Starting your own company
I received an email from a group of software developers: “We have been working for a software company for several years. The owner does not know much about software or the business and has made many mistakes. We have discussed with each others about starting our own company. We have the skills, we know about the business and good relationship with some customers. We think that we are ready. Do you have any advices for a start-up company?”
Answer: Business happens when you develop products or services that people need and are willing to pay for at a price that is in excess of your total cost of producing that product or service. The key to any business is to find that need and fill it. Your business goal is to find out what people really need, and then give it to them better, faster and cheaper than anyone else.
To succeed as a new start-up company, you will need three key “Better” factors: Better operational: Your company must have the ability to develop products and services of high quality at a lower cost than your competitors. Better customer relationship: Your company must develop a good relationship with all customers based on knowledge of the customer’s business. Better technology: Your company must offer products or services that are better and faster to that of your competitor.
By reviewing these three key factors in details, you will determine whether you have the ability to compete in the market or not. It is easy to dream of starting your own company but start-up is not easy. You have to prepare everything carefully and in details. Do you have enough capital to start a company? Could your capital sustain a number of people for several months or year in case you do not have customers? Do you know your competitors and what they will do when you compete with them? There are more things that you must consider carefully and discuss with each others in details and put in writing to avoid any conflicts in the future. To start a new company is hard because it requires a combination of hard work, intelligence, and luck. Anyone who tells you that it is easy is not telling you the truth.
For many years, I have seen many developers told me that they want to be Bill Gates or Steve Jobs. If you carefully read their stories and compare the amount of luck to the amount of skill and hard work it took for them to succeed then you will find that the amount of luck is amazing. Not only was their timing is right, their ideas is exceptionally brilliant, but their luck were also happened only … twice in history. The market today is littered with many companies started by people who thought it would be that simple. They read about heroes that built companies and become billionaires but when money did not come, they quits. Do not let this happen to you. I do not want to discourage you because I always believe that there are opportunities but if you want a chance at succeeding you should stay away from trying to duplicate the “easy to get rich” stories and be serious about the business.
If you decide to start a company, you will need to have a business strategy to compete in the market. There are several ways that you can do such as improve your product or service in some way so that it is better than that of your competitors, but at the same time lower your price to capture larger share of the market. Another approach is to produce or deliver your product or service faster than your competitors but at the same time maintain your level of quality. As a new company, you may offer better support services to go along with your product or service than your competitors. You may want to make your prices more attractive than your competitors. You need to understand that technical skill is only half of the equation; the other half is about how to manage a business so you need business skills.
As a new company, the key priority is to maintain a good reputation in the marketplace. You must determine how much you can sell, and the prices you charge. The friendliness of you and the ease of doing business with you is a key part of your reputation. Your integrity, honesty with your customers, the degree to which they see you as trustworthy and dependable is a key value to your customers. Doing business requires an impeccable reputation and a focus on the improvement your product or service to support customers. You must always ask what does your product or service achieve for your customer? What does your product or service helps your customer? What does your product or service helps your customer to improve their business? Remember that customer satisfaction is the fundamental element of good business.
To operate a company, you are no longer a software developer or a technical person but a business person and in business you must think long term. You should never do any “Short cut”, you must never consider “Compromising on quality”. You must think how to grow the business, how to expand the company and how to achieve customer satisfaction. Only then you can be successful.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
