How big corporations kill small startups

In this article I want to tell the story of a startup that I launched 10 years ago, about the first sales, about the “take-off” that never happened, and how it all sank into oblivion (the Oblivion River).

In the early 2000s, software development was a popular area for self-activity. The Internet was still not as popular as it is now, and the software was put by all and sundry and everyone. Then I was a good, one might say, a strong C ++ programmer. None of the most difficult tasks could stop me. And I wondered if I shouldn’t do something of my own, because the prospect of working for an office that programmed all kinds of “dregs” for rather “distant” (in terms of understanding software necessity) customers didn’t inspire me much. After all, life passes, enthusiasm is not eternal (and if it is eternal, not at all), and writing in a resume that I have been programming on FoxPro for 10 years for regional branches is not the largest bank - it was not my goal.
Therefore, I drew myself a dream by force of thought (about the same as in the picture) and slowly began to go to it.



The first step was the choice of direction, what could be done. Criteria identified such:

• Not very strong competition, preferably several players, but the players themselves are strong. This confirms that there is a market, you can work on it, but there are risks that someone strong will, in the end, be cool or change the market altogether.
• Products desirable moderately curves so that there is something to improve. If the players are large, then it is possible to compete, if not in the B2B market, but there is still a lot of space among medium and small companies or in the private sector.
• Demand, albeit not the biggest, but stable. Here it is desirable to choose a growing market, watch trends.
• Buyers are not “housewives”, but competent, confident, solvent specialists.
• And so that the product could be made by one for some reasonable finite time, so that the structure and market conditions did not have time to change much.

In my opinion, the right choice of your place in the market is a very important question. If something is wrong to pick up, it may not only not take off, not a single license may be sold at all, not a single user involved, etc.
As you all now noticed, when I was going to make a startup, I danced not from the idea that inspired me (as many start), but from a certain market segment . It is important! At least this is verified by the experience of not just me, and it works.
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Now, in a nutshell, what was chosen to create and why

At first, I decided to make a full-fledged script debugger, which then grew into a fully functional embedded development environment that allows people to create macros in different scripting languages, debug them, and run them in their applications. Those. product to automate other software products, if the latter provide some kind of external API.
Among the competitors was Microsoft with its Script Debugger and an early version of Visual Basic for Application (VBA). There was also some small private company that did an ASP and JS web page debugger on them. It was easy to compete with Microsoft, because a simple similar product was offered, and there was no need to buy an expensive Visual Studio just to debug scripts. It was easy to embed my product and distribute my own with mine as part. more flexible licensing. It was possible to surpass the second competitor due to the fact that for their debugger to work, it was necessary to install a web server, perhaps IIS (although I don’t remember exactly), even to debug client scripts.
With the price I have not thought for a long time. $ 250 for corporate use and $ 175 for home use. Visual Studio was more expensive, and the product of the second competitor is cheaper. I immediately declared that we were cooler, and therefore more expensive. Well, if you want even more, and less conveniently, and without the possibility of integration into your application, then go to Microsoft. Or embed VBA, but it is generally expensive and difficult to license and inconveniently distributed.
The development of the first version of the product took exactly one year. Then for two more years I developed functionality, corrected errors, etc. But this is not important now. It is important that the product was a year after the intention to make it.

Now how it all started, sold and what happened afterwards

The easiest site was made in a couple of days, there was a forum on it to discuss something, links to download, and buttons to pay. No phone calls, no round-the-clock support, just home-made knee work and an English (ala Indian-Russian) curve for e-mail, such as "We are very happy that you bought our software. We will send your reg-keys within 72 hour. ” Immediately, I note that the quality of the language in the whole history did not play any role in the success or failure of the startup. All that was required was a banal understanding of each other, albeit with mistakes and in broken language, and in general, I immediately declared to everyone that the product was from Russia, so treat with understanding, they say, we speak badly, but we have a good product .
The product was moderately good and began to be slowly sold. The first sale occurred in the first month. Then two, three, five. The first corporate purchases appeared when 10 licenses in a set (for employees) were purchased at a discount at a time. Clients were different, they were very solid, for example, US Navy, NASA, the Government of State is true la la. This really not only inspired, it caused euphoria. Monthly incomes began to exceed the salary of the bank director, where I worked at the time. It was cool, what can I say.

