Dynamics Corner
About Dynamics Corner Podcast "Unraveling the World of Microsoft Dynamics 365 and Beyond" Welcome to the Dynamics Corner Podcast, where we explore the fascinating world of Microsoft Dynamics 365 Business Central and related technologies. Co-hosted by industry veterans Kris Ruyeras and Brad Prendergast, this engaging podcast keeps you updated on the latest trends, innovations, and best practices in the Microsoft Dynamics 365 ecosystem. We dive deep into various topics in each episode, including Microsoft Dynamics 365 Business Central, Power Platform, Azure, and more. Our conversations aim to provide valuable insights, practical tips, and expert advice to help users of businesses of all sizes unlock their full potential through the power of technology. The podcast features in-depth discussions, interviews with thought leaders, real-world case studies, and helpful tips and tricks, providing a unique blend of perspectives and experiences. Join us on this exciting journey as we uncover the secrets to digital transformation, operational efficiency, and seamless system integration with Microsoft Dynamics 365 and beyond. Whether you're a business owner, IT professional, consultant, or just curious about the Microsoft Dynamics 365 world, the Dynamics Corner Podcast is the perfect platform to stay informed and inspired.
Dynamics Corner
Episode 408: 💰Startup Success: Navigating Real Problems, Market Feedback, and Market Fit 💵
🏛️💸 In this episode of Dynamics Corner, Kris and Brad are joined by David Hirschfeld, who explores the essential elements contributing to startup success. The group discusses why understanding customer problems is crucial and how many startups fail due to delayed revenue generation. Founders are encouraged to focus on solving real problems instead of merely adding features. They highlight the importance of targeting a specific niche and caution against the misleading power of positive thinking. Many founders become overly attached to their product rather than the problem they are solving, which can lead to pitfalls.
🎧🎙️ Join us as we uncover the secrets to transforming problems into profits and navigating the startup journey with resilience and adaptability. 🎙️🎧
#MSDyn365BC #BusinessCentral #BC #DynamicsCorner
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Welcome everyone to another episode of Dynamics Corner. What does it take to start a startup? I'm your co-host.
Speaker 2:Chris, and this is Brad. This episode was recorded on February 12th 2025. Chris, chris, chris, what does it take to start a startup? Or should I say, what does it take to launch a product or start a product? Today we had a wonderful conversation and I learned so much from David Herfield. Hey, chris, let's talk about something that can really change the way you work Data Courage's apps for Business Central.
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Speaker 3:David, good afternoon hey guys, how are you doing? And my background flipped, or is it correct? It looks good. I think, your background looks great. Okay, because it looks flipped to me, but it looks perfect right here I can read it. I guess you're looking from the inside out, so it's oh I mean looking at um on my virtual camera, it's correct, but when I look at the rivers it looks like Techies is spelled backwards. Yeah, I had the same problem.
Speaker 1:So from our view it looks good. But I had the same problem on my end.
Speaker 3:How weird is that that it looks right to you. I've had this happen before, yeah, where it looks right to you and wrong to me, but I don't care, it just needs to look right to you guys, I think it would be unique if it was backwards.
Speaker 1:You'll have to watch it with a mirror Backwards and upside down maybe.
Speaker 2:I think I'll have to go to a virtual background one time and do that and see if anybody catches that I'm living upside down or something.
Speaker 1:We can't tell right now. If your background is flip-flop, can't tell, okay, you can't tell.
Speaker 3:That's why I'm weird, I just leave it the way it is yeah, how about that?
Speaker 2:yeah, that's, uh, that's definitely unique. It's that's definitely upside down now and now you're in the upside down.
Speaker 3:Now you just have to. You think they get it, I don't think they get it.
Speaker 2:The upside down but I think it would be even more creative if your hair stood up. Oh yeah, that would be really creative.
Speaker 3:If I had hair to stand up actually.
Speaker 2:Not having hair is actually an opportunity. It's a saver as soon as I started losing it.
Speaker 3:I just started shaving it and I found out what I was missing my whole life was not having to take care of it.
Speaker 2:I was in the army and I had a shaved head and then when I got out of the army, because I liked it so much, I kept a shaved head, so I had never really grown it per se. I used to have a high and tight, and then my my hairline started changing.
Speaker 2:And then one year recently, I decided to grow it out to see what I have, and uh, and decided to shave it back yeah, yeah, I've had some experiments that I wanted to do with it, but I just like the not having any hair because of the convenience.
Speaker 1:You just see, mine is mine was flipped, Brad, because when I didn't, I shaved my hair off, as you know, for a long, long time. And then I worked for a beauty supply company and they needed a quote. Unquote model for shampoo and so. I was asked to grow my hair and I've grown up my hair and then of course I kind of stuck with it since. But I agree it's less maintenance right no, are you still are?
Speaker 1:you still a model? No, I mean, it was kind of like a here and there in his mind in my mind yes, I'm always going to be like 25 year old.
Speaker 2:He said it, not me, but if you know anymore you can shave your head.
Speaker 3:So yeah, how about the people that get to just be hand models?
Speaker 1:it's like we don't really want to see the rest of you, but your hands look nice oh I heard about those, the insurance you'd have to put on your hands, right, because it's like, if that's right, yep, bread and butter, is that you run?
Speaker 3:if you run head first into a truck, it's not a problem, as long as your hands stay out of that accident. Is there even a market for hand models anymore? I don't have any. Probably not. There shouldn't be because you can just make prettier hands with AI now.
Speaker 2:Yeah, that's what I was thinking. That is true Speaking of. Ai, AI seems to be all over the place. Before we jump into the conversation that we wanted to speak about this afternoon, Mr David, would you mind telling us a little bit about yourself?
Speaker 3:Yeah, sure, I've been in the software business for the last 35 years. I started out an enterprise. I started my own software company in the early 90s and grew it to 800 customers in 22 countries and sold it to a publicly traded firm in 2000. That was my successful exit my initial one, and then I was VP of products for them for several years and then left and started another software venture that didn't go so well and that one, after 18 months, failed. And that one failed and I didn't realize the things I did the first time by accident, that led me to success.
Speaker 3:I didn't do them the same way the second time, and if I had, I would have been successful in that venture too, because I was actually getting traction on the product that I built, but I was trying to get investment instead of generating revenue for my customers as a way of proving product market fit and building my business model, which I did the first time. So I started Techies after that failure. It was in 2007. I started Techies that was 18 years ago and I've been doing contract development for other people ever since. We actually have a couple of SaaS products coming out this year, which are products that we're building for our own internal use, but they're products that other people that are struggling with the same products that we struggle with also need. So really excited about becoming a blended service and product company.
Speaker 2:Excellent. So Techies? You started. You said 17,. Math is right? 17 years ago, you said 18.
Speaker 3:18 years ago I knew there was one of those it's late in the day over here Like carry the one type thing, yeah, carry the one, add, yeah let's carry the one, add the two, go upside down and so I mean techies.
Speaker 2:You said you're writing software. Contract software is you're writing contract software for yourself and others, and that's where you're creating the product. You're creating products, we're writing software for other people.
Speaker 3:Right, that's we. I've worked with over 90 startups over the last 17 years. Um, a few of them really successful. The majority of them fail, and they always fail for the same reason, for the same reason that mine failed, and that's they wait way too long to start to generate revenue.
Speaker 3:And the only way you prove product market fit is you ask people to buy your product. And until you're asking people to buy your product, you don't know if you have a product market fit or not, no matter how confident you are Right. So, um, uh, and and then by the time you most people, it usually it's anywhere from, you know, 12 to 36 months before people formally start marketing their product. Um, that's just sort of typical, because they're, you know, founders are afraid to ask the hard questions of the customers. So they get it to a certain point, they're MVP.
