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Starting a Software Business in Today's Economy?
Ryfar asks: "I'm a programmer with 3 years of experience in C, C++, and Java. With the current low economic trends in the software sector, the small software company I've been working for since I graduated is going out of business. Since it's so hard to get a job at another software company with so little experience, I'm considering the option of striking out on my own with a friend with similar development experience and creating a small software consulting company. Naturally, until we were profitable to the point that we could hire other people to work with us we would be both the programmers and the marketers/salesmen. The question is, Where should we start looking for business? How do we capture the hearts and confidence of potential customers when we don't have PhD's from MIT? Could those here with applicable experience on this subject share with the rest of us?"
How about reading Micheal Tiemann's essay here? It sounds more or less like you. It's an interesting read anyway.
I have a small business I run by myself. I develop patient management/tracking system for Eye Doctors. I've been doign this for a few years and let me tell you the secret. Find a market where there isn't much competition. Eye doctors have some software available but it really is poor and overpriced (and most of the people who've used it complain about user-friendliness and such). I offer a simple alternative at a lower price and my client base has expanded by 4 in the last month (I know that seems like very little, but it's not when they bring in the dollars that I'm charging and the time I have to spend on each client). Having a connection inside the industry also helps, hehe. In regards to another post here, there are so many doctors/lawyers using out-dated DOS based software. Someone who could write an equivalent in windows or *nix (if the doctor is willing to switch systems completely) would probably be set. Also, in the doctor/lawyer industry, word of mouth is HUGE so I'm getting calls on my software from people I haven't contacted yet. Just my two bits.
The number one thing with being a consultant is communication. You have to be able to communicate with the customer, to find out what their needs really are, and communicate to them why your solution is better than the rest.
But it's more than just communicating facts. The customer must a) be confident that you know what you're talking about. They really don't care about your degree. They care that you know what you're doing. The customer must b) be confident that you know his needs. This is where most people screw up. They talk about what _they_ like - Linux, Apache, open-source, etc. They don't talk about what the _customer_ likes. Customers don't like Linux, but they do like security. Customers don't like open-source, but they do like having control over their technology. Customers don't like technology, they like their problems SOLVED. The better you can communicate both the problem you are solving, why it needs to be solved, and are able to quantify how much is being saved, while still being a likable, lovable guy, the better chance you will have.
You need to understand that they way you market yourself will have a big impact. Don't market yourself as a Linux guy or a C++ programmer. You're not. You're more than that. You are an analyst who can analyze and solve problems and can build solutions.
Be thinking entirely in terms of their business - how they do business, how they purchase, how they manage, how they interact with their customers. These are all important things. If you have the cheapest and fastest customer-billing system in the world, but it can't print the company logo correctly, it doesn't cut it. This is their business, and if you treat it with respect, that will go a long way.
Try coming up with a product you can sell - something simple. You don't have to actually sell it, it will just get you in the door so you can see how they do business and what other solutions you can offer them. For example, maybe try selling a ticket-tracking system (i.e. - Request Tracker), and make a sales pitch, but while your there, take whoever you are speaking with out to lunch, and find out what his _real_ problems are that you can solve. And offer real solutions, not just technology.
Engineering and the Ultimate
...Is more than possible. We do it with almost no effort after 6 years in business (just two of us). And for relatively competant people there is still a lot of work out there. I went to a clambake last week and talked to 5 people just socially and two of them gave me business cards to call them about projects. I could have talked to more people, but I'm really not very social.)
Number one for going out on you own: have someone else to live off of for at least a year, 18 months if possible. Give it time to blossom because it will take time unless your current contact list is amazing already.
Best thing we did for marketing was to join the local chamber of commerce and volunteer on various committees, some on technology so the fit is nice. Go to the regular events and mingle. If you can't manage to hold up a conversation with a business person, leave time to learn how in your business plan.
Get started by volunteering your services to a non-profit (the WORST to work for, by the way, making it a great learning experience as the organizational problems will be at their max) or to a friend's company or a friend of a friend's company. Whatever. Get out and work! even if it is for free. What will happen is this, after the first three or four jobs where you make people happy, people will come looking for you.
