Starting your own company (S5E21)

[Aq]

Have you thought about starting your own company? What stands in our way?

[bolsh]

Hi Aq,

As a man who recently started his own company...

Knowing your stuff and having a good network of people, and being a decent (or at least prolific) writer can open doors for a bog standard consulting shop. In my case, I propose to my clients that I participate in discussions on licencing, do audits of their usage of free software components, train their teams on the dynamics of free software communities (how to get patches accepted, good practices for reducing R&D & maintenance costs by working with upstream, technical infrastructure used, etc), and working directly on projects to help cultivate user communities around their free software projects.

I have another idea which would work well... you go around small & medium sized companies scaring them into thinking that the BSA is going to knock on their door any minute, and they probably don't know what's installed on their computers. You then offer your services to do a complete inventory of the software they have, and for each piece of software without a licence, offer 3 solutions: remove the software, buy a licence, or replace the software with a free software equivalent. You'd make a bomb - not least because you could train a monkey to do the work, and you could grow pretty quickly.

The bottom line is that if you're good at your job, you're already making your employer more money than he's paying you, so if you have the balls and the contacts, you can increase the amount you earn by doing it on your own. If you're not good at your job, sit tight

Dave.

[slef]

I liked starting my own company so much I did it twice... the first time as a typical startup, the second time as a worker cooperative so that hopefully the problems of the first wouldn't be repeated. So far, so good. Cooperatives also seem much more in keeping with the free software/open source environment.

[neuro]

Yikes, slef is here; hello sir! We may have clashed sabres over SmoothWall at some time in the past

How do you find doing business as a co-op? Do you ever lose business due to misconceptions as to how co-ops work?

[port7]

It's a doddle to start your own company, I am an IT Contractor and so self-employed. I bought an off the shelf Ltd company and got a good accountant, I was up and running in a few days.

The hard bit is finding work, you could start off doing contracting to get the cash in and then branch out to other stuff like support contracts, systems integration, etc.

[IRLConor]

Did it for about 3 years straight out of college with some of my classmates.

It was great fun and here's what I'd say to anyone thinking of doing it:

1. You need bugger-all money for a tech startup. Rent and food are your biggest costs.
2. You can probably get said money from a bank.
3. It's not hard to start a company. (Certainly not here in Ireland.)
4. If it fails, it fails. Wind up before you lose too much and then just get a "real job".
5. Finding work can be a pain in the hole.
6. Use friends and family to get contacts.
7. If you have a solicitor or accountant in the family they'll probably help with the legal/accounting bits.

[slef]

How do you find doing business as a co-op? Do you ever lose business due to misconceptions as to how co-ops work?

Well, it's better than working as a non-co-op (no external shareholders to justify why you're not taking the most obvious money-making option every time) and it probably loses us a little business, but I believe it has also helped us to win some business in rather specialised markets.

I'm not really clear what the common misconceptions are about how cooperatives work. Got URL?

Are they more harmful than the common misconceptions about free and open source software? Seems unlikely to me.

Now, how do I get this bloody forum to email me on replies and/or give RDF Site Summary feeds?

[DanielT]

any tips on the hard part of starting your own company i.e. finding work?

[bolsh]

any tips on the hard part of starting your own company i.e. finding work?

Be able to say what you do and why you're good at it in 15 to 30 seconds.

Make a list of everyone you know and their phone numbers.

Ring them up to say hello, and tell them what you do and why you're good at it.

Work at making your list longer

[slef]

any tips on the hard part of starting your own company i.e. finding work?

Contacting people you know is a big part of it, as mentioned above. I also advertise in lots of places and measure my advertisements' performance, trying to improve them. For example, Yell.com sucked, but local village magazines give a pretty good return, which I wouldn't have expected for web+telecoms business.

However, when starting my current business, I was lucky: I had already worked for one start-up, learned from it, done the Business Link type courses (although they are useless about cooperatives - simply not mentioning them) and got a scholarship to help me start up; some of the work was pretty much given to me by someone who couldn't do it any more; and I was already famous/notorious enough in LUGs to have some potential customers approach me for help with web application and system administration problems. Then again, being that lucky took much hard work...

I don't think I'd want to start a business without either some work lined up (say a quarter of my first period's turnover target) or a clear idea of the size of my market. I guess that means you either need to be lucky, or moonlight a little to start up.

[bolsh]

I don't think I'd want to start a business without either some work lined up (say a quarter of my first period's turnover target) or a clear idea of the size of my market. I guess that means you either need to be lucky, or moonlight a little to start up.

+++ on not starting without some work lined up already, unless you're really green-fielding it and building a new web business or something like that. But even in that case, I would recommend getting a prototype up & running while you're still a paid employee, and start the company just to perfect it/get financing from the bank/launch. Having some money set aside helps too.

Don't neglect seemingly unrelated opportunities to grow your network either... for example, helping out as an unpaid lecturer for a local school seminar might get you business from the university, the students, or one of the student's parents. Writing an article for a magazine will get you calls for consulting or opportunities for book contracts, or more interesting work (since magazine authors tend to get pretty well known). Conferences allow you to meet dozens of interesting people - collect cards, follow up afterwards, and you might well be surprised where your business will come from, even in conferences not directly related to your core activity.

One example: a guy who was on a "Chambre de Commerce" training course for start-ups with me got 2 or 3 contracts out of fellow students, who were also doing the course on starting your business, through conversations over lunch.

[ozgeek]

I would think that a hosting type job or a hosted application, which is what it sounds like Adam is thinking of the most obvious way of reducing risk would be to run it in parallel with a day job.

This is more practical I guess if you are going to develop a hosted app, you can just build the first cut of the app in your free time.
Devoting your time to bulding your app will presumably also help you save money as you will minimise the need for a life outside work (your day job and your project).

Then when you are ready to go live you may have a bit of money saved up to say pay for server, rackspace etc and maybe a few months of salary.

It is possible to also support a hosting/hosted app type business while you are working your day job, at least if your employer is not too much of an ass.

A number of people I have worked with over the years have run their own side businesses which also involved providing some of their own customer support while at their day job.

One thing to watch though, at least here in Aust, is that a lot of employers have a clause that basically says they own why IP you make while you are employed with them, so you need to negotiate that if that is the case for you.

If you want to start a company that provides consultancy type services you can of course just start your company, whore yourself out as a contractor, but perhaps only do it half/three quarter time and the rest of the time you can work on developing your own direct business and then service those clients.
As you get your own clients you can cut down on your contract work.
Eventually you can probably employ someone else.
I know of a number of people here who have started small businesses in this vein.
Some of them, while remaining small have developed some quite lucrative contracts.

[bastiaan]

I thought of starting a support company for free software desktops. While I think there would be enough corporate interest (especially from small business customers), I don't think there's enough money in it to be worth my time.

[slef]

I would think that a hosting type job or a hosted application, which is what it sounds like Adam is thinking of [...]

[...] a lot of employers have a clause that basically says they own why IP you make while you are employed with them, so you need to negotiate that if that is the case for you.

How do you make money from a hosted application if you release it as free software? (I have my own ideas about this, but I'd like to learn others.)

I think I'd almost never sign an "we own work we don't pay you for" contract. Has anyone here signed one?

Also, I know someone with a contract that actually encourages them to work for others and/or themselves alongside their main job!

[slef]

I thought of starting a support company for free software desktops. [...] I don't think there's enough money in it to be worth my time.

I know what you mean. Desktop support is hard to do as a small business. There are just too many ebbs and flows in demand, as far as I can tell from my modelling. Either you get lots of complaints or you have workers sat idle a lot.