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Software Businesses

Eric Sink on Starting Your Own Software Company 234

prostoalex writes "The topic of starting your own software company was recently brought up on Ask Slashdot as a way to fight current employment trends. Eric Sink from SourceGear, who shared his software company-building experience before has written a new article published on MSDN. Getting started with your own software company suggests several simple steps to evaluate your abilities, count your estimated expenses and then start the software company, if the idea still seems feasible."
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Eric Sink on Starting Your Own Software Company

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  • by tcopeland ( 32225 ) * <<moc.dnalepoceelsamoht> <ta> <mot>> on Thursday January 29, 2004 @02:59PM (#8126122) Homepage
    ...on starting a company is right here [].

    Lots of similar ideas there, including a few rants against VCs and incubators.
  • by PedanticSpellingTrol ( 746300 ) on Thursday January 29, 2004 @03:00PM (#8126135)
    Advice on starting a software company from the MicroSoft Developer's Network? I have to say I'm just a tad leery of this generosity.
    • by The Bungi ( 221687 ) <> on Thursday January 29, 2004 @03:03PM (#8126164) Homepage
      What, you want advise from OSDN?
    • by fiannaFailMan ( 702447 ) on Thursday January 29, 2004 @03:29PM (#8126492) Journal
      He's not an M$ employee.
    • by Anonymous Coward on Thursday January 29, 2004 @05:41PM (#8128068)
      I posted this a little late when this was discussed a couple of days ago, so here it is again so that it can hopefully help out some people.

      You can't just throw clever programming at the problem and get money out the other end. For one, it takes a hell of a lot of marketing knowhow, something that most geeks should have known they were crappy at when the prettiest girls went to the fast-talking football players. There is much more to making a company than clever tech. Tech ability is becoming a cheap commodity.

      Amen. This gets right to the heart of what most people here don't seem to realize, much less mention. Starting a software company requires great coding AND marketing skills, not to mention a good sense of what would even be a good product to make. I'm speaking from experience here; I've succeeded in my own startup.

      Most geeks either don't have what it takes or aren't willing to put forth the effort required to make a software company succesful. Aside from the coding, there's the packaging and the selling. After the packaging and the selling, there's the support and maintenance. And by maintenance, I don't just mean maintenance regarding your product...but your company. Because once you get to the point where you've got a nicely packaged product that needs to be supported and maintained (assuming you've done it right), you've also got a nice little beast on your hands called a corporation.

      Now I imagine that most of this stuff would be a breeze for the average slashdotter, except for the part about packaging and selling (i.e. marketing). This is the most difficult area for geeks to master. The head of the evil empire is where he is today because of his mastery in this area. But Bill Gates isn't the only geeks with those skills, so if you want to succeed, find yourself a partner with (very important) BOTH marketing AND technical skills. Let him do all the talking. Let him handle user iterface, software packaging (installers, icons, etc...) and you can concentrate completely on coding while he puts a pretty face on it and handles the customers.

      Of course, this is all easier said than done. So I'll tell you what I've done and how I've succeeded. Hopefully this information will help you succeed as well

      A couple of years ago I was running out of contract work and I didn't want to go get a "regular" job because I don't like being a cog in the man's machine. So I decided to start looking for opportunities.

      Step 1: Look for an opportunity
      I figured it would be easier to start in a niche market with little competition. I also knew that small businesses are a ripe market for IT services. It just so happened that one of the companies I was doing part time consulting for was a small business in a niche market. The owner of this business had excellent contacts in his industry as well; I don't mention the industry because I don't want to invite competition :)

      I knew I possessed the marketing and people skills necessary, but I didn't quite have some of the coding skills to pull it all off. So I talked to a friend who is a top notch coder working for a large web hosting company who was interested in starting a business. I told him about my contact in this small, nich market and about the need for certain types of software. We both had similar outlooks on life and our personalities were a good match for a business partnership, so we agreed to start a company.

