Ask the entrepreneurs advice
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Just launched the website for a business my wife and I are hoping to get off the ground. It will mostly be her baby but software development fits in nicely as an added extra so my services are there for anyone who wants them.
I'd appreciate feedback from anyone who's willing to take a look. Don't want to post the link publicly but I'll pm a link if you ask
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@Jaloopa I will take a look.
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@Polygeekery said in Ask the entrepreneurs advice:
She bought the car based on its safety features, now I am glad that she did.
You can't go wrong buying a car for safety features.
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@Polygeekery said in Ask the entrepreneurs advice:
I am confused as to what you are asking about. Try to clarify if you can.
Perhaps this is an instance where public sector work has...colored...my perspective. Consider two business models:
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Client wants a program that does X. I spend 2 months writing a program that does X. They pay me a thousand bucks. Optionally, every 6-18 months they ask for new features or help updating SQL/.NET/Windows.
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Client wants a program that does X. I round up some monkeys and they spend the next 5 years banging on typewriters, inching towards something that reads like Clifford the Big Red Dog run through Google Translate.
I'd like to operate under the former but all I've seen demand for is the latter. Is there a way to convince a client that me, myself, and I can do the work or should I just keep looking until I find a client that accepts this as possible without coercion?
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@Zenith
The biggest problem I see in development (and systems admin, which is what I do for a consulting/development shop) is that the X a customer "wants" initially needs Y and Z added within days of the software being deployed. While love 'em & leave 'em sounds good in theory, it's not a good development / consulting practice, as best case is they don'tget pregnanthave bugs (or newly desired features, which is basically the same thing from a user's perspective) and forget about you, and more likely case is that they do wind up disliking the software and you gain negative reviews instead of positive recommendations to generate new customers.Hence, the prevalence of support contracts / continuing relationships with the customers... basically contracted "captive IT"... saves flexibility for you (in theory) since you can work for multiple clients and level out some of the down time in between new features for a given client... saves flexibility for the client since you're not an employee so they're not stuck with a long term full time employee to sit around between features.
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@izzion I've done long term support as an employee. I just don't want to have to hire monkeys to satisfy some headcount requirement.
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@Zenith
When they're asking for support, are they asking for a Service Level Agreement (SLA)? A contracted response time window for you to start working on the problem and parameters for how to determine how long a fix is expected to take? In my experience, my clients don't care how many people are on my team, they just want an indication that if an issue comes up that my company will be able to respond to it in a reasonable time window and minimize the impact on their business.You might be able to sell them on verifiable metrics:
- Track your cycle time for responding to bug reports and for resolving them
- Track the ratio of support / rework done compared to velocity on similar projects, over several time intervals
- Offer a managed services agreement that provides for a contracted response time (I would only guarantee the response time and a structure for how you'll keep them updated while working on the issue -- contracting resolution times in software development is a very risky business) and provides a structure for penalties if those times are exceeded. Depending on the work, the retainer from the MSA should also be structured to include ongoing "regular maintenance" -- updating libraries / underlying systems for security patching, etc.
Obviously, the most important part of offering an SLA is having the tracking to ensure you're meeting it (and having very specific, quantifiable metrics to define it). And then making sure to actually bill the client for the value the SLA provides.
Edit: The other question I would have if "support warm bodies" is becoming a sticking point is whether you're under-quoting by too much. Are your hourly / fixed fee rates comparable to similar work for other providers in your area, or are you drastically undercutting them? IT contracting is very much an industry where being the low bidder works against you if you're too low - companies have multiple bids and/or some expectation of what the work "should" cost, and when an offer seems too good to be true, they're likely to assume they're going to get Chinesium crap, which I could definitely see making them more concerned about what the support lifecycle is going to look like.
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@Zenith said in Ask the entrepreneurs advice:
I spend 2 months writing a program that does X. They pay me a thousand bucks.
You're under-charging.
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@dkf said in Ask the entrepreneurs advice:
@Zenith said in Ask the entrepreneurs advice:
I spend 2 months writing a program that does X. They pay me a thousand bucks.
You're under-charging.
