SPI 046 : Building a Lucrative Business with No Ideas, No Expertise & No Money with Dane Maxwell

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In this session of The Smart Passive Income Podcast, I invited Dane Maxwell from The Foundation to come onto the show and chat with us about his approach to building an online business, one that doesn’t include the need to become an expert in any particular niche (what?!), any money or start up funds (double what!?), or even any ideas! In fact, in the interview, Dane talks about how he never starts a business with an idea and how that can actually hold you back.

Sounds crazy, right? It doesn’t make sense right now, but when you start listening you’ll quickly understand what he’s talking about when I ask him what exactly he does. To sum it up for you:

He doesn’t start with an idea, and he’s not interested in becoming an expert at anything other than understanding the pains and problems that people are having in a particular market, and that’s exactly what he does. He asks people what their pains are, what do they wish was available to help make their jobs easier, what are the repetitive tasks that they perform every day, and he builds software solutions that specifically solve those problems.

You don’t need to worry about ideas. You only need to worry about understanding the true pains and problems that people are having. If you can do that, the right solution will come.

The amount of information in this podcast is incredible, and it’s obvious that Dane is operating on an entirely different level when it comes to teaching online business. It’s unique, and almost a breath of fresh air because he shares that you don’t have to become an expert at something and then build a platform to share that knowledge, you just need to find out exactly what people want and then deliver it to them. Dane just prefers software as the delivery mechanism, and he tells you why in the session.

As some of you know, I’ve had my run at software before, but it was a failure. I had paid to get 2 WordPress plugins developed and one didn’t come out right (totally my fault) and the other is still being worked on after a year of development. Dane and I talk about this in the episode as well and he tells us what kind of software works best – and it’s not WordPress plugins. And if you follow Dane’s advice you don’t even need to know how to code or have money in order to get this software developed. It might sound too good to be true, but it’s definitely not some get rich quick scheme and it definitely takes a lot of work and due diligence too. Dane provides a framework of 6 months, actually.

In this session, Dane and I also talk about the following:

  • Why software is the most lucrative vehicle to finance your freedom.
  • Dane’s thoughts on the human desire to become an expert, and how that cripples potential entrepreneurs.
  • Why people have reservations about getting into software.
  • The most important questions to ask in order to understand people’s pains and problems.
  • How to find companies and who (and how to) contact them to get information for potential software solutions.
  • Why stripping away features is important to get your software launched, and how to use that to your advantage.
  • An example of how Dane decided to create his first software business just by asking questions.
  • Why questions to ask to understand how much to price your software.
  • How to get guaranteed paying customers and have no chance of failing. 
  • The most common mistake that people who attempt to create software make.
  • The secret language of millionaires that can’t be learned overnight, but must be experiences.
  • Criteria for great markets to get into to build software for.
  • How to automatically find the solution to people’s problems.
  • Success stories from his own students, and the idea extraction process that went along with their businesses.
  • The #1 reason why people aren’t paying for your product.
  • How to break down businesses to help break down their problems and pains.
  • The problem with All-in-One Software Solutions

Dane also gives us so many memorable quotes during the session, it’s not even funny. I had about 4 or 5 pages of notes after our interview. Here are some of the highlights:

  • “If you can define the problem better than your target customer, then they will assume you have the solution.”
  • “Looking for a passion CRIPPLES potential entrepreneurs.”
  • “We (The Foundation) do not believe in being an expert. We believe in being an expert at defining problems, and then putting experts in place to solve them.”
  • “There are more opportunities and more problems than you could ever solve.”

Right click here to download the MP3

Items mentioned in this podcast include:

The Foundation

Dane references The Foundation in the session, which is his program for teaching a limited group of students how to build a successful software businesses over the course of 6 months. He’s already gone through a successful round with students and shared some of the successful companies that came out of that with us on the podcast. I’m happy to share the link to The Foundation here on the blog, but please know that I never went through this program myself, which is why I am not an affiliate for this program. I do not directly benefit in any way from sharing this link, but I share it because I can see it being extremely helpful for some. If you do end up getting accepted into his program (there’s an application process, I believe), please let me know I’d love to keep track of your progress.

Thank you for your support! Cheers!

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Transcript

Click Here to Download the Transcript for Session 46 (PDF)

  • http://bitly.com/NvkUEm vincent

    +1

    • http://bit.ly/OxkgV4 Dan@ The lazy marketeur

      Really good podcast. Very good techniques, too.

      • http://libeltyseo.com TomL

        As always with these types of interviews… one has to read between the lines.

        Nothing comes easy… anyone that wants to succeed at this method will need to put a lot of blood, sweat and tears into it just as with any other business.

        No money needed… really… but what if someone doesn’t have an uncle willing to invest into the first business. Yeah you can get a friend or a regular business owner but that will be an entirely different story. Anytime I hear that a family member was involved in a launch of anything then that person loses a lot of credibility with me… especially when saying that anyone can do it.

        I remember when working for a large company as a sales guy… seeing this guy come in to give us a speech. He didn’t really know what was going on and admitted it but hey… his cousin was the owner so its okay.

        The foundation sounds interesting if it can cut my learning curve. However, price will be what I really look at… as I can simply invest it into my first app. I know how to sell, get to business owners, outsource and manage a team already… this is just a different product.

        Great interview… very misleading headline… shame on you Pat.

        Regards,

        Tom

        • Pat

          Tom, I appreciate your honest opinion, thank you for that. I don’t think the headline is misleading if, like you said, one puts in the hard work and Dane talks about exactly how difficult this is and that it doesn’t come easy. If it was easy then there would be no need for handholding along the way. The opportunities are there and easy to find, but the actual work – it takes up to 6 months just to get to a point where you can finally launch something. He did mention his Uncle in one example, but he also gave other examples (like iDrumBeat and the Home Inspection business) that didn’t require any money from the owner.

          No shame here.

        • http://www.onlinebusinessmania.com/resources/ Sajan Elanthoor

          I really don’t think there is any problem with the headline. Moreover the content is awesome.

        • http://www.fromdreamstolifestyle.com/ Patrick

          I have to admit I was a bit skeptical about the headline but after listening to the pod cast I’d have to say this was best one I’ve heard so far! Love your content but this was just amazing. It sounds like such a simple strategy, but the fear element most people have is what holds them back from achieving their goals (myself included). Dane really struck home when he explained that his business is about finding the problem and building a solution just by asking. I had to give your pod cast a 5 star rating after this pod cast ;) Keep up the great work Pat, and thanks Dane for sharing your knowledge with us!

    • http://thefoundation.io Dane Maxwell

      Word. Thank you Vincent.

  • http://thehowtomakemoneyonlinemom.com Julie

    Can’t wait to listen to this one! It sounds really good!

  • http://www.jaycodon.com Jacob

    About 7:30 in, he touches on the most important thing, I think, with starting a business. He identifies a problem and then goes from there. That is probably the best advice you can get when trying to decide what you want to start. Or, you can tackle it from a slightly different area and that’s to scratch your own itch. Find a problem you have and chances are, so do other people.

    • http://thefoundation.io Dane Maxwell

      It goes a bit deeper Jacob. Instead of guessing that others will have the problem, we are talking about selling the idea to at least 5 to 10 people and getting money from them before a product is built. We have a whole process to do this ethically and so customers are excited to buy in. Don’t build a product until you’ve got the sales. In fact… if we find members coding in the foundation before they have any sales, we kick them out.

      • Jeremy

        “In fact… if we find members coding in the foundation before they have any sales, we kick them out.”

        Really? What do you do if they say something you don’t like? ;)

  • Duke

    Dane and Pat, you’ve both sold me with this podcast. I listened to #44 and #45 yesterday and I’m working my way through the others. But this podcast had a lot of great “meat.”

    Dane’s triggered a couple of ideas in my head, which fear of software has kept me from pursuing. Hate off to you both.

    • Duke

      HATS! Hats off, not hate. That’s an unfortunate typo.

  • http://www.HireYourVirtualAssistant.com Owen McGab Enaohwo

    Pat, thanks for interview Dane, he is the go to guy for creating software and I personally look forward to joining the foundation and using the ideas that I will discover for creating my web app. Cheers!

  • http://exs24samples.com/ Dave G

    Hey Pat that Idrumbeats.com link is not working for me here….aside from that grabbing the podcast now as it sounds very interesting :)

    • Nate

      It’s idrumbeat.com ;)

      • http://exs24samples.com/ Dave G

        d’oh!

  • TrafficColeman

    Dreams are always started as ideas and turn that idea into a working system. Pat its great that you us the power of the internet to teach and touch people who may have gone out and bought a book on how to build a lucrative business from scratch. But your going out your way to do this for free…how awesome is that?

    That’s how you made the top 10 in the Forbes bro.

  • http://www.smartshoot.com Steve Young

    Love Dane! Took his Mixergy class on copywriting. Looking forward to this interview. Thanks Pat!

  • http://raspberrypi.dk Jeppe

    What an awesome podcast! It is, indeed, inspirational, Pat.

    As an engineer student, I love the idea of working with the problem in mind. We do this all the time and it could simply be amazing to get a recurring revenue software business going; let’s see if there is any chance to be accepted to the foundation or I will have to try it out myself :-)

  • http://ihaveacaffeineproblem.com Brandon Breshears

    Awesome Pat! So great. I’ve been commuting lots lately for work so I just eat these babies up.

    I’m specifically trying to build another niche site that I’m not an expert about to see the difference. Anyways just wanted to say I really really appreciate all the work you put into this. I’ve referred over a dozen people to your site, 6 of which are now building niche sites. Also I just got my 100th adsense click today so I’m stoked! Thanks dude you rock and good luck with your daughter coming soon!

  • http://purchaseplr.com Jessica Kihara

    I’m download this right now, wishing it would go faster because I can’t wait to listen to this. It sounds completely different from anything I’ve heard before. So excited!!!

  • Chris Altamirano

    Such an awesome podcast, just finishing it up as I type this. I love the business model where he talks about having your idea financed/funded by those people who already know their own pains – really awesome stuff. Great podcast overall and really solid resources. The real life examples are really inspiration also..

    Think you’ll shift from wordpress plugins to web based apps now Pat?

  • http://www.dslrlensshop.com/ Steven N

    Downloading it now pat, just got your email. Thanks again

  • http://www.locsolutions.biz Michael

    Hey Pat!
    Cheers for yet another very informative podcast!
    My team and I are currently working on building our Internet Service business and your pod casts have helped us in almost every single step of the way, Thanks again.

    Michael

  • http://www.locsolutions.biz Michael

    Sorry for REpost,
    But I was wondering where can I get the same CAPTCHA system that you use?
    I find it very easy and user friendly, I tend to find myself walking away whenever I see an annoying captcha!

    Thanks again!

  • Nate

    Awesome podcast Pat!

    FYI, the link should be idrumbeat.com, not idrumbeats.com

  • http://debtdefeater.blogspot.com/ Mo

    Awesome podcast Pat!

    I think by far the most interesting part was at the heart of business in general: solidly identifying a potential client’s most painful issue, and presenting a viable relatively inexpensive solution. It’s not only great for business, but keeps within the paradigm of being honest, which is what I like particularly the most about your business Pat!

    • http://thefoundation.io Dane Maxwell

      Mo, inexpensive is not what I like. I like fair. And I like making prices feel fair by doing price anchors. We want to make as much money as possible by charging a fair price, not by being inexpensive or cheap.

      The great thing about copywriting, and putting your salesmenship in print, is that with the proper pricing anchors, you can make an otherwise expensive price seem like a bargain.

  • http://www.createawebsitehq.com Brian

    Best Podcast yet, superior to all tick tacky ways to make money online currently out there. Great thought process for finding an idea, without stressing passion, skill, etc. Very real information, have been wanting to a web based software for a while now and this is great motivation. Pat I think you’ve been flirting with some web based software apps, the map generator is a “tool”, just not targeted.