And here the first big mistakes and misses

My first mistake

I believed that it will always be this way, or rather, that it will be even better and more. After all, no tendency to decline was observed.
Like thunder in the middle of a clear sky for me was the .NET output from Microsoft. On the one hand, it's okay, well, some new C # languages ​​came out there, which, it would seem, from that. There was not enough experience, intelligence and foresight to see behind all this the decline of the ActiveX Scripting technology on which my product was built. All slowly began to move to .NET, VBScript began to disappear. ActiveX Scripting has been declared deprecated, i.e. obsolete, lost. All bet and all power is now on .NET. Everything else is junk, including my product.
And then I realized a very important thing! I have not created a new product. I just stuck to a huge giant , to its closed proprietary technology, making only some more convenient wrapper (in general, of course, useful). And suddenly “Atlas Shrugged”, made a step into the future, and I, like dust, flew off and remained forever in the past. I felt sad. For a whole year I did and for another year I developed what no one needs now, and it will no longer be necessary ever, ever.

Morality is here: yes, it works. You can use various technologies of various major players in the market. You can make good money on it. But we must not miss the moment when they begin to take steps forward. And jump in time, i.e. sell, translate into open source code, remake under new trends, etc.

My second mistake

Human greed, unwillingness to share with someone (in relation to partnership) and the fear of losing, did not play into the hands.
When I was "at the peak of fame," I was very inert. I did not want to consider any offers that were constantly received from my clients. Among them were voiced:
“Let's cross our products and make a new more powerful product, we will enter new markets, increase sales, fame”. I usually answered that “we” (everyone was sure that there are a lot of us, that there is a big strong team there) and we are developing so well, why do we need to change something, invent new bicycles, when this one drives itself, and I’m lucky . Then I did not allow myself to leave the comfort zone and, as a true entrepreneur, would rush towards new adventures.
"Sell us your source codes for 20 thousand dollars." No, the twenty is not enough, for half a penny is ready, and then on special conditions. No, do not sell at all, we do not sell the source code. And at the very thought, now you will sell them to them, then a clone will come out in a month, wring out my clients and will receive a profit like this, just like that. And I put so much effort. No, not for anything not selling. By the way, now they are not needed by anyone anymore.

The conclusion here is simple: integrate, cooperate, find partners, share, strengthen and grow with others. A startup (or product) of one person will remain a lifetime as a stall at a bus stop and will never become a supermarket chain.

My third mistake

I relaxed and just forgotten the project.
At first, when everything was just beginning, I was very attentive to each client, wrote detailed answers to all the questions that arose for a long time, inserted their requests for correction of errors and new functionality into “To do” (the list of what needs to be done). There were more customers, and, as a result, there was less time left for everyone.
Instead of allocating at least some student for a hundred bucks to respond to customer requests, I simply scored on them. Sometimes I answered that we do not plan these functions, since they are complex, although they were simple and were made in a couple of lines of code. Well, I didn’t want to open the project, look for the places where you need to edit, compile, build a new installer, upload to the site, publish news, send emails about updates. I wanted to stupidly spend money and enjoy life . It was possible to do this for a while. And customers, you bought the software, and use it. Correction of errors is done, nothing else was promised. Do not like, remove and do not use. In the end, you had the time (a whole month) to familiarize yourself with the product and make a purchase decision. You accepted it. All in your hands.

Here I will not draw any conclusions. Because they are, in fact, a lot. Try to make them yourself, who can. Indeed, on the one hand, I really want not to become a slave to my product, but to start enjoying pleasure from success, on the other hand, it will all end once if you stop doing it. You can try to sell a share, move away from development or even from management, somehow diversify to reduce risks, or let the money received on new projects. Always up to you. Dare!