Speaker 3:Then they want to add features, they put it out for free beta. They're getting feedback from the market. Often, that feedback's misleading because these are not invested users and, plus, they're focused on what their initial agenda is to make the software better for what they're doing, but they're not paying for it. So you don't even know if those are gonna be paying customers once you put those features in and then once they finally have the software in a shape that they feel that's really ready for market you know, which is usually many, several releases past MVP then they start charging, only to find out people won't pay for it.
Speaker 2:This right here you can take me. You just piqued my interest with the words that you had just mentioned. I want to try to unpack some of that because I think a lot of individuals think that it's easy to create a startup. A lot of individuals think that, as you had mentioned, you create a product, everybody will come and you'll be successful and you'll be retired in five years or you'll be able to spin it off and sell it for $15 billion. But a lot of individuals that work with startups as you had even mentioned, you have successes, but you have more failures than you have successors.
Speaker 3:A huge amount more failures than successes. Um, and because to be successful with a software startup requires a lot of discipline and doing the heart and doing it the hard, easy way I call it the hard things upfront makes everything go much easier later on. Most people don't want to do that. They want to get to building the product. Um, they want to. They because they have a vision and they believe in themselves. Right, which are the, which is the kiss of death for a startup founder. Um, you know the power of positive thinking. You know abandon that idea. Well, you gotta be anxious and a contingency planner to the max and do the hard work up front to understand your market, understand the problems, understand the customer. And founders that love their product and believe in their vision fail more often than not. I mean in mass numbers the ones that love the problem and want to spend all their time talking to their customers. Those founders, consistently much higher percentage, find a path to revenue and success. I love that.
Speaker 2:Love the product no, don't love the product. Love the product no, not love, Don't love the product. Love the problem and also have an exit planned, or your contingency. I call it an exit, but you're saying a contingency because you may not be successful with your product.
Speaker 3:Everything Contingency. There was a I don't remember, I think it was the happiness lab. This is a podcast from this woman, stanford professor, lori Santos. It's huge podcast and she did a review of this concept of the power of positive thinking and it turns out this was a myth that started in the sixties and just caught on and everybody thinks it's great.
Speaker 3:But if you, if you pull serial successful CEOs, what you find out, these are really high anxiety people. They say I was lucky, I was just the right place, right time, I was lucky. And you scratch the surface just a little bit and all of a sudden you find out that they were everything we're sure. They were going to fail every step of the way and they thought of everything that could cause them to fail and they created contingency plans for everything so that when something happened it was like, of course, they were lucky because they had thought about it in advance and sort of had a plan around it. Those are founders that are, you know, that are critical thinkers that are successful because they focus on what's the problem I'm trying to solve and what are the problems that can cause me to fail, and that's where they spend their energy and by doing that. They make it so that they make sort of a, they galvanize their machine to be successful, regardless of what happens in the market.
Speaker 1:They didn't make up a problem. Like we know they didn't make up any problem. You know solving a problem, yeah.
Speaker 3:If they thought there was a problem. They went and got in front of customers, found out it wasn't a problem, it was something else. And the software ends up just being the natural conclusion to the process of mitigating the problem. Not something to be in love with, just the thing to fix it, to help fix this problem for them.
Speaker 2:My mind is spinning. I probably won't even be able to articulate or communicate during this conversation, because everything that you were saying is just resonating so deeply with me. Because when you're creating products, you're trying to solve a problem and if you lose sight of the problem and you continue to be invested in the product, it goes with what you're saying this is my point of view, or I'm taking back from my experiences and also with what you're saying this is my point of view, or I'm taking back of from my experiences, and also from what you're saying they wait too long to make to generate revenue. Meaning also, when do you start selling? When do you start charging? When do you bring market? Oh, I always have to add this one more thing and then it's ready.
Speaker 2:I always have to do this one more thing, that it's ready, and you get so lost in the product and I've witnessed this as well that you forget the problem that you're trying to solve and you end up trying to solve problems that don't exist and add complexity as well to it as well. It's the not just because you can doesn't mean you should. It just means you need to solve the problem in the easiest way possible, not in the most complex way possible, because you can get lost and it could take you forever to come to market with whatever it could be In a product. We're saying it could be a software product, it could even be a physical, tangible product to solve a problem such as locking the door or something else. You need to make sure you understand and identify the problem to solve it.
Speaker 3:Exactly, yeah, and by the way, that way that word. You know the word feature is like. If you, if the word feature, it keeps sneaking into your vocabulary. That because you ask a founder say, yeah, well, we need this feature because it makes it much easier to do this. I said, as soon as you put the word feature in there, you've lost focus on the problem.
Speaker 1:Yeah, right you're solving a problem, right that? Not millions of problems at once.
Speaker 3:Right when you say look at this feature and you're demoing the feature. You've lost sight of the problem and the customer, while you're demoing, right, because they don't care about your features, they care about you understand what they're struggling with Exactly.
Speaker 2:No, thank you. This comes to many different areas. We focus on business, central implementations, erp implementations, software implementations, architecture, solving problems and solving solutions. So what you're saying resonates with what I see in many implementations Even it may not necessarily be a product, but it's a solution to a problem that sometimes individuals get so lost in solving the problem that they lose sight of the problem right and it's oh, I could do this.
Speaker 2:Oh well, well, that looks cool. Could you add this? Oh, could you add that? Oh, we're going to add this and you're never ready the core disappeared.
Speaker 1:Yeah, you lose the original.
Speaker 2:Yes, so when do you bring a product to market? And what I mean by that is what considerations? If somebody is bringing a product to market whether they're solving a solution for one particular customer or creating a product to satisfy a problem for many different businesses what should they consider a think of before they bring it to market, to also determine the success of the product, or what are some things they should keep in mind? We talked about being anxious and having contingencies for foreseeable problems what are? Some other factors that they can should consider.
Speaker 3:Yeah, that anxiety thing is more of a characteristic of successful serial founders as opposed to something you should strive to be right.
Speaker 2:But the idea that you're always I've been striving to relax, and now you've just told me that I can be as anxious as I was, so I'm okay with that now.
Speaker 3:It's actually a kind of an indicator of potential success, right? So? And it's not the only path to success. There are some people that just have the charisma to bring business in right. So, and it's not the only path to success, there are some people that just have the charisma to bring business in right. That's a different kind of founder, but that's the very, very rare founder. I was recently working with one of those, so I do know that's another path, but he was still an incredibly critical thinker and pivot, pivot, pivot based on feedback of the market, and stay focused and simple. So he had all those instincts. He just also had the other S, the other X factor as well, and he just recently raised $5 million with very little effort.
Speaker 3:By the way, everybody, get that out of your head. Don't pitch, deck and MVP and get an investor. This is not the way to go. This is what every VC wants you to think, so that VCs have thousands of potential startups to sit through to pick the ones that they want, and they have promoted this concept forever. It's not how to launch. It's not the way. It's not how to launch, you know, unless you're a Stanford 20-something dropout in biotech and people are clamoring to give you money it is.
Speaker 3:Here's the numbers. A VC, a typical VC, is going to see 3,000 pitch decks, and I have corroborated these numbers with VCs. They'll see 3,000 pitch decks. These numbers with VCs, they'll see 3,000 pitch decks. Some initial person will kick out half of them and then, out of those 1,500 that are left, they'll do not a deep dive, but they'll do a more. You know they say, okay, these kind of fit our model, let's see which ones look like they might be decent, and out of those they'll get a hundred of them that will go to an analyst, because the rest will get cut out for other reasons. And out of those, um 60 will end up, uh, in front of the partners, and then 30 of them will get investment. So it's one in a thousand. Is your odds? Was that right? One in a thousand?
Speaker 2:one in a hundred. Yes, one in a hundred.
Speaker 3:There we go with the zeros again one in a hundred and carrying the, carrying the one, one in a hundred actually get funded. And out of those seven, um well, 30 out of 3000,.
Speaker 2:Wait, we're going to go back to this. Drop the ones. One out of a thousand.
