“How do you know it is bad advice?” you may ask.

Well, for over eight years I’ve co-hosted a tech startup podcast where we’ve interviewed many successful entrepreneurs. With each interview I’ve ‘unlearned’ a little bit more.

Here are some of the more important unlearnings…

Idea Secrecy

Grandpa says: “Don’t tell anyone about your idea kiddo! They’ll steal it. Look what happened to those Winklevoss twins in the Social Network!”

Nothing could be further from the truth! You need to gather as much information and learning as possible. You should talk about your idea to anyone who will listen. Each time you talk with someone, you’ll learn something new that might push your project forward. You should especially talk about your idea with potential customers!

People and companies generally don’t copy unproven ideas, they copy proven ones (see Slack, Flock, and Stride, for instance). Furthermore, if a large company is the type that does steal, they will usually only consider stealing when a product is massively successful (I’m looking at you, Facebook).

As Howard H. Aiken said: “Don’t worry about people stealing your ideas. If your ideas are any good, you’ll have to ram them down people’s throats.”

Further reading:
Why you shouldn’t keep your startup idea secret – Chris Dixon (3 mins)
Your idea isn’t good enough to keep secret – Ramit Sethi (2 mins)
Why You Should Tell Everyone Your Startup Idea – Kevin Siskar (3 mins)

First Mover Advantage

Grandpa says: “Ya got ta think a something new, see, something never been done before. Just like them Googles fellas did!”

In the vast majority of cases, there is no first mover advantage. Most ideas are not new. There will be some kind of competition already out there. In the rare case a project is wildly successful, being known as an innovator could result in favorable coverage, but being the first does not necessarily help you.

For example, Lyft came before Uber, then Uber launched UberX in retaliation to Lyft and surpassed their traction quite considerably.

Another great example is YouTube. They were not first, they just hit at the right time. Bill Gross talks about this in his TedTalk, “The single biggest reasons startups succeed.” Other examples of success stories that were not first to market: Google, Facebook, Slack, Apple, etc. The list goes on and on.

Further reading:
Here’s Why The First-Mover Advantage Is Extremely Overrated – Steve Blank (5 mins)
The Single Biggest Reason why Startups Succeed – Bill Gross (6 mins)

NDAs

Grandpa says: “I hope you made ’em sign an NDA, kiddo! Those guys like that are sharks. They’ll steal your idea and leave you in the dust, see.”

It is widely seen as an amateur move to ask a VC, friend, or angel to sign an NDA.

In a VCs case, they talk to hundreds of founders. It would be foolish for them to have to cross check each NDA they sign.

Basically, in the context of telling someone your idea, an NDA does very little other than cause friction between you and the person you are talking to. Also, if your business is so fragile that the idea being out there is a significant risk, then it’s probably not a good business.

NDAs do have a place, and that is usually within large corporations. For example, when Microsoft hires an outside consultant, they would need to sign an NDA.

But let’s say you went through the trouble of having someone sign an NDA, and they then broke that NDA by discussing your idea with a friend. Would you really have the need or wherewithal to take legal action? Would it be worth the damage you’d do to that relationship?

Further reading:
Ideas are just a multiplier of execution – Derek Sivers (1 mins)
Why I Won’t Sign Your NDA – Andrew Warner (2 mins)
Why I Also Won’t Sign Your NDA – Viktor Hanacek (3 mins)

Patents

Grandpa says: “You better get a patent kiddo! It’s your only protection from all them sharks, see.”

Patents are expensive, time-consuming, and generally pointless!

The irony is, once you have a patent, the inner workings of your idea will be publicly exposed on uspto.gov. To get around that patent, someone only needs to tweak it.

Precisely the reason why Elon Musk does not file patents.

Further reading:
For Most Small Companies Patents Are Just About Worthless – Todd Hixon (7 mins)
If We Published Patents, It Would Be Farcical – Elon Musk (1 mins)

Business Plans

Grandpa says: “You got to git yourself a business plan, kiddo! Then you can show it to your bank manager and git a loan, see.”

The truth is business plans are not useful in the context of a modern software startups. It takes time and effort to write a business plan – time and effort that should be spent on validating and building the business!

Note, by “business plan”, I mean a standard long-winded document as described here rather than a Lean Canvas, which is a very useful tool.

