You Don't Need Developers or Investors to Start a Tech Business (Advice from a Serial Founder)

This seems to trip everyone up that I speak to. You don't need a software development team and you don't need investor money to get started. So, it comes up quite a bit because obviously we built the last business tech product. When people have an idea for a tech product or a website or anything that usually the first questions asked are where do I find software developers and how do you go about getting investor money? I can't drill into people's heads enough how important it is to prove the idea in a rough prototype or predtoype sort of state. And what's a prito type? It's basically a proof of the thing working. So for example, say you have something which is selling a product. So you want to always try and boil down whatever the app product idea. These are generally broadly ambitious ideas like it's going to be the next Airbnb, it's going to be the next Uber. And people start overengineering in their mind what they need to prove that the product is going to work and that the business can work. The expense, like the amount of money you can lose, like no one thinks they're going to lose money. no one thinks their idea isn't going to work out. But if you want to save yourself a lot of time and a lot of money, just prove it. And don't prove it by going and developing an entire app. Prove it by taking it down to its most base format. So that can look like if it say for example it was something like reading emails and calling back customers. You don't need to do AI integrations. You don't need to do NAND integrations. What you need to do is go and off of the job with a human doing it first to businesses and see what they want. your products that you build are going to support whatever the infrastructure is of the thing you sell and not the other way around. Don't worry about where you're going to find an engineering team and don't worry about where you're going to find VC money because all of those things are going to be way way easier to figure out once you have something that you're selling to people because the only thing that really matters at the end of the day is the distribution and conversion of leads into sales. I was talking to a family member the other day about their idea and they're speaking about getting a software engineering team to build out this whole website. Uh, and it's essentially it's a directory. It's connecting two types of people. I said, "You don't need any of the software stuff. All you need to do is set up a mailing list like a a newsletter emailing list that lists the things that you're going to put on the directory eventually. There's a million more complex things in business processes that have to go on under the hood. But you figure all of them out without spending a single dollar really easily with a mailing list and a landing page. And the landing page says this is what you will find on the email list. The email list pushes the directory listing out there. And then what you're doing from that, you're watching the activity. You're watching the subscriber base grow. So you're advertising the mailing list. you don't advertise the app and the the broad ambition, the big big picture. It's perfectly fine to have a big picture, but don't try and build the big picture until you've proved the market. So, you build the mailing list and then you run ads that go to the landing page, which all it does is convert to the mailing list and you say like whatever the thing is that you're trying to do, make sure that there's a user problem. Another friend wanted to make a unique type of piece of furniture, get it manufactured in China, etc. No one was really doing well. There's a gap in the market. Great. Before you go and talk to Chinese manufacturers and think about how am I going to scale this, how I'm going to send it to the US, put a listing on marketplace, put a fake listing up and see what the demand is for the product. It's very easy to do. Make some pictures with AI or take a photo of if you want to know how much volume something's doing, sell a competing product. So, he was thinking that the competing product was too high price. I said just get photos of the competing product. And I know this is annoying if you're a marketplace user. I'm sorry. Apologies. put the listing up for the secondhand version of the thing at the price that you think it's going to sell for and then look at the demand of that listing because you might like you can fight against all of these things not actually giving you the data you want. You can test way easier and save way more money by not overengineering at the start. We are guilty all the time of overengineering at the start. Uh there's some good reasons for that because because usually our like minimum viable product is tech because we build tech like we build technology that's what we do. Um there are costs of changing things later. Most of the people that I speak to though they don't have they're not going to build like the earliest version I'm suggesting isn't a tech play. It's like plugging an email list and a landing page together doesn't take much time or money. and there's no risk of like having to change from building something in one way to another. So, and then the the final other one was essentially what I would equate to, it's like in a different industry, but it's what I would equate to like in a manufacturing facility, they would have maintenance schedules on a part like this power thing was done at this time on this machine, estimate like the downtime of the machines when things have to be replaced and