      Step 2: Incorporate
      I then did a little bit of research to learn how to actually create a company. Whichever of you is the smartest one should handle this. I just happen to have a 156 IQ, so it was a breeze. ;) My research led me to these guys [] who created a corporation for us in Delaware for about $100. We also bought a corporate kit from them (for ~$50) which included a corporate seal and all the necessary legal documents. On a side note, a lot of the informati
      • First, being a former high school jock (yeah, me and Al Bundy... great), I can tell you that being popular with women in high school is a combination of looks, status, and confidence. That's not to say you have to look like a movie star, that's not what I mean about looks. You have to have a look. It has very little to do with salesmanship in a clever sense. Frankly, if Bill Gates wasn't loaded, I doubt he could get a date, but he certainly knows how to run a business. I also doubt Brad Pitt is much of
  • by Anonymous Coward on Thursday January 29, 2004 @03:02PM (#8126147)
    Enough about Erik Sink's efforts. What about the companies started by Jon Fail and Trevor Bankrupt?
  • MSDN? (Score:5, Funny)

    by Anonymous Coward on Thursday January 29, 2004 @03:02PM (#8126151)
    Ahhh, finally step 2...

    1) Start small software company with flagship product
    2) Get bought out my Microsoft
    3) Profit!
  • Some simple advice (Score:5, Informative)

    by a XOR b XOR a XOR b ( 744728 ) on Thursday January 29, 2004 @03:02PM (#8126155)
    I know tht;s a bit flippant .... but if you use a PO Box for your company's registration and correspondance and no one ever is going to come to your house you're not going to piss anyone off .... and they probably wont care
    • One annoying thing about PO Boxes is that only the USPS is allowed to place mail in them, thus no FedEx, UPS, or other courrier services can send items there. More of a warning, because they are still useful for things like domain registration.
    • PO Boxes are expensive and only accept USPS mail. I have a box at The UPS Store, formerly MailBoxes Etc. It accepts mail from any service, and they will even hold UPS/FedEx packages for me (ones that obviously don't fit in my box.) One large advantage, IMO, is that it allows me to put my address as "12345 Culver Dr. #A144". This looks like an office suite, instead of a PO Box. YMMV. Good luck.
  • by L10N ( 458520 ) * <Bert DOT Bolin AT gmail DOT com> on Thursday January 29, 2004 @03:03PM (#8126167) Homepage Journal
    The advice seems very balanced and well-thought out. I RTFA and enjoyed it a lot. I want to encorporate these ideas as I start to look for a new job as I recently burned out at my support job and quit for sanity's sake. This is good stuff.
    • by Anonymous Coward
      I want to encorporate these ideas as I start to look for a new job

      First step: buy a dictionary!
      • awwww give me a break AC! I would bother to spell check, review, and have others assist in proofing important documents. Casual posts to slashdot I make a best effort submission of my ideas but I do not spell check them per se.

        wheeeeee spell check trolled by an AC
        *rolls eyes*
    • by Strudelkugel ( 594414 ) on Thursday January 29, 2004 @04:36PM (#8127316)

      This is good stuff

      Sure is. I started a company with some friends. It did great at first, then fizzled. I'm assuming you will eventually want to find others to help build your company. Here are my most critical observations about my experience:

      (1) How easy or difficult will it be to work with your partners? Be absolutely honest about this with yourself. Ambitious people have to have egos, but will everyone's ego drive the company forward or turn the company into a battleground?

      (2) Write up a business plan. Make sure everyone agrees to what it means in terms of roles, responsibilities and expectations. This will help a lot with item (1). As Eisenhower once said: "Plans are worthless, planning is indispensable."

      (3) Hire an excellent attorney to draw up the company documents before you write the first character of code. If you think you can't afford it, or worse, don't think you need to, you will regret it, and it will cost a fortune to do later what could have been done for less at the beginning.

      If (1), (2), and (3) are going well, it will not be that hard to raise money. Notice I haven't said anything about the actual idea, just as Sink describes. There are lots of things that people will pay for, and between you and your partners, you can think of a few products. Debate the pros and cons of each idea, then put the best one into the b-plan. Investors will be interested in your product/service, but they will be far more interested in your team's ability to execute. A bad team won't get funding for bottled fountain of youth, a good one can get funding for an arctic ice service.

  • Microsoft reads these forums.
  • 1: Get a good patent attorney.
    2: Don't write any software
    3: Sue
    4: Profit?
  • If you believe in Nomenative determinism [], you really shouldn't be taking business advise from somebody named Eric Sink.
  • Myer's-Briggs Test (Score:5, Informative)

    by ChopsMIDI ( 613634 ) on Thursday January 29, 2004 @03:06PM (#8126202) Homepage
    One way to increase your self-awareness is to take a standard personality test. There are several such tests, but my favorite is the Myers-Briggs Type Indicator (MBTI).

