Starting a Software Business in Today's Economy? 382
Ryfar asks: "I'm a programmer with 3 years of experience in C, C++, and Java. With the current low economic trends in the software sector, the small software company I've been working for since I graduated is going out of business. Since it's so hard to get a job at another software company with so little experience, I'm considering the option of striking out on my own with a friend with similar development experience and creating a small software consulting company. Naturally, until we were profitable to the point that we could hire other people to work with us we would be both the programmers and the marketers/salesmen. The question is, Where should we start looking for business? How do we capture the hearts and confidence of potential customers when we don't have PhD's from MIT? Could those here with applicable experience on this subject share with the rest of us?"
Start a business in today's economy? (Score:2, Insightful)
Re:Start a business in today's economy? (Score:3, Informative)
However, I think Ryfar needs to concentrate on what he is going to sell. Building a computer consulting business takes approximately 2 letters and about 1 day of work (here in the UK).
What he really needs to think about is the products he will sell. What will they do? Who for? For how much? How long will they take to develop? How will he survive for this period? Where will he get the capital from? What if it all bombs? What if it is exceptionally successful and your price point cannot sustain the labor you need to employ?
The big idea is the key. You build a business around a big idea, not build a big idea around a business.
Re:Start a business in today's economy? (Score:2, Funny)
Re:Start a business in today's economy? (Score:2, Funny)
Re:Start a business in today's economy? (Score:2, Insightful)
Registering a computer business may take a couple of letters, but actually building (i.e., establishing a clientele, making a profit) takes a lot more than that!
Re:Start a business in today's economy? (Score:2, Interesting)
Because smaller companies are able to go after the business that larger ones won't even pay attention to. And smaller companies don't have the same expenses - they pay for what they actually need, not massive overhead for capabilities they *might* eventually have a need for.
Personally, I run a small business doing - gasp! - web development. I've got 3 developers and 2 designers working non-stop on projects that larger companies wouldn't touch - $5-10k in revenue on average. And, EVERYONE sells - we all work our asses off to bring in business, and thus we have it. Anyway, we're able to get ~5-7 of those projects done per month and the pipe-line is FULL - lots of middlin' businesses out there couldn't get the time of day from larger firms (and, much to my happy surprise, we actually have more revenue than many of those same firms
Simply put, I'm making a hell of a lot more money, having more fun, and am in much more control of my life than when I was grinding away for someone else.
THAT'S how a small business can do it.
People with money, they tend to pay more (Score:2, Insightful)
Re:People with money, they tend to pay more (Score:4, Interesting)
Something generic like "dentist" tends to be saturated with software solutions already. There seems to be more opportunity in highly niche markets. I personally would look for markets where there are only one per small town and a few per large town.
Bigger companies tend to target bigger markets and filled them up. It is not worth it for them to go after a few side fish. That is where the little guy might have a better shot. The hard part is finding a way to eat, drink, and sleep their business in order to understand it.
Re:People with money, they tend to pay more (Score:2)
My dentist still uses a Windows 3.x machine to run his scheduling software (which keeps track of patients' appointments, etc.).
Re:People with money, they tend to pay more (Score:3, Interesting)
1. Doctors drive Jaguars. I drive a 93 Civic. I know hundreds of doctors and none of them drive Jags. The most common car is probably a Jeep. The financing in medicine has gotten tighter along with the rest of the economy, and medicine is no where as lucrative as its made out to be on TV.
2. Doctors will pay any "big bucks" for bad software. Yes and No. Yes there is a lot of bad software, and Medicine is way behind other industries in the use of computers for information management. Yes, much of medical software is rediculously priced. But if your going to sell something to me you've got to prove that your product will be better. We've learned from our mistakes, and unfortunately you'll need more than a few programming skills to be sucessful (evidence, the number of failed companies in this field). You need to know about HL7, standard vocabularies (SNOMED, ICD, UMLS, etc) and what makes them good and bad. You need to know about HIPAA and privacy issues with the EMR. You need to know about modelling complexity in medicine. How is your system going to handle it when the pharmacy adds a new medicines, or labratories change coding schemes How is your system going to access old labs and medicines. This is what makes current medical software bad. To do better, get a degree in informatics.
3. A startup with a good product will suceed. Unfortunately, one of the most important characteristics I would look for is a track record that demonstrates that your going to be around in a couple of years to support the software I buy from you, and that you are backward compatable with my existing software. Your best route in consulting is probably going to depend on learning and supporting other existing software.
I hate to be pessimistic, but you've got your work cut out for you.
One we all know and love (Score:4, Informative)
Re:One we all know and love (Score:2)
Excellent post! (Score:2)
(redundant?
Thanks!
Innovate (Score:3, Insightful)
What is software meant to do? What is the purpose? To me the best app would be one that allows a person to perform a job that they are completly inexperienced at. Like it or not, Windows is as popular as it is for that reason, it allows people who know absolutly nothing about PC's to use them. Don't get stuck in the rut of creating software simply for it's own sake.
Research your chosen market, find out what is lacking in all the software currently being used, and create something that will exceed it. Ask non-techies what they want out of software, what are their biggest complaints about the software they use know. My company develops software for a select accounting market, but it is so complex that it takes a week of training or more just to get started using it, and none of the training is technical. To me the best peice of software is the one that thinks the way I do, or at least appears to.
If you create a really good app, and are willing to customize it (for a fee of course), you will have more business than you can handle. Don't make the mistake of giving it away either, shareware has been the death of many good ideas, simply because the creator could not afford to develop it any further. Develop the app, take it to the customer. If it is really good, it will sell itself.
Get a contracting job first (Score:4, Insightful)
Most companies who are looking for out-sourced programming needs are looking for:
1. Small, one-shot deals (a database, a parser, etc)
2. Maintenance on old code.
3. Supplemental help on a large, in house project without any strings attached.
You will not have time to be an effective programmer and self salesman in a slow economy.
Re:Get a contracting job first (Score:2)
There is time to be an effective salesman and an effective programmar, even in a slow economy...(that is, if he's willing to put in the long hours that any entrepreneur should be putting in -- fast or slow economy).
I think that getting bogged down with a consulting organization may net some short-term cash (maybe), but it would be too tempting to keep doing it and he'll be missing valuable opportunities to meet his own clients and build his own business, which is the goal in the first place.
Not an awful suggestion, but I'd stay away from that path.
--noah
Re:Get a contracting job first (Score:2)
More to the point, the salesmanship game is about contacts, contacts, contacts. Get info on local and regional trade shows, Chamber of Commerce expos, and join professional networking groups. Most moderately sized cities will have sales networking groups who meet regularly to discuss techniques and pass on leads (for example, a hardware sales rep may pass on a lead to another group member for services that he can't provide). Whatever you do, network, network, network. It's all a numbers game. The account rep that I work with at my consulting company has about five steady customers that keep him in business out of a group of several hundred local contacts.
Most people who start successful consulting businesses have been working in their field for a number of years and already have a significant number of contacts with various potential customers. Most often they end up starting their own business when an employer's customer asks them to do some work on the side. It's not so often that somebody wakes up one morning and decides to start a consulting business from scratch. If you currently do not have a client need you can expect a long dry spell while you try to drum some up. Good luck.
Re:Get a contracting job first (Score:2)
Having been employed for over 20 years ending as cfo/cio, I walked out to go independent, met up with some guys with an interesting consulting plan and a need for content delivery software - and haven't looked back. The experience gained in the last two years has been priceless, especially in how you survive on your own without corporate backup.
But this is my word of caution: in this environment, programming skills aren't enough. The key skills are the ability to analyse, prototype creative solutions, and to see clearly the end goal and plot a path to it. These result in deliverables. As another poster says, forget about programming labels and concentrate on the bigger picture.
Re:Get a contracting job first (Score:2)
There's actually a very easy way to ask. One simple question:
"What is your markup?"
If they are a reputable company, they will tell you. If they tell you that "client confidentiality" prevents them from revealing it, or any other excuse, they are not a reputable company.
