4 ms·

One of my favorite points in the book is the explanation for why any sort of niche small business software sucks. In consumer software, customer acquisition co

One of my favorite points in the book is the explanation for why any sort of niche small business software sucks. In consumer software, customer acquisition cost is low and development costs can be spread over millions of people, so there is a big profit potential even though the price is low. For large enterprises, the customer acquisition cost is high (lots of meetings with suits), but the payout is high (millions of dollars is good value for software that is going to be deployed at 20,000 locations and serve millions of customers). For a small business, customer acquisition is still expensive (sales and support done personally), but the price is still pretty low. The book cured me of mumbling "I could make software better than that in a week" every time I saw a receptionist at a small office struggling with a bad app.

stcredzero 8y ago
The book cured me of mumbling "I could make software better than that in a week" every time I saw a receptionist at a small office struggling with a bad app. What if the acquisition cost could be made low? Doesn't patio11's appointment reminder app fall into this category? https://www.indiehackers.com/interview/how-i-grew-my-appointment-reminder-business-to-12k-mo-2b8720ca25 https://www.indiehackers.com/interview/how-i-grew-my-appoint...
- rpeden 8y ago
  It might. He talks about revenue but not about profit. So we dpn't really know much about his costs, aside from him mentioning that he was spending a meaningful amount on insurance. It could very well be that acquisition cost was quite reasonable, and he may have talked about this elsewhere. I just don't think the IH interview tells us enough to know for sure one way or the other.
  - simonswords82 8y ago
    He's published a huge amount of detail about revenue and costs, his profits aren't enough to sustain a family. I say that with the greatest amount of respect for the man by the way, he's super super smart and I love his writing.
- TrevorAustin 8y ago
  Probably not, given that he abandoned the app and works at Stripe now.
- coldtea 8y ago
  It can be great even if the "acquisition cost" is high, assuming you charge people for it. It just doesn't lend itself to the "do a business that sells $10 dollar bills for $5 funded by VC money until it has enough eyeballs to start selling ads".
- simonswords82 8y ago
  I learned the hard way that "passive income" via SaaS is fools game. Yes it does exist, but it's incredibly rare and so it's very unlikely that any idea I have is going to be the unicorn idea that generates a shedload of money for minimal effort. I stand about as much chance of becoming the next YouTube/Insta star.
nacho2sweet 8y ago
I guess I will never redevelop my salons booking app. I do appreciate how it easily emails me back my forgotten password in plain text tho.
gamblor956 8y ago
If your dream is to be a "startup" (meaning it scales because of millions of VC funding despite the lack of any sort of plan as to how to make a profit) then yes, small business software sucks. If your dream is to make millions through a sustainable enterprise, then small business software is awesome.
- thenaturalist 8y ago
  Please do not mistake me asking in a direct way as arrogance, but: Are you making this claim based on the assumptions that cashflows over medium user acquisition & support cost will work out or have you pulled this off yourself? I'm currently scoping a small - medium enterprise concept with a very concrete set of paying first customers, but thinking ahead this looming uncertainty really bothers me.
  - simonswords82 8y ago
    I can't talk for OP but I've been running a software company with both software products and bespoke service lines that generate a good level of income...I reckon I can assist you with your uncertainty - feel free to email me on simon.swords@atlascode.com
  - gamblor956 8y ago
    It's a matter of scaling. Small business-focused products generally will scale linearly with inputs. Good for a "lifestyle" business that keeps its owners and employees happy, bad for a VC-funded business that needs to hit a grand slam just to break even.
    - taneq 8y ago
      And this is why, from the point of view of a "lifestyle" business owner, VC funding looks like the kiss of death. Scaling fast is risky, and if you're gambling with your own money, you don't want to be forced to turn your sure bet into someone else's moonshot.
  - geekpowa 8y ago
coldtea 8y ago
>One of my favorite points in the book is the explanation for why any sort of niche small business software sucks. Because the author prefers filthy greed and the creation of yet another corporate behemoth over creating something decent, charging people for it, and making a living from that?
- sokoloff 8y ago
  The problem is people in small niche businesses often don't have the money to pay what amounts to a sustainable amount relative to what a software developer capable of striking out on their own could make with nearly zero risk by working for one of those behemoths (or really anyplace where tech is a competitive enabler or differentiator).
  - coldtea 8y ago
    How is that a problem? The developer that wants that can go work on one of those behemoths, and those that value the small niche businesses can work there. Plus, I don't see Basecamp or Panic or Bare Bones or whatever paying less to their devs. And less compared to what? Behemoths are usually in SV or a few constrained places, and have the usual SV culture (including ageism etc). Small niche business are anywhere, in places with much smaller costs of living, better work-life balance, and more kid-friendly environments. Heck, Procreate (frequently top of the App Store and Award Winning) is in Tazmania.
    - sokoloff 8y ago
      The problem is that it's insanely difficult to build a sustainable business in software targeting niche small businesses. I think Basecamp is not targeting niche small businesses; they're a general purpose project management/team collaboration software, used by many businesses. It happens to be used by some small niche businesses, but in the same way a business checking account is used by many small niche businesses. To me, niche small business software evokes more "software to automate inventory in a small machine shop", "landscape sprinkler system installation planning software", "antique shop inventory management software", "beekeeper scheduling software", etc.
avinium 8y ago
This is something I too have learned. Just because some product/feature sucks/is missing, doesn't mean it's commercially viable to address. Sometimes the market is too small or costs too much to reach. Users might legitimately want something, but not enough to pay the price required to sustain a business.