    Determine your personality here: []

    I'm an ENTJ (coincidentally, the same as the author of the article).
    • by Mateito ( 746185 ) on Thursday January 29, 2004 @03:13PM (#8126280) Homepage

      > I'm an ENTJ

      I'm FINE

      Fucked up, Insecure, Nuerotic and Emotional.

    • I'm also ENTJ. I would say that that particular web survey is flawed, but I've taken the real MBTI before, and it came out the same way. So I guess that means that link has a bit of credibility doesn't it?
      • by nelsonal ( 549144 )
        NT's are the typical "geeks" I'm an INTJ. It's their way of classifying people that broadly splits people into four groups:
        Artisans, who like action and activity, craftspeopel, artists, and lives of the party usually fall under the SP group. Guardians these are typically the politicians lawyers managers they love order. Those people who worked their tails of for straight A's were likely guardians. These two groups each make up 30-40% of the population, and typical couples are made up of one of each. NFs
        • There is an excellent book about MBTI called Please Understand Me and and an updated version of it called Please Understand Me II.


          Please Understand Me is *not* about the MBTI. It is about the four types, and how it *fits* with the MBTI. As for the MBTI, Keirsey hasn't the slightest idea what Intovert/Extravert is, and says it means shyness. He then explains S/N as how Meyers explains I/E. His T/F is absolute lunacy.

          Keirsey wanted to know what made people tick, so he looked at the outside of people t
      • 'm also ENTJ. I would say that that particular web survey is flawed, but I've taken the real MBTI before, and it came out the same way. So I guess that means that link has a bit of credibility doesn't it?

        Hmmmm... I took it twice, just because I didn't feel a simple "YES/NO" response was appropriate for some of the questions... that is, I could see going either way, depending on context.

        First time, I came out as an INFJ, second time as an INTP. After reading the descriptions of the types, INTP seems more
        • All these tests are neccesarily flawed. Keirsey mentions as much at the beginning of his book.

          The idea is to answer what your urges are, not what you actually would do. Further, there are rarely extremes cases of the letters, so the "iffy" questions balance out.

          I don't like "telling people what to do" or "giving order" too much...

          That's a J/P question. Js like giving orders. They believe in heirarchy.

          but I do very much enjoy instructing people in the sense of teaching, or showing somebody how to do s
    • I am an INTP. The Myers-Briggs test is remarkable...I recommend everyone (especially INTP) read it so they can understand the common traits (both good and bad) of their personality.

      INTP is a very unique group...only 1% of the world's population. But it probably accounts for at least 75% of programmers.

      Slashdot readership I would estimate as high as 50%.

      Idealistic...fascinated by complex abstract concepts (computers)...and of course doesn't always shower enough...sounds like a /.er to me!
      • INTP is a very unique group...only 1% of the world's population.

        As are all the INs. The ENTs, are nearly as small too.

        But it probably accounts for at least 75% of programmers.

        Probably not. ISTPs do just as well. Though, i must admit, there were more INTP programmers than other. But, all NTs and the introverted NFs are likely to be programmers too, and show up much more then 25% of the time.

        Slashdot readership I would estimate as high as 50%

        You are *way* off there. Slashdot readerships has likely a
    • An ENT? (Score:5, Funny)

      by DrCode ( 95839 ) on Thursday January 29, 2004 @05:04PM (#8127645)
      You mean you're extremely slow to make decisions, but once you've decided, you're unstoppable?
    • These tests are such a crock. You really think all people can be put in one of 16 pigeonholes? You really think a true/false test can tell you anything about your personality? Give me a break.
    • I'm an INTJ :)

      Sivaram Velauthapillai
  • MS... (Score:2, Insightful)

    by andy55 ( 743992 )
    Microsoft and its ilk don't do developer tools because the potential revenue is so exciting. Rather, they play in these markets because doing so is strategic support for their platform.

    Which is why I've always found Win32 example code, docs, and the like mediocre at best. In contast, Apple always has incredible and astoundly impressive dev docs, support, and communication. Whenever I'm trying to find stuff on msdn, it feels like the days when your searching for something using Hotbot. At Apple, I'm r
    • Re:MS... (Score:4, Insightful)

      by danheskett ( 178529 ) <danheskett@gm[ ].com ['ail' in gap]> on Thursday January 29, 2004 @03:13PM (#8126277)
      In all fairness to Apple and MSDN/MS....