Exude confidence, but not cockiness when you talk to people. Offering free advice that people need to hear is the best way to get them hooked on hiring you. Seem busy and act busy. It is just like with dating, potential dates crawl out of the woodwork when you are already taken because of the way you act, this is true in business as well.
Another thing: people are hiring you more on who you seem to be (how you will be to work with) than you think. It is about 50/50 with what you know (this surprised me).
Be prepared to say "no" to work that is out of your focus. Once people realize you are competent they will ask you to do everything, including basic sys admin stuff. This is where we, personally, draw the line. We don't do Windoze which makes this easier to get out of. It may seem strange to imagine turning down work but you will be constantly learning and you need to specialize to really be effective and you can't specialize in everything.
Buy basic marketing books like "gorilla marketing for the home-based business" and "selling your services for those who hate to sell" they helped me get going.
And good luck!
After my first job as a programmer went bankrupt (in 1980), my fellow programmers and I toyed with starting a business. We sounded a lot like you. It was hard to get a job, so we would just start a company. Can't be that hard, right. We'd do a better job than the boneheads that put our last company out of business, right. We were programmers, by god, we could do anything if we set our minds to it!
Twenty plus years later I am glad I decided to get another job. I've learned a few things I'll share with you for free that I paid dearly for:
1. You don't know everything when you are 25. Or 35. Or 45.....
2. It is more important to be a businessman than an engineer if you want to be successful.
3. Learn how to write a business plan and execute what's in it.
4. Learn what all those funky financial reports mean, how to create them, and why you're business life (and personal life) depends on them.
5. Become a marketeer. If you don't know how to get a message across to someone, or how to figure out what to charge, or who your competitors are, or what the barriers to entry for you company are you will fail.
6. Become a salesman. Not necessarily work in sales, but be able to sell your idea to investors, to partners, to employees, and to customers.
7. Learn to take responsibility. If you are a procrasinator, you will fail as a entrepeneur. In a startup you are the boss, even if there are five or ten of you. You have no support organization, no secretaries. If you don't do it, it may not get done. Remember, you will have employees, and they will depend on you for their livelihood. What you do and do not do will affect and possibly destroy people's lives. If you are not up to that level of responsbility, get some more experience until you are.
8. Learn to learn quickly. As I mentioned above, you will be doing many different things, some of which you have never done before (and may not want to do again). Figuring out what to do quickly will give you more time to do the important stuff.
9. Management is important. Learn scheduling, people management, budgeting, and espcially how to help others deal with change.
10. Figure out a way to buy a business that is profitable already rather than build one from scratch. It's always easier to make more money and get more financial backing if you are profitable. After twenty years that's what I am doing right now, buying an existing profitable business.
If you are dead-set on going ahead, remember one thing. The successful super-geek programmers were the ones that team up with solid, smart business people, i.e. Gates-Ballmer, Joy-McNealy, Andresson-Clark, etc. Who's your partner going to be and do you trust them absolutely with your life.
Start small. Projects you can pump out fast and charge a minimal amount for, but do your best work on these, really polish them and make them shine. Be prepared to work a LOT of really long nights, and on boring shit like web design. This is not to make money, it is to build a base of clients who will recommend you to other people. The better your reputation, the more money you can charge for your time.
Where to look for clients? Everywhere. Friends and family. The net. Newspapers, yellow pages, and bulletin boards. People you meet on the street. (I'm serious.. face to face has a really magical quality to it that makes people listen to you 100x more than a phone call, fax, or email) Carry a really cool conversation piece that demonstrates your talent (example: a graphics demo on a PDA)
Want to know what people want in today's economy? (Well, always, really) To save money. To get businesses to spend money on you, you have to demonstrate how what you can do for them will save them money. Show them how they'd be fools NOT to buy your software.
And make you you put a lot of work into building a truly reusable code base, it pays off huge in the long run.
"Mind, as manifested by the capacity to make choices, is to some extent present in every electron." -Freeman Dyson