Lessons learned from 13 failed software products(successfulsoftware.net)
successfulsoftware.net
Lessons learned from 13 failed software products
http://successfulsoftware.net/2010/05/27/learning-lessons-from-13-failed-software-products/
10 comments
I really liked hearing about these niche software companies. I've always this thought in the back of my mind that there might be money to be made building niche software because... well no one writes it.
Although, I suspect thinking about it more, it might be developed by people who are selling something else (like the furnance HW company making software for gas power installation companies).
Although, I suspect thinking about it more, it might be developed by people who are selling something else (like the furnance HW company making software for gas power installation companies).
I think you misjudge what people are willing to buy and how much money can be made from a niche.
Some of these had potential to make a lot of money, like Net-Herald (charged way too little by the sound of it, should have offered massive commission to vendors), R10Clean (if he didn't he should have targeted consulting companies that supply sharepoint or inhouse enterprise solutions, this is a constant pain point for them), Clean Chief and DRAMA.
And there are ones like Highlighter and PC Desktop Cleaner that had a massive potential market. After all RedGate are a famous start up and they sell simple programming utilities (simple in that they do one thing).
Think if you hadn't heard of reflector, and they'd failed to gain traction, their story would sound exactly the same as Highlighter's.
There's not a product on that list that I think had zero opportunity to start with, maybe chimsoft but he even managed to sell some copies for $2k each, so there was a demand.
And as for interesting, for me the self-assessments was the interesting part as some people got it spot on and some people blamed totally random things for failure.
Some of these had potential to make a lot of money, like Net-Herald (charged way too little by the sound of it, should have offered massive commission to vendors), R10Clean (if he didn't he should have targeted consulting companies that supply sharepoint or inhouse enterprise solutions, this is a constant pain point for them), Clean Chief and DRAMA.
And there are ones like Highlighter and PC Desktop Cleaner that had a massive potential market. After all RedGate are a famous start up and they sell simple programming utilities (simple in that they do one thing).
Think if you hadn't heard of reflector, and they'd failed to gain traction, their story would sound exactly the same as Highlighter's.
There's not a product on that list that I think had zero opportunity to start with, maybe chimsoft but he even managed to sell some copies for $2k each, so there was a demand.
And as for interesting, for me the self-assessments was the interesting part as some people got it spot on and some people blamed totally random things for failure.
You know, i'd also be really interested in the reverse of this in pretty much the same format, form successful products. Obviously, people could avoid specifically naming their products and niche but a brief "How long I spent working on it", "How I went about marketing it" and "Lessons I learned from it" would be great.
Bob Walsh/Micro-ISV from Vision to Reality (2006) - has a big chapter with interviews of starting "niche" companies from just launched to very successful(HubSpot/FogCreek). It was interesting to revisit their websites and see how many of them survived. Some are dead, some had failed products but they came up with new ones and became successful.
http://www.amazon.com/Micro-ISV-Vision-Reality-Bob-Walsh/dp/...
http://www.amazon.com/Micro-ISV-Vision-Reality-Bob-Walsh/dp/...
Almost everyone cited inefficient market research as a cause for failure. So my question is, how do I carry out market research?
It's actually very simple. Hard to do but simple. There is no sophisticated insight or knowledge or process you need to know. It's simple but hard.
Suppose you have an idea for some software for travel agents. Before opening an idea or writing a single line of html you go to the phone book and find the number of a travel agent. You call them and say :
"Hi can I speak to the manager please. Hi there, my name is Sam and I have an idea for a computer software tool that might be useful for Travel agents, I'm not selling anything but would you have 15 minutes available for me to talk to you and get your feedback ?"
Do that 20 times. Talk to 10 different people. List any repeated phrases, objections or suggestions. Ask each of them "Do you think this would be useful to other travel agents ?".
Now if you have the guts to do this very simple but difficult thing enough times that you actually talk to 10 different potential users you will know whether there is a market and if there is you will already have real beta testers lined up.
People may want to pick holes in this "what about..." "what if...". Yeah, you can analyse on the internet all you want but the fact remains, if you do this the chances of you building something people will buy goes up dramatically.
And the reason people don't do this is almost always fear.
(note: I was the Sam Howley in the article)
Suppose you have an idea for some software for travel agents. Before opening an idea or writing a single line of html you go to the phone book and find the number of a travel agent. You call them and say :
"Hi can I speak to the manager please. Hi there, my name is Sam and I have an idea for a computer software tool that might be useful for Travel agents, I'm not selling anything but would you have 15 minutes available for me to talk to you and get your feedback ?"
