Identifying SaaS Opportunities

This is such a great article by Paul Graham of Y-combinator:
How to Get Startup Ideas

I have read and re-read this so many times. There is so much great info in there.

I like what he says about "sitcom" start-up ideas. I have spent a lot of time developing SaaS products in the past that weren't necessarily good ideas. They sounded good, but the key is:

Can you find several customers who want the product and will pay for it before it has even been built?

I'm not saying this is easy to do, but it is so important to work backwards and try to find how you will reach the customers and how much they are willing to pay and if the problem is enough of a problem for them to pay money for.

As a programmer I like to just write code and not have to do some of these things but I have found that it is so important and otherwise I am just wasting time.

This I think is the hardest thing of all. Pretty much all of my successful ideas I have stumbled onto by accident.

For instance when salesforce crm was released I gave it a go and found there was lots of code we had to bolt onto it to get the correct behaviour. Turns out there were a lot of companies with same issue and that was a great niche to be in for a while.

My personal philosophy is very similar to yours. I like to see someone doing something and think to myself "I can do that better!".

The problem comes with how to identify the opportunity. I read the daily developer news every day. This keeps me up to date with toolkits, API's and frameworks etc.. that I should be using but doesn't really help me identify profitable niches.

I asked the same question as in my original post in a few technical forums I visit. For some reason I was met with extreme hostility!

I was told if I need to ask for help then I should get another profession as it was "easy". I challenged these people to iterate their process but was just met with more insults.

I am not sure why this attitude was prevalent. All I can think of is that they don't want competition or are in fact not in a position of entrepreneurship and are in fact on a wage and far removed from the actual creative process.

I talked to a developer the other day who told me about a software he built that bolted onto a popular software for carehomes. It made it easier to manage multiple homes. He was doing very well out of it. He got the idea as someone asked him to build them the system and then he expanded it to offer it to other companies. This is a clear example of a reactive opportunity. I'd like to develop a proactive process for finding opportunities.

When you look at the internet marketing fields processes for identifying niches, I feel there should be an equivalently well thought out and defined process in the SaaS field.

I'll be honest I haven't read any books for "startups". I always thought it would be about management processes etc.. but now I am thinking there may be some answers for me there.

Thanks for your comments and positive attitude guys

Check out Dane Maxwell's approach. His philosophy is very simple. Choose a niche/market then find the biggest pain within that space. Build software to solve the problem.

I'm not sure what you mean but to clarify my original statement: in IM there are many detailed processes for identifying a niche for an info product, just look in the wso section. Some of these methods are very clever and unearth topics I would never have considered of the top of my head.

I am working on trying to develop a process for identifying as many niches as possible that I could develop and market a SaaS site to. I would indeed have the end goal of selling access to the SaaS.

Yeah I built some code for the ACT sdk and then Salesforce in the early days before it was saturated.

I am only recently realised that basecamp was popular. I think my main problem has been getting my information from a stagnant pool.

I am now dedicating 2 hours every day to scan reading a wide variety of business and tech blogs. I knew a guy who did very well creating a service that read all of the banking news and condensed it for bankers who were to busy (lazy) to read it themselves. I'd be willing to pay to join a newsletter that digested all the news and gave me stuff relevant to building apps. Maybe that is the real opportunity here? What do people say about selling shovels? The app market is definitely a gold rush type environment right now