4 ms·

You can even ask for money without having any way of receiving it. This is a good discipline to get into when doing customer development interviews. "So we've

by patio11 14y ago

You can even ask for money without having any way of receiving it. This is a good discipline to get into when doing customer development interviews. "So we've established that this is going to save you four hours a month. OK -- it isn't ready for you yet, but it will be soon. It costs $50 a month. Can I get a $50 deposit from you to reserve your spot? We'll apply it against your first month's fee." If you've identified a problem people actually have, they'll crawl over you to give you money. You don't even have to accept it, just watch whether they're actually willing to get out the checkbook or not. (n.b. A lot of software is sold prior to existing at numbers substantially higher than $50. For example, you might hypothetically be building something enterprise-y and looking for your first anchor customer. If you are, the conversation goes something like "OK, will you soft-commit to being our first customer on this? We'll draw up a Letter of Intent which says that, six months from now, after we've got the technology in place, we start implementing a field trial for $YOUR_COMPANY, with successful implementation to be followed by an annual purchase in the six figure region. Does that sound good to you?")

jasonkester 14y ago
The recruiting agency that launched here yesterday seemed like a good example of this. Their entire product consisted of two webforms (without even any validation) that would collect contact information. It's entirely possible there was no database behind it, and that it just emailed the founder. The founder would then send out a mail to the addresses in Pile A saying "pay us $25k and we'll forward your details to Pile B using our Top Secret Algorithm". No computers necessary. And genius.
- patio11 14y ago
  There are a lot of businesses that start out that way. Probably my favorite example is ZeroCater, which -- to my understanding -- was a cell phone, a Googledoc spreadsheet, and a lot of hustle. "Hey YC companies hit me up, I'll order all the sandwiches this Thursday. "Hello Bay Area restaurant, I want to place a $4k order this Thursday and every two weeks for the next six months. Can I talk to your owner? We have some requirements to make this work." "Hey Valley IT company, tell me your dietary restrictions and food magically appears at your office, for the low low price of [guesstimate: $400 / employee / month]." "Hey Valley restaurant, we're really loving the sandwiches. Here's an order for $6,000 and please pay extra special attention to the note about the vegan ones. I know it's a hassle but then again I do order $6,000 of sandwiches at a time so I expect you to deal." In the process you'll discover things about this process which suck, and you can automate or systemize them as business needs/opportunities dictate.
  - orangethirty 14y ago
    Good point. As programmers, we sometimes forget that we can get the business going without the software. Most of the time, all we need is some sales hustle going to confirm viability and get initial traction.
  - trvlngwlbry 14y ago
    I agree. I like the section in The Lean Startup on the related idea of the 'concierge MVP', whereby you're serving your initial customers very manually to really understand their needs before investing heavily in automated systems. The example from the book that comes to mind (and I forget the name of the startup) was a grocery delivery app. They started out by manually going up to people at the grocery store and offering to give them suggestions on groceries to buy based on meal ideas. Eventually, they got someone to agree to participate and provided enough value to the person that they could - and did - get paid by the customer. This helped validate their idea to started building out the app that would do the same thing using software.
  - Firehed 14y ago
    Conceptually I agree, but having spent the last <way too long> being fed by ZeroCater, there's a lot of stuff that falls through the cracks when humans are involved - and when you are dealing with your customers every single day that tends to get noticed.
    - ximeng 14y ago
      Specific examples would be interesting...
      - Firehed 14y ago
        Of ZeroCater? They have a feedback form that's emailed out an hour after lunch, but the actual suggestions we provide go largely ignored. Several employees have described it as them having really short-term memory. They also seem to insist on "trying out" restaurants again that the entire company dislikes. Further, the feedback (when taken into account) never seems to apply to the company, only to the specific restaurant. For example: we request that next time $sandwich_shop delivers to leave the bread dry and put mayo and mustard on the side. That happens the next time $sandwich_shop delivers (though frequently not the time after that), but does not happen when $other_sandwich_shop brings food.
- niftylettuce 14y ago
  We actually started out with a fully fledged system, however we needed to drastically simplify things so we cut back quite a bit :) Had some help from some awesome folks and we got moving! If anyone has ?'s let me know, we've bootstrapped everything so far. https://teelaunch.com https://teelaunch.com