Massively. if its a a program you can also sell elsewhere, that might be ok, (Intellectual property is yours and this could be re-usable and marketable). If its customer specific, you bill at a daily rate of 25... that sounds unsustainable.
Depending on what you do and where you are, you could/should bill 200-300 hourly .
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@heterodox said in Ask the entrepreneurs advice:
@Polygeekery said in Ask the entrepreneurs advice:
She bought the car based on its safety features, now I am glad that she did.
You can't go wrong buying a car for safety features.
Is auto pilot a safety feature?
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@hungrier said in Ask the entrepreneurs advice:
@heterodox said in Ask the entrepreneurs advice:
@Polygeekery said in Ask the entrepreneurs advice:
She bought the car based on its safety features, now I am glad that she did.
You can't go wrong buying a car for safety features.
Is auto pilot a safety feature?
No. No it is not.
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@Polygeekery said in Ask the entrepreneurs advice:
@hungrier said in Ask the entrepreneurs advice:
@heterodox said in Ask the entrepreneurs advice:
@Polygeekery said in Ask the entrepreneurs advice:
She bought the car based on its safety features, now I am glad that she did.
You can't go wrong buying a car for safety features.
Is auto pilot a safety feature?
No. No it is not.
Or at least not yet. It's possible to do a passable job of it under full highway conditions (where it's really just adaptive cruise and lane following, both of which exist now in production), but there's a whole world of difference between that and urban streets (or the more complex rural settings).
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@dkf said in Ask the entrepreneurs advice:
@Polygeekery said in Ask the entrepreneurs advice:
@hungrier said in Ask the entrepreneurs advice:
@heterodox said in Ask the entrepreneurs advice:
@Polygeekery said in Ask the entrepreneurs advice:
She bought the car based on its safety features, now I am glad that she did.
You can't go wrong buying a car for safety features.
Is auto pilot a safety feature?
No. No it is not.
Or at least not yet. It's possible to do a passable job of it under full highway conditions (where it's really just adaptive cruise and lane following, both of which exist now in production), but there's a whole world of difference between that and urban streets (or the more complex rural settings).
I thought that Google StreetView cars routinely drove on urban streets.
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@jinpa They are driven by human drivers
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@hungrier said in Ask the entrepreneurs advice:
@jinpa They are driven by human drivers
Depending on your definition of "human". Well, at least in our area.
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@Kurt-C-Pause said in Ask the entrepreneurs advice:
@dkf said in Ask the entrepreneurs advice:
@Zenith said in Ask the entrepreneurs advice:
I spend 2 months writing a program that does X. They pay me a thousand bucks.
You're under-charging.
Massively. if its a a program you can also sell elsewhere, that might be ok, (Intellectual property is yours and this could be re-usable and marketable). If its customer specific, you bill at a daily rate of 25... that sounds unsustainable.
Depending on what you do and where you are, you could/should bill 200-300 hourly .
Yeah I just threw a number out there for my example but I must've had selling disc-based programs on the brain. I've been trying to pull 12 months of activity together after the fact without the program I could be selling. It's about time I really put some effort into finishing the UI so I don't have to go through Enterprise Manager in 2020.
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@Zenith said in Ask the entrepreneurs advice:
@Kurt-C-Pause said in Ask the entrepreneurs advice:
@dkf said in Ask the entrepreneurs advice:
@Zenith said in Ask the entrepreneurs advice:
I spend 2 months writing a program that does X. They pay me a thousand bucks.
You're under-charging.
Massively. if its a a program you can also sell elsewhere, that might be ok, (Intellectual property is yours and this could be re-usable and marketable). If its customer specific, you bill at a daily rate of 25... that sounds unsustainable.
Depending on what you do and where you are, you could/should bill 200-300 hourly .
Yeah I just threw a number out there for my example but I must've had selling disc-based programs on the brain. I've been trying to pull 12 months of activity together after the fact without the program I could be selling. It's about time I really put some effort into finishing the UI so I don't have to go through Enterprise Manager in 2020.
Really important: If it's B2B (as I assume): You are not actually selling a program. What you are selling is improving the customers' bottom line through:
- better quality of X (less erros),
- better speed of y
- better whatever you program does translated to business speak ($$$).
