Developing a software idea into a business

Question

I am interested in finding out the experiences of those who at one time have come up with a neat software idea, maybe as a result of a hobby, dissertation, college project, etc and have developed it into their own business. Or maybe those that could not endure subordination, wanted to create something for themselves and have done so.

I have one or two ideas of my own I would like to pursue and some of the things I am interested in finding out are:

• The methods used to find out if people actually want your product?

• Price discovery - finding out what people were willing to pay for it.

• The pitfalls...

• Did you put about a prototype based on what you thought customers would want and refine it according to their reactions? Or the other way: research it all first before even writing a line of code...

Many thanks

Andy

Answer 1

What you'll hear from most is "Fail Fast" - you want to spend as little time as possible before finding out if your idea is viable.

Essentially, you want to get your product out into the marketplace as quickly as possible. Try to write a beta, or feature-lite version that has only the core essentials. Get it in front of users ASAP, so they can tell you where you're wrong, because you almost certainly don't understand it as well as you think you do. If they like the core, start refining. If they don't scrap it and move on.

As to price, I've heard that most startups under-price their products.

If you're really interested in striking out on your own, a better place to ask these questions is http://news.ycombinator.com

Answer 2

I really like the book called 'Getting Real' by the company 37 Signals. The book is about creating a profitable and successful web application. However, the advice in this book isn't only applicable to web applications, as it contains a lot of excellent advice for software developers who just want to market an application.

I highly recommend you check it out, as it might give you some more advice. The book is free to read online.

http://gettingreal.37signals.com/toc.php

-JP

Answer 3

Check out the Business of Software discussion board.

Answer 4

The only way to know for sure if a product will succeed is to launch it. But you can reduce your risk of failure by taking the following steps (much condensed, obviously).

-Decide who your ideal customer is. Approach some of these people and find out what your product would be worth to them. Talk is cheap - try to get some committment from them, e.g. a promise to buy when it is released.

-Google for competitors. Lots of competitors=bad (probably too much competition). No competitors=bad (probably no market). A few successful competitors with mediocre products=good.

-Think carefully about marketing your product before you start programming.

-Launch ASAP with a minimal feature set.

-Iterate like crazy based on customer feedback.

See also related question:

http://stackoverflow.com/questions/86998/whats-the-best-way-for-a-developer-to-start-hisher-own-business

Answer 5

Turning an interest into a business: it is easy to find lots of examples of success and failure. How to apply these lessons to your own situation is not so clear, but your starting point is excellent: something that interests you.

You can look at examples of success stories, and you can try to follow the same steps towards success, but the real world can not be controlled like code. Timing and luck are huge. You may be rewarded beyond your wildest dreams for a trivial accomplishment, or you may be totally ignored for the best thing since sliced bread.

Learn all you can from others, but make sure you are on your own path, doing work you enjoy, building something you believe in, preferably with a small team on the same path. Learning from your own successes and failures is profound. If you maintain interest, that in itself is success. Best of luck!

Answer 6

All of the suggestions made so far are fantastic. I would also highly recommend the book Founders At Work by Jessica Livingstone who is a founding partner at Y Combinator which is a start-up funding company mentioned in one of the replies you've got already. Heck, Joel Spolsky wrote the foreword for that book.

A great resource to also check out (and while I'm on the topic of shamelessly plugging Y Combinator) is to have a look at Paul Graham's site, also a founder. His essays on software start-ups and the numerous adventures to be had by starting one are fantastic.

Last but not least, I'll plug another favourite, Seth Godin. Can't go wrong reading his blog.

Last but not least, my own personal bit of advice. Just do it. It's largely all about motivation. The rich and successful are motivated. They got up and did something. They likely failed the first time and the time after that, but they never gave up. That motivation was always there. Yes you need to have a good idea, yes you need to make it technically sound, yes you need a good lawyer... blah blah blah. First and foremost, start doing. The rest of those details you'll pick up along the way.

Best of luck!

Answer 7

Excellent question! Startups usually need more than one person because usually a marketing guy can't write code, and vice versa. Finding out if the idea is something people want is what the marketing guy can do, and writing the code is what you can do. My experience, from doing two startups is that writing the code will teach you new things (or at least patching together bits of code from pre-existing sources, I found that if you write too much code you're probably doing something wrong because much of it should have been written already).

Somebody else mentioned some blogs like Joel Spolsky and Paul Graham, I'll second that. Both of those have been a huge influence on me and kept me going when things got tough. One thing that Paul keeps saying over and over again is that you gotta get a beta out there as soon as possible, and then improve it rapidly. So code up a beta, and then you and the marketing guy/gal have something to show people to get better feedback to drive you towards making the right product.

Hope that helps

Answer 8

One of the first calculations you should research is the size of your market and how much of it you can grab. If your software will be for left-handed goldfish owners who drive red volkswagens then your customer base simply won't be big enough to support your efforts. Cash flow is the blood that keeps a business alive. How many copies do you have to sell each day at what price to pay your bills and make a sufficient profit? Those numbers can be sobering.

There are many similar common startup pitfalls to watch out for, and most of them aren't specific to software. Review the vast literature on "why new businesses fail" to make sure you avoid those mistakes.