3 builders who never spoke to each other

Treat money already leaving their account as proof

What someone already pays for a workaround, a contractor or a rival subscription is a measured number, unlike anything they tell you in an interview. Find the existing spend first, then set your price as a visible fraction of it or of the wider occasion the purchase belongs to. Buyers with no habit of paying for tools in your category are the ones to walk away from.

The method

1. 01

   Look for money and hours already being spent on the problem: manual work, a person being paid to do it, a spreadsheet workaround, or an existing subscription. That spend is your evidence of willingness to pay.

2. 02

   Verify that the customers you are targeting already have the habit of paying for tools, ideally for tools like yours.

3. 03

   Look at what people already pay third-party tools for as proof of what you could charge for yourself.

4. 04

   Getting the existing-spend and 5x tests right is what produces a trial-to-paid rate high enough for a one-person business to work.

5. 05

   Judge whether the market is big enough by expressing your price as a share of what the customer is already spending on the overall occasion.

What it returned

• 2013

  In 2013 Crowdbooster, Buffer, Hootsuite and TwitterCounter were charging from $9 a month for Twitter analytics that Twitter itself gave away.

• 5

  Large venture-funded SaaS companies are estimated to convert 5-15% of free trials, whereas Storemapper consistently converted over 50%

• $26,645

  With the average US wedding at $26,645, Zue framed his product as asking for well under 0.1% of the couple's budget.

• The prompt list covers time, effort and money spent, the existing budget for the problem, and whether they simply tolerate it instead.

Sources

• Business Idea Evaluation Qustions – Jakob GreenfeldDan Hulton · jakobgreenfeld.com · Business Idea Evaluation Qustions · 2022-04-21
• Why I would pay for TwitterJustin Jackson · justinjackson.ca · 1. Analytics · undated
• Chapter 2: What Makes A Good Micro-SaaS Idea? - Tyler TringasTyler Tringas · tylertringas.com · Be 5x better than customers currently pay · 2016-10-28
• The Place Card PitchCory Zue · coryzue.com · It’s a huge market · 2017-04-26
• 42 Questions to Ask Before Starting a BusinessPreetam Nath · preetamnath.com · Can I build a viable business by solving this problem? · 2021-01-10