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This is... bullshit. The insights are forced – the rules for new businesses aren't so fixed that the advice from an internet persona and a brief questioning of

This is... bullshit. The insights are forced – the rules for new businesses aren't so fixed that the advice from an internet persona and a brief questioning of the business model would kill a business. And to call it a post-mortem? Forgive me, but post-mortem analyses are valuable when slow – these insights come too quick, without enough chewing going on.

fatnoah 6y ago
For some reason, this article really aggravated me. The conclusion about the pricing model feels the most forced to me. What he's really saying is that he wanted to limit the number of customers to 25 or so and achieve a $2k MRR within 2 months. The reason for this was to have more time for other pursuits, such as homeschooling the imminent child or other pursuits. Implied there is some amount of time required that is << 40 hours/week. Reading his initial blog post, he doesn't mention the pricing model at all. He does mention taking a week to build a POC that his dad can show to his co-workers as well as contacting a few hundred BI folks via LinkedIn. That doesn't seem like a terrible approach. Build something, see what resonates, etc. Reading the article, what really seems to have happened is that he spent a week creating a UI POC, shopped it to 30 BI folks on LinkedIn over two weeks, and didn't get traction. I'm not sure what happened to the 20-30 reach outs per day. The real reason for the failure wasn't the pricing model, it was that the developer wanted something that would earn $2k/month with little to no effort on his part. The main reason the project failed was because he did no research in building it, and then decided not to continue it. The "pricing model" comes in when he decides what # of customers he can support in whatever amount of time he was willing the spend. He then extrapolated a number from that to get $2k MRR. Then, and only then, did he actually look at what comparable products on the market charge. The more I think about it, I'm pretty sure the whole exercise, including the "pricing model" conclusion, was simply an exercise in content generation. If so, well played, sir.
- elliotbnvl 6y ago
  Hey -- very interesting that this article aggravates you. I'd really like to know more about what resonated with you personally, even if that resonation was negative. You've given me a lot to chew on, and I really appreciate the unbiased, perhaps even adversarial, response. > The conclusion about the pricing model feels the most forced to me. What he's really saying is that he wanted to limit the number of customers to 25 or so and achieve a $2k MRR within 2 months. I think this is an incorrect assumption. The idea going in is if I can get to $2k MRR within two months, that'll free me up to quit my day job by extending my runway significantly. Then I can spend all my time working on the SaaS, working on the more time-consuming parts like marketing, organic content generation and outreach, etc. > Reading the article, what really seems to have happened is that he spent a week creating a UI POC, shopped it to 30 BI folks on LinkedIn over two weeks, and didn't get traction. I'm not sure what happened to the 20-30 reach outs per day. Well, I had started doing those 20-30 reach outs per day, but on like day two I found Jason's video and it blew my mind enough to disrupt me from that course of action immediately. I stopped doing outreach to think about it (why would I want to bother people about something I may not even ship?). After spending some time thinking about it and discussing whether or not I should continue with a couple of my mentors and my dad, we all agreed that my time could be better spent elsewhere. > The real reason for the failure wasn't the pricing model, it was that the developer wanted something that would earn $2k/month with little to no effort on his part. I hesitate to call this "failure" anymore after reading the other comments on this post, which have been really helpful in shaping how I think about this whole story. Instead, it's a thought-through decision to put my effort in elsewhere. If I can spend the same amount of time building a POC and getting 25 paying users, with all else being equal, why would I want to spend that time building a POC for which I can charge less? Isn't it natural to build a startup where I can charge more, if that's within the realm of possibility? Given the fact that I was only three weeks in, I wasn't suffering from sunk cost fallacy of "well, I've come this far -- might as well keep going now!". > The "pricing model" comes in when he decides what # of customers he can support in whatever amount of time he was willing the spend. He then extrapolated a number from that to get $2k MRR. Actually, the $2k MRR comes from picking a somewhat arbitrary goal that I thought was slightly out of reach, and significant enough. I think there were a couple of people that mentioned hitting $2k MRR within 6 - 12 months in Indie Hacker podcasts, so I thought -- if they can do it that fast, is there any reason I can't do it faster? My thinking here comes from that quote Tim Ferriss likes to share, "why not six months instead of ten years?" So... why not give it a shot, ya know? > Then, and only then, did he actually look at what comparable products on the market charge. Actually, those numbers came up in conversations I was having with the people I reached out to on LinkedIn. They started talking about price, and I watched Jason's video, at around the same time. The reason I didn't mention anything about price in my first article was simply because I legit hadn't even thought of it at all. Once I did think of it -- well, I'll end with asking this rhetorical question again: if I could build something and sell it to 25 people for either X or 2X, why would I build something I can only sell for X? It makes sense to go for the 2X, right? Cheers, and thanks again for taking the time to write up that comment. It's been helpful to me in thinking about how I went about this and what I will do differently next time. > The more I think about it, I'm pretty sure the whole exercise, including the "pricing model" conclusion, was simply an exercise in content generation. If so, well played, sir. Welllllll... about that. The articles I've been writing about this process are definitely an exercise in content generation. The process itself, though, is just me fumbling my way through this with few mentors and little experience.
  - ryanwaggoner 6y ago
    if I could build something and sell it to 25 people for either X or 2X, why would I build something I can only sell for X? It makes sense to go for the 2X, right? Obviously, if you are presented with two options for things you can sell with similar ease to similar numbers of people, you should pick the higher priced one. But you don’t have another product like that, do you? You have this one. Why not try and sell this one, instead of worrying about some theoretical 2x alternative. If you find the 2x alternative, why waste your time with that when you could just find a 4x alternative and build that instead! The end of this road is obvious: just build something you can charge one customer $2k / month for. Presto!
    - elliotbnvl 6y ago
      > But you don’t have another product like that, do you? You have this one. You're describing the sunk cost fallacy, and the beauty of having spent only three weeks on this idea is that I haven't sunk very much cost at all. I could very easily go for the one that makes 2X. > If you find the 2x alternative, why waste your time with that when you could just find a 4x alternative and build that instead! It's a sliding scale. The higher the price point, the longer the sales cycle. If you sell a $5 widget on your website, a consumer can buy that without a moment's thought. Selling a $100k/yr enterprise software subscription can take a year. Or two. And require having been in the industry for three or four or ten, as other folks in this thread have pointed out. My goal is to find the sweet spot between pricing my product so cheap that I can't consistently acquire enough customers on my self-funding budget and so expensive that the sales cycle is too long.
      - ryanwaggoner 6y ago
        That's not the sunk cost fallacy unless sticking with it now is actually a bad idea. I don't think you have enough info to determine that, and it's a lot less work to do so than it is to build something else and validate it.

