Tips for starting a software business
What I have learnt since 2005 about software business
Motivation
- If you got layoff, just start a software business because you have no ‘excuse’ or downside.
- Start a software business because you want to solve a problem but not for money only. The reason is if you are just going after money, if your business is slow, then you may give up too early.
- Should you be in software business if you do not have a background in a technical subject? A successful business requires more than technical knowledge, so think competitive advantages, e.g. you have extensive offline distribution channels for target markets of your new software.
Strategy
- Start small but think big or ahead.
- Think thoroughly but not in situation of analysis paralysis.
- If you are not sure whether an idea will work, release a prototype and test the market.
- Where is the profitable idea? Look constantly for pains.
- Likely profitable idea is hard to get, but execution is even harder because forming a strong team requires knowing a lot of good people and luck.
- Benefits are great, but in order to ask customers to part with their money, the pain has to be perceived as acute and your solution has to be appealed to be value for money. For example, it is better to sell energy saving air-conditioners to people in Middle East then fuel economy passenger cars.
- If you think big, get at least a partner that is very different from you because for business to succeed, it require different talents.
- If you have or your partner has knowledge about US market, consider it as your home market because US is a relatively homogeneous, huge and still lucrative market.
- With open source software, software as a service (SaaS), cloud computing and out-of-work talented programmers, you can experiment with software ideas.
- Think value for money but not absolute low price because the latter may cause your business unsustainable
- Think solution for customers and not just features and benefits of your product. The main reason is your product may ease some of your customers pains but your customers may still do not have a solution. For example, DIY natural gas tank installation kit for passenger cars in an area with limited natural gas stations.
- Founders are cheerleaders and self-critics.
- Small market is all right as long as you are happy with a ’small pond’.
- According to Seth Godin’s book, the dip, quit when you no longer has a chance to become number one in your niche.
Hopefully you can share with me some tips on starting a software business. Peace…
Me !