5 problems software dev companies have to solve – or die trying

Added by piotrzaniewicz 7 years ago in
B2B
Founders
Growth Hacking

6

Many founders around the world want to build software companies that constantly have new projects queued up and always deliver high quality.

Few will come out on top – the competition is strong, there are never enough clients and great developers are a diamond dozen.

But successful companies show that you can thrive in this tough environment. I’ve spoken to founders of market leading, go-to software development companies in B2B, some with hundreds of employees on-board.

Here’s what I learned about the road to building a strong software company from founders of 4 companies – Arkency, Netguru, Polcode and Software Mill.

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Discussion

trevorhatfield

trevorhatfield

NEW 7 years ago

Some really good points in here @piotrzaniewicz. Specifically:

"you shouldn’t allow any project to account for more than 10% of your revenue. Which is easier to achieve the bigger your company becomes. Getting to that point means that when one project is unexpectedly terminated, your team is still earning money on at least 9 others."

This makes sense with 100's of employees, but do you still believe this if you have a team of 5 or do the principles change?

1 reply
piotrzaniewicz

piotrzaniewicz

7 years ago

Thanks!  It all depends, really - the type of company, type (and size) of service, business plan in general, etc.   But, we're talking revenue here - with a team of 5, depending on the size of your projects, I think this principle can still be true. Because it basically boils down to this - "don't base your success on big wins with big clients, rather keep doing smaller projects and keep having small wins".  In other words - a big client is a great boost, but it's not a sustainable source of revenue. Hope that answers your question!
piotrzaniewicz

piotrzaniewicz

NEW 7 years ago

Thanks!  It all depends, really - the type of company, type (and size) of service, business plan in general, etc.   But, we're talking revenue here - with a team of 5, depending on the size of your projects, I think this principle can still be true. Because it basically boils down to this - "don't base your success on big wins with big clients, rather keep doing smaller projects and keep having small wins".  In other words - a big client is a great boost, but it's not a sustainable source of revenue. Hope that answers your question!
1 reply
trevorhatfield

trevorhatfield

7 years ago

Thanks @piotraniewicz. This makes sense and I agree with the theory for the most part. The problem is when dealing with a small team you only have so much man power. For instance, what if you were given the opportunity to:

1. Work with 20 customers totaling a worth of $1000 / month but combined for 200 hours of customer service work per month

OR

2. Work with 2 customers also worth $1000 / month but only combined for 20 hours of customer service work per month

It could be a hard decision, since the 20 customers represents stability, but might weigh more heavily on resources. Just something to think about. Only playing a little devils advocate, but do agree with the more stable approach, just might not be plausible in some scenarios maybe. Curious to hear what you think.

trevorhatfield

trevorhatfield

NEW 7 years ago

Thanks @piotraniewicz. This makes sense and I agree with the theory for the most part. The problem is when dealing with a small team you only have so much man power. For instance, what if you were given the opportunity to:

1. Work with 20 customers totaling a worth of $1000 / month but combined for 200 hours of customer service work per month

OR

2. Work with 2 customers also worth $1000 / month but only combined for 20 hours of customer service work per month

It could be a hard decision, since the 20 customers represents stability, but might weigh more heavily on resources. Just something to think about. Only playing a little devils advocate, but do agree with the more stable approach, just might not be plausible in some scenarios maybe. Curious to hear what you think.

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