Unemployed? Why Not Start a Software Company?

R.S.D. asks: "I see all these Ask Slashdot articles about unemployment these days. Why don't a few of you guys get together and start a software company? Out there in the world, there is still a lot of software that needs to be written, and people are still pumping lots of money into software (and biotech). In fact, the software sector is still described as the enduring leader in raising venture capital, though apparently in Silicon Valley more money is going out of the maturing software industry and into things that are still high-tech like biopharm and nano. Is anyone else trying this? If so, how's it going? If not, why not?" This is easier suggested, than implemented. For those who have gone this route, what suggestions would you give to those who may follow?

"Every time I see a group of 5-10 self-described 'great but unlucky' IT workers looking for a job, and how their previous company had to lay them off because their former employer had this 'stupid idea' it was to move all the jobs to Elbonia, I have to ask myself -- why don't these guys get together and start a software company. If you don't make these 'mistakes' of outsourcing development to Elbonia, couldn't you compete pretty well?

Best of all if you ever did need to grow, in this job market, you can get highly educated and experience software engineers even more inexpensively than China or India -- I've heard some internships are unpayed these days.:-)

Yes, I am taking my own advice, and trying this, even though I was not unemployed."

Comments

The challenge of financing

[glinden]

I'm not sure it's that easy.

The biggest problem for unemployed software engineers getting together and forming a company is financing. If you're unemployed, you probably don't have a lot of cash around to provide seed capital for your business. If you do scrape together enough seed capital or find an angel investor, you're usually stuck with not drawing a salary and having no health insurance for about a year as you try to ramp up your business. And you're doing all of this for a high risk venture where only 1 in 10 businesses actually succeed.

Nevertheless, I'm building a startup right now, Findory.com. But I wouldn't underestimate the obstacles here. It isn't something that can be done lightly.

Re:The challenge of financing

[Anonymous Coward]

Nice.. you made first post on a Slashdot and you get to plug your startup. I tried to check it out, but the link doesn't work!!

This looks like it though.

Re:The challenge of financing

[sane?]

Sorry, your confusing me.

We've talking software here, the same stuff that many of you do for free with Linux. You have a computer, you have the skills, your marketing and selling might not be great, but at least one of you will be street smart and presentable enough to talk to customers.

So why do you NEED lots of finance?

Find a niche, find a need, create a demo of a solution and sell it. Deliver and find more of the same.

You can be faster, smarter and cheaper than the competition, and if it doesn't work, it need not cost you much at all.

Its one of the advantages of knowledge based industries - the barriers to entry are skill based, not fixed costs.

Re:The challenge of financing

[eln]

It's not just about finding financing, it's about figuring out what to do with that financing once you have it, and how to turn it around so it turns into a net gain for your backers and yourself.

Most programmers make poor business people. It's a totally different mind set. It's not just about making the next killer app, it's being able to effectively market and sell that app in such a way that you are producing a net profit.

You also have to be able to set reasonable deadlines for yourself and stick to initial specs, despite the strong urge to over-engineer. Any killer app you can conceive is not going to be worth squat if it takes more than a year or so to get the initial version out the door. Chances are that if you take any longer than that, someone will have released a program to do the same thing, or whatever your program was designed to do will have fallen out of fashion. The concept of writing a piece of software quickly but "good enough" is something a lot of programmers have a hard time getting their head around.

Writing programs is easy. Writing programs and also running a business in any direction other than straight into the ground is hard, and a lot of times the pressure of it will suck the fun out of programming for a lot of people.

Re:The challenge of financing

[Squinky86]

Finance is needed because it's very hard to get software writing jobs in America. To get money, you must already have money and a good reputation.
As of right now, most programming jobs are going overseas, specifically to the Indians. It's very hard for a young, new programmer to get a job in modern America, and great deals of luck are required.

Re:The challenge of financing

[Yazheirx]

Kudos on the site, I'm sure yahoo will rip it off in as soon as it actually becomes a blip on the radar. How are you actually making money on this? I did not see any advertising nor did I have to pay.

Re:The challenge of financing

[glinden]

There's a lot of expenses for a startup. At a minimum, there's legal costs from incorporating with your partners, but there's a bunch of small administrative costs as well, especially if meeting with those customers involves any travel.

But the biggest challenge is not drawing a salary for a long period of time. Most people don't have enough savings to live for 12 months without any income.

Re:The challenge of financing

[ComputerSlicer23]

Uhhh, creating Linux took years. Creating a viable piece of software that someone will pay for takes a lot of effort, and a lot of time.

Without some form of savings/income to draw upon, one can't develop software on their own (Free or not). You don't get a net connection for free. You don't get parts for free. You don't get to live rent free. If you do, you probably didn't need the job you so unluckly lost.

People work for a variety of reasons. Most of them are because they need income to barter for other goods and services.

Software that takes 6 months for one guy to slap together, isn't going to impress anybody who has an IT background. They'll see it's obviously only 6 man months of work... ;-)

Most people I know don't have 6 months worth of income available to them as cash they can easily spend. Getting 6 months of time together while working full time at a job is difficult at best. Especially if you work a time demanding IT job.

Kirby

Re:The challenge of financing

[Anonymous Coward]

Deliver Pizza at night (or during the day). Wait tables. Strip (if you are female, or even if you are not (this might not be the best idea for a geek)). Then code during the day. Problem solved...

Re:The challenge of financing

[jacem]

If you intend to make a consumer product one of the barriers you will almost certainly face is access to the retail stores supply train.
This may not apply to all software based bussinesses but if you want to see you product on a store shelf be prepared to pay a lot to have the packaging made.
Not to be too cynical but you may also face an unfair and restictive competition from others companies that already have access to that supply chain.

JACEM

Re:The challenge of financing

[hackstraw]

So why do you NEED lots of finance?

Some people like to eat, sleep out of the cold, take care of their families, etc. Reask that question after being out of (finance providing) work for 6 months even if you started your own software company.

Are you the one that buys all of those "Make money quick with no work and no capitol!" infomertials?

Re:The challenge of financing

[Kenja]

"So why do you NEED lots of finance?"

I like food. I also like having a place to live. In addition I like having electricity to power my computer. While it is true you could just live at the bus station, eating pigeons and powering your laptop off of the utility outlets they have there. But that doesn't seem like the best environment to be creative in. In addition you would have to do a lot of panhandling inorder to get the legal costs of starting a software company covered.

Re:The challenge of financing

[Trillan]

As someone who's been working on this for the last eighteen months, let me tell you the sad truth: Being faster, better and cheaper... and even first to market... isn't nearly enough. What you'll need is the business deals that your competition already has set up. And they're most likely exclusive.

Why did I say competition if you're first to market? Well, your competition won't offer the product you're working on... but they will have similiar products, and they'll happily tell users and business partners that they're working on a product that'll stomp yours.

It costs a LOT. I'd estimate at least 70% of our costs go towards trying to get business deals, and that's the sort of thing you just can't do cheaply.

Re:The challenge of financing

[JWhitlock]

We've talking software here, the same stuff that many of you do for free with Linux. You have a computer, you have the skills, your marketing and selling might not be great, but at least one of you will be street smart and presentable enough to talk to customers.

I don't know about other programmers, but I work 40-60 hours a week at my paying job, then spend any extra time on free software. If there is ever a time conflict between the two of them, I give the extra time to my job. Free software doesn't pay the electric bill, the mortgage, etc. etc.

Re:The challenge of financing

[XorNand]

Don't incorporate! There is no reason you need to endure that expense and headache. Plus you're double-taxed: first on corporate income and then when you draw personal income from the corp. Look into forming a Limited Liability Company. Buy a $50 book, fill out a form half the length of 1040EZ and pay the state registeration fee ($50 in Michigan, $125 in Ohio YMMV).

Don't let all the business or legal jargon scare you, it's easy and legally-binding. You'll have to draw up your own Articles of Organization, but once again, it's easy. It's pretty cool because you get to establish your bylaws and you can write it in plain English, not legal speak. There's plenty of examples on the 'net and in books.

Re:The challenge of financing

[Safety Cap]

So why do you NEED lots of finance?

Think about what you will need:

1. Customer Service/Tech Support
   • No large company will buy software that doesn't come with support. That means you'll have to have someone man the phone. That means you have to have an office with at least a phone.
2. Sales
   • You'll need a web page at a minimum, and a place for your sales force to live when they're not on the road, meeting rooms, etc.
   • Don't forget phones for your sales force - mobile/office/whatever. Business rates for phones are more than the $30/month you pay for that extra line in your parent's house, Timmy.
3. Distribution/packaging
   • How are you going to deliver your software? Shrinkwrap, via internet (see the part about the web page), as a bundled solution? All those things need cash to get going. Don't THINK you'll get your stuff into CompUSA without having some way of delivering CDs
4. HR/Payroll/Accounting
   • Someone's gotta keep track of the pay for your employees and send them their W-2s at the end of the year for taxes. There's that whole paying-taxes-quarterly-thing that the government seems to be real sticklers about, too.
5. Lawyers
   • If you make it a habit of signing contracts without vetting them through a lawyer, eventually you will lose big $$$, or even kill the business. They will also make sure that your employment agreements and business deals are on the level.
6. Office space/equipment
   • Gotta have development, test, and production servers, if you want to do it right (and ultimately, save money)
   • You'll need a network that gets backed up properly (i.e., every day and tapes stored off-site in a secure location---not under the mattress in your parents' house, Timmy!) because you're storing your CVS db there, right?
   • You'll need legitimate copies of purchased software, so if you're doing .NET, you'll need a real copy of Visual Studio for every developer.
   • Printers eat paper and toner.
   • So do copiers
   • So do fax machines
7. Receptionist
   • Think prospective clients are going to be impressed by your sloppy self greeting them at the door? Better at least buy a suit or some nice khakis and a clean golf shirt.

Re:The challenge of financing

[wwest4]

why settle for pizza tips? fuck that - if you can swallow your pride and deliver pizza, you could just as easily swallow someone else's pride and do gay porn. it pays ~$300 a scene. come on, for $300, you'd take a shot in the jaw, right?

Re:The challenge of financing

[Anonymous Coward]

it's very hard to get software writing jobs in America

I think you're missing the point. The object of this thread is that, if you already are passionate enough about coding that you do so in your free time, it may make more sense to start a company than look for a job. If you can compete on quality and cost with a firm of consultants who sell offshore programming services (and you can, for any smaller project) then you can skip the finding-a-job stage and jump to the finding-a-client stage instead.

Re:The challenge of financing

[sane?]

Well, first off, the poster said unemployed. Therefore the question of available time tends to be already covered. Nobody is saying that you shouldn't look for a more conventional job at the same time.

Second, I said niche for a a specific reason. Its amazing how often you find small niches with needs that are not met, or poorly met. You can find opportunities where the programming effort required is minimal, but the value to that customer is immense. Nobody is saying you should take on Microsoft - in fact its because you're small that you can successfully address these niches. Your local, you know the problem, you know the culture. You can also target your marketing cheaply.

Re:The challenge of financing

[irc.goatse.cx troll]

" Uhhh, creating Linux took years. Creating a viable piece of software that someone will pay for takes a lot of effort, and a lot of time."

He's not talking about the kernel, or the desktop. He's talking about the stuff we hack together FOR linux. The perl script you spent a weekend on to `insert niche here`. Thats what can be sold (even while keeping it GPL).

"Without some form of savings/income to draw upon, one can't develop software on their own (Free or not). "

True, but thats where the unemployed part comes in. You're not getting a source of income/savings anyways, so why not start coding? Beats watching geraldo all day.

"You don't get a net connection for free."
If you mean residential, You can hack from a $10 dialup account if need be, do all your work local then put it on a sourceforge page. Once you get some clients, chances are one of them will be able to work out a hosting deal with you.

Re:The challenge of financing

[Uzik2]

uh...

To be blunt, because my rent is due RIGHT NOW and I
don't have the cash to pay it?

Re:The challenge of financing

[tetranz]

and having no health insurance

It depends where you live. Many countries provide public healthcare for their citizens.

Re:The challenge of financing

[Chibi]

You have a computer, you have the skills, your marketing and selling might not be great, but at least one of you will be street smart and presentable enough to talk to customers.

It took me a few years of work to realize this, but sales and marketing are probably the most powerful force a company can have. Yes, you need the tech folks to create products to sell, but a good sales/marketing force can help make a huge difference. How many stories do we have of "X technology was much better than Y technology, but Y won in the end because more people bought into it?" So, why would people buy into an inferior product? Because they were convinced by the folks we all loathe (sales and marketing) that they were getting a somehow better product (whether it be quality, value-per-dollar, whatever).

And in the case of a smaller company, good sales/marketing is even more important. Sorry, but you're going to have a hard time convincing most companies to buy the product that you developed yourself in your basement because no one has hired you for the past year... but get the right face-people to represent and sell your product, and you might be pleasantly surprised.

I'm not trying to discourage those who want to go this route, but if you want to be your own boss and create a software company, I imagine that you'll spend a lot more time on the business side of things than you might expect.

Re:The challenge of financing

[gfxguy]

I've been looking to go into business myself (non-computer related), but it all seems so bewildering and complicated - and I think that we somehow must be way overcomplicating things.

I picture the Korean guy in the town I came from who started his own fresh produce market. Talk about start up costs - a software company can be anywhere, but a market needs to pay for prime real estate (he was on the busiest road in town), and has to pay for all that produce up front. He barely spoke english, but somehow managed to fill out all the forms, get his licenses and inspections (you don't need your computer office inspected like a place that sells food) and insurance. I don't think he had any money.

That's annecdotal, but I see people like that all over - they start up restaurents, markets... things that seem to me to have very high overhead. So how do they do it?

The truth is that some of us simply aren't cut out to be entrepreneurs. I know I'm not. I want to be. I'm keeping my eyes open for an opportunity, but even still it will take a lot of trust from a lender to be able to get started - and I've always known I'd have to keep my current job until things took off (god willing).

But I'm simply not willing to take a chance. If I was single, maybe, but now that I'm married with two kids (and the sole income provider) I need to play it more safe. The only people that I know that have gone into business for themselves had money to start with... so as soon as they started making money, it was there's to keep, not pay back to the bank. I won't have that benefit. Like I said, some of us simply are not cut out to be entrepreneurs.

Re:The challenge of financing

[Ralman]

Why do you need finance?

Have you ever tried living on beans and rice for 6 months at a time? You need money to live on while you build the "next big thing". Without drawing some form of a paycheck, how do you expect to pay for the electricity to run the computers, rent to house the computers, ISP to download the stuff you need?

When you look at the costs, the hardware and the software are the cheap items on the list. The rest is lawyers, accountants, insurance, rent/lease/mortgage, electricity, phones, salaries (even if minimum wage), and taxes.

Having created two companies so far, I can tell you that you WILL WANT TO talk to at least a lawyer and an accountant. Not to mention any fees that you will have to pay the government for creating a legal company.

Believe me, it is easy to come up with the idea. It is harder to try and continue to work on something for free when you have no job. Yes there may be those out there who can mooch off the parents until they can get onto their feet. Then there are the ones who have to pay the bills just to continue to have somewhere to live.

The other part of the problem is trying to break into the market. Yes, there are cheap forms of advertisement (word of mouth). Grantes it is not impossible, but right now in this economy, it is hard enough to find a job for yourself. What makes you think there will be someone out there that will want to hire a newly formed company with NO track record and unproven software/services?

Re:The challenge of financing

[jrexilius]

Here are my business expenses:

1) server colocated in datacenter with back-up dial-in line $300/mo + $2000/server
2) SSL cert, web site marketing costs, etc. $500/yr
3) answering service, mail box, fax service $600/yr
4) cell phone & DSL at home $100/mo
5) incorporation, filings, fees, business liability insurance, registered agaent $2000/yr
6) business checking account $500/open
7) software, $0. all open source

So the company costs me an upfront ~$5000 and $400/month after that for a grand total of ~$10k for the first year.

Personal expenses:
rent/mortgage, utilities, taxes, maintenance, etc.
car payment, gas, insurance, parking, maintenance
debt (credit cards, student loans, etc.)
food, clothes, fun money, living
insurance (health, dental, death, disability, etc.) (~$200/mo for individual health)
savings & retirement etc.

My personal expenses after cutting out A LOT of fat are $4000/month for a grand total of $48,000 for the first year. after taxes.

Re:The challenge of financing

[gregfortune]

Don't incorporate then. If you all trust one another, form a bunch of one man companies and subcontract the work out to each other.

Travel is one you can't get around, but if you're smart, it doesn't have to be that costly. (ie, don't pick up your first client 500 miles away from home)

Totally true about the salary though. The trick is to find a company that is willing to contract a large project and then pay at periodic points during the project rather than a lump sum at the beginning or end. If the project is large (12 month project for 5 people? That's fairly large), it shouldn't be impossible to set some milestones say every 3 months and collect a portion of the total at that time.

If you can afford to live on a very meager salary and budget the money you recieve to last over the 3 month period between "paychecks", it doesn't work out too bad. With a large project behind you to point at as a portfolio, you can negotiate will a little more power on the next project.

Re:The challenge of financing

[Svartalf]

While one can get away without office space at the first part of your venture, you're going to be needing an office space of some sort for people to take you seriously. That takes money.

While one can get away without office equipment at the first part of your venture (i.e. Using your own computers, etc.), typically, unless you're a tech freak like myself, you're not going to have enough machine muscle past a certain point- AND you really, really don't want to work off your machines forever. Buying equipment for the venture costs money.

Don't forget the expense of Salaries. That takes money as well. Don't forget insurance and other benefits- again, that costs money.

This is not to say that it can't be done (I'm trying to do this very thing while I'm holding down contract jobs to pay the bills while the other venture grows, hopefully into something I can call a day job at some point.) but that it's NOT anywhere near cut-and-dried simple as many, yourself included, are trying to make it out to be. Many of the things you're probably going to do without aren't really options if you knew anything about it. (I can tell you all about a few hospital visits (To the Emergency room...) that my wife legitimately made that ended up being rolled into a refinancing because we didn't have health insurance... No, insurance is NOT an option, it's more of a requirement- you can't afford the costs of a serious medical issue without it unless you just one one of the lotteries across the country.)

If it were that simple, there'd be a lot more people out there trying to make it happen in a downturn- and it's been no different than in any the others I've been through.

Re:The challenge of financing

[ckaminski]

No, I just know that it doesn't take money (necessarily) to make money. It takes a good clean outfit (tie necessary, suit not), and a willingness to lose a lot of sleep, sweat a lot, and learn how to sell.

I've made money going in at the bottom in a company, whizbanging the CEO, and making the sale. I've seen companies run out of parlors by guys out of work with nothing but an idea and a dream, and a client with a need.

Go find someone, small shop, warehouse, manufacturing center near you, and solve their computer woes. I guarantee you they have a supply chain problem or JIT issue that you can solve if you work hard enough at it. Lawyers with websites, etc...

90% of running a business is marketing yourself, not actual delivery of product. Otherwise, how would Linux or Microsoft ever have taken off? Hmm??

Re:The challenge of financing

[DevilM]

Having successfully raised funds for a software startup I can tell you for a fact that it is very difficult. Further, it takes a unique set of skils that most people who are good at software engineering don't have. I was lucky in that I had worked with previous companies raising captial, so I had experience and connections.

Anyway, my software company recently exited as we sold off our IP to others. I now have a consulting firm that among other things helps people with raising funds. I represent several angels in the Atlanta area, so if you have a great idea that you need help raising money for, let me know. That doesn't mean you should start submitting business plans to me, but if you do have a great idea, strong founders, and would like to discuss your options over lunch then by all means let me know.

Re:The challenge of financing

[Radius9]

A limited liability corporation is still being incorporated, its just a different form of corporation. Other than what you need to do to become incorporated, and some rules on shareholders, it is in essence the same as an S-Corp. An S-Corp lets you apply you're corporation's profits and losses onto your personal income taxes, as will an LLC, making your corporation somewhat easier to manage. On the other hand, a C-Corp is a corporation that has to pay quarterly estimated tax, and I believe that is the corporation you are talking about. Where you are mistaken however is that you are double taxed. The only place you are double taxed is dividends, i.e. profits paid out to shareholders (which in the case of 1 person, is just you). If I start a C-Corp, and the corporation earns $300,000, and I get paid $250,000 as an employee, then I am personally taxed on that $250,000, and the corporation is taxed on the $50,000 it has left over after paying me, hence no double tax. If I take that $50,000, and want to pay it out as dividends, then the corporation pays taxes on it (after which, lets say $40,000 is left over), pays out $40,000 to me, and then I pay taxes on that $40,000 of income. What you can do however, is you can do something like pay it out as a bonus, in which case it becomes a write off for the corporation, and you're the only one to pay the tax on the $50,000 (instead of $40k, because the corporation didn't pay taxes on it). The other thing you can do is shift expenses that are business related from yourself to the corporation. Things like your travel expenses, computer equipment, a percentage of the rent, business lunches, etc. The advantage of having a corporation (and this includes S-Corps, C-Corps, as well as LLC's) is that corporations have a greater leniency on certain things that they can write off. For example, if you go on a business lunch, and it is not out of town, you can only write off 50% of the amount. If the corporation has a policy of paying for business lunches, it can write off 100% of the amount, whether it is in town or not.

Just a little disclaimer however, I am not an accountant, just a business owner. If you are seriously looking into incorporating, speak to an accountant first. Although I highly recommend all contractors incorporating, there are numerous things that you have to keep in mind, and there is overhead, so its best to go into it with eyes open, or you are liable to get screwed for not following the rules.

Re:The challenge of financing

[hoegg]

You're not kidding. Sales and marketing has been the hardest part of my business, which is about to be four years old. Luckily, I started with a client and was able to sustain that business while I slowly gained others, mostly through word of mouth.

I set up shop in February 2000, and since then have gone from two business partners to none, re-incorporated once, moved 1200 miles, and changed my core business model several times.

Through it all, the only sure way to get business was word of mouth advertising. You simply have to maintain a reputation and talk to lots of people.

Re:The challenge of financing

[llefler]

I can't do it because its toooooo haaarddd....

He's talking about creating a job. Is your reputation so bad that you won't hire yourself? Anybody I know that is serious about programming owns a PC. All of them have compilers too. And if they didn't there are free compilers, either OS or previous versions of commercial compilers.

So you need three things; time (unemployed, you have plenty), a marketable idea (a little more difficult, but there are so many BAD programs out there than need replaced, not even counting processes where software doesn't even exist), and someone to sell it. The last being the hardest part.

I have a friend that is always telling me "I need to learn more about this or that so I can get a programming job". Let's see, he needed; better understanding of OOP, web services, XML, SQL.... So I gave him a project to write that addressed all of them. Since I have seen nothing in 4 months, I'm assuming he really doesn't want to program.

I turn down several consulting jobs a year because I like the security of a stable paycheck. I don't have time to do my job and consult. So my experience is that there is work out there. If you know anyone who owns a small business, they can probably tell you how some software that doesn't exist could benefit their company. And unless they have some really odd business, there are probably 1000 other small companies doing the same thing they are. Niche markets can be profitable for a small group of programmers.

Re:The challenge of financing

[ron_ivi]

And the grandparent post is assuming someone's working alone. Do you know other unemployed people? If not, perhaps unemployment's not all it's cracked up together, or perhaps go to a Linux users group and see if they all have jobs. Why not work together on something. It's amazing how impressively a few highly motivated people can turn out a good prototype (perhaps especially if their seed money is running out).

Re:The challenge of financing

[Deraj DeZine]

I'm never delivering pizza to you again =)

"Ah, the pizza. Here, why don't you step inside while I grab my wallet... out of my pants... that are on the ground over there... Hey, do you have a second? And would you like to earn $300?..."

Re:The challenge of financing

[FreshFunk510]

From what I remember, the taxation depends on your type of incorporation. There are various types of S-corps and C-corps.

And, from what my financial friend told me, while there's double taxation there are also some advantages to certain types of corporation. Basically it involves loop holes with personal compensation and using the company as an entity to lower your taxes. People do it all the time .. how else do you think rich people get away without paying much in taxes?

Re:The challenge of financing

[Anonymous Coward]

Most business people make poor business people. Have you watched The Apprentice? It's a fucking joke!

Re:The challenge of financing

[dasmegabyte]

Finding financing is NOT HARD. Finding venture capital is, but you don't need it. Venture capitalists expect the possibility of a major return on their investment (20%+). Banks, on the other hand, just want you to pay back what they loaned you. To get a bank to give you a business loan doesn't take much...prove there's a market, prove you can deliver to it, and you've got upwards of a few hundred grand. My boss does it twice a year -- our industry segment moves in cycles, he finance two quarters with loans and pays them off with money gained during the other two quarters, pumping the excess into growth. It's even easier if you're willing to work off credit...shit, webslum is a lazy project that doesn't really try to make any money, and we've been offered credit lines in the five digits. Think of all the hardware you could finance with that...and all the months of dedicated lines you could swipe, borrowing off future gains.

However, the problem is one of social networking and markettability. Since the 'bust' that put people out of work, I have been offered three jobs. Offered. Which says to me that the problem isn't the availability of work, but the ability of the currently unemployed people to find it and properly market their skills. And if you can't sell yourself, there's no way you'll be able to sell software. That's the first step!

Then there's the issue of drive. A lot of my friends who are out of work in the tech field don't WANT to work in the tech field. They just want to make a lot of money doing something "easy," and now that they can't they want to whine about it. After all, they slid through the CS program at some fancy pants college, shouldn't they be guaranteed a job? Newsflash folks: without the passion to learn how to write software, how to manage your own company, and to research what a market needs, you'll never be able to make it anywhere. A lot of people just want to find themselves in a job where they can get major paid to tap away for 8 hours and never really put any energy into anything. These people will never make it in the industry.

That said, I dare any of you to prove me wrong. Owning your own business is exciting and fun and can be a LOT more worthwhile than working for somebody else.

Re:The challenge of financing

[sane?]

You're thinking big, think small.

You need a product that can justify costs of a few k per item. You are not in the Microsoft game, you are in the niche game. Value to a specific niche is what you are looking for. Value sufficient to justify the costs you will charge, and small enough that the big boys aren't interested.

So:

1. Have a number redirected to your mobile, and have a rotation within your little group.
2. A website is cheap to do well. Don't have an office for the first year. YOU are the sales force.
3. You are going to deliver it personally (unless its a web service). You're not in the shrinkwrap game yet.
4. Providing you keep it simple, you can use off-the-shelf software for this for quite a while. Sure, you won't find every tax loophole, but the accountant charges can be kept to a minimum.
5. Keep it simple. Try and start from the basis of your template contract. Use your brain, and a lawyer when you have to. The aim is to be a partner to the customer - if they try to tie you up in too complex contracts or terrible terms, walk away.
6. Work from home. Don't have fixed overhead costs until you have to. Plenty of companies can succeed to the extent they need to never having a 9 to 5 office. Some people swear blind that the office is a necessity. It you agree then get the cheapest, smallest, most dive like office you can.
7. Go to the customer, don't expect the customer to come to you. Sell on the solution you can provide, sell on your dedication. If they want the glitz then you will likely not get a look in until your turnover is $1m anyway - don't go after those customers.

I'm not saying I disagree with what you have said. There are lots of reasons why it can be too difficult, too expensive - but provided you keep you wits about you, they are possible to avoid.

Re:The challenge of financing

[BoRictor]

The difference with the Korean produce shop owner is that he has a local business community to borrow funds from. That's how Korean stores are able to start up and survive. Then as he begins to profit from his business he can repay his loan and pay his membership dues which others can then borrow to start up other businesses. It's a co-operative system/community that enables Korean grocers to thrive. I have yet to hear of a single software company co-op.

Re:The challenge of financing

[abandonment]

if you have people that are willing to partner on an idea, you can make it happen.

our company has software we've been selling for 6 months now, it's not making us rich, but it's building up slowly to the point that the 2 principles involved (myself and my partner) will be able to live on it rather well within the year.

it's all about drive and creativity.

if you say it's 'not gonna happen', then frankly, it ain't gonna happen.

just because someone else got millions of financing for a project, does NOt mean that this much money is required by any means.

www.gekidodesigns.com

Re:The challenge of financing

[Strudelkugel]

I'm not sure it's that easy.

You're right.

The biggest problem for unemployed software engineers getting together and forming a company is financing

Surprising as it may seem, I don't think this is the biggest problem. I started a software company with some friends, and believe me I could go on about this subject. But, I will narrow my observations to what I found to be the most critical factors for success.

(1) How easy or difficult will it be to work with your partners? Be absolutely honest about this with yourself. Ambitious people have to have egos, but will everyone's ego drive the company forward or turn the company into a battleground?

(2) Write up a business plan. Make sure everyone agrees to what it means in terms of roles, responsibilities and expectations. This will help a lot with (1).

(3) Hire an excellent attorney to draw up the company documents before you write the first character of code. If you think you can't afford it, or worse, don't think you need to, you will regret it, and it will cost a fortune to do later what could have been done for less at the beginning.

If (1), (2), and (3) are going well, it will not be that hard to raise money. Notice I haven't said anything about the actual idea. There are lots of things that people will pay for, and between you and your partners, you can think of a few products. Debate the pros and cons of each idea, then put the best one into the b-plan. Investors will be interested in your product/service, but they will be far more interested in your team's ability to execute. A bad team won't get funding for bottled fountain of youth, a good one can get funding for an arctic ice service.

Re:The challenge of financing

[Anonymous Coward]

Give me a break. I can't believe I'm even reading such a flame bait topic. I have my own software company already. Woot. Yeah baby and I'm rolling in the bucks like all the other software moguls out there --not. I don't make shit. The only reason I keep the damn thing going is that there's no point in quitting at this point and it is, after all, my hobby as well as my profession. But after years and years of hard work I probably make less than a few hundred dollars a month. It's not that simple.
God, just thinking about it pisses me off. Fuck.
Alright, but let's get back to the point. This anectodal story about the Korean grocer is utter nonsense. If the guy didn't have money, then he couldn't have done it. That's just the way it is. The fact is, the guy did have money. He invested it in his business and his business will probably close within ten years and he will work very hard in that time and maybe he will make decent money, but probably not.

Re:The challenge of financing

[XorNand]

If you're one code monkey working out of your apartment, don't bother doing anything more than filling a "Doing Business As" (DBA). It costs like $25 in more areas. Essentially it's like giving yourself another name. All income is reported on your 1040 under your SSN. It's cheap and easy. If things grow, then you can always roll it into a new business entity. WAY too many people overlook this option when they have stars in their eyes.

A C-Corp is a standard corp and S-Corp is like Corporate Lite. It's designed for a small, closely held group of investors. There are some restrictions on what you can and cannot do, who you can offer interest to, etc. Still though, either form is too complex and costly for most people who simply have a good idea and pocket change to work with. I recommend an LLC for a small group of friends and just a sole-proprietorship (the DBA option) for just one guy.

No, I'm not a lawyer but I have done a lot of this stuff and have learned from my mistakes. Don't do a corporation unless you have serious starting capital (what is not what this /. article was about).

Re:The challenge of financing

[l-ascorbic]

My experience is with the UK, so that's what I'll talk about. There are good arguments both for and against incorporating. If you're on your own it's probably best to not bother at first. The main point is to limit your liability, but with startups most creditors would want a persnal guarantee from you anyway, so that benefitis gone. If you get investors you'll need to incorporate, but if you have already they'll want new documents anyway, so you may as well not bother to start with.

There can be tax benefits, though the IR-35 rules are designed to put a stop to lots of them.

If you do want to incorporate it's pretty easy and cheap to do yoiurself, and certainly better than paying someone to do it for you. I did a writeup on everything2 explaining how to go about it: I've done it a couple of times now. Shouldn't take more than an hour or so and 20.

Re:The challenge of financing

[lost sheep]

He's right, the double-taxation only applies to dividends. One giant basic need for incorporation: it protects the owners from lawsuits and creates a separate entity that is the business. What this means: Say you have an employee that works for you, there is a fire, they die. Their spouse sues your company for $2,000,000 and wins, but the company only has coverage for $1,000,000 and only $500,000 in the bank. If you're incorporated: The company goes bankrupt, that sucks. If you're not incorporated: The owners are required by law to come up with the money; the company goes bankrupt along with the owners, that is sucking in a most extreme form. Additionally, if you ever want to do things like bring in investors, bring in partners, ESOPS (aka stock options for employees), do certain kinds of business with governments and other businesses, and have any sort of business exit strategy (except the strategy of leaving it all to your kids) you need to be incorporated. So take some advice, visit an accountant and attorney have them draft the articles of incorporation in whatever state you want them to be in (Deleware is the most popular!).

Re:The challenge of financing

[XorNand]

Cool, thanks for the clarification and the advice.

Re:The challenge of financing

[Anonymous Coward]

Wellll....in regards to our startup, which is running in the black...

(Granted, we all have full-time jobs in addition to our consulting work, so finances aren't quite as tight for us, but we all have families so it's not like our day jobs provide us with a huge amount of free capital...)

1. Our customers understand that they are dealing with a small shop. We are available by cell phone 24/7 for tech support; if one of us is not available at a moment's notice, someone else is. Working with a small shop is more cost-effective - we don't charge the huge per-hour fees that some consulting companies charge. Our customers appreciate the personal attention they get from someone who is actually involved in the development and building of the product.

2. We ARE our sales force - none of us are so hideous and unpersonable that we can't talk to our customers. This was a consideration when forming our company. If someone is a genius coder but can't talk to a potential customer, we can't use him - we have a couple of genius coders that are also genuinely nice people who love what they do and don't mind sharing their knowledge with the customer. This kind of tech person DOES exist. People who can't switch hats probably shouldn't be trying to create their own business.
As far as our web page goes, hey, we're software people, the only overhead is paying for the URL.

3. It doesn't have to start out in CompUSA. Start small and grow. Think about what you can do that is manageable - sell applications to businesses instead of trying to write the next big video game or the next Paint Shop Pro.

4. and 5. We do barter work with a tech-savvy attorney - we made his webpage look pretty and do the occasional odd tech job for him, he reads our contracts and does our taxes for us. No expense out of pocket for either of us. Of course, this means that you are friendly enough to be able to find someone who is willing to do this...

6. Ebay, Ebay, Ebay for your servers and other hardware. Anticipate your hardware needs so that you don't end up having to buy something at full price at the last minute. Stick a server in your parents' (or friends', if you are living at home) basement and automate your backups, so that if your house burns down you still have your software. Save money on faxes by getting an Efax account, so that you don't have to pay for the paper unless you actually want the fax. Get a scanner, use it and your printer as a copy machine. It's not fast, but it's fast enough for a startup.

7. This comes down to the personability issue again. Learn to be nice to people, take the extra few minutes to shower in the morning, and you can serve as your own receptionist. Hire a real receptionist when your business gets so busy that you can't possibly do both at once.

Granted, our situation is somewhat unique - we sell applications to businesses that take care of things like actual software duplication - but it was the niche we found because we wanted the extra income and we wanted it with minimal overhead.

Re:The challenge of financing

[tourslafrance]

Don't underestimate the effort involved in incorporating or in starting a business. It is complicated (else everyone would do it). The Korean guy with the produce market probably works 12-16 hour days, his wife might work in the shop, as might his kids. He has enough belief in himself (and knows enough relatives who also have done it) that he is willing to chance failure.

While it is complicated and a ton of work to start a business, it certainly is doable. It really helps to
(1) be naive and optimistic (if you knew all the problems that would come your way, you wouldn't even start, in all probability)
(2) be willing to give up all extra-curricular activity, except your family
(3) be driven by fear of failure (for financial reasons, ego, people dependent upon you, etc - preferably all of the above)
(4) be cynical - (if every suit who said he/she would OEM our product did so, I would be far richer than I am now)

My wife and I started a company, had kids and sold the company 10 years later. And now, we are going to do it again, in part because our previous experience was pretty damn fulfilling, especially for my ego.

Re:The challenge of financing

[ajagci]

Some people can slap together million dollar software in six moths. But they aren't going to be out of work...

Re:The challenge of financing

[dasmegabyte]

This is defeatest bullshit. I have worked for several small companies, and they were all QUITE successful despite lacking most of these.

1) Developers can very easily man support lines by themselves for a short period of time. In fact, I've discovered that even in large companies, developers generally have to help with support for the first six months of a new program's release, and that this helps drive the bug discovery and repair process.

2) Why do you need a sales force? You can make a sizable profit with only one or two corporate sales, which you can get through simple advertising. Sure, eventually you'll want somebody to do cold calls and direct sales visits, but for the first year or so, if your software is a good enough value you'll be your own sales staff and still get more orders than you can fill.

3) You shouldn't think about getting into CompUSA as a start up anyway. Business should move SLOW, or else it burns up too much cash and too much energy. Start with a a web page. Move up to shipped sales. Then move into retail. Lots of companies, from WinZip to Globalscape, did this. And to make the most money...start wirh business services FIRST, then move to the consumers (who are worth less money and have greater support needs).

4) Outsource this. It costs practically nothing. And with a staff of fewer than 10 folks, chances are you can do it yourself.

5) Lawyers are only needed to finalize contracts. You'll be billed a few hours time, which may be expensive, but isn't the same as having a guy on retainer at all times. A good lawyer is your best friend, but that doesn't mean you have to bankroll him.

6) The key there is "eventually." I have worked in companies with 2 or 3 servers that provided better work and faster than companies with farms of them. Fewer servers means less IT work, and it can mean cleaner environments. Back ups cost $10 per month at our server coloc. And really, by the time you NEED a copier and a fax machine, you'll have the cash to pay for them. Otherwise, you're doing it wrong.

7) A receptionist is a major luxury. My boss has been doing this for 17 years, and only two years ago did he hire a receptionist. My first job, the receptionist was also the HR lady, also wrote contracts and pricing, and performed QA. Anyhow, the easiest way to avoid needing a receptionist is to have all meetings at your clients' offices. It's cheaper, and most of the time they prefer it.

What you're talking about is, indeed, essential for Microsoft, IBM, Apple, and even Adobe. But plenty of folks get on just fine without any of these artificial "business constructs."

Re:The challenge of financing

[saden1]

excellent post....very informative.

Re:The challenge of financing

[jonsmirl]

If you're worried about taking care of a family, house payments, and a salary, then a start-up is not the right place for you to be. I've done two very successful companies now that both started from less than $2,000 in capital.

If a salary is important to you go get a job. If taking an incredible risk for an incredible payoff is your style do a startup. To do a non-financed startup you have to learn to live and make do with nothing. If you just bought a McMansion and have two kids, forget it.

I have a bunch of friends that have worked at VC backed start-ups. They got great salaries and benefits. But in the end the VCs got rich and they still effectively had just a salary with a little bonus. If you're employee #50 at a VC backed start-up you're not going to get rich. And don't forget VC backed start-ups are still start-ups and they fail all of time leaving everyone unemployed.

So if you don't have a plan for living two years without income, forget the zero-dollar startup and go get a job.

If you're bored while waiting, write Open Source software. Give it away and develop a reputation that will help get you hired.

Re:The challenge of financing

[Anonymous Coward]

Caution: At least in Colorado, an LLC is not considered a corporation, in a legal sense. That being said, I've founded several LLCs, because they're still the best business structure for a small software company. But read up on this before you do it.

I recently started a new software company (I have one already, but I want to do different things, and do them differently). It so far has cost be about $400 in various expenses, and I'm ready to start coding and selling my first product.

You don't need financing. You need people who can work (for nothing, for a while), and an idea, and a clue of what to do with it. I create products and programs that don't need a million-dollar marketing and business machine to create and sell them.

Go forth, and code! (But not, in Forth.)

Re:The challenge of financing

[Anonymous Coward]

Ok- its true that its simpler to make an LLC than a S-corp or C-corp filing.

But get ready to get your ass sued off.

The 'limited liablity' in LLC means limited liabilty to the other partners in the business. The corporate veil isn't as strong to protect you, because you are essentially a sole-proprietership. So in the case of a client that sues you over a contract dispute- you could lose your house, etc.

Re:The challenge of financing

[allism]

Your rent will still be due, and you still won't have the money to pay it, whether or not you are working on a project. If I had the choice between hiring someone who told me "Yes, I was unemployed, but I still spent my free time coding" or "Yes, I was unemployed, and I sat around doing nothing techy" I would hire the first guy - he's coding because he loves to code, not because it's where the money is.

Re:The challenge of financing

[FreshFunk510]

Well, yeah, my friend was the one who was doing all the finances and dealing with this stuff.

I wish he was a bit more practically minded like you and didn't waste money on incorporation. That idiot.

Re:The challenge of financing

[Charlotte]

Starting a business is daunting, but the point is spending your money well. You just spend that amount of money that is absolutely needed (I should know, the startup I worked for managed to go bankrupt in 6 months). Keeping your cash flow in balance is critical for any new business.

The problem with many people is that they start a business like you explained it. There's no reason to get a secretary when you have 0 customers, instead get a cell phone. The first thing to do is get a customer. Use your dad's printer, darned, and get a fax receive service where you can go collect any faxes for you.

One very important item: make sure you can survive if your customer doesn't pay. Explain him that you are a beginning businessman and need monthly payments. Do _not_ wait to get paid until the job is finished! Do _not_ give the customer the finished product without asking for a signature confirming delivery. Make sure the delivery confirmation mentions the contract under which the product was delivered to the customer. If the above is impossible then get an insurance against customers who won't pay and bump your price to account for the offset in cost.

Don't bother getting a business location, do that once you have actual money coming into your bank account. Use your house or your brothers' barn instead and deduct the cost as a business location. In my country if your house is 100 m2 and your desk where you run your business (your computer room) is 30 m2, then you can deduct 3/10 of your rent as a business expense!

If you can keep your company going like this for 2 or 3 years you're set.

Re:The challenge of financing

[sbeitzel]

Wow, mod or post...

I'd mod you insightful, (and I hope someone does) but you missed a really crucial part: an actual business plan.

It's true that without sales and marketing, nobody will know about your kick-ass product. Marketing is important, not least because the sales force can report back what the customer really wants. But, having worked at a few tech startups, let me say this: you can have cool technology, you can have a good sales force, but if you don't have any kind of road map for how you're going to run the business (who's the customer, what problem are you solving, how does each iteration of your product line solve the problem, where does revenue come from, how and when do you expect to meet expenses, et bleeding cetera) then your kick-ass technology and super sales force won't keep you afloat.

You need a business plan.

Re:The challenge of financing

[natron 2.0]

why not start your own Linux Distro? just a thought...

Re:The challenge of financing

[yngv]

Don't let all the business or legal jargon scare you, it's easy and legally-binding.

I love that line! It's even better out of context. Make a great sig...

Re:The challenge of financing

[Anonymous Coward]

$4000 a month personal expenses? You must have children right? I get payed $1100 a month, and manage to save money out of this ....

Re:The challenge of financing

[PhiltheeG]

You know it's bad karma when you shun a pizza boy job for a gay porn job, but end up playing a pizza delivery boy fulfilling an order for a "large sausage with extra toppings" ... in a gay porn

Re:The challenge of financing

[notbob]

Well glad to know your can do the math to realize that even full time employed most of us can't afford to start a company :D

Hell I can't afford my $3k/mo of bills while working 45hrs/wk for a day job...

Re:The challenge of financing

[Anonymous Coward]

Jesus, dude... What kind of lifestyle are you living? Your monthly personal expenses are even more than my monthly income (by about $400).

My monthly expenses are:

rent $600
electricity: $100
phone: $65
digital cable: $100
net: $50
food: $300

That comes out to about $1,200, before any fun-money gets involved. And I don't count my 401k contribution since that is pretax (but I max it out).

Of course, if I were running my own business and *not* also working, I would have to pay a lot for health insurance, but even though my employer, I think I'm paying about $150 - so it wouldn't be that big of a difference.

Re:The challenge of financing

[duffbeer703]

Your grocer didn't discuss his finances with you.

Typically "ethnic" businesses are ethnic for a reason. Extended families, churches, etc each chip in and get a slice.

Re:The challenge of financing

[rskrishnan]

I like the spirit - but selling for $$ is pretty damn hard. The average "small business" is also hard pressed for $$ - so they nickel and dime you to death. So you land up giving them software + consulting + "fixing their chaotic processes" all for a pittance. I do like the spirit of the idea - but have been burned by 2 kind'a-bad experiences.

Re:The challenge of financing

[jenkin sear]

I'm curious- does a DBA provide the same level of liability protection as an S-Corp?

If I'm incorporated as an S corp, and somebody sues me, they can only take the assets of the business - they can't take my house, my car, etc. Does a DBA filing do the same?

Re:The challenge of financing

[base_chakra]

As someone who's been working on this for the last eighteen months, let me tell you the sad truth: Being faster, better and cheaper... and even first to market... isn't nearly enough. What you'll need is the business deals that your competition already has set up. And they're most likely exclusive.

It sounds like your strategy has been to actively seek out contracts rather than develop your own product line; the latter can be promoted for very little money. Two of my buddies started developing shareware applications and formed a LLC called Programming Art. I was highly dubious when they told me they were building a slideshow app, and even moreso when they announced a typing tutor program, since these markets are so dense as it is.

But then two things happened that made me think again: first, they pointed out that even though each of these markets are served by established product lines, the markets are so BIG that even if you only capture 1%, you're still doing well financially--especially if you're a small operation with very little overhead. Apparently their business model was sound enough, because in no time their products started scoring large corporate site licenses, not to mention very respectable single-user sales figures.

It's not always as difficult as it may seem to get the winning edge. Maybe your product offers competitive licensing terms. Some people choose one program over another mainly because they like the interface better. Or your app has one feature that sets you apart from the crowd. The fact that Programming Art's typing tutor has a Dvorak mode differentiates it from most of its competitors.

Don't automatically rule out a software market if its rife with competing products. Learn from other people's mistakes and think about what their products lack--then find your niche.

Re:The challenge of financing

[Chibi]

Details, details... ;) In all seriousness, you make a very good point. An embarrassing oversight on my part. You'd think I would've learned from the dot-com days.

Re:The challenge of financing

[Uzik2]

Excellent point! I've personally been doing exactly
that. The last time I was unemployed I was creating
and selling 3d object on turbosquid.com and putting
together an adoption system for the local animal
shelter. None of which would pay the rent though :(
I should think bigger and more commercial if I'm
going to make it as an entrepenuer.

Re:The challenge of financing

[dedalus2000]

my project lead wrote a small program recently to handle inventory at grocerie stores. he has preorder sales in excess of 10,000 dollars a friend of his is marketing it. I've had opertunitys myself to freelance but have too little time with five kids. this was a weekend project I can see some people makeing a decent living starting a company.

Re:The challenge of financing

[bscott]

> if you can swallow your pride and deliver pizza, you could
> just as easily swallow someone else's pride and do gay porn.

Wow, in your mind those two professions are equivalent?
(And I thought *I* was a huge moral relativist...)
The apparent nonexistance of a line between legal and illegal actions should leave you admirably suited to a job in almost any large corporate legal department. Blimey, you're set for life, dude!

Personally, I delivered pizza for 2 years - even while I was earning $75/hr as an at-home programmer. It was a nice break from the keyboard, getting me out of the house on a regular basis, and I got the not-so-occasional free slice - the best kind of pizza is free, after all! So where's the pride-swallowing, I ask you? I'm not begging for change, I'm not representing scumbags in court, I'm not calling people during dinner to sell them siding, and my clothes stay on. It can be dangerous work if you're not in a nice area, but otherwise it's enough to live on and you'd be surprised how many computer-y types I've known through the years who used pizza places as a nice little moonlight position... especially computer techs - I think it's just a nice change of pace to have a job where people are happy to see you!

Re:The challenge of financing

[oddman]

Exactly what is it about delivering pizza that makes it something that you need to "swallow your pride" in order to do it? It is lawful, gainful employment.

Is it glamorous? No. Is it challenging and stimulating? Yes, but necesarilly in a way you'd like. Is it high paying? Not really.

But none of these facts makes it shameful or somehow dehumanizing. In fact one might argue that the refusal to take a job in maunal labor or service (food delivery is both) is shameful. You should never consider yourself too good to take a job, if you are unemployed.

Re:The challenge of financing

[smittyoneeach]

Speaking of that perl script, how much money has been made by the people on CPAN?
I happen to have a way swift idea, prototyping it in a proprietary environment. I think it rocks. I'm not even worried about the start-up costs. I can get the money.
Buying off on all that for a moment, how to license the product? Part of me want to GPL the thing (though it could be done in a totally public-domain mode) and see if a business could turn a profit on the binaries, particularly MSI, as the idea is extremely mass-market.
While the idea of the money and freedom is attractive, the stress and complexity of running a business are unattractive.
I think I want to polish the idea and just sell it to an existing company. Seems the maximum cash/minimun stress approach.

Re:The challenge of financing

[jacem]

I thought we were talking about a start up.
I have a startup business in the legal services field not the software business but what you are describing is pretty advanced.
Lets look at this list in terms of 2-5 partners. (one of the things you have to be carefull of if you have to many partners is that even if the company is a success there may not be enough money to pay that many people after expenses are paid.

1. Customer Service/Tech Support

This requires a little flexibility with the truth but in a small start up a partner should be able to field a Customer Service/Tech Support question or two a day. and just tell your customers that you have a tech support dept until you have enough clients to actually require/afford one.

2. Sales

You'll need a web page at a minimum. Okay that is true but they are not an enormous expense. I am assuming as a software company you can create your own. Hosting can be done quite cheaply.
A sales person would be nice but a partner can do sales, especially if you are lucky enough to have a partner that is good with people.

3. Distribution/packaging

Are you going to be selling in the consumer market or the custom solutions market? In the custom solutions market the deliverable will probably be distributed be have a person from you staff go to the client site and install the product.
In the consumer market you are going to have to face a big expense of packaging I will admit.

4. HR/Payroll/Accounting

If you are talking about less than 30 people (including the partners) these tasks can be spread out among the partners.

5. Lawyers

Unless you have written signed contracts with your clients you don't really need a lawyer. With partners you do want an operating agreement. (In NYC that cost $1500)

6. Office space/equipment

Most programmers I know have a few older machines lying around their apts. These make excellent file servers you may have to upgrade the hard drives.
You can store the your off site backup under your mattress at your parents house Timmy. (What are you worried about a nuclear war or industrial spies trying to steal your intellectual property.)
I would suggest open source development tools wherever possible so as to keep your expenses down.
(All of the stuff mentioned so far are one timers from here on in you get to the recurring costs these can kill you if you are not carefull.)
Rent on office space costs less than you think. (I pay more for my uptown (NYC) apt. than I do for my Wall Street office. The office is as big as my apt. (If it had a shower I would move into it. It is in a better neighborhood after all.))
Phones, Internet etc. All of these cost more than there residential equivalents.

7. Receptionist

Answer your own dam phone. (Are your starting a company or playing at being a boss.)


What you have to do before opening a business is ask yourself how is my personal credit can I and or my partners get bank loans to cover things for a while. The other thing is that before you open your own company is prepare yourself financially. remember you are not just trying to get a job you can't be fired from you are making a bid to free yourself from the tyranny of middle management. So save up for the lean times while you have a job.

To throw out a little flamebait if you are an IT worker and are not preparing for periods of unemployment in the current IT environment you are a fool. Saving up for six months of unemployment between gigs (worst case) and saving up to start your own gig. are not that different.

JACEM

Re:The challenge of financing

[h8macs]

I would have to agree with all of what was stated by the "master" post. I would add just one extra detail, those of us who have kids and need what little income we can get often tend to take lesser paying jobs in a related field or in a different field all together.

I wonder how many 'good' IT folks in general are scraping by working 2 jobs trying to make ends meet and still come up short. Unemployment is still VERY high, and this isn't the folks that turn it into a career these are the folks that have been attempting careers!

Working hard long hours and for lesser wages does not make it easy to start a business which would entail even more hours worked with perhaps less income.

IMHO

Re:The challenge of financing

[XorNand]

No, you are 100% personally liable. It's just registering an alas with the state. FYI, just forming an S-corp doesn't mean that you are immune from personal liability. I would really recommend that you give a lawyer a ring. There are certain formalities that you have to maintain, which vary from state to state.

Re:The challenge of financing

[Anonymous Coward]

actually, no. LLC is a Limited Liability COMPANY, not corporatation. so you are not technically "incorporated"

LLCs are the "have your cake and eat it too" entity, you have the pass through taxation of sole proprietorships and the limited liability of corporations

Re:The challenge of financing

[Tassach]

So why do you NEED lots of finance

Mortgage. Kids. Health care. Food. Etc.

