Dan Martell - April 24, 2023


How to Start a SaaS with ZERO Coding Skills


Episode Stats

Length

12 minutes

Words per Minute

208.0328

Word Count

2,519

Sentence Count

103


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Transcript

Transcript generated with Whisper (turbo).
00:00:00.360 Here's five secrets for building software
00:00:02.520 even if you don't know how to code.
00:00:05.080 You know, one of my buddies, Taylor, came to me one day
00:00:06.760 and he's like, hey, I wanna get into this SaaS world.
00:00:09.140 You know, teach me your magical ways, Dan Martell.
00:00:11.600 Like, how do I build software?
00:00:12.920 And I was like, all right, man.
00:00:14.760 Like, I know you think it's like black art,
00:00:17.520 but it's actually not.
00:00:18.640 If you understand how to extract the right ideas
00:00:21.340 from your customers and put together a package
00:00:23.880 where you can actually get them to fund your development,
00:00:26.300 and even better, use that package to hire the team,
00:00:30.000 and make sure that you don't overbuild, that is the secret.
00:00:33.440 So I walked him through the process
00:00:34.760 and I'll share with you guys today,
00:00:36.020 and it allowed him to go within six months from zero
00:00:39.600 to having a working product in the market
00:00:42.020 and generating 350,000 in sales for their software.
00:00:47.060 This is how we do it.
00:00:48.180 These are the five secrets.
00:00:49.440 Let's get into it.
00:00:52.420 The first secret is to find a paying problem.
00:00:55.860 Find a problem that the market has,
00:00:57.740 your customers have that they're willing to pay for.
00:01:00.360 You know, my first, literally, I've never shared this before,
00:01:03.180 but the thing that I built that I charged for,
00:01:05.500 the first product that I ever created,
00:01:07.680 was a CD-burning app.
00:01:09.760 I was literally 18 years old.
00:01:11.800 I had one of the first CD-ROM burners on my computer,
00:01:15.640 and all my friends would come over
00:01:16.860 because we were downloading songs off of Napster,
00:01:19.200 and they would make these CDs for their girlfriends.
00:01:21.740 And I was like, sitting there,
00:01:23.340 watching them on my computer, day after day,
00:01:26.400 hour over hour, just like obsessing over the 5,000 songs
00:01:30.640 that downloaded over the internet
00:01:31.900 to make their perfect 152 song playlist.
00:01:35.560 And it would just get to me
00:01:36.780 because they were using my computer.
00:01:38.240 I wanna be on there gaming and chatting.
00:01:40.240 So eventually I sat down and I coded this software
00:01:43.100 in Visual Basic that allowed them to install
00:01:46.280 on their home computers, connection to my computer
00:01:49.640 to download all the songs I had
00:01:51.200 so they could make their own CDs and then order it,
00:01:54.420 click a button, it would send it over to my computer
00:01:56.820 and at night I would put a CD in the burner
00:01:59.660 and it would burn the songs for them to get,
00:02:01.900 it was 20 bucks.
00:02:03.060 That was the first thing I ever built that somebody paid for
00:02:06.600 and inside of me something kind of snapped.
00:02:08.680 I was like, oh, this is crazy.
00:02:11.260 I built this thing, people pay me for it
00:02:13.520 and all of a sudden I kind of felt like,
00:02:15.140 oh, there's more to this software world
00:02:18.000 where I could like build other tools
00:02:19.800 and maybe have people pay for it.
00:02:21.420 And that to me is the filter, number one,
00:02:24.360 for deciding what idea should I pursue.
00:02:27.040 So many people build things
00:02:28.940 that oftentimes turn into vitamins, right?
00:02:31.220 These are nice to haves, they're not must haves.
00:02:33.480 We wanna build painkillers.
00:02:35.420 So the tip that I wanna share with you
00:02:37.260 is that if you're trying to find ideas
00:02:39.760 that people are currently paying for,
00:02:42.200 go to consultants, go to custom dev shops, ask them.
00:02:45.460 If you're trying to build an AI software
00:02:47.680 for logistic companies, find the development agency,
00:02:51.280 the people that build software for logistic companies
00:02:54.560 and go see what are the things
00:02:56.080 they're currently building for customers?
00:02:57.560 What's the custom integrations?
00:02:59.580 What's the actual dollars they're spending money on?
