So, you have an idea to start up with. Indeed, it looks like you have the idea. But is an insight, even the brightest one, enough for success? This question gives rise to a bunch of other questions. Do I have any chances to succeed without huge startup funds and experience? Do I have to be a software developer myself? What are my first steps? Be sure you stand a good chanсe to succeed even without software competence and extensive funds. Follow our guide and learn how to establish a software development company step by step.
Conduct market research
The first thing you should do before starting a software development company is conduct market research. Identify your major competitors, target audience, their needs and preferences. Analyze the stage you are entering the market in: introduction, maturity, or decline.
- At the introduction stage, there’s no such software on the market. As a result, your product may be either in huge demand or in no demand at all, if you fail to persuade customers that they need it.
- At the maturity stage, your competitors already gain good revenue on similar software, but there is still some space in the market. For example, you know how to create an alternative that will be more powerful or more affordable. This is, probably, the best stage to enter the market.
- At the decline stage, the market is already saturated with offerings similar to yours, which means that your idea lags behind.
Choose the way to sell your software
One more important thing is to decide how you will sell your product. If there are similar offerings on the market, study the way your competitors do it. Basically, you can either sell your software directly to the end user or allow users to download it through your website.
In the case of direct sales, you will be dealing with big companies and SMEs. You may sell licenses for your software or charge for subscriptions, making the product available for a limited period while the subscription is active. You may also customize your software to make it perfectly suit customers’ needs. Your profit will depend on the uniqueness of your software and on the number of competitors on the market. Basically, selling a few expensive licenses to big companies may be as profitable as selling lots of cheap licenses to SMEs.
If you plan on selling your software through a website, you should start with offering users a free trial of your product to see if it works for them. Meanwhile, you may gain revenue from support and maintenance.
Start up
Once you’ve conducted market research and decided on the way you are going to sell your product, you may proceed to the software company creation.
Create a prototype
Software prototyping allows you to get an idea of how the final product looks before investing time and money finishing it. A piece of software enough to enter the market is called an MVP (Minimum Viable Product). Users test it, provide their feedback, and decide whether they opt for it in the future. At this stage, correcting mistakes is easier and cheaper than doing it after the product’s final release. That is why you should come with a prototype as early as possible. After you assess how it goes with your software prototype, you can make all the necessary changes.
Once you have a prototype, or better yet, an MVP, you may attract venture capital, grants and loans, find investors among your acquaintances or attract online funding resources.
On a final note
Starting a software company involves much effort. Now, you have a detailed guide on how to do it. Do not neglect the steps described in it, learn from other companies’ positive experience and mistakes, and you will successfully cope with the challenge.