Even if you sell a IT nerd tool to a buisness (a CLI library or whatever), you need to sell it to the users AND to the person paying the bill (a.k.a Manager). The users want functionality, the managers Return on Investment.
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Starting to get some work for the side business my wife and I have set up. She's done a job tonight that's paid for the bids we bought on bark.com, and we have another couple of leads including a continuing gig for £600 a month for a site that looks like a vanity project by a woman with a rich husband. Not bad for the small amount of time we've put into marketing so far.
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@Jaloopa said in Ask the entrepreneurs advice:
a continuing gig for £600 a month
Those are the good ones. MRR is where the good money is at. As you build that you have a budget you can depend on and can start to invest more.
Budget a few percent (3-5%) of MRR for marketing and advertising and spend that on its intended function each month and you will have a snowball effect before long.
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@Polygeekery
I just had a call with a company that's looking for part time remote work with VB and SQL. The setup already sounds a million times more interesting than what I've been doing, plus it's part time so I don't have to take the risk of quitting and losing benefits. There would be occasional travel to Delaware (2 hours away), where I also have to do the interview.They want to know my rate. That's always hard for me. The cold calls I've gotten over the last year quote anywhere from $30-$110 per hour with no benefits. What is a reasonable rate to propose? Usually I say $100 per hour to get rid of the cold caller that's wasting my time but this actually sounds like something I want to do. They want bugs fixed and features added instead of expectations managed! Would I be scaring them off if I said something like $40 for the first two months and $60 once you see how much better I make your applications?
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@Zenith said in Ask the entrepreneurs advice:
They want to know my rate. That's always hard for me.
Consultant rate is usually expected salary /1,200-1,500.
People low-ball themselves by dividing by 2,000. You're taking more risk, they can do away with your position very easily, and you will have unbillable hours. Account for that in your equation.
So, $40/hour would be an expected $48-60K salary. I am guessing you are low balling yourself.
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@Zenith said in Ask the entrepreneurs advice:
Would I be scaring them off if I said something like $40 for the first two months and $60 once you see how much better I make your applications?
Also, once you work for $40/hour it is hard to get them to adjust that and especially by so much. Go for the final rate upfront.
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@Polygeekery said in Ask the entrepreneurs advice:
So, $40/hour would be an expected $48-60K salary. I am guessing you are low balling yourself.
I was thinking on the lower end because it's part time and remote while I work another job that pays the bills but it's definitely a lowball number. The situation that I often find myself in is trying to sell one $20 American-made hammer to people that would rather buy the $18 Chinese hammer five times.
Also, once you work for $40/hour it is hard to get them to adjust that and especially by so much. Go for the final rate upfront.
I guess if I'm going to drive three hours round trip for an interview I should make sure they're serious. Thanks.
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@Zenith said in Ask the entrepreneurs advice:
I was thinking on the lower end because it's part time and remote while I work another job that pays the bills.
Aim higher and you can switch more quickly.
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@Zenith said in Ask the entrepreneurs advice:
The situation that I often find myself in is trying to sell one $20 American-made hammer to people that would rather buy the $18 Chinese hammer five times.
Don't try to sell to those people. They are not your intended customer.
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Given that we can't all be good at everything, nor is paying warm bodies without a steady stream of funding a viable option, I'm licensing many of my assets. Generally, the licenses I'm under are pretty liberal in that you can do whatever you want as long as you encrypt the assets on distribution of your Product so they cannot easily be extracted, don't try to resell the individual assets, and modify them slightly from their original form so they're not a carbon copy.
However, a couple of licenses I'm under have ramifications with respect to pricing and distribution of my Product when that time comes. One licensor basically forbids microtransactions without written permission (which I would guess entails their getting a cut of the sale):
While incorporation of the CRT Content into User’s applications is authorized as set forth above, User expressly agrees and acknowledges that any discrete sale of CRT Content separate from a purchase of the User’s application is allowable ONLY with express written consent of DAZ. Thus, for example, within the context of a game, the sale or purchase of the CRT Content, portions thereof, or either two-dimensional or three-dimensional derivatives thereof as a separately-purchased commodity or upgrade using items of actual or virtual worth is prohibited without prior written consent of DAZ. Written consent of DAZ may be sought at the address set forth herein.
