Ben Langhinrichs

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Is there a market for YOUR product?

Fri 20 Mar 2009, 02:53 PM

by Ben Langhinrichs
Being a moderately successful ISV has its rewards, but it also has a few downsides.  One is the need to answer frequent questions from ISV wanna-be consultants about how they can sell products (and sit around and rake in the cash, or so the assumption goes).  While I am happy to talk with people about the pros and cons of product development, if the developer is already busily working on his or her creation, I try to lead with the most important question:
"Is there a market for your product?"

This question often leaves people speechless.  It shouldn't.  Don't spend two years writing a product before asking the question.  Is there a market for your product?

Even when the developer says that there is a market, I try to follow up with probing, inconvenient, even obnoxious, questions to make sure that this is really the question he or she is answering.  It is a different question than 
"Is there an audience for your product?"
even though many people confuse the two.  There is a huge audience for Youtube videos, but if Youtube were to charge a mere 50 cents per video, you would watch the huge audience vanish overnight.  There is no market for random videos, no matter how clever the hamster.

So, how is a developer to decide whether there is a market or an audience?  It is mostly the difference between need and desire.  Your family needs food each week, so you go to the grocery store and spend your hard earned money on food.  Your family may desire a swimming pool, but the decision is a whole different process, dependent on having "spare money" rather than "ready money".

Still, many developers think that they know the difference between need and desire, and that the tool/utility/gizmo they are developing meets a true need.  Often when this happens, they "know" because they personally "need" this tool/utility/gizmo.  My rule of thumb on this is simple, be very careful evaluating need vs. desire if you are part of the perceived market.  If you don't think it is difficult for someone to distinguish between their own needs and desires, talk to a teenager on prom night.

But let's assume that you, the developer, ARE part of the perceived market.  Try this little test.  Imagine the most awesome electronic gadget or system (e.g., iPhone, Sonos, camera, whatever) that you drool over, but DON'T OWN.  How much does it cost?  Whatever your tool/utility/gizmo is, it is competing with that awesome electronic gadget or system.  Whatever your tool/utility/gizmo costs must be substantially less than the awesome electronic gadget or system, or the user (YOU, in this case) will simply buy that awesome electronic gadget or system instead, or neither if the money isn't readily available.  Now, honestly ask yourself.  If you found out today that somebody else had already developed the tool/utility/gizmo you are working on, and it cost the same amount as the awesome electronic gadget or system, which would you buy?

Suddenly, the tool/utility/gizmo you are developing has a ceiling price, and it may be much lower than you expected.  You may have been thinking hundreds or thousands, and it may be the price is really under $200.  How many people would have to buy it before you could live on that?  How much support would there be for each user?  How much sales effort would there be for each user?

Perhaps most importantly, did somebody else already create the tool/utility/gizmo?  You may think not, but how do you know?  Perhaps they just discovered already that the sales effort for each user, in this case YOU, was too much.  You don't know because they didn't spend the large sums and long time it takes to penetrate the potential market with awareness.

Not to be discouraging or anything, but "Is there a market for your product?"  and is it a market that can make you any substantial return.  Think before you write, as it may save you a lot of hard work and money (which you are welcome to come spend on my products, of course).

Copyright © 2009 Genii Software Ltd.

What has been said:

826.1. Palmi
(03/20/2009 03:02 PM)

Well said - I have been there and gotten surpriced by the "Hits" on my Gizmo App that i thought no one has but been out there for years. I really think ISV wanna-be consultants should do Baby steps amd keep "KISS" in mind when they are coming up with all the Fetures that they THINK everyone needs.

826.2. Rodney Scott
(03/20/2009 05:45 PM)

Spot-on advice. I understand the developer's temptation to fetch “spare money”. It’s often more fun to create, and easier to think up, products that merely meet wishes. And consumers who spend money most readily tend to spend it unwisely, putting desire above need (including the teen on prom night). During the Great Depression, the movie industry seemed (just as now) recession resistant. However, considering the price of marketing and number of consumers needed to make a profit helps put things into perspective (it requires money in order to make money the fun way). I especially support your advice about the importance of comparing what you offer to what is already offered.