Lean startup · Sales

How many founders tried selling their idea before building it?

Bill Lennan Red Rope Social

April 29th, 2016

I'm a fan of the lean methodology.

Curious who else starts by selling a solution to a problem ( i.e. validating financially that a prospect sees a problem and will pay for a solution )

If you've started like this, I'm curious to hear your story.
If you didn't start like this and have significant traction - that's also a great story :-)

David Pariseau

April 29th, 2016

I've actually done that quite a few times.  Personally, I like finding a problem someone has, getting them to pay me to develop a product for them that addresses their issue and leaving me the rights to sell it to other folks. I try and charge enough to cover as much of the raw costs of developing it, which is a great deal for them, but the rights to resell means that everything else is upside.  Also, typically there's on-going maintenance and support that you can charge for, if you do it well you also have a satisfied client you can use as a reference, or to validate your concept (if you're looking for funding). 

Mark Swanson Leader, Entrepreneur, Strategist, Technologist

April 29th, 2016

Bill -
I bootstrapped my first company using the process you describe back in 1993. Spent 3 years prior to this writing and trying to sell kiosk software that presented tourist attractions in hotels...got little traction. I took a job as a contract programmer at BellSouth and later befriended a gal in the marketing department who had a problem. She was responsible for corporate marketing in dozens of offices and needed a way to distribute presentations. With the focus of a problem and someone willing to pay, I redesigned the software to be a custom developed laptop presentation system updated via CD-ROM. We launched the whole system with new IBM Thinkpads to the salesforce with great fanfare and it was successful. Later redesigned the system around the web in 1995, leading to other Fortune 500 customers. Merged the company in 1997 and went public in 1999. The key was finding a problem that someone would pay to fix, leverage previous work and let customers be part of the design process.

Bill Lennan Red Rope Social

April 30th, 2016

Hi Donald,
Maybe you should post your thoughts as it's own thread. 

More people will see it that way.

James Ewing Cloud Computing Architect at D+H, Author, Coach

May 5th, 2016

My personal experience on this has to do with prototyping.  People (investors) need to see a tangible (even digital) representation of what it is you want to do, as well as a tangible representation of how much you know about your target customer and the business metrics to make it viable.

In other words, an idea is worth the paper it's written on.  It becomes valuable when you have something that approaches a proof of concept, combined with an existing (or new) market needs analysis, a business plan showing how you'll market, sell, implement, and support your solution, as well as pie-in-the-sky numbers for margin (and if you're like me, exit strategy).

Finally one more thing; nowadays I don't have or do anything that doesn't also include my philosophy about corporate / business culture, as this is such a huge part of who I am that I can't imagine spending time or money on people who don't share my ideological philosophy.

Donald Steward Owner, Problematics LLC

April 29th, 2016

I believe that much of the trouble in the world today is because people are unable to solve the problems that adversely affect them. This makes them frustrated and causes them to behave irrationally with anger and hostility. 

I have developed a problem solving method and computer program that uses cause-and-effects to solve problems that otherwise we would not have been able to solve.

I have been able to demonstrate proof of concept by dealing with many problems such as those that have Congress in gridlock.

 With the appropriate set of cause-and-effects, one can find the cause-and-effects whose effects can be used to describe a behavior. Then the cause-and-effects can be traced backwards, from effect to cause, to find the causes that would explain that behavior, or show how to cause that behavior. A behavior can have multiple explanations.

Cause-and-effects can be strung together with each effect being the cause of the next effect to form a path, or what I call a mechanism. These mechanisms show how to achieve desired goals.

 But as of now, to demonstrate proof of concept by solving various complex problems, I run a collection of programs manually. Before I can demonstrate a Minimum Viable Product, I need to develop a user interface that will allow other people to use the method.

I need programming help to develop the user interface. I need to develop the user interface for an MVP before anyone would invest in this. Catch 22. 

 So I am looking for a passionate investor who is interested in making this a more tranquil word, and then making money by doing so. 

The idea appears to be unique. And it often takes decades before anyone will look into a new idea to see how it works and how it can be used beneficially. But I am impatient. Although I could eventually do this by myself, I am concerned about seeing it done sooner rather later because the world needs it now, and because at age 83 I don't want to see the concept die with me. 

 So I am caught in this dilemma. Does anyone have a suggestion for a passionate investor or another way of getting this done? 


