How large corporations kill small startups
In this article I want to tell the story of a startup that I launched 10 years ago, about the first sales, about the “takeoff” that never happened, and how it all went into oblivion (the Oblivion river).
In the early 2000s, software development was a popular initiative. The Internet was still not as popular as it is now, and software was installed by everyone and sundry. Then I was a good, one might say, strong C ++ programmer. None of the most difficult tasks could stop me. And I thought, if I couldn’t do something of my own, because the prospect of working for an office that programmed all kinds of “dregs” for rather “distant” (in terms of understanding the need for software) customers did not inspire me much. After all, life is passing, enthusiasm is not eternal (and even if it is eternal, not everyone has), and writing in a resume that I have been programming with FoxPro for 10 years for regional branches of not the largest bank was not my goal.
Therefore, by the power of thought I drew my dream(approximately as in the picture) and began to slowly go to her.
The first step was to choose the direction that this could be done. The criteria are defined as follows:
- Not very strong competition, preferably several players, but the players themselves are strong. This confirms that there is a market, you can work on it, but there are risks that someone strong will do, in the end, something cool or even change the market.
- Products preferably moderately curves so that there is something to improve. If the players are large, then you can compete, even if not in the B2B market, but there is still a lot of space among medium and small offices or in the private sector.
- Demand is not the greatest, but stable. Here it is advisable to choose a growing market, watch trends.
- Buyers are not “housewives,” but competent, confident, solvent specialists.
- And so that the product can be made alone in a reasonable finite time, so that the structure and market conditions do not have time to change much.
In my opinion, choosing the right place in the market is a very important issue. If something is picked up incorrectly, then it can not only not take off, it may not sell a single license at all, not attract a single user, etc.
As you all noticed now, when I was going to start a startup, I danced not from an idea that inspired me (as many start), but from a certain market segment . It is important! At the very least, it is verified by experience of more than one of me, and it works.
Now in a nutshell about what was chosen for creation and why
At first, I decided to make a full-fledged script debugger, which later developed into a fully functional embedded development environment that allows people to create macros in different scripting languages, debug them and run them in their applications. Those. a product for automating other software products, if the latter provide some kind of external API.
Among the competitors was Microsoft with its Script Debugger and an earlier version of Visual Basic for Application (VBA). There was also a small, small private company that debugged ASP and JS web pages on them. It was easy to compete with Microsoft because it offered a simple similar product, and it was not necessary to buy expensive Visual Studio just for debugging scripts. It was easy to integrate my product and distribute mine with my composition, i.e. more flexible licensing. They managed to surpass the second competitor because their debugger needed to install a web server, possibly IIS (although I don’t remember exactly), even to debug client scripts.
I did not think for a long time with the price. $ 250 for corporate use and 175 for home use. Visual Studio was more expensive, and the second competitor's product was cheaper. I immediately declared that we were cooler, and therefore more expensive. Well, if you want even more expensive, and less convenient, and without the possibility of integration into your application, then go to Microsoft. Or embed VBA, but it is generally expensive and difficult to license and inconveniently distributed.
The development of the first version of the product took exactly a year. Then, for another two years, I developed functionality, fixed bugs, etc. But it doesn’t matter now. It is important that the product was a year after the plan to make it.
Now about how it all started, sold and what happened afterwards
The simplest site was made in a couple of days, it had a forum to discuss something, links to download, and buttons to pay. No phone calls, no round-the-clock support, just home knee-high production and an English curve (ala Indian-Russian) for e-mails like “We are very happy that you bought our software. We will send your reg-keys within 72 hour. " I note right away that the quality of the language throughout history has not played any role in the success or failure of a startup. All that was required was a commonplace understanding of each other, albeit with errors and in a broken language, and indeed, I immediately declared to everyone that the product was from Russia, so be sympathetic, saying that we speak poorly, but the product is excellent for us .
