Tuesday, October 05, 2004

Learning to roll with the punches

In the aftermath of my New York inspired meltdown I spent some time looking at the other players in the market. It turns out the market has matured somewhat since I last did this seriously, which was obviously far too long ago.

Mostly I found products with similar price tags to New York. There was one product though, which I'll call London, which is comparable to Sydney in both features and pricing though based on the Application Service Provider (ASP) model. Their monthly charges are very reasonable and their features include most of the planned features of Sydney. To be honest I'm tempted to start using their service myself right now.

The ASP model is something that I had considered for Sydney but as a future step. I don't have the networking experience to run a 24x7 service and I don't have the funds to pay for someone else to do it for me.

I can't say that I wasn't worried by this discovery. When I found the London website late one night I just turned off my computer and went straight to bed.

"Well that's that," I remember thinking, "I'm sick of all this IT stuff, time to find something new."

I don't think I was really serious about that but at the time it was quite liberating to think that I could just walk away from it all. I didn't have a clue what I'd be walking away to, but I did realise for the first time that there were probably other options out there if Sydney doesn't come about.

Thankfully morning brought with it some perspective and renewed enthusiasm. I realised just because the potential market isn't quite as open as I originally thought that doesn't mean I should give up without a fight. I wasn't quite sure how but I was resolved to find a way to adapt to this new challenge. Amongst other things I went back and re-read the comments I received from readers when I wrote about New York a few weeks back. Once again, many thanks to those who took the time to give suggestions and encouragement.

I haven't got around to reading the books that were recommended to me as yet, but I did follow the suggestions from Brian, Adam, Chris, Tom, Glenn and David. I listed London's strengths against Sydney's and looked for ways that I can differentiate myself using the flexibility I have as a one man operation. I've got a few ideas and I'll keep looking for more, but unfortunately London looks pretty darn good and it's available here and now. The main point of difference between the two appears to be the deployment models, with Sydney being a more traditional onsite application against the ASP model of London.

I'm interested to hear what others think about this but I'm of the opinion that most people fall into either the traditional onsite application camp or the ASP camp and don't often shift between the two. If I'm correct there should be plenty of room for both Sydney and London without the two even needing to go head to head.

If I'm wrong and London does turn out to be a direct competitor to Sydney then I'll need to play on the usual fears about losing control of one's data and the potential privacy implications about using an ASP. I'm not particularly worried by these issues myself but there are plenty of people who are. Another point of difference could be the increased flexibility of running Sydney inhouse and being able to more easily integrate it into existing systems than London.

It's this integration with existing systems that I'm investigating right now. If I can work out a few technical integration details I'm thinking of altering my development schedule and maybe initially targeting a smaller niche to test the waters. More on that soon.

10 Comments:

At 12:13 AM, Anonymous Anonymous said...

ASP Models are difficult to run, and really only run well under certain circumstances. I would never even consider an ASP model these days. Personally I think it was a bunch of c*&p to make Gartner and the Meta Group more money.

I'm in a similar situation to you though, which is making a product over a long period of time, being a one-man show and trying to analyse how I will fit in the market. I'm doing research on this, but you never know how it will turn out. I've had some comments just today that 'I may be onto something', but I'll see.

I'm curious though as you mention integration. Have you considered that Sydney may be a vehicle for contract-consultancy that you run as well? You develop something and a company that has bought Sydney pays for extensions so you get several angles? Sometimes this is a great way to fund the development, you just have to be wary of IP issues.

 
At 1:29 AM, Anonymous Anonymous said...

Here's something else to try-get in touch with London customers, and see if you can find something they don't like about it, e.g. "If there was one thing you would change about London, what would it be?"

Maybe London's got a satisfied customer page with contacts. Or you could just call their sales department and say you're interested in London, but would like to be put in contact with some of their satisfied customers. Then you can call them, again as a potential London buyer so they aren't put off by a perceived sales pitch.

(And don't forget to ask London customers what other products they considered before buying London!)

If you do talk to London's sales department, you might want to say that you're from a business that's roughly of the size and type (sector, etc.) you're interested in for your own customers. If they blow you off, it's a good indication that they don't really go after your customer type and so there's a niche for you right there.

This whole exercise will not only tell you what London customers think they need and are lacking, but it'll also tell you who the London customers are-maybe they're the same customers you'd be after, or maybe you could target a different group.

--Chris Coughlin

 
At 2:28 AM, Anonymous Anonymous said...