They are marketing your skills and taking a cut of your pay to do so. Companies that misrepresent those they market, often have a huge markup-- which is the worst possible situation, the client expects more from you than you are capable of and is paying a huge amount of money to get it, but you're not getting the huge amount of money.
This, so far, has been %100 effective for me. IT does screen out most contracting agencies (Hal Kinion, etc.) but then, most of them are not reputable (including Hal Kinion).
I don't think how long they have been in business, or glowing reviews from people who have gotten jobs from them is a good way to tell when they are reputable. I was really excited about 7 years ago when one of these poor agencies got me a job at $55 an hour. Little did I know they sold the client at $200 an hour-- and the client was not happy. Needless to say it was a poor experience!
Expect that they have to pay %8 for social security and another 2-4 percent for unemployment insurance. So, a markup of %20-%40 is probably ok, with %40 being a bit on the high end. If they are reputable, they will break down their costs in the markup (for instance, if they pay health insurance for you, thats part of it, and if they provide vacation pay, etc.) Don't be stingy.
But if they won't talk about it, then they are not worth your time. After all, they are being deceptive-- this is not confidential information, YOU Are the product!
If its confidential to anyone its confidential to you.
you don't need a PH. d. to impress folks. (Score:2, Redundant)
learn to sell real well (Score:4, Interesting)
Open source is your best bet if your are starting out. Companies will want you to do a few small projects on the side to validate their own ideas about open source.I learnt that small businesses are aware of the benefit of open source but Microsoft has done a phenomenal job of painting us -- the open source geeks-- as a bunch of untrustworthy slackers. You need to disprove that notion.
So pick a field , research the technology and learn to sell. So dont spend time thinking of cool new product ideas ; dip into the open source pool of products and learn to pitch them to businesses in their language. And contribute back to that knowledge pool.
Re:learn to sell real well (Score:2)
Care to specify?
i have a small software business (Score:5, Informative)
Absolute Agreement (Score:5, Interesting)
Rather than re-typing everything mitzman already wrote, I suppose "ditto" fits the bill.
In my case, it is software and services in the construction industry, which happens to be doing well in Arizona (the construction industry... I've just been at my venture for about 3 months now, fingers cross, and business is starting to pick up). In the general case, finding a need that is not being addressed WELL is probably the key.
It doesn't help to have friends... in my case, family ties have helped get a foot in the door. Anyone out there who needs help with computer ANYTHING is a potential client. To get the ball rolling, don't be afraid to take on something that seems simple to you... those easy ones that you do correctly set the tone and get your reputation rolling in the right direction.
I hesitate to suggest doing some work at deep discount or free rates, but it worked in my case and helped me get some demonstrations of my work out there... so I was paid in marketing value, which will hopefully turn into cash.
Finally, I will repeat something, regarding the outdated DOS stuff.... completely true. You would be amazed, and it is true in so many areas, from my state government (I speak from direct knowledge) to a furniture store that is about to open their second store-- that one couldn't generate a report of their inventory and dump it to a file, only to paper, because they didn't understand much about how it all worked (I didn't want to press them).
A few months ago, I was a bit uncertain about starting something, but I actually have far too diverse a resume (ie I worked in silicon valley and took advantage of the high mobility and salary potentials) to get a job in conservative Arizona, where everyone wants 5-10 years doing the same thing, usually doing something very specific and dated, and sometimes requiring either MCSE certification or a secret clearance.
That's my $0.02, hope that helps, and good luck!
Reward back (Score:5, Insightful)
Note, that word of mouth is the best reward is a two way street. When someone mentions they are looking for X, pull out the buisness cards of all your clients in X, and give them out. And tell your contact the next day you did so (if they are good salemen they will call right away to see if your friend is serious)
Referals are a two way street, if your customers find out that you don't refer people back to them when the opertunity comes up they will drop you (and perhaps activly refer others to your compitition). You can only contact a few people a day, and not all are interested in your business, but if you work for all your customers and suppliers they will work for you a little, and you contacts will go way up.
Eventially you hope to hire salesmen who do this, and love the doing the referal game, but even then you should refer when the oportunity comes up. Your pocketbook will thank you.
PS, always make sure your referals are to good companies. If you know one of your customers does cheap work, don't refer them except when cheap is the only consideration, and then make it clear that cost is the only reason to consider them. In general you should refer people to the best.
Re:i have a small software business (Score:3, Insightful)
I just finished another post in this thread about how to approach a vertical market by writing good software with integrated services. Its definetely the way to go, and if you read my post, you'll probably understand my approach.
On a sidenote, I'm employed by a software company to maintain government/non-profit accounting and management software. Its used by municipal governments and school districts. Its written in DOS, using an extremely old outdated non-relational database, spagetti code, and we charge MAJOR $$ for a complete installation. In addition. our users enjoy $3500 annual license fees for the pleasure. Seriously... this is the perfect illustration of vertical market opportunity!!
Re:i have a small software business (Score:5, Funny)
-Bill
PS: Don't you dare GPL your software, that make Steve mad!
Re:i have a small software business (Score:2)
One nice thing about vertical markets is they actually have a lot in common. The afforementioned company started in Dental software, then branched out into vision care software, then private medical practice software. In all, each new "market" was a change to about 4-5% of the code.
If you're going after these markets, the most important thing is to listen to the customers. And it doesn't hurt to get the chair of the regional professional board as a customer, either ;)
Re:i have a small software business (Score:2)
Why go after eye doctors if you know somebody is already tromping there? There are probably a thousand other niches floating around, and it is best to have an insider as a friend/relative, like he said.
Bars, temples, mom-pop pizza shops, golf shops, horse breaders, foot doctors, chiropractors, fashion desingers, etc. etc. etc. might be a good niche to target.
Find a good friend or relative in that biz and poke around to see what they have and don't have regarding software and needs.
The ability to communicate is your best solution (Score:5, Informative)
But it's more than just communicating facts. The customer must a) be confident that you know what you're talking about. They really don't care about your degree. They care that you know what you're doing. The customer must b) be confident that you know his needs. This is where most people screw up. They talk about what _they_ like - Linux, Apache, open-source, etc. They don't talk about what the _customer_ likes. Customers don't like Linux, but they do like security. Customers don't like open-source, but they do like having control over their technology. Customers don't like technology, they like their problems SOLVED. The better you can communicate both the problem you are solving, why it needs to be solved, and are able to quantify how much is being saved, while still being a likable, lovable guy, the better chance you will have.
You need to understand that they way you market yourself will have a big impact. Don't market yourself as a Linux guy or a C++ programmer. You're not. You're more than that. You are an analyst who can analyze and solve problems and can build solutions.
Be thinking entirely in terms of their business - how they do business, how they purchase, how they manage, how they interact with their customers. These are all important things. If you have the cheapest and fastest customer-billing system in the world, but it can't print the company logo correctly, it doesn't cut it. This is their business, and if you treat it with respect, that will go a long way.
Try coming up with a product you can sell - something simple. You don't have to actually sell it, it will just get you in the door so you can see how they do business and what other solutions you can offer them. For example, maybe try selling a ticket-tracking system (i.e. - Request Tracker), and make a sales pitch, but while your there, take whoever you are speaking with out to lunch, and find out what his _real_ problems are that you can solve. And offer real solutions, not just technology.
Re:The ability to communicate is your best solutio (Score:2, Informative)
Agreed, I did this in the last downturn and that is excellent advice.
Go for the small to medium sized companies. When they ask questions, answer them with out charging for your time. You'll make your money when you do the software. Don't talk over people's heads and match your dress to the business, pin stripe suits for banks and blue jeans and baseball hats for garages. They will trust you more quickly and be less likely to hold back money or information later.
It takes an average of 5 sales calls to make a sale. So spend lots of time visiting and re-visiting local businesses.
Sign up as a software re-seller for some software you like that is related to what you want to be doing. It will help get your foot in the door, and th commissions can be quite high.
