The real cost is your time. Projects always take longer than you expect, especially if you haven’t done it before (the business part). Product is the easiest and has limited risks if you have decent dev skills.
Enterprise is also one of the hardest markets, not only technically, but also getting clients (3-12 months from first contact to money in the bank is normal). Enterprise is also a game where they don’t buy the best software, a lot of factors play a role in getting enterprise clients. It’s doable but definitely playing a new game on hard/insane level.
Focus on the problem that you solve for the business, without a very strong case for that and be able to gain a champion within the company you are selling to, it’s near impossible. As you can see its more about sales, and connections, and less about product.
I’ve been in your situation before serving enterprise SaaS as a two-person company for 5 years. It was very hard and I would not do it again. Then again, once we got clients they were easily paying $30k/yr with long term contracts in place. High risk, high reward.
If you are starting out you have different levels of risk you can take. Since your real prime-time years are at stake, are you going to play this game on hard right at the beginning? I’d suggest to start on easy, get more experience, and as you grow, level up. Once you have a couple $$$ in the bank, do bigger projects with higher risk/higher reward ratio.
That’s what I wished someone told me 10 years ago.
If I were you in this situation now, I’d first warm up those connections, as they will play a crucial role in your company. Is it something they want or need? Is the pain they are experiencing so hard they are willing to prefund the project? If you think so, try convincing them to get either dev money beforehand (hard) or have them sign a binding (hard) or non-binding (doable) agreement to pay xx amount when the software is ready. Include what features/problems you will solve in the agreement.
Your ideas about profit sharing are too complicated in my opinion.
If you are not able to convince them to prefund or either sign an agreement, for me personally this would be already too high risk. Unless those connections are decision makers and you play golf every month with them ;)
That’s what I would do in your situation and my 2 cents.
Wish you all the best of luck, not want to discourage you, but sharing my own experiences in a somewhat similar situation. If you need advice, help, or just wanna bounce some ideas, always willing to help out fellow entrepreneurs.
we've been doing this for the past 4 years, but as i really started to enjoy sales, things are going quite well, so i'm just adding my 2 cents:
From my experience the sales process is the only thing that matters. No client cares about the software (at least initially).
Although this is/was tough to hear as a softwareenigneer (i didn't believe it either), if you're in B2B and trying to solve a serious enterprise problem, most of the readily available info on "how to start up" on the web is not applicable.
All the talk about "build a fancy landing page", "build an MVP", "test your market first" did not help us. This is because we found that our target audience is not really active on the internet and the amount of potential DECISION MAKERS/BUYERS (not users!) is in the thousands to tenthousands not in the millions. Therefore we needed direct sales, whether we liked it or not. And initially that's a founders job.
See this as a hint for my claim: B2B companies that are turning over many millions of dollars per year often have "a website" (which looks like it's 1999) but that's basically it.
Why? The clients are in B2B as well, so the level of doing business is mostly person to person, establishing a relationship. You don't need a fancy website for that.
The reason is actually pretty simple: If you are solving a relevant business problem in B2B the duration of the anticipated business relationship is 5-10++ years. Depending on WHAT problem you solve the dependency on the clients new supplier (=you) is very high. Therefore a client cares much more about WHO that supplier is. Building that trust takes time and interactions, and that is why B2B is so fundamentally different from B2C where you have everything from one-off interactions to product-lifecycles of 1-3 years (max).
It was therefore always clear to us that building a viable B2B business takes 10 years.
So what did we do? Initially none of our clients cared about the software but about the business problem we solve and the people/the company who they are doing business with. We funded our product development by doing a mixture of pre-financed dev work & "contract software dev/consulting" with the IP remaining with us. This allowed us to build a product and use the references to get to work with the next clients. Over time this lead us to our (now SaaS) product.
B2B is tough, but as soon as you're in, you're in.
My experience too. Although I mostly order from Amazon Germany. The barrier for selling from Germany is also higher as you need additional tax registrations in Germany since this October.
I come from a non-traditional background. More than 10 years ago I started a niche community that grew at its height over 1.5M/monthly visitors. Everything custom built in PHP.
Then I co-founded a SaaS analytics service which we ran for 5 years.
In 2017 I started a solo project while learning Node.js, Vue.js, Postgres, microservices, to keep myself updated.
I decided that I wanted to join a team after going solo for a while and to progress my professional career. However having no CS degrees I lack foundational programming skills. I only know the stuff that I come in contact with so during interviews, sometimes I can't answer seemingly basic programming questions. I always focused on implementation and having limited time, didn't look for the why.
