Lessons Learned from a Software Developer’s First Attempt at Launching a Startup

This is a guest article by Karl Falconer. Karl is a software engineer with more than 10 years of experience who specializes in agile web development and web services integrations. He authors a software development blog at http://www.falconerdevelopment.com/.


There comes a time in a software developer’s career where they reach a crossroads and ask themselves, “What next?  What should I do next to keep my edge?”

When I arrived at this crossroads, I did not feel challenged by the software projects I was working on and began seeking something new. After much internal debate, I made the decision to step out of my comfort zone and shift my from the hard skills of software development to include more soft skills like marketing, and business development, with the ultimate goal of starting a software company.

Throughout 2010, I studied the ins and outs of launching a product by reading books and blogs and talking with friends and colleagues. I paid particular attention to articles about failure, so I would not make the same mistakes with my own product. In midsummer of 2010, I began work on my first product, which would later become MicroMaximus.

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Why Making Something Customers Want Isn’t Enough

Photo by Stinkie Pinkie

In his essay How to Start a Startup, Paul Graham famously stated there are three things needed to create a successful startup:

  • To start with good people
  • To make something customers actually want
  • To spend as little money as possible

This list is pure genius. However, over the past several years running my own businesses and working with hundreds of entrepreneurs, I’ve found a fourth ingredient that’s necessary for a company to succeed:

Customers must give you more money than what you spend to acquire them.

I realize this is an obvious statement. But here’s the kicker…

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How Can Software by Rob Better Serve You?

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I posted last week about the enormous value of the information I received from surveying my DotNetInvoice customers through survey.io.

Today I want to ask you the same 7 questions, but in reference to this blog. Your answers will no doubt shape the future of what happens here.

You can answer anonymously at:


Four Things I Learned From Asking My Customers

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Survey.io is a tool that helps you edge into customer development. It’s a free tool put together by Sean Ellis and Hiten Shah as a way for product owners to easily survey their customers using pre-written questions.

You enter your product name and voila – 8 questions that Sean Ellis has used many times to achieve his massive successes with companies like DropBox, Xobni, LogMeIn and Lookout.

I’ve had this on my to-do list for DotNetInvoice since Survey.io launched, but wanted to wait until our QuickBooks integration launched, which finally happened last month. I was further spurred into action at MicroConf; one of the key takeaways from the conference was that I need to be talking more to my customers.

So two weeks ago I dove in head first and emailed the survey to all of our customers. The results were surprising…

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Choosing a Domain Name When YourApp.com is Taken

Photo by Kevan

A reader recently emailed with the following question:

I am working with my business partner on building a web application and the domain name I’m looking for is already registered.I have done a ton of searching on the web, including forums like OnStartups and can’t seem to figure out which way is the best. Everyone seems to have contrasting opinions.

I am thinking of other ways to register my applications domain name, and I thought of a few possible solutions:

  • www.my-site.com
  • www.mysiteapp.com
  • www.mysitehq.com (I saw that 37signals uses this for some of there web apps and liked the idea)

I was wondering if you thought this made a big difference or not.

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You Can’t Make Money Charging $1 Per Month

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I recently received the following question from a reader:

[When we spoke at a recent conference] I had been thinking of a $1/month price point [for my product aimed at teachers] to make it a “no-brainer,” and you strongly advised against it, suggesting $5-7 at a minimum.  Are you concerned at all about the fact that teachers could continue using the existing work-around solution? I wonder if I provide enough value to rationalize $5-7. Maybe it would be better for me to find more ways to add value rather than lower my price point?

My Response
Trying to make money selling an app for $1/month is crazy unless your market is gigantic and you have the expertise or the funds to reach them (and even then, support will kill you).

Let’s look at some numbers:

  1. If your goal is a meager $2k per month you need 2k customers.
  2. To begin, that’s a lot of non-technical customers to support for that little money. You’ll still be working a full-time job at that point so it’ll be nights and weekends. Not cool.
  3. To get 2k customers with a 1% conversion rate you’ll need 200k unique visitors (total, not monthly). If you crank really hard on promotion and word of mouth I can imagine you’ll ramp up to 1k-2k uniques per month. Even at 4k per month you’ll be waiting a long time to hit that 200k mark.
  4. These days I’ve been advising people to go up-market and try for $30/month and $50/month price points. What can you build that people would value that much?

In your case you have a hard pricing constraint because teachers don’t have a lot of extra cash lying around to spend on software. But I don’t see any way a niche product can work with a price point of $1/month. Even at $5-7/month it’s going to be extremely difficult to build revenue beyond a few thousand dollars.

MicroConf: Things That Rocked and Things That Could Have Been Better

MicroConf Speakers
Photo by Dave Rodenbaugh

MicroConf Badge

Anytime you spend 3 months planning an event, whether it’s a wedding, a product launch, or a conference, you need a post-mortem. A time to reflect on things that went right and things that needed work.

This post is my post-mortem for MicroConf 2011, which took place last week in Las Vegas, NV.

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“Startup Wisdom” Ebook from Hiten Shah, Noah Kagan, Patrick McKenzie, Myself, and others

Hot off the presses, download a free copy of this 52-page ebook for the price of a Tweet (or a share on Facebook). Visit www.MicroConf.com to make it happen.

Six Startup Marketing Lessons in Six Photos

I snapped each of the following on my iPhone during the past 8 months.

“Wines sell better when we put these orange ‘sale’ tags on them so let’s put one under every bottle!”

Lesson: Too many price reductions diminishes their impact along with the value of your product.

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What the Hell Does a “Business Guy” Do?

Photo by Dan Taylor

I try to hang around with entrepreneurs as much as possible. I dig people with an insatiable desire to create things, and I’m not anywhere close to being cool enough to hang out with painters and musicians.

One term I hear thrown around now and again among technical founders is “business guy” (or gal…except it’s always “guy” when I hear it). This is the mythical person who’s going to swoop in once your app is built and handle all of that business-y stuff.

You know…the stuff we technical founders scoff at as tertiary to our product’s success:

“I don’t need no stinking MBA. I got code to write!”

Code that will be magically catapulted into the hands of millions once the business guy steps in.

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