Speaker 3:Yeah. So 1% of the 1% of those get funded Um and out of those 1%, 70% will fail. So VC-funded startups 70% fail.
Speaker 1:Wow, that's crazy statistics yeah.
Speaker 3:Because now you've got all this pressure on you and you've been thrown this money and most people's instincts are wrong in terms of what you do when you've been given all this investment or something shifted in the market, and it doesn't take much when you're in startup phase to derail you. Uh uh, most of the time it's something that could have been avoided or can be steered around if the founders really got good instincts and is disciplined. But, but you know, startups are very risky. You know people think I've. Well, but my idea is so brilliant, right, don't you the word brilliant code, for I'm gonna fail.
Speaker 2:Uh, right, I mean, there's so many code words, I have the best idea.
Speaker 3:Everybody wants it right, yeah, code words, for I'm going to fail bit, but isn't there always?
Speaker 2:a start to something. So you're saying starters fail, so I try to take it back. You have to start something somewhere.
Speaker 3:Right Vision is not a bad thing. Having an idea that you believe in is not a bad thing until that belief becomes the thing that drives you forward. So, in other words, you haven't done any. There's no veracity around the belief, it's just a belief. And that's where founders stumble, right at the very beginning. So what they need to do is peel off the black robe, you know, and stop preaching about the great idea and how cool it's going to be, and put on the white coat and become clinicians and say, okay, this is really solve a problem. Who's solving it? For what is the problem? It's solving. What's the value? So the number one job. When a founder starts a company or is going to start a company, he's got one job and no. And founders don't realize this. And I didn't, and I've fallen, by the way, this is not hubris. These are all the same mistakes I've made. So you know this is hard knocks.
Speaker 2:These are the best lessons to learn or, excuse me, the best stories to hear are the stories that people have experienced, because we can learn from it and, as you had mentioned, not every story is the same. Your experiences may be different than others that go through the process, exactly right, and the perspectives may be different as well, but we appreciate you sharing this with us.
Speaker 3:Yeah, yeah. So one founder, the number one job. Oh, I'm happy to share it. I'm all excited.
Speaker 2:I'm honestly sitting here, being very quiet and listening to you, because the questions and the things that I want to say, I just if you could see my anxious little brain, it's going.
Speaker 3:Number one job. Yeah, I'm not going to try to unpack that that metaphor exactly, but it was kind of cool so I can't make those sounds. So that's why I think it's cool. Okay, number one job. Every founder has number one job. Okay, back up for just a second.
Speaker 3:Give you the context of this job there's going to solve. You have all these potential niches you can market to, right, because you've got a problem you're solving. That usually applies to a bunch of niches and when you look at it from the perspective of the stakeholder in that niche and you dig down into the root of what problem it's really solving, it usually breaks out into several different problems, right? So you might have 10 root level problems that you're actually solving with this thing and there may be 20 different niches. Okay, your number one job as a founder is you have to pick one of those niches and you can only focus on two, at most three, of those problems and they have to be very tightly clustered and those problems have to have these ingredients. They have to be to the stakeholder in the niche that you're selling to. It has to have a very high perceived impact because of that problem to that stakeholder in the niche that you're selling to. It has to have a very high perceived impact because of that problem to that stakeholder. Perceived means they believe that problem threatens them personally in some way, because they won't be motivated to listen to you if they don't have a high level of perceived impact to that problem. They won't hear you when you're trying to reach them. And, independently of that, it has to have a high level of perceived impact to that problem. They won't hear you when you're trying to reach them. And, independently of that, it has to have a high cost. Because you can have a high perceived impact and a very low cost, right, and then you can't charge much for your products. You can't make a business out of it. You can have the opposite You're going to have a very high cost but a very low impact.
Speaker 3:Everybody in my industry has been dealing with that problem for 30 years. Nobody's going to support me to deal with that problem because we all do it, you know, and we've got all these other problems we've got, you know. So that's like the opposite, right, high cost but low impact. So that's a hard sales job If you can't get somebody to believe that this is worth pursuing. So if you have both of them you. Then you can get somebody to listen to you because they believe that you understand the thing that scares them and pains them and you can charge a lot for it so that you can build a business around it.
Speaker 3:And it's one niche and you got to find those two or three problems. That's the number one job of every founder. And then you got to figure out what's the messaging so that they realize that you understand their problem. How much do I charge? What's the sales cycle? Is it the right niche? Because how long is the sales cycle? How easy is it to reach the stakeholders and buyers in that niche? Right, these are all things that might promote a niche or demote a niche. But once you've done all this right, one niche should stand out as the clear early adopter, because it's the only person you can really sell and that also informs what you need to focus on in your initial product.
Speaker 3:But we don't want to start building the product yet and this is the. This is, you know. Launch first behind me. Launch your sales and marketing engine as a way of proving product market fit. Create a pre-launch sales model to this niche stakeholder. Create some kind of high fidelity prototype, which is basically a design, an animated design mock-up that looks like a real product, not like just click through mock-ups, but more than that. But not an MVP, because MVPs are expensive and you're having to commit to a certain aspect of your product in terms of what problem that's solving. When you build an MVP, a design prototype looks like a real product. When you demo it, they think you've already built it, but there's no software behind it and you can pivot really quickly. You can get feedback, you can make changes, go and test the market again. You can test the market two, three, four times in the space of a few months and when people start to buy it in your high value model and a high value model might be a lifetime license Everybody goes lifetime license.
Speaker 3:I'm not giving away lifetime licenses, right. But they don't step back and say wait a minute. I could sell a hundred licenses lifetime licenses, you know for the price of maybe 18 months of a subscription fee and and bring in the same amount of money as I would if I went out and got a seed investment. But I'm only giving away an immeasurable fraction of a percent of my market with those lifetime licenses. I have this big group now of invested beta users. They're not trials anymore, they're beta users.
Speaker 3:So we're not trying to do product market fit anymore. We're focused on product solution fit, in other words, making sure that now that they've got the product, they can use it and solve the problem in the way that they thought they could and so that you don't have people getting it and then leaving the product later on. So you're focused on just on the glue at that point, not on the marketing, on what will people buy it at that point, not on the marketing on what will people buy it. Um, and you, uh, and you've got revenue and the same amount of revenue that you'd give 10, 15% away If you got a seed investor and all the work you do to get that investor.
Speaker 3:None of it is building your business, whereas everything you're doing, if you do a prelaunch sale, it's all about building your business. You're building a sales marketing, you're building the design, you're refining the design, you're you're, you're understanding the problem even better and better every time you demo it and you're getting feedback from potential buyers. If they're not buying it Cause that's all you care about is it's not solving the problem? Is it not important enough problem that it's worth buying in on this opportunity which you won't get later on. You know you're going to have to have the product or you don't know you're going to have, or is this the wrong market? They're not early adopters. Whatever it is, you're building your business and refining the sales and marketing engine and once you figure it, once you get that magic kind of formula, then you start building product and use the revenue from sales to then fund development. And if you do need to go to investors, it's a whole different discussion because you've got a growing market, you've got traction, you've got revenue.
Speaker 1:Yeah, that's a good call out that you know. You made a good point about balancing where, trying to find you understand the problem and whether you put a lot of effort building it now and then later on no one is really interested, versus creating not an MVP, more of a click-through to kind of give you the concept of like, hey, this could work, this will solve your problem, and then be able to develop the MVP.
Speaker 2:That's a big problem in this space. No, it is in a number of areas.
Speaker 3:Just one thing the click-through has got to be very realistic. Not just does the screen design the needs to function, the screens need to have drop downs and the data needs to you know, needs to look like I have a nickname for that stuff.
Speaker 2:I call it vaporware, like it really doesn't exist, but it looks like it exists, and I mean I use that sarcastically, but it's serious because I agree with what you're saying and I see this over and over again, as Chris has alluded to is everybody thinks that they have the greatest solution that everybody needs. They spend a lot of time developing it. Sometimes by the time what you started like what you, what you started developing and the problem that you had solved was another key point that you had made. If you lose focus of the problem, the problem can change by the time you even finish.
