Episode 334 | Why some products fail and others succeed

Show Notes

In this episode of Startups For The Rest Of Us, Mike and Rob talk about why some products fail and others succeed.  Based on a listener question they lists reasons for both sides while also revealing some old failed product ideas of their own.

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Mike [00:00]: In this episode of ‘Startups for the Rest of Us,’ Rob and I are going to be talking about why some products fail and others succeed. This is ‘Startups for the Rest of Us’ episode 334.

Welcome to ‘Startups for the Rest of Us,’ the podcast that helps developers, designers and entrepreneurs be awesome at building, launching, and growing software products whether you’ve built your first product or you’re just thinking about it.

I’m Mike.

Rob [00:26]: And I’m Rob.

Mike [00:27]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?

Rob [00:30]: Kind of the same old stuff. Just hiring a few more folks. We had two new developers start last week, and I think we have two or three open job recs right now. Doing a little bit of MicroConf prep with yourself and Zander. Kind of finalizing the schedule and some sessions. And, you know, fighting the good fight.

Mike [00:49]: It’s amazing how much the little things for MicroConf eat into your time. I mean, there’s all these little things that you think will take five minutes or something like that and they end up eating through twenty or thirty.

Rob [00:58]: Right. Yeah. There’s been a little bit of evening work and some thought and schedule crafting that’s gone on. But, overall, can’t complain given that we’re basically putting on two conferences back to back. I don’t feel like it’s anywhere near even the same amount of work that we used to put in five years ago on the conference.

Mike [01:16]: Right. It seems like it’s not twice as much work to hold the two conferences back to back either. At least not yet. I mean, we haven’t been onsite for it so that could certainly change things.

Rob [01:23]: Yeah, that’s true. And what’s nice about that is, like we’ve talked about in the past, we opened enough tickets that we just about sold out of both conferences but not quite. And I think that’s exactly where we want to be. I think we’ve sold four or five tickets in the past week across the two conferences, and that’s the ideal pace I feel like. Is that last minute folks who want to come who hear about it late I would really like for them to still be able to buy tickets and we’ve never had that really at any MicroConf in the past. So, it’s been kind of nice to see that.

How about you? What’s going on?

Mike [01:55]: Well, kind of related to MicroConf. I’ve been working on my working on my MicroConf talk a little bit. And outside of that, I’ve obviously been putting time into Bluetick and right now I’m working out some UI and workflow issues related to allowing people to self-onboard just because there’s certain parts of the setup process in onboarding that are a little bit more complicated. So, we’re reworking the UI a little bit to make it easier for them to do that and just kind of give them a wizard to walk them through it and anticipate where they’re going to run into issues. Because we’ve seen enough demos in onboarding sessions where this is obviously a problem and getting it the point where people can do that without our help and assistance is definitely going to be worthwhile.

And then kind of related to that is I’m working on recording some video walkthroughs of different parts of the application to show people how to use it so that I don’t have to walk people through those demos myself. Just based on stuff that I’ve learned that people have asked about and said, “What does this do?” Or, “How does that work?” And looking at places to key those videos in so that it’s obvious that if you need help here’s a little button just click on that and it will walk you through this particular piece.

Rob [02:55]: Yeah, that’s a really good way to go. I think that’s kind of become the blocking and tackling template. For this I know it worked really well for us in the early days of Drip. And it still does. I think the videos I recorded two years ago are still live. Or someone may have re-recorded them because we changed our top nav and we were like they get out of date.

And that’s the one bummer with videos is you have to re-record the whole thing as soon as you change one part of the app. You can’t just edit text or replace a screenshot. But recording a sixty- or ninety-second video that’s really tight can go a really long way for brand new people just getting oriented with a specific feature. And in Drip we actually embedded it right at the point they needed to consume it. They were also in the KB but there were only three or four constructs in the beginning. It was broadcasting campaigns and I don’t remember what else. But right as you got into a broadcast it’s like, “What’s a broadcast?” And then there was a sixty-second video of me talking about it. How to use it, how to set one up. Boom. Done. And we got some good feedback about that early on.

