How To Build a Software Company With No Money

don't write the code how to test your software idea without writing any code whatsoever maybe you've already started hiring a developer potentially you've built the products already in the market or maybe you don't even have an idea but you don't even know where to start I'm going to share something in this video that's gonna make it ridiculously easy but I know right off the bat you're thinking my situation is probably a little different dan and I don't know if following this advice is gonna work for my specific situation and I'm begging you I'm pleading with you please listen just just try it it's in credit can tell you the amount of entrepreneurs hundreds of entrepreneurs that come to me after they've spent months years hundreds of thousands of dollars invested in building a product that nobody wanted what I'm gonna show you is a simple framework that's gonna allow you to build something that the customer absolutely wants you can't mess it up if you follow this process it's guaranteed right you're gonna do it in a way that's gonna get the customer to finance the development it's called customer financing it's not venture it's not angel it's not friends and family it's actually getting the customers to finance it and it's going to make it easy okay so I want to deconstruct a few of my companies first so you have some context when I was building my company flowtown we were a venture back software company but before we ever raised money for that product we were social marketing application what was we tested it we actually built a fake interface okay we actually like I called it Wizard of Oz and we created three screens the first screen was upload your email addresses the second one showed a result of those emails analysis and the social media data that we had on all those emails and then the third screen prompted for payment now here's the crazy part when you submitted payment details on the third page we didn't collect a credit card and we just said to you oops our servers or overcapacity are bad please come back in the future we've collected your email we'll send you an email we're ready to go and what that allowed us to do is test the idea with real product that was fake we actually didn't build anything real customers that threw down credit cards we just didn't collect the credit card and we saw the conversion rate from invite in regards to what they thought it would do what information aggregated view they saw and did they have enough interest and going forward so that's one example my next company clarity was a marketplace for entrepreneurs to get advice over the phone from other entrepreneurs in real time and what we did well what I did to test it in the early days was real simple I used three technologies one I found an expert somebody that could give SEO advice that people knew of that was notable guy named Neil Patel really expensive it was actually a funny story I emailed Neil I was on skype chat and I was like hey Neil how much would you charge for SEO advice thinking like 500 bucks or something like that and he's like $2,000 and truthfully I don't even do it anymore outside of private equity companies because they're usually gonna then put me on retainer and I'm like okay good to know now why was that important because before writing any software I started to understand the pricing dynamics of the experts if you think that you know a certain type of person's gonna use your platform and you reach out to them and they all say no for for a reason you learn more about it so I had to find people that were priced appropriately so I found some expert that were had blogs that were pretty well known and they were willing to do it for 500 an hour then I reached out to a bunch of startup founders that I knew had kind of marketplace type dynamics to their product content marketing and I said hey would you pay $500 to talk to this expert and they said absolutely and I was no problem I coordinated the call using Google Calendar no tech and 1-800 free conference call free conference call Google Calendar locked and loaded tested with money PayPal that's what I'm talking about is is being creative about how you you kind of test your idea but I'm gonna walk you through a very specific way that I think is even better so there's three steps to testing your software idea without writing any code one is building a clickable prototype here's the way to think about it is you wouldn't build a skyscraper you know a 100 million dollar skyscraper without building kind of a miniature version of skyscraper to see kind of like how does it sit on the land and how do people interact with it and you know kind of the dimensions and whatnot that's the same thing for software so what I recommend is using a tool like keynote Opia that you can download and use keynote or maybe use PowerPoint and create clickable screens like if you can draw a square box you're good to go okay that's simple and you just you just say okay well somebody logs in here and then they go to this area and they create this thing and then they have the results and then there's a dashboard and you just create the simulation of how the software will work if you want to get fancy and I don't recommend it there are other products out there like a balsamic like a UX pin like envision app that allows you to create almost pixel perfect simulation of your prototype now here's why I don't recommend those is because when you show them to customers for feedback they might be a little hesitant to give you really honest feedback because they think like oh you already built this I don't want to hurt people's feelings you know so I highly recommend that if you want you can use a clipboard this is what I used to do early days when I was in my early 20s clipboard piece of paper big sharpie marker and I would draw it and I would go to the mall or the farmers market or wherever your ideal customer hangs out okay so you're just big squares and it sounds stupid but I'm telling you the entrepreneur the ones that are gonna be successful if you think that that's above you and that's hokey-pokey and you want to do it trust me it's gonna it's gonna be a shock to you when you finally have to go it into the world and actually sell a product that is probably not really where