fatnoah 6y ago

For some reason, this article really aggravated me. The conclusion about the pricing model feels the most forced to me. What he's really saying is that he wanted to limit the number of customers to 25 or so and achieve a $2k MRR within 2 months. The reason for this was to have more time for other pursuits, such as homeschooling the imminent child or other pursuits. Implied there is some amount of time required that is << 40 hours/week. Reading his initial blog post, he doesn't mention the pricing model at all. He does mention taking a week to build a POC that his dad can show to his co-workers as well as contacting a few hundred BI folks via LinkedIn. That doesn't seem like a terrible approach. Build something, see what resonates, etc. Reading the article, what really seems to have happened is that he spent a week creating a UI POC, shopped it to 30 BI folks on LinkedIn over two weeks, and didn't get traction. I'm not sure what happened to the 20-30 reach outs per day. The real reason for the failure wasn't the pricing model, it was that the developer wanted something that would earn $2k/month with little to no effort on his part. The main reason the project failed was because he did no research in building it, and then decided not to continue it. The "pricing model" comes in when he decides what # of customers he can support in whatever amount of time he was willing the spend. He then extrapolated a number from that to get $2k MRR. Then, and only then, did he actually look at what comparable products on the market charge. The more I think about it, I'm pretty sure the whole exercise, including the "pricing model" conclusion, was simply an exercise in content generation. If so, well played, sir.

