November 23, 2020
I keep hearing the phrase "building shovels" in the software product world.
I may be butchering the real meaning but in my mind, a "shovel" means a useful tool that enables others to more easily build their business. These tools might come in the form of membership platforms, hosted private communities, course platforms, payment platforms, and site builders. We're seeing a big rise in all these things right now.
It seems as though the "no-code" movement has prompted a lot of these patterns to emerge which also means almost anyone can build a complete website or application that earns them some sort of money.
2020 has been wild
I think we can all agree this past year (2020) has been a whirlwind.
We have been dealing with a global pandemic, high unemployment rates, shortages on goods, and toppling industries (travel, events, entertainment, etc...).
It's really no wonder why so many people are starting their own businesses. Some people simply want to whereas others have to.
History tends to repeat itself. In terms of pandemics, there was one back in 1918. Recessions in the United States tend to occur over time as well. Many big businesses that exist today were born in or around 2008 when the last major recession hit. Would they have started building if that never occurred?
This year more entrepreneurs, indie hackers, and solo-preneurs are emerging. It's now more common for people to be chasing their dreams of starting a business.
What shovels should you build?
Not knowing what to build can send you down a rabbit hole of idea generation. I've been there all too often. It's probably why I have so many failed attempts at products.
It seems that most successful entrepreneurs advocate not deciding what to build in a vacuum. If you can find a way to get feedback before building anything from a handful of potential customers it might save you a lot of time and stress.
While I agree with this theory I find it hard to also get 100% confirmation in that process. Some people will tell you they would totally pay money for something you built just to be nice. There's a layer of psychology that comes into play during a sales process. A customer what's assurance and will be bullish when it comes time for them to give up some of their hard-earned money.
Most of the advice you see from SaaS-based founders is to build for businesses, not the consumer. This past year, the consumer is starting to become a business. While their spending budgets are much lower, they are still on the hunt to earn potential income by being their own boss or working on a very small team.
The "shovel" concept makes a lot of sense here to me because with it you can position your business to both consumer and business. Maybe it makes sense to niche down but I feel like there's something there that could benefit both personas.
What to build can vary greatly. I think the key thing to remember is what "shovel" you build needs to be both useful and enable the end-customer to earn more using it. They'll seek "shovel"-based tools to save time, energy, or solve a problem they don't know how to solve.
A short case study
Take course platforms for example. I could have very easily got my credit card out and signed up for a premium version of Podia or Gumroad and saved maybe months of time building my own for my recent course hellorails.io.
I chose not to do this simply because I wanted to build it myself. I wanted more ownership of my brand, domain authority, and feature set. Would most people go down this path? Probably not but I had the skills to build it even though it was nothing special in comparison.
Besides my own reservations about course platforms, tools like Podia are changing the game when it comes to offering value to others. Whether you're a course creator, speaker, writer, streamer, or any other person who creates, you now have a platform that's incredibly powerful that earns you money.
Stripe does the same thing for secure online payments. Initially geared for developers, Stripe has enabled virtually anyone to charge one-time or recurring payments online with a few clicks.
Here are some random example "shovels" that come to mind:
- Gumroad - Earn from selling virtually anything online
- Podia - Similar to Gumroad, which more emphasis on courses at the moment.
- Stripe - Charge people online in a one-time or recurring fashion
- Mailchimp - They used to be more of an email marketing software platform but have scaled to be a one-stop-shop. Not the cheapest though!
- Memberful - Provide memberships to your audience with ease (I work here ☺️)
- ConvertKit - Email marketing platform with drip campaigns and other features. I don't really love convert kit but you see a lot of folks using it. Email marketing usually leads to the sale of other goods/services you provide.
- Jumpstart Rails - A past project I teamed upon with some friends. I no longer work on it but it's a Ruby on Rails application template that enables developers to save a boatload of time getting a software-based idea out the door.
- Carrd - A very easy to use landing page builder that requires no knowledge of code to get up and running.
There are so many more out there but I hope you see the pattern. These tools on their own basically take the really hard parts of the software and make them more approachable for others in a more convenient way. You can use your time to worry more about your own business rather than how to leverage the Stripe Billing API for example.
As a maker myself I've learned that the things that appeal most to businesses and consumers interested in your product are one of two things (or maybe both?).
- What you build enables someone to earn more money
- What you build enables someone to learn something of value that then earns them more money.
Courses work because people want to learn something. It's often a one-time fee so it's less of a commitment. Upon completing the course they hope to be more skilled or knowledgeable in a given area. Having more knowledge means they can apply it to their own endeavors.
Software enables other businesses or consumers to automate and/or solve a problem they either don't want to solve or don't know-how. Throwing money at the problem lets them move forward faster and ultimately earn money faster.
If you build software, "shovels" are less likely to see as much churn since it's a tool often required to keep their business in operation.
Building "shovels" makes perfect sense when you take a step back and see those two points above. You want to enable others to move forward with value or a means of earning more. Nothing else really matters to them.