Further reading:
Don’t write a business plan – Jason Cohen (5 mins)
5 Reasons Why You Don’t Need a Business Plan – Geoffrey James (3 mins)

Technical Co-founders

Grandpa says: “You need to git yourself a partner, kiddo! Someone with some smarts, see.”

I talk to a lot of non-technical founders who think they need to get a technical cofounder before they get started. The problem is, it’s very hard to convince a technical cofounder to join an unproven business.

The irony is, to validate a business, you probably don’t need a technical prototype. In many cases, you can use lean validation methods such as the Wizard of OZ technique and Concierge MVP. After you’ve validated your idea, you’ll find it much easier to convince a developer to join you.

Further reading:
Why you can’t find a technical co-founder – Elizabeth Yin (3 mins)
You will not find a technical co-founder – Rik Visser (6 mins)
Quick Guide to Outsourcing for Entrepreneurs – Ryan Battles (5 mins)

Sweat Equity

Grandpa says: “Sweat equity is all the rage, kiddo! Work for shares and you’ll own a giant piece of the pie, see.”

I advise people to be highly skeptical about sweat equity deals. Here are a few reasons:

1) An unvalidated idea will have a tiny chance of success, so the work will probably end up being for free.

2) If the company does gain traction and make some money, the founder will most likely feel bad about having to pay for work already done. Instead, they will want to spend money on new features.

Put another way, the work will feel like it has no value after the fact. Most founders do whatever they can to get stuff done now. They are focused on the now. It will feel like pulling teeth to have to pay for work that was done last year.

3) In many cases, future investors will not want to honor previous sweat equity deals. I’ve seen this play out in the real world. It doesn’t work out well for the developer.

4) Something that almost always happens after the fact: founders have different ideas of how much value the sweat equity is worth vs. the provider.

Even if a deal is struct beforehand, this situation is likely to arise. Founders usually undervalue the work that’s been done, and providers usually overvalue it.

Further reading:
Some Hard Advice on Working for Sweat Equity – Tim Berry (2 mins)

Company Formation & Lawyers

Grandpa says: “You need a real company, kiddo! Got to dot your I’s and cross your T’s! Git it proper and legal, or you’ll be sued, sued, sued, I tells ya!”

I advise to not form a company until you’ve validated your idea.

I’ve learnt this lesson many times over. Specifically, 4 times. Each time it cost anywhere from $500-$2000 in legal fees. And it’s a terrible feeling to have to dissolve a legal entity that once held so much hope.

Instead, when you’re first getting started, create a new Stripe account as an individual and make sure the “auto transfer” feature is disabled.

Then, start validating your business and collecting money using Stripe’s regular tools. If you reach the point where you’re earning enough revenue to prove your idea is good, you can incorporate. If your project is not working, simply refund everyone that you captured money from.

The same goes for working with lawyers. I regularly see new founders prematurely waste money on legal fees when they are at the idea stage. Obviously, in some cases lawyers are required, like if you are starting a crypto currency broker, but in in most cases it is prudent to validate that customers will actually buy your product before getting a lawyer!

Further reading:
When do I need to incorporate a company?  (5 mins)
Do I need an attorney when I start my business? – Jean Murray (3 mins)

Raising Money

Grandpa says: “That’s a great idea, kiddo – git yourself to silicon valley and the bigwigs will invest, see.”

I think many people try to raise money because they think that is what they are supposed to do.

However, if you are at the idea stage, raising money can become the ultimate quicksand. Instead of building a business, you’ll end up building a pitch deck. You can end up spending months, if not years, asking other people’s permission to give you money… just so you can get started.

But, in many cases… why?

Wouldn’t it just be faster to start validating and building your product until you already have decent traction or revenue as described here.

In other words, perhaps the best way to raise money… is to not raise money!

Instead, bootstrap a successful business, after which point you’ll be able to impress investors and/or accelerators, or bypass them altogether as you see fit.

Further reading:
Start Now. No funding needed. – Derek Sivers (3 mins)
9 Million Dollar Startups That Were Not Funded – Dan Norris (6 mins)
The advantage of no funding – Derek Sivers (3 mins)
Invest in Lines, Not Dots – Mark Suster (4 mins)

In Closing

With all due respect to your elders, you should tell grandpa to shut it. If you’re spending all your energy on lining 100 ducks up in a row, you’re not spending that energy on validating and building your product, and that’s where your energy should be focused in the early stages. Don’t get bogged down with advice – just focus on getting to the point where you can buy grandpa a beer with your profits!