00:03:03.380 What's the actual problems that they're paying people
00:03:06.460 to build code to solve those problems,
00:03:09.060 to help you understand what would the first list
00:03:11.460 of features be that I wanna build for my new software?
00:03:15.200 Second secret is we wanna prototype the product.
00:03:18.440 What this means is we want to create something
00:03:20.660 that we can actually show a potential buyer.
00:03:23.120 So they give us feedback before we go
00:03:25.260 and spend a bunch of money on getting custom code built.
00:03:28.500 You know, the first thing that I ever
00:03:30.000 kind of helped somebody build was my brother
00:03:31.860 was looking to build a software for managing his properties.
00:03:35.360 He had a bunch of tenants and he wanted to build a product
00:03:37.700 that would allow them to like go online
00:03:39.920 and request issues being fixed in their apartments
00:03:42.780 or whatever it is.
00:03:43.620 So all I did is I took a clipboard with paper, okay,
00:03:46.980 white printer paper, a black Sharpie
00:03:49.600 and drew different screens and different flows
00:03:52.900 to demonstrate to a potential user how it would work.
00:03:56.420 And then to get feedback, I went to the mall,
00:03:59.080 the local mall, super not fancy, this is 20 years ago,
00:04:01.940 and just stopped people and asked them like,
00:04:04.780 do you live in an apartment?
00:04:05.920 And they'd be like, yeah, why?
00:04:06.920 And I'd be like, well, I'm thinking of building
00:04:08.220 this software, it's called Manage Street.
00:04:09.880 And I'm just curious, like when I show you this,
00:04:12.440 what would you do with that screen?
00:04:14.000 And they're like, what are you talking about?
00:04:15.680 And I was like, well, my brother's thinking
00:04:17.340 of building this software and I'd love your feedback
00:04:19.140 because the last thing he wants to do is build something
00:04:21.600 and do it in a way that you might not actually find it useful.
00:04:24.720 And I sat there and I would just talk to people in the mall
00:04:27.520 just randomly to get feedback on the product.
00:04:29.960 And we learned so much.
00:04:31.220 We learned about the things that were important to them,
00:04:33.420 what they expected the first time user experience
00:04:35.900 to look like, what would happen after a button,
00:04:38.300 what were the screens that would pop up.
00:04:39.740 And we just write down these notes to help us get feedback.
00:04:43.040 The key is, is that we want to build a clickable prototype.
00:04:47.140 That is the concept.
00:04:48.140 today's world we have software like balsamic or figma or envision app that creates near pixel
00:04:54.300 perfect software with no code you will save all your time all your money by doing that first so
00:05:01.580 that you then have the specs and get feedback from real customers that could buy it so that you don't
00:05:07.420 go and build a bunch of stuff that nobody's going to find useful the third secret is we want to
00:05:11.900 to pre-sell to fund.
00:05:13.780 What this means is we wanna take the clickable prototype,
00:05:16.960 this design of the first spec of our software
00:05:20.580 and actually go put it in front of potential buyers
00:05:23.440 and take their money.
00:05:25.220 Some of you guys may think like, that's crazy.
00:05:26.880 Why would people pay for software?
00:05:28.960 Here's the deal.
00:05:30.260 My whole thing is that if somebody is not willing
00:05:32.200 to pay you for that software before it's ever built,
00:05:35.220 then you may be building something
00:05:36.520 that doesn't really have a problem that they care about.
00:05:39.220 If you think about crowdfunding,
00:05:40.820 These are all examples of where people see a thing,
00:05:43.640 get excited about the problem it's gonna solve in their life
00:05:46.100 and prepay and buy into it.
00:05:48.700 One of my companies, Flowtown,
00:05:50.300 which was a marketing tool for small businesses
00:05:52.480 to get the social media data on their customers
00:05:55.180 through email addresses.
00:05:56.700 Before we ever built the full product,
00:05:58.820 we wanted to test it.
00:05:59.980 We wanted to get early customers to pay for it.
00:06:02.160 So what we did is we created a landing page,
00:06:04.640 put the three features and the benefits
00:06:06.620 that you would get from using this software,
