The software industry in the past decades has proven to be very lucrative and doesn’t seem to be slowing down.
A report by IBISWorld shows that this industry marks an annual revenue of $238 billion while registering a growth rate of around 3.9 percent every year.
However, if you are going to succeed, the main question is, “Is my idea bright enough for success?” The answer to this question will pretty much set the stage for the future success of your software company.
In a bid to direct you on the right path, we will take an in-depth look at how to start a software business and get projects. We will show you how to test your business idea, the steps to take before establishing the business, and finally, how to get projects.
How to start a software company and get projects
Let’s dive right in.
Step-1: Identify a problem
All businesses exist for the sole reason of addressing a particular problem.
For instance, Steve Jobs made it possible for the average citizen to own a computer in their home. In this way, he opened the portal to the new age of technology, battling it out with other tech companies like Microsoft.
However, this doesn’t mean you have to develop new technology (though it would set you apart from the rest). You can develop existing technologies and leverage them in industries that don’t use them.
For example, the concept of AI is not so new. However, if you would integrate it into e-commerce, it could stand out as innovative.
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Step-2: Carry out market research
The next step should be carrying out market research.
In this step, you identify your target audience, major competitors, preferences, and needs. Also, spot the stage you are getting into the market, namely, introduction, maturity, or decline.
- Introduction stage
At this stage, there’s no other software like yours in the market. For this reason, your product could either be in no demand or huge demand depending on if you can convince prospective clients that they need it.
In 2008, Airbnb started a website to enable people to book accommodation globally. The concept was to enable tourists to rent accommodation from local citizens.
Initially, investors steered clear of funding the project due to the widespread notion that few people would think of renting their apartment to strangers.
Luckily, the company was started around the Great Recession, when people needed extra money, which shot the service to popularity.
In 2009, Uber Technologies also leveraged the crisis and made money. They came up with an application that allowed users to book drivers who drove their cars. The service bridged drivers who sought extra money and passengers who needed cheap rides.
These are examples of fresh ideas that were introduced when the market urgently needed them. However, sometimes great ideas may spring up too early.
In the 90s, Z.com, an online entertainment company, was founded and brought in 750,000 visitors in a month. Although it had enough funding and had an excellent business model, it was phased out of business in 2003. Its Achilles heel was the fact that broadband penetration was very low in 1999-2000. Users found it hard to view video content online.
Two years later, when broadband penetration had risen to 50 percent, Youtube entered the scene and became a success.
It’s clear that Z.com came into the market when the market was not ready yet.
- Maturity stage
Your competitors already draw good revenue on related software in this stage, but the market is still large.
For instance, you may know how to develop an alternative that will be more affordable and more powerful.
This is most probably, the ideal stage to get into the market.
Masquerade Technologies Inc. was started in 2015 and offered their customers MSQRD (Masquerade)- a mobile application that supported face-swapping.
It allowed users to alter their look by choosing a filter mask or effects from the library and then share it on Instagram and Facebook with their friends. It was bought in 2016 by Facebook.
- Decline stage
In this stage, the market is full of business offerings related to yours, which causes your idea to lag.
Radio Inc, a music-streaming website, was launched in 2010 on a subscription basis. The service had a following in 85 countries. However, it struggled behind its competitor Spotify and eventually succumbed to them. It filed for bankruptcy and was bought in 2015 by its competitor Pandora Media Inc.
The success of your product depends on the stage you choose to go into the market. As such, focus on your potential customers. If they are interested in your idea, you are likely to hit gold.
Check out, Types of Funding for Startups.
Step-3: Business plan
After identifying the kind of service you want to offer and gauging your market, it’s time to get things in order.
A business plan will double your chances of attaining your goals. A business plan acts as your map in starting and managing your startup.
It makes up for all the actionable steps from getting funding, getting investment capital, making key purchases, hiring team members, and making strategies for its growth.
A business plan encompasses the following points:
- Business Summary: This section touches on the company’s mission statement and information on its leadership, operations, and employees.
- Service/Product Description: This part has details on the services and products offered. It outlines product functionality, pricing, and customer benefits. It may also have details on manufacturing and production.
- Target Market: An outline of the target market. It includes trends and competitor analysis in the industry.
- Marketing Strategy: This section outlines the company’s strategy to reach out to its target audience. It will have a list of distribution channels it will get into and upcoming marketing campaign plans.
- Budget: A sum of the estimated costs linked to the running of the company. This includes manufacturing, staffing, development, marketing as well as operating expenses.
Also, check out, How tech startups use investments?
Step-4: Fund Your Solution
Once you have a business plan, it’s to hit the ground running and put the plan into action.
Your business plan is no good if you can’t mobilize it.
