3 minute read.

Using leaky bucket theory for software development

Paul Anthony / October 18, 2015

Posted in: Archive


At the start of any new software product that doesn’t have a customer base, the balance between product and marketing is a tricky one. Particularly if you are developing a product yourself.

If you don’t focus on acquiring new customers you’ll not learn about the problems within your product and what features matter. If you don’t focus on product, the customers you have already acquired will churn.

A minimum viable product is only viable when your customers decide to stick around and covert.

So how do you best decide what to build next? Or whether to just keep on marketing? How do you strike the balance of focus?

The leaky bucket is an analogy that will strike a chord with many building a software product. Pour customers into your product and see what issues prevent them from buying, or from converting from a trial to a paid subscription. The more customers that leak out through a particular hole in your bucket is where you should focus your development efforts.

It’s easy to get carried away and think the new shiny feature you’ve just shipped is going to help separate you in a crowded marketplace, particularly if you are just getting started.

For products which are brand new in established markets, the features your customer wants are often the ones your competitor has developed two years ago, rather than the fancy ones you’ve dreamed up overnight. For those products that are disruptive or carving out new markets in particular, the biggest mistake you can make is not continue to market your software and to keep pouring water into the leaky bucket to hear what those people have to say about the direction you are headed.

Measuring where and how you acquire customers is an important part of the process too, as you can then focus more heavily on that particular channel for future acquisition.

To use the bucket analogy again, it’s as important to find a hose to pour in customers than simply wait for it to rain. You need people to tell you exactly where there pain points are, and you’ll only get that from talking to or emailing them. The only way you’ll be able to talk to them, is to get them through the front door. In short, what I’ve found most useful, is to keep your foot firmly on the marketing pedal until you’ve got some potential customers to talk to.

Focusing on the reasons that people didn’t convert, or the features the majority asked the most about is a great way to build  at least the first few iterations of a product. Once that feature ships, get back in touch with those customers and try and attract them to try again. It’s a slow process, but one that puts a personal touch to a product that feels like you’ve developed something just for their business, hopefully making them a much more loyal customer and indeed a brand ambassador in the long run.

  • saas
  • software

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