Consultants need more experience than employees (Score:2)
You don't think you have enough experience to get a job but you think you have enough experience to be a consultant? I guess you will be targetting companies that have no programmers on staff. How many of these need software written? Or by "consultant" do you really mean "temp"? I think we need more info about you business plan, something doesn't make sense, unless you are not going to develop software.
Your only hope as a consultant may be to not do programming. "Fix" PCs for small companies, set up their servers, etc. Much of such work at small companies is the same as or only slightly beyond what many hobbyists are doing with their own home systems and home LANs.
Re:Consultants need more experience than employees (Score:2, Interesting)
I've done both IT work and programming for various operating systems, and I can tell you that it helps a great deal to do both of these. Mainly, programming for a certain OS can help you troubleshoot problems with that OS because you will likely have a greater understanding of how that OS performs certain tasks at a programming level. Going the other way I would think would also help, though not quite as much. With IT work you usually have to figure out the problem from trial and error, whereas with programming there are API references you can look at to gain the knowledge and then apply that to IT work.
In any case, I do not believe that having a few years of programming experience will necessarily allow you to successfully do IT consulting work. Though if you are very good with OS installation and configuration, you should be able to do well as an IT consultant. In fact, if you have both the skills of a programmer and an IT worker, then I'm pretty sure you will be very successful at IT consulting. For many companies with more than about 5 or so PCs, being able to script tasks is where your talent will show. Creating complex login scripts and computer startup scripts is essential to solving certain problems without having to perform tasks locally on every single computer, and this is where the programming knowledge comes into play. If you can fix a problem that would normally need to be done by logging into every single computer by simply modifying a single script in a short amount of time, I couldn't see how a client could not be impressed. Most computer consultants would need to log into each computer to solve the problem, but if you can script it, then you're way ahead.
Re:Consultants need more experience than employees (Score:2)
I know that, what you seem to misunderstand is that the support business takes comparatively little time to learn. The secret is that you only need to know a little more than the people you are servicing. A couple months of tinkering at home and you will appear to be a guru to the local real estate agents and other potential clients. As your capabilities scale up so can your clients. I've watched friends do this.
In any case, I do not believe that having a few years of programming experience will necessarily allow you to successfully do IT consulting work
I didn't mean to imply any such thing. I am merely pointing out how a technically oriented person could start a consulting business. Also you seem to be thinking of a completely different level of service than I am. This is a large world out there below organizations that have IT departments, they need assistance, and they think a guy who can reinstall windows, drivers, install a CD-R and make backups for them is a guru worth $50-75 an hour for a service call, installation, preventative maintenance, etc. Again, I've seen it happen more than once.
Welcome to the real world of computing.
ha ha ha ha -- um, no. (Score:5, Insightful)
Not to just be a troll, but this sentence alone shows that you haven't really thought this through.
Think about what are you going to be doing in this business. Keywords do not make a business, friend. I don't hire a "C, C++, and Java" programmer; I hire someone who can create an order invoice system (for instance).
"How do we capture the hearts and confidence of potential customers when we don't have PhD's from MIT?"
Another question that shows you haven't researched your market. Potential customers, again, aren't looking for resume keywords. They're looking for someone who can fulfill a specific need. Better yet, they are looking for someone who can explain things to them without resorting to words like "TCP/IP", "HTTP", "DNS", and "C/C++/Java".
To put it bluntly, if you
a) try to sell resume keywords like "C++" or "B.S. in Comp.Sci" as a business;
b) can't explain things in a simple, non-technical manner;
c) pressure your clients to do things your way ("Oh my God! You're using Internet Explorer! UGH! You want me to code what?");
your business will FAIL.
And most of all, don't be flaky! Make your clients feel like they are your #1 priority, even if they aren't. As a consultant, that is the top complaint I have heard regarding other consultants.
I would write more, but I'm onsite at a client's office right now, doing freelance PHP consulting -- that's what I do for a living. It's not easy to be freelance full-time, and you're definitely going to need to put more thought into it than you have already. If what I have said scares you, and you don't want to spend 50% of your time explaining what an "Internet Explorer" is, do the world a favor and don't go into consulting. If, on the other hand, you enjoy dealing with people, dropping off business cards, and generally showing off your work at every opportunity, go for it. You'll most likely find it to be a much more rewarding career in the end.
Re:ha ha ha ha -- um, no. (Score:2)
Re:ha ha ha ha -- um, no. (Score:2, Insightful)
Re:ha ha ha ha -- um, no. (Score:2)
Obviously you've never encountered a Microsoft consultant. Not only do they do all three things listed above, it seems to be the primary focus of their training. And it's gotten them to be the most succesful business in the history of business.
Re:ha ha ha ha -- um, no. (Score:2)
That is because they have a big name and can take advantage of their position to sell sh*t by talking sh*t. "If the richest man in the country talks about Visual Basic, then it must be good."
A startup does not have that luxury. Don't act like MS until you are MS's size and notoriety.
Look before you leap (Score:2, Insightful)
In short, you need to understand that starting a consulting business means you're taking on WAY more than just IT work. There's a lot of really interesting growing for you to do here, but be aware that it's going to hurt!
If I were you, I'd look into whether there are any consulting companies who would work with you to handle some marketing so that you can concentrate on some of the other aspects of growing this business. You'll still have way too much work to do, such as project management, billing, bill collection, account management, and so on.
Final piece of advice: Consider doing this if you're excited about trying to build a business, but DO NOT do this if you're just excited by the idea of doing a bunch of development.
Oh, and good luck!
Two Years Too Late (Score:2)
3. Profit!!!
Marketing and programming at the same time (Score:5, Informative)
Number one for going out on you own: have someone else to live off of for at least a year, 18 months if possible. Give it time to blossom because it will take time unless your current contact list is amazing already.
Best thing we did for marketing was to join the local chamber of commerce and volunteer on various committees, some on technology so the fit is nice. Go to the regular events and mingle. If you can't manage to hold up a conversation with a business person, leave time to learn how in your business plan.
Get started by volunteering your services to a non-profit (the WORST to work for, by the way, making it a great learning experience as the organizational problems will be at their max) or to a friend's company or a friend of a friend's company. Whatever. Get out and work! even if it is for free. What will happen is this, after the first three or four jobs where you make people happy, people will come looking for you.
Exude confidence, but not cockiness when you talk to people. Offering free advice that people need to hear is the best way to get them hooked on hiring you. Seem busy and act busy. It is just like with dating, potential dates crawl out of the woodwork when you are already taken because of the way you act, this is true in business as well.
Another thing: people are hiring you more on who you seem to be (how you will be to work with) than you think. It is about 50/50 with what you know (this surprised me).
Be prepared to say "no" to work that is out of your focus. Once people realize you are competent they will ask you to do everything, including basic sys admin stuff. This is where we, personally, draw the line. We don't do Windoze which makes this easier to get out of. It may seem strange to imagine turning down work but you will be constantly learning and you need to specialize to really be effective and you can't specialize in everything.
Buy basic marketing books like "gorilla marketing for the home-based business" and "selling your services for those who hate to sell" they helped me get going.
And good luck!
Re:Marketing and programming at the same time (Score:4, Funny)
Okay, this guy is submitting a question to freaking Ask Slashdot. Let's try to use analogies that these people can understand.
Slashdot weenie? Already taken? Jeez!
Re:Marketing and programming at the same time (Score:2)
What I did (Score:2, Insightful)
All the book keepings and such take at first a lot of your time so be prepared for that, but that becomes a lot easier in time.
Finding new customers is a slow process. Tell everybody you know (and whos willing to listen) about your company. Unfortunately bugging people is necessary if you want to find new clients. If your previous employer is going out of business don't be shy about taking some of your customers and contacts into your own business. They are not your previous employers property so you are free to pick and choose. Ask them if they could be a reference to your venture
You are a bit unexperienced when it comes to business if you have only done programming. You need to woe your potential clients, but they hardly speak your JAVA language so reducing youself to slippery sales slogans is tempting, but try to speak to them in their terms and be a patient listener. They will tell you what is difficult for them to comprehend and omit what obvious to them quite often.