Do that 20 times. Talk to 10 different people. List any repeated phrases, objections or suggestions. Ask each of them "Do you think this would be useful to other travel agents ?".
Now if you have the guts to do this very simple but difficult thing enough times that you actually talk to 10 different potential users you will know whether there is a market and if there is you will already have real beta testers lined up.
People may want to pick holes in this "what about..." "what if...". Yeah, you can analyse on the internet all you want but the fact remains, if you do this the chances of you building something people will buy goes up dramatically.
And the reason people don't do this is almost always fear.
(note: I was the Sam Howley in the article)
Market Research is more or less Customer Development. So all the Lean Startup stuff is a good place to start learning how to do market research.
Awesome article. You hear a lot about getting feedback early being a good idea, but this really highlights it.
I was going to contribute to the list when I saw the call go out. But I didn't know I could make an anonymous contribution. Maybe I'm not yet read to admit the failure is actually a failure all the while the lights are still on.
The main thing to take away is that the formula for success is pretty simple but so many developers ignore it because they think they know better, or are just attracted to the technical challenge like moths to a flame. But if you want to make money with software, you've got to get everything right : the market, the price, the functionality, the presentation, the features. If you do get all this right, well, there's no easier way to make cash if all the skills you have involve using a compiler.
The main thing to take away is that the formula for success is pretty simple but so many developers ignore it because they think they know better, or are just attracted to the technical challenge like moths to a flame. But if you want to make money with software, you've got to get everything right : the market, the price, the functionality, the presentation, the features. If you do get all this right, well, there's no easier way to make cash if all the skills you have involve using a compiler.
This is a nice validation of Steve Blank's customer-focused model for creating start-ups. It's the kind of article I want to see more often on HN.
I would like to see more detail about what was done in terms of customer and market research for the more successful efforts though. I'm sure there's some valuable lessons to be drawn from that experience.
I would like to see more detail about what was done in terms of customer and market research for the more successful efforts though. I'm sure there's some valuable lessons to be drawn from that experience.
Any regrets? No.
Wow! Almost every one said that.
Now that I think about it, it's not that surprising. I have had 2 failed product businesses, and looking back, I did lose a lot of time and money. But I learned a lot. Both technically and business. Stuff I could have never learned in a regular job.
I have had quite a few good jobs since those days, and I've always done well, both with the work and the rewards. I attribute my success to those failures.
Failing with a startup often teaches more than succeeding as an employee. You may lose time and money, but the other dividends may make it all worthwhile anyway.
Wow! Almost every one said that.
Now that I think about it, it's not that surprising. I have had 2 failed product businesses, and looking back, I did lose a lot of time and money. But I learned a lot. Both technically and business. Stuff I could have never learned in a regular job.
I have had quite a few good jobs since those days, and I've always done well, both with the work and the rewards. I attribute my success to those failures.
Failing with a startup often teaches more than succeeding as an employee. You may lose time and money, but the other dividends may make it all worthwhile anyway.
That's how our mind works, it's very difficult to admit complete failure. You will always come with some reason to feel better , I guess it's for the better :)
"It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat." - Theodore Roosevelt
"It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat." - Theodore Roosevelt
Great TED talk in the same vein: http://www.ted.com/talks/dan_gilbert_asks_why_are_we_happy.h...
Most of the founders in the article are quick to bash their creation, saying "clearly there was no market need." I am not convinced, even for a very niche product. Poor marketing efforts can be blamed here -- it seems likely of hobbyist developers create a product and just sit there, waiting for someone to come buy it.
This talk is about commercial failure, not technical failure.
Some products seems a bit too simple and/or reinventing a-square-wheel to me (a syntax highlighter ?!)
That's one of the important take-aways: technical success does not equal commercial success. Spending years of your life creating a sophisticated, polished, technically impressive solution to a non-existent problem is not a recipe for success.
I struggle with this more than anything. I shrug off simple ideas because I perceive them to be amateurish and unimportant, and instead stress out over something bigger that may be infinitely less successful.
I'm gradually learning to just work on something, as sitting around waiting for some magical idea is a waste of time. Not to mention, you can discover much bigger problems and opportunities from working on anything as opposed to nothing.