The product turned out to be fairly good and began to be sold slowly. The first sale took place in the first month. Then two, three, five. The first corporate purchases appeared when 10 licenses per set were purchased immediately (for employees) at a discount. The clients were different, there were also very respectable, for example, US Navy, NASA, Government of State labor-la-la. It really not only inspired, it caused euphoria. Monthly incomes began to exceed the salaries of the director of the bank, where I worked at that time. It was cool, what can I say.
And here the first big mistakes and mistakes just went
My first mistake
I believed that this will always be the case, or rather, that further will be even better and more. After all, no tendency to decline was observed.
For me, like a bolt from the blue, .NET was Microsoft's way out. On the one hand, it's okay, well, some C # languages appeared there, which, it would seem, from that. I did not have enough experience, intelligence and foresight to see behind all this the sunset of ActiveX Scripting technology, on which my product was built. Everyone slowly began to switch to .NET, VBScript began to disappear. ActiveX Scripting declared deprecated, i.e. outdated, lost. All bet and all power is now on .NET. Everything else is junk, including my product.
And then I realized a very important thing! I have not created a new product. I just stuck to a huge giant, to its proprietary proprietary technology, making only some more convenient wrapper (in general, of course useful). And suddenly, “Atlas Shrugged”, took a step into the future, and I flew away like dust and remained forever in the past. I felt sad. I did the whole year and developed another year that now nobody needs, and will never be needed again, never.
The moral is: yes, it works. You can use various technologies of various large players in the market. You can make good money on it. But we must not miss the moment when they begin to take steps forward. And jump in time, i.e. sell, translate into open source code, remake it under new trends, etc.
My second mistake
Human greed, unwillingness to share with someone (in relation to partnership), and fear of losing everything played out of hand.
When I was “at the peak of fame,” I was very inert. I did not want to consider any offers that were constantly coming from my clients. Among them were voiced:
"Let's cross our products and make a new, more powerful product, enter new markets, increase sales, and fame." I usually answered that “we” (everyone was sure that there were a lot of us, that there was a big strong team) and we are developing quite well, why do we need to change something, invent new bicycles when this bike rides on its own, and I'm lucky . Then I did not allow myself to leave the comfort zone and as a true entrepreneur rush to meet new adventures.
“Sell us your source codes for 20 thousand dollars.” No, twenty is not enough, I'm ready for fifty dollars, and even then on special conditions. No, we won’t sell it at all, we don’t sell the source code. And at the very thought, now you will sell them to them, then a clone will come out in a month, wring out my clients and make a profit like this, just like that. And I put so much effort. No, I won’t sell it for anything. By the way, now nobody needs them anymore.
The conclusion is simple: integrate, cooperate, find partners, share, strengthen and grow with others. A startup (or product) of one person will remain all his life as a stall at a bus stop and will never become a supermarket chain.
My third mistake
I relaxed and just forgot about the project.
At first, when it was just the beginning, I was very attentive to each client, wrote for a long time detailed answers to all arising questions, inserted their requests for bug fixes and new functionality into the "To do" (list of things to do). There were more customers, and as a result, there was less time for everyone.
Instead of allocating at least a student for a hundred bucks to answer customer requests, I just scored them. Sometimes I replied that we do not plan these functions, because they are complex, although they were simple and made in a couple of lines of code. Well, I didn’t want to open a project, look for those places where you need to edit something, compile, build a new installer, upload to the site, release news, send out update letters.I wanted to stupidly spend money and enjoy life . They managed to do this for some time. And customers, you bought software, and use it. We do the correction of errors, they did not promise anything else. Do not like, delete and do not use. In the end, you had time (a whole month) to familiarize yourself with the product and make a purchasing decision. You have accepted it. All in your hands.
Here I will not draw any conclusions. Because there are actually a lot of them. Try to make them yourself, as anyone can. Indeed, on the one hand, one really wants not to become a slave to his product, but to begin to enjoy the success, on the other hand, everything will one day end if you stop doing it. You can try to sell a stake, move away from development or even from management, diversify yourself in some way to reduce risks, or let the money received for new projects. It is always up to you. Go for it!