. . .

I’m creator of Nugget, an online incubator & community. We help founders start and grow profitable side projects.

Instead, they walk the same route day after day. So much so, they create a visible deer path on the forest floor!

We do that same thing with our thought patterns. The technical term is cognitive bias. When someone tells us an idea and we shut it down, it’s most likely our pre-conceived notions that squash it. The idea is trying to push us off our familiar path, and we’re not having it.

This is not the optimal way to evaluate the merits of a startup idea.

I invite you to challenge yourself to think about startup ideas you see in new ways. Here are some examples:

Think About The Business Domain

Often times, an idea that seems stale in one business domain can translate to another and become fresh and relevant.

In Nugget we have a classic example of this. The CRM. You may think there is no reason in the world to build a new CRM. It’s stale. It’s been done. It’s owned by SalesForce, right?

Well, as it turns out, our most common idea submission is for a niche-specific CRM. We’ve had a request for CRMs that cater to makeup artists, estate agents, church pastors, educational trainers, party services providers, to name just a few.

In this same way, you can try to translate any idea you hear to a new business domain. You might come up with something pretty great.

Think About The Market

When you hear an idea, think about the market behind it. Perhaps the idea is not to your liking, but the group of people it serves is.

For example, one Nugget member kept gravitating towards nuggets that served authors. He was not consciously aware he was doing this. When I pointed it out to him, it was a revelation. This prompted him to start moving beyond the ideas in Nugget, and reaching out directly to authors, and asking them “What can I build for you?”

Think About The Value Chain

Each business idea is part of a larger ecosystem. The idea you hear might not interest you, but perhaps there are interesting possibilities up, or down, the value chain.

For example, let’s say someone told you they had a great idea to build a video platform for dog walkers.

There are many layers to the value chain behind this idea.

Dog breeders breed the dogs, dog trainers train the dogs, dog walkers walk the dogs, streaming services stream the video, domain services handle the DNS, etc.

If you think about the full value chain, top to bottom, you might come up with another idea that is far more compelling than the original one.

Think About The Little Snowball

Many times ideas we hear are sprawling and gigantic. It’s a classic rookie mistake to start building something too big. A much better approach is to try to find a single aspect of the idea that is productizable.

Just about every part of growing your business becomes easier if the foundational idea is do-one-thing-well.

I learned this lesson the hard way. I launched my tool Pluggio, a tool that buffers social content, at the same time as Buffer. Buffer focused on doing one-thing-well while I built Pluggio out to become a social media dashboard. Ironically, no matter how many features I added, Pluggio’s main selling point continued to be social buffering.

So, while I was adding 100k lines of code to make a really slick single page web app, buffer was marketing and integrating their very simple app. Due to my “high product surface area,” my time was sucked up by support requests. Sales were harder because the product was harder to explain. Integrations were a non-starter because the product was too complex.

After 3 years Pluggio’s yearly revenue was $50k and Buffer’s was $1m.

Think Optimistically, Even About Stupid Ideas

One of Elon Musk’s super powers is he thinks optimistically about any idea that comes into his head. He forces himself to think it through and try to solve all the problems it might present.

For example, if someone told you they had a great idea to ease traffic congestion by building hundreds of tunnels under cities, you would probably think, “That’s stupid, don’t waste any time thinking about that!”

Not so for Elon. He lets his mind go there. He optimistically tries to solve even the most outrageous sounding problems.

Next time you hear an idea that sounds stupid, try to think about it optimistically and see if that presents you with anything interesting.

Conclusion

These are just a few ways you can re-imagine and bring new life to any idea you hear. There are many more, and I’d love to hear your take on this too.

. . .

I’m creator of Nugget, an online incubator & community. We help founders start and grow profitable side projects.

Here’s a little example of why that is an optimal strategy:

Let’s say you were drilling for oil. You didn’t know exactly “where” it was. But you knew it was in a specific quadrant of land. You had picked 3 possible starting points to start drilling and investigating.

Unknown to you, one of those starting points was directly on top of the oil. The other two were not on top, but with work and some sideways drilling, you would be able to get there.

The starting point directly on top of the oil would take 2 days to discover the oil. The other two starting points would take anywhere from 4-12 weeks to discover the oil.

So, would your optimal strategy be to pick one random starting point and keep working it?

Or, would your optimal strategy be to investigate all three starting points and spend a day or two on each?

