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The great start up tradition

We programmers have been feeling sorry for ourselves for too long. Since the dot com bubble burst there's been a constant feeling of depression in IT - it's time to take matters into our own hands. We need to get back into the great start up tradition that created the IT industry. 

Software start ups don't need to worry about the state of the market, start ups create markets. There was no PC industry when Gates and Allen started Microsoft in 1975.  No dot coms when Netscape was written. Start ups like Autocad and Visicalc created their own software categories.

With apologies to Marx, what have we got to loose but our chains?

Matthew Lock
Saturday, October 18, 2003

I agree. We're working on a time machine here. Er, or something just as esoteric and unbelievable. It's cool though. Low pay but great folks.

Roger Townsend
Saturday, October 18, 2003

A half a year to a year ago when everybody was complaining that there was nothing to do, no work, no nothing, I said - every programmer has at one time or another said that they could:

a) Write a program better than x.
b) Write a program eveyone would use because __.
c) etc.

So when I said "Well why not take this time while you're unemployed to write that program and market it" the only response I got was "because we lack the vision and motivation" or something like that.

Besides, an Amazon size startup needs Amazon size funding, and a Jeff Bezos size personality at the helm. Good luck finding funding today, and do you think you're the next Jeff Bezos?

www.MarkTAW.com
Sunday, October 19, 2003

Hey, hey, Rog! What's happenin'?! Come on, now, give us the 411!

Rerun
Sunday, October 19, 2003

> Besides, an Amazon size startup needs Amazon size
> funding, and a Jeff Bezos size personality at the helm. Good > luck finding funding today, and do you think you're the next > Jeff Bezos?

Go the Ben and Jerry's route like Joel suggests: http://www.joelonsoftware.com/articles/fog0000000056.html

Matthew Lock
Sunday, October 19, 2003

While I am all for start-ups and the potential they create, contrary to urban legend they were not responsible for the bubble bursting.

In 1997-2000, Y2K was in full swing.  Anyone who could type called themselves programmers.  And they were employeed by the thousands.  Tens of thousands.  Like slaves rowing a great ship, the drum beat ramped up.  In the process of making systems Y2k compliant, or replacing them completely, entire structures were removed from organizations. 
--Those 1000 weekly reports, became 100 when it was found 900 were of so little value they were not to be converted. 
-- The "hard to maintain" areas were simplified so that it did not require six people to maintain a subsystem, now it would only take 1.
-- Legacy systems with high over were removed, or rewritten with fall less support overhead required.

Then work was done.  All those people who could use a keyboard were let go.  Many of the long term employees were when done when the efficiency of what was done, took their jobs. 

Finally, with all the upgrades compressed into two years, it was unnecessary and nearly impossible to plan large implementations in 2000-2004.  1/1/2000 was a world wide sync point.  Everyone was current and many businesses could not afford more IT expansion.

While a startup is still a great approach.  It is no different in our industry than any other.  In the US 52% of all small businesses fail.    Great ideas will be produced, and I believe they will be produced by the startup (or what is historically called the small business).

We will not get back to 1998, until there is some other requirement that makes everyone focus  spending on IT.  I hope something comes but it may be Y10k.  I just hope I am around for that one. ;)

MSHack
Sunday, October 19, 2003

Matthew,
those "startups" you mentioned did not vanish since the bubble burst. So every entrepeneur has to compete with the remaining pack.
Please provide a hint for the coalition of the willing what kind of program or service still needs to be developed. Or did you mean consulting only? I guess the professionals who are smart enough to survive out there with their own startups started them already.

Johnny Bravo
Sunday, October 19, 2003

> Please provide a hint for the coalition of the willing what kind > of program or service still needs to be developed.

I don't have the killer idea off the top of my head. But my point was that the history of software has a great tradition of start-ups. Moaning about H1B visas, outsourcing and our value in companies has replaced the entrepreneurial spirit of the past.

Developers create the innovation!

