For the backstory, see part one.
There's a part of me that thinks that quitting should be an easy decision. A big part of me.
The way I'm thinking about it, there are two reasons to continue working on this:
1. Swinging for a home run. If there's a chance for high upside. If not, there are other ideas I could be working on that do provide the upside I'm looking for.
2. Swinging for a single. If there's a high likelihood of making a few hundred thousand dollars. Something comparable to what I'd make working as a programmer.
Swinging for a home run
Throughout the time I was working on Premium Poker Tools, I had been assuming that the market was big enough to provide high upside. Eg. I thought that 100k users and $100/user was very possible.
- In being amongst the poker community, you get the impression that Flopzilla (market leading competitor) is ubiquitous. Everyone knows what it is. Everyone has it. Everyone needs it.
- The poker subreddit has over 100k subscribers. Educational YouTube videos get over 100k views. Some posts on TwoPlusTwo have over 1M views. The type of person to watch an educational YouTube video on poker is serious enough to want to have Flopzilla or a similar app, you would think. So maybe there are a few hundred thousand of these people in the world, and maybe I can capture 100k of them.
- On top of that, poker seems to be a game that is growing. And imagine if it is legalized in more states?
- At $100, the app pays for itself. And poker players are the type to understand +ROI decisions, you would think.
- Poker players tend to be on the wealthy side. Older people with money. Younger people in high paying fields like tech. Younger people who are playing professionally. Well, most of them aren't actually wealthy, but it's especially important for them to invest in tools.
- Maybe there's potential to be making hundreds of dollars per user. After all, that's still +ROI for a lot of people.
But more recently, I've come to believe that that all just isn't true.
- One reliable source said he'd estimate that the market leader, Flopzilla, has between 1,000 and 10,000 users. And they charge $25-35. Which would imply an upper extreme of just $300k or so. Before marketing costs.
- Four other people in the industry I've spoken with all say the same thing, although they didn't want to get into specific numbers.
- Looking at Flopzilla and the other competitors, they're mostly one man shows that are lacking in terms of design and business stuff. If the market were bigger and they were making millions of dollars, I'd expect them to have a team and for things to appear more professional.
- It's becoming more and more clear to me that very few poker players actually sit down and study. And that's what my app is for: to help you when you sit down and study. People want to passively watch YouTube videos and be told what to do. Poker coaches talk all the time about how students who are paying them a lot of money are too lazy to do the homework they were assigned.
- It's also becoming clear to me that poker players aren't these rational purchasers that I envisioned. They're not quick to open their wallets, and often don't think about whether or not it pays for itself.
Even if the industry people I've spoke with are wrong about the market being eg. 10k users, I'd need them to be way off. Suppose I make $25/user after marketing costs. That would mean I'd need 400k users to get to $10M. Since I can't expect 100% market share, I'd really need the market to be something like 1M people, and that is a very long ways from the 10k upper extreme that people are telling me. Maybe the real market is 50k instead of 10k, but not 1M instead of 10k.
Swinging for a single
If I do decide to quit working on Premium Poker Tools, my next step would be to take some time to work as a programmer and save up money before moving on to my next startup. But if I am close to the point of making a few hundred thousand dollars or something, then I may as well just keep working on PPT instead.
I just don't think the chances are high enough that I'll get to first base, so to speak.
Zooming out, I've been working on this app for 2 years and 3 months and only have two paid users.
Furthermore, I've sort of exhausted a lot of the customer acquisition channels. Affiliate partnerships, paid advertising, YouTube, Twitter, blog, in person networking, offering it for free, participating in poker forums, refer a friend, offering to coach/study with people: none of it has worked.
So looking at it from that perspective, it would be crazy to say, "The upside to make millions might not be there, but I'm on the verge of making a few hundred thousand, so I should see this through."
Also, it's worth noting that throughout these past two plus years, I've continually thought to myself, "I'm just a month or two away". I clearly have a bias, and I need to adjust in the opposite direction.
Like I was saying at the beginning: this should be an easy decision. The reason to work on this is if it has a big upside, or if I'm on the verge of "hitting a single". Neither of those things seem close to being true, so I should quit. That's all there is to it.
I've went through this conversation with myself many times, and something just felt off. I was telling myself that the answer is obvious, but I still felt very hesitant to move forward with the decision to quit. It didn't feel right.
Eventually I noticed what was holding me back: "what if". What if I'm wrong and there actually is a big market? What if I really am just a month or two away from hitting a single?
The correct response to that is to note that you can never be 100% certain of anything, and just because there's some small chance I'm wrong doesn't mean I should keep working on this. You just have to make the best decisions you can given your uncertainty, not wait endlessly until you are certain.
Of course. I know this. My Monkey Brain even knows this. It's something I've always been pretty good with. Let me try to do a better job explaining what has held me up. Imagine the following:
I quit Premium Poker Tools, and proceed to do my thing working as a programer. Nine months later, I see a new poker app take off and make millions of dollars. I think, "What the hell! How did this happen!" I start looking into it. I find some financial website that shows Flopzilla making millions of dollars a year. I talk to some people who say, "Oh yeah, the market is huge."
I'll tell you why this would be boundlessly frustrating to me. Because if I had just taken the time to do this research before quitting PPT, I could have been the one who succeeded. Because a trivial inconvenience is the thing that got in my way. I expect better of myself. If that happened, I'd be extremely disappointed in myself.
