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How To Build a Software Company With No Money - YouTube
Channel: Dan Martell
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don't write the code how to test your
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software idea without writing any code
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whatsoever maybe you've already started
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hiring a developer potentially you've
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built the products already in the market
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or maybe you don't even have an idea but
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you don't even know where to start I'm
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going to share something in this video
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that's gonna make it ridiculously easy
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but I know right off the bat you're
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thinking my situation is probably a
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little different dan and I don't know if
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following this advice is gonna work for
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my specific situation and I'm begging
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you I'm pleading with you please listen
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just just try it it's in credit can tell
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you the amount of entrepreneurs hundreds
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of entrepreneurs that come to me after
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they've spent months years hundreds of
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thousands of dollars invested in
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building a product that nobody wanted
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what I'm gonna show you is a simple
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framework that's gonna allow you to
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build something that the customer
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absolutely wants you can't mess it up if
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you follow this process it's guaranteed
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right you're gonna do it in a way that's
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gonna get the customer to finance the
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development it's called customer
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financing it's not venture it's not
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angel it's not friends and family it's
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actually getting the customers to
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finance it and it's going to make it
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easy okay so I want to deconstruct a few
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of my companies first so you have some
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context when I was building my company
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flowtown we were a venture back software
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company but before we ever raised money
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for that product we were social
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marketing application what was we tested
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it we actually built a fake interface
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okay we actually like I called it Wizard
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of Oz and we created three screens the
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first screen was upload your email
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addresses the second one showed a result
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of those emails analysis and the social
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media data that we had on all those
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emails and then the third screen
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prompted for payment now here's the
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crazy part when you submitted payment
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details on the third page we didn't
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collect a credit card and we just said
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to you oops our servers or overcapacity
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are bad please come back in the future
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we've collected your email we'll send
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you an email we're ready to go and what
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that allowed us to do is test the idea
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with
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real product that was fake we actually
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didn't build anything real customers
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that threw down credit cards we just
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didn't collect the credit card and we
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saw the conversion rate from invite in
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regards to what they thought it would do
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what information aggregated view they
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saw and did they have enough interest
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and going forward so that's one example
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my next company clarity was a
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marketplace for entrepreneurs to get
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advice over the phone from other
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entrepreneurs in real time and what we
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did well what I did to test it in the
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early days was real simple
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I used three technologies one I found an
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expert somebody that could give SEO
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advice that people knew of that was
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notable guy named Neil Patel really
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expensive
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it was actually a funny story I emailed
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Neil I was on skype chat and I was like
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hey Neil how much would you charge for
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SEO advice thinking like 500 bucks or
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something like that and he's like $2,000
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and truthfully I don't even do it
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anymore outside of private equity
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companies because they're usually gonna
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then put me on retainer and I'm like
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okay good to know now why was that
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important because before writing any
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software I started to understand the
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pricing dynamics of the experts if you
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think that you know a certain type of
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person's gonna use your platform and you
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reach out to them and they all say no
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for for a reason you learn more about it
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so I had to find people that were priced
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appropriately so I found some expert
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that were had blogs that were pretty
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well known and they were willing to do
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it for 500 an hour then I reached out to
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a bunch of startup founders that I knew
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had kind of marketplace type dynamics to
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their product content marketing and I
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said hey would you pay $500 to talk to
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this expert and they said absolutely and
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I was no problem I coordinated the call
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using Google Calendar no tech and 1-800
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free conference call free conference
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call Google Calendar locked and loaded
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tested with money PayPal that's what I'm
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talking about is is being creative about
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how you you kind of test your idea but
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I'm gonna walk you through a very
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specific way that I think is even better
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so there's three steps to testing your
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software idea without writing any code
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one is building a clickable prototype
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here's the way to think about it is you
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wouldn't build a skyscraper you know a
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100 million dollar skyscraper without
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building kind of a miniature version of
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skyscraper to see kind of like how does
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it sit on the land and how do people
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interact with it and you know kind of
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the dimensions and whatnot that's the
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same thing for software so what I
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recommend is using a tool like keynote
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Opia that you can download and use
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keynote or maybe use PowerPoint and
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create clickable screens like if you can
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draw a square box you're good to go
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okay that's simple and you just you just
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say okay well somebody logs in here and
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then they go to this area and they
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create this thing and then they have the
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results and then there's a dashboard and
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you just create the simulation of how
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the software will work if you want to
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get fancy and I don't recommend it there
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are other products out there like a
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balsamic like a UX pin like envision app
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that allows you to create almost pixel
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perfect simulation of your prototype now
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here's why I don't recommend those is
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because when you show them to customers
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for feedback they might be a little
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hesitant to give you really honest
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feedback because they think like oh you
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already built this I don't want to hurt
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people's feelings you know so I highly
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recommend that if you want you can use a
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clipboard this is what I used to do
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early days when I was in my early 20s
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clipboard piece of paper big sharpie
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marker and I would draw it and I would
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go to the mall or the farmers market or
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wherever your ideal customer hangs out
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okay so you're just big squares and it
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sounds stupid but I'm telling you the
