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Q: What steps do I need to take to get a concept for asoftware program from the idea stage to the distributionstage?
Kevin Reese
Olney, MD
Via e-mail
A: To answer your question, we called upon twoentrepreneurs who have been extremely successful at bringingsoftware products to market. Jon Ferrara is the executive vicepresident and co-founder of GoldMine Software Corp. in PacificPalisades, California. The company was founded in 1989 by Ferraraand his partner, Elan Susser. We asked them how they brought thistwo-person company, started in an apartment, to a 100-personcompany with more than 500,000 customers.
Ferrara says to be successful in the software industry, you needthree components:
1. Unique technology. With all the programsalready out there, your idea must be new and different tosucceed.
2. An innovative selling position. Differentiateyour product from others in the same category.
3. Value that is easily communicated. People want toknow what a prod-uct can do for them.
Ferrara advises that in today's software marketing climate,it's better to find a software category to build from, ratherthan inventing a new category. Essentially, unless you have a lotof marketing dollars behind you, you'll be hard pressed toconvince users they need to purchase your completely new product.Instead, you need to convince them your product will either enhancean already successful product or better suit their needs than theproduct they're currently using. For example, GoldMine extendedthe contact management category started by ACT! by creating anetwork-abled contact manager (for tracking sales leads,maintaining contacts, generating reports and communicating withteam members).
If, unlike Ferrara and Susser, you are not a software programmeryourself, you'll need to hire one to implement your idea.Finding one these days isn't too difficult, and the Web is anespecially good resource for filling these types of positions. Ifyou don't have the funds to pay a programmer, you may be ableto find someone who will accept partial ownership of your companyas compensation. Of course, you need to be extremely wary aboutwhom you bring into your business, and you should verify aprogrammer's credentials thoroughly before moving forward.
To take your product to market, you're going to need amarketing plan. You can either look for investment capital to fundyour business or you can go it alone. Because investors oftenrequire a portion of ownership or control, bootstrapping your newbusiness may be more appealing. That's what Ferrara and Susserdid: "We started with $3,000 and no bank loans and grew ourbusiness into a $20 million com-pany," says Ferrara.
To successfully take GoldMine to market, the partners hadto creatively market the product to their audience with very littlemoney. They went to the most obvious user of the product--VARs.Knowing that it's easier to sell what you know and what youuse, the partners created a plan that got full running copies ofGoldMine into the VARs' hands for a nominal fee. This workedwell to get the VARs to sell the product, but then Ferrara andSusser had to make sure the VARs' customers were aware of theproduct. That's when they turned to public relations toincrease awareness. After the product was a success at this level,the partners were able to easily enter the retail market with asingle-user product that didn't threaten their VAR saleschannel.
Q: Which is the best accounting program for a smallbusiness? How will it need to change as the business grows?
A: Small-business owners need a product they can notonly afford but can easily figure out. Intuit's QuickBooks issuch a product. Intuit, maker of the popular personal financeprogram Quicken, decided to develop QuickBooks in the early'90s after it realized that nearly 7 million Quicken users werealready harnessing Quicken for their small-business accountingneeds. A survey revealed these small-business owners justdidn't "get" the other accounting programs outthere.
Accounting practices, such as double-entries, posting andclosing, and working from a general ledger, are foreign to mostsmall-business owners. You need a program that does all the genuineaccounting but does it in the background so all you have to do isenter information. Other products have followed Intuit's leadin creating easy-to-use programs, including BestWare's M.Y.O.B.Accounting Plus ($149) and Peachtree Software's Peach-treeAccounting for Windows Release 5.0 ($129). The easiest of theseproducts is still QuickBooks; however, special needs might make oneof the other two more desirable.
One of the reasons I prefer QuickBooks is that it iscustomizable for your business. An interview process takes youstep-by-step through the setup and asks about your business todetermine how your interface should be set up. For example, it willask if you have employees, and if you don't, the payroll aspectof the program will be turned off. If you add employees at a laterdate, you can turn the payroll function back on. Another nicefeature of QuickBooks is its easy and customizable reportingcapabilities.
Before you decide on a product, determine exactly what you need.For example, Intuit offers two versions of QuickBooks--the standardone at $99 and a $199 enhanced version for service-basedbusinesspeople, such as consultants, architects and freelancers,that is capable of time tracking, job costing and estimating.
Another concern for any expanding business is the ability tonetwork the product so multiple users can access it. Currently,both M.Y.O.B. and Peachtree support this function, whileQuickBooks' next upgrade, scheduled for release this summer,promises to address it. Of course, some businesses demand a programthat is dedicated to its industry. There are numerous high-poweredaccounting programs you can look into as your business grows. Thebest bet, however, is to discuss your needs with people in yourindustry to find out what products have worked best for them.
Cassandra Cavanah is a contributing editor of PortableComputing Direct Shopper magazine and has reported on the computerindustry for nine years.
Hot Disks
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Contact Sources
BestWare, http://www.bestware.com
GoldMine Software Corp., (800) 654-3526, http://www.goldminesw.com
Intuit, http://www.intuit.com
Peachtree Software, http://www.peachtree.com
