As you may know, my primary focus these days is building a software business. I’m investing $599 a month in The Foundation, a software as a service (SaaS) training program. For those of you curious as to how I’m faring, here’s a quick update.
To start, here’s a simplified look at the process taught by the Foundation for building a SaaS business:
- Pick an appropriate niche
- Arrange interviews (usually over the phone) with top professionals in that niche
- Through a process called idea extraction, figure out what problems they have that could be solved with software
- Pick one pain that many people seem to be experiencing and which you can develop a good solution for
- To fund development, presell the solution to professionals eager for it (this also serves to validate the idea)
- Hire developers to build a minimal viable product (MVP)
As of this writing, I’m at step three above. I’m targeting the tour operator niche since I travel a lot myself, I already had some contacts there, and it’s an industry I’d be happy to serve as I’d ultimately be making it easier for people to travel.
So far I’ve managed to get on the phone and speak with ~15 operators, and I’ve been quite pleased with the development of my idea extraction skills. There’s a famous recording of Foundation head honcho Dane Maxwell doing idea extraction with the owner of a pool cleaning company. Within 45 minutes, the pool guy is telling Dane that he would happily pay $500 a month for a software solution to one of the problems they’ve identified on the call. And we’re not talking about some crazy complex solution here, but something pretty simple that could be built in a matter of weeks, and which would likely be of interest to hundreds of other pool cleaning companies across the country.
I can’t say I’m at that grandmaster level with idea extraction yet, but I have had four calls in recent weeks where tour operators told me they’d happily pay $30-100 a month for a software solution to a problem we identified on the call. Bear in mind that I’d never spoken to any of these four people before, only conversed briefly with them via email to set up the phone conversation. It feels pretty magical being able to pinpoint a pain and have people interested in paying you for a solution so quickly. It’s like you’re creating a business opportunity out of thin air. I didn’t think I’d be pulling off that feat repeatedly after just a dozen calls.
Of course, I still have a long way to go. People telling you they’d pay for a solution and them actually pulling out their credit card and paying for that solution are two different things. Plus you have to ensure that you can follow through and provide the solution you promised, which is no small thing.
My main challenge right now though is pinpointing a pain that many tour operators are having. The aforementioned four all had different problems requiring different solutions. I’m still on the hunt for a common problem that lots of people in the industry are crying out to have solved. I believe I can find something like that by niching down even more, as it’s become apparent that there are many different kinds of tour operators, all with different software needs.
Unfortunately, just as things are starting to heat up, I’m having to push pause on this project for the next month, as I’ll be hopping aboard a cargo ship on Wednesday to spend four weeks at sea with no Internet (the latest leg of my round-the-world trip without flying).
I know, I know, it’s not the smartest thing to be doing while I’m trying to build a software business, but I’m doing it anyway.
Let’s wrap this up with a few FAQ’s:
Is the Foundation worth the money?
It’s still too early for me to give a definitive answer on this (I’m just two months into the six-month program), but I will say that thus far the value delivered by the Foundation has exceeded my expectations. And my expectations were pretty high to begin with.
The content is superb, inducing ah-ha’s on the regular, but on top of that they also do a great job of emphasizing and encouraging the members to take action. I consider the $3,594 total I’ll end up spending on the Foundation to be an investment, one that will bring me much greater returns in the long-run.
What are the biggest lessons you’ve learned so far?
- Referrals trump cold calls.
- Taking 15-20 minutes to prep for a call and plan what questions you’re going to ask makes a huge difference.
- Framing how you ask a question goes a long way to determining what kind of response you’ll get. Example: “Can you recommend anyone else for me to talk to?” vs. “This has been great, thank you so much, I’ve really learned a lot here. I don’t suppose you could recommend anyone else who would have great insights like you and would be happy to talk to me?”
- People will automatically consider you an expert once you demonstrate an ability to deeply understand their pain.
- Reflection is key. You do yourself a massive favor by thinking back over a call (or listening to a recording), picking out a few things you could have done better, and then rehearsing the superior approach you come up with.
That’s all I’ve got for now. If you’re interested in hearing how this software biz develops for me, jump on my Business & Entrepreneurship mailing list below.