Mike [03:48]: That’s basically the approach that I’m using. It’s like right at the places where they need that information, that’s where the videos are and you’ll just be able to click on a little button that has the video embedded into it and it’ll just pop up over the page or something along those lines. We’re still kind of working that out. But, as you said, the one concern that I have is that there’s still parts of the app where the UI is changing and I know that those pieces are going to get out of date and it’s like, “Do I really need to worry too much about that?” Right now, I’m just going to say heck with it and record them and if they get out of day, they get out of date. And if we need to go back and re-record some of them then we will. Or I will.

Rob [04:23]: Yeah, that’s the way to go. One piece of advice there is I would consider only having the videos easily accessible during the blank slate phase. That’s where there’s zero data on that page and that’s when someone’s just trying to get started. They can watch the video or they can dive right in. Once they have one or two of these things set up, the odds of them needing to watch that video drop dramatically. At that point, you could potentially have a little link out to a KB or something.

I don’t know that you need to go so far as to – for the rest of the time that someone uses the app, you always have some link available for them to drop it in. Because you only need that the first one or two times tops that you’re going to set this up.

Mike [05:04]: That’s an interesting approach. I can certainly embed it on certain pages directly where if the page loads and there’s no data behind it, then show that video. And then otherwise up in the top corner or something like that, have a little help icon that they could click on.

That’s something I have to think about whether or not having that extra button there that’s kind of hidden or out of the way where people can just click on that and say, “Get help for this page,” for example. I wonder how much value that adds.

Rob [05:29]: Yeah. You could throw it in and then you could instrument it just to say, “How many clicks does this get?” Throw it into Mixpanel or Google Analytics or something. It’s just a javascript action. And then you could always remove it if people aren’t using it.

We found that the blank slate approach has worked really well. We got a lot of positive feedback about it. And then it kind of goes away once you’re past the blank slate which tends to be when you don’t need it anymore. So, that’s one way to do it that we’ve found to be quite good.

Mike [05:52]: Cool. I’ll definitely take a look at that.

Rob [05:54]: So, what are we talking about today?

Mike [05:55]: Well, today’s episode is based on a listener question from Matesh. And there was a conversation that kind of went back and forth so I’ll sort of paraphrase things here. But essentially he was asking about why some early ideas failed, specifically related to us. But I thought that it might useful to listeners for us to address that in a broader sense and talk about why different products fail and why different products succeed. And different ways that you can mitigate that and identify whether or not you’re on the right track or the wrong track.

Rob [06:23]: Sounds good. Let’s dive in.

Mike [06:25]: When you’re looking at the success and failure of different products, I think that there’s two very broad categories that things fall into. And the first one is whether you launched it or not. Clearly, if you never launched something then it’s not going to succeed. And that’s kind of a whole bucket of failures. There’s plenty of hard drives out there that are probably just littered with projects that people have started and then never finished. I think it’s pretty clear that there’s tons of reasons why those things failed. Most of it’s just people didn’t spend the time on it and follow through with it. But I think that we just kind of ignore those and move on to ones where people have launched it but, for whatever reason, it didn’t succeed.

Rob [07:00]: Okay. But before we do that, I have to tell you about at least one of my projects – it was probably circa 2005, 2006 – and I never launched it. But I still think this idea is as bad as it was the day I conceived it.

I always wanted to be able to follow artists and bands and directors and writers. Like I love Aaron Sorkin’s writing. And I wanted to go to one place to paste them all in or select them from a list and then, whenever they release something new, I would hear about it. You would think this would be fairly easy but I found myself keeping this big text document of all these band names and then these writer names and authors. And then I would periodically go through it and past them into Amazon and look and then I’d past them in here and there. And then I was just like I don’t think there’s really a good service for it. I think Bandsintown may do that now but I’m not sure it tells you about CD’s.

But anyways, I went through and I built the dot net and I hooked it up to the Amazon API and I did all this stuff. And then I realize this is an awful idea. This is something that some big venture funded company would do and try to create a big buzz around and raise a bunch of funding and then they’d go out of business and someone would come and pick up the scraps. Although I wish this existed and in a really palatable format.

