Dhana Pawar

One of the worst kinds of businesses is one that sells something to a price sensitive consumer. My nightmare business is a software company that creates software for school teachers to help them manage their class schedule. Why? Because the ultimate customer is a teacher. Teachers don’t make much money, and are often price conscious. They also have to pay for it out of pocket. A big ticket software purchase for a teacher might be $9.99 per month. Software of the same complexity, in a different niche, for somebody who uses it to make a lot of money, could cost 100x the price. And usually they just throw it on a corporate credit card. They rarely pay for it themselves. Total price insensitivity. Example: Imagine if you instead made a simple software tool that helped hedge fund employees analyze a certain type of trade. Or a niche tool that helped companies file some annoying government form that would deliver a $25,000 tax benefit. Nobody wakes up and thinks “I want to start that.” It’s freaking boring. And that’s why it’s a good business. You have a customer who will pay a large amount of money for you to solve their problem because it enables them to make far more, plus you have no competition. Business on easy mode vs. hard mode.