How to start a company, for programmers

You're a programmer, a world-class programmer, and you'd like to start your own venture, wouldn't you?

But then you read some stuff here and there and... You start getting nervous. Everyone talking about marketing, everyone telling you what you should and what you shouldn't do...

Rule 0: Product or service?

Read Cusumano's book and take your own side. Mine is clear: product, product, product!

The product business scales well (or crashes fast), the services business simply don't.

Rule 1: Prove you can do it!

You're going to implement a new product, aren't you?

Prove you can do it. A solid background and a good job experience (this won't help engineers just out of college) will be key.

Think about how you will handle the development, how long it will take, how much it will cost... hey! Aren't you a professional developer, these are the things you're supposed to master, right?

So, take your time, think how you would do it, take note of everything you'd need... do it correctly. Think how you will convince a bunch of business people who don't master the concepts you do. You need to be solid, professional, a true software engineer. You won't need to cover the nifty-grifty details but you need to probe you can do it.

Yes, this step is not easy. Try to get used to speak to a wide audience, try to become an expert on your field, talk in conferences, write articles, start a blog...

Rule 2: Ideas are cheap!

When you tell someone "I'm going to start my own company" you'd usually listen "you'll need a great idea".

Wrong!

Normally people think ideas are very expensive. "If I had a good idea I would sell it to company XX and make a huge amount of money".

Yes, if you have a really great idea you could. Easy money. You just think for a while and then you get a huge amount of money in return, you wouldn't even have to spend time writing code...

Stop dreaming!

If you've such an idea... stop reading! You're already far behind me!!

But, normally, most of the companies, even the huge ones, are not about great ideas (they look great now, but they were just normal when they started), are just about regular ideas correctly implemented.

I'll try to explain it in a few sentences: creating a device to move people around the world using the internet is a great idea, but I can't implement it. (Ok, you think it is a stupid idea, right? But I'm sure you got the point).

So, forget about looking for a great idea. You're a programmer, you can build things. Think about one you can build, check if it is worth, and prove you can do it.

Rule 3: Do you have competitors?

You already have decided you will implement a new product. You know you can do it. You can prove it.

Now, is it going to be the only product on the market?

If so whether it is great (check Rule 2) or it is so stupid nobody will ever buy it.

Remember, you've to build something people will want to buy.

If you develop something geeks will download but not pay for... you'll be famous (maybe) but it won't be enough for a product.

Of course, if you have too much or too strong competitors, this isn't good either. I mean, writing the "next-gen" operating system is probably possible, but remember you won't only have to develop it (which will be tough enough) but also sell it. Your competitors are already spending millions on advertisement, so you won't beat them with a few thousand dollars. Stop dreaming, you won't! So if this is the case, find a new idea.

Rule 4: Write a plan

You probably know how to do your product, but still you need a plan.

Grab a template, and write 50 to 60 pages. Please, make it readable, give it a decent formatting (remember it is for non-geeks), and include all the key subjects.

Read this (http://www.sequoiacap.com/founders/) for a template, but there are thousands out there.

You've to include a cash-flow evolution and some more financial data.

It's very, very complex :-P ... but still you can do it. Basically, you've to think about what you think you'll be selling. Check your competitors, be pessimistic and never (never) say things like "we only have to reach 5% of the market). You won't (maybe) and anyway, business people are sick of hearing this. So, avoid telling this stuff.

Remember, start with an executive summary. This is only one page, and there you've to grab the attention. Remember the rule: you have to move people from point A (they don't know about the product) to point B (they want to buy it).


Rule 5: You need money

Forget about the money! Start the business in your spare time as the great Eric Sink recommends in his great book. "Do a normal programming job in your first 40 hours a week, and a product on the next 40 hours".

Try, if you can do it, maybe you're as good as Eric.

The guys at 37signals also write about starting a company with no external funds. Read it if you're interested.

But, if you aren't a college dropout or a new grad in your early twenties, then you probably need some money month after month.

If this is your case, then you better try to convince something your plan is good enough to invest money on it. It will be a good test for your plan, anyway: if nobody wants to spend money on it, maybe it isn't worth after all.

Look for seed capital and business angels, then prepare a great presentation, and remember all the previous steps.

Wrapping up

There’re thousands of rules, but the most important one is: don't listen! Learn! Learn from people who are worth listening, but everyone seems to be the "expert" when it comes down to start a new venture... forget what they say, trust yourself... you know...