Guest post by Jason Cohen.
“My idea isn’t good enough yet” explained a friend who is thinking of starting his own company. He’s waiting for the idea to be completely fleshed out before taking the leap.
Newsflash: Your idea probably sucks, and it doesn’t matter because your business will probably turn out to be something completely different.
Sounds wrong? Let’s see.
In 1998, a company received $4.8 million in funding to “beam money between Palm Pilots.” I’ll code-name this product: MoneyBeamer.
Here’s the pitch. Alice wants to give Bob some money, but Alice doesn’t have cash or her checkbook. There’s no ATM around. Both Alice and Bob do own palm pilots and they both previously installed MoneyBeamer and, despite having forgotten all their normal modes of money transfer, they did remember to bring their palm pilots. MoneyBeamer will allow Alice to send money to Bob. Well actually it won’t, but it will remember that Alice wants to send Bob money, and once Alice gets back home and connects her Palm Pilot with her computer, and after she dials up to the Internet, MoneyBeamer will contact a server and transfer the money, provided of course that Alice has the money and didn’t secretly change her mind in the meantime.
Would you have invested in them? Not with an idea like that. You’d be wrong though — it was PayPal. Their work with encryption combined with an idea for a consumer-targeted on-line banking system made it the easiest way to send money… by email. They were sold to eBay for $1.3 billion. Today they process $2,000 of payments every second.
I’m sure you won’t recognize this web-based sensation:
This is Game Neverending: An in-browser multi-player on-line game “with no way to win, nor any definition of success.” (Sounds like a lot of Web 2.0 companies to me.) It never saw the light of day.
What was most interesting (to its alpha testers) was that people could share game objects by dragging them into chat windows. They saw this as a useful enhancement to chat applications in general, so as plans for the game fizzled out the engineers created a Flash application for real-time chat plus file-sharing with a particular emphasis on image-sharing.
Unfortunately the Flash application was only real-time — your pictures didn’t stick around when you closed it. And this was fatal because it turns out people were interested in the sharing part more than the real-time part. So in yet another upheaval they rewrote the Flash application as a regular website and lo, Flickr was born. Now it’s the largest photo-sharing site in the world with 3 billion photos and 5,000 more uploaded every minute.
Of course a rant like this wouldn’t be complete without self-deprecation, so let’s accompany the Ghost of Christmas Past into the annals of my own company, Smart Bear. My first idea was a product called Code Historian; it could dig through the history of a file and show you what changed. Accurate name, but turns out to be almost useless.
- Mar 24, 2003: Hideous. ”Do one thing and do it poorly.”
- Dec 22, 2003: Fugly. ”Three products… is that enough for a Suite?”
- Oct 10, 2004: Lame. ”Everything above the fold, most expensive first.”
- Jan 11, 2006: Getting there. ”You really need a graphic designer. No, really.”
- Sep 10, 2007: Ain’t bad. ”At least you admit ‘code review’ is all that matters.”
- Present day: Nice. ”Hey, where did those other products go?”
At one point we were selling six different tools; the only one that mattered in the end was Code Reviewer. Perhaps a screenshot will make this clear:
The point of all this isn’t to berate anyone for their crappy ideas. In fact, just the opposite — the point is that it doesn’t matter what your first idea is. First, it’s probably wrong. Second, the only way to find the right one is to try the wrong one and see what happens. You won’t find it by fiddling around with PowerPoint slides and Photoshop mock-ups.
So get out there and make some mistakes! As Neil Davidson said recently:
You don’t need stratospheric growth and a billion-dollar addressable market to bootstrap a software company. A $50,000 market opportunity is enough to get you off the ground — once you get started you’ll figure out the rest.
(Neil is the co-founder of Red Gate. It started as yet-another-online-bug-tracking-system that no one cared about but is now a popular purveyor of fine SQL database tools with 95,000 customers to their credit.)
If you liked that, you’ll probably like these too:
- Uncommon Interview: Bob Walsh, Digital Entrepreneur
- Not disruptive, and proud of it
- Employed with a side of startup
- Rude Q&A
- Communicating Values: Show, don’t Tell
This post originally was published December 22, 2008 on Jason Cohen’s blog, “a smart bear.” Check there to see comments and more tips from his readers!
Jason Cohen founded Smart Bear Software, maker of Code Collaborator, a tool for peer code review and recent winner of the Jolt Award. He took Smart Bear from start to multiple millions in revenue and 50 percent profit margin without debt or VC, then sold it for cash. He also is a founding member of ITWatchdogs, another bootstrapped startup which became profitable and was sold. He’s also a mentor at Capital Factory (like TechStars or Y-Combinator in Austin). And, he’s the author of Best Kept Secrets of Peer Code Review, the most popular book (35,000 copies) on modern, lightweight methods for doing peer code review effectively without everyone hating life. He blogs at “a smart bear.” Email him: jason (at) asmartbear (dot) com