00:06:08.740 We even went as far as having a signup process,
00:06:11.500 an upload screen for the data that they were given us,
00:06:15.140 showed them what it would cost to use the software,
00:06:18.200 collected a credit card, and when they clicked submit,
00:06:21.360 we didn't even charge the credit card,
00:06:22.960 and we made up this fake excuse
00:06:24.460 that our servers were overloaded,
00:06:26.100 and that we'd get back to them
00:06:27.680 when the product was available.
00:06:29.460 I mean, we wanted to validate, you know,
00:06:31.860 so by sending hundreds of emails,
00:06:33.760 having people go through the flow, upload the data,
00:06:36.780 and click the buy button
00:06:38.180 so that we had real validated customers
00:06:41.000 that were getting software that changed the game for us.
00:06:43.680 You know, I had another friend of mine, Ryan,
00:06:45.260 he built this software called Bucket
00:06:46.960 and I walked him through the same process
00:06:48.880 and he built the clickable prototype,
00:06:50.860 launched the program, he called it the inner circle program
00:06:54.000 and he had a bunch of people, hundreds of people
00:06:56.120 fund the development of his software
00:06:58.500 by getting them to buy into the vision
00:07:01.020 that they were building so that he didn't have to spend
00:07:03.320 a lot of money building stuff that nobody wanted
00:07:05.640 you just show them, here's what I'm gonna go build,
00:07:07.500 this is when you're gonna get it,
00:07:08.700 and the way to do it,
00:07:09.860 and I call this the early adopter program,
00:07:12.060 is you want them to prepay for a year,
00:07:14.900 but give them a 50% discount.
00:07:16.960 So if you're gonna do an inner circle,
00:07:18.480 or what I call an early adopter program,
00:07:20.320 you wanna give them whatever the annual cost would be,
00:07:23.020 give them a 50% discount to get early access
00:07:26.600 to use your software, to co-create it with you,
00:07:29.360 to even have their name, this is what Ryan did,
00:07:31.180 he put their name on his website to be,
00:07:33.260 These are the early supporters of our product
00:07:36.060 so that they felt like they were part of a movement.
00:07:38.780 You have to get people to pay ahead of time
00:07:41.500 to truly validate if you've got something worth building.
00:07:44.800 The fourth secret is we wanna test the team.
00:07:47.480 See, most people that make the mistake
00:07:48.940 of like wiring 50, 100, 200 grand to a development agency
00:07:53.180 and saying, here's this thing, please build it.
00:07:55.640 See, the benefit of having a clickable prototype
00:07:58.260 is really simple.
00:07:59.100 Now I have the product specs.
00:08:00.920 I have something that is defining what I'm asking you to build
00:08:04.520 so people can give you a really clear estimate.
00:08:06.420 And then you can take one of those specific features
00:08:09.420 and dole it out to two or three different developers
00:08:12.240 and ask them to build it as part of a test project.
00:08:15.240 When I was building my company Clarity,
00:08:16.640 which was a marketplace for entrepreneurs
00:08:18.300 to get advice over the phone,
00:08:19.700 I had a bunch of early customers put deposits
00:08:22.240 to show me they were serious.
00:08:23.640 I then took the spec, went on Upwork,
00:08:26.080 a freelancing site for developers
00:08:28.220 to build different prototypes.
00:08:29.820 And I could see who communicated better,
00:08:32.500 who wrote the best code, who built the thing on time.
00:08:35.600 And then that gave me the sense of relief
00:08:38.480 to hire the right person to build the product.
00:08:41.160 And what's cool is because I had the prototype,
00:08:44.200 I had all of the specs because one of the key tips
00:08:47.340 is you never want a developer to design your software.
00:08:51.000 It's called developer design.
00:08:52.560 It's the biggest mistake.
00:08:53.640 I can see it almost every time I come across software,
00:08:56.260 somebody's like, hey, look, I got this thing built.
00:08:58.020 And I'm like, you let a developer choose the labels
00:09:01.280 on the buttons and the screens and the flows
00:09:03.220 and it's complicated.
00:09:04.740 When you have a clickable prototype,
00:09:06.360 it allows you to test first different people,
00:09:09.020 find the right person,
00:09:10.380 and then give them the full project to build out.