Speaker 3:Oh yeah.
Speaker 2:And also you think you're solving the problem in a certain manner from a technical point of view, not from a business point of view. So you take your solution, drop it in front of a user who has to use this solution or this product. Again, if we're talking software or even another product, they have to use it daily. Will they even use it the way that you architected it and set it up? So going with that what I call vaporware from the software side is something we used to always say is you know, we do a demonstration of a solution. See, if we had the buy-in, if we had the buy-in, then we'd scramble and build it, so we'd kind of shell it.
Speaker 2:So it does look functional, you can visualize how it would work. Well, it's not even an MVP, because if you tried to use it it wouldn't do anything, but at least you could put stuff in there so they could see the flow of the screens, the flow of the data or even how the product would hold up hold up.
Speaker 3:Wow, this is, and also mvps only have a small part of your vision of the product, whereas when you build the vaporware and the actual term, if you want, like something you can, you know, sound smart about, it's called high fidelity, prototype um, which is really just an animated mock design, mock-up as well, but that's better than I learned, learned eight years ago. It's what they're actually called, if you want an actual term that you can look at.
Speaker 3:High-fidelity prototype Prototype yeah, yeah, got it. But you can build out the vision of the product in your high-fidelity prototype the two-year roadmap in a very short period of time, because there's no intelligence behind it, right, but it has to look real so that when somebody looks at it and you're demoing it to them, they don't ask you the question how do I know you can build this? Because if they ask the question, you can't get that sale. They won't ask that question if it looks real. Even if you tell them it's not real software, they don't hear it because it looks. Oh, they must just be in test or something. That's what goes through people's minds and they'll buy it if you've got the business model right this is crazy.
Speaker 1:it sounds like you're saying that it requires a little bit of patience to really get this to the market and getting a lot of feedback loop from your end users, a lot of people when they build a product, they want to make money as quickly as possible, and then, of course, they trip along the way and they spend a lot of time on something that maybe you're not solving a problem at all.
Speaker 3:It's not even a problem, but it's not one that people feel is worth paying money for. You know or they're not, or they're the raw, or you don't know who the early adopter is, or whatever the you know it's. It's the homework that hasn't been done properly in the very beginning and that's preventing you from being able to create a revenue engine from it.
Speaker 1:Yeah, and I think you said market research right. That's a big component when you're building a. You know a product, a software that you need to market research to make sure that this is actually going to be the right tool that's going to solve a problem within an industry.
Speaker 3:I am always a little leery of using the term market research only because it sounds like it has to be done by a marketing company, and marketing companies actually are lousy at this. Marketing companies are really good when you have some sales history and you know who your ideal customer is and then building doing the research on how to penetrate that market. That's what marketing companies do really well. They suck at startups, you know. When you don't have any idea who that ideal customer profile is, then you need some. A different kind of methodology is something that I created out of many arguments from with marketing companies, a metrics-driven kind of approach to doing this, and I can even explain it. You know it's basically we score, take all the niches and have a methodology for how you define a niche right. When do you know you've made it? It's an actual niche? And then the same thing with the root level problems. Then you figure out what all the root level problems that you are solving. Then you score this grid in terms of how much impact on a score of one to 100 or one to 1,000, but just as long as there's enough gradient in the scoring so that when you later on you're gonna use those numbers to chart this, that you can see what floats to the top. And you do the same thing with cost. How much does it cost for each problem, to each niche, you know? So you end up with this big, these two matrices that you bubble chart to each other. You take the top two or three problems from a scoring perspective and a cost perspective from each of the two charts and you put them in a bubble chart and you'll get three or four that'll float up to the upper right, the niches. That'll float up to the upper right, the niches, and it'll be one of those. That's your early adopter.
Speaker 3:And then you have to do the more deep dive stuff. From that point you know what's the sales channel, how do you reach them, what's the cost, what's the sales cycle, what's the market size of each of these niches right To try to figure out. And then you can and it's easy to test this by niche, because you don't need 20 discovery interviews, which the whole discovery interview methodology is really subjective and very often takes founders in the wrong direction. Instead, as you're scoring these niches, you realize you don't know this niche very well and you're making up numbers. So you just make one or two discovery calls to a stakeholder in the niche at that time when you realize you need more information, and then you can fill out. You don't need 10, you just need one or two, because you're not trying to be perfect, you're just trying to generally triangulate around which ones are going to come up here and which ones are going to be down here. And then you do the deep dive on the two or three niches that float to the upper right in this bubble chart and one of those becomes your early adopter and it usually is easy. Then you do confirmation interviews, not discovery, but you do confirmation interviews. There you do about 15 or 20, because now you have all your numbers, your assumptions, how much it should cost, what problems, how much the problem costs them, how much the impact is right, the language to reach them, and then you just do.
Speaker 3:Then you're doing your market research where you go out to 15 or 20 stakeholders in that niche Um and in the niche that you believe is the early adopter niche, and you're looking for a really high affinity response. Out of at least 30% of those people, um, affinity is like oh, that problem is killing me. We need to, I'll do anything to get rid of it. I think you could charge more because you probably didn't consider this and this in your costs. Yeah, that's where we go to. You know you're going to find a lot of people just like me in these various channels, things like that. Right, I'd love to be part of your focus group as you're building the product, you know, or that sort of thing, because this will probably be your first customers will be those high affinity responses. If you get like 30%, then you've got a market and you've got an opportunity to sell into an early adopter niche.
Speaker 2:With this. So we're talking, like I said, I have a lot of questions so with this. So we're talking about finding the niche, finding the problem, determining if the problem is, or even how do you determine if the problem is a good problem to solve. You talked about the process to go through that. How do you find these problems? So there are chances where, through that, how do you find these problems? So there are chances where in our day-to-day, someone will come to us and say I have a problem, I need to do x, can you?
Speaker 2:help me do this and then you help them do x again. It's so you may be in the business of consulting to develop custom solutions for somebody, for a product or for something else. How? How can you determine if a problem I understand that the matrix is that even find these problems to say that okay? This is a problem that exists somewhere. Now I need to solve it without somebody coming to you and telling you there's a problem. Is there a way that you can search out these problems?
Speaker 3:Well, so that's the entrepreneur looking for a business right, as opposed to somebody who's starting a business. So the best customers that I've had well, the best actually customers I've had are people. I call them recovery customers, and those are people that have been working with other software one or multiple software development teams in the past and they've been struggling and then we get them and they recognize how much better we are than the other ones. Those are my favorite customers because I don't have to, because I already know how hard it is to build software and all of a sudden it's not as hard as it was right. So those are my favorite.
Speaker 2:Those are your favorite. I don't mean that you have to, but I deal with those situations as well and I'll give you back to your thought. I'm sorry, oh no, no problem, but some of those customers, have you ever run into the problem where they've been sort of jaded in a sense, where they may not trust you? I know you may do better and it takes time, oh, but none of them trust me.
Speaker 2:They come in saying that I've already spent a volume of dollars trying to solve the problem with Chris. Then Chris couldn't do it, so I went to Brad. I spent more money. Now I'm going to you. I'm going to track every penny because I'm not throwing it away again.
Speaker 3:Yeah, which is fine with us. We track every penny for them. So you know, if you go to my website, it says at the top hyper exceptional software development team. And I don't ever ask anybody to believe me just because I put it at the top of my website. I say let me show you what that means to be a hyper exceptional software team and because exceptional teams produce artifacts that typical teams don't, which is evidence. That's easy to understand what the difference is just by looking at that. They're still not going to trust me until they see and I don't expect them to until they start to see that we're delivering in the way that I promised we would, and then they become my biggest fans. So I love those customers for that. We got off the topic a little bit only because, no, it's not your fault.