May 1st, 2016

I approached several potential customers and they said they'd definitely buy it.
I approached hundreds of potential users and 80% said they'd use it.
No investors would talk to me. Two were willing to trade a few emails, but they are sure "it" won't work, though it's not clear what they think "it" is.

Perhaps the problem has been that I've tried to sell the concept rather than the solution. When I launch, I'll just sell the solution.

But the potential is much, much more than that. Few people are open minded enough to hear it. (Most think they are, but they don't realize how full their minds already are about this domain.)

I didn't see a way to actually sell it without building it. Perhaps if I approached enough customers, but they're very hard to connect with, without a product and some buzz...

PS: Several friends didn't believe it'll work, either. They thought it was a good idea, but wouldn't work. But after discussions, they now believe it can. Most believe I won't succeed w/o a team and funding, and they've been right this far. But nothing else seems as valuable to the planet, so I'll do my best...  If you want to discuss it, please email me. I'm very easy to find on the web, or just guess at an address...

Shardul Mehta

May 4th, 2016

Hi Bill,

I always start this way and encourage entrepreneurs and product managers to do the same. I've done the opposite earlier in my career: identified a problem and then built a product only to find no one was willing to pay for it.

It's critical to get true customer validation, which comes in the form of currency. Ideally this currency is always payment upfront. I've done this in my last two startups, as well as several products I've launched as head of product for companies I've worked for.

For any product/startup idea, it's important to be able to answer "yes" to the all important question of "do I have a problem worth solving?" That question is made up of three key questions:
  • Is the problem urgent? That is, is there real customer pain or is the job to be done super important?
  • Is it pervasive? Are there enough customers out there with the urgent pain?
  • Are customers willing to pay to have the problem solved?
I've faced situations where the answer to the first two questions were yes, but the third was no. So I moved on to my next idea.

Since you asked for stories, here's a quick one: For my most recent startup, to validate the demand, I did a webinar on the topic, which resulted in getting 10 pre-orders for a product that didn't exist. Furthermore, it helped me build an interest list over 300 folks, and as I built the product I was able to continue converting those interested folks into paying customers.

Hope this helps!

Bill Lennan Red Rope Social

May 4th, 2016

Some awesome feedback, thanks :-)

I've got a services business - trying to NOT have to build my own tech under it. 
( lots of possibilities to license )

The general feedback validates that we are on the right track :-)

Rob G

April 29th, 2016

I've done it with 4 startups thus far.  It's mind boggling how many companies don't do this - don't validate product/market fit before they build.  I work with an incubator here in the Seattle area and i'm active in the startup community.  The vast majority of the startups i see are 1 or 2 technical founders, often no other skill set on the team, and the vast majority of them do little if any real product/market validation before they start to build.  They will talk to people, but not really push for what i would call solid market validation.   I have my theories. An example for one of my startups:  we did extensive market research, ideal customer profile research, pricing, detailed operational budgeting, cash flow modeling, etc. so we had a good idea that the numbers could work.  Then we 'built' our MVP in powerpoint and did extensive customer interviews (b2b) as well as end user interviews.  Got good feedback and validation.  refined our models, did more customer and end user validation.   Thought we would like to launch with 4 customers and ended up with 8 commitments.  We decided to skip a true "MVP" and build more of a rev 1.0.  We thought we were ready to launch so we started implementation/execution planning with 2 customers.  They allocated resources, put a project team together, announced the launch internally as well as advertised to their customers externally (that was brave!).  We got to within days of launch and it turned out that our development lead seriously over estimated the dev progress.  The product was no where near ready to go.  At first we rescheduled, then we had to cancel the launch plans with our fist 2 customers.   Painful. embarrassing. Not something i would recommend, but it did provide valuable demand validation. 


May 1st, 2016

I suggest you focus on a few specific problems. Most people won't believe your solutions, but perhaps there's some way you could let them interact with the system to convince themselves.

This is sort of my plan, going forward. Use it for specific purposes to show that it works, and let the real benefits creep up on people. And suggest more as people become open to it.

People who are close-minded about a general solution, especially those who believe they're open minded (and have proof in other areas), are simply close-minded. When I write, they hear something other that what I write. We all know our frames of reference allow certain ideas and disallow others, but most people haven't seen it work first hand. Most people would say they're limited humans, yet they live like they have confidence in their thoughts.

So we have to prove it to people.  And if we fail for any reason, they'll think it was because the idea didn't work...