Launch a Business, Not a Side Project

I think we have a serious problem in our industry.

I believe it generally started when Basecamp became quite successful and 37signals started to talk about their theories on the subject. Their basic mantra was “Don’t quit your day job to build a web app. Build it in your free time and use your day job to pay the bills until your new app brings in enough money to quit your day job.”

I used to agree with this, but now I think I’ve come full circle.

I’ve seen a lot of web apps launched recently which haven’t succeeded. They’re not failing miserably, and they’re not wild successes. They’re just kind of puttering along, sapping just enough resources to be a problem, but not succeeding enough to really take off.

The majority of these apps were built by small web design firms or freelancers who bought into the dream without really understanding how much time it takes to make an app succeed. I speak from experience as this is exactly what happened with Amigo (which we sold in a firesale a few months ago).

Who Died, Who Survived?

There’s a really interesting post over at Meish.org with a great graphical example of the various web apps that have gone under. Here’s the graphic Meg put together:

Web 2.0 company logos who are crossed out

It’s a sobering reminder of how tough it is to launch a successful app.

So what’s going on here?

I believe there’s a general misconception that goes like this:

  1. Identifity a niche need that you have that’s currently under-served
  2. Bang out somewireframes (or better yet, just start HTML’ing)
  3. Ask a designer or developer to help out, in return for a bit of equity
  4. Tweet about an invite-only beta
  5. Listen to beta feedback and make tweaks
  6. Launch
  7. Get TechCrunched
  8. Build recurring revenue till you can quit your day job
  9. Live the good life

The major problem occurs between step #7 and #8. Most apps will fail here, not because there’s a problem with the idea, but because they don’t know how to market it. The reason for this is that it takes significant passion and time to properly market an idea. Sure, you may get lucky and the app magically spreads itself, but the cold hard truth is that most apps need serious time and effort in order to make them a success.

We need to consider that 37signals and the success of their apps are probably outliers – anomolies that aren’t easily repeatable.

So now what?

Don’t get me wrong, I’m a big fan of 37signals, but I think that unfortunately a lot of folks are getting the false impression that it’s easy to build a successful web app.

It takes time, passion and more time in order to make something succeed.

With that in mind, here are my suggestions for avoiding the web app Deathly Hallows:

Make time for marketing

Plan for the fact that marketing the app is going to take at least two days a week. I’m talking about about 16 solid hours of work, at a minimum.

How will you do this if you’ve got clients banging down your doors for changes or updates every day of the week? I’d highly recommend saving up enough cash so that you can take at least two months off from normal client work in order to make your app a success. This is two months after you launch. Keep in mind you might not be making a single $0.01 during this time, so you’ll need plenty of reserve cash.

If it’s impossible to make time for marketing, you’ll have to get investment in order to hire someone who can do it for you. This is pretty dangerous though, as this new recruit isn’t going to have your passion or understanding of the app.

Create a resource that helps your customers kick ass

One of the reasons why 37signals has been so successful is because they have built a large blog that’s aimed at their potential customers. Signal vs Noise has around 90,000 RSS subscribers and it does one thing really well: offers great advice, opinion and tips for people who might subscribe to their products.

If you read one thing about building a community around your products, read this comment by Kathy Sierra. It sums up this idea in a couple paragraphs.

Spend money on advertising

I think a lot of us are lulled into believing that if you tweet enough about your new app then it’ll surely succeed. Wrong. It’s very likely that the only way you’ll be able to get the word out to the masses about your new idea is by spending cold-hard-advertising-dollars.

Now, if you’re going to go down this route, it’s vital that you can track the effectiveness of your ads. You need to know:

  1. Conversion rates on clickthroughs
  2. Percentage of clickthroughs
  3. What keywords are converting well for you
  4. Where people are dropping out of the conversion process
  5. Which ads are working (always test different copy and designs)

A/B Testing from the Start

One of the keys to increasing conversion rates on your site is to test the hell out of it. Plan on doing A/B testing from Day One, and never stop. If it’s a bit overwhelming, just tackle one page at a time, starting with your home page. Google Website Opimizer is the way to go on this.

