Three Ways To Build A Product From Scratch [Audio Only]
Jun 27, 2020
Audio/Transcript follow along here.
I’m Philipp, CEO of PMFIT.AI and today we’ll be talking about the three ways to build a product from scratch, plus the pros and cons of each.
So, what are the three ways? One, product based on an idea you have. Two, trying to solve your own problem. And three, solving an audience’s problem.
Let’s start with the first one, which is building a product based on an idea you have. In this case you’re basically saying you have some insight about how the world works and you’re curious to see if you’re right about that.
This is pretty dangerous because effectively you’re hoping you understand the world correctly. You’re hoping there are people that find the problem you’re solving important. You’re also hoping people actually understand and like your solution. And lastly, you’re betting on the fact that you can go out and then go find these people who meet all this criteria.
A fun one I’ve tried to do before was where we said, Hey, what about mothers of newborns who are trying to lose weight? Right. Absolutely no grounding in reality, we just thought maybe that’s a problem. They’re probably going to be super tired, super short on time. Why don’t we create a thing called MyMammaFit and see how this turns out.
So we didn’t actually build anything other than a landing page cause we were so concerned that this could be a complete nonsense. And then we use this landing page to go to a bunch of Facebook groups and reach out to newborn mothers to see what they thought of this type of idea. Definitely felt like we were maybe incorrect about how the world works in that case.
After a bunch of conversations, it was so clear that we knew so little about what’s going on there that we just decided to pivot to an audience we were more familiar with.
This is where you see some really wacky consumer ideas and… Which is fine, a lot of successful products started out as wacky ideas like Facebook and Microsoft. But when this goes wrong is when someone spends months or years building something out only to be very, very frustrated at the end of it when no one wants what they’ve built.
This works well, when you set a hard limit, like a week or a day, and then you build the thing out and then you just search and search and search to figure all those questions out. Like, where are the people who want this thing? Who are they? And a lot of times you’ll even find whatever you’ve built doesn’t work exactly how you meant it to. But with the help of the audience you discover you can iterate based on their feedback.
So ultimately lots and lots of feedback that you get after just building something in a day or a week will allow you to start destroying a lot of the ambiguity around your idea.
I think another ironic place where products get built based on ideas of the world is inside of large corporations. It’s ironic because large corporations have so much information qualitatively and quantitatively about what people want. And on top of that they have a huge audience to start with but then sometimes you’ll see a product come out of a lot of group think and with no real customer involved. And end up as a disaster.
I think Hacker news posts I recently saw talked about how Sun* built this computer that allowed you to work remotely from anywhere with just a little card. And they had all their employees using this amazing software and loving it actually and this isn’t like 1990 or something.
And when they try to get people to buy this in the real world. Well, no one used Solaris* and no one was ready for this sort of solution. It was so ahead of its time. So because they weren’t grounded in the reality of the world even though their idea was great. It just never took off.
To end on a positive one for this one, it’s Zappos. If you’ve heard the story. They thought, Hey, do people want to buy shoes online? And they had no idea, but the internet was something that was becoming popular. So they went downstairs where there was a shoe store, took a bunch of pictures of the shoes. Then, posted those pictures online and set up their product that way.
Then when people actually bought the shoes, they would just go downstairs, purchase those same shoes at the same price and ship it to them. This was an amazing way to validate that, yes, in fact, people did want to buy shoes online. And it only took them I believe a day or a couple of days to figure this out.
The next one is about building something for yourself, solving your own problem. This one’s great because you’re probably not gonna want to build something that’s not very important to you. And if you’re honest with yourself, you’ll know if it’s a good solution or not. On top of that you’ll probably hang out with people similar to you. That’s just human nature. And then of course if things do pick up and you get traction, you’ll already know some of the next steps of what to build.
Really the risk is whether or not you’re so unique that there’s only a hundred more people like you a thousand more people. There’s a very little market. Y Combinator is huge on preaching this approach and that’s because beyond the nice properties of it, even if it is a tiny audience that you get ahold of initially you can then use adjacent value propositions to get the value out to more people. Or you can look for adjacent markets that will also enjoy your solution.
It gives you an audience to then iterate and build with, even if ultimately it doesn’t end up being your final audience. This is great cause then you’re not building something in a vacuum. You’re not just taking an idea, like we talked about in the first approach and then hoping your reality of the world is correct.