      Browsing through the docs at Apple is like visiting a good friend's reading room.. things are how you expect them, already picked over, and some pages already dog eared. There are a few dozen or maybe a hundred volumes, all on topics that interest you.

      Visting MSDN is like visiting the Library of Congress. It's all there, it's just a matter of finding it all.

      Point being, metaphor aside, that MS is responsible for a LOT more software than Apple is, and even when you figure in hardware, it is a large deal bigger job to manage all that info for MS. And it's not just volume, they have to keep mounds of info for products that haven't been sold commerically in over a decade.

      It's a big job for Microsoft. Maybe Apple does a better job, but if you multiply the amount of info Apple needed to carry by about 50 or 100 times you'd quickly see that MSDN is not too shabby. It's pretty close to on par with offerings from competitors like Sun and/or IBM.
      • Re:MS... (Score:2, Interesting)

        by arf_barf ( 639612 )
        Yes, but that doesn't change the fact that you CAN never find anything in the MSDN. Even the integrated MSDN that ships with VS is shit.

        Best example: invoke help on the Format function in VB 6. Result: complete useless crap. To find the possible format expressions you have to look through 4 more pages that ere not even linked directly to the main page...
        • Re:MS... (Score:3, Informative)

          by cpeterso ( 19082 )

          I recommend using Google to search MSDN. Just add "" to search MSDN (or "" for KnowledgeBase articles). The MSDN search engine is worthless!
        • It works well if you already know what the thing you're looking for is called. For example, if you want class foo, just search for class foo and it'll find it through the whole mess. It has been my experience however, that search for how to do something (how do I convert this byte array into an int array, for example) on msdn is useless, as is searching for 'a class that does bar.'
      • Re:MS... (Score:2, Insightful)

        by jeff4747 ( 256583 )
        How does MS have more documentation than Apple?

        Apple has both hardware and software, with heavy docs on both. MS only does software. Sure, MS has Office and some products besides their OS, but so does Apple. MS's docs seem huge by comparison because they've redone the same thing 3-6 times.

        As for history, I've seen references to how an API worked back in System 6 in their on-line docs, so Apple has got quite a long history in their documentation too.

        The real deal is how much the company needs developer
    • I know what you mean about searching MSDN. I usually use Google with "". This generally directs me straight to where I want to go.
  • My top tip (Score:3, Funny)

    by Mr_Silver ( 213637 ) on Thursday January 29, 2004 @03:07PM (#8126217)
    The best way to make a small fortune .. is to start with a large one.
    • The best way to make a small fortune .. is to start with a large one.

      Actually, this *is* the Microsoft way. But first, you actually have to work for them, not a "perma-temp", then rake it in for a year or two, sell it or fold after sucking all the money out.

  • ...for people who are unlucky at finding jobs. Generate it!
  • Shareware (Score:5, Informative)

    by rjelks ( 635588 ) on Thursday January 29, 2004 @03:08PM (#8126235) Homepage
    The Association of Shareware Professionals [] has some great resources for writing, marketing, and selling software for the author on a tight (read almost no) budget. While some companies probably get VC help, I think this a great start for research if you are interested in trying out some capitalism with your software. There is a lot of competition due to the low barrier of entry, but a motivated individual with talent could end up quitting their day job. WinZip [] is a good example of a success.
    • There is a lot of competition due to the low barrier of entry, but a motivated individual with talent could end up quitting their day job. WinZip is a good example of a success.

      Sorry, don't think so. How many WinZip registration keys are floating around the internet? How much lost profit $$ does that represent for them?

      To me, it seems like a better example of how writing shareware earns you no money because it's that much easier to pirate/crack.
      • Lost profit? From people who weren't going to pay? Hah!

        See it as free advertising targetted at those who will pay.

        I register shareware I want to keep using, but even at $.25 it's not worth registering if I'm going to use it monthly - too much hassle. So I only register things I really like.

        I assume other people are the same way. I may not register WinZip because I work from the CLI most of the time even in Windows, but other people don't have a CLI copy of unzip, or are afraid of the CLI, WinZip is going
      • "Sorry, don't think so. How many WinZip registration keys are floating around the internet? How much lost profit $$ does that represent for them?"


