I want to start up! What's involved?
There are three big questions every entrepreneur asks when looking to start a full time technology business:
- how much will it cost?
- how long will it take?
- what is the process?
For those prospective Evermight clients with no experience in the web or mobile industry, my answer always shocks them. A typical answer I cite is that it takes roughly 2 years of full time equivalent (FTE) hours to establish a technology business. So that means the founders can expect to a) commit 4000 hours of sweat equity themselves or b) pay $200k+ salary to employees to do the work for them or c) some combination of a) and b). But things are less daunting when you realize you have to break the time and costs up into smaller phases, which I'll get to a bit later.
For people who have never been intimately involved in the software development life cycle in a business setting, they'll probably think, "No way, there's got to be a short cut." Sorry, there isn't, and it's because of competition. Any individual is capable of devoting 2-3 months of FTE effort to a new business idea. In fact, many people take a long vacation from their full time job to do this. And the reason they all fail is because there are individuals willing to compete with 6-8 months FTE commitment. And the reason a lot of these fail is because the truly serious start ups compete with 12-24 months FTE commitment. It is this final group of year-long committed start ups that begin to stand out of the crowd.
So what actually happens during the 12 to 24 month time span? A popular answer I give prospective clients is the average time to execute each business/software development phase for previous Evermight clients in start-up mode. Here it is, and keep in mind it's subject to drastic variations depending on the business:
General Research - 1 - 4 months
The founders need to conduct research into the idea, the competition, the market, the business model, and the resources required for implementation. There are several questions I always find myself asking every entrepreneur interested in Evermight services. The questions are:
- Describe your business in 1 or 2 sentences. Ie. if you can't limit your answer to just 1 or 2 sentences, then you don't have a business. You probably have MULTIPLE businesses.
- Who are the competitors and how do you intend to be better. If there is no competition, why do you think that is? Are you sure there's demand for your business services?
- Look at the growth and history of your competitor. Will their growth apply to you? Ie. whatever time and resources your competitor needed, be prepared to do more to out-muscle them.
- How will you respond to copy cats? Ie. Other organizations with more capital and influence in the industry than you who copy everything about your business, right down to the price point.
Answer these questions and you're off to a good start.
Other popular processes that may happen in this phase include prototyping for user feedback, SEO landing pages to evaluate market, datalaytics research to determine user trends, assembling a business plan etc...Detailing the entire General Research process is beyond the scope of this entry and is specific to each client.
Requirements Capture and Planning - 1 - 2 months
Once the founders have a clear vision for their business, they can work with a developer to begin the requirements capture phase and identify all the challenges and the solutions to them (the solutions often become software features). Founders often formulate an exhaustive list of requirements, so they must prioritize requirements by categorizing each as either mandatory or nice-to-have. Once they have a truncated list of mandatory requirements, they can assemble a project plan around time and costs for their delivery.
Implementation - 4 - 12 months
Implementation is relatively easy if General Research, Requirements Capture and Planning are done well. Founders often work with a team to implement the wireframes, graphic design and technology that will ultimately power the business. The implementation team generally consists of one designer who provides wireframes, user interfaces and graphic design, and at least one software developer who constructs the actual software based on the designs of the designer.
Often times in the implementation phase, clients, designers and developers will discover solutions that were great in concept do not translate well in reality. Or some solutions take more time to implement than was orginally anticipated. As such, the team frequently re-evaluates the priority of items in the mandatory requirements list through-out the duration of the implementation phase.
Business Development - at least 6 months and ongoing
Business development actually happens sometime during the Implementation phase. The founders must devote considerable time to making executive decisions, devising new business strategies, formulating strategic partnerships, creating opportunities, marketing and sales. This is an ongoing effort that makes or breaks the business. It is so important in fact that most start ups allocate 66% of equity to the party responsible for business development compared to just 33% for the party responsible for implementation.
Hopefully by now, I've convinced you that starting a technology business requires long term commitment. Founders must genuinely enjoy the challenge of starting a business to be able to endure the 2-year start-up marathon, not to mention the years afterwards to establish the business. Are you ready? If so, on your mark, get set, GO!!!!