elliotbnvl 6y ago
Hey -- very interesting that this article aggravates you. I'd really like to know more about what resonated with you personally, even if that resonation was negative. You've given me a lot to chew on, and I really appreciate the unbiased, perhaps even adversarial, response. > The conclusion about the pricing model feels the most forced to me. What he's really saying is that he wanted to limit the number of customers to 25 or so and achieve a $2k MRR within 2 months. I think this is an incorrect assumption. The idea going in is if I can get to $2k MRR within two months, that'll free me up to quit my day job by extending my runway significantly. Then I can spend all my time working on the SaaS, working on the more time-consuming parts like marketing, organic content generation and outreach, etc. > Reading the article, what really seems to have happened is that he spent a week creating a UI POC, shopped it to 30 BI folks on LinkedIn over two weeks, and didn't get traction. I'm not sure what happened to the 20-30 reach outs per day. Well, I had started doing those 20-30 reach outs per day, but on like day two I found Jason's video and it blew my mind enough to disrupt me from that course of action immediately. I stopped doing outreach to think about it (why would I want to bother people about something I may not even ship?). After spending some time thinking about it and discussing whether or not I should continue with a couple of my mentors and my dad, we all agreed that my time could be better spent elsewhere. > The real reason for the failure wasn't the pricing model, it was that the developer wanted something that would earn $2k/month with little to no effort on his part. I hesitate to call this "failure" anymore after reading the other comments on this post, which have been really helpful in shaping how I think about this whole story. Instead, it's a thought-through decision to put my effort in elsewhere. If I can spend the same amount of time building a POC and getting 25 paying users, with all else being equal, why would I want to spend that time building a POC for which I can charge less? Isn't it natural to build a startup where I can charge more, if that's within the realm of possibility? Given the fact that I was only three weeks in, I wasn't suffering from sunk cost fallacy of "well, I've come this far -- might as well keep going now!". > The "pricing model" comes in when he decides what # of customers he can support in whatever amount of time he was willing the spend. He then extrapolated a number from that to get $2k MRR. Actually, the $2k MRR comes from picking a somewhat arbitrary goal that I thought was slightly out of reach, and significant enough. I think there were a couple of people that mentioned hitting $2k MRR within 6 - 12 months in Indie Hacker podcasts, so I thought -- if they can do it that fast, is there any reason I can't do it faster? My thinking here comes from that quote Tim Ferriss likes to share, "why not six months instead of ten years?" So... why not give it a shot, ya know? > Then, and only then, did he actually look at what comparable products on the market charge. Actually, those numbers came up in conversations I was having with the people I reached out to on LinkedIn. They started talking about price, and I watched Jason's video, at around the same time. The reason I didn't mention anything about price in my first article was simply because I legit hadn't even thought of it at all. Once I did think of it -- well, I'll end with asking this rhetorical question again: if I could build something and sell it to 25 people for either X or 2X, why would I build something I can only sell for X? It makes sense to go for the 2X, right? Cheers, and thanks again for taking the time to write up that comment. It's been helpful to me in thinking about how I went about this and what I will do differently next time. > The more I think about it, I'm pretty sure the whole exercise, including the "pricing model" conclusion, was simply an exercise in content generation. If so, well played, sir. Welllllll... about that. The articles I've been writing about this process are definitely an exercise in content generation. The process itself, though, is just me fumbling my way through this with few mentors and little experience.
- ryanwaggoner 6y ago
  if I could build something and sell it to 25 people for either X or 2X, why would I build something I can only sell for X? It makes sense to go for the 2X, right? Obviously, if you are presented with two options for things you can sell with similar ease to similar numbers of people, you should pick the higher priced one. But you don’t have another product like that, do you? You have this one. Why not try and sell this one, instead of worrying about some theoretical 2x alternative. If you find the 2x alternative, why waste your time with that when you could just find a 4x alternative and build that instead! The end of this road is obvious: just build something you can charge one customer $2k / month for. Presto!
  - elliotbnvl 6y ago
    > But you don’t have another product like that, do you? You have this one. You're describing the sunk cost fallacy, and the beauty of having spent only three weeks on this idea is that I haven't sunk very much cost at all. I could very easily go for the one that makes 2X. > If you find the 2x alternative, why waste your time with that when you could just find a 4x alternative and build that instead! It's a sliding scale. The higher the price point, the longer the sales cycle. If you sell a $5 widget on your website, a consumer can buy that without a moment's thought. Selling a $100k/yr enterprise software subscription can take a year. Or two. And require having been in the industry for three or four or ten, as other folks in this thread have pointed out. My goal is to find the sweet spot between pricing my product so cheap that I can't consistently acquire enough customers on my self-funding budget and so expensive that the sales cycle is too long.
    - ryanwaggoner 6y ago
      That's not the sunk cost fallacy unless sticking with it now is actually a bad idea. I don't think you have enough info to determine that, and it's a lot less work to do so than it is to build something else and validate it.