Starting your own company takes money -- money to live off of and money to pay for the essentials needed to run a business. If you have enough money to live off of for a year or two, then starting your own company is a possibility; if you don't then you either need to find funding or find a job - either way you need to convince someone to give you money in exchange for your talent & ideas. Running a business as a second job is a whole lot different than making it your primary source of income.

Re:The challenge of financing

[Mod Me God Too]

$300 for a jizz scene?! That's cheaper than a rent boy! You should be able to command $2000+ unless you are really ugly (but there's probably a niche for that so ugly guys could earn more!!!).

Re:The challenge of financing

[Trillan]

It sounds like your strategy has been to actively seek out contracts rather than develop your own product line; the latter can be promoted for very little money.

Nope, it's our own product and was even a relatively unique idea. It was just in a market space that has other products.

I won't give details, but think about if you had some sort of companion product for a fianancing package. It doesn't compete, and it doesn't offer features that should be rolled into an existing package, but the Quicken guys (just for instance) might swat it down with FUD anyway while they build a competing product. That's more or less what happened to us...

Re:The challenge of financing

[jrexilius]

Chicago area cost of living is fairly high. $1200 rent plus utilities, $150/month for a parking spot etc. etc.

Re:The challenge of financing

[galore]

Don't let all the business or legal jargon scare you, it's easy and legally-binding.

Ah... more great advice from the readers of slashdot.

Re:The challenge of financing

[jrexilius]

no wife or kids, so I am obviously in a more flexible position than many others.

Re:The challenge of financing

[pixel_bc]

> There is no reason you need to endure that expense and headache.

Aside from the indemification -- sole ownerships or partnerships and They can sue YOU. Incorporate and they sue the COMPANY. A small difference, but one that could make a huge difference if the lawyers ever get involved.

Re:The challenge of financing

[Anonymous Coward]

Porn's not illegal, dumbass

Re:The challenge of financing

[4of12]

Uhhh, creating Linux took years.

And money.

Many Linux contributors are subsidized as students at a university or as employees of large corporations or governments who get paid to do things only tenuously related to their open source programming.

A demanding IT job where you're fighting brush fires 110% of the time is not conducive to being able to do programming on the side.

You need a source of livelihood that gives you enough slack time (and little to no family obligations) even to afford the time to invest in programming.

After you lose your job is not the time to decide to pour 12 months of effort into programming; you need a steady income, even if it's small, and a job and lifestyle that allows you to spend the tremendous time that successful projects require.

Re:The challenge of financing

[Tassach]

So you need three things; time ... a marketable idea, ... and someone to sell it

You forgot the essential fourth thing: money to live on. If you're living in your parent's basement, you might be able to survive on peanuts while you build a business. If you have a family to support, then your options are much more limited. If your spouse / SO can support the family while you're building the business, that's great. But when you're the primary breadwinner, you have to do something to bring money in *now* so that the mortgage gets paid and the kids have food on the table. "Sponging off your family" is a kind of financing -- they're paying your living expenses so you can build your business.

Re:The challenge of financing

[jrexilius]

yeah thats exactly the challenge. Software is cheap but we work mostly to support our lives which is usually where our income goes. Income and expenses usually match eachother fairly closely. If you make $1000/month you may spend all that and more. If you make $5000/month you will liekly spend close to that much. You find yourself making cost committments based on your income. "I can afford the rent for that place I like" or "I can afford that car that I like" whatever that amount is..

Re:The challenge of financing

[allism]

it doesn't pay the rent, but it can go on your resume...which means that eventually it WILL help pay the rent.

Very cool, doing work for an animal shelter :)

Re:The challenge of financing

[fm6]

Nevertheless, I'm building a startup right now, Findory.com.

Pretty cool app. Dare I ask how it's supposed to generate revenue, or is that a secret part of your business plan?

Findory reminds me of MovieCentral.com, a really well-designed web application that helped users find movies simliar to ones they already liked, and also to hook up with people with similar tastes. I like it mainly because of a clever feature that threw randomly chosen movie titles at you and asked you to rate them. I fed a lot of data into their system just for the fun of it. If ever a DotCom deserved to succeed, it was that one.

But like all the other DotCom's they failed to find a revenue stream. There's no infrastructure for micropayments, nobody wants to pay a subscription, and there just isn't enough ad revenue to go around. Has something changed since then?

Re:The challenge of financing

[gpinzone]

You're doing the same thing as Google's News section? How do you expect to make money?

Re:The challenge of financing

[glinden]

We're getting a bit offtopic, but I'll briefly respond to this.

Advertising revenue cratered in 2001-2002, but it's been picking up again. Google, for example, is estimated to have nearly $1B in ad revenue in 2003. Google's technique, in Google AdWords, is to make advertising targeted and useful. They do text-only ads, but they achieve much higher clickthrough rates than obnoxious popups or take-over-the-screen ads that you see elsewhere because they're actually relevant and helpful to Google's users.

I'm not going to go into how this technique could be applied to a personalized news site like Findory News, but I'm sure you can imagine some possibilities.

Re:The challenge of financing

[wwest4]

i was just joking, sorry to offend. i was just playing on the notion that once-proud software engineers won't lower themselves to working a low-tech job.

Re:The challenge of financing

[stephanruby]

"At a minimum, there's legal costs from incorporating with your partners, "

Don't take on partners, aside from the legal cost or the potential liability of having partners, sharing the work and sharing the benefits of a company with someone never works out in the end.

My advice is to either be a subcontractor or use others as subcontractors. If you don't have money, you can always barter your time with the other guy, but at least you'll have complete control of your project and the other guy will have complete control over his project.

I know this isn't what common sense dictates and I know that this might not work for specific large-scale ventures, but trust me, if you ever had troubles with partners in the past -- I urge you to try this approach.

Re:The challenge of financing

[infinite9]

I have an Article C corporation. It's much more complicated than this. If your corp makes $100,000 and you pay yourself $50,000, the 50k you pay yourself was an expense and is not taxed on the corporate side. It is on the personal side though. So have your income gets the corporate rate, the other half gets the personal rate. This is not double taxation. Now if you don't make any money the next year and you use money you've already paid corporate taxes on to pay your salary, that money is taxed (again) as personal income. As long as you're making money, this isn't a problem, right?

Re:The challenge of financing

[HeyLaughingBoy]

Software that takes 6 months for one guy to slap together, isn't going to impress anybody who has an IT background. They'll see it's obviously only 6 man months of work

This is insightful? The amount of time you spend on a product is irrelevant as long as it meets the needs of your customers. Most businesses aren't looking to be impressed; they're looking to get work done efficiently. I sold a product for around $100 that cost me $15 in parts and was designed and debugged in a week to companies that could just as easily have built it themselves. Why didn't they? It was just easier to buy 10-20 from me every month than to go through the whole product development process to end up with the same thing.

Re:The challenge of financing

[wwest4]

i'm implying that pride is a negative emotion in the context of how one eeks out a living.

and now for some more funny:

Personally, I did gay porn for 2 years - even while I was earning $75/hr as an at-home programmer. It was a nice break from the keyboard, getting me out of the house on a regular basis, and I got the not-so-occasional free piece of ass - the best kind of ass is free, after all! So where's the pride-swallowing, I ask you? I'm not begging for change, I'm not representing scumbags in court, I'm not calling people during dinner to sell them siding, and I don't have to deliver pizza. It can be dangerous work if you're not in a nice area, but otherwise it's enough to live on and you'd be surprised how many computer-y types I've known through the years who used porn studios as a nice little moonlight position... especially computer techs - I think it's just a nice change of pace to have a job where people are happy to see you! ... amen to that!

Re:The challenge of financing

[Uzik2]

The resume angle occurred to me when I did it.
It ended up not being being used. The animal
shelter has such a miserable budget their computers
were obsolete. A LOT obsolete. I wrote something
that would work on any windows compatible box,
but I hadn't counted on windows 3.1 and DOS on
a 386! ;)

I really should resurrect that project via the
web. Then I just have to get someone to host the
thing as a tax writeoff.

Re:The challenge of financing

[dedalus2000]

Did you say "whizbanging"? Sounds like your right out of the music man. did you sell the CEO a trumpet or a sousaphone?

Re:The challenge of financing

[fm6]

I don't see why this is offtopic, but thanks for an interesting reply.

Need a tech writer? Will work for equity!

Re:The challenge of financing

[NanoGator]

"If not, perhaps unemployment's not all it's cracked up together, or perhaps go to a Linux users group and see if they all have jobs. Why not work together on something. It's amazing how impressively a few highly motivated people can turn out a good prototype (perhaps especially if their seed money is running out)."

Yeah because Linux users have a reputation for throwing money at every product they love!

Re:The challenge of financing

[glinden]

An LLC is a corporation. Forming an LLC is incorporating. But, yes, LLCs are a good choice for many small businesses.

But, even though I agree there are advantages of LLC's, there are also some disadvantages. LLC's are more complicated to form, don't have normal forms of equity (so you can't easily offer stock options to employees), and can't have venture capital investors. S corps have the tax advantages (pass through of profits and losses) of an LLC without the complexity, but they aren't as flexible. C corps are a good pick if you don't meet the restrictions for a S corp and don't like the disadvantages of an LLC or if you intend to go public (probably not a concern these days).

If you're looking for a good book on this, I'd recommend The Entrepreneur's Guide to Business Law by Bagley. Great book, broad coverage of this and many other legal issues for a startup. Not a particularly light read though.

Re:The challenge of financing

[JoeBuck]

That Korean guy probably saved most of his salary for years to get some capital, and then might have joined a type of capital pool called a kye. Each member puts up a substantial amount of money, and each member in turn gets a loan to start up a business. As the loan from the first business is paid off, there's enough money to fund a second business, and so on.

Re:The challenge of financing

[Prof.Phreak]

If a salary is important to you go get a job.

Wasn't that the whole argument: folks who cannot get a job should start a company???

Yes, you can start with very little money (to run the `business'), but you really can't `run a business' when you're worried about paying rent or buying groceries.

I've had a company that went well for a little while, but when around 2001 it started sucking bad for a while, I really started to appriciate the stability and financial security I had when I was an employee.

So if you don't have a plan for living two years without income, forget the zero-dollar startup and go get a job.

Exactly. Which makes it sort of pointless for the unemployed to be starting a company. (unless they have the funds to not worry about the unemployment in the first place).

Re:The challenge of financing

[garyrich]

"Don't do a corporation unless you have serious starting capital"

Partially correct. The other half is "or you think someone may want to sue you". In this world, someone always wants to sue you. A DBA provides no protection for your assets. They sue, you can lose your house. An LLC or S-corp provides effective cover. The real downside is a minimum of $880 a year in corporation costs in California.

Re:The challenge of financing

[glinden]

It's a little offtopic, but I'll briefly respond.

Findory News isn't the same as Google News. Google News does pull from a broad variety of sources, but it shows the same news to everyone. Findory News is personalized. It learns your interests and emphasizes the most important news for you. More information is available in the about and FAQ pages.

Re:The challenge of financing

[Anonymous Coward]

Incorporation costs are actually very small if you do it yourself -- you can incorporate for a few $100s or even less.

Launching the business however takes much more effort and money, even assuming that you don't need office space and already have equipment (computers & software). The main costs come from traveling to customer sites, and maintaining you alive until you get paid for the first projects.

Then there is the risk of not getting enough business -- but nothing prevents you from starting a business and looking for a job at same time, right? ;-)

Re:The challenge of financing

[cpeterso]

I was about to say Findory.com is a rip-off of Memigo.com, but then I saw the mention of Memigo technology in your About page. :-)

I love Memigo and read it daily. My only complaint is that it is has poor usability because of its power-user focus. Findory.com looks like it is a bit more usable.. though the site could use a little face lift :-) Good luck!

Re:The challenge of financing

[El]

You don't get a net connection for free. I do! Thanks to my neighbor neglecting to enable WEP encryption on his Linksys wireless router...

Re:The challenge of financing

[El]

It also tends to get you robbed and shot in a lot of neighborhoods.

Re:The challenge of financing

[allism]

What town is the shelter in? Maybe someone here will see the post and donate an old computer.

Maybe try putting Linux and WINE on one of their old computers? Might be less of a resource hog.

Re:The challenge of financing

[Anonymous Coward]

You forgot to mention that in a C-Corp you pay taxes on the salaries you draw (FICA + FUTA + state taxes) + taxes on your income.

On a S-Corp you just take the profits from the company into your personal income and only pay income tax on it (no taxes on salary, unless you pay yourself a salary). In reality, you may actually draw a small salary to keep social benefits, health coverage, etc.

Another point is that you should claim S-Corp status right in the beginning, since you can convert to C-Corp anytime you need (S-Corps are limited to 35 shareholders, and cannot be public -- you'll to convert in order to get your IPO :-). However, you cannot convert a C-Corp into a S-Corp to gain tax benefits. Also remember that C-Corps and S-Corps are the same for all purposes except for IRS taxation purposes.

Re:The challenge of financing

[gpinzone]

I watched "The Apprentice" and have found out the secret to success: "Show some skin and you can accomplish anything." However, it doesn't work too well if you're a guy.

Re:The challenge of financing

[sartin]

Customer Service/Tech Support, no large company....

Sell to small companies. Sell services to large companies. I am currently renting myself to a large company that now wants to employ me. Tough decision to make, but nice to get to choose.

Sales...web page...phone

My web site runs me $45 a month for full root access and so much bandwidth that I host 10 smaller sites for $5 month each (paid annually) and get a wash on the expenses. The customers pay by PayPal or check and I get free business checking. My Vonage phone costs $35 a month for a voice line (with call forwarding, email notification of messages, and web access to messages) and dedicated FAX line (which rings to a computer sitting in my study which was always on anyway).

Distribution/packaging....

All depends on what business you are getting into. All of these points are assuming a large business model for a small company. Think small. Think cheap. Grow when you need to grow. The other path is take lots of funding and give away lots of equity.

Re:The challenge of financing

[msoftsucks]

No. You can be personally sued. But there are ways to protect yourself. You can get an insurance policy to cover some of this risk.

Business Policy (liability) - covers accidents and the like
Errors and Ommissions - covers if you screw up a client's system.

Re:The challenge of financing

[Anonymous Coward]

NO, an LLC is NOT a corporation anywhere in the US. It is a "best of both worlds" business entity. It gives you a liability shield, just like a corporation; and is taxed like a partnership. The "members" (think, shareholders) are not personally liable for the debts or obligations of the LLC. (this does NOT preclude any personal liability you may incur, like crashing the company truck into a schoolbus) The LLC itself does not pay any income or dividend taxes like a corporation does. The taxes come out when the owners take the profits as income. (either as a quarterly profit check or as regular income tax if the owners take a salary.) The LLC does have to pay property taxes, business taxes, etc... It is only shielded from income tax.

The LLC is the greatest thing since sliced bread. It usually doesn't cost more then $200 to create, the forms are rarely longer then two or three pages, there are not the strict requirements of annual meetings, bookkeeping, shareholder reports, etc... in order to maintain your liability shield. (remember, to not have the corporate veil pierced, you have to actually act like a corporation and have meetings, keep books, etc...) The only reason to go with a corporation nowadays is for an IPO. Other then that, it just isn't worth it.

You would be stupid to not create an LLC.

Re:The challenge of financing

[Anonymous Coward]

Important to notice is that a sole-proprietorship does not protect you -- if the sole-proprietorship is sued you are sued; if it goes bankrupt you are bankrupt.

However, a corp (C or S) or a LLC are actually separate entities from you, and do give you some protection.

Re:The challenge of financing

[Uzik2]

The shelter is called "Wayside Waifs" and it's
located in Kansas City. They're a not for profit
private animal shelter. I'm sure they'd be happy
to get some donations.

Re:The challenge of financing

[msoftsucks]

You forgot: Insurance!!!! - Don't even start without getting this!

Re:The challenge of financing

[Innova]

Do you have to worry about any liability when you are a sole proprietor? If you code something bad, can't your customers come after you? Even if you are in the right, the legal fees could get you.

Is there any advantage a LLC would have over a Sole Proprietor in this situation?

Re:The challenge of financing

[Doctor Faustus]

But the biggest challenge is not drawing a salary for a long period of time. Most people don't have enough savings to live for 12 months without any income.

Weren't we talking about people who were unemployed, anyway?

Re:The challenge of financing

[cheekyboy]

Yeah, I wish I could take the source code of the 'failed' company (where the boss is enjoying his millions) and re-package it with the features it should have had and start making cash now, instead of the product being killed in the middle of its life while making a decent cash flow.

NOTE: never trust your startup CEOs, they are out there to make millions for themselves and screw you like a whore in vegas.

Maybe these outof work IT guys will start making virus's or get jobs at Spam companies to work for evil people.

Maybe we should just pitch a tent at the million $ mansions our ex-ceos live at now.

Re:The challenge of financing

[caspper69]

Deleware *used* to be the most popular, primarily because they had a very advanced set of laws with respect to corporations. This is not so true anymore. I recently read an article comparing Michigan Corps. with Deleware Corps. which found that they were very similar (i.e. other states are starting to mimic what Deleware has done). Hey, but Deleware had to have something, right? Since there's not a lot going on there, they went out and enacted several laws that made having a corporation there desirable. Again, other states caught on and decided to follow suit. There is no difference in the eyes of the Feds, so, best to incorporate in your own state. I say this especially since if you were to use a corporate service to incorporate in Deleware (provided you don't live in Deleware!), you will also have to pay your local state to get permission to do business as a foreign corporation (not Foreign as in from another country, but Foreign as in formed under the laws of another state). This can easily be several times more expensive than simply incorporating in your own state. In Michigan, Corporations cost $60 (LLC's $50), but North Carolina, for example, charges a $500 fee for a foreign corporation looking to do business there. Not very practical, especially in keeping with the trend of this thread (starting a software business on the cheap!).

Re:The challenge of financing

[Uzik2]

Linux and wine isn't a bad idea but I'd probably
have trouble selling it to the staff there. They've
got a tool that works for them and they might be
a little resistant to me ripping their system
up. If it was redone as a web page it's got better
potential to find homes for the critters and won't
impact their systems. It would also be a good way
to help out more than one shelter at a time.

Re:The challenge of financing

[Anonymous Coward]

Exactly what is it about delivering pizza that makes it something that you need to "swallow your pride" in order to do it? It is lawful, gainful employment.

Perhaps you misread the original post as you clearly didn't get it. He said swallowing someone else's "pride" in the context of gay porn. I'll leave that up to your dirty little mind to think about what you might really be swallowing there. The "shot across the jaw" reference might have been one clue, ya think?

Re:The challenge of financing

[gnu-generation-one]

"Don't do a corporation unless you have serious starting capital, or you think someone may want to sue you". In this world, someone always wants to sue you.

You could start your business somewhere other than the U.S.?

Sue them all, let the courts sort them out...

Re:The challenge of financing

[hondo77]

No, it does not. A DBA is you, basically. If someone sues your DBA, they're suing you personally.

Re:The challenge of financing

[odin53]

Some of what you say is incorrect. An LLC (a Limited Liability Company) is, by definition, not a corporation. The two business forms are very, very different. This means also that LLCs are very different from an S corporation, because S corps and C corps are exactly the same kind of business entity -- a corporation. The "S" and "C" designation is entirely a tax code thing; you don't "incorporate a C/S corp", you incorporate a corporation. You declare that you are an S corp to the IRS.

You're right that business owners who are choosing between the LLC form and the corporation should always consult an accountant, and consulting a lawyer would be good too. Aside from the tax advantages and disadvantages, there are many advantages and disadvantages to the LLC as a legal structure.

Re:The challenge of financing

[base_chakra]

That definitely sucks, and I feel for you. What's also unfortunate is that this is the sort of situation that drives some people to filing patent applications even if they're politically/ethically opposed to it. If you're really cornered and the development schedule for a similar product is ponderous, would you consider selling your product to (in this sample case) Intuit?

Re:The challenge of financing

[gnu-generation-one]

"Software that takes 6 months for one guy to slap together, isn't going to impress anybody who has an IT background. They'll see it's obviously only 6 man months of work"

Uhh, somebody with an IT background looking at 6 man-months of work, is going to think it's worth $60,000. Whether they pay or not depends on whether they need it, but that's what it's worth.

Re:The challenge of financing

[mcrbids]

Plus you're double-taxed: first on corporate income and then when you draw personal income from the corp.

This has been suggested by both my attorney and my lawyer as a myth. Corps are taxed on income; moneys paid to employees is not counted as income. Presumably, you'd be an employee of your own company so that you could enjoy some of the many perks of incorporation, such as health benefits. (most which can be written off in a corporation, but not so for LLCs)

We were thinking LLC but upon further review, we're incorporating...

Re:The challenge of financing

[C10H14N2]

I had enough cash to get through a year without working and still have an exit strategy (read: enough to get through two years AND move 3000 miles away), so I took the time to do local market research, draw up a business plan and set up the basic structures for simply doing business (i.e. corporation, bank accounts, insurance lines etc.) and started doing some heavy networking. There are other social costs. Businesses do _not_ like doing business with anyone who does not look like a business. Translation: you need an office and they're not free. If you don't trust me on that, you just walk into a chamber of commerce and wait for someone to utter the words "home-based-business" and watch the reaction. Besides, it's illegal in most cities to have clients come to your home for ANY business and some businesses cannot be licensed as home-based at all. Accountants, for instance, often are forbidden for some inexplicable reason. If you go to enough booze-and-schmoozes, Mayoral breakfasts, Chamber brunches, networking dinners and golf tournaments... you get the picture, it all adds up quickly to thousands of dollars and you _need_ to do it. The drycleaning alone will break the bank. When you start doing real marketing (read:advertising, trade shows etc.), it gets really expensive. Keep in mind you need to have at least six month's reserves to keep yourself alive, plus at least as much for business expenses. That's a tall order for someone with no revenue stream. Investors? It costs as much money to woo investors as it does to find customers...and it's harder. A customer is risking a single purchase order on you. An investor is betting the farm.

There are success stories, but most often failure is simply due to lack of resources and it takes a TON of resources to start a company. Remember, if the business flops, you've still got to have six month's reserves to find a job else you'll be working at McDonald's. If you have a mortgage to pay for (and god help you if you have kids), that means at least $100k free and clear in order to risk it. That ain't chump change.

In any case, just doing your homework is expensive and often after doing it you'll find it is not worth the risk and wasting $10k to figure that out is a hell of a lot better than burning $100k and ending up serving Big Macs because you can't even afford to look for a job anymore.

Re:The challenge of financing

[Java Ape]

Agreed. A few years ago I worked (like everyone else) for a dot.com startup as the head of IT. It was a great little firm, with an intuitive, useful product that could potentially save their clients a substancial amount of time and effort. I emphasize this because most failed dot.coms failed to have product or a profit model that made any sense.

They put their effort and more money than the owners could afford into developing the product, holding off launching until the product was well-refined, robust and thoroughly tested.

By the time they launched, they had little money for marketing or packaging. We watched companies with a fraction of our technical savvy make (and lose) several fortunes. The firm in question lived and died in the starting gate, with a well-developed chunk of software and a few patents to mark their passing.

Marketing and Money are more than afterthoughts, they are the meat and potatoes of business. If you don't have them, stick to writing GPL software, at least your poverty won't surprise you!

Re:The challenge of financing

[budgenator]

a DBA is basicaly a registered alias, it offers no protection that I'm aware of. DBA, Doing Business As, it actualy point to your assets. I've seen corp's with DBA as well as sole proprieterships, here in MI. your jurisdiction many be different. Get Competent legal and accounting advise.

Re:The challenge of financing

[meta-monkey]

Oh man I'm about to piss myself. Excellent work, sir, you just made my friends list.

Re:The challenge of financing

[Anonymous Coward]

Depends, if it's a breach of contract claim, then they have to go after the LLC, since that's whom they signed the contract with. (presumably) If it's a tort claim, then they may be able to go after the LLC and you personally. (if you're the person who committed the tort) An LLC is only $200 to form and easy to maintain. There really is no reason to not use one.

Re:The challenge of financing

[Trillan]

Yeah, we considered something like that. The problem is that the market we're in (education) is a lot more fractured than the accounting market. Also, there's a few other factors in there that make the market really strange to work in.

Thanks for the sympathy. :) We haven't given up, and there's still a good chance of us making a living here... it's just taking longer than our worst forecasts.

Re:The challenge of financing

[Trillan]

Marketing and Money are more than afterthoughts, they are the meat and potatoes of business. If you don't have them, stick to writing GPL software, at least your poverty won't surprise you!

Maybe a little harsher than I would have put it, but brutally honest and true nonetheless. :)

Re:The challenge of financing

[irc.goatse.cx troll]

"Buying off on all that for a moment, how to license the product? Part of me want to GPL"

GPL for the public, and sell private licenses to companies. Lets face it, not everyone can live by the terms of the GPL, and thats a good thing. This way you can keep it GPL, but sell it to whatever company wants your product but can't go GPL (be it moral reasons, or maybe they're already using proprietery code and can't link them due to GPL).

Re:The challenge of financing

[ScottSpeaks!]

Last I checked, as long as you're over 18 years of age (and so is everyone else involved), it's perfectly legal to make gay porn.

I was underemployed for several years, working part-time while I went for a second degree. I swallowed my pride and got a paper route (which meshed nicely with both my class and day-job schedules). Good daily exercise, and better money per hour than the day job. I didn't actually make gay porn (I'd have to lose some weight for that), but I did sell it, online. Again, no big blow to my pride there.

Re:The challenge of financing

[ScottSpeaks!]

I've seen that one! Did you write the script?

Re:The challenge of financing

[sh0knah]

It would sure be nice to have all of those things at a little startup. But it is not necessary.

Some of my buddies and I were laid-off a couple of years ago from a company that made some bad decisions. We decided we could do better and started our own company. No seed money. No exclusive contracts. No investors. All married with children. None of our wives are employed.

Bottom line - 2 1/2 years later and we have set a trend of doubling our revenue every twelve months. We are making millions of dollars a year (almost all of it goes back into the company). We have hired aggressively from the pool skilled developers we knew who got laid off. And we are looking to move to a bigger office (for the second time). And the four of us who started the company still own 100% of the company.

You have to think of things differently to be a non-funded startup. You can't try to operate in the same way as the company who just canned you.

Re:The challenge of financing

[llefler]

You forgot the essential fourth thing: money to live on

But the whole premise here is that they are unemployed. So they some alternate income already. Unemployment, SO, ....

The same friend I mentioned earlier is working two jobs, one in retail and one in entertainment customer service (bouncer). Yet still finds many hours a week to play computer games. So there is obviously a little opportunity time for someone who is motivated. I didn't say it was supposed to be easy.

Re:The challenge of financing

[Anonymous Coward]

I was in this gig for about 4-5 years with a partner. I can tell you now that working at a bookstore will likely pay more for the amount of stress. Here are some hidden expenses.

1) Legal - You do want contracts that work, right? Or a license that works.
2) Book keeping - Unless you have quite a bit of tax knowledge, you're going to be at H&R a lot.
3) Marketing - You have to market your services... even if you are the best in the world. Find someone to sell it and pay them only commision, but make it a good percentage. Give referal discounts. If you do have capital, then you can buy it.
4) Transportation - If you don't have an office, or if you do a lot of things that need to be on site, you will have to drive around a lot. You will likely need a cell phone as well.
5) Internet connection - Periodic outages on normal internet connections can cause embarassment. Sometimes it's wiser to have a second connection through a different provider as a backup in case all else fails.
6) Equipment and Software - Yes software costs, and sometimes you have to buy office, visual studio, photoshop, dreamweaver, flash, etc. if you want to do the job.

Other bariers:
1) People won't take you seriously. A lot of people won't take you seriously unless you charge some obsene amount of money and have a plethora of clients... or at least make it seem that way.
2) Timezone differences if you market online can keep you up all night answering support calls. Also, some businesses are up all night. In any case, you have to be willing to take calls past normal business hours usually.

It seems to me that the best factors for success have nothing to do with skill. You just need to be old, wear a suit, and sell something even if it doesn't exist.

The best clients are the wealthier small-business work-a-holics. They don't care who you are if you can do the job. They pay well. They generally have enough knowledge that they won't call you at 9PM asking how you double-click.

Some very important skills that my partner didn't have (mostly the cause of me looking for real work... which I found within a month):
1) The ability to say no. If someone asks you to do something, you are not obligated to do it. They aren't your boss, they are a client asking if you can provide a service.
2) Ask an hourly fee and stick to it. Don't let them talk you down, don't feel sorry for them and charge them less just because it took so long to accomplish a task that wasn't worth the money (see #1, and give over estimates). If you have a support contract, offer options for set amounts of support, and don't give them leway. Charge them if they go over so they'll learn to at least try to solve the problem on their own.

Don't bend those to get in the door with a new client. The only valid time to bend them is if you are trying to get your first set of clients, and be careful then. Bending on those undermines your own work.

Other things that some people should know is that they should charge a reasonable price. If it's something you don't have experience with, don't charge for your time learning. Say no, or learn it on your own.

It's best to never accept a client's contract if you think they are demanding something that will hurt them. If they want a flash intro page, tell them you won't do the flash intro page, but they can contract someone else to do it. If they argue with you over the technical aspects, then you really shouldn't do it for them. It's just going to end with bankruptcy of the other company, and you'll be stuck with a product that needs serious overhall for you to be able to market it to anyone.

In my learning first year, we did some work for three companies, two are now bankrupt. Be very weary of the client. Never trust a client to have a valid business plan. If you're going into a contract to develop software for them, research and ask them questions about their business and make sure it sounds viable. Make sure that the people in cha

Re:The challenge of financing

[nihilistcoder]

Hmm, this notion of a co-op is utter nonsense. I'm Korean who immigrated to this country when I was 3, and I can tell you straight up that my parents NEVER had any community co-op to borrow money from.

They had enough saved to get an apartment rented for a few months, and both worked two jobs each. They worked like this for years, saved enough money, the risked it all to buy a mini-mart dairy.

As was metioned by someone else, they did put in 14-16 hours a day, often times 7 days a week, and I did help them. Fortunately, they succeeded and are now retiring comfortably.

They were fortunate though, because all those Korean grocers you see, all of them are not making good money like it may seem. It takes hard work, good business sense, and intense dedication and willingness to not give up.

If my immigrant parents could speak hardly no English and had practically no money make it, I don't see why many here couldn't.

Re:The challenge of financing

[texmexberg]

As someone doing this, I can say this is true. But if you go through each and every one of these Items, you will find some way around it. I just signed a lease "a handshake and roll of 20's' on an apartment in Mexico for $350 per month including utilities. If it gets real bad, I can sell the wedding rings and engagement ring and get one more year of rent! Does anyone know what steps I must take to avoid US income tax since I own and operate a business from Mexico? Is that the best option. What problems can that present if and when I return to the US?

Re:The challenge of financing

[insanechemist]

Expense is usually only involved when you hire a lawyer. If you're on a shoestring budget get a book and do it yourself. I did it for a state fee of $90 in FL. You can file in FL online and they email you the corp papers. Get an EIN from the IRS and file one more form to elect your corp. type (don't remember the form #) and you're on the way! BTW IANAL and IANAA.

Re:The challenge of financing

[llefler]

Creating a viable piece of software that someone will pay for takes a lot of effort, and a lot of time.

Creating a viable piece of software requires a need. I have seen software that costs $2000-5000 per machine that I personally could have coded in a month. (and ended up with a better product too) The only hook on this particular package is access to the hardware that is uses. If you had to buy it, it would cost $10k to get a test setup. But the business is going to have to buy it anyway to implement it.

There are lots of expensive packages out there that maintain their price because there is no alternative. Generally, look at any small package that requires a dongle. And there is room for plenty more.

IT departments buy packaged software because they don't have the expertise to create it or the desire to invest the time.

Re:The challenge of financing

[gfxguy]

Excellent post - exactly what I was saying. At this point in my life (two young children), I simply am not willing to work that hard for an extended period of time. If I knew it would only be six months, or a year, I'd do it.

Frankly, I love my family, but being as difficult for me as it was to begin with (as I mentioned, not everybody can be an entrepreneur), starting a new business now is all but out of the question unless something big happens. I keep my eye out, though, and it's in my mind a lot. I have no doubt one day I'll do it, and unlike a lot of Americans I admire and respect people like your parents, they're what makes America great.

Re:The challenge of financing

[sosegumu]

So you need three things; time (unemployed, you have plenty), a marketable idea (a little more difficult, but there are so many BAD programs out there than need replaced, not even counting processes where software doesn't even exist), and someone to sell it. The last being the hardest part.

Man, I come up with problems that need solutions every daggone day.

Today for instance, I thought of something. I've become quite an Electricity Nazi and am trying to find more and better ways to reduce my electric bill. I just suffer the cold while I'm home alone, but I do like for the temperature to be tolerable for my wife when she's home. We have a programmable thermostat, but unfortunately, her work schedule changes every week. As I was re-programming the thermostat for this week's schedule, I thought how nice it would be if there were just a way the the thermostat could pull her work schedule out of Outlook and adjust accordingly.

I know a programmer/engineer who works in the aerospace industry specializing in machine interfaces, and he says that it's really not that big of a deal. Of course, he's working so he doesn't have the time.

There are solutions if you want to spend $1000, but I'm thinking that there has to be a better/cheaper way.

I think of stuff I need all the time but I really don't know jack about programming, nor do I wish to learn, so maybe there is a market for this kind of stuff.

Re:The challenge of financing

[moojin]

i'm jae mi gyo po 2 sae.

glad to have you aboard.

andrew

Re:The challenge of financing

[Danga]

The same friend I mentioned earlier is working two jobs, one in retail and one in entertainment customer service (bouncer)

So now bouncers get upset when you call them bouncers? This political correctness movement has gone to far!!!! lol I'm laughing my ass off at that, I really am! Funniest thing I have read in a while.

Re:The challenge of financing

[HermanAB]

Anybody who says 'don't incorporate' did not read either the law or the tax code. Your total tax bill is far less when running a company and earning dividends, than with a sole proprietorship.

Re:The challenge of financing

[radd0]

From reading this comment (and entire thread) one should walk away knowing never to come to Slashdot for legal advice.

An LLC is good for some, but not everyone. And in California you are (IMHO) over-taxed in the beginning, with their assessment of an $800.00 MINIMUM LLC state tax. There are reasons why companies and corporations are formed in certain states, taxes and laws can differ from place to place.

To recap, always consult an attorney first, not slashdot. :-) And most tax accountants are happy to answer a few questions over the phone as well at the possibility of obtaining a new client.

Re:The challenge of financing

[dubiousmike]

If I weren't stuck in the meta mod black hole, I would mod you up.

Everyone thinks they need to order a business version of this service or that. You don't. Why pay double or more for phone service when you can use a residential service. You just don't get to claim it on your business's taxes (I think). Get a company calling card and use it for your long distance expenses.

Re:The challenge of financing

[shaitand]

You seriously overrate some IT managers and corporations judge of talent.

I'll give you a random example from my own past experience.

Several years ago (like 6-7, I don't even think I'm under an NDA anymore, ancient times really) I worked for a lesser known corporation called Sony Electronics.

I started off at this Sony Electronics place, in Tech Support. I went there expecting they would be interested in knowledgable people. I walked in and they first did a lie detector test for security clearance and drug testing. Then they gave you a technical test, where they would ask you questions and you'd have to describe how to perform various tasks off the top of your head and explain technologies in certain areas etc (architectures you've worked with etc.). Fair enough, after all a customer isn't generally going to call and give you a multiple choice question.

It wasn't long before the interviewer was starting to scribble on the back of the sheet when writting down the processors I'd worked with (3rd question, after name and date of birth) before he simply sat it down and started quizzing me. All of it fairly easy windows stuff (only setback was that he said it was windows 98se and asked about system resources, I started explaining how to get to the system monitor and he got very confused, he wanted the overall rating in system properties).

So I go through the rigerous Sony 1 month training course and another month on the floor. And then I discover the magic which is numbers. That is all sony cares about. My (now wife) worked there with me, she is of a knowledge level where she knows there is this cd command and a vague idea of how it works, if you ask her how to move to the root of the C drive she will advise to type "cd C:".

She didn't know shit, probably fixed about 3 customers problems for real. It's a fair bet that every customer she handled called back 3 or 4 times. Needless to say she was the Star of our entire shift, 94-96% of her time was spent on the phone or available ready for a call to come in. Her average call time was about 6 minutes. If you checked her calls (easy to do) there was ALWAYS a callback but Sony neither noticed nor cared.

Me, I rated about 85% spending alot of my time in unavailable (mostly spent on call documentation), my average call time was more like 15min. I had an average of 5 or 6 kb updates (solutions that were wrong or had no solution in the sony knowledgebase, wife had zero in the year we worked there) a day. If you looked through my calls you would always see almost nobody I worked with had to call back for the same problem and the only reason I escalated a call was because it required a solution that wasn't within my authority (certain types of repairs) and even then I usually walked over and got authorization rather than bumping up the call.

I have several letters in the Sony book (where customers wrote to the president of the company because they were so pleased with my work) and had one customer try to send me home baked chocolate chip cookies (nazi security gorillas examined and proded them for 3 months and finally handed me a bag full of cookie pieces, seriously).

Now with all that, I was at barely acceptable performance and got lectures on my numbers fairly routinely (course they'd never fire me, that takes a 6month process at sony and they wouldn't start it with my star employee girlfriend as part of the package).

My wife is an accountant by trade by the way, and her poor performance as a phone tech really doesn't reflect on her work in the subject she actually knows something about.

In any case, that is an example of the way Corporate America works, I could give you dozens of other examples. It's much like the government, there are rules and guidelines and reality rarely intrudes on the way things work there.

Re:The challenge of financing

[Sivaram_Velauthapill]

I'm probably one of the most politically correct persons around here... but even I find that funny...entertainment customer service...lol hehe :)

Sivaram Velauthapillai

Re:The challenge of financing

[keyshawn632]

True, but the point of incorporating your business is to protect from being sued in the court of law.
When you incorporate your business, it in itself is its own legal entity. Thus, when someone sues you, they legally sue the company, NOT you and\or your business partners.
It would be pretty wise to do so with all those frivolous lawsuits around.

[but hell, this is just coming from a 17 yr. geek who took economics last semester]
[I'd recommend to read "Natural Capitalism" by Paul Hawken]

Re:The challenge of financing

[Sivaram_Velauthapill]

You sound like a good person to start a new company. If you can come up with new ideas, you just need to find another software developer and you'll be set.

Although, do keep in mind that a good business analysis should be done before plunging into anything. If someone doesn't have business experienced, they can read some books/websites, or visit their local small business organization (governments usually have some organization for entrepreneurs; govt also have free seminars on taxes, and other things that will help you).

With your thermostat-thingie idea, I think you would fail one of the early business requirements (although this is just MY OPINION). What is the potential market size for your product? Probably (almost) negligible. How many people use outlook to manage their lives? How many people use electronic thermostats? I'm guessing not many would be interested in your product (although this is just a guess). Furthermore, can you make money off it? I'm not too sure. If you are saving hundreads or thousands of dollars in energy then you can clearly sell your product for some decent money. But if you only save, say, $100 per year, how much can you sell your product for? And would anyone be interested?

Sivaram Velauthapillai

Re:The challenge of financing

[Anonymous Coward]

Why?
Insurance is risk managment and starting a new business is so risky as it is that the extra risks that insurance covers don't change the odds much at all.
Of course some states require some types of insurance to do some types jobs and its illegal if you don't have it.

Re:The challenge of financing

[Anonymous Brave Guy]

I do! Thanks to my neighbor neglecting to enable WEP encryption on his Linksys wireless router...

Think of it as a service payment for all those great pr0n sites you've introduced him to.

Re:The challenge of financing

[GCP]

Go to the US embassy in Mexico City and ask. There's probably an IRS office right in the embassy that deals with issues like yours. (Yes, the IRS has offices outside the US.) A gringo owning and operating a business in Mexico is rather common, and you can save a bundle in taxes if you find out what the rules are and follow them.

Or, go to one of the Mexican offices of a major US accounting firm and ask them what they can offer. They'll charge for their services, but probably not for an initial consultation, and they can show you how to minimize your taxes without getting in trouble with either the IRS or the Federales.

Re:The challenge of financing

[Anonymous Coward]

Delaware is still the most popular state in which to incorporate. It is also the cheapest if you are using one of the many internet services, and the fastest.

If you incorporate in another state, you have to pay someone to be your "registered agent" there, this is for maintenance of the legal address of the corporation in absence of a physical presence there (office, building, leased land, etc).

You do NOT have to pay your state to do permission as a foreign corporation if you do not have a "physical presence" there. So, if you have a business incorporated in Delaware, and you live in Maryland, you don't have to pay or register as a Foreign Corporation to do business with firms in Maryland, if you don't have an office, own land (in the name of the business), etc, in Maryland, even though you personally live there.

Re:The challenge of financing

[Sivaram_Velauthapill]

I do not know anything about US stuff (I'm from Canada--but I don't know that much about Canadian law either). But if what you are saying is true, then why would anyone go with a sole proprietorship? Why do they even exist? What you are saying makes no sense. Sole proprietorships will simply dissapear if what you are saying is true.

NOTE: I am not saying you are wrong. I'm just questioning how that can be. Perhaps you are leaving out some criteria (eg. perhaps what you are saying is true iff your company makes more than $100,000 in sales--I just made this up)).

Sivaram Velauthapillai

Re:The challenge of financing

[dr_canak]

"Find a niche, find a need, create a demo of a solution and sell it. Deliver and find more of the same."

I saw an interview with Warren Buffett on one of the PBS meet the CEO specials. One of the things he said that has really stuck with me:

"If you have two good ideas in your lifetime you can afford to give one away."

Coming up with something worth selling, that others are actually interested in paying for is a little easier said than done. And it's one thing to sell something. It's entirely something different to sell enough things to generate even $10,000 a year in income.

just my .02
jeff

Re:The challenge of financing

[Anonymous Coward]

Most of these engineers like working for free and writing themselves, their peers that work on commercial projects as well as the companies that make money out of business.

Re:The challenge of financing

[Sivaram_Velauthapill]

First of all, don't forget that immigrants may be skilled. They might have had decent jobs, had businesses, etc back in their native land. Sure they may not have good language skills but how do you know they didn't work in a business before? How do you know they didn't own a shop back home? And so forth.

As far as money is concerned, people just save as much as they can. Most immigrants save more than non-immigrants. The Korean couple probably just poured all their savings into the business.

Lastly--and most importantly--the shop probably makes little money. The shopkeepers probably won't own expensive cars and houses. They probably just make enough (similar to a factor worker). The advantage, of course, is that you are your own boss.

As far as you not looking into it, I agree that it is a tough position for you. If you are a sole income for your family, I would stay away. The VAST MAJORITY of the businesses fail.

As you also point out, you need to be an entrepreneur. I personally don't think this is as big of a block. You can always partner with someone else who has the business skills while you do something else (like the technical or something). But one thing is for certain: one of you need to have entrepreneurial skills.

Sivaram Velauthapillai

Re:The challenge of financing

[sosegumu]

Thanks for the kind words. It is refreshing when people think about how to spare others' feelings before posting.

I'm sure that you're right about my particular off-the-cuff idea, but I guess the point is that if someone as simple as me can come up with ideas, then someone who can write code should be able to make a living at it, as long as they can find a way to put food on the table until such time as their idea pays off (or not).

Having said that, I would even settle for something that gave me PC interface into my thermostat--whether it used Outlook or not--to allow me to schedule further down the timeline. I read recently that if you can reduce the temperature (obviously during the winter months) by 10 degrees for two 8-hour periods per week, you will reduce your energy usage by 33%. Here in the frigid Midwestern US, that's a lot of green.

As for me being the kind of guy to start a company, I already have one doing network stuff, but the idea of spending my time writing code makes my head hurt just thinking about it. I have tried to write a little in the past, but the fact is that I'm either not wired that way or I'm just not that smart.

Another thing you're right about: a careful planning is in order before launching into a business venture. And really, even that isn't enough to guarantee success.

Re:The challenge of financing

[Anonymous Coward]

They'll see it's obviously only 6 man months of work

Which has absolutely nothing to do with the success of any product, including software.

Re:The challenge of financing

[Anonymous Coward]

well then, form a commune.

Re:The challenge of financing

[Anonymous Coward]

Why not use a residential phone as a business phone? Because, when the phone company finds out (and they will), you'll be liable for penalty charges and the difference that you saved.

Re:The challenge of financing

[jred]

When I was last laid off (6+ yrs ago) I delivered pizza for a while. Until my car got repo'd cause I wasn't making any money. If you *do* decide to deliver pizza, make sure they don't stick you on the day shift. That sucks.

I did get a couple of good tips, though. Once I delivered to a (apparently) drug dealer. There was a lot of weed on the counter, anyway. Got a big fatty for a tip that day.

Then there was the two really cute chicks getting ready to leave for CA who wanted me to go, too. If it weren't for my daughter at home, I'd have split that day.

That said, I'd probably come closer to doing gay porn than pizza delivery now. Hopefully I won't have to do either.

Re:The challenge of financing

[bazooie]

err uh... DONT FORGET QA!!!

geez, it's no wonder so many start-ups fall short. QA is treated as an afterthought.

Re:The challenge of financing

[Plimsoles]

A couple of points. First, exit strategy. A buyer of a C corporation will pay individual shareholders less than for an LLC because the aggregate tax basis in the LLC's assets after the purchase will increase to the purchase price. In contrast, the tax basis in the assets of a C corporation will not change as a result of the purchase. Increased tax basis means increased tax deductions. The buyer can share some of that tax benefit with the seller by offering the seller a higher price. Second, reducing C corporation profits to zero through deductible payments (compensation, etc.) will work for a while, but when (if) the business becomes successful, that tactic will grow increasingly problematic. (Writing off 100% rather than 50% of business lunches, unfortunately, is just wrong.) Although investors may prefer C corporations for various reasons, they can always set up a C corporation as their investment vehicle. Putting your business in a C corporation is like putting it in a lobster trap: easy to get in, impossible to get out (without a severe tax hit). In contrast, if you start with an LLC, you can always incorporate later (an LLC is a COMPANY, not a CORPORATION). btw--I do this for a living

Re:The challenge of financing

[Anonymous Coward]

Form an LLC, get your ass sued off.

Sounds like a nice day. (rolls eyes)

Re:The challenge of financing

[Sean Clifford]

A demanding IT job where you're fighting brush fires 110% of the time is not conducive to being able to do programming on the side.

You need a source of livelihood that gives you enough slack time (and little to no family obligations) even to afford the time to invest in programming.

Thank you. Maybe I should cc this to my boss.

Having to be admin, supervisor of 2 IT dudes, lead developer (now only developer) of our web apps suite (and support 7 other companies using it), and general IT go-to guy things get busy ... and stressful.

Still, I'm glad to have a job.

Re:The challenge of financing

[Skim123]

I wonder if the Korean grocer is the first son of the first son. My fiancee is Korean, and from my understanding the first son of the first son, as an adult, is fiscally responsible for his immediate and extended family. That means if his dad needs money, he doles it out; if his brother needs cash, it's his responsibility; etc. So I wager the first son of the first son typically takes a very button-down, conservative job.

Re:The challenge of financing

[malachid69]

I registered a Domestic Oregon Corporation at the end of December. It cost me $20 to Incorporate (ie: file the Articles of Incorporation), $5 to get a copy of the filing. It also cost me $20 (+$5 copy) to file an Assumed Business Name, because I did not want MY name in the name of the business. No legal fees, $50 total.

There is no such thing as an S-Corp in Oregon (ie: Oregon considers S and C corps as the same). Why did I choose a C-Corp instead of an L.L.C.? Because it has the most legal protection against lawsuits down the road. It has more stringent recording requirements, but, L.L.C.s are really best for only having 1-3 people in charge. If you want a larger corporation, a C(or S)-Corp is a better approach.

As a side note to anyone else thinking of registering in Oregon, the rates increased to $50/document on 1/1/04.

Re:The challenge of financing

[malachid69]

My wife has the same style of work schedule, and we have the same situation with the programmable thermostat. Of course, it would probably help a lot if the thermostat was at least backlit.

But I digress. I like your idea... But, perhaps instead of pulling from Outlook, there could be multiple ways to pull the data... Maybe even something like an RSS feed or something? Not really sure here, but since neither of use us Outlook, it would have limited use -- but if it was tied into something we could easily use... I would be interested.

One solution might be to use a TINI board (www.ibutton.com) from Dallas Semiconductor. You can program it with Java. I have one running on my network right now, with webserver, telnet, ftp, etc... It has Serial and NIC connections...

Malachi

Re:The challenge of financing

[Anonymous Coward]

About a year ago my friend lost a job and I was still in college. We decided to get together with YetAnotherUnemployedProgrammer(tm) and formed a team of three. We worked very hard for about a year nearly full time (we actually spent more than 8 hours a day each) and ended up developing software that is technically equivalent and in some areas better than our competitors. The problem is, the software targets mid-large companies.

Right now we're stuck with a superior technological solution and no way to sell it because we have no way to market it. We see plenty of competitors with inferior software make money while we're stuck with a labor of love and no way to sell it. The truth is, customers don't just come by if you develop great software unless you're really lucky. Bad software is a lot more likely to sell if you have money for an extensive marketing campaign. We're still looking for a way to market the product but unfortunately there is no way for us to gain capital and there is simply no way to reach markets without money.

Re:The challenge of financing

[augustjoe]

I think this is kind of the point of the post. Find a way, or a person to write the program. Sell the solution for $1000 to 10 idiots, or sell it for $100 to 100 Electricity Nazi's (even better!). Either way, you are no longer unemployed.

Re:The challenge of financing

[Anonymous Coward]

Why not move to an unincorporated area where you can do what you want in your house ? It sounds like you live on one of the coasts.

Re:The challenge of financing

[C10H14N2]

Funny, I didn't think "the coasts" had a monopoly on incorporated cities.

Re:The challenge of financing

[horza]

Indeed. I started a software company and:
* my office was donated rent free
* I already had half dozen computers available
* the staff, including myself, worked without wages
* we lived off meagre savings, no unemployment benefit
* lived with parents, except one staff who slept in a shed at the end of our garden

After over one year I'd already used $30-40k of borrowed money. The moment the software was developed and ready the tech crashed happened and every promised sale fell through (as half the clients also disappeared). Fortunately I have an understanding family that have classified it as an 'indefinite' loan.

It was certainly a hard learning experience, which I don't regret for a moment, but I started from a very priveledged position and even from there I ended up worse off than I started. Expenses included the server, artwork, travel expenses, equipment upgrades, etc. Everything was spent according to budget and a business plan. The fact is that you need to outlay as you can't sell your software until you have a product, though we did mini-projects alongside the main one to generate a nominal income.

Phillip.

Re:The challenge of financing

[The Clockwork Troll]

The parent post leaves out a lot of details.

I highly recommend Nolo Press's Quick LLC.

It is an excellent introduction to all kinds of business entities/structures including sole proprietorships, limited partnerships, general partnerships, S- and C-corporations, and of course limited liability companies. After reading this book you will have a pretty good idea of whether an LLC is right for you and there are instances when it's not.

LLC's are not corporations but can elect corporate tax treatment (which could be beneficial, for example, when your corporation is making under $75k per year in profit; the first $75k of corporate profits are currently taxed at a marginal rate of only 25%).

There are also many other subtleties to LLC's including variations on management and laws governing treatment of LLCs as securities.

My biggest take away from this book was that if you plan to pursue external financing sooner than later, you may actually want to incorporate (typically as a C-corporation) rather than form an LLC so as to simplify the process of giving equity (but not necessarily managerial control) to outside investors.

Re:The challenge of financing

[digitaleus]

If you're wanting to guarantee success, you're not the right person to start a business. Period. ;)

Re:The challenge of financing

[digitaleus]

In this world, someone always wants to sue you

Only if by "this world" you mean the USA.

Re:The challenge of financing

[digitaleus]

You don't necessarily need to impress anybody that has an IT background. I've rolled together countless little apps in a few days (or even hours) that have really impressed whoever it was intended for. The key is that I understood what their problem was, and was able to efficiently solve that, and let that which did not matter truly slide.

Don't think "is this cool technology?" "who is this useful for and why?" It's not an easy thing to do, especially for a software developer, but if you can pull it off.

Re:The challenge of financing

[NateTech]

You personally can still be sued in cases of "gross negligence".