Mike [08:10]: I think what you’re looking for is indieshuffle.com.

Rob [08:13]: Yeah? Does it do it for all the things I mentioned?

Mike [08:16]: I don’t know. You’d have to probably look at it and figure out whether or not. There’s probably little things that you were looking for that either are there or are not.

Rob [08:24]: Got it. So, this is cool for music?

Mike [08:27]: Yep.

Rob [08:27]: But it doesn’t have any of the other stuff. I follow authors who write fiction and nonfiction. And I follow, like I said, writers and directors so I would need film. Mine was going to be all that because you could, of course, use Amazon to look for those as new products came out. A new book or a new DVD at the time because there wasn’t streaming.

I’d imagine there’s either a service out there doing this now or there’s three different services. One for each genre.

Mike [08:52]: Yeah. Indieshuffle, I believe, is primarily aimed at music only. But there’s probably ones out there that are similar for those other spaces.

Rob [09:00]: Totally.

Mike [09:01]: Interestingly enough, I have an idea that I started back in 2005. I wrote out all the designs for it and it literally became a multibillion dollar business. It was named Lighthouse but the idea was essentially file sharing made easy so that you could just drag stuff into a folder and it would automatically share it on other machines. Sound familiar?

Rob [09:19]: Dropbox.

Mike [09:20]: Yep.

Rob [09:21]: Yeah. Now to be fair there were like 30 Dropbox competitors even when Dropbox came out. So, you could very well have been the 31st. Because obviously, the idea was one thing but Dropbox getting out ahead, raising the $10 million and execution is what took it ahead.

Mike [09:36]: Oh, totally.

Rob [09:36]: But it is fun to know. I almost acquired a business that did exactly – this was a Dropbox competitor – and the guy wanted a crazy multiple. But it was basically that. It had all the apps and all the stuff. It was kind of like a virtual thumb drive is what we were thinking of at the time.

Good thing you never launched that one because without raising a bunch of funding I’m not sure that you could have ever gotten that off the ground to the extent that they did. Because it’s the freemium model that allowed them to really get the traction, right?

Mike [10:00]: Right. It was 2005 when I wrote the design document for it and it was like an almost forty-page design document for it. But I never followed through and actually wrote it. I still wanted to tweak things out and figure out whether it was going to work or not. And at the time I was transitioning over into doing consulting because I’d left my full-time employment at the time. So, I was doing a lot of consulting and traveling and I just didn’t have the time to work on it.

Then fast forward like two or three years to 2008 is kind of when I went back to it. I started working on it and I think I probably wrote like a code for a week or two, and then I stumbled across Dropbox. And I’m like, nope, that’s it.

Rob [10:37]: Let’s say you had tried to build it in 2005. Do you remember how expensive servers were and storage and all that crap? It would have taken you literally millions of dollars to build it to any type of scale that would have paid. It was not a bootstrappable business even if you were ahead of Dropbox. Just purely for the cost of everything.

Mike [10:58]: The market that I was specifically looking to serve was magazines where they need to collect digital materials and files from graphic artists and they need to get those to their office. The problem was that most of those people had to use FTP servers and a graphic artist just does not know how to use FTP. They had problems with it. So, I was trying to make it easy for them to share their files. And there’s a general use case scenario that Dropbox came out and addressed at the consumer market. It’s interesting how that whole thing ended up playing out.

Rob [11:31]: Totally. What do you mean they don’t know how to use FTP? I think your wife takes offense at that.

Mike [11:35]: No. The thing is, she was actually the one who enlightened me to the problem because she was working with all these people who needed to send files to her. And they couldn’t figure it out. She was working at the magazine and they were trying to send her files and they just couldn’t get them or they didn’t’ get them in time. There was a lot of issues with FTP. You send the file and there’s no notifications behind it either. So, obviously, Dropbox has the notifications and stuff built into it.

