Birth of a New Product Filtering Ideas by Jack Krupansky We read stories about products and how they came about, but they're always after the fact and you have to wonder how much of their history was rewritten and what REALLY happened. I'm in the process of trying to turn a few ideas into products (and hopefully lots of money), so I thought I'd try to capture events as they're happening, starting as early as possible in the product cycle. A year from now we can all look back and compare my expectations with what really happened. And maybe you can give me real-time feedback to help me avoid big mistakes. The risk for me is that you could decide that I have a really good idea and do it yourself. Luckily, there is a several month delay between when I write an article and when you actually read it. I'll also withhold specific technical details, nominally in the name of focusing on marketing and other non-technical, business issues. Unluckily, that same "protective" delay may make any feedback moot. A benefit of writing about this process as it happens is that I'm essentially making a commitment to back up my words with actions. We all have lots of good ideas that could be wildly successful, but all too often we fail to translate those ideas into reality. Since my process of considering product ideas has been underway for some months, I'll try to give more of a broad overview of my approach in this article and in future articles you'll be able to see how events unfold. Starting Point A friend and I have a few existing products that have had rather limited success and we've been sitting around trying to figure out what to do. Revenue from the old products has tailed off. And maybe we're more than just a little bored with the old products. Then along comes the Internet and, like everyone else, we're being bombarded by all the hype, so we're constantly trying to figure out how we could make more than a little money off of it. Too Late? Even before we've started on a new product, we've already made a major blunder: we waited too long. We can no longer depend on significant revenue from the old products and we've missed many of the early opportunities in the Internet and other hot, new technologies. So we have to try to make up for lost time. The next time something new and promising comes along, we'll be much more inclined to jump on it much more quickly. But for now, we have to resort to playing catch-up. Leveraging Existing Investments Occasionally we discuss totally new ideas, but we usually come back to wanting to leverage our existing investments. I have mixed feelings about that. If we can adapt our product technology to the Internet then we've got a head start. That's good, but maybe we'd get a better return on our investment of time and money if we focused on hot new ideas with no baggage to slow us down. We both lean towards conservative, sensible approaches, so we're mostly focused on leveraging our current technology. I have two customers who are interested in significant enhancements to one of my projects. Primarily that would give me consulting income, but those extensions might improve the marketability of the product. Multiple Ideas, Parallel Thinking We still haven't focused on a single idea to turn into a product. We have a variety of ideas that we keep bouncing between. We can't afford to be so unfocused forever, but right now we have that luxury. Sometimes we think we've identified the "right" idea and then within a few conversations we discover a horrible flaw and reject that idea and go back to the drawing board. But just because we discover a fatal flaw doesn't mean that we won't also discover a fix for the flaw in the future. We have a lot of "back burners" going all the time. Focus and Persevere At any point in time we really do focus all our attention on a single idea and only move off that idea when we run into problems. Juggling multiple ideas allows us to keep going forward as rapidly as possible without getting terminally bogged down by difficult issues. The risk is that sometimes you need to have the stress of issues in your face and on your shoulders before you finally can get the inspiration or motivation or perseverance to come up with solutions. It all comes down to judgment and knowing when to hang in there and knowing when to retreat and regroup and attack under more favorable circumstances or on a different front. Technology Limitations A big part of evaluating any idea is the level of technological risk. In a previous article I mentioned something I was calling "Project X". It's something that really interests me, but I just never got the project going. Resources were a problem and maybe it was just too big for me alone. But the ultimate obstacle was that the project is critically dependent on technology that is just not available yet. I expect that within five years the technical hurdles will be surmountable. It's a little like having an idea for building a personal computer before microprocessor chips were available. For now, all I'm doing is keeping my eyes open for technology advances or opportunities to deploy a subset of my ideas. Marketing Issues Ultimately, product ideas must be evaluated by making a judgment as to how marketable the product will be. This may kill lots of great ideas, but it also kills lots of mediocre and truly bad ideas. When we're discussing ideas, mostly we talk about the technical issues. But inevitably we jump ahead to worrying about marketing. A good first question is whether we have any existing customers who have asked for something similar to our idea. Synergistic Thinking A lot of the benefit that my friend and I get from bouncing ideas off each other is that we think alike on a lot of issues. That allows us to avoid having to go into excruciating detail to convey our thoughts. This productivity benefit lets us go through lots of the ramifications