I'm gradually learning to just work on something, as sitting around waiting for some magical idea is a waste of time. Not to mention, you can discover much bigger problems and opportunities from working on anything as opposed to nothing.
I can't stres enough how important your comment is. This is exactly the advice I got from a few of the very successful entrepreneurs that I've met.
you can discover much bigger problems and opportunities from working on anything as opposed to nothing
That turns out to be so true. Once you start working on something and talking with potential customers there will be plenty of opportunity to adjust or scale your idea or even to jump to something totally different that you never would have known about if you hadn't just got started in the first place.
Obviously given the choice most people would prefer a world beater idea. One that has the potential for a lot of money and self actualization but you could wait forever for that idea to materialize.
Since you can't make the perfect idea happen you're way better off picking the best idea available and just starting.
you can discover much bigger problems and opportunities from working on anything as opposed to nothing
That turns out to be so true. Once you start working on something and talking with potential customers there will be plenty of opportunity to adjust or scale your idea or even to jump to something totally different that you never would have known about if you hadn't just got started in the first place.
Obviously given the choice most people would prefer a world beater idea. One that has the potential for a lot of money and self actualization but you could wait forever for that idea to materialize.
Since you can't make the perfect idea happen you're way better off picking the best idea available and just starting.
Simple products can do pretty darn well if you get the commercial side right. We seem to be hearing about bingo-card guy every other day 'round these parts, and that's a very simple product.
"Simple products can do pretty darn well if you get the commercial side right."
What's your definition of "really well"?
Patrick, the bingo card guy has been hanging around the joelonsoftware forums for 5+ years and selling his product for equally as long.
Last I heard, he was making roughly $35,000/year. Even in the mid-west, this is barely enough to survive (for one person..let alone an entire company). I would hardly call this a commercial success.
What's your definition of "really well"?
Patrick, the bingo card guy has been hanging around the joelonsoftware forums for 5+ years and selling his product for equally as long.
Last I heard, he was making roughly $35,000/year. Even in the mid-west, this is barely enough to survive (for one person..let alone an entire company). I would hardly call this a commercial success.
Roughly $35,000 for what he describes as a trivial amount of work each month, while he was holding down a job as a salaryman.
Now that's he's gone full-time, there's no doubt in my mind that his revenues will be prodigious.
Now that's he's gone full-time, there's no doubt in my mind that his revenues will be prodigious.
"Roughly $35,000 for what he describes as a trivial amount of work each month, while he was holding down a job as a salaryman.
Now that's he's gone full-time, there's no doubt in my mind that his revenues will be prodigious."
The app took him a few hours to make (I seem to remember this on from JoS). I think the service he has now was created by freelancers he hired (which is a smart move for someone without a lot of time to work on their business). The development of the app was trivial, but the amount of time and effort he has put into marketing is not.
Even working full time for 5 years, if you are marketing it every day (which he was), you should be able to get a better ROI than this.
My feeling is that the reason he isn't making that much money is because the market for such an application isn't that large. I see that he is also coming out with other services/products, which is further proof that he is moving on to bigger and better things. He probably should have done this a few years ago.
Even so, success isn't based on what you could possibly do in the future, it's what you have already achieved. My main point still stands: he made some money, but should not be considered a commercial success.
Now that's he's gone full-time, there's no doubt in my mind that his revenues will be prodigious."
The app took him a few hours to make (I seem to remember this on from JoS). I think the service he has now was created by freelancers he hired (which is a smart move for someone without a lot of time to work on their business). The development of the app was trivial, but the amount of time and effort he has put into marketing is not.
Even working full time for 5 years, if you are marketing it every day (which he was), you should be able to get a better ROI than this.
My feeling is that the reason he isn't making that much money is because the market for such an application isn't that large. I see that he is also coming out with other services/products, which is further proof that he is moving on to bigger and better things. He probably should have done this a few years ago.
Even so, success isn't based on what you could possibly do in the future, it's what you have already achieved. My main point still stands: he made some money, but should not be considered a commercial success.
If I am reading his blog posts properly (and I believe I am), the time he put into marketing was also trivial.
Of course, he chose a small market. He was basically monetizing some spare time. And there's no doubt that he'll be more ambitious in the future, now that he has more time to spend on these projects.
I consider making $35,000/year in a few hours a week to be a "commercial success." Especially, since the kind of work he is doing is easily repeatable in other niches.