Okay, so no hat stores. Fine, I'm not keen on the centralized architecture that such a Product entails (i.e. rebooting a server at 3am), that just means that I have to up the price on my Product since it's a single sale. In a market where the customers are stingy bastards. Where top-of-the-line content with multi-million-dollar budgets has held a nominal price around $60 for nearly two decades.
What if I split up the Product into multiple smaller Products, or "expansions" on the main Product? Maybe that'll work. But then I run into another licensing issue:
You are licensed to use the Item to create one single End Product that incorporates the Item as well as other things, so that it is larger in scope and different in nature than the Item.
Examples of End Products: apps, games, podcasts, websites, live performances, videos, DVDs, films, TV shows and advertisements.
So, do multiple modules of the same End Product count as one End Product, or multiple End Products? Multi-use licenses cost about three times what single-use licenses cost, but single-use licenses are very cheap (e.g. $1 per asset), so maybe it's better just to purchase multi-use licenses and be done with it.
This leads into another issue: short of shipping 10,000+ units, how the heck does one turn a decent profit commensurate with the time invested (years) in this scenario?
There is, of course, the option of turning to Kickstarter/Patreon for funding, but I've already made it this far without begging for money, and I feel those platforms have been tainted with vaporware, which is not the sort of reputation I want around my Product.
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@Groaner said in Ask the entrepreneurs advice:
So, do multiple modules of the same End Product count as one End Product, or multiple End Products? Multi-use licenses cost about three times what single-use licenses cost, but single-use licenses are very cheap (e.g. $1 per asset), so maybe it's better just to purchase multi-use licenses and be done with it.
Depends on the terms on the multi-use licenses. I'm theory, could you build the licensed assets in to the base product and keep them out of expansions and only purchase one license per user?
@Groaner said in Ask the entrepreneurs advice:
This leads into another issue: short of shipping 10,000+ units, how the heck does one turn a decent profit commensurate with the time invested (years) in this scenario?
What is your expected sale price and how much of that is COGS?
One thing about products and services like this is that you really start making money as you iterate. You are doing a lot of this work once (it is a game, IIRC?). On next iteration (version, expansion, whatever) you are going to build a lot off of this groundwork. It will take a lot less time.
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@Polygeekery said in Ask the entrepreneurs advice:
@Groaner said in Ask the entrepreneurs advice:
So, do multiple modules of the same End Product count as one End Product, or multiple End Products? Multi-use licenses cost about three times what single-use licenses cost, but single-use licenses are very cheap (e.g. $1 per asset), so maybe it's better just to purchase multi-use licenses and be done with it.
Depends on the terms on the multi-use licenses. I'm theory, could you build the licensed assets in to the base product and keep them out of expansions and only purchase one license per user?
Shipping all (or an excess of the bare minimum) assets with the base product and leaving the unused ones "disabled?" That's not a bad idea for a few reasons, among which that it'll be far easier to maintain the content database. I'm not against buying multi-use licenses for all the relevant assets as it'd probably set me back a couple hundred bucks tops, but that would be one way to get around it.
@Groaner said in Ask the entrepreneurs advice:
This leads into another issue: short of shipping 10,000+ units, how the heck does one turn a decent profit commensurate with the time invested (years) in this scenario?
What is your expected sale price and how much of that is COGS?
I'm thinking somewhere between $10-20 to start out, and 30% of that goes to Steam or GOG, 12% to Epic if I decide to sell my soul to them. As you can see, the margins are horrendous and I should probably consider going into an industry with thicker margins like air travel or foodservice.
That said, I'm more worried about having a Venture the Void problem where one spends several years developing an awesome product and gets a total of twenty-five paying customers. One needs to make a lot of sales at that price point to make the effort worthwhile, especially if you get into talking about hiring staff. However, that seems to be more a problem of advertising and marketing, and I don't know shit about advertising or marketing. I barely know how to make an awesome product.
One thing about products and services like this is that you really start making money as you iterate. You are doing a lot of this work once (it is a game, IIRC?).