In other words, if you screw up and send someone else's business or life spiraling into the ground without warning from the software you wrote them, they can still sue you on the case that you've been not only "negligent" but "grossly negligent".

But nice try. Incorporation does not give one a shield from still being responsible for one's own actions.

Re:The challenge of financing

[dubiousmike]

Of course they wont - my father did it for 20 years. You can have a phone that you "split" between business and personal, even if the split isn't an even one.

Re:The challenge of financing

[famazza]

• The biggest problem for unemployed software engineers getting together and forming a company is financing. If you're unemployed, you probably don't have a lot of cash around to provide seed capital for your business.

I'm sorry to say so, but crisis demands investments. You must think about it when you aren't in a crisis, so gather as money as you can so it's possible to invest in a solution when you are unemployed.

You should have money when you get unemployed, if you aren't, I'm sorry.

Re:The challenge of financing

[mwa]

Software that takes 6 months for one guy to slap together, isn't going to impress anybody who has an IT background. They'll see it's obviously only 6 man months of work... ;-)

You're being very generous to IT management. I get 2-3 requests a week to "review" COTS network management "solutions". The last one I looked at was recommended by a NOC manager. It took me 20 minutes to write something using open source components that provided equivalent functionality to their "core competency." Of course I had no flashy GUI with red=bad green=good colors (management's idea of "quality" management software; the "Oooh, shiny things" syndrome), but I got the message across.

Someone is buying this stuff and it's not at all obvious to people with purchasing authority that it's a complete and total waste of money.

As George Carlin said "If you take any 2 things that have never been nailed together before and nail them together, someone will buy it."

Re:The challenge of financing

[gfxguy]

First of all, don't forget that immigrants may be skilled.

Never said he wasn't - I'm sure he knows more about produce than I'll ever want to. Perhaps he did run his own business in Korea, but I think U.S. is very restrictive (contrary to popular belief) about business owners - licenses, insurance, etc. Yet he managed. The point is that if he can do it, when it seems so complicated, then a large number of us should be able to do it, too.

As far as money is concerned, people just save as much as they can. Most immigrants save more than non-immigrants.

Amen. Still, if I'm going to be prepared for a year lease, a years worth of insurance, licensing fees, inspection fees, initial stock, and all the other miscellaneous expenses that go into starting a business, as well as save enough for me until (god willing) the business starts to make money - that's a boatload of cash.

Lastly--and most importantly--the shop probably makes little money.

That I won't argue, either... the point is that he's not bitching about being unemployed. He's not bitching about employers taking advantage of him. He's not bitching about lousy raises. And he's probably still saving more than most Americans making more money.

The point was, and is, then there must be a lot of people here who could do it if they put their minds to it. A software company wouldn't have nearly the start-up costs as a "brick and mortar" store. In my case, I simply don't want to start a software company.

I just heard on the radio this morning that there are quite a lot of self employed people, that the jobless rate is misleading because so many of those who lost their jobs are now self employed. They didn't say if those people were managing to make ends meet, but the point is that there ARE a lot of people doing it.

Re:The challenge of financing

[Anonymous Coward]

Sorry, but I don't think it does. Or maybe you have some special talent that earns you more money?

People I know in the industry (oversees, ironically enough) pay the guys about $60 a day. The equivalent in the US would be about $200 or $250 a day.

That's eight or ten hours of shooting. A lot of Viagra. A lot of scenes...

At least women in the adult film biz can dream of becoming stars - and the big names make Very Big Money. Some very ambitious women choose this line of work and are very successful in it. Plus they get paid more per day.

But besides Ron Jeremy, are there really and male porn stars these days?

I'm not too up on the gay film scene but as far as I know, nobody is a "star" in the sense that they are in mainstream magazines, they get paid $$$$ to appear at clubs, etc...

So: I know you were probably trying to be funny, but the pizza job is not really so bad in comparison.

(Posting AC to save wear on flameproof suit)

Re:The challenge of financing

[texmexberg]

I wanted to share an exerpt from a Free Circluar Newspaper called I Love Laredo, Jan. 23, 2004: "A Coward is a hero with a wife, kids, and a mortgage." Page10.

Re:The challenge of financing

[Brian Boitano]

Your story seems a little more representative of call center operations - where the bottom line is the number of calls answered per hour. Especially in a helpdesk/support environment, the more calls you can answer per hour, the lower your wait times will be - and it will look like your call center is performing fantastically. Most of these types of jobs would be more accurately classified as Customer Service, I guess.

Re:The challenge of financing

[Anonymous Coward]

Actually, it is a Limited Liability *Company* people doing this type of thing seem to be careful to make that distinction. I have hear, too that Wyoming is now the place to set up your legal entity. I was a bit shocked to some big financial companies (I think it was a TV ad to a mutual fund or the like) are incorporated in Wyoming - no taxes, privacy, etc.

Re:The challenge of financing

[Anonymous Coward]

I just heard on the radio this morning that George Bush was right to invade Iraq for any reason he can think of. And you know, that's right. I'm with you buddy.
Fuck these whining losers. We ought to round them up and cart them off to Africa.
You goddam whiners shut up before me and gfxguy give you something to really cry about. You tell these pussies what's what bro.

Re:The challenge of financing

[glinden]

It's offtopic, but I'm curious what suggestions you might have for a "face lift" for the site, especially since you're a frequent user of Memigo. If you'd be willing, please get in touch at the e-mail address provided on the About Findory News page. I'd very much appreciate hearing your comments. Thanks, cpeterso.

Re:The challenge of financing

[shaitand]

Aye it's about playing the numbers, get callers off the line fast and it's looks like your good, they call back and it just looks like your needed that much more.

Re:The challenge of financing

[dspyder]

I agree... everything I've seen and heard has guys getting paid peanuts in comparison. And that's for hard work where you have to stay up and last for hours.

There's just simply a lot more guys out there willing to do the work.

That being said, I'd certainly star in a bukkake for $10k if it was offered to me. I have no shame and the money could be put to good use.

--D

Re:The challenge of financing

[Sivaram_Velauthapill]

Some posters below give some ideas. Using a standard like RSS instead of Outlook and so forth. I guess you can also try using Wi-Fi technology or something like that. Your system doesn't seem too hard. I don't think the programming is the hard part. What you are proposing is so simple (from a programming point of view) that it isn't even an issue. I think some of the hardware and interface issues may be more complex (it all depends on what you are trying to do).

There is a push by the large companies for integration between appliances. Companies are trying to develop systems where your tv can talk to the computer, or your microwave, or whatever. I think your idea is kind of like that. Bill Gates has been talking about this for ages but I think the time is now. I believe that Wi-Fi (or wireless networking in general) provides a lot of potential.

I still don't like your idea because I don't think it has the market potential (although one would really need to study/estimate/whatever the market size). I'm not really sure how many people really use Outlook to manage their lives (professionals do but do they care about your product?). In any case, you should worry the least about programming/software and get the other stuff (like product concept, design, market research) done--if you are serious that is. You can always find software developers to partner with (or find contractors or something).

I've been thinking about starting a business (I started one last year (linux business) and it failed :( ). I'm unemployed so I'm open to all options. My problem (this was the problem with the last business) is that I need a marketing/sales person.

Areas that I think have good potential now are Wi-Fi, RFID tags (Walmart forcing suppliers to use them means that it WILL become a standard), and appliance/system integration (as I described above). I also think that there might be a market for security products of all sorts due to the terrorist situation faced by USA (BUT I think these are too complicated and probably require millions of dollars in development costs--not sure). These are just MY OPINION and do not blame me if your business fails because you tried one of these ;)

If anyone is reading this lives in Toronto and is thinking of starting a busines (in the tech area), let me know. I would be interested in joining (depending on details). I don't have much capital to put up but I'll work "free".

Sivaram Velauthapillai

Re:The challenge of financing

[Anonymous Coward]

Mod this guy up for christs sake :)
+1 informative :)

I didn't think about that; getting out of paying for all those extra taxes by receiving it as profit rather than salary. NIFTY KEEN GEAR :)

Thanks a bunch kimo sabe :)

Re:The challenge of financing

[Anonymous Coward]

Your notion of the world is limited to "US"?

99.9% of all artiles from the "worl" section are about US.

Re:The challenge of financing

[stonecypher]

Exactly what is it about delivering pizza that makes it something that you need to "swallow your pride" in order to do it?

The customer's attitudes. Good people that have never had problematic service industry jobs rarely understand this. One person in three treats you like shit, and makes active efforts to humiliate you for any problem be it your fault or not. If the other drivers or the kitchen are falling behind, you hear about it all night.

This is surprisingly humiliating on short order, and after not too long you begin to struggle to keep your self esteem.

But none of these facts makes it shameful or somehow dehumanizing.

The ones you listed? No. But they're not the motivating forces here. A slaughterhouse job sucks, but not because it fails to be glamorous, challenging, stimulating or fiscally rewarding. It's important to identify the key factors in awfulness before challenging them.

You should never consider yourself too good to take a job, if you are unemployed.

He didn't. He just looked at them with horror which, I can assure you from personal experience, is well-earned. If I ever go destitute, I'll go back to a job like that, and I'll be cheery and have a good work ethic about it. But I sure as hell won't look forward to it. And I don't think I'd keep faces on Slashdot about it, either. On slashdot, honesty > politesse.

Re:The challenge of financing

[ahdeoz]

They are disappearing. But a sole proprietorship is more convenient, and there are not the tangles of beurocracy (which is set up to block everyone from incorporating) to deal with. They benefits are not that great for most people, and the fact is that taxes and legal forms are set up expressly to give business to accountants and lawyers, and only secondarily to benefit those doing them.

Re:The challenge of financing

[ahdeoz]

Our system of government and society (read: those with the money already) are working hard to prevent people from becoming entrepeneurs. If you want capitalism, go somewhere else, or change your definition of capitalism. It worked for the capitalists^Wsocialists in America.

Re:The challenge of financing

[ahdeoz]

actually, you probably weren't working for Sony, you were working for an outsourced call center, like Convergys or Sykes, and they got payed per call by Sony. So you were losing them money & customers.

Re:The challenge of financing

[ahdeoz]

Here's a quick tip: Develop a VB app or java equivalent. Even though your webapp is harder to build (especially advanced user functionality) and more versatile, scalable, and maintainable, as a webapp people nowadays think "Oh, it's just a webpage", but they'll pay more for what's percieved as a standalone app, even if it is just a click and paste VB gui using "web-services" to talk to a database.

Re:The challenge of financing

[ahdeoz]

How about a free pizza (with your choice of toppings) and $60. That's what you'd get working for an hour and buying the pizza.

Re:The challenge of financing

[SirTreveyan]

If your company will not have a physical presence because say all of your income will be generated from the web-based sales, then incorporating in Delaware can be an advantage. For example

1. No state sales tax. Since Delaware does not have a state sales tax you will not have to worry about collecting it from any other state, at least for now. I used to live in South Jersey, and for big ticket items it paid to cross the river and buy in Delaware.

2. Delaware does not tax corporate property. Many states tax the property that a corporation owns such as cars, computers and other assets. Like most states there is a tax based upon real estate values, but if you do not own real estate in Delaware why worry about it?

3. If I recall correctly Delaware's corporate income tax is quite favorable being fairly low.

4. The legal system itself is geared toward protecting corporations. If you ever read the fine print in contracts, most companies require you to sue them in the state where they are incorporated. This dissuades many from suing because of the inconvience. But from what I have heard about Delaware law it is very difficult to get a judgement against a corporation.

Depending upon how the numbers run, it may be far more beneficial to incorporate in Delaware and register as a "foreign" corporation. But why register if your company will not have a physical presence in your home state?

Some states try to say that employing someone from within their state automatically creates a physical presence within that state. There are ways around that. Set your corporation, an LLC, up to be a marketing entity. You write your software. You do your marketing on the web acting for your company. When your software is done, create a licensing agreement between you and your company. Your company gives you $1 and your company markets your software with you retaining all rights to the software. BAM, you are not an employee and whatever profit your company realizes, flows to you.

Is it legal? I dont know. But if you dont go braggin about it, I doubt anyone will catch on.

Re:The challenge of financing

[shaitand]

actually I was working for Sony Electronics at their Fort Meyers Florida call center. My paychecks were drawn directly on Sony's account at Chase Manhattan.

Sony ELECTRONICS has one call center for all support in the United States. Sony Entertainment and Sony Music are different stories. Sony Canada also contracts the SCISC (Sony Customer Information Service Center) to handle it's support calls.

Goto this webpage http://www.ita.sel.sony.com/support/

The "other support sites" stuff on the righthand side are the exceptions. Everything else on that page (and then some, clie's etc.) are all handled at one SCISC facility in florida (about 100-200 employees on the floor at any given time). B2B is also actually in the same building as well as all web support. The canadian support contract includes internal periphials as well.

Re:The challenge of financing

[rpfelder]

I am very pleased to see that people have opinions on the best way to start a software company. First, we must realize that while time is important, it is second to your idea or concept (product). What you would like to create or bring to the market is a very lengthy and time consuming issue. Sometimes what we think we need today, will take us a year or longer to develop, so it can become outdated. If what we develop is to enhance or fix an existing product, we will have to recreate it all without having the source code available. I must admit my software skills have depreciated over the last 3 years, but I believe that there is still a lot of opportunity and capital out there for us to get. We need a commitment from individuals (us) not companies. Most major software companies are ran by marketing personnel, not technologists. So there is very rarely any innovation happening in those places. Microsoft & Linux are just 2 products that have committed leadership from there founders and their communities, that is why they have S-U-C-C-E-S-S! I would be willing to talk/brainstorm with any of my comrades out there about the possibility of joining forces and creating the next "BIG" thing. Write me a reply or shoot me an email, with "SLASHDOT" in the Subject line. Thanks! Motto: "Don't Just Talk About It, Be About It!

Re:The challenge of financing

[ckaminski]

Oh God, the market-speak got me! Must be too much time listening to my crazy officemate talk about his blues band...

Must go purify my soul with some Counterstrike now.

Market interfaces....

[BWJones]

Find a dedicated concept or conceptual area to exploit. How to do this? Simply ask folks what areas they are having problems with software needs.

I'll tell you that a number of folks are doing quite well at the interface between biotech and software. The amount of data that is being generated by biotech is truly mind boggling and we need software tools for analysis and visualization of that data. Software that is capable of analyzing multi-dimensional datasets is particularly in demand right now with gene chip analysis and the work we do in our lab on molecular phenotyping. For instance, we are adopting software used in the remote sensing community to analyze "multispectral" data sets in the retina and other tissues and the communities that this software came from (GIS, Remote sensing, Intelligence) are very interested in software that can help distill multispectral data real time to enable streamlined processing and analysis. Your link to DARPA is particularly informative for these potential projects, but don't forget about other resources as well like the National Institutes of Health.

Re:Market interfaces....

[The Jonas]

Find a dedicated concept or conceptual area to exploit. How to do this? Simply ask folks what areas they are having problems with software needs.

Interesting site can be found here.

Re:Market interfaces....

[dustmote]

Absolutely. I think that the difficulty that faces a lot of people is seeing what is needed, what there is a market for. It's very easy for a person to figure out what their own software needs are - I can tell you the top ten programs that I would write/have written if I had the time or wherewithal, but it is difficult for me to figure out the needs of the business on the fifth floor of our office building. I suppose that the trick, as you have pointed out, is to find places where a huge volume of information is being generated that needs processing and correlating. Still, it can be hard for a lot of people to see the difference in "things I need" and "things other people want and need".

Re:Market interfaces....

[Anonymous Coward]

Software that is capable of analyzing multi-dimensional datasets is particularly in demand right now with gene chip analysis and the work we do in our lab on molecular phenotyping

A word to the wise for all you software developers out there: You cannot pick up life sciences like biology like you can pick up a new programming language. To write something really useful, you need a depth of knowlegde that you will not pick up by reading O'Reilly's "Developing Bioinformatics Computer Skills."

Re:Market interfaces....

[Anonymous Coward]

Absloutely correct. Start your owen company, or band together with others in a startup.

I've started several enterprises, the first one got sold to Rational then got sold to IBM. Worked out, um, just great.

Only way to go.

Let the drudgework programming get shipped anywhere, who cares.

Sharpen up your talents, gird up your gumption, and... go.

BWilde.

Re:Market interfaces....

[datababe72]

I was just going to say something similar myself.

I know some excellent software developers in biotech who do not have any biology background. But they faced a sharp learning curve. In addition, many scientists are inherently suspicious of programmers bearing programs to "solve all of your problems", because they've been burned before. Biology is a very messy science. The rules governing the data are often unknown... that's what the scientists are doing research to discover! This is a very difficult area to address without including someone with both a background in biology and a reasonable understanding of the software development process. (Of course, I am biased, because being this "translator" is how I make my living....)

Also, I've gotten a lot of calls from people fleeing fields like telecom, wondering if biotech is a "safe" harbor. Yes, and no. It is certainly growing, but much of biotech is inherently boom-and-bust: most companies are venture funded and most of them don't make it. So while you can manage to create an excellent career at the interface of biology and IT, you almost certainly will go through several lay offs and company failures.

Biotech software developers are also not immune to the forces affecting the rest of the field: Accelrys, one of the most successful companies selling software to life sciences/pharma now does much of its development to India. Lion, another big player, recently laid off a lot of people, too. And these are the successful companies!

None of this means I disagree with the grandparent post... there IS a lot of interesting work to be done with biological data. But please don't think this is a hot, easy field to get into. The cost of entry is high (significant knowledge of biology) and the customers are hard to win over.

Re:Market interfaces....

[ill_mango]

Dont forget small and medium-sized companies either.
I myself just started working at a small company (30 employees) and they have an incredible amount of paper-based forms and garbage that can be all but eliminated with programs that take me less than a day to write using Access and VB. They were about to spend a couple hundred dollars to hire a software company to do it.
Companies like this have enough money to burn that they can buy custom-software, and since their needs are not large, you can make a killing when you use rapid-dev languages like VB

Re:Market interfaces....

[nycsubway]

I've tried this, but not with software. I've created educational and reference materials for programmers. It's tough to start out, you need to establish a customer base, and that is the hardest part. Once you have customers and a stream of money, you begin to invest in things to make your operation more efficient and be able to sell your product for less.

Since I'm talking about a product that costs money to produce each time, the cost of production is the most expensive thing. Creating new reference cards is inexpensive. So for me, finding ways to reduce my cost of production is important.

This is slightly different than software. I beleive the bulk of cost is in developing software, and it costs virtually nothing to sell. However, your software can become outdated quickly and will not be worth much. Selling a product where the majority of investment is in producing each product is different than producing one that can be copied and sold cheaply. Software is a business that I think I would have trouble making money in.

Re:Market interfaces....

[the_2nd_coming]

creating an easy to use file system sticker printing software...you know those stickers at the doctor's office that are colored and have the first two letters of your last name on them? well they have to be printed ontot he sticker....the software to create a sticker SUCKS...I watched a demo when I worked for the welfare office...this guy was attempting to teach these 50 year old women how to use the software...it was a blank MDI with a huge menu bar full of weird named menues....most of the functions needed to be right clicked....talk about a crappy interface...if some one can make an interfeace that is easy for an administrative assistant to use with minimal training, they can make a killing in that market.

Re:Market interfaces....

[pacc]

"Simply ask folks what areas they are having problems with software needs."

Correct, starting to make a program is the wrong way around. If you are going to survive you must be sure that there are a customer waiting for it and then scrap your own ideas and find out their needs first.
They ought to be the experts.

Re:Market interfaces....

[kisrael]

I myself just started working at a small company (30 employees) and they have an incredible amount of paper-based forms and garbage that can be all but eliminated with programs that take me less than a day to write using Access and VB. They were about to spend a couple hundred dollars to hire a software company to do it.

A couple hundred dollars? That is very small change. If each person gets minimum wage, that's at least 30 * 12K = 360K in salary every year, plus god knows whatever other expenses...it's cool to make software to improve efficiency, but if you're competing against a couple hundred dollars, you're not goint to "make a killing"

Re:Market interfaces....

[HeyLaughingBoy]

I think that the difficulty that faces a lot of people is seeing what is needed, what there is a market for.

Exactly. When I started my first company (I say "first" because even tho it is defunct, I will definitely do it again and again), I had daily contact with customers at my job so I knew quite well what they wanted and how I could produce it and get it to to them. I also had a valuable business contact that I learned a lot from.
Now it's different. I have no customer contact in this job so I'm now figuring out how to meet people that may be future customers or may know future customers e.g., I'm thinking that finding markets that software is used in and going to trade shows for those markets may be a way to meet people. I'm also looking at some hobbies I have that I know people spend tons of money on to see what I can produce and sell there.

It's that lack of contacts that's killing most of us.

Start a company?

[ellem]

Pfft! If I had that kind of drive I wouldn't be unemployed now would I?

Re:Start a company?

[Anonymous Coward]

Well at least your honest. If no one could tell a lie for a day 99% of us would be screwed!,

Yes, but which coder works while the other 9

[Anonymous Coward]

post on slashdot?

uuuuh. did you think about this?

[heller]

There's not enough business in the software industry to support the existing industry, otherwise those who were in it before wouldn't be unemployed, and you propose another company?

Re:uuuuh. did you think about this?

[rbolkey]

There's enough business. What there isn't is enough business in certain markets of the software industry to support the exiting industry catering to those markets.

Re:uuuuh. did you think about this?

[Rocketboy]

Perhaps the difficulty is that there's little need for more software vendors producing "me too" products. Is there really a profitable niche for selling a new spreadsheet, database, or word processor? E-mail or chat client? I doubt it. The challenge -- and the reward -- comes from inventing new products that don't exist yet, or which do exist but don't work very well. Remember too that the real money often doesn't come to the first group introducing something new and radical but rather to the more highly polished second and third. 'Course, that was before software patents...

Re:uuuuh. did you think about this?

[bloggins02]

Perhaps, perhaps not. I think a lot of software companies out there are failing to follow the old adage: "don't sell shoes to shoemakers." Meaning? There are WAY too many software companies trying to sell software and services to...other software companies!

This can only go so far, eventually some of those software companies have to sell to someone else, or we're in a big circle and going down fast. Software companies that hire REAL coders (who, for example, know what a "stack frame" is, I'm not talking about code monkeys) and do software projects for people in other markets still have the potential for success.

Are V.C.s likely to fund your new company which aims to sell yet ANOTHER content management system or source code revision system or .NET component? No. Might they fund a business who writes software that analyzes biotech data in real time, or even controls sophisticated steel factory machines? Probably.

Re:uuuuh. did you think about this?

[Orne]

The whole point of the parent is that there is enough business to support the industry as a whole, it's just that the focus isn't where it used to be 4 years ago. You lay people off at Company A because Product A isn't as desirable anymore, which has no bearing on the desirability of Comany/Product B. And, if more people realized this, they would jump at the opportunities out there now...

Was: General telecom, ISPs, general IT networking mantainance
Now: Biotech, hospitals, record keeping, transactional databases, financial auditing, data mining

Re:uuuuh. did you think about this?

[Anonymous Coward]

Don't forget that most slashbots would build a company with a 1) Do free stuff 2) ? 3) Profit businessmodel.

Guaranteeing a 100% failure rate.

Re:uuuuh. did you think about this?

[dukeluke]

True - before software patents you actually had to have a good product to compete. Now, you just need good lawyers.

Re:uuuuh. did you think about this?

[Rocketboy]

And good lawyers are expensive.

My own take on this oscillates: sometimes I think that it is still possible for a garage start-up to make it, sometimes I don't. I do believe that it is possible for one or more smart people to create a killer product on their own but recent history shows that a great product isn't enough. It has to be effectively marketed, something a lot of Smart People don't do well, and even then (in our current litigacous US society) you still have to have money to fend off the lawsuits competitors will throw at you if for no other reason than to run you out of cash and out of business. Sometimes the best I think can happen is that you get bought out and watch someone with deeper pockets get rich. Maybe you'll get enough to pay off your student loans, maybe not. Rich people don't like to see the peasants making it good, you know. What good is an exclusive club if anyone can join?

Re:uuuuh. did you think about this?

[the_2nd_coming]

no...most of the people layed off were from large companies....the small-medium sized companies that operate localy cannot afford the services that IBM or Dell offer and would much rather pay 10 grand plus costs for a guy to buy the hardware, install the network, set up the machines, develope any special software needed that cannot get purchased and integrated, and then be on call for an hourly fee to do support work if needed.....one of my buddies from highschool did this and he has made a killing and now has a staff of 15 people.....

think localy when starting a business, not globaly.

Re:uuuuh. did you think about this?

[IANAAC]

Sure there is enough business. I am a translator in addition to doing sys admin work. I can tell you first hand there is a real need for good translsation memory/glossary management/project management software that either an agency or an individual translator could use, Linux, Windows or Mac. I could (and have) cobble(d) together various open source pieces to do my translating projects, but would love to see something more cohesive.

Another real need in the Linux community is PDA sync - Palm stuff is there, but there is NO option for Zaurus sync. IBM is rolling out Zaurus PDAs supposedly, but with Windows sync only.

I guess my point is: take a look at what you do everyday with your PC (or any device that uses some form of OS, embedded or not). Chances are you'll see a need for either invention or improvement.

Re:uuuuh. did you think about this?

[ev1lcanuck]

I think there is a market for me too products. One that hasn't been explored much, the home market. The market for grandparents and little kids who don't know too much about computers. Something sort of like Microsoft Bob was supposed to be (but obviously done right).

Integrate Office-like applications geared for the home market instead of big corporations. I mean how many grandparents do you think need powerpoint?

I know there is MS Works and MS Money and Outlook Express and MSN Messenger and all these individual little applications but computer-illiterate people don't necessarily knwo how to work them.

I see these ads all the time for comptuer tutoring software for computer-illiterate people. Showing people how to use things like Excel and work Windows Explorer. Why not, instead of making these people learn the corporate version of a piece of software, make a piece of software designed for them with ease-of-use in mind.

Sorry for the long, fairly offtopic rant, but I thought somebody should say it.

Oh, and if you are thinking of making my idea, please go ahead and tell me when you're done, I need to buy two copies for each of my parents...

Re:uuuuh. did you think about this?

[PainKilleR-CE]

Those types of things are fine, and probably can and should be done, but in the end require a lot of the more costly portions of a software business to be in place. It's not just about the time developing the software (which may be a big portion for this market), but also the funding and marketing.

With niche markets you can sometimes get companies that are willing to fund a project based on a pitch and a demo. Small companies are just as likely to do this sort of thing as larger companies, and more likely to take a chance on a small startup with no real history (though everyone will probably want resumes of the people that will actually be doing the work for the sake of making sure that you actually have the capability to do what you say you'll do). If a company wants some way to sort their email in a particular manner in Outlook or connect Outlook to Excel and doesn't really have an IT department that can write macros for them or any coders on staff to handle some simple VBScript (or anyone they can afford to pay to do something as simple), they may pay a small amount for a quick project that you can leverage to other companies or use in a larger project (just make sure anything you might sign still maintains your right to do so). They may need something bigger than that, like a database and front-end for their inventory and tracking system that just isn't big enough for the larger, more expensive companies to handle. A little project done well may be enough to lead to bigger projects down the line, either from the same company or from other companies they work with.

With broad markets you may not be able to get any funding (you'd need something more like venture capital, someone (or multiple people) willing to put in money on the idea for a share of the profits or control of the company), and even when you do you'll have to find a way to get your product to your market, as well as letting your market know your product is there.

Personally, over the last 5 years, despite working for a rather large company rather than working for myself, I've managed to expand our oppurtunities simply by building on the simple projects I started out with. Now we're getting to a point at which we're building software to do things that weren't possible before rather than simply to augment or replace existing software that we had no control over (and that the company that supplied the software had no stake in). The development cycles get longer as the scope of the projects get larger (and many small projects have turned into larger projects over time as more functionality was requested by the customers), but the funding increases as well to reflect the difference in size as well as the potential earnings. On the other hand, the software I'm writing isn't something that Microsoft would come in and write, simply because the market is very small, and the knowledge required tends to come most readily from within the industry (certainly not a software-driven industry, but rather one that is coming more and more to terms with how it can leverage software to improve it's products and services). Many of the people that really have the knowledge required aren't software people at all, so it takes people familiar with the industry to be brought together with people familiar with software to really get things moving. People in industries like biotech and other areas should be fairly familiar with the idea that people with little to no software development experience learn something like perl to get a job done more quickly. Now imagine what happens if you bring a software developer into that environment that's willing to learn enough about the industry, or at least the particular project (on a project-by-project basis) to move the more complex ideas those people (the guys hacking together perl scripts from vague ideas of how perl works) have into the realm of actual tools they can use comfortably. Those are the kinds of areas where many companies could use small development houses that can come in and help them out with small projects, and the people doing the software could stand to make some good money that way, if they are there when these industries look for them.

Re:uuuuh. did you think about this?

[El]

Problem is, it is far more expensive and risky to do the "missionary sell" of a new product than it is to do a "me too" product in a proven market. Look at Microsoft -- they've never really produced an innovative new product (other than MS Bob), yet they've done quite well by taking over markets that other companies proved were profitable. (CP/M, VisiCalc/Lotus 123, WordPerfect, Apple, Logitech Mouse, Nintendo/Sony game consoles, etc.)

Re:uuuuh. did you think about this?

[JuggleGeek]

Email? I think there is. Email clients have made little progress in the last 5-10 years. Spam tools are designed as "add-ons" that don't really integrate - they stand aside and pre-filter and such.

But the fact that I believe there is a market for a better email client (and I do) doesn't mean that I think it is financially viable. Simply matching the basic functionality that already exists in todays email programs would take a lot of time. The features I would like to add would take more. And as soon as you made it public, if Microsoft or anyone else who sells email products decided that they liked some of the ideas you had implemented, they could throw 30 programmers (along with testers, documentation guys, and other various support personel) onto the job, and soon their program would do everything yours can do. In order to get any market, you would have to keep your product in the closet until you were ready to market, and then you would have to get that market fast. Once your open that window, it'll only be open for a short time before you would have to compete with the big boys.

So, I believe *could* build a better email program. But would it be worthwhile to spend that much time/effort/money developing it? I doubt it.

Re:uuuuh. did you think about this?

[PeteQC]

Do you think that there is a lot of place in the restaurant business? No, but successful restaurants open every day!

Re:uuuuh. did you think about this?

[El]

This is doubly true today with offshoring -- do you really think all those companies in India and China buy a copy of your software development tools for every developer? How do you think they keep their costs down? I'm afraid there is no way to make a profit on tools in today's market.

You need to have somtheing to create...

[EveningToast]

See, I am a very creative guy. but not a very good programmer. Maybe the bulk of people who are out of work are programmers, or not up to the ask of assembling entire programs....

Re:You need to have somtheing to create...

[stratjakt]

A lot of unemployed people are just plain useless.

They're still waiting for a $200,000-per-year-with-stock-options gig writing FORTRAN routines to create amortization tables.

If you really want it, work is easy to find.

Re:You need to have somtheing to create...

[bendawg]

My problem seems to be somewhat of the opposite...I am a very good programmer, but have a hard time coming up with ideas.

Re:You need to have somtheing to create...

[Anonymous Coward]

This needs to be said over and over again. I've worked with some of the most clueless jackasses in the world these last three years. They are all artifacts of the boom time, when a guy with a pulse and enough fingers to type got 75k a year. Just because the retarded speculation of idle rich jerkoffs gave them something to do for a while, they think they're entitled to a job programming.

Truth is, the talent in the industry is terribly diluted right now. This correction will continue until the deadwood floats back out to sea.

Re:You need to have somtheing to create...

[the_2nd_coming]

there you go...start a company with the parent...MS has Bill Gates and Steve Allan....

Re:You need to have somtheing to create...

[the_2nd_coming]

err...PAUL Allan...:-p

Re:You need to have somtheing to create...

[yngv]

so why don't you two team up?

Re:You need to have somtheing to create...

[El]

If you really want it, work is easy to find. Well, almost right. If you really want work AND are willing to work for $9/hour, work is easy to find.

How to sell it..

[Anonymous Coward]

You are saving the company money buy buying ur product. thats the only way u can sell it. Automation.

Dont go for consumers. We will pirate youre asses into a wall.

Consumers havnt got the money, enterprises do.

Elbonia

[Anonymous Coward]

Back off on Elbonia you insensitive clod!

Start a Software Company

[danknight]

I'm Going to call it ... MikeRoweSoft !!!

Re:Start a Software Company

[Bombcar]

No, that's already been done. Make your logo a Black Bird, however, and you've got MyCrowSoft!

(stolen from elsewhere.)

Re:Start a Software Company

[danknight]

W00t ! My First +5 Funny! (In my Best Howard Dean voice ): I'd Like to thank all the current Mods who made it all possible !

Re:Start a Software Company

[Anonymous Coward]

You forgot the Aaaaiiieeegggghhh!!!!

With Howard Dean there's got to be an Aaaaiiieeegggghhh!!!!

slashdot problem

[havaloc]

The problem with starting your own company and gathering a bunch of unemployed slashdot readers is that they will be reading slashdot from 'work', looking for the elusive FP!

Re:slashdot problem

[Tablizer]

and gathering a bunch of unemployed slashdot readers is that they will be reading slashdot from 'work', looking for the elusive FP!

How is that better than "real" people who gab at the drinking foutain about sports, girls, movies, and food? It is unnatural for most humans to do the same thing 8+ hours strait. Humans need breaks and variety to keep sane. Geeks just tend to turn to slashdot instead of social gab.

Re:slashdot problem

[Anonymous Coward]

They would also always insist of this great business model:

1) Do free stuff.
2) ?
3) Profit!

Making failure a certainty.

Re:slashdot problem

[Zeelan]

Nay.... you just put them on salery and then expect them to work 12 hour days. Four hours on slashdot... two hours cubical hopping... one hour eatting... and five hours of real work.

If you want more work.... set a really short deadline and then expect them to show up on saterday and sunday... for the good of the company.

Re:slashdot problem

[cabazorro]

Thank you for the pang of desillusion
i hope you are happy now

Why not, indeed?

[Anonymous Coward]

Let's put it up on sourceforge, do nothing with it, and talk about how we are open sores developers! Hooray for Linux! SCO is really hurtig our industry!

I have a better idea. If you areunemployed, why don't you find a job? I am tired of reading your rants here. If you can't find a job, you probably stink.

Personal experience

[Anonymous Coward]

More than 90% of IT workers i know are employed. 100% of the good IT workers i know are employed.

Re:Personal experience

[Slack0ff]

Very true. IF a bunch of unemployeed programmers hooked up I could only guess that software as buggy as Micro$hit would be the end result. BK and McD are always hiring people to work lateshift clean-up.

Re:Personal experience

[Anonymous Coward]

Do you live in India?

I am a hardcore Linux admin, have been using Slackware, Linux From Scratch, and Gentwo all on the same box with unlimited uptime, one user, and a 0.0,0.0,0.0 load average for over 10 years.

I know all about security, adminsitration, and bourne shells. I refuse to work on Windoze boxen because they get virii and are evil monoploists with no understanding of personal comittment fortitude, or wht I can afford living in my mom's basement.

So you are lying, and the IT market is hard for us pros who won't work on inferior M$ Winblows products.

Thanks for the advice!
--A proud Slashbot

Re:Personal experience

[Anonymous Coward]

Certainly true, I know several that are out of work and they are all turds. Hell, even several of the turds have jobs....

Re:Personal experience

[dukeluke]

Been my personal experience as well - if you're good, then you're employed - Q.E.D.

And if you're not? - Well, time for you to find a more forgiving job that doesn't require true competence in the field.

Re:Personal experience

[Anonymous Coward]

"...I refuse...Windoze boxen...virii...evil....monoploists....personal comittment fortitude...living in my mom's basement...M$ Winblows..."

Thats why you are unemployeed.

Re:Personal experience

[Anonymous Coward]

Ya know, I was just about to call you an idiot, and then about halfway through your post I realized you were trolling. Masterful job.

Re:Personal experience

[Anonymous Coward]

Ha-ha, the parent is a troll, but so true. I can just imagine a job ad applicable to your average slashdotter:

A dynamic medium-size corp. looking for experienced open source supporter with knowledge of PHP. Must be able to bash Microsoft products, including the products that the applicant has never worked with, or the products not yet released by Microsoft. Must have good apprecation of Apple's design practices and be able to provide a half-an-hour lecture on why its market share is so low. Must be able to extoll the virtues of Linux to any casual listener. Six figure salary, all benefits and prepaid home broadband guaranteed.

Re:Personal experience

[Anonymous Coward]

You're an idiot. Most unemployed IT and engineering people these days were laid off due to decisions from the top. These are the people who would typically find work within a couple weeks, but now it's extremely hard to get into positions because companies are in their turtle shells right now and won't risk expansion.

Re:Personal experience

[Tablizer]

More than 90% of IT workers i know are employed. 100% of the good IT workers i know are employed.

What I find is that good IT and "employable" are two different things. Companies seem to prefer bullshit artists who do hit-and-run short-term thinking and coding. If they make sacrifices in code and design quality to meet deadlines, nobody ever seems to complain. Cleaning up or patching over their own cruft is job security for them.

The good BS artist has an advantage because nobody has the time or ability to verify what is being claimed, so if they put the blame on a bad Flux Capacitor, and are good liars, they are usually believed.

The Dilbertian view of the work world is generally true in my observation, at least in the domains I am familiar with. It is mostly a social/political game, not a technical one.

Re:Personal experience

[Anonymous Coward]

You don't know that many people then!

You may also be experiencing the 'blame the victim' syndrome. Your post is such as easy stab to take, kind of like making fun of the homeless.

I know several people who had 'star performer' assessments, yet were laid off when the large organizations they worked for deflated in the crash.

I know some who are still looking. Their big problem is that they dedicated their time with their previous employer in niche skills that are no longer relevant.

Re:Personal experience

[Anonymous Coward]

I know several people who had 'star performer' assessments, yet were laid off when the large organizations they worked for deflated in the crash.

Jeff Skilling was on the cover of Business Week. That's the ex-CEO of Enron. Being judged a star performer doesn't mean much outside your current job. Maybe they were judged star performers because they dedicated their time to a niche skill that their employer needed. That doesn't make them more employable.

Re:Personal experience

[MerlynEmrys67]

I tend to disagree - Been laid off twice in the past 3 years, both Startups changing their focus out from under me.

Yeah - I was unemployed both Nov 2001 AND Nov 2002, 3 months later I had two job offers, and many prospects in the pipeline. So in one of the WORST job markets in my memory (15 years experience) I have gotten 4 job offers.

Their big problem is that they apparently didn't maintain external contacts, current skills, and the ability to be flexible in a bad job market (I had to move - once for each job)

Re:Personal experience

[Javagator]

Not necessarily true. I have a friend whose company was bought out, and the first thing the new managers did was fire all the people who were "making too much money" (i.e. the best programmers). He's working for a startup now for free. In a year I guess he will be flat broke or a millionaire.

Re:Personal experience

[Anonymous Coward]

I second the motion that you're an idiot. Merely being good won't get you a job. If that was true I'd be employed by now. If I had a nickel for everytime someone expressed astonishment that someone with my skills managed to stay unemployed I wouldn't need a job.

Re:Personal experience

[Screaming Lunatic]

More than 90% of IT workers i know are employed. 100% of the good IT workers i know are employed.

Speak on brother. Let me add that 100% of the good IT workers that bathe, speak english fluently, and have motivation to get out of their bath robes and network that I know are employed.

Bitching about not having a job is for the guys that sit in their mom's basement in their bath robe trying to get the latest kernel compiled, tweaking every last detail in fluxbox, while trolling on Slashdot.

God dammit people!!! Set some goals, brush your teeth, put on fresh underwear, and get out in the world and kick some ass!!!

Re:Personal experience

[Anonymous Coward]

Good IT does not equate with "won't make sacrifices in code and design quality". Some sacrifices are necessary, otherwise you won't have any customers. I know too may developers who are incapable of answering the question "what is the best solution given these constraints". They just hear the "what is the best solution" part.

Re:Personal experience

[Anonymous Coward]

A good coder is one that can deliver the stuff his employer wants. If your employer judges that hit-and-run is needed and you don't want to do that, then you are not the right person for the company.

Re:Personal experience

[Anonymous Coward]

I know about a dozen people who are world-class programmers and better than I am. I know hundreds who are mediocre or worse. I spent a year unemployed/underemployed. To be honest, you sound like one of those mediocre But-I'm-Employed-by-an-F500 programmers I mentioned a moment ago.

Re:Personal experience

[Anonymous Coward]

Thank you. I think your previous author must be young. It's just a naive viewpoint. Moreover, I think many of these more self-congratulatory postings represent denial on the part of their (employed) authors, in an attempt to raise their own sense of security and invulnerability. It's not only statistically implausible to suggest that nearly all unemployed IT workers happen to be the duds of the undustry, but it also implies that the IT industry possesses an intrinsic fairness and wisdom, creating in effect an employment "meritocracy" where competence dominates and overrides all other factors. Poppycock.

There are a host of other more importanct factors that determine hiring or layoff practices. For examples, outsourcing, ageism, management incompetence, replacement of domentic workers with HB-1 workers, artificial inflation of jobs requirements (or underemployment, i.e. requiring a doctorate or MS degree when a BS will do, or requiring a degree from a natural guru who has otherwise proved himself), etc. In my experience, competence is dropping ever further down on the list of employment qualifications. That's in contrast to 10 or 20 years ago, BTW, a period where competence really did rule and tech companies were not all run by bean counters and marketdroids.

Re:Personal experience

[PainKilleR-CE]

Must have good apprecation of Apple's design practices and be able to provide a half-an-hour lecture on why its market share is so low.

You forgot the next part: ...including the products that the applicant has never worked with, or the products not yet released by Apple. ;)

Another one, though probably only for a signing bonus:
Must be able to extoll the virtues of Linux to any casual listener. ...and explain how Microsoft stole code from BSD.

Re:Personal experience

[Anonymous Coward]

God dammit people!!! Set some goals, brush your teeth, put on fresh underwear, and get out in the world and kick some ass!!!"

Thanks for the pep talk. If it wasn't for us lazy unemployed people the unemployment rate wouldn't be so low. And it's got nothing to do with the economy. Hey I think I see where you're going with this. Yeah, if it wasn't for poor people we would have such a high poverty rate. If it wasn't for children our educational system wouldn't be in such shitty condition. etc. etc.

Re:Personal experience

[cheekyboy]

What I find amazing, is that stupid ass managers (whos job is barely brainy and any coder could learn like a new api, after all its 90% flowchart logic) , well these managers can't just go , "oh im making too much $$$, ill cut my salary by 10%, and ill ask Bob the highend coder there, do you want to be kicked out or reduce your pay by $20k" Surely that would be the best result.

But we know the boss' will get a good bonus after sacking 10 people. Gee, any one could have done that, give bonuses to people who work hard, not write up status reports for higher ups.

Btw Javagator, how much cash did the CEO of that startup make, probably millions. Not like he has a need to get a job or he can invest it and live of that.

Re:Personal experience

[cheekyboy]

Yeah, thats like saying if you have 20000 plumbers in a 30000 population small town, everyone of them will get a job.

Its supply demand, if theres 800 people applying for 1 job, and you are in the top 10, but you dont get chosen because the job requirements are so damn specific, its like finding a vaccine to SARS or something.

Again it doesnt help that if in your local area again theres another bunch of 400 to 1000 staff/it people sacked by big corporates like IBM or a telco. Even more coders looking for jobs.

Re:Personal experience

[SgtSnorkel]

More than 90% of IT workers i know are employed. 100% of the good IT workers i know are employed.

OK, so you only know the people you work with?
( ;-) sorry, but it's one possibility)

My personal experience is that, as you gain more experience, you become a bigger threat to your boss. You'll know you've hit the tipping point when you have trouble getting hired, but all your interviews involve solving some problem the company is facing.
First-rate people hire first-rate employees, second-rate people hire third-rate employees.

Re:Personal experience

[Anonymous Coward]

You never learned about irony did you?

Re:Personal experience

[Javagator]

how much cash did the CEO of that startup make

I don't know.

I did this.

[anaphora]

I started this when I was 16. I designed programs to teach kids arithmetic. Now I'm 18, have a steady job that brings me about $10/day for all of the work of listing my programs on eBay, and every once in a while, I'll get lucky and a school will want to purchase 50 or 100 copies of my program on floppies for their computers. The programs took about 3 days to write, and they were the best 3 days of my life.

Re:I did this.

[Anonymous Coward]

eBay is killer for side work. After my contracting work ended, I went back to school to get certifications for Cisco, Sun and Microsoft. While I was doing that, I began buying, refurbishing and reselling computer and telco equipment on eBay. One man's junk is another's treasure, as they say. I could find perfectly usuable stuff for dirt cheap or free at swap meets, LUGs, schools, "dumpster diving," foreclosed dot-bombs, and such. Take it home, clean it up, make it look spiffy and new, fix anything broken, package it up and sell it on eBay for profit. I'm making about $1000 a week doing this in my spare time, that's more than my first two jobs payed!

Re:I did this.

[tommck]

$10/day doesn't really cover many people's coffee habit! This isn't really going to help any guy out that was used to pulling in $50-100K..

Re:I did this.

[Anonymous Coward]

Not to sound conceited by I just made what you make in a day sitting here typing this post. It would take 6 months just to pay one month of my mortgage. I think the poster is talking about living off of a software company. Not making extra money to support their porn addiction.

Re:I did this.

[anaphora]

Well, 10$ a day is $3,650 a year. This isn't bad for a college student doing two minutes of work a day. If you want to pull in 36500K/year, design 10 programs instead of 1 and market them. If you want to make 100K, design 30 programs and market them well. I spent 3 days coding, and I wasn't very good at it at the time (I started in VB, then the third day changed everything to C and restarted), so if you spend, say, 90 days coding, you could theoretically create the 30 programs required to bring in 100K. of course, lots of variables influence this.

Oh, You could also try selling them for more than $5 a pop. That's all my programs cost, cause I don't do it for the money as much as I do it for the experience.

Re:I did this.

[tommck]

WEll, frankly, 3 days is not enough time to come up with an idea, never mind designing a coding a solution. Then, there's marketing, etc. You seem to have gotten lucky with what you've written, but it's pretty much impossible to write 30 useful programs with an average beginning-to-end time of 3 days. If you could do that, you'd be giving Bill Gates a run for his money...

Re:I did this.

[GoofyBoy]

>This isn't really going to help any guy out that was used to pulling in $50-100K..

Only a time-machine set to travel 5 years in the past will help this person.

Re:I did this.

[Kenja]

So at 10$ a day you would only have to do this 100 days a month to cover basic cost of living out in the real world.

Re:I did this.

[hackstraw]

...have a steady job that brings me about $10/day for all of the work of listing my programs on eBay...

If more Americans were happy with these wages, then we would never have to worry about being unemployed and having our jobs outsourced to India.

Re:I did this.

[tommck]

cute, but I believe this is only true for the truck driver turned VB programmer types... I've had no problem maintaining my salary level throughout the bad times.

T

Re:I did this.

[Anonymous Coward]

Those were the best 3 days of your life? You need to get laid real bad.

Re:I did this.

[Anonymous Coward]

> it's pretty much impossible to write 30 useful
> programs with an average beginning-to-end time
> of 3 days. If you could do that, you'd be giving
> Bill Gates a run for his money...

Windows _was_ written in three days.

Its just taken 15 years to debug it.

Re:I did this.

[scorp1us]

At $3,650/yr that's 365 $10 hookers.... Who's the fool now?

Re:I did this.

[CyberVenom]

Just out of curiosity, do you have a webpage or something that describes the features of these programs? I wrote some lame programs back when I was in school to help some of my teachers, but they were never anything I even tought I could make any money on. (lame stuff like real-time force vector addition sims, etc.)

Re:I did this.

[Anonymous Coward]

Damn. For writing math software, you really suck at math. $36500k/year is $36.5 million- thats going to take a lot more than 10 programs. Moron.

Re:I did this.

[kisrael]

cute, but I believe this is only true for the truck driver turned VB programmer types... I've had no problem maintaining my salary level throughout the bad times.
Crossing my fingers and counting my blessings, same here.

Re:I did this.

[kinnell]

You could look at it that way. On the other hand, he has has created a viable software product in just 0.1man-months of development time, which probably earns him an hourly rate in excess of $1000/hr.

Re:I did this.

[jcuervo]

but it's pretty much impossible to write 30 useful programs with an average beginning-to-end time of 3 days. If you could do that, you'd be giving Bill Gates a run for his money...

Sorry, thought we were talking about useful programs, here... :-)

Re:I did this.

[Idarubicin]

So at 10$ a day you would only have to do this 100 days a month to cover basic cost of living out in the real world.

I know the parent poster is probably kidding, but think about it--this kid is pulling in an extra $10 per day, every day of the year, from the three days of work he did two years ago. Ten bucks a day will comfortably keep him in groceries. Another such app will pay his rent as a student, as long as he goes to school outside of a major city.

He's not working for ten dollars a day--he's not working for ten dollars a day! This is a bonus on top of his regular day job, or a little pocket money to help out at college. At ten dollars per day for two years, that's more than seven thousand dollars for three days of coding. Assuming he's spent another four days on maintaining his website and shipping his product, he's down to earning only a thousand dollars per day for his actual labour. That's better than a hundred bucks an hour. Good show!

If we assume that he spends a full two hours per week shipping and advertising his product, that's still $35 per hour--not a bad wage, and it takes up less of his time than most hobbies.

Re:I did this.

[limekiller4]

You're missing the point. Actually, I don't think you're missing the point, you're being an ass. But to answer anyway...

Taking an extra $300/mo in cash that he didn't already have for three days of coding and a trivial amount of work on eBay is an excellent return on investment. Lessee:

After 1 year: $3,650
After 2 years: $7,300
After 5 years: $18,250
After 10 years: $36,500

That's $12k for each day he worked. Pretty good in any man's math.

So please stop being a dick.

Re:I did this.

[anaphora]

Nope. I have no need for a website. You can view one of my eBay auctions here, though (until 1/29, at least): http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item =3657074442&rd=1

Re:I did this.

[anaphora]

Oh, and let me note before you say "thats only 90 cents per program!". Those fees are exaggerated during parts of the year. The 30% to charity was something I was going to do anyway, I donated $100 to Penny-Arcade's Child's Play. The fees are only about 8% lately, but at times they spike up to around 20%. Shipping is down since I've started skimping on stamps and only sticking one on an envelope instead of two. Packaging is constant. My profit is about 82% of the final purchase price, and during the school year I sell 3 programs a day, netting me about 11.50$/day, which rounds out nicely to 10$ on those days when I only sell 2.

Re:I did this.

[goon]

as master po would say ... yes grasshopper, but he is learning. imagine when he explores *efficeincy*. Be not concerned about the golden egg. He is discovering how to be the goose

Re:I did this.

[Anonymous Coward]

The URL you posted is invalid. Could you post a valid one, please?

Re:I did this.

[jred]

Well, *I'd* say the fool is the one going to $10 hookers. Have some respect, man. 100 $35 hookers is the way to go...

Re:I did this.

[hymie3]

remove the %20 from the url (slasdot place a space in his posted url) or you could go via this link

Re:I did this.

[CyberVenom]

Wow! Now that stuff looks like a program I wrote to help my little brother study his spelling words. ;) Except mine was written in QB for DOS (circa 1995 I think), although it was still bright and multicolored! (I think I was using VGA mode 0x13)

Software company? Great idea!

[Anonymous Coward]

How about making a word processing or spreadsheet program for Windows? You're practically guaranteed success!

Been there...

[AKAImBatman]

...done that. And I have to warn you, it's not easy. What you think makes a good product will in fact be very different from what your customers think is a good product. You can plan on at least a year of post-release development before your software meets the needs of your clients. And you'll have to be doing the development while taking the time to advertise the existing version, so you can at least make enough money to make ends meet.

My best advise is to start a small software company while still employed. Don't advertise too much, and listen to what your customers have to say. If you keep constant development going, you should have an excellent product prepped for the next time you're out of work (or to start off on your own).

Re:Been there...

[poot_rootbeer]

My best advise is to start a small software company while still employed.

Remember, never take business advise (sic) from somebody without talking to a lawyer first. IANAL, but...

If you're doing anything even similar to software development for your current employer, don't be surprised when they fire you and take you to court seeking ownership of the software product you developed for your own company. If you're bound by a non-compete clause, they'll try to get you with that; if you're not, they'll try to claim your software takes advantage of their trade secrets and may end up getting you anyway.

