Don’t Fish Empty Waters
I’ve mentioned in other posts that my base criteria for evaluating a business opportunity is that it has to be in a growing space, a spendy space, one that has a gap in the market you can fill, and is something you can be the best in the world at.
I lived on Lake Sammamish for a few years in a little cabin we rented. It had its own dock and I would spend much time fishing on that dock. Few people know that in late August on Lake Sammamish, giant trout lurk on the bottom, about 500 feet offshore, and if you can cast a buzz bomb that far and let it sink to the bottom, you’re in for a beautiful 18 inch cut-bow trout surprise.
But in winter there are no fish to speak of from the shore of Lake Sammamish. Absolutely nothing. Guaranteed. I spent 5 years verifying this using floating and sinking fly lines, nylon with all manner of spinner, bait and buzzbomb attached to it. And you can tell there are no fish, because there is absolutely no one fishing on Lake Sammamish during winter.
As you read this blog, it may occur to you that some of my insights are glaringly obvious. Not so when you’re an entrepreneur getting started and filled with passion for solving a particular problem in a particular space where there is a particular perceived need.
Around year 4 of living on Lake Sammamish, I had spent another morning mid-winter catching nothing. I sat down to drink my coffee and thaw my hands and I was flipping through a fishing magazine. There was an article about something or other fishy. There was a line in that article that said “Don’t ever fish in empty waters.” I started thinking about this line – this bit of ridiculously obvious insight in this fishing magazine.
I had been fishing empty water for a few years. My bias had been to create new products that went after new markets. That is by far the riskiest thing you can do and the highest risk quadrant in the Ansoff Matrix. You’re inventing a new product and you’re also inventing the market for that product from scratch. The people you want to sell to simply don’t know that they need the thing and you’re going to have to educate them on what the thing is and how it works and why they need it before they’ll even consider buying from you.
I launched something called linebuzz.com which gave people a way to post inline comments on a blog post by highlighting text and then typing a comment in a dialog that appeared. Contextual comments. No one knew there was such a thing, that they’d need it, how they’d use it and so on. I was fishing empty waters. I could work my ass off to stock those waters with fish, but as a two person operation (my wife Kerry and I), that sounds like a lot of work, and you’re busy enough creating a product and shipping and supporting it as a two person team.
My bias has always been towards that insane fourth quadrant. The new product, new market, blue sky, riskiest craziest innovation space. Feedjit.com was the same. New product, new market (real-time analytics before Google launched it) and we had to educate everyone on what it was and that it might be useful. Easy for Google. Hard for us. We had massive virality on our side, and that made it much easier, but still very hard to grow cashflow.
These days, my criteria for evaluating an opportunity, mentioned above, includes “a growing market” and “a spendy market” which means that you’re going to be fishing well stocked waters, where new fish are constantly being added. You might think that this means you should go after existing product / existing market opportunities – the least risky of the four quadrants. I believe you can have it both ways.
With Wordfence, I created a new kind of security product in a space where there were some firewall and malware scan options, but they were niche players, hard to use and worked very differently from my WordPress plugin. So, in a sense, it was a new product.
The market for WordPress security had just begun to emerge but was not established. Players like Cloudflare were spending millions to create awareness on the need for security among website owners.
So it was a new enough product in a rapidly emerging market, where the market already existed in the form of millions of WordPress site owners. Others were spending a lot to make those site owners aware of the need for my product.
Maybe we can describe it as a newish product in a newish market with many of the risks already mitigated.
These were not empty waters I was fishing in. This was not a Linebuzz with no one wanting or needing inline comments on their blog. The waters had fish, the number of fish was increasing, and I just had a new kind of bait.
To be clear, I don’t think of my customers as fish. I think of them as partners and trusted advisors who guide my every product and strategy decision. Anyway, back to my fishing metaphor…
This insight, of not fishing empty waters, or not building a product for no one, may seem glaringly obvious if you’re not accustomed or passionate about creating new things. But if you enjoy hanging out on the ragged bleeding edge of innovation, like I do, coming up with completely new product ideas that could potentially change the world and the way we do things, your bias is going to be towards empty waters. Try to find a compromise, as I did above, that allows you to innovate, but taps into an existing market in some way, and creates a product that your target market has some frame of reference they can use to relate to it and understand why they want it.
Good luck with the product/market fit – and with the fishing.