I don't see ANY mention of marketing in there. I can't tell you the number of SaaS-on-the-side startups that I've seen launch to nothing but crickets.

If you launch a SaaS offering, understand that you'll be competing in your on-the-side marketing efforts with people who are spending lots of time/money to grow their business. Going to try SEO? Your competition has going full steam with SEO-- how are you going to compete? Adwords? Most SMB SaaS can't afford adwords. Facebook ads? Bit of a minefield, but possible. Word of mouth? There's a lot of noise out there

In other words, have a customer acquisition plan and be prepared for that to be your fulltime job. 37Signals, with their early fame and following, took 12 months before they could afford to set aside consulting. It's a longer road than you think.

Personally my advice would be to quit your job and go and work in an existing industry you think you might be able to disrupt with software, it's the only way you'll learn the real problems.

I did this the other way around by working as a hardware engineer for 10 years then getting into web dev. I spent some time thinking I'd wasted the start of my career but now realise it's the best thing I ever did.

If anybody is looking for a problem to solve I've got one so get in touch. This isn't the next Twitter for Groupon, I'm working through some hard problems so please dont waste our time ;-)

Like Ed said, companies large and small have pipelines of ideas and projects they can't get to.

You'll make much more than $5K / month if you can pull that off. Heck, I'll send about 5 companies your way on Day 1.

Spend time studying OpenERP because it's succesful and you'll have to compete against it. Their platform is a great case study: it's powerful and modular while being difficult to take over. Their code base is a mess and yet they have developer's traction. There's a huge market, no matter what you plan (a platform or a solution).

If you go for a platform, avoid small projects.

What I like about it: You're focused on building something that supplies an actual demand. Good!

What concerns me about it: You're still too focused on yourself. Every one of your bullets was about what you want your business to look like.

I think you're focusing too much inward when you need to be focusing on your prospective customer and how they will benefit from the value you provide them.

Examples are everywhere, just a few off the top of my head:

  - salons that wants to optimize their scheduling
  - retailers that want to improve one on one communication
  - actors/artists that need better portfolios
  - shopkeepers who want to capture more POS info
  - teachers who want to play bingo in class (never mind)

The rest (your bullets) will take care of itself. The shape of your business will be the byproduct of doing whatever you must to satisfy your customers' needs.

One great resource that will probably help you:

http://www.amazon.com/Start-Small-Stay-Developers-Launching/...

nopassrecover, edw is 100% on target about looking outward. However actors, salons, and teachers are all good examples of people with little money to spend, who would not capture significant extra margins by adding software.

In my estimation, nopassrecover, you would do better to think deeper in the B2B value chain, particularly if you can flex relationships you've made in previous industries you've worked in. Imagine how many more people you could touch writing software that hooks into a shoe factory's shoe machines than making a web store -- and how much less of a customer's attention that would require.

Two consejos that I think are good (but not necessary) for entrepreneurs to follow:

1. Do a part-time job while you work on your own thing.

2. Use knowledge & relationships from businesses you have worked in directly.

And (3) for hackers specifically: spend some time thinking about and researching how the commercial world fits together. Who made the plastic fibres in the salon's brush? How does the aesthetic layout of the salon enable them to charge more? What other construction materials could they have used? What catalogs are thrust in the face of new salon owners and how does that affect the way they see their choices? What's the price history of the real estate they own vis-à-vis the other places they could have set up shop? And more generally: What companies in the world do the most revenue and why? What companies have the most profits?

The salon scheduling example is particularly naïve, because scheduling software would not add much value to either salon owners or customers.

But edw519, I very much agree with you about looking outward (both to meet business minded people and to meet people who don't have iPhones).

Interestingly, someone told me recently that his sister, who runs a salon, spends a ridiculous amount of money on precisely this: scheduling software! He's a hacker and couldn't quite work out why she would pay $thousands (sic) for some crappy semi-customised calendar when Google Calendar works just fine: in the end it came down to, "because all the other beauty salons use this software".

Not that I'm recommending this particular niche, mind you...

It reminds me of the saying "Working for youself means you don't have a boss. It means you have customers, which are much less forgiving and demanding than a boss would be."

You could also look at them as constraints that need to be satisfied for things to function: it needs to look like that if it's going to work for him. I think it's worth filtering things like that if you're aiming for a "lifestyle" business. You're correct that you also have to filter by "what can I do to help people", but you're going to have to run both filters sooner or later.

I agree completely about the Start Small Stay Small book. I think it's one of the better ones I've read in a while. There's nothing earth shattering, but it's full of concrete advice and is aimed at "the rest of us" who don't live in Silicon Valley and aren't aiming to "change the world".

Indeed. In business, u comes before i.

And the niche you choose does make quite a difference in what the resulting business will look like, what demands it makes on your time, what kinds of customers and partners you will be interacting with, etc..

Unfortunately, if you're looking for "a niche, any niche" that happens to meet criteria completely unrelated to what the need actually is, who the people actually are, etc., it seems unlikely to work out well.

I suppose this depends on personality, but... it's hard to build a business. If you find the perfect niche but you actually have no past domain experience, don't have any personal connection to the "pain" you're fixing, etc., what will carry you through? I imagine you'd be much more likely to throw in the towel when things got tough (and I suspect investors would worry about that as well).

You make it sound much easier than it is. Getting out of the office: easy enough. Finding the right people who can tell you the right things at the right time: difficult. Very difficult.

I'm practicing this at the company I work for, and I have many ideas. Be cautious about legality, here, and don't get too specific with how your employer solved the problem, just use the tactic to identify the problems.

Build one this summer? And then what are your expectations? That it will be making $5000 a month from then forward with no further input?

If you want to make $60k a year by the end of next year, advertise $30/hr computer fixing services, advertise locally, and schedule 60 hrs a week of work. (The extra is to cover advertising overhead.)

If you want to build a product or service bringing in more than $100/month, you need to spend 5-10 years building it up to the quality where it can compete with the others who have spent that much time.

Anything you can throw together with "3 months work" that can bring in $60,000 indefinitely is going to be cloned right after release by 10 other people, all of whom will deliver a cheaper better product.

It's not really all that reasonable to expect to create something that will support you indefinitely with only 3 months work unless you are a blond bombshell that targets sick elderly men for marriage.

Whenever you meet someone ask them what they hate about their job or what takes the most time at work. That can often give you a good idea on what areas have potential.