By picking more than one starting point, you increase your luck surface area and give yourself better odds.

Keep in mind, once you start working on an idea it’s much harder to back out due to sunk cost fallacy. That’s why it’s so important to run these experiments at the very start before you build anything.

If you’re zeroed in on one concept, you could be missing the bigger picture close by. Sure, some people get lucky and strike oil right away. But it’s more likely that you’ll run dry and need to move camp. Or, you might discover there are landmines and you need to get the hell out of there! The more methodically you explore your landscape and validate your options, the more likely you are to survive, and even succeed, in this crazy startup world.

. . .

Note: Validation tests = Talk to potential customers within a specific market segment and see if they have the pain point you hypothesis. Then see how willing/hungry they are to pay for your proposed solution. No need to build anything. Mockups and conversation should suffice.

. . .

I’m creator of Nugget, an online incubator & community. We help founders start and grow profitable side projects.

—

Firstly, I want to say congratulations to this competitor for doing something. The fact that he is actually doing something is a big deal. Most people don’t do anything.

Secondly, I want to say thank you to the new competitor. When someone is first to market with a new concept it’s a bit precarious. It’s not until a competitive market starts to emerge that a product category becomes validated.

Thirdly, I’m open sourcing the core Nugget Mechanical Turk HIT. Feel free to use it to create more competing products in this category or to get ideas for yourself.

Fourthly, Nugget originally offered 7 free ideas and then a premium subscription to get more. I’m launching a competing offer where you can get a free business opportunity every day from Nugget.

The Enlightenment

I’ve been executing on Nugget for over six months now. I’ve paid over $3,500 dollars to Mturk workers to get more than 3,500 ideas, of which I’ve distributed about 350(ish). I’m quite picky about what I let through.

What I have deeply learned is this: Ideas don’t matter.

What truly matters is product/founder fit, serving a market you care about, learning from your customers and maintaining momentum.

Ideas are simply stepping stones to a market and a lot of hard work.

. . .

I’m creator of Nugget, an online incubator & community. We help founders start and grow profitable side projects.

Out of 20m global software developers, very few have built a profitable SaaS business.

To give some context, consider “software developers” as a group, have built 4m mobile apps, but only 15k SaaS businesses.

This is especially odd, given the amazingly commoditized and fickle nature of app marketplaces, with low price points and levels of competition never seen before.

Funny story. Last year, I joined a membership site of a mobile app guru, he’s made millions from mobile apps. I sent him a private message describing my skill-set and asking what the best thing for me to build was. His response?

“Build a SaaS app. It’s a better revenue model.”

True that.

Romancing the SaaS

In the hacker world we like to romanticize impressive outliers like Zuckerberg building Facebook or Koum building WhatsApp. Yet, a solo developer building a profitable SaaS app, is also an outlier and deserves of some romancing.

So let’s get started

The practical reason to build a profitable SaaS side project is because, on the lower end of success, it can net you a second salary while being a fairly low risk endeavor when done right.

In my case, my apps monthly $3.5k enabled my wife to quit her job, take a year off work, and establish herself as a play therapist in private practice.

I was then able to sell my modestly successful app for $100k which helped us to shift gears with regard to our quality of life.

But the real, unexpected gain that I feel, is the sense of personal achievement and growth as a result of the process.

I don’t think I’m being over dramatic when I say I feel like I trained for, ran, and won an ultra-marathon. It was a four year journey of ups and downs that forced me, many times, to push through my own self limiting beliefs and cognitive bias about what I was able to achieve.

Or put another way, it’s a bit like playing a four year strategy game, against a zomby hoard opponent, in god mode, and winning.

As a solo developer you need to wear every hat to build a business. And I mean eeeevry hat.

Customer relationships, Marketing, PR, UX, Pricing experiments, Conversion Funnels, Mailing lists, Case studies, Product road map, Infrastructure management, Customer Support, and the list goes on and on.

If you do that and emerge victorious from the other side, it is impossible to NOT be profoundly changed as a person.

That’s the reason why when you tell someone who has gone through this process your world changing “idea” they are seldom impressed – they simply know too much 

It’s also the reason why we have the saying “Execution is everything” because, execution, literally is, everything.

My favorite part of all of this is that if you can do it once, you can do it again, but this time with knowledge.

Rob Walling’s career is the perfect example of someone who repeatedly did this and with each business leap frogged in size until his Drip exit.