  • http://www.howtoonlinebusiness.net/ Sajan Elanthoor

    Hi Pat,

    I really liked the podcast and I’m sure it will help lots of people to move forward in online business with a different perception. Downloaded and want to hear it again and again.

  • Samir

    Amazing Article and lovely website Paperless Pipeline….
    is this an wordpress based website ???? which theme is that ???

  • http://www.zzzprofits.com Moe

    Definitely a fresh contradictory view of looking at a lot of things. To be honest i am not sure if that podcast was helpful to me at all. It seemed very scattered, jumping all over the place and a hell of lot easier said then done. I definitely don’t feel like i could just go out a create a million dollar software with zero money now.

    • Maurizio

      I definitely agree this is only a huge pile of c**p.
      Maxwell is blabbering around obvious stuff that maybe (maybe, because it could be completely work of ficiotion) worked for him, but cannot be taken as a “method”, becuase it is pretty obvious that if you can solve problem to peole (and get customers, make them understand and make them actally pay) you can amke money.
      Have you had a look at his “Foundations”?
      It takes ages to go through, and at the end I do not understand what is trying to sell, but obviously he is trying to sell us somenthing.
      And again all thsi podcas is about mr Maxwel promoting his “Foundations”.

      What a pile of s***t!

      • Nate

        Enjoy your medicore life.

    • http://thefoundation.io Dane Maxwell

      Hey Moe, I’ll be releasing a looonnnnnng video that walks you step-by-step through how I created my first 6 figure software product. I’ll show you where I got the developers, how I got it designed, how I got the idea. I’ll be logging into the backend of my systems to show you. This might be what you need to get a better idea. Thank you for being real with your honesty.

  • http://michaeluszeit.de Michael Uszleit

    Ha, there you go, foundation.io takes forever to load, go SPI Fans, that’s the impact an engaged audience creates.

    It was a great show. I listen and read a lot about wrong and right ways to get started. I got trough MJ Demarco’s Book last week and he can’t stress enough the fact that you have to hunt peoples needs. You have to get your *ass* out there, ask the right questions to the right people(some of them mentioned in this episode, thanks Dane!) and build products that solve their particular problems. If you actually help them, money will always follow.

    Thank you Pat, keep it up.

  • http://liveonblogs.com Reeja Mathews Alfred

    enjoyed the podcast good work Pat

  • http://www.onlineincomestartup.com Dr.Spencer Jones

    Great podcast Pat, listening to the full podcast is the first thing that I did when I woke up today. An entirely new perspective to doing business online. I personally wish to focus on answering problems only in the internet marketing niche. Softwares are definitely a lasting income source if you have the right software people, the right idea and the right market.

    Dr.Spencer Jones

  • http://www.topbloggingcoach.com Theodore.N

    Hey Pat, you rock. All your podcast i’ve listened to are wow. To sum it up, I think I’m adicted to your podcast. Keep it up man, awaits more

  • http://www.emailslistbuilding.com Matteo

    Always awesome Pat. I agree, building an online business about developing software to solve a problem is the best way to success.

  • http://yourbuygoldguide.com Ken @ Gold buyers guide

    Pat you always over deliver and i couldn’t agree more with this approach to online business

  • http://www.EntrepreneurOnFire.com John Lee Dumas

    Pat,
    You truly did sum up Dane…a breath of fresh air. I love his approach and mentality. Thanks for the great sum up now I can’t wait to go for a jog and a listen!

  • http://CashFlowsToo.com Monty Campbell

    Sounds Amazing! I look forward to listening to it. I do love the idea of developing software. In fact it is on my todo list for 2013. Beyond that scope it is something I appreciate about having a successful mentor that has done it. The difference in success on line or in anything starts with who do you listen too. If you want to be the greatest Oil Painting Artist, it doesn’t help to work with an industrial painter.. You need Picasso to teach you.

    In any event, I love your work Pat. And with you continued success.

    God bless’

  • http://www.casemodcontest.com/f17/ woodward82@ Case Modding

    Great podcast! Im listening for the second time around right now.

    I do have a question. He says to use a females name in the first emails, how does that effect calling them, and it’s not the same person that emailed them?

    • http://thefoundation.io Dane Maxwell

      Use a female in your initial email and have them pose as your assistant. When they agree to talk, say you will connect them to your CEO or boss (aka you). Increase response, and also… perception of authority.

  • Archie Jones

    Interesting post!

    I liked his comment that the customers are not experts in their pain, even though they were living it. I’ve run into the same issue with my work. I would describe it differently.

    When my friend, John, hosts a cookout at his house, he’s an expert on the smoker. He’s spent countless trials perfecting his skills, and when you eat his BBQ… you know he’s the boss.

    So if I asked him about his pain, he might first tell me that maybe his sauce isn’t 100% developed. If I kept asking, he might say that the weather is hard to work around sometimes. But finally, he’d mention those gnats. Those tiny little bugs that seem to get the cookout invite before any of the actual guests.

    Make no mistake; John is living the pain when those gnats show up in his back yard. However, he is no expert on gnats. In fact, he doesn’t even want to know anything about gnats… he just wants them to go away. His whole entire weekend is focused on what he IS and expert at; smoking. The very last thing he really wants to do is become an expert in gnats.

    So, when I take the time to learn how to remove the pain of gnats at his cookout, then I have something very valuable to him.

    • http://thefoundation.io Dane Maxwell

      This is sweet.

  • Archie Jones

    Okay, one more thing.

    When I have tried to “find” a problem in an area I was not an expert… and didn’t know any experts. I turn to my good friend Google.

    A couple of years ago my friend (that same guy John) were discussing a new development venture. Microsoft had come out with WPF and it looked interesting to me. I told John, “We need to take people’s pain away.” Unfortunately, I didn’t know anything about WPF.

    So, I did a Google search, “WPF sucks”. The results were amazing. All over the planet, there were developers in pain… eager to discuss why they were hurting.

    Now, whenever I start a new venture, I perform the same type of search.

    Cheers!

  • Anonymous

    Pat, thanks so much for discouraging foul language on this podcast. I’m not a nun, but those words don’t add to the discussion and certainly don’t add to your brand. You’re a class act, STAY THAT WAY!

    BTW, the podcast was excellent and the guests material was superb!

  • Joey

    I’ve worked in the Software-as-a-Service sector for 6 years and really haven’t seriously considered any other sector thanks to the financial stability in it. However, I’ve never even considered starting my own business in that sector, mostly because of the complexity of so many SaaS products. His perspective in lowering the barrier to entry is great to hear. Thanks Pat!

  • http://prayerhabits.com Jared Dees

    Honestly, Pat, this is the best SPI Podcast interview yet. The questions Dane shared are exactly what he called them: gold. The immediate action I’m going to take is exactly your thought: update my autoresponder. Thanks Pat and thanks Dane. Great business model and great system for niche analysis.

  • http://applicationcourse.net Askin Akhan

    I have one of them Bamboo pads. They are great, not only for whiteboarding but also for creating logo’s and graphics which require detail on photoshop.

    Ash @ AppGeeks

  • http://www.prosperityclicks.com/ Rob @ Prosperity Clicks

    Great, great, great podcast.

    I couldn’t agree more with the statements about people getting in their own way by having limiting beliefs.

    Success truly does begin from within. You can have all the know-how in the world, but, if your sabotaging yourself, you’re not going to get anywhere.

    I’m very pleased to hear more and more people who, like me, are expressing the importance of a successful mindset through their content. Because THAT is what is truly going to help people start being successful.

    Keep up the good work, Pat. And, thanks very much to Dane for giving such an excellent interview.

  • John

    This episode was great. I hope he comes back! VERY inspirational.

  • http://cloudventuresgroup.com steve wyman

    Hey Pat

    Loved that PODcast, im working on the outline design for a very disruptive software product idea and this is very inspiring.

    Steve

  • http://www.heresyourschedule.com EricB

    I’ve been following your blog for a little over a year now and listened to most of your podcasts. I have to say this one has got me the most excited! Not to take away from any of your other podcasts or posts, but I couldn’t stop listening to this. At one point I checked to see how much longer it had left because I thought it was nearing the end and got really excited when I realized I was only about halfway through. So glad you did this interview and really excited to try this out! Thanks again Pat and Dane

  • http://www.hangovermonkey.com Edgar

    I agree with you Pat! I too, I am afraid of coding and not having control.

  • http://leweylu.blogspot.com/2012/08/how-ive-earned-858-in-4-days-directly.html Lewey Lu

    Great post pat. I wonder where did you get your ideas?

    Lewey Lu

  • http://www.laptopsunder200hq.com Pete Rockwell

    Great podcast, Pat! Probably the best one yet. Awesome content, thanks.

  • http://howtoprogramwithjava.com Trevor Page

    Excellent podcast, I’m really glad someone pointed out how valuable software as a service is! I’m a programmer by profession and I live this “software-as-a-service” model everyday at my dayjob. I work my butt off to make someone else rich, but I learn a ton doing it, so it’s worthwhile to me right now.

    In any case, if any of you are interested in a programmer, I would be willing to team up taking the equity route that is explained in the podcast. I create web applications for a living :)

    Keep up the great work Pat!

  • http://www.zzzprofits.com Moe

    Yes i am interested in a programmer, but i don’t know what i want to make, I dont have any ideas, and i don’t have any money. So you want to team up?

  • Remco

    I’ve been walking around with a software idea for yrs now….this podcast might have given me a push in the right direction.
    I also believe that people sabotage their own success, for the fear of succeeding.
    Tony robbins wrote about this in his book ‘awaken the giant within’

  • Thomas K

    Wow, this podcast has really changed my way of thinking. Thank you so much for interviewing Dane and allowing me to discover his business.

    I also recommend everyone to watch the Mixergy interview with Sam Ovens (one of Danes students). Go to the foundation website and check it out.

    Tom.

    • http://www.medical-marijuana-mentor.com Tomoko

      Agreed. This is a serious paradigm shift for me and it TOTALLY makes sense.

      But I wasn’t able to get the Sam Ovens video to play. did anyone else have problems w/it?

  • Donald

    Pat,

    Great podcast, as usual!

    fyi… the links for elance and odesk both go to elance.

    Thanks.

    • Pat

      Thanks Donald, all links updated and corrected now.

  • http://www.lazybastardlife.com Jason

    Pat,

    Awesome interview. Biggest take away for me besides the main conversation is that I should start thinking about having businesses (or business owners) as my customers and not consumers. Get your hooks into a business with your software and make it so good that it’s impossible for them to leave.

    Also, Pat, your interview style is incredible. It’s been a pleasure to have been here since #1 and listened to your evolution. I heard Dane on another podcast last week and stopped half way through. Nothing against Dane, I just think the interviewer was not as engaged in the conversation as you were or was asking the wrong questions. I’ve download this other podcast again to give it a second listen (and to absorb more info).

    • http://thefoundation.io Dane Maxwell

      Which podcast was that Jason… the one you stopped listening too?

      • Will

        My guess would be the one on http://www.automizeit.com/blog/dane-maxwell-reviews-interview. The interview has a hard time… but really the content given by you Dane is just as or even more useful. At less it builds your overall idea better… looking forward to details on how things work. I will be trying this. I am looking forward to it. I am thinking MLM agents may find this useful and even other sales rep positions. Thank you so much for having a passion a to teach. =) You win the gold metal of hope and prosperity for all…. in the market place.

  • Glenn F

    Fantastic episode, Pat. Was really glued to it all the way through. Very inspirational. Thanks!