Re:Been there...

[AKAImBatman]

If you're doing anything even similar to software development for your current employer, don't be surprised when they fire you and take you to court seeking ownership of the software product you developed for your own company.

This is true. I was assuming a software product that has little to no relation to your current job. Developing something similar to your employer may not always be illegal, but it is unethical.

Re:Been there...

[Wylfing]

What you think makes a good product will in fact be very different from what your customers think is a good product. You can plan on at least a year of post-release development before your software meets the needs of your clients.

No, no, no, no, NO. I guarantee I will get modded as a "troll" but listen -- I am profitably self-employed and I am involved in several new business ventures a year. What you are describing is NOT entrepreneurialship, it's dot-com non-business-model bullshit where you finance yourself for 24 months before you hope to make a sale. Of course that's hard! It's backwards! An entrepreneur finds a market FIRST and makes a product SECOND.

If you want to develop software for a living (and please realize you may need to change fields), then get some CHEAP PLAIN business cards with just your personal contact information on them, and go to local business and see what their software needs are. Target medium- and small-sized businesses. Talk to the owner and ask him or her where the pain is WRT the flow of information. If you are worth a dime as a programmer you will immediately see 10 ways to improve their systems based on what the owner tells you. Ask the owner if it's OK to propose software solutions that can help his/her business. Whether yes or no, leave your card.

Now, if the owner was amenable to a proposal, figure out a SMALL INEXPENSIVE project you could do for that organization. Something with a few weeks to completion. GET SOME HELP writing the proposal if you need it (honestly rate your skill as a writer). This can't be a piece of crap, and it has to be focused on the business needs you talked with the owner about. Then personally deliver this proposal and put some context around it vis-a-vis the business need. Don't expect anything to happen. You will probably not get any work the first time, because doing this takes a little practice. But it is no better or worse than going on endless job interviews, is it?

You must also ask the business owners you talk to whether they know anyone else in the community that may need some outside IT help. Build up names and addresses and continue to stay on friendly terms with department managers and business owners (i.e., call them up once in a while and say "Hi").

I would be surprised if you kept this up for one month and you did not have at least one project by that time. Write a scope document for each project detailing precisely what you will deliver, when, and for what price. This will be your contract, so have them sign it. Then you knock it out of the park and deliver exactly what you proposed, on budget and on time. After that you have a repeat customer. Go get a few more.

Note: Always bill about 10% of a project up front and subtract that amount from the final invoice. This gets the wheels of their accounting department working and shows the person signing the checks that you know what you're doing. Also, net 15 invoices are OK, no matter what anyone says.

Re:Been there...

[AKAImBatman]

You're confusing consulting with pure software sales. The former is "create a product for a customer and try to resell it to others" while the later is, "I see a market of XX dollars that this program will attack." Most out of work programmers will tend to do the former as a quick way to make some money. The good ones will be able to make a business out of it. The article (as I understand it) is referring to the later situation.

For example, I have an idea for a new consumer operating system. I'm not going to go ask businesses what their needs are. I'm going to do consumer market research and attempt to build the product that I believe the market wants.

Re:Been there...

[winse]

Dude.....this is great stuff. I've actually done a little bit of this, only I found that it was much easier to modify (or just outright use) gpl hud than writing something brand new. 9/10 programs that anyone thinks of already have 3 or 4 implementations on freshmeat. You might as well use the "free" weed... or beer or whatever Stallman said it was.

Re:Been there...

[poot_rootbeer]

What you think makes a good product will in fact be very different from what your customers think is a good product.

This would be a great opportunity for someone to argue that open source software will never come to dominate the market as long as developers continue to scratch their own itches instead of thinking in terms of customers.

Anyone want to run with it?

Re:Been there...

[Wylfing]

You're confusing consulting with pure software sales.

It is you who is confused. This article asks the question: Rather than go on job interviews to work for someone else, should I instead start my own business? In response, many people said "Oh NO! Starting a software business is TOO EXPENSIVE and TOO HARD." As an example of this imagined hardship, superparent talked about the difficulty of funding years of development time while he tried to figure out what his customers wanted to buy. That's not evidence that it's hard to start a software company, it's evidence that with a poor business plan and a lack of understanding of your customers your business will suffer.

Re:Been there...

[AKAImBatman]

This article asks the question: Rather than go on job interviews to work for someone else, should I instead start my own business?

Fair enough. However, most people don't think of consulting as a "business", even if it is. Consulting is most certainly the easiest (and quickest) option to money. The only problem is that you need to have the right kind of personality (or know how to manage your personality and do consulting a little different). It's not feasible for me to be a consultant in the current market. I'm highly skilled, but my Alpha personality scares people and makes them feel threatened. Even if I hide my personality from them, enough will poke through later to sour the relationship. I'm in a much better position as an ISV or employee. In both of those situations, I can be more aggressive and get things done the way I believe they should be.

Re:Been there...

[Anonymous Coward]

the problem is that a lot of companies make you sign agreements that say something like we own anything you make, whether it be on our computers or your own computer, on your own time.

Remember that Apple incident a few months ago? As long as you're drawing a paycheck, they own the code you write. Period.

It's a good way of limiting competition, and if someone's stupid enough to write innovative code anyway, well, they can profit off of all that too.

Re:Been there...

[tomaasz]

"By giving your company the tools it needs to manage data effectivly" [Datadino.com front page]

What you think makes a correctly spelled word will in fact be very different from what your spellchecker thinks is a word, provided you use one.

unemployed? just get a job!

[egomaniac]

This is really no different than saying "Hey! You're unemployed, right? Why don't you just get a job? That would fix things right up!"

Where do you think the money comes from when you start a company? That's right, investors. Now, if you can't find a job, what the hell makes you think that you're going to be able to find investors?

"Hmmm. You've been looking for a job for the past year. Unsuccessfully. You have no experience running a company. You don't have a clear business plan. You have no leadership skills. Well, what have I got to lose? Here's ten million dollars. Have fun!"

Re:unemployed? just get a job!

[micq]

Where do you think the money comes from when you start a company? That's right, investors. Now, if you can't find a job, what the hell makes you think that you're going to be able to find investors?

Many companies come to mind that made it without trying to convince some stranger to loan them a bunch of money before they've proven themselves in what they do... some that might be familiar: apple, microsoft, dell...

Traditional thinking tells you you need some hefty investment to make something work, where as a determined mind will tell you that you can do it, out of a spare bedroom, doing odd-jobs on the side in the evening...

Then you're fictional conversation could quickly become "Hmmm.. You've been working hard on this for the last year, successfully. You have a great product, and with our experience in running a company, business plan, and leadership, you'll go far... "

Re:unemployed? just get a job!

[egomaniac]

I never said that it's impossible. My point is merely that successfully starting a company is a hell of a lot harder than just getting a job, and if you're not able to find a job, you shouldn't view starting a company as a quick fix for the situation.

Re:unemployed? just get a job!

[jacem]

I think one of the problems is that several of the start up firms that I worked for since the late ninties started out with an invester saying.

"Hmmm. You've been looking for a job for the past year. Unsuccessfully. You have no experience running a company. You don't have a clear business plan. You have no leadership skills. Well, what have I got to lose? Here's ten million dollars. Have fun!"

Then again most of those companies were extrodinary failures.

JACEM

Re:unemployed? just get a job!

[AKAImBatman]

Traditional thinking tells you you need some hefty investment to make something work, where as a determined mind will tell you that you can do it, out of a spare bedroom, doing odd-jobs on the side in the evening...

You can, in fact, take that much farther. There's nothing saying that you have to live in the middle of a city when running your own business. Move out to the country where the cost of living is much cheaper. Add in a cheap web hosting service (if applicable), and you should be able to have a burn rate of no more than 25,000 per year! (perhaps less)

The down side is that I'm assuming a business model known as "sole proprietor". This means that you as an individual are doing business under some other name. Any debts, lawsuits, or unexpected expenses will land squarely on your head. As a result, you'll want to incorporate as an LLC as soon as your company starts generating a steady revenue.

Re:unemployed? just get a job!

[micq]

It's definitly not a 'quick fix'... but if the jobs aren't available, and he's a hardworker and dedicated, it can be done without other's big bucks... I agree with you that it's not the easier option of the two if jobs are available though.

Re:unemployed? just get a job!

[limekiller4]

This thread has a stunningly high number of assholes replying. I don't know why. But here goes...

Good points ...all except you berating the mere question. The poster is doing nothing more than saying "hey, here is an avenue that doesn't seem to be getting a lot of consideration." Why are you riding him?

Yeah, it's difficult and probably way more difficult than anyone who hasn't already done it realizes. But there are a lot of benefits too.

Further, banks and investors aren't the only way to go. Find a half-dozen guys who are willing to refinance their mortgages (or get one on the condo they picked up during the boom) and there is some modest capital to keep you going for a year. Three to five if you really like ramen.

Now stop being a fucking dick and shooting down a perfectly good question because you're enjoying the company of whatever half-ass job you subscribed to.

Re:unemployed? just get a job!

[hyphz]

> Many companies come to mind that made it
> without trying to convince some stranger to
> loan them a bunch of money before they've
> proven themselves in what they do... some that
> might be familiar: apple, microsoft, dell...

Problem is, none of these firms had to compete with firms of their current size at the time they were starting up.

As it is, it tends to be very hard to do so. Advertising is the obvious bottleneck: MS/dell/etc can always use another page ad, so you're going to have to bid against them, and if you can't, you won't get distribution.

i don't have a lot to say on this...

[micq]

but:

Yes, I am taking my own advice, and trying this, even though I was not unemployed."

Good luck to ya. From what I see, smart individuals with the willpower to stick it out, and some selling ability, will do fine doing this... even in this economy. So more power to ya!

Re:i don't have a lot to say on this...

[Anonymous Coward]

"Good Luck to ya."

Thanks! (I'm the guy who submitted the original article)

I think I know what I'm getting into (having tried this before during the height of the .com frenzy, when it was too easy to make too many mistakes like growing too fast).

This time it's harder (but not quite impossible) to get money, but that's forcing me to make healthier decisions for the company. Focused on getting enough customers to break even _before_ the seed round dries up. Then if I need VC money, I can presumably do it at better terms. You sure get more respect if you can say "I'm profitable and want to grow faster" than if you say "I've got a cool idea but am running out of money this month".

I'm available

[Abm0raz]

I'm not much of a manager. I owned my own company before. My partner stole a bunch of stuff and there is currently litigation against him pendinf. If someone wants to start a software system, I'll code. I'm not much for free coding (so don't suggest sourceforge) seeing as I need to pay rent and stuff. I currently do freelance coding for various people as well as work full time running mail servers and anti-spam software for a large Architectural and Telecommunications firm.

-Ab

Re:I'm available

[karnal]

Not to pick, but you mentioned litigation and a request to do work in one fell swoop.

Someone could think you're sue-happy... obviously, we don't have the whole story, but I don't think an advert in the postings of Slashdot would find you much work.....

Re:I'm available

[Abm0raz]

heh, point taken. I have a job, but it's more support maintenance than creation. The litigation is because my former partner took the company's bank account and disappeared. The original investors are suing him, not me.

I don't need the job, but I would prefer to get into programming rather than server maintenance and preferably on a newer company where I could help guide than a drone in a larger place. It wasn't exactly meant to be a resume submittal. :)

-Ab

Re:I'm available

[FroMan]

I'm not much of a manager.

Q: What's better than winning a gold medal at the special olympics?
A: Not being retarded

It probably has something to do with your lack of personal skills.

Or a hosting company.

[Scott Lockwood]

I did. I'm not rolling in dough, but I make enough to pay my admins, and keep a little for myself. Plus, I learned a whole bunch.

Umemployed? Why not start a software company?

[Anonymous Coward]

Can they DO that?

unpaid internships

[happyfrogcow]

I've heard some internships are unpayed these days.:-)

Yes, how do companies get away with this? If the internship is part of a college degree/coursework then that is one thing, since you get course credit. However, unpaid labor? Aren't there labor laws? I hear a lot of the movie industry uses unpaid internships because people, apparently rich kids, really want to be in the movie industry and can afford to use ma & pa's bank account to float their boats for a while until they move up to a real job.

Can you waive your rights that are protected under labor laws? Is that what these "unpaid internships" have you do by signing a contract? Whatever happened to minimum wage laws?

I do realize that back in the olden days, apprenticeships were used regularly. But even these, didn't they offer housing and food in return for work?

someone please enlighten me.

Re:unpaid internships

[MikeXpop]

To put it shortly, it's to get your foot in the door. With internships, you're almost guaranteed to get a job (who would turn down free labor?) and in doing so you're getting work experience. They're good for college students to get so they can have things to put on their resumes.

I'm not sure how labor laws and minimum wage laws affect it though.

Re:unpaid internships

[cpex]

i got 18/hour for my internship

Re:unpaid internships

[thasmudyan]

My company does unpaid interships and I'll tell you why:

At most other shops, interns are paid, allright, mostly to make coffee and do the tasks no one wants to do. And it's OK that they get money for that.

At our company, interns receive a personal training plan and are basically treated like students. The employees are encouraged to spend lots of time with them, teaching them what they know. Our interns work on real projects, and are getting real experience with their desired field of work. This costs the company a bunch of money, because time and resources are diverted to implement these training plans.

So, no, we're not paying them additional money but when they leave (and some get assimilated by us), they know a whole lot more about their future jobs. Getting this knowledge across basically costs us money that - let's face it - we're never getting back in any way. It's true, an intern also produces stuff during her stay, but the value of that doesn't compare at all.

Re:unpaid internships

[Anonymous Coward]

I've got you trumped. ;-)

My job history:
(US Dollars, Central United States, and all entries should be prefixed "Summer After ____")
10th Grade (Most of 1998, Gotta love the .com boom!): $40 -> $75 / hour -- website design
11th Grade (Summer 1999): $7 / hour IT for High School
12th Grade (Summer 2000): $15 / hour IT for High School
Freshman Year (Summer 2001): $17.13 / hour with 1.5 overtime + $500 relocation bonus
Sophomore Year (Summer 2002): $19.13 / hour with 1.5 overtime + $500 relocation bonus
Junior Year (Summer 2003): $22.13 / hour with 1.5 overtime + $1250 relocation bonus

This May I get my B.S. Computer Engineering, by the way.

Re:unpaid internships

[JCMay]

Unpaid internships are normally associated with school credit of some kind. Some degree programs require, in addition to classroom coursework, a certian number of hours of "on-the-job" activites. I had a class in high school that required me to log a certian number of hours in the WGST newsroom. I went in and taped wire service stories from a cut sheet for on-air use. I didn't get paid money for the work I did there, but I got credit towards completing the class I was in.

As an aside, I also got my mement of "glory" when I became a "reporter" for about 30 seconds when newsroom phone rang. I answered it, and it was an out-of-state radio station calling for information concerning the then-unfolding hostage situation in Chamblee. Kenneth Noid was more than a little unhappy with Domino's advertising, and was doing something about it. The other radio station taped my run-down of the events in their story. Somewhere in the midwest, I was "Jeff May of WGST in Atlanta!"

Re:unpaid internships

[Chibi]

>> I've heard some internships are unpayed these days.:-)

Yes, how do companies get away with this?

Before getting into IT, I was a pre-med in college. Lots of lab jobs are unpaid, and yet there are people continually applying for them. Reason? Because they want the experience and are hopeful that it is an investment in their future (med school applications, publications, etc). When I switched over to IT, I was looking for programming-style internships. I was pleasantly surprised to see how most of the IT ones were paid. :) Well, back about 5 years ago, at least... :( Ultimately, it's a supply and demand thing.

Re:unpaid internships

[jimbrewer]

I owe A LOT to offering myself up as an unpaid intern. For the first 18 months after getting my BSCS in '01, I was still doing the same blue-collar, (skilled) manual labor that I did before and throughout college. During a slow period (where I was lucky if I could find work Thurs-Sun) I offered myself up as a 100% free part-time programmer on my local LUG mailing list. While I was looking for experience rather than pay from the (only!) company that took me up on the offer, two months (only 16 working days) later I was offered part-time paid and one week later I was offerred full-time paid.

I shudder to think where I would be if I had taken the easy route and gotten a part-time coffehouse job like I had the previous years.

Re:unpaid internships

[Anonymous Coward]

Unless the economy is doing very poorly, I can't believe many students would agree to this type of internship without at least getting credit through their school. Payng an intern doesn't have to be a losing proposition. If you find a talented student, you will be potentially paying them a lot less than you would be paying a full-time engineer or a contract employee to complete a job. I worked at HP for a summer and completely redesiged/rewrote the GUI for a mature product, because no one on the team had any Swing experience. I can tell you for sure that my manager believed that he got his money's worth from hiring me, and I definitely got a lot out of that summer.

Training employees, interns or new full-time engineers, is just something that a company has to eat in terms of profits and productivity. You can't hire someone and expect them immediately to function without any training. Do you expect your new employees to work for free until they've learned enough so that their productivity exceeds the money spent to train them (learning the development environment, group dynamics, product APIs, etc)? As you already stated your company is having interns do work on real projects and if this work isn't offsetting your cost in training them, then you have a major problem in hiring unqualified students or a poor training program. At HP we were paired with a senor engineer whom was our mentor, when we had questions we would ask that person for clarification and advice, but most of the "training" I did was on my own reading project requirements/design docs to familiarize myself with the project and its APIs. My experience with the c shell (their shell of choice on all testing machines) was limited, but I read a nice online how-to and borrowed a book from an engineer when I needed to write a new regression test script. This exactly what a newly hired full-time employee would do if he/she didn't have any experience with the c shell.

Not to mention that your company is getting a chance to potentially recruit very talented students that will possibly return as full-time employees. The only students that I knew that were willing to work for free were students that were horrible programmers that couldn't pass the interviews at decent companies.

The real problem

[Anonymous Coward]

People who can write software, collect the requirements, write out the specs and deliver working code are generally employed.

The unemployed peope hanging around at Slashdot generally come from the following backgrounds:

- former Unix/AIX/Solaris admins pissed off at their employers for switching to MS or Linux, but uncapable of delivering any good software or services for the platforms normal people use
- HTML Workshop people, who have seen other people code Javascript and thus are not afraid to mention Java in their resumes, and since C# is a Java rip-off, why not mention 3-year experience with C# as well
- Linux junkies who can write a Perl/PHP script to peruse their address book and download pr0n and that's about it

Re:The real problem

[Anonymous Coward]

Yeeha, too true for this forum...

Re:The real problem

[Anonymous Coward]

heh, I bumped into a website of such a moron in 2001, which stated that 'he had 10 years hands-on-experience' in building websites
very nice, because the first browser was available around 1993 !`

Re:The real problem

[Anonymous Coward]

/. sucks if you're looking for real data, but stays amusing over the long term. Kind of like the funny pages...

Re:The real problem

[rocket97]

heh, I bumped into a website of such a moron in 2001, which stated that 'he had 10 years hands-on-experience' in building websites very nice, because the first browser was available around 1993 !`

Actually around 1990 so that still fits in the 10 year line... www

Sure we are

[jasonditz]

Is anybody really NOT doing this?

I mean, every unemployed software developer I know still freelance codes to make ends meet (at least once unemployment runs out).

But making ends meet and having a strong business where you're honestly "getting ahead in the world" are two very distinct things. Of all the people I know trying this, few were able to come up with more than $10,000 over the last 12 months, and some of us considerably less than that.

Finding paying customers for software isn't easy (at least those willing to pay what the software is worth). I often go 3-4 weeks without anything profitable to do... and get called by someone who wants a 20-30 hour job to cost them like $50.

Re:Sure we are

[hoggoth]

> few were able to come up with more than $10,000 over the last 12 months

I am upset if I don't make $10,000 a month.
Spend more times doing 'sales'.
Build a network of referrals.
Give free seminars to attract attention.
Make sure you are always working. If you ever have down time you aren't doing enough sales.

Don't try to compete on price. It's not worth it. If someone wants you to compete on price with India, move on.

Re:Sure we are

[dustmote]

I diversify. I recently got my massage therapy certification, and am doing that in my spare time instead. It's pretty decent spare time work, and I'm able to avoid the burnout I would begin to feel if I did the same thing after work that I do at work. I also sell homemade soaps, candles, and wreaths during the Xmas months, and have occasionally been known to get a throwaway second job, like waiting tables or part time entry-level retail work. Of course, I don't have the needs and responsibilities of someone who is in their 30's or 40's (or 50's), and I don't have a family to support right now, so it is easier for me to get by on these sorts of things, but it helps to have many different skills in case one fails me for a while.

Re:Sure we are

[jasonditz]

The sad thing is, a lot of these people couldn't get what they want done in India for the price they're asking either. They expect custom designed software to cost more or less what some retail shrinkwrap box would.

Re:Sure we are

[Anonymous Coward]

I am upset if I don't make $10,000 a month.

You are a troll, and full of shit.

Re:Sure we are

[hoggoth]

>> I am upset if I don't make $10,000 a month.
> You are a troll, and full of shit.

If I were I would have posted as an Anonymous Coward, just as you have.
I work from my home office 90% of the time, and I make approx. $10K per month. I do it by spending a lot of time and effort selling.
At times I have to turn down projects because I am too busy. I have tried bringing in a partner and once I even tried outsourcing a project to India, but that was a total disaster and hurt my reputation.

I'm not saying it's easy. It was much easier a few years ago. I didn't have to work nearly as hard as I do now. I have a lot of experience and a lot of contacts. I also had enough funds to survive making almost NOTHING my first year on my own while I built up contacts and clients.

It's not because of lack of great ideas

[Anml4ixoye]

The company I am working for I didn't join because of their great ideas. Though what we are building is very cool. It was the fact that the CEO and President are both Ernst and Young alumni, and two of our Board of Directors have significant experience in the industry we are building it for. On top of that, they have a rock solid business plan that I was very impressed with, and know what's important to spend money on (legal, dev workstations, software licenses) and what not to (not working off of a yacht yet).

Add to that what an earlier poster said about financing and you have the mix to keep most people from starting or suceeding at this. Show me software developers who know how to create a good financial plan, can prove a track record of delivering software, and know the industry they are building for, and I bet very few of them are unemployed.

Re:It's not because of lack of great ideas

[Beta Master]

A potential investor will look at four potential areas of risk: Market, Team, Finance, and Technology.

Most software folks do GREAT on the team and technology stuff. It's what we live for. Unfortunately, it's the market and financials that get investors fired up.

Part of building your team is finding folks who know how to talk to customers and turn that into a financial forecast. This is called MARKETING, and is crucial to any new venture. If you can't get anyone to stand up and say "Hey, if you build this, I'll buy it!" it will be nearly impossible to get funding. No one wants to put dollars in to a business unless they have a very clear idea of when dollars will start coming out. So go find yourself a great marketing person, and an accountant.

You can try to build your own company without outside funding. It's a lot like getting a home-schooled MBA. Even if it doesn't work out, you'll learn a LOT and will at least have had the opportunity to work at a level above what's available in an established company. Sharpening your chops is always a good thing.

You can also get a great team together and find a company who needs your services, who would be willing to deal with the business issues (paychecks, infrastructure, marketing, sales, finace) in return for your contribution as employees. Getting a pre-formed team is a company's dream. Unfortunately most companies can't affort bulk hires right now, but if you can show that the work your group will perform for the company will pay for the investment the company makes in the group, you'll have a chance.

If you can find a great team, try starting your own group or company. It'll give you something to do other than watch the History Channel. The worst that will happen is you'll learn something while looking for a job. The upside is the potential for creating your own opportunity, your dream job, the company you always wanted to work for. I highly recommend it.

Here's a good place to start for the how to of doing your own thing. Good luck!

I have tried multiple times

[Tablizer]

....and failed. It is not easy. You can't just throw clever programming at the problem and get money out the other end. For one, it takes a hell of a lot of marketing knowhow, something that most geeks should have known they were crappy at when the prettiest girls went to the fast-talking football players. There is much more to making a company than clever tech. Tech ability is becoming a cheap commodity. That is life in the new mellenium. The sun is setting on us geeks and there are fewer and fewer escapes.

Re:I have tried multiple times

[Anonymous Coward]

Plus your relatives and neighboring banks will avoid you like the plague after you blow every cent you borrowed from them.

Nothing better than being unemployed AND in debt.

Re:I have tried multiple times

[timjdot]

..also been involved in several. You need a market a small company can penetrate. E.g. insurance and other large industries do not do business with small companies. You need a market that will not be trashed by free products; and that makes the phrase "software market" almost an oxymoron for a small company. What I am saying is that you must identify your market first and then make your company. Make what people will buy rather than what they might buy. Or get some exec. from a large company to own part of your copmany: that's how most of the successful VC's make sure their companies are successful, incestuous relations.
BTW, you might assume the companies I worked for were not profitable... they were. Just can make more by moving the jobs to India and Phillipines.
Best luck. We can make the world better with better software... but better for ourselves and our neighbors or better for the king atop the mountain?

Re:I have tried multiple times

[cybermace5]

Football players? You thought it was the fast talking? No no no...it's image. Football players had the strong, solid images while geeks had the wimpy, unexciting image.

Fast talking doesn't get you anywhere without a good image. Are you going to buy something from a fast-talking salesman who has shabby clothes and three-day stubble? As a company, you have to appear clean, strong, and dependable. One of the greatest fears of a customer, especially in software and engineering fields, is that you will disappear and render their investment useless should it ever break. I have seen long-time outside vendors be stricken permanently future bidding because of one or two problems or delays.

You can't have any slack in your performance or image, because customers won't give you any.

Re:I have tried multiple times

[nycsubway]

I agree, I have tried writing software on my own. I first started by writing a scheduling/record keeping system for doctors offices. I thought that since the offices often pay around $1000 for their systems, if I was able to sell it to them for $100 and give them features they wanted, that I would be successful.

My marketing and investment in it were not enough to sell anything. I put an ad in JAMA, and sent out individualized letters and surveys to doctors in my area. NOTHING. It would've taken me too much time to create what people would've been able to use. Plus the market was already saturated with systems. Most were expensive... but, they already had relationships with doctors, knew what they wanted, had their trust, and had a product ready to sell to them.

I found a better business model was to sell something that was smaller, more manageable, and could be built up more slowly, requiring little capital. Also it was something I liked doing. I decided to start it because I found there were no other products available that had what I wanted. A C/C++ reference card. I sold some, and began to get suggestions, and I've begun to create more cards. Then I found ways to reduce the cost of making them, allowing me to sell them for less, and gain more customers.

Slowly is what I've found is the best way to make a business work. All the time you put in is worth it, and its nice to be able to realize little gains as you go along.

Re:I have tried multiple times

[Anonymous Coward]

Yeah, me too. Like I posted elsewhere here, I wrote an entire engine to run my site and I service tens of thousands of registered members (and who knows how many others). I've been around for more than five years and am a pretty popular site/service.

Yet, somehow, I can't figure out a way to make money off of it. I'm not talking about some site that just offers articles, news and funny pictures to look at. I offer an actual service where one user offers, makes and completes transactions with another user.

I am overworked and overloaded (on top of it all, I have a real career). I am frustrated because I know there HAS TO BE A WAY TO MAKE MONEY out of this, without gouging my users or driving them away, but I just don't have the expertise to figure that part out. I am stuck at the 3. ??? 4. PROFIT!!! part...

There are other people who offer things like magazines and other online services in my special little niche - and they seem to be making some money at it - if not a living. But I just am stuck with my particular offering.

I'm not even sure where to go to get guidance or take "the next step". And I'm wary of people whos vision may be to *only* make money, so I can't just put out a call to "anyone with business and marketing skills who wants to partner-up".

I enjoy what I do, even though it drains me and it has for many years. But I am constantly funding the thing out of my own pocket. I've spent about $25,000 since I started it and I see no end in sight as far as that is concerned.

I'm not really a programmer, either. When I started writing my software/engine, I had no clue what I was doing (it's written in PERL). It is still a bit of a spaghetti job, because I don't have the time to go through and tighten every last bit up and write oodles of documentation (there are emails to answer and user needs to tend to), so I couldn't even sell the software to other people who may want to do the same thing (and considering the "field" it's in, I doubt there is a big market for the software that I wrote).

I wish I had some old buddy or something that just graduated business school and wanted to test his mettle by turning my dinky project/service into some big-wig venture that satisfied both my wallet and my users. I would LOVE to be self-employed out of this... but.. GAR.. As it is, I'm just pulling my hair out on a daily basis.

Re:I have tried multiple times

[TRACK-YOUR-POSITION]

Might this be a temporary lull in geekdom? Right now, I look at the world and don't really see an urgent need for programmers--everyone already has the internet to communicate, what else do I expect people to do with computers? Businesses already have databases and ecommerce--further improvements are merely differences in quality rather than in kind. Programmers are a dime a dozen.

But suppose in a decade or so robots really took off--every physical task done by humans could be done by robot, but only after geeks program the robot. There would be a trememndous rise in demand for software engineers. True, eventually the robots would replace all current physical labor, the need for programmes would diminish--UNLESS the increase in supply created more demand for newer and newer uses for robots.

Which might be the real problem geeks are having right now--the same problem everyone who makes money by WORKING instead of by OWNING--our economy right now is really bad at turning increased supply into future increased demand, mostly because of the vast wealth inequalities that have opened up. We have a small economy that works to produce goods for a small number of people at the top, and unless the government changes its policies things will continue this way for sometime.

Re:I have tried multiple times

[psb777]

I tried and it worked and now I am financially independent. So why can't you do it? At least that is the question being asked by some here.

What most "successful" people forget is that they got lucky. Sure, you make some of your own luck, but not all of it. It is all too easy to become arrogant.

What you are doing is right: You must try multiple times. You are more likely to throw a six if you throw more than once. If you expect to have to try multiple times then you will not chuck all your life savings into one venture. Failing, as it is so likely, must not be disastrous.

Start your venture. Work hard and be focussed. Enjoy the ride. Expect to fail!

And if you do get lucky then do not think you have the Midas touch: Ringfence your financial gain before starting the next venture.

Re:I have tried multiple times

[pwroberts]

"[...] something that most geeks should have known they were crappy at when the prettiest girls went to the fast-talking football players. [...] Tech ability is becoming a cheap commodity. That is life in the new mellenium. The sun is setting on us geeks and there are fewer and fewer escapes."

God damn, that was depressing reading.

Ignore him, fellow Slashdotters! Cling to the illusion that we're still useful and special people :-D

Um. We are, right...?

[dies]

Re:I have tried multiple times

[Anonymous Coward]

if one user completes a transaction with another user then just charge a slice of commission at the top...like ebay etc.

Re:I have tried multiple times

[Plimsoles]

fast talking football players?? As in the cartoon of the football player pointing to a player on the field and saying to the coach "Look, coach, look. See Jim run. Run, Jim, run."

Mindset

[savagedome]

Starting a software company sounds like a neat idea but is easier said than done. When you are unemployed, the primary focus is finding a way of paying those rising bills. Starting a company is not going to solve that right away. It takes quite a bit of time before you get into the profit making green zone.

Also, software company is about having an idea that would make for a good software. When hunger strikes and you are driving down a freeway, you are not looking for a gourmet restaurant. Any fast food joint does it for you.

Fund your development with services

[Anonymous Coward]

The lead time before your software dreams start generating cash flow is immense. Sometimes it never happens.

I've seen self-employment work best as a service business. Can you do networking and software support? Do you think these jobs are beneath you? Do you have skills in dealing with customers? You know software development inevitably turns into support in successful projects?

Support pays the bills and generates the cash flow needed to fund you development efforts. The problem is most developers think they're going to develop a successful product and let someone else worry about the support problems. Never happens. Might as well bite the support bullet now. You will find it is not beneath you. It is hard even for the technically skilled. It will pays the bills and give you the time for pure development.

Re:Fund your development with services

[swordfishBob]

Unless you have a fantastic product and have cornered the market for a great margin, services is where the money is. You might have to work at a low level sometimes, but there's as much need for high-level services. That's where people charge 3-digit hourly rates, and where someone who does a good job keeps getting invited back.

Business plan

[Space cowboy]

Don't expect to get anywhere without one. It may be crap. Hey, it *will* be crap. You'll look back and laugh (or cry), but it's important to have a standard yardstick to measure yourself.

Beware of angel-investors (people who know you and are willing to give you cash to start up). Unless you have a better experience than most (myself included), you'll fall out, and it'll get messy. I wasted 3 years.

Do a *realistic* assessment of your income and needs. Before you jump ship or give up something else, make sure you can support yourself. Sounds stupid, but it's amazing how little costs can add up. It's easy to fall afoul of the law with tax returns and VAT as well (for us Europeans)...

Get people on board who can run a company - not as paid (or maybe nominally paid) - someone who's outside the business most of the time, and isn't fixated on the next quarter, because you will be, and you'll need a longer-term plan as well as the short-term survival strategy. Make them a non-exec director.

That's about all. The business plan *is* the most important, believe it or not... Most banks will help you through it for free (hoping to get your business). At the very least they'll give some sound advice. It's their job to fund businesses that work....

We've been going for 2.5 years now, and learnt the hard way (the aforementioned 3 years) that there's more to doing this than meets the eye...

On the other hand, if you can handle the extra pressure of being both boss and worker, it's a far nicer lifestyle than being a cog in the engine :-)

Simon.

Re:Business plan

[daybyter]

The good news is, that no BA will help you anyway these days. We have a couple of good ideas and a local BA organisation. They helped exactly 0 companies over the last years...

Re:Business plan

[dustmote]

Business skill set and programming skill set are not mutually exclusive, but they don't necessarily go hand in hand, either. I completely agree with you on that. If you go the route of starting your own business, you're going to be learning an entirely new set of skills and pitfalls, and you're going to be gambling on it with your financial well being. I'm not saying it's a bad idea, but it's a risk to consider, as well. If you're unemployed, the argument could be made that you have nothing to lose, but you can still lose a lot of time spent and energy exerted that could be finding work in the mean time. It's a gamble I can take, at my age, but one that a middle-aged family provider may have a lot more difficulty justifying.

Re:Business plan

[Anonymous Coward]

Not true. Flexibility and a good product under development is key in a startup; don't waste time and limit yourself with ancillary issues as this.

Re:Business plan

[mabu]

Critter is a professional media asset management application designed for content creators who are looking for a focused, automatic, non-intrusive and cost effective solution...

You gotta love the way products are marketed these days. It's hard to even tell what the hell it does. This is indicative of the marketing being the thing that's sold and actually not the product, so while you think you have a product-oriented business model, you actually have a gobbely-gook, marketing-babble-based model. At least your product descriptions give some idea. I go to some web sites and they're selling a "solution" to an ambiguous "problem." WTF.

Re:Business plan

[Rotten168]

VAT as well (for us Europeans)...

What, you think we don't pay a VAT? We just have a different name for it, that's all.

Re:Business plan

[e_lazardo]

Spot on for all counts. Don't forget the ROI & finance sections, and expect it all to change more frequently than you might guess.

Re:Business plan

[Space cowboy]

To be fair, here, it is aimed at film houses like ILM, Sony, Lion etc. as well as post-production houses. You need to spread the "acceptance"-level so it appeals to as many as possible in your sector, and our market spread is pretty wide :-)

People seem to ignore anything they don't immediately grasp, which is useful when you're trying to describe something that A calls a 'spade', and B calls 'an earth-inverting horticultural instrument' :-))

Simon

Re:Business plan

[Anonymous Coward]

Bullshit. I run a small business, and a business plan is fucking VITAL. It's way too easy to find yourself saying, "Oh, that's not a big deal...that service we need for our business only costs $100..." Sure, that may be true, but when you wind up saying that about 50 different things...

It adds up. It only takes a week or so to write a solid business plan, and but it'll save you thousands of dollars and weeks of productivity in the long run. Believe me...we operated our first year without one, and it was almost a disaster. WRITE A BUSINESS PLAN.

99% of software sucks.

[Anonymous Coward]

By sheer mass of probability, chances are your software startup will churn out software that sucks.

Better to work for a boss who'll take the blame for that suckage, than take it directly on your own shoulders :-)

really, why not?

[Anonymous Coward]

www.netprogrammer.com

I always knew in my heart I was not good enough.

[soluzar22]

That is why I never tried be-your-own-boss software engineering as a career. I'm a decent enough tinkerer, who has just about enough talent with programming and IT generally to garner a substantial reputation among my less-than-100% techie buddies. On the other hand, I see some of the stuff that other hobbyist programmers come up with and I know that I could never have done that. Having seen it done, I could maybe do it again, but that is not enough to get ahead in business, now is it?

As it is, I'm the biggest propellorhead in the English dept. at my university, and I still find time to code for fun sometimes.

Re:a little project for inspiration

[Anonymous Coward]

Counter example:
BSD-Lites

count me in

[Anonymous Coward]

I am game, now who is paying for the advertising, health care, and salary of all my newfounded fellow employees?

Simple

[slash-tard]

Most of the unemployed IT workers are the types who have never setup a real server. These people used to be secretaries or auto mechanics and thought they would go into the IT biz via a cram session school and get rich.

IT also doesnt mean programmer. People doing support type positions are probably not very good at software development just like good developers usually arent good at network/systems administration.

I dont know any good developers who are having trouble finding work.

Re:Simple

[Anonymous Coward]

The difference is that good network admins know that they aren't good programmers, whereas a lot of good programmers think that network administration is beneath them.

They are two very different diciplines. I personally hate to program, but that's because "writing lines" was the standard punishment I used to get for fighting at school, and its scarred me for life.

Re:Simple

[Rotten168]

No talented auto mechanic would ever take an IT job... there's just so much more money to be made as a mechanic. Plus the work is better and it's generally more in demand.

Hey thanks Man . Great Idea.

[Wooji]

Now can I get the quick start guide for programming in whatever language prefered.

The experienced can get jobs.

[RyanFenton]

The unemployed are most likely comprised primarily of those MANY people who are either IT people who without a huge portfolio or over 5 years of experience, CS people who haven't graduated, or have less than 3 years recognizeable experience. It's hard to push through phone networks to speak to people who would ordinarilly throw away your resume, and it's very hard to get acceptable experience in this market. Without experience, and without the money that comes with it, it's VERY hard to start a business that other businesses would give regular business to. The experienced people can still find jobs.

It's that span between "cheap high school/early college labor" and "unquestionably valuable asset" that gets people in this market.

On that note - Anyone interested in a CS Major with around 3 years professional experience? - I'm friendly, helpful, quick of mind, and have paid my dues.

Ryan Fenton

Pay your employees

[yamcha666]

A little over a year ago, my current boss and the owner of the company were unemployed. So they decided to start up a company specializing in web development for indie artists and indie labels - help them produce a web presence basically.

They hired me and one other unemployed web developer. But the owner refused to take the time to apply for small business loans, finance the company properly, the list goes on - Essentially, over a year after the company got started, me and the other developer are making $150 / month if that. And the owner is not sure when he'll be able to give us more. Even when we first started business, I wasn't making anything a month.

So, my recommendation when starting up a software company of any sort- Make sure you always have enough money to at least pay your employees. Else moral and loyalty will go down the toilet.

Re:Pay your employees

[Anonymous Coward]

Not to slam on you as it sucks not to get paid, but what did you think would happen when you went into a job developing web sites for indie bands? They're struggling as it is and don't have the money to spend on a website.

Re:Pay your employees

[yamcha666]

Well, you did hit the nail right on the head. The bands are pretty poor as are we. But my coworker and I have been trying to get into small businesses too, but our manager (also our sales rep) is more concerned about increasing his popularity in the local music scene than actually helping the business make money. But you are right about the struggling thing.

Everyone thinks they can run a restaurant.

[Anonymous Coward]

Low barrier to entry. Relatively easy work.
Something you can do locally.

The problem is that you have to find something
that you do better and do it for less money
than the competition. Don't try something
that 1) Microsoft will stomp you at and 2)
H1-B guest workers or outsourcing from India
will stomp you at.

Same reason I didn't

[dejaffa]

I'll give you the same answer a friend of mine gave when he and I were quitting a consulting company about the same time and someone asked why we didn't start our own.

I don't know anybody who's good at sales whom I trust.

Re:Same reason I didn't

[Anonymous Coward]

Some sales people I "trust to work hard to get their quarterly bonus". When you're the boss, you can tune trust to the individual.

In the extreme case, set up a commission-only compensation plan for the sales guy.

MBAs?!

[Anonymous Coward]

No one on slashdot will do it, because it will force engineers to work with those MBA-types, and we all know how that goes ;)

BTW - I did start my own software company three years ago and its been the best experience I could have imagined. Besides all the cliches - hardest work ever but the most enjoyable - its great knowing Ive created something in this world thats delivering a well received product, creating jobs and money for my friends, and having an impact on our industry.

I am serious about my above comment too. Engineers NEED business-minded people and vice versa. Software does not sell itself in a vacuum. A start-up needs a strategy of how its going to penetrate its market. It needs funding (even if that means bootstrapping). It needs people who can SELL the product (and usually the engineer who made it doesnt always do a good job of that).

So good luck to those who are attempting to start their own company.

Start a software company, stop writing software!

[iansmith]

Between dealing with the horribly overcomplicated tax code, legal issues, bills, dealing with publishers or self publishing and dealing with distributers or on-line sales systems, advertising, marketing research and everything else that goes into running a busines, you can forget about doing any programming.

You need a lawyer, accountant and a CEO to manage the whole mess and THEN you can hire programmers (or yourself) to actually start writing.

Code or Manage. Pick ONE.

Look for the lowest overhead...

[GweeDo]

While I am not unemployeed, I am working on a start up on the side developing Indie Computer Games. While "indie" games have budgets near $20k-$50k we are looking to produce games for only around $100 total (not counting our time as a cost). So far so good. Our first game is due out in under a month. I hope it flies :)

Check out Happy Kitchen Games for more information.

Re:Look for the lowest overhead...

[Anonymous Coward]

"While "indie" games have budgets near $20k-$50k we are looking to produce games for only around $100 total (not counting our time as a cost). "

The $20k-$50k cost mainly consist of salary so that people working on the games can pay their bills. It's not an option to "not counting our time as a cost" since you also will be required to pay bills.

Re:Look for the lowest overhead...

[MadScientist]

Right, but we're employed elsewhere and are building the software company in our spare time. If the company is able to fully support us some day, that would be great. If not, then we have little at risk.

-dougl

Still won't get venture capital

[GOD_ALMIGHTY]

Can't remember the reference, it was on one of the tech sites, appearently the Vulture Capitalists in Silly Valley won't even look at your business plan if it involves using US engineering talent for the bulk of the development. They want offshoring in the plan to begin with before they dish out any money.

Has anyone else heard of this practice?

That being said, you're probably better off writing some development tools and selling support contracts to your old buddies who still have jobs. Software dev houses still like to buy stuff rather than developing it in house. If you've been unemployed for a while, I'm pretty sure you can deal with crap margins at first just to get some cash in.

I think that a good model, probably larger in scope than what I'm suggesting is Out of the Box by EJB Solutions. Check out what they're doing for some ideas.

Good Luck.

Re:Still won't get venture capital

[ron_ivi]

Parent wrote: "appearently the Vulture Capitalists in Silly Valley won't even look at your business plan if it involves using US engineering talent for the bulk of the development. They want offshoring in the plan to begin with before they dish out any money.

That's false. Some top tier VC firms want tech that is not easily commoditized, and even tell the press that those jobs will stay here.

For example, a couple days ago's San Jose Mercury News quotes VCs saying the opposite:

"[Kevin] Fong [of the Mayfield Fund], too, expressed optimism about jobs. His firm has doubled its pace of investment into new companies, he said, and they're hiring. ``These are the kinds of jobs that won't be leaving the country,'' he said. ``They require very deep domain experience, the ones you find in the valley.''"

Sounds to me like you're source was trying to make excuses for not having his biz-plan read -- or perhaps he was talking to a VC firm targeting markets inappropriate for his product.

if it were that easy...

[mcmonkey]

Those guys probably wouldn't have been laid off in the first place.

Why not start your own company?

1. Because you have bills to pay. Starting a company usually involves a big outflow of cash, and not much income.

2. Because you want to keep doing what you've been doing. The time you spend running your software business (meeting with lawyers, meeting with clients, meeting with acountants, meeting with...) is time spent not developing software, or whatever it is you like to do. For some people, this is an acceptable trade-off to be their own boss. For some people, it isn't.

3. Because you're no good at it. Being good at writing code is a world away from being good at running a business that employs code writers.

4. Because it takes more than an idea. Sure, a lot of lame ideas that got funded during the bubble crashed when the buble burst because they were still lame ideas. But don't let that hide the fact that companies founded on great ideas still fail.

Starting your own company is a great experience and path to sucess for many people. But it isn't for everyone.

Why does it have to be a product development?

[Anonymous Coward]

There is lot of opportunity for providing software customization and maintenance service. Some smart guys I know, _quit_ their well paying jobs 3 months ago and are already trying to fill up their orders. Their target? Small companies with IT budgets used up on more management than programmers. Yes, it doesn't give same satisfaction, doesn't do much to our ego. But it keeps you occupied, be your own master. And earns bread.

Can't lose

[dylanm]

About 2 years ago I took a software job for minimum wage, at the very least it kept my skills honed and looked more attractive on a resume to be currently working. We worked our butts off and the company actually started to make enough money to back-pay a real salary. We were eventually acquired by a large software company and all made out quite well. Realizing what you can do while sitting at folding tables and plastic lawn chairs in a cramped office is probably the most valuable thing I took from that experience.

Interesting Idea

[ev1lcanuck]

I think that this idea could really spark a nice little company. I think that slashdot readers are some of the most technologically savvy on the planet and if you stuck a bunch of them together in front of a typewriter (or compiler as the case may be) they could write war and peace.

In two years I'd love to see this proposed group of slashdot readers making some cool software that could compete with the big boys. I know I'd buy it!

Where to get started?

[faust13]

I'm very interested in starting a company. I have a couple pieces of software already to go, but where and how do I land the investors?

Re:Where to get started?

[timjdot]

customers.
if your products can be sold then perhaps your customers will invest in your company if they really believe in it.
You can read some VC books but largely the q. is whether you are willing to spend your family's life savings or give the company over to someone else. E.g. you can let some VC's take it over. You might end up with some money but certainly not control in my experience.

Re:Where to get started?

[jrexilius]

I posted later on about what I am doing:

post

One method is to build the busines and software part-time while employed elsewhere. So maybe if you are unemployed, try finding any job, even one that pays less or is not great career move and spend off time building business.

Good luck!

Re:Where to get started?

[faust13]

It sounds like I'm headed in the right direction. Thankfully, I'm not unemployed, but that means I can only work on building my business part time.

I'm hosting my server at home. Refining my software daily.

The biggest leap I'm having is making the customer connnection. How do I attract customers?

Re:Where to get started?

[jrexilius]

That is exactly the challenge I am facing. For now, the first wave of customers for my products will be previous clients, friends in the industry, and previous employers. That will get me through the first 6 months, help prove out the software, and establish a presence but it wont be enough to pay all of the bills and salary for myself.

So come June I will have to figure out how to sell, bid on contracts, and make new connections. My plan is to try and partner with other consulting groups as resellers, to use an open commission structure to encourage other people to sell for me, and get help with marketing. Perhaps make an investment such as ad space in a magazine. I will ultimately try and find someone who is a sales/marketing type to help as I dont have the expectation that I will be able to be great at it and build the product.

Thats what I am going to do. I will let you know how it works. My target customer is business rather than consumer so my approach may not work for consumer oriented products. Although the ad space and marketing tactics would apply in either case. Also perhaps you might try some form of referal rewards program or something like that. Best advice is to treat sales and marketing like you do technology. If you aren't the guru, find someone who is and ask advice, look at other products to figure out how they did it, etc.

Regarding the poster suggested

[GoofyBoy]

... defense soliciatations.

These are alot harder than you think.

1. There are alot of companies with deep pockets going for it.
2. You will spend a huge time writing proposals down to accounting to the cent before you get into what IT guys would want to do. PHB type of things. And you are not guarenteed you will get the job or get paid for that work.
3. The amount of waiting for things to go through would destroy a business with no income.
4. I can almost guarentee you that a bunch of unemployeed slashdot readers will not qualify for these types of jobs either finacially or with experience contracting with the government.

Re:Regarding the poster suggested

[ivan256]

5. Few things suck as much as not getting paid for over a year after you finish a job.

Re:Regarding the poster suggested

[theMerovingian]

Seconded!! This is a very bad idea for a startup. I have chased a few VERY MINOR defense contracts (less than $1000), and there is ALOT of competition.

All the major jobs that go out to bid were written by a big consultant shop, who will get preferential treatment by the purchaser. Often, the purchaser just has to get 3 bids before allocating more than X amount of money. The bidding process is often just a formality, and they will largely ignore competing bids as being "out of spec", even if your bid is a better overall solution to a problem.

Plus, you have to register with Dun and Bradstreet, and jump through many hoops to even be eligible to bid.

Repeat: a total waste of time and money for the average company!

Re:Regarding the poster suggested

[Anonymous Coward]

(I'm the guy who originally mentioend defense solicitations).

When I submitted the article, I was on a DARPA/SBIR page that suggested that _most_ of the SBIR ("Small Business...") money want to tiny companies, and had a graph with a peak at 2-5 people!!!

I've worked for five startup companies now (digital video, electronic component procurement, retail advertising, etc), and three of the five had some of their seed money from those sources (two DARPA, one Air Force). It's true that the money from the small business programs are small (100K to 800K, IIRC). But as GoofyBoy pointed out, the big money contracts are being pursued by the big guys, and are *FAR* more painful from a paperwork point of view.

99% persipiration, 1% inspiration.

[gurps_npc]

Actually, those numbers are off.

It is more like this: 30% pure luck

30% Financing

30% Perspiration

9% favorable government laws/rules

1% Inspiration/talent

But it is clear that talent/genius/great guys get nothing. The people that make it in the real business world have a bit of luck, find some financing, work their asses off in the early years, get a some favorable government rules, and might have a passably good idea.

Bill gates is practically the posterboy for this formula. He had the luck, the cash, some hard work in the early years, a lot of favorabel USA rulings, and a very very few ideas taht weren't 1/2 bad.

Re:99% persipiration, 1% inspiration.

[FreshFunk510]

In the spirit of Rounders (the movie), I wouldn't call it luck.

To quote, poorly, from the movie:

"Why do you keep on thinking it's luck? Why do you think the same 4 guys end up in the final round every year at the World Series of Poker?

I wouldn't say Bill Gates got lucky but I'd say he bet on a high probability event. He knew computers were going to get big and he knew they could exist in the consumer space so that's where he bet his money.

It's the same with Warren Buffett. He adjusts his portfolio so that a certain % of it is on high probability events and smaller %'s are invested on lower probability (high risk, big return).

Re:99% persipiration, 1% inspiration.

[timjdot]

you forgot 95% connections in the case of the aforementioned. It always has and always will be not what you know but who you know.

Re:99% persipiration, 1% inspiration.

[bluGill]

He was lucky. He was born when he was. If Bill Gates was instead born as sun to King Henry the eight of England he would have changed history, but he would not have started Microsoft. Bill gates had already sold his first program before I was old enough to read, its my bad luck that I'm not old enough to have been there then or I could have (likely wouldn't have but that is a differenty story) released a better BASIC and turned that into millions...

Someone however will get lucky. And there might even be a software buisness that will topple Microsoft. However that doesn't change that he did a lot of wother work and made a lot of other (high probability) bets that paid off. Luck is a factor though.

Re:99% persipiration, 1% inspiration.

[FreshFunk510]

He was lucky. He was born when he was. If Bill Gates was instead born as sun to King Henry the eight of England he would have changed history, but he would not have started Microsoft.

??? I don't call that luck. I call that chance. I mean if you call that luck you can call every hobby, every computer he tinkered with, every electronic toy he had, some element of luck. That's ludicrous.

He didn't walk along a red-brick path to find a pot of gold. He had a vision. He dropped OUT of school to implement that vision. That's not luck; that's dedication. He stayed with the business from fledgling DOS to Windows 95. That wasn't luck. That was perspiration.

See. Microsoft, like Rome, wasn't created in a day. Nor was his vision implemented in a day. Winning the lottery is luck because you pick numbers and have a 1/1000000000000 chance of winning. But Gates worked on his vision and his chances of success are much, much different than a lottery. Saying that the fact he was born to his dad is luck is ludicrous. In that case we are all lucky to have been born to our parents (????).

