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Building a software company is a lonely place. Every day, it can feel like you are doing something for the first time – taking on a problem for which you do not know the answer. But being a software founder is not a new thing any more; people have been doing it for six decades. And there are tried and tested solutions, and the people who found those solutions. Here are five things all founders should remember about how to find help in our sector.
First, don’t keep thinking in terms of competition. There is an outside assumption that, in software, everyone competes with everyone else; yet this is such a broad industry, they clearly do not. Moreover, because it is cyclical, there will be founders who launched 10 years ago who encountered the same problems you are now experiencing. And there will be companies launching now, or that have recently done so, that are currently going through the same, too. This is a tremendous resource. It means that, whatever challenge your business is facing, there will be someone in the software ecosystem who can help you.
Second, know that finding them is not an issue. While there are thousands and thousands of software companies worldwide, if you think in terms of venture and the sources of finance for each, the world becomes quite small pretty quickly. Eleven VC firms collectively participated in 548 of the 2,513 SaaS startup deals across the US between 2015 and 2016, according to Pitchbook. The excuse “I don’t know anyone!” is simply not valid.
Third, think about the scope of the market. Software businesses, which are geographically omnipotent by definition (i.e. they can sell to anyone, anywhere in the world), can capitalise on the fact that a global issue for one company is always a local one for another. If a UK-based business is navigating selling into Germany, that is a question of international expansion. But for a German software company, it’s a local challenge. You can apply similar thinking to hiring, raising money, building a new product. Someone will have done the same thing faster and better than you. Find them, and learn from them.
Fourth, and perhaps most importantly, acknowledge that being a founder is a really, really hard thing to do with your life. A popular narrative that we think about in the wrong way is that everything about building a company is a grind. It is, but it is vital there are filters on that – i.e. knowing what is meant to be difficult versus what is difficult because you are thinking about it in the wrong way. This is where other founders are crucial – because they will help you distinguish the one from the other.
Another related argument is that people should start a company when they know more than anyone else. But founders typically know more than the next person because they have gone out and built and learnt. The person who hurls themselves into building something because they have an inkling of how the world should be – even if they know very little about that thing – is especially true in software. People who build software companies are almost always scratching an itch.
There is a cognitive bias described in psychology, the Dunning-Kruger effect, which states that the lower your ability in a given area, the better you think you are at it, and vice versa. You will need this inverted confidence when you start out, and talking to other founders will help you navigate how to deploy knowledge and experience. Conflating building a product with building a business often happens to software founders – because someone who wants to create something that is better than everything that has gone before it is very different to the person to leaves a hedge fund to build a lucrative company.
And fifth, remember that the only way to derive value from these interactions is to find other founders whom you genuinely like as people. To my mind, this is a far better rule to have for yourself than, say, persistently attending structured events on sexy topics. In fact, it is a pretty good rule for life in general: find the people you like and respect and learn from them.
If you want to change something, build something. Compensate for knowing nothing by constantly putting yourself alongside others who are muddling through the same thing at the same time, or who are slightly ahead. That is how you will jump forward.
April 2, 2019 at 02:33AM
Forbes – Entrepreneurs