        The $$ is in corporate licenses. Every mid to large company knows perfectly well that there are hundreds/thousands of copies of winzip being used by their employees. The license is cheap CYA. I bet there isn't a single SP 500 company without a corporate license to winzip
  • Finally... (Score:3, Funny)

    by faust13 ( 535994 ) <.gro.tsrifstoohsnah. .ta. .tcatnoc.> on Thursday January 29, 2004 @03:08PM (#8126240) Homepage
    Finally, I can be the one outsourcing to off shore development centers, and getting richer.

    Yes, this is a joke.
  • I do programming work for my company of course but I also do consulting work on the side using PayPal. I have done work for customers all over the world as C++ Architect using simply PayPal and email. However if you want start a software company I would say that most important is to have guards. In Tirupathi we must ensure that no one breaks in to steal the computers or the cables and other things. Also it is important to enforce discipline among coders because my company is very strict on discipline.
  • Go on, you know you want to!
  • do it! (Score:5, Informative)

    by mixmasterjake ( 745969 ) on Thursday January 29, 2004 @03:21PM (#8126384)
    just past the 1 year marker, having started my own business. he forgot the one thing that i think is the most important. make contacts before you take the leap. sadly, who you know is more important that what you know. if it weren't for the contacts i've made in advance of starting my business, i wouldn't have lasted two months.
    • Re:do it! (Score:3, Informative)

      by Gargamell ( 716347 ) *
      sadly, i agree that this is the most important aspect of generating revenue in any company

      i am in the situation where i see my NEW company making it with very little funding, simply b/c we have the right contacts, entry points, and of course determination (code)

      i will be sure to give the update in 1 year

    • Re:do it! (Score:3, Informative)

      by soloport ( 312487 )
      We started out with no customers or contacts :-/ We nearly shipwrecked our future, too.

      If you do start without customer, though, do pick up the phone and start calling like mad (google for the term "cold calling" and learn about good vs bad cold calling).

      Now we have plenty of clients and are beginning to grow through referrals.

      That was lesson # 1. Lesson # 2 (recent) occured when I spoke with a business-mentor/friend about how our business was doing and he said, about referrals: You have to ask for
  • From the MSDN article:
    One book I really like is called The Silicon Valley Way by Elton B. Sherwin, Jr. Note that I do not like the title of this book, since I don't like the way things are generally done in Silicon Valley
    I entirely agree. They sprawl everything out, build too many roads, and worst of all there are hardly any women in sight!
  • by Anonymous Coward on Thursday January 29, 2004 @03:24PM (#8126431)
    I started my own company developing new ways to access the internet that is cheaper and more reliab}=20 ]} } } }&..}=3Dr}'}"}[NO CARRIER]
  • Good advice (Score:5, Insightful)

    by glinden ( 56181 ) * on Thursday January 29, 2004 @03:25PM (#8126433) Homepage Journal
    Some excellent advice in that article. What I thought were the key points:
    • Ideas are worthless
      It's all about execution. The idea by itself is worth nothing.
    • Know Yourself
      Are you really prepared to do what it takes to force this company to succeed?
    • Understand the business
      You may not need a business plan, but you need to understand your product, competitors, and where your cash will be going during the first several quarters.
    • Seed capital
      Initial financing is difficult to acquire for a risky new startup and, even if you do find it, you'll end up working with little or no salary for the first several months.
    A startup can be rewarding, but risky, difficult, and challenging. If you're going this route, be prepared for the difficulties and determined to make it succeed.
    • I think the only part of this I have to disagree with is the common statement "Ideas are worthless".

      Now I know and agree that a good idea on its own is worthless, it just sits there looking smug, but never causes any effect. However, you can have the best execution in the world, be as energetic as you like, without some idea that separates you from everyone else you are 'me too'. About the only thing you compete on is price, and since others can undercut you, the end tends to be drawn out, messy and costl

      • Re:Good advice (Score:3, Interesting)

        by tomhudson ( 43916 )
        Sorry. but ideas are worthless.

        Just count the number of times people have come to you with a "great idea" that they want you to code in return for a "piece of the action". My response is always "Pay me $$$ and a piece of the action, then we can sit down and talk."

