#1 Master marketing and sales
A developer with marketing skills can create products and earn an income well above his skills as a programmer in the strict sense. Let’s say that only 20% to 40% of the success of a software company depends directly on the activity of developing software. A software developer with excellent code and complete software but no clients is just a software developer, not a business or a company. An entrepreneur with many potential clients but no software/product is on the market.
Your brand, reputation, and intellectual property are 100 times more valuable than any software or technical feat. The software and technical work are relatively cheap and replicable. They cannot be the foundation of your business because someone can come and clone your product after you have done the hard work of introducing an innovative product and establishing/educating the market. If another product has only half the functionality of yours, but more effective marketing is more than enough to make it more successful than you.
#2 Understand your customers
Most companies fail because they build something that nobody wants.
Know well who you are selling to and what problem you are solving for them before developing something. Forget the code, find the market first. Talk to your clients. Ideally, you should try to solve with software your own problem that is recurrent in the market, or in other words, a software that solves a problem of which you are the target market along with many others. If you are not the target audience for the product you are going to create, you need to find and hire a product manager who does know in depth the problem you want to solve before creating the MVP (minimum viable product).
#3 Don’t be seduced by technology (Software)
Sometimes developers don’t realize that the hardest parts of starting and growing a business have nothing to do with the code or technology stack that is chosen. Marketing and Sales, getting and retaining customers, and everything else in between is much more difficult to sustain in the medium term than writing code.
Customers don’t care that your new technology is shiny and fresh, they care that it solves their problem. Often many developer-entrepreneurs will argue that it is much easier to do it with old and proven technology (there are many cases in the market of obsolete technologies that are still used for new developments) because new technologies change rapidly, they are less stable, it has fewer learning resources and fewer developers.
The important thing here is to focus on being differential and offering competitive advantages to your target audience, being as standard as possible in everything else (cloud, multi-platform, multi-device, etc.).
#4 Learn to delegate
Imagine that you write a job application of yourself for each of the jobs the company has to do and carefully consider why the hell you would hire yourself for each job.
The time you dedicate to a task is valuable, the time you dedicate to it is time that you cannot dedicate to anything else. So focus on doing the things that you are best at and that you excel at everyone else.
Determine exactly what tasks there are in managing your business that you are not an expert in, such as accounting, sales, administration, etc … and hire people to do those parts for you.
#5 Set income goals
Plan profitability, set goals and be realistic about whether you are achieving them successfully. If you do not achieve the desired profitability, you may have a good personal project on your hands, but not a viable company.
An objective that is often used in the software industry as a guideline to know if a company is going to be profitable in the medium term is that a monthly income of € 10,000 is obtained within three months after launch (this is basically limit profitability for a small team of 2 to 4 people, plus a little extra money to reinvest in the company).
If that profitability can be achieved, then either the product, the target market, or the team needs to be reviewed. It’s not a tough goal, but it’s a great way to financially frame your product launch by forcing yourself to ask tough questions about what you’re doing.
It is also useful as a pricing criterion from the beginning. If you have very few clients, they would have to pay enough for you to reach € 10,000 in 90 days. If your product is not worth that much, then you need to expand or improve it. It is better to overcome this pitfall from the beginning. If you feel like you can’t make € 10,000 of monthly recurring income over a three-month period on your own, then you probably need to find a co-founder who can help you get there. Thus, in addition, you can already calibrate the expectations of the co-founder also based on your experience.
#6 Create an MVP
Develop the smallest viable version of your product and test it as soon as possible, make it available to customers as soon as possible, and ask them to pay you.
Often all you need is a landing web page to measure interest. Create a static website describing the problem and the solution, with a record, using Google Adwords and Analytics.
Skip everything that is not essential at first. Focus on the key features that customers will pay for. It will seem incomplete and broken to you, but it is only broken if you can’t get customers. When you find the correct formula for the product and need to scale, you will probably need to refactor or rewrite large parts of the code anyway, but knowing that the product works the job is done differently.
Do things that don’t scale. Don’t test your MVP thinking ahead, just do it so you can validate that your product has a real market beyond your four walls.
#7 Other important tips
- It is important to be good at talking to people and networking.
- A good reputation and word of mouth are better than buying the # 1 spot on Adwords.
- “Fire” bad customers. They are not worth the stress, frustration, and opportunity cost.
- Learn to say “no” to requests that don’t fit.
- Don’t forget to take care of yourself.
- It is a marathon, not a race. Sleep, exercise, eat healthy food.
- Be patient. It will take longer than you think.
- Work on your process. Doing an hour of client work allows you to earn an hour of income. Improving your business processes can earn you a large multiple of that.
- Find out how to sell to the same customers over and over again. The first sale is the hardest, so you can “downgrade” it, and make the most money in the future with that same customer.
- Don’t let a single customer represent more than 10% of your income. If that client leaves, you will be in a dire situation.
- Banks will lend you money when you don’t need it, and they won’t lend you money when you do need it. Apply for a loan or line of credit when you have the cash to have a fund in case things go wrong.
- Don’t hire too fast. Try to get 3 months of payroll in the bank before proceeding to the next hire.
- Create simple products that do one thing well.
- Do not accept money from anyone who cannot afford to invest badly.
- Don’t hire an outside “marketing” company. They will charge to ask you questions like ‘What do you think we should do? If the product ranks well with customers, you know more than the marketing company will ever know.
- Bugs (at least small ones) are not a problem. Not recovering is.
- Start now, you will never feel ready. Just start, learn, and repeat. Action is king.