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Comment by mrfredward | Hacker News Reader

One of my favorite points in the book is the explanation for why any sort of niche small business software sucks.

In consumer software, customer acquisition cost is low and development costs can be spread over millions of people, so there is a big profit potential even though the price is low. For large enterprises, the customer acquisition cost is high (lots of meetings with suits), but the payout is high (millions of dollars is good value for software that is going to be deployed at 20,000 locations and serve millions of customers). For a small business, customer acquisition is still expensive (sales and support done personally), but the price is still pretty low.

The book cured me of mumbling "I could make software better than that in a week" every time I saw a receptionist at a small office struggling with a bad app.

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If your dream is to be a "startup" (meaning it scales because of millions of VC funding despite the lack of any sort of plan as to how to make a profit) then yes, small business software sucks.

If your dream is to make millions through a sustainable enterprise, then small business software is awesome.

Please do not mistake me asking in a direct way as arrogance, but: Are you making this claim based on the assumptions that cashflows over medium user acquisition & support cost will work out or have you pulled this off yourself?

I'm currently scoping a small - medium enterprise concept with a very concrete set of paying first customers, but thinking ahead this looming uncertainty really bothers me.

I can't talk for OP but I've been running a software company with both software products and bespoke service lines that generate a good level of income...I reckon I can assist you with your uncertainty - feel free to email me on simon.swords@atlascode.com

It's a matter of scaling. Small business-focused products generally will scale linearly with inputs. Good for a "lifestyle" business that keeps its owners and employees happy, bad for a VC-funded business that needs to hit a grand slam just to break even.

And this is why, from the point of view of a "lifestyle" business owner, VC funding looks like the kiss of death. Scaling fast is risky, and if you're gambling with your own money, you don't want to be forced to turn your sure bet into someone else's moonshot.

To back who you are replying to. My story might be interesting.

Small niche software doesn't suck : if you love that niche, if you can create something that that niche loves and that what you create is difficult for others to replicate.

I have small business with small client base that will forever remain small. ~ 140 clients. A couple of staff members now days.

Cost of acquisition is high. I need to retain a client for 2 years to achieve ROI. That bit is hard work. But you structure things accordingly. From the clients perspective, changing competitors products is very disruptive so I need to make sure I create something that makes it worth their while. The product itself and its capabilities compared to competitors, where the product is headed, support etc around that product and whether or not their is a genuine need for the product.

Making good money. Now bringing home more than market salary, but only after many years of sitting under so probably not at net break even just yet. In a few years all going well I'll sell out and will live very comfortably in retirement off what I expect to be able to sell for.

Fairly happy with my lifestyle. Flexible and generally a little less hours than full time. Can be pressured/stressful at times but no more than I remember when I worked for others.

I'll never be Peter Thiel wealthy but I am on track to achieve my financial goals.

Congrats! Fellow entrepreneur, interested to hear more about your story.

This is something I too have learned. Just because some product/feature sucks/is missing, doesn't mean it's commercially viable to address.

Sometimes the market is too small or costs too much to reach.

Users might legitimately want something, but not enough to pay the price required to sustain a business.

I guess I will never redevelop my salons booking app. I do appreciate how it easily emails me back my forgotten password in plain text tho.

The book cured me of mumbling "I could make software better than that in a week" every time I saw a receptionist at a small office struggling with a bad app.

What if the acquisition cost could be made low? Doesn't patio11's appointment reminder app fall into this category?

https://www.indiehackers.com/interview/how-i-grew-my-appoint...

It might. He talks about revenue but not about profit. So we dpn't really know much about his costs, aside from him mentioning that he was spending a meaningful amount on insurance.

It could very well be that acquisition cost was quite reasonable, and he may have talked about this elsewhere. I just don't think the IH interview tells us enough to know for sure one way or the other.

He's published a huge amount of detail about revenue and costs, his profits aren't enough to sustain a family.

I say that with the greatest amount of respect for the man by the way, he's super super smart and I love his writing.

Probably not, given that he abandoned the app and works at Stripe now.

It can be great even if the "acquisition cost" is high, assuming you charge people for it.

It just doesn't lend itself to the "do a business that sells $10 dollar bills for $5 funded by VC money until it has enough eyeballs to start selling ads".

I learned the hard way that "passive income" via SaaS is fools game. Yes it does exist, but it's incredibly rare and so it's very unlikely that any idea I have is going to be the unicorn idea that generates a shedload of money for minimal effort.

I stand about as much chance of becoming the next YouTube/Insta star.

>One of my favorite points in the book is the explanation for why any sort of niche small business software sucks.

Because the author prefers filthy greed and the creation of yet another corporate behemoth over creating something decent, charging people for it, and making a living from that?

The problem is people in small niche businesses often don't have the money to pay what amounts to a sustainable amount relative to what a software developer capable of striking out on their own could make with nearly zero risk by working for one of those behemoths (or really anyplace where tech is a competitive enabler or differentiator).

How is that a problem? The developer that wants that can go work on one of those behemoths, and those that value the small niche businesses can work there.

Plus, I don't see Basecamp or Panic or Bare Bones or whatever paying less to their devs. And less compared to what?

Behemoths are usually in SV or a few constrained places, and have the usual SV culture (including ageism etc).

Small niche business are anywhere, in places with much smaller costs of living, better work-life balance, and more kid-friendly environments. Heck, Procreate (frequently top of the App Store and Award Winning) is in Tazmania.

The problem is that it's insanely difficult to build a sustainable business in software targeting niche small businesses.

I think Basecamp is not targeting niche small businesses; they're a general purpose project management/team collaboration software, used by many businesses. It happens to be used by some small niche businesses, but in the same way a business checking account is used by many small niche businesses.

To me, niche small business software evokes more "software to automate inventory in a small machine shop", "landscape sprinkler system installation planning software", "antique shop inventory management software", "beekeeper scheduling software", etc.

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