I know I'm not perfect and there are things I'll miss. I just don't want to get caught in the above scenario where there are obvious things that I miss. Because of laziness.
So then, the solution is pretty simple right? Just take the time right now to investigate all of these things and make sure I don't fall victim to trivial inconveniences. But somehow, that solution just doesn't seem to be working for me. I just keep worrying that there are other things I'm missing. That there are more trivial inconveniences that I should look out for that I just don't want to because I'm lazy. I know that sounds weird; it's a hard feeling to explain.
I feel tempted to just move on despite the voices in my head saying "this doesn't feel right". But if I do that, I know I'll torture myself with "what if" questions.
Let's try writing about the "what ifs". Sorry if it gets too poker-specific.
- What the people I spoke with are wrong and the market right now is actually really big? Even if that were true, it still seems unlikely that I'll succeed, given how little traction I've had. Anyway though, I feel confident that the market isn't big. What else can I do to increase this confidence? I could reach out to more people. I don't really want to do that though. I could learn more about researching your competitors. But I've done a bit of googling and it hasn't been too fruitful. One article said you can estimate based on the number of employees. I'm pretty sure they don't have employees, which would imply that the market is small.
- What if I'm just being impatient and need to spend more time building an audience? Well, even if that were true, it would only be for a slice of a ~$300k pie. The amount of work/time doesn't seem like it's worth it for a small reward, especially given that it could easily just flop and not get me any traction. Also, I really enjoy writing blog posts and making YouTube videos, and it's something that I can do in my spare time if I decide to quit.
- What if I'm just one affiliate away from making this a success? Flopzilla does affiliate stuff, even with some A-listers, and they still only have 1k-10k users. So, as tempting as it is to think otherwise, it's pretty unlikely that one affiliate does the trick for me. Even if it does and it snowballs into more and more affiliates, we're still talking about a roughly $300k pie, and working with affiliates means giving up 30-50% in revenue share.
- What if this new tool I want to build gets me over the hump? It's possible that it's a hit and it gets me, say, 2k users at $50/user or something. But that's not enough to justify continuing to work on this full time, given that it could also just flop. The upside would need to be like 10 or 20k users, and I really don't think it's that large. However, this tool I'm referring to is something that I plan on working on in my spare time regardless, and if it really takes off, I can always quit my job and pursue it if I feel it's appropriate.
- What if lowering the price and undercutting my competitors leads to a lot of traction? I highly doubt it. I had been offering it for free for a while, and it was only getting me like 100-200 users/month. I think it's more about exposure and having an audience than paying $20 instead of $25. But even if undercutting them is a success, how big a success are we talking? Maybe 5k users if I'm lucky. I can always try this in my spare time, and come back to Premium Poker Tools if it has a ton of traction all of a sudden.
- What if I can expand the size of the market by making it easy enough to uses for the masses? Right now, the masses are confused by and don't know how to use this sort of poker software. Even more serious players often fall into this bucket. It's always made me feel hopeful, because if I solve this problem, it could give me a big leg up. I have many ideas on how to do this. Some sort of workbook thing to go through. More handholding. A little gamification. But all of this would be a pretty big undertaking, and my intuition is that it wouldn't grow the market too significantly. And there's a lot of risk. It doesn't seem worth spending 6-12 months working on.
- What if I add stuff like spaced repetition to make studying more effective? I really don't see this being something that people will understand and value enough to pay a lot of money for. And I don't see it as something that will attract attention from the masses.
- What if I built something that helped you zoom out and find good exploitative spots? It'd be a big undertaking. Let's just say 6-12 months. It could easily just flop. That all makes it a bad candidate to "swing for a single" with. And, while I personally think it'd be awesome and that everyone else should agree with me and pay a lot of money for, I don't see it as having home run potential, unfortunately. It comes back to the fact that players don't want to study and do the work. Also, I think it'd be inherently complicated, which would make it harder to target the masses with.
- So many people have told me that they really like the app. With that sort of feedback, this should be making at least decent money, right? What if I'm just doing something horribly wrong? I don't know. I really don't. I guess a high quality product isn't enough, and for whatever reason I'm still far from the point of "hitting a single".
Even after writing all of this out, it still doesn't feel right. I feel like there are brilliant ideas that I had in the past and was excited about, that I put to the side and am failing to recall right now. I feel like I've built up to thee point where I'm slightly better than the competition, and that if I spend another six months or so, I'll really start to pull away and differentiate myself with a solid competitive advantage.
But all of these ideas I have. The things I'd do to pull away and differentiate myself. I don't actually think that any of them would really "grow the pie". They'd just give me a better shot of getting a slice of that ~$300k pie. And that just doesn't seem like it's enough.
It could easily fail. Even if I build all of this cool stuff, people could just want to stick to the software they already know. Customer acquisition is hard. The things I'd be building would be much more of a vitamin than a painkiller, and so I don't think "build it and they'll come" would happen.
So ~$200k reward let's say + 50% chance of success let's say (generously) + 12 months more work + a lot of stress and anxiety. And that's the optimistic equation. That just isn't good enough.
This is very, very difficult, but I've decided: it's time to call it quits.