Do a Lot of Antiquing !!!

Garage sales, out of the way antique shops, and second hand stores are all great if you're looking for that hidden gem or unrecognized value from other people's discards.   Recently popularized in many reality TV shows like American Pickers, a lot of money can be made in sifting through another person's old things.


What does American Pickers have to do with running a successful software business?


Plenty!!!


If you're running a small to medium sized software business, the key to growing your business could be in hiring experienced employees that have been discarded by larger software companies, and in many cases directly from your competition.


Often, there is nothing wrong with these employees.   Large software companies can be brutally inefficient when attempting to force their headcounts to balance with next quarter's projected financial statements.   Sales are down for a given quarter, the big software company needs to shed some employees, and an easy mark is to hatchet without mercy, employees that have come along as part of a acquisition.   When a large software company needs to fill a hole in their product lineup, instead of building the technology in house, they go out a buy a smaller company that has already built it.   Leveraging their own much larger sales staff and partner ecosystem, the acquiring company is poised to increase sales rapidly.  The original sales, marketing and support staff from the company they just acquired becomes redundant.  The redundant are quickly discarded.


Hate to say it, but a recent article, "The Brutal Ageism of Tech Years of experience, plenty of talent, completely obsolete" ( http://www.newrepublic.com/article/117088/silicons-valleys-brutal-ageism?src=longreads
 )   couldn't have been more accurate.  


Built up on their historic beginnings as offshoots of Universities, most large software firms have tunnel vision when it comes to software development talent.   The best, the brightest and the most recently graduated are given preference when it comes to hiring for new positions.   Large software companies are aware of how little is invested in upgrading of the programming skills of their current staff, so they incorrectly conclude that the best way to move forward is to bring in new blood, with new ideas, new approaches and new skill sets.  Or so large companies think.   Millions of dollars each year are spent recruiting the best and brightest, while at the same time thousands and thousands of resumes from talented older employees are quickly tossed aside as soon as they can be be properly disqualified.


This tunnel-visioned youth movement within large software companies is not restricted to the programming field.   Some of the largest software companies have let this "youth at all costs" movement permeate into their sales structures as well.   So much so, that many large firms find themselves releasing experienced sales representatives acquired through acquisitions, while they are simultaneously indoctrinating fresh new sales recruits in their own, recently institutionalized, sales academies.


I wonder how shareholders would feel if they knew about all the money that is being wasted in these areas.   To make matters worst, the expense of releasing more experienced employees with several years experience is high, while the retention rate of the new recruit that has less experience, but more training, is comparatively lower.  Totally baffling is the logic used to determine that the payback of investing in good training is wasted on loyal long term employees of the firm.  Yet, it makes perfect sense to invest in new recruits, who once trained, can't wait to find out how much their new titles and new knowledge are really worth in the open marketplace.


Surely someone in Human Resources Management at large software companies understands the fact that overall morale at a workplace that discards loyalty with such cavalier fervor (oxymoron intended) will soon have no loyalty to discard.  Some good middle-aged employees may start their own job hunt once they witness how their older colleagues get treated.  Human nature will compel them to ask themselves, "How long will it be before that's me being shown the door?"


As a smaller software company you cannot afford to make the same hiring, firing, or releasing mistakes that your larger competitors make.   But why not profit from their mistakes?  You can in fact narrow the revenue gap between you and your larger competitor, very quickly, by hiring their discarded talent and turning it back loose on them.


Older talent have the connections, the knowledge and most importantly, the actual hands on industry experience that can't be found in a textbook or magically created in a corporate academy.   They are ready to start immediately and have the experience to get up and running right away.  Take a jump into that talent pool, and just watch those "old" hires float you safely to the shore of software business success.




 

What problem are you trying to solve?

If you want to make some real income from your software venture, you need to decide what sort of application you want to write.

One that interests you or others?

Here's a hint, do a market survey and make sure there is a need for the solution you want to produce.   Find out what already exists out there, and how it stacks up to the solution you want to provide.   Will your application be sufficiently differentiated enough to carve out it's own niche?