Yes, Bill Gates was at the right place at the right time but dont' call it luck. Think of it this way: every inventor has a 1/1000th (or whatever) chance of being at the right place at the right time and he just happened to fall into that category. But luck? To me that just sounds like an excuse.

Re:99% persipiration, 1% inspiration.

[gurps_npc]

1) Rounders was bull crap. First of all Poker is mostly a game of skill, not luck, but they STILL considers anyone that wins twice to be amazing. How many times have the yankees won the world series? Any real poker play knows that even in the game of skill called poker, luck plays a large deal.

2) Did you read my email past the first line? I said hard work is just as important. And that was what BIll Gates did. He was not a computer genius - other people did the genius work on Windows. And he had a TON of luck.

Basically what happened was this: IBM created a killer app for their desktop by letting other people make the hardware and them selling the software (DOS). The courts said, no, that is a monoply, you must let another company sell the hardware. Boom Microsoft was born. They took IBM's Dos, turned it into MSDOS and began their climb to monoply that the courts said IBM was not allowed to have.

Bill gates worked hard, but to get where he ended up he used a lot of Luck, a lot of Hard work, a lot of financeing, some handy government rules, and maybe a tiny little bit of intelligence.

The point is that being intelligent is not that big a help to becoming succesfull.

Re:99% persipiration, 1% inspiration.

[gurps_npc]

Connections helps you get a start. They do almost nothing to help you succeed.

That is how I got my job, by knowing the right people.

But to really succeed, who you started out knowing does practically crap - if you work hard and have any thing but entirely bad luck, you can easily meet the people that you need to meet and make the connections that you need to make. It is pretty much a non-factor in making a start up business succesfull. To the extent that it is a factor, it is part of the 9% financing.

Re:99% persipiration, 1% inspiration.

[PissingInTheWind]

Bill Gates parent were millionnaires (so were his grandparents) and his mother was sitting on a board where a IBM exec was too, so Billy got a preferential treatment... The rest is history.

If being born to millionaires parents with great contacts isn't luck, I don't know what qualifies.

Re:99% persipiration, 1% inspiration.

[FreshFunk510]

The point of Rounders was simply to illustrate my idea that what many people refer to as luck is simply people playing the odds.

I read your "email" (post) past the first line. No, he wasn't a computer genius but my post, nor yours, was about genius, was it? It was about playing probability.

Thanks for the history of Microsoft. Oddly I already knew it (go figure). But you further make my point; winning the lottery is luck because of the extreme chances involved, the fact that it happens in 10 seconds (to pick the winning numbers) and takes no effort on teh part of the winner. However, if you read the Microsoft history you just wrote, you'll see that this didn't happen in a day. It took a very long time for Microsoft to become as powerful and wealthy as it did. The chances were good giving the industry he was aiming for AND the decisions HE made ..which was more than just one decision but a series of decision which you wrote about. AND it took extreme effort on his (and Balmer's) part to make it a success. That, to me, is not luck. That's preserverance.

Like I said in my other response, Rome and Microsoft wasn't built in a day. By your logic we should call the creation of Rome "luck".

Re:99% persipiration, 1% inspiration.

[FreshFunk510]

That's not luck.

Luck is winning the lottery. Luck is getting into an airplane crash and being 1 of 10 who survived with 490 other people dying.

You could say that Bill was lucky to be born of rich parents. But jsut because he was born of rich parents didn't mean that Microsoft would become an instant success. That totally does not speak the the things he did over the many years to make Microsoft successful. You're basically implying that we're born into a certain fate and those who end up with good ones are simply luck. I'm sorry but that sounds like complete bs to me and it's a way for people who are jealous of people like Bill to comfort themselves.

Re:99% persipiration, 1% inspiration.

[PissingInTheWind]

Yeah, of course. I agree with what you say. I was just (maybe unclearly) pointing out the fact that being rich helps a lot to get richer, and he had the chance to have a headstart into that.

Of course he worked hard and did a lot of things right. I don't believe in "fate" or "destiny", I don't think essence precedes existence.

Re:99% persipiration, 1% inspiration.

[gurps_npc]

You have no idea what my definition of luck was. You keep looking at the parts that I declare to be perspiration and thinking "he thinks that is luck? what a fool".

For the last time, read my response. Yes I thought you had already "knew" it, but you do not appear to pay any attention to. It does NOT prove your point at all.

Since you seem to be incapable of basic logic, here is a full explanation of what happened, assigning descriptions so you will not be an idiot and think "luck" when I am saying Persipiration."

Starting situation: IBM created a killer app for their desktop by letting other people make the hardware and them selling the software (DOS). Government Regulation rule 9%: The courts said, no, that is a monoply, you must let another company sell the hardware. 30% Financing: I did not mention this, but he found the money. 30% Hard work: Gates starts up microsoft, Boom Microsoft was born. They took IBM's Dos, turned it into MSDOS and began their climb to monoply that the courts said IBM was not allowed to have. 30% Luck: IBM failed to see the huge value of what they were giving away and did not take proper precautions (such as a 30% stake in the company, or breaking it up to multiple companies, or even puting any free-bes for IB In this case the luck was mostly what other people did not do. Or are you going to say that Bill Gates hard work was responsible for all of that?

Bill Gates had a lot of luck - nothing went wrong for him that goes wrong for so many other businesses. What if Apple had purchased his little company early? He would have sold out for less than 10 million easy.

NOT a good idea!!

[TrollBridge]

Wouldn't this be starting the cycle all over again for a lot of people?

MOD PARENT UP!!!!

[Anonymous Coward]

He's the PERFECT example of what this article is supposed to be about. THANX!!!

The challenge of spelling

[Anonymous Coward]

If you cannot learn to contract properly, then do not try it. The correct spelling of "you are" is "you're," not "your," you ignorant Git.

Re:The challenge of spelling

[sane?]

you ignorant Git.

Nice reasoned argument. I can see you've really given it a lot of thought, considered all the factors and come to a considered viewpoint that addresses the thrust of the discussion.

Or maybe you just get off on correcting unimportant mistakes.

My brain doesn't always see these things, and for postings on /. I don't give it a lot of consideration. I tend to focus on what's being said instead.

PS Be very careful of throwing rocks in glasshouses.

Re:The challenge of spelling

[KDan]

I tend to focus on what's being said instead.

Not to play devil's advocate, but there is a saying in French which goes: "Ce qui se concoit bien s'enonce clairement, et les mots pour le dire arrivent aisement." Meaning: "What you conceive well inside your head, you clearly enounce, and the words to say it come easily." Bad grammar is almost always correlated to a muddled idea of either what you're trying to say, or the language you are speaking (in my experience). If you knew your mother tongue, you would only ever make such a mistake when severely impaired by alcohol or other drugs.

The fact that you are sloppy in your understanding and knowledge of your own mother tongue, which is the instrument with which you think, definitely counts as a black mark against you. How can you think and analyze things rationally if you haven't mastered the basic tool of rational thinking - language?

Daniel

PS: Yes, this is off-topic, so mod me down.

Re:The challenge of spelling

[sane?]

Utter rubbish, put about by English teachers to inflate their perceived worth.

Don't beleive me? Take a look at the papers and articles of those with the ideas, those that have actually advanced knowledge. There is NO correlation between the ability to write well and the ability to think well.

We are all put together differently, with different skills and mindsets. You often find those that excel in one area will suffer in others.

I used to have teachers like you, and I'm damn glad that there were others to support me and recognise just how dumb such theories were.

In the end I got to the stage where I could string sentences together tolerably well, and make only a few mistakes.

Somehow it never stopped me making patentable advances and being a world leader in a niche technology field.

Funny that.

Re:The challenge of spelling

[Anonymous Coward]

By the way, I've been reading your posts and I think that you express yourself very well and give the impression of someone with a good education. It is likely that the poster who went after you for a trivial spelling error did so because he disagreed with something else you had said and decided to try for a cheap takedown rather than come up with an argument against your actual ideas.

Re:The challenge of spelling

[sane?]

Thanks for your kind words. You might well be right. I happen to have a way of seeing words that means I can read well, but spelling, grammer, etc. are hard work for me. As a kid I had teacher shouting at me since 'by theory' I was supposed to be able to write as well as I could read. It took hard work to be able to fake it well enough to survive.

Throughout my life I've had related problems in writing and getting across ideas in words. Thing is, because I think strongly in pictures I'm actually better than most at finding new ideas. Its a kind of karma thing, the way the brain is wired; and I wouldn't change it for the world. I can always find someone to rewrite things for me if I really need it.

I've no problem with people not agreeing, provided they do so after thought, not rote reaction.

I've posted my thoughts here because I've seen time and time again people coming up with loads of reasons why its impossible for them to start their own business. At the same time, I've seen people with no talent (technical, business, finance, people, anything) start and succeed at business. In the end it comes down to fear. People fear the unknown and 'wise' words of others, and feel they are safe in a big firm. However, nobody is safe. If you can take control of your life, then you can be the agent of your own future. In the end that is the only place to be, when you make the transition from sheep to wolf its like waking up.

If you can code, you can understand finance, and enough law to get by. Marketing is 99% bull - just doing something different and running it by someone else first is usually as good as a marketing degree. Buy and read an 'idiots' book instead of a software book - you'll be amazed how simple it is.

The only area that software people tend to fall down on is people skills. No matter what, you have to grow to be passable at them - and even code jocks can get there through reps training.

As a by product, it helps in dealings with the opposite sex as well.....

Re:The challenge of spelling

[Sivaram_Velauthapill]

How can you think and analyze things rationally if you haven't mastered the basic tool of rational thinking - language?

How is language rational? I find very little in it.

In any case, thinking rationally is not the only way to do things. Being creative (which is generally irrational) can be good too. It all depends what you are trying to accomplish. People are different. An architect (of a building) probably isn't very rational but a mathematician is very rational. A musician probably isn't very rational but a writer of instruction manuals probably is.

Sivaram Velauthapillai

Re:The challenge of spelling

[vruba]

Yes and no. Yes, there are some pretty silly claims about the value of good orthography. However, language is an extremly widely-supported interface, and you should be able to use it well.

Furthermore, although there are plenty of dyslexic geniuses, I think you'll find that there are even more who are good at writing. Off the top of my head, Einstein, Feynman, Knuth, Rob Pike, Alan Turing, J. B. S. Haldane, and Freeman Dyson are all very good writers. Being smart at the things they were famous for didn't keep them from being smart at explaining those thing.

Sure, you can just hire an editor. But you can just hire a software engineer. People do specialize, but that's no reason to completely ignore things outside your field, especially if they help it in the long term. Einstein would not have gone very far if he had been unable to articulate what Relativity meant to other mathematicians and physicists.

There's nothing wrong with learning to write outside "writing classes", provided you actually are learning. But entirely dismissing the study of writing is rather foolish. It's like dismissing touchtyping or code optimization or database design -- sure, you could learn it as you go along, but you'd better hope you're really good at it before you have to do a whole lot of it at once. You're always going to have to write something; you can't just duck it. If you use it well, it can be extremely useful in convincing people that your ideas are any good.

If nothing else, use a spellchecker. It makes you about twice as credible in one simple step.

Re:The challenge of spelling

[KDan]

I'm not a teacher, I'm a software engineer. I did not say that there was always a correlation between bad mastery of language and sloppy thinking. If you re-read my post you will see I said "almost always". In my experience, it's very often been the case that people who were sloppy about their spelling and grammar were also sloppy about their thinking. Don't take it so personally.

Daniel

Re:The challenge of spelling

[stridebird]

If nothing else, use a spellchecker. It makes you about twice as credible in one simple step.

Hmmm...thee original (tiny, insignificant, who the hell is thee idiot who picks up on things like this) mistake was two right "your" instead of "you're" and of coarse thee spell chequer is not going too help yew with that.

I'm in

[jedi_odin]

Hey, someone start one up, I'm in.

Re:a little project for inspiration

[Anonymous Coward]

if you're going to karma whore, please try to be less obvious, thanks.

The problem with this plan is...

[Anonymous Coward]

that all you slashdot jackasses keep writing good software for free.

Just be sure

[iminplaya]

to get a really good patent attorney.

Survey says...

[Anonymous Coward]

Best way to DIY software company?

• Fake it back on Earth
• No return journey
• Slingshot + hold breath
• Wait for development of teleportation
• Outsource it to India
• Big tax cuts for DIY software businesses
• Wait for Big Crunch, step over
• Send the B ark

[X] Vote

Wanted: Marketing Department

[zoikes]

The challenge (whether you're looking for a job, or a new software company looking for contracts) is getting others interested in you (getting them to recognize that your talents are *just the thing* they need...). That's a marketing problem.

The biggest benefit I see to forming a software company is -- Division of Labor (one of the foundations of civilization itself). A group of engineers can band together and support a marketing person who can find (and close on) work for them.

I'm ready to give it a go...

Re:a little project for inspiration

[Kevin Mitnick]

my karma is in the pits, I don't need steenkeen karma. You called me up on it though.. was the whoring that obvious?

Some of us are trying..

[Anonymous Coward]

..this very thing, but being underemployed is somewhat worse than being unemployed. Being underemployed means I have to keep up with more projects of smaller size just to get food on my family's table. That doesn't leave a lot of room and positive morale to be pro-actively entrepreneurial.

Still, I have 3 projects in various levels of development. One should present some cash-flow to help weed off another brain-draining job so that maybe I can feel like I'm spending more time within my core skills.

I've also found it difficult to get other like-minded people excited. We all went through the dotcom thing, we all had massive projects plundered in various ways, we've all been a little demoralized. I'm carrying to banner so far, but my associates, all talented and highly skilled people, seem to have lost the dream in a big way. At least for a while, and that means a while longer still.

I am trying to...

[gtrubetskoy]

Great topic. IMHO, entrepreneurship is the only way out of the tech marketplace disaster we find ourselves in. (BTW, Cringely is suddenly not at all optimistic about the "offshoring phonomenon").

Here are the reasons why felt absolutely compelled to start a company:

• Ever since being laid off from a seniour level job at a large ISP in 2001 I have been unable to find anything that would match my level of expertise. I have not been unemployed a single day since, but I've changed jobs 3 times already and have been frustrated with the level (or lack thereof) of technological advancement, at least in my general area - Washington, DC.
• I know for a fact that the survivors of the dot bomb are plagued with all kinds of moral and managerial problems. I am convinced that this will not pass, and that the only way to find an interesting project is to make one yourself. Sure it's easier to "get a job", but the management of today's companies who have the money to hire lack the vision and creativity to provide you with a dream job, so you have to do it yourself. I also see this as a competitive advantage - I can have my prices very low because I don't have the overhead of loans, layoffs, chapter 11, etc.
• I do not think I can make a living by simply being a developer or system administrator. The offshoring thing is very real, and unless you insert yourself into the IT chain not just as a programmer, but as a manager and steakholder, don't expect anything other than a mediocre living.

The bright side is that it is still much easier to start a business in the US than most anywhere else. Really, why not take advantage of it?

Re:I am trying to...

[Anonymous Coward]

"but as a manager and steakholder,"

Mmmmmmm.... steak.

Re:I am trying to...

[gtrubetskoy]

Embarrassing, ain't it? I saw that after clicking submit... This is what I get for not using a spellchecker.

Re:I am trying to...

[Anonymous Coward]

but as a manager and steakholder

Steakholder? Now that sounds like my kind of job!

Re:I am trying to...

[Anonymous Coward]

I shut my business down due to companies hiring offshore and H-1 rather than Americans and, mostly, due to harrassment from the IRS. If you start a business then you'll feel like most small business owners that the IRS extorts money from you.
My only consternation is those who have not been unemployed do not realize how serious the job losses are. How'd they like a 25% pay cut for their next job!!! Having just finished a round of looking solidly for 4 months (though had a contract), I feel the rates are dropping fast. I think Greenspan is a little shister for the speech he just made basically saying "F. you programmers and engineers, we are letting all the businesses move the work overseas! Stop whining and start flipping burgers - and you'd better say you like it!"
I am thinking every day how to start my own business but you can bet your ass it is not in IT. With the US government and corporate overlords hell-bent on eliminating the working middle class the only things I can think of are being a slum lord or some other such thing that cannot be sent overseas.
- and if you think I'm over-reacting, wait until you take a 60% pay cut and realize your Masters and 12 years of experience were a very bad investment!

Re:I am trying to...

[Techmaniac]

The only steakholder in my house is my stomach.

"Get in ma bellie!" /scottish accent

Re:I am trying to...

[poot_rootbeer]

I know for a fact that the survivors of the dot bomb are plagued with all kinds of moral and managerial problems

And your proposed solution to this is to have scads of people with zero managerial experience go into business for themselves?

insert yourself into the IT chain not just as a programmer, but as a manager and steakholder

mmm... steak.

Re:I am trying to...

[dmorelli]

I was unemployed for nine months in 2002 and was able to find something below my skills about a year ago that I've managed to hang onto.

I'm absolutely ready to be in on somebody's start-up if they're interested in someone working from their home office. Say, a moonlighting deal initially where I get to keep this gig to pay the bills.

I've been looking for a different job every couple of days since I got this one, never stopped looking. Let's do it, people, somebody get in touch with me. Java expert, web and non-web development, Linux preferred.

Re:I am trying to...

[El]

Ever since being laid off from a seniour level job at a large ISP in 2001 I have been unable to find anything that would match my level of expertise. Could that possibly have anything to do with the way you spell "senior"???

Re:I am trying to...

[Anonymous Coward]

Maybe he's angling for CEO... very few of those seem to be able to spell well.

Anyway, if GWB has problems with literacy, it would be un-American not to misspell words occasionally. Watch out, pedants -- you'll end up in Guantanamo if you're not careful.

Re:I am trying to...

[meta-monkey]

If you start a business then you'll feel like most small business owners that the IRS extorts money from you.

The county is worse. I got a Master's in EE, but decided I'd rather be a photographer, so I opened my own studio. In my county, we have something called "tangible personal property tax" for businesses. Get this. Let's say I go buy a $7,000 Canon 1Ds camera. I pay my 6% sales tax on it. Fine. Now, because I use that camera to make money, the county demands EXTRA taxes on it, EVERY YEAR. In my county, it works out to $25 in taxes per $1,000 of value. Also, the county determines the valuation, and they only depreciate 10% per year down to a minimum of 30%. So, even the camera may only be worth $3,000 next year when the Canon 2Ds or whatever comes out, I'm still paying taxes on it like it's worth 90% * $7,000 = $6,300. These taxes are assessed before I make dime one.

I'm not fond of income taxes, but at least it makes sense. I make some money, I give some to the government. Fine. Sales taxes? Sure, you buy stuff, you pay a one-time consumption tax to the government. No problem. Real estate property taxes? That's fine, too. I'm paying the county to provide police and fire services for my home. But this "tangible personal property tax" just floors me. I bought a powermac g5 and a cinema display last year, and now I have to pay the county about $120 just for the privledge owning it. And again next year. And the year after that. The government doesn't provide me any service because I own the computer, yet they want money every year, before I make a nickel. That's just taking food right out of my mouth.

Sorry for the rant. I absolutely hate that tax.

Re:I am trying to...

[Colonel Panijk]

but as a manager and steakholder

Steakholder? Now that sounds like my kind of job!

OK... fork you too!

IT vs Business

[FortKnox]

Its simple. To start a company you need a business aspect. Most IT people have no business background. That's a HUGE stumbling block for not only starting a company, but keeping it around, and growing it.

Besides, most people would rather create a game, and without the graphical artists and such, you are up a creek.

So...

[Anonymous Coward]

Where do you want the resume spam?

Or are we each supposed to start our own?

Working on it...

[ThogScully]

My brother and I have a company. I'm the IT and he's the management, currently getting his MBA at Yale while I have recently graduated with a degree in CS. We've been in business since 1998 and have no debts as a company, but each of us has plenty.

The hard part of getting off the ground is that there's just me coding for the most part - he will help when he's got an idea and some time, but any code reaching production usage has to go through me before I put it on my servers. It's awfully tough finding programmers that will work for free like I essentially do in the investment that the company will be successful and yield a paying job. And since I don't have much help, we're limited to how fast we can grow. Working with the pretty fast-paced music industry clients means that development speed is very important, but we can barely keep up.

The best advice I can give anyone is to work on creating one product that is solid, then work on another product. Try not to spread too thin over too big a project or too many projects. Once you complete a project, only go back for bugfixes or to fork it into a new revision when you're ready for a new version and featureset.

It's not easy and if not for my fiance, an engineer with a good reliable engineer's salary, I wouldn't be able to afford working only this job, which is already taxing my credit cards too heavily and my stress levels can only take so much of the 24x7x365 on call status.
-N

Being employed can be an issue too

[openSoar]

being employed has it's own set of issues as a software developer too - forgive me if this makes me sound like a spoilt brat but i have a well paid job in the software industry but not really doing what i like - i have about half a dozen "home" projects on the go with no time left in the evenings to take them to completion and it constantly gnaws away at me.. i guess, if i really had the cohonas i'd resign and take things full time but a san francisco bay area mortgage makes that mostly unfeasible.

I did

[Anonymous Coward]

and I failed...
Started a webdesign and hosting company, all official and stuff, but got pushed out of the market by the big hosting-for-one-dollar corps and 'housewives that do web-design'

Now I have a job, errrr, am somewhere else when I browse around...

... Investor money for what?

[cjustus]

... I've read through many skeptical comments, and I'm just picking this one more or less at random...

What do you need investor money for? You own a PC, or you wouldn't be on slashdot... Compilers are a dime a dozen... The biggest expense for many companies is R&D... It's not like you have to stop looking for a job while you're coding - you keep your skills current... The cost to enter the software development business is pretty much nil for someone who isn't working...

I guess before there were investors, there were no companies, and all companies have required investor money to get going...

Those of you interested should check out the Association of Shareware Professionals ... Lots of good info here...

Re:... Investor money for what?

[AKAImBatman]

You forgot marketing. That's going to cost you money, plain and simple. Marketing campaigns can cost you as little as $50-$200 dollars a month (Google Adwords), all the way up to $10000 per month with a 3 month commitment (magazine placement).

Re:... Investor money for what?

[Kenja]

Rent, food, electricity, gas, water, garbage service, internet connection etc. These things cost money. To pay for them is why people have jobs. When you dont have a job you cant pay for them. So where are you living while you write this software?

Re:... Investor money for what?

[cjustus]

A totally valid question... The initial post talked about being unemployed for a year anyway - doing what? Living where? I don't know, but unless they've liquidated everything, they've still got some kind of PC and can start coding instead of doing whatever else they've been doing for the past year (or perhaps in addition to whatever they've been doing for the past year...)

If you can't figure out how to generate some value from your skills, then starting a company is not for you, and if you're not willing to sacrifice a $X / hr job to work for yourself, why would anyone else hire you for that amount

Re:... Investor money for what?

[cjustus]

... And there are ways to market your product for nothing but effort... Just look at our slashdot posts - it doesn't take anything but time :) ... Writing an article for a content-based website, a magazine (hey - you might get paid for your article)... All generate leads, build reputation, and could be more worth-while and credible than an ad in a magazine...

Re:... Investor money for what?

[Chibi]

What do you need investor money for?

He needs investor money so he can put food on the table. If you are unemployed and looking for work, you have the potential to start making an income again. If you are unemployed and decide to make your own company which will not make a profit in the forseeable future with little to no savings for living expenses... then you're in trouble...

Re:... Investor money for what?

[AKAImBatman]

But you're still not going to get enough business that way. In order to get market share, you need mind share. To get mind share, you need eyeballs. To get eyeballs, you need to put catchy ads in places where a lot of people will see it.

And I don't mean just anyone. You need to target your audience and make sure that you're getting the best bang for your buck (ROI). Advertising in a magazine that addresses the topic your product addresses is a very good way. Just keep in mind that even the smallest magazine charges more than most programmer's wages to place your ad.

And while I'm on the subject, posts on Slashdot and other forums may not lead to the best ROI. If you spending time on some other advertising campaign (or programming) is going to result in more sales, then you're time is wasted. However, if you are posting on those forums for personal enjoyment, then it (almost) never hurts to pull in a few sales along the way.

Re:... Investor money for what?

[sane?]

No, no, no

How often do you read an ad in a magazine? In particular how often do you read the little ads at the back (porn excepted)?

Do magazine articles, do conferences (in your field), do the unexpected. In general you will find that your ROI is much higher, providing you actually have something worth selling.

Google adwords are virtually the only ads that are worth trying for the small company - and even then keep it targeted. Otherwise you will find mailed flyers, personal meetings and the 'network' is more effective.

In the end, make damn sure your product is good enough, or innovative enough to get word of mouth. Its the only way you can grow a small company without giving all your profits to the advertising men.

Re:... Investor money for what?

[AKAImBatman]

How often do you read an ad in a magazine?

Usually after the third or fourth time I've seen it. You're not *supposed* to notice the ad. Your unconscious sees it and files it away for later use. After seeing the ad enough times, your brain will attempt to make a conscious note of it. That conscious note will translate into "cool, that's interesting". Even that isn't the biggest return. The biggest return is when someone sees a mention of it outside the printed ads. (Say a friend, an article, or a websearch result.) If they'd seen the ads before, they'll be that much more likely to check it out.

And that's not even counting the people who are already looking for a solution like yours. Those will be your early adopters, who will make the "word of mouth" part of advertising work.

Re:... Investor money for what?

[leshert]

The magazine and website creds aren't to introduce your brand. They're to establish your bona fides after you've made the initial contact.

Starting at zero, if your aim is a consultancy, you're far better off making personal contact with businesses in your area than advertising. Get the local business to create a buffer zone of cash flow, and then grow. The only companies that advertise out of the gate are the ones flush with investor cash (I've been in those ten years...).

Re:... Investor money for what?

[El]

The biggest expense for many companies is R&D Wrong. The biggest expense for most companies is Marketing... the very thing most geeks are least well equiped to do. I've wanted to start my own company for years. I just can find people to balance out my week areas of marketing, finance, and legalities. Do you know of any good marketers, accountants, and/or lawyers willing to work for free?

Re:... Investor money for what?

[AKAImBatman]

My aim is to sell a product, not consultancy. Thus options such as magazine exposure. And I wasn't saying that you'd do that out of the gate. Start small with things like Google Adwords and submitting to Tucows. After you've gotten some recognition, *then* do magazine ads. However, you still need capital, albeit not as much.

Re:... Investor money for what?

[RomulusNR]

What do you need investor money for?

For fucking bread and water, numbskull.

Not to mention the electricity for the computer and the internet line.

Oh yeah, and for that roof over your head, if for nothing else to keep water out of the electronics.

We'll exclude such optional items as daycare for your kids (unless you can try to get your code to compile at the same time you're trying to get your 4 year old to behave), gas for your car, any water or phone bills..

(I don't care if you demod this, either.)

Re:... Investor money for what?

[RomulusNR]

It's entirely clear you absolutely know nothing about being unemployed.

Sure, you can claim unemployment... for a while. Eventually it runs out.

Even if you do claim unemployment, if you then decide to go into business for yourself, you cannot legally claim unemployment anymore. Even if you do keep doing your three mandatory job applications a week.

So please go back to Intro to CS and leave the real world to the rest of us. Kthx.

(Now, I'm not saying there's no point in doing any technical work while unemployed... if you take on a project while unemployed, and drive it to something presentable, it will possibly help you get a job somewhere, but you still need to focus on remaining economically viable.)

Re:... Investor money for what?

[Shajenko42]

What do you need investor money for? You own a PC, or you wouldn't be on slashdot...

Not necessarily. He could be posting from a public library.

Re:... Investor money for what?

[cjustus]

[griting teeth... must not start flame war...] :)

I guess in your world, no one who is unemployed has ever started a company before... That starting a company without money from an investor is impossible... Filling out 3 job applications a week is a fulltime job, takes over 60 hours a week, and there is no time for anything else...

Open up the yellow pages - do you believe that all of these companies were started by people who were already working _and_ received investor money? Joe the plumber was already working as a plumper for someone else, wrote a business plan, got 10M in VC money, so that he could launch Joe's plumbing...

Just stay in your safe world filling out your job apps, reporting to your government keepers, and not doing anything else...

What do you do if you...

[Baron_Yam]

Have 'support' skills, not 'creative' skills? Seriously, what can an unemployed LAN admin offer to start a new company?

A programmer can make a whizbang new application and sell that; an administrator needs an existing application to require his skills. In addition, IT support techs can't start a new company all that easily because everyone else already has...

Re:What do you do if you...

[Anonymous Coward]

Sure you can, You just have sell services instead of software. Offer services such as

Server upgrades (software or hardware)
Desktop upgrades (upgrade all the PCs to XP or Linux )
Network upgrades
General support for server/desktop issues.

To start out small, look for companies with no IT staff (usually companies under 30 employees). Doctor offices lawyers, insurance agencies. Small business are a dime a dozen and just about all of them need PC support.

Most of the big consulting corporations either don't want to be bothered with the small fish, or simply charge too much for these smaller businesses. Do all the work yourself and hire temps when you need a hand. When you build up a client base, then start looking to hire employees. Now your on your way to building your own corporate empire!

One final suggestion. Keep IT simple. Don't set up "fly by the seat of pants" configurations. Don't do silly stuff like setting up desktop PC's as servers. When it fails or breaks, your the guy that is going to have to fix it at 3 am! Recommend good quality equipment and software. Don't let clients talk you into building solutions that you know won't work or will be ridiculous to support. Look for ways to leverage process automation to reduce your support time. Best of luck!

Re:What do you do if you...

[danharan]

Everyone I know that is doing service is doing extremely well.

Some of the things you could do for individuals or small businesses:
-setting up internet connection
-install a router so that people can share an internet connection
-setting up that printer on the network so everyone can use it
-install and update anti-virus software
-install and teach people how to use OSS such as OpenOffice, Firebird and Thunderbird. Heck, you might sometimes get away with installing Linux/KDE.

Use affiliate programs or resell web-hosting, computers and computer parts, as well as various software. Clients love to have one trusted person that can advise them on all their IT needs.

And if after your first on-site visit you set up the computer so that you can securely login to make more changes, I'll even recommend my parents hire you. Geeks that don't want to do tech support for their families will probably be the first ones to refer customers.

STFU!

[Anonymous Coward]

NAME the customer he told that to. You CAN'T! FUCK OFF u bitch-ass AC!

Why not start a Consulting Company?

[grimace1969]

I had the very same idea as the original poster not too long ago. I thought it was a shame that there was a lot of programming talent just waiting for something to do. I realized though that you need something to build, and developing a product and getting investment isn't typically doable in this type of economy. Its probably easier to provide a service, instead of creating/developing something brand new. There are tons of small companies that need some sort of programming, but not a full time programmer, or even a new product, but something that makes what they already have work better would be worth investment.

Capybara Games

[Random Guru 42]

Here is just the group. It started off with the name Toronto Games Initiative, a bunch of unemployed game guys in the city who gathered online (and offline) to try to start a game company. If you check out the site or Google them, you'll see that in these few months they've really gotten up and at 'em.

Creating a Product : Most Do It Backwards

[tactical_geek]

First define a market, then figure out what they want. Oh, that market should have some cash and be irrational.

old news...cuz I did it too...but with one problem

[MoFoQ]

I'm too damn lazy to code or do anything.

btw, this is meant to be funny for those too lazy to read.

doing just that

[jrexilius]

although I am not unemployed. An earlier poster touched on the key point: paying rent. And I mean my own rent. A software company doesnt need an office. Here are my business expenses:

1) server colocated in datacenter with back-up dial-in line $300/mo + $2000/server
2) SSL cert, web site marketing costs, etc. $500/yr
3) answering service, mail box, fax service $600/yr
4) cell phone & DSL at home $100/mo
5) incorporation, filings, fees, business liability insurance, registered agaent $2000/yr
6) business checking account $500/open
7) software, $0. all open source

So the company costs me an upfront ~$5000 and $400/month after that for a grand total of ~$10k for the first year.

Personal expenses:
rent/mortgage, utilities, taxes, maintenance, etc.
car payment, gas, insurance, parking, maintenance
debt (credit cards, student loans, etc.)
food, clothes, fun money, living
insurance (health, dental, death, disability, etc.) (~$200/mo for individual health)
savings & retirement etc.

My personal expenses after cutting out A LOT of fat are $4000/month for a grand total of $48,000 for the first year. after taxes.

I have 12 hours a day 6 days a week for 50 weeks a year, burstable to 18/7 for short stretches. When you are responsible for everything you cant burn yourself out.

So you look at your resources, your overhead, do the math and figure out if its feasible.

This is completely ignoring the fact that most engineers make for very poor salesmen, financial planners, marketers, and strategists. Which are as essential to a business as good technology or product.

Re:doing just that

[odyrithm]

1) server colocated in datacenter with back-up dial-in line $300/mo + $2000/server

DSL costs me 25 a month, I run all my services from there, when I get a job and its complete they pay for the colocated server for there use.

2) SSL cert, web site marketing costs, etc. $500/yr

No need for one when developing software, again its an expense of the client if your developing web based services.

3) answering service, mail box, fax service $600/yr

A decent professional site/email based on your DSL line will cover that, mobile and fax machine are a small cost really.

4) cell phone & DSL at home $100/mo

Granted.

5) incorporation, filings, fees, business liability insurance, registered agaent $2000/yr

Granted.

6) business checking account $500/open

Costs nothing in the UK, so granted for the US as I dont know.

7) software, $0. all open source

Now your talking ;)

Re:doing just that

[jrexilius]

;-)

Yeah the reason I had to move into a datacenter and get SSL certs was because I was selling webservices that required heavier bandwidth and better uptime than what local business class DSL could provide (which BTW is $300/mo). SSL cert was because customers enroll online and didnt want people getting the funny error message about cert being issued by SnakeOil company ;-) (yes could become own CA rather than apache default but they would still get warning dialog box).

If you were building a pure software product then you wouldnt need that stuff like you are saying. Although if you wanted to sell it you may want to think about PayPall or some other online transaction broker which wouldnt cost that much.

Re:doing just that

[Anonymous Coward]

This is completely ignoring the fact that most engineers make for very poor salesmen, financial planners, marketers, and strategists. Which are as essential to a business as good technology or product.

I agree with your expense assessment, mostly. I don't agree that engineers can't practise business skills.

This is a skill set like any other, which takes learning and practice - lots of it. The problem is that creating software for 60 hrs./week leaves little time to learn an enormous set of skills.

And from what I see when I look at people who are effective in business, the only way to perfect your skills is to spend enormous amounts of time interacting with other people - even (especially) in social settings. Now, if you've exhausted yourself building a product for a year, assuming you had expenses covered, how would you have had the time to be out talking to new people 60 hrs a week, too?

The skills you learn as an engineer have to be practised solo, in front of books and computers. Now you know why engineers are also accused of having poor social skills.

Re:doing just that

[Anonymous Coward]

your expenses are 48k without mentioning kids? no offense, but that's not lean enough. consolidate all those loans while interest rates are still low. turn credit card debt and loans into a bigger/fefinanced/second mortgage. at least get out from the interest.

clothes? you're working from home
food? kraft m&c/ramen
fun money? you're working 6+ days a week
CARS AND GAS? you're not going anywhere cause you work at home

trim it down, naw

Re:doing just that

[Idarubicin]

My personal expenses after cutting out A LOT of fat are $4000/month for a grand total of $48,000 for the first year. after taxes.

You ought to be able to cut that back some more. Try getting rid of your car and moving to a cheap apartment near public transit. A car (gas, maintenance, and insurance) is probably your second-largest (after rent/mortgage) or largest expense. Unlike mortgage payments, car payments don't even build equity for you.

I am one of the lowest of the low, one of the so-called serfs of science. As a graduate student at a Canadian university, I live in downtown Toronto on a stipend of $22,500 per year--from which I pay $6000 per annum in tuition. It is possible to live on $14,500 per year--that's $1200 per month. It just sucks.

So, the question is--how much of your lifestyle are you willing to sacrifice for your company? Living on $4000 per month? That's nearly fifty thousand after-tax dollars per year...Unless you're supporting a family, try to dredge up some memories of your student days, and recall all the ways to cut costs.

Re:doing just that

[ShadyG]

You seem to account your cash flow accurately, but those are not all expenses. For example:

rent/mortgage, utilities, taxes, maintenance, etc.
car payment, gas, insurance, parking, maintenance
debt (credit cards, student loans, etc.)
food, clothes, fun money, living
savings & retirement etc.

Out of those, mortgage principal, house maintenance that can be considered a capital improvement, car/CC/student loan principal, and savings/retirement all contribute to your net worth. If you have left over revenue after meeting your variable expenses such as loan interest, food, clothes, depreciation, etc, those net worth items are paid out of profit.

I too have roughly $4000/mo coming in at the moment, all of which is accounted for. However, about $2100 of that goes directly to a very aggressive loan payoff schedule. Once the loan is paid off however, the amount I take in that exceeds my lifestyle will immediately become strikingly apparent, and I can redirect profits to 401k, IRA, and other goodies such as vacation funds, or Legos.

Re:doing just that

[jrexilius]

you are correct. I did not mean to say that they couldn't be but that in general they are not by default. Starting a business is a rather challenging place to learn and develop these skills, while, as you say, busting your ass to build a product and pay rent.

Re:doing just that

[jrexilius]

Yes, there is more fat that needs to be trimmed. Lease on apartment is up in 3 months. Putting stuff in storage and renting a room. Car and insurance are essential but dropping the parking spot (as I wont be driving into the office anymore anyways). No more gym, a jump rope and dumb bells at home (but excercise is important to functioning). All said and done I should be able to trim it down to about $2500/month. Which is what is going to happen in the next 3 months. I still prefer to estimate high on expenses though.

Re:doing just that

[Anonymous Coward]

It is possible to live on $14,500 per year--that's $1200 per month. It just sucks.

Canadian or US dollars? Do you pay tax on that?

Re:doing just that

[ScottSpeaks!]

For five years while getting my second degree, I worked part-time for US$1100/month (after taxes). That's with no dependents, no car payments, no cable TV, no pizza deliveries, etc. but with a 3-bedroom apartment in the city, and SDSL (offset by some webhosting business I did). Obviously that's not possible in cities where that won't even get you a studio apartment, but a lot of people could live on a lot less than they think.

Re:doing just that

[bahwi]

I think you may be over doing it or just being a geek(which is a good thing):

Let's take a quick look at your expenses.

1) server colocated in datacenter with back-up dial-in line $300/mo + $2000/server

You obviously only need this if you have a successful product and REQUIRE a dial-in line and a dedicated colocated server. A lot of people are fine off of hosting companies, including corporations. Not everyone has nor needs a dedicated server, and a small software company does not. I say $10 or $15/mo tops for a webserver.

2) SSL cert, web site marketing costs, etc. $500/yr

Do your own marketing. SSL cert is again not needed until larger. If you are really doing online payments you are paying for credit card stuff as well, which is not too necessary. Use PayPal. Sure, it is "unprofessional" but considering most companies I've dealt with use it, it's not uncommon. PayPal: only like 5 or 10% or something. Web Site Marketing? Try VistaPrint. =) Cheap, with specials all the time.

3) answering service, mail box, fax service $600/yr

Small software company? $10/mo for mail box. Fax service is really overrated, have it sent to Kinko's if they absolutely can not email it to you. Answering Service? $50 for a digital Answering Machine at Wal Mart.

4) cell phone & DSL at home $100/mo

Yep. Tax deductible too.

5) incorporation, filings, fees, business liability insurance, registered agaent $2000/yr

Small software company? None of this is necessary. Do an LLC or S-Corp, much cheaper. Or just be sole proprieter until you're making enough money to do it the other way.

6) business checking account $500/open

Again, not absolutely necessary and many banks have no minimum, no start. You just need a license. That's in Texas of course, so YMMV.

7) software, $0. all open source

Damn straight. =)

Overall, if you have the money for all of that and a product that requires all of that, go for it. Otherwise, treat it like you do everything else and cut back. I know it is cool to have a dedicated server, but is it absolutely necessary? When you can get a lot of space and bandwidth for $10 a month is $2k a month really justified?

Once you get bigger, of course, you can change. But until then a backup is created great with cdbakeoven instead of a monthly fee.

Plus try rackspace, dedicated co-lo's for $200 or $300 a month. Much better than $2000. =)

No, I don't run my own software company, I do consulting. I work 40+ hours a week and this is my own business. So I only know the business parts, but I also know what it would take to run a software company, especially a small one. And you can not over do it at the beginning.

You are correct that it is ignoring the fact that most engineers are terrible marketing and sales people. They should improve on these skills, as these skills are not only essential to a good business but are essential to GETTING A JOB these days! =)

My advice, whether getting a job or starting a company, get business cards, vistaprint is cheap. Oh, and if they have the vistaprint logo on the back meaning you couldn't put in $10 or $20 (however much it is to remove the logo) it looks like you just want something from putting in nothing. That doesn't look good to an employer.

I hope this helps at least one person get a job, and I hope it at least partially puts into perspective what it takes to really run a business. Once you get bigger though, the expenses do go up.

Re:doing just that

[lostguy]

While nodding (internally, I'm not that much of a freak) at this, I imagined that legions of Europeans are shaking their heads at the nutty Americans, for two reasons:

* $48k/year is lean? After taxes?? Sheesh!
* Why would you be so willing to sacrifice your own comfort and standard of living just for a very slim chance to make more money than you need?

Because it's right and just, of course. :-)

Re:doing just that

[Anonymous Coward]

For faxes just sign up with interpage for $10/mo. and have them emailed to you (you can send outgoing via email too).

your own company doesn't pay $$$

[Anonymous Coward]

That's a stupid idea, because until your software company gets a product out, which could be years, you don't get paid squat.

What sort of company ?

[psycho_tinman]

Earlier posters have already pointed out that you need either a business plan or a product to get a company started (not to mention some source of funding).

Another type of company that I've contemplated starting is a specialist in an area. For example, any sort of networking project, or any sort of database administration work... Guns for hire, in other words. You go in, do a specialized install, get a maintenance contract, and you're done. Some system administrators may require training courses in specialized server software.. you handle those.

Basically, you have two ways to go. You can either be a product oriented company, and try to push as many of your product out into the marketplace, or you can be service oriented, and take it project by project. Each has a set of pros and cons..

Product oriented means you need deep pockets at the start, and a lot of faith. You may be coding without a client for ages, while you build a product that works. These companies are a lot more stable in rough times, once they get a few clients, but breaking even is a huge task, because they have so much invested in a product (which may sink in the marketplace).

Service or contract or even project oriented companies are easier to start up. Here, funding is less of a problem but you need solid contacts to give you projects at the start. Your margins are driven solely by how well you can deliver and close out the individual project.

In either case, you're looking at a lot more work than you would encounter being a wage slave. It takes a lot of different skills (you need to be savvy with business, have a head for numbers, worry about your presentation, and like Napoleon asked of his generals, "you need luck"). Once I sat down and figured out all this (and had friends tell me pieces), I realized that I might be able to handle the technical aspect, but definitely wouldn't have a clue handling a business. So, for now.. my plans are on hold.

Personally, I think people who start companies and have an entrepreneurial streak generally have a pretty good idea and aren't doing it just because they can't find a job..

The problem is...

[qtone42]

... the idea:implementation ratio for the folks *I* know who could do this is pretty bad.

--Qtone42

Working well enough for me...

[mclove]

I started my own company back in college, and thanks to an unexpectedly successful product by graduation time I was making enough money so I didn't even need to look for another job. But even if you're unemployed, depending on your credit history and other factors you may be able to get startup financing, or failing that you can try to find a low-paying low-stress part-time job that'll pay you just enough to keep you going until your first product release.

I design/write/sell software for Palm OS, and for what it's worth, PDA's and embedded devices are a *great* opportunity for small developers now - the size and expectations are low enough so that one programmer in a couple of months can create a top-tier PDA product. The only problem is that the programming tends to be a more frustrating than for Windows - Palm OS in particular can be very perplexing for someone who isn't familiar with event loops and 80's style application coding, and even Pocket PC is fraught with weird compatibility issues. And the development tools for both platforms kind of suck. I'm not exactly a brilliant programmer, though, so it's more a question of patience than anything else, and if you've got the stomach for it it can be quite rewarding.

Really it all boils down to ideas; the key to early success as an independent software developer is making something that's sufficiently innovative/exciting that your customers will basically sell it for you, because even with Google et al big advertising campaigns are still the domain of big companies. One great way to get started is to find a small niche market with few competitors, create a well-polished new product for it with some innovative ideas, and back it up with a friendly attitude and impeccable support - at $99 a pop you can make a perfectly decent living with a few dozen orders a month.

Re:Working well enough for me...

[MountainLogic]

Are you really making a living or is it just to get buy until you can find something better?

Re:Working well enough for me...

[mclove]

I'm definitely making a living; even with health insurance and the sky-high cost of rent in Manhattan I'm still banking $1000/month or so. If you get a successful product the first thing you need to do is establish a savings account - that way if the next product's a bust you can still keep your head above water.

There's some recent discussion of this sort of thing on the Palm OS developer forum here,
and a slightly less enthusiastic account from one game developer here - clearly YMMV but there are certainly plenty of folks out there making a living on this.

Re:Working well enough for me...

[31415926535897]

Just curious...what is it that you sell (especially for $99)? I've been interested in starting Palm development. Also, in what manner do you develop (CodeWarrior IDE, regular Palm SDK + gcc)?

Re:Working well enough for me...

[mclove]

I sell a language learning/translation dictionary product, and the current version actually goes for around $49 (with commensurately higher volumes than "a few dozen copies"). The $99 figure was meant more as a general example of how a vertical market product can be a moneymaker with even a very small volume. I am actually working on another product now that in some configurations will run as high as $150, and I have reason to think that some people will actually pay that, but aside from software for the expense account crowd $50-$70 tends to be the limit, and most of the software at that level is either reference content or multiple-application suites like Documents To Go. For a top-tier utility or productivity app a figure like $30 is more reasonable, and games etc are generally in the $10-$20 range.

And I use CodeWarrior; it has a number of annoying idiosyncracies, but far fewer than gcc (which requires you to mangle your code in various ways just to get it running at all), and I'm quite fond of Metrowerks' debugger. But if you're considering buying it, wait two weeks, as it's likely that there'll be a new version announced at the PalmSource conference next month.

If you had ever done it,

[Anonymous Coward]

you'd know the answer to that question. Never again!

IP/Patents

[Anonymous Coward]

I'd be scared to try to start a software company with all the patent/intellectual property nonsense happening these days. Seems that the legal fees alone would make it cost prohibitive.

"must be free",

[Anonymous Coward]

Since software "must be free", how do I pay the bills with this plan?

I haven't met many...

[kwelch007]

I haven't met many very talented yet unemployed software developers. I've met lots of mediocre or average developers that were unemployed. But the developers that I've met who were "very talented" have had little trouble finding a job.

Finding a job they like might be a different story of course.

Re:I haven't met many...

[0bjectiv3]

I haven't met many very talented yet unemployed software developers. I've met lots of mediocre or average developers that were unemployed. But the developers that I've met who were "very talented" have had little trouble finding a job.

Finding a job they like might be a different story of course.

Best regards,
kwelch007
Bangalore, India

Re:I haven't met many...

[kwelch007]

I, for one, have actually tried the outsourcing thing with my company. We outsourced a minor C++ project to a group from Pakistan (not India, but same idea.)

What a complete disaster. I think that businesses looking to outsource overseas because of cost will find out that they get what they pay for.

"Great but unlucky"

[fqrley]

doesn't seem to be as productive as just working at any job available. I was fortunate enough to lose a good job a few years ago. I got to blow my savings on trips, beer, and parties while doing occasional contract or academic work for a few years. Quit whining, enjoy the ride.

Commit

[FreshFunk510]

My friends and I tried to start a business venture and I'd say our idea had some viability but people seemed to commit in varying degrees at varying times. I think one way to get everyone to commit is to put a price on it.

For instance, one big problem we had was determining how much we should spend on marketing. We thought it best to go on a situation by sitaution basis as we encountered them and to determine, at each time, whether marketing ventures were worth it. I think this was a big mistake.

What we should've done was determined how much it would've cost to start a business BEFORE we set out for it. Even a rough figure will be good enough to prepare everyone to how much they are going to be committing financially to a company. I would then recommend amassing this money and then setting out on your venture.

This way you can set a budget for costs such as marketing. When you send out an ad campaign for $500 or $1000 you won't be thinking about how much of that comes out of your own pocket but you'll be thinking like a real business like how much of your total marketing budget that is, whether it was worth it and whether you want to spend it again. If you pull it out of pocket right then you'll always be stingy because you have no real solid metric to evaluate costs.

Finally, putting your money on the line from the beginning (whether it's $1000 or $10000) makes you try a lot harder.

Insulting

[DevCybiko]

Thats an insulting attitude. It's like saying "Hey, you're an assembly line worker, why don't you just go out and start building something". The fact is that there is more to making a successful software company than writing code. In fact, the code is the easiest part of the process. To be successful in business you have to identify a need and convince someone to give you money to address the need. Software Engineers (typically) are not well suited to salesmanship. IMHO you need at least 3 different personality types to start a software company. You need someone with creative energy and vision who can ariculate that vision in a way that motivates both clients and employees. You need a financially minded individual who can see the vision and convert it into dollars and cents - making sure that its a viable venture. and you need an imaginative technical lead who can turn the vision into a product that meets the needs of the client and keeps to the bottom line. It's not just a matter of writing code and raking in the bucks.

How to succeed In your 1st company

[scorp1us]

1) Product userinterface design is #1. It doesn't ahve to work right, as long as it can politely tel the user to goto hell. They'll be happy to.

2) It should work as advertised. Yeah, its got to do what it says it will do. But if you're polite, everything is negotiable.

3) Don't do the work yourself. You cost too much. Get at job managing a Mc'D.'s

4) Outsource the actual work to India (Not China - the hippy reds will steal your code)

5) Get your wife or some stripper to sell it during the day time. Pay them commission only.

Re:How to succeed In your 1st company

[scorp1us]

Let me aloborate... Stippers are good help because they are free during the day (business hours) and they usually have really good interpersonal skills. Manipulationof men comes naturally, and in business they are still usually the decision makers.

You still have to train them though. But come christmas party time, there is sure to be no shortage of entertainment either!

I'm trying...

[lost sheep]

but I keep reading slashdot and getting distracted!

What about shareware?

[Electric Eye]

I haev no knowledge of how profitable making sahreware is, but personally I'd go this route first. It establishes some sort of track record, gets your name out there, and maybe actually makes some $$.

Can anyone who has done this chime in?

Re:What about shareware?

[bluGill]

I haven't done it, but I know some who have. Few products make enough to actually allow you to quit your day job, and they are all excellent products that a lot of work went into. Even then, most people use them without paying for it. (and if you expire they are likely to try someone else, so you aren't likely to get their money anyway no matter how good you are)

Most people pull in a registration every week, more or less. Not enough to pay the bills, in the long run it might be enough to pay for your development efforts, (assuming no interest) but that is after many years. So you need 100 different applications that you can convince someone to pay for, each out their on its own. Expect it to take several months to make each.

if someone wants to start one

[Anonymous Coward]

i'd be willing to work for it. are you hiring?
i know enough about my skill set to know i don't know how to run a business, and if i did, i probably would outsource myself to someone else who charges 1/10 as much anyways.

(outsource the ceo, not the programmer...)

No, I'd rather complain about outsourcing

[Anonymous Coward]

Instead of doing anything about my own situation I would rather complain and expect others to hand me jobs.

Re:No, I'd rather complain about outsourcing

[Anonymous Coward]

I'm with you. And there's lots of other reasons I can't get a job too. Umm. Let's see. Maybe it's because I'm a dumb ass.

Ah ha!

[ZorMonkey]

Its so simple! Come up with something people will pay for! How could I be so stupid?

Up untill now my plan was:

1: ???
2: Get some unemployed programmers to write it.
3: Profit!

Why should you need financing?

[Coventry]

I did this over a year ago, with no financing. In fact, I was in debt upto my ears. First, some misconceptions need to be cleared up:
- don't get an office. They cost money. Work From Home. If you have multiple people, either work remotely and meeting irl a few times a week, or choose one central house/apartment and setup shop in a room there. Basements are fine, so are spare bedrooms.
- Use existing hardware.
- Get dirt cheap hosting and put up a good looking website. customers won't know you're only paying 5$ a month for the site.
- don't pay yourselves salaries - I've seen way to many people think 'I need X amount of cash to pay myself Y per week for six months until the business is making money'. Plan on paying yourself what you can, and using unemployment as a cushion until things take off.