I'm falling between junior and senior experience and I feel companies have no clue what to do with me.
At the moment I'm learning advanced JS concepts, programming paradigms, data structures and algorithms, and plan to open source a project that shows all that. Showing my portfolio with projects is not enough for the roles I'm looking for.
I probably lack interviewing skills. So thanks for creating hatchways, I might use it in the future. From a hiring perspective, hiring full time based on a couple interviews is super risky. I actually like to work freelance/intern before committing myself - culture works in both ways. This is obviously a privileged position if you have time or money.
I like the idea of the hiring manager/interviewer being more of a coach during the process, and tailoring the process towards different personalities/situations.
If the pain point you are solving is big enough, people will accept buggy and slow products regardless. Sometimes its better to ship, especially if you are testing product market fit. A bug free, slick, with awesome tech used, is worth nothing if no one is willing to pay for it/solves a big enough problem.
A lot of solid advice. I’m surprised you learned so much in just your first year. It took me way longer for certain things to realize. Thanks for sharing!
I have been a passive user on Quora for a while now. At one point several years ago it forced me to sign up for reading an answer. This sucked.
However, I started receiving weekly digests, which included interesting questions and answers. I enjoy reading those digests and learned a bunch, professionally and personally from life experiences from other people. I never interacted until this year. It's good Sunday afternoon reading material for me.
Since I started answering questions this year (I became a top writer in certain topics), I've seen the other side too. I usually do not answer questions for pleasure only. I sometimes plug my business at the end of the answer but always make sure I answer the question and add value. I usually spend 1-2 hours on a question and I make Quora specific graphics to support my answer. Sometimes I do need to do extra research so this is where the 1-2 hours come from. I can see not everyone can spend this amount of time if it's not your business. The way I see it, people don't mind if you plug in your business if you provide value first.
Generally I'm a bit more positive than the average commenters here, as I received invaluable knowledge which changed and also solidified some of my own views. I've never compared Quora with SE, probably due to my use-case as to soak up experiences from other people instead of a source as factual information.
The value Quora provides for each individual depends on the selected topics when signing up and what you click-through in your digests. Somehow I ended up with interesting life experiences topics and never technical topics. I like airplanes but no aviation expert, but somehow I ended up receiving experiences from travellers, pilots, and crew. I find those experiences amusing to read.
I suggest to try to read and follow some of the niche topics outside programming, I think that's a better use-case for Quora.
So many useless services and so many who believe this year will end in a bullrun. If you ask them why, they can’t give a good answer, or it’s “because last year we had a bull run in December”.
I believe in Bitcoin and blockchain, overall I think last years run was good for mainstream understanding, but adoption and technology didnt keep up the pace of all price speculation. We correct, we cry, we slowly recover. Not this year, and not next year.
Enterprise is also one of the hardest markets, not only technically, but also getting clients (3-12 months from first contact to money in the bank is normal). Enterprise is also a game where they don’t buy the best software, a lot of factors play a role in getting enterprise clients. It’s doable but definitely playing a new game on hard/insane level.
Focus on the problem that you solve for the business, without a very strong case for that and be able to gain a champion within the company you are selling to, it’s near impossible. As you can see its more about sales, and connections, and less about product.
I’ve been in your situation before serving enterprise SaaS as a two-person company for 5 years. It was very hard and I would not do it again. Then again, once we got clients they were easily paying $30k/yr with long term contracts in place. High risk, high reward.
If you are starting out you have different levels of risk you can take. Since your real prime-time years are at stake, are you going to play this game on hard right at the beginning? I’d suggest to start on easy, get more experience, and as you grow, level up. Once you have a couple $$$ in the bank, do bigger projects with higher risk/higher reward ratio.
That’s what I wished someone told me 10 years ago.
If I were you in this situation now, I’d first warm up those connections, as they will play a crucial role in your company. Is it something they want or need? Is the pain they are experiencing so hard they are willing to prefund the project? If you think so, try convincing them to get either dev money beforehand (hard) or have them sign a binding (hard) or non-binding (doable) agreement to pay xx amount when the software is ready. Include what features/problems you will solve in the agreement.
Your ideas about profit sharing are too complicated in my opinion.
If you are not able to convince them to prefund or either sign an agreement, for me personally this would be already too high risk. Unless those connections are decision makers and you play golf every month with them ;)
That’s what I would do in your situation and my 2 cents.
Wish you all the best of luck, not want to discourage you, but sharing my own experiences in a somewhat similar situation. If you need advice, help, or just wanna bounce some ideas, always willing to help out fellow entrepreneurs.