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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.
...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
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