  • http://www.newbodyblog.com Adam

    All great tips and very inspirational. But I think this works well if you speak language that is used in many countries like german, english or spanish. So market is bigger. But if you live in a small country and your language isn’t spoken anywhere else you got problems. Luckily I speak english and it’s easier for me but I know a lot of people are stuck in my country because of launguage. But anyway, great podcast as always Pat. Thank you

    Adam

  • Cornelius

    Wow…I had to keep pausing the podcast just to take notes. I really appreciate the great info.

    Thanks,
    Pat

  • Byron

    I nearly didnt listened to that episode since I thought software is the last thing I’d like to go into but thats one of your best episodes ever.

    <3 Pat

  • http://cheapestwaytotravelhq.com Kyle @CheapestWayToTravelHQ

    I really liked this podcast and even though I have started a blog, I do very much live by some of the same maxims as Dane. For one, I don’t think I am an expert, don’t exactly represent myself as one and I believe that helps me make a connection with my readers. I am just like everyone else trying to accomplish the goal of traveling more that reads my blog. In that way, they can learn from my prior experiences while joining me on my journey to accomplish my goal of traveling full-time. I am not an expert, I haven’t completely accomplished what I advocate but it is genuine. Dane hasn’t created the software he advocates for his future customers upfront but his exploration and creation of it is genuine because he shares that experience (through asking about his customer’s “pain”). Even if you don’t go the same (radical?) route as Dane, you can take many lessons from his approach. Understand your audiences pain and try to provide a solution.

  • http://hustleandgrow.net Clint

    Hey Pat,

    Great interview. However, I’m curious as to why you didn’t mention your successful app building business? There’s a lot of synergy with your app biz and his software dev biz.

    Regardless, great podcast and thanks!

    Clint

    • Pat

      Hey Clint, fair comment, however it would be safe to say that my app business doesn’t really build apps that solve people’s problems, which is probably a bad thing. Unless, that problem is boredom and lack of silliness. I think niched apps have much more potential.

  • http://www.alaininternetmarketing.com Alain

    I find amazing that this person is only 29 years old. He speaks with the wisdom of some one on his 60s. It so incredible that people can have this mindset right from the start.

    Thank you so much. This is one of the most inspiring podcast I have ever heard.

  • http://championsempire.com Jerrywhyte Obamwonyi

    Thanks so much Pat, your email is always the one with preferential consideration whenever i log into my inbox.

    I have become so obsessed with your internet marketing style

    thanks! thanks!! thanks!!! so much

    Jerrywhyte Obamwonyi

  • http://signi-n.blogspot.com/ Mayson

    I really like his idea that if you find the pain,you dont even have to convince people to buy your product.Dane just brought a different perspective that many people dont think about.It’s a different approach as opposed to following your passion and creating a product that you think people want.If you want to make money,create a business,I came across the same idea on Techcrunch.This is the best podcast which I will listen to over-and-over again.

  • http://hire.billeisenhauer.com Bill Eisenhauer

    As a software developer with 25+ years of experience, I want to preach a little caution here. Dane appears to be successful, but software is very difficult to do right. If you think a WordPress theme is expensive, try getting a custom app written.

    Also, SaaS apps bring with them the responsibility and expectation to be up and running when customers want/need to access them. So someone under your employ will have to always be available to keep things running. You cannot just leave for vacation and assume that your app will not have an issue; things happen.

    The SaaS model can be lucrative, just make sure you have your eyes wide open. I think this podcast may not have represented all the challenges you may face. That said, I enjoyed the podcast and the information provided.

    • http://thefoundation.io Dane Maxwell

      Hey Bill, I agree – to an extent. These problems can all be managed… plus… they are good problems to have as a result of building a profitable software product. I welcome these problems, more so than I welcome not having them. They are a good thing. I go on vacation all the time and have my developers running the products for me. Key point: Mindset here is critical.

      • http://www.linkedin.com/in/samasmith Sam Smith

        +1 ^^^

        Those problems can definitely be managed. I know Dane hasn’t talked much about the infrastructure he uses when developing web-apps, but I’m 100% certain he doesn’t run them on servers in his own house, and I’m 90% certain he doesn’t rent a server that he, himself has to administer.

        If I were pursuing SaaS (and let’s face it, anyone who listened to this podcast is, now), I’d rent shared/dedicated hosting space from somewhere like Rackspace or HostGator to host the app. If problems ever come up, you either hop on live-chat to get help from a tech, or have a virtual assistant do that for you.

        Going back to the infrastructure, I’d be curious to know more details about what you use. I assume you leave coding language up to the developer (Ruby, PHP, ASP, etc), and the database is usually dependent upon the host you chose. Do you have a preferred host, or specifics that you look for in a host?

  • http://privateinvestigatoradvicehq.com/ andrew

    First Pat..Great interview. You really should have him back on to pick his brain further. Secondly I am a private investigator. As the interview was taking place I was writing down possible ideas and brainstorming. Then Dane brings up the private investigator idea and I was a bit deflated but it was awesome to hear the idea made it into my line of work.

    Keep up the good work Pat.

  • http://www.hongkongshuttle.com/ Ron So

    Dear Pat,

    This is by far the best episode of podcast I’ve ever heard.

    There’s a ton of valuable knowledge pack in it and I think it will change a lot of people’s lives.

    Keep up the great interviews!

    Ron from Hong Kong Shuttle

  • Tenoch

    Great podcast. One of ur best ever. Really a lot of the principles he discusses could be applied to other ventures beside SaS.

  • http://lifestylebusinessdesign.com Matt John Canty

    this podcast sucks. lol…… jokes aside this is one of the best podcasts going around right up there with mixergy! Pat, the podcasts just get better and better you have inspired me to try to put together a podcast for my niche cheers mate :)

  • http://catscratchposts.co.uk James

    My head is buzzing with all the ideas – and confusion as to where to start first. Expert in my field or start from scratch by ‘finding the pain’? Great podcast, Pat, and looking forward to reading all the tips and info in the links

  • Avo

    At the end there is a miscalculation 2 out of 10 is 20%, 20% out of 2000 is 400 (not 2% and 40), however I am sure 2% would be also significant :)

    An excellent podcast and one of the most real business opportunities out there for sure!

  • http://www.CareerCoachJeff.com Jeff

    Wow – my head is swimming with ideas this morning! Great podcast Pat and well worth the hour. Too be honest I couldn’ve listened another hour.

    A great follow up with Dane might be a listener submitted Q&A session.

    Think about it!

    Jeff

  • http://theaccountantmarketer.com/ Steven

    This is a pretty epic post, I feel a second listen is required

  • http://startingyourlawfirm.com Chris

    Pat:

    Great podcast! I’ve been a long time reader and not much of a contributor. But this podcast forced me to say something.

    The ideas were fantastic, the philosophy was very well articulated, and Dane’s personality was priceless.

    Just wanted to say thanks.

    Chris

  • http://www.smalltalkofdoom.com Kwin

    Finally got to listen this morning; what a great conversation. Please take Dane up on his offer to come back another time.

    Dane touched several times on the forces that keep us from achieving. For those who are interested in this phenomenon I can’t recommend enough a short book by Steven Pressfield called “The War of Art.” It is both insightful and motivating.

  • http://dorszyk.com Michal DD

    OK so my dog loves you now, I hate you (kidding). It was supposed to be a short 30minutes walk because I had so much stuff to do today but after I started to listen to the podcast I couldn’t stop, so interesting and inspiring. My dog had a much longer walk than planned for that moment and she enjoyed it very much. I want to build a software now so bad, I already have few ideas/pains that I was thinking about for a long time already. I hope this podcast gave me enough motivation so I will actually go forward with this. Anyway thanks, it’s really good. If anyone haven’t listen to it yet, go ahead it’s worth it. /Michal

  • http://hire.billeisenhauer.com Bill Eisenhauer

    There is a lot of enthusiasm for this topic, but I would encourage anyone who wants to dip their toe into this to consider starting with a very simple SaaS product. For instance, solve one thing really, really well, but keep a tight scope and don’t expect to charge much. We’re talking about a $1-$5 service here.

    Until you have really done something like this, you don’t know how hard it really is to conceive of what web pages you need, what should happen on each page, what edge cases you need to cover, what cross-browser issues there are, etc. This stuff is really, really hard. Don’t be too ambitious at the start. People who do this stuff for a living have a hard time. People who don’t code may have a harder time because they don’t know what they don’t know.

    I’m not saying don’t try this, but please, please be careful. If you know someone technical, try to have an honest discussion about your idea and see what you may learn about your journey toward putting a solution out there.

    Man, really not trying to scare anyone off or dampen the enthusiasm too much here. I just know that this is an advanced income opportunity and given a choice you might want to start with any number of the other ideas on this site that Pat has talked about.

    If you do decide to do this, embrace the ideals presented in the book ‘The Lean Startup’ and fire a BB instead of a cannon ball. Start with a survey, confirm interest, and then build something small and crappy. The go from there if it succeeds and you dig the life of a SaaS operator.

    • http://thefoundation.io Dane Maxwell

      I agree with Bill on most things here, not all.

      Software can be scary… if you don’t know what you are doing. That is why I created The Foundation. No one is teaching this because it’s hard. But I believe we have it simplified as best we can.

      This is what we teach.

      Great developers and designers will handle the technical details like cross browser issues, etc… We show how to hire them and negotiate great rates… then… get customers to fund developers, or… we also have a team of investors who will come on to invest in products.

      We do focus on really simple services being built, very simple scopes… but sold for $1 to $5 is absolutely untrue. Here you’ll see a simple GPS check in app can be sold for $500 a month: http://mixergy.com/listen-to-dane-maxwell-call-a-prospect-and-hear-how-he-extracts-a-profitable-business-idea/

      I think your mindset might need a perspective shift on the pricing and scope thing.

      We follow lean start up to an extent, but I find it missing things that are important for making money. We don’t usually do surveys, we use email and the telephone to dig deep with people. Survey… maybe later. We find people like the ideas of a survey, they can hide behind them and await an answer. But we are in the trenches talking with customers.

  • http://www.mynotetakingnerd.com Lewis LaLanne – MyNoteTakingNerd

    Pat,

    Simply put you Rock!

    The quality of content on these Podcast are of “Paid” quality and we all owe you a big thanks.

    Thank You!

    Lewis

  • http://www.wordpressthemedesk.com WordPress Desk

    I loved the podcast, it was excellent.

  • http://thermalbinoculars.topstoxx.com Bobby

    Great podcast as usual. I have actually attempted to use Dane’s software strategy in the past but just couldn’t seem to get it off the ground. He gave some good info that may help me to delve into this again. So much information, so little time!!!!!!

    Thanks Pat!

  • http://www.newbodyblog.com Adam

    Pat

    How about making a post or video about creating a podcast. I am very close to having one, just wanted to make sure I am on a right track.

    Adam

  • http://Nurnazman.wordpress.com Nura

    Excellent excellent podcast!! I really love listening to all your podcasts :) usually listen them in d car or bus.. Find them more interesting to listen to u rather than reading through in blogs. Nevertheless ur podcasts have given me tonnes of information with no skimping at all. Ur such an excellent and humble person! Hope I can be successful like you one day :)

    This episode has been among the most interesting yet! Especially with the case studies…such great ideas and love listening to them :) thanks so much Pat for bringing them to us. Thanks so much again!:)

  • Eric Foster

    Pat,

    Great interview. Loved it! I always look forward to your podcast, but this one was different, in a good way. Cant quite put my finger on it… All I can say is it was good! Maybe have Dane on again in the near future!

    Eric

  • http://www.forwardboost.com Justin

    I really liked this interview because of the main idea of it. The most important skill of an entrepreneur is to bring the pieces together to fulfill the final vision, not necessarily being a jack-of-all-trades.

  • Lynn C

    Pat, this is such a great podcast, I cannot thank you enough…I’ve already forwarded it on to my friends and family, and I hope they will be as inspired as I am by the work that both you and Dane are doing!

