If you've read any of Michael Gerber's books you'll know that one of his paradigms is to work on your business, not in your business. This simple statement escapes most programmers who one day stumble upon a great idea and believe they can build it. And build it they do with great fervor! They stay up late, night after night, avoid going out with friends and family, and dedicate a silly number of hours to their hot new endeavor.
And that's how it continues, week after week, month after month, until the programmer wakes up and realizes they are never going to actually sell anything. Not because they can't or because they don't want to but because they are stuck in an increasingly addictive cycle of innovation. In their highly technical mind, the product is never quite ready. "If I add this feature" they say, "then it will be perfect." And sadly, just one failed sales attempt triggers a longer continuation of this cycle. Programmers aren't built to be salespeople by default. Programmers are built to solve technical problems and leap over insurmountable obstacles in software.
If you read the overview of this blog you may have made the connection that I am included in this group. I'm a programmer and I've been building my business for the last 10 years while I lived what I described above. In 2002 I started building a SaaS e-commerce platform for small businesses named NetEmporium. This stole away approximately two years of my life. I worked diligently every night and day to build it. In the end, I sold it to four companies and made a whopping $5,000 before scrapping it altogether. Hardly worth the effort.
Around that same time I built a SaaS collaboration tool that included email, calendaring, contacts, tasks, and more. This was one of the first SaaS collaboration tools available (besides Outlook for the Web) but again, I failed to sell it and only saw a return of a few thousand dollars. Shortly after that I built a SaaS web content management tool named WebTools. This is the grandfather of our current web content management system, Marketpath CMS. I made a few thousand off of that one too.
Needless to say, I learned this lesson slowly, always thinking I could build a great product and it would sell like hot cakes! Truth is, I did build a great product - some features of NetEmporium have yet to make their way into Marketpath StoreFront, our current e-commerce module for Marketpath CMS. But my problem wasn't building software it was selling it.
Incremental Development, Marketing, & Sales
One of our salesmen has mentioned multiple times that he wished he could code (develop software) because he wants to help out with our never ending list of feature additions and bug fixes. Each time I've told him it's a curse and to stay away. The reason is simple - software will always have new feature requests and bugs but unless we have people that sell and market it well, there will be no reason to develop those features and fix those bugs.
So, for those of you programmers dying to know how to be successful developing and selling a software product, take the following points to heart. They are simple, straightforward, and lack fanfare - which is what you need before you kill off a couple of your best years.
- Prove the Market Need: Build software in small stages. You don't need to solve every problem with your software on the first push to production. You just need to solve one problem better than your competitors. Build that one feature really well and start selling it. If you get bites (and you won't need a great deal at this stage) then move on to the next round of development.
- If you can't sell the early version, dump it. You have to know when to kill an initiative before it drags you down too much. My grandfather once told me if you don't make any money in a business after a year, then find something new. Now, with software, if you can't make any money after a few months then that's the time to dump it. Don't get hung up on your own stubbornness.
- Ignore the Feature-Creepers: Don't let would-be customers over-prescribe their own medicine. Every other customer will ask for a feature addition to your tool. Listen, but don't operate on the assumption that you need to build that feature. Your goal is to prove your product has a market. Once you do that then you can add more features. Find the customers that can use your tool as it is or else you'll be spending all your time adding features for that one customer (even though others might be able to benefit too, but this distracts you from your goal to sell, sell, sell.
- Hire a Replacement. When you have increased your revenue by building your software logically and in small chunks, hire a developer to replace yourself. If you've made it this far (you're making enough revenue to hire a developer) then outsource that portion of your job to someone else. This allows you to focus on planning, marketing, and selling. Or, alternatively, bring on a partner who has experience building similar companies. Just know your strengths and weaknesses and hire people who are smarter and more skilled than yourself. If you can't lead the company yourself, you need to be very sure the person you bring on can. They should have a proven track record. Don't fall for the "I understand the job and can do it" responses. Track records are worth their weight in gold.
- Look for Investors. If you've proven that your product has legs then don't hesitate to look for investors. Capital is the life-blood of every business and without it your growth will likely trickle. I can attest to this. I've seen other local firms in my area excel with the proper capital resources while my own company grew much more slowly.
- Find Advisors. Everyone needs a shoulder to cry on and a helping hand when questions get to big. You can't always look to your staff for help (they might be the problem). Having a network of advisors who have "been there, done that" can be a tremendous aid to your venture.
The biggest thing to keep in mind, as a programmer and new entrepreneur, is that you cannot code your way into a profitable business. There are flukes to this rule, for sure. But 999 times out of 1,000 it holds true.
For the last ten years I've received my GMBK MBA, that is, the "Getting My Butt Kicked" MBA. I've learned the hard way many, many times. This is not the easiest path, though. When resources are stretched, I still sometimes jump in and do a little development. This is partly for my own enjoyment because every now and then, it's nice to hole myself up and escape for a bit. But I realize this adds almost zero value to the success and growth of my company. So I try to limit it as much as possible.
As you dive into your new venture, your million dollar idea, keep in mind these simple tactics. You'll thank yourself later.