* The Business of Software

A former community discussing the business of software, from the smallest shareware operation to Microsoft. A part of Joel on Software.

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Moderators:

Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

What did you struggle with starting out?

I am writing a training course for people wanting to start their own software company. I am trying to think back to the things that I struggled with early on. But it is 8.5 years ago, so it is hard to remember all the details. Also different people struggle with different things. What did you most struggle with in the early days?

-Setting up a company
-Product name
-Promoting your software
-Pricing
-Invoicing
-Bookkeeping
-Website
-Payment processing
-Support
-something else?
Andy Brice Send private email
Tuesday, September 24, 2013
 
 
Despair
Loneliness
Contempt and ridicule from family and acquaintances towards what I was doing
Alienation
Hunger
Ad Hoc health care.
Scott Send private email
Tuesday, September 24, 2013
 
 
My allergy to marketing.  I'm still in "if you build it, they will come" mode after six years.
Richie Hindle Send private email
Tuesday, September 24, 2013
 
 
>I'm still in "if you build it, they will come" mode after six years.

How is that working out you? ;0)
Andy Brice Send private email
Tuesday, September 24, 2013
 
 
Scott,

I was talking more about skills, rather than motivation/attitude. I realize those are very important. But they aren't easy to teach. And there are loads of (mostly very dubious) get rich quick/motivational courses already.

People around me were very supportive. Perhaps I was just lucky.
Andy Brice Send private email
Tuesday, September 24, 2013
 
 
I can relate to what Scott said. It is often a very lonely journey and not everyone is supportive.

In my case, I was finishing up my consulting day job and pretty much everyone in the IT department made it their business to come and let me know my idea would never work. Even people who I'd never spoken to before came to say it was impossible.

Obviously, my mistake was to mention what I was planning to do after I left. Should have said gardening leave or basket weaving, or perhaps that I was going to write a book.
Scorpio Send private email
Tuesday, September 24, 2013
 
 
@Andy: I built it, and some of them came.  :-)  They're still coming, but with marketing there'd be more of them.

One further answer to your question: Not enough buying-in of components.  I built my own cryptographic licensing system.  I built my own .NET obfuscator.  WTF?
Richie Hindle Send private email
Tuesday, September 24, 2013
 
 
Probably market research.

And I'd say my biggest failure back then, like most people, was not realizing how important it is.




AC
Reluctantlyregistered Send private email
Tuesday, September 24, 2013
 
 
The skill I most needed was the ability to truly listen to what my customers were telling me.  I had one solution and they were asking me for something else, and instead of building that something else, I spent too much time trying to persuade them to use what I had built. 

I remember thinking "But I built something so much better than that!" and not hearing what they were really asking for.  When I finally got it through my head and built what they were asking for, they finally spoke with their credit cards and checkbooks.
Brian Leach Send private email
Tuesday, September 24, 2013
 
 
Making objective decisions regarding all the things you listed. This forum, startup websites, books, and articles can be useful for getting ideas, but I have learned that only I can figure out what makes sense for my product and my market and that cannot be taught. Successful startup entrepreneurs figure it out. Failures do not. Entrepreneurs should resist implementing something just because it purportedly worked for others.
Bill Anonomist Send private email
Tuesday, September 24, 2013
 
 
I've been finding and calling up business owners directly in my new targeted niche market and asking them what problems they need solved in their business.  I've gotten lots of answers, but found several common painful problems.  Soon, I'll switch to idea validation mode, and just call up another 50-100 businesses and ask them..."do you have this one problem in your business?".  If I get reasonable traction with their responses, I'll start to presell a few - just to make sure they put their money where their mouth is.  After that, pure development and implementation. 

Doing this is to avoid the main struggle I had starting out - building something nobody wanted.  My goal is to first find out what they want and are willing to pay for...then build it.
Prime Suspect Send private email
Tuesday, September 24, 2013
 
 
"I was talking more about skills, rather than motivation/attitude."

Well you asked what "things did you struggle with". Those are some of the things different from your list. Do you only want your own list regurgitated back at you then and not anything not on that list?

Regarding motivation and attitude I didn't struggle with that. Without being strongly motivated and with the right attitude of perseverance how else could I have survived long enough to succeed? It is strange to take from my post that I was unmotivated and had a bad attitude.
Scott Send private email
Tuesday, September 24, 2013
 
 
>It is strange to take from my post that I was unmotivated and had a bad attitude.

That wasn't what I meant.