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entrepreneur the ones that are gonna be
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successful if you think that that's
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above you and that's hokey-pokey and you
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want to do it trust me it's gonna it's
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gonna be a shock to you when you finally
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have to go it into the world and
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actually sell a product that is probably
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not really where it needs to be so
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that's one is build a clickable
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prototype of your idea the second thing
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is find the early adopters okay and the
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innovators there's this thing called the
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technology adoption curve by Jeffrey
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Moore and it talks about the different
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phases of technology adoption and what
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I've seen most entrepreneurs starting
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off and failing at their software do is
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they go for feedback from people that
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have that aren't early adopters people
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that are what's called the early
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majority or even worse the late majority
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if you live here's do if you're building
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a restaurant app and you live in a town
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of a hundred thousand people and you
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think that there are restaurants that
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are early adopters you're probably
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misled they're the in small towns
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there's not people innovate
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pushing the limit I remember a long time
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ago a friend of mine came he's like hey
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I've got this idea there's these new
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thing called
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iPads and I want to build an app that
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lets people order their food from the
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table from the iPad and I was like cool
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well go talk to potential customers and
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the challenges they went talked to
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people in their own town that were not
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early adopters restaurant tours and all
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of them said customers will never do
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this it's about experience never work
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never work never work so they stopped
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the challenge was is that they didn't
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think about okay weird what are some of
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the characteristics of an early adopter
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customer where did they spend time what
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did they look like maybe they're using
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snapchat for marketing I mean that would
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be a clear characteristics if I found a
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restaurant they use snapchat then I'd be
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like okay they're early adopters back in
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the day it would have been had Facebook
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page right maybe they're using Facebook
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messaging for marketing I mean you're
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gonna have to figure it out for your
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context in your time in the world what
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is it that gives you inclination that
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that type of customer is an early
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adopter is an innovator progressive in
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their thinking willing to try and adopt
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new technologies once you have that then
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you use those people to validate your
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clickable prototype and then the third
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thing you want to do is pre sell it pre
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sell your software so that you're not
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building for three four five six months
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spending tens of thousands of dollars on
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a product and then finally showing it to
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the customer for them to say that's
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really cool but it's really not gonna
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meet our needs because it's missing this
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one thing you know the unfortunate
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situation is that most potential
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customers giving you feedback when
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there's no financial commitment they're
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just being nice and I can't hold them
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against it they don't you know if you're
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an entrepreneur and you're passionate
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and you're excited about we were
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building on the last thing they want to
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do is be the person that bust your
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bubble they don't want to say it's a bad
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idea but I will tell you this everything
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changes when they give you a dollar okay
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once you ask for a dollar I don't care
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if it's 110 100 thousand soon as you ask
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for money everything changes in regards
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to their thinking around your product
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and what's required to actually meet
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their needs if they're gonna exchange
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money then they're gonna start saying
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well does it allow me to invite my team
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how do I collaborate how do I
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whole a specific report you know if
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you're making me if you're asking me to
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use this to run my facebook ads what's
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the report I'm gonna see to know that
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I'm getting a positive ROI whatever it
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is as soon as you ask for money that's
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when the customers gonna get clear of
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what they need and give you very what's
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called true customer validation most
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people think they're doing customer
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validation they're not if you don't ask
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for some kind of commitment either a
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major time commitment and or a financial
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commitment the feedback is not validated
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now here's the the myth most people say
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think you know Dan my situation is
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different
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I can't pre-cell my software there's no
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way a big company is gonna give me money
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for something that's not built here's
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why I know that that's just absolutely
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not true I came from I built a
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consulting company spheric technologies
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I worked with innovation departments
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inside of Procter & Gamble Dole Fu's
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Johnson & Johnson and here's what I
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learned they were willing to give my
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company money to build innovation to
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build custom solutions to build software
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and had there been a product off the
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shelf that delivered the solution to the
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problem they had they would have bought
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that versus versus asking us to build it
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so anytime people say well my situation
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is different I say no it's not if
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there's a company out there that you can
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see doing something similar to you but
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maybe just for them for their business
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that means that they thought enough
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about having that problem solved that
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they were willing to invest and have a
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company build a custom solution for them
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which means they would have paid you
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upfront for your solution they would
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want to help you co-create it especially
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if you show the mock-ups you work with
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them you put them part of the customer
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advisory board and that is how you
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validate your idea
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you get pre-sales and you ensure you
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build the right product so real quick
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make sure that you create a clickable
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prototype to get real feedback find the
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customer that's an early adopter in
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third get them to pre buy your software
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I hope this video finds you incredibly
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well and I'll see you next Monday if you
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like this video be sure to subscribe to
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my channel for other videos on how to
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grow and build your software company I'd
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also invite you to join my newsletter
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where i share free training videos
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exclusive contests and other private
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invites to events and also if you're
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ready to get going I got two other
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videos queued up for you right now see
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you next Monday
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