of lots of ideas more quickly. This synergism allows us to do most of our discussions via email. Occasionally we talk on the phone or actually meet fact-to-face, but frequent email is the norm. Complementary Thinking My friends skills and thought processes do have differences from my own, so I get a lot more benefit from discussing ideas with him than if I was talking to myself or a clone. Many times one of us has an idea and the other has a completely different view of it. Specific Ideas One of our ideas involves combining my object-oriented programming language technology with my friend's relational database technology to produce an object-oriented relational database. There are already products that do this and the big players have staked out this turf, but my friend thinks he knows of niches where he can succeed. Another idea is the ability to submit an executable script from a client web page to be executed on a server. There are obvious security and performance considerations, but also a lot of potential for doing significant data access without causing horrendous network traffic. I've been thinking about tweaking my object-oriented programming language to make it a little more Java-like (or JavaScript-like), or maybe just leaving it alone and marketing it as being Java-like. Since those languages are already widely available, about the only marketing leverage I can get is the low-cost availability of the source code for my tools and my availability to customize it. I have a customer who had already looked at licensing Java and decided against it due to the high cost and the fact that they wanted something easier to use and something they could customize. I'm considering a stripped down version of my scripting language focused purely on expression evaluation. Over the past two years I've received a number of calls from developers who had a very simple need to allow their users to enter expressions (possibly from a "control" file) and evaluate them. They were scared away by the prospect of a full-blown scripting language. Online Mall I've already started pursuing my idea for an Entrepreneurial Software Developer's Mall web site. It's rather primitive and limited, but it is operational at http://www.basetechnology.com/esdmall.htm. It's essentially an online catalog of small, entrepreneurial software tool venders and consultants. There is no fee to get your product or services listed in the mall. Interest has been minimal, but I have some ideas for improving it at minimal cost. My only promotion for this idea so far has been to mention it in previous articles and a posting on the ENTNET-L Engineering Entrepreneur's Network mailing list (created as a result of interest at ENTCON'95.) I only received a few replies, but there's very little traffic in that mailing list anyway. I plan on directly contacting a number of smaller software tool venders and soliciting their entries. I may also just go through the relevant trade publications looking for smaller venders that have email/web addresses and add entries myself and then email them to see if they're interested in supporting the concept of the mall. Once I have about a hundred entries, I intend to print up a little flyer or business card and hand them out and post them at trade shows. I also have an idea for co-op advertising where several small venders share the cost of a larger ad for the mall with short blurbs for their products and services featured prominently. I want to increase the usefulness of the mall as a resource. I'll add a list of all the known trade publications and their web sites. There are a number of sites that list software tools and some existing software malls. All of them should be listed. I'd like to add an interactive Q&A forum so people looking to solve a specific problem can request help. Longer term, if the mall begins to attract enough traffic, there's the potential to attract advertisers to the mall itself. Even when the mall becomes successful, I don't expect to charge for having an entry listed. That's in the spirit of the Internet. I'd like to aim to list every software tool vender. If I can achieve completeness, then I can attract attention as the place to go to start looking for software tool solutions. I don't yet have a formula for profiting from this idea, but since it does provide me with a promotional vehicle for my own products it's worth pursuing as long as the costs are kept down. I consider this idea to be a diversion of my primary efforts, but since it has potential for helping my marketing efforts, it's worth my attention. If nothing else, it's also a vehicle for honing my marketing skills. Who knows, it may turn out to be more successful than any product I might come up with! Other Ideas My friend and I have discussed many other ideas. Lots of ideas for utilities for the Internet. But neither of us really has much interest in developing utilities. I've suggested that maybe we should consider some specific end-user applications that would allow us to use them as a vehicle for pushing our technologies, but neither of us had any specific application ideas, yet. We've considered focusing on tools for server- based applications since we believe companies are willing to pay real money for them as opposed to the client side where everything is supposed to be free on the Internet. I had an idea for a voice data entry control that could be placed in web forms. For example, it could be used to gather user input without requiring them to do lots of typing. One approach would be a voice recording, another is word recognition, and another is phoneme recognition. The latter would be technically simpler and allow the form to ship voice data to the web server as a phoneme stream without the bandwidth required for sampled audio. Another idea was a web browser add-in to allow the user to navigate via voice commands. These are