Interesting blog. I don't see much comment about how Syd is coming along. Lots of talk about money and plans etc etc, but the primary goal must be to get the product to market. Go to it !

 
At 12:09 PM, Anonymous Anonymous said...

Interesting blog. I don't see much comment about how Syd is coming along. Lots of talk about money and plans etc etc, but the primary goal must be to get the product to market. Go to it ! I admire the spirit of your comment, but must disagree -- unless you are specifically advocating the "fail faster" strategy.

If you don't have a plausible theory of why the product will be fundamenally superior for some subset of the market, simply "going to it" will expend energy and terminate in a fatal error.

The lack of such a theory is evidence that the entrepreneur does not understand the product/market. While searching for this insight, it's normal to ruminate about money and plans and competition. Competitive analysis, studying marketing, learning about business, etcetera, are not a waste of time. On the contrary, set a goal of reading one business book per week. You are no longer a programmer. You are a businessman. Programming is now way down on the list of priorities.

Unless Sydney-type products are irrelevant or trivial, it's likely that the competitors have made one or more fundamentally incorrect assumptions about how to solve the problem. These are potential opportunities. These are the assumptions so "obvious" that the competitors never even thought to articulate them. They are difficult to identify as an outsider or first time entrepreneur. Experienced users/customers would know, if only intuitively, but such people aren't always available for study/interview.

Here is another source of counsel (may be somewhat U.S.-centric):

MIT Enterprise Forum

 
At 7:32 PM, Anonymous Anonymous said...

I understand what you are saying. Assuming Lachlan has decided that his product will have a market (I take this as a given), then the product comes first. I run a business of 120 people having started from one software package which I wrote. I knew it would work and just got on with it. Once I sold it and started making money, I became a businessman and not a programmer (well, mostly :-) )

 
At 9:40 PM, Anonymous Anonymous said...

Lachlan, there is no simple answer for deciding to go for a Desktop application or an ASP based application. I have worked on both, and one product I have worked on customers can buy it either way. Some applications are more suited for ASP or Desktop, but also, some users prefer it one way or the other too. Personally I prefer desktop apps mainly because of the performance advantages - but there would be an equal amount of people who would go for an ASP solution any day. Consider an email client - I've used web based ones and desktops ones.... geez, I hate web based ones (but gmail could almost sway me), but look at the amount of people who use web based clients.

Maybe you should give us some clues about what Sydney is so we can offer more appropriate suggestions? Do you really need to be so secretive about it - I very much doubt that if you openly talk about it, it would make any of your blog readers decide to create a competing product. In fact, the opposite is true: being open and talkative about a product you are developing would more likely steer others away from doing the same thing as you'll have a good headstart - and you'll get some more targeted suggestions and ideas as well :)

cheers,
tate.

 
At 6:22 AM, Anonymous Anonymous said...

Lachlan, if London really is an ASP product only, then you're right, you potentially have a market as big if not bigger than London's available to you.

Many businesses are inherently paranoid about their data, who has access to it and how reliable their own access to it is. A business has to be very confident in the capabilities and security (service and financial) of an ASP before entering a relationship with them. Because of this hesitancy your product is put in a much better position in the minds of what I would believe would be the majority of your potential market. You will be providing the safer option, full control of the data and service availability on a platform that hopefully the target customer has complete confidence in, or at least knows well.

Ian

 
At 9:56 AM, Anonymous Anonymous said...

> Have you considered that Sydney may be a vehicle for contract-consultancy that you run as well?

In my case, I'm interested in starting an ISV in order to get away from the contract-consultancy work. It's been fun and lucrative, but it gets old like anything else. Although it can work as you suggest -- either as "consultware" or as a way of paying for unique enhancements to your software. I've seen a small company successfully do the latter.

As for the ASP model, the main issues that come to my mind are: Is an HTML-based user interface good for your application? What degree of reliability/availability do you need to achieve?

The ASP model can require expensive hardware if you need high-availability or large data capacity from the very start.

 
At 4:24 AM, Blogger Seun Osewa said...

I really don't understand how you people can have healthy debate, give advice, share insights without knowing anything about the products in question. Clue me in, people!

 
At 7:53 AM, Blogger Lachlan said...

I appreciate any feedback I get from people. Yes some of it isn't relevant but that's my fault for not releasing more information. There's been some good advice given though and it's been great to know that there are kindred spirits out there.

 

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