Of course, he chose a small market. He was basically monetizing some spare time. And there's no doubt that he'll be more ambitious in the future, now that he has more time to spend on these projects.
I consider making $35,000/year in a few hours a week to be a "commercial success." Especially, since the kind of work he is doing is easily repeatable in other niches.
"I consider making $35,000/year in a few hours a week to be a "commercial success." Especially, since the kind of work he is doing is easily repeatable in other niches."
If you have followed his story at all on the JoS boards, It sure doesn't seem like only a few hours of work a week. If he is only working on it a few hours a week, he even has less credibility. It's little more than a side project that is now making some money.
I think it's great that he's making money, I just get tired of seeing interviews, articles, and posts claiming that he is running some kind of really successful business.
"Especially, since the kind of work he is doing is easily repeatable in other niches."
Marketing experience can be used in other niches. However, if you spend 5+ years on a niche to make $30,000, you are doing something wrong.
If you have followed his story at all on the JoS boards, It sure doesn't seem like only a few hours of work a week. If he is only working on it a few hours a week, he even has less credibility. It's little more than a side project that is now making some money.
I think it's great that he's making money, I just get tired of seeing interviews, articles, and posts claiming that he is running some kind of really successful business.
"Especially, since the kind of work he is doing is easily repeatable in other niches."
Marketing experience can be used in other niches. However, if you spend 5+ years on a niche to make $30,000, you are doing something wrong.
What do you consider a commercial success, then?
"What do you consider a commercial success, then?"
A commercial success to me is the ability to live comfortably off of the business (and quit your day job). I suppose Patrick has quit his day job for $30K/year, which I think will make it difficult to survive without savings. (even in Japan).
A commercial success to me is the ability to live comfortably off of the business (and quit your day job). I suppose Patrick has quit his day job for $30K/year, which I think will make it difficult to survive without savings. (even in Japan).
If it's making more than it's costing him, and he's got time to be getting on with other stuff, he's doing pretty well in my book.
"If it's making more than it's costing him, and he's got time to be getting on with other stuff, he's doing pretty well in my book."
If I put up a random web page on a free hosting provider, slapped Adsense on there, and started making $1/month, it would also fit your definition.
You set the bar on "pretty well" way too low. This is also the problem with a lot of startups (and why they end up failing).
If I put up a random web page on a free hosting provider, slapped Adsense on there, and started making $1/month, it would also fit your definition.
You set the bar on "pretty well" way too low. This is also the problem with a lot of startups (and why they end up failing).
Perhaps I should have added "and he can quit his day job" to the list.
I you've hit on the point, though. Obviously I have a lower set of criteria for what makes something a "success" than you do; I don't believe something needs to actually take the exponential curve up to VC heaven to be worth doing and a commercial success - whether or not the business model could, in fact, support that.
I you've hit on the point, though. Obviously I have a lower set of criteria for what makes something a "success" than you do; I don't believe something needs to actually take the exponential curve up to VC heaven to be worth doing and a commercial success - whether or not the business model could, in fact, support that.
Actually, I could really use a program to print highlighted code in an optimized way for code review. But I couldn't find a good one that sufficed for my needs (Windows, GUI).
Pygments (http://pygments.org/) is a Python program that can highlight almost any language, and outputs a bunch of different formats, including HTML and LaTeX. You can see an example of the results at http://www.railstutorial.org/book (HTML) and http://www.railstutorial.org/downloads/pdf?version=2.3.8 (PDF via LaTeX).
Can't you print from your editor ? (Emacs can) Then you get your highlight setup.
For more fine-grain control on the output, there is some LaTeX package that can highlight code.
I use enscript for that.
Lessons learned from 13 failed software products: -
1. Give up.
It wasn't the same person failing all 13 times.;0)
a) Not super-duper niche, or b) Somewhat interesting
In my opinion, a large percentage of these products were missing legs before the developers even started. Be it the idea was ridiculously boring, or it had zero opportunity to make any significant revenue.
I'd prefer to see failed software products which definitely should have taken off, but didn't due to reason X or reason Y.
For example, Company A didn't look for funding for reason X, but then their burn rate got the best of them and the company failed. Or, Amazing Product B was growing really fast, but didn't learn to scale properly in time, so they lost 90% of their customer base when all of their servers crashed for two weeks.
Stories like that would be MUCH more memorable than a guy who failed to turn a profit from chimney sweep software.