        Then they get all mad when I point out that their idea by itself has $0.00 value without my talent, and that, if I'm going to code it for nothing except a "piece of the action", why don't I just code it for "all the action". After all, ideas aren

      • To be clear, I (and Eric in his article []) only said that ideas are worthless without execution. We didn't say that ideas are worthless with execution or that executing on a bad idea is worthwhile.

        As you said, the trick is to find a great idea and execute on it.
  • by Junks Jerzey ( 54586 ) on Thursday January 29, 2004 @03:26PM (#8126447)
    Starting your own software company is easy, but you'll probably go under. The key is coming up with something that people really like so much that they're willing to pay for it. Obviously you have to conciously avoid geek tendencies to go Linux-only or to use Emacs for a GUI and so on. But that aside, it is still tough to come up with a real niche where you have _the_ product that people want to buy. You can't just jump into an existing niche with a text editor or password manager or anything else there are fifty of already. You also can't compete with high-end applications like Maya and Photoshop. Finding the right niche, and filling it correctly, is most of the battle.
    • This is true, there are a lot of ideas kicking about. You simply have to solve the problem. Try studying a discipline in IT and using that to improve a product. For example, postgres and mysql are DBMS's with a lot of room to grow. Learn the product, study the science, and build a better mousetrap. Nothing stops you from selling it, much as RH sells their version of Linux.

      The same could be said for Linux admin-ware. Study all the packages, the admins out there, and form your own uber-dashboard.

    • by JaredOfEuropa ( 526365 ) on Thursday January 29, 2004 @05:45PM (#8128133) Journal
      Finding the right niche, and filling it correctly, is most of the battle.
      Yes... if I look at a few of the more successful recent startup software companies or new software products, most of them are in niches that existed for quite a while, but (apparently) no one thought were there. All of these companies learned about another business, perceived an IT need that was not being met, and successfully fulfilled that need. The following are just a few examples, to give you an idea what I mean by 'learning another business'

      Accounting software. Yes, much bookkeeping software already exists, but one company noticed that there was no package available that was 1) in Dutch, 2) Easy to use for lack of (unnecessary) features, and 3) able to get non-accountants going quickly. They targetted home and small office users, with success

      Gym software An older example, but one of the best known ones, and one of the earliest small business niches to be recognised. Many companies discovered (independantly) that there was software to do accounting, software to work out training regimens, and software to track client training progress, but nothing that integrated all of these functions. Someone discovered this niche, and now there are quite a few packages that fulfill all of the IT needs of gyms.

      Power plant maintenance and safety management software With power plants being the domain of big, wealthy firms, you'd think they would already have decent software to coverall aspects of this. Not so, apparently. One student wrote a package to do data mining and efficiency improvements for a nuclear power plant, as his graduation project. He turned it into a business,, and now he is talking to many large European energy suppliers to sell his software. You can find profitable niches even in heavy industry, apparently.

      Pattern generation for embroidery machines I kid you not. Years ago I found out that patterns for embroidery machines were all made by the machines' manufacturers using record-playback... I asked to have a custom one made, and was quoted a price of about $500 for a simple pattern.
      I thought of starting a business, and sell software able to create patterns from scans to shops with such machines. Shops would be able to embroider custom designs onto jackets and such for $15 rather than $500. I never actually did it, but I know that the manufacturers of embroidery machines have only recently started to offer such software.
      This last example also illustrates the point against having too strong a competition. I could have been successful selling this software, but I could never have competed against the manufacturers, once they got into the action. I suppose being first to market wil allow you to outdo the larger competitors, but it will not last. Don't let such products be your only products. Or hey, you could get lucky and be bought by the larger competitor.

      Niches for software and IT services abound. Look around you, especially at areas where IT services seems 'too expensive', like small businesses, bakeries, mom&pop stores and such. Look for businesses with particular needs, and think about how IT can fill those needs.
    • You can't just jump into an existing niche with a text editor or password manager or anything else there are fifty of already. You also can't compete with high-end applications

      I hear this rhetoric so often that it seems true, but it is not. It is easier to be sucessful having a unique product that is also in high demand. But where are the ones willing to work hard to make something better than the existing, professional, mature programs?

      Where have the real programmers gone? The ones confident enough to

  • Contractors (Score:5, Interesting)

    by heroine ( 1220 ) on Thursday January 29, 2004 @03:29PM (#8126498) Homepage
    The right answer for 99% of programmers is to become a contractor. People have been becoming contractors since time began yet for whatever reason this is now a big deal. In 1999, most of the programmers out there were contractors.