it needs to be so that's one is build a clickable prototype of your idea the second thing is find the early adopters okay and the innovators there's this thing called the technology adoption curve by Jeffrey Moore and it talks about the different phases of technology adoption and what I've seen most entrepreneurs starting off and failing at their software do is they go for feedback from people that have that aren't early adopters people that are what's called the early majority or even worse the late majority if you live here's do if you're building a restaurant app and you live in a town of a hundred thousand people and you think that there are restaurants that are early adopters you're probably misled they're the in small towns there's not people innovate pushing the limit I remember a long time ago a friend of mine came he's like hey I've got this idea there's these new thing called iPads and I want to build an app that lets people order their food from the table from the iPad and I was like cool well go talk to potential customers and the challenges they went talked to people in their own town that were not early adopters restaurant tours and all of them said customers will never do this it's about experience never work never work never work so they stopped the challenge was is that they didn't think about okay weird what are some of the characteristics of an early adopter customer where did they spend time what did they look like maybe they're using snapchat for marketing I mean that would be a clear characteristics if I found a restaurant they use snapchat then I'd be like okay they're early adopters back in the day it would have been had Facebook page right maybe they're using Facebook messaging for marketing I mean you're gonna have to figure it out for your context in your time in the world what is it that gives you inclination that that type of customer is an early adopter is an innovator progressive in their thinking willing to try and adopt new technologies once you have that then you use those people to validate your clickable prototype and then the third thing you want to do is pre sell it pre sell your software so that you're not building for three four five six months spending tens of thousands of dollars on a product and then finally showing it to the customer for them to say that's really cool but it's really not gonna meet our needs because it's missing this one thing you know the unfortunate situation is that most potential customers giving you feedback when there's no financial commitment they're just being nice and I can't hold them against it they don't you know if you're an entrepreneur and you're passionate and you're excited about we were building on the last thing they want to do is be the person that bust your bubble they don't want to say it's a bad idea but I will tell you this everything changes when they give you a dollar okay once you ask for a dollar I don't care if it's 110 100 thousand soon as you ask for money everything changes in regards to their thinking around your product and what's required to actually meet their needs if they're gonna exchange money then they're gonna start saying well does it allow me to invite my team how do I collaborate how do I whole a specific report you know if you're making me if you're asking me to use this to run my facebook ads what's the report I'm gonna see to know that I'm getting a positive ROI whatever it is as soon as you ask for money that's when the customers gonna get clear of what they need and give you very what's called true customer validation most people think they're doing customer validation they're not if you don't ask for some kind of commitment either a major time commitment and or a financial commitment the feedback is not validated now here's the the myth most people say think you know Dan my situation is different I can't pre-cell my software there's no way a big company is gonna give me money for something that's not built here's why I know that that's just absolutely not true I came from I built a consulting company spheric technologies I worked with innovation departments inside of Procter & Gamble Dole Fu's Johnson & Johnson and here's what I learned they were willing to give my company money to build innovation to build custom solutions to build software and had there been a product off the shelf that delivered the solution to the problem they had they would have bought that versus versus asking us to build it so anytime people say well my situation is different I say no it's not if there's a company out there that you can see doing something similar to you but maybe just for them for their business that means that they thought enough about having that problem solved that they were willing to invest and have a company build a custom solution for them which means they would have paid you upfront for your solution they would want to help you co-create it especially if you show the mock-ups you work with them you put them part of the customer advisory board and that is how you validate your idea you get pre-sales and you ensure you build the right product so real quick make sure that you create a clickable prototype to get real feedback find the customer that's an early adopter in third get them to pre buy your software I hope this video finds you incredibly well and I'll see you next Monday if you like this video be sure to subscribe to my channel for other videos on how to grow and build your software company I'd also invite you to join my newsletter where i share free training videos exclusive contests and other private invites to events and also if you're ready to get going I got two other videos queued up for you right now see you next Monday

Channel: Dan Martell

Views: 251,419

Keywords: How To Build a Software Company With No Money, Building a Software Company, Start a Business With No Money, Validate Your Idea, Ask For Money, Custom Solution, Startup Life, Dan Martell, how to start software company, how to start a tech company, how to start a software company, tech startup, software business ideas, software business, starting a tech company, software startup, software company startup, starting a software company, tech startup ideas, how to build a software

Id: wlouEWnEFVQ

Length: 11min 8sec (668 seconds)

Published: Mon Oct 16 2017