Welcome back! It's been another fairly chaotic week here in Vietnam with a cyclone hitting the city, another apartment move, and more code/outreach/other things going on. But this week I wanted to talk about the race to the bottom, which as I understand refers to businesses under-cutting one another in an attempt to gain market share. As a solo developer this is one of the key growth levers I can (and will) pull, in order to get my projects off the ground. Lets get into it.
Software is a unique category of product which has a (usually) significant cost to produce, but a minimal cost to distribute. This means that once the initial cost of production is recovered in sales, all future sales are essentially 100% profit (minus operating costs if any). On top of this, for someone like myself the cost to produce is low given my skillset (assuming zero opportunity cost e.g. returning to London and getting a real job). This means that when it comes to pricing models for whatever I'm producing, I can get extremely aggressive in order to build a solid customer base.
A tried-and-true approach to building tech products is to take an existing idea and create a better, faster, cheaper, or simpler version of it. This is exactly what I've been doing over the past few days with a social media scheduling tool (original I know), which I'll be launching as my first standalone product in the coming days (timeline TBC). The question then is, how should I price it?
As a rookie entrepreneur with an existing customer base of exactly 0, my pricing model will be aggressive. Extremely aggressive. I'll be providing the service for free for the first 100 users, and if there are ever more than that then I'll consider a subscription model. The rationale behind this is simple; although the infrastructure will cost me (a few pounds a month total), the value for me will come from working with actual users, getting feedback, and converting that into a broader audience for whatever my second standalone product will be. Also, this is a tool that I personally will be using, so even if nobody else gives it a go, it's a brick in the wall for my future projects.
This also represents a shift in perspective from 'sprint' to 'marathon' in terms of the technical capabilities I'm building. My goal now is not to build the perfect product first time and ride off into the sunset, but rather to try my best to fail as fast and as often as possible across everything I'm doing, so that my tools, outreach, and everything else improve unreasonably fast. I think this is the only way to achieve my goals in any reasonable time.
On the topic of finding customers and pricing things, my quest to build an audience for tech things online has taken a bit of a hit this week as there were multiple days where I just wasn't engaging (hence the motivation to look into scheduling tools). This by itself isn't the end of the world, but the takeaway for you is that if you are thinking about starting out on a journey like this, get your social media strategy (and tools) set up early so that your online growth is decoupled from your day-to-day availability and motivation.
That's all for this week. Another short one since there's a bunch of tech things I could include but this is a non-technical newsletter so I don't want to bore half of you to tears. Next week will hopefully be about the lessons learned from releasing something into the free market. Hope everything is well wherever you are!
Thanks and all the best,
Oliver
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