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.

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? 

Chicke Fitzgerald

April 29th, 2016

I did this with my first tech company and while the launch client (#2 online player at the time in their category) definitely said that they would put our tool on their site if we built it, they ended up putting us in rotating ad space on five pages of their site, instead of giving us "persistent" placement.  That little missing word in our agreement cost us the success of the project.  By the time we launched, we had invested nearly $7m in the company and we ended up failing spectacularly due to the lack of accessibility of our product.  Important (very expensive) lesson learned.  

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. 

Donald Steward Owner, Problematics LLC

April 29th, 2016

I don't think that any of the responses so far responded to my message.

Let me ask a question: If there were a website that could use to resolve complex problems as I proposed, who do you believe would use it?
University faculty?
Government agencies/offices?
Offices of elected officials?
People who might consider themselves experts on particular problems?

Together, how many might this be?

Could such a method lead to a more harmonious world?

Who would care?

Who might be motivated to look into this to see how it works and how it could be used?

If anyone were interested, you can contact me for more information at:
steward@problematics.com   Put Explainer in the subject line. 

Thank you.

Andrew Chapman Publishing Entrepreneur and Author

April 30th, 2016

Donald -- I know nearly nothing of computer science, so I can't even begin to address that side of your issue, though I do suggest trying to seek the personnel you need through your Cal State alumni.

As for your other questions, as you've explained this, it seems to me that anyone could have a need for it. Who doesn't have complex problems in their lives? And therein lies what I see as the challenge you face: When "everyone" is your target market, you have no target. So I think you need to choose a target market that suits your goals.

That said, I'd eliminate government prospects as the sales cycle can be so very slow and innovation is generally resisted. Very large organizations of any kind will probably present this same problem. Conversely, universities and researchers could be ideal if they aren't too large, since you're a professor emeritus and have a strong academic background; you can talk their talk.

But my hunch is that your best bet would be smaller or individual consultancies whose clients are large organizations. In other words, these consultants are faced with large, complex problems but they themselves are not large, complex organizations; you have a quicker foot in the door while offering a clear solution and benefit.

Otherwise, I think you'll want to look at social entrepreneurs who are addressing multinational problems with complicated logistics. For example, the "buy one, donate one" model that provides goods to the third world faces complications in distribution, international agreements, cultural differences, and more. Your tool seems perfect for this type of situation. If your alma mater has a social-entrepreneurship program, it would be worthwhile to explore what avenues they may be able to direct you toward. Likewise, it seems like you could benefit from a formal internship program that would allow you to delegate some of what you need to do and brainstorm uses for your Explainer.

Lastly, I'm glad you mentioned being 83 - it's such an inspiration to see older people who are still very active and passionate about improving the world!

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.

Bill Lennan Red Rope Social

April 30th, 2016

And thanks for all the insights folks, I appreciate the feedback :-)


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...