Building a Software Company From Scratch

At APconnections, our flagship product, NetEqualizer,customers is a big jump, requiring traditional sales and
is a traffic management and WAN optimization tool.marketing. Don't expect your loyal base of open
Rather than using compression and cachingsource beta users to start paying for your product.
techniques, NetEqualizer analyzes connections andWe use testimonials from this critical mass of users
then doles out bandwidth to them based on presetto market to paying customers who are reluctant to
rules. We look at every connection on the networkbe early adopters (see below).
and compare it to the overall trunk size to determineChannels? Use Direct Selling and the Web
how to eliminate congestion on the links. NetEqualizerOur innovation is a bit of a stretch from existing
also prevents peer-to-peer traffic from slowing downproducts and, like most innovations, requires some
higher-priority application traffic without shuttingeducation of the user. Much of the early advice we
down those connections.received related to picking a sales channel. Just signup
When we started the company, we had lots of time,reps, resellers, and distributors and revenues will
very little cash, some software development skills,grow.
and a technology idea. This article covers a couple ofWe found the exact opposite to be true. Priming
bootstrapping pearls that we learned to implement bychannels is expensive. And, after we pointed the
doing.sales channel at customers, closing the sale and
Don't be Afraid to Use Open Sourcesupporting the customer fell back on us anyway.
Using open source technology to develop andDirect selling is not the path to rapid growth. But as a
commercialize new application software can be anbootstrapping tool direct selling has rewarded us with
invaluable bootstrapping tool for startuployal customers, better margins, and many fewer
entrepreneurs. It has allowed us to validate newreturns.
technology with a willing set of early adopters who,We use the Internet to generate hot leads, but we
in turn, provided us with references and debugging.don't worry about our Google ranking. They key for
We used this huge number of early adopters, whous is to get every satisfied customer to post
love to try open source applications, to legitimize oursomething about our product. It probably hasn't
application. Further, this large set of commercialimproved our Google ratings but customer comments
"installs" helped us ring out many of the bugs byhave surely improved our credibility.
users who have no grounds to demand perfection.Honest postings to blogs and user groups have
In addition, we jump-started our products withoutsignificant influence on potential customers. We
incurring large development expense. We used openexplain to each customer how important their posting
source by starting with technology already in placeis to our company. We often provide them with a
and extending it, rather than building (or licensing)link to a user group or appropriate blog. And, as you
every piece from scratch.know, these blogs stay around forever. Then, when
Using open source code makes at least a portion ofwe encounter new potential customers, we suggest
our technology publicly available. We use bundling,that they Google our "brand name" and blog, which
documentation, and proprietary extensions to make italways generates a slew of believable testimonials
difficult for larger players to steal our thunder. These(Check out our Web site to see some of the ways
will account for over half of development work butthey use testimonials).
can be protected by copyright.Using open source code and direct sales are surely
Afraid of copycats? In many cases, nothing could beout-of-step with popular ideas for growing
better than to have a large player copy you. Bigtechnology companies, especially those funded by
players value time to market. If one player clonesequity investors. But they worked very well for us as
your work, another may acquire your company towe grew our company with limited resources to
catch up in the market.positive cash flow and beyond.
The transition from open source users to paying