As my final semester of college comes to a close, I’ve been training one of my classmates to help organize the computer science events here at Berkeley – and as an engineer, he hates the idea of promoting events that don’t exist. “It’s total vaporware!” Yes, it’s vaporware, because we’re advertising an event that doesn’t actually exist. But by selling vaporware, you quickly figure out if something is worthy of spending your time on.

Last summer when Andy and I started our company, we just put up a crappy webpage that told people what our product did. And of course, we didn’t have a product. So people would try to sign up, only to find a form where they could leave their email address. This was important for three reasons:

1 – we immediately knew that our problem was worthy of solving.
2 – we got instant feedback from people telling us what they wanted to see from our product.
3 – it gave us the motivation to push forward.

In fact, I’ve taken this to the next extreme: my focus is on the vaporware itself, since it solves the problem of not knowing what to build. Engineers are terrible when it comes to solving problems that don’t exist, and I knew that my co-founder and I had a similar risk. I now spend about 50% of my time figuring out what needs to be solved (by fixing the website, validating screenshots of our vaporware), and 50% of my time on building the product that has so far been vaporware.

This works in many arenas of life – for the CSUA (computer science undergraduate association) here at Berkeley, we’re co-hosting the annual “Engineering Demo Day”. Which means we had to find a) a lot of engineering demos, b) sponsors for the event, c) people to attend. To take my focus on vaporware to the extreme, we signed up dozens of demos and secured out sponsors before even finding a venue, because none of the logistics would have mattered if there was no demand in the first place. We set up a facebook event advertising the event to see if anyone would RSVP. This took less than an hour of our time. My CS friends hate the idea of selling vaporware (and in this case promoting an event that doesn’t yet exist), because it’s “morally questionable”, but I don’t think so at all. Let’s say that Demo Day had no demand. We’d tell the demoing teams that the event is off, and we’d tell our sponsors they could keep their money. No problem, at all.

Let’s say inDinero had no demand in its first product. What if I told you that it didn’t have much demand? Truth is, we didn’t get any compliments until I redid the website for the third time. And through each iteration of the user-facing website, I learned of what prospective customers wanted, I figured out what our website didn’t advertise, and I had a much better idea of what people were looking for in a finance product. And all of this knowledge came from my selling vaporware.

The bottom line: Vaporware is good because 1) it’ll save you time and money, 2) it’s a completely legitimate method of doing customer development, and 3) You’ll learn so much about your product without even having to build a prototype.