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Unemployed? Why Not Start a Software Company?
"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."
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.
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.
Visit Jonesblog and say hello.
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?
More than 90% of IT workers i know are employed. 100% of the good IT workers i know are employed.
...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).
Javascript + Nintendo DSi = DSiCade
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!"
ZFS: because love is never having to say fsck
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.
Random Musings
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.
I don't need no instructions to know how to rock!!!!
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.
There is no 'i' in team, but there is in fiasco...
... 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.
The surprise isn't how often we make bad choices; the surprise is how seldom they defeat us.
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...
---- It puts the lotion on its skin or else it gets the hose again. It does this whenever it's told.
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.
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 $10000) makes you try a lot harder.
"Injustice anywhere is a threat to justice everywhere." - Martin Luther King, Jr.
Thats an insulting attitude. It's like saying "Hey, you're an assembly line worker, why don't you just go out and start building something". The fact is that there is more to making a successful software company than writing code. In fact, the code is the easiest part of the process. To be successful in business you have to identify a need and convince someone to give you money to address the need. Software Engineers (typically) are not well suited to salesmanship. IMHO you need at least 3 different personality types to start a software company. You need someone with creative energy and vision who can ariculate that vision in a way that motivates both clients and employees. You need a financially minded individual who can see the vision and convert it into dollars and cents - making sure that its a viable venture. and you need an imaginative technical lead who can turn the vision into a product that meets the needs of the client and keeps to the bottom line. It's not just a matter of writing code and raking in the bucks.
So at 10$ a day you would only have to do this 100 days a month to cover basic cost of living out in the real world.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
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
man is machine
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)
HPC for Primates. Read Cluster Monkey
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.
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.