To wrap it up

The most important piece of advice I’m trying to communicate is that you need to prepare for the huge amount of time it’s going to take after you launch to make your app succeed. Of course you need to believe it’s going to kick ass, but make sure you’ve got a  plan for making that happen. It might take several years of work to really make your web app a success, so be prepared.

Plan on building a business, not just a side project.

I’d love to hear if you agree or disagree, or if you have tips of your own.

Photo Credit: flickr.com/photos/david_han

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Comments

95 comments on “Launch a Business, Not a Side Project

  1. Great post Ryan. More questions for the budding entrepreneur: "are you building something people need?" "how many?" "will they pay for it?" @sjblank and his excellent book "4 Steps to the epiphany" http://tr.im/lCWq are recommended counterparts to this post and all the good stuff the guys at 37 signals have shared.

  2. Great post Ryan. More questions for the budding entrepreneur: "are you building something people need?" "how many?" "will they pay for it?" @sjblank and his excellent book "4 Steps to the epiphany" http://tr.im/lCWq are recommended counterparts to this post and all the good stuff the guys at 37 signals have shared.

  3. I 100% agree with this. I started cmsadvantage.com as a side project while running my web design business. After 2 years of this I just realised there was no way in the world I was going to be able to succeed by doing both things half arsed. I sold the business and now work full-time on cmsadvantage. We have just recently launched I am starting to realise how much work is needed to build up the marketing side of the business. As the they "Now that the product is built – the hard work starts".

    I tend to agree with everything you have said here, although I think your 2 months worth of savings might be on the tighter end of the scale. The more money you have (or can get a hold of) the better your chances of success are, provided it is used wisely in a targeted fashion.

    Thanks for the great read.

  4. Interesting points Ryan.

    At Varien, we stopped taking client work for a full *6 months* in order to focus on Magento and shifted 90% of the resources towards the product (and we had a sizable staff of over 35 people).

    A few more points from my perspective:

    – Creating a successful product/app while servicing clients is extremely difficult. There are always resource decisions and constraints that need to be made and if you simply can't say no to clients/work/money, it's probably best not to bother.

    – Factor in the opportunity cost. Your time is valuable and typically the most important asset you have.

    – Split the teams. If you are more than a 1-man shop, dedicate resources FULLY to the effort. It will be very hard to do it otherwise.

    – Always overestimate what its going to take. Even then, chances are you've underestimated what it really takes.

    – Market months in advance. Get your name out, share the experience of developing the app/site with the world. Be transparent. This will help to build a community which will be an important asset as you launch.

    Best of luck folks. It's a fun ride.

    Roy

  5. Great post, and good additional advice from Roy. Very interesting to hear that Varien stopped taking client work for so long to get Magento out. It definitely shows in the quality.

    I've been pondering a few ideas and in my mind have known that it would require 100% focus and this post and comments completely reinforce this.

    Ryan, you mentioned having a cash reserve to fund your project after launch. What if you need more than what you or your company have available? Do you have any resources or tips for finding funding? I know now is not really the ideal time to look for investors or backing, but maybe there's some magic wishing well that I don't have the map to.

    Thanks for such an insightful post.

  6. Surely market research is the key. I may well feel the my app plugs a whole in my digital life, saving me time and energy, and my friends may feel the same way, but if I'm going to spend the next few years dedicating all my resources to it, it had better be a time-saver for a much, much wider audience.

    A lot of the web 2.0 failures seemed to miss sight of their target audience, focusing instead on great new features, APIs and so on.

  7. "It might take several years of work to really make your web app a success, so be prepared."
    I had hope to make my web app that will pay the bills within a year. After working on the app full time for 4 months, it looks like several years would be closer to reality.

  8. I just wish I had a job to think about leaving while I materialise my ideas! This is not the best time to be graduating from BSc Software Engineering!

  9. Enjoyable post, although I'm quite surprised to hear so much stock being put into "traditional" (insofar as that word applies online) advertising, with a global downturn in clickthroughs very much in effect.