Let’s talk about what being honest with yourself is about. One instance of this that I’ve personally experienced is when we built a meal planner for losing weight. The idea was meal planner that allows you to cook food that’s delicious yet still lose weight. This was a big game changer for me who usually dieted by eating a pound of chicken every day for six months.
What I found happening was I love the meal planner. It’s very useful at first but over time I just stopped using it. Cause I just gravitate towards my favorite meal. And then eat that every day. Stop looking at the meal planner. And if you looked at my usage, you would clearly see this pattern of churning.
So even though I was enamored with the fact that it’s our own solution. Realistically, it wasn’t getting the job done as a product. So then when we realized this we thought, what other high frequency tasks are important around this. And the other one was about weighing in every morning. So every morning you weigh in and then you check to see how your progress is in the last seven days on average.
So we built that and that was great, but then it was on web. So that was a huge hassle to have to go to your computer or find that on your phone in the browser. So then we were thinking, okay, next how do we build that into a mobile app. And then next, how do you just avoid having type in anything manually at all? How do you sync?
So you really have to be a perfectionist. You have to make yourself very happy because chances are people who are not you are gonna expect even more than you. So it’s really difficult to be that honest with yourself since there’s so much dissonance from building it yourself.
If you truly solve it for yourself, though, where you’re using it every time you do that task. Then you’ll have something you can convince people like you to try.
One company who’s notorious for doing this as Apple. They literally just take a team of people and lock them up in a room for five years so to say. They’re building consumer products like a phone or Apple TV, or a laptop. Things that millions and millions of people already have before Apple even releases their very first product.
They don’t have to worry about the size of the market. They don’t have to worry about whether or not people understand. That’s actually a big reason why Apple releases products as a late entrant rather than an early entrant. Because if you just focus on the things you find most important as you’re building out this technology that’s already understood. If you perfected by having all the important tasks, be very easy, basically take as close to zero time and effort as possible. Then people are gonna find it extremely delightful. And the product will be a big success. And that’s exactly what Apple does over and over and over again. They take something that’s already well understood in the market. And then they deliver a much more delightful solution by optimizing the key tasks that exist in it and making the UX be extremely simple and easy to use.
And then the last one, which is basically trying to solve a whole audience’s problem. This one is the lowest risk approach by far. When you start with an idea or you solve your own problem, you’re ultimately trying to get to this point. Here you start with the audience and then the risk of course is if you’re unable to find the most important problem for that audience. Or if you’re unable to solve one of the most important problems for this audience.
Where can this come from? Something like a big Twitter following a newsletter, a podcast, some sort of community you’re involved in. Which is different than finding a community after building a product for yourself. This is where you are in a community that you already can talk to everybody.
What’s amazing about this is you can start by learning so much from the audience right away. You iterate with them right off the bat. Hopefully you have enough rapport where you can get feedback and best case scenario if you successfully solve this for them you will have your first few paying customers.
The fallacy I’ve seen with this one is where someone like a consultant tries to solve all the problems that they do in their consulting job. And that’s just not realistic when you’re trying to productize something. As a consultant you’re solving problems in the long tail. You’re jumping all over the place. Whereas as a product you have to find the most common denominator that is solvable. As in, it takes the least amount of engineering possible. And then really try to get that to perfection.
You ultimately want to use your audience as an input . You’re trying to synthesize what a lot of people are telling you and you’re trying to separate them in mini segments to find the most passionate one for the problem that you’re solving.
At the end of the day you’re still gonna have to get beyond that audience. So if you have 10,000 Twitter followers which is how you start, you’re still gonna have to make it beyond that audience. And that’s a different process then working with them. Just like it’s a different process scaling from anyone at the three approaches we’ve talked about.
That brings us to the final point of this topic, which is no matter how you start, you really don’t know what the total addressable market of anything is. Best you can do is gather a large enough audience with which you can iterate and then either fit your product to reach more markets. Add more value props for the same market so you can charge more. Or even hop to adjacent markets.
There’s a lot of frameworks and data and Gartner polls and all sort of things available. The voodoo magic that VCs used to assess this but at the end of the day the only way to know is to try to scale.
I hope you found this useful subscribed to my channel for more and check out our startup PMFIT.AI which helps you scale once you find your initial audience.