I don't really know that there is anything much I can do in a weekend training course to help people overcome issues such despair and loneliness. Is there? Other than to give them a realistic idea that it involves a lot of hard work and there is no guarantee of success.
Andy Brice Send private email
Tuesday, September 24, 2013
 
 
Perhaps I should have phrased it as:
-what did you struggle with?
-with hindsight, what could you have done to make it easier?
Andy Brice Send private email
Tuesday, September 24, 2013
 
 
I'll add a +1 to the idea validation theme above. Before my first commercial product (i.e. the first one I made money from) I'd gone through years of implementing small product ideas then I'd get to the end and realise I had no clue how to sell them. Then I'd drift off and do something else.

So I guess some coverage of validating ideas early (before coding) would be a good idea. For me the lean startup principals make a lot of sense, although as with anything I think they can be taken too far and some of what's in the lean starup book is borderline for me.

Perhaps during this you could diffuse / minimise some of the hyperbole around VC's, webapps, phone apps etc. and encourage the students to focus on something that can be sold at a profit from very early on.
Jonathan Matthews Send private email
Tuesday, September 24, 2013
 
 
It's something unmarried people coming from a corporate environment for the first time are surprised by. At work they have nominal friends they talk to.

Working at home, one might be tempted to find friends to talk to, perhaps go to the corner coffee shop every couple hours. But then you're not making much progress. So it's something to be aware of, both that it's a psychological change in environment, and that you might compensate for it by doing things that kill progress.

Regarding family, the story gets told from time to time about the person who did not get buy in from their girlfriend or wife before starting this.

The partner may have to get a job. The partner may have to be a de facto investor in the company, whether she wants to or not. The partner may have to adjust to much lower income for a long time, no vacations, and not seeing the partner for hours at a time, even if he is in the house with her. Maybe he has to rent an office to have a place to work. The partner who now has to apply for food stamps because of no income may resent the renting of this office.

It is absolutely critical to get the partner's buy in. If you don't have full and enthusiastic support, you need to either end the relationship, or not start the new venture.
Scott Send private email
Tuesday, September 24, 2013
 
 
One reason that rich professional families stay rich is not inheritance. It's that the parents encourage, support and subsidize the child's ventures. Among the poor, the child who tries to start a new business is more often seen as uppity, selling out, etc. This has the effect of keeping them down.

Two partners working together on something, understanding there may be long years of long hours of hard work and low income, dramatically increases the chance of success. Consider the asian couple running a gas station or restaurant. They know they have to work together to succeed at running their own business.
Scott Send private email
Tuesday, September 24, 2013
 
 
Yes, it is vital to get buy in from your partner. That is something that is worth emphasizing.
Andy Brice Send private email
Tuesday, September 24, 2013
 
 
Programming ;)
Alex Vasilevsky Send private email
Tuesday, September 24, 2013
 
 
I know you are going for 'business stuff', but isn't choice of platform a huge one? eg. web/installed, ios/android, java/python/ruby etc. Each of these will have huge long-term implications.
GregT Send private email
Tuesday, September 24, 2013
 
 
I'm going to cover desktop vs web vs mobile. But I certainly won't be getting into choice of dev stack beyond some basic advice e.g. try not to use bleeding edge frameworks, especially if you don't have the source.
Andy Brice Send private email
Tuesday, September 24, 2013
 
 
Scott, sometimes I miss you when you're not here.
Bring back anon Send private email
Tuesday, September 24, 2013
 
 
Btw, Scott, was there a partner for you at one point?
Bring back anon Send private email
Tuesday, September 24, 2013
 
 
Knowing where best to spend my time.  I was always worried that what I was spending time on right now wasn't the most important thing.  Turns out I still struggle with it.  There just isn't enough of me to go around and sadly the stuff I am most interested in doing is (mostly) a waste of time that will have no perceptible benefit on the business.

So, I guess that could all be bundled up into "time management".
Mark Nemtsas Send private email
Tuesday, September 24, 2013
 
 
> Programming ;)

@Alex, +1.

On that note:  @Andy, do you only really want to hear about the business side of the struggles, or the software side as well?  In other words, do you want to pick up the story after the software is written to a releasable state, or from the point when the would-be entrepreneur decides to sit down and try to write an application?  Because I think these two things are night and day.
Racky Send private email
Wednesday, September 25, 2013
 
 
>Knowing where best to spend my time.  I was always worried that what I was spending time on right now wasn't the most important thing.

I'm not sure that feeling ever goes away. You never have enough information to be sure you are doing the optimal task at any given time.
Andy Brice Send private email
Wednesday, September 25, 2013
 
 
Racky,

I am more interested in the business side. That covers deciding what to program, but not how you actually program it. The course is aimed at people who already have reasonable programming skills.

In my experience misvs usually struggle a lot more with business than technical issues.

