The Business of Software

It seems to me that the biggest single challenge Micro ISV's face is finding a business problem to solve and thus generating a value proposition with their software.

Most geeky types' software solves problems from the business they know - developing software - hence they find themselves building products for developers like project management tools, bug trackers etc, etc. But this is a limited market.

As a Micro-ISV wannabe myself I'd love a way to get in touch with people with a business problem to solve. In fact, I'd even buy a business problem.

So, and I know this is a naive question but what the hell, where can I find my business problem to solve? Is there a market in selling business problems I can buy from?

Go to a trade show focused on an industry you might like to sell software into.  It's usually pretty cheap (< $100) to get an "exhibits only" pass.  With this, you can view all the vendors' booths and see who's trying to sell what to whom.  But, even better, you'll get access to a bunch of potential cusotmers who can tell you what they need that nobody at the trade show is selling.  I guess this works for identifying vertical market software needs, but maybe it's bad for something more cross-cutting, like a figuring out that lots of businesses need a recruiting management application (resumes, etc.)

RentACoder, eLance, bizmoonlighter are all sites where people plainly list the problems they're willing to buy solutions for.

The true value there isn't the opportunity to bid on a project for peanuts, but it's the knowledge of what people want and where problems exist. There are many ways to use these sites that their creators never intended.

Business ideas aren't hard to come up with: e.g., I was preparing the garden yesterday and the sight of larvae in the soil made me wonder if there was a software market for insect & pest management (quick googling shows that there is indeed a large one), the hard (time consuming) part is getting the requisite domain knowledge so you know what to build.
Even with a first customer, you need to be sure you're not building something that only that customer wants.

Anyway, the take home message is that if ideas can be so easily generated while digging in the dirt (and that was only one of several I had at the time), then the ideas themselves can't be worth much; hence no market.

I'd be happy to sell you a business problem for $50,000 ;-)

Seriously, though, the best way to find a business problem is to talk to potential customers in an industry that you find interesting.

If you focus on something you have a strong interest in, it will keep you going through the down times.

Altertatively, pick up some trade journals for an industry you're interested in.  Scan the ads, topics, etc. to see what is being offered.  Look for gaps and opportunities.

Hope this helps.

Somebody made / is making a bundle from match.com et al.  Likely that's a problem you've encountered and solved with some degree of success at some point in your life.  At the time, did it occur to you to write an application?  (I have one in the back of the list for keeping track of match dates, but current BF isn't too happy about my doing the user testing...)

Ditto craigslist.

Ditto etc.com, etc.net, and so forth.

So true, they're not microISV anymore. Didn't even know there was a market hardly until the solution arrived.

What itches do you experience in your own life away from the PC that could be scratched by the right application?

Paul Graham seems to have come to the same conclusion as lw.

ideas = worthless
execution = priceless

http://www.paulgraham.com/ideas.html

One of the previous bosses I worked for had lots and lots of business problems. Many of which he refused to recognize as a problem as admitting it was a problem reflected poorly on his management skills.

Here are 2 from that company:
http://discuss.joelonsoftware.com/default.asp?biz.5.332716.11
http://www.crazyontap.com/topic.php?TopicId=2502#31431
If I did some searching on joel's site, I bet I could find another dozen+ stories from that company.

Another problem that he refused to acknowledge was that one of his customers figured out how to steal about $1k/month from him (the customer did about $30k/year in business and at the profit margins of that line, he would need to do somewhere over $150k/year in business to cover that shrinkage). Even when it was pointed out in black and white, he refused to acknowledge it, or take action. When I demonstrated a prototype system that would stop such theft, it was rejected as his wife didn't want to use it: "who do you think you are? one of the owners?"

I suggest that there will be a number of people in business who won't recognize that they have problems at all. "I can stop drinking/smoking anytime I want to."
http://c2.com/cgi/wiki?DeadMooseOnTheTable

Personally, I use guru.com and rentacoder requests  as "homework" assignments. As I don't get the bids (usually getting underbid by someone who bids $20 total for a 400-hour project), I sometimes use the specs/reqs for ideas and implement only the interesting parts. Most I just think about what the solution would look like, scribbling on notepaper or cocktail napkins.

"But this is a limited market."

Wow, how big of market do you need?  I would guess there are hundreds of millions of dollars spent every year in developer tools.  And other technology solutions?  BILLIONS are spent every year in middlewear, databases, b2b products, web servers, language add-ons, etc.

I don't see how the 'software/developer/middlewear' market is small at all.  Thats the industry all of us know best.  I'm always a little suprised that so many people try to find ideas outside the industry they were blooded in.

>> I'm always a little suprised that so many people try to find ideas outside the industry they were blooded in.

Because...

1) Developers are cheap (poor customers).
2) Developers think they can do it better and often do it themselves - develop their own solution - that is a "scaffold" but adequate for themselves.
3) From the developer end, many people want to solve the same problem they see someone else having solved. Or they immediately try to mimic someone who is successful. IE: how many programmer's text editors are there? Tons. How many people here on JOS and affiliated boards (CoT) have discussed writing their own bug tracker because "how hard could it be"? Several, in my recollection.

As an example, the developer's components market is notoriously difficult to break into. This plays into another programmer foible: everyone wants to be a "standards setter" and develop their own hierarchy of components, just to show everyone they can OOP and therefore how brilliant they are. (a variation of #2)

Lastly, most developers are so far away from financial considerations in their employer's businesses that it's often very difficult to make a business case for a new product. It saves them time, sure... but their employer may not buy it for them, figuring that that is what the programmer is being paid to do.

When you get away from developers, you get away from the crowd and the groupthink.

Thanks all - some great replies and loads of stuff to follow up with

>> I'm always a little suprised that so many people try to find ideas outside the industry they were blooded in.

Because that's where the money is.  You want to be selling to people who CAN'T do what you can, not to people who know how to pull their own rabbit out of their own hat.

I don't sell art to other artists (much). 

I bet bricklayers don't lay a lot of bricks for other bricklayers.  Ditto plumbers and plumbing. 

You simply have to figure out how to get reach / find / understand that market, which may be harder for people whose entire lives have been spent at a keyboard.

> It seems to me that the biggest single challenge Micro ISV's face is finding a business problem to solve

So what you're saying is that there's this business problem which is finding a business problem to solve? Okayyyy...

+1 to the Paul Graham comment about the value of ideas of execution.

More to the point though, solving a not-very good problem exceptionally well is way more interesting than solving a really excellent an intereting problem in a half-assed way.

Would you rather have, say, a browser that didn't crash, or, a time machine that killed it's users only 97% of the time?

Paul Graham statement is the usual answer, however, I don't find it helpful, because you have to begin with an idea and a very good one makes the execution a lot easier.

"because you have to begin with an idea..."

I used to think the same thing and now I very much disagree.  You are better off beginning with a customer.  Actually that should be customers.

That is why a lot of ideas we have are based around developers because we are that customer.  We have a general idea what we need and we extrapolate it to everyone else.

But, having an idea doesn't really help you unless you know someone needs that idea.  I have an idea, I should write software for fireman to keep track of how long their equipment has been in use, when it was last inspected, blah, blah, blah.

Do they actually need it?  I have no idea. 

Better to go to a bunch of fireman and say "Hey, I was thinking about writing some software for you guys, what do you need?"

Maybe they will say we need something to keep track of how long our equipment has been in use, when it was last inspected, blah, blah, blah.  It's the same exact idea but there is a LOT more power in it.  Instead of thinking they need it I now know they do.

Of course, I haven't made a dime yet so standard disclaimers apply.

People have to WANT your solution - not just need it.

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