  • http://1kex.com Jay Piecha

    I love he he casually tossed in crazy facts like emails from females, specifically “Lindsay” and “Jill”, get better open rates. I was like….”wait, what? that statement right there could be the basis of an entire podcast” How much testing do you have to do to find that out? Lol

    I think I heard you *quietly chuckle* at quite a few of the little tidbits he weaved into the convo? lol

    I loved his take on how to choose a business – focusing NOT on “passion for the topic” Not sure if I could personally go in a direction I had NO interest in whatsoever, but he definitely made good points on how it can hold some people back if they tried TOO HARD to look for a passion idea :)

    Great interview!
    Jay

  • Acebravo

    Impressive

  • Mark G

    This was a fantastic interview and I’m excited about the possibilities, but it seems to me that there is more to this than was discussed. Wouldn’t you need to employ, or outsource, customer service and tech support personnel to keep the business running?

    • http://thefoundation.io Dane Maxwell

      Yes. We show you how to do that. But… you don’t need to do it until you’re at at least $3k a month in revenue. At that time, the recurring revenue pays for your team and you have a healthy profit left over. Again, hiring these teams is a good problem as a result of success.

  • http://CashFlowsToo.com Monty Campbell

    Yes this interview challenges me to put for the effort everyday to get better. I come back to read this post regularly. I’m thankful for the blog and the podcast. You are inspiring me and others to pursue dream with passion power and purpose. I thank you for this interview and look forward to one day interviewing you personally.

    Have a blessed day and I wish you continued success.

  • http://The-Military-Guide.com The-Military-Guide

    I’m trying to download the transcript (http://www.smartpassiveincome.com/download/transcript-SPI046.pdf) and keep getting an error message: [an error occurred while processing this directive].

    Trying a right-click “Save as” also gives me a “no file” error. My system is trying to download the file but there doesn’t appear to be an actual file at that URL.

    Anyone else able to access the transcript?

    • http://www.toile-filante.com Simon de Toile-filante.com

      The same for me :-(

      • http://The-Military-Guide.com The-Military-Guide

        OK, I have a PDF now. Thanks to whoever fixed the problem…

  • http://www.thinkmaze.com/ Igor

    + 100. This podcast opened eyes in a new way. Thank you both for making it possible!

  • http://bloggingdudes.com Ken

    Pat,

    Much respect, but that has got to be the driest Podcast I’ve ever listened to on this site. Sorry, man.

    Ken

    • Pat

      Ken, thanks for your honest opinion. Sorry it didn’t please you. The truth is, different strokes for different folks. You can scroll through the comments and see just how much this particular podcast session has resonated with people. Some have told me it was the best. Hopefully I’l make it up for you in the next one.

  • Wes

    Ken is crazy. This podcast was awesome.

  • Eric Foster

    Hey Pat and everyone…
    What am I missing here when posting comments? I keep getting update emails to this post, as when I left a comment, I clicked “Notify me of followup comments via e-mail”… But when I come back to the post to see what others have commented, I don’t see my post, or any comments on this post since August 30th. Maybe comments are being help for moderation?… But yet I still get comment replies via email, even thou the haven’t been approved / moderated and dont appear on the website yet?

    Thanks. – Eric Foster

  • http://1kex.com Jay Piecha

    Same thing is happening with me – what Eric Foster just commented/asked you. I don’t see comments but getting the email updates.

    • Pat

      Jay & Eric, I’m trying to figure out what’s going on, but I’m not sure even what’s happening. Is it because posts are broken up into 100s, and you have to click “see older comments”? Maybe replies are being made to older comments, and thus are hidden on the “see older comments” page? The reason for the cap is because one of my posts has almost 2000 comments. Maybe 300 would be better, I’ll switch and see what happens. Thanks for letting me know what’s up everyone who has spoken up!

  • http://lifeafterthearmy.com Ken

    Pat,

    You’ve already “made it up” to me 25x over with your awesome site. Sorry that this is the first time we’ve actually interacted and that it was negative. My b. Just my feelings on this particular piece. I hope my SPI swagger is still intact.

    Ken

    • Pat

      Ken, like I said, it’s totally okay! I appreciate your honesty. No need to apologize, really, and don’t worry I still love ya :)

  • http://www.thinkentrepreneurship.com Pete Sveen

    Hey Pat,

    I thought this podcast with Dane was great. I have been going to meetups with programmers in my area because I am looking into developing software, but lack the programming knowledge. I bring the business experience to the table. I have listened to this podcast twice already and have gotten great ideas from it, as well as inspiration. I’ve been seeing Dane Maxwell’s name all over the net the last few months and am glad you were able to catch up with him for the interview. Thanks for putting it together. Cheers! – Pete

  • http://www.oneclickpublishing.net/ Wayne

    Another “home run” Pat! I so appreciate the content you consistently deliver. I am a developer for 20+ years and finally launching my own software business. This podcast was so encouraging to me as I am 5 months into the development of my “flagship” product. You and your guests help me keep going through the (at times) grind of trying to “get it right” (but not “perfect” :) )

    Thanks again, Pat – You ROCK!

  • http://nopassiveincome.com Chris

    Hi Pat & Dane, great podcast.
    It’s always inspiring to hear success story in interview.
    Software is (and will be) one of the most lucrative ways of building a solid business…
    Thanks for sharing,
    Chris

  • http://supplementbewertung.com Massimo Craze

    And yet another motivational Podcast on my playlist called ‘motivational favorites’ =) thank you once again, pat

  • http://www.wpsquare.com/ Bharat

    Hello Pat, I really like this idea of including PodCast into the article. I heard to it and fell in love with the way you explain things. One immediate thing I’m going to do now is, subscribing to your feeds.

  • https://www.facebook.com/SampleLottery Gert

    For first, Thank You So Much Pat, for that podcast!

    And thank you Dane!

    I was almost ready to going a sleep, but then I checked Your blog as I usually do for “any case”. Just love Your writings and podcasts, Pat. And after that I spent about 2 more hours to listen podcast and checking Danes The Foundation page.
    Absolutely brilliant content, easy to follow and for simple people. I’m from other side of the globe(Finland), but I still got it and understood all very well.

    You and Dane helped me already, I got so amazing idea from Your podcast and now I’m already working on that, building my web-app(I’m coder and few hundred lines done by now). Got a lot of inspiration.

    Thanks, from all my heart!

  • J

    The information has great inspiration and it tells you to think outside the box and instead of having a direct idea just look at a problem and form an idea. Even though this is good information, I was disappointed. I thought something more valid and doable was going to be share. Why I am not sure but I chalked it up to being something to take some info from and added to my database of ideas and knowledge.

  • http://web-design101.com/createawebsite/about Amy

    This is an exceptional interview, Pat. I have listened to the first 25 minutes and realized that I can’t do this while at work, so I’m going to start from the beginning and hit the whole thing when I have some free time at night this week (I’m thinking a good long bubble bath will be the optimum setting. :) )

    Great job on this one. I am recommending it to others for sure!
    Amy

  • http://www.medical-marijuana-mentor.com Tomoko

    Probably my favorite podcast to date. And that’s saying something b/c Pat you always got the goods! Question I have is WRT due diligence, any idea how many people Dane or his students talk to for market research? How do you know when you have a solid idea or just an outlier? Maybe a question for follow up? I’ll also email Dane to ask. If I hear back, I’ll post. But wanted to throw out there in case others were wondering too!

    great interview, pat!

    • http://thefoundation.io Dane Maxwell

      Q: Any idea how many people Dane or his students talk to for market research?

      As many as necessary…but… you only need 1 solid conversation to extract a painful idea. Check out mixergy homepage for a call of me doing this. It just took one person.

      Q: How do you know when you have a solid idea or just an outlier?

      When you can get money from at least 5, and ideally 10 people before the product is built. We walk through how to do this at The Foundation.

      • http://www.medical-marijuana-mentor.com Tomoko

        Hey Dane, regarding the Foundation, I watched the video and from what I could tell (I was working while watching/listening to the vid so I apologize if I missed it), it looks like it is a 6 month on site bootcamp in CA. Is that correct?

        (If so, I think you have the makings of the next great reality show.)

        • http://thefoundation.io Dane Maxwell

          Yes Tomoko. 6 month program. Reality show huh?

      • Natalie

        Hi Dane,

        When you say “we walk through how to do this at The Foundation”, you are referring to the program that you have to apply to, correct? And if you’re not accepted into the program (or apply), do you provide this information in any other way?

        I understand paying for your time and attention during the camp. But, do you offer anything in the way Pat does on your blog or website?

        Great podcast!

  • http://www.mybusinesstricks.com/ Peter Mutiso

    A great inspiring article. Thumbs up

  • http://perfectearningtips.com IGBALAYE OLAYEMI

    This is a really good podcast and a very hard working from Pat, actually it’s not that easy to come out with good tips like this but can be helpful if one can stress himself out to get this. great and help tips….thanks for sharing Pat.

  • Zack

    Pat thanks this was an awesome episode you always bring great guests however Dane is one that really clicked with me. I have thought about doing SW in the past but the fear of the unknown took over and he freed that up. Awesome interview once again!

  • http://www.beatnikbudget.com Derek Olsen

    EPIC!

    This might be my favorite episode yet. Amazing idea. Brilliant. Even if you don’t plan to build a product with “no ideas”, the concepts and ideas still apply to almost anything an entrepreneur tries to do.

    (I also loved the two-part email list podcasts)

    -Derek

  • Keith

    Does anyone have any idea how much the 6 month course to The Foundation is?

    I can’t find the price on Dane’s site, and it sounds like it going to be pretty expensive. Are we talking more than 4 figures?

    Thanks

    • http://thefoundation.io/blog/ Dane Maxwell

      Hi Keith, good question… we are not set in stone on pricing yet. To some… it will be expensive, I don’t think more than 4 figures though. We will release pricing by third or fourth week of September!

      • http://www.iblogjuicing.com Frank

        Dane,

        What’s the best website for information on this course? Are You planning to launch course nest year?

  • http://www.iblogjuicing.com Frank

    Definitely an Interesting Podcast. I was trained in spin selling and it is a great approach. No problem No Sale. I’m working on my Blog at the moment but I’m keeping my eyes open for my next venture. I like the Passive nature of this approach to business. Of course after you’ve busted your hump to get things done.

    Good Luck Everyone

  • http://MemorizeTheBibleWithMe.com Dan Horner

    Pat,

    Thanks for having Dane on the Podcast. Fantastic content.

    I really liked Dane’s emphasis on picking up the phone and talking with people! He is so right – you get all the emotion of the problem and can get past surface issues by having a live conversation. This is how you find implicit needs and develop them into nice big “explicit” needs that demand a solution.

    One thing that has me perplexed: don’t you need, at minimum, some back-up money to guard against software project over-runs? Or even worse: the first product completely misses the mark and you have to pay for a re-write or even a obtain a new developer?

    I ask this because I’ve followed Pat enough to know that he hasn’t necessarily released every piece of software he paid to have developed. (Whether LOLer apps or his WordPress Plugin.)

    If I remember right, Pat hasn’t been happy with some of the projects he has outsourced and either scrapped the idea or has withheld release because he didn’t want to damage his brand.

    Well, if I were using Dane’s method, yet found myself in the same situation Pat did regarding his WordPress Plugin, I’d have used someone else’s money and had no product. And, I’d have spent my clients money and they would want it all back! Yikes. Can you say lawsuit?

    Dane, How do we protect ourselves in this situation?

    Dan

    • Pat

      Hey Dan,

      With the WordPress Plugins, I was admittedly building solutions for myself and did no such talking to others about the problems and pains. I assumed based on my own experience and as a result, the resulting plugins were not anything I was completely happy with. I think if you go with Dane’s exact process, you won’t run into the same situation as me.