    I certainly agree that sitting back and waiting to be retweeted won’t do you any good, but I do question the lean towards advertising spend.

  10. Ryan, I enjoyed the article but you are citing two different starting points.

    The first, being those that are looking to start a business so they can leave their current jobs.
    The second, is those starting a business when they already work for themselves.

    You can't take two months off work to start your own company – it's not like dropping client work in favour of internal app development.

  11. The Techcrunch point is pretty interesting: is this genuinely a good/important way to promote an app? I would imagine Techcrunch readers are individuals also making web apps, rather than actual potential customers.

    I always thought that the reason why most apps fail is because they only spark the interest of other web app developers, and seem so spurious it will only appeal to power users (e.g. an app which mashes up RSS/Twitter/Delicious/Facebook/Tumblr in a wild an outrageous way….. who in the real world would actually use that?)

    I'm currently working on a app aimed at personal trainers, which is a world so removed from Techcrunch etc. that it makes promotion way more difficult.

  12. Daniel – spot on. We launched version 1 of our web app maybe 24 months ago now and got a bit of coverage across Techcrunch, Cnet etc. Trouble was, whilst we generated a heap of traffic and a heap of test accounts, we scored very few actual customers. Tech guys rarely buy web based CRM for small business!

  13. Ryan,
    Agree with your blog and a very enjoyable read too. We're working on a startup at the moment (http://www.chatbadge.com) and have planned to spend many months on communications (pr, advertising, marketing).

    Also Heyamigo sold in a firesale?? That might explain why visitors to HeyAmigo now get an error when signing up!

    Click 'sign up' and the digital certificate has expired. I sent an email to 'contact us' (presumably IT support) but no fix yet.

    cheers,
    Andy

  14. Ryan,
    Agree with your blog and a very enjoyable read too. We're working on a startup at the moment (http://www.chatbadge.com) and have planned to spend many months on communications (pr, advertising, marketing).

    Also Heyamigo sold in a firesale?? That might explain why visitors to HeyAmigo now get an error when signing up!

    Click 'sign up' and the digital certificate has expired. I sent an email to 'contact us' (presumably IT support) but no fix yet.

    cheers,
    Andy

  15. I created one of the projects Xed out on that chart. Looking back it was a project and not a business – I got coverage on all the hot tech blogs and the associated huge spike in traffic but there really was not a business there. It did help me get my next job though and it was a fun ride.

  16. Also, I should point out that I have launched a very successful side project which isn't a business at all, and arguably it has done a huge amount re: my reputation in the industry which will pay dividends down the line even though it generates $0.

    So in that sense, launching a side project can sometimes be better than launching a business…!

  17. I agree completely. Building and marketing a web app takes focus and time. I took an entire year off regular projects (and am still trying to go as long as I can afford that in-between-state) in order to build my web app. As you stated, marketing is taking a great chunk of the time I invest into that project. The other part goes into further development, seo and blogging (related to the app).

  18. I am glad to say my business is currently what I do full time. It is however a lot of work when you also have to do your own seo. I am hanging in there though.

  19. I'm not sure I can fully agree with the main point of the article–though the points made along the way are mostly very true. I believe there is error in the statement:

    "The major problem occurs between step #7 and #8. Most apps will fail here, not because there’s a problem with the idea, but because they don’t know how to market it."

    While I agree that can often be the case, let's look at a lot of the "failed" ideas. How many Twitter API clients do we need? How many RSS aggregators? With all the hype around Web 2.0, we were bound to (and did) see a lot of the same trouble that existed during the "bubble." First, too many people trying to capture the same market. Second, and more importantly, ideas with no real business legs behind them–that is, no sight into building the idea into a sustainable business.

    The problem with Web 1.0 is that everyone wanted to sell something but no one was buying. The problem with Web 2.0 is that while you might have a great idea that can become very popular, you have no real way to make money. Let's look at Twitter, Facebook, and YouTube. Arguably, these are 3 of the real "darlings" of Web 2.0. Reportedly, each one of these ventures burns a ton of cash with no real plan for how to stem the flow (Facebook possibly being an exception due to the level of targeted marketing they can do based on your profile).