Speaker 3:I said my favorite customers and then I had to back up and say, okay, wait a minute. Okay, then behind that, my favorite customers are people that come from an industry, whatever it is, where they are struggling with a problem on a daily or weekly basis and it has to be daily or weekly so it's top of mind all the time, right, and they can easily articulate how much that problem impacts them personally and what it costs them, what that problem is costing them in some kind of monetary way. And then that person is also in an industry full of other people just like them doing the same thing they're doing, struggling with the same problem they're struggling with, and there's no obviously consumable product that's available that solves this problem. Well, what I mean by consumable? There may be really good products in enterprise, but I'm a small business, right, and so those are out of reach for me, things like that and they have some reach to that community of other users Like those are.
Speaker 3:You're already 50, 60, 70% of the way, farther along than the entrepreneur that just has a great idea, whether it's a great idea or not, because they understand what they're trying to solve and who they're solving it for and have some idea how to reach an initial group of those people.
Speaker 3:So those people understand a problem because they struggle with it already.
Speaker 3:So that's one way, like what you were talking about, that's actually the best way to start something.
Speaker 3:Or they recognize there's just a better way in my industry to do something that well, I guess it's still the same thing. Like I have somebody in the healthcare world who realizes how much hospitals would save if they can predict illnesses and he came up with algorithms during the pandemic that could predict somebody was going to be hospitalized three days before they started showing any symptoms and it was like 95% accurate. Anyway, so that was a customer I've had for the last couple of years who turned that into an AI voice-enabled nurse that reaches out to somebody in lower income population like usually Medicaid patients, and will go out and call them and have a conversation with them when they see things as a result of their wearable device that go out and call them and have a conversation with them when they see things as a result of their wearable device that go out of that show patterns of there's something starting that we need to get a hold of before that person's in the hospital and it's costing the healthcare system a fortune.
Speaker 2:That's genius, because everybody wears wearable devices. I wear a wearable device, I track, track everything and to have somebody be able to analyze it where you can see a slight, anonymally anomaly anomaly anomaly I got it.
Speaker 2:I got it a slight anomaly that you may not notice, because right, yeah that you may not notice and somebody can see that trend based on other data as well, because that data has to go somewhere. I track all of this information with my sleep, my HIV, my steps, my heart rate, my oxygen, and it's goes somewhere. I take a look at it. But to be able for someone to be able to alert me and say, hey, you're resting heart rate slightly elevated, which it gets typically for me if I'm ill, they may be able to see that an illness may be coming, I think that's genius.
Speaker 1:Preventative.
Speaker 2:I think that's what we need and it does. It becomes preventative maintenance on your body Right.
Speaker 3:Yeah, absolutely. Yeah, yeah, but from a Medicaid perspective it dramatically reduces the cost of healthcare. Right, if you can catch that before they even have any kind of symptoms that that person would recognize as something they need to do something about. Yeah, so, anyway, that was an example of somebody who had a better way of doing something, but it came out of this initial research that he did on being able to predict, do predictive analysis on diseases, to try to reduce hospital costs, healthcare costs. But I can talk about like in my own world.
Speaker 3:So I'll give you a couple examples of some ideas that we are now pursuing turning into SaaS products that I mentioned earlier. One of them is as a result of a lot of the podcasting I do. I end up creating referral relationships with some of the podcasters and some people that hear me in the interviews and things like that, and they refer projects to me or I refer projects to them and I have to have a way, and of course, there's referral fees and all that involved, which can be really lucrative, and so people. So I need to be able to track this in a pristine way, and after you get so many referral relationships, this becomes really difficult. So I went looking for software just for referral partner relationships and there's nothing out there that's any good. You know, the stuff that is out there that's consumable is mostly about trying to establish these referral relationships, not about tracking and managing the relationships and the status of them. Where you give the referral partner a portal where they can log in and see the status of the referrals or put a new referral in and see what they've earned and all that right.
Speaker 3:It exists for affiliate marketing. It's been around forever for that. It exists for enterprise in the channel marketing world. There's a bunch of solutions there. But this is one of those consumable things. But for just somebody like me who's got these loose referral partner not loose, I mean they're, but the referral partner relationships and it's not some big channel partner program there's nothing out there. So we're building that, building it for ourselves originally, and then I'm going to go out and do a bunch of prelaunch sales, just like I talk about, and, assuming that I'm getting the traction I want, then we'll add all of the SAS scaffolding around it and then start to market it. You know officially, but we're building it anyway because we need it. So another one we do a very, very detailed job, when we do estimates way more than most software companies do so.
Speaker 2:Just can I go back to what you said. So you're building the product for yourself because you're solving a problem for yourself, but you also want to see if there's a market for that problem for others. So in that case you're building something that you're solving one of your own problems, so you can have some measure of success there. So even if it's not something that is marketable or sellable to others in the state, you at least benefit from it because you gain efficiencies. I was going to build it anyway.
Speaker 3:And then, talking with people, I find out that they need the same thing so that they can manage their referral partner, and I've had many people say well, let me know when it's out. And I thought, okay, you know what? So we'll make it a little prettier than we would have for just our own internal use, but not much. It's still not going to be some beautiful polished product when it's done, but it'll be usable, and I that's all I care about right now usable and reasonable in terms of the the user experience, so that I don't hate using it, because if I do, then we'll start ripping it apart and fixing that. But right, I'm solving a problem for myself and in the process of doing it, it turns out that this looks like there may be a market for this product. So another one we do, like I was saying, estimates.
Speaker 3:When we do a project estimate, we go into way more detail than most software shops, and I know that because I talk with a lot of other founders of custom software shops and we talk about oh yeah, we do really detailed estimates and I say, yeah, so do we. Would you like to see how we do it? Because maybe I'll learn something from them if they show me theirs. So I always show them mine first, and when I show it they go oh no, we don't. Our estimates are really high level compared to yours. That's really cool. Tell me more about your process, and every single time I get that. So that's how I know that they're way more detailed than most. But it's expensive process to do that right, because it takes my most expensive people.
Speaker 3:We break it down into an actual functional module delivery on what we're going to build and put estimates to each one of those modules. And the modules have to be broken down small enough so that they fit in what we call t-shirts. So it's a t-shirt sizing methodology that we which we didn't invent, but we've kind of built on that. So we're building an AI model around this which on the 20th of this month, I'll see the first version of this ready for us to start using internally.
Speaker 3:We're building it around Google Sheets because that's how we do our estimates now, but it'll be all generated and hopefully even improve how we do our estimates now and again I've heard from other software shops that I've talked to that they want the same thing because it'll help them make better the estimates, will be more accurate, and it'll also give them make their proposals more effective. Right, because I have so much detail and then. So I'm going to turn, go out, do a prelaunch sale model on that once we've got that and we know it works for us, and then we'll build the SAS. You know the UI which we've already created, the design for the SAS, so I can demo that. But we're not going to build any of those really pretty screens until we know that there's a market for it.
Speaker 2:So with that product that you're talking about there, you're solving a problem for estimation, which is a challenge and a struggle for many, across many different industries or software industries, because software to me is rather general. It's almost like someone saying I work in it, I work in software, because software can cover many different facets of problems industries, functions, languages. The model that you're working with is it applicable to a specific type of industry, type of product, or is it an estimation model that can be used across the board?
Speaker 3:Pretty much across the board Pretty much across the board, I mean and it will give you the ability to make adjustments. So it's learning from your team's level of expertise and ability to deliver and manage projects, because a lot of an estimate has to do with the team right In terms of how accurate you are. The estimates will be accurate based on certain assumptions that it makes initially, but you can change those assumptions and teach it based on things you already got that are components that you've built that reduce your time in certain areas and other areas where you don't have much expertise and it adds time. And as it's learning, you know it'll start to be really accurate for your own team or anybody's team.
