Launch a company

So you know you want to build that next big Google, but how do u go about it?I came across a few different books or articles on how to start a software company and they offer some interesting insight, which i summarize below in addition to some of my own thoughts:

Heres a broad outline of the steps involved in building a software company:

Step 1:You have a Bright Idea! Really?

Try playing devils advocate..Whats unique about your idea? Has someone else tried something similar ? What was the outcome? How will you compete with existing players? On Quality? Functionality? Price? How many potential customers are out there for the product/solution you have in mind? Do you have a rough guess on how much it will cost to produce this software? As VCs love to say, Ideas are dime and dozen..its all about the execution.. so think through your idea not just in terms of market potential but in terms of feasibility for execution as well..Do you know what skills are required to code this software? Do you have these skills or can find someone who does who will program this for you at a low cost? How will you sell this software? As a service?

Step 2: Fail to plan, Plan to Fail

Very often, entrepreneurs get overwhelmed when they hear the word ‘Plan’. the immediate reaction..Lets go write a detailed business plan that we can show off to VCs..thats great..but seriously…do u really need to spend days and nights trying to come up with a great looking/sounding plan? I think do your due diligence with respect to the market size, opportunity, competition, and financial projections and just note down bullets in a word doc, without sweating over deciding on a business plan format. You can come back to the pretty stuff later..get the basics noted down. and move on to the next step building your beta version of the software..

Step 3: What have u got to show?

Come on..what have you got to show.??.besides some fantasies about changing the world..Its time to sharpen the coding saw and get cranking..decide on the key features you would like to include in your beta version and identify features that should be included in future releases..also if you plan to have several tiers of offerings such as basic, pro or premium in case of a SAAS type offering..break down your features that fall into each tier..you should aim to build ONLY the basic set of features initially,,unless you are loaded with cash and have an army of folks working on this..Get to market quickly with a beta version that includes basic features enough to demonstrate the value of your product/solution..This will be vital for the next steps.

Step 4: Lawyers..Why do we have to deal with them????

Lawyers..its a love hate relationship.. But they are really vital to a start up’s success..Ensure you have the legal stuff in place before going to market..such as Forming a LLC or S-Corp or C-Corp..You dont have to worry about this stuff initially..Get the product ready to sell first, and when you are ready..Go find a good lawyer or use one of the online incorporation services such as www.legalzoom.com

Step 5: Whos got the $$$$$$$$$?

If you were able to bootstrap your firm till you had a beta version ready, VCs are likely to give you some more attention for 2 reasons

a) They know you are serious, are a risk taker and have come this far knowing the challenges that lie ahead

b) They have a demo version that they can evaluate and decide if this is worth their time and money.

Nows the time to burn that midnight oil on sprucing up your business plan to look pretty..Attend as many trade shows, conferences, as you can.. Angel investors are great resources for taking that next leap as well. Negotiate term sheets with Venture capitalists..they tend to be very demanding on the percentages,,so watch out..

Step 6: Would you like to help us succeed?

Now that you have hopefully obtained some dollars..its time to call your buddies and associates and see if they may be interested in lending a helping hand..Most startups that succeed depend on team members who the founders either know personally or have strong recommendations from those they know..Be wary of the compensation here..VCS would like to see their money spent wisely..so try to minimize actual salary based costs..try negotiating equity or see if they can help you part time etc.

Step 7: Get the word out

Now that you have a product ready for the market, and hopefully some marketing dollars, reach out to your target customers..for SAAS or online companies, its critical that proper Search Marketing dollars are invested..A lot of the SAAS companies,..especially the ones targeting consumers like you and me and not enterprises rely on search traffic to their site to get new business..use social media effectively..Spread the word through your contacts on LinkedIn or Facebook, Twitter or blog about the specific industry/solution you are addressing..In fact, its not a bad idea to get the blog/twitter posts going much before you launch..if you are able to attract the same “target audience” to your twitter /blog posts prior to launch, you already have a potential customer base that may be interested in your solution.

Step 8: Party till you drop..Just kidding.

Its hard work all the way to the finish..Once you have some customers signed up..the other fun part of running a business kicks in..dealing with customers requirements, customer support, product enhancements etc..Try to bring in a few experienced hires in each domain such as Customer Support, Marketing etc, so you can devote your time to expanding the business and formulating a winning strategy..

It sounds simple enough..but is a lot of hard work..Its possible, and several have done this before,so i am sure you will  as well.. Good Luck

Folks,

I apologize, i have had to disappear into the woods for the past few months for personal reasons..

Well..im back now and looking forward to sharing and learning more fun stuff on entrepreneurship, venture capital and high-tech.