Getting capital for a software startup is no easy feat. It is challenging if you’re raising capital beyond your bank credit. You have no choice but to seek other fundraising options. Luckily, there are multiple opportunities to get investors to fund your startup.
You can enroll in accelerator programs or reach out to angel investors to seek additional funding. A great perk to getting investors on board is that you get guidance in starting your business.
Also, check out, What makes a startup successful?
Step-5: Hire people
The people you bring into the company greatly determine the success of the business. As the founding members of the software company, they determine the foundation and dynamics of how the business is going to be run.
As such, you’ll have to be vigilant when selecting your staff, starting from the recruitment personnel to software developers.
Furthermore, you have to figure out how you hire your team. You can widen the net and bring in the broader talent pool by, say, freelancing and outsourcing.
Step-6: Create your MVP
When you build a Minimum Viable Product (MVP), it acts as a trusted avenue to testing the waters.
One, it enables you to receive the initial feedback from the target market. Two, when you put out the first beta version of your product, you get insights and gauge how your product will perform in the long run. It will also act as your first step into the industry.
Learning how to start a software business can be incredibly hard and frustrating if you have no mentors to hold your hand. Mentorship goes a long way when you are starting a software company. There’s the need to surround yourself with the right people who bring out the full potential of your startup idea.
How to Get Projects
Now that we have seen how to start a software business, we looked at how to get projects.
If your business is to stay afloat, you’ll need to bring in customers and fast. Well, getting projects to work on is no walk in the park. However, with the right marketing strategies in place, this shouldn’t be hard.
To help you start a software business and get projects, here are some of the ideal ways for software companies to market themselves and bring in customers:
Original video content
Video content as a form of marketing has become quite prevalent with tech companies when introducing their solutions.
While most customers might not be able to go through your company datasheet, they most likely have the time to view an entertaining and engaging two to a three-minute video related to a solution that might prove valuable to them.
When coming up with video content to market your product, here are the key areas to look at:
While your software product is most likely complex, robust but impressive, you should zoom in on telling a compelling narrative when leveraging video to promote your solution.
Guide the viewer through how you helped specific clients to get from “A to Z,” how your startup started or how your team came with a specific feature.
Hook people in with an easy to comprehend narrative first before digging into the specifics with them afterward on sales calls.
Being in the B2B enterprise space doesn’t mean that your videos should be void of humor. On the contrary, your videos should be funny and entertaining, which helps you stick out from the crowd.
For instance, New Relic’s most popular video on their Youtube channel is a funny rap video on coding made by one of the employees.
The video content strategy should have room for useful yet educational content. This includes tutorials on how to use the solution, webinars, product demos, and “how-to” style videos.
Webinars are especially useful, as they require people to give out their contact info to register. This way, you’ll be in a position to build a contact database and get to marketing with these contacts.
One of the most potent software marketing standpoints is when a target buyer is convinced that a solution will work for them because it worked for another company.
This is what you achieve from client testimonial videos.
Companies nowadays are struggling to be seen or heard amid constant noise from others trying to promote their products or service.
Furthermore, tech buyers are growing increasingly smarter and getting more desensitized from the traditional marketing they see every day.
For this reason, they are looking to others whom they admire or trust to give a review of their experiences with a solution, product, service, or platform before they decide to use it in their own organization.
Furthermore, business leaders and enterprise decision-makers most often look to experts in their fields when determining new technologies to buy and implement.
This provides an excellent opportunity for companies to use influencers, who have a loyal following and boast of credibility in an industry, to promote to their enterprise decision-makers.
There are huge amounts of digital content getting generated each day. This content ranges from high-quality content down to “clickbait” and content mills that people don’t benefit much from. The same principle applies in the B2B tech marketing space.
Regardless of the niche, you’re in, there are probably many competitors vying for the same customers. Some of them hardly put in time and effort into the content.
To survive as a software company, you’ll need to forego short-term thinking that seeks to generate click-throughs and come up with a consistent program of content that is high-value and that will lead to long-term trust between your brand and your target buyers.
Market Automation Tools
An important part of contacting and nurturing leads among tech companies is using marketing automation tools.
To come up with sustainable and predictable revenue models, you need to employ automated systems that allow you to collect leads, build a marketing pipeline, segment contacts, and promote to them consistently.
Marketing automation helps software companies grow, nurture and later on, pass leads over to the sales department when they’re ready. This is important in the technology space, and note that these cycles can go on for weeks, months, or even years.
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That’s it on how to start a software business and get projects. Like any business, you should seek to provide a solution and test it out to ensure that it is profitable.
Once you set up the software company, you’ll need to engage in rigorous marketing to get new clients and get the projects. With the steps listed above, this should not be hard to pull off.