      With our LOLerApps brand for iPhone apps – those apps were definitely NOT build to solve any problems. They were built for fun and entertainment and they were definitely hit or miss.

  • http://www.adambate.com Adam Bate

    This is probably my favourite podcast episode yet.

    I wish I had the time to apply to the foundation right now as it sounds like an excellent place to learn. That said, I’ll definitely be incorporating some of these ideas into my business.

  • Micah Haines

    I am curious how much weekly time dedication is needed to pull off a full working software based business within 6 months. Were Dane’s students working long hours each week or did they do it on a part time basis in the early mornings or evenings?

  • http://www.adambate.com Adam Bate

    A little off topic, but I wanted to ask Dane where he gets his landing pages for the businesses.

    Are these custom designed or is there a landing page goldmine somewhere that I’m unaware of?

  • Jessica

    Hey Dane,

    Loved the interview and I just applied to join the foundation. So Psyched :)

    But my question is how much will it cost? It sounds like it will be pretty exclusive, and I’m willing to invest but I don’t have more than $1000 to spend right now.

    Will that be enough?

    Thanks

  • http://www.webponder.com Webponder advice

    This was the craziest online business podcast I’ve heard in my life and the funniest thing is it actually makes sense.

  • Jose

    Really? another “Free” offer. My email address is not free. People need to think before getting on yet another mailing list when you see Special Free Gifts

  • http://www.earthcity.de Tim C. from earthcity.de

    This is one of your best podcasts ever. So much great tips. In the middle of the podcast there is this 10 minutes where he gives a bunch of great tips and hints. The ‘fear of success’ made me realize that I have the same problemn stoping me sometimes. Thanks!

  • http://www.omabu.com Mike

    Hey Pat. Just wrote a little post about top bloggers who inspire me. check out my blog. I included you in my top blogger list. hope you like it and thank for having this amazing blog.

  • Jack Moon

    Hey Pat,

    I found it very difficult to warm to Dane at all during this interview due to his attitude however, there was more value and insight in the episode than all the others combined. (and yes, I have listened to every episode 2-3 times)

    Dane spoke about the reality of setting up a business with limited capital (or none) and about how to ensure that the business gets repeat income. Note the word “ensure”. To be so certain of success you MUST have a system based on market research, A/B split-testing and direct response marketing. Nothing else will do.

    - Jack

  • http://freepsncardcodes.org Vinod Kumar

    I’m download this right now, wishing it would go faster because I can’t wait to listen to this. It sounds completely different from anything I’ve heard before. So excited!!!

  • http://makedogsyourlife.com Fernando Camacho

    Holy crap Pat – you just blew my mind with this interview. My mind is spinning with everything Dane discussed. The way he breaks down the determining the pain points and the questions to ask is pure gold. Although I see how it’s possible to do this with no money out of pocket as Dane described I don’t think it’s quite as easy as he makes it seem.

    Still, just great stuff here. I’m off to start asking some questions and find some problems to solve.

    Thanks so much as always. Pat, you’ve been one of the best resources for me in my online endeavors. Not sure what I would do without you. Keep it coming!

  • http://www.thetravelabstract.com Zach Dreyfuss

    Epic Podcast Flynn.

    Been working on starting up my blog for 1.5 but only going in long hours the past 4 months.

    I been working on video webinars, eBooks and other blogs but now I am pumped to look into software.

    webapps has so much potential and helps avoid the crowded AppStore that requires a bit more luck to make it than I would like.

    This direct marketing and making sales calls to find the problem seems like the best way to actually get in the door. I love it.

    I will definitely be stealing Dane’s swag and using Jill as my personal assistant to outreach troubleshooting for my new software firm startup.

    I agree that the webapps niche is unfamiliar and that may be way there is some
    But I don’t see how it is any different than Pat investing 2 years of his life grinding to get his big break. These things take work and dedication.

    I can see there is a bit of negativity that Dane makes it seem easier than it appears and I think that’s just how good he is. He has this problem solving down because he has been doing it for so long.

    When people have concerns about SaaS servers, needing tech support for your WebApps and “how could you not think of those problems” to me sounds like great problems to have because they are problems that come with a successful software company.

    Just 2 cents from a random fan of SPI and first time listener to the podcast.

    Great line of questioning Pat and the intro song reminds me of Bill Simmons B.S. Report.

    Keep up the great work.

  • Ross

    I like it a lot. Good advice.

    One question though.

    One thing that bugs me is how Sam Ovens explains the reason how he chose the real estate/ property management industry for his first software. He said its because he saw most jobs advertised. But after the GFC, the real estate market is not really in hiring mode in my eyes.

    Then I listen to this interview and strange how mentor Dane is in the real estate business too for software solutions. Danes, reason about his uncle being a broker sounds more real.
    Otherwise all good. Just feels like Dane suggested the property management idea to Sam and Dane realizes he needs a case study to have a successful product launch. Simple as that

    • http://www.thetravelabstract.com Zach Dreyfuss

      I thought about the real estate connection there as well.

      I think there is something to why they both went into real estate, which is a huge industry with many different secotrs, but not because Dane needed a case study.

      First they both addressed completely different problems that are in no way related, recuitment and property inspections, that if they weren’t real pains would not have worked.

      I also know the Financial Crash ( GFC, right?) did have an impacts all over the world but it is 2012 and the GFC really started in 2008.

      This is just anecdotal evidence but where NYC, where I live, where the buyer’s market may not be too strong the renter’s market is extremely competitive.

      On craigslist alone there are probably 50 different hiring ads for some type of real estate professional, property manager or “agents”.

      I take everything with a grain of salt but I think it’s unfair to assume Sam got this idea handed to him.

      Dane’s mantra seems so obvious now but it’s really something that comes with getting in the trenches and learning the hard way. Luckily he shared it with us so we can make those changes now before we throw away $1,000′s on a passion that doesn’t help anybody’s pain.

      I guess we will have to wait for Dane to pull a Pat Flynn and open up his books so we an see the proof of his earnings. But I think even then there will be the skeptics.

      • Ross

        Fast forward to the 18.38 min mark, Dane said he used “strange question?” in the subject line for his emails.

        Now listen to the Sam Ovens interview with Andrew Warner. Fast forward to 23.38 mark, surprise surprise he uses it too.
        Man, that is a coincidence. No wonder Sam, stumbles at the question at the 17.28 minute mark in Andrew’s interview when asked how he found the idea and about what other markets he found too, not so clear type of answers e.g. accountants, lawyers. Kinda blushes as he is quickly trying to think of an answer.
        Man, I am out of this, just wanted to get it off my chest. Off to find some painful problems out there which is still great advice.

        • Sam Smith

          I’m not really sure what you’re getting at, but there’s no coincidence there. If you watch the intro video at The Foundation’s Website, it’s pretty clear that Sam Ovens was a Foundation student in the past. He’d be dumb to not use what he was taught.

          Accountants and Lawyers are absolutely *not* vague answers. Every single industry has painful problems to solve guaranteed. Like Dane said, just drive down the street and look at the types of businesses you see. The biggest problem in The Foundation shouldn’t be “what markets have problems?” but “How do I extract problems out of any market?”.

  • Fred

    Awesome Podcast! I’d love another podcast with Dane!

  • paul

    Hi,

    I was introduced to this podcast by a friend: “This is it!” :)
    Sounds pretty cool…
    What I would like to know from Dane:
    You talked about 5 or 7 successful software projects…
    How many ideas/projects did you approach, that you did not follow through because you realized they will not be profitable or what else? How many time did you spend on the ideas/projects before you let them go???

    thank you for a honest answer :)

    Paul

  • http://parkrangerhq.com Myron

    Hi,

    I really enjoyed this podcast. I’ve recommended it to my business partners and friends. Certainly, the concepts are not earth-shatteringly new. But, how many people have successfully executed them – Dane has. Nice work, great interview!

    Does anyone know what criteria Dane uses to determine whether an industry or sector is worth pursuing?

    Thanks.

  • http://Www.etransactioncoordinator.com Transaction Coordinator

    I think the best advice was to make up a fake assistant… Other than that, I felt this was just rehashed advice from other gurus.

  • Richard Santos

    Pat – Awesome podcast! keep up the good work. I just started reading your blog and I am already working on a few ideas I have for online businesses. Thank you!

  • http://www.yourfinancessimplified.com Dominique Brown

    The perfect business idea – find out what people want & deliver it to them through software. This is a very informative podcast, Dane is really a genius. The foundation of his business is all about giving solutions to a problem, just by asking.

  • Benj

    This is what’s wrong with the IM community. None of you have seen any actual proof that the “foundation” students are making any money. You take Dane’s word for it.

    I’ve just checked out the SherlockDocs website and his main video on the homepage doesn’t even play, I doubt he’s making that much money, espeically when there’s a private investigator that has posted on these boards and mentioned zero interest in the app.

    It’s nowhere near as easy as “identifying a problem, creating a solution and becoming an instant millionaire”. It’s misleading and will leave people broke. There are millions of companies that have identified big problems, created a good solution and are now out of business.

    Yes, Dane’s had success with his own, but it seemed that he hardly ever answered the questions that Pat asked him, he danced around them for a minute and then went off on a complete tangent.

    It seems like the whole thing is a complete PR stunt for his “Foundations” website, which you have to pay for.

    Dane, if you’re that confident that you’re method is so easy and a definite money maker, why not take a % of the sales created by your students rather than charge people upfront. Or are you just another typical IM that sells on Hype?

    • http://thefoundation.io Dane Maxwell

      I really appreciate your post Ben.

      Dude… I totally understand your skepticism. With all the junk out there, I might have felt the same way after listening to it too.

      I’ve been burned for $12,000 by scammy marketers in the past. It sucks.

      Our most successful student (Sam Ovens via http://www.snapinspect.com) had $5,000 in the bank when he joined, 8 months later he has over $70,000. That’s not from learning how to do software. He has a successful software company, but now on the side he makes $7k a pop doing direct response website design work. In 3 hours he can turn out $7,000.

      Another one of our members (Dan Corkill via http://www.followupboss.com) just reached $2,000 a month in revenue.

      Another member (Troy Lavina via http://mosaicrm.com/technology/primary-research-compliance-manager/ ) got to his first $5k per month in revenue with his very first customer in a wicked niche.

      The Foundation works, and it’s fun :-)

      Tom, here are replies to each of your questions below:

      Tom said: This is what’s wrong with the IM community. None of you have seen any actual proof that the “foundation” students are making any money. You take Dane’s word for it.

      Dane: Tom, I agree, much is wrong with the IM community. Many people have been scammed by internet marketers. We have done personal phone calls to every single member who finished The Foundation and none of them had a single bad thing to say. We will be posting their reviews and feedback on The Foundation soon. We care so much about our community that we asked each person who finished for the feedback. We will reveal numbers on the students the third week of september. They are not millionaires, they are building up their recurring revenue. No hype here. You’ll see it all. But I have to say as well, we had 30 members at the end of the first foundation, I think 15 will go on to create software companies eventually, 8 or so are currently doing it, the 7 are a little slower, and the other 15 will probably never do it. But they are so damn happy because they have freedom now. One guy quit his job and now works from coffee shops, travelling around working on SEO because of the mindset shifts he had in the foundation. So, I will quantify the dollars for you, but there are other things to consider.

      Tom said: I’ve just checked out the SherlockDocs website and his main video on the homepage doesn’t even play, I doubt he’s making that much money, espeically when there’s a private investigator that has posted on these boards and mentioned zero interest in the app.

      Dane: Tom, the video plays for me. Paul is at a breakeven cashflow right now with the server expenses, he’s at around 6 paying users and 30 to 50 leads he’s working on to close right now. He’s learning how to do marketing for the business now.