Matthew Lock
Sunday, October 19, 2003

I personally believe that the bubble popped, not because there were startups, but because companies were getting funded because of "business vision" (aka, massive branding strategies) instead of "business commoin sense" (aka, a workable business plan for making money in the real world).

It was a feeding frenzy. Chum in the water, and sharks everywhere.

It died, because reality took over.

Brad Wilson (dotnetguy.techieswithcats.com)
Sunday, October 19, 2003

Oh, and I'm one of a very small handful of people working in a self-funded startup company right now, so yes, people are still doing it. Yes, we will survive. Yes, we will make money. No, we're not promising anybody billion dollar revenues in 10 years. :-p

Brad Wilson (dotnetguy.techieswithcats.com)
Sunday, October 19, 2003

I've probably said this before but the bubbled popped because of the way VC startups had their finances organised, around a 5-6 year cycle.  It was just that a lot of them came to the end of their funding cycle and guess what, they weren't even close to making money.

Simon Lucy
Sunday, October 19, 2003

I agree with a lot of what's being said & I certainly agree with the Ben & Jerry's model. BTW I've read "The Inside Scoop" which is a very good book about what happened in the early days of Ben & Jerry's.

You don't have to be an Amazon.com, and by working from home, you have the advantage of basically zero overhead. Probably some extra web hosting costs, but if you can do it all yourself, or with some friends, there won't be a point where you simply fail because your monetary costs overwhelm you.

My point was if you have the free time (so many people were complaining about being unemployed at the time), why not write some shareware and distribute it? It doesn't cost much money to do this, only time.

It may be hit or miss, but without any overhead, and with the core functionality in place, even if you get a job, the effort needed to patch and improve the software will be much less than the effort needed to write it in the first place.

Or a consulting company, again by working from home you save on overhead, and you can join with other people who have complimentary skills to get things done. I've known several people who've done this with varying degrees of success.

BTW, Ben & Jerry did have overhead... a loan from Ben's uncle to rent the gasoline station they used to start in, the electricity costs for the freezers, and there was a point where just a few ounces of ice cream per cone they sold were eating into their profits and could've meant the difference between staying in business and going out of business. They were desperately trying to teach their employees how to scoop the right way. Though I certainly agree with Joel.. They were much more likely to go profitable before Amazon.

www.MarkTAW.com
Sunday, October 19, 2003

It's a myth that Y2K attracted lots of newbites who are now looking for jobs. Y2K used experienced programmers and did not, in my view, greatly change the plans of the large transaction-oriented corporations who undertook Y2K work.

The simple fact is that corporations reduced their expenditure on projects, displaced significant proporitons of locals with H1-B's and shifted a significant proportion of new projects overseas.


Sunday, October 19, 2003

On startups:  I am of the firm opinion that all "Ben and Jerry" style startups that don't use venture capital (and I classify Microsoft as almost being in that mold in its early days in the 70's) sound like total chickensh*t when you describe them to someone else. At least until they begin to pay off. 

Any self bootstrapped business with decent potential *is* tough simply because nobody else has been willing to crack that particular nut yet because nobody's figured out how to run a business in that niche. As soon as someone invents a going business that takes advantage of a particular unexploited inefficiency in the market, then two things happen. One, it becomes "self evident" to everyone that the business was worthwhile and wasn't crap all along; secondly, the first such going concern in a niche gets modeled by others.

One example of this *is* actually Microsoft. I recall being in engineering school when MS was starting to cash in on MSBASIC and feeling that the market for microcomputer software was so low-dollar and low-end that it was beneath contempt to even consider. One thing I didn't figure on was sales volume.  Instead, my engineer's chest puffed out and I resolved to work on BIG systems like VAXen... :-( And no, it was NOT obvious at all in 1977 or 1986 that MS would become the juggernaut it is today.