00:09:13.660 The fifth secret is customer backwards.
00:09:16.580 See, most people make the mistake
00:09:18.700 of when they launch software,
00:09:20.060 they put it out in the world,
00:09:21.180 they built something,
00:09:22.020 it's their baby and people start signing up for it.
00:09:24.640 And they're just so hungry to like learn from people.
00:09:27.160 So they're asking for advice.
00:09:28.420 And the truth is, is everybody's got an opinion
00:09:30.880 and they'll give it to you.
00:09:32.120 But what I've discovered is you only wanna get feedback
00:09:34.740 from people that are using the product.
00:09:37.460 You know, when I was building my company Clarity,
00:09:39.720 I had a bunch of people say to me, great product.
00:09:42.280 I love the idea, congratulations.
00:09:44.440 And I'd be like, oh great, do you have any thoughts,
00:09:46.000 any feedback, any advice for me?
00:09:48.000 And they'd be like, oh yeah, you know, you should do this.
00:09:49.960 You should consider that.
00:09:51.080 You know, next time you should launch with this integration.
00:09:54.100 And then I remember one time I was getting this feedback,
00:09:55.920 This person was super opinionated.
00:09:57.960 And then I went on the backend admin system
00:10:00.600 to like check out their account.
00:10:02.240 And I noticed that they never actually use the product.
00:10:04.560 Sure, they had an account, they signed up for it,
00:10:06.580 but they never actually went through
00:10:08.460 and did anything with the software.
00:10:10.360 And it made me realize that if I'm going to spend time,
00:10:13.900 money in improving something,
00:10:16.100 I have to only talk to people
00:10:18.300 that are actually actively using the product.
00:10:20.800 So it's customer backwards.
00:10:21.940 I need people that are paying
00:10:23.240 and using and getting their feedback.
00:10:25.320 So one of the tips is this great survey
00:10:27.480 called the Customer Development Survey.
00:10:29.800 And there's a bunch of different aspects
00:10:31.540 that I think will really serve you.
00:10:32.940 So you can go Google it, check it out online,
00:10:34.700 Customer Development Survey,
00:10:35.760 it's pretty well known in the product world.
00:10:37.760 But the key there is when you're getting feedback
00:10:40.940 from the customers, you wanna segment
00:10:42.620 from people that are not active.
00:10:44.380 You do not want to take feedback
00:10:46.800 from people that are not active,
00:10:48.120 because the ones that are,
00:10:49.340 the ones that would be very disappointed
00:10:51.040 if the product went away,
00:10:52.420 they answer the question of,
00:10:54.340 hey, what's one thing we could change
00:10:56.160 to better meet your needs in our product?
00:10:58.300 And the people that are active in the product,
00:11:01.240 that answer that question,
00:11:02.940 those are the folks that you wanna value their feedback.
00:11:05.720 Everybody else is just noise
00:11:07.780 and it can absolutely send you down on a rabbit chase.
00:11:10.880 So if you're thinking of building software,
00:11:12.160 be sure to follow this process.
00:11:14.200 I know it's exciting, I wanna move ahead real quick
00:11:16.880 and build something and it's so much fun
00:11:19.380 and we can do no harm
00:11:20.860 and wouldn't this idea be creative and so cool?
00:11:23.260 And then you're gonna call me one day
00:11:24.880 when you've spent tens, maybe hundreds of thousands
00:11:27.560 of dollars on an outsource dev team
00:11:29.640 that you built the product that you finally launched
00:11:31.600 that nobody's using.
00:11:32.600 And that's unfortunately the call I get.
00:11:35.020 So if you found this useful, be sure to leave a comment.
00:11:37.680 I wanna invite you to join
00:11:38.720 my Scaling SaaS Founders Facebook group.
00:11:41.300 It's a free group where we connect with other founders
00:11:44.260 just like you that are building software
00:11:46.120 that don't know how to code.
00:11:47.340 And we're sharing resources and best practices
00:11:49.920 and strategies to grow their business.
00:11:52.580 And I wanna leave you with this thought,
00:11:54.460 that the best type of financing is from a customer, okay?
00:11:58.720 Customer financing is the best form of financing.
00:12:01.800 With that, I wanna challenge you to live a bigger life
00:12:04.080 and a bigger business, and I'll see you next in my minute.