After I made the decision to strike out on my own, I needed to figure out all the "non software" stuff I had to do. This included hiring a lawyer, an accountant, a website designer (not the same as software development!!), registering my company with the proper government officials, etc. I knew I would have to spend some time learning new things that were out of my technology and sales comfort zone. I could not afford to hole up in an office and just start coding. I made a conscious decision early on that I would not just start developing software without a customer or at the very least a solid prospect that could help guide me as to what was truly needed.
It was gut-wrenching to be burning through what little capital I had saved to hire professionals and start the infrastructure. My account and lawyer were charging more than my going consulting rates, if I could find consulting work! Trying to decide between incorporating or an LLC was confusing, but I opted for an LLC for reasons my high priced accountant explained to me as I was daydreaming of ways to make more money to pay him. There are times when you must trust the people you hire.
This is why many people start off with more than one person and form a partnership. Having 2 or more people to help with the internals would have been so helpful. At the time it was too difficult to find more souls to join in on such a risky venture. I certainly knew that it might take a long time before I could actually afford to pay someone, so to bring someone in meant to have them work for pure equity. If the company was to fail, I could only live with myself if I was the only victim.
What about raising capital? I will write more about that later. However, I was informed by an acquaintance of a state sponsored contest for startups. The way it worked was you presented your business plan to a panel of industry veterans. The top 10 companies would receive grants and free office space. Sounded perfect for me!! I submitted my form, described what I was doing, and put myself out to be judged. I made it through the first of 3 rounds! How encouraging!!
I was called in to present in front of a panel of judges. Contrary to a common fear of public speaking over death, I thrive on it. My experience on panels at large trade shows always gave me the pre-show jitters, but I always felt the adrenaline rush once things got underway. At this event I presented to 3 judges in a closed room. None of them had a background in the financial industry and only one in software, and my business revolved heavily around enterprise software. I had 10 minutes to show my presentation. Very difficult to explain what it is that I do, but I broke it down simply and promoted my industry experience, publications, a pending patent, etc. I left feeling content about the presentation and waited for an email result.
A week later the email came and stated that I was not chosen for the next round. Ok that stinks, but I wasn’t too upset over that. I knew it would be tough. There was a link to read the judges’ comments. I figured I might learn something. “I don’t believe there aren’t already hundreds of people on Wall Street and Fleet Street that are doing what he’s trying to do.” I still feel the twinge of rage when being “criticized” by a so called veteran about the business I’m in. Of course others are in this space!! So began my thinly veiled contempt for Angel Investors / VC’s who are involved in this crazy investment bubble, only looking for the next Facebook/Twitter/FourSquare mass market social software. Sounds simple, but I’ve learned to not look for outside encouragement, especially outside of my domain.
It’s been over a year now since that contest, and I’ve made sustainable income from consulting and product sales. I have a large client licensing my software, and I have a healthy sales pipeline. I’m happy I’m not in the zero income, capital burning, social media business. “There are hundreds of thousands trying to do that.” Quote me on that.
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