If not, back to the drawing board to come up with something that has a conceptual fit and an existing demand.   Too often I have witnessed a lot of programming hours wasted on coming up with an application that had already been on the market for a few years.  Worse still, some of the existing applications were far superior in terms of ease of use and capabilities than their latest challenger.

Note if you think that games development is the way to go; I hate to rain on your parade, but it's a very risky market to go after.   You are literally rolling the dice in hopes of coming up with something new.   Besides, according to recent reports, there's a lot less money in the games market and that business applications is where the real money is at.

In short, follow the money.   Find an industry that has a need for a new application and be the first to solve that business need or problem with an application that is easy to use, and you are well on way to success.  But whatever you decide to do, make sure you do enough research up front to verify that the market you think, hope, or dream is there, is actually out there.

Remember, 

Knowing What, When and Why to Outsource

Expertise.

Some companies are founded upon industry expertise. Often in the medical application space, a group of doctors will get together and decide to automate a process that hasn't been automated by anyone or if it has, they feel it should be done better, and they go do it. They will pool their resources, hire programming staff and an application takes shape. Software programming is usually the first skill set they outsource.

But should that be the first step?

There are so many dynamics for full-time software companies to consider before they begin to design a new version of their application; shouldn't start-ups fully weigh these same factors before proceedng?

I like to think of the word "TEST" to organize and remember the four main groups of factors to consider before starting to turn your great idea into a software application.

T Tools.

What tools will you use to your develop your application? What application development environment? HTML, HTML5, Microsoft, Eclipse, Java? There are many alternatives here to consider. How will you data be stored? Will you be using Open Source development tools and components or commercial software to produce your product?

Some companies initially decide to use open source across the board because it lowers their start up costs. But does it really? What you save in purchasing commercial software development tools, you could easily lose in additional legal fees to ensure that your final product does not violate any open source license agreements. Ultimately when one considers that you may lose some prospective customers who do not want to take any legal risks whatsoever running open source software, commercial software seems to be the logical way to go.

E. Existing

What exists out there already? Does an application like yours already exist? How popular is it? Whats wrong with it? How big is the company? How does your planned product differ? Is that differentiation substantial enough to justify existing users of your competition's product to switch to yours? Is your target market still growing? Is it established? Or is it on the decline? I once worked with a software start up that had spent five years developing software for Photo shops. Sadly they went to market just a couple of years before the advent of the digital camera which has subsequently decimated their target audience and by extension their business.

S. Systems.

Will your application reside at each customer site, on premise. Or will you be offering your software as a service? SAAS, which means your customers will access your application via the web from a server you host is growing in popularity these days. But will the trend continue? Will your application support desktops, disconnected notebooks, smartphones and/or tablet PCs? What server platforms will you support? Linux, Unix or just Microsoft? Keep in mind, the fewer server platforms you support, the more prospective customers you could stand to lose.

T. Time

What is the timing of your project? How long will it take you to get to market? How will the hardware available and the speed of networks change before your release date? How much buffer time do you have in your current plans to allow for adjustments that will need to be made along the way?

During the time between concept and final product, have you considered what the competition will do? Have you made the necessary financial allocations to fund the project until you start to see some revenue flowing? Keep in mind, that there will also be some sales lead time needed after your final product is finished before you get your first sale. Depending on the industry, this can sometimes take an entire year or longer.

Last is the word TEST itself. This entire process of getting a software product to market is not easy. It will test your patience, your pocket book and your character. But it is my belief, that if you invest a little time up front to weigh your options and fully plan your project; you can end up saving yourself and you colleagues a lot of frustration in the future.

What we can learn from the movie "City Slickers"

Couldn't sleeep the other night and watched a rerun of the movie City Slickers. Billy Crystal was great in that movie but I digress.



Jack Palance as the tough guy cowboy was noted for the line "what's your one thing?" In otherwords what is most important to you? In the context of the movie Billy learned that his family was the most important thing to him. From a humanistic viewpoint that's the way it should be with all of us in the software business. But from a business perspective there are actually two things you need to value and protect at all costs. To neglect either could spell death for your software firm.



What are these two things?


