Advice for new software companies

Unless you want to be the next hotel chain, the next local taxi company, the next record label distributor, the next video rental outlet or…

Unless you want to be the next hotel chain, the next local taxi company, the next record label distributor, the next video rental outlet or the next telco caught off guard by the equivalent of Airbnb, Uber, Spotify, Netflix or WhatsApp your company needs to become a software company.

Here are three bits of advice for established companies looking to break into software in order to introduce new profit streams or to protect their existing business against disruptive shocks.

  1. Build your software so that it wont last forever

It is tempting to build your software so that it can scale to meet your most optimistic projections or include all the functions that any superuser will want.

Don’t. It’s expensive, takes too long to get to market and could do more harm than good.

Build your software so that it will become obsolete if it grows because 9 out of 10 solutions won’t.

Rather develop frugal and fast, and for the most common user.

If after you’ve launched you realise that your solution is taking off, start your development cycle again. This time with more robust infrastructure and the features your users are explicitly asking for.

2. They won’t come

A benefit of software business is that it opens up international markets. The downside of software is that there is global competition. App stores are littered with apps and ingenious solutions that are never and will never be used because potential customers don’t know that they exist.

Don’t expect your customers to just stumble upon your tech. Plan on how you are going to promote your solution and how your clients are going to adopt it before you start development.

If you can’t find a good way of linking your potential users and your software, reconsider your development.

3. Think like a startup

No matter how big and established your non-software business is, as you venture towards development, start thinking like a startup. What this means is that you must empower a small team to focus on failing fast and frugally, and learning quickly.

The experts can’t predict how the market is going to react to a new solution so don’t expect the people building your six month, one year or five year plans to know better. Give your teams space to design a loose plan that can be tossed out as they learn and grow.

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