      Tom said: It’s nowhere near as easy as “identifying a problem, creating a solution and becoming an instant millionaire”. It’s misleading and will leave people broke. There are millions of companies that have identified big problems, created a good solution and are now out of business.

      Dane: That would be misleading to say. I agree. That’s why I didn’t say that. I’ve never said become an instant millionaire. It’s taken me 6 years to get my software business to $500,000 a year. I’m not talking about building a fly by the night company. I’m talking about gaining freedom by building a business slowly over 6 months, one that lasts for longer than 5 years.

      Tom said: Yes, Dane’s had success with his own, but it seemed that he hardly ever answered the questions that Pat asked him, he danced around them for a minute and then went off on a complete tangent.

      Dane: Tom, what questions did I dance around? If you put them down here I will answer them.

      Tom: It seems like the whole thing is a complete PR stunt for his “Foundations” website, which you have to pay for.

      Dane: The strategies I talk about work. No stunts. I don’t know what else to say to this.

      Tom: Dane, if you’re that confident that you’re method is so easy and a definite money maker, why not take a % of the sales created by your students rather than charge people upfront. Or are you just another typical IM that sells on Hype?

      Dane: Nothing is a definite money maker. And my method is simple, not easy. If it were easy… then there would be more successful entrepreneurs out there. This is simple stuff, not easy. People get tripped up on emotional process of creating a company, and that’s one reason why I’m teaching this stuff. And… there are very few places to go that help people through these emotions. As far as taking a percentage, I’ve thought about that, I’m against it for a few reasons. 1) People value what they pay for. 2) If I go the percentage route then the risk is all on me, and if the person doesn’t follow through, I am left investing energy in someone who isn’t a performer. 3) I believe the experience of the foundation is worth charging for.

      • Eric Foster

        Dane,

        You win first place!

        Not only for the answers that you provided, but for the longest comment in SPI history. LOL

        Thanks for sharing.

      • Benj

        Dane, I appreciate you taking the time to answer, there is certainly no need for you to do so and it is great that you respond.

        I’m not trying to turn anybody against you or anything like that, it just seems that 99% of people take everything as gospel and jump head first into opportunities without even looking at things from another perspective.

        I agree that the strategies work and it is a good concept, I just think you skip over the importance of other aspects. It’s basically like saying “If you want to create a business, find out what people want, create it and sell it to them”, yes that works in principle but there is so much more involved (hence the training aspect which I understand).

        I just don’t get that if you have identified such a fantastic way to make money and you have already built a $500,000 a year business (which I have massive respect and admiration for) why would you not continue to use your own teachings to grow a $1million business or more?

        BY the way, I’m not Tom, I have no idea where that gravatar came from.

      • http://www.topfiveawards.com/ Scott

        Dane, I LOVED watching your videos and podcasts yesterday. Thanks for all the FREE content and inspiration. You really kick started my mind and I’m being dead serious!

  • Benj

    Plus..

    You keep mentioning in these posts that you “recorded a live telephone call so you can see just how easy it is” but you clearly state that you never launched a product from the telephone call. So why not show us a recording that acutally resulted in a product being created and money being made??

    So the one example that you keep referring to never even made it to the drawing board.

    Anybody can ring up a company and say “what problems do you have”.

    • http://thefoundation.io Dane Maxwell

      Hi Ben,

      That call was designed to help people learn how they can extract ideas and get people to pay for them. That’s all. For the full process from idea to making money…

      You can check out “the recording” of Sam Ovens case study on Mixergy.com and at TheFoundation.io to see an example of a product being made that made money using this process.

      You can also check out my interview on mixergy on paperlesspipeline if you’d like to see how I do this process from idea extraction to making money with it.

      Why didn’t I build that product out myself? My focus is spent on teaching at The Foundation now. I sacrifice the number of students (and my impact) I can teach if I’m out building companies at the same time.

      I’ve used this process to build all of my products at http://www.zannee.com – so those would be “recordings” for you to check out too.

      Does this help?

  • Eric Foster

    I agree with Dane’s remarks about “taking a percentage” vs charging for training. I can’t tell you how many dozens, and dozens of people I have trained “to do” something (at no charge) and they just never do it!

    Information and knowledge is important… But you can find people to do almost anything you need done. The “how to” type stuff, is the easy part.

    But… Execution, mindset, sales, marketing, and the skills to run a business, are all a very important part of starting, building, and running ANY type of business, both online and offline.

    I find in funny (for a lack of better words) that people will show up to their 9-5 job to make a paycheck, but cant find extra hours, or have the willingness to do something, that can change their life.

    Why not?… Is it a lack of… motivation, focus, goals, dreams, planning, organization? Probably all of the above, plus more!

    This is all mindset “stuff”.

    Eric Foster

    • Benj

      I understand what you’re saying. But Dane states that he is clearly making £10,000′s per month (which I in no way dispute) but his true and absolute passion is teaching people. Is the income from his “teaching” really going to make that much of a difference.

      If the concept was as easy as he makes out, why do people need so much coaching? If it’s for the frame of mind stuff, I can buy a book from amazon, download tony robbins from itunes or simply look on youtube.

      Plus, he’s already stated how easy it was for him, if that’s the case, why doesn’t he have successful products in other niches apart from the real estate industry (which his uncle was in so clearly had an advantage), and why would he stop at making four.

      If he has stumbled on such an easy way to make money, who wouldn’t scale it up to make millions? But instead he would rather charge a few entrepreneurs to learn this incredible method.

      I’m not suggesting that people shouldn’t look to create their own businesses, I think everyone should be encouraged to and it’s something that I spend a lot of time on myself. But I don’t think it’s right to give false expectations and make out that launching a product guaranteed to make millions is so “easy”.
      I’m also not trying to cause arguments here, just stating it from a different perspective. If he can answer, fair enough.

      • Hank

        His training will pay much more than he makes with his software company. 300 people will be accepted into The Foundation, at $3,000 each. That’s $900,000 for teaching the 6 month class.

        • Pat Flynn

          Dane is already a millionaire from his software companies.

        • Shea

          In a few of his videos, Dane clearly states that there is often more money in teaching a skill than actually employing it. I think that anybody who has mastered any process has the right to charge a premium for his time.

        • http://www.webproco.com Jeremy

          I think Dane has the chops, has proven his methods work, and now teaches what he knows works.

          I personally don’t know what he knows, appreciate what he shares, and I’d pay for the value he provides to shortcut me from my own trial and error method and pace.

          Hell yeah Dane, charge away :).

  • Clint

    @Ben:

    The recorded phone call is something that I use in my role as a technical pre-sales consultant. In my previous job in sales, we called this a “discovery call” to find out the customers problems, issues, pain points, wants and needs BEFORE we do a product demonstration. This was to ensure that we didn’t just “show up and throw up” our product and hope they would buy.

    Also, we used this technique to customize our presentation so that the customer can see EXACTLY want he wants AND needs. Think of it this way. Imagine you went to your favorite restaurant and the server rattled off everything on the menu that’s available. That’s a huge time waster. Instead, they read you the daily specials, take your drink order, and answer any questions about the type of food they serve (i.e., do you have a vegan dish, what types of steaks do you have, etc.). Dane’s call was to demonstrate how to extract a prospect’s true needs instead of the proverbial Field of Dreams build-it-and-they-will-come tactics that so many companies use today.

    Hope this helps.

  • Eric Foster

    These are the words that come to mind when I think about business…
    (in no specific order)

    Relentless, Focused, Intense, Pursuit, Driven, Desire, Action, Delegate, Prioritize
    Resilience, Passion, Dream, Persistent, Clarity, Willingness, Goals, Hope, Organize, Planning, Knowledge, Follow Through, Execute…

    What are your favorite business words?

  • Shea

    Pat! I need your help! The recording of the podcast seems to be corrupted, it skips throughout. Can you double check to see if it is just me, or if the file you’ve uploaded skips also? I’m a longtime listener and this podcast is a topic I’m very interested in.

  • Benj

    Clint, I’m not doubting the method. I think it is a great idea and something that I do on a daily basis. What I am doubting is that it isn’t that as easy to create a profitable solution to these problems as Dane makes out.
    With regards to his phone call, I could call up Nike today and ask them what their biggest problems are and create a solution. This does not automatically mean that they are going to be chomping at the bit to buy it.

    I know from first hand experience that developing a product that people say they would pay for and provides the solution to a clearly identified problem does not automatically mean you are going to make millions

    And if Dane’s method is so simple (which in theory, I agree it is) why would he not create a product from the call he shows. Yes they are good questions etc but the income they result in is 0. If I spent all day identifying problems for businesses and then not creating a product, I would have 0 money.

  • http://www.whoisdavidhutcherson.com David Hutcherson

    I have listened to a majority of your interviews and I can’t express why, but this is by far the BEST interview yet. You all should have talked for at least four hours. I was hanging on to every word. Tremendous value.

  • Eric Foster

    @David

    I agree. I really enjoyed this one too. Opened my eyes a bit. My comment was very similar to yours…

    “Pat… Great interview. Loved it! I always look forward to your podcast, but this one was different, in a good way. Cant quite put my finger on it… All I can say is it was good! Maybe have Dane on again in the near future!”

  • http://associatestraining.com William C Allen

    Awesome! I am in the middle of creating a project using this very way of doing things. Was great to hear I am definitely going in the right direction. Excellent podcast, really. Thanks!

  • http://www.ContractorRegistry.com Steve (Construction Contractor)

    Another great SPI podcast.

    Loving the frequent updates.

    Keep it going, Pat.

  • http://www.ContractorRegistry.com Steve (Construction Contractor)

    Another thought.

    If I’m the pool guy, I’m buying bulk 2GB SD cards, putting one into a camera and mounting it on a tripod and setting it up around the pool and recording all activity while on site. I’ll put the SD card in the file until the bill is paid and then reuse the card for another project.

    If someone disputes the project, I’ll contact the client and let them know that all work is recorded on video “to ensure that employees are not wasting time” and offer to allow them to view it.

    That will send disputes down very quickly.

  • Alex

    Pat, based on the ideas in this podcast, I am now following Dane and The Foundation. But something cool happened, I’m in transition to another state and the questions and ‘finding the pain’ technique helped me land a job at major corporation (very much needed right now). I am waiting on a background check as we speak. Thanks! Winning…

  • Janet

    Ugh. Frank Kern, Jeff Walker on his Foundation home page. No need to read any further. Sorry.

  • Thomas Stratton

    Great episode, this is what I have been stumbling around trying to figure out how to do, Dane explains it in a way that finally clicked and makes sense to me. Thanks Pat for your awesome podcast and continued efforts.

  • jason

    great podcast Pat thanks for making such a genuine effort for us, really appreciate it. I’m a huge fan now.

  • http://www.systemsthinker.com/interests/systemsthinking/ SystemsThinker

    This was a really interesting podcast. I was most impressed that Dane understands that the most important things to focus on are process and principles.

    I was struck by the fact that Dane’s approach incorporates some elements of two of the paradigms/approaches that I have found most powerful.

    One is systems thinking, which is so important that it’s what I’ve named my site after

    http://www.systemsthinker.com/interests/systemsthinking/

    The other is Appreciative Inquiry (Dane’s approach definitely focuses highly on inquiry from a very appreciative perspective).

    http://www.systemsthinker.com/interests/appreciativeinquiry/

    I wonder if Dane or Pat (or anyone else) are familiar with these fields. I think you’d find tons of insights and ideas to even build further on the useful principles discussed in this interview.

    • http://bensommermusic.com Ben Sommer

      Dude – awesome. I’m an IT architect (by day). System thinking is the core capability an architect needs. What excites me about this “simple business-to-business SaaS” approach Dane has is the opportunity to “eat my own dogfood” when it comes to the product development and project management. I advise and help execute my client’s projects by day – how cool to do it for my own project!

