Made Redundant. Planning To Set Up On My Own.

[eek]

As someone has already said the other thing you need to watch out on is the idea that if you build it there will come has long disappeared.

You really need to spend as much time (if not more) working out how you will promote the business then on how you will create it. I've got a hundred bookmarks of things to look at but start with http://www.kalzumeus.com/blog/ and read everything there.

[FreeFall]

A lot depends on your appetite for risk. An unmentioned alternative;

If your idea is really that good, take it with you and speak to contacts in the IT industry who operate in the same space. Sell them your idea with your consultancy attached - capital cost of the idea, revenue cost of you to help them drive it from concept to product. They carry the development cost, you get a lump sum and a job. If the idea has legs then a decent, forward thinking, company will snatch your hands off. If it's marginal you may get a bite. if they can't see the sales figures then drop it as it's likely to be emotion rather than true potential. Make sure you get patents filed and NDA / CDA's in place first though if you're exposing anything about the value proposition for your idea. As someone has already stated - it's very easy to steal ideas.

I'd be tempted to do some research of the market first, regardless of your chosen path - it's very easy to overestimate the value when it's personal to you and extremely difficult to take an objective look. Others can do the latter for you very easily, and given half a chance they will (especially in this financial climate).

[JimDiGritz]

That's what I've found so far.. in fact it's part of the reason I came up with my thing in the first place. There was a very clear need to address a certain problem at my old company, and they were spending a lot of money trying to solve it. The problem was that they didn't understand the root cause of the issue, and they hired an outsider with no experience in the industry to solve it, using expensive third party tools and platform... the result is they've spent a year and a 6 figure sum producing something of negligible value... and they still have the same problem they had when they started!

In fact, the root problem isn't really a technical one at all... it's a people / systems thing. My thing is actually remarkably simple, but offers a much easier, more structured process which will ultimately solve the problem "organically".

I'm starting by pitching it to my old company, but if that fails I've got good contacts across the industry, so I'm confident someone will take it up... It's all about that first customer really, and making sure I under-promise and over-deliver.

Thanks again for the advice

So the main takeaway here is that you have identified a broken process which is causing your organisation and probably many others ££ pain.

Good start. Now you need to figure out how to completely de-risk your proposed solution. Spending six-figures pursuing the standard, accepted and understood 'solution' to their problem is far easier to defend than taking a risk on an unproven solution which may or may not be a silver bullet.

As I said earlier, my main line of work is now working with tech start-ups to help develop value propositions and positioning. I'm not going to promote my services on here however I have worked with dozens of software start-ups or early stage companies and all of them have struggled to get their first 'beachhead' customer. It is one of the things I see especially with companies started by engineers/developers. They often have brains the size of small planets and often are a bit sniffy about sales & marketing. All too often it is a given that their superior product will be simply be bought. it isn't.

Finally, if I can offer another piece of advice pick a sub section of the market and try to crack that first. Don't make the mistake of thinking that just because your solution is horizontal or can help almost every company you should try to go after every customer. Become famous for something. Again this is counter intuitive to most non sales/marketing people. Surely you should go after as many customers as possible? No, that's called boiling the ocean and it never works. Get known as the solution to problem X for HR departments - even if it is precisely the same problem that finance or operations has. This is how you gain traction and build momentum.

[RufflesTheGuineaPig]

I'm not a programmer myself, though I dabble a little. I've never set up a software company before either, so I'm always open to advice, ideas, etc.

I am a computer programmer. A very good one. I work for a small IT firm writing software for a niche market. And I can assure you that usually when a non-programmer thinks they have a great idea or have found a niche, their ability to exploit it depends on them finding a programmer willing to spend hundreds or thousands of hour coding for "several thousand pounds" or for a small (less than 50%) share of the company.

The programmer will be doing 90% of the up-front work and 50% of the work once the product is launched, so you'll need to have deep pockets. So assuming you can get a product to market in 12 months, you're going to need £40-60k for the programmers wages plus probably £10k for marketing, then £40-60k again in the second years as you'll be keeping the programmer on to support it.

