How to Start a Software Development Company Right after College?
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The software development process is like an art where there are different techniques for creating a product. But you see, the key to running successful releases is entirely non-technical. It’s about the process. The MVP (minimum viable product) release process has become the best way to promote its values to IT newcomers. We decided to create a little guide for those who dream of their digital business but do not know where to start or are afraid to fail because of a young age.
Business success has nothing to do with IQ. If that were the case, many entrepreneurs would probably not be able to realize their projects. It is crucial to feel excited about the opportunities before you are in any business. Every time you get burned with an idea, do not waste your most valuable resource: time. Working 20 hours a day won't make you more productive - it will only bring you closer to burnout. Practice shows that 8-12 hours is enough to promote the business.
Starting your own company looks a lot easier than you might imagine. So you have two options:
- Hire outsourced staff.
- Make a one-person company.
Next, you have to understand what type of business you want to open: based on the release of products or services. For example, will you create software that can be sold to clients who will use it on their own (product-based), or will you solve the problem for your clients and then charge them (service-based).
As always, the content in this article is derived from Multiprogramming Solutions' years of experience running MVP software and is not to be interpreted as financial or legal advice.
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Get an awesome software product ideas
The secret sauce of a great product or service is its value to the customer and its ability to solve problems. Before launching your brand, be prepared to spend a lot of time studying the market and competitors. The first time you cast your line, you'll realize that most of your potential competitors target a wide net in branding and marketing. Hence, the understanding of the audience of such companies - given that most business owners are people with non-technical backgrounds and are completely non-oriented in the industry, this approach can be overwhelming. But by honing your skills in specific areas and developing innovative MVPs designed to address specific business goals, you can also win the public's attention. By focusing (as a developer) on what you like, you get the opportunity to work in a narrow market segment. Therefore, you move faster towards leadership rather than being devoured by large competitors in a pond with small fishes. Unfortunately, you are much more likely to get eaten if you do it.
Your marketing strategy should be as plain as a pikestaff, for instance:
- Your goal is startups.
- You implement software startup ideas by creating an MVP.
- After testing, the business owner understands the product's viability and probably continues to work with you.
There are specific processes that you have to consider when building a product. One of them is forming the most profitable and popular product or service concept. But if you have even a few clients, you have to generate hundreds of ideas, which is already quite tricky. So here are a few basic ways of how to start a software business without getting burned out by “ideas” fever.
- Take notes from the beginning of your journey
Sometimes, you should go from the opposite: if the search for a niche traditionally starts with demand research, you should try to offer your vision to the market. After all, you will be able to experience more emotions and inspiration while creating your product or service, and this, in turn, will allow you not to burn out and lose energy at the beginning of the process.
- Evaluate concepts
Systematize ideas based on your own experience and the state of the industry. Please answer the question about the longevity of your creation, its relevance, scalability, level of customer satisfaction, the complexity of execution, and cost-effectiveness. Try applying a grading system on a scale of 1 to 10 to each parameter listed. Review your notes regularly - the grades will change depending on the situation. Then, before you take the job, you will be able to determine precisely how necessary it is in the current timeframe.
- Model future software
Having done the most challenging action, namely choosing a project, feel the momentum and finally start working on it. Try to simulate a future project and test its viability. Note - the failure of initial tests does not always mean the collapse of everything. Dig a little deeper and study the audience segment and the problem you want to solve. As practice shows, most projects fail not for lack of funding but because they are non-innovative, irrelevant, and do not solve the problem at a high level.
Now let's break down what to do next once you've settled on something: build or buy software decisions?
What young entrepreneurs need to realize in their plans is the right amount of capital from the right investor. The initial stages of investing from your pocket are risky, especially if you have not had this experience before. Cooperation in conjunction with a business angel, on the contrary, will help you not to lose your own money by virtue of some agreements, but also, in case of failure, do not screw up and immediately start something else.
So, to find the money, you need to make a proper business plan that can attract the attention of potential investors. When striving to succeed, you should consider that investors are more likely to accept a startup idea if supported by software development startup costs and experimental data. Even if you are sitting in an incubator garage somewhere, take the opportunity to test the MVP. After all, people in business usually follow the Learn-Measure-Create principle, whereas a young startup should begin from the opposite direction.
