I haven’t met a lot of developers whom didn’t have a business or app idea in the back of their mind. Heck I have tons myself ! With all the content around entrepreneurship it is hard to distinguish the quality advice from the wantrepreneur pep talk.
We are developers ! We solve problems and we do it well ! So how do we make a business out of it ?
Forget what you think you know
Entrepreneurship is the new Hollywood ! Everybody wants to make it so content around how to build a business has been popping throughout the internet. Because we are taught to read the docs, we consume that content yet we have no idea how to make sense of all these contradicting guidance.
So let me help you out !
Business plan
At this point, writing up a business plan is no better than fishing for gold with a metal detector on the beach. Just forget it for now.
Market research
Yes, this is a crucial part but it is not done through a marketing expert or through ten pages surveys. It must be done through putting yourself out there and talking to people. More on that later.
Influencer’s advice
Whether it’s Mark Cuban, Gary Vaynerchuck, Grant Cardone or some other big name influencer who was quoted saying something keep that out of your mind for now. They’re probably right in some sense but you lack context of that situation where they said what they said. For now you are pre everything so we will keep things much more simple.
Forbes, WSJ or some other publication
Throw that out the window. Period.
🚫 At this point it is very important for you to NOT WRITE A SINGLE LINE OF CODE
Understand the type of business you want to build
Not all businesses must be multicorns based out of Silicon Valley. Actually most businesses start as a simple side project before becoming a real business. You all know the “built in a garage or dorm room” stories but did you know that GitLab was built for the specific needs of one of the cofounders and he had no intention of turning it into a business?
There are two types of business you will likely build. A Service business or a Product business.
Service provider
Being a service type business is tightly coupled to your working time available. As a developer you have an expertise in your field. As a person you probably have some other expertise through your hobbies. You can start thinking of a service you could provide to individuals or business based on that intellectual property.
A service based business is easier to start. But since your WTA ( 💪🏻 there it is ! I just invented my first acronym 🙌) is limited throughout the month your only way to increase your revenue once you start is to raise your hourly rate or hire a cheaper resource to sell to your client.
That is what we call a non scalable business. Again, there is nothing wrong with a service type business and that’s what I do for a living.
Example: Coaching, Freelancing, etc
SaaS or Subscription based app
A product type business is probably something you are considering. Building an app around a need that you have yourself or identified in your surroundings. As a developer you already see how technically you can build such a solution and you are tempted to spin up your IDE and start coding, right?
This type of business falls into the scalable type of business that everybody in Silicon Valley wants to build. Its revenue is not linked to your time and if it sells it will make money when you sleep. Sweet ! But what they don’t tell you is that it is a lot more expensive to build a product business.
Let’s assume you are savvy enough to build the first working version. You still have to generate some sales to start making revenue. Selling software — however cheap it might be — is a skill that is expensive to hire. It is not something you can wing and start doing without some training and practice. You will get discouraged after your 4th sales call.
And if you are building a consumer app where you don’t have to sell it is even worse. In order to have enough user to start generating revenue, you will have to get in front of thousands of potential users and convince them — through ads or some kind of financial incentive — to try your app out. Don’t use Facebook, Instagram or Snapchat as an example to prove me wrong, their success happened after months of hard work and iterating through their products.
Yet this might be the best type of business you could start as a side hustle if you want or need to keep going to school or keep your current job.
Example: Subscription based app (Dating, Productivity, Money management app…)
Get yourself out there
No success whatsoever happened overnight. Airbnb took three years to get out of the dark and one of the best advice the cofounders received from their mentor Paul Graham was to get out there and talk to their customers.
Reach out to your audience and start talking
Before starting anything, you have to reach out to the audience you are thinking of serving. Talking to them is crucial to understand their language and their problems. Relying on your opinion or what you have observed around you is not enough and I guarantee that skipping this step will lead you straight to nowhere.
Expose yourself
This is the most difficult part right here but there is no way around. You have to show yourself. In real life events and online you have to put your face out there and start talking about your audience’s problems. At this point you don’t need to have identified specifically what your business will be about but you are introducing yourself to your market as someone who has understood them and is willing to find a solution.
This is 2019-2020, you will not be able to hide behind a bland landing page and stock photos. So join Facebook and/or LinkedIn groups and start having conversations with people you’re aiming at serving. Because that’s what business is all about — Providing value to a segment of people.
Focus on Product-Market fit
Product-Market fit is the Moby Dick of entrepreneurship. You can sail for years and never find it but when you do, it is obvious ! Product-Market fit is when your audience says “Hell Yes!” and curses the hell out you when you are late delivering your product.
Now I have never heard of a business finding PMF on their first try. It goes through plenty of iterations. So keep that in mind for when you will start coding. You will likely rewrite a lot and often.
🚫 And again, NO CODE BEFORE PRODUCT-MARKET-FIT 🚫
Start small
Nothing will come out of thin air and big bang its way to being a profitable business. Every successful business, big or small, has started in a tiny niche before expanding.
Remember you have to go out there and talk to your audience. By narrowing your niche you make sure you talk to the right people and you also differentiate your product or service from the incumbent players.
Narrow down your target
In order to identify and reach out to a specific audience, you have to narrow it down until it hurts. It should feel like your market is tiny. If you are building something for consumers (B2C), you should aim at an audience between 20K to 50k people. Anything above is just too broad.
If you are building a B2B product or service, use LinkedIn premium (Sales Navigator) in order to define your market size. Your target niche should be 100 companies.
Start without code
With Airtable, Zapier, Bubble.is and all those no-code tools, try to build an ugly version of the product or to fake your service in order to validate the idea with your audience. By having conversations with your target audience, they will know you and trust you to find their solution. So it is ok to offer an ugly MVP to them before building something sexier.
Get ready to spend some dough
Now all of this comes at a cost. Mostly your time but also some of your dollars (or euros … or some other currency).
You will need to subscribe to a set of services in order to maintain relationship with your audience. You will need a landing page, email services, probably some other services to build an MVP and that’s before writing a single line of code. In my experience, be prepared to spend either $1,000 or somewhere around $50/month.
Although it might seem expensive, trying to work around it is a huge loss of time.
Final thoughts
Building a business is an exhausting work. You should enjoy the process and not have the end of making money be your primary motive. Otherwise your motivation will wear off by week 3 and you will have just wasted your time.
Starting a business does not have to be a lonely process. Surround yourself with colleagues or friends to try to build something. Don’t overthink the equity split or the “should I start a business with my best friend or not”. That is a problem for later. Not starting alone is a real advantage.
One final thing, do not incorporate before you have your first paying customer.
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Now I know that this is only an introduction and you probably have specific questions. If that’s the case, hit me up on twitter or instagram to talk about it !
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