    Just because an idea is great doesn't mean you can build a viable, sustainable business around it.

  20. I think this post is pretty spot on. I for one have been surprised how long it takes to grow a community with my own little startup. It's difficult to spend more time on a project though, because no matter how much you believe in it, it might just not be a good idea and will never take off so I think you also need to be careful of not justing going full guns blazing on something that isn't actually as awesome as you originally thought.

    Marketing has been a difficult thing for me, how have you guys managed to get any press?

  21. Great post. I think the steps can be simplified down to the 'Underpants Gnomes' business model from South Park:

    Step 1: Steal Underpants
    Step 2: ???
    Step 3: Profit!

    Steps 1-5 all fall into the 'Steal Underpants' category of building a product, and steps 8-9 equate to 'Profit'. Just like the Underpants Gnomes, we all have trouble with steps 6 and 7. Those correspond to '???' for the Gnomes and 'Go-to-Market' for the rest of us.

    To succedd with that mysterious step, I'd advocate three things:

    1) Just as you suggest, treat it as a business. It's no surprise that Web developers like spending time…developing, so they spend their time there. If you truly want it to be a business, you have to spend time on the marketing element.

    2) Successful GTM starts all the way back at your first step of identifying an opportunity. Have you done a bit of math on the size/attractiveness of the opportunity and validated that with customer interviews and market analysis?

    3) What are the elements of the go-to-market plan (beyond "have a cool product") that lead to getting TechCrunched? And what elements are there to sustain the business – or are you treating TechCrunch the way pets.com treated the Super Bowl ad?

  22. Most of these web apps failed because they violated a cardinal 37signals rule, which is you should charge money, real actual money, for your service. Don't worry about tweeting secret beta invites or getting on TechCrunch. Just go out and build a real product that solves a real problem.

    @Russ touches on this. Russ, check out David from 37Signals in this video from 8 months ago and you'll see him address the Underpants Gnomes theory head-on! (video)

    Ryan, you're right about marketing. You have to get people trying your product, or it might as well not exist. The two-guys-in-a-garage story is alluring, but you rarely hear the part of the story where they get out of the garage and hit the pavement telling people about their product. That's a shame, because it's equally important as the product itself.

  23. Most of these web apps failed because they violated a cardinal 37signals rule, which is you should charge money, real actual money, for your service. Don't worry about tweeting secret beta invites or getting on TechCrunch. Just go out and build a real product that solves a real problem.

    @Russ touches on this. Russ, check out David from 37Signals in this video from 8 months ago and you'll see him address the Underpants Gnomes theory head-on! (video)

    Ryan, you're right about marketing. You have to get people trying your product, or it might as well not exist. The two-guys-in-a-garage story is alluring, but you rarely hear the part of the story where they get out of the garage and hit the pavement telling people about their product. That's a shame, because it's equally important as the product itself.

  24. Ryan, you could put a different spin on this; people are rarely building products that fix one specific problem with razor sharp focus (i.e. customer signs-up, clicks X, and pain point is gone – bish, bash, bosh). The closer you can stick to that (not that I've reached that holy grail just yet, but I'm hoping to with http://Notipal.com) the more likely you are to launch the app on the base budget & min. required resources, and the greater the chance of the app selling itself. I get scared when I hear people say, 'we're building a platform for [xyz]', especially when it's a one-man side project lacking clearly defined user-stories.

    Take ThoughtBot – those guys seem to be handling multiple side projects well enough, and I think that it's due to the fact that they're building products that fix problems. I continually recommend their products to others because they solve my problems.

    But Spreedly would probably be my most inspiring & topical example of a side project done right. The team still say it's a side project, but with the way things are going, I think they'll be full-time on it before too long.

