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Perrin and I are happy to bring you episode 63 of the Niche Pursuits podcast. We took a bit of a break while Perrin took the plunge and joined the married club! That's right, Perrin got hitched recently…wedding gifts still welcome!
We’re back and and excited about today’s episode which will be part 1 of a 5 part series on how to bootstrap a software business.
Along the way, we will look at my software company, Long Tail Pro and how it became my most successful venture and we’ll also tell you, the listener, how to go out and start your own successful software business.
Perrin and I discuss the advantages of a software business. The advantages include huge profit margins, being able to create once and sell an infinite amount of times without major ongoing costs, and finally you do not have to be a software developer yourself to create a software company.
The downside is it can require more in-depth market research and more upfront investment.
When you think you have an idea, research is so very important. Research what already exists and if your idea isn’t different in some way then it’s likely no better than what’s already out there.
Three key ways to validate your software development ideas:
- Solve your own problems. Long Tail Pro was developed because I was frustrated with limitations I encountered on other keyword research software.
- Be different from your competition. While there will be similarities, some aspect of what you develop needs to be different from the competition. It’s important to note that buying decisions made by the consumer are based on those differences.
- Find out if your competition is making money. We discuss some tips on how you can learn if they are financially successful.
Software development can be an amazing business. In the next part of our series we’ll talk about how to hire somebody great to be your software developer.
We’d love to hear your software ideas or learn about any cool software businesses that we may not know about. You can always send us an email or leave a comment below. If you enjoyed today’s episode please leave a rating on iTunes right here. Thanks!
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Interesting post. Was more hoping for an update regarding your Amazon physical products business. Starting a software business requires an idea and the software will be complex. A physical products business seems much more “doable” for the average person who wants a lucrative side business and doesn’t have a lot of capital to hire employees, etc.
I’ll be discussing Amazon business in the future for sure.
Hey Spencer!! I am quite following your post from day 1. I was browsing your awesome contents. All those clear my doubt about many things, which I couldn’t find. I want to ask some question, which might be related to other users.
1. Many bloggers are from developing countries and where pay rate is quite low compared to US, UK market. So, Is it possible to built awesome niche targeting these markets?
2. I found your Niche projects very inspiring. Why they are down now? I didnt find any two of them.
1. I do believe it is possible; however, I haven’t ventured into areas outside the US.
2. Read the last posts here for project 1: https://www.nichepursuits.com/projects/best-survival-knife-guide/. The project 2 site is still up: https://www.nichepursuits.com/projects/a-penny-shaved/
really enjoyed this podcast..more like this please..great commentary on software startup and how to determine if you should even pursue an idea
Thank you Bo!!
Software Idea:
NEED: Disabled person needs to communicate with remote family.
My father is a stroke victim, and as a result, can’t speak well, and can’t type messages as he can’t really get the right word. But he can read, and understand. He is using an iPad to contact his friends and family by Skype and Facebook, but is limited to mostly reading, and clicking on links.
He needs a way where he can select “canned” messages, and send them, without having to type email addresses, URL, etc.
Duane…that sounds like a pretty interesting idea! I don’t know if anything like this exists, but I think its worth looking into for sure.
I’m still trying to see if niche website can work here in my country, Nigeria coupled with Adsense. I have always been thinking creating Software requires someone to be a software engineer. But your posts on this has really opened my eyes. When I get my niche web floating well, I will then test the waters of Software. Thank you ,Spencer. Your posts has been helpful all this time. Please, don’t stop this good job. The only room that always get bigger is the Room of Improvement. Love ya! From Nigeria With Love. Muah!
Gratz Perrin! Welcome to the club. I have been married for 14 years and still feel like I’m on the honeymoon ; ).
Guys, thank you for taking the time to share so much with us!
My head is buzzing with questions after listening to this podcast.
=> That was a great tip about mining information on how well a competitor is doing. If the company is not public then most of that information is usually a closely guarded secret for this reason alone. I never would have thought to do that. Thanks Perrin!
=> Stop and Think. Great advice. I have gotten myself into trouble in the past by not analyzing the market or doing the proper keyword research for a website or app and ended up wasting a lot of time and money. Just because the idea sounds good does not mean it will work and always needs to be scrutinized with proper marketing research.