The Grand Quest

So, if you’re the kind of person who likes to play a one month game of D&D or run an ultra-marathon, or climb a mountain, or spend a year fixing a vintage car, or get your teeth stuck into a really hard problem, or deeply challenge yourself, then I would like to invite you to try the journey of being solo software developer building a SaaS side project.

It is a worthy and life changing one.

. . .

I’m creator of Nugget, an online incubator & community. We help founders start and grow profitable side projects.

Often times, they steer clear of really interesting projects because they feel there is too much competition in that market. It’s a common cognitive bias because that’s how we’re taught to think about competition in the “normal” business world.

However, in my not so humble opinion, if you are a building a self-funded SaaS app as a side project, competition is irrelevant and should be ignored 99% of the time. Here are six reasons to support that assertion:

Reason #1: If you build up a rapport with your customers by building what they want, and serving them well, you will get a solid customer base. Jessica Livingston, co-founder of Y Combinator, points out – building something people want is the single most important factor for success.

Reason #2: People don’t think the same. That which your competitor considers to be an effective UI will annoy the hell out of a percentage of their customers. Every day those folks will login and think “damn, I wish they didn’t do it this way”. Then, one day, those people will find out about your app and be overjoyed.

Reason #3: It helps to be in a market with competition. It means potential customers are already educated about the type of tool you’re building. So now, rather than spend time educating people, you can spend time finding clever marketing angles and differentiators to siphon people from the competition to your product.

Reason #4: There are many, many, examples of companies moving into saturated markets and killing it.

Social networking was old news by the time Facebook started gaining Traction.

Google was preceded by over 20 competitors.

Slack was soooo late to the party. There was Hipchat, Campfire, Skype and a host of other services.

How about Gabriel Weinberg and DuckDuckGo? One guy going head to head with Google. One guy and a few linux servers up against a market saturating behemoth… and now DDG is one of the default choices as an iPhone search engine and getting over ten million queries a day.

Rob Walling’s Drip. Who in their right mind would enter a saturated market owned by Constant Contact, Mailchimp etc.? But it worked out. He even exited for undisclosed millions.

Reason #5: With true differentiation you can carve your own segment out of any market.

A good analogy to use is Photoshop layers. In this analogy the market is a single picture in Photoshop, built out of multiple layers.

The trick is to make sure you are not on the same layer as anyone else. In many ways this type of segmentation is like having no competition at all.

Consider Drip, it sits within the competitive eco system of email-as-a-service providers, but is still exists on a different layer than any other service in that market, no wonder Rob cleaned up!

Reason #6: If you give a shit you can overcome almost any obstacle.

We KNOW with dogged determination you will get customers. We KNOW you will build a unique and competitive offering because you will be in constant communication with your customers. We know once you start talking to real customers and making them happy you will be energized.

What we don’t know is… Will you stick at this and get past the 3 year dip it takes to build any business? A feat that is way easier if you give a shit about what you’re doing.

. . .

I’m creator of Nugget, an online incubator & community. We help founders start and grow profitable side projects.

We hear the term Product/market fit all the time, but few talk about Product/founder fit. Ironically, it may be a great deal more important for your individual success.

So what exactly is it?

Product/founder fit is a measure of how well your startup fits YOU.

The better it fits, the more likely you are to succeed. Because, with full Product/founder fit, you are curve-fitting your business around you. Which means you will be far more likely to stick with it for the 3+ years it takes to build and grow your business.

The criterion for good Product/founder fit are different from founder-to-founder. Broadly speaking, you need to make sure the business you’re building matches up with your personality, skill-set, resources and goals.

Example of a bad fit

After the win of selling Pluggio I needed a new side project to work on. Uber for x was all the rage. So, I spent a long time thinking about what kind of Uber for x I could build.

I really liked the idea of Uber for coffee and snacks. So, I worked nine months nights and weekends to build a beautiful app & dispatch platform called Lyte.

When I finished building it. I launched it, hired some couriers, did some local marketing. Orders quickly started coming in. The business was officially launched and making money.

There was just one problem… I did not like it.

I discovered this the first time I used my own service. I ordered a cup of coffee. My courier quickly delivered it to me. However, I felt a strange feeling of awkwardness and wondered why I had not just gone out and grabbed it for myself.

Uh oh.

There was no way I could spend the next 3-5 years building a business that made me feel awkward, no matter how big the pot of gold at the end of the rainbow.

