

Build Your Product, Then Your Business - dberube
http://blog.mojotech.com/post/46245524128/build-your-product-then-your-business

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benjaminwootton
Do we not have exactly the opposite problem within this community?

We know coding so we spend our time hacking away in dark rooms on product
stuff such as frameworks, features, deployments, websites etc.

We leave considerations about marketing, distribution, customer research till
later, and end up building something that we have no way to effectively
market.

The order should probably be to develop the business model, then develop the
product, and only add this kind of administravia in as absolutely necessary.

~~~
flyosity
Figuring out what to do after you build a product is only hard if you don't
plan to sell the product. For example, if you build a consumer-oriented
service that you plan to offer for free, then, yes, developing the business
model is hard. And by looking at lots of "pageview-successful" startups who
are still trying to make their first dime of revenue, it may take years to
graft a successful business model to a free service. Hell, I think Twitter is
still working on this.

But if you build a product that _you_ want because it fits a need that you
have, then it'll probably fit other people's needs as well. And then you
attach a price to it, and then people pay for it, just like any other types of
goods that people purchase. Examples of products with simple business models?
SaaS apps with monthly subscriptions. Build a good product, charge a fee to
use it. Yes, you still have to figure out how to market it, but since the big
hurdle is getting people to hand over money for the thing you built, you're
well on your way.

(And, just one more clarification, talking to potential customers and
integrating their feedback while you build the product and making sure that at
each step you're building something people _want_ is a good way to make your
marketing/distribution problems a lot simpler.)

~~~
jmathai
I think that's a bit of an oversimplification. Scratching your own itch might
not solve a need for a market big enough for a viable business. You end up
"pivoting" till you figure that out.

If there's a way to find that out early then you save yourself valuable time.
Time which could determine if you're able to stay alive long enough to succeed
or not.

Not at all advocating spending a year on market research but don't go straight
from idea to your basement to start coding. Not if you're trying to build a
business out if it.

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csmatt
In the past, no one ever seemed interested in the ideas I'd come up with. I
gave up on finding someone to pair up with from the start and spent most of my
free time working on a prototype for <http://www.socialocale.com> . I posted
about it in a FB status and the next day a coworker came in and said "let's
make this happen!" We've been working on just that ever since.

It really helps persuade people that your idea is worth it when they see that
you were driven enough to spend your free time to bring it into existence. It
actually probably tells them that 'you' are worth their time moreso than your
current idea.

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patrickk
What if formally incorporating your business is a prerequisite for getting
real user feedback (i.e. feedback that's not from friends and family)?

Like accepting credit card payments to a merchant bank account from real
customers, or setting up an iOS developer account for a premium app to accept
payments from Apple?

One of the pieces of advice YC gives to startups struggling to find direction
is to "charge users for something". Surely you can't do this unless you're
properly setup to accept payments. I suppose you could accept payments into a
personal bank account and incorporate later, but most tax authorities would
frown heavily on that.

~~~
victorhn
> I suppose you could accept payments into a personal bank account and
> incorporate later, but most tax authorities would frown heavily on that.

In my country many online retailers accept payments on personal bank accounts,
but being a total novice to receive payments i have some questions : is there
an amount of monthly flow of money where tax authorities start checking your
transactions in your bank account? also, how is the process? does your bank
notify your government that you are receiving an extra-ordinary amount of
money?

~~~
jsiarto
In the US -- there is no "minimum amount when authorities check bank accounts"
-- they can't legally do that. You are required to report all income to the
IRS regardless of source and it's generally not a good idea to mix personal
and business accounts. An LLC, EIN and bank account take about 1 hours worth
of paperwork and you're generally set to start exploring the business side of
an idea.

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etagwerker
How about this?

Build an experiment, then your product.

~~~
dberube
Isn't the product the experiment?

~~~
etagwerker
Not necessarily. You could build a smoke test (experiment) for a SaaS solution
for dog owners (product)

You have your vision, but before you go into building a product, you test your
target market.

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freework
He has it right about many companies who are more interested in building a
organization rather than build a company. I've seen it many times. I think it
is tied to economic strength. When the economy is strong, you see more
"culture based" companies who just want to hire their buddies and go through
the motions. When the economy is strong, you see more companies putting effort
into building a product and really trying to go after a market. Right now
we're in a market slump, so most startups you come across are mainly looking
to hire for cultural fit.

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nickfrost
I disagree. Just as many startups fail because they don't have an actual
business to be the foundation for their product. It's important to have
someone on your team (founder, advisor, investor, or whoever) thinking about
how to build a business, as well as someone thinking about the product. If you
do, then you're more likely to succeed than if you're just focused on product.
IMO.

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atomical
Or you pick a market with a lot of customers and competition and build a
product knowing that there is demand...

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DividesByZero
Wow, what a transparent strawman. Every 'how to do a startup' guide stresses
that getting your product in front of users is the key priority of every new
company.

Nothing I've ever read has ever advocated getting an NDA or figuring out
pricing strategy before you have interested users.

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davidw
Yes and no: some of that 'busywork' is pretty important if there's more than
one founder and you don't want to deal with a major shitstorm when someone
bows out and still wants a share, or some such similar situation.

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kemofo
This is exactly backwards. But I think the author was trying to say something
else and just messed up the title.

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samtp
Should be taken with a grain of salt since the author is in the business of
building web/mobile apps (products).

~~~
dberube
...and businesses