interesting ideas, but I just haven't been interested in doing add-ins for other products. First Two Customers One of the most important filtering steps that my friend and I have not been doing consistently is making sure to line up at least two customers before pursuing an idea. If you have two prospects that sincerely claim that they'll buy your product, then MAYBE its a good (i.e., marketable) idea. If you don't have two prospects or can't find two prospects, then there's a good chance that your great idea is not so great. This is a step that we SHOULD be doing, but aren't due to laziness, discomfort with cold-calling, or maybe just outright fear that the answer will be negative. It's really an easy way to do a little market research. It doesn't tell you the size of the market, just whether there might be any market. Marketing Although the Internet is the much-hyped solution to marketing, there are a few adjustments needed. The Internet can be used for SOME promotion. It can be used to distribute promotional information and demos. It can be used for Q&A. It's a communications tool. But I don't think it's sufficient as a stand-alone marketing vehicle for most products. I think it works best when linked with traditional marketing tools. My current opinion is that it will work best for many entrepreneurial software developers when coupled with a limited print advertising campaign. Put quarter-page ads in relevant trade publications and focus them on the product benefits, not details, and point the reader to your web site where all the details and downloadable demos are available. My friend convinced himself that everyone was going to search for software tools on the web with Yahoo and AltaVista rather than continue to read magazines and all he needed was a downloadable demo. That's what he tried and after several months he's gotten very little interest. And that's for something that's FREE! I've had my products listed in lots of lists and never got even 5% of the sales I got from traditional advertisements. I really believe that you need a little print exposure in traditional trade publications where prospects browsing though the paper pages can be exposed to products they hadn't necessarily even been thinking about. One of the things we're really committed to is low-cost marketing. It's easy to come up with ideas which could succeed with huge outlays of marketing dollars. But we're both committed to wanting to run one-person operations. We may pursue ideas together, but more as partners and without any employees. Filtering Process Once you have a new idea, how do you evaluate it and decide what to do with it? There are a number of questions to ask about the idea. Not in any particular order, but they're all relevant to whether you should go ahead and productize the idea. What specific embodiments can you imagine (i.e. specific products)? What are their benefits to a customer? How many customers do you think you might be able to get? How much effort (and money) will it take to turn the idea into a shippable product? Can you do it yourself or is it so big that a team would be required? Can you whittle down the idea so that you could develop and market the product yourself? Is there a "ready" market for the product or would it require intense evangelism and a "missionary" sell? Can you quickly identify two customers who definitely would buy today if you had the product today? How long would it take to develop the product? Do you have the resources to wait that long? Do you have the patience to wait that long? Will your prospective customers have the patience to wait that long? How long might it take to ramp up sales to a level where you can pay yourself a reasonable salary and recoup your investment? We're really focused on low-cost, one-person operations, so every idea has to meet our criteria of being developed and marketed and supported by us alone. Even if your idea is sound, are YOU really interested in it and do you want to dedicate the next year or more of your life to seeing it come to fruition? Once you get customers, are you ready and willing to support them? What's the potential lifetime of the product? Are there potential follow-on products? Will the incremental investment to continue the business be minimal or will each increment be like starting over from scratch? In practice, my friend and I pursue these questions by exchanging email frequently. One of us suggests an idea and the other knocks it down, reinforces it, or maybe ignores it. We go back and forth and either the idea dies off or it just gets stronger. Ideas frequently sit on the "back burner" for extended periods. We don't ask all of these questions for every idea, but certainly the questions are floating around in the back of our heads and may end up pre-filtering ideas before they even get emailed. What's Next So far, we've been taking a go-slow approach with our idea evaluation. We're both doing consulting work to pay the bills. We need to speed up our evaluation process, but I suspect it may be two or three more months before we finally decide exactly what to go ahead with. We're both heading out to ENTCON in Colorado in a few weeks. Me from Paris and my friend from Vermont. Maybe we'll finalize some of our thinking, or maybe we'll be exposed to some new thinking that will cause us to radically change our thinking. Maybe serendipity will rule the day. Maybe the person sitting next to me on the plane has money to invest or a problem for me to solve. --- Jack Krupansky runs a one person software business, Base Technology, which develops and markets the Liana object- oriented programming language and CodeScript scripting language interpreter and offers Windows software development consulting. He may be reached at 800-786-9505 (messages), jack@basetechnology.com on the Internet, or at http://www.basetechnology.com on the World Wide Web.