Another example is the company Cables-To-Go, which you find all over catalogs like TigerDirect. I personally know a family that is related to one of the founders of that company. If someone had told me back in the early 80's that I could eventually be wealthy by assembling cables in a strip mall in Dayton, Ohio, I would have sneered as I applied to the Dilbert hives where I was looking for my next 'leet "proper engineering" job. Now, look at where these guys are and where I'm at... dammit.

That's my final point. Ego has its cost. I think it requires the ultimate humility to consider a business line that nobody "qualified" wants to consider.

Bored Bystander
Sunday, October 19, 2003

Part of Y2K was rewriting legacy systems for modern languages and platforms, and newbies were involved in that.

But still, I think the dotcom frenzy was the main reason for the tech bubble and its subsequent burst.  Employees were quitting in droves to join startups that offered megabucks in options and/or bigger salaries.  Then after being left with so many vacancies, employers were willing to hire anybody who could type.

When reality surfaced, the employees of startups got laid off as the dwindling dotcoms downsized destructively or went out of business altogether.  Management of traditional brick-and-mortar companies saw the layoffs going on, and with their follow-the-herd mentality they decided it would be good if they started laying off too.

T. Norman
Sunday, October 19, 2003

> And no, it was NOT obvious at all in 1977 or 1986 that MS
> would become the juggernaut it is today.

The raises an interesting comparison. What if in 20 years Palm is the dominant computing platform having erroded the market for desktop PCs?

It sounds unlikely, but I bet it seemed unlikely in the late 70s that microcomputers would be the dominant model against mainframes.

Matthew Lock
Sunday, October 19, 2003

Just stay away from the crack ($VC). The companies I admire most are the ones I've never heard of...quietly but profitably cranking away on stuff they love to do.

fool for python
Sunday, October 19, 2003

fool for python:

what are some of these "quiet but profitable" self-funded software startups?

runtime
Monday, October 20, 2003

Fog Creek

Damian
Monday, October 20, 2003

I think you also have to realise the barriers to entry these days are much higher.

You can't slap together a computer with a couple of guys in your shed like Steve Jobs and Steve Wozniak did back in the early Apple days.

You can't make a commercial quality game as just a single guy or a couple of guys anymore. Typical games have hundreds of people now.

I think it's a lot harder to get a startup going these days. Everything is bigger scale than it used to be.

One has to focus on the niches to be successful as a small startup. Frankly I doubt there are that many niches in the PC or Enterprise space anymore ... they've mostly been filled.

You need to do something new and different ... remember that in the glory days of startups, computers (and later the internet) were the new and different thing.

Sum Dum Gai
Monday, October 20, 2003

> I think you also have to realise the barriers to entry these
> days are much higher.

These are equalised somewhat by the better tools we have today, free operating systems, free rdbms, global computer network, higher level languages etc.

Matthew Lock
Monday, October 20, 2003

There is a truism that still holds water.

Large organisations make big complicated things, small organisations make small simple things.

In software applications small is beautiful again, the large leviathans are stagnant and stable, the Word, Excel, Autodesks of this world. 

Make exquisitely formed things and people will buy them.

Simon Lucy
Monday, October 20, 2003

I appreciate the spirit of this thread.

I think it's important to actually *do* something rather than complain about the state of the industry.  You'll have a much higher chance of success that way.

But the point is to do something.

The Pedant, Brent P. Newhall
Monday, October 20, 2003

I'm trying!

I created a shareware program. Well, I did four others ages ago, but they are all discontinued now. It's only on version 1.0, I'm still working on reporting and graphs capabilities. It's a personal finance manager, check it out at http://www.abassis.com

So far, one sale of $24.95 after commissions. My overhead is a $6.95 hosting fee and $9 annual domain renewal fee.

I do agree that bootstrapping is hard. I've been trying to build a business since 1997, without big success. Sometimes you have the vision but need more luck, more timing, or more money. I didn't create a Napster-like program before Napster existed because I could not afford the server bill (which would be on the tens of thousands of $$ monthly).  I enticed to a brazilian portal to create a diary service (the blog term did not exist at the time) in 1998. But I gave up when we didn't reach a good agreement. Again, I didn't have the resources for a solo flight and had to give up on the project, too watch it be very successful in 2001 (in Brazil).