  • http://www.topfiveawards.com/ Scott

    This was my first exposure to Smart Passive Income which lead me to Mixergy which lead me to all sorts of fantastic resources. Amazing podcast. You guys can thank IOS6′s new Podcast app that’s included for showing me the light. Thanks guys!

  • http://bensommermusic.com Ben Sommer

    Great podcast – FYI if it will help anyone to have this approach distilled into a simple strategy document, here’s my outline of Dane’s approach:

    https://docs.google.com/document/d/1Kpl1XEfyRihXJMjToU-UMqcyBIhpHi5tJMZU9Ty-eaY/edit

    Call me anal!

    • Eric Foster

      Hey Ben Sommer,

      Thanks for the effort on the Google doc. Was checking it out. Nice work.

      Eric Foster

    • Dave

      Ben – I second the comment. That is an excellent summary that you put together.

    • Cornelius

      Awesome summary! I appreciate the info on this topic from Dane. You did a great job in condensing the information into bite size chunks.

  • http://www.justinrunes.com Justin Runes

    Invite him back. I will keep coming back for this guy.

  • http://www.yourbossblows.com Bryan Knowlton

    Another great podcast! I really liked how he explained the process. Very in depth and detailed. Thanks again Pat!

    Bryan

  • http://www.erfolgreich-sparen.com Rico

    This Podcast is the most enlighting one i have ever heard. It all sounds so obvious, but I was never able to see the facts so clear. I can see myself how i always get carried away forgetting the problem and only fighting for that only solution that i have picked.

    Pat i am listening to your podcast for about a year now. You accompanied for long hours on my train trips to work. Keep the good work going :)

  • http://mybrainblinks.wordpress.com Matt Lewis

    Pat, I have listened to this podcast at least 6 times now. It’s amazing. Especially when Dane, and you, talk about building BELIEF. That is so devastatingly vital and difficult to acquire without focused intent, that this podcast can change the way anybody thinks about anything.

    Thank you!

  • Collin

    Thanks for your energy, Pat!

    I’m curious though, about your personal goal listed near your computer to be seen as an expert, and the claim in this podcast that the need to be seen as an expert can cripple you. Just wanted to hear your thoughts on this juxtaposition, as I assume you get something out of your goal!

  • http://londonmugs.co.uk Mike S

    Really interesting stuff, thanks for this Pat! Not sure I will follow the precise method Dane uses but there are plenty of lessons to be learned that can be applied to other business concepts!

  • Ethan R

    Pat,
    This podcast was amazing! I felt so inspired and loved every minute of it. I think the two best things I learned (or re-learned) from this were:

    * Find a niche and NARROW IT DOWN. Find that specific problem you can solve. Don’t try to be the one-stop-shop with everything and the kitchen sink.

    * Launch with the minimum set of features you possibly can. This gives you all sorts of benefits such as, starting sooner, getting early feedback and having a cheaper cost to launch. Then you can use the feedback and the revenue you receive to continue development.

    I would love to see you have Dane back for a future episode!

  • Lee

    I signed up to be considered for the Foundation program. Dane’s promotion said it would be a select group. I was somewhat skeptical so I sent in a blank application with only my email address. Surprise, I was one of the chosen:-). Hey, this guy is good. . The email with a link to how to sign up was included, along with a final sales pitch. “PS – On the details page, you’ll find
    a tier called VIP. This is the highest
    tier you can get into at The Foundation.
    We only have 6 spots left. If you’d like
    to be considered for one of the 6 VIP
    spots, reply back telling us why. With gratitude,

    Dane ” the VIP spots go for $10,000 each (max of 10 members) the next tier is $800 a month with 300 spots, and the “lite” tier is unlimited @ $300 a month. Looks like with this you get pdf of his scripts, tips, notes, etc and access to a facebook page with other “Lite” members. Wow, you do the math, That is some serious cash. His claim is that he will help start 10 businesses out of this group. Here’s the link he sent out : http://thefoundation.io/program/

    • http://www.webproco.com Jeremy

      I signed up too, after seeing the sales form it definitely felt like just another IM group making cash. Dane has a knack for teaching…and selling (almost the same thing you’ll notice), but no doubt this is the most lucrative way he can make money, and it’s guaranteed. He says “I could start a software company and make money without teaching”…Yes you could Dane, but not 100% GUARANTEED easy money like you get from teaching. Lets be clear, I’m not knocking it, I think it’s brilliant, and I’d do what he’s doing too if I were in his shoes. I’ll never shout people down for wanting to make guaranteed profit, Kudos.

      The bottom line is, Dane offers value in his material, it really just depends on if you can afford it or not. I personally can’t right now, I have 4 kids, and working out of debt is a bigger priority than going in to more debt with the 4% chance I will have a profitable business in 6 months from the program. I already make profit from a service based business, so for me personally, it’s just not the right time.

      If I had 10k to use, or even the $800/mo to use for 6 months, and a bit more time on my hands, I’d probably be on-board.

      I think it depends on your personal situation, what you can afford, and how driven you are on your own. The foundation is a paid accountability system that teaches good principals to build a business, even non software based businesses could learn from it. Compared to other crap out there, it appears on the surface that he does get deeper than most IM courses…again just speculating based on the videos and reading his copy-writing techniques.

    • http://thefoundation.io Dane Maxwell

      Hey Lee, I understand your skepticism. Yes, we stand to make a handsome amount of cash, and I think it’s in proportion to the value we provide. 7 years of my life’s work… and all of this work is really lining up. The money, the passion, and the results we provide people are all lined up. We are shooting for 30 new companies now. Not 10. Very exciting!

      Your application has not been accepted. You got to see the sales letter to apply again. Your blank application will in fact be, rejected.

      Acceptance letters start to go out this weekend and up until Tuesday.

      • Nate

        Owned.

        • Jeremy

          Owned? What are you 15 playing WoW? I think you meant pwnd right?

          Add some value Nate.

        • Nate

          What’s WoW? And no I meant owned, but thank you for your extremely valuable comment.

        • Pat Flynn

          What is this, a YouTube comment thread? No need for this back and forth – we all have better things to do, yea? Thanks fellas. ;)

        • Nate

          Agreed Pat.

      • Lee

        Dane, No need to be so sensitive. I didn’t say anything particularly damning about your enterprise, only that I was skeptical. You’re creating an enterprise – not a cult – so relax dude, it’s ok for people to have questions. I think you and your cousin have a gold mine with The Foundation, and should work it for it as long as it lasts.

      • http://AllyNation.com Jonathan Nation

        “Acceptance letters start to go out this weekend and up until Tuesday.”

        This is good info Dane & I’m not sure I’ve seen it anywhere else.

  • 2 cents

    A very interesting post and I see a lot of positives as well as negatives. I’ll give my thoughts on the negatives first (not that anybody should take any notice, for some reason I just feel compelled to post this??).

    Ok, so first, it really gets at my goat when people claim that their new found passion and vocation is “helping others to succeed”, but then charge a boatload of cash to anybody that wants to take advantage of your new found kind nature (yes, $800 dollars is nothing compared to the value you’ll recieve blah blah blah, just what every other internet “guru” says about their product”).

    Yes, Dane gives a ton of content out for free, but that’s all part of a pretty genius marketing plan for the foundation (one of the positives i’ll expand on in a mo). He already gives you the exact method he uses but people still want to pay for his “teachings”, which it seems some members weren’t overly impressed with according to various comments (yes, they didn’t have the “right” mindset, weren’t prepared to take “action”, couldn’t commit 100% blah blah blah, just what all the other internet “gurus” say), but some were. Yes, the key to success is following in the footsteps of people that have been successful themselves but if you need to have your hand held and need to be spoon fed all the way through when you already have enough info to make run with it, as soon as the 6 months is over and Dane doesn’t want to know you, you’re going to fail.

    Dane reiterates a number of times how easy it is to make money with software, yet the only industry (and his biggest success) story came from the real estate industry, which his uncle was an experienced player in. Clearly a huge knowledge (or access to someone with) plays a major role in whether you will be succesful. If he had created successful products in other areas, I would be less dubious.

    Now lets take Mr Sam Owens, his most publicised success story. His snapinspect apparantly is making $2,000 per month (of which no one has seen any proof, I’ve yet to see any proof for the earnings of Dane’s softwares as well, but that’s just something we have to deal with on the net). He had to pay $3,000 for Danes course (i presume as the last one was $500 for six months), he owes the developer $30,000 (if my memory serves me correct) and thats not to mention what he has to spend on branding, marketing, website creation (which according to the sales page can all be done with a couple hours a day????) etc etc. It doens’t seem to be the instant money maker it’s claimed to be.

    Plus software is so easy to make money with, Dane isn’t even doing it any more. So instead of building on his $500,000 a year business by exploring problems outside of real estate, he is now teaching 300 people (“apparantly” that’s the limit) for 6 months at least $800. Now that IS truly genius, that is a minimum of $240,000 per month – HOLY COW – clearly, the money isn’t in software creation, it’s in teaching.

    Rather than focus on snapinspect, Sam Owens should take what he has learned from Dane, copy his marketing strategy and launch his own “foundation” style mentorship programme for half the price. He’s already got a decent following from his mixergy interviews etc so I’m sure he could easily clear up.

    Now here’s what people should take notice of. Dane is clealy a marketing genius. His tactics have allowed him to build a huge list of people “desperate” to be “accepted” for what is basically just another mentorship programme, which is certainly less than guaranteed to be a success. Roughly 10-13% of people come out with their own company (of which many won’t be around in 12 months, that’s just the nature of business). From the way he has managed to get himself all over, and I mean literally all over, the internet, Frank Kern style giving away tons of free information to the whole application process, it’s something all aspiring entrepreneurs should be examining with extreme detail.

    He has transformed the standard “mentorship” programme and the lambs are lining up for the slaughter (lol, for want of a better phrase).

    Pat, since you pride yourself on being an honest and open marketer and back up all the products you advertise, I think that you should change the game again by actually following up on clients that have been/are going through the mentorship programme to see if Dane’s programme lives up to his claims. I think it’s only fair to the 50,000 + followers you have. Maybe follow the progress of one of the new students from start to finish or something like that.

    Anyway Pat, sorry for such a long comment, just wanted to put my thoughts on paper.

    • Pat Flynn

      Hey 2 Cents, thanks for the honest comment. I do appreciate it, and really I don’t see why you feel the need to hide your real name.

      Since this podcast episode I have been talking with Dane and have agreed to potentially invest in some of the software companies that arise from the program if they need help funding and I think they are a company worth investing in. This will give me an insider look at the program, how participants fair in it and you can be sure that I’ll be keeping a close eye on the students and how they fair in the program. I was planning on definitely reporting back on the success stories, or lack thereof in the program. I’d love to have one or more of his students on the podcast later on to definitely talk about the experience.

    • http://www.webproco.com Jeremy

      I have mixed emotions after reading your comment, and reading Dane’s latest “the foundation has been delayed” email.

      Some thoughts
      - Is there another program or mentorship that’s better for less?
      - Do other programs really post results and have a much higher success rate?

      I think it will come down to how much someone wants it, and how well they execute. Like you said, Dane lays out the blueprint, holds their hand, and for me the only thing I find that he offers is great marketing/copywriting techniques over other knowledge I already had. Then again I live in the software industry, and I’ve been a part of successful and failed start-ups, so my learning curve is less there.

      If anyone here wants to understand how to build a software company (just the software creation part), Dane pulls a lot, if not most ideas from the likes of 37signals and Tim Ferris, and he’s not ashamed to share that. Grab yourself a copy of rework, and 4 hour work week. You’ll be on your way. If you look at zannee.com (Dane’s site), it’s almost a 100% ripoff (in style and layout) of 37signals/basecamp back in the day. Nothing wrong with that either, use what works, copy what works.