    As a contractor you're satisfying all the reasons the authors give for starting their own "businesses" and it's a lot less of an initial risk.

    • I don't know about the US, but in the UK, there are around 40K+ unemployed contractors. It seems employers are only looking for experienced staff to work as project managers in order to take on as many graduates as possible.
    • I was a contractor during the whole dot-com bullshit, and it was great. I'm not sure what risk at all there is. I post on Headhunters take me out to lunch. I work. It was very, very, simple, and *much* more lucrative than doing what most suckers do: "permanent" employment.
    • Re:Contractors (Score:5, Informative)

      by EricWright ( 16803 ) on Thursday January 29, 2004 @04:09PM (#8126993) Journal
      It's funny, but in the late 90s, there were a lot of contractors out there because of the outrageous hourly rates they could command. Now, there's a lot of contractors out there (myself included) who are doing it because of a lack of permanent jobs.

      I've only been at this for 4 months now, but have a freshly signed and delivered 12-month contract (for which I turned down a permanent government job). At least I won't be out job hunting for 6-8 months, which IMO is the biggest down side to contracting.
    • Re:Contractors (Score:4, Insightful)

      by Renegade Lisp ( 315687 ) * on Thursday January 29, 2004 @05:49PM (#8128186)
      As a contractor you're satisfying all the reasons the authors give for starting their own "businesses" and it's a lot less of an initial risk.

      Absolutely. The one thing you don't need to have as a contractor is a good idea of something that other people might be interested in. You just work on what your customers find interesting and important. If all goes well, you can transform that into stuff that's interesting for you as well (that's why they hired you).

      Also, the one thing that counts more than anything else for a contractor is your contacts. You should build them before you actually start to depend on them financially, e.g. while you study. Actually, it doesn't take much conscious effort. It just happens if you spend long enough among technically oriented people.

  • by Anonymous Coward
    "Very few truly versatile people have the determination to finish a Ph.D."

    There is a difference between being versatile and unable to focus! One could argue that having the ability for focus myopically on one detail FOR A NECESSARY WHILE should be included in versatility. Versatility is not the opposite of being able to focus. By his definition that author seems to have confused ADHD with versatility.

    Truly versatile people tend to score very inconsistently on MBTI. The are far to busy switching betwee
  • by 192939495969798999 ( 58312 ) <> on Thursday January 29, 2004 @03:52PM (#8126776) Homepage Journal
    I noticed that the consulting firm that I work for now is essentially a software company, and that such a software company is incredibly easy to start, assuming that one already works at said consulting firm. The thing that takes the most time is winning the contracts in the first place. If you can get the customers (and therefore $) easily, you're home free.
  • by happyfrogcow ( 708359 ) on Thursday January 29, 2004 @03:59PM (#8126862)
    I'm sorry, but the MBTI is severely outdated. Here is a much better series of personality tests []

    Most important, in no order is this [], this [], and this []
    • My favorite question from one of those tests:
      Suppose a girlfriend or boyfriend that you were *really* into said one day, "You and me just aren't right for each other," and dumped you right there. Did you notice the poor grammar?

      HAHA...that's great!
  • Business Plan (Score:5, Informative)

    by Herkum01 ( 592704 ) on Thursday January 29, 2004 @04:39PM (#8127359)

    I disagree with his statement about a business plan, he concentrates on the one thing most people write then for, getting venture capital or a bank loan. While it is true that a VC or a bank would require this there is a very good reason to write one. It is focus yourself on what your are trying to accomplish.

    What is your product, who are your customers, how do you do business, what are your expectations. Do decide to write customized software for dentist offices or are you just desperately doing anything for cash? How are your customers going to know who you are and what you do if you are not willing to define what you do to yourself!

    Also starting your own business does require alot of focus, you have alot of things to do and you have to be timely about accomplishing them. Paying employees, the bills, contacting customers, while you are very scattered in what you working on, you cannot hop from one to the other just because you cannot focus one thing. The IRS will have your butt in a sling you don't do payroll properly, your customers will have your butt in a sling if you don't deliver what you promise, the list goes on and on.