Have a plan B if things don't work out.
Best of luck...
Re:What I did (Score:3, Insightful)
"The difference between working for yourself(consulting) and working for a company (corporation) is the trade between the illusion of freedom and the illusion of security."
Another profundity I feel like sharing tonight is
"The customer is not always right but the customer is always the customer"
If you grok those two items, you will be in a good position to make a decision about what is best for you.
Please post again as you move forward!
My advice (Score:3, Insightful)
Chances are, if you are asking for tips you aren't going to make it as a consultant. Most people who do well as a consultant edge into it doing small jobs for friends, who tell friends, and they build up a decent little base of clients and eventually decide to drop the day job for the job that is paying better.
I can't think of anyone who just "decided" to be a consultant and made a go of it without keeping their day job.
Of course there are benefits- like price and tax breaks on toys you would be buying anyway. And a business is allowed to lose money for a couple of years.. there are also some government funds available for starting your own business.
But really, if you have to ask, you probably want to keep looking.
YES, sell free software (Score:5, Interesting)
Rather than writing YASP (yet another software package), you should examine vertical markets.
For those that aren't business people, a "vertical market" is one in which your business has an extremely narrow focus. The premise of a vertical market is that a product offering is extremely specialized, in demand, and expensive. Since vertical markets aren't large, vertical market products sell for a lot of money.
I'm going to use a real life vertical market as an example for illustrating my approach. The healthcare medical practice management software market.
Every medical practice, hospital, HMO, etc. need to have highly specialized medical practice management software. This software is produced by hundreds of companies that charge BIG bucks for the pleasure of using it.
So, why NOT write medical practice management software and charge a lot of money for it? Two reasons... the market is flooded with overpriced software, and there's a better approach.
Its the better approach, that becomes really attractive to vertical market customers. In the instance of medical practice management software, practice managers think of the software as a "necessary evil". They don't want to spend big bucks, but they HAVE TO, because there are no realistic alternatives. This becomes even more important in a slow economy, because these people are going to be even less willing to spend big bucks on a new system, when their clunky old systems are still chugging along. After all, its a "necessary evil", and doctors would rather drive new jaguars than buy new billing software.
The better approach would be to develop a competetive software package for whatever vertical market you chose, and then GIVE IT AWAY FOR FREE. Not open source, not "freeware", but a commercially supported, industry standard, software package that they can use for FREE.
So now, I bet you're scratching your head wondering how giving away FREE software will make you money. Well...
The software you design will have built-in services that are of value to the customer. This is the KEY. You charge per use fees for these services!! In the medical practice management example, one valuable service would be statement billing. Imagine the customer's delight, when they could simply press a button in the new software you wrote, and it would communicate with your servers via the internet, resulting in their bills being sent to a printing/mailing clearing house. Bingo!! You just saved them time and money, because preparing bills themselves used to take 2 full days... now it takes 30 seconds, and you've made money because you charged $0.85 per bill you handled.
Not only does the end user get new high quality free software, they also save time, money, and enjoy optimized workflow, all courtesy of your software.
This is the next step in the software industry!! Microsoft is already aiming in this direction with
The trick to making this work is understanding your vertical market. Verticals are strange domains, and its not going to be simple to enter a vertical market. You'll need a few sales guys that believe in your concept, that are willing to 'pound the pavement' and "sell" your free software. You're also going to have to know what services you can integrate with your software that are of extreme value to end users.
By providing these services in bulk, across a few hundred clients, you should be able to provide these services for less $$ than it would cost for them to do it themselves.
Remember, vertical market software is a "necessary evil". In a slow economy, free (or low cost) software with integrated services is highly desired!! There you have it.
NET? Why push solution before problem known? (Score:2)
NET? Thanks, but no thanks. The approach is flawed, the tool is redundant and the tool is from a source no one should trust. There may be a few places it will work, but there are free alternatives that should be used first.
What you have proposed is "freeware" with a leash. You "give" the client a piece of software that does NOTHING on it's own and charges per use of your services. When you go out of business, the customer is left with nothing, unless someone wants to reverse engineer your old system. Normal propriatory software did better than this. It might work for some things, like printing pictures on the internet, but that just won't do for medical records.
Moreover, there's nothing keeping you from providing these services with existing software, not that horrid !NET stuff. Yes, Microsoft is finally learning that the internet can do more. Slow, late, buggy, insecure, invasive, and now touted at the only "standard" way to do anything - how typical of them. Why not just set up a nice little Apache server and process requests through secure html?
I'd consider offering my services more as a consultant if I were to try to make a living at software these days. Give clients a nice open source solution with the GPL recomended. This way my work can be reviewed by others and ported to new hardware if I'm around or not. Because I'm good, I'm sure my clients will come back when they want more. The hard part is getting in to begin with. Once you are in, the results will be all the push you need to have more clients and make more money. The world is full of M$ junk that is not living up to it's promise. As full as the world is, so your market is wide. Doctors, scientists and engineers all appreciate the honesty inherent in open publications and peer review. In fact, few accept less than that for critical applications.
Re:YES, sell free software (Score:2)
Re:YES, sell free software (Score:2)
In most vertical software markets, the users pay hefty $$ annual fees for the luxury of using the software. This is in addition to the $100,000 they put up for the initial installation.
So, do you see the advantage of my approach from the user's point of view?
Some Free Advice (Score:5, Insightful)
#1 - Do *not consider* starting a company unless you know exactly what niche you are going to fill.
#2 - Under no circumstance start a videogame company, if I see one more shitty Allegro/Clanlib game Im going to scream
#3 - Get a day job, a couple close friends, and work nights. That way when you fail it wont hurt as bad
good luck
I admire your courage but... (Score:5, Interesting)
Having said that, do either of you have sales experience? While you may both have ample development skills, without being able to land the business to work you'll be screwed. Where do you find that business? I'd suggest doing lots of networking. Getting business through friends of friends is your best bet. If that's not going to work for you, try to find small projects for smaller businesses. You'll likely have to take a lot of the risk of project failure on yourself (why should they trust you). So prepare to have little to no income for a while because until you can proove you can deliver, people aren't likely to cut checks.
Other things to consider. Find a good lawyer to help you in drafting contracts, etc. Find a good accountant to deal with the financial details of all of it. Do you have consulting experience or was your job more of a strict product development role? Consulting is a lot more demanding in the way of documentation, tracking of requirements, etc.
Good luck to you, but I'd recommend going back into the job market and trying to build your exeperience. Work on that PHD
You shouldn't (Score:5, Insightful)
Business and Retail are two different fields. Retail usually buys on price, they don't care that the motherboard is a piece of s*$! just it's cheap. Business on the other hand will get mighty pissed if the computer they just bought needs fixing after just one year.
Also it is unethical as a professional to pass yourself off as a consultant when you don't have the expirience. Remeber those professional ethics classes at uni? Don't pretend to be someone who has 15 years expirience when you only have 3. That's why there are so many unemployed "IT" people out there. They don't know jack. And those who do, still have a job. In our expirience it has been god-damn difficult to find someone GOOD to employ
It's not just the inexperienced who are unemployed (Score:2)
It's not just the inexperienced who are unemployed. The dot-com and tech industry layoffs were quite across the board as whole projects in surviving companies, and whole companies that didn't survive at all, came to an end. When a manager who gets to stay if he makes his department lean has to deal with a budget slashed to the bone, and doesn't have much work for those who remain to do, anyway, he's not just going to pick the few lesser experienced people and send them packing. With no work, even the highly experienced people won't be bringing any value into the department or the company, so they are let go. The 1990's saw a lot of turnover of people, so in the minds of management, once they do need experts again, they can just hire them when they are needed.
Your statement "it has been god-damn difficult to find someone GOOD to employ" might need to be questioned. How hard did you really try? And do you offer the level of pay that someone with 20 years experience is really worth, when they inquire? Hint: you're not going to find very many of them at the local college.