Speaker 1:Yeah, so, david, the problem you were trying to solve then and forgive me if I'd missed this when you're explaining it was that it took long, or or took too long, to create an estimate or statement of work. Is that the biggest problem that you dealt with?
Speaker 3:Cost and time. You know I want to give a customer an estimate within a day or two, but we never can block out enough time of my senior people where they can dedicate to it right. The first they have to evaluate the requirements, look for gaps, go back to the client to clarify right and take the requirements and turn it into something organized that the client can go back through and review and make sure that it's in enough detail and that everything's there that they understood and then right. So this model does all that as well, as then takes that, does a module, breakdown of it and puts the estimates to everything based on our team's expertise, and eventually it'll also then say, okay, this is the team mix you need and here's the duration and how the team is allocated over the period of three or four months or whatever that estimate time is, because we do that too, but the software won't do that initially.
Speaker 1:That is a great problem to solve because that is common right now. I mean, even if it's not just a software problem and even if it's just like consulting you, you know you're putting a statement of work. It's a lot of work to put that together because then you got to take into consideration of all the things you've learned from a discovery and then translate that and then provide a solution. So it sounds like this one, your tool, your software, would expedite a lot of that which gives you a quicker turnaround time. And then, where the client doesn't feel like they're waiting weeks for you to respond to an rfp you know, which is we all know that takes forever right to respond to those I love.
Speaker 2:Rfps, chris, those are the best things. They're so general and vague. I'd rather just say everyone picks them in the way I say vague too. I'm sorry, but I'd rather have somebody just call me up and say here are some questions I have and you can answer them. Because the basic generic questions does your software have this or can you do this? Yes, no, requires modification, can't be done. I can take any question and say it depends. Yes, do you have a chart of accounts?
Speaker 3:what do you mean, and then they get really stupidly detailed for things that really aren't going to matter, like you, you know exactly. You know. Tell me what hospital you were born in and where did you right it's?
Speaker 2:crazy. You see these RFPs over these years. I understand the concept of using it to try to maybe narrow down your focus, to go for some more detail, but with such broad questions, anybody can go well, yeah, we do that, but does it require modification? It depends. How detailed do you need to be in your chart of accounts, for example, or is it? I agree with it? I do? I just remember those questions Exactly. I remember one specifically and they hammered on a particular topic that was so basic, with pure details, and such broad stroke on. It was actually had to do with like interfacing and connectivity and processing of the data. It's like oh, can you interface with other systems? Like one question versus you know. And then they were talking about purchasing and it was like a thousand questions and sometimes the same question worded differently. Yeah right, I see those on RFPs as well, where it's they want to catch you.
Speaker 2:I don't know if they want to catch you, or if they just take it and copy and paste in the questions and adjust them, and I always say, well, if you want to talk to me about an RFP, to see if we're even in the same space. Let's go through it together.
Speaker 1:And I can ask you the questions you know, to save everybody's time. But, and I can ask you the questions you know, to save everybody's time, but they won't do that. The crazy part is that they put all the effort and then at the end it's like, oh, we didn't really need all of this, or you know, there's a simpler process. You know, and you just killed all those time putting that together.
Speaker 3:They just have to look like they're making a decision independent of any kind of influence, right? That's usually where these RFPs come from, you know? Or they just want a bunch of people to provide them proposals without them having to do any kind of engagement with those people until the proposals are out. You know, it's one or the other. Either way, to me it's just, it's a. It's a lazy way of making decisions.
Speaker 1:Well, yeah, I mean, I think you know especially for you know your consulting firm that you're trying to build your business and the more volume that you get for these RFPs or even putting together a statement of work, you're going to be living in it and that's all you're going to be doing, because it takes too long to to build those out.
Speaker 2:So this is, this is exciting that you're building, so we'll you know I like the idea of it and, for the record, I don't mind someone asking questions if we can do something. I'm just saying rfs and the general concept are so broad and vague that they're wasteful of everyone's time. It it's not just the time of the individuals filling it out, it's the time of who puts it together, the time that who's to analyze it and collect it and such Not to go off on a little tangent there and then you don't know anything.
Speaker 3:Forever, while you're waiting for them to close it. They're reviewing. You're sure that they have no interest in you because you can't get anybody on the phone and they haven't responded after two or three months, right, and then you find out you're a finalist or that they already picked somebody and contracted them before you ever spoke to somebody or one. You know, it's just very frustrating. You have to really have a thick skin and do a lot of rfps to not you know, uh, to not take each one sort of as a personal failure.
Speaker 2:Yeah, no, it's well again. It's business, you can win some you lose some, as they say. It's yeah, always have to take things and make it not personal, I think, when it comes to business.
Speaker 3:With RFPs. I always feel like you either are in the business where you're responding to lots of RFPs, or you're not touching RFPs. Yeah, there's no real happy medium there.
Speaker 2:And not touching rfps.
Speaker 3:Yeah, there's no real happy medium there, and those that want to do them the night before, I think and they can just whip through it right, it's so easy. It's so easy. Do you remember what hospital you were born in me? Specifically the name the obscure questions that come up. I'm not, that's obviously. I'm I'm kidding, I understand I like the sorry.
Speaker 2:My sarcasm level is off the charts. Oftentimes people can't tell that I'm being sarcastic, which is unfortunate uh, so it's tough.
Speaker 2:Well, I get it oh good, I see I like this. Okay. So what else do you have? I mean this whole startup journey. I know we wanted to talk about some other topics, but we seem to have gone down this startup road, this product road, because it's important to understand. And it's not even just a startup company I'm taking it and maybe looking at it from a step back, is even taking a product to market. So you may be an existing company that may want to bring another product to market and the considerations would be the same. It's almost as if, if it's new, if it's a new line of business, yeah, yes, well, because in essence, you go back to your venture capital and funding.
Speaker 2:If you already have a seasoned business, successful business, and you have a new product that you want to bring to market, even if you're funding it yourself, it's still somebody providing the capital for that, to fund it, and all of the things that we have spoken about during this session still come into play to make sure that you have a market because you may not be wasting or spending I don't use the word waste again, it's the sarcasm you may not be spending. Somebody who's um funding you their money. You know the what they call the free money, but it's not free because you do pay it back somewhere yeah right within your product, uh, sometimes even a little bit more.
Speaker 2:No one's going to give you money for free, but you're funding it yourself, right? So you need to make sure that you really understand where is your money going, so that the product that you have, you understand your success, because not many people want to just give money away. Right, it is interesting.
Speaker 1:Oh, go ahead, david, go ahead.
Speaker 3:No, no, you go ahead because I've been talking a lot.
Speaker 1:No, no, it's all good. So I'm very interested in this conversation about the startup journey because Brett and I have worked in the ERP side, which is Nav, and now Business Central, now Business Central, now Business Central, as the software application itself now has an app source or marketplace that people can download. So we're starting to see a lot of these applications popping up and I think it's an important conversation to have you know how do you get into that space, what kind of problems you're solving, because they are popping up everywhere. There's, like you know, over 5,000 applications now in the market app place and it's growing. But I think it's important for people to understand what it would take to take a product that is trying to solve a problem in the business central space. How do you market? How do you get it in front of people? How do you get people to buy into it?
Speaker 3:I think it's an important conversation, yeah, so if you're, let's say, there's a lot of different types of products that you might launch when you're creating a new product in your company, one is a product that is that fits into a category of products that are already successful selling, products that are already successful selling, and so that's where your marketing department's going to be able to, you know, be very successful in helping you craft and launch the marketing and the outreach and everything else, because you're already in that business or some aspect. Like I'm a Fritos and I'm coming out with a new type of chip, for example, that would be that type of product. Or I'm a um, um, I'm an ERP and I know that many of my ERP customers need some CRM functionality in the ERP or accounting functionality, and so I'm coming out with a new accounting product and I already have lots of requirements for my clients. So these are all kind of in your channel. You know who you're marketing to, you know who your ideal customer profile is and all those things.
