Do you like to wait in lines? I don't and that's why two years ago a couple friends and I wrote an application that allowed restaurants to notify their patrons, via text, when a table was ready. This app was going to allow us to skip waiting altogether! Although we were psyched about our app, no one wanted to buy it. What we learned back then is something I know many young entrepreneurs still don’t understand today.
We built our system as part of a Startup Weekend in Seattle. With a little bit of Sinatra, Twilio, and jQuery (and a lot of beer and Halo), it only took us a day to make the application and to record a [promotional video] (https://vimeo.com/25483882). Then, encouraged by the SW event, we headed out the door and talked to our customers. We went from one restaurant to another, asking if they would pay for our product. Most restaurants said no, a couple were interested, but one in particular was very interested.
Din Tai Fung is a restaurant out in Bellevue, Washington, and it’s quite common for its customers to wait in line for 40+ minutes. Managing the guests is a nightmare and requires three full-time staff for that task alone. The restaurant owner told us that if our application could save him just one staff member, that would be worth it for him. That's $12/hour for 10 hours for 30 days—$3,600 per month. We didn't even dream to charge so much for our application! But after a couple of meetings with the manager, it became clear he wasn't going to buy. But why not?
Well, although we had a functional product, here are a few things that were missing from the application:
We were a group of "kids" who built this product overnight.
The manager did not know if we were going to be there two months later to support the product.
Had something gone wrong, he could not be certain that we had the capacity to be there at a moment's notice to support the application.
Our product did not ship with hardware and he did not want to stitch the pieces together.
We were charging way too little to make the product feel sumptuous.
Two years ago, guest-management system were not at all popular, which was a huge risk for him in terms of a process innovation.
We had a good product with a lot of potential, but even a restaurant that badly needed our application did not want to buy it because everything other than our product was stupidly underdeveloped.
And that, kids, is the lesson. A great product, or "something that people want," is not a business; it's just the core of your proposition. In order to make it sell, you need to understand your buyers and how they make decisions about the product. Then, your marketing, sales, features, and offerings need to match with your buyer's needs.