Picking a task that is far too ambitious to program is a common thread. I guess that is a business+programming issue.
Andy Brice Send private email
Wednesday, September 25, 2013
 
 
*I'm not sure that feeling ever goes away. You never have enough *information to be sure you are doing the optimal task at any given *time.

I agree.  So teach people that they'll never know if they are doing the optimal thing and arm them with the tools to increase the probability  that they are doing the most optimal thing. 

If you can do that I'll be queuing up to learn because I STILL struggle with the conundrum weekly.
Mark Nemtsas Send private email
Wednesday, September 25, 2013
 
 
I would like to know if any of you regret your decision? I mean I'm sure many of you here spent countless hours of hardworking on your startups.

Do any of you regret that decision and hoped that your got a job instead? Was all the hardwork worth it in the end?
John Senar Send private email
Wednesday, September 25, 2013
 
 
John

Even the people that failed rarely regret it, based on this (very small) sample:
http://successfulsoftware.net/2010/05/27/learning-lessons-from-13-failed-software-products/

But that could be cognitive dissonance. ;0)
Andy Brice Send private email
Wednesday, September 25, 2013
 
 
I have a suspicion that people who fail and regret it tend to disengage with the community.

I was recently testing a new feature in my product which checks for out of date copyright messages. Unfortunately BoS was a goldmine for finding sites that hadn't been updated in years. If I go back and click a bunch of links from people a few years ago many of the sites look abandoned. Kind of depressing.
Jonathan Matthews Send private email
Wednesday, September 25, 2013
 
 
> Do any of you regret that decision and hoped that your got a job
> instead? Was all the hardwork worth it in the end?

I'm still well pre-launch and I have often regretted starting down the road at all; going along with what Andy said, I picked a project that the combination of skills + scope != timely reward.  (It may be worth nothing that I started out thinking about it as a freeware project, and well into thought I should aim to sell it)

> Even the people that failed rarely regret it, based on this (very
> small) sample...
> But that could be cognitive dissonance. ;0)

Good psych acumen, Andy!
 
> I have a suspicion that people who fail and regret it tend to
> disengage with the community.

Yep--classic case of a potential for survivorship bias when polling as John is.  There may be a 100:1 ratio of regretters:non-regretters, but we'd poll at 1:10 or better due to it.
Racky Send private email
Wednesday, September 25, 2013
 
 
>I would like to know if any of you regret your decision? I mean I'm >sure many of you here spent countless hours of hardworking on >your startups.
>
>Do any of you regret that decision and hoped that your got a job >instead? Was all the hardwork worth it in the end?

I regret some of the choices I have made along the way.  Most of these are either failed products or products that I partially developed and then discarded.  I regret that my decision to quit my job and do the full-time mISV thing probably lead to the demise of my marriage.  But that was probably going to happen anyway, the mISV just brought it on more quickly.

But I don't regret the freedom it's given me, the ability to decide my own destiny, and the opportunity to be involved with my children's lives much more intimately than if I was still working my old 60 hour a week engineering job.  If I had the chance to do it all over again I might do a few things a bit differently but I'd certainly do the mISV thing again.
Mark Nemtsas Send private email
Wednesday, September 25, 2013
 
 
How about that, logins never expire here at BOS!  I'm one of those people who saved up money, got my life partner on board and quit a good job to pursue my 15 year old dream.  13 months later, I had to face up to reality and get back into the workforce or drastically change my lifestyle (with the very real possibility that I wouldn't be any closer to success after 23 months).

I tend to agree with Scott on this, it's the motivation and attitude issues that will keep you up at night and keep you from reaching your goals.  You can have everything else figured out but if you can't deliver a product people will pay money for, you won't be successful.  On the other hand, once you have a product that compels people to give you their money, getting a working payment page or selecting  the perfect product name are minor league headaches that shouldn't slow you down.

I've had the opportunity to meet hundreds of successful business people whose success has nothing to do with software, and to a person, they had to talk themselves out of quitting or giving up.  Nearly all of them had to ignore well-meaning advice that their ideas and plans were flawed.  I just don't see how the business of software is any different.  If you can teach people to see the fine line between stubborn and stupid, that would be truly valuable.
RGlasel Send private email
Wednesday, September 25, 2013
 
 
-Product name
-Promoting your software
RossR Send private email
Thursday, September 26, 2013
 
 
@RGlasel

It is always interesting to learn from failures ( http://successfulsoftware.net/2010/05/27/learning-lessons-from-13-failed-software-products/ ). Why do you think it failed:
-too ambitious
-too much competition
-not something people wanted
-lack of marketing
-couldn't promote it cost effectively
-something else?
Andy Brice Send private email
Thursday, September 26, 2013
 