Heres how it works: while on unemployment, come up with an idea for a type of software business, and then throw up a website (make sure it looks good), and start writing software. You have to keep looking for a real job, but as long as you aren't making money on the biz, you don't have any income to report, and still get unemployment. If you want to sell products, write them while still on unemployment. If you want to do consulting or custom work, be finding clients while on unemployment. If you are small enough, and have learned to be lean, then your first customers will pay enough that you drop off unemployment and go from there. If not, then divy up the money, pay for expenses, etc (The biz can pay you back for the web hosting, for example), then pay yourself. You Can make money while on unemployment, as long as it's not much - they will reduce how much you get from unemployment in a near 1:1 ratio.

If you do good, you may find yourself off unemployment and making better-than-unemployment wages within a month or two.

You may fail, miserably, but with a cost-of-entry of a few dollars a month and your time, it won't cost you much to fail. If you aren't on unemployment anymore - say if it ran out - then find a job somewhere else to tide you over while you try to get the business going. After all, a 8$/hr job at a bookstore is a lot more money than 0$/hr.

Also remember that starting a business is Not for everyone - many people want the security of a known salary, and don't like the idea of taking risks. Others don't want to work long hours, especialy on something so risky. Ask yourself if you are one of those people.

Me, I've been lucky, and perhaps that has skewed my perceptions. My friend and I were discussing starting our own company, and then a client fell into our lap... a client that by themselves paid our bills and allowed us to grow the business for 6 months. Of course, now we're looking for more clients, since things are slow, but thats the nature of owning your own biz - risk.

neurokode.com - yup, thats me and my partner, and yes, it needs work - we've been too busy to touch it much. Need contract development, or a code audit? Contact us. Want tools for DB development with python? Check out pdo.neurokode.com

Re:Why should you need financing?

[Anonymous Coward]

A warning: if you're truly a consultant, not an employee, you can't collect unemployement since you are self-employed. If you lawfully report your income from consulting, the unemployment office will consider your client as your last employer. That will not go over well with your client. This happened to me.

Re:Why should you need financing?

[ClosedSource]

If you have a family and mortage without a lot of money in the bank, 8$/hr can be a lot less than 0$/hr since you can't pay your bills with it and you could potentially make a lot more. You'd be better off using your time trying to find a job with pay to match your responsiblities.

Re:Why should you need financing?

[Coventry]

Thats part of the risk involved - one where you go 'nope, starting a business isn't for me'.

As for me, i have a family and mortgage, but when no tech jobs are to be found, 8$/hr is still better than 0$/hr.

Re:Why should you need financing?

[Anonymous Coward]

Guess what. Collecting unemployment while taking an income from you start up business is illegal and in most states you will not only be cut off from unemployment, you may be asked to return funds given to you during the period you collected from both sources.

Re:Why should you need financing?

[MindStalker]

He said specifically don't pay yourself, till you go off unemployment. Its not illigal to incorperate a buisness while on unemployment, and then every cent you get paid put in back in the corperation. DO NOT dip into this money for anything but buisness expenses. Grow the company while you are on unemployment till you think you can start paying yourself.

Re:Why should you need financing?

[EvilTwinSkippy]

I'm using a slightly different approach. My wife and I are developing a hosting business on the side. She goes out to people's houses to tutor them on the Internet while she's home with the baby. She makes pretty good money at it to. I get called in to do rocket science type stuff, like wire a small network or set up a website.

Along the way she occasionally runs into someone who runs a business and needs hosting. We have been snapping up a few small $5-$10/month clients, and also host a few non-profits who needed some server-side scripting stuff at around $30. At this point our DSL line into the house is paying for itself.

My plan is to keep adding small mom and pop enterprises until it starts to rival what I'm making during at my day job.

The key is that we have that social in. We aren't Sach's, and we aren't Walmart. We are that nice young couple who Estelle recommended to use who teaches computers, and hosts internet sites, and they are oh so good at explaining to the tech support line about what isn't working with the computer.

We have yet to advertise. Our customers tell all their friends about us.

It all started with sending my wife over to give the former CEO of our organization a few computer lessons. Next thing we know, she told a few friends who after she dropped by told a few friends...

Re:Why should you need financing?

[Lost Race]

throw up a website

That's some beautiful imagery there, though I probably would have written it as "barf up a website".

Re:Why should you need financing?

[Coventry]

did you read my post? the idea is to get the business going while you have income from unemployment, Not to collect double income.

Re:Why should you need financing?

[Anonymous Coward]

How do you find your customers? Do people find your site on Google searching for JSplash or do you have a catalog of potential buyers?

Re:Why should you need financing?

[Martigan80]

Also remember that starting a business is Not for everyone.

That fact and the one about "You may fail, miserably." are two of the biggest things one should realize first.

Failure is a part of learning and success my not come in six months, then again it depends on how_you_mesure success.

Great point and I will put some of these in my notes!

Re:Why should you need financing?

[mabhatter654]

Well you have to start a business in something you DO!

Remember, most software is written in-house by people for the company...or is bought by companies to "scratch and itch" in their specific industry. MS with all its money is only the tip of the iceberg! Think of all those things in your old business that should have been fixed...FIX THEM, then go back and show them how it's done!!! Because the company laid you off [set you free!], you can even go to their competitors and sell to them too.

If you're only after enough work to feed yourself, it doesn't take that much...especially when you consider that the company was willing to pay more than twice your wage for your work for them due to taxes, overhead, etc. If you can find about a dozen companies to need your services on a regular basis you can just about recover your salary from before...

Re:Why should you need financing?

[Anonymous Coward]

I have the opposite experience -- find yourself an office! A small place will do, try to find some other people that work one or two people and get an office together. There are office hotels as well that offers phone, internet etc. It all depends on what type of person you are, but I found it extremely difficult to focus on the work thing when home. As soon as the job is demanding I get the sudden urge to clean the apartment or cook food. An office got me much more productive, plus there are other people there I can talk to. You do have to have a small income first though.

Re:Why should you need financing?

[Anonymous Coward]

while on unemployment... You have to keep looking for a real job, but as long as you aren't making money on the biz, you don't have any income to report, and still get unemployment.
In New York State (and others I am sure) this could cost you your unemployment benefits. If it is your own business, they do not care if you are showing revenue or not, and will terminate your benefits over this. Its right in that big book they give you the first day (the one that nobody reads).

Re:Why should you need financing?

[Chop]

I just read a "Start your own computer business" book that had a very good piece of advice, "Do not quit your day-job until your business/startup is bringing in twice what you make in one year."

Chop

Re:Why should you need financing?

[El]

using unemployment as a cushion until things take off. Uh, isn't drawing unemployment while starting your own company illegal in most states?

Re:Why should you need financing?

[cpeterso]

That's probably because a legit business would have to pay taxes. If you pre-tax business revenue equals your post-tax salary, then your business is paying you LESS money.

Re:Why should you need financing?

[Coventry]

How do you find your customers? Do people find your site on Google searching for JSplash or do you have a catalog of potential buyers?

Actually, JSplash is just a demo app, something we've been meaning to release on sourceforge, but have been too busy to do. BSD style license.

JSplash is what landed us our first client though - we did it in around 10 hours (between two people) on a friday night. Note that time includes installing tomcat and all required libraries on our server. When we showed them a working slashdot clone (minus moderation and subscriptions, but you get the idea) and then told them how much that would of cost to have made, they were sold that we knew what we were doing and could get a lot done for low cost.

100% of our revenue so far has been from custom work of the following types:

- Remote monitoring applications. These use cellular networks to communicate with devices in the field. Note that the server side was already done, we wrote the client as a java web start application. The client is written mostly in Jython.

- Web application work. This is full cycle 'get me a solution that does X' kind of work. We've done Intranets, document management systems, and ecommerce systems.

- Fix-it work. This includes security audits on existing projects, as well as picking up projects other companies have fubared and bringing them to completion in a timely manner.

We've made no money from JSplash, remoteD, PDO or PHASE (another open source project that we haven't had time to release) - except for JSplash, the others are tools we wrote to scratch an itch we had, and we just wanted to share them with the community. It'd be nice to make some money from support contracts on those, if any of them ever took off (PDO is doing good so far), and that is actually one of our long term goals:
To make OS tools people will use, and provide support contracts for those who need them. Not that we wouldn't support them for the community, but priority would come to those who paid - think of the ReiserFS model of support.

Anyway, the point is, we do mostly custom work. Now, to folloow through the intent of your question: How do we get the customers who pay for this? Do we advertise?

We, in the non-computer sense, networked. Everyone we used to work with (who didn't hate us or vise versa), we keep in contact with. We talk about what we're doing, and what we're capable of doing. Then, if someone asks them 'do you know of anyone good with technology X we could get to do Y?' - they say 'yes, I do.'

We've never advertised before, but we're entering a slow period, and so NeuroKode.com is about to get a revamped design, and we're about to send out our first Ad campaign. Simple tri-fold fliers to introduce ourselves and what we can do. I hate spam, and I hate the idea of sending out fliers to people who will 99.9% of the time just throw them away - but its less evil (IMHO) than email spam. Like google, we have a try-not-to-be-evil policy.

As for networking, keep in mind that people you worked with at clients/customers of your former employeer could be good contacts to keep. Of course, don't try to sell them the services your former employer sells them unless either A) your former employer is out of business or B) you do not have a non-compete agreement in place. Better than B is if you have a different product or service to sell them that you know they may need.

Oh, and one more thing: make sure you are good at what you do. You don't have to brag, but if you are the best PHP coder in your city, make sure people know. If you aren't the best at something, then become the best at something - provide the cheapest or best product (or preferably both) or services around. It's easier for word of mouth to work if you are Good at what you do/sell.

Re:Why should you need financing?

[Coventry]

Nope. Collecting income while on unemployement is illegal in most states. Remember that the goal of unemployment is to help you out until you get back on your feet and find a job again. In fact, in most states, such as mine, you _can_ make money while on unemployment, as long as it isn't much:
This sort of odd-job income is encouraged, and there is actually a blank on the form for 'non-reoccuring income' you didn't get from a real job. Originnaly the intent was to let people do odd jobs, like roofing, house repairs, etc, while on unemplopyement, without screwing them out of the unemployment long term. Thus, the week you got 200$ for putting up some house siding, you write down on the unemployment card that you got 200$. Your next check from unemployment will be 200$ or so less. Income from a business you started is the same way.

Note, though, that you _must_ still be looking for full time work if you are to collect unemployment. This includes interviewing. And if you get an offer and turn it down in favor of your business, well, you just lost unemployment.

Re:Why should you need financing?

[kootch]

Nice try, but it doesn't work that way.

When you incorporate a company, you are listed as the owner of the company. When your company earns revenue, YOU are the ultimate recipient of that money, regardless of whether it is distributed to you or now. It's not referred to as a salary but instead a "draw" against the profits of the company.

Something that also doesn't work but that lots of people think does: working for "free" for a company in exchange for future equity.

The general misconception is that payment is in the form of cash in your hand. It's not. Payment is barter, future equity, unclaimed profits... anything.

Re:Why should you need financing?

[meta-monkey]

Wow, YANAL. I own my own business, and it is incorporated. The corporation can make all the money it wants, and stockpile hoards of cash, but I don't actually earn any income unless I either a) draw a salary from the company or b) have the company release dividends to the stockholder (myself).

In a way, I can still be compensated by the company if the company purchases goods and services that I consume, but only if they are legitimate business expenses. For instance, the insurance and maintence on the company car I drive. This is not income, it is not reported to the IRS as income. As a matter of fact, it is reported to the IRS as an expense and is tax deductible.

There is absolutely nothing illegal about drawing uenmployment while you work for yourself for free.

The general misconception is that payment is in the form of cash in your hand. It's not. Payment is barter, future equity, unclaimed profits... anything.

Wrong. You're working extra hard right now so you'll get a raise next year. Are you paying taxes on next year's raise this year?

Re:Why should you need financing?

[Anonymous Coward]

do you think before you post? your comment is stupid and useless

Re:Why should you need financing?

[kootch]

Please explain to me how the company you say you own makes profit yet you are not taxed on that profit?

Last time I checked, all profit your company makes is taxable. Since you own the company or own % of the company, you are being taxed on that profit regardless of whether you draw money from the coffers.

When you fill out your tax returns (for you AND your company), you have to declare a K-1 which is your obligations on the profit your company made REGARDLESS of whether that money was distributed to you or not.

Re:Why should you need financing?

[cehbab]

ye aint wrong :). Warning: MagpieRSS: Failed to fetch http://sourceforge.net/export/rss2_projsummary.php ?group_id=90707. (HTTP Response: ) in /home/groups/r/re/remoted/htdocs/rss_fetch.inc on line 230 Warning: Invalid argument supplied for foreach() in /home/groups/r/re/remoted/htdocs/index.php on line 10

Re:Why should you need financing?

[Anonymous Coward]

$50 says computer lessons aren't the only thing your wife is giving to the CEO

Re:Why should you need financing?

[Coventry]

Yeah, those occasionaly popup on the sourceforge sites - even though the XXX.neurokode.com sites are on sourceforge servers, it fails every once in awhile when trying to access sourceforge services. Very annoying, to say the least.

From the sourceforge.com site:
"We're Sorry.
The SourceForge.net Website is currently down for maintenance.
We will be back shortly"

Re:Why should you need financing?

[Anonymous Coward]

Also remember that starting a business is Not for everyone - many people want the security of a known salary, and don't like the idea of taking risks. Others don't want to work long hours, especialy on something so risky. Ask yourself if you are one of those people.

Also, not everyone has the mental ability or temperment to run a business. Not everyone is cut out to be an entrepeneur.

Re:Why should you need financing?

[Sanction]

I think that the point is to have the first few months not generate a profit. If every dollar made is counter balanced by expenses, there is no taxable profit. A good accountant could even turn it into losses if you have enough expenses. You only have to turn a profit 3 out of 5 years to be OK with the IRS, and previous losses can even be carried over to avoid taxes in profitable years.

This money is not all just taxed, it is either taxed as corporate profits if it stays in the company, or as income or dividends if you pay yourself. If you are an LLC, SP, or partnership, then it shows up on your taxes as income. A corporation is legally a new person, all reported separately. If all profits are reinvested in the company, paid out as expenses, or even held in a corporate checking account, you have not made any income personally. This will be reported in your corporate taxes, not personal.

You are not making any money, the company is. Depending on how the state laws are written, this may be enough of a distinction to avoid losing unemployment.

What you may not realize

[deadline]

What you may not realize is that in a traditional business model, the software development expense is about 20-25%. The rest is sales, marketing, administration, etc. So, the cost of starting a company is generally 4-5 times more than the cost of your core team. Add in the 2X modifier because start-ups always need twice the amount they think and you are looking at about ten times the cost of software development. Plus, you need to have one of the core team intimately involved with the initial sales effort. Do not trust your vision to someone that needs you to explained to them. This is often hard for programmers to do, but it is essential when starting up.

Now, OSS models change this equations. because most software (unless you are doing a lot of custom stuff) has to be number one or two to survive. So companies spend a lot of money on marketing and discount the software to try and "tip" the market to a point of increasing return for there product. Open software does not require this expense and in a way almost guarantees that your software will begin to build a critical mass (if it does not you are barking up the wrong tree)

Re:What you may not realize

[deadline]

Whoops, pushed the submit button to quick. The highlighted sentence should read: Do not trust your vision to someone that needs you to explain it to them.

sucking the fun out

[revividus]

Writing programs is easy. Writing programs and also running a business in any direction other than straight into the ground is hard, and a lot of times the pressure of it will suck the fun out of programming for a lot of people.

I have to agree. I wouldn't call myself a hacker, but I have a lot of fun messing around in a variety of programming languages, and I enjoy exploring what can be done online with things like PHP, CSS, and javascript.

So when someone asked me to build them a website, for pay, I thought, "This is great! This isn't work, it's fun!"

Well, it beats roofing, but having to give yourself deadlines and using other people's ideas to design the pages... yeah. That's definitely a bit of a fun-sucker.

At least it pays (a little; I won't say what I'm charging, but I've since realized it's WAY too low. Live and learn :-)

Times have changed, people have changed

[mabu]

I like the way the poster arbitrarily suggests, "Why not start a software company?" as if this is something you can casually do because you're bored or something.

The truth is, even if you had a good application to address, whether you could write a viable piece of software that was marketable is an entirely different matter. Even if you get to that point where you have a good market, and a good product, it's only then that the real tough work begins...

I "accidently" started a software company many years ago when I wrote utilities to help clients in my computer consulting business. The products turned out to be so useful that everyone suggested I start selling them, which I eventually did. It took me almost three years, living in a crappy 1BR apartment that didn't even have working plumbing, making some months, not enough money to pay the rent, but eventually word got out and my product received Editor's Choice in PC Mag. Ok, now I've made it? No. Another problem -- distribution. Even though I had the best product in its market, my competition was in bed with the 1-2 major distributors and put pressure on them to not carry my product. I was in a catch-22 as I couldn't afford to spend money on advertising unless I had distribution, but the distributors wouldn't carry my product unless I was advertising, but I didn't want to put a $20k+ ad in PC Magazine (the major pub at the time) when the product wasn't on store shelves. Eventually we picked up distribution, but it was through a lot of hard work, travelling around doing promotions, exhibiting at Comdex (which at the time was an uber-expensive mafia setup where you'd pay a fortune for a crappy location and then find out when you arrive IG moved your both to the middle of nowhere). I won't even go into the nightmares of trying to deal with venture capital firms -- let's just say I'm still on medication from the rash those people gave us.

Before Windows, the economics of the industry was bad enough. Now it's even worse. You don't have to worry about distribution; you have to worry about some other company with more resources and a desire to envelop every market they can copying your product or bundling it with their existing products and destroying your market. Whereas a great product would eventually be found out, nowadays, most of the industry is hype/advertising driven and those with the most resources, not the best product, rule.

That's not to say it can't be done. But starting a successful software company has more to do with having a realistic idea of exactly what you need to do, and a *tremendous* amount of perserverance. There are lots of shortcuts you can take to offload responsibilities to exploitive partners and publishing companies, but you might as well get a 9-to-5 if you do that because you'll end up getting taken advantage of and losing control of your work.

Re:Times have changed, people have changed

[FreshFunk510]

Which brings me to another point of economics. Supply and demand.

The reason why a company like Google can be successful even when it appeared in the same market (search) as 5+ other relatively successful search engines was because their technology was not easily replicable.

It's like what another person on this topic said: who needs another mail client, browser, etc? Taking that theory a bit further: You need to build something where someone cannot easily replicate it. Well, you can, but then your competition will come down to whose costs less due simply to "supply and demand".

I must say, though, that even if you come up with some incredibly intelligent technology not easily reproducible, there are companies that have tons of money that they can throw at a problem. At this point it might not be worth it for them and may be more cost effective for them to just buy you out (if you're into that).

Finally, what I've noticed is that you can get some power behind a relatively non-specialized, non-insane technology but you have to build a really huge user base (Frankel's Winamp, ICQ, Napster). The only problem is that if you want to make any money off of these ideas you have to sell them who is dumb and willing to pay a shitload for a userbase and for technology not all that special (AOL).

Re:Times have changed, people have changed

[donnz]

I have worked for small software companies most of my career and now am a part owner of one (coming on seven years of age)...

I would suggest that the way to avoid some of the pain (there is *always* pain) described in your post is to combine bespoke development / consultancy with product development. That way, if you are lucky, you get to pay the bills and keep your house even if the products do take longer to roll off the production line.

Personally, I also prefer to share the load and risk with other like minded people. That way you also increase your chances of getting a variety of paid work and clients.

Re:Times have changed, people have changed

[donnz]

I forgot to mention that OSS has made our life a hell of a lot easier - making us appear more competent and competitive - than large, more established competitors. Don't underestimate the huge boost using OSS tools and products to deliver results can give your fledgling business.

Re:Times have changed, people have changed

[Anonymous Coward]

If an IT worker or software engineer is unemployed, there is at least 98% chance they would never make it with their own company.

There are a lot of traits that successful entrepreneurs tend to possess. Leadership ability, a realistic view of one's abilities, perseverance and being really good at something are just some examples of these traits. If you have these traits, chances are really good that you don't have a problem staying employed even in this economy.

It is a much more likely scenario that a person with these traits would become frustrated with the grind and quit their job to start a company. This is especially the case these days because the working climate is pretty bad out there!

If you have the drive to be independent, are willing to work really hard and don't need a lot of money to live on, do it! This is where I'm at. I have no problem staying employed and have had multiple offers, but I keep turning them down. If you can say this, you may be suited to starting your own company.

Don't listen to people that make blanket statements. Most of the barriers people mention are based upon assumptions. Many of these people only understand the business models of the companies they have worked for -- and they probably don't understand those very well either.

Forget about funding. As long as you are willing to think SMALL you don't need financial investors. Look for people that are willing to invest time if you need help.

Above all -- think SMALL!! Don't shoot for the moon unless you want to fail. Don't expect to get rich quick. Expect to work very hard and to build slowly. Do these things and you have a good chance at success.

If you lost your job and can't find one, work on your skills or find a new career, but don't try to start a software company. The field in this country is shrinking without a doubt and only the best will survive.

Re:Times have changed, people have changed

[mabu]

I agree with you. Another thing I can't stress enough is that if you look at almost all successful software/tech companies you will find there's rarely one person behind them. Maybe with OSS, you can collaborate virtually and compensate, but the most successful companies have always been a team of at least two people: a developer, and a marketer, (Jobs & Woz, Gates and Allen, HP, etc.) - and the key is finding a partner that you can trust and has your same level of values, commitment and goals.

Re:Don't forget...

[Anonymous Coward]

SCO, don't forget to pay your mounting legal fees!

This has already been done...Ninnle!

[Anonymous Coward]

www.ninnle.org

Apparently even SCO uses it!

Why IT people don't band together to form corps

[BlueBoxSW.com]

I see two reasons why this wouldn't work well: 1) IT people like to get their hands dirty, they don't like to manage (in general). 2) IT people don't like to understand problems from a business sense, they like they translated into computer problems first. This inhibits taking a unique idea and solving it via software, as you have to understand the customer/business side first. 3) IT people are bad marketers. They tend to give too much detail and be too honest with shortcomings. By the way, I started my own software company 6 years ago after being laid off after a merger. I do think it's the way to go, but there's a lot more business to it than most IT people would like. Also, we just submitted a proposal for a DOD gov't grant to do some custom software development. There's a grant program just for small businesses called SBIR (Small Business Initiative Research).

Programmers don't like to work together

[heroine]

The problem with starting a company is that you need to have more than one person involved, otherwise you're just a contractor. Most programmers become contractors when they're unemployed and call themselves companies for legal reasons but in reality you won't see many programmers corralling each other into a real company.

Services Not Products

[CowboyBob500]

I did start a software business (not because I was unemployed, but because I was sick of PHBs) and the key is not to focus on a product when you first start up. Focus on providing services, by which I mean become a contract developer but charge it to your company. Develop your product in your spare time (yes, running a business requires lots of hours).

This is what I'm doing. I do short-term software contracts to support myself (and to build up a war chest to survive on later), and I'm working on my product in-between contracts and in the evenings. As for my product, it's going to be a full-featured shopping cart (not especially original I know, but it's designed for small businesses who want an online retail outlet and want to administer it themselves).

I'm also developing my own backend libraries for database agnoticism, schema config via XML, XML tree searching/improved navigation, command pattern implementation etc etc which aims between raw servlet APIs and full-on EJB app-servers for that ever-elusive middle level. Of course, I'm intending to GPL these libraries when I've got them into a sufficient state.

Hmmm... gone a bit OT towards the end there, but my original point remains, services, not products. At least to start with.

Bob

@sshat

[Anonymous Coward]

Best of all if you ever did need to grow, in this job market, you can get highly educated and experience software engineers even more inexpensively than China or India -- I've heard some internships are unpayed these days.:-)

for saying something like that with a smile you really need some lovin from bubba.

DARPA - yuck

[hey]

I would hate to work on a contract for DARPA.
Lets optimize the kills from that curse missile!
Lets run some simulations to see if we can kill
more people by using smaller bomblets.
What fun.

Re:DARPA - yuck

[Anonymous Coward]

Let's create the Internet.

Re:DARPA - yuck

[rduke15]

Thank you for trying to draw attention to this. What a shame for the /. crowd that nobody seems to consider it highly relevant and mod it up.

Re:DARPA - yuck

[Anonymous Coward]

Duh, I'm a stupid liberal who can't think of why funding DEFENSE is good. Duh! Duh! Doh!

Re:DARPA - yuck

[Anonymous Coward]

Touche good sir.

outsourcing vs. specialist business knowledge

[BillsPetMonkey]

At my present company, I work with a guy who has only ever worked for the same company - he likes to think of himself as an "executive" even though he is in charge of a subsidiary e-trading platform within the company.

He thinks that the development side should all be done in India. He thinks technical knowledge is unnecessary. Of course as a consequence he always falls over when anyone asks anything remotely technical and has a huge problem saying "I don't know the answer to that question".

I am the opposite. I know the technology. I don't care all that much for the industry (retail) sector we deal with.

I was just given a thousand GBP bonus for a piece of specialised software I wrote for the company (took 4 days) which could never have been written in India because they just don't know the business well enough. By the time they've understood the requirements definition to the degree that we need, we've already spent endless amounts of time explaining the nature of the problem.

What I'm getting at is two things:

1. 1. There is definitely money in writing specialist software for people who understand business problems.
2. 
   2. These kinds of problems cannot be outsourced easily because they are very business specific.

I can write more software in my spare time and will get more bonuses (if I don't get the bonuses, I'll stop writing them!).

doing it-challenges

[linuxislandsucks]

I am currently doign it..in fact my LLC wil finally come to b ein feb 2004..

The challenges are fiancial in supporting living expenses of prgrammers..in my case we are doing paid tech writing during the day :)

If you have a cell phone you might run into our products in summer of 20004 :)

Back to code..

Re:doing it-challenges

[Anonymous Coward]

so in 18.000 years cellphones are still used ?
wow !

Re:doing it-challenges

[glenstar]

I am currently doign it..in fact my LLC wil finally come to b ein feb 2004.. ....... If you have a cell phone you might run into our products in summer of 20004 :)

Let me guess... your product is either a spellchecker or an easier to use keyboard?

Ya'll are missing the point...

[Anonymous Coward]

He's not doing any work for his $10 a day... His hourly wage for this is probably way higher than any job you've ever worked (especially considering unpaid overtime). Stop being so bitter and open your mind to the possibilities.

You should

[Anonymous Coward]

Why don't you distribute Linux for free and then charge for support services everyone on Slashdot keeps babbling about as the way for open sores to make money?

I mean, seriously, 1000 anonymous cowards can't be wrong, you should invest all your money into Gentoo CDs and then go around businesses on the Fortune 500 list (so buy an issue of Fortune, too), and sell those wonderful lucrative Linux services.

Write a Business Plan

[Anonymous Coward]

One of the first steps is to write a business plan. I used a template from BizPlanBuilder (don't know if they are still around) and it worked out. You will need to do some serious planning and the template will force you to think of all sorts of things maybe you didn't consider. Remember that a startup is very high risk and therefore an investor will demand a very high rate of return (like 40% per year) to compensate for the risk. Also very important is that the initial investors have an "out," a way to sell out to longer term investors or whatever. Been there, done that, printed the t-shirts, and it was an incredible ride. Do it.

You have the US. Use it!!

[scorp1us]

Most americans don't realize what they have. It took me working for a Danish company in the US working with Danes to see the opportunity before us.

Case and point: If you get a promotion in Europe you get a tab more money with a lot more reponsibility. With that tad bit more money, you have a 85% tax rate to take all but 15%.

Here, in the US, we have a 15-33% tax rate. You get to keep 2/3rds of waht you make. This is a huge boost for you. It's one of the lowest in the world, and yet no one takes advantage of it. That alone should be motivation enough to get into a position where you are captain of your own fate.

Re:You have the US. Use it!!

[bckrispi]

You get to keep 2/3rds of waht you make.

Keep in mind, however that we also have to pay for our own health care (the costs for which have skyrocketed in the past 4 years). Our cost of living is generally higher than in Europe. The paycheck may look big when we get it, but it evaporates really quickly.

Re:You have the US. Use it!!

[Brian Stretch]

Keep in mind, however that we also have to pay for our own health care

Buy catastrophic health insurance. I'm paying $75/mo for a $2,000 deductable. Basically, I pay cash for routine medical expenses, no paperwork to speak of, but if I get hit by a truck the insurance kicks in and I won't lose my home. Alternatively, you can pay a few $hundred per month for the pretense that the insurance company pays for everything. Remember, the point of insurance is to cover you in case something unexpected happens. If it's expected, insuring it is an expensive waste of time.

There are Medical Savings Account plans if you have significant recurring expenses that you want to tax deduct. Really, the tax angle is the only reason why insurance is usually employer-paid.

Re:You have the US. Use it!!

[bckrispi]

Not to sound presumptious, but I assume you are insuring only yourself, again assuming you are a single male. Were I single, I could get 100% of my premiums covered by my employer, and only have a modest co-pay. However, I have a wife who is of prime childbearing age, and a son who likes to skateboard.I have to bear a percentage of the cost of their premiums - which have shot up about 80% in the past two years. I can guarantee that the catastrophic coverage for them would be much higher than $75/mo. Also, do prescription purchaces count against your deductable??

Re:You have the US. Use it!!

[Brian Stretch]

You are correct. I won't hazard a guess as to what premiums would be in your situation, other than a fraction of what your employer is paying for the usual traditional coverage or HMO/PPO. I have a separate $500/year deductable for prescriptions.

I don't think catastrophic coverage premiums are moving up as fast as full coverage, but I won't know until the next semiannual bill comes. Hopefully I won't ever have to use the insurance. I like not having to deal with a middleman when paying for my allergy shots (that "preexisting condition" did hike my premiums slightly) and what not. It's educational to see what things really cost.

Since you're employed you're probably best off with what you've got, but if you ever get downsized or go independent keep catastrophic insurance in mind.

Elbonia...

[goodhell]

"Every time I see a group of 5-10 self-described 'great but unlucky' IT workers looking for a job, and how their previous company had to lay them off because their former employer had this 'stupid idea' it was to move all the jobs to Elbonia, I have to ask myself -- why don't these guys get together and start a software company. If you don't make these 'mistakes' of outsourcing development to Elbonia, couldn't you compete pretty well?

The only problem with this, is that sooner or later they'd lay themselves off because they had this 'stupid idea' to move all the jobs to Elbonia. And they'd be back where they started!!!

Unemployed? Make money through Gnome!

[tellurian]

Make money through the Gnome Bounty Hunt:

http://www.gnome.org/bounties/

If you have the gall.

[The Creator]

Get your group together and finish the product while still collecting uneployment. Then start the company and have a product from day 1, with virtually zero developement cost.

Beats losing your unemployment before making any money.

Wasn't Laid Off....I Quit

[ChopsMIDI]

About 5 months ago, I quit my full time, decently paying, software development job to start working for myself.

Personally, I don't see what all the whining is about ("waah! my boss fired me to offshore his work to india!"). I've experienced offshoring code first hand on two seperate projects and both times, niether of them understood what was requested. And several tens of thousands of dollars later, they were canned. I find it rather easy to convince people that offshoring is one of the biggest wastes of time and money, and becuase of that, I found it rather easy to go on my own.

I'm hardly what you'd call a people person, but the contracts still keep rolling in. And although I'm currently making less than I was full-time, I'm the happiest I've ever been....I make my own hours, I program in whatever language I want, and I set my own wage. And now I have time to do a morning exercise, to try to lose all this weight I gained working in a cube for 3 years.

I would like information on...

[scorp1us]

Grants for starting my own tech company. I have an idea, and a proven business model. But I need time and money. I figure that since 75-58% of all business in the US is small business, there should be some grant program to help me start my own company...

Does anyone here know of such resources?

Re:I would like information on...

[micq]

You could always ask Matthew Lesko.. :)

IT workers?

[Anonymous Coward]

First, IT workers are not necessarily software developers, coders or project managers. Some may be, but lots are just that - IT workers. They answer phones, they reboot machines, they file trouble tickets, they move hardware around and they maintain user accounts. That's a far cry from starting a software company.

Second, if you're unemployed, how are you going to get the money to fund a software company? Even chintsy simplistic internet-based ideas (ie, Friendster, etc) get millions of dollars in capital to even start their companies up - much less keep them running.

Just paying the filing fees for an LLC or S-Corp status, registering a trademark, keeping track of taxes, employees, etc is a full time job and costs thousands of dollars right there. (I believe registering a trademark is something like $400 or more. Filing for LLC is another $1,000, not counting legal fees if you use a lawyer).

Then, let's say you guys come up with an idea. But to secure your position in the market while you're developing that idea (so some other group doesn't beat you to the punch), you want to patent it. Say goodbye to another $20,000 right there.

You could be out $25,000 the first morning before you even dish out the $3 for coffee.

Doin it

[TheDanMan]

Doing it, started a few weeks ago. Starting a remote backup service that implements my own software to back up the computer. I give it a few months before I'm ready to open the "doors" for business as I'm still writing the software, but I am well on my way. I also decided to start my own little corner of the net. http://www.dansdungeon.net forgive the l33t webdesign as I've not done anything with it yet.

Good idea, but not very likely

[vmazek]

The problem with writing software (of any kind, that can support a number of programmers) is that nobody wants to purchase software that is not implemented somewhere.

Among the first questions you will get after you respond to a Request for Proposal is:

1. Where is this software used.
2. List names and contact information of people using the software.

If you say that you write "custom" software, very FEW people are willing to pay the kind of money custom software requires to develop. They will rather hire more minumum wage people to type stuff into excel and access than pay for a more efficient software.

look at the title of the article

[Anonymous Coward]

"Unemployed?". It's not asking why working programmers don't start a company. If you are unemployed, you've got lots of free time. You've got problems paying rent and buying food anyways, if you try to start a "company" it doesn't increase those costs.

Hey!

[fejikso]

I'm a programmer, not an entrepreneur, you insensitive clod!

Bubble burst, or champagne still bubbling?

[ron_ivi]

Yesterday's SJ Mercury news article has stats that VC funding is way up (22% over last quarter), and that software is the big winner with $415 million in the bay area this quarter.

Sure one bubble may have burst, but looking at the glass as a whole, the champagne is still sparkling.

(or the beer's still got a nice head of foam)

Re:Bubble burst, or champagne still bubbling?

[firstadopter.com]

Trust me VC money will come back once Google IPO primes the money pump soon.

Re:Bubble burst, or champagne still bubbling?

[ahdeoz]

If your sales go down by 50% in one quarter and then up by 50% the next, you have a net loss.

Those who can...

[The Iconoclast]

Those who can program, do.
Those who can't ... post on Slashdot. :P

(Yes I am aware of the irony in posting this, but I never said I was a good programmer.)

You need SALES

[nooglide]

No matter how good your software is, you need to sell it. Sales drives everything. goooo capitalism! Figure out a way to sell what you're doing or find someone that wouldn't normally post on this board, like me, to sell your totally-uber-super-sweet product that works great and you developers are working to maintain and upgrade. although, this too is only a small piece, running a company has many many more aspects i'd suggest reading 'execution' if youre interested in running a company. thats a good starter. it was written by larry bossidy who was the kickass CEO of honeywell

Start a Dot Com?

[IthnkImParanoid]

On a related note, isn't the reason there are so many unemployed programmers because people with no business sense started companies that, predictably, died horrible deaths?

Time for the obvious (and actually on topic) underwear gnomes post:

0. Lose job in dot com bust.
1. Found small startup in a flagrant defiance of recent history.
2. ???
3. Profit!

I would start one...

[rivaldufus]

but I can't find any unpatented ideas.

I wish it were that easy.

[Anonymous Coward]

I guess I fall into two camps here. First, I wrote/write software (though I'm not really a coder). Second, I run a big web site.

Unfortunately, I am a one-man-band. I wrote all of the code to run the site by hand. It's a significant amount of code, too. Then I have to deal with the hardware and the day to day customer-service/user-needs. Sometimes the customer-service end of things takes so much time that I can't get around to writing more code or adding features. And I'm also doing this in the time I can scrape up for myself outside of work.

My service might be a lot bigger and a lot more popular if I had some marketing skills and a lot more free time and people to delegate my work to, but since I don't, I can't leverage this into a monetary success or a business and it has to remain an unpaying (in fact, wallet-draining) hobby.

It's unfortunate, too. I have tens of thousands of members in my particular niche and I seem to be the only one in my "specialty" who *isn't* making money.

I won't make excuses for the marketing/business part either. I'm not a salesmen and I don't have any expertise in those fields.

Another challenge

[danwiz]

I'm building a startup right now ... But I wouldn't underestimate the obstacles here.

Like trying to keep your server up after you get yourself slashdotted?
OTOH, your load-testing's complete.

a better idea ...

[fhess]

I was looking for a new linux laptop and realized what a pain it is to find a good one (which is payable) or how much time it costs for the research. Like some dell laptops seem to be running pretty good with linux, but the only thing you can find on their website is: dell recommends Microsoft Windows XP. So I got the idea to offer some linux laptops with linux preinstalled. Anybody some ideas? Same idea?

Re:a better idea ...

[emerica]

Won't work. Anbody who is going to want Linux can handle installing it. Also, it's hard to get a system without an Operating System so they're already paing for Windows. This eliminates the cost benefit of Linux.

duh. I'll fix unemployment.

[BobRooney]

Starting a business is not something to be done lightly and even when done correctly is challenging. At least once a week people say to me, hey, you're a programmer, can you make a program to XYZ specifically for my business? I tell them sure, at a rate of $50 an hour for development plus support costs. They promptly change their minds. No one wants you to make money if it costs them money.

Everyone knows the answer is simply to cut taxes for the wealthy. When the rich are richer, they'll sponsor more creative software projects of questionable profitability...no wait, they'll buy another yaht. Nevermind.

Worthless ideas

[bluGill]

That sounds great, but it is worthless. When you are unemployed the state (might differ if you are not in the US) pays you to spend 40 hours a week looking for a job. I know that almost nobody actually spends all 40 hours a week looking for a job, but that is what you should do.

I cannot start a company and remain on unemplyment, it is against the rules. Lookup OddTodd one time, he created a successfull cartoon, and the state wanted to take his unemplyment benifits back, he only won that case because he was able to show that he didn't expect his cartoons (which are funny) to make money. If you start a software company can you really expect me to belive that you do not expect to make money?

Re:Worthless ideas

[wrax]

One reason to live in Canada. People on Unemployment can get grants from the govt to start up a business. The government even makes it easy for you to get workers by covering all or most of their salary for 32 weeks provided they too were on UI. I'm considering starting up a business after my current contract is up, and I just found out about a grant that pays your startup costs and lets you draw a salary for 6 months (and doesn't have to be repayed).

The time is ripe for a new wave of small niche businesses to start up.

Re:Worthless ideas

[JM]

Watch out! Things aren't that simple, and you might get into troubles.

I live in Canada myself, and had major problems with the government because I started my business while unemployed.

OK, in some cases, you can get grants from the government, but to get these grants take as much time as finding a job or customers. You'll be required to write a business plan, present that plan to a board of advisors who might steal your idea, or, if they're not interested, will shuffle you from government agency to government agency.

But the major thing to check is that you *must* continue to be available 40 hours a week to search for a job, and you must be able to *prove* it.

In my case, I had to refund part of my benefits because of this.

But in the end, I managed to get a grant, and some financing, by using the "roundtable" trick.

If you have an office, announce a pre-opening, and invite every government people you can get.

When they're all at the same table, they cannot tell you to go see such and such person, because they're here. So you get everyone working together.

Re:Worthless ideas

[Elentar]

Actually, that depends on the state. In California, where a large number of unemployed tech workers undoubtedly reside, it IS legal to start a company while on unemployment - you just aren't allowed to have income from it. The important factor is whether you are doing work for which you ever intend to get paid; volunteering time at a charity and working hard for a company that doesn't pay you is exactly the same, as far as unemployment is concerned. This comes directly from an Employment Development Department worker after I asked specifically about it.

In case it's not obvious, you can be a founder of a company and benefit from a company phone, company-provided internet connection, company computer/laptop, company PDA and even a company car - anything that's a legitimate business expense - and still not be an employee and not receive any pay. And none of those items are "double taxed" like paying an actual salary is. So take advantage of the perks of being a founder!

The single greatest expense for a small company is the employees, so you'd be surprised how often this comes up.

Cheers,

-Elentar

Re:Worthless ideas

[Anonymous Coward]

Actually, you may start developing software or looking for potential customers prior to starting the company while being unemployed.

In several developed countries, unemployment centers actually can provide you with assistance in planning and organizing your company while you are still unemployed. I would check that out on your country

Re:Worthless ideas

[ScottSpeaks!]

Collecting unemployment does not necessarily prohibit you from starting a business (or other income-producing activities). The rules vary from state to state, but here in Michigan there are really just two catches:

1. You have to still be looking for a "real" job to continue collecting benefits. If they ask, you need to be able to demonstrate that you've been doing that (e.g. by producing names of places you've submitted apps, interviewed, whatever). Working on starting a business in the meantime "in case I don't find anything" is fine.
2. If you are making money from odd jobs (which is really the same thing as starting a small business, just the scale and scope is different), that typically reduces the amount of benefits, and if you make too much in a given period, you can't collect from the state. (I picked up a few consulting jobs while on Unemployment, and those weeks I just didn't claim benefits.)

Re:Worthless ideas

[ScottSpeaks!]

The rules vary from state to state, but the ones I'm aware of (such as Michigan) do not prohibit you from starting a business while collecting unemployment benefits. Looking for a job may be your "full-time job", but "moonlighting" is allowed... even encouraged.

The first catch is that you must continue seeking a "real" job to collect benefits from the state. If they ask, you need to produce the names of places you've applied, interviewed, etc. You need to have "get a job" as Plan A.

The second catch is that if you make money from some other source, they'll reduce your benefits according to a formula, and if that income reaches a certain level, you can't collect at all. For example, there were a few weeks during my months on the dole that consulting gigs exceeded those limits, so I simply didn't collect for those weeks. I was working on Plan B there.

The two aren't mutually incompatible. In fact, in just about any region where unemployment is bad (e.g. the United States) you'll see "feel good" articles in the paper about people who used this strategy and a year after getting laid off, are now eking out a living with their own business instead of eking out a living with lousy McEconomy job. (Me, I ended up doing the latter.)

Re:Worthless ideas

[instarx]

I cannot start a company and remain on unemplyment, it is against the rules.

Sorry - tht is not correct. You can start a company you just can't make any wages. In New York the weekly unemployment form specifically asks: "Did you receive any salary or wages in the preceeding week?" - it does not ask "Did you work for free during the week?".

Unless the stars align for some lucky stiff there won't be any "problem" with wages in the time before unemployment benefits run out.

Re:Worthless ideas

[digitaleus]

Come on, rules are made to be broken! You don't need to form a company just to start writing code.... ;)

Re:Worthless ideas

[muckdog]

Too bad 50% of your salary goes to income tax once you start that company.

Re:Worthless ideas

[weileong]

If you start a software company can you really expect me to belive that you do not expect to make money?


In this economy? Hell yes.

Re:Worthless ideas

[wrax]

Well, thats Canada for you anyway. No matter what you do, about half of what you make goes to the government anyway.

I did this... sorta

[a1cypher]

When I was 16 or so I started doing some freelance web programming. I got a couple $1000 (or less) contracts to start, a couple of which fell through. So I decided to write some stuff that I can sell over and over again.

I started looking around for something that works well, is simple and doesnt have many variants. I came across a script that I liked, so I made my own version. I spent a weekend writing the script, and it started selling like hotcakes. I put it up on a simple website and listed it at various resource indexes around the net and its been selling ever since. The script sells for ~ $29.95 and started selling at about 2 or three copies a week. Its been dying down now, after about 2 years on the web, but I still made some nice coin off of it.

I realize that this may be small change for most people, but the trick is to come up with 10 - 20 scripts (or small programs) that each fill a particular niche and sell as well. I havent had much time to write any simmilar simple scripts like this recently because I have been swamped with other custom projects and university.

But this long rant brings me to my point. Alot of times existing software can be bloated with useless features. By writing a simpler version that is easy to use and serves its intended purpose well, then you will be doing well.

For those of you who are interested, the script I wrote was based off of PayPal's knowledge base script.

I have done this too

[coryrauch]

I actually left a good job for personal reasons (What? I know, I loved that job, but I wanted to move closer to my family). I moved to a new area and couldn't find Tech work there at all (Pennsylvania). So I started a business with my own savings called Sysbotz and it takes time to get a viable software business going. Like some one mentioned before its not always what you think that will sell, but what the customer thinks. The major tip I could give is to listen to the customer, that includes checking up on how there doing, seeing if they see anything that needs improvements. Like what was mentioned before too, it may take a few months of not making anything before you see anything, so plan for this too. Open source projects are a great starting point too and could use the help, if you see a viable open source project why not contribute some of you new found spare time and offer business services around it.

Techies of the World Unite!

[Anonymous Coward]

The greedy capitalists are crushing our career paths using cheap foreign labor. It won't go away. Other professions have erected barriers to protect themselves, so we must also. Political influence is a necessity, not a luxury. Being a smart geek won't matter anymore. Brains are growing into a cheap commodity just like wheat or toys from China.

I can vouch for it....

[sleepophile]

A few of my friends were unemployed and pretty desperate...so they started a compnay and surprisingly did pretty well. And though the company hasnt been getting a lot of projects lately... all of those who started it ...have now found really well paying jobs . The reason? all of them were hired because the moment they mentioned about the company they had setup ...the HR guys were really impressed by their initiative..... So the idea of setting up your own company is'nt that bad...the worst that can happen is that ,....ull lose some money , but u'll also gain some invaluable experience!

How-to: start a software company

[mabu]

1. Be born to rich parents with lots of connections

2. Go to Harvard, meet lots of other rich kids, get bored with school and drop out

3. Form a software company, be in the right place at the right time, then take someone else's work and license it to the largest computer company in the world.

Re:How-to: start a software company

[EvilTwinSkippy]

You forget:

4. ????

5. PROFIT!!!

Go cry to you mommy!

[Anonymous Coward]

Yeah that's right. It's almost impossible to start a business. So to all of the negative posts about this: don't even try you big bunch of waa babies. Even if you get anywhere near success, it doesn't matter. Your employees will just bitch and complain... Wait.. Sort of like how you guys bitch and complain. So, when I finally get past all the years of making no money and keeping all my employees well paid and as happy as possible, I finally pay myself a bonus. All you hear then is about how the president is raping the treasure chest. It's all BS. I had to make promises to my customers to get here while my employees work there 8 hours a day and expect to get paid for every hour they put in. While, I work 16 hours days and get paid nothing. So, when I'm taking a half million out of the bank, don't bitch! You got your half million over the last 10 years working your steady job. It all depends on your point of view doesn't it? Now be a good employee and go stand in the unemployment line.

pricey/dicey

[Doc Ruby]

Er, the story you're FP'ing is *about* the abundance of financing for SW startups. It's not about the absence of risks. In capitalism, facing the odds, against the business environment selecting your venture for success , is justified by the high risk:reward ratio. Of course, as you've started up, you are seeing this every day (except maybe not the reward, yet).

The biggest problem for unemployed SW engineers forming a successful company is that they don't necessarily know anything about finance. Especially if they were the ones who lost their jobs in their prior company's "reorganization". But engineers can learn finance through experience, while laid off financiers have little hope of learning to program. So go out and make 'em pay to play!

Time is free!

[Anonymous Coward]

This tactic helped me land a job.
Four steps:

1. Get a list of the tech companies in your area/state
2. Check their web sites. Many of the small/medium sized companies websites will not have been updated for a couple years.
3. Using a nice template, copy and paste their old site into the template (no templates? download Dreamweaver or something). This will take about 2-3 hours sometimes, but remember, your time is currently free! Do 1 or 2 a day.
4. Send it to them for free, in the mail, along with a copy of your resume and a letter explaining what you're doing (and that the new web site is free for them to use).

Repeat.

Some companies thanked me, but told me they weren't hiring. Some just used the web sites I created. Some did nothing. 3 companies offered interviews, none of which were listing open positions. 1 hired.

My kick-ass plan for a new software company

[mr_majestyk]

1) Think of really cool new application 2) Spend huge amounts of time programming and debugging the application 3) Give away free copies and all the source code 4) ??? 5) Profit!

Re:My kick-ass plan for a new software company

[Anonymous Coward]

6)learn how to include html line breaks into my slashdot posts

The problem with anecdotal data is...

[Svartalf]

...that it's merely ONE data point. What you see is pretty parochial- it's focussed on what you're seeing. And you honestly put it that way- but the phraseology implies that it's that way throughout the industry.

To be bluntly honest, it depends on what segment of the industry you're in, what town you're living in, and a whole host of other factors.

My personal experience is quite a bit different than yours.

More than 70% of the IT workers I know are employed (but not much moreso...). 80% of the "good" workers (and that's relative- I suspect that I have a more stringent sense of "good" than you do...) that I know are employed somewhere close to what they should be (There's "employed" and then there's employed- if you're an MBAed Software Engineer, you should probably be a Team Lead, Development Manager, Director of Development, or CTO, depending on your experience, etc. Teaching tech courses at DeVry because that's the only place that'll give you a job is pretty much underemployed, or as I referred to it earlier as "employed".). It's not that the industry went away like buggy whip manufacture- the companies all went into a panic and butchered their staffing to look good for a couple of quarters on Wall Steet. Sanity is just now beginning to filter back into the IT job market, three years after the bust from the dot-com failures.

The moderators that modded the parent up to 5 as "Insightful" apparently didn't understand that the parent really wasn't very much so...

Location, experience, etc...

[coyote-san]

I notice you don't mention where you are located, what your general experience level is, etc.

This has been a *very* weird recession. Historically developers could go down a notch or two and companies were grateful to get a senior developer for mid-level developer wages, etc.

But not this time - it seems that local companies (at least) either want impossible experience (10 years of java, 5 years of WXP, etc.) or they have explicitly reject anyone with more than 2 years or so of experience. And there's absolutely no lateral movement - if you've been working with C then you won't be considered for Java positions regardless of your qualifications in the second language. (There was even one particularly clueless company that advertised for a C programmer - but only C programmers who didn't know either C++ or Java.)

I think a friend sums it up best. It's like somebody has advanced cancer and angrily refuses to see the expert who has successfully treated thousands of patients with similarly advanced cancer. Nosiree Bob! He wants the guy who's only been out of med school for a year or two - he's perceived to be cheaper (without even checking the expert's bottom line) and hey everyone has the same medical degree, right?!

Re:Location, experience, etc...

[xyote]

Typecasting is pretty horrific. I've been trying for 10 years to get out of sysadmin back into software development. The sysadmin job was just supposed to be temporary to learn unix. When you point out to a prospective employer that you used to work as a developer on a multi-processing kernel, they look at you as if you were speaking Martian because that wasn't your last job.

Re:Location, experience, etc...

[Anonymous Coward]

I agree to that. I started work as an embedded developer, doing device drivers for VxWorks. My next job was web development and I've never been able to get another job in embedded anymore... God know I have tried.

It can be done...

[Interested Guy]

I am doing this. The trick is to find a narrow enough niche that nobody else is serving.

The nice part about software is that the value has very little to do with how much time it takes to develop. What matters is how much benefit the end user gets from using it.

There are tons of small businesses out there that need a lot of help. Often their needs are pretty simple, but they know very little about computers, so they are willing to pay to have their needs addressed.

The problem is scale. In order to find enough niches to keep yourself busy, you need to be a good networker, and a good marketer. Often you need to be plain lucky (That is what happened to me) You need to keep track of accounts recievable, shipping, manufacturing, You have to collect and pay taxes. You become the technical support guy for you customers (on your app and others) All of this gets pretty cumbersome for a 1 man operation.

But.... The only person who is only truely going to pay you what you are worth is yourself. If you don't have anything else to do, and you see a need, fill it!

I think you underestimate the number ...

[Anonymous Coward]

.. there may be thousands of slashdot readers that are coders, but the number of people that are actually contributing to successful open source projects (functional and used by more than a few dozen people) is probably in the high hundreds or single-digit thousands.

The open source "marketplace" is just as competitive and merciless as the commercial market. Maybe more so, due to the community's collective BS sensing skills.