There were all these ancillary things that went into that in transferring the files and making sure that people knew about them and there were deadlines and stuff like that. But, I don’t know. It’s interesting to look back on that stuff.

Rob [12:11]: For the listener wondering what we’re talking about, Mike’s wife used to be a graphic designer for a magazine. It was obviously a problem within her purview there.

Cool. So, let’s dive in. I totally sidetracked this whole episode so we could talk about these old, crappy ideas. Well actually, your idea was a good idea. Just one that would have taken a different approach.

Mike [12:30]: It kind of leads back to some of the reasons why something doesn’t get off the ground. It does relate to the episode, both of those things do. But I guess to kind of step back and go back on track, there’s a difference between launching and not launching. Once you’re past that, things also break down into a couple of different categories. And the first one is, did you get any paying customers or not? Because there’s a big difference between a product that gets zero customers and gets at least one. And there’s a lot of reasons why something might get no customers. Obviously, the most prevalent one is probably you didn’t do any marketing or you weren’t able to talk to people.

There’s also the quality problem issue. Your product has to be good enough for people to want to pay for it. Has to have the features that they need. Had to be solving a problem for them. And if it’s not doing any of those things then you’re not going to get any customers.

Rob [13:15]: Yep. Isn’t this startup founding 101 these days? Product building. The first step is figuring out what the problem is to be solved. So, there should be some conversations. And this only became popular really around 2007, 2008. Before that we just went off and everybody just built stuff and hoped people would use it. And then Steve Blank really bringing his customer development approach to the forefront. And that was the first time I heard about asking your customers in advance. And it was like, “Whoa, you can do that? What does that even look like?” And then there were several books written for our work group because one of them where Tim Ferriss did the ad words in advance of offering the product for sale. But there were six or seven books that had talked about that before that came out. And that was when it was like this really makes a lot of sense to try to do as much validation as possible up front to ensure that you are in fact solving a problem.

Mike [14:08]: That’s the first bucket of potential failures. The next one is: if you’ve achieved paying customers but the product is still losing money. Essentially you’ve got negative margins. And there’s a bunch of different reasons for products that fall into this category. They could range from your infrastructure or your hosting costs being too high. Your cost of acquisition is too high compared to your lifetime value. That means that your cost to acquire a customer is more than they are worth. It may cost you $50 to acquire a customer but if they’re only going to give you $25 over the course of the lifetime of that customer, it’s really not worth being in that business. You can’t sell at a loss and make it up on volume.

There are other situations where if it’s a product high service, for example, you might be selling something for $100 and then you’re farming out the work, but it costs $150 in labor to deliver whatever that is to the customer. And, again, you’re in the situation where’s you’re trying to deliver something, and you’re just simply not charging enough. And even in those situations, you can’t necessarily just raise prices and expect the problem to be solved. There’s certain types of problems or situations where the customer is simply not going to be willing to pay more money for something. They have this in their head that they can afford “X” and if you go to “X+5” or “+10” they look at that and say it’s not worth it to pay to have that problem solved at that price point.

Rob [15:27]: This is where I would guess if you had actually launched that Dropbox competitor, this is what you would have found if you tried to bootstrap it. You would have had to charge enough that you wouldn’t have been able to get – well, if you’d gone after magazines that’d be fine. That’s a whole other issue. But let’s just say you had gone after the consumer market like Dropbox did, you would have probably wanted to charge $5 a month or whatever. $40 or $50 a year and you wouldn’t have had the organic growth and the big exponential growth curve that Dropbox did have because they were doing that freemium model up front.

So, one thing to think about here is if you do raise a big bucket of money and you decide that you want to grow this thing super-fast and get the volume, it’s a lot more of a riskier bet because you’re not getting your money up front. But that’s how these companies get to the $100 million and eventually the billion dollar valuations.

