech products.

Weekly emails discuss the full product process including idea generation and validation, building MVPs, and strategies to get more customers.

Subscribe here

🧠 How to build an MVP (Building 101 #3)

Charlie from IdeaHub — Sat, 12 Aug 2023 10:03:13 +0000

Hey all,

Welcome to part 3 of Building 101 🎓, this time we’re looking at building MVPs - ‘Minimum Viable Products’.

Let’s jump in… ⬇️

What does ‘minimum’ mean? Getting brutal with your idea of what it means to solve a problem.
Technical decision-making: Prioritising speed over scalability.
Doing things that don’t scale: Doing things manually at the start, and automating later.

1. What does ‘minimum’ mean?

“What would you give to someone if their hair was on fire?”

This is the question asked by Michael Seibel (founder of Twitch) when articulating what an MVP is.

He asks founders - “How would you solve that person’s problem?” Most people will suggest a bucket of water - that’s the perfect solution. But if you went off to go and get a bucket of water, you’d be too late. In reality, you’d use literally anything around you - even if it meant rubbing a brick across their hair to put the fire out.

It’s a crude analogy but the brick is your MVP - it’s the literal simplest thing you could use to solve the problem. A lot of people are scared by this idea and spend months building the perfect solution without it ever seeing daylight.

But in reality, it’s not so unfamiliar:

The first iPhone had no video. It had no app store and only supported 2G internet at a time when 3G had already been a thing for 4 years!
Airbnb initially had no payments. It was only marketed for people needing an air bed to sleep on around work conferences.
Stripe had no banking integration at launch. The team would spend hours after dark manually filling paperwork for new accounts.

(The Airbnb example is my favourite - how niche is that?! 😂)

If you find yourself months into an MVP build, take some time to reflect on what your idea of ‘minimum’ really is.

I already know what my product should do, just let me build it! - Anonymous first time builder

It’s valid to be this brutal to start with. That’s because your first few users (the ones with their hair on fire…) are ‘early adopters’ - they need a solution, not sophistication.

2. Technical decision making

In today’s world, the market provides us with a sliding scale by which we can decide how much code we want to write.

When building an MVP, we should always be making technical decisions from the point of view of speed over scalability. There are 3 approaches I think all builders should think about before writing a single line of code.

No-code solutions

Firstly, can your solution be built without any code at all?

Maintaining code is like being in a very clingy relationship - it needs constant attention and monitoring. If you ignore it for too long it will start to misbehave and eventually cause you problems. Plus - you’re the only one who can fix it.

In those early days, you want to be spending as much time as you can speaking to customers and obsessing over your core value proposition - not worrying about bugs.

Here are some examples of real businesses that started out on no-code platforms:

Dividend (Bubble)
As a new-era lender of financing for clean-tech home improvement, and having raised over $365M in venture funding to date, Dividend is probably the most successful company to take its first steps with a no-code solution.
Teal (Bubble, WebFlow, AirTable, Zapier)
Teal is a job search platform that provides a great example of how no-code tools can be combined to build out a fully-featured solution.
LetterHunt (Softr)
An example of a niche platform for newsletter growth that achieved multiple #1’s on Product Hunt, entirely with no-code.

There’s a real use case for no-code tools, here’s what I think most builders should be looking to use if they’ve decided no-code is for them:

So - if it’s possible to build your MVP with no-code you definitely should!

PaaS (Platform-as-a-Service) solutions

There are plenty of cases where what you're trying to build will require you to write at least some code.

It could be the case that your product is your code, for example, a proprietary analytics engine, or it could be that you're addressing a solution marketplace that is as yet untouched by no-code, like browser extensions.

In all cases where we do have to write code though, we should aim to write as little as possible.

One way of doing this is by using a PaaS solution. The best platforms I have used when building my own products are Supabase and Firebase.

Both offer part-solutions for a particular segment of your tech stack such as authentication or data storage. Firebase just tips the scales with its wider range of features including push notifications and analytics, deployment management and simple integration with every other Google product on the planet...