wikwocket 14y ago
This reminds me of Amy Hoy's advice, to develop a pitch/offer that resonates with people, and only then to develop the actual product/service to meet that (verified) need. I believe she refers to this as crafting a "Shut up and take my money!" pitch.
edw519 14y ago
A lot of software is sold prior to existing at numbers substantially higher than $50. And a lot of software that is already paid for is never delivered. Or delivered late. Or delivered, but not as expected. Don't. Do. This. Please don't mix the popular memes of "Release early, release often" and "Good enough" with "Get paid up front". This happens so often that I've made a career from cleaning up the mess left by people who didn't deliver what was already paid for. Be very careful if you do this. It's a whole lot easier to repair your code than to repair your reputation.
- travisp 14y ago
  I would hesitate to actually get paid up front unless you really do have something coming soon, but it's quite trivial with many of the payment networks to collect the information and not charge until you're ready. If you truly have no product yet and your ability to deliver is not certain, this seems like a reasonable way to get promises to pay for something while still having a way to exit gracefully if you find you can't deliver.
  - pulledpork 14y ago
    Great idea, this is called an authorization hold for credit cards however I believe most banks will only honor this for about 7 days.
    - travisp 14y ago
      Actually, with Stripe and Amazon they will just hold on to the information and not authorize/charge so you can wait much longer (like Kickstarter). The downside is that you aren't guaranteed to be able to charge the amount at the end, but I don't think that's likely to account for the majority of your customers.
- jiggy2011 14y ago
  I suppose it depends on whether you have integrity or are just seeking to maximise the $. The people who's mess you cleaned up are likely to have already been paid (maybe even more than you). I'd certainly love to know how many sports cars have been bought off the back of government software projects where a line of code was never written.
scoot 14y ago
Oh dear - Dane Maxwell^ has a lot to answer for. First Nathan Barry (http://news.ycombinator.com/item?id=5026251 http://news.ycombinator.com/item?id=5026251), and now you. Regurgitation something you heard someone else promote as good business practice doesn't make it so. Have you actually done this? Were you successful? This isn't at all what Garrick is promoting, but rather that when when your MVP product crosses the threshold from M to V (so-to-speak), you'll be in a position to fulfill, and know you're on the right track. "the exact moment you have anything to sell – you’re ready to make that first sale" ^[For those that didn't come across Dane Maxwell's "The Foundation" during its marketing phase towards the end of lsat year, safe to say that if you're familiar with typical "information marketing" strategies, that is what make up the bulk of this "product", rounded out with a bit of idea and product development, and some rather incongruent self-help, group-hug conference calls slapped on. It isn't all bad, but someone who advocates skimming email addresses from web sites to send unsolicited commercial emails to, along with long-form sales pages, and pre-payment for non-existing products, has to approached with a degree of skepticism. With the exception of this info marketing product, Dane Maxwell's own track record in the methodology he promotes is limited at best.]
- mnicole 14y ago
  Similar to the Nathan Barry situation, I felt that the Execute book (touted as a book about getting a product out the door in a week, written in a week, but not available in any other format than print for two months) was equally asking way too much for the lack of information given. I wrote out this huge response to one of the designers and posted it on Dribbble, but deleted it after his response was merely "Thanks, we might do that later." Basically it dwindled down to "Why? Who are you? What have you done? You've proven nothing to me on this one page site, which isn't even attractive in itself. We don't even execute a product together, you tell me how you do it, but that assumes too much on my capabilities. Does this book expect me to know how to program? Does it expect me to know how to design?" Information on the book was spread across three different websites, the Table of Contents screenshot was just a mockup, and none of the sections seemed to be about actually doing something so much as "how it works for me." Well, I read enough "How x works for me," posts on the internet, and they are almost always pointless and subjective. Just really basic stuff that would have helped convince people that they were making a solid purchase. If you're asking for money up front, especially if you don't even have any idea what the final product is going to look like (i.e. the author scrapped the book with three out of the seven days he'd slotted and rewrote it), this is a minimum of what I'm expecting. Maybe I just don't want my readership to be suckers, I want them to be people who know what they're getting before they get it, as that will only help me spread the word and make more sales in the end.