I'm no Jack Palance so I can't use intimidation to drive my point home. So I'll just have to rely on logic here. The two most important things to any software business are the customer list and the source code. Put either at risk and you are just plain foolish. Period.



Which leads me to question the lack of thought some software company executives and owners put into their partner or component vendor selection process. Since most software applications require a backend database lets take a quick look at the spectrum of alternatives for a moment.



To the "radical" left of the database alternative spectrum we have "open source" databases like MySQL and a considerable number of also rans and wannabees. To the monopolistic far right of the spectrum we have Microsoft with its various versions of MS SQL Server. To compete with MySQL Microsoft also has a free version which is limited in capacity called Microsoft SQL Server Express.



Many startup software companies take a very short-sighted view when it comes to selecting their database vendor. Their criteria is soley initial price. They don't do their homework and believe that Open Source databases like MySQL are free. Which are not when distributed with a commercial software application. Often according to the various GPL's out there if you distribute your application with an open source database then your application source code needs to be available to anyone who asks; free of charge. For your application is now considered open source. Talk about leaving the door to the chicken coop open and letting all the chickens run free!

On the other end of the spectrum you've got software startups who make the default decision of going with Microsoft SQL Server Express. "It's free after all and if my customers run out of room with the free version of MS SQL well then they can just buy it from Microsoft on their own." is often the phrase used to justify this abdication of responsbility. Do you realize what you are doing here? First off your customers are not getting a complete turnkey solution. Second when they run out of space on the free MS SQL Express they will be calling you with the problem and blaming you for not telling them about the several thousand dollars in database expenses they'll have to pony up to Microsoft to stay functional. Moreover you've just managed to build into your customers' life cycle an extra decision point that your largest customers will reach first. And that decision is this; since we're faced with a large unanticipated database cost now anyway; shouldn't we re-examine if we have the right application at this point?

Understand too that all your large customers who stick with you and buy the commercial version of MS SQL will now have to establish a direct relationship with Microsoft. Do you realise that in effect you have just turned over your customer list over to the largest monopolistic predator in the history of computer software? Just ask Netscape, Borland and a large number of other innovative software companies what it feels like to have Microsoft wrapped around its' neck in a snake-like fashion. Can you feel the squeeze?

If using open source is like leaving the chicken coop door open and letting your chickens run free then using Microsoft is like opening the chicken coop door and inviting the fox in for a visit.

One threatens your code the other your customer list.

Where to turn you ask?

This is one of those rare instances where I will go commercial for a moment when I strongly suggest you give SQL Anywhere a try. It's a commercial product so there is a fixed royalty attached which varies by quantity; but your customers will get a complete turnkey solution and you maintain control of your customer list! By going with SQL Anywhere not only are you joining over 1,000 OEM software partners just like you but you are protecting both your software code and your customer list! Don't be "chicken" give it a try!

You can download a free developer's version of the product which is full-featured by pointing your browser to:


http://crm.sybase.com/sybase/www/iAS/sql_developer_download_sales.jsp?refID=rep03


If you have any questions feel free to email me at: jgingeri@ianywhere.com


Perhaps in addition to just reading my blog you'll decide to give me the opportunity of helping out your business.


James Gingerich
Sr Partner Account Manager
Sybase iAnywhere
519-883-6248
http://www.linkedin.com/in/jamesg2006
http://softwareindustryrant.blogspot.com/
http://softwaresalespersoneducation.blogspot.com/

This blog's purpose.

After experiencing and surviving over 20 years in the software industry I've noticed that there seems to be a large knowledge gap in the business that hopefully this blog can address.

I'm not talking about technical knowledge here. Plenty of that. Perhaps too much in fact. And therein lies the origin of many of the problems that plague a prototypical software company. This is not one of those blogs designed to be nothing more than a conduit of mere corporate gossip. Rather this blog is a mere compilation of lessons learned from mistakes I've made and or witnessed being made by software companies large and small over the past two decades.

Hopefully the topics covered will be helpful to you in the development of your new software business or the improvement of your existing one. If you find this information to be useful all I ask in return is a few options when you IPO! Seems only fair doesn't it? ;-)


James Gingerich