  25. Ryan, you could put a different spin on this; people are rarely building products that fix one specific problem with razor sharp focus (i.e. customer signs-up, clicks X, and pain point is gone – bish, bash, bosh). The closer you can stick to that (not that I've reached that holy grail just yet, but I'm hoping to with http://Notipal.com) the more likely you are to launch the app on the base budget & min. required resources, and the greater the chance of the app selling itself. I get scared when I hear people say, 'we're building a platform for [xyz]', especially when it's a one-man side project lacking clearly defined user-stories.

    Take ThoughtBot – those guys seem to be handling multiple side projects well enough, and I think that it's due to the fact that they're building products that fix problems. I continually recommend their products to others because they solve my problems.

    But Spreedly would probably be my most inspiring & topical example of a side project done right. The team still say it's a side project, but with the way things are going, I think they'll be full-time on it before too long.

  26. Sound advice here Ryan. As you rightly pointed out, 37 signals put a serious amount of commitment into marketing their products and company and they touch on this point in Getting Real (http://gettingreal.37signals.com/toc.php).

    What they don't really get across is the level of commitment needed to run a application once it's live. It's find it's akin to having children. First comes the pregnancy bit where the child (app) is developing in a controlled environment: you control what goes in (code, design, words), gather (parenting) advice from friends and families (beta group), and let the world know of your impending arrival (blogs, twitter etc…). It may not feel like it but that's the easy bit. Once the birth has happened and your app starts to grow so does the level of responsibility and diversity of challenges. I could go on and beat this metaphor to death and talk about 2am feeds, cleaning dirty nappies, dealing with naughty children, getting into the right school, child development, peer groups and so on but I think you get the picture.

    I'm a big fan of the 37 signals 'it could be you' approach and Getting real is on my list of UX books for non-UX people. we wouldn't have a lot of the great tools we have today without people taking that leap. The advice that Ryan has pointed out might help ensure that people don't leap into the dark.

  27. Sound advice here Ryan. As you rightly pointed out, 37 signals put a serious amount of commitment into marketing their products and company and they touch on this point in Getting Real (http://gettingreal.37signals.com/toc.php).

    What they don't really get across is the level of commitment needed to run a application once it's live. It's find it's akin to having children. First comes the pregnancy bit where the child (app) is developing in a controlled environment: you control what goes in (code, design, words), gather (parenting) advice from friends and families (beta group), and let the world know of your impending arrival (blogs, twitter etc…). It may not feel like it but that's the easy bit. Once the birth has happened and your app starts to grow so does the level of responsibility and diversity of challenges. I could go on and beat this metaphor to death and talk about 2am feeds, cleaning dirty nappies, dealing with naughty children, getting into the right school, child development, peer groups and so on but I think you get the picture.

    I'm a big fan of the 37 signals 'it could be you' approach and Getting real is on my list of UX books for non-UX people. we wouldn't have a lot of the great tools we have today without people taking that leap. The advice that Ryan has pointed out might help ensure that people don't leap into the dark.

  28. Great post, Ryan. These tips will serve me well as I'm getting ready to start a web app of my own. I'm approaching this from a bit of a different angle, since I have to juggle work, the app, as well as university classes.

    The part that I particularly found useful is the A/B testing – something I haven't thought of. Don't be like Apple: our way, or the highway :)

  29. I'm not sure it's a problem "in our industry". I mean, how does this compare to the restaurant business – where a lot of restaurants are run almost at a loss by people who can afford to run them as a hobby?

    The end result is that the restaurant business provides restaurants, and that people have nice places to go out and eat. And restaurateurs have a bit of fun.

    Perhaps the web-app business is destined to be the same; coders get to play at running a company and "doing it right". Meanwhile, the public gets a lot of fun and useful web-apps. And the web is a vibrant place.

  30. I would argue that Tech Crunch is the exactly wrong audience to market to. The people who read Tech Crunch do not buy software. Find a niche audience, understand their needs, find a problem to solve, find people who will pay for software and then build it for them. 37 Signals built a tool for web designers. While their tool set is great for small design shops, it does not scale. We build software for architectural, engineering and construction companies. http://www.cosential.com Our sweet spot is companies with more than 100 employees. It has taken us years to market to them and years to sell. Our sales cycle is 3-6 months.