stuff. It was the equivalent of that in a different industry uh because he noticed a gap. In that case, what I told him was start with the Google sheet. And the reason you start with the Google sheet. So he wants to give it to a client and they can record things in there with like drop downs and stuff. I'm like great. That's all possible to put into a Google form and then take it from the Google form and put it into a Google sheet automatically. Those things are really easy to do. You get to see if the thing works, if it's valuable for that one person, and then you can decide to go and build an engineering team, etc. The important thing to know is hiring. There's a huge market of software teams, product designer teams, etc. who will do their best to make your idea work. They will do their best. They will build the thing, but they make money from providing the service. They don't make money from telling you not to do the idea or to test the idea before you start building things and spending hundreds of thousands of dollars. So take this advice instead, which is to find the best possible base version of the thing. Do it manually with a person doing it. Oh, that won't scale. Don't [ __ ] worry about scale. Scale doesn't matter right now. Just prove that you can get someone to pay for it. So you first customers are going to come for free. Most likely, you're going to say, "Hey, I'm I just want you to use this thing. You use it. I'll make sure everything works great." They're going to be free. Then you segue into selling the product. Say, "Well, you can either do it with your existing customers if you're really sure they're locked in. to say, "All right, so the price is going to be this." You can have quite an open and honest conversation with them about the value it's delivered to their business, and then make a a call on what it's worth, and then go and try and sell it. Get your numbers right about like, I tried to I showed it to 10,000 people, a,000 people bought it at this price. Great. Now you have a very good idea of what you can afford to spend on software development. Cuz what you don't know if you go straight to software development, go straight to one of these design agencies is what the payback period on the investment is going to be. And this can literally kill your business cuz you could have a very profitable service that you built on a budget with Google Sheets and manual work and it can turn into a really profitable business. There can be things that it's better to hire people for because they have a direct monetary value assigned to them and people do it better than the machines will for a time until you can like really get the tech going well. But if your payback period is too big, if you have to invest half a million dollars to get the website done, to get some automation done, and then you come into the market and you have to drop your prices, you can be absolutely cooked cuz you might from doing the manual job, you might get to a point where we can't afford to sell this for under $50 a month. Great. Well, now you've just backed yourself into a hole where like the market doesn't support the investment. And you won't know that unless you start by doing it in the most lowfi predto type way possible. Don't be afraid of this won't scale. I can't do this like this forever. All of that stuff is fine. You're going to be in a better position with software developers. So typically to get a good software engineer, you will need to give them equity in the business if they're going to be full-time or the agencies charge a lot of money. If you already make money and you're talking to a software developer about giving them equity, having the number there, you can give them less cash for more equity because they can see that it's a proven business and a proven model. And the same thing for the agencies, you'll have more information about how much you can actually afford to spend. So instead of going into it completely blind with an idea where they will tell you like, "Yeah, we can build that idea." Not tell you if it's going to be a profitable idea, but they'll tell you they can build the idea, which is great. But you can go into it if you can do that for a year or even half a year. There's not many cases where half a year or a year is going to really hurt your competitive advantage. Realistically, it's too short a time horizon. There are some, but essentially what you're what you're going to go into that with once you've built the product, you've served people, you've sold it to customers, you've manually created things that are working, some automations, you're going to go into those meetings actually knowing what you're talking about, not knowing which infrastructure should be be on Kubernetes. Um, but you will know exactly what it has to do and you won't have to lean on them to tell you how it needs to work. You'll be able to say, "No, customers don't like that. We need to do it this way. this doesn't matter. We need to do it this way. And you can be much more critical about what you're spending and you'll know that you're spending in a market that supports it or the broadest stroke. This advice won't work for everyone. It won't work every single time. But it will help most people that I speak to who want to go and get software engineers or want to go and get VC money to launch an idea. You just do not need those things and they're not the best things to get first if you've never done it before. Make the smallest version of the product, sell the smallest version of the product, and then go approach those things after. You'll be in a much much better position.