 
Challenge #1:  My biggest hurdle was getting my nag of a wife on board.  From my very first investment (domain name) to professional fees and conference charges, she's been glued to our various online bank portals like white on rice,  reaming my ass, one withdrawal at a time.  "How the F**K are you planning on paying the mortgage THIS month you bastard!?  *I* don't get to spend all *my* time doing my *hobbies* - why should you?"  She's a real piece of work, that one.  I thought I could shift her powers of annoyance into something useful, like managing contacts/leads or whatever, but that didn't work because she'd ask too many damn questions and when I told her to "hold on" or "you can go here to find out about that" it would quickly degenerate into her regularly scheduled program of "you NEVER have time for me! you SELFISH prick!"  I probably would've divorced her a few times over already but it would've eaten up too much time, money and resources to be worthwhile and besides, she's the mother of my children.  Also, when Scott talks about "alienation" or "isolation" or whatever, he means it; this sh*t will crush your social life.

Challenge #2: Knowing the threshold of "I can't develop this thing anymore because I'm too dumb/busy to innovate beyond my own means" and figuring out how to find A+ players hungry for the challenge

Challenge #3:  (B2B-specific) Getting "stuck" in no-mans-land of the procurement process at Big Corporation where the guy who loves and uses your s/w has all but  ZERO influence on getting that damned amount approved and PO drawn up.  How DO you navigate the path back to the "money guy" while re-iterating the value in NEW or DIFFERENT ways than you did before ? (no one wants to hear your same, boring .. .' but you'll save money, man!' lines over and over....)

Challenge #4: Others have said this, but the earlier you can identify a crap product, the better off you are to cut it off at the knees and get on with life.  It's cliche but they say "your first product is never successful" - this is true from personal experience.  I was still in misv "lala-land".

Challenge #5: Metrics / Time Management.  You HAVE to at least TRY to stay true to measurable outcomes; a 3 month goal, a 6 month goal, a 12 month goal ("I should have x hours of free time by month x and making z dollars") - NEWS ALERT: I *still* don't do this, but I am trying hard to now.

I'll share some more if anything else comes to mind...
BI Baracus Send private email
Thursday, September 26, 2013
 
 
It's true failed misv'ers disengage from the community.  That's what I did.

In the spirit of 'I failed too' here are my stories.

My first programming gig was enterprise cobol.  My first misv project was a mainframe documentation generator, think java docs for mainframes, with diagrams  (jcl jobs, and eventually cobol program flow charts).  I quit to go full time on it in Aug 2008.  I required to extremely difficult software components; a parser for cobol, and a parser for IBM job control language.  Needless to say parsing jcl kicked my ass.  That plus the uncountable design decisions in an extremely complex domain (mapping source code to database tables for example) meant 'analysis paralysis'.  After 6 months I was no longer making progress (ie surfing the web iiving off savings) so I went and got a job.  Now I have mostly complete jcl parser and a mostly complete antlr cobol grammar to show for my efforts.

For my second project; I noticed that some products tend to get bought by larger companies and disappear.  Compuwares Fileaid was such a tool  It was a gui for editng fixed length files, and could map them to layouts and cobol copybooks.  I could parse cobol copybooks, so started work on a fixed length file editor of my own.  I figured this project would be doable; just an editor, much smaller in scope than my previous project. 

I made a lot of progress, got close to a beta release, then met my now wife, and a marriage and on child later, it languishes on my (off site) version control.

In retrospect my failure was biting off more than I could chew.
SuperDuperUser Send private email
Thursday, September 26, 2013
 
 
@Andy
It was something else.  The point where you have a product that people (in my case, those people were potential investors) can see in action and get excited about, because it is obvious to them that it will be successful, has to occur before you reach the stop or go decision point.  I guess it was naivete that lead me to believe I would be able to get family and friends to put up some money in a relatively short period of time (less than a year) because it was obvious to me what I was capable of achieving  and how brilliant my plans were.  At least I didn't  lose my marriage or friends because of it, and my relatives don't dislike me more now than before.

"-too ambitious
-too much competition
-not something people wanted"

The less ambitious you are, the more competition you have, and the more likely you are to produce something people don't want.  I'm not bitter, in fact I have a greater appreciation for those stubborn people who keep at it until they are successful (and hopefully greater compassion for people who try very hard, but still don't succeed).
RGlasel Send private email
Thursday, September 26, 2013
 
 
My biggest challenge right now are:

#1 - Parents. I feel like my dad feels I'm just sitting home all day doing nothing. He knows what I'm doing but deep inside I know that he thinks I'm wasting my time. Which would explain why he's constantly sending me job ads.