    37 Signals got lucky in that they got lots of publicity for Rails. That was the marketing trick. After that they kept hammering away and filling their blog full of link bait. Reproducing the buzz of Rails will never happen again, so I would suggest people focus on different ways to get publicity.

  31. I would argue that Tech Crunch is the exactly wrong audience to market to. The people who read Tech Crunch do not buy software. Find a niche audience, understand their needs, find a problem to solve, find people who will pay for software and then build it for them. 37 Signals built a tool for web designers. While their tool set is great for small design shops, it does not scale. We build software for architectural, engineering and construction companies. http://www.cosential.com Our sweet spot is companies with more than 100 employees. It has taken us years to market to them and years to sell. Our sales cycle is 3-6 months.

    37 Signals got lucky in that they got lots of publicity for Rails. That was the marketing trick. After that they kept hammering away and filling their blog full of link bait. Reproducing the buzz of Rails will never happen again, so I would suggest people focus on different ways to get publicity.

  32. Great article! I think 37Signals filled a gap in the market in the right place at the right time.

  33. It's a pretty common trap, people thinking things just need technical solutions and the people will come. Normally the tech is much easier than the people.

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  35. I disagree.

    While ongoing marketing is a problem for tech geeks, it's not the main problem. 37signals is great at marketing and one of the few online app companies that thrive off their story, Getting Real. Their products are just OK (not a dig, just smart business by them).

    After helping over 75 start-ups and creating three businesses, the biggest lesson I've learned is positioning a product/service around a need. If a company is going to enter a crowded space, it better solve unique problems people have. And those problems must sustain the business with revenue. No amount of post launch marketing will solve this problem.

    Fast and furious development is a good tactic. However, finding a winning business and design strategy is much more difficult.

  36. I always thought that the reason why most apps fail is because they only spark the interest of other web app developers, and seem so spurious it will only appeal to power users (e.g. an app which mashes up RSS/Twitter/Delicious/Facebook/Tumblr in a wild an outrageous way…..

  37. I've been pondering a few ideas and in my mind have known that it would require 100% focus and this post and comments completely reinforce this.

  38. Excellent article Ryan. I thought you might like to know that I just posted a followup article about Meg's post in which I actually quantify the success and failure rates of the companies referred to within the logo collage above (~200 web startups). I would love to hear what you think about the results.

  39. Ryan, great post.
    We are learning how much time it takes to Market the web app after launch.
    Having spent 3 mths working part time on the build of http://filesharehq.com we were lucky that as a new agency, we weren't flooded with client work, however now we have launched the app, we are deciding how much time to spend on Marketing the app. 1-2 days seems sensible, and this is where we are placed at the moment, but it is very easy to get stuck in Analytics / Reports and Twitter search feeds for more time than is allowed.
    I am sure we'll learn the good balance at some point, but for the moment we are feeling our way along keeping the focus on both parts of our new business.

  40. Ryan, great post.
    We are learning how much time it takes to Market the web app after launch.
    Having spent 3 mths working part time on the build of http://filesharehq.com we were lucky that as a new agency, we weren't flooded with client work, however now we have launched the app, we are deciding how much time to spend on Marketing the app. 1-2 days seems sensible, and this is where we are placed at the moment, but it is very easy to get stuck in Analytics / Reports and Twitter search feeds for more time than is allowed.
    I am sure we'll learn the good balance at some point, but for the moment we are feeling our way along keeping the focus on both parts of our new business.

  41. there are lots of web owners who thinks that after they published their sites, and that’s it. well its not that way guys. you have to promote your websites by publishing them on different known sites. you can do bookmarking you know. by bookmarking, you can help promote your sites to belong to the top ten in SEARCH ENGINES.

  42. do your marketing before you build your app.

    That way you know what to build that will sell well… and if there is no way to build the thing so it sells well, then you've just saved yourself a ton of time and can move on to a new project.