Correct. I'll be sure to give you guys the lowdown in a future Lounge thread in time for the alpha, but here I'm staying tight-lipped for reasons that are probably obvious.
On next iteration (version, expansion, whatever) you are going to build a lot off of this groundwork. It will take a lot less time.
Yeah, it's been a lot of work to build the tech, but these days I find myself working a lot more on content than on tech, which suggests that maybe I am getting close to release. And I've been careful to limit the scope of content for the initial release as otherwise it'd take many more years to build. There's also some concern about using what was cutting-edge tech in 2012 and being married to it in say 2025.
Now, if you have, say, $20 for the base product, $15 for add-on 1, $20 for add-on 2, and so forth, suddenly you might be asking well over $100-150 for the "complete" product. I feel like that's going to raise some eyebrows, and that you need microtransactions or some other cost-obfuscation mechanism if you want to really bring in revenue. LoM, for example, has Patreon tiers where some people are paying $100 a month, and many more are paying $10-25, which is obviously enough to surpass a AAA title price tag within a few months. It's funny how once you turn it into a monthly thing, people seem to stop caring as much about the upfront price.
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@Groaner said in Ask the entrepreneurs advice:
I'm not against buying multi-use licenses for all the relevant assets as it'd probably set me back a couple hundred bucks tops, but that would be one way to get around it.
Ahhhhh, I misunderstood. We license a library and we pay license fees per install. So every time we sell our service and the software gets installed we pay the developer. In your case you only pay per asset and it is a one-time cost. That reduces your total expenditure potentially several orders of magnitude.
What I proposed is still a way to potentially save money on licensing other things. Keep it in your back pocket.
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@Groaner also, you might want to check out 8-bit Guy's series on his game "Planet X3" on YouTube. You could also reach out to him via email. He is a nice guy and he is extremely forthcoming with information. He ended up making a small fortune selling a RTS game for old DOS computers.
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@Polygeekery said in Ask the entrepreneurs advice:
He ended up making a small fortune selling a RTS game for old DOS computers.
Really? I know his game was more popular than he expected, but was the thing really that lucrative?
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Would you recommend this motivational technique?
Company Allegedly Makes Employees Eat Live Fish, Drink Chicken Blood for Failing to Meet Goals
A Chinese company in Guizhou has come under fire for allegedly making employees eat live fish for failing to meet their sales targets.
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@boomzilla Nope thread is
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@Zerosquare said in Ask the entrepreneurs advice:
Really? I know his game was more popular than he expected, but was the thing really that lucrative?
https://www.kickstarter.com/projects/1973096722/planet-x3-for-ms-dos
2,548 backers pledged $113,640 to help bring this project to life.
IIRC from other discussions, sales outside of Kickstarter more than doubled that figure and his initial figures for profitability were based on the economies of scale based on $40K of sales. He was going to do okay if he sold $40K, but a lot of those expenses were fixed costs.
That's as far as I feel comfortable going in to it as the rest of what I know may have been told in confidence.
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Okay. Well, good for him!
(I was tempted to contact him when he said he was looking for people doing sound/music and DOS coding, since I've got experience in both and like that stuff. Alas, I was too busy with other clients...)
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Anybody have any advice/experience in using LinkedIn to generate leads? My wife is going to a few networking events but LinkedIn seems like a big untapped resource
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@Jaloopa said in Ask the entrepreneurs advice:
LinkedIn seems like a big untapped resource
It isn't. Everyone has saturated it so it has little efficacy. It becomes more background noise for the people you are trying to reach.
YMMV, I am speaking of the US market. The UK may be very different in this regard (it is in many others).
You're trying to reach local people. Target locally. Meetups are awesome for this, just keep at it. Have you tried any targeted local Google ads?
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@Jaloopa said in Ask the entrepreneurs advice:
Anybody have any advice/experience in using LinkedIn to generate leads?
We here in IT are telling Sales that they're spending a lot of money on Linked In Navigator to get leads from Linked In..... Money that they are not making back in sales.... We have numbers to prove it, but since they forced Accounting to put that subscription under our budget they don't care because on their projections they see the positive $$, not the negative $$$$ of this business arrangement. the negative bit is on our budget and everyone knows IT is a cost centre..... bullshit. IT advocated against this from day one!
