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On Starting a Software Business

stephaniehurlburt.com

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Re: On Starting a Software Business

#111

Post by davidbanham »

k__ wrote: post #85
jwildeboer wrote: post #83

Earlier quoted context omitted.

So basically she worked hard on her skills and invested a lot of time and effort to talk to a lot of people to meet the persons that allowed her to grow her business. Most people don't do that and complain. ;-)

For me the point here was, that the meeting of that person the most crucial step and also pure luck. Writing about "Starting a Software Business" which boils down to "just know the right people" is a bit demotivating :\

She made her own luck by making a concerted effort to meet lots of people who may be relevant to her business.

Re: On Starting a Software Business

#112

Post by valuearb »

x0x0 wrote: post #105
valuearb wrote: post #92

Earlier quoted context omitted.

It's not the 50-50 split that's bad, it's the part where you don't talk about vesting. I have a friend who confounded a startup with another guy. It started with my friend agreeing to put in $20K and some advice, the other guy working full time, for a 50-50 split. After one year my friend has put in $200k+, worked full time building business, marketing, etc, while the other founder does his own job poorly. They agree…

I don't understand -- how would vesting have helped? If you can't fire the other person, vesting doesn't help when you have dead weight in the cap table. It sounds like the only remedy is your friend should have had hard conversations earlier when the other partner had less leverage...

Actually vesting would have reduced the other partners leverage greatly. First, they would not have been an LLC, would have already been a C Corp. The partner was refusing to sign the transfer docs so they could become a C corp to leverage outside investment, and give employees option agreements. If they had been a C corp, my friend would have gained more shares with every investment, and could fully control corporation decisions. Vesting also would have made it more clear to his partner how little equity he yet had, and more amenable to working together.

But outside my example, starting any new idea as a 50-50 partnership without vesting requirements is a terrible idea.

Re: On Starting a Software Business

#113

Post by ClassyJacket »

theparanoid wrote: post #72
tertius wrote: post #56

Earlier quoted context omitted.

I'd like to see some responses to this from some gurus. I have the same problem. I have a bunch of generalized skill but I feel not enough to make large $ with consulting. I don't attribute this to impostor syndrome.

Specialize. It doesn't have to be an esoteric domain. Something like Go server apps or Docker is enough.

With an industry that moves so ridiculously fast, how do you know what'll be in use in the few years it'll take to become good at something?

I feel like if I'd learned web development five years ago I wouldn't know anything about it today.

Re: On Starting a Software Business

#114

Post by dgacmu »

JamesNK wrote: post #95
ridruejo wrote: post #60

Earlier quoted context omitted.

The point is scaling without increasing linearly the number of employees. Accenture has approx. 400K employees

A succinct way of putting it is there is a finite profit margin on consulting.

Agreeing: https://priceonomics.com/which-companies-have-the-highest-re...

Accenture is #493 of the S&P500, at $101k of revenue per employee. (!) They're doing a bit better than McDonalds (#497). The scalability argument holds -- compare to Netflix, which scales quite well (#23, $1.9M/employee).

Re: On Starting a Software Business

#115

Post by [deleted] »

themgt wrote: post #77
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 think it's possible find a useful middle-ground between consulting and product building, in the pg "do things that don't scale" sense. As the article also points out you can kill a second bird with the same stone, which is self-funding via the consulting. And then ideally via the consulting you find a niche(s), build your own processes & tooling for your niche to deliver value to clients, and then can product-ize o…

[deleted]

Re: On Starting a Software Business

#116

Post by personjerry »

davidbanham wrote: post #110
Kostic wrote: post #79

Earlier quoted context omitted.

Is it really? Do we have data for geographic distribution of HN users?

A little old, but this is the best I could find. https://news.ycombinator.com/item?id=3298905 That poll indicates that the significant majority of HN readers reside outside the Bay Area of San Francisco in the US.

Yes, but that's definitely disproportional to the % of population of the Bay Area relative to the world

Re: On Starting a Software Business

#117

Post by x0x0 »

valuearb wrote: post #112
x0x0 wrote: post #105

Earlier quoted context omitted.

I don't understand -- how would vesting have helped? If you can't fire the other person, vesting doesn't help when you have dead weight in the cap table. It sounds like the only remedy is your friend should have had hard conversations earlier when the other partner had less leverage...

Actually vesting would have reduced the other partners leverage greatly. First, they would not have been an LLC, would have already been a C Corp. The partner was refusing to sign the transfer docs so they could become a C corp to leverage outside investment, and give employees option agreements. If they had been a C corp, my friend would have gained more shares with every investment, and could fully control corporat…

But even if they had been a C corp, vesting or no vesting, it sure sounds like they were both still employed so it still would have been a 50-50 equity split. Thus your friend couldn't have ordered anyone around? In order for vesting to help, someone has to be no longer employed and thus no longer accruing equity.

I'm not arguing against vesting, but I don't understand your example.

Re: On Starting a Software Business

#118

Post by imron »

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…

> I'd like to hear more specific experiences on switching from working for free to $CONSULTING_RATE for the same client

You probably can't. If you perform some regular work for someone for free, then they will think that that is your rate, and they come to you because your rate is so low.

The help the OP is talking about, is things like:

"Our most successful publicity attempts always sprung out of helping others-- we did several community workshops, mentored lots of people, helped people find jobs, etc. As time went on, we also got more invitations to speak about the product at events and conferences."

Re: On Starting a Software Business

#119

Post by pikachuaintcool »

jboggan wrote: post #61
pikachuaintcool wrote: post #47

Earlier quoted context omitted.

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

Please expound, I feel like I understand some of the risks but am curious to hear your objections. I personally would prefer bootstrapping but I think there are times when a market is growing quickly and you don't want to be left on the sidelines.

Honestly I wouldn't take my opinion seriously, I have very little experience in industry and my opinion might be misinformed. But if you really care, I'm talking from an ethical perspective. Imagine if Facebook or Google or Twitter were successfully bootstrapped, think about how much better off everyone would be. If all you care about is making money then VC money probably would work I guess. But it makes me sad.

Re: On Starting a Software Business

#120

Post by ericd »

pikachuaintcool wrote: post #119
jboggan wrote: post #61

Earlier quoted context omitted.

Please expound, I feel like I understand some of the risks but am curious to hear your objections. I personally would prefer bootstrapping but I think there are times when a market is growing quickly and you don't want to be left on the sidelines.

Honestly I wouldn't take my opinion seriously, I have very little experience in industry and my opinion might be misinformed. But if you really care, I'm talking from an ethical perspective. Imagine if Facebook or Google or Twitter were successfully bootstrapped, think about how much better off everyone would be. If all you care about is making money then VC money probably would work I guess. But it makes me sad.

That's a big if, at least in Twitter's case.
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