    Check out Chance Barnett's blog (chancebarnett. dot com) for more about how to do this. Also see Andrew Warner's Mixergy to hear other interviews.
    http://blog.mixergy.com/direct-marketing-techniqu

    +

  43. do your marketing before you build your app.

    That way you know what to build that will sell well… and if there is no way to build the thing so it sells well, then you've just saved yourself a ton of time and can move on to a new project.

    Check out Chance Barnett's blog (chancebarnett. dot com) for more about how to do this. Also see Andrew Warner's Mixergy to hear other interviews.
    http://blog.mixergy.com/direct-marketing-techniqu

    +

  44. Ah, I needed to read this. great article, prefect timing. I am currently experiencing much of what you write about here. Kind of in a grey area.

  45. I'd like to offer an alternate view. If you develop an application, make it publicly available, and then find that no one uses it unless you spend at least two full days per week marketing it, then the application is not something that people want or need.

    This is the Web. You don't need to "market." Worthwhile things will market themselves. Undesirable things will fail regardless of how intensively they are marketed. Marketing a Web application is an utter waste of time and money. It may even be immoral. Your marketing message and any user activity that results from it, such as clicking on a link, eats into the world's limited supply of time and attention. People could be creating great art, spending time with their kids, or pursuing vitally important scientific research. Instead they're clicking on your fucking Google ad or reading your spammy blog comment.

    "Sure, you may get lucky and the app magically spreads itself…"

    There's no luck involved and nothing magic about it. If the app is good and not a waste of time and you show it to three people, they'll share it with their friends because they like their friends and want them to also enjoy good things. It will spread not through luck or magic but through our natural inclination to talk about things we like.

    Let me ask you this: do you enjoy being marketed to? Do you know anyone who does?

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  47. Hi Ryan,

    The gap between being TechCrunched and "Build[ing] recurring revenue till you can quit your day job" is not the major problem "because they don’t know how to market it". It's a problem derived from a lack of value in the product.

    Don't focus on marketing the product. Focus on making it better. On delivering real tangible value. That's the lesson of Kathy's (excellent) comment to your community building post and it's been my personal journey over the last few months: http://www.thruflo.com/2009/05/30/how-social-medi

    James.

  48. Hi Ryan,

    The gap between being TechCrunched and "Build[ing] recurring revenue till you can quit your day job" is not the major problem "because they don’t know how to market it". It's a problem derived from a lack of value in the product.

    Don't focus on marketing the product. Focus on making it better. On delivering real tangible value. That's the lesson of Kathy's (excellent) comment to your community building post and it's been my personal journey over the last few months: http://www.thruflo.com/2009/05/30/how-social-medi

    James.

  49. Plenty of huge successes were started as either hobbies or side jobs. The Wright brothers come to mind.

    The difference between the winners and losers isn't whether or not something is a "side job;" it's how much effort they put into it. The Wright brothers, for example, were extremely innovative in how they approached their problem and the solutions to the mechanical testing required to make forward progress.

    The bottom line with ANY enterprise is that there are far more failures than successes.

    Plenty of great ideas have failed as full time endeavors as well! The speed and relative ease of starting a web business, by its nature, invites failure. The broader access to the tools and low initial capital outlay required compared to starting say a small retail shop lets people without a solid foundational knowledge of business get in the game.

    Ultimately, your chances might be slightly better if all your attention is focused on one task. It is not, however, a pre-requisite for success and shouldn't deter great ideas and work ethic from being the next enterprise to take flight.

  50. Surely market research is the key. I may well feel the my app plugs a whole in my digital life, saving me time and energy, and my friends may feel the same way, but if I'm going to spend the next few years dedicating all my resources to it, it had better be a time-saver for a much, much wider audience.

    A lot of the web 2.0 failures seemed to miss sight of their target audience, focusing instead on great new features, APIs and so on.

  51. Two key elements here: Selling and Marketing. Sales should always lead the marketing of the product. There is a great deal of talk about the advertising or marketing but what about the actual selling of the product.