Speaker 3:But a lot of companies are, you know, there's a growing number of these things called innovation centers in large companies, where they're looking for company employees to innovate on ideas that may not be lateral to what they currently do, may be different, and Google's famous for this right. In fact, maybe they I don't think they started it, but they were certainly the ones that made this idea of innovation being a part of your job. You get a day every week to innovate on your own things and, as a result of that, products that are completely different than anything else they had came out of that, like Gmail and things like that, you know, when they were a search company. And for those products products like that then something like Launch First makes total sense, because you don't know who the ideal customer profile is necessarily for these new products, right? So you're really innovating something completely new like an entrepreneur and you have to start from scratch. So the quest now in a big company like that, one of the benefits you have is your own internal users. You can see how well they're adopting these new solutions and it gives you sort of an early adopter perspective that you wouldn't have if you're not a big company perspective that you wouldn't have if you're not a big company.
Speaker 3:But there's a lot of smaller companies that come out with new products that they have enough money and they're successful, and now they've got a new idea but it's not directly related to their product. But I guess what I would coach them is don't build that product. Find something that fits into your existing market and go after that until you've gotten really big. But a lot of companies they start to feel like they have to spread the risk around to completely different markets earlier than maybe they should, and for those they should, you know, go back to lean startup. So a lot of my ideas come from lean startup, not all of them. A lot of them just come from my own experience.
Speaker 3:Like the whole pre-sale model is not a lean startup thing. It comes from the idea of test it. You know, come up with a, you got an idea, so to make a hypothesis about what you think the outcome should be, come up with a way of testing that and a way of measuring the results of that test. So you know what's success and what's not. And then and that's you know right out of lean startup Handbook and we just do the same thing for doing pre-launch sales, as that's how you measure success is you're generating enough revenue? And the metric for that, by the way, for SaaS is you have enough your cost of sale versus what you calculate as your lifetime value of your customer. There's a three to one ratio there as your lifetime value of your customer. There's a three-to-one ratio there because you need enough profit in there so that you now can take that profit and put it back into the system to scale and grow your company.
Speaker 2:When you're looking at the testing of your product and maybe if it's a new product or an existing product. And then I have another question about launching a product, do you ever do any A-B testing? Do you recommend any A-B testing across different customer bases to see if it fits outside of maybe a target for a broader range?
Speaker 3:Well, that's what that whole matrix process is. It starts there because you're looking at all of the different niches, right, and you're scoring them. So you're sort of baby testing it from a theoretical perspective, given the fact, the idea that you understand those niches well. And if you don't, then you're going out and talking to the customers, not about your product but about their problems. By the way, there's a great book. It's my favorite business. I love reading the mom test. Are you familiar with that?
Speaker 2:You can't even say that I didn't even know there was a book, but that's what I always say If that's a book, it's. Really, yes, honestly, I swear on anything on this planet. I always say to everybody I always use my mother, because if my mother can use it and my mother likes it, then it's okay, because it has to be something my mother can use.
Speaker 3:Oh, okay, well, that's very similar, but it's not quite the same.
Speaker 2:I want to hear this now. I'm looking this book up.
Speaker 3:The problem with asking your mom if she thinks that she can use that, or if she thinks your idea is good, assuming you have a good relationship with your mom. Right? She's going to say oh, of course, I think it's a great idea. You're so smart, you'll figure out how to make it work, right? That's not helpful. Well, that's not what.
Speaker 2:I'm talking about. I'm saying if my mother has a problem and I can create something for her to use, then it's a good product because it's simplified to a point where my mother can use it, because what I see oftentimes is people create something so complicated and complex, they eliminate a huge market of the population because it becomes too involved and too complicated to use Right. So you're yes, I'm sorry. So what's this mom test book?
Speaker 3:It's funny that you say that often. That's that is right. From a UX perspective, I totally agree with what you just said, but from whether or not your idea is a good one or not, you know your mom is the worst person to ask about your ideas. But how would you ask your mom the questions in such a way that you would actually get honest answers from her about whether the ideas are good? And that's what the mom test is, why it's called the mom test, and it's not really about asking your mom, but that's, metaphorically, what the book is about.
Speaker 3:It's how do you, when you go out to the market, most people do their product research with customers by talking about you know, talking about maybe talk a little bit about the problems they're trying to solve. And then they go into features of what they want to build and get, try to get, feedback, and people don't give you honest answers, sometimes because they're just lying, but a lot of times just because they don't know until or they don't have enough context to know what the honest answer is. So the MomTest talks all about the fact that when you're doing market research on the product you want to build, you never talk about the product ever. You only talk about the problems customers are struggling with, how they've dealt with those problems historically. Have they? Have they ever found products that satisfy the problem, that mitigate the problem, and why did they stop using it? And you just focus on them and their problems and never, ever, bring up your product or any features.
Speaker 3:Would this if you had a product that did this, would that help? They don't do that because then they immediately start shifting into wanting to make you feel good mode and then and you get nothing valuable out of it. So that's why I like and the guy is a serial entrepreneur, His name's Rob Fitzpatrick, a successful serial entrepreneur, and he has just a brilliant way of I talked about some of these concepts myself before I found his book, but he goes way more in depth. He has a whole system for how you do this, from the conception of your product to even after you launch and you're selling it. How you speak to customers to get honest truth from them, so that you can basically create the right sales cycle, the right product, the right features in a product that really connects with them and syncs with what they need.
Speaker 1:Does the conversation need to start asking and talking about the problem? And then do you go back then and do a demo Like, let's say, for example, you already have the product that will, you know, potentially solve the problem. Or maybe you had a conversation with them and you know that your product will solve that problem. When do you want to demo that and show that to that prospect?
Speaker 3:demo. Then show that to that prospect well with the. Well, if you're approaching all this right, they're going to ask they would ask you for it. I mean, if you're solving the problem that's big enough that they need solved and and cost them enough, and you've already and you've made them feel like you really understand their problem, then they naturally assume you can solve that problem. They're going to draw you in right, as opposed to you having to find some way to get in front of them. There are exceptions to that, but in general that's kind of what you're after.
Speaker 3:So it's like the difference between selling and consulting. So when I'm talking with somebody, for example about the project, first time I've talked to them, they don't know me and they're kind of questioning me to find out whether I'm somebody that is even worth talking to. Usually in the first few minutes they'll ask me something or say something that I'll disagree with, because they have some perception perception and I look for those opportunities. I say, no, that's not how it works, so you can't do it that way, or I won't do it that way. And here's why because now I've created a schism with them and now it gives me an opportunity to create a bridge. I said, however, let's look at it from a different perspective and I give them a bridge to something that feels good to them.
Speaker 3:And now, all of a sudden, we have a relationship where we did not have a relationship.
Speaker 3:I was a salesperson, they were somebody looking for, and I don't do this intentionally.
Speaker 3:I just realized sometime you know, years ago that this seems to happen often in my conversations, just because I'm very honest when I'm talking with people about what I can and can't do, what I think they should do, what I don't think they should do, when I don't know what they should do, and I usually can back those things up with something and I can tell right away when we've had that moment, usually in the first few minutes, because then they start to ask me for help instead of trying to figure out whether I'm somebody worth working with. Right, and now it's so in a sales situation, when you connect with a sales, with a customer, from that same kind of perspective, where they feel like you really understand their problem, you might be able to help them with it, and now it's not about trying to find a way to show them the product, it's more just about sort of planning to show how you've mitigated the problem, because they wanted as much as you want to show them.
Speaker 2:I like that how you've mitigated the problem, because they wanted as much as you want to show them. I like that. Speaking of problems, from the conversation that we've had thus far, I've been inferring that it's a problem that may not have been solved, or it's a new problem. Or if it's a problem that everybody has, what about products that solve problems that have already been solved, For example, the general broad? There are many email. People need to communicate email. There are many email clients out there to serve email within organizations or for individuals. What's the approach or what's the consideration for taking an existing problem that has a solution and coming up with an alternative solution?
