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View Full Version : The Rapture and Folly of Software Startups



Halebop
26-07-2004, 07:36 PM
Due to an overwhelming public demand... well 2 requests... I've been prompted to muse on a software startup. I shall leave the company un-named because we are not really equipped to deal with customers or scrutiny as yet (although we do have a princely 3 customers piloting our system).

I don't want to give too much away until we are better prepared so I'll have to be a bit vague. We have a product (well, 50% or so of a product) that can analyse almost any data and tell you if you've done a good or bad job. Its visual, distributable, simple, low maintenance. It's designed to be scalable and incremental. It (this is part of the "next" 50% that is still being developed) conforms to basic concepts of Business Excellence/Baldridge which is more familiar to genuinely innovative organisations but in practice usually this means large organisations because formal business excellence systems need substantial resources and specialisation.

At the moment we are tailoring it to some specific and unique people (I dislike the "HR" name) related needs. I can't be more detailed than that or you might guess who our customers are.

Now I'm sure a few of you have started up businesses but here are my day to day challenges and rewards:

Everything costs more than you plan because/and it takes longer than you plan. But such an amazing number of things are given freely and unbidden that I have tears in my eyes just writing about it. There are many good people in this world. I feel very lucky.

You make your luck. I'm also reminded of a quote: "The future belongs to those who believe in the beauty of their dreams"

It's impossible to write a full, accurate, functional specification for a piece of software. The client changes his mind all the time (that's mostly my fault). Your programmers are forced to make lots of assumptions that often need "un-assumptioning". Sometimes however, the angels of all innovation shine out of assumptions. Glory be blind luck and the spending of lots of money.

New Zealand is a fabulous place to do business. There are very few restrictions on anything we do. There is very little red tape. I am very grateful to be a kiwi.

New Zealand is a small place to do business. Our business will need foreign markets to build into something meaningful.

We are not interested in any of the innovation funds up for grabs. We are masters of our own destiny. If I was to ask for help from the government it would be to ensure better research and statistics on local and foreign markets. We could probably get tens or hundreds of thousands in innovation money when what we really want and need is foreign networks and timely access to intelligible market data. We're not ready to go anywhere overseas except maybe Australia but we are children wandering a huge and dangerous wilderness.

We value the opinions of experts and consultants. The decision needs to be yours but other influences can be a bargain, even at hundreds of dollars an hour. This includes Lawyers! They can be great value.

There is an amazing amount of free stuff on the web. I use a free graphics package called The Gimp and I'm our (un)official in-house graphic designer and can make a reasonably proficient job at creating web-graphics and icons. There are free internet browsers (I use firebird which is more secure than IE), free email applications (Thunderbird), free word processor/spreadsheet etc (Open Office), even free antivirus (AVG - though this might not be free forever). Hopefully nobody will produce a free version of what we are doing just yet!

The downside of software businesses:

When you are trying to cut back on work a new venture can be a sometimes troublesome demand on your time. My barks worse than my bite though.

The Software Industry is fickle, usually low margin and most companies fail. I rate our chances of success at maybe 10 or 20%. I guess it's just one of those "I climbed it 'cos it was there things".

Hopefully this says enough without saying anything at all! [:p]

Capitalist
26-07-2004, 08:10 PM
The very best wishes for your new venture Halebop-- I salute you.

"It is time for us to stand and cheer for the doer, the achiever, the one who recognizes the challenge and does something about it." Vince Lombardi

"No pessimist ever discovered the secret of the stars, or sailed to an uncharted land, or opened a new doorway for the human spirit." Helen Keller

Risk
26-07-2004, 08:29 PM
Halebop, I guess that says it all then....

youre working long hours ...and/or are having second thoughts about something...and/or had way too much to drink!

Having been a computer consultant in the past, the best advice I can give you (for free I might add!) is to do the hard work up front.

spend the time doing feasability studies, market research, getting the requirements out in the open and understood by everyone involved, etc.
pay attention to detail before the detail exists.

most startup businesses fail in the first few years, and IMHO most software startups do even worse. a 10% success rate estimate is being optimistic.

having said that, if you truly believe in what youre doing, and dont try and rush things and deliver an unfinished product, then you might just make it.

and you might have a year or two of success before everyone is doing what youre doing, and your business gets lost in the crowd.

for example, you say you use the free internet browser "Firebird". I dont know if youre aware, but that has been replaced by "Firefox".
Thats the reality of the software industry.

Gryffyn
26-07-2004, 08:45 PM
Thanx HB for doing this thread on request.

Also an ex IT consultant hence the extra-interest.

Good luck...

Halebop
26-07-2004, 08:52 PM
Thanks for the advice and kind words.

And yes, our chances of success are perhaps closer to nil but it's hard [gulp] to actually say that "out loud". Rest assured when/if we go for venture capital it won't get mentioned. [}:)]. Perhaps DPC can help us go public? Nah... I'll wait 'til there are FIVE customers first.

Halebop
26-07-2004, 08:56 PM
Doh! Actually I use Firefox. Old habits die hard. Proves the value of brand names and the tiredness of my mind.

Mr_Market
26-07-2004, 09:22 PM
As a programmer, I have worked for a couple of start-ups over the last few years, one in NZ and the other in UK. A few observations:

- Your software must fill a real need within the market. My belief is that many failed software start-ups produced either pseudo-solutions that didn't provide any real benefit to the customer, or that they were too far ahead of their time and the market wasn't ready for them.

- Don't hire the cheapest programmers, hire the best:)

- Allow your programmers the freedom to be creative whilst keeping within the scope of the project. You want to arrive at an inovative solution within well defined bounds.

- Train technical people to be sales-people, not sales-people to be technical people.

Well, I'm sure I could add more, but I'll leave it at that for now.

Best of luck.

stormrose
26-07-2004, 10:19 PM
Best of luck with the venture. Don't let the high failure rate scare you - most software startups don't take care of the business aspects too well.

[Don't hire the cheapest programmers, hire the best:)]
I agree with this. An excellent programmer out performs a merely competent one by a factor of 10+!

Gryffyn
26-07-2004, 11:14 PM
For some light relief and a little inspiration read Microserfs by Douglas Coupland. Truly excellent.

Don't worry about starting small - I worked for a start-up in the UK during dotcom boom. We had 15million quid raised on the AIM market and still it ended up a disaster.

Make sure everyone believes in the dream and they'll all work like crazy to make it happen because they are having fun.

skinny
26-07-2004, 11:21 PM
Best of luck halebop :)

Halebop
26-07-2004, 11:47 PM
Thanks again all.

I should add however that I am but a minority shareholder and interim grande fromage only. My pedantic project skills are useful at this stage but once we need to get serious about selling and relationships it's doubtful I'm the right person for the job. You see, apparently I can be a bit abrasive! [:0] I know, it's surprising, but go figure? ...Executive Chairman sounds good though... I wonder if I get my own jet [camera pans, scene fades to corporate - robber - baron - luxury - fantasy] No Bill, you and everyone else in Seatle are fired! ...er except that one in the tight sweater. Fancy some more Bolly?

boris
27-07-2004, 07:22 AM
Halebop I wish you well and offer the following observation
The helpdesk people are the best/worst advertising your software can get. The ability to understand the software is important but less important than membership of the human race. These people must be able to speak clearly and concisely in the language most of us use. They should also remember that the people they are talking to are the ones who pay there salaries through support fees etc.
As the old saying goes a happy punter tells a few but a grumpy punter tells everybody.
Cheers Boris