Over the last 30 years, the fortunes of those attempting to break away from safe full time employment as a programmer/software developer/software engineer to be their own boss, developing leading edge software in a small office with a few other like minded professionals has taken significant different challenges. But for a new University Graduate with a few years employment under their belt, is it still worth considering, or are small software companies a thing of the past?

Pre Internet (Hard Times)

Before the internet it was quite a challenge to set up an independent software company. Along with a good idea and a good development team, you also needed traditional sales and marketing (magazines, trade shows, telesales etc.), and possibly more challenging, you needed to create physical copies of your software program on a CD (or floppy disk) and a hard copy of your Help Manual, all packaged into a shrink wrapped cardboard box.

To fund this enterprise you probably also needed to approach venture capitalists and split your company ownership. To borrow a phrase from the young people…”Ain’t nobody got time for that!”. Still the rewards were plentiful if done properly and many leading companies such as Microsoft and Apple started in this way.

Post Internet (Good Times)

With the dawn of the internet, the barriers to entry were significantly reduced. Not only did you no longer need to pre-box you product, either the end user could simply download it or the software was the web site, but it was also easy to do the sales and market of the product yourself with a little SEO (Search Engine Optimization) work for Google ranking and PPC (Pay Per Click) advertising.

More significantly however, your potential audience was massively increased as you automatically had a World Wide presence though your web site. Also, at least in the beginning, the Dot Net Bubble meant investment was easier to obtain as companies clambered to hit on “the next big thing”.

Open Source, Mobile Apps, Crowd Funding and Social Networks (??? Times)

So moving forward, we now find ourselves in a world where most new software is free. Moreover, you can even get the source code for free. Just looking at GitHub or CodePlex you can see a plethora of brilliant new projects…even ASP.NET 5 from Microsoft is built on an Open Source codebase! Can you make money from Open Source as a small developer? MySQL was sold for $1B to Sun (now owned by Oracle), but this seems to be the exception rather than the rule.

The other growth area is Mobile App development. This may be a better bet for a small start up as again it is easy to write an app and add it to the an app store. Just look at the popularity of the annoying but addictive(?) ‘Flappy Bird’ game. This was written by one person as the basis to learn how to develop apps, but in the new world of Social Networks it only takes a matter of days for a new idea to go viral to millions of people.

The other recent change is the notion of using Crowd Funding to help get an idea to production. This is a massive breakthrough for small companies, however it still requires your big idea to be of interest to others, which is probably difficult for someone wanting to develop the next Accounting Software product.

In Summary

So to answer my own question, I’d say probably not, however I think that times are definitely a changin’…again!

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posted on Friday, May 29, 2015 3:19 PM

Comments

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# re: Are small software companies a thing of the past?
on 6/21/2015 8:27 AM
I go through your blog, The content Is very good and original. Will wait for your future posts.

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