With that said, I’m doubting – if you’re listening to this – that that’s where you want to go. So, you really do need to pay attention to unit economics. I heard someone at one point say that they wanted to start a competitor to Kissmetrics and Mixpanel. And I told them, “Do you realize they spend” – I forget what the amount was. It was like a quarter of a million dollars. It was more than a quarter of a million bucks a year and this was in the early days. This was before they scaled up. It was a quarter million a year just kind of table stakes just for all the hardware. Or even the EC2 credits. Or whatever it was they were doing because it’s just such a resource intensive business. So, diving into these analytics platforms or something with a lot of queues where you’re sending email – as I know all too well from having worked on Drip all these years – there can be real infrastructure costs. There’s a difference between a crud app like Basecamp or invoicing software or something and switching over to something that really gets a lot of requests per second, 1,000, 2,000, 3,000 request per second. There’s a true marginal cost per customer that you add.

It’s not something you’re going to be able to predict exactly. But it is something to keep in mind and do a sanity check of like, “Is there anything here that’s really going to scale up exponentially in terms of server load or in terms of support costs as I grow this app?”

Mike [17:25]: And sometimes those aren’t very easy or straight forward to calculate. I remember some offhand comment about it was either Kissmetrics or Mixpanel where one of the early versions of the app, they had 25 servers running in order to support nine customers. Which is more than one server per customer. And if you look at the price points that they’re charging you really can’t afford to have two to three servers per customer at the price points that they currently had. It’s just simply not possible. So, if you’re trying to develop a competitor to it, your hosting costs alone are going to kill you. There’s no way that you’re going to be able to make that work.

That said, they did get funding, and they’re able to scale it based on the fact that they’re able to drive those prices down. It’s a starting point. But, again, not everybody’s going to be able to be in a position where they can get that money and invest it to be able to drive those costs down as far as they need to go in order to make the business work long term.

Rob [18:16]: So, you’ve talked about the first step was never launching. The second one was zero customers versus one or more customers. This third one is getting paying customers but realize that it’s losing money. I think we have two others that we want to cover in terms of the ways that products can fail. What’s the next one?

Mike [18:32]: The next one is you have what I would call a mediocre success. It has paying customers but it’s got a marginal profit. And by marginal, I mean it’s almost not worth your time to do. The product is at least break even and it is making money but maybe it’s only making a couple thousand dollars a month. Maybe it’s $2,000 or $3,000 but, again, even if it’s making $3,000, if you’re spending thirty hours on it, is that worth your time? I think that’s an individual question you have to answer but if it’s paying you $10 an hour for your time then it’s probably not. If it’s paying you $50 or $100 or $200 an hour for your time then I would consider that probably more than a mediocre success. But there’s also overhead associated with running more than one product at a time and having each of them be a mid-range success that is simply not meeting your needs full-time. And the context which in it’s going to be harmful.

But, going back to the products that are a mediocre success, there’s problem solution fit. If it’s not a problem that people really need solved or it’s a nonexistent problem, chances are good that you can get some people to pay for it. But you’re not going to get large scale numbers of people. You’re going to get those people who it’s a really painful problem for and they’re willing to pay for it. But that could just be because they don’t know what some of the alternatives are out there or they haven’t done their research. And you can very quickly fall into a situation where people are using your product for something it simply wasn’t designed to do.

Rob [19:54]: Another thing that could be wrong when you have some paying customers but essentially a marginal profit and you’re not growing is you don’t have product market fit. So, you’ve built a product but you’re offering it to the wrong market or audience or there is not market or audience for this. And a related piece of that is market positioning where it might be related to your pricing or how you’ve portrayed it against competition but you really need to dig into why is your product better and for whom. And it might not be differentiated enough against the competitors and new products really need that.

People need to be able when they hit your website to think, “What bucket does this fit it? Is this invoicing software or proposal software or email marketing software?” And if you have just a description that is what the product does, everybody’s trying to figure out what bucket you fit into. As we’ve talked about in the past, creating a new bucket or creating a new product category is very expensive. HubSpot kind of did that and I think they might have said it took them $5 million before they were able to – he said they had to raise millions and millions of dollars before they were able to really define that product category. And I think that it’s a common mistake people make and one that I made with Drip in the early days was not wanting to position this against other competitors. Or just put it into a specific space like this is email marketing software but here’s why it’s better. Or this is marketing automation but here’s why it’s better.