Example of a good fit

Pluggio, on the other hand, was a much better Product/founder fit for me. I didn’t design it that way, it just happened by accident. Apart from the fact it didn’t make me feel awkward to use, there were a lot of other aspects that made it right for me.

For example, I am highly motivated by talking directly to customers and brainstorming a solution to a problem they have. It’s a great feeling delighting a customer.

It suited me to work on a product that was built, marketed & sold completely online. The asynchronous nature of the work fit very well with my random hours of availability.

The B2C nature of the product was an excellent opportunity for me to learn about branding, funnels, case studies and other SaaS business practices.

The final product was very low maintenance and did not require real world hands-on operations. This was perfect for someone with a day job who only had enough time for a side project.

Find YOUR Product/founder fit

Before you embark on your next journey, I encourage you to take a step back and make sure the project aligns well with you. Here are some key questions you can ask yourself to try to establish if you have found Product/founder fit, or not.

• As a founder, does the project suit your personality type?
• Do you have enough available time to support and build it?
• Is the problem space interesting enough to work on for 3+ years?
• Do you have a way to connect with, and find, early customers?
• Do you have the skills and/or resources to build it?
• Is it something you can build and release in 3 months?

If you can answer yes to all those questions, congratulations, you’ve found something special!

Now you can start interviewing customers and iterating your product with the knowledge that you’ll see it through. Perhaps, one day, you’ll find Product/market fit too!

On that day, you’ll be unstoppable.

Discuss on HN

. . .

I’m creator of Nugget, an online incubator & community. We help founders start and grow profitable side projects.

When myself and my co-host interviewed Travis Kalanick on our podcast, he had recently co-founded a little snowball called UberCab. It was so early in Uber’s existence he didn’t even mention it.

I notice Uber falls into a category of companies I call little snowballs. There are some fundamental features these companies have in common. I thought it might be helpful to list a few little snowballs and then talk about how you can go about starting your own.

Uber
Travis Kalanick and Garrett Camp commissioned the creation of a simple app that enabled users to hail a black car on demand. To validate they asked friends and colleagues to install the app. They hired a driver & watched what happened. After a few months of hustle the app hit 10 rides in one day.

Airbnb
Brian Chesky and Joe Gebbia bought a few airbeds and put up a static site called “Air Bed and Breakfast”. They expanded the concept so that other people could offer airbeds in their homes and make money too. Then they expanded the idea to rooms, then to entire apartments. Their journey was a hustle from hell, but they made it happen.

Google
Sergey Brin and Larry Page built a web search engine. It was one page with a search box and submit button. The backend was a simple database search returning ranked results based on the number of backlinks. It did a really good job at providing search results, and took off.

Slack
Stewart Butterfield worked with his Tiny Speck group to build a better team messaging app. Slack makes it really easy for people to signup and start chatting as a team. At its core Slack is a simple IM client.

Other examples
AT&T, Dollar Shave Club, Buffer, Shazam, DropBox

What is a Little Snowball?

“A startup that is founded to do-one-simple-thing-well, and that can be massively grown outward from that starting point.”

Typical markers:

• Very simple idea with a single facet
• Extremely low product surface area (frontend and backend)
• Can generally be prototyped and brought to market in months
• Is instantly useful and quickly gains early-adopter traction

Each of these markers makes it considerably easier for you as a founder to start and grow the first version of your business.

A Simple Single Facet

Just about every part of growing your business becomes easier if the foundational idea is do-one-thing-well. I’ve been part of a number of startups where it was almost impossible to explain what we do in a single sentence. This wreaks havoc during sales meetings and investor pitches.

However, when your startup is a single cell organism, customers and investors are not confused about what you do. Word of mouth and viral loop growth becomes significantly easier to achieve. You can focus on growing the business, rather than trying to understand what the business is.

A Low Product Surface Area

This is a huge, almost unfair, advantage. Dollar Shave Club is the ultimate example. An idea you can build and launch in a weekend. Then, from Monday forward, spend all your time, effort and money on marketing and learning about your customers.

I learnt this lesson the hard way. I launched my tool Pluggio, a tool that buffers social content, at the same time as Buffer. Buffer focused on doing one-thing-well, while I built Pluggio out to become a social media dashboard. Ironically, no matter how many features I added, Pluggio’s main selling point continued to be social buffering.