So yeah... Linked in is not a good lead gen source.
In fact I'm not sure if i can recommend any lead gen source..... Like every market i see is either saturated to the point that you are noise, or runs into issues with potential violations of CASL, GDPR, CaliGDPR..... etc....
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@mott555 said in Ask the entrepreneurs advice:
"If you like writing code, the last thing you should do is start a business."
This can be true. I doubt it's widely-known around here but I am majority owner of a game studio LLC. (We don't really have anything to show yet but we have big plans for 2015.)
One of the things I've really had to work on is getting one of my partners set up to manage as much of the legal side as possible, and also step into a project manager role. I spent way too much of our first year doing that stuff when my time is better spent doing development, and as a result we really missed the mark on our first project idea and it had to be shelved.
Starting a company as a coder is fine, but you really need to partner with someone who can help manage the business otherwise you will never get to code.
Just got a typical years-out-of-date @obeselymorbid like on this post. This thing is no more...we got nowhere, then we sat on a dead LLC for a couple of years, and finally did the legal work to dissolve it this year.
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@Jaloopa said in Ask the entrepreneurs advice:
using LinkedIn
I firmly believe that there are (at least) two distinct "worlds" within Linked In.
The first is the cesspool of unsolicited attempts at "Connections".
The second is a very viable way of performing certain types of networking. For example from 77 till 92 I worked at a firm. There were about 300 (out of 1800) employees I had a relationship with. Over the years, many of us lost touch. With LinkedIn, about 80% of us have reconnected in a mesh, and we stay in semi-regular contact, get notified of job changes (or retirements), and often use each other as valuable (and trusted) business resources.
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@TheCPUWizard And then there are people who blur the line.
A few months back I got a completely unsolicited connection request, from someone whose name I didn't recognize... but she said "I think I went to high school with you," and added a handful of details that only someone familiar with my high school at the time I was there would have known. Turns out I didn't really know her, but we moved in the same circles and had a few friends in common. Apparently she's using LinkedIn as a more standard type of social network to try to reconnect with everyone.
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@Mason_Wheeler Not surprising since a decent number of people have stopped using Facebook/Twitter but not LinkedIn.
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@TheCPUWizard said in Ask the entrepreneurs advice:
from 77 till 92
Holy
, Batman! I was born in '77...
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@lolwhat said in Ask the entrepreneurs advice:
Holy , Batman! I was born in '77...
I started as a student in '72, "turned pro" on my 16th birthday [75].....
Yup, I remember when "software was simple holes in pieces of paper".....
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@TheCPUWizard said in Ask the entrepreneurs advice:
I firmly believe that there are (at least) two distinct "worlds" within Linked In.
The first is the cesspool of unsolicited attempts at "Connections".I used to think like that, but then I started thinking there is no incentive to not accept a random connection from recruiters, and it probably makes me appear more in their searches. It seems like doing it wrong, someone explain me a reason to have only people I know connected there.
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@sockpuppet7 said in Ask the entrepreneurs advice:
there is no incentive to not accept a random connection from recruiters
Avoiding wasting your time? Entertaining people who don't even bother reading your résumé (and may not have any intention of offering you a job in the first place) tends to gets tiring after a while.
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@sockpuppet7 said in Ask the entrepreneurs advice:
I used to think like that, but then I started thinking there is no incentive to not accept a random connection from recruiters, and it probably makes me appear more in their searches. It seems like doing it wrong, someone explain me a reason to have only people I know connected there
I do accept the "random" ones, but if they do not bear some type of value within 60 days, they are gone... Probably 1% to 2% actually remain, but those have indeed turned out to be valuable (such as leading to a 5-6 figure contract).
As far as people I already know, it gives easy visibility into who they know. Then when I have a desire/need to establish a connection with someone, I can leverage the existing chain..... Does that make sense?
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@TheCPUWizard said in Ask the entrepreneurs advice:
I started as a student in '72, "turned pro" on my 16th birthday [75].....
Yup, I remember when "software was simple holes in pieces of paper".....
Paper or cardboard?