Commonly, these solutions are used as standalone backends supporting a custom frontend application built with a JavaScript framework like Next.JS or a mobile development framework like Flutter.

Designing your tech stack this way is beneficial as you only code the easy stuff (your frontend) and can abstract away the difficulties of server and database management to 3rd parties.

A note on mobile apps - always use a cross-platform framework like Flutter to avoid separate codebases for iOS and Android. Remember - we’re focusing on speed!

IaaS (Infrastructure-as-a-Service) platforms

TLDR: Basically never use these for an MVP.

The most common IaaS platforms are Amazon Web Services (AWS), Azure and Google Cloud Platform (GCP) and they all offer solutions for a very niche part of your tech stack like networking, security and access management or databases.

These are enterprise-grade platforms for building at scale requiring lots of code and configuration - they shouldn’t be touched at the MVP stage.

Moving on.

3. Doing things that don’t scale

If you haven’t noticed already, we’re focusing on speed. That means sacrificing automation until your product is ready for the floodgates to open.

Here are 5 things you should do manually at the MVP stage:

(Note: If a no-code solution can do these for you - then fine, use it!)

Billing management

First of all - use Stripe (duh…)

If you building an MVP, you should hopefully know who your initial users are going to be. Instead of wasting time writing an integration, just create accounts and manage billing cycles and invoices manually.

Customer signup

While implementing this doesn’t take that long nowadays - in a similar vein to billing, create accounts for customers manually through your platform of choice and don’t write any code to automate this through a signup page.

Email automation

Early on, it pays to get personal with your customers, so email them yourself!

Save yourself time in integrating with a mail provider and get back to building your core features!

Marketing

Paid ads are hard to get right for new products.

And the time and money are best spent elsewhere on rewarding customers for interviews (everyone loves an Amazon gift card…), engaging in networking events and building up a social presence.

Testing automation

At scale, it pays to automate testing as it can massively improve reliability and speed up the development of new features.

But when you're building an MVP your solution will change so fast that you’ll be re-writing this almost daily.

Kick that can down the road!

Round up

That's it! Hopefully the discussions I've gone through can help you when deciding on the steps to take when building your MVP!

If you enjoyed this post, let me know in the comments!

IdeaHub is a newsletter for tech peeps who want to learn about building their own tech products.

Weekly emails discuss the full product process including idea generation and validation, building MVPs, and strategies to get more customers.

Subscribe here

🧠 How to validate ideas (Building 101 #2)

Charlie from IdeaHub — Thu, 10 Aug 2023 22:06:07 +0000

Welcome to #2 of the (almost…) new “Building 101” series 🎓 running over the next 6 - 8 weeks with a full rundown of the practical steps involved in building and growing your own tech products.

This week, we’re looking at how to start validating product ideas.

Let’s jump in… ⬇️

How to validate your product ideas

Everyone talks about validation as the most important step in building (or not building…) any product. This is much to the dismay of anyone with some programming skills - we just want to get stuck in and solve the problem!

The reality is, spending weeks building an awesome product to solve a problem no one has isn’t a very good way to go about starting a business.

Before we get hands-on keyboards (and don’t worry, we will…) we need to know if our time investment is going to pay us back dividends in the future.

There are 3 things you have to understand before you can decide whether to take an idea forward or trash it altogether:

Your problem
Your market
Your competition

Write these down, and tick them off as you go through. First, start with understanding the problem you're trying to solve.

Know your problem intimately

Could you explain the problem clearly to a 10-year-old child? If not, then you don’t know your problem well enough. This sort of raw understanding rarely comes from just having the problem yourself.

Don’t get me wrong - having the problem yourself gives you a massive upper hand but in order to truly validate it as a business - you have to talk to users.

The classic example is The Mom Test. You should never ask your family if something is a good idea - their response will always be “It’s amazing… because you're amazing!”.