Re:You shouldn't (Score:2)
That is not true. My brother, dad, and I all lost our jobs this past year, and our expirence is across the board. My Dad is an expert, 30 years expirence with computers and programing. My brother grew up on computers, but has no education to back it with. (they seemed to have loved him at his last job until they ran out of money) I have the Degree, and 5 years expirence (not much I know), I know something. None of us know it all.
If it is difficult to find someone good it is either because you aren't looking, or more likely you don't want good, you want someone who has put in a lot of time with your specific problem. Sort of like the Java programer ads I saw that wanted 5 years expirence within a year of Java being released. Or lastly, you are unwilling to pay the prices good workers demand, and unwilling to take those who will work for less to become good.
Mind you, finding someone who is good, and then knowing they are good is extreemly difficult. Nobody can get along with everyone, HR won't let bosses talk, and only the best references are choosen; so how to you know if someone is good or bad?
Yes it is unethical to claim to be more than you are. However a consultant with 0 years of expirence is still a consultant, and might be better than the consultant with 15 years. (Generaly 15 years means something, but some people have 1 year expirence repeated 15 times) With no expirence you are worth less money, and are not bogged down with the old way of doing things, either of which appeals to some people.
Be honest. Refuse the jobs you know you can't do well, and if you accept one you find out you can't do, hire someone else to help you, and eat a loss. (since you thought you could do it you ought to have made some progress so most likely you end up making $5/hr for the part you did)
When I was young...... (Score:5, Informative)
Twenty plus years later I am glad I decided to get another job. I've learned a few things I'll share with you for free that I paid dearly for:
1. You don't know everything when you are 25. Or 35. Or 45.....
2. It is more important to be a businessman than an engineer if you want to be successful.
3. Learn how to write a business plan and execute what's in it.
4. Learn what all those funky financial reports mean, how to create them, and why you're business life (and personal life) depends on them.
5. Become a marketeer. If you don't know how to get a message across to someone, or how to figure out what to charge, or who your competitors are, or what the barriers to entry for you company are you will fail.
6. Become a salesman. Not necessarily work in sales, but be able to sell your idea to investors, to partners, to employees, and to customers.
7. Learn to take responsibility. If you are a procrasinator, you will fail as a entrepeneur. In a startup you are the boss, even if there are five or ten of you. You have no support organization, no secretaries. If you don't do it, it may not get done. Remember, you will have employees, and they will depend on you for their livelihood. What you do and do not do will affect and possibly destroy people's lives. If you are not up to that level of responsbility, get some more experience until you are.
8. Learn to learn quickly. As I mentioned above, you will be doing many different things, some of which you have never done before (and may not want to do again). Figuring out what to do quickly will give you more time to do the important stuff.
9. Management is important. Learn scheduling, people management, budgeting, and espcially how to help others deal with change.
10. Figure out a way to buy a business that is profitable already rather than build one from scratch. It's always easier to make more money and get more financial backing if you are profitable. After twenty years that's what I am doing right now, buying an existing profitable business.
If you are dead-set on going ahead, remember one thing. The successful super-geek programmers were the ones that team up with solid, smart business people, i.e. Gates-Ballmer, Joy-McNealy, Andresson-Clark, etc. Who's your partner going to be and do you trust them absolutely with your life.
What?!?!? (Score:2, Insightful)
Am I completely missing something here???
Bud, go work for another company or two for a few more years before you start selling yourself as a consultant. Make sure it's in a big company too, so that you find out what's it's like to work for someone other than a "small software startup." You're eyes will be opened to a number of new experiences.
It's much more likely you'll get a good paying new job that can get you more experience in this industry than it is for you to find business as an individual contractor with your amount of experience. There are good contractors and contractors who just think they're good. Make sure you're the first and not the second before you try striking out on your own.
Good Luck.
Lyell
Your 5 minute MBA (Score:5, Interesting)
Before you start the business, you or the other founder should take a class on accounting. Your local community college is very likely to have something that you can audit, take at a reduced rate for no grade. This will be quite helpful, especially if neither of you has experience with bookkeeping. Get something to keep your books, Staples has Peachtree for free after reabate, or GNUCash might be enough in the beginning. Related to accounting, the one thing every failed business has in common is that they all ran out of cash. Profits don't matter, its how much cash you pull in, your suppliers will not let you spend retained earnings. Keep a close eye on your cash position, and know whether you are making cash or spending it at least monthly. Finally, if you decide to go into business with another person, spend the few hundred and let a lawyer either create the articles of incorporation, or partnership agreement. They know many more potential problems than you or I can imagine, and should have some advice for how to structure the company to minimize them.
More frankly, it is extremely rare for a business to be profitable in the first year. If you and your partners do not have enough save to meet each of your personal expenses for at least 6 months stick out for anything you can find to come up with a little capital.
Some of the better ideas I have heard to drum up business are:
1. Help some folks with their PCs first, then eventually you might meet a small business owner who needs help with a bigger project.
2. Give a talk and be willing to answer questions about IT to your local chamber of commerce or businessperson's association.
3. Advertising. One of the places you might consider is talk radio, most of the audience is less techincal, usually wealthier, and more likely to own a business than the average American.
The advice about finding a salesperson is excellent, we geeks are not usually the best at selling things.
Do not try to get too big too quickly, you will kill your cash flow as you grow. But realize that the way businesses make money is through leverage, either charging more than it costs for your employees, or on the financial side, through the use of debt. I doubt you will find a bank willing to offer you a loan early in the life of your business, but be extreemly careful regarding debt. Non-debtors never go bankrupt, they may not succeed, but the lender never has to come after assets if you do not owe them anything.
Lastly, (Is this the third time I have tried to close, I am beginning to sound like a pastor)good luck especially if you decide to venture forth in the the exciting world of business.
The Secret to Successful Consulting (Score:2, Informative)
reiterate it... it all comes down SALESMANSHIP.
You may be the best programmer in the world, but
if you cannot communicate clearly with the customer,
figure out their needs while making
them feel confident in your abilities, and then
follow that up with a very professional looking
proposal... you will not succeed as a consultant.
I've been an independant consultant for over
seven years. I've met plenty of programmers
that are probably more skilled than me, but they
were unable to hack it as an independent because
they never could get the hang of customer
relations.
It also takes quite a while to build up a list
of industry contacts and repeat customers. Many
places hire contractors only off of a 'preferred
vendors list', and getting on one of those can
take some work. Hand out your business cards
liberally, and hang onto every business card you
receive (or better yet, enter them into a database).
Join your local chamber of commerce.
Volunteer to teach some free technology courses.
Develop and release some useful free software and
use it as a hook to draw traffic to your website.
Never pass up an opportunity to market yourself.
After you find the customers, be sure to manage
things correctly. Never work without a signed
contract. Include late fees for slow payment.
Get a good accounting package or at least a good
accountant. Build up a warchest of money to
ride out the slow periods (I'm glad I did).
Thats about it. Only time and a lot of work will
reveal if you have what it takes to be an independent consultant and (more importantly) if
you actually enjoy it.
Thad
Some advice... (Score:5, Informative)
Where to look for clients? Everywhere. Friends and family. The net. Newspapers, yellow pages, and bulletin boards. People you meet on the street. (I'm serious.. face to face has a really magical quality to it that makes people listen to you 100x more than a phone call, fax, or email) Carry a really cool conversation piece that demonstrates your talent (example: a graphics demo on a PDA)
Want to know what people want in today's economy? (Well, always, really) To save money. To get businesses to spend money on you, you have to demonstrate how what you can do for them will save them money. Show them how they'd be fools NOT to buy your software.
And make you you put a lot of work into building a truly reusable code base, it pays off huge in the long run.
Not to be a troll but ... (Score:4, Insightful)
Seriously if you know C and Java you have it made, you might have to relocate but there are hundreds software jobs out there. I'd suggest going to ComputerJobs.com [computerjobs.com] or to Monster [monster.com].