I kind of wanted to be this new unique thing and all the headlines were just so vague and nondescript that people were having a tough time understanding. So as soon as we went with the, “This is marketing automation but it doesn’t suck,” That was the headline for so long. That really put us in a good position because people then realized, “Okay. So, you’re not going to own this entire market but you are going to own this portion of people who hate the other providers that are there.” So, that was a big product positioning fit for us. And I’ve seen other products be able to do that as well.

Mike [21:44]: The other thing that what you just talked about does is that it allows people to mentally identify who your competitors are because if they can’t do that then it’s going to be difficult for them to compare and contrast what you offer versus what some of the other ones offer. And sometimes you want to be able to specifically define who your competitors are and you can use market positioning to do that. But you can also take a particular market and either go upscale with it or down scale with it.

With Drip, for example, it was essentially pitched as Mail Chimp but more advanced. It was not quite advanced to the level of Infusionsoft or Marketo or things like that. It was more for a small business scenario then for a large enterprise or for somebody who’s just working out of their home office. And, obviously, that has changed over time but that was the position that you started in and that served Drip, obviously, very well.

Some other reasons you might be having some mediocre success is that you have poor design, which if your UI is not very good, it can affect some of your adoption rates. If somebody hits your website and they look at the screenshots of the product and it doesn’t look very good, then they are probably less inclined to purchase it. Even if you’ve gotten a base of customers who used it and the reason they used it is because they were experiencing the pain so much that they just had to have a solution. And they didn’t really care what it looked like. But, as you start to expand your customer base, people are going to care. They’re going to start taking those things into account. If you have misspellings in your UI, for example, that’s going to reflect on them. They’re going to say, “If you can’t get even just these basic things right on the surface, if it’s a complicated product in any way, shape or form, what sorts of problems are going to be underneath the covers?” So, you have to keep those types of considerations in mind.

Poor design decisions can lead to essentially a high churn rate which high churn is simply a symptom of something else. It could be support, it could be onboarding, it could be poor design, it could be quality, it could be downtime issues. There’s lots of different things associated with that. But at its core, high churn rates are associated with some other problem. And it could just not be even a technical problem. It could be that you are marketing to the wrong people and those are not the type of people that are going to stick around. It could be a symptom of a market targeting problem.

Rob [23:54]: Right. Back to poor design. You can point to apps that are successful that have poor design, and I will tell you, yeah, they were early. They were the only choice at the time. Or they really did a lot of heavy outbound sales, and the people who they talked to didn’t know any better. So, a lot of the email marketing or marking automation or big sales like sales force CRM stuff, yeah, the UI’s aren’t great. But you’re not them. You didn’t start ten years ago. You’re starting today. And today UI is a huge deal unless you’re in a very tight niche where you’re kind of the only player. So, this is something that you definitely need to pay attention to.

And in regards to churn, you’re right. It is a symptom of something. It’s often a symptom of crummy support or no product market fit or there’s a bunch of reasons that can happen. But all of this stuff is going to keep your grown flat. And that’s exactly a good way to have paying customers but essentially marginal profit assuming you are working on this a lot.

If you think about the micro-businesses I used to run – like DotNetInvoice or beach towels or apprentice line jobs – those had paying customers but they were highly profitable in the sense that the money that came in, I spent almost no time maintaining things. It was really all work done up front, and the money that came in was mostly profit. Maybe it was only a couple grand a month like you said but I wasn’t spending thirty hours a month on it. So, if you cobble a few of those together, you can actually kind of nice little lifestyle making $10,000 a month with a handful of these small apps not investing the time.

But that’s not really what we’re talking about here. We are talking about you having the intent of growing a SaaS app and working on it most of your free time and getting it to ten, twenty or thirty thousand because we’re guessing that, probably if you’re listening to this, that’s the goal that you have.