So, while I was adding 100k lines of code to make a really slick single page web app, Buffer was marketing and integrating their very simple app. Due to my high product surface area, my time was sucked up by support requests. Sales were harder because the product was harder to explain. Integrations were a non starter because the product was to complex.

After 3 years Pluggio’s yearly revenue was $50k and Buffer’s was $1m.

Fast to Prototype and Launch

The sooner you can get to market, the sooner you can validate and start learning about how your customers make purchase or adoption decisions.

Often times you can quickly validate a business by taking very manual steps that don’t scale. For example, if you wanted to validate the business hypothesis –  People will order coffee from a delivery app – you could get 250-500 business cards printed out saying – We deliver coffee. Call us on 123-123-1234. – then hand them out at the mall at breakfast time.

The very next day you will have some great information about your basic hypothesis.

Build Something People Want

The final little snowball component is to make sure your core idea is something people actually want. Without that je ne sais quoi, your rolling stone will gather no moss.

How Can I Find My Own Little Snowball?

Full disclosure, I am founder of Nugget (startup incubator & community). Our primary purpose is to help you find, and grow, your own little snowball.

That said, here are some tips to help you come up with off the cuff ideas:

Think Small

This sounds easier than it is. Many founders think at large scale because they want to build a Google or Uber. They feel it’s too much of a gamble to think about smaller things. Another common trap is to get caught in the mindset of thinking more features equals more sales.

To think small, you should notice details of everyday problems going on around you and try to find do-one-thing-well opportunities.

Notice Problems

Problems are everywhere. The trick is to open your consciousness to the stream of problems that life presents us with. You would be surprised at how capable we are of drowning out regularly annoying tasks that become part of our daily life. Now it’s time to start to notice those things we’ve trained ourselves to ignore.

One note about this: it’s very important you solve a problem that other people have. That sounds like obvious advice, but if no one else has the problem, you’re dead in the water.

Look For Optimizations

Optimization essentially means “to make something better”  and is really just another way to solve a problem. However, thinking through the mental model of optimization can lead you to come up with some interesting product ideas.

For example the core essence of Buffer is an optimization of Twitter.

As a side note. Question: Why didn’t Twitter simply add that feature when they saw it take off in Buffer, Hootsuite and other apps? Answer: They were too busy staying on task and building their own little snowball.

Explore Old Ideas

You probably already have a number of ideas you’ve been thinking about and possibly even products you’ve launched. Have another look at them through the lens of what we’ve discussed here. With any luck, you might find a single facet that can be extracted from that old work and turned into a do-one-thing-well little snowball.

. . .

I’m creator of Nugget, an online incubator & community. We help founders start and grow profitable side projects.

To make things more real your next step is to form a company and seal the deal, right?

My advice is DON’T do that… until you have proven your business is actually going to work.

I’ve learnt this lesson many times over. Specifically, 4 times. Each time it cost anywhere from $500-$2000 in legal fees. And it’s a terrible feeling to have to dissolve a legal entity that once held so much hope.

So, how can you validate your business and capture funds without incorporating?

Here’s a good trick.

Create a new Stripe account as a solo entity, or using your existing consulting business entity. When you setup your account make sure you set the “auto transfer” feature off.

Then, start validating your business and collecting money using Stripe’s regular tools.

At the point you have enough revenue to prove your idea is good you can incorporate, setup a bank account and such. After that is all complete you can plug-in your new company details to stripe — and switch auto transfers back to on.

However, in the event your project is not working, this gives you a great back-out clause. Simply refund everyone that you captured money from and close the Stripe account or use it for your next test project.

Use this process to save a lot of heartache and take a more scientific, less emotional approach to validating your new ventures.

. . .

I’m building Nugget, a startup incubator & community, that focuses on helping software developers launch sucessfull side projects.

Then, you tell your family, a few trusted friends, and even some of your colleagues about it. And…

They don’t like it.

They have all sorts of logical arguments for why it’s a waste of time. They offer advice how to tweak it. You fight for your idea, but deep inside your resolve starts to crack, and before you know it you HATE it. You drop it because, meh, something better will come along…

Sound familiar?

This type of feedback can kill your best ideas.

Entrepreneurs often assign far too much value to feedback from family, friends and colleagues.

In truth, they are not qualified to kill our ideas. Many of us know this logically, but let’s face it, it sucks when people close to us think we came up with a stupid idea. It just feels bad.