I'm not saying you shouldn't start your own company, I don't know anything about the local economy where you live but I'm going to say that with 3 years experience and your skills you shouldn't have too much trouble finding a job.
Nepotism... (Score:2)
I've taken that path (Score:2)
DataDino [datadino.com] is a product I developed that is similar to Toad, but allows you to connect to multiple databases. We've sold a few copies so far and expect business to gradually pick up. Here are a few things I learned:
1. It takes time. If you can't hold out for more than six months, you'd better try working double shifts part-time.
2. Your success is partially dependent on how well your business is known. If people know you, they'll trust you and buy your product.
3. Try to have an open-door policy. With DataDino we use Bugzilla to allow people to request enhancements and new database support. People like this because it gives them feedback that you as a company actually listen to what they have to say.
4. You'll be tempted to pack a lot of helpful text into your web page and advertising materials. Don't do this. Try to pack actionable items into as small a space as possible. (e.g. I used to explain what Java Web Start was before I offered to option to run the program. Now there's just a big red plunger that says GO.)
5. Marketing is a hellva hard thing to do. It's challenging and one wrong step can tarnish your company's name. Make sure you are getting the biggest bang for your buck off of every advertising dollar, and make sure that none of it is likely to offend your users.
I highly recommend two tasks to get you going. The first is to attend a StoresOnline [storesonline.com] seminar when they come to your area. These guys make money off of people with successful online businesses, so their seminars are very helpful. You might want to check out this link [overture.com] before you buy into their offer tho.
The second is subscribe to SiteProNews [sitepronews.com]. There's a lot of helpful statistics and info that pours out of their articles, so you probably want to check it out.
Good Luck!
My advice.... (Score:2, Flamebait)
How about just hanging a sign around your neck that says, 'will code for food'. Sometimes the truth hurts....
learn from my mistakes... i did the same thing.... (Score:4, Interesting)
I graduated with a BS in CS in May 1999. I started my career immediately out of school hacking C++ for a fortune 500. I left after a few months to join a start-up embedded systems company. At the time, I felt that this was my ticket to fortune and glory (after all, when I joined this start up in the middle of 2000, the Dow had just hit it's all time high. It seemed every 20 year old with a CS degree moving to Mountain View or San Jose was becoming a paper millionaire). When I interviewed with them, the Engineering VP reassured me that I was going to become financially secure after the IPO from all of the stock options they were waving in my face. So in my naive enthusiasm I jumped at it (wouldn't you?).
6 months pass, I show up to work one brisk Monday morning in November of 2000, only to be told that I had been laid-off along with all the other engineers and marketing people. They weren't able to secure any more venture capital, and the seed money had dried up. When I started, I was employee number 12, during that 6 month period they ballooned up to 40-something (I lost count) just before the lay-offs.
(I'm almost to the point of the story) So my roommate was also hacking code for them (he was writing Linux device drives and such, he had much cooler tasks than I did) and laid off that same morning. So we headed back to our apartment, played some Counter-Strike to cool off, and tried to figure out where we go from here... That's when we had the idea to start our own software consulting company. We had both worked with consultants, and we both felt that we were as competent and experienced as any consultant we had worked with. So we got out selves a lawyer and an accountant and started Treknetix Software out of our apartment. Our plan was to just write anything for money, then as we get settled in, we would find a specialty to focus on. Well, it turned out, finding clients is at least ten times more difficult than actually engineering a software system. We ended up getting a few contracts, mostly web work. We did a lot of LAMP (Linux Apache MySQL PHP) sites. It was during this time that I migrated completely away from Windows and to Linux %100 of the time. But we just weren't getting enough work to pay for rent and lunch meat each month. Slowly, I started to dig into my savings to support myself. I kept telling myself that I'd just borrow from saving now, and everything will be all right after things start really picking up. Well, of course they never did.
With only $14 to my name, I moved back home with mom and dad at the end of 2001. I created a resume [dice.com], and started applying for jobs like mad. When that didn't work, I went to professional recruitment firms... my college's career office.... local networking events.... nothing worked. I tried all the "best practices" for finding work, namely, treat it like a full time job. Spend at least 8 hours a day looking into positions and sending out resumes. My roommate went off to graduate school... I think I'm going to follow, there is just no work to be had.
Do I regret starting Treknetix? No way! I learned so much about working with non-engineering managers. I've really broken out of that "anti-social" programmer mold from my experience working with clients. This is a good thing. Now only if I could apply this somewhere else.... (bitter anyone?)
My advice to you. Try it. But, if you can, move somewhere you don't have to pay rent, or get married to a rich girl first. DON'T TRY TO LIVE OFF YOUR SAVINGS! I can't stress this enough. That's the only regret I have since graduating college. I should have moved home immediately after the layoff.
This has gone on longer than I would have liked. So to make a long story short: SOMEBODY HIRE ME!!
http://resumes.dice.com/thomasmis
Re:learn from my mistakes... i did the same thing. (Score:2, Informative)
My advice to you:
1. Get some certs. A cheap method is buying a subscription from brainbench.com and taking as many tests as you can. The certs will not get you the job, but they will get you the interview.
2. Get a professional resume. You have good skills but a horrible resume. I needed to swallow my pride when it came to this, but as a technology dude I suck at resume writing. A good resume leads to a good interview. When I started job searching, my resume sucked and that cost me dearly. Good resume services are expensive, but calculate how money you are losing by being unemployed! Try to find a firm that has a focus on IT. Make each job sound like a natural progression in your career, even if it isn't.
3. This is bad market for technologists. If a job requires you to learn Powerbuilder, Delphi, Oracle, etc. take it anyway. You can't afford to be picky right now.
4. You may get paid less than you're worth. Sorry, those are the breaks.
4. You may need several different resumes for the optimal search, but this will get pricey if you get them professionally done.
Hope that helps...
P.S. DO NOT get an 8 page C.V. If you don't have a PhD it makes you look unfocused.
Lessons I've learned (Score:4, Insightful)
But I also learned that the most difficult part of getting a business going and making it self-sustaining is marketing. Word of mouth will be your most powerful marketing tool, as others have suggested. However, in my experience, lead conversion is the most difficult part of building the business. Once someone expresses interest in your services, you have to convince them to actually lay down the cash to have you do the work.
One book I've found very helpful is "Managing the Professional Service Firm [davidmaister.com]" by David Maister. This book really brought home to me the reality that as a technology consultant, you really are in the service business, and as such your marketing efforts have to be an integral part of everything you do.
Another thing I discovered is that getting someone to let you do work for them is not the same as them actually paying you in a timely manner. Developing a billing procedure that lets you provide deliverables in stages, which are tied to invoices, might be something to consider. We've been doing that for the past few months with much better results than the "build it, bill it, wait for weeks and weeks to get paid" process, which really sucks. It may seem like a minor detail, but cashflow can be a real problem when you need to buy a development tool or some service, and suddenly you find that you don't have the cash because your clients have been late in paying you.
Also, treat the business process as you would a technology process. Constantly critique your business efforts and try to learn from your mistakes. As obvious as this sounds, a lot of small business people simply don't conduct any form of self-evaluation or process critiquing.
Don't let the naysayers get you down. It takes a lot of courage to go out and start something on your own. There will always be people sitting smug in their salaried positions, ready to sharpshoot you. But they'll never know what it means to put yourself out there on the edge and go for it.
Finally, for the financial and legal matters associated with starting a business, check out Nolo Press [nolo.com]. Their books are very thorough and have been extremely helpful to us in negotiating the often frustrating local, state, and federal paperwork shuffle.
Best of luck!
Extremely difficult (Score:4, Insightful)
1. Work out of your home, keep expenses low and your rates very reasonable. You need to have a very attractive pricing advantage over the larger, more established out sourcing firms.
2. Even though you are working out of your home, you need to look professional and not a fly by night venture. If you live in a basement apartment or the low rent district of town don't advertise it. Also don't use a PO Box. If necessary hire the services of an office front where they offer admin, mail and boardroom services. Have your mail sent their and pick it up or have it forwarded to your place. Whatever you do, make sure you look professional and as good as the other guys.