    The other thing about small business is he ignores that you don't have to do everything yourself. There are alot of companies that cater to small business to do the time consuming but boring things that have to get done, like payroll. Always look around for help in this area because for $50/month(or whatever) is cheaper than you spending 8 or 10 hours a month trying to figure all the forms and making sure that they all get done in time.

  • by Bob Hearn ( 61879 ) on Thursday January 29, 2004 @04:53PM (#8127530) Homepage
    Here's my experience writing and selling ClarisWorks: []

    It's a bit out of date (we started in '89), but even so, we were told it was too late to get into the software startup game. We had no business plan. Yet we managed to beat our Microsoft competition (MS Works), with no venture capital, in fact without even incorporating... of course, getting bought by Claris helped. But I think keeping everything ultra-low overhead was essential - *all* of our time was spent designing and developing, and none on coming up with a business plan, a "failure plan", etc., as described on the MSDN article. YMMV...

    There are still plenty of great ideas out there, waiting to see the light of day.

  • by jmalm ( 723129 ) on Thursday January 29, 2004 @05:09PM (#8127702)
    "Borrow against your home.
    Borrow from friends and family.
    Have a working spouse.
    Borrow from your credit cards."

    Obtain money from a potentially major customer

    This one is often overlooked. If a company has a problem they need solving and is willing to fund some of your development effort to solve it, this is a golden opportunity. Depending upon what problem you are solving, the company may not be interested either in owning any of the IP you create or supporting the product if/when it takes off.

    This is how the company I'm with now started and their sales are $500MUSD per year. It all started from a $500K investment from a major industry leader, who remains the company's biggest and most valued customer.

    • This kind of funding is often overlooked.

      I have always thought that for a software company, it would probably be a good way to start out:

      Develop a piece of software to alpha/beta quality, then find a company that would like to use the software. Offer some form of a deal where they get the software "free" and future updates "free", in exchange for some seed money.

      Ok, so at first it wouldn't be "free", but if the company grows and the software becomes something big (ie, you get many more clients), they might

    • "Borrow against your home.
      Borrow from friends and family.
      Have a working spouse.
      Borrow from your credit cards."

      Sounds like good advice for losing your house, your friends, your marriage and ending up in debtors prison.

  • Not Worth It (Score:3, Informative)

    by NatZi ( 119253 ) on Thursday January 29, 2004 @06:16PM (#8128482)
    I would think seriously before starting a "software" company. As an experienced software company executive, the current legal and economic climate minimize the viability of any software firm.

    First -- unless you are well funded, the errors and omissions insurance is either unavailable or so costly as to not be economically viable. Starting a software company today, considering the patent portfolios of most companies and the litigious environment, is simply negligence.

    Second -- if I had a micro-payment for every person who thought that he or she could "do better on their own," I would make Microsoft look like the corner grocery store. Frankly,it is not that there are no good ideas nor that there are no goiod people. The current legal environment practically limits any innovation. Until software "patents" are struck down, this issue will not change. If you think you have a "hot idea," you would be best served, and probably save yourself a lot of litigation costs, by keeping it to yourself.

    Third, many people starting a company naively think "gee, I earn $60,000 per year" so I can just charge that to the customer myself and make a killing. However, to "earn" $60,000 in salary, you would need to bill, on average with very low overhead, $150,000 to $180,000 of work. Are you prepared to do that (including working three times your current work week)? Most new entrepeneurs fail because they underprice services. Undercutting rarely works unless you have a true commodity. And even then, you better have reserves to survive when your competitor undercuts you simply to make a point.

    Frankly, I would councel people to make use of there time for something worthwhile and not waste time on software. The patent environment makes it almost impossible to innovate without paying license fees. It simply is not worth it.
  • by Zapdos ( 70654 ) on Thursday January 29, 2004 @06:22PM (#8128575)
    Please do yourself a huge favor and follow this link S.C.O.R.E. []

  • by snatchitup ( 466222 ) on Thursday January 29, 2004 @08:10PM (#8129682) Homepage Journal
    My company is staying afloat because I immediately outsourced to the Russians. They were way cheaper and better than the Indians. Plus, I love Dostoesky.

    Hey, if you can't beat 'em, join em.

    You got to start with outsourcing just to stay competitive.
    1. Make a BASIC interpreter for a new hobby computer using your university's computing facility.

    2. Profit for at least 30 years!

A language that doesn't have everything is actually easier to program in than some that do. -- Dennis M. Ritchie