And I would apply same BS filter to any press release cranked out by the venture capital business: Run the numbers: $325 million for 52 ventures: $25 million per venture/year. Take $2 million off the top for the top exec's to buy new Hummers, divide by $150K/yr per employee (assume all the jobs are not outsourced - ha ha): about 150 jobs per new venture X 52 ventures - about 8000 new jobs. Well, it's a start. Heck, there were only 1000 new jobs last quarter, in all sectors.

Where do you get your domain expert?

[NickFortune]

The big problem is finding a non-computer area for which to write your software.

Why not just write software aimed at the software community? It's not that easy. Windows and Linux are awash in IDEs, and smaller scale than that, most developers will roll their own productivity tools. An O/S would have to really be special to compete with MS muscle and linux prices. There are always bleeding edge applications that need code - but these are risky (bleeding edge is prone to fads) and again, you wind up needing someone with indepth knowledge of the development area. Which brings us back to domain experts.

If you're going to write software to ship dogfood (been there, done that) then you need to know the dogfood business. Or the transport business. prefereably both. So either you need an unemployed dogfood shipper who has faith in your skills, or you hire a dogfood expert.

But the real trouble is that you need the expert in order to have the killer idea in the first place. You need someone who's shipped enough dogfood to know what the problems are that need to be solved, you need someone who who has a good enough grasp of tech to see how software can address those needs in a "must-have" manner, and you need dammed good communication skills so oth parties get an accurate understanding of what the other is talking about.

And then, you may find that there really isn't anything that needs doing.

Of course if you're old drinking buddies with the Dogfood King, or if you been working for 15 years writing code for a dogfood warehouse before being laid off then you may already know where you're going. Otherwise...

The thing is, trechnical excellence alone will not usually do the job. About the only way that makes you oney is as a consultant, and the crash and burn of _that_ market is one of the reasons why there are so many techies on the dole in the first place.

Unemployed? Why Not Start a Software Company?

[AviLazar]

While at college my friend and I needed some extra cash and we created a website design company (stop laughing at me). We utilized our personal computers (I created a server so we could share data easily). The server which was an old scsi box was donated to us (cost 0), but I am sure a group of techies could muster up an old computer to act as one (not that it is really needed, just more convenient). Our advertising was limited to internet advertising (registering and getting a website hosted on yahoo which runs $9.00/month). Free online search engine registrations. Acquiring paper supplies where we created flyers, & business cards ($30.00 which included extra ink for our hp color deskjet). Our most expensive cost was registering the company (as an LLC) for $500.00 All but one of our clients were from word of mouth. Doing this venture, strictly part time (less then ten hours a week), we earned about 10k/year. Not a lot of money to say the least, but for 10 hours a week of work, with very little advertising that is a good deal of money. Again this was a part-time "wouldn't it be nice to have some extra cash in the pocket" work. Eventually we went from web designing to creating business cards, flyers, menus, etc for various clients. I think it is possible for people to create something and even be able to work at a regular job. It requires working late hours (sometimes) - but that is a sacrifice. The problem would-be startup companies have is that they want all the glitz and glamour up front. The nice city-view office, the $600.00 Aeron chairs, secretaries, etc. Start with what you got---we are software based - you need a home, computer, internet connection, electricity and a phone/fax line. -A

Because you need to EAT

[FatSean]

You'll need some sort of income to keep yourself...oh lets say...in a fucking house or apartment? Maybe a little food now and then? Damn....

Bootstrapping

[ChiralSoftware]

This is called bootstrapping. The Software Council of Southern California is having a presentation on it.

Open Source as an Inexpensive First Step

[virtigex]

One of the unstated advantages of an open source project is that it can serve as an online resume. Employers can only guess at how real your resume is. You may say that you're a hot-shot programmer, but how can an employer really know? Answer, they can download, compile and run your project from SourceForge. If they cannot do this, maybe you don't want to be employed by them anyway.
If you release you code under the GPL, there is nothing to stop you (as the copyright holder) from re-releasing the code under a more commercial license if your open source project is popular or you find a market for it.
Starting your project off as open source is a great idea. Even if it does not take off, your code is out there and other people (and future employers) can see what your programming ability is like without having to take your word for it.
It certainly works for me. I have two project on SourceForge that helped me land two $100k+ jobs.

Re:Open Source as an Inexpensive First Step

[higginsm2000]

If they cannot do this, maybe you don't want to be employed by them anyway

LOL. This is the silliest comment I have read for quite some time. Thanks.

Re:Open Source as an Inexpensive First Step

[dave1g]

"If you release you code under the GPL, there is nothing to stop you (as the copyright holder) from re-releasing the code under a more commercial license if your open source project is popular or you find a market for it. "

except im guesing he it would be on sourceforge so people could help develope, except they own the copyrights on the bits of code that they wrote. You can still sell the software, you just have to provide the source.

this business model works well with customers that dont know what compile means.

Nice assumption...

[Svartalf]

How many were just deadwood in the industry that got nailed in the mass layoffs? Quite a few.

How many were the best and brightest and got nailed by happenstance in the Great Downsizing (which is what really happened here...)? Quite a few.

Do not assume that if they were unemployed that they'd be boobs. It could very well be that they've been overqualified for the paltry few positions being offered up until very recently. If you've NOT been there, please do the world a favor and shut up.

The Biggest challenge is finding an idea

[Stone316]

Forget business plans, forget financing, first you have to come up with an idea. Sure, there may be tons of software that needs to be written but unless you've had exposure in these areas then the software you create isn't going to be that good.

Sure, i'd love to write some code from biotech but I wouldn't have a clue where to start. Sure, with research I might be able to find something that people may want but it would take alot of ramp up to even consider writing an app.

Your best bet is to write something in the area your very familiar with and since you were previously employed chances are there are already apps in that area.

For every 100 ideas theres probably only a handfull of usefull/needed apps. How do you pick the right one? Your betting alot on something that may not return anything.

As with inventing the best way to get 'rich' is to solve a problem thats you've personally run into. The trick is, realizing that this is a common problem that may affect alot of people.

For instance, not computer related but in my area there was a couple that had a dog. I don't remember the exact details but they needed to muzzle him but the on the shelf muzzles didn't work, so they created their own. Soon after, they realized others had the same issue and they started selling them at a flea market. A couple of years later a guy stumbled upon them and wanted to license the product from them. Plans are for millions of these units to be made and sold around the world and they get a few bucks a pop. Needless to say, they can retire quite confortably now.

Usually its the simple solutions that reap the greatest returns. How many times have you been watching an infomercial or saw a product at the store and thought, why didn't I think of that?

A tech related example, remember that Y2K program that checked to see if PC's were Y2K Compliant? If I recall correctly Dell licensed it from a guy and he got a 1$ for every PC it was put on... Several hundred thousand.

Anyways, i'd love to develope my own software (even tho i'm a DBA :).. Anyone have some ideas they'd like to share?

Up until recently...

[Svartalf]

...I was unemployed. For Two and a Half years, in fact. Go and check my resume:

http://svartalf.freeshell.org/frank_resume.html

Does that LOOK like I am lacking in the competence department?

If you have not been there, please do the rest of us a favor and shut the Hell up.

Re:Up until recently...

[dukeluke]

So sorry - but your link was not working as of 2:25 pm - perhaps you got /.'d?? lol - anyway, I concur that there are a slim minority of unemployed people out there who are truly qualified - however, I detest and loathe those on unemployment who would rather take an unemployment check than go flip burgers....and that's what really irritates me here.

As far as your resume - never got to see it - I'm sure it fabulous - then again, I'm only 20 and already have a truly killer resume - don't believe me? - well, that's life.

I still firmly believe that anyone with the drive and determination to succeed ultimately will - I'm not saying it will be easy - or that you won't be unemployed at all - just that if someone is competent and determined that they can find work anywhere!

Re:Up until recently...

[Anonymous Coward]

I still firmly believe that anyone with the drive and determination to succeed ultimately will - I'm not saying it will be easy - or that you won't be unemployed at all - just that if someone is competent and determined that they can find work anywhere!

But we're talking about finding work in a depressed IT industry. Oh yeah you had mentioned flipping burgers...

Re:Up until recently...

[cheekyboy]

They wont hire IT people, they will say , "are you a mexican?" first. Or they'll say, WTF you way over qualified or they will say, "you have no experience flipping burger, we believe that skill takes months of experience, go jump IT looser".

Maybe become an IT consultant for the mafia or columbian drug lords to give them secure comms and secure DBases with AUTO delete if 'rebooted' on a different network , IE at the FBIs lab. Tax free cash and you probly get some free samples.

Re:Up until recently...

[Anonymous Coward]

That auto delete won't work. They use special firewire bridges with write disabled. You'd have to use an encrypted filesytem or something.

I'd personally be a little leery of working for organized crime given their retirement policies. When you interview, be sure to ask why the position is open.

The only way to start a successful business...

[Flyboy Connor]

...is having a client.

I have observed, from closeby, many people starting their own software business in the last few years. The ones that survived were the ones that had a client from the outset.

You can build something you like and/or you think is useful, and then try to sell it. That doesn't work. Most likely no-one is interested, or only interested in your product if it is changed considerably. Moreover, if you have an "off-the-shelf" product, people don't want to pay a lot for it.

Get a client, and build what that client likes. This brings in money. Make sure you take into account that on average you work 20 paid hours per week, no more. The rest is needed for time between jobs and for finding new clients.

You will still be cheaper than the big guys, so you may be able to sell yourself. Especially since renting someone from a big guy is as likely to get you a cheat as a good developer, while you, obviously, are a certified good developer.

In the past when I did odd jobs I usually offered a "no cure no pay" scheme, if it wasn't a very big job. Clients are willing to pay more for such a scheme, and as long as you know you will succeed, no harm done (just make sure you define the "cure" conditions).

If there is any time remaining, build your brilliant general solution and try to market it.

There are several good books available on writing and marketing software as a small business. Find one and read it. It will help you avoid the greatest pitfalls. I learned a lot from Hudgik's "Writing and Marketing Shareware". It's fairly old but contains lots of good advice.

Re:The only way to start a successful business...

[harborpirate]

I wouldn't say the only way to start a successful business is to have a client from the outset, but it certainly is the easiest.

If you're going to build a product and then sell/market it, you better know beforehand that the market for it is there. Naturally, this requires money and time.

And how do you get input as to what changes your future customer wants? Without an existing client this is very, very difficult.

So I'd say, you either need to have a client from the outset, or have a very VERY clear idea of what a client would want before you even think of starting a company.

Two other types of companies that might be successful in the short term:

Vaporware corporation.
- "Um, do you have any screenshots yet?"
Software patent litigation company (Use any combination of the first three words).
- "Why is your software company composed entirely of lawyers?"

Re:The only way to start a successful business...

[Anonymous Coward]

What about Google? Or ICQ? Or Netscape? Or ...

Re:The only way to start a successful business...

[Post]

The only way to start a successful business... is having a client.

Neither the Macintosh nor Google would be here today if this were true.

You have to find/define a niche, and develop a product that fits in that particular niche.

Somebody once said to me: "When you're on the road at night and get into a critical situation - never steer your car towards the lights! Because light means someone else is there already."

He was an old man, referring to cars. But I have applied this both to (IT) business and creative work, and never had a reason to regret it.

But then, your mileage may vary.

I will offer FREE technical services (remotely)

[Anonymous Coward]

you start the company, I will be your after hours architect (hardware platform... OS architect..)....

Why? becuase many are unemployed, I am not, many are stuck looking for a job, I am not. MANY are capable to work for profit, I will work for fun. Best part? I don't like for people to get screwed over, so why would I do it to them?

Now the but....

If we make good money, I would like to be compensated, stock options, some type of cash bonus, whatever... but who knows where it would go....

Re:I will offer FREE technical services (remotely)

[RoundSparrow]

Makes sense, you have a day job and want a new option... Ok... then why did you post as AC?

P.S. I need a good FreeBSD sysadmin + Perl guy. OpenBSD OK too (we have both). $12/hour pay range, but established company (since 1999) and we are making a profit. Send e-mail to Jobs@IPCoast.com if interested. Prefer person in Washington, Oregon, or Arizona.

agree

[ragnar]

What can I say... you hit the nail on the head. Good stuff. Thanks for sharing.

Maybe if your link to your resume worked...

[Anonymous Coward]

Maybe if your link to your resume worked... you wouldn'dn't have been unemployed for two years.

And yeah, posting a broken link to your resume *does* make you look like you're lacking in the competence department.

Re:Maybe if your link to your resume worked...

[Anonymous Coward]

Well, at least your sanctioning of the practice of judging by appearance does certainbly indicate your familarity with IT industry hiring practices.

You know, however, there was a time when that was not so. I.e. when your shoes did not require that special shine at an interview. Or even when you wore old shoes just to filter out those employers who judge shoes instead of competence. Hey, does anyone here remember the good old days when shoes themselves were optional! :-)

Founders, Directors, Managers, Programmers

[GuyMannDude]

It's not just about finding financing, it's about figuring out what to do with that financing once you have it, and how to turn it around so it turns into a net gain for your backers and yourself.

Good point -- and most of your other points are good too.

I think questions of financing are a few steps down the road. If a group of programmers wants to get together and start a company, there are more important issues that need to be addressed first. First is "What is the reason for this Company's existance?" If all you can think of is "To keep us employeed!" then you've got some big problems. Write down a Mission Statement. What is this company going to do? What is its contribution to the world going to be? What are the Core Competancies? What are the guiding principles? Starting a company is a signficant undertaking. If you don't have a pretty good idea of what the company is going to try to achieve, then you're in for trouble.

Here's another question: who is going to do what? You've got a bunch of programmers -- great! Now what? Who is going to be management? Are you going to pick some from your group or hire an outsider? As the parent noted, being a good programmer doesn't mean you'll be a good manager of programmers. If you pick managers from within your group, how do you know that when the going gets tough that the 'grunts' are going to listen to, respect and obey the orders of Management? If you're going to pick someone from outside your group to act as management (which isn't such a bad idea), then how are you going to be assured that they are going to drive the company in the direction you want? That's where Founders and the Board of Directors comes in. Boy, you'd better have that clearly-articulated Mission Statement written down because otherwise Management is going to have a hard time knowing what's expected of them.

There seems to be this pervasive mindset amoung tech people that because they got better grades in school than those who studied business, that they should have no trouble being business people. As the parent pointed out, however, being a good business person is completely different from being a good programmer.

Honestly, if anyone is seriously thinking about getting their friends together and starting a company, you'd better think long and hard about what you're trying to do.

GMD

IP Law may be a hurdle

[oldstrat]

My pet rock just got a broad patent covering out of work IT people starting software ventures.

Unemployed? Why spend money?

[FreshFunk510]

There's a certain irony to starting a business when you're unemployed. I know because I've been there twice.

The irony, in short, is that when you become unemployed the last thing you feel you can do is blow wads and wads of money on anything (even on a business idea). Personally, I go into this sort of "survival mode" where money is only spent on essential things like food and porn. When you're not pulling in any paychecks it's only practical to think this way.

Secondly, one has to understand that once you've been working for a while your life has certain financial characteristics. You know how much you pull in a month and your costs follow accordingly. You have car payments, maybe a house payment, food, girlfriend (cyber/imaginary of course), and maybe a savings account. When you become unemployed the last thing you will think about is how to blow your savings away which would put you on the street.

Getting the foot in the door...

[Interested Guy]

I have found that usually I have to write the software for somebody for free in order to get my foot into the niche. This works out well, for both parties. You have them as a resource to tell you of their business needs, and they get a product that saves makes their business more efficient. Once you have a product that works, you can market it to others within that niche market, and charge a pretty decent price.

The greatest obstacle for me ...

[krygny]

... and for the overwhelming majority:I'm scared shit. Pure and simple.

I once bowled with a guy that had his own business. He was dumber than most small kitchen appliances. (He needed long addition to keep score!) I asked myself, I said self - what does he have that I don't. Answer: He was too stupid to be afraid of all the things that can go wrong. Even though he wasn't nearly smart enough to prevent them from going wrong, they just didn't. Most of us suffer from paralysis from analysis.

I'm in the middle of doing this right now

[soft_guy]

but on the other hand, I have a day job (as a software engineer). You can't make a go of it unless you either have investment money to feed you while you are starting or else you have a day job.

Also, get 2-3 partners with really good complementary skills. For example, I have a partner who is a marketing guru. I have another who is an expert at starting companies and knows how to deal with investors, business strategy, etc. I have a third who was the head of QA at my last company. And for now, that's it. I supplied the idea, and I'm writing the code.

Re:I'm in the middle of doing this right now

[Anonymous Coward]

Even harder with a day job, IMHO.

I'm the original guy who submitted the article; and spent since August with a day job while my partner already started the new one part time.

I made very little progress after the 10+ hours my day-job (also sw engineer) took.

Within 14 days of quitting, the new company's customers started being happier, and potential investors started taking me more seriously. Getting out of the middle was the best thing I could have done for this new company. I was killing it before it had a chance trying to start by spreading myself too thin.

A business opportunity

[DonK]

We're all familiar with the fractured English that appears with, say, Japanese games. Presumably here the manufacturers know better, but use the charm of the fractured language as a marketing device. But other non-English-based companies - (for a random example, see http://www.xjgroupusa.com/About/lcd.htm ) - it's clear that someone needs to connect them up with a technologically savvy and literate English speaker to improve their presentation. One could imagine a service which proof-reads and corrects English on a per-page rate, and advertises itself widely enough that these foreign companies would find out about it.

Or maybe you could manufacture automobiles

[Anonymous Coward]

This idea reminds me of the comic strip in the National Lampoon newspaper parody. There's a picture of a very detailed model of a ship & the guy's saying, "Hey kids, carve this ship out of a block of wood! Isn't it swell?!"

Re:I always knew in my heart I was not good enough

[Alexei]

Yours is an interesting situation. Without knowing much about you, I'd say: play to your strengths. English is definitely not the forte of most programmers, and so you may be able to carve out a new space for yourself. Off the top of my head, grammar checkers are pretty lousy, even in Word. Make a good grammar checker (genetic learning algorithms maybe?), and you'd probably have a great product for all those asian companies who'd like to present a good image to customers in the US and elsewhere but write in atrocious english.

you've solved unemployment!

[Purificator]

you've solved the unemployment problem in america: ship all the unemployed people out of the country. i'm sure the canadians will love having a bunch of unemployed americans show up demanding business grants.

in all seriousness, things like this exist in america but most people don't know about them. i only know because some guy on late night tv commercials is always babbling on about grants and loans and pueblo, colorado. even so, a business grant/loan is not the same as collecting state unemployment benefits which, as the previous poster noted, you may not collect (in the U.S.) while you have a job.

you could probably start building the business without the unemployment agency noticing, but once you start seeking (and finding) customers, you'd better make sure you're not still drawing that check. it's that gap between when the money stops and when (if!) it starts up again that scares the pants off most people. i know it's got me scared out of starting my own business.

And for your first product...

[Joey Patterson]

Hire someone named Winifred Dowes and make her (or him) vice president of marketing. Win's first task is to come up with a name for your new program. Don't be surprised if you get MikeRoweSoft/MyCrowSoft WinDowes. :)

Oh, wait a minute... someone with that name has apparently posted to /. before.

How to distinguish yourself

[severett]

One of the problems I've always struggled with trying to overcome is how to make yourself unique in a market where there are so many others just like you.

Why should a company or person hire me when there are a dozen other people just as qualified and able to do the work. In some ways the market is way over saturated.

Noooooooo!!!!

[deacon]

You need to incorp for liability purposes.

A type S (NOT C) corp will do that without the double taxation problem.

Furthermore, if you pay yourself only dividends, not salary, you are exempt from social security and self employment tax.

NO, don't take my word for it, see an accountant!

Re:Noooooooo!!!!

[XorNand]

What kind of liability? Are you crafting air traffic control guidance software? Creating a new timer IC used in a pace maker?

A lot of people start a corp because they think "well, now I can't be sued and lose my house". That's is incorrect. A corp is not a magical shield. Google the term "piercing the corporate veil" for an explanation on what I mean.

Re:Noooooooo!!!!

[ahdeoz]

But, if you own a corporation with lots of money and political connections, it *is* a magical shield from things like liability and malfeasance.

FYI

[Big Blingin]

Linux kernel release 2.6.xx These are the release notes for Linux version 2.6. Read them carefully, as they tell you what this is all about, explain how to install the kernel, and what to do if something goes wrong. WHAT IS LINUX? Linux is a Unix clone written from scratch by Linus Torvalds with assistance from a loosely-knit team of hackers across the Net. It aims towards POSIX compliance. It has all the features you would expect in a modern fully-fledged Unix, including true multitasking, virtual memory, shared libraries, demand loading, shared copy-on-write executables, proper memory management and TCP/IP networking. It is distributed under the GNU General Public License - see the accompanying COPYING file for more details. ON WHAT HARDWARE DOES IT RUN? Linux was first developed for 386/486-based PCs. These days it also runs on ARMs, DEC Alphas, SUN Sparcs, M68000 machines (like Atari and Amiga), MIPS and PowerPC, and others. DOCUMENTATION: - There is a lot of documentation available both in electronic form on the Internet and in books, both Linux-specific and pertaining to general UNIX questions. I'd recommend looking into the documentation subdirectories on any Linux FTP site for the LDP (Linux Documentation Project) books. This README is not meant to be documentation on the system: there are much better sources available. - There are various README files in the Documentation/ subdirectory: these typically contain kernel-specific installation notes for some drivers for example. See ./Documentation/00-INDEX for a list of what is contained in each file. Please read the Changes file, as it contains information about the problems, which may result by upgrading your kernel. - The Documentation/DocBook/ subdirectory contains several guides for kernel developers and users. These guides can be rendered in a number of formats: PostScript (.ps), PDF, and HTML, among others. After installation, "make psdocs", "make pdfdocs", or "make htmldocs" will render the documentation in the requested format.

It's more than just good code

[rossz]

You also need someone who can sell your product or your company services. This is something that 99% of geeks are unable to do well.

So you need a few coders, you need a sales person, and you need an idea that isn't shit.

Actually, the idea can be total shit if your sales guy is top notch, but you still have to be able to look at yourself in the mirror.

perl hackers wanted

[ozzy_cow]

Allright, here's the deal:
I'm incorporated, I got *real* customers paying me *real* money to develop highly customized CMS in perl.

So quit your yapping and if you work hard drop me at line aoeajsdaf at yahoo.com (freemail address to protect my privacy).

I'm heavily using and re-using other people's code (based off twiki.org) and the final product will be GPL. And don't worry as long as real estate agents have jobs, so do we.

Use your experience with your own company

[Garridan]

If you start a company that produces a useful product, should it ever fail, you can use that experience, plus the product itself to distinguish yourself from other applicants. If you can show an employer that you have the drive to complete a large project, you're practically a shoe-in -- even if your idea wasn't profitable.

Doesn't work well...

[Junta]

The suggestion is rather unhelpful. I am quite happily employed with a good job, after several months of searching early last year. If you can't even sell yourself to employers, you certainly are going to have an extremely difficult time selling your skills to customers. In other words, good business means someone with a head for marketing (i.e. lying and exagerrating). It also means just someone who is simply good at business in general over technical skills. It also means a lot of startup resource, which is as rare as employment.

Personally, the path I took to employment was finding a contracting company, who is more willing to talk to candidates, figure out the right lies and exagerrations they can pull off on behalf of the applicant, and pass them off to the potential buyer in a nice, favorable light. I wasn't told about their lies and exagerrations until the buyer was interviewing me, and I was mad I was caught off guard, but it seemed to be par for the course. I served my time as a contractor and the company was so satisfied with my work, I got hired on as a full time employee. Since then I've been getting friends who have had difficulty to use contracting companies, with near 100% success. Representing your skillset and professional experience is a lot harder than you may realize, and it takes the marketing 'guts' of the companies to add the lies it thinks you can pull off in the interview, or at least to get you to the interview so even though the company discovers you have exagerrations, they know your skill is good and the lies aren't your fault...

Ummm... unemployed

[SilkBD]

So I can play Morrowind all day and all night... why would I want to do anything productive?

Been there...um, already there

[alexborges]

Yeah, done this. Still on it. It works.... BUT

Its not for everyone.... I mean, if you ever felt loyal to you employer and really put out there, and then felt you were fsked by them....well, with your own company its ALLLWAYS that way...

You just have noone to blame but yourself. When things dont work its your problem, when things work, you have the responsibility to pay your people first, then keep whats leftover....

Still, it can become a passion, even for a geek.

If you need to start a small biz?

[Zapdos]

Here is one group you need to have contact with. S.C.O.R.E.

Re:If you need to start a small biz?

[moojin]

Great Resource! MOD THIS UP!

Not GPLed

[Anonymous Coward]

I bet that program isn't open source, right? That is fine by me, as I haven't taken a vow of poverty either. All I can say is: FUCK THE GPL!

We use Comodo...

[Phil John]

...and they're around $50.00 per year. They work in 96% of all browsers (the other 4% being netscape
What we offer as software is a kick ass e-commerce system and loads of extras that clients can bolt onto their websites (that we have often set them up with in the first place). It pays my bills, and those of my business partner (my brother) fine.

Hosted Web Solutions

[Bandit0013]

I think hosted web solutions are going to be the best small software company niche to fill.

Alot of small businesss out there have software needs but can't / won't shell out > $10,000 for boxed software. Especially software that can be difficult to set up or requires someone with IT know-how to maintain and patch.

.NET and J2ee technology are starting to allow pretty robust applications to run on a thin client. Having hosted access to an application cuts out all the install/server/IT labor costs from the business.

With powerful servers being relatively inexpensive, as long as you don't have a huge number of transactions going on you can stuff quite a few customers on a single database server. All paying subscription fees and sharing the cost burden of having a robust application.

If you get companies accustomed to using your service, and they put time and effort into putting data into your service, it becomes expensive for them to walk away from you. (they have to reformat their data for a new system, research and buy a new system, retrain users)

In addition, once you get your application up and running, most of your deveopment time will just be spent improving functionality and adding some features here and there. (Being a subscription service new "upgrades" or "features" can be touted as free to the user as well, quite a selling point)

I actually have a web product nearly completed I've been building using this theory. I just need to find a good web graphics/javascript guy. *coughhintcough*

Re:Hosted Web Solutions

[Anonymous Coward]

This is the same dumb idea we've been hearing for years.

Summary

[DjMd]

Useful advice from slashdot:

Unemployed? Get a job

Fanstastic
Whats next? Sick? Get better?

Dot Commerce 101?!?!

[thrillbert]

Think about what you will need:

Wow.. that's a very impressive list, except that you missed the two most important things that are needed:

1. Clients.
   • Without these, it doesn't matter if you have any of the seven you listed.
     
2. Motivated Employee
   • This, the majority of time, is yourself. The person who will work hard to get the company up and the customers happy.

Damn dot commers.. ran the economy down to the ground and they still want to put the carriage before the horse.

---
The truth is what is; what should be is a dirty lie. -- Lenny Bruce

Re:Dot Commerce 101?!?!

[digitaleus]

Damn dot commers.. ran the economy down to the ground and they still want to put the carriage before the horse.

A start-up is like the old-west - a 6 shooter and a saddle are more than enough

Been there doing that

[Allnighterking]

And I have been since right after the bust. Know the following.

1. In 1999 you needed an idea, in 2003 you need a current revenue stream. Meaning the product must be in a form that is saleable and people are buying. This of course is for the Angel round VC rounds need more.

2. Count on a factor of 4 in time. People withing the group will come and go. And every time they do the same wheel gets gone over 1 more time.

3. No matter how good it is. It wont be what marketing wants. They are really good at selling what they never have.

4. Markets change constantly. You have to be ready willing and able to drop a line of developement you think is neat to meet real customer demands.

5. If you are developing for Linux invariably the customer will present you with a problem that is in reality a Windows problem and ask you how you solve it in Linux. No amount of explaining that it is a windows problem not a Linux one will work. You need to apear to solve a problem they never will have.

6. When in Linux it is nearly impossible to make people understand that

You cant install a RH 9 binary kernel on RH8 (source rebuilds are a different matter.)

SuSE and RH are different distributions not different OSs

7. days = weeks and weeks= months. In this kind of environment things can go much slower than youd like (lest test equipment, and shear exhaustion play a factor.)

8. Talk with your signifigant other. If he/she isnt on board with the hassles of starting a company you are hosed.

9. Declare one day a week a no work day. Youll need the break.

10. Seperate work and home physically. If you can roll out of bed and be in your office, your productivity will suffer.

11. Keep a regular schedule. Its good for you mentally as well as physically.

12. Dont eat at your desk. Taking 20 minutes to eat away from your desk will improve your productivity.

13. Dont code whats cool. Code what solves the problem you need to solve.

14. Take the time to know your competition before you write the first line of code. Find out what people do/dont like about it.

15. Dont re-invent wheels. Leverage your system. For example dont write software to create a database of installed RPMS. Read the rpm database instead. If you are writing for windows dont create all of your own unique classes check MFC first.

16 Dont rewrite - re-factor. (exception the code is 100% borked and doesnt do anything.)

17. Dont solve problems you like solve problems people have. Code to create a mirror image of a word doc might look cool, but its not much of a product.

18. If you dont have the time to do it right you wont have the time to do it over. Shortcuts are nearly garuanteed to byte you in the buns when its critcal that it doesnt.

19. Be flexible. You may have the greatest solution in the world but if everyone is fascinated with your widget.... build widgets.

20. K.I.S.S. (Keep it simple stupid) More money was made off of paper clips than Lasers.

I did too

[nycsubway]

I started making C/C++ reference cards for programmers and students. It brings me about $10/week. It has the potential to be very profitable, but it needs more marketing...

Thank You Slashdot!

nah...

[potat0man]

I remember an article in the Harvard Business Review on entrepreneurship I read about two months ago. One statistic stuck out in my mind: 40% of the small businesses on the 1988 Inc. 500 list did not have a business plan. Lots of decisions are made on the fly. Many businesses change their whole market and direction when they realize what they started to sell was not what their clients wanted to buy. I'll agree it's important to have a business plan. But if you're self-financed and you're the leader with fewer than 50 employees, there's no reason it can't just be in your head.

Re:nah...

[Anonymous Coward]

With all due respect, I must disagree. More companies fail because they did not execute their business plan than for any other reason. I can attest to this. I am now looking for work because our small 5-person development company got sidetracked developing a neat "tool" that we could sell to help fund development of our main product.

Unfortunately, once we got some nibbles on the tool, we ended up devoting more and more resources to change it in a fruitless effort to try to "win that first sale." Of course, the sales didn't materialize and we had burned up the major portion of our seed money.

Lessons learned?

1) It's OK to modify your business plan, but make sure that you put as much or more effort and due diligence into the modification as you put into the original.

2) Review the plan at least every six months to find out where you are failing (trust me, you are). Make a conscious decision to find the fault and alter what you are doing, or if what you are doing makes more sense, revise your plan.

We did end up selling this tool to another company with deeper pockets, and hopefully, over the next 5 or 6 years, I will get some of my original investment back. In the meantime, I'm out of work.

Apps that still need to be written

[Orion Blastar]

That link you provided goes to a government website that uses governmentspeak and does not actually tell me what apps still need to be written.

I do see that business apps for Linux, OSX, OS/2, etc may need to be written as Windows/DOS business apps dominate the market. A Data Wharehousing, ERP, Accounting, Payroll, HR, or even a Client Management program could make a nice niche market in alternative operating systems and help migrate organizations away from Windows.

The key seems to be to use open sourced solutions to create a package to solve a problem that most organizations face. If a company were to provide a total package of software, support, and training in alternative technologies, it might acutally make a good niche market.

Handheld devices are also an untapped market, the storage on them are now started to get beyond 30M and memory sticks and compact flash cards can expand that to the point of holding a small database of 100M or higher. Portable power in your hand, just like the desktop and laptop PCs have. I have an idea for hand helds that I have not seen anybody do yet, but I lack the capital to implement it. I am unemployed and have worked for Fortune 500 companies in IT Departments with software products that got named "Commercial Qaulity" by management. Yet that very same management turned on me to replace me with someone who works cheaper and faster than me, but not the same quality.

A VC or Angel would want stock and control of the company in exchange for investment. If I lose control of the company, I will not be able to carry out my vision and will be micromanaged to death. I belive in organizational management, and that classical management is going away. I need to be empowered to make decisions that effect my position and environment. If not, I might as well be working as another disposible employee for a company that is going practially nowhere and causing a ton of stress for its employees.

Cheap servers

[Safety Cap]

You have good points -- thanks.

Here's another source for servers.

You can get financing. You just need the time.

[Aqua OS X]

Draft up a partnership agreement and a business plan (and buy books before you do either of these things).

Moreover, if you can swing it, try to get a good designer to help you with some preliminary corporate identity work. You could probably get by without paying the designer. See if you can find someone who's unemployed, has knowledge of business, and is willing to be part of a partnership. (just don't hire some 14 year old self taught kid)

After you've done this, start shopping around for business loan. When a bank sees that you have a structure, a well developed plan for making a profit, a plan to market your product/service, and a plan to present yourself ... they will give you a loan.

You might also want to explore LLCs and LLPs. You might not want want your personal assets to be endangered should your business get sued or go broke.

(Ohh, and I'm and unemployed interface designer and retail strategist [stupid economy].... so hit me up if anyone is starting something in CA! I can make you some nice shinny buttons and icons :) )

Start company, easy. Making money, hmmmmm

[ChuckMaster]

A few friends and I started a software company selling games for the Pocket PC. We don't do this full time, by any means. We distribute through Handango.com. It saves some headaches but it's to make your product noticed. A main thing to consider is that you need to make things that aren't out there. We just made an ogg player, then found out someone is giving on away for free. And coming up with an original idea is difficult, if you've thought of it, chances are someone else has as well. It is hard work, but you're more motivated if its YOUR company. There's something about that control aspect that really drives you. I myself got to the point where I cringe when I think about interviewing with an HR drone, but legal forms no longer scare me. Anyway, we're giving away a free ogg player. Check us out at www.swordandspiritsoftware.com

Where to incorporate/form a LLC?

[soundhack]

I have one question that I havent been able to find an answer to in the many books I have on LLC's and etc.

If I want to form a (say) LLC solely to bring up a website and sell whatever, do I have to form it in the state that I reside? the state where the website is being hosted?

The reason I ask is that I live in CA and it has a nasty requirement that LLC's have to "register" every year, paying an 800+ dollar fee. I think that is excessive! Can I instead open up a bank account in a LLC friendly state (Nevada?), form the LLC there, then just say I do business solely in Nevada? (the website I have is being hosted in CA)

Clueless

Re:Where to incorporate/form a LLC?

[Anonymous Coward]

Requirements vary from state to state. I believe you would need to have a mailing address in order to start a business in a neighboring state. If you have a friend or relative that has a address in another state you might be able to something out. The problem your going to run into is payroll. since your residence is in CA you will still need to deduce CA income tax whenever you pay yourself

Re:Where to incorporate/form a LLC?

[Anonymous Coward]

In Texas the fee is one time filing of $200, then a franchise tax of 4.5% percentage of income or revenue, I forget which. At least one member of the franchise needs to be a resident of Texas. I'll cut your cost in half and be the Texas partner for only $400 a year.

But seriously, dude, why do you need a LLC to run a web site ? Is someone going to slip and fall while logging in and sue you ? LLC stands for Limited Liability Corporation. Think of paying that $200 (or $800 in CA) fee as buying insurance against loosing a law suit -- would you pay that much for lawsuit insurance just to run a web site ?

Re:Where to incorporate/form a LLC?

[soundhack]

very good point! LLC means limited liability company, not a corporation, but your point is still valid.

I guess the fact that without the limited liability I could conceivably (as opposed to likely) be sued for personal assets scares me senseless. In that way I'm pretty risk averse.

I have a great deal of faith that someone somewhere will find some way to find fault with my software and sue me. Plus I may want to branch out into small hobby circuit boards which may more likely cause injury---I guess you can slip and fall over a circuit board :)

Been There, Done That...Me too

[Anonymous Coward]

4 guys, $350,000.00, good product. Went bust. IT'S ALL ABOUT SALES. I generally don't like most salesmen but that's where a company is made or lost...SALES. A good salesman can sell crap (best fertilizer on the planet, all natural...) a bad one can't sell sex.

My $.02

been ther done that...

[Anonymous Coward]

I choose to learn hardware engineering and start a guitar amplifier company. [moddaudio.com] and a microchip basic (aka Stamp like) company [picputer.com]

After around 2-3 years at it I am still losing money, but its looking a little better.

Unfortunately, marketing is going to be the real trick. You end up competing with well established companies with large marketing depatments and deep pockets.

But it is also easy to get discouraged when you see your ex employers getting several articals on slashdot (gibson tech labs magic/gmics product) and see them on tech tv's the screen savers.

Also the what is he doing now, Replay TV ceo slashdot artical was a bit hard to read.

If you are going to try it on your own, don't expect any help, not even from slashdot reader.

Re:been ther done that...

[RGRistroph]

I think you actually have an interesting product. I would have bought a picputer 12 months ago, had I known about them. I might buy one in a few months if you have them, when I will be doing a semi-automated animatronics project for a Haunted House. In fact, just out of interest, how many would I have to sign up to order right now to get a batch from you ? I can handle getting just the circuit board and components, I can surface mount solder. Also, the software can't be limited in any way -- you'll have to give me source even if you make me sign an agreement not to distribute it.

A couple of tips here dude. For one, link to picputer.com and modaudio.com, it raises your rank in google and brings in customers. Two, while I'm sorry your former friend assaulted you and destroyed your stock of amp cabinents, take that shit off the web site -- it's bad for business. And don't say "I'm not selling these because I have no permanent address", that sounds awful even if it is the truth. Say, "temporarily, I am only taking larger orders, due to the need to be more efficient in production. I will be taking single orders as business builds." Or something like that.

Get a post office box for $12 a year, and put that one the page. Get rid of the "I can't put my real email up here because of spam" nonsense; install spamassassin and put up a contact email address.

Anyway, back to your picputer. I would expand my market beyond music groups; try to contact some of the hobby robot groups and see if they are interested. You might be able to get a club to go in on a group order of a number of unassembled kits which they could all put together in a soldering party.

If you go the self-employed route,

[stephanruby]

If you go the self-employed route and even if you're not earning squat, know that the government will take your unemployement benefits away.

Why does it have to be a software company?

[Biljrat]

There is most like something besides software you can do to earn money if you start slow and do not try to over-extend.

I now program, cook, bake (and yes, those last two are different skills), play bagpipes and do/teach these from my house. I retrained and started really slow. Used my work/social networks to get low paying (sometimes free) jobs in the new skills until I had a couple of regular clients (it took a couple of years). In the meantime I kept programming for the man.

It is eight years later and now I take a contract or two that interests me, have a regular batch of students that pass through, and play at lots of weddings, funerals, graduations, etc. It is quite varied, I have lots of fun, and get paid quite well for what I like to do.

The point is, just do what you like while you are doing what you need to get by. If you work at it, you will get good enough to be paid for it. Until then, just do good work and do not live beyond your means.

Think about what you are spending your money on. You do not need $100/mo DSL if you get get by with $10/mo dial-up and occasional trips to the library or Kinkos. You do not need $500/mo co-located server if you can get by w/ $75/mo shared server space. You do not need ___ if you can get by w/ ___ . Just fill in the blanks and adjust your expectations and money requirements accordingly.

You can live in the US and quite well for $1000/mo if you change your expectations.

Re:Why does it have to be a software company?

[Anonymous Coward]

I'm living in the US on $500/mo. That includes rent (I have roommates I share with), a car (ok my insurance is momentarily lapsed), and eating Ramen and hotdogs.

It's getting fucking old. I haven't seen a movie since Unbreakable. I work less than 40 hours a week as a part timer doing windows and network maintance, with occasional contract programming. The contract programming is picking up to larger and more frequent gigs, but not to quickly.

Let me say this: if Bernie Ebbers, Skilling, the Fastows, and those Aldephia people are not ALL in jail by Nov., I'd vote for an outright communist over W. Hmmm, with Kerry I guess that's pretty much what I'll be doing.

No, no and no! Don't write software....

[PGillingwater]

There are hundreds of software projects out there right now. The world does not need more software. What it needs is *better quality* software.

How to achieve this?

Well, there are some basic answers I might offer. First, start by looking at the existing projects, and choose one you like. Then download the software, and get to know it. Use it, test it, reporting bugs. Join the mailing lists, read the archives, then when you get to know the culture, start making contributions. After a while, you'll be ready to make a bigger contribution. To really help, start writing good quality documentation, tutorials and FAQs. License it under a suitable documentation license, then set up a tip-jar to reap the rewards of your contribution. If enough people appreciate your work, then you'll start to see some results.

To summarize:

• Choose a favourite package
• Learn it, then test it thoroughly
• Notify the developers of the results of your tests.
• Start writing documentation
• ?
• Profit!

Doing just this right now.

[bigattichouse]

We've revamped our company Bigattichouse. We all work from home, communicate via pre-paid-calling-cards, IM, remote pair-programming and email... and we bid out work for our existing clients. We charge $65/hour (which is much cheaper than most places) and bid the hours to complete small acheivable portions. Most of our clients get small $500 - $2500 chunks/apps done at any given time, but keep us working for months at a time. Many small happy successes lead to big happy projects.

Re:Doing just this right now.

[Anonymous Coward]

"remote pair programming" ?

Pair programming usually means just on typist and another person next to them talking.

I have done a shared emacs window over remote X, were we could each type in the same buffer . . . it didn't really work well except for bug tracking with a shared gdb and discussing ideas via chat or phone as we worked.

Come up with a good idea.

[Anonymous Coward]

Other posts have touched upon the economic costs of starting a business, namely issues such as marketing, advertising, distribution, facillities, and so forth, so I will skip those for now.

Do not underestimate the difficulty in coming up with a profitable idea. Again, as mentioned elsewhere, once you develop a product, you'll spend the majority of your time either providing support (which does make money) or fending off the competition (which creates headaches). Obviously, the easy situation is to find a niche market wherein potential customers are willing to pay for a solution.

Let me give you an example. A year ago, I ran into a group of principals at a conference and we started talking about computers. They obviously had a few complaints. Their school district requires them to electronically submit certain forms on a periodic basis, and the forms themselves were extraordinarily difficult to work with; one such gripe was that you could not save your work but had to do everything in one sitting. If you've spent any time around a public school lately, you'll know interruptions are more the rule than the exception.

Anyway, it sounded like a great business idea. Slap together a python script (or whatever) that mimics the forms, allows principals to save, spell check, etc etc, then open the appropriate email/http connections and submit it. Charge each school a $25 site license, multiply that out through the district and I was looking at maybe $5,000 for just a few days work. Word of mouth would spread to other school districts and principals would be beating down my door looking for similar niche utility products - or so my contacts said.

So what happened? It turns out these forms they were griping about were severely bug-ridden Word templates copyrighted by the district. I can fix the bugs in the templates in less than a day, but if it was that easy, I'd soon have more competition than I could deal with. It wouldn't be long before some 14 year old kid figured out how to fix the forms and undercharge me. And there was the looming spectre that the district might sue me under the DCMA if I attempted to profit off of their work.

Point being, there are lots of "needed" software products, but just because you can do them doesn't mean you should base your business upon them. I haven't ruled out working for the district, nor should you if you are in my shoes, but in the long run, you're much better off spending your time looking for bigger projects that you can actually depend on as a source of income. And that is the difficult part.

And they work...

[bluGill]

Strippers work. They don't even need to strip, just stand around like beatiful airheads, with just enough on to be legal in public.

One job years ago we sent a bunch of salesmen to a trade show, and nobody went to our booth the first day. So they hired a few "booth babes" figguring that at least they would have eye candy while sitting in an empty booth. However from that day on everyone was interested in their product. I don't know how many sales this generated, but there is no such thing as bad publicity and I'm sure at least a few people getting information were buying.

Course it also means your company is sexist. I wouldn't want that reputation.

As someone in the process of doing this....

[blinky321]

What advice can you guys offer as regards funding. We will be looking for a little under $10 mill for a very unique software idea. Of course everyone thinks their idea is unique but in this case it really is :) Where to go - where not to go - how much to give investors percentage wise.

Re:As someone in the process of doing this....

[thasmudyan]

Ehem, move over, time for me to be Mr. Wise Arse.

We will be looking for a little under $10 mill for a very unique software idea.

Oh my god. Don't do this unless you have some kind of semi-working prototype that you can show off with. Start small, don't go in there guns blazing full steam ahead, because chances are high you will crash. $10 mill is also a lot of money that must come back in soon, or investors will start to get ugly with you.

"Think Big" got tech in trouble. It will get most businesses in trouble. Don't do it, prove - also for yourself - that your concept is sound first, using as little resources as possible. If $10 mill is just the development costs that you have calculated, don't do the project AT ALL.

hungry?

[Anonymous Coward]

its like saying "hungry? why not become a farmer?"

Get Insurance

[waldoj]

If I'm incorporated as an S corp, and somebody sues me, they can only take the assets of the business - they can't take my house, my car, etc. Does a DBA filing do the same?

Definitely not. That's why it's important to do the math: what's cheaper, professional liability insurance, or incorporating (and doing all of the accounting and paperwork that goes with that)?

For most of us, insurance will be more expensive, particularly for anybody that does any sort of critical (ie, people could die, important data could be lost, things could break physically) programming. Although I no longer have professional liability (I'm an S Corp for this reason), when I did, it cost me about $1,500 per annum. That's pretty much the baseline for decent PLI (professional liability insurance) for any coverage for programmers that's worth having.

Remember, though, that even if you incorporate and don't have insurance, you can still easily lose your company if you get sued. Your personal assets, however, will be protected. Remember, too, that you don't have to do anything wrong to be sued. But you still have to have enough money to defend yourself against that suit, and that's what PLI is for.

Disclosure: Not only am I a veteran programmer, but I'm a licensed property and casualty surplus lines insurance agent in the state of Virginia. :)

-Waldo Jaquith

Greenspan recommends...

[timjdot]

Greenspans recommends leaving tech but is unable to tell you where to go...
http://money.cnn.com/2004/01/26/news/econom y/green span_jobs/index.htm.
If he doesn't know what you should do to start a company or have a next career, and I quote "by its very nature is not easily predictable", how can you expect to know what company to start?

The problem is getting sales

[Anonymous Coward]

Programmers who are laid off may have what it takes to make a good product. Assuming they can come up with a good idea for a business, the deal breaker for me is getting the sales. Like many other programmers, I do not have the networking skills, connections, or interest in selling my product. I am more interested in sitting in dark rooms writting code than making the sale, and I have no sales talent to speak of. This is why I don't start my own company.

Re:No, no and no! Don't write software....

[Anonymous Coward]

I dont get it. Where comes the profit from writing documentation for open source projects, anyone made a fortune from such a idea, more than $9 a day?

Finally

[HangingChad]

Someone who really has started a business before. lol. Reading some of the other posts it was obvious they've never actually run a business.

Keep expenses at the absolute bone and don't spend any money until you have to. Even if some VC was insane enough to give you startup money, the first thing they're going to do is start whacking all the expenses you don't really need.

Do spend a couple hundred bucks on professional liability insurance. It's cheap for IT consultants.

Starting your own business on a shoestring is also a great way to hide gaps in your employment history. Especially if you have a company name to point to.

I for one am starting a newspaper.

[haaz]

Blogs detailing the startup (now in slightly more specific detail) and other fun stuff can be found at the paper's site, which is of course,. I just set up a 1U server for it (running Linux, of course), but that's as close as I'm going to get to the software biz for a long while. got my fix with LinuxPPC. ;->

Up to my ears in startups

[MythoBeast]

I currently have numerous startup type projects going. The problem I've had is in finding decent partners. Why do we need parters, you ask? Because nobody I know knows how to write both the network connectivity protocols, the GUI front end, and can still draw well enough to create the graphics. Under the circumstances, you're left with the options of either taking partners or spending months learning new technologies and skills that you may never need again.

In once case, one of the partners decided to try to take my code and run off with it. After that got sorted out, we spent several months waiting for another of the partners to crank out his part of the project. Right now, we're scrambling for beta testers.

On another project, I've been the bad partner. The bulk of the coding is my responsibility, but I keep finding more things that the project needs. Mostly, they're waiting on my designs to settle out so they can work on their chunks.

And then there's the issue of how to split the ownerhsip of the company once you actually start the company. Most people get the bright idea that you should automatically split the company equally among all contributors. This means that the guy who designs and writes the bulk of the code winds up with the same percentage as the guy who designed a few icons for the web site. Deciding how much each person's contribution is worth is more than a little taxing on the business relationships.

To this date, I've been working on those startups for over a year, and am still waiting for them to pay off. Maybe they will, maybe they won't, but it isn't due to a lack in my effort.

What is this military advertisement

[rduke15]

I'm sure there is plenty of useful software that could be written. Why does the link in the news posting have to be to DARPA, a military agency??!!

And don't excuse it by saying DARPA created the Internet. I know, and it's a shame for the Internet.

If you really have nothing better to do than working for the military, then try doing nothing for a while; it won't harm.

::sigh::

[Anonymous Coward]

And it must be said...

1) Start a software company
2) ?
3) Profit!

"local business community"

[moojin]

could you go into more detail about the "local business community" that you are referring to? could you also provide factual references to the above statement.

Re:"local business community"

[Textbook Error]

Sure - although this is talking about NYC, the principle (low/zero-interest loans from a collective) is pretty common in any society with a large immigrant population (i.e., not just in the US, world-wide).

Re:"local business community"

[moojin]

although "kye" exists, i doubt it was used as extensively as a means to fund a business as the article portrays. it is often used by a group of korean housewives to finance purchases of household items. i doubt that newly arrived immigrants, even those living in the u.s. for several years, would have enough "good" social ties to enter into "kye" to fund the start of a business.

perhaps when there were tight restrictions on the amount of money that was allowed outside of korea, this could have been possible, but now it is impractical.

Re:"local business community"

[Anonymous Coward]

I doubt it was used as extensively as a means to fund a business

Could you provide factual references for the above statement?

Simple answers

[Krafty Koder]

Here's some simple reasons why everyone isnt setting up a "software company" a)Indian programmers can work at a fraction of the cost of U.S. programmers. In a lot of cases you simply cannot compete on price. b) Restrictions on worldwide travel - U.S. and European programmers cannot simply up and leave and move to India or China say. You probably wont be allowed to work there due to the visa restrictions. Free trade does not equate to free movement of labour. c) Microsoft's monopolistic practises and stranglehold on the hardware industry. Think you can set up a profitable Linux desktop company? Think again. What about Lindows so, I hear you say. Well, that's bankrolled by Mr Robertson's fortune from selling MP3.com. Lesson: if you want to break the mould, you have to have a few hundred million dollars to even BEGIN to start competing. In other words, the I.T. market is seriously screwed up.

Move overseas.

[Anonymous Coward]

India is high profile, but there are other players. Some of whom are recieving work *from* India.

Response follows:

[judicar]

These people can't hold down a job, what makes you think they can run a company?

Re:Response follows:

[Anonymous Coward]

Look at the people who run companies now. They sure aren't the cream of the crop. In fact, a lot of them probably got there because they had no choice, because they were fired in first Bush recession . . . wait a minute, I see a pattern . . .

Found this one amusing

[Trigun]

IT Support/Help Desk
Requires knowledge of Linux, databases & networking.
Java programming exp. an asset.
Email: jobs@canhear.com,
attach Word format resume.

Emphasis mine,
Idiocy theirs.

MEANWHILE, BACK ON PLANET EARTH...

[zentigger]

where are mod points when you need 'em? This is either some serious trolling, or perhaps "sane?" hasn't moved out of the basement yet and is /.ing while mommy is cooking lunch...

oops, too late ;)

[wolfywolfy]

from the site

"Eligible entries must be submitted and accepted by all the applicable module maintainers before the GNOME 2.6 UI freeze, scheduled for January 12th, 2004."

rule 0: code what you know

[Anonymous Coward]

Rule 0: code what you know

Rule 1: breaking rule 0 will make sure you create useless software with no market

---

Consider the stupidity of the assertion that bio-tech needs lots of software. Yes they do need lots of software. The need lots of software written by the scientists who are defining the problem. The hard part isn't writing the code it's figuring out the problem. After you have that done it's often faster to write the code than the write the spec, evaluate the result (you have to do that for your own code anyway), write the spec for modifications. Bio-tech was a poor choice of example. Besides how many out of work techies have the background to jump into a wholly new area AND meet the deadlines AND comprehend the financial side?