3. Define a very small target market or a very small set of services you wish to sell. Become a Java consultant not a Java/C/C++ consultant. Even better would be a Java web developer or a Java enterprise software developer. Choose whatever you know best, learn to know it better, and market only those skills. You will need to market yourself as being 'experts' in that field as opposed to a couple of smart guys who knows a lot about software development and can do whatever people may ask. If you try and be too much you will come across as not being an expert in anything and right now I think companies are only interested in talking to the experts.
4. Read books about sales and marketing strategies. Few "techies" really understand what sales are all about. We've all heard and told the jokes about sales and marketing people. Be prepared to become one. When approaching a company, try to figure out what services they might need and focus on solving their needs as opposed to what you can do for them. They aren't interested in what you can sell them, they are only interested in having their problems solved. If you don't think you can solve their problem, forget about it. Don't waste your time on a potential contract you likely can't/won't get.
Other than that, be prepared for a lot of work but have fun. Don't expect to make a million dollars. If you are only in it to get rich, you will certainly fail. If you enjoy what you are doing you are more likely to be successful.
Must own suit for Sales (Score:2)
Re:Must own suit for Sales (Score:3, Insightful)
Uh, yes and no. You don't talk to small one man mechanics in a suit, you wonder in, and while talking up the benifits of your software, guide the transmission while he lowers the jack so it comes out faster. You will have much better luck if you can speak the language. (Warning, do not try this unless you actually know how to do it right. The salesmen that wonders in and helps do a task that should have two people can get a sale, but the salesmen that turns a $200 job into a $2000 job with one wrong move not only loses the sale, but all chance of others in the industry) In reality you will never touch a car when you talk to the mechanic, since it looks like you are pushy, and trying to take the job, you just need to have the ability.
Don't even look at a bank without your suit. Make sure when you go to a dry cleaners make sure you have it starches perfectly. When you mail to an envlople company spend as much effort on the envelope than you do on the rest of the presentation. You can wear jeans into most (but not all) computer companies, but the suit is better until you are sure. With some clients the suit will hurt you, with most you can't get by without.
Take Advantage of the Recession (Score:2, Informative)
I started by wanting to create a digital film company (I have a lot of experience writing scripts and wanted to produce them). I haven't done any programming in over 10 years (the last programming I did was on an Apple
I put a dream on hold because I realized the business this person is in BLOSSOMS in a recession. And now a few of us are providing data for him. He's backing us to market this service to people thoroughout state and we've already contacted people he knows in nearby cities. Next week we will be rolling out version 1.0 and beginning to deliver our service to businesses nearby, but not near enough to be competing with our initial contact.
This particular business has two STRONG advantages over many other businesses: 1) It's based on providing services for companies and people that do well during a recession, and 2) We aren't selling the program, we're providing a service, so instead of being paid 1 time for a program, we're paid monthly for our services. (Like the way M$ wants to move from selling Windoze once to making it a subscription based service.)
There've been a few bumps -- including the fact that the head programmer (me) hasn't programmed in over a decade. I think that, in the long run, has helped, since we haven't been "boxed in" by preconceived notions or software business experience. Instead of deciding what types of programs to supply, or analyzing a market, I listened. I did not jump until I saw something that was a long term demand. I also made sure the service I was providing would basically not be effected by recessions (and, in fact, business is better BECAUSE of the recession).
I have to add I also learned from on of the local big companies. In Richmond (VA), Philip Morris is a huge employer. When a recession comes, people may not pay the rent, but they'll shell out bucks for smokes. While it is possible to take advantage of the trends of a good economy and provide luxeries, it's important to make sure your company's base services are not dot-com flashes, but something that meets basic needs that people will pay for, even if there is a recession or depression.
(BTW, based on our current client list and the people asking to subscribe, we expect to be profitable within 6 months.)
web work for small businesses (Score:3, Interesting)
It's not glamorous and it's not exactly programming (unless someone wants an online front-end), but it's an area of the market that has been virtually untouched because small businesses can't afford the high prices that silly corporations pay. The only drawback is that "webdesigner" doesn't look that good on a resume anymore.
That's a consulting business, not a software one (Score:2)
If you're really doing a software business, the money is years away. The potential upside is higher, but the problems are much more difficult, and you may not make any money at all. I've done two shrinkwrap products that sold modestly at retail, but the big money ultimately came from licensing the intellectual property inside them to larger companies.
Marketing yourself as a consultant is just another way of having a job, but without benefits or job security.
you're not looking to start a company (Score:2, Insightful)
I was in the same situation you are now - I was laid off a year ago (Aug 1, 2001). I started looking for full time work where I could. After a few weeks of picking up the pieces, I decided to give starting a company a try - and I did - well - sorta. When I approach someone for work and I tell them what I do, I usually get "Oh, you're a freelancer then" or "How long have you been out on your own?" or something like that. I have to explain that I'm a company - I registered my name, have a business bank account, I have a company website [codepoets.ca].
Still, you won't be recognized as a company - you're freelance. The people I've talked to think that freelancers are somehow lower than dirt. I don't get paid on time - I don't get complete requirements, I get told I have the job and then the work it pulled. You're going to get sand kicked in your face. It's a really hard line of work and you have to make sure that you really want to do it.
Where do you find work? I don't know. I got lucky and found some connections through a friend of a friend - I get most of my work through there. It's best if you have personal projects (that you think might make money! Don't forget - you're in this for money!) to do when things are slow - otherwise you'll end up watching too much daytime TV.
Why do I keep doing it? I love the freedom. I've done so many different types of projects - the straight web stuff gets boring after 10 minutes, but the exciting projects just zip by. The hours rock - I can take off any day of the week I want - of course I don't get paid and I usually end up working weekends.
Ask your friends if they know anyone who needs work done - ask family - do volunteer stuff. Get in the newspaper - get free publicity. Make sure that you're cut out for this kind of work - it's exciting stuff, but you really have to want it.
Two things to do (Score:2)
Before you make your decision to go for the regular job, or on your own, do the following two things:
First of all, go to the library, and find where they have the books on starting a business, business plans, sales, and marketing. Get some of each, and plan to read them all in the next few weeks. Take advantage of inter library loan to get more books. While your at it, resume/job hunter books are in the same area, so get them too just in case. Skip TV and movies at home, read these books. Note which are good, and buy them.
Second, but at the same time, build your contacts. Go to church, most people at church would prefer to hire an honest Christian (jew/muslum/whatever you are) to whoever they know, take advantage of this. (Be careful though, church is for God, not advertiseing, but the socal hour is a great way to mention your business ideas in passing and get opinion, which you follow up on afterwards) Like to drink in a bar? All your drinking buddies have jobs, find out what their companies needs. Like to play sports, you teammates are contacts. Just mention that you are considering starting a comptuer company, and see what they come up with. Most will know nothing now, but one or two will come back in a couple weeks with some things their company needs improved, and you have a contact. You don't have to take it, but you have it.
Remember, the plan is important. However make sure that plan is woth it. I planed to be a millionare by 30, until I realized I didn't want to do the work (not nessicarly all honest) to do that. So get the plan right, it isn't to make a lot of money, it is to pay your bills first. Then it is to get some luxeries, but make sure there is time to enjoy the luxeries.
Good luck. I'm considering must the same thing as you are.
Recomendations I can make... (Score:4, Insightful)
2) Read up a little on tax law.
3) Read up a LOT on selling, cold calling, marketing. Self help stuff too if you need motivation. Many people do.
4) SELL, that's right, *SELL* your service. Be a salesman first, geek second.
I did the Java programming route for five years in NYC. Fun, but even my bubble went pop and working as an S Corp has soooo many benefits. Shall I list a few?
1) You are your own boss.
2) You have no limit to what you can earn (no bottom either, carefull!)
3) You are officially an Officer of a Corporation, a "President" actually, and you can tell that to cute girls in bars and it's great. Much better sounding that "Java GUI programmer". GUI sounds icky, makes most girls run away.