Oh, and don't go thinking you'll be able to get someone in India to do it for peanuts. Pay, peanuts, get monkeys. Everyone in IT knows this. It's the main reason IT now has a reputation for failed projects.

[RufflesTheGuineaPig]

All too often it is a given that their superior product will be simply be bought. it isn't.

The trick is to get a customer first who is willing to work with you during the development phase in exchange for preferential pricing.

[JimDiGritz]

The trick is to get a customer first who is willing to work with you during the development phase in exchange for preferential pricing.

Alternatively you build the solution with your first customer(s). This is how the majority of enterprise software start-ups I know have succeeded. Use your close industry contacts to get a customer before you build the solution. Build it according to their requirements and get commitment throughout the process. Once you have the software up and running you can productise it and create a go-to-market plan to sell it to other companies. If you don't have these deep personal industry contacts then find someone who does and give them half the company! (hint: not a salesperson)

I'm glad that you as someone on the dev side are on the same page as me.

[ManVsRecession]

Awesome stuff guys.. and lots of very valuable food for thought. I can't reply fully right no

Jim, you and I are on a very similar wavelength here I think, and it is encouraging to hear someone with experience pretty much confirming the approach I'm taking.

In terms of de-risking the proposition, that's something I'm thinking about right now.

I'm thinking along the lines of rolling contract for me to consult 1 day a week with them, until such time as they see the potential and are eager to leverage it up with more resources, or decide they don't like it and terminate the contract. That, with an initial agreed duration say 3-6 months, is all I need.

This would be similar to FreeFall's suggestion, only I don't charge a fee, and keep the IP. Not totally risk free, but pretty close.

[ManVsRecession]

oops.. vague rushed post...

The idea would be to charge a freelance rate, but no fee for the idea / IP, so I'd keep them. In the worst case scenario, and unforseen technical difficulties scupper the project, the human / process side of what I'm proposing would still offer them good value.

[TalkingSense]

Ruffles, yes I have been to many pre-start up meetings with loads of people bouncing of the walls about how wonderful their product concept is.

Then they think they are doing us techies a favour by allowing us to implement (oh yes and do the fixed price estimate).

The Channel 4 Fresh Meat sitcom had a lovely scene in which JP "invented" a new idea for a smart phone / shaver. He then toddled off to the resident geek and gave him £100 to build it. Classic line "what are you doing in the bar, go home and get to work, I own you ".

Ho ho !

Apart from that, yes selling the product is key.

I totally agree with the approach of developing with a pilot customer, then rolling out.

Also, most startups do some WFH (Work for Hire) to keep cash-flow ticking over while they develop their product.

I have coded lots of things on lots of platforms. The work keeps trickling in even here down on the South Coast.

Could be worse, could be involved in renewable energy

[cybernoid]

Please send me a pm with precise details of what the problem is and what your solution is and all the work you've done so far. thanks

[eek]

Please send me a pm with precise details of what the problem is and what your solution is and all the work you've done so far. thanks

Why?

[ManVsRecession]

Why?

Fishing? I can't blame a chap for trying...

Actually do we even have PMs here? I can't find the button..

[eek]

Fishing? I can't blame a chap for trying...

Actually do we even have PMs here? I can't find the button..

I know he's fishing I just thought it was an incredibly unsubtle way of doing it.

[dangermaus]

Fishing? I can't blame a chap for trying...

Actually do we even have PMs here? I can't find the button..

You get pms after a cerain amount of posts

[ManVsRecession]

Ah, thanks dangemaus.

Thanks again for all the tips guys. Very valuable!

