Advice, Alone, Is Terrible (or, the secret of Patrick McKenzie's Success)

I tried doing what $SuccessfulPerson did... but it hasn't worked for me.

Here is most advice from successful people in a nutshell:

The way I won the lottery is that I picked my children's birth dates as the winning numbers. So that's my advice to you! You need to have children. And you need to remember when they were born.

You hear this advice, but you are unconvinced. "Could it really be so simple?" So you track down five other lottery winners and ask them the secret of their success. You are shocked to discover that they are all telling you the exact same thing! They too used their children's birthdays. This is amazing! This information is incredible! You're bound to win the lottery in no time!

You buy a ticket and dutifully fill in your children's birthdates. But that weekend, not even one of your numbers come up. You moan and write angry tweets in despair.

You go back to the previous winners and demand an explanation.

You need to stick at it! It might take 10 years before you're an overnight success!

Okay, after speaking to all of the winners it seems you have to use those same numbers over and over for years! Still, it's a small investment to make for such a huge pay-out.

But what are you missing?

The silent evidence, as Nassim Nicholas Taleb calls it in 'The Black Swan'.

How many other people followed the same advice and did not win? Where are the countless stories from people who lost?

When we only consider the testimony of winners we're exhibiting "Survivorship bias.", a form of selection bias, and all of those past winners are blinded to it, because of the Narrative Fallacy. They under-estimate the role of luck in their success.

(An alternative strategy is to look at failures, and Andy Brice has a great review of some failures and this is certainly worth reading.)

Picking On Patrick

Now let's say we're interested in something that is not entirely based on luck: let's look at successful bootstrappers.

To pick a (not at all) random example, let's look at Patrick McKenzie, the genius behind Bingo Card Creator, who showed that even a tiny niche like "Printable Bingo Cards" can be turned into a successful small business.

What role did luck play in Patrick's success? What survivorship bias are we exhibiting when we try to learn from his success?

Obviously, the choice of bingo cards was not a particularly "lucky" choice. It's hard to imagine a smaller niche.

To quote something a local developer said to me, verbatim:

He made a business out of frigging bingo cards! He can do anything!

How true is that?

Let's run a quick comparison of the estimated number of searches each month for 3 different "head" search terms, in 3 distinct niches:

  1. Timesheets
  2. Bingo cards
  3. Bug tracking

Think about all three for a moment.

How many engineering hours do you think have been put into the Timesheet-software business in the last year?

How many hours have been put into the Bug tracking business?

And lastly, how much software engineering effort do you think has been spent on Bingo Cards?

My instincts tell me the answer are, respectively: a heck of a lot, a heck of a lot and very little.

bingo_versus_Bugtracking_timesheets.png

Here's the estimated number of monthly searches (and suggested bid) according to Google Adwords Keyword tool:

Keyword Monthly Searches Bid
Bingo cards 12,100 $1.14
Timesheets 8,100 $7.99
Bug tracking 1,900 $8.00

So, based on that estimate, the total monthly traffic for bingo cards is bigger than each of the other two. It's even bigger than both combined!

I'm not suggesting that those search terms have the same value per search. They no doubt all convert differently, and they convert to products at wildly different price points.

But I am suggesting that 'Bingo Cards' is a bit of a sleeping tiger. It may be small in terms of total expenditure, but it is well trafficked, and certainly better trafficked than some areas that receive a heck of a lot of developer attention.

How did Patrick find this lucrative niche? By being a born genius? Nope. Someone came to him with the idea, she even brought along the information that there were no suitable competitors. That is Patrick's lucky break right there.

There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.
Julius Caesar Act 4, scene 3, 218–224

Patrick's success with Bingo Cards began with luck, but the luck only mattered because he was:

  1. Sensitive enough to recognize it
  2. Ready to act!

Here's what happened next, as Patrick tells it later:

So I searched through the Internet, and found the same: the free programs in this space are missing critical features for teachers, and the paid programs are overpriced and underpromoted.
—Patrick in Start Here If You're New

See what he did: Research! And the research relied on who he already was at that point in time: someone who understood the needs of teachers.

Next, he cobbled together a very rough bingo card creator that didn't run on half the computers it was installed on. Yet:

...it still got me 25 thank you notes within a week, after being distributed to a mailing list of 60 teachers.

That is a brilliant result! That is like pulling your boat up in the middle of a lake and fish start leaping into the boat.

In "lean startup" terms we'd say he built an MVP to test the hypothesis "Can I build a Bingo Card program that teachers will use?" He hadn't read 'The Lean Startup', due to the simple fact that it was 2006 and Eric Ries hadn't begun to write the book. The response he received from that mailing list gave him a very clear signal.

So not only did this niche have a decent amount of traffic, it was desperately under-served. And Patrick had proven that he had the skills to service that market.

But it all started with luck, the role of which is given very little attention in the traditional interpretation.

I'm not suggesting Patrick is in any way delusional. Patrick understands exactly what happened, far better than any of us. It's the common interpretation that is wrong. Any interpretation which says "he started in a bad place, but used A/B testing to get to a good place" — that interpretation is wrong. You need to dig deeper!

But compare this to every other success story you read. Patrick is far more forthcoming and open with his backstory than just about anyone else you read about. And even still, you could blink and miss the "lucky" part of the story. Luck is insidious!

If you had followed Patrick's blog from day 1, you wouldn't have known the above part of the story. He first started his blog, detailing his journey, a few weeks after the MVP had been a success. If you followed the blog back then, starting on day 1, you would think that the story started with him deciding to build a quick and dirty version 1. But the quick and dirty version 1 that he documented was really version 2. The MVP had already happened. At the time, the most important chapter of the story was untold!

What does this mean? Does it mean that unless we get lucky we have no hope of success?

Absolutely not. It means you have to look very deep into success stories to find out how they really start. The luck is usually hidden or at least obscured. And since we can't rely on luck for our own stories, we have to start with something else.

Have you guessed what it is yet?

Here it is....

How to get started in business

<Drumroll suspense="high">

</Drumroll>

Research!

Yep.

It's the same damn thing I was banging on about last week! And next week! And the week after that.

We have to start right back at square one. Earlier than all the stories we've heard. Right back at the first tiny spark of the story. We have to start with research.

Research, not wishful thinking, is the best tool we have.

The method Patrick described, of looking for competitors on google was one piece of research. Sending a quick and dirty example to a small 'hot' list was another form of research. Listening to every idea that came his way: this is research too. And the above example also shows some basic research using the google adwords keyword tool.

For the last few months I've been working hard on understanding the research aspects of product development, getting lost in the fractal landscape of "researching research", cataloging and experimenting with many techniques, from JTBD to Sales Safari and many more. Only now am I getting close to a point where I can write about research with any confidence.

In the book I'm writing (Your First Product) I intend to walk you through some simple, reliable forms of research, one step at a time, suitable for time-poor developers building a modest first product.