The Secret to Finding Profitable Software Ideas
Lean Startup • Software Product Lifecycle
Learn how to find profitable software product ideas by identifying real customer problems and validating your idea before building.
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Finding Your Software Business Idea by Talking to Customers
Are you sick of grinding away at your tech job, and starting to think about building a software product so you can work for yourself? Well, before you take the plunge, I want to share some lessons from my own experiences, so you don’t make the same mistakes I did.
I’ve started three software companies over my career. The first two failed badly, and while I thought my ideas were good, I was approaching things in the completely wrong way. It doesn’t matter how great you think your idea is—what really matters is how painful the problem you’re solving is for the customer. In this article, I’m going to share a simple process you can use to find people who have real problems they want solved, and who are willing to pay money for your solution.
Choose Your Market First
Before you start dreaming up a software product, the first thing you need to do is select a market. You want to focus on a group of people who are dealing with specific problems. There’s a website called IBISWorld, which I use with some of my career coaching clients, and it can help you identify potential markets. It offers a huge range of industries—from healthcare and education to tech and aviation.
“In my first two startups, when I finally found people with problems, I made the mistake of pitching my solution too early. I was so excited about my software idea that I tried to convince them that it was the answer to their problems.”
If you’re serious about starting a software company, you need to identify a few different industries where people might have problems you could solve with a small software product. At this stage, your goal is to find a group of people who experience a recurring pain point. Once you have a few ideas, the next step is to start connecting with people in those industries.
Finding and Reaching Out to People
You might be wondering, “How do I contact these people?” Let’s say you’re interested in helping audio engineers who work on film soundtracks. You need to find where those people hang out, and the easiest way I’ve found to do this is by asking ChatGPT. Ask it where you can find online communities or in-person groups related to your chosen market. ChatGPT will usually suggest places like Facebook groups, Reddit, LinkedIn, Twitter – or even trade magazines.
Once you’ve identified where these professionals are, your goal is to reach out to them and ask about their biggest problems. Send a direct message (DM) or email that says something like: “Hey, I’m researching problems in the audio engineering industry and noticed you work in this field. Would you be comfortable telling me about the most painful and persistent problem you deal with?“
It’s important to remember that you’ll need to reach out to a lot of people—anywhere from 20 to 100—because most of them won’t respond. But some will, and those responses are pure gold. These are the people who will tell you exactly what their painful problems are.
Avoiding Early Mistakes
In my first two startups, when I finally found people with problems, I made the mistake of pitching my solution too early. I was so excited about my software idea that I tried to convince them that it was the answer to their problems.
Don’t do this. Instead, take the time to really listen to what they’re saying. If you want to build a successful business, you have to solve an actual, painful problem that your customers genuinely care about. It can’t be something you’ve tricked them into thinking they need.
Asking the Right Questions
Once you’ve found a few people who are willing to talk to you about their problems, follow up and ask if they’d be open to a short meeting. Frame it as a conversation to better understand their pain points and potential solutions. When you meet (whether on Zoom, over the phone, or in person), ask them these five key questions, which I adapted from Dane Maxwell’s book Start from Zero:
- Remind them of their problem: Start the conversation by saying, “You mentioned your most painful and persistent problem is [X].” Make sure they confirm that this is still the issue.
- How are you solving it today? You want to understand how they currently handle the problem. If they aren’t doing anything about it, that’s a sign the problem might not be severe enough to justify them paying for a solution.
- What happens when you don’t solve this problem? Ask about the consequences of not solving the issue. Does it cost them money, cause stress, or limit future opportunities? If there are no real negative consequences, it’s unlikely they’ll pay for a solution.
- What would the ideal solution look like? Ask them what a perfect solution would be, if they could wave a magic wand. This will give you insight into how they perceive the problem and what kind of solution would really work for them.
- How much would you pay for that solution? This question might feel awkward, but it’s critical. You need to know if they’re willing to pay for the solution and how much. People can say they’d pay, but you’ll get a sense of how much the problem matters to them based on their response.
Look for Patterns
Now that you’ve had a few conversations, you want to aim for 15 to 25 interviews in total. Your goal is to spot patterns. Are the problems people mention similar? Do they all talk about the same pain points? Are the solutions they envision similar? If you notice that the majority of people in your target market are describing the same issue, you may have found a worthwhile problem to solve.
Validate the Market Size
Once you’ve identified a consistent problem, the next step is to assess how big the market is. If only a small number of people have the problem, it might not be worth pursuing. You’ll also need to consider pricing—how many people would you need to sell your solution to in order to make it financially viable?
At this stage, the key is to make sure you have a large enough customer base to support your business.
The Idea Isn’t Yours, It’s Theirs
The most important takeaway from this entire process is that the idea isn’t something you came up with—it’s something you found by talking to real people. This is critical because it means you’re solving a real problem that people care about, rather than trying to push your own idea onto the market.
After talking to enough people, you may decide you don’t want to pursue the idea, and that’s fine. But at least you’ll have an honest understanding of whether the idea has legs. And remember, when you approach potential customers, don’t narrow the conversation by pitching your solution too early. Let them guide you to the problem and the potential solution.
Are you thinking about starting your own software product company? Have you started validating your ideas with real customers yet? If not, I encourage you to try this approach before diving headfirst into development.
About the THRIVING TECHNOLOGIST show
On YouTube and all major podcast networks, Jayme shares teamwork and leadership strategies, guidelines for healthy company culture, and stories about real projects so you can have a sustainable career in the software industry.
Jayme Edwards
A family man and veteran of nearly 40 software projects, Jayme experienced many wins and losses over his career as an architect and consultant.
Now he's coaching software developers, managers, and business owners to overcome challenges in the IT industry - so they keep growing.