by patio11 14y ago

jasonkester 14y ago

The recruiting agency that launched here yesterday seemed like a good example of this. Their entire product consisted of two webforms (without even any validation) that would collect contact information. It's entirely possible there was no database behind it, and that it just emailed the founder. The founder would then send out a mail to the addresses in Pile A saying "pay us $25k and we'll forward your details to Pile B using our Top Secret Algorithm". No computers necessary. And genius.

patio11 14y ago
There are a lot of businesses that start out that way. Probably my favorite example is ZeroCater, which -- to my understanding -- was a cell phone, a Googledoc spreadsheet, and a lot of hustle. "Hey YC companies hit me up, I'll order all the sandwiches this Thursday. "Hello Bay Area restaurant, I want to place a $4k order this Thursday and every two weeks for the next six months. Can I talk to your owner? We have some requirements to make this work." "Hey Valley IT company, tell me your dietary restrictions and food magically appears at your office, for the low low price of [guesstimate: $400 / employee / month]." "Hey Valley restaurant, we're really loving the sandwiches. Here's an order for $6,000 and please pay extra special attention to the note about the vegan ones. I know it's a hassle but then again I do order $6,000 of sandwiches at a time so I expect you to deal." In the process you'll discover things about this process which suck, and you can automate or systemize them as business needs/opportunities dictate.
- orangethirty 14y ago
  Good point. As programmers, we sometimes forget that we can get the business going without the software. Most of the time, all we need is some sales hustle going to confirm viability and get initial traction.
- trvlngwlbry 14y ago
  I agree. I like the section in The Lean Startup on the related idea of the 'concierge MVP', whereby you're serving your initial customers very manually to really understand their needs before investing heavily in automated systems. The example from the book that comes to mind (and I forget the name of the startup) was a grocery delivery app. They started out by manually going up to people at the grocery store and offering to give them suggestions on groceries to buy based on meal ideas. Eventually, they got someone to agree to participate and provided enough value to the person that they could - and did - get paid by the customer. This helped validate their idea to started building out the app that would do the same thing using software.
- Firehed 14y ago
  Conceptually I agree, but having spent the last <way too long> being fed by ZeroCater, there's a lot of stuff that falls through the cracks when humans are involved - and when you are dealing with your customers every single day that tends to get noticed.
  - ximeng 14y ago
    Specific examples would be interesting...
    - Firehed 14y ago
      Of ZeroCater? They have a feedback form that's emailed out an hour after lunch, but the actual suggestions we provide go largely ignored. Several employees have described it as them having really short-term memory. They also seem to insist on "trying out" restaurants again that the entire company dislikes. Further, the feedback (when taken into account) never seems to apply to the company, only to the specific restaurant. For example: we request that next time $sandwich_shop delivers to leave the bread dry and put mayo and mustard on the side. That happens the next time $sandwich_shop delivers (though frequently not the time after that), but does not happen when $other_sandwich_shop brings food.
niftylettuce 14y ago
We actually started out with a fully fledged system, however we needed to drastically simplify things so we cut back quite a bit :) Had some help from some awesome folks and we got moving! If anyone has ?'s let me know, we've bootstrapped everything so far. https://teelaunch.com https://teelaunch.com

wikwocket 14y ago

This reminds me of Amy Hoy's advice, to develop a pitch/offer that resonates with people, and only then to develop the actual product/service to meet that (verified) need. I believe she refers to this as crafting a "Shut up and take my money!" pitch.