      Coming back to your comments about money, again I really can’t fault Dane for making guaranteed money. I don’t think it should be a debate here, it’s much better for them to launch the foundation and make guaranteed money, rather than start another software company. If Dane were to start another software company right now, there’s absolutely no way he’d be as profitable in 6 months compared to what the foundation is pulling in. I’d do the same in his shoes.

      To Dane and Pat, I think it would be phenomenal if you ran a “niche site dual” style documentary where Dane and company build a profitable software start-up outside the realm of real estate (others objections not mine). Given the attention and popularity of Pat’s original program, I can’t imagine how popular this one would be. Offering full transparency to the process so everyone can watch would be incredible. I’m guessing 90% of the folks that watch would still open their wallets, if not more.

      Last thought: If you want something bad enough, you’ll go get it. Most people just don’ wanna (see http://unicornfree.com/2010/is-it-hard-or-do-you-just-don-wanna/)

      • Ross

        I think Dane’s copywriting skills are awesome. Also, every one should take note of his product launch style, he is offering a ton of free content, “giving away his best stuff for free”. At the same time building up a massive email list and goodwill with that list. Big bonus is people are just waiting to open their wallets for him, that is a result with a successful product launch. (not just now but in the future too) He has moved the “free line” even more, moved the bench mark up higher for others gurus to meet. Also amazing how he has got some big name people to promote his work without having to pay affiliate commissions. Normally for a make money product launch like Jeff Walker and Eben Pagan style they offer 50% but that is his good fortune I guess.

    • Ignazio

      I totally agree with 2 cents.
      If he was making so much cash making SAS why did he stop doing it? If he loves teaching and helping others do it for free, and keep making cash with the SAS model, not by starting an e-course.

      • Jason

        Have you ever tried to teach something for free? I have seen it and there is no buy-in. I’m not saying Dane could do it that way but why would he? In no defense of Dane, just heard of the guy today, he may not want to do the software thing and is happier teaching.

  • http://www.medical-marijuana-mentor.com Tomoko

    Hey Pat, so happy to see you as an investor and mentor in the upcoming Foundation. I’ve sent in my app and ready to roll up my sleeves and make the financial and emotional commitment to make this happen. Yes, Dane’s Foundation is not cheap and its not guaranteed, but it’s about as close as anyone can get to a map of tried and tested techniques IF PEOPLE FOLLOW IT. I definitely understand the skepticism out there and the feeling of being “sold” by a master marketer like Dane. And the success rate is less than 10% (!). That said, I also think this is one of those opportunities that people will look back and say, “man, I wish I would have gone for it!” And THAT scares me more than failing at the Foundation.

  • Steve

    Thought I’d add my thoughts on Dane and his process after hearing this interview and consuming a lot of his other material.

    First let me say that I think what Dane is doing is, overall, wonderful and I do believe he has great intentions. I think he’s passionate about helping people and has a ton of talent to bring to doing that. And I sincerely think he will help many people.

    Now to bring some perspective to that.

    I think Dane has done what a lot of very religious people do. He has had a “see the light” experience that worked for him and gone whole hog into complete and total evangelism for his beliefs. It’s hard to blame him. He was not doing well, he did a certain process and it changed his life in an extreme way. It’s easy, especially at such a young age, to think you found the holy grail and want to “convert” everyone to this belief system.

    However, I think that over time Dane is going to gain a more realistic perspective. And I think the perspective is that he did find a wonderful process, but there is a lot more nuance to it than the way he is presenting it.

    One of the possibly bad things about marketing is that being a “true believer” can make you a more effective marketer. This can be bad for customers because they latch onto the charisma of such a person. But such “true believers” are usually not able to see things in a balanced way.

    So for example.

    First of all Dane’s idea extraction is a great idea. But it isn’t quite the incredible insight he makes it out to be. It’s really just a form of market research, something all smart companies do. In fact, even when we do keyword research, all we’re doing is looking for where there is demand for something before we build a site out. So this isn’t anything close to new idea. It’s a smart idea. And it’s great for Dane to promote it. And it’s great that Dane has honed some good detailed particular questions and tactics for how to do that market research. But it’s something people have been doing for a long long time, using focus groups and other things. He hasn’t reinvented the wheel. He’s just putting a new spin on market research and why it’s wise to do market research to identify demand before building out something. Since the idea of doing market research first was such a bolt of lightning to him when he realized it at a very young age, he presents it as that even though it’s really not the case.

    Second, while Dane’s process obviously can work well, he often makes it sound like it would just be foolish to use any other process. Well Steve Jobs didn’t do it this way. A lot of people had great success coming up with an innovative idea they felt passionate about and selling it to a world that didn’t even know they wanted it. That’s another process and it can work too in certain situations. It’s not really right for Dane to act like his idea extraction is “the way” and these other ways can’t also work. I’m not sure he really believes this, but sometimes he seems to be saying it and it would be nice if he was clearer about the fact that this is one process that is good for a certain type of person in a certain situation.

    This brings me to probably the most important point. The real task is to get a more clear idea of which processes work in which situations which proportion of the time. Here I think Dane is really, because of his understandable evangelism due to his own experience, overselling.

    From what I can gather, Dane did this process himself a handful of times. It worked two or three of those times and one time he hit it really big. From what I can tell all of these were in a very small set of industries, if not only in one industry that happens to be very lucrative. He has taught a bunch of students, and out of those, a few have done moderately well. What % success rate and what unique aspects were present in the cases that succeeded? If we were approaching this from a more objective route, we’d do a lot more testing over a lot more people and come up with much more detail on when this works, when it doesn’t, how often it works, whether it really works only in a few markets or in any market, when a different process actually does better, and so on.

    Instead, after what I think any researcher would consider a terribly small sample size and not nearly enough analysis, Dane is promoting this as something much more tested and sure than it is. He’s overhyping the few moderate success stories, the failures (including his) are not being counted and mentioned and studied much. And at the same time he’s not mentioning the successes that many have had with other methods, but focuses on the failures of those other methods (especially his own, no surprise).

    Why do I write this? Not to discourage Dane or people from doing the Foundation. Far from it. I think Dane has awesome passion, is a very talented teacher and marketer, and should absolutely continue what he’s doing. What I do think though is he should slow down and test things more thoroughly and get a larger sample size and be more complete in analyzing how well and when this process really works, as well as when other processes work, so as not to be dogmatic or evangelical. I think honestly with experience and time and as he gets older this will probably happen.

    I have a little bit of qualms about him charging so much for The Foundation and marketing it so feverishly at this time based on what is really a very small test sample. It would be like testing a new drug on 100 people, getting one hugely awesome result, a couple decent results, 85 no results and then just putting it out there at $100 a pill. I don’t think that’s enough testing. If you’re the one who gets the awesome result, you can see why you’d become such a huge proponent and believe you found the holy grail and that those who aren’t getting that result are just not yet at your level of belief and passion and skill. But that’s exactly why we don’t test things on just a handful of people. We test them more widely with a lot of controls to make sure what is really causing the outcome and what isn’t. And we test them in competition with other methods side by side to see what happens in different cases.

    I would have loved to see Dane do a few more rounds of The Foundation as further testing to really zero in on what the success rate is before doing this huge expensive launch of it.

    But I will say that I would rather he do what he’s doing than stop altogether because I think as he keeps teaching he’ll reach these understandings anyway and end up really helping people. I just think he will help more people in the long run by taking this more balanced view of things and not becoming too dogmatic. But that’s just my viewpoint.

    • 2cents

      Awesome comment, best of the thread so far.

  • http://www.adventuresinfatherhood.net Ryan H.

    Great podcast Pat and Dane, really inspiring.

    This might be a really dumb question, but I haven’t been able to find the answer in the comments….how much does the Foundation cost? It sounds amazing, and I’d love to find out more, but didn’t find a whole lot of info on the site.

  • http://korbul.com John

    Pat, this was a fantastic podcast. Tons of stuff in there that I think can be really useful. At the very least, the mindset and the tactical advice can be used in any business. I’m looking forward to using them in my own client interactions. It doesn’t just have to be new customers that you can use this with, either. I’d love to see you have Dane on again sometime.

  • http://liveastylishlife.com Jamila

    Pat, I have to admit this was certainly one of my favorite podcast so far. I really like that Dane brought a fresh perspective to starting a business. I teach entrepreneurship and we discuss need finding (identifying the problem or pain) but the way that Dane has packaged all his concepts together to get results is really cool. I personally thought doing software was way too complicated before hearing this. My mind has completely opened up now.

    Thank you for making this podcast a little longer so we could gain as much learning as possible. Lastly, I already read the copyrighting doc and it was super helpful. I’m going to juice up some of my headlines over the next few days. Thanks to Dane for the free offer. I checked out the foundation.io site also. The work is great but needs some more females and people of color involved…In terms of making a difference… that would game changing.

  • MarkQ

    Thanks for this podcast, Pat. It is really and eye-opener and ear-opener at the same time. Thanks you also Dane, You clearly defined the solution to our problems. :)

  • Wade

    Hi Pat,

    When I first heard about The Foundation, I just assumed Tom Cruise was behind it. But seriously….

    I thought Dane does a good job at pitching his philosophy on how to find/start these small businesses (I’m using the Romney definition of small business). That being said, there are parts of the “unified theory” that require bigger leaps of faith than others, but I won’t get into specifics. Whether or not you drink the kool-aid or not, I have to admit, it was one of the more memorable Pat Flynn podcasts!

    However, I do have a few specific questions for Dane (although he has probably long forgotten this thread).

    #1 – Dane didn’t talk a lot about website maintenance. This would include not only hosting, bandwidth, and storage, but also defects and upkeep, keeping it compatible with new devices/os/etc. (such as tablets). How much would he say he spends monthly (either in dollars or a percentage) ?

    #2 – Churn and sales. Like with any site that draws recurring revenue, all sites are bound to go through a loss of some clients and a gain of new ones. I would think this is especially true for this type of premium service. What is the typical churn rate for essentially these very expensive services? Can new customers be found fast enough (and inexpensively enough) to compensate ?

    #3 – Competition. As a believer in market forces, after a lucrative niche has been exposed, there will be a tendency for copycat sites to come in and essentially do the same thing for 1/2 the price. Even Dane himself would have to admit that the barrier to entry is quite low (his whole premise is based on this). Is there anything you can do to protect your asset/investment ?

    Just a shoutout to Pat, love your podcasts…..I just discovered you recently so trying to catch up.

    Thanks,
    Wade.

  • Artur

    Hey Pat, I’m your new subscriber and listen to your podcasts for a few days now. Obviously for a reason, but this session was mindblowing. I was absolutely stunned and I saw a whole bunch of new opportunities. BIG thank you for insporation and knowledge. Cheers, Artur

  • OnlineSecurity123

    Wow! That was an amazing interview! Pat, you have awesome interviewing skills and I am really enjoying your podcasts. You are definitely in the right field and I know I could speak for others in saying thank you for sharing all this information!

  • WARPit

    I have spent many hours with Pat in my car driving along- and I totally appreciate what you are doing. It is great that you share so willingly and that is a message for us all.

    One quesitons about this podcast- you say in the show and in the transcript you will list the golden questions- but i cannot find them.

  • Kevin Basham

    One of the best i’ve heard in ages, thanks to Lewis Howes for pointing me in the direction of your podcast. I’ll be referring to yours and Dane’s work in my blog this week which will include a link to share your great work. Thanks for sharing!

  • http://www.tiestandards.ca/ Taaron

    I keep coming back to this episode because it’s such a goldmine of information. I have Dane’s two follow-up questions on post-it notes on my desk at work as a constant reminder that I can always find out more to solve a problem. It’s really helped me provide more value to my clients.

    Fantastic episode.