=> You mentioned one of the cons of getting a new software business off of the ground is the starting capital. You mentioned $2k-5k and then Perrin mentioned $20k toward the end of the podcast (correct me if Im wrong). Could you break that down in one of the future podcast’s? What is the bulk of the cost? Have you thought about or ever researched crowd funding options?
=> Do you have your developers sign an NDA?
=> I was curious why you chose to develop LongTailPro with Adobe Air? Did you build it using HTML/JavaScript or Action Script (within Adobe Air)? Besides having the benefit of developing in a system that can be used across multiple OS’s, are there any other benefits of using Adobe Air?
The reason I am asking is I have a lot of software ideas I would like to pursue but I am always torn on what platform to build it in. Should I build it as an APP for both Android and iOS markets OR make it exclusively as desktop software? I have built Windows and Mac software nativity in the past and found that I could not get a decent ROI from the Mac side of things since it was only ever about a 1/10 of the user base. What have your experience’s been?
=> Overall the one area that I am nervous about is marketing. You can have the best idea in the world but if no one knows about it, it wont go anywhere. I am very curious about the marketing efforts that went into LongTailPro or if you hired out to a third party service.
=> Could you talk a little bit about billing platforms? LongTailPro has an upfront cost with a recurring billing, are you using a third party system to administer that?
=> Hosting & Development. These questions may be a little too dev specific, if they are I understand ; ). About the update server. Are you guys hosting everything off of an EC2 instance nativity? When checking the license between standard and pro accounts, are you using a third party system for that? Something like Recurly? I would love to hear more about your XP with the nitty gritty of the actual development process and hosting.
I appreciate any insight you can give. I recently left a lucrative job to pursue my true passion, internet/software entrepreneurship. Right now I’m build affiliate sites, apps and software products. The window of time I have is short (maybe a year) to get something working, so everyone of your posts and podcasts are like pure gold. Thank you both for taking the time to share so much XP with us all.
I got a ton more questions that I’ll hold back since this is only part one of a five part series ; )
Thanks Guys!
Thanks Matthew…glad you enjoyed the podcast so much! We’ll do our best to keep sharing great tips. Here’s some answers:
1. You asked about start up funds. The cost could be all over the map. The biggest bulk is usually development costs/hiring programmers. It could be as low as $2k to $5k if its something very simple. However, most apps are going to be closer to $15k to $20k…and this is still honestly on the low end. But I believe there are TONS of ideas that could be started for $10k to $20k. Other ideas are much greater than $100k to start.
2. NDA. Nope, never. I do my best to hire great people that I trust.
3. Went with Adobe Air/Action Script mostly because of cross platform capabilities. Building a native app is ideal; but you are correct that you would have to have 2 code bases for both mac and windows. If its a desktop app, then the windows market is much bigger…might make sense to start there.
4. I’ll dive into marketing quite a bit in future parts of the series 🙂
5. I use Clickbank as a billing platform/affiliate network.
6. We are using a 3rd party licensing system. Actually it was a 3rd party at the beginning, then I just bought out the technology; so its now inhouse.
I know these answers are brief, but hopefully that helps!
I enjoyed your all podcast, i got clear view on software startup and how to determine.I need help on Adsense Folk. If you’re interested ping me. Thanks for sharing.
As this is my first comment here wanted to start by saying how much I appreciate your podcast. Learnt lots and now investigating Amazon thanks to you.
Wanted to briefy share my software (non) experience to support your do your research thesis. I do a little DJing and was frustrated by the poor tagging in iTunes. There was no good Mac alternative so spent a day drawing up a spec and got a couple of quotes, which was about $6k from memory. Then I did some digging about App Store sales and pricing. Realised that would have to sell 10-12k to get any sort of RoI when typical apps do 10 or less a day i.e 3-4 year payback and the market is a little niche too. So I canned it. Then a month later someone put out something very similar and initially for free. Close escape!
Good job on your analysis! Don’t let the ideas stop flowing though 🙂
Thanks Spencer for all of your amazin tutorialss. Been learning a lot from your podcasts. I once had a good idea about an android app which I shared with a app developer. Sadly he stole the idea but couldn’t succeed in the playstore. He didn’t do proper research. My point is research is very important in case of software business, otherwise all the effortss become waste. However, i will be glad if you could make some new tutorial or stories on amazon niche sites.
Sorry to hear your idea got taken. Good luck!