stcredzero 8y ago

The book cured me of mumbling "I could make software better than that in a week" every time I saw a receptionist at a small office struggling with a bad app. What if the acquisition cost could be made low? Doesn't patio11's appointment reminder app fall into this category? https://www.indiehackers.com/interview/how-i-grew-my-appointment-reminder-business-to-12k-mo-2b8720ca25 https://www.indiehackers.com/interview/how-i-grew-my-appoint...

rpeden 8y ago
It might. He talks about revenue but not about profit. So we dpn't really know much about his costs, aside from him mentioning that he was spending a meaningful amount on insurance. It could very well be that acquisition cost was quite reasonable, and he may have talked about this elsewhere. I just don't think the IH interview tells us enough to know for sure one way or the other.
- simonswords82 8y ago
  He's published a huge amount of detail about revenue and costs, his profits aren't enough to sustain a family. I say that with the greatest amount of respect for the man by the way, he's super super smart and I love his writing.
TrevorAustin 8y ago
Probably not, given that he abandoned the app and works at Stripe now.
coldtea 8y ago
It can be great even if the "acquisition cost" is high, assuming you charge people for it. It just doesn't lend itself to the "do a business that sells $10 dollar bills for $5 funded by VC money until it has enough eyeballs to start selling ads".
simonswords82 8y ago
I learned the hard way that "passive income" via SaaS is fools game. Yes it does exist, but it's incredibly rare and so it's very unlikely that any idea I have is going to be the unicorn idea that generates a shedload of money for minimal effort. I stand about as much chance of becoming the next YouTube/Insta star.

nacho2sweet 8y ago

I guess I will never redevelop my salons booking app. I do appreciate how it easily emails me back my forgotten password in plain text tho.

gamblor956 8y ago

If your dream is to be a "startup" (meaning it scales because of millions of VC funding despite the lack of any sort of plan as to how to make a profit) then yes, small business software sucks. If your dream is to make millions through a sustainable enterprise, then small business software is awesome.

thenaturalist 8y ago
Please do not mistake me asking in a direct way as arrogance, but: Are you making this claim based on the assumptions that cashflows over medium user acquisition & support cost will work out or have you pulled this off yourself? I'm currently scoping a small - medium enterprise concept with a very concrete set of paying first customers, but thinking ahead this looming uncertainty really bothers me.
- simonswords82 8y ago
  I can't talk for OP but I've been running a software company with both software products and bespoke service lines that generate a good level of income...I reckon I can assist you with your uncertainty - feel free to email me on simon.swords@atlascode.com
- gamblor956 8y ago
  It's a matter of scaling. Small business-focused products generally will scale linearly with inputs. Good for a "lifestyle" business that keeps its owners and employees happy, bad for a VC-funded business that needs to hit a grand slam just to break even.
  - taneq 8y ago
    And this is why, from the point of view of a "lifestyle" business owner, VC funding looks like the kiss of death. Scaling fast is risky, and if you're gambling with your own money, you don't want to be forced to turn your sure bet into someone else's moonshot.
- geekpowa 8y ago

coldtea 8y ago

>One of my favorite points in the book is the explanation for why any sort of niche small business software sucks. Because the author prefers filthy greed and the creation of yet another corporate behemoth over creating something decent, charging people for it, and making a living from that?

sokoloff 8y ago
The problem is people in small niche businesses often don't have the money to pay what amounts to a sustainable amount relative to what a software developer capable of striking out on their own could make with nearly zero risk by working for one of those behemoths (or really anyplace where tech is a competitive enabler or differentiator).
- coldtea 8y ago
  How is that a problem? The developer that wants that can go work on one of those behemoths, and those that value the small niche businesses can work there. Plus, I don't see Basecamp or Panic or Bare Bones or whatever paying less to their devs. And less compared to what? Behemoths are usually in SV or a few constrained places, and have the usual SV culture (including ageism etc). Small niche business are anywhere, in places with much smaller costs of living, better work-life balance, and more kid-friendly environments. Heck, Procreate (frequently top of the App Store and Award Winning) is in Tazmania.
  - sokoloff 8y ago
    The problem is that it's insanely difficult to build a sustainable business in software targeting niche small businesses. I think Basecamp is not targeting niche small businesses; they're a general purpose project management/team collaboration software, used by many businesses. It happens to be used by some small niche businesses, but in the same way a business checking account is used by many small niche businesses. To me, niche small business software evokes more "software to automate inventory in a small machine shop", "landscape sprinkler system installation planning software", "antique shop inventory management software", "beekeeper scheduling software", etc.

avinium 8y ago

This is something I too have learned. Just because some product/feature sucks/is missing, doesn't mean it's commercially viable to address. Sometimes the market is too small or costs too much to reach. Users might legitimately want something, but not enough to pay the price required to sustain a business.