But I learned a lot, and today I work as a consultant with a nice salary because of the experiences I've acquired. If you have any idea you think is nice, go for it. But don't dream too much. Business is hard. And when your site or software fails, all you are left with is experience, good memories, and a pile of bytes.

Mauricio Macedo
Monday, October 20, 2003

I> You can't make a commercial quality game as just a single guy or a couple of guys anymore.

Actually, you can. We're doing it.


Monday, October 20, 2003

"In the US 52% of all small businesses fail."

Then just start two businesses and you're set!

:)

Jim Rankin
Monday, October 20, 2003

Dexterity software has done exactly that.

Check out dexterity.com

And he's also got lots of articles that explain why people fail.
http://www.dexterity.com/articles/


You have to make a decision: am I going to find reasons why I can NOT start a company, or am I going to identify and solve the problems associated with starting a company.

It's not for everyone.
It takes a lot of persaverence (sp?) and a lot of humility and sweat.


ONE BENEFIT TODAY
In many ways, its harder to start a company today, but in more important ways, it's easier to be successful in pc software than 10 years ago:

1.  Bigger market
More people have computers and more of them have the SAME operating system (thank you Microsoft).

2.  Informed customers
This means less tech support and less explaining how a computer can be helpf8ul.

There are still niches to be served and products to be displaced.

One problem in identifying the above is that the niche products are in NON TECHNICAL fields.  Any niche area that computer-oriented people would see a need in has already been attacked.

Howevever, if you find a non-technical field (like software to help librarians, whatever) then it's much less likely that some geeky programmer has encountered the problem/niche area and solved the problem.

So... look at non-technical fields. Find a need in that field that  computer would solve and you've got a potential market.

Basically, you need to write software for non-techies in order to find an open market.

That's what we did. And we've been very successful for the last 4 years (which was when I devoted myself full time to the company). It supports me, my wife, and our three children, while letting me sock away $15k a year for retirement.

We're not millionaires (yet ;-)  but I enjoy my work.

Entrepreneur
Monday, October 20, 2003

"But I learned a lot, and today I work as a consultant with a nice salary because of the experiences I've acquired."

Hey, this is great!  I think this counts as a success story.  Should be inspiring to any unemployed (or the rest of us when unemployed in the future) to work on that program we always wanted to work on.  Even if it doesn't pay off directly, the experience will.

Jim Rankin
Monday, October 20, 2003

The folks who actually are "doing something" just happen to not hang around in this forum because ... they don't have time.

Johnny Bravo
Monday, October 20, 2003

> Hey, hey, Rog! What's happenin'?! Come on, now, give us the 411!

There's several things I've got my fingers into lately but here's one of the more exciting ones:

- custom designed hybrid pets
- novelty vegetables and fruits

Bioengineering nowadays comes down to solving massive computational problems and for the first time ever a small group of people can easily afford the grid of supercomputers needed to do it.

Roger Townsend
Monday, October 20, 2003

> I think it's important to actually *do* something rather than complain about the state of the industry. 

Agreed.

> The folks who actually are "doing something" just happen to not hang around in this forum because ... they don't have time.

Probbably.

OK Mr. "Do Something" Let's do something. JoS Forum Consulting, Inc.


Anyone remember the Beehive? They made software for Apple Mac's and sold it as shareware, giving a percentage to each developer. People would propose projects and if enough people signed up to get it going, would start the project with a pre-defined compensation if it went to market.

It seemed like a neat idea, but I think it was replaced by sites like SourceForge where reputation & just providing good tools, and not profit were the motives.

www.MarkTAW.com
Monday, October 20, 2003

Those evil profiteers! Darn them! Darn them all!

Pirates every one cheating the honest man out of his daily bread just for some 'software' that doesn't even cost a half pence to replicate.

Ed the Millwright
Tuesday, October 21, 2003

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