6 Tips for a Software Startup

Jan 21, 2011

A software startup can be pretty tricky.  One of the reasons why is most software startups are founded by the quiet tech guy.  The “developer”.  Or..a software startup is founded by a more creative, or business oriented, founder.

This article is for those founders, who have a software startup, but are a little less than 100% familiar with software.

Get an Equity Technology Partner (CTO)

Getting yourself an equity technology partner for your software startup is essential…and hard to find.  So you better get started looking now.  The goal is to find a partner, that “quiet tech” guy that knows in’s and out’s of software development; yet can turn ideas into software.  You’ll want to keep the same partner involved in the software startup that is familiar with the code from the beginning.

You’ll likely run into two problems here: either the software tech can’t contribute to the creative process (you’ll have to clearly spell everything out), or he will not be willing to work for equity.  Don’t get discouraged, just keep looking for that perfect partner.

Form a Partnership Like Agreement

Many software gurus involved in software startups are offended by the 5% equity when they’re building the main product (the software).  At the same time, they realize they need “the other half” to make the business work.  It really helps to approach them with a partnership like agreement, and be flexible with their equity.

Software Startup Costs

As Daniel noted in his article on Startup Growth Capital, “Some product development, such as most consumer-driven SaaS development, should require little or no product development startup capital at all”.  This is because your equity software startup partner can develop most, if not all, of the software at no cost other than their time.

There will be other costs associated to plan for in your software startup costs, such as: server space, designers, graphics, etc.

Avoid Crappy Design with your Software Startup

Many founders will focus on the development of the software, completly excluding the design and usability.  Customers can be picky, even with B2B software programs.  No one wants to buy something that doesn’t look good, and has a good user interface design.  On our costs projections, we planned for an average of $1,500 in art/graphics per page.  You can probably be safe budgeting the same on your software startup costs.

Software Startup Revenues

We have some standard things to look for when it comes to planning your software startup revenue streams:

  • Free Trial
  • Prices Clearly Published on Your Website

Do you offer a white labeled version?  A consumer based version?  Is it accessed via internet, on the cloud, or installed on location based server?  These all determine your revenues.

Additional Software Startup Resources

OnStartups posted a great test for a software startup: The @Darmesh Test: 16 Questions for a better software startup.


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