As entrepreneur Marc Andreessen famously wrote in The Wall Street Journal a few years ago, "Software is eating the world." Traditional businesses are being disrupted and everyone is talking about starting a new software-based business. Clearly an opportunity is out there, but founders with prior software experience have an advantage.
For nontechnical founders with business backgrounds, the big challenge in starting a software company is navigating the technical part of the operation. From my vantage point as a nontechnical founder and as someone who has worked with many nontechnical founding teams, I can offer five tips to entrepreneurs who are short in tech skills but aiming to build a successful software business:
1. Target the right market.
Nontechnical founders are typically businesspeople. Ideally they can leverage experiences and connections from their prior career to use in the new software business. If $1 million in theoretical revenue can be identified from existing connections, the company is well positioned.
To pivot into a new industry, think big, but start small and choose a niche so as to have clear target customers to call on.
2. Assume that the company will be building software for a while.
Building the software product for a company is not a project. It's a journey. The organization needs the ability to respond to customers and continue to refine its product until it finds a market fit.
Don’t start a software business unless a dedicated technical team can be kept running throughout the journey to make the product better each week. The more dedicated the technical team is to the long-term journey, the better.
3. Start selling to prospects right away.
In software, “build it and they will come” is not a reality. While the technical team is working on an product (which can take months), develop customers, That way when the product launches, business customers will be lined up.
Use Powerpoint and mockups to demonstrate what the company is building and presell the product. Not only will it build the business faster, the founder will gain insight into what customers want to use and are willing to pay for. Remember: The product will never be done so don’t wait to start selling.
4. Stay focused on strengths.
Given that a founder needs to be focused on finding customers for the product, avoid the temptation of trying to control the decisions of the technical team. Give the team clear guidance and let the team work on the solution.
Assuming that the technical team is experienced, be a good listener, collaborate and build trust. Be a product visionary without specifying every detail. Now get back to selling.
5. Build maneuvering room for the business to stay alive.
Time flies when a startup is being built and so can the budget. The #1 job of a nontechnical founder is to ensure the software business has budget runway to keep the team working on the product and build a user base. Create a realistic and conservative rolling one-year road map for the company and do everything possible to outperform the milestones.
Compare the company's performance against these milestones to attract more customers or additional investment into the business. The more that members of the team outperform the goals of the original plan, the more leeway is realized. Be sure to set very realistic expectations up front. Underpromise and overdeliver.
The earliest stages of any software company will involve some very hard tasks: identifying a problem to solve, building the software to address it, selling and marketing the software and being sure to not run out of money. Nontechnical founders don’t have the skills to develop software but need a proven technical partner who can be trusted. But once that technical gap is filled, be sure to stay true to what makes nontechnical founders successful and focus on building the business.