So, how to start a software company and get projects? First, look for the right people and their attitudes. To find an investor, check out the following platforms: Forbes, BusinessInsider, CrunchBase, and AngelList - here, you'll find an abundance of options with detailed descriptions of preferences, investment stories, accounts, etc. Another choice is to find specific platforms (like F6s, 500 Startups, and Gust) where both parties are looking for collaboration opportunities. In this case, note that each transaction will be removed 5-10% commission. In addition, there is a third search option - attending conferences and meetups. Live communication is best for successful contract signings and creates an aura of nonchalance and trustworthiness. Finally, you can visit, for instance, AngelSummit, Webit Festival Europe, and SVOD - they will amaze you with the level of information, help you decide on the niche, and open new opportunities for your future company.
Of course, the linchpin of everything is the people, or rather your company's employees. If you are a one-person band, you will find it more challenging to promote your ideas, and you will have to perform many roles, from project manager to kungfu master. If you want to be more relaxed and earn more, look deeper into how to manage a software development team. Keep in mind that investors evaluate professionalism under the prism of goals and business strategies, which is sometimes difficult to implement without people.
Partner with software developers
If you have everything ready to launch a startup, from an idea and a vision to an investor, but you cannot turn it all in the right direction yourself, you need an outsourced development team. Let's talk about this with a simple example. To keep up with the latest business trends and gain a foothold in the marketplace, you can launch a new app or upgrade an existing one. The same goes for hiring people: you have a choice to create your stable team of specialists or resort to outsourcing. The first option is always more attractive but challenging to perform. And here's why: it takes an average of 39 days to hire an employee.
Outsourcing is more profitable in terms of costs - your investor will note this immediately considering the business plan for a software development company. But it also has its disadvantages because finding a professional prepared for the strategy of a business idea is also tricky. In addition, such cooperation includes the risk of unstable earnings for the developer, which can be a blocking factor in his work. According to the survey, 52% of companies plan to get outsourced employees, and more than a third of organizations have already implemented this practice. At the same time, they consider the skills needed to start a software company.
Outsourcing has recently become the most affordable option for startups because it reduces project costs by 59%. The people you hire are undertaken to perform all the goals of the sprints’ strict deadlines, which is closely related to the fragile trust of the client.
We decided to give you some tips to help you partner with developers.
- Experience matters!
Regardless of how brilliantly knowledgeable the specialists are, their experience in a specific pool of tasks plays a crucial role. You will clearly understand their working capabilities by evaluating the portfolio or even downloading some of their applications.
- Pay attention to pricing
Every business has different needs, and developers offer several interaction models (e.g., hourly or monthly payments). Find the perfect one for you, and go for it!
- Commitment and meeting deadlines
International teams living in different countries and time zones with cultural differences sometimes face misunderstandings and disruption of agreements. Therefore, take care to create a reliable team responsible for all tasks.
Please note! Ask your employees to sign NDAs (non-disclosure agreements) and adhere to other security measures. That will be the right decision.
Yes, yes, we've already talked about this above (see Find investors); nevertheless, for the creativity of your innovations to benefit the investor and the audience, a higher degree of awareness of all MVP business processes is required, which can only be checked by testing.
So now, dawn on your white lab coat and apply skepticism, empiricism, hypothesis, and falsifiability to build a minimum viable product. But, first, record and review all the assumptions underlying the concept. For example, to facilitate the process, you can use the Business Model Canvas, which will give you an idea of starting a software startup in reality and answer questions regarding customer value, cost, etc.
Then choose a couple of experiments that can support your claims. For example, you can apply A/B testing, which helps determine the willingness of your target audience to pay money for your products or services. At the end of each round, ask yourself how much evidence you have obtained that supports your assumption about the business model's profitability. Is it worth freezing the project or moving on? The riskiest ones can now be transformed into falsifiable hypotheses by setting minimum success or fail criteria. Ultimately, the answers will form a shared vision of the need to launch the project. In addition, each repetition of this cycle will help identify bugs and improve the user experience.
By the end of this blog, we hope you have the answer to what to do while starting a software company. With market research and survey reports in mind, you should carefully consider the ideas generated and identify their innovativeness for the market, thereby creating artificial demand.
If you have just finished college and are thinking about starting your own business, this article is just for you. We've compiled the best tips from industry experts to help you decide on a niche, a team, and a project budget. In addition, we described the process of finding investment while starting a software company with no programming experience. Well, we hope you get lucky! Be brave and dare because everything is sure to work out.