

Creating a successful new online product - 13 tips - swombat
http://www.inter-sections.net/2008/05/07/13-tips-for-creating-a-successful-new-online-product

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SwellJoe
"The smaller the niche, the lower the bar to success."

And the smaller the success. Careful how small you go. Avoiding competitors is
kind of admitting, "I can't build a competitive product, so I'll build a
crappy one for people who don't have any alternatives." You may wow your
target audience, because no one has ever paid any attention to them, but that
doesn't mean you've built a successful business.

An old oil field and platform manager once said to me (after he'd been doing
water table research work for municipalities for a few years), "You're going
to bust your ass no matter what. You might as well bust your ass for $10
million as for $10 thousand."

Y'all can take all the 10 thousand dollar markets you want...I'll be over here
working on cracking a billion dollar (and growing) market. I might not come
out on top of the heap...but even second place is going to be a pretty penny.

~~~
skmurphy
Success in a small niche can enable success in a larger niche, which in turn
can enable a larger success. One of the properties of a market niche (or
segment) is that the members reference each other's buying decisions (in other
words one member will be influenced by another member's testimonial). If you
get to critical mass in a niche (typically about 1/6) before anyone else, then
your marketing costs go down and your customer acquisition becomes easier.
There is a lot of benefit for aiming at a small niche to get started, and it
doesn't preclude serving a larger market later. By the way, 1% of a large
market is a recipe for extinction. You have all of the cost of trying to reach
a large market recouped over a tiny customer base.

~~~
SwellJoe
"By the way, 1% of a large market is a recipe for extinction. You have all of
the cost of trying to reach a large market recouped over a tiny customer
base."

This is actually a different argument. 1% of any market is a recipe for
extinction...but less so in a larger market. The problem with the "even if we
only get 1% of the market we'll make X million" fallacy is that reaching each
new customer costs a certain amount--it doesn't matter how many potential
customers there are...you have to community your product and its benefits to
each of them individually. In the end, every sale is an individual sale...you
have to convince someone somewhere that your product provides greater value
than its cost to them (even if it is free, they have to learn to use it,
remember to come back, etc.).

I don't believe this really counters anything I've said above. There are
plenty of niches that are so small that they won't even support a lifestyle
business of two or three people in comfort...sure, you won't have many
competitors, but you also won't get any vacations or live very large. In many
tiny niches you'd probably even have to have a real job to make ends meet.

My argument was, and remains, "be careful how small you go".

~~~
dfranke
Please tell me that "community" was just a typo of "communicate" and that you
didn't really use it as a verb.

~~~
SwellJoe
Typo, and past the edit period.

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naos
It's funny, I think I have made all the mentioned mistakes up to number 8 over
my 10 years of web development. I learned the hard way, and I can tell you
that those are really great advice.

Point 1, 2, 4 and 12 are especially important. Developing a prototype quickly
and and including the end user as early as possible make a huge difference in
the success level of a project.

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wumi
"Creating a new, successful product is like writing a book, creating a movie,
or raising a child. It’s a fiendishly complicated task that requires great
adaptability creativity. Rules can only get you so far. No amount of advice
can guarantee you success. Sometimes, the rules fail, and you need to adapt to
those situations and do what needs to be done, even if it flies in the face of
accepted wisdom. For every rule of product development, there is a dozen
examples of teams which did it differently and still succeeded."

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mynameishere
_You don’t need job adverts, you don’t need resumes, and you don’t need
contract negotiations. What you need is to network..._

I think I'll specifically avoid the shmoozers, thanks.

~~~
nostrademons
Networking doesn't necessarily mean schmoozing. It means hanging out with the
folks who are in the same field as you and going to the same events they do.
Most of the time, they'll have the same interests as you, so these'll be the
folks you want to hang out with anyway.

Posting on news.YC or programming.reddit counts, for example.

~~~
swombat
Absolutely. By networking I (I'm the author) meant putting yourself in
situations where you will meet the kind of people you want to be working with
and become friends with them.

If you go there with a pure agenda of "recruiting a co-founder", people will
sniff you out and you won't make any friends. But if you go there to meet
people in the community you probably will, incidentally, meet some who might
end up being your cofounders.

Daniel

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sabat
I can list a whole lot of successful web-based companies that don't fit many
of this guy's criteria. I'd suspect this was a DHH sock puppet writing it
except that he thinks that small businesses on the web are a lousy market, and
DHH's success with Basecamp probably proves otherwise.