edw519 14y ago

A lot of software is sold prior to existing at numbers substantially higher than $50. And a lot of software that is already paid for is never delivered. Or delivered late. Or delivered, but not as expected. Don't. Do. This. Please don't mix the popular memes of "Release early, release often" and "Good enough" with "Get paid up front". This happens so often that I've made a career from cleaning up the mess left by people who didn't deliver what was already paid for. Be very careful if you do this. It's a whole lot easier to repair your code than to repair your reputation.

travisp 14y ago
I would hesitate to actually get paid up front unless you really do have something coming soon, but it's quite trivial with many of the payment networks to collect the information and not charge until you're ready. If you truly have no product yet and your ability to deliver is not certain, this seems like a reasonable way to get promises to pay for something while still having a way to exit gracefully if you find you can't deliver.
- pulledpork 14y ago
  Great idea, this is called an authorization hold for credit cards however I believe most banks will only honor this for about 7 days.
  - travisp 14y ago
    Actually, with Stripe and Amazon they will just hold on to the information and not authorize/charge so you can wait much longer (like Kickstarter). The downside is that you aren't guaranteed to be able to charge the amount at the end, but I don't think that's likely to account for the majority of your customers.
jiggy2011 14y ago
I suppose it depends on whether you have integrity or are just seeking to maximise the $. The people who's mess you cleaned up are likely to have already been paid (maybe even more than you). I'd certainly love to know how many sports cars have been bought off the back of government software projects where a line of code was never written.

scoot 14y ago

Oh dear - Dane Maxwell^ has a lot to answer for. First Nathan Barry (http://news.ycombinator.com/item?id=5026251 http://news.ycombinator.com/item?id=5026251), and now you. Regurgitation something you heard someone else promote as good business practice doesn't make it so. Have you actually done this? Were you successful? This isn't at all what Garrick is promoting, but rather that when when your MVP product crosses the threshold from M to V (so-to-speak), you'll be in a position to fulfill, and know you're on the right track. "the exact moment you have anything to sell – you’re ready to make that first sale" ^[For those that didn't come across Dane Maxwell's "The Foundation" during its marketing phase towards the end of lsat year, safe to say that if you're familiar with typical "information marketing" strategies, that is what make up the bulk of this "product", rounded out with a bit of idea and product development, and some rather incongruent self-help, group-hug conference calls slapped on. It isn't all bad, but someone who advocates skimming email addresses from web sites to send unsolicited commercial emails to, along with long-form sales pages, and pre-payment for non-existing products, has to approached with a degree of skepticism. With the exception of this info marketing product, Dane Maxwell's own track record in the methodology he promotes is limited at best.]

mnicole 14y ago
Similar to the Nathan Barry situation, I felt that the Execute book (touted as a book about getting a product out the door in a week, written in a week, but not available in any other format than print for two months) was equally asking way too much for the lack of information given. I wrote out this huge response to one of the designers and posted it on Dribbble, but deleted it after his response was merely "Thanks, we might do that later." Basically it dwindled down to "Why? Who are you? What have you done? You've proven nothing to me on this one page site, which isn't even attractive in itself. We don't even execute a product together, you tell me how you do it, but that assumes too much on my capabilities. Does this book expect me to know how to program? Does it expect me to know how to design?" Information on the book was spread across three different websites, the Table of Contents screenshot was just a mockup, and none of the sections seemed to be about actually doing something so much as "how it works for me." Well, I read enough "How x works for me," posts on the internet, and they are almost always pointless and subjective. Just really basic stuff that would have helped convince people that they were making a solid purchase. If you're asking for money up front, especially if you don't even have any idea what the final product is going to look like (i.e. the author scrapped the book with three out of the seven days he'd slotted and rewrote it), this is a minimum of what I'm expecting. Maybe I just don't want my readership to be suckers, I want them to be people who know what they're getting before they get it, as that will only help me spread the word and make more sales in the end.