4) You keep most of what you make (you'll know exactly why after reading a bit on tax laws).
Good luck!
two pieces of advice for you (Score:2)
secondly, find someone you can partner with who is also looking to start a company, but whose background is business. I was extremely fortunate in finding a business partner who has become a great friend, who has excellent connections, and who defers to my judgement on technical matters (and I, likewise, defer to his on business decisions). If you can find someone who has been in business in your chosen area or market for a span of time, that's fantastic.
Another point to mention is somethign that's been brought up in other posts. vertical markets are indeed great areas to go into, as long as there isn't competition who does the market well. ASP's are the perfect business plan for these kinds of markets. For instance, few small businesses can afford a 50k or 100k piece of software, but many more would be willing to pay 2k to start up with it, and four dollars a customer in the database, or a patient (in a medical setting) or something like that. it allows them a minimal startup cost and they can pay as they go. you should, however, also provide outstanding customer service in that scenario, and give customers the option of buying the software outright.
This, incidentally, is also where free software shines. A vertical market is actually a market where the technology you need already exists, and you play the role of integrator... for instance, you integrate a webserver, database, message queue, etc, into some application. there's no reason you can't use LAMP or jboss or something like that to fulfill that role. The software you're actually writing isn't much more than glue (albeit pretty damn cool glue
enough.. i digress... in any case, i certainly encourage your endeavor, just stay out of my vertical market--there isnt' room for many here.
Be warned... (Score:4, Insightful)
- ~80% of all new businesses are started by engineering types.
- ~80% of all new businesses fail.
- Technical people, for the most part, are not business people.
- 3 years of experience will not you make a business success. Trust me. It takes a long time and a large effort.
- You must be focused and have an over abundance of energy.
- You must be able to put your ego and ideals aside when required; you will have ample opportunity to show your $hit; patience truly is a virtue.
- You must be able to ride the storm. In most cases, life will be feast or famine.
- Quickly gained success is quickly lost.
- There is no substitute for experience.
- A partnership is like a marriage. You better be ready for this one.
- You must be prepared to fail. And, when you fail, you must get back up and keep going. Otherwise, you are wasting your time; get a job.
- Attitude is everything.
Jamey
Re:Be warned... (Score:2)
Real Life Example (Score:2)
Re:Real Life Example (Score:3, Insightful)
Yes, actually. The rule of thumb with a resume is that a lie of omission is NEVER a lie. You're a PhD and you're being told you're overqualified? Only list everything up to your Masters. Still overqualified? Only list up to your bachelorate.
You worked for your own company for five years? Pick ONE of the 'hats' you wore during your time, that's appropriate for the job your hiring for, and build your entry around that.
Less Experience != No Job (Score:2)
In fact this type of hiring is quite common. I think your problems may be due to a glut of programmers in general, rather a glut of experienced ones.
How I got started (Score:3, Interesting)
So what do you need (or rather what was it that made me "succesfull")?
From someone who hires consultants (Score:5, Insightful)
Here's the top hints that would make me hire you:
Simple answer (Score:2)
Go figure it out on your own.
Customers (Score:2)
If you don't already know who your first three customers are, you are not ready. Go get another job and build up your contact list. The first customer is easy. Not finding any customers past that first one is what kills independants and small companies.
Well, the best way to get clients.... (Score:3, Insightful)
Personally, in your situation, I would rather flip burgers. If the reason for starting your own business is inability to find work, then it's not going to be easy. Because starting up your own businness is expensive. Both in time and money.
The first thing you should do is to start is to contact local companies telling them that you are in the process of deciding whether to start a local business and see if they are interested. This will give you a chance to see how many paying clients you will get, what kind of work you will get, and how much they are willing to pay.
The second thing you should do is to contact an accountant, preferably someone with experience of helping small startups (i.e. plumbers, hair-salons, etc...). This is important for two reasons:
I would also consider contacting the employment agencies in your city. They may offer courses, etc..., for people thinking about making a startup. At the very least, they should be able to point you in the direction of somebody who does (again, I don't know about US, but I imagine the situation is similar).
There are a number of pitfalls:
And finally: don't go bankrupt! If you do, you will loose everything in the process. Remember that this might also include such things as your wife, kids, and house!
If you are still interested in starting your own business, then have a go at it. But don't do it because you might think it to be easier than just getting a job.
Re:get your MCSE (Score:2, Insightful)
In this kind of market, people want something new, not that you know what some obsure key in the MS Windows registry does.
Agreed... (Score:2)
However I have yet to find a client that has refused to use my services based on the fact that I do not have an MCSE or MCSD. They want experience first.
Re:get your MCSE (Score:4, Funny)
Re:RIAA Silly (Score:2)
Re:How to make money on Open Source software? (Score:5, Insightful)
********
By selling solutions, not software. The software "product" idea is going away. In it's place, there will be numerous tools developed by people building solutions for others. If you sell a a product that you obtain for 0 cost, people won't need to do business for you. But if you sell solutions that consist of free elements that you put together to solve business problems, you will be paid well. In fact, the business usually won't care how much you pay for the pieces, as long as you deliver the full package.
Those solution providers will release the tools they develop themselves solving business problems as free software. Why? Because they recognize that it is important to maintain the environment that allows them to be successful.
The legal environment is a good analogy. Legal knowledge is free. All court cases and laws on the books are accessible at zero cost. However, lawyers are one of the highest-paid professions. Why? They put the pieces together (which were obtained at zero cost) to create a valuable solution for the client (getting out of jail, etc.)
Re:How to make money on Open Source software? (Score:2, Informative)
Baloney.
It takes tens of thousands of dollars to furnish even a minimal law library. A single multi-volume treatise like Witkin's "California Procedure" can run you $1100 easily. Cases on-line? Lexis/Nexis and Westlaw cost an arm and a leg themselves.
Your analogy is simply dreadful.
(When I think of how much money I've sunk into programming books over the years, I *wish* you were right about knowledge being free.)
Re:How to make money on Open Source software? (Score:2)
*******
Again, you are missing the point. The knowledge is free, even if the books aren't.
It takes time and money to learn the knowledge, but it definitely is not proprietary.
Re:Um... (Score:3, Interesting)
Computers are everywhere these days, and we don't seem to run out of people who have problems with them. In many cases, simply having a policy that says that the owner must provide the software on original media can keep you out of any legal trouble, and in many cases, "fixing computer problems" can be reduced to simple software reinstallations.
Or you could perform hardware upgrades--many computer users won't remove the cover and install a part themselves. There's almost always money to be made here, because computers keep getting faster and better, and people simply aren't comfortable upgrading on their own.
These alternate courses are feasible, will turn profits fairly quickly and don't really require much in the way of education/certifications, and can be done even with a staff of one. Really, the biggest part of such a business is advertising.
Re:Um... (Score:2, Interesting)
Re:Reality (Score:2)
#include legalization_speech.h
Re:The sun has set (Score:2)
I hate to agree, but you may be in some sense right.
Besides debt, much of the money that funded the last boom was also savings and capital. It took people years and years to build -up these bankrolls. Now much of it has disappeared. It will take years and years again to build it back up. I know a guy who lost about 2/3 of the wealth he inherited from his father (about $900,000). It took his father a lifetime to accumulate it. It was "invested" away in about a year.
This poor guy was really taken advantage of and got conned/screwed by an asshole VP of marketing. The investor was a good guy. Still, the money is gone. Where is the tech industry going to get its next $900,000 or $2,000,000 or $100,000,000? Was the growth of the economy during the 90's real or just the spending off of capital?
So we have a double-whammy; squandered capital + big debt.
And this isn't just private debt. Our governments also borrow and this will bite us in this ass too.
Well, the 90's were fun. Long live the 90's.
Re:The very people whom you ask could be killing y (Score:2)
Yeah, don't want to be associated with them blue-collar workers--you know, them people who do 75% of the work in this country and get 15% of the wealth.
Besides, they get what they deserve, right?
bleh