Estimating the market for your software

A follow-up to Starting a Micro ISV, In The Beginning….. there was nothing:

Estimating the market for a specific softare product can be hard, because public data is usually quite scarce. You just have to look around and scoop up whatever data you can.

I read a great article (I don’t have a link offhand, sorry) about a guy who started a new software company by writing up the datasheet and sending it out to the types of companies that would buy that sort of software. Then, he solicited feedback. Would you buy it? How much would you pay? Which features appeal, and which don’t? By talking to potential customers, he was able to come up with a product that nicely fit a market niche.

So, the baseline is something along the lines of: how many potential customers are there? what are they using now, and will they switch? how much money do they have?

You might think: I’m going to revolutionize the way charities keep track of their volunteer staff. There are lots of charities, and right now everything is done with pen and paper. Of course, they don’t have any money, but…

Or how about this scenario: millionaires are having trouble “getting good help these days”. Word of mouth isn’t cutting it and newspaper ads aren’t doing it. So, you can make software to manage the recruitment and activities of personal staff of these people (could be similar to what was envisioned in the last example). There’s a fairly small market of people for that. But they have a lot of money to spare!

those types of questions just tell you if there is a market. then you need to find your Free Prize so that you have a Purple Cow.

By the way, you’ll get all of the answers and eliminate all of the risk. Some of it is just guesswork. If you’re not comfortable with that, you won’t end up starting a business.