Looking back on all the ventures I've started or been involved in for the past 10 years, they all have one thing in common – they have all been internet businesses, mostly selling web-based software as a service.
It's not that I'm naturally a technical person. In fact, when it comes to DIY I'm the sort of person who will hammer a screw into the wall to save going to the hardware shop to get some nails. I couldn't write a single line of PHP code. I hardly know any Linux commands and yet most of the servers running my current email marketing business, Message Horizon, are based on Linux. I have no interest in learning these tools either. There's no need to. The most important thing for an entrepreneur starting a web-based business is to understand and research what the technology is capable of doing, and even more importantly – what its limitations are.
There are plenty of techies out there who really know their stuff. Let them build the technology. Make sure you team up with the best technical people you can afford. A word of warning, however – pick ones you think you can work with. The ability to get on with your technical people is key, as I’ve found they can be slightly arrogant when dealing with those of us who are less technical than them. If you spot one of these, avoid them at all costs – otherwise they will quickly drive you to despair.
So, why would a non-technical person be so heavily involved in web software businesses? The main reason is they make great businesses. They have all the key ingredients that make business fun and rewarding.
- They are only limited by your imagination. You can make software do almost anything with a computer. Whether it's automating your social media updates, sending email newsletters, taking online payments or powering data searches, your software does what you want it to do.
- A software as a service can produce recurring revenues, similar to subscription payments. This is the holy grail of any business. If you can build a decent base of clients paying you on a recurring basis then you're well on your way to having a stable, profitable business.
- They are scalable. You can start very small with a prototype and add layers of complexity and more processing power as you grow.
- They can make very low-cost start-up businesses. You don't need stock, premises, or even full-time staff. You can run them from home.
- They can be automated. Your website can do most of the selling for you. Some web businesses require very little customer pre-sales negotiation, if any. Payment and fulfilment can be handled automatically.
- Your market is international.
- You can add complementary services and build a portfolio of linked businesses.
The best way to start a web software business is with a basic version, which you develop according to user feedback. Over time the product will evolve into something customers actually want, rather than your own interpretation of what they need.
In terms of the idea, the key to web software is to automate a repetitive manual task or to simplify a very complicated one. Find a "problem" and make your software provide the solution. Take inspiration from your own everyday tasks, whether it be in the management of your website or any other task. Sooner or later you'll come across a requirement that isn't well served by existing tools. You may be already on the way to starting your own web software business.
Jonathan Rodger is managing director of email marketing service Message Horizon.