In reality, this is true of anyone we ask. We’re all so scared of upsetting people that we often hide our true thoughts and feelings. So how can we judge if our ideas are worth pursuing?

Instead, explain the concept to your customers and ask leading questions like “How do you solve this problem currently?” and “How often do you have this problem?”. This instantly relaxes people as we’re all more confident talking about something we understand and will likely raise follow-up questions.

It also gives you a feel for where your problem sits in this plot:

The golden zone is where all the ‘best’ problems are - high pain and customers encounter them very often (hopefully daily…). Almost all major technological advancements going right back to the wheel sit in this zone - it’s still true now and always will be.

If your idea is solving a problem in the golden zone - stick a tick in your first box!

Know your market

What’s also true of these problems is that you’ll never be the first to address them - there’s likely some competition. As part of validating your idea, you have to understand the forces at play in your chosen market.

This starts at the industry level, and to begin with, it’s useful to think of industries involved in technological development as falling somewhere on this plot:

You can debate where exactly these points should sit but the general trend is that the more complex a problem, the less competitive the solution marketplace will be. And over time as technology becomes more sophisticated the dots tend to shift right and downward creating more opportunities for solo builders.

As we’re looking to build products of our own, we have to be realistic about what we can achieve. If you want to create a new social network or revolutionise the insurance industry, then that’s great - but you're going to need a lot of help!

Therefore great validation is to plot your own product onto the chart above. If you're less competitive than ‘e-commerce’ and less complex than ‘work management’ then stick a tick in your next box!

Although this is a general trend there are plenty of great problems lurking in other areas of the chart. The bottom left quadrant for example contains many relatively untapped niches that may have yet to fully undergo a digital transformation and therefore have minimal competition.

However, stay away from the top right quadrant - these problems will have you working your butt off in both solution design, and in winning customers.

Know your competition

You should now hopefully have two ticks against some of your ideas. Now for the more labour-intensive part - making a list of competitors.

Here are 3 places to look:

Google (obviously!)
G2 - a review-based platform with thousands of listings
SimilarWeb - analytics platform for competitor analysis

There should be at least 2, but no more than 5 ‘high-quality’ existing solutions to your problem.

There are likely more than 5 solutions, but we need to know what ‘high-quality’ looks like so now collect the following information on each:

Year they launched
Price point If tiered, note down the lowest, highest and average of all plans
Number of customers This can be difficult to find if it’s not advertised on a website, especially for small businesses - a cold call can work 😉.
Average organic Google rank for a specific search term Try things like “Software to manage [X]”. This gives you an idea of how successful their digital strategy is. Check for any paid ads they might be running.
Average organic Google ranking for business/product name This gives you an idea of general brand recognition. Check the paid ads here too as often other competitors will pay to rank for a competitor’s brand name.
Number of features released in last 3 months Get a feel for this from blog posts and other social content. And if you can’t find anything - that’s an opportunity for you to differentiate already…
Quality of support Check what SLAs are claimed and check responsiveness by making use of any free trials and submitting dummy requests. Check reviews to get an idea of general system health.

Then, importantly, check their tech stack. There are numerous ways of doing this but the easiest way is to install Wappalyzer and run this on the platform, making use of any free trials.

This is important as a modern tech stack can dramatically improve the speed of execution.

This can be highly industry-dependent and isn’t a hard and fast list, but in most cases, here are things to keep an eye out for:

✅ React, Vue, Svelte, Next
✅ Node, .NET

❌ JQuery
❌ PHP, Ruby

Combine this with a gut feeling for how ‘dynamic’ the business comes across - the more so, the more likely they run a tight ship from a technological standpoint.

Once you start collating and comparing all this data, it quickly becomes clear what ‘high-quality’ is for your specific problem.

If you’ve successfully compared your competitors and can start to see areas where you might be able to differentiate, then give yourself your last tick!

Congrats! You’ve just validated your first set of ideas.

Hopefully, at least one or two look promising and can be taken forward. This is something you should continue to revisit throughout your building journey.

That's it for this week! ✌️

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