Learn What NOT to Do if You Want to Start a Software Company

For businesses across diverse industries and geographies, it is increasingly vital to establish an in-house team capable of developing software solutions that can be supplied to clients, thereby creating a crucial strategic advantage.

With supply chain uncertainties in the current climate, relying on software as a consistent source of revenue offers clear benefits. By accessing services such as Microsoft or Spotify, new clients can be quickly secured without worrying about any shortages from far-off suppliers.

With the swift rollout of collaboration tools, internal software solutions and remote work policies, IT departments have earned higher esteem and greater assurance.

It may seem simple to concentrate on the external market and assume that establishing a skilled software firm is feasible without additional expenses, if one has the necessary resources. Learn more about how to establish such a company from our blog here.

Establishing a software company is no easy feat. Below are several common tactics that frequently lead to frustration:

Emphasizing First-to-Market Advantage

Companies that have created exceptional in-house applications might assume that obtaining client references and setting a price is all that is required to win customers. However, gaining voluntary pilot usage from an external audience can have a considerable amplifying effect on potential impact.

This tactic relies on the belief that the broader external market will behave similarly to either the internal users or the set of external customers utilizing the product in tandem with a larger connection. Although the staff may have a preference for the bespoke app, they may not have been presented with any commercially accessible alternatives.

Conducting market research can help prevent potential issues. It helps you determine if your product can be sold and what features customers would like to see. Additionally, it is necessary to consider support, security and service standards, including non-essential features important to the external market that may differ greatly from the internal user base.

If your market research indicates that launching your in-house application might be more difficult than anticipated, the findings may be discouraging. However, it is better to acknowledge this beforehand than proceed hastily and risk failure.

Leveraging Internal IT Resources

It’s probable that in-house technology staff are skilled and committed. However, a professional product development team is unlikely to match the same expertise. The work of the latter should not be compared to or assumed to be of the same quality as internal IT staff. Specific knowledge beyond that of an in-house IT department is required to succeed in creating a software product.

Running a business that produces and sells physical goods will reveal that building commercial software is akin to crafting a physical product rather than developing an internal IT system. Although a team possesses considerable software engineering expertise, they will not create successful software products if IT employs different metrics, goals, and organizational structures compared to a thriving product team.

Just as it’s impractical to anticipate great proficiency in marketing from a highly skilled salesperson, it is unrealistic to presume that a proficient IT department can transition effortlessly into a thriving commercial software development team.

To rapidly create a commercial-grade team, it’s advisable to seek external assistance. Production, testing, and customer service can be outsourced, similar to physical goods, and the same process for assessing an outsourced service should be implemented to determine what should be handled internally.

Disregard the Advertisements.

The staff’s enthusiasm for the new software product you have created implies that it has the potential to be a profitable venture when it is released to the public. Nevertheless, it’s critical to recognize that there is a plethora of software programs on the market designed to address a variety of scenarios, which means that you may find the market already saturated with comparable products.

It’s natural to assume that releasing your product through a popular online store will lead to higher visibility and sales. Similarly, it’s tempting to believe that your existing sales team can effortlessly promote software alongside the products and services they are already acquainted with. However, it is essential to realize that software necessitates specialized marketing and sales support, which renders these assumptions mostly incorrect.

Nevertheless, a personalized sales and marketing plan is frequently vital to capitalize on the potential of recurring revenue and reduce supplementary costs. Unless you’re selling a highly specialized and costly product, it may be necessary to explore cost-effective alternatives to your current field sales team.

Your after-sales team also deserves the same level of care and attention. In contrast to internal users or clients who use your software as a part of a broader relationship, paying customers will anticipate and insist on a superior level of product support.

If your business concept seems too good to be true and you anticipate a consistent stream of revenue merely by repackaging an existing software application and releasing it into the market, you are, like any other venture, exposing yourself to potential disappointment.

Starting a software company is equally as difficult as launching a novel product or service category. Before commencing the process, conducting thorough market research and grasping the requirements of your target audience is crucial. Essentially, just because the IT team is skilled and has achieved success with the technology being utilized, a successful launch can’t be guaranteed. Hence, it’s vital to evaluate the risks and prepare accordingly.

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