[eek]

this appeared on my rss feed this lunchtime. Its definitely worth a read

http://mobile.smashingmagazine.com/2012/11/07/succeed-with-your-app/

[ManVsRecession]

this appeared on my rss feed this lunchtime. Its definitely worth a read

http://mobile.smashingmagazine.com/2012/11/07/succeed-with-your-app/

Nice one Eek. That's a good little guide. I'm going to be mocking up design prototypes of the apps in the next few weeks, and I'll be drawing on some of that info. Meanwhile I'm burning the midnight oil on my main thing... wondering how I can cut the presentation down to fewer slides. better call it a night I think.

thanks again for the link!

MvsR

[porca misèria]

Hi,

I thought that I should add my tuppenceworth here.

What a splended thread. First wjk then JimDiGritz contributing well-reasoned posts that I really, really wish I'd seen when I first tried to strike out on my own. Spelling out so much of what I learned only by bitter experience, absolute poverty, and eventual retreat to contracting work.

[cybernoid]

I know he's fishing I just thought it was an incredibly unsubtle way of doing it.

[RichB]

Oh, and don't go thinking you'll be able to get someone in India to do it for peanuts. Pay, peanuts, get monkeys. Everyone in IT knows this. It's the main reason IT now has a reputation for failed projects.

That and a refusal to -think- about what they want before they open their mouths or sign something.

[eek]

Another post from my rss feed

https://training.kalzumeus.com/newsletters/archive/consulting_1

key comment charge the value of what you do not their value for the time your spending.

Edited November 21, 2012 by eek

[ManVsRecession]

Thanks Eek.. an interesting read. I guess that's what I'm trying to do in a way, selling the value.

I did my first pitch the other week, to my old boss. No luck unfortunately, though he like the general idea and is open to something in the future when things pick up. I also got some good feedback on the presentation itself which was very useful, particularly with regard to which aspects to focus on. In my case I'd gone mainly into the benefits and some examples of the user experience, but not enough into the the technical side.

In the meantime, I've got a 2 day "starting a business" workshop next week, curtesy of the DWP, and I really need to start earning too so I'm looking for either freelance work in my field, or something more menial where I can work on my own thing in my time off then approach more companies when I've got more details plans put together.

So... so far the score is Man 0 : Recession 2, but I can close that gap.

thanks again.

MvR

[ManVsRecession]

Well, it's a new year, and so far it's looking good.

Firstly, I've been able to bring on board a truly exceptional sales/business development person. I have exactly zero experience in this area, so this is a key appointment.

Secondly, we have a customer! This is a serious milestone obviously, and means I don't need to find other work to pay the rent whilst we build the thing. It also makes us a lot more attractive to investors, which means a proper development budget.

Soooo, I'll reckon the score is now Man 1 : Recession 2, and we're beginning to hit our stride

[ManVsRecession]

Oops, too late to edit my previous post, but just to add :-

The customer is paying for a prototype / proof of concept, rather than the full product, so I am able to do most of the development myself at this stage. Given the risk they are taking, I gave them a very good price on this prototype, and first refusal on the full system if they decide to go for it.

The need for a proper dev team is still there, but I have May-ish to find the right people.. I'm currently thinking one highly experienced rock-star engineer with the specialist skills I need, and one hotshot young graduate/PhD.. maybe 100k between the two of them?. Again I have zero experience putting together a proper development team, but I have friends who do, so I'm soliciting all the advice I can find on this.

It's all starting to get rather exciting to be honest

[Guest TheBlueCat]

The need for a proper dev team is still there, but I have May-ish to find the right people.. I'm currently thinking one highly experienced rock-star engineer with the specialist skills I need, and one hotshot young graduate/PhD.. maybe 100k between the two of them?. Again I have zero experience putting together a proper development team, but I have friends who do, so I'm soliciting all the advice I can find on this.

Depending on where you are in the country, that might be doable. The easiest way to check is to search for the skill set and location on jobserve.com to see what others are offering. My one piece of advice on hiring programmers is not to assume that 20 years of experience makes someone any good at it. It's very easy to have 1 year's experience 20 times, if you see what I mean. Finding people that can build something solid ab-initio is really difficult.