On Starting a Software Business • Hacker News Board

Re: On Starting a Software Business

#41

Post by siliconc0w » Sun, Jun 25, 2017, 5:16 PM UTC

Consulting doesn't scale, software does.

One pragmatic strategy to find product/customers:

    1) Pick an industry
    2) Ask someone in that industry what they use spreadsheets for
    3) Build something better

There is a lot of 'cybernetic' processes that are a mix of humans with domain knowledge and machines with spreadsheets for schemaless storage and querying. Generally the move is to encode the domain knowledge into code and standardize the storage (i.e excel -> RDMS) to make it more useful.

Re: On Starting a Software Business

#42

Post by quickConclusion » Sun, Jun 25, 2017, 5:18 PM UTC

westoque wrote: post #8

Interesting about the 50-50 split. If you talk to most people in the valley, they would probably tell you this is the worst thing you can do. That is, if you're looking from the perspective of a VC.

We're talking about a small consulting shop here at the start, where the paycheck comes form the actual work. Makes a lot of sense. No VC would touch that kind of business at that point anyway, not scalable.

Even later on, once they have a product, why would you change that? 50-50 is great, since you need both parties to agree to do something, which is essential in a small business like this.

Re: On Starting a Software Business

#43

Post by EGreg » Sun, Jun 25, 2017, 5:19 PM UTC

personjerry wrote: post #36

thomk wrote: post #12

Earlier quoted context omitted.

Strike up a conversation with anyone, casually mention you work with computers and they will tell you every problem they have from their horrible cellphone reception to the idiot IT guy at work to issues with Excel. Whatever the current 'computer' problem is, your'e about to hear it. That's step 1. Step 2 is give them some solid advice in the form of a few things to try. Say "Well here's what I would do" and tell the…

Not if you live in the bay area

Why not? Can you elaborate

Re: On Starting a Software Business

#44

Post by EGreg » Sun, Jun 25, 2017, 5:21 PM UTC

Observe what people are doing inefficiently that you can fix.

Test whether they'd buy it with google adwords or facebook ads and conversion rate to filling out the form and putting in credit card. Refund everyone.

Imagine how it would be viral and test your hypothesis as well. So your customer acquisitin cost goes down exponentially!

Re: On Starting a Software Business

#45

Post by Silhouette » Sun, Jun 25, 2017, 5:26 PM UTC

bluedino wrote: post #33

skybrian wrote: post #3

I'm wondering about how they draw the line between "give first, take later" and "don't do work unless you're getting paid for it."

I'd like to hear more specific experiences on switching from working for free to $CONSULTING_RATE for the same client I helped a local business group with their website, their previous host shut down and all they had was an archive on CD, they had some quotes for 10-20 hours to get it back up and running (and then everyone wanted to charge them hosting/domain registration). I did the work for free. A couple hours imp…

This is an example of a more general problem with undercharging (or doing spec work) in any creative industry. If you don't charge what you're worth, perhaps because you're trying to be helpful or offering "mate's rates", then you may get one happy client but you'll also get underpaid. Then that client will happily recommend your (excellent value!) services to their friends and colleagues who are also looking for (excellent value!) services and will be happy to similarly underpay you. And so it goes on.

In my experience, there are really only two levels of pricing that work. You can work literally for free, or for some token payment so someone is an official client of your business. This is sometimes helpful very early in a business to start some sort of portfolio and establish a bit of credibility, but otherwise I think it should be reserved for genuine charity work where it's clear that it's a gift and not your normal working practice. Everything else should be charged at decent professional rates immediately, both so you don't undersell yourself and to dissuade potential clients who can't or won't pay decent professional rates and all the other similar potential clients in their network.

Re: On Starting a Software Business

#46

Post by chubot » Sun, Jun 25, 2017, 5:30 PM UTC

siliconc0w wrote: post #41

Consulting doesn't scale, software does. One pragmatic strategy to find product/customers: 1) Pick an industry 2) Ask someone in that industry what they use spreadsheets for 3) Build something better There is a lot of 'cybernetic' processes that are a mix of humans with domain knowledge and machines with spreadsheets for schemaless storage and querying. Generally the move is to encode the domain knowledge into code a…

I've heard this before, but part of the appeal of the spreadsheet is that Patty from accounting or Joe from HR can modify it without having to ask any IT staff, including you.

So I don't think it's a foolproof scheme, unless your solution is also programmable/customizable, which is a lot of work.

Re: On Starting a Software Business

#47

Post by pikachuaintcool » Sun, Jun 25, 2017, 5:31 PM UTC

westoque wrote: post #8

Interesting about the 50-50 split. If you talk to most people in the valley, they would probably tell you this is the worst thing you can do. That is, if you're looking from the perspective of a VC.

Taking money from a VC is probably the worst thing you can do.

Re: On Starting a Software Business

#48

Post by personjerry » Sun, Jun 25, 2017, 5:49 PM UTC

EGreg wrote: post #43

personjerry wrote: post #36

Earlier quoted context omitted.

Not if you live in the bay area

Why not? Can you elaborate

In the Bay area everyone is assumed to be in tech unless otherwise noted, so this sort of uninformed response to "I'm a computer guy" is generally not seen

Re: On Starting a Software Business

#49

Post by sethev » Sun, Jun 25, 2017, 5:57 PM UTC

siliconc0w wrote: post #41

Consulting doesn't scale, software does. One pragmatic strategy to find product/customers: 1) Pick an industry 2) Ask someone in that industry what they use spreadsheets for 3) Build something better There is a lot of 'cybernetic' processes that are a mix of humans with domain knowledge and machines with spreadsheets for schemaless storage and querying. Generally the move is to encode the domain knowledge into code a…

Accenture revenue in 2016, $32.9 billion. Consulting definitely scales.

Re: On Starting a Software Business

#50

Post by thomk » Sun, Jun 25, 2017, 6:04 PM UTC

personjerry wrote: post #36

thomk wrote: post #12

Earlier quoted context omitted.

Strike up a conversation with anyone, casually mention you work with computers and they will tell you every problem they have from their horrible cellphone reception to the idiot IT guy at work to issues with Excel. Whatever the current 'computer' problem is, your'e about to hear it. That's step 1. Step 2 is give them some solid advice in the form of a few things to try. Say "Well here's what I would do" and tell the…

Not if you live in the bay area

You're right. I would like to amend my comment to exclude the .004% of the Earths surface that is the Bay Area.