What will people pay for?
It was only yesterday that my business partner, Lukasz and I took our girlfriends to dinner and when walking home we passed a small cupcake shop which specialised in selling unique and attractive cupcakes.
The girls quickly commented on how they would love to own a shop like this and it really got Lukasz and I thinking about how, if executed correctly, a shop like this could be really successful. We also commented on how it would be nice to be selling an actual physical product for once instead of a web or software based product or service.
You see the problem with selling software or services is that people do not want to pay for them. It is as simple as that. Facebook, Twitter, Snapchat, Pinterest, these are all highly popular services which nobody wants to pay for. Facebook and Twitter use adverts, however Snapchat, even with its crazy valuation has absolutely no way of monetising itself at the moment.
The first business I ever joined with Joe was called The 1013 Guy and this business simply made its own, cheaper version of a tool used by rowing clubs all over the world, imported them from China and sold them online and at events. This business, which now requires very little work is fantastic as we just let the orders roll in online, book a courier to deliver the packages and sit back and relax.
The reason selling these tools is so much easier is because the tools are a tangible product. Our customers expect to pay for these tools, just as they expect to pay for a loaf of bread in the shop.
Software or services on the other hand are extremely hard to monetise and are resulting in crazier and crazier monetisation solutions due to consumers getting smarter and becoming less willing to pay.
Even five years ago when I was in secondary school around 16 years of age, all of my friends used Microsoft Office and I always received files in .doc format. This was because their parents had this software on their own machines which my friends used.
Now, my friends all use Google Docs or OpenOffice to manipulate their text documents and nearly none of them have purchased Microsoft Office for their own devices now that they have them. This is a reflection of this tech-savvy generations un-willingness to pay for in-tangible goods and it will be interesting to see how companies respond to this in the coming years.
I do find it strange, that while I am in the business of selling software (more about that soon), I do not personally pay for any software. I use Google Docs for my documents and Google Drive for my storage. I use Spotify and just ignore the adverts for my music. I have owned two Android phones and now own an iPhone and I have only ever purchased one application which was SwiftKey for Android.
So I must ask myself, why am I trying to get people to buy software, when I refuse to buy it myself? Or when my friends refuse to buy it?
It often seems that selling cupcakes would be easier. So I ask you all, what will your customers pay for and what would you rather sell?