Mike [25:31]: The last one we’re going to talk about in this particular category is the high cost of acquisition but also a corresponding high lifetime value. Let’s say that your cost of acquisition is $1,500 and your lifetime value is $2,000 but you’re getting $100 a month from each person. Well, it’s going to take you fifteen months to get back the money that you’ve paid to acquire that customer which means that you have to spend a lot of money up front to get a return that is going to put you $500 in the black but it’s not going to start until another fifteen months after you acquire them. And that’s a very difficult position to be in. That’s why some companies go out and they raise funding to be able to start putting money into that funnel to help them figure out how to move that up, how to lower their costs of acquisition. And they’ve proven that it’s a profitable business model. They really just need to make the numbers work.

And if you’re in a position like this, it’s very difficult to do that because it’s going to stunt your growth. It’s going to make it a long slow slog in order to make that into a profitable product which defines this as a mediocre success.

Rob [26:32]: There are a lot of hurdles that you have to get through if you look at this list that we’ve just talked through. Just getting something launched is a pretty big deal. I know that we used to always talk about on the podcast how that’s not the finish line like most people think. That’s maybe the 40% marker and these days, the further things get and the more competitive they get, I think that may be even earlier. It’s so much easier to get to launch today than it was five years ago just given the tools that we have and all the resources and things like Heroku the platforms as a service. I used to have to spend a lot more time doing that stuff even the marketing tools as well. And then just getting zero versus one customer is a big hurdle. And then getting to the point where you’re marginally profitable. I think we’ve seen a lot of folks get there these days. It’s a hard place to be in because it feels like by that time you’ve worked so hard on the app and you’ve spent so much time building and launching and promoting and then you get to the point where it’s making $1,000 a month top line and it’s $500 a month in hosting costs and you’re still spending twenty hours a week developing on it. It can be tough. It can be a long slow ramp of death, if you will.

I think there are a bunch of other potential reasons that an app can fail but once you make it past this point where you have customers and marginal growth, if you can make it past that, those are the apps that we hear about. Those are the apps that we talk about. Those are the folks that do the attendee talks or the main stage talks at MicroConf. Or that you hear interviewed on podcasts. That’s kind of that final hurdle. I shouldn’t say final because, obviously, there’s so much more beyond that. But it is a point where you just feel like you’ve done something that so few people have done. It’s a big bridge to cross to get past that product market fit or get to that point where growth really does start coming easy. And it’s almost magical when that happens and you see that growth curve go up. And you think to yourself, “Oh my goodness. How did we get here?” Suddenly you go from scrambling from customer to customer to the point where 7K MRR growth per month. You look at that and you say, “Yeah, that was an okay month.” Or you can be disappointed with that. It sounds insane when you say that out loud but you do get to the point where that is the norm or less.

I just want to encourage you. If you’re listening to this, it does sound like a long road, but there is hope. There is a point where you get there and it just feels like everything’s hitting on all cylinders. You’re always going to have stress; you’re always going to have the next feature you need to get out or the competitor that’s ripping you off. But there does hit a point where you’re going to feel proud of yourself. You’re going to feel like you’re kicking ass and that’s where you want to get to. That’s the goal.

Mike [29:01]: That sounds like a pretty perfect place to stop for today’s episode.

Rob [29:04]: Thanks again to Matesh for writing in. And if you have a question and you’d be interested in hearing us discuss it on the show and maybe even turn it into an entire episode, call our voicemail number at 888-801-9690. You can email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from ‘We’re Outta Control’ by MoOt. It’s used under creative comments. Subscribe to us in iTunes by searching for “startups” and visit startupsfortherestofus.com for a full transcript of each episode.

Thanks for listening and we’ll see you next time.

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2 Responses to “Episode 334 | Why some products fail and others succeed”

  1. Rob, This may be wheat you are looking for. You can follow people and brands on Amazon. It ws a little hidden. https://www.amazon.com/gp/profile/timeline

  2. brian says:

    Why some products fail?

    People like Mike are running it alone and spin their wheels for months and months.

    Why products succeed?

    People like Rob are strict with trying and failing fast. Sticking to it, shifting and simply doing the work needed.

    Mike is a better teacher than a doer. So painfully obvious this last year and a half.