4 Tips on How to Start a Software Company and Succeed
Shashikant Chaudhary is the current Vice President of GlobalLogic (formerly known as IndusLogic). He recounts his journey from founder of Lambent Technologies, a provider of mobile solutions, through his trials and tribulations as the company grew, to the eventual sale of his company in an opinion article in SandHill.com entitled Growing a Software Company on a Shoestring. Along the way he developed what he considers the 4 most important points that any software entrepreneur should keep in mind on his/her way to financial success. Isn’t this everyone’s dream? Doesn’t everyone wish they could start a software business, watch as it builds to a crescendo and then sell it on the upswing? Bet you thought all you’d have to do is read this posting, take note of a few tips and/or tricks, and soon you would be rolling in the money faster than you could count it. Well they are no guarantees in life. In fact I have this Blog loaded with disclaimers, but let me add just one more: the 4 tips included in this posting do not guarantee success. These tips are merely a recounting of how one person did in fact start a company and helped it grow and then eventually cashed out. I do admit that his story is quite compelling and his “Tips” although not groundbreaking theory, do provide any interesting twist to some age old formulas. When writing this posting for this Blog I wasn’t quite sure which category to place it in because it is only tangentially related to software licensing and outsourcing. The story of the business discussed and how it grew and was eventually sold has an element of Telecom, but I decided that it is most likely best considered as “Other Interesting Items” and so that is how this posting wound up here.
I like that Chaudhary starts off in his article by identifying the stakeholders in his business as the employees, investors, and customers. Too many times business people center their efforts on the investors (usually shareholders in a publicly traded company) and relegate the employees to a second tier. Customers are sometimes not even considered stakeholders. They occupy some other category maybe on a par with stakeholders, but not quite the same.
Chaudhary wastes no time and dives right in with his 4 key success factors for the software services entrepreneur. These 4 key success factors are:
· Talent: Putting together the right team is essential
· Employee Loyalty: One must be able to keep the talent. Chaudhary used an innovative stock plan to keep his employees loyal.
· Find your niche: As a small company Chaudhary took some inspiration from Al Ries and Jack Trout, authors of “Marketing Warfare”, and sought to attack his bigger competitors at their weak points, hence “win battles” but not the whole war.
· The CEO or Owner must be the sales leader. This is too important a role to be left to anyone else.
He tells an interesting story on how he identified potential customers. He describes his strategy of face to face meetings and the absence of email or the phone as part of that strategy. He did target seven cities in the US and visited them on a regular schedule. The word “frugal” does not even begin to describe his approach. His strategy worked and he identified people of influence and companies who had a need for his services. His article concludes with a very brief discussion on the pitfalls that can lead to failure. It’s not an indepth discussion on pitfalls. Perhaps it didn’t need to be since his company was merged long before any of the pitfalls he identifies had time to get a foothold.