IANAL, but be careful

[truthsearch]

...or choose one central house/apartment and setup shop in a room there. Basements are fine, so are spare bedrooms.

IANAL, but I do know you need to be careful if you have employees working in your home. In many places it's illegal to have full-time employees working in a place that's not zoned for commericial use. Just check your local laws or ask a local commercial laywer that quick question.

Re:IANAL, but be careful

[Coventry]

Part of this premise, starting on a shoestring budget, means that there are no employees - everyone involved should be a partner, because you don't have the money for employees. IANAL as well, but I do know that liability laws are very different in that situation versus having employees over to work, as well as zoning laws. As long as you aren't retail, having a business run from your house is usually ok... but asking a lawyer would never hurt - especialy if you live in a restricted community or have 4 partners coming over eating up parking spaces and such.

Note also that while the work you put in may be full-time, if you or anyone else involved is on unemployment, they have to be spending the time to meet the requirements of unemployment as well - sending out resumes, trying to get interviews, etc. In a sense, this means you may be working 2 full time jobs.

Re:IANAL, but be careful

[GCP]

IANAL, either, but I don't have to be one to deal with this anymore than I have to be an accountant to pay taxes.

Forget the legalistic "employee" part. Zoning laws vary all over the place, but they are usually in a commonsensical form designed for the average person. Typically they'll be something like "you can't have any commercial traffic in and out other than a daily small package delivery service (e.g. UPS)" or "you can't put up any business-related signage" or "you can't have customers/clients visit the house" or "you can't have non-residents other than household service employees working on the premises" or "you can't have more than two non-residents working in the house, whether paid or not, and the type of work must be quiet and unobtrusive", or that sort of thing.

In the US, they are governed by the local community, for the most part, and some communities encourage domestic private enterprise, while others are prickly about it.

When you get your business license, they'll tell you about it. If you don't get a business license, you'd better not pay taxes, or they'll catch you. And, of course, if you don't pay taxes, you'll have bigger, scarier agencies to worry about, so just go get your business license.

Golden business oppurtunity...

[sleepingsquirrel]

Looks like you are presenting a good business opportunity to me... The business of helping small startup businesses.

1. Rent large office space ($2000/mo)
2. Divide office into 20 cubes
3. Equip office with phones/printers/faxes/web servers/etc.
4. Hire recptionist to answer phone/direct calls
5. Rent out cubes to budding small businesses for $300/mo
6. Profit!

Re:Golden business oppurtunity...

[leshert]

They already exist. They're usually called "business incubators", and they're usually about as effective as you might imagine.

Yeah, I'm doing just that...

[greendot]

I've been unemployed for about 7 months now. The treatment I was receiving and the utter lack of respect by recruiters and businesses alike turned me very bitter. I couldn't stand looking at one more job posting because I "knew" it would be another black-hole. I feel like I'm faced with giving it all up.

I did decide to give something up, the need that I had to work for somebody else. Fark 'em. I'm tired of having to prove myself against no-talent spaghetti code writing wanna-be's. What better way than to put up or shut up? So, I found a niche. I found a vertical market with a severe lack of good software and customers who are... competitive and desperate. It's one of those markets where they'll do anything to succeed.

My plan? At first, the manual is going to be in PDF and the software downloaded from a website I already own.

I'll use PayPal or another blood-sucking credit card payment system at first until I can evaluate a true merchant account.

Sales will be handled by the customers. They are already part of a "team" but compete between themselves. They already sell product between team members, so my incentive won't be a new concept for them, and there will be a hefty commission as well.

It will be copy-protected as best I can, but a pro could still crack it. But, considering the market.. I don't think it will be on anybody's scope.

I have contacts already showing great interest and showing screen shots.

Now, all I need is the time to finish. That is what is going to make or break this deal. If I was single, this would not be a big deal. But, my wife is going to kill me if I don't get a "real job" soon.

I may have to sell off VIP customer slots to get a little $$$ in the bank in order to convince the wife that this will go somewhere.

Re:Yeah, I'm doing just that...

[Anonymous Coward]

Instead of paypal consider Kagi or regnow. I think they are much less likely fuck you over by holding your money until you prove it's yours. You can sign up as an individual, or as a DBA, you don't need to incorporate.

some tips

[moojin]

just wanted to lend some advice:

1) if you are looking for a pure programming job, emphasize that on your resume. de-emphasize the html / web site design.
2) if you want to emphasize your html / web site design skills, fix up your website (whilezero.com), it does not reflect your html / web site design skills.
3) a couple of days ago there was a post on good and bad cover letters and resumes, read it and fix your resume. what did you create and how did you do it? don't just list a bunch of skills. how did what you create affect the business in a positive way?

just some tips...

software charity?

[Anonymous Coward]

Why not follow in the Great One's footsteps and start a software charity?

Couldn't one make a living wage coding Free Software? Tax exempt too.

I don't know what the technical difference between a busness and a charity is but it seems that distros are borderline.

Trolling by submission?

[mariox19]

Excuse me, but the confrontational attitude in this submission sounds like a troll itself. Have we all been taken in?

Re:Trolling by submission?

[Anonymous Coward]

Nope, it was a legimite question I had, and that I asked at the last Linux User's Group that I went to.

Literally half the people were unemployed, some of them had modest savings (i.e. they said they weren't looking to move back in with relatives, or anything), and many were complaining about how "stupid" the management was of the companies that laid them off and outsourcing jobs oversees.

So I asked them that if they have ideas (i.e. how not to make the "mistakes" their previous employers did), have a team, and some had savings, why they didn't get together and do something.

I think this question motivated at least some of them.

Because techies can't run a business

[glyph42]

It's the #1 reason why 80% of all start-ups by would-be entrepreneurs fail. Techies can't run a business. Train yourselves in business first, then do it. It could work.

Just join Amway/Quixtar!!

[Anonymous Coward]

But stay away from them parasitic, cult-like "support" organizations that go along with it.
(actually, there is no need for them anymore since
everything they do/did can be done for free over the internet)

To paraphrase Stroustrup paraphrasing Einstein:
They are "as close to a cult as possible, but no closer"*

*for legal reasons, of course; if they could get
away with it they would -- and some do out of ignorance of the law.

Work

[Mixel]

Have a look at rentacoder. It most likely won't pay your bills but it might feed your goldfish...

Re:Work

[thasmudyan]

I don't know about you but the prices at rentacoder are pure fantasy values! Contracts like "I want a clone of Yahoo Groups done with Java for no more than $500"? Come on! Developers have to be crazy to do that shit!
Is that the rotten odor of Scam City that I smell here?

Re:Work

[Mixel]

Exactly my point :) Crazy or not, the funny thing is... a whole load of those projects actually get done [scroll down]. I've completed about a dozen projects at RAC for rediculously low sums of money. Not that I needed the money; was just bored with everything else in life. Now I kind of got seriously bored of RAC too. My life sucks.

*sigh*

The barriers are there

[UninvitedCompany]

I've done it. It was hard, and we made some money for a while. I'm back to the corporate world for the moment.

You have to find a market that is presently underserved, and where they have some problem that can be solved with software that is worth spending, oh, at least $10,000 or more to solve. You can't build a business out of $500 software sales unless you have a lot of seed capital.

Generally, you need a sales rep that has some sort of background or insight into the market you have chosen. If you want to sell inventory management for shoe stores, you better get a sales rep that used to run a shoe store, or that sold to shoe stores, or had some other industry contact.

There will be dry periods. You can't count on self-funding a startup and paying everyone based only on some custom projects up front. If you can all work for half pay for a year, or if you have a couple people that will work for stock only, then you have better chances. Generally, you can't get investors to put money in early unless someone on your team has a personal track record. Otherwise you have to wait until you have an established revenue stream.

The other comments are germane. You need someone to do support. There will be a lot of on-site work. You will need someone with both software skills and people skills.

Most of the costs are salary and travel. The professional fees, the phone, the fax machine, paper for the copier -- these don't really add up. Not like a market salary for two developers and a sales rep, anyway.

I believe that it is tough right now because most businesses that have a custom software need have already replaced their DOS-based systems. Most are reluctant to change. The overall consolidation in so many businesses means that most of the small corporate clients are much larger than they were 10 years ago. These larger businesses are less willing to deal with smaller, newer software firms.

And there is increasing commoditization of software. Places are willing to have a clerk spend a day or two each month "doing the reports" in Excel. It's hard to sell against that, particularly with the small outfits.

All that said, the deals are still out there. And it beats sitting around the house even if it isn't particularly lucrative.

Code for Mac OSX...

[cheekyboy]

If you code for macosx, and give some progams nice GUIs, you might have a chance, mac people do pay for software more than windows thiefs.

Also theres much less competition on the mac, so you wont find 72 shareware version of XYZ app. Even the smallest crap app can sell for $10.

BUT. You probably now NEED to get a mac, $$$$$. And you would need to learn the new apis (TIME), or you could do it in XWindows Apis (puke) or gtk/qt , now theres licence issues or do a web interface.

Re:Code for Mac OSX...

[tius]

No kidding, I was (half) joking about this just prior to our last round of layoofs. The shareware I've seen for MacOSX is hillarious:
e.g. a GUI'd util to renice your processes to "BOOST PERFORMANCE without UPGRADING your box." Actually, I'm still laughing at that one. The thing is, I bet the programmer is making money on it (think it was $20 a pop!).

A more challenging example is that there are FAX managing programs for $90 (US) that are just front ends to open source fax S/W. Actually, I think Panther even does this.

Certain benefits you are forgetting about

[edxwelch]

Maybe you don't want to work for a boss with pointy hair and write software that's specified by idiots.

Maybe for once you want to show them how it's done, to create a great product and take all the credit (and earnings) for it.

Not to mention a politics free environment, interesting technology and in the location of your choice.

Coop?

[pherris]

From The Cheese Board Collective History

The Cheese Board Collective is a business wholly owned by its members. For tax and liability purposes it has been incorporated, with each collective member an equal shareholder and member of the board of directors. Upon joining each member is given ten sharess worth $100/share. When a member leaves these shares are sold back to the corporation. All members are paid an equal hourly wage. Profits go to buy new equipment, raise wages, or are placed into our retirement fund. Moneys placed into this fund are distributed based on hours worked.

While this model might not work for a large company "risking it all" on their first product (where a lot of cash is needed) it could work for the described situation. I believe coops are eligible for "not for profit" status which allow you and your mates to keep a little extra cash. I wonder if anyone has tried this with software developement.

My other thought was why not do an OSS program and charge for support (per call/email). Again, not for a big company but it would put a very livable paycheck in your pocket every month.

Bonne Chance.

Re:Coop?

[Anonymous Coward]

So basically you get the worst of Capitalism and Communism rolled into one ?

Gary Player once said...

[holygoat]

... "the more I practice, the luckier I get".

I think that holds true in a lot of situations - running a company, playing sport, or writing code.

It's harder than it looks

[Anonymous Coward]

It's very easy to write software. It's much harder to sell it. Actually, it's pretty hard to sell anything. Even when something seems like a great idea and a great implementation, you'll be amazed how hard it can be. Competition is considerable, so you definitely should not be doing something anyone else is doing. Forget the idea that your app will be better or faster or easier to use; people do not care. They will stick with whatever they are using. Secondly, there's a big gap between writing some software and making it commercially presentable; installer programs, access keys, documentation, help files, a payment system all take a lot of time. Thirdly, like I said, despite your best efforts you can find yourself with a cool product but nobody that wants to buy it. Nobody wants to be the first, so to sell your software has to be immensely useful. Finally, don't kid yourself. It's easy to convince yourself that you have something that's killerapp special and out there, but that won't fool your customers. Did you see StartUp.com? There is a scene when they realise their competitor has gone first (and has a better web site). The CEO tells everyone the competition is scared and he's determined they're going to win. It was painful to watch, because I knew they were doomed and not everyone can win, despite how much they want it. I know you'll do it anyway, but for damned sake make sure you don't make these mistakes. Be bold, but don't fool yourself, and know when to walk away.

K

Um.. People got layed off for a REASON!!!!

[greymond]

So the people who got layed off got that way because
1) They weren't qualified
2) The company did not need them/their position
3) THEY WERE NOT ESSENTIAL ...generally I see lazy people layed off...

That aside if the person did have a brain they probably got another job quickly or had the drive to start there own thing. Those that continue to sit around seeking pity for "I have 10 years software development experience and can't find a job" are either lieing or have 10 years of working with irc scripting and not actual development...oh and surfing the net all day posting on slashdot doesn't count as a P2P Development Manager either.

"If you don't make these 'mistakes' of outsourcing development to Elbonia, couldn't you compete pretty well?"

Outsources programmers is not necesarily a bad idea. The problems with "outsourcing" comes mostly from companies that try to have there customer service/help desk offices over seas. That type of outsourcing makes it hard for customers to understand "click clack hahd driv gu gak duh" on the phone.

Yeah!

[texmexberg]

I am doing this, too! I am exhibiting software at two tradeshows in the next 5 weeks. I am cutting costs by living in Mexico! Go for it!

Re:Yeah!

[Backov]

What's your product? You've got me all curious now. ;>

Re:Yeah!

[texmexberg]

It is my first day on slashdot. What did I do wrong? I have a featureless software package for vertical markets. My first show is next week. I got my domain name yesterday... This is late breaking. I do have 10 years in sales. That is the good thing. I know that it matters if you meet a need to the people in need and REACH them at or below thier price point and exceed thier expectations. I know that God and Karma will take care of those who try and that is all that matters, whether you believe in God or not. If you think you are in control of your fate, you may have something coming.

Re:Yeah!

[Backov]

Way to promote your product when someone asks!

Sales, sales, and more sales...oh ya and marketing

[Anonymous Coward]

Because the main obstacle to your dream is going to be actually making sales. Most software geeks do not do well moonlighting as salesmen, and you're most likely not going to get any venture funding these days unless you've proven your concept by actually generating sales and revenue. So unless you know a really good sales person who will help you for free you'd better brush up on those sales skills.

Silly AC

[GCP]

He's talking about "opportunity cost", and he's absolutely right. Put down your Game Boy and go look it up.

(I swear the average age of these AC's is probably about 13.)

Startups

[Bytal]

That is exactly what I and few close friends from high school and college are doing right now. openorbit.net

And let me tell you the difficulties you encounter brought my opinion of people like Bill Gates or Larry Ellison or even Miguel de Icaza to a much higher level. Though I'm sure few people think running a software company is easy, I don't really know how many programmers or hackers appreciate the business side of things. I would have to say that legal, financial and management issues are 60-80% of a good business. The coding itself is often a safe retreat from navigating the perilous fields of US business and legal practices. And not every firm can afford a lawyer for every little detail from incorporation/LLC formation to contract negotiations, trademark protection, NDAs, patent searches. Not even to mention regular business practices such as accounting, tax law and employment rules. The amount of work/finances required to cover all of these bases is one of the major hurdles that discourages most wannabe startups. Like they say "It takes money to make money", and starting your own business, software or otherwise is something that often cannot be done on the cheap.

Looking at the huge amounts of half finished products and low quality scripts that abound on sites like freshmeat.net it's very easy to get your own project lost. What few hackers want to admit is that waiting for the world to recognize the inherent greatness of your product, no matter how well coded is not always a solution for a software firm. Marketing, networking and media contacts and plain people skills often make or brake companies no matter what the quality of their product. And this is without taking into account market forces and the demand for said programs. Say what you will about the business practices of Bill Gates and others like him, but when you see in person the difficulties they had to surmount, they at least deserve respect for having the will and the ability to get to where they are right now and stay there.

Re:Startups

[Anonymous Coward]

Your website lacks several serious pieces of information which you MUST have in order to get business:

1) I have no idea where you are physically located.

2) The names of the people involved, and their bios, are not on there.

3) There are no links to previous work done, example web sites or even simply descriptions of projects.

If you were located in my area, for example, I could suggest someone I know who is about to pay way too much to have someone put up a simple email server with spamassassin check you out. I'm not sending him to a page with no real address and no real names, though. Rent-a-coder would be better.

Starting your own company

[jkxx]

In this world of 8-hour workdays and with a need to constantly pay bills it's not very easy to just up and start a company. Of course taking a loan is an option, but for many college students (like myself) that would just mean a second loan to pay off. And then I'm not sure companies would very much like to hire me if I'm trying to get my own team together and compete instead of cooperate with them.

Otherwise hey, it's a great great idea and it could
end up producing some quality software. Only it really helps to win the lottery beforehand...

I've also done it, and also I'm still at it

[thasmudyan]

My experiences were a little different, not entirely though.

You can't count on self-funding a startup and paying everyone based only on some custom projects up front.

Basically me and two friends (we were doing hobby programming stuff in my parent's basement) threw all our savings together and started with that. From the start, we were sure that we didn't want any outside money or help for that matter. We decided that we'd either be totally successful or be totally defeated and ruined.

So yeah, go figure, the costs of running the operation alone were eating us alive. Come month 3, I had to begin to eat those horrible noodles for 0.30 cents a meal. No car, no appartment, nothing - I slept on the couch in my office for a while. (At least we had showers and a kitchen, too!)

And all the time we were hoping for the big breakthrough that would send us skyrocketing, well... of course, it didn't come. The dot-com bust was melting most of the companies that we were doing business with.

Then, something happened. Only it didn't so much happen as perhaps "develop". We kept doing it, kept learning, continued to make better stuff - and after 5 horrible months, we were able to pay ourselves the first time! Man, that was one cool moment, wouldn't want to miss that experience!!! In the next months, more money started flowing in and we survived. Before, we were so close to give up! We're in our 4th year now, we're not rich or anything, but now there are 10 people working for us and things are really beginning to be great. Of course, money is still bad, we might still be earning more if we decided to quit and do grunt development for another shop or something like that. But nevertheless I get the feeling of accomplishment, because it may not be much, but it's totally ours!

I believe that it is tough right now
Yes, the climate is bad. But that doesn't mean that you shouldn't try this out if you want to. Do it while you're young, even if it goes down the drain you still have that experience. I believe lots of startups fail because the founders discover that it just isn't for them. If you're not dependent on venture capital or have any investors interfering with your things, you can go a long way running on pure willpower alone.

All that said, the deals are still out there. And it beats sitting around the house even if it isn't particularly lucrative.
Total agreement here! :)

And if you're the obsessive guy like me, chant with me now:

MUST.NOT.FAIL.MUST.NOT.FAIL.FAILURE.IS.NOT.AN.OP TI ON...

Because the ones unemployed are unemployable...

[ebunga]

Even in the backwards technology-fearing place I live in, a competent techie can find a job in no time at all.

you're making the assumption that we're developers

[Artifex]

There are plenty of us in IT that aren't software guys.

I'm having to work outside my field right now, but I'm a network engineer. And I don't mean admining some Windows servers, like most "network" ads are really asking for, I mean configuring Junipers and Ciscos for multi-hop BGP, etc.

Sure, I could become a PHB, but don't I want this company to succeed? :)

What are you talking about???

[Anonymous Coward]

cjustus wrote:
>
> What do you need investor money for? You own a PC, or you wouldn't be on slashdot...
> Compilers are a dime a dozen... The biggest expense for many companies is R&D...

What are you talking about??? R&D is usually a tiny fraction of most companies expense. I challenge you to name "many companies" who's biggest expense is R&D, or even their second biggest expense.

I have a better idea!

[Anonymous Coward]

Let's put on a show in the Old Barn and raise enough money to save the family farm!

The enterprise market is dead last couple years

[Anonymous Coward]

Our group had similar ideas, let write software for the enterprise market. The problem is that the enterprise market has been scaling down and they are not buying as much software and support as in the 90s. Companies are using what they have and not buying the latest gadget software last couple years. Not only that you're competing with inhouse outsourcing, and larger companies with deep pocket.

The consumer market has no money, and you're pretty much compete with shareware, freeware, and piracy. The video game market is tough to crack, as expensive development tools and fee often discourage people to get into.

Great idea...but what should the product be?

[dtjohnson]

Starting a software business is a great idea but what should the first product be? Where is there the greatest need for the canned software that might be produced by a small start-up developer? These would be my hot areas:

a) data visualization tools--i.e. things that helped view and digest large amounts of data such as maybe a multi-dimensional 'spreadsheet' tool
b) digital music tools for improved quality
c) digital image storage, viewing, and management aids
d) tools that allow better integration, correlation, and storage of images, text, and sound.

Gates saw the future... would have you?

[paragon_au]

Fine, you are here now. Instead of complaining that he was of (semi)mature age when computers were just starting look at something that in the future will be big and do that.
Most people had no idea about computers when Bill Gates started to work on them.
If you had been born at the exact same second as Bill Gates, I'm betting when Bill was attempting to create code, and making his own home computer. You would have been at school, being almost totally oblivious to what computers were all about.

So instead of complaining he was born at that time, look at what in the future will be big, and get to work on that.
BioTech is going to be huge, maybe you should have been mucking around with basic BioTech stuff instead of with writing software which in now out of its infancy and into maturity.

Re:Gates saw the future... would have you?

[bluGill]

Corrention: I'm not complaining. I know that I wouldn't have created something like Microsoft. I'm saying that given that was born a few years too late, even if I had it in me everything Bill Gates has, I still could not have created Microsoft. Timeing is a large part of it.

There might or might not be opportunities out there right now that would allow the right person to create something bigger than Microsoft.

Can't afford a car? Why not buy a helicopter?

[soft_guy]

Starting a software company is fine, but you'll either need investment money or a day job. And if you pick day job, let's hope you don't mind working 20 hours a day until your company gets revenue.

MOD UP +5 insightful

[shaitand]

Too bad I don't have any mod points.

You hit the nail right on the head

[Anonymous Coward]

You can't just throw clever programming at the problem and get money out the other end. For one, it takes a hell of a lot of marketing knowhow, something that most geeks should have known they were crappy at when the prettiest girls went to the fast-talking football players. There is much more to making a company than clever tech. Tech ability is becoming a cheap commodity.

Amen. This gets right to the heart of what most people here don't seem to realize, much less mention. Starting a software company requires great coding AND marketing skills, not to mention a good sense of what would even be a good product to make. I'm speaking from experience here; I've succeeded in my own startup.

Most geeks either don't have what it takes or aren't willing to put forth the effort required to make a software company succesful. Aside from the coding, there's the packaging and the selling. After the packaging and the selling, there's the support and maintenance. And by maintenance, I don't just mean maintenance regarding your product...but your company. Because once you get to the point where you've got a nicely packaged product that needs to be supported and maintained (assuming you've done it right), you've also got a nice little beast on your hands called a corporation.

Now I imagine that most of this stuff would be a breeze for the average slashdotter, except for the part about packaging and selling (i.e. marketing). This is the most difficult area for geeks to master. The head of the evil empire is where he is today because of his mastery in this area. But Bill Gates isn't the only geeks with those skills, so if you want to succeed, find yourself a partner with (very important) BOTH marketing AND technical skills. Let him do all the talking. Let him handle user iterface, software packaging (installers, icons, etc...) and you can concentrate completely on coding while he puts a pretty face on it and handles the customers.

Of course, this is all easier said than done. So I'll tell you what I've done and how I've succeeded. Hopefully this information will help you succeed as well.

A couple of years ago I was running out of contract work and I didn't want to go get a "regular" job because I don't like being a cog in the man's machine. So I decided to start looking for opportunities.

Step 1: Look for an opportunity
I figured it would be easier to start in a niche market with little competition. I also knew that small businesses are a ripe market for IT services. It just so happened that one of the companies I was doing part time consulting for was a small business in a niche market. The owner of this business had excellent contacts in his industry as well; I don't mention the industry because I don't want to invite competition :)

I knew I possessed the marketing and people skills necessary, but I didn't quite have some of the coding skills to pull it all off. So I talked to a friend who is a top notch coder working for a large web hosting company who was interested in starting a business. I told him about my contact in this small, nich market and about the need for certain types of software. We both had similar outlooks on life and our personalities were a good match for a business partnership, so we agreed to start a company.

Step 2: Incorporate
I then did a little bit of research to learn how to actually create a company. Whichever of you is the smartest one should handle this. I just happen to have a 156 IQ, so it was a breeze. ;) My research led me to these guys who created a corporation for us in Delaware for about $100. We also bought a corporate kit from them (for ~$50) which included a corporate seal and all the necessary legal documents. On a side note, a lot of the information I read cautioned against incorporating in states like Delaware where there are extra tax and legal breaks for businesses; however, those sour

Re:You hit the nail right on the head

[hobuddy]

I hope this information has helped.

Thanks for sharing it.

Re:You hit the nail right on the head

[Anonymous Coward]

that was awesome information. thanks.

Are you serious?

[kir]

Every time I see a group of 5-10 self-described 'great but unlucky' IT workers looking for a job, and how their previous company had to lay them off because their former employer had this 'stupid idea' it was to move all the jobs to Elbonia, I have to ask myself -- why don't these guys get together and start a software company.

Because most of the people who don't have a job that are bitching and moaning about it on slashdot have neither the balls nor the talent to start their own software company. [I said most... not all.]

The only talent many of them have is complaining about out sourcing, Microsoft, President Bush (and his evil ways), John Ashcroft, Iraq, RIAA/MPAA, and John Katz.

FLAME ON!

I recommend against this: a waste of your life

[Anonymous Coward]

I did that: I set up my own firm, had a good idea addressing a specific part of the environmental market, developed a very easy-to-use package that worked wonderfully. Then Texas' environmental enforcement division quit policing actively; laws that were supposed to be passed didn't (thanks to then-governor George Bush); in short, my previously wonderful-looking market went to hell in a haybasket.

There was only one competitor, but they had much more $$ and were well-entrenched in places where they'd already sold. On two separate occasions over a three years period it was found that their software was computing environmental emissions completely incorrectly - this for environmental compliance calculations that can subject a company to fines of millions of $$.

You would think this would drive their customers to my product. Wrong! Rather than purchase my correct easy-to-use product, my competitor's customers paid my competitors for both

• new copies of supposedly corrected versions, and
• transferral of the data from the old incorrect databases to the new versions.

IOW my competitor made even more money by fucking up!

And I learned that one could never underestimate the stupidity of one's clientele.
[There is at least one other possibility that cannot be completely discounted: that the people in charge were getting kickbacks. But I can't even begin to address that sort of problem.]

In short, I put in 3 years good effort for no profit. I have the pride of workmanship of producing an excellent product: well-documented, easy to install and marvelously user-friendly. I learned a lot, of course, but the experience has left me a pessimist about human behavior.

Search Engine

[Anonymous Coward]

Even though I'm employed I am doing exactly that. If anyone here lives in the SF Bay Area and has search engine experience please send your resume to findant2004@yahoo.com (yes its a newly created email address just for these resumes)

Join me and together we can make a difference.

Shortage of I/T Workers

[Anonymous Coward]

Your so clearly RIGHT!

I to am about to venture into the self employed and going to write software... for those that can't. There is a shortage of I/T workers! (Note WORKERS).

First, I would rather write real code (C/C++) than be a Dilbert. Somehow this business has been infiltrated by "quick" click kiddie. sales people who don't/wouldn't know the truth if it bite them in the ass. Management, well - getting neck strain for kissing butt and ligement strain from knee jerking isn't a career.

Companies spend billions figuring out how to make real-techs work for less. There is always a manipulative type in the office climing over others to scramble like a rat to get a chicken bone. An HR infiltraighter to play games.

One advantage for sure, is no HR and false promises. When they really want to do something you can be there to build and do the real work as none of their remaining staff can do it!

Free, born for xNIX and MSCE (Microsoft Sanitary and Culinary Experts need apply.

All I need in a Delorean...

[vrmlguy]

# Title: A -- Defense Sciences Research and Technology
# Special Focus Area: Time Reversal Methods
# Announcement#: BAA03-02, Addendum 3
# FedBizOpps Reference: February 4, 2003

The only difference between most of you folks and

[Anonymous Coward]

myself is that I'm actually making an effort to
continually work towards my goals.
Not having the capitol to do what you want is a bummer
and a reality for many people. So? Find something
you CAN do that may not be so nice for you that
will pay the bills during your development period.

I run my own business from my home. It's not big,
it's not pulling in a full income yet, but it's steadily growing. It takes WORK and that's what
people want to avoid.

Go ahead :)

Software development != IT

[Anonymous Coward]

I don't know of one good developer that is unemployed. I know several great IT folk who can't even get an interview.

Re:The challenge of financing (For Australians)

[Anonymous Coward]

For those unemployed IT workers in Australia (who are already receive unemployment benefits), something that would solve the "not drawing a salary" problem is the New Enterprise Initiative Scheme (NEIS).

Basically, you apply to join the NEIS scheme, and select a NEIS provider (the grapevine says that Mission Australia is best avoided - 13 weeks stretches out to 7 months!). They provide you with a 6 week Certificate IV in Small Business Management, which shows you how to write up your business plan, makes you undertake market research and a perform a financial analysis. 3 "prominent" business people in your area read your business plan and interview you, and you will eventually get approval (a process that is 13 weeks long in total, including training).

After that, you get paid the equivalent of the unemployment benefit, WHILE running your small business (for the first 12 months of it anyway). You are also allowed to work part time to a value of no more than double your quarterly allowance (in acknowledgement of those with large capital requirements).

During this 12 months period during which you're receiving the NEIS allowance (aka run a business for the dole), you also receive "mentoring" support. Before I forget, the only two conditions are: 1) if you enter a partnership or form a company, all members involved with NEIS must own a total 50% of the business (irrespective of the number of others) 2) You must register to collect the GST (for the others: VAT / Sales Tax etc).

The link for more information is here:

http://www.workplace.gov.au/Workplace/ESDisplay/0, 1282,a0%253D0%2526a1%253D537%2526a2%253D639,00.htm l


Like I said, won't help with raising capital, but will help with food and rent.

slashdotters are whingers

[Anonymous Coward]

That's right, you all whinge about patents, IP etc

And now that you're unemployed, its the perfect example of why you are merely a tradesperson, and not an innovator.

So get off your high horses, stop whining about patents, just because you are unable to innovate yourself.

From your friendly patent attorney

Global networking alliances is the best solution

[Anonymous Coward]

The best way to fight "unemployment" for Software Technologists and Entrepreneurs is to form networking alliances that extend globally.

For example, I maintain a portfolio of people who have various specialist and general skills in software, web application development, and project management. By having people with ourlapping skills you can afford to have some members of your team busy at any one time. If required, you can hire local staff.

When one of us finds a lead, we can implement the project quickly by forming an inpromptu team (which isn't all that far removed from what some big Enterprises do). Communication is efficient using email, voice-to-voice, private chat boards, and telephone. I've been doing this for the last 2 years, firstly from Silicon Valley, then from Zurich, now in Western Australia (Australia is definately an inexpensive outsourcing opportunity).

I quite enjoy the flexibility that this business model provides. I urge you to try it! You must focus on your teamwork and management skills, and have the right person working on the right part of the puzzle.

If anyone would like to form alliances, visit my website and leave a message via the contact form.

http://at.dev.at

Cheers,
Devon Andersen
CEO Andersen Technology Development

Why Not Start a Software Company?

[Anonymous Coward]

Because I'd probably have to outsource my job to India.

A new term - subsistence programming!

[PetoskeyGuy]

I work for myself as a programmer. I live in Northern Michigan though, so I do work at the rate most indians do. I never achieved huge pay so there was never a fall for me. I quit my job and started on my own company. I actually got a RAISE working for myself because property prices are not as insane as they are in California. You could purchase a huge house on the lake for the price of a ranch in LA. I am an American Outsourcer I suppose. I've never seen pictures of my boss or my co-workers, but we get along great and talk most every day for over a year now.

Anyway - form Wikipedia...

Subsistence farming is a mode of agriculture in which a plot of land produces only enough food to feed the family working it. Depending on climate, soil conditions, agricultural practices and the crop grown, it generally requires between 0.25 and 10 acres per person.

Sounds like your suggesting out of work programmers learn from the farmers who were arguably outsourced and replaced by machines a long time ago and have had longer time to adapt. Come up with a share ware app (or somehting) that can pay the rent and feed the kids. Forget a major company and the overhead involved.

I can't agree more with the personal aspects. I compete with others with guarenteed and proven quality, and making friends with all my clients. They are not someone to make money from - they are fellow business owners trying to succeed and there is no reason we can't do it together. I've lost huge $$$$ on projects because a viable open source alternative existed that I could adapt to their needs instead of recreating from scratch. In return, I have clients who come to me first for just about everything. Plus bartering is awesome. No taxes and the work gets done. Being in a small town (about 5,000) probably helps with that too.

Re:A new term - subsistence programming!

[protocoldroid]

love the term :) i consider myself a subsistence programmer, i just never had a good term for it.

i run a small image hosting service called weblogimages.com (not a plug, just an example, it's not exactally marketed to the slashdot sort) and it pays my rent and then some. it gives me a little insurance so i can go and sell more of my work. I know i'll make most of my bills, and I can keep on selling work to other customers. i don't live in a big city either, i live in central new york. It's not exciting, but, the cost of living is dirt cheap, and at least out here, it's no more than 4-5 hours to new york, boston, montreal.

originally i used my extra time (and a steady job) to build some web applications that i knew i could sell to small business people on a personal basis (no advertising, no shrink wrap) and do minimal tweaking to personalize the application for each customer.

the cost is so low for my clientelle, and the profit is so good for me, i'm always excited to do work, and my clients are more than willing to give me more.

anyhow, i recommend any programmer to at least attempt to do some work on the side. pick some up and give it a shot. i got real tired of writing estimates as an employee of a company, and seeing them bill my annual salary for a couple weeks of my work. Divide that price by 26 and make some extremely happy customers! :)

Go for it!

[si618]

You don't have to be unemployed to do this, just willing to forgo some sleep :) My girlfriend and I have setup our own company after developing some FOSS software (see URL) and being approached by people interested in using it to build other FOSS software. Although when I first started writing it, I never planned for this to happen, but we now have some donated hardware, some dosh in the bank and lots of future potential. Even if it doesn't succeed i've learnt so much from the process it has been worthwhile...oh...and the 2.8GHz notebook with 1G RAM and 16.1" monitor doesn't hurt either ;-)

My advice: You don't need lots of cash, just lots of motivation, so find your niche, see what's already out there, and if you think you can do better, GO FOR IT!

Liable for what?

[Skim123]

He's an unemployed guy working in his apartment writing PHP Web pages for brouchure-ware type sites. What liability suits should he be concerned with?

Don't think of it as one project.

[Anonymous Coward]

If you think of starting a business which will simply produce custom tools to help principals and school teachers cut through the bureaucracy of the school district, and plan from the start to write this word-template-fixer or whatever and have the school district demand you stop or fix the problem that created the need for your solution within one year, and then you simply jump on the next problem, that can work.

Because you can be fairly certain of an unending stream of problems needing help, and the contacts and relationships from the first sale will constantly feed you the next problem.

Copyright and so one won't matter too much. You'll be moving on just in time to apologize and comply with the Ceise and Desist letter, and request a face-to-face to "straighten out any misuderstandings" (and make some more sales contacts). You are selling a service, not a product.

Unemployment = 1/2 income for 26 weeks. Not a lot.

[Richard Steiner]

...and it usually tops out between $350 and $500/week depending on various factors. The formula is designed so UI benefits are roughly half of your qualifying income (i.e., have of what you were making), but the ceilings are such that even someone like me who was making $32/hour as a consultant only received $350/week before taxes.

That doesn't come CLOSE to paying my bills.

Not only that, but after that initial 26 weeks, there *is* no further unemployment income (thanks to our Congress who decided to drop the Federal Extension that existed for the past few ears), so even someone who was willing to spend that initial period of time trying to create a startup instead of actively looking for work is going to find the bottom falling out of his income very quickly.

It's pretty damned hard to live on an income of zero! And it's a lot harder to start a business in those conditions...

I was laid off BECAUSE I WORKED FOR AN AIRLINE!!!

[Richard Steiner]

And because I only had a little over 13 years of experience in an extremely senior group.

The decision was made by HR based on tenure.

I hope you never have to go through what 30% of the IT department I worked for went through...

I did it, its tough

[scphantm]

The company i worked for folded about a year and a half ago. The job market in Pittsburgh was dismal at best for a windows web app developer. i was a lucky one and was given about 3 months notice from one of the owners that we were going to be closing "suddenly" and i should start looking. after sending out about 250 resumes, i got 5 calls and 1 interview. my problem (accourding to a head hunter) was that i was overqualified. so, 3 weeks after being married with a new step-child and cleaning my desk, i did what anyone would do, i copied the client contact list before i turned off my PC (being the admin has its advantages). i called a few of the clients and within a few days i was in business on my own. that was a year and a half ago and things have been definatly up and down. i have learned that you can only milk a customer for so much money before the well dries up and there is nothing more humbling than spending 5 hours a day looking for 1 hour of work.

my daily routine is now get up, travel around meeting with people, calling people, writing proposals, and responding to questions from potential clients until about 4. then i come home and start coding. i code until about 11:00. thats when i stop to watch the news. while im watching the news, i hit ITMoonlighter.com and try to drum up more work. its a tough living but its a living. i make nothing like the money i did with a real job because my market is so saturated with people doing the same thing. how can i possibly compete on a development project where a fully qualified student at Pitt U is bidding on the same thing project and looking for nothing more than beer money.

my only saving grace has been my wife and i live cheap. i have good months and bad months. and sometimes, really bad months. i have yet to have a really good month but thats the lifestyle.

My summary, if you take on something like i have, it is definatly a lifestyle, not a living.

Re:Unemployment = 1/2 income for 26 weeks. Not a l

[llefler]

...and it usually tops out between $350 and $500/week depending on various factors.

In Missouri it is even worse, the maximum is $250 a week.

And I don't think the thought process would be; "I just got laid off, maybe I'll start my own business." More likely it would be, "what little unemployment benefits I am receiving is about to run out and I'm not getting any offers, so I better start making my own opportunities before I'm living on the street."

I have a feeling IT could get a little rough while we shake out all the people who came because a CS degree got them lots of money. Salaries are going to adjust and we'll get the backlash from acting like prima donnas the last few years. I certainly wouldn't want to be a fresh graduate right now.

How do you start a business with no money? You ask your friends and family if they know anyone that needs their computer worked on. If you're lucky, one of them owns a small business. Small businesses are notorious for relying on 6 year old Win95 machines (or just as often, DOS) with NO system backups. It's not because they are cheap, it's because they aren't techies and they haven't considered the risk. A big opportunity for OS people to install some new software, pick up a little customization work, as well as some regular service. And a little word of mouth advertising too.

SIGH... Damn freeshell...

[Svartalf]

They blew out my DNS entry again. Check again in about an hour from now. It's there all the same.

I got a job, allright- it just took 2 and a half years to happen.

You know...

[Svartalf]

If my fscking web host hadn't blown out the DNS entries for my site, I'd not have had a broken link. If you look at my URL for my /. user id, you'd note that I refer to "svartalf.freeshell.org" as my homepage- I'm nowhere as lacking as you imply.

The damn thing was working all of a day or so ago.

Re:You know...

[dukeluke]

Whoa....there bud - I understand and sympathize with you on your blown DNS - and no - I was not meaning to imply that you lacked anything in terms of your resume - very stylish indeed.

But, let me reiterate one point - you are now EMPLOYED - and you got that job because you are GOOD and DEDICATED. Trust me, I'm in college and a few acquaintances are always oggling over my resume and my current jobs (currently two part-time Sys Admin positions). And honestly, I got these jobs because A) I'm GOOD B) I'm DEDICATED and C) does good looking count (please note the humor intended).

All humor aside though - those friends of mine who are in college and are truly GOOD - are employed and those that lack DEDICATION or COMPETENCE (most often both) are not. Simple as that.

I do not mean that if you're GOOD and DEDICATED you will always be employed - just that the majority of those who are - are or soon will be (2.5 yrs is soon in the scheme of life).

Re:You know...

[Svartalf]

It's all cool with me. You ought to go check the website anyway if you haven't already- not a lot there, unless you're a Linux fan, but hey...

It's a frustrating thing to keep hearing people saying that if you're good that you should be able to be employed. Yes, I'm employed right now. Quite nicely so, although the pay's on a par with a mid-level professional than a senior-level one like myself- but it does allow me to pay the bills. For another three months. Then, if they decide not to renew my contract (because there's no work left for me to do- not because of anything else- it's possible...) I'm out on the streets pounding the pavement and they're just now beginning to cold-call me again in dribbles like they did back in October just before I got this gig. They're just not hiring- and I'm pretty good at the computer software and systems design thing. What do I do? Change careers after 15 years at it? Perhaps- but what to do that will actually put money in my pocket and I won't hate the job or myself doing it?

"2.5 yrs is soon in the scheme of life"

Yes, and no... Try saying that when you've got a thousand dollar house payment, a $400 dollar car payment, a $250 lease payment on a truck, about $600 or so a month in utility payments, etc. 2.5 years through which you slowly lose each and every thing you worked all your previous work-life for can make it seem like a hell of a lot longer.

Re:You know...

[dukeluke]

Feelings understood and sympathized with. I am, alas - but 21 and a Sophomore in College - granted, I know my stuff and I'm a hard worker. But, I cannot truly relate to you until I'm in your shoes. Yes, I know the feeling of the world caving in financially (try having your computer struck with lightning and car dies all in two weeks! - that and going to school full-time and part-time job..ugh - it was a nightmare).

But, alas - we all strive on - and that's what makes us truly robust and priceless to society - we're willing to work hard and do what it takes to find that job and keep it - even if it means starting at a lower-paying job to work ourselves up again on the corporate ladder.

As far as losing a job? God has truly blessed me and I'm fortunenate to have always been employed when desired - granted, these were often Internships or other entry-level grunt jobs - but, Hey! I'm a Student! (and proud of it).

I pray that I'll never forget what it feels like to know that everyone you work with is above you in the 'ladder' - and I hope that your troubles have made you a better man and resulted in a refinement of your skills.

I did check out your site- and I enjoyed it too! Thanks for all your thoughts on this - and I wish you the best with your endeavors.

If you're interested - check out my jobs - www.semonis.com - and www.csesoftware.com. I just started CSE - I'm going to be the Network Administrator's Assistant (or other choice description ;-)

PEACE!

GPL, licensing, and intellectual Property

[Yogs]

I believe that there are several important concepts in the piece of software I am writing that legitimately deserve to be called intellectual property. How do you research existing Intellectual Property? I really have no idea, and would currently probably just go down to the local public library, ask and pray. Any advice on this? Also, does GPLing source code showing an implementation of an idea you'd like to have protected as Intellectual Property constitute abandoning claims to it as property?

Let's All Get Rich!

[Anonymous Coward]

Wow! So many exciting companies will be started as a result of this thread. Please let me know when you go public, since the collective market cap will surely be huge. It's so good to be living in 1999!

Related experience

[truthsearch]

I agree and I'd like to add something. Switching technologies can effectively bring your experience back down to zero. I have 8 years of development experience, all on Windows. I'm looking for a job doing non-Windows development, but they all want related experience, so I'm basically starting from nothing again. So I spend my free time doing Linux development so I can claim some form of experience. Otherwise I'll be stuck on Windows forever.

Moral of the story: In markets like today it's important to pick technologies you want to stick with or which apply to multiple areas. C++ and Java can be used on multiple platforms, for example, but only going Win32 development may lock you in.

One more vital point

[da_weaz]

It's all well and good to talk about funding, incorporation, unemployment and starting a software firm but you're missing one VERY vital point in addition to all of this....

You have to find customers who are willing to pay you for your product! Finding customers, even in niche markets, is pretty easy. Getting your foot in the door and getting them to lay down money for a product they know nothing about from a "company" they know nothing about is a whole different beast. I can cite several examples where a customer chose an inferior product not because they didn't know enough about the superior product but because they knew the name of the inferior products maker or were "good ole buddies" with someone in that org. It's the old saying "It's not what you know but who you know". It's a high risk, usually low to mediocre gain game. There are very few significant success stories.

Re:I always knew in my heart I was not good enough

[soluzar22]

The suggestion you make is broadly similar to the ideas that I've been having about my future career lately, strangely enough. Mind you, I have 2 years left of my degree - I only just started this year - and I'm not going do anything until then.

Need good ideas

[dspyder]

Fully willing to take the time and energy, but I'm coming up short on good ideas. I really want to get into the wireless industry, but all of the things (software and hardware) I've ended up needing are already in some stage of development.

Always keeping an eye out... --D

Re:IT's not that easy

[symbolic]

I've done it, I'm considering another go at it. One of the biggest problems is dealing with company politics and budget cycles. Depending on your niche, and how you intend to sell your software, there can be a rather significant lead time between the initial contact and the day they hand you a signed check.

There are other potential problems- for example, dealing with business partners you count on, but who never seem to fulfill their commitment.

Then you've got the issues dealing with any kind of changeover that might be necessary, and convincing prospective customers that it will be worth the time and effort. Sometimes, the software they're using isn't all that good, but it's good enough, given the alternatives and their associated costs (real or perceived).

Stay positive

[kalr]

Hey, I was working in a call center and luckily sat beside the marketing director of the multi million quid company I was doing telesales for. I realise not many people get an opportunity like the one I had, but you have to make the most of what you've got. So I wrote a huge proposal for a new software system, complete with functional demo etc which would replace the ancient terminals into *cough* SCO *cough* Servers and handed everything (after applying copyright) to this marketing director guy. Of course I never got a dime, I knew I wouldn't because no huge company is willing to give some self taught twenty year old geek a wad of cash for developing all this stuff when they can only sue him for $5 if everything goes messy. The point is, he handed the proposal to Ford, a large insurance company and IBM - all whom I met at their request. The result? after two weeks of work on a proposal that wouldn't bring me a singe penny directly, I now have contacts and big people interested in the stuff I do, including investors. Things are looking up now.

Re:Unemployment = 1/2 income for 26 weeks. Not a l

[rifter]

...and it usually tops out between $350 and $500/week depending on various factors. The formula is designed so UI benefits are roughly half of your qualifying income (i.e., have of what you were making), but the ceilings are such that even someone like me who was making $32/hour as a consultant only received $350/week before taxes.

That doesn't come CLOSE to paying my bills.

Not only that, but after that initial 26 weeks, there *is* no further unemployment income (thanks to our Congress who decided to drop the Federal Extension that existed for the past few ears), so even someone who was willing to spend that initial period of time trying to create a startup instead of actively looking for work is going to find the bottom falling out of his income very quickly.

It's pretty damned hard to live on an income of zero! And it's a lot harder to start a business in those conditions...

I understand where you are coming from, but I think you are seriously missing the point, as are many of the other complainers on this board. Look, the situation is:

1) You do not have a job

2) You are receiving unemployment, which is admittedly a pittance, but it is all the money you are getting now.

3) You are having as much trouble finding work from corporate employers as you are paying your bills on said pittance.

IMHO, your options are:

1) Keep looking for work and pray

2) Create a job for yourself as suggested

3) Whine and cry on slashdot

These are not mutually exclusive, however. I think if you are successful at 1 or 2 then the one will make the other more difficult. However, there is another option here. If you find a non-IT job, particularly one which is at night, or an IT job that does not compete with your consulting and is also at night, you will alleviate your income problem and still be able to work on your new source of income.

You have to understand first of all that we are usually our own worst enemies, and defeat ourselves. It soudns like you are suffering from a defeatist attitude which will never get you anywhere. Remember that Jobs and Wozniac had almost no cash when they started and sold Jobs' microbus and Wozniac's HP calculator to start Apple. And the major problem that almost scuttled it was that HP had gotten Woz to sign away his IP to them in one of the very common nowadays IP agreements for his internship with them.

So realize that you are in a bind and that only you can get out of it. Be brave, strike forth, and don't let anyone steal your IP. :)

Protestant Work Ethic.......bleh

[lysium]

Lawful, gainful employment? What does that even mean anymore?

If America was a nice, cooperative socialist democracy, where everyone has a place and the Individual takes second place to the Whole, then that sentiment would be valid. But in a country where the standard introduction is "So what do you do?", things are different.

Take a job as a pizza man, and see what kind of people you associate with, professionally and otherwise, after a few years on the job. Then, maybe, you'll understand how socially degenerate you really are.

One other question, while I am thinking about it. Would refusing to work in a coal mine or PCB plant be "shameful" too?

==================

Re:Protestant Work Ethic.......bleh

[grmoc]

I've worked in a PCB plant.

There isn't anything "shameful" about it, until you realize that all the women are balding, you've lost your sense of smell, and all you're shirts fall apart in the wash because of all the HCl mist condensing on the ceiling and dropping onto you.

All for $12 an hour!

re: A real startup...

[telecaster]

Let me give ya'll my take, since I'm living it.

I own a small software company. We are two guys in an office and we are profitable. We can pay our salaries (not much, but enough to live on) and we are gaining customers monthly. We, as of today, are doing pretty well.

It wasn't like this from the start.

We had some false starts trying to find the right mix of product and market. It was hard trying to focus on what is "right". But once we figured it out, it got a lot clearer what our goal was...

Thats why I think its also good to have an excellent business knowledge of the market and the climate in which your building and selling your products.

I think its easy to say "why not start your own". The issue is this: You could build the best widget in the world, but can you sell that widget? Can you market it, and can you continue to be profitable by supporting that widget?

We struggle every day. We bring enough money in monthly to pay the bills and whats left we keep for salary and benefits -- its truely a startup -- I figured last week, that I have about $300,000 of my own personal sweat equity into this venture because I went 2 years without cashing a paycheck.

My partner has the same amount.

So it does NOT come cheap.

We have an excellent product and our customers love us. However, it would not have been this way had one of us (me) been the one who could cold call and sell the damn thing. Everyone knows that an engineer is usually the last person to be selling the product. Fortunately, I'm a good engineer and i'm also very good at sales and marketing. My partner, he's also a very good engineer, but he's NOT a sales or marketing type. I often wonder had I not worked as a sales engineer for 5 years at large company, would I have been "just an engineer".

I also knew how to get to the customer and how to make them want the product. We have competitors now, and its becoming even more of a stuggle as we battle the cash flow vs. investing back into new development -- which we love to do (R&D is fun, isn't it??).

We want to hire more people, but I'm reluctant to do so unless I feel that we have a model that can pay everyone and sustain growth at the same time.

What have I learned?

I've learned that its not easy. Its the hardest thing I've done in my life. But its also very rewarding and to know that you have products that people use which are "real" and are "useful" makes me feel that we've accomplished something.

A fascinating idea

[Fareq]

dammit.

That's my idea, you idea thief!

Oh well, I guess there's room for 2 geek-run software firms out there...

as for the nay-sayers? Let 'em nay-say. More business for me.

Re:Unemployment = 1/2 income for 26 weeks. Not a l

[ahdeoz]

Thank you congress! Because when I become unemployed, that extra six months or more of pay that would have gone to a leech like you can now be invested in someone like me who wants to work. I'd rather get 6 months pay in six months than spend a year getting the same amount on the dole.

die fucker!

[Anonymous Coward]

die!!

pwned

[Anonymous Coward]

grandparent poster is a doof.

Mod this up

[Anonymous Coward]

It's the troof, niggas

Re: Starting a niche software company need advice

[kyle2010]

First congradulations on your success with your PDA software. I am 100% with you a few dozen orders at $99.00 dollars and you bet that you can make a decent living. Carving out an area in the market is key. That's why I need your advice. You have done it. I want to create a company similar to the freelance websites with one key difference. Instead of coders being turned into a comodity. I see a market place where coders like yourself are able to stake a claim, and make good for themselves. What I need help with is the task of creating categories that make sense. For example I see the top level being something like Software/Applications/PDA, but then the problem is the 4th level. I figure that there needs to be 4 or more levels to break things downs so they make sense. What I want to avoid is having 1000 PDA gurus and no way for the buyer to no the difference.

Re:Find a niche, create a demo, sell it

[kyle2010]

I agree your capital can be your skills and not your cash. I am in the process of creating a site that is focused on helping people to carve out a niche for themselves, and I need your advice.

The site will be allow for users to seach for professionals who specialize in a particular area.

Unlike most of the other site out there that only have 2 or so categories, I want to have 4 maybe more.

Let say you are looking for an application developer.

Instead of Software & Technology/Application Development.

I think it should be

Software & Technology/Appplcation Development/PDA

filter by Industry
sort by

This is driving me crazy. What is the best way to break it down. Any ideas would be appreciated.

Your company sucks.

[Anonymous Coward]

LOSER Hosting.

private come ons

[Doc Ruby]

You can just PayPal him the trick money, MMGT, and spare the rest of us your lonely romance.