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Starting a software business as a SWE requires almost no investment

lumost 3y ago
Perhaps, but scaling one requires extreme investment. Recent startups are raising close to a billion to take on competitive markets.
- deleted 3y ago
  [deleted]
- maxilevi 3y ago
  Sure, but I doubt your average tradesman starting a business is targeting billion dollar markets. Scaling software to the same level of revenue as a trade business is as easy if not easier. For one you don’t need that many employees
  - BetaDeltaAlpha 3y ago
    Scaling software to the same level of revenue as a trade business is a sure way to get run over by the VC backed competition.
    - bruce511 3y ago
      I get that when you live in a forest all you see are trees, but 99% of software companies are not in rather VC markets, nor have VC competitors. There are massive problems that come with "scale" - problems most people don't want. The VC model is all about the exit, whereas, again, 90-something-% of businesses, trades included, are focused on long-term sustainability, not on the "exit". Sure, the VC space us very visible, very "loud", gets a lot of press, and so on. And of course 100% of non-vc owners don't get to be billionaires, but to VC world is a tiny sliver of the software world.
      - lumost 3y ago
        My experience is that you are either in/will be in the vc space - or you are in a specialized/regulated industry (finance/health) or you are a consulting firm. Even living outside of SV I don’t see a lot of in between firms.
        bruce511 3y ago
        I guess that's a limit of your experience :) I'm in a space that doesn't remotely interest VCs, it's not a regulated industry, and we're not a consulting company. Actually we're in 3 such spaces. I also teach other (working) developers and while some are in health care the vast majority are unregulated. But to be fair, you've likely never heard of us, or our ilk. We do the boring office software that underpins every boring industry. We're not self-driving cars or exoskeletons, we're data in, data processing, data out. Our market isn't sexy enough, or wide enough for VCs, we don't need millions of $ anyway, so we've never bothered to ask for it. We do boring things like make a profit, and fund growth out of cash-flow. We hire slowly, and we don't do layoffs. We have lots of competitors just like us.
        lumost 3y ago
        A good test for me of whether you are a consulting firm is “how many customers do you have?”, “How many of them provide significant revenue?”, “how much work serves only one customer?” There are many boutique SaaS firms - but if you only have a few customers, the business looks more like an outsourced internal team then an independent concern. happy to be proven wrong on this point, would give me some ideas for my career :)
yCombLinks 3y ago
Any competent tradesman is making a living wage on basically day 1 with his business. A software business (not writing software for someone else, selling your own software) is much more difficult.
- karaterobot 3y ago
  Why compare a tradesman to a software entrepreneur? The tradesman sells his skill and labor in exchange for money. A more direct comparison would be a SWE selling his skill and labor in exchange for money. Or, a manufacturing entrepreneur creating a product and selling it. In both apples-to-apples cases they either make money on day one, or it takes a long time to make money.
  - evv555 3y ago
    The apples to apples comparison that pops to mind is a tech consultant. Where you own a client funnel and have some potential to scale and delegate. How hard is it to create this client funnel in IT vs manufacturing?
  - yCombLinks 3y ago
    I do agree with you, it's just the wording in the parent made it seem like a different scenario. When a software friend of mine says "I'm starting a business", I get a very different picture than a software friend of mine saying "I'm starting consulting". If a tradesman says "I'm starting a business" I envision him still doing similar work, but also finding clients, figuring out contract details etc.
- FrustratedMonky 3y ago
  Yes exactly. Doing SWE as a 'contractor' type as a tradesman, very difficult because you have to find customers, and most customers have software teams and aren't just calling up SWE to work a few days. Trades have easier time being expert at X, and people can call them up and get them immediately to do X.

Perhaps, but scaling one requires extreme investment. Recent startups are raising close to a billion to take on competitive markets.

deleted 3y ago
[deleted]
maxilevi 3y ago
Sure, but I doubt your average tradesman starting a business is targeting billion dollar markets. Scaling software to the same level of revenue as a trade business is as easy if not easier. For one you don’t need that many employees
- BetaDeltaAlpha 3y ago
  Scaling software to the same level of revenue as a trade business is a sure way to get run over by the VC backed competition.
  - bruce511 3y ago
    I get that when you live in a forest all you see are trees, but 99% of software companies are not in rather VC markets, nor have VC competitors. There are massive problems that come with "scale" - problems most people don't want. The VC model is all about the exit, whereas, again, 90-something-% of businesses, trades included, are focused on long-term sustainability, not on the "exit". Sure, the VC space us very visible, very "loud", gets a lot of press, and so on. And of course 100% of non-vc owners don't get to be billionaires, but to VC world is a tiny sliver of the software world.
    - lumost 3y ago
      My experience is that you are either in/will be in the vc space - or you are in a specialized/regulated industry (finance/health) or you are a consulting firm. Even living outside of SV I don’t see a lot of in between firms.
      - bruce511 3y ago
        I guess that's a limit of your experience :) I'm in a space that doesn't remotely interest VCs, it's not a regulated industry, and we're not a consulting company. Actually we're in 3 such spaces. I also teach other (working) developers and while some are in health care the vast majority are unregulated. But to be fair, you've likely never heard of us, or our ilk. We do the boring office software that underpins every boring industry. We're not self-driving cars or exoskeletons, we're data in, data processing, data out. Our market isn't sexy enough, or wide enough for VCs, we don't need millions of $ anyway, so we've never bothered to ask for it. We do boring things like make a profit, and fund growth out of cash-flow. We hire slowly, and we don't do layoffs. We have lots of competitors just like us.
        lumost 3y ago
        A good test for me of whether you are a consulting firm is “how many customers do you have?”, “How many of them provide significant revenue?”, “how much work serves only one customer?” There are many boutique SaaS firms - but if you only have a few customers, the business looks more like an outsourced internal team then an independent concern. happy to be proven wrong on this point, would give me some ideas for my career :)

yCombLinks 3y ago

Any competent tradesman is making a living wage on basically day 1 with his business. A software business (not writing software for someone else, selling your own software) is much more difficult.

karaterobot 3y ago
Why compare a tradesman to a software entrepreneur? The tradesman sells his skill and labor in exchange for money. A more direct comparison would be a SWE selling his skill and labor in exchange for money. Or, a manufacturing entrepreneur creating a product and selling it. In both apples-to-apples cases they either make money on day one, or it takes a long time to make money.
- evv555 3y ago
  The apples to apples comparison that pops to mind is a tech consultant. Where you own a client funnel and have some potential to scale and delegate. How hard is it to create this client funnel in IT vs manufacturing?
- yCombLinks 3y ago
  I do agree with you, it's just the wording in the parent made it seem like a different scenario. When a software friend of mine says "I'm starting a business", I get a very different picture than a software friend of mine saying "I'm starting consulting". If a tradesman says "I'm starting a business" I envision him still doing similar work, but also finding clients, figuring out contract details etc.
FrustratedMonky 3y ago
Yes exactly. Doing SWE as a 'contractor' type as a tradesman, very difficult because you have to find customers, and most customers have software teams and aren't just calling up SWE to work a few days. Trades have easier time being expert at X, and people can call them up and get them immediately to do X.