#2 - Advertising. My products are actually good and reputable. I get Emails everyday from people who loves it. The problem is the traffic is no where nearly as high as a I expect it. I tried SEO, Press Releases, Software Submission... still not too much luck.
John Senar Send private email
Thursday, September 26, 2013
 
 
For me it has always been tough to think of myself as a salesman. But I eventually saw the writing on the wall. You don't quit your job to go build a product. You really are quitting your engineering job and become a salesman. Most of us are pretty bad at being a salesman. But that is what it is. We wouldn't quit our jobs to go become dentists. But we don't really respect sales and think it is just a side issue. Sure we can do it. How hard could it be compared to engineering? But I found out it is hard. Much harder than math or coding anyway. Takes a lot of skill and guts. If nothing else, I have gained a healthy respect for people who are good at sales and marketing. Most of us engineering types don't like sales or salespeople any way. Didn't like them when we worked for the Man either. No wonder most of us don't succeed when we go on our own. How can you succeed at something you don't like doing?
codingreal Send private email
Friday, September 27, 2013
 
 
>I tried SEO, Press Releases, Software Submission

SEO takes time. Press releases  are very hit or miss, even if you have something interesting to say. Software submission gets very little traffic in my experience (depeneds on your market, of course).
Andy Brice Send private email
Friday, September 27, 2013
 
 
>How can you succeed at something you don't like doing?

I actually found that I quite like marketing. It is an interesting challenge. Especially the more geeky side of it (e.g. adwords). Think of it as hacking on Google/your audience, as opposed to hacking on your computer.

Also I don't have to do a lot of sales, the website and the free trial does most of it for me. I just have to answer pre-sales questions and follow up enquiries (usually by email). Might be different if you are selling big ticket B2B items, of course.
Andy Brice Send private email
Friday, September 27, 2013
 
 
@Andy: Are you making a profit from AdWords for a $29 product?

When I last looked at this, the only way I could see any way to do it was to have a bid price so low that the campaign was only getting a few dozen impressions per day... perhaps my audience is way smaller than yours.
Richie Hindle Send private email
Friday, September 27, 2013
 
 
>Are you making a profit from AdWords for a $29 product?

Yes. But I have a lot of adwords data and experience. It is getting tougher each year though:
http://successfulsoftware.net/2013/05/26/the-declining-profitability-of-google-adwords/

I'm not sure I would recommend Adwords as high on the list for anyone starting out with a $30 product now (unless you sell multiple per transaction).
Andy Brice Send private email
Friday, September 27, 2013
 
 
@andy or anybody else here,

What would you guys recommend for marketing/generating traffic? Obviously, just build it and they will come is not working out too well for many of us.

One big mistake I made:
6 Months ago, I purchased an expensive Press Release package from BlackhatWorld forum. Within 2 months, my targetted keyword was on 2 - 6th place. Which is great but the PROBLEM was the keyword I chose sounded good, however, after I researched it I realized it didn't have much search traffic. so ALWAYS research keywords first. Also if you're gonna purchase SEO, try only for WHITEHAT services.
John Senar Send private email
Friday, September 27, 2013
 
 
- Finding good advice and communities like this
- Having self belief.  Will people really pay real money for my software?
- Finding the time
- Getting over the build it and they will come mentality
- Getting over needing to do things perfectly
- Twittering, social mediaing, blogging when it feels like I should be coding
DanDan Send private email
Friday, September 27, 2013
 
 
These are very broad topics. For example, regarding bookkeeping, where are you going to start? The online Software you are using to track sales, accounting for your business, choosing your corporation type, the location of incorporation, paying taxes...

Regarding Advertising and marketing, there are also many angles: Adwords, Sales pages, A/B Testing, SEO, Mail campaigns, Analytics... You simply can't cover it all.

So why did I fail (or not succeed yet).

Well, I think you can't do all the work yourself. So you need to hire people. It's impossible to handle everything yourself, so you need

1. Hire people on a long term contract (employees)

2. Hire people on a short term contract to do specific tasks

This need one of the following

1. Capital (raised or your own capital)

2. Enough earnings

This means bootstrapping until your venture can make

1. enough money to cover your costs + the business costs

2. Additional money to start hiring

My current Software brought $2500/month in sales at its peak. It barely covers my expenses. I also freelance on the side.

If my Software brings $5000+/month, I'll be able to invest more.
Abid Omar Send private email
Sunday, September 29, 2013
 
 
Thanks for all the feedback.
Andy Brice Send private email
Monday, September 30, 2013
 
 

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