    Read Crossing the Chasm by Geoffrey Moore, it has great insight into what it takes to get your concept into paying hands. Far too often apps fail because there is no sound sales plan – who, what, where, when, why and how people are going to pay us for our app.

    Then the marketing can back into the sales goals. Not the other way around.

    And remember adding more features DOES NOT guarantee that you will sell more!

  52. Two key elements here: Selling and Marketing. Sales should always lead the marketing of the product. There is a great deal of talk about the advertising or marketing but what about the actual selling of the product.

    Read Crossing the Chasm by Geoffrey Moore, it has great insight into what it takes to get your concept into paying hands. Far too often apps fail because there is no sound sales plan – who, what, where, when, why and how people are going to pay us for our app.

    Then the marketing can back into the sales goals. Not the other way around.

    And remember adding more features DOES NOT guarantee that you will sell more!

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  56. Good points. The stories of users discovering a great web app built as a side-project is rare in real-life I guess. You have to market the product, and work on that full time.

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  58. Hey :)
    Very nice article!
    I coach young entrepreneurs in a business plan competition, many of them in the web 2.0 area with iPhone apps, web apps, etc…
    I will definitely give them the link to this article. It is really well laid out and has so many valid points in it.
    Really good.

  59. Hey Ryan, thanks a lot for the post! You’ve got many useful articles on here, helped me greatly! One of my friends made that exact mistake you mentioned. Tried to help him but I had just read this thing just now, LOL! Anyhow, it’s a good point to keep in mind for budding entrepreneurs who want to build their own website or web apps.

    James Johnson
    CEO
    Sebo Felix Premium

  60. Research is important. Before you know what to do and how to do it right, you must have the right information. However, it may surprise you to find that often if you focus on looking for what you want, you can do it in a few minutes. Most of the time are spent wandering around from sites to sites.

  61. I can imagine. That's why for this new project we have one designer/developer and two sales guys in the team!! Probably a very unusual team for a tech startup…

  62. Hey Daniel,

    I agree – getting TechCrunched isn't necessary for success. It's great PR, but probably not to the right audience.

    Ryan

  63. Hey Brian,

    Fair point – I agree every startup needs a viable business model. I was assuming, for the sake of the article, that this was already the case.

    The main point is that you need more than a viable business model – you need to know how to market it.

    Cheers,
    Ryan

  64. Hey Chris,

    Getting press is a slow and difficult process. First of all, you need to get on journalists radar. Emailing isn't a great option, because they're already flooded with requests for coverage.

    The best way is to make a huge effort to meet the journalists in person. It's so much easier for them to trust you once they've physically met you. This of course doesn't guarantee coverage, but it's a great start.

    Best,
    Ryan

  65. Why the suprise? Ryan owns a business that sells advertising.

    Advertising should be nowhere near top of the list of start-up marketing activities.

  66. Thanks for the clarification; that makes perfect sense and I agree.

    I'm troubled by that graphic and article showing failed "Web 2.0 start-ups." Even assuming that all of them had solid business foundations, that looks to be somewhere around a 50% failure rate–which, let's be honest, is significantly better than traditional start-up success vs. failure rate.

    Either way, let's not take the whole "signal vs. noise" argument out of the equation (the concept, not the 37Signals Blog). When literally dozens of start-ups exist around RSS aggregation, the vast majority will fail as the leaders emerge. Your point about marketing works hand-in-hand with that notion if we suppose the ones with the best marketing are the ones that succeed. But I would contend that as we've seen with Facebook vs. Myspace, marketing (in the traditional "marketing budget" sense) is losing out to a superior experience and word-of-mouth.

    I think we agree in spirit so to say that I disagree with the article was a bit strong–I think I'm more on the topic of: there's more to it.

  67. Hey Jon,

    I'd recommend getting a bank loan before you approach angels or VCs. It's the cheapest way to get capital as they won't ask for equity.

    If that doesn't work, I'd recommend talking to Reshma at SeedCamp and ask for some recommendations.

    Best,
    Ryan