Ruby on Rails before Ruby on Rails

Back in 2001 I prototyped a new type of web framework in PHP.

My framework had a command line interface that could easily generate boilerplate code and a corresponding database schema.

My idea was to make it super fast for developers to be able to create CRUD apps. I thought I was onto something, because with my framework I could build an entire blog platform from scratch in 15 minutes!

This was 2 years before Ruby on Rails.

At the time, there was another PHP developer who worked in the same company as me. He was highly respected by the other developers and seemed like the perfect person to ask for feedback about my project. Especially since he was a member of multiple PHP related meet-up groups.

I took him out for a beer and showed him my prototype. His feedback:

“This project is a complete waste of time. No self respecting developer would want to use a tool that wrote code for them. PHP is a rapid development tool already. Good programmers already have the libraries they need. It’s flawed to think you could make PHP a more rapid development tool for those programmers than it already is.”

I was gutted. I felt like a narcissist for thinking my code could replace other developers’ code.

I instantly shut the project down.

From the vantage point of 2016 we can see my idea was not a bad one.

However, would it surprise you to know I also think the feedback he gave was not bad?

His perspective made a lot of sense in a world where the existence proof of something like Ruby on Rails was not there. At that time there was no accepted world-view for this type code generation workflow in web frameworks.

If my idea wasn’t bad… and the feedback wasn’t bad… what was the problem?

Sucky Feedback Loop

When we solicit feedback from family, friends and colleagues, emotion can often get the better of us.

As a result we can shut down our best ideas based on the wrong people’s feedback and thus never get a chance to ask the people who matter.

In order of priority, these are the user groups we should really get our feedback from:

1. Existing customers (or user-base)
2. Target customers (or user-base)
3. Experts who understand the domain
4. Colleagues, friends & family

The higher up the list, the more seriously we should take the feedback. Simply following this basic advice will change your feedback loop in a very positive way.

However, we can do much better than that.

Introducing the “Idea Feedback Formula”

The Idea Feedback Formula is a mathematical method we can use to reduce our feedback into a 0–10 confidence score. Armed with this information the decision to invest further time into an idea becomes much clearer.

If you feel like experimenting right now I made a tool that does all the calculations for you over here.

If you want to know how it works, read on.

Step 1

Ask for feedback from as many of the above user groups as possible. Ask at least four people. The more people you ask the higher trust you can have in the confidence score.

Step 2

Each person you interview MUST give you a “Do this” or “Don’t do this” vote.

For the purposes of this formula “Do This” = 1 and “Don’t Do This” = 0.

Next, rank the feedback you’ve gathered according to its ranking level, using the following example as a guide:

Existing customers (or user-base) = Level 4
Target customers (or user-base) = Level 3
Experts who understand the domain = Level 2
Our colleagues, friends & family = Level 1

It’s important to note there are shades of gray in determining which people fall into which category.

Some of your closest friends & colleagues may actually be domain experts in relation to your idea. However, be conservative how you break the tie in these circumstances, and choose the lower of the available levels. In this example, then, when your friend is also a domain subject matter expert, err on the side of ranking their feedback in the Friend Zone just in case they may be softening their feedback to spare your feelings.

Step 3

Calculate and reduce your feedback to a confidence level between 0 and 10. To do this, average the votes of each group, multiply each average by its group ranking weight, finally add the weighted averages together.

Here is the Idea Feedback Formula in pseudocode:

Confidence = AVG(CurrentCustomerVotes*4) + AVG($PotentialCustomerVotes*3) + AVG($DomainExpertVotes*2) + AVG(FriendVotes*1)

Here is how to read the resulting confidence level:

Confidence 0–2: Nope.
Confidence 2–4: Explore further, with caution.
Confidence 4–6: Yes, looks promising.
Confidence 6–8: Wow, looks great!
Confidence 8–10: Oh hell yeah!

You’ll note your final confidence level largely relies on the types of people you interview. If you only ask friends and family, you will never get a high confidence level for making a go/no-go decision about your idea.

This system of levels will force you to ask people with domain expertise, prospective customers and current customers before moving further along with your idea.

TL;DR

Don’t kill your ideas based on feedback from family, friends, or colleagues.

Make sure you ask the right people—domain experts and customers—and then be certain to weigh their feedback above the advice you’re getting from people closer to you.

. . .

I’m creator of Nugget, an online incubator & community. We help founders start and grow profitable side projects.