Speaker 3:Right. Nobody's going to buy that if that's all they think it's just another solution that does the same thing. If it's not solving a problem, okay. Everything gets down to problem and how much somebody feels impacted by the problem, which an impact means that it creates some level of fear in them about this problem. If they don't get rid of it, then I'm never going to grow my business. My competitors will eat away at my customer base. I'm going to start losing people in my team because they're unhappy with you know, because I don't realize there's problems with the manager until it's too late.
Speaker 3:Whatever, it is right. Or I've got people walking out of a restaurant one of my three restaurants, one of them's losing customers and leaving one-star reviews because of a bad wait person and I don't realize right, these are problems that I feel that threaten me in some way. Or if it's, if it's your ERP system that you know you always have a fear that you're not running your organization, your distribution, manufacturing, delivery, whatever it is well enough in some respect. And if you can tap into whatever that is, then people will lean forward and go and because they realize you understand what the problem is. You'd only be talking about it if maybe there's some way you can help resolve, you know, mitigate that problem, even vacations.
Speaker 3:Why do people get excited listening about vacations? Because they're afraid that if they miss out on these vacations they're going to live a dull and boring life. It's. You know, I don't like the idea of it. I used to fight against this idea, but I realized that it all comes down to being trying to mitigate your fears. You know, if you can tap into the real root level of those fears, um and I don't mean like you're trying to, you know, basically become a horror film to somebody, but you know, um, uh, but you basically tap it. You people want to feel better than they do because they're afraid of how they afraid of whatever that is that's making them feel that way.
Speaker 3:Most decisions are made based on emotion, if not all.
Speaker 2:So it's tapping into it's exactly what you said is you're tapping into the emotion of someone making the decision. A person makes decisions based on emotion and a fear is an emotion. Is I'm going along with what you're saying, but I am afraid of something, so I'm going to make this decision.
Speaker 3:Or this is going to make me happy, or I feel good, right, so I'm making this decision that's going to make me happy, and I'm afraid that I won't be able to capture that happiness if I don't do it Right.
Speaker 2:There's some fear that's driving it.
Speaker 3:Right, yes, if you're just always incredibly happy and so satisfied with everything. Nothing's ever going to get you excited or motivate you to make a decision to be because there's, there, has to be, has to be a perspective right, this has to be better and this is worse. And I don't want this worse. Right, better, and this is worse. And I don't want this worse, right, even if it looks like it's, I'm only doing it because this looks like it's going to be really fun. You know, if I don't do it right, I thought, oh, this is going to be fun and if I don't do it, I'm going to miss out. Right, fomo, I'm going to miss out on this really fun thing. How horrible would that be right, you're pulling on Pulling on that emotional string, yeah.
Speaker 2:There's so much involved with all of that process so it's a lot to tap into.
Speaker 3:The only reason to put a product out there, a new product out there, is because you're mitigating a problem, you're tapping into somebody's fear, and they're real. I'm not trying to make it sound like you're manufacturing fears. These are real things Like maybe it's a new ERP system. Erp systems are really expensive. Maybe you have one that's equivalent, but it's a third the price, and for some companies that can't afford the bigger ERPs but need it, that's a huge problem to solve.
Speaker 3:Or even though all the functionality exists remember I said one of them is consumable, right? If the problem is, if there's nothing out there that's consumable, or you may have something now, but it doesn't integrate with other things that this particular niche needs desperately, and so now that's a niche you can use to get your product into an industry that might be already saturated. But if that doesn't exist, you're never going to sell it, right? If you can't find that thing that people need to fix, then there's no reason for them to buy it Because I'm learning a lot about the path that you're taking as sort of a startup mindset.
Speaker 1:But maybe you've been in the business for quite a while but you still have that startup mindset of growth and trying to put a solution out there.
Speaker 2:That's how I look at it. I look at it, to me it's a dual conversation. We're talking about startups, things to consider, but also for mature companies that are trying to bring a new product to solve a new problem coming into market. It's still to me, in my opinion, it sounds like it could be the same way, the same process. I think it is.
Speaker 3:Yeah, if it's not again in a channel they're already really familiar with and they're just adding another brand in the same channel.
Speaker 2:Yeah, you said you use doritos you're adding, you know, spicy doritos or cheesy doritos you still have a core product, you're just expanding upon it. But if you're branching off into you're making doritos and now you realize you want to start making it, might even I don't know soft drinks, might still be in the food product.
Speaker 3:Yeah, you're going to apparel, right?
Speaker 2:it would be a different story.
Speaker 3:Yeah, exactly. Well, this is good.
Speaker 2:Well, Mr David, we appreciate you taking the time to speak with us today. I've learned a lot. We did have more that we wanted to speak about, so we'll have to see if we can coordinate.
Speaker 1:We did. I'll have to bring it back.
Speaker 2:I'd love to have you come back for part two on this, because I really wanted to talk with you about some of the AI and workflow topics that we had discussed.
Speaker 3:Which is what I thought we were going to talk about too. So this is, but you know it's fun talking with you guys, so I'd love to come back and do it again. I would definitely like to reschedule something.
Speaker 2:We'll finish something after. I apologize for taking another tangent, but when you started talking about the startups, I got a little excited, and it's a little bit of what you do here when we talk with everybody. We really don't have a format. We'll pick a couple of topics and whatever sticks with the conversation we'll expand upon, but you express some valuable insights. I've learned a lot. I have a lot of different perspective on something, so I really appreciate the time that you spent with us today and also the valuable information that you shared, and I definitely will reach out to you afterwards to get you on for part two, because, if the AI workflow this is another struggle. I talked about this in a previous episode that we just released, maybe a week or two ago. I really need to incorporate AI into my workflow to help me keep up with tasks, and I was super excited to talk about it with you.
Speaker 1:Yeah, so we'll hopefully get that soon, I think we spent a lot of time on RFP right, it's perfect.
Speaker 2:It is perfect, but in the meantime, we do have your guest information, the guest section of the podcast. We have the information and if anyone would like to reach out to you to learn more about startups, learn about some of the great things that you're doing or some of the other valuable insights that you have, what is the best way for someone to contact you?
Speaker 3:Go to techiescom, which is spelled T-E-K-Y-Z dot com, t-e-k-y-z dot com, and you can email me directly. Don't put my email link in the thing, but if somebody makes it to the end of the show, then to me they should get my email. David at techiescom. Absolutely, yeah, and feel free to reach out to me directly and on any subject. If I can just be helpful and steer you in the right direction, I'd love to talk to you, whether it has anything to do with future business for me or not.
Speaker 2:Oh, perfect, thank you, we appreciate that. And again, we appreciate your time. Time is, to me, is the currency of life. Once you spend it, you can't get it back. Any money that you spend doing one thing, you're not doing another, and we truly value the time that you spent to speak with us today and share your insights with us and those that are listening, and we definitely look forward to talking with you again soon.
Speaker 3:Okay, yeah, we'll do that soon. Thank you guys.
Speaker 1:Thank you, Dave Bye.
Speaker 2:Thank you, chris, for your time for another episode of In the Dynamics Corner Chair, and thank you to our guests for participating.
Speaker 1:Thank you, brad, for your time. It is a wonderful episode of Dynamics Corner Chair. I would also like to thank our guests for joining us. Thank you for all of our listeners tuning in as well. You can find Brad at developerlifecom, that is D-V-L-P-R-L-I-F-E dot com, and you can interact with them via Twitter D-V-L-P-R-L-I-F-E. You can also find me at Mattalinoio, m-a-t-a-l-i-n-o dot I-O, and my Twitter handle is Mattalino16. And you can see those links down below in the show notes. Again, thank you everyone. Thank you and take care.
