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Strategy Letter 0: Deciding which product to make

I am an avid reader of "Joel on Software", and I liked his Strategy Letters very much.

They contain information which is very useful for a software entrepreneur.

However, there is one thing that is missing, and which is of exceptional importance - that of deciding which product to make.

You can be the best programmer and manager in the world, pick a product idea, work hard on developing the software, and then have disappointing sales.

Marketing and development are hard, but these are subjects which have been researched toroughly - you can buy books, learn about them, work hard, and you will do them reasonably well.

Picking the right product to make is of extreme importance.

So, my question to Joel and to you is: how do you pick which product to make?

Thank you!

Monday, May 19, 2003

Do you mean picking which idea to follow up (when you've already come up with several) or coming up with an idea in the first place?

Monday, May 19, 2003

Make a product that fills a need in the market. There's your answer.

John Rosenberg
Monday, May 19, 2003

Marketing and development are easy compared to finding a production people will actually pay for.  A good idea can still fail in the execution phases, but if you have a product with no one to buy it execution can be perfect and you'll still fail.

Monday, May 19, 2003

er production = product in the above

Monday, May 19, 2003

The advice that I've heard (here on Joel on Software and elsewhere) is:

1. Sell it
2. Design it
3. Build it
4. Profit! ;-)

I think most engineers want to build something cool (often a dev tool they would like themselves) and THEN try to find someone to buy it. Unfortunately, this requires lots of upfront time, work, and money... before the hard work of selling (and making money) even begins.

If you can sell your concept FIRST, then you can more easily adapt it to your (prospective) customers' ACTUAL needs. And once you close in on a product that you can build and they will pay for, then you build it. The customer can pay up front (full or in part) to cover your development costs.

Monday, May 19, 2003

George, identifying hot product ideas is not something you learn by asking people how to do it. By the way, your comments that management and development can be learnt by anyone are also wrong.

Must be a manager
Monday, May 19, 2003

There is a good book on the creative process around marketing concepts - which plays into this topic - it's called "Jump Start your Business Brain" by a former P&G exec.

With a degree in CS and - knowing nothing about marketing and product development - I found it very valuable.

Doug Ross
Monday, May 19, 2003

"The customer can pay up front (full or in part) to cover your development costs"

How does this work for shrinkwrap products? Can you really commit to a delivery date for a million copies of a word processor before you've written any actual code? How many customers will pay for a word processor a year or two before it's actually available to try?

Even if you "sell" to a distributor rather than an actual customer, that just leaves the distributor needing to decide if they want to buy it, and a belief that they can sell it to customers (for sufficient profit for themselves) is the main reason they would make that decision. Given that a software company could hire the manager who made that decision, how will that decision be made?

If you want to create a new consumer product (especially if it's innovative, and not "Yet Another Word Processor"), you really want to have the market research to back up your business plan, but that's not the same as making an actual sale with the customer handing over actual money.

andrew m
Monday, May 19, 2003

Sometimes I come across a two page article that sums up how to choose a market.

This is one is absolute brilliance. A whole year of marketing at school will not teach you what is a 5 min read of that article.

Remember, at the end of the day, the amount of Money you can pay yourself is going to be based on the products you have. In other words, all those high paid developers are result of the company having a product to sell. If that company does not have a product, then they can’t hire a developer. The exception being the dot com boom, where all developers were being paid by wall street, and not actual sales and services.

If a software developer is to be paid good money, then the company must have a product to support that developer. There no magic here. If it is easy to make money, then every man and his dog will do the same thing. (so, it is NOT easy!).

However, this applies to any business, and has little to do with software. If it is easy to make money in a business, then you can bet a lot of people will start doing it, and it will not be so easy after a awhile! The only thing not easy in business is talent, that is hard.

Anyone can go learn to play the guitar. If you do learn the guitar, you are better off to play country music, then to try and come up with a new form of music.

Ok, now you can play the guitar, but you certainly can’t fill a stadium like the Dixie Chicks Can. (they are what, worth each 100 million + EACH right now?)

So, you for sure don’t want to pick a market that does not exist, since that likely means that no market exits!

However, to do well in those existing lucrative markets, you need to do a very good job.

Anyway, that simple and brilliant  market article is:

The above is a must read….

Albert D. Kallal      (Microsoft MVP [ms-access])
Edmonton, Alberta Canada

Albert D. Kallal
Tuesday, May 20, 2003

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