A Journey of Entrepreneur: Why I Shut Down My Profitable Software Company
Back in 2019, I decided to stop working full-time at a Software Engineering company and started my own Software Development business.
- How did I start my business? What motivated me?
- What did I learn in the last eighteen months of building my software company?
- How did I get clients?
- Why did some of my clients want to share their 15%-35% business equity with me?
- Why did I close my profitable software business?
I used to work on the marketplace to explore new tech and stuff. I never had the intention of starting my business back then. After working on the marketplace for a while, almost 97% of my clients wanted to rehire me and even they wanted to pay more for the next project.
I worked an average of 12–15 hours daily (Please don’t do it, a couple of times I got sick because of this unhealthy work-life), but I really enjoyed what I was doing.
I quit my full-time job along the line and started looking for some team members so that I could distribute my workload because I felt burnout.
I hired two of my close friends as they were also looking for some paid gigs. I had already talked with the clients and told them I had to hire some people for their project and they were okay with it.
Lessons I learned: Always be transparent with your clients, it will help and save you in so many ways.
1. How did I start my business? What motivated me?
My friends and I completed the first project not too long after. After the completion of our first team project, I paid my friends. It wasn’t a huge amount of money for all of us, but the feeling was invaluable. I had never paid anyone for software engineering work, so it was the very first time I paid someone for doing software engineering with me. Also, my friends never earned any money from software engineering before working with me. It was the first payment they got for doing what they love to do and want to do. The joy I saw in my friends’ faces when they received the remuneration check from me was one of the best moments in my life. It was that moment I found out it was beyond amazing and that was one of the major motivations for me to start a Software Company.
I strongly believe in doing work that can make a positive impact on others. Some months later, two of my friends and I started our first software company. We hired three new developers who were also freshers and very early in their careers. Overall, my team was quite new in the software industry. We were super excited about the journey, and its future.
Lessons I’ve Learned: In our life some moments are unpriceable.
2. What I learned in the last one and half years of building my software company.
I already had professional experience in the Software Industry and some connections with some big shots. My team didn’t have any professional experience except working with me through some paid gigs. They were quite good at problem-solving, but as they didn’t have any experience working in the Software Industry, I had to guide them through everything as much as I could and I spent a very good amount of time every day doing that. We were all enjoying, learning, and exploring. I was responsible for onboarding new clients and worked closely with other companies’ CEO, CTO, and Product Owners to clarify and break down the product requirements, define technical specifications, user stories, schedules, status, product roadmap, and details of each project. I also led, organized, and facilitated all sprint cadences (planning, reviewing, retrospectives and standups) for our engineering team. I also had to do coding, architecture, and DevOps. I know I had to do so much stuff, but I am not master any of it.
Software Engineering is my bread and butter, I cannot live without it. I never thought I would have to do DevOps. Interestingly, I learned DevOps throughout this journey. Well, I still don’t know too many things about it as I am still learning and exploring daily. Seven months later, I disturbed some of my management work to my co-founders to spend more time on Software Engineering, and DevOps. Long story short, unfortunately, that didn’t work out.
Lessons I’ve Learned: Finding the right co-founder is really hard sometimes. All of my co-founders are really awesome software engineers and good human beings. They are amazing friends, but in business, you have to make sure your co-founder(s) has solid experience working in the industry or has the individual experience or skills to manage a business without you.
They don’t have to have all the skills set you have but they should have leadership skills and be able to set and execute the long-term visions of business. If you are a technical Founder, find someone from the business industry who is crazy and passionate about innovation, building new things, and execution.
3. How we generated leads and got our clients.
This was the most challenging and hardest part I must say. Finding good clients and at the same time getting fair payment for the project on time from them was really challenging. As I already have some previous experience, it wasn’t hard to find my first client. In the beginning, I did not really face the reality of this industry. Slowly, I discovered finding a team project is way harder than finding a solo project on Marketplace. So, I moved on from the marketplace. Also, there were so many very good software agencies on the marketplace already, so it was really a very tough competition for any new company.
A) At the beginning, I targeted Upwork/Freelancer/Guru for my clients as I was already familiar with them.
My ideal customer profile was from the USA, UK, or Europe. Due to the fact that I lived in a South Asian country, my timezone was a huge gap as well as challenging to maintain and become an early bidder on those marketplace job posts. Trust me, early bidders get some unfair advantage sometimes, but at the end of the day, you must have solid knowledge and understanding of their project recruitments. Also, you have to know the tech stack very well they mentioned in their job post.
B) Make partnerships with small and large digital agencies/software development companies?
Making partnerships with small or medium agencies was one of the best decisions I made in the early days. This one is very hard to execute, but try to build partnerships with some US, UK, and European software companies. Please, never ever send template sales emails to them. Try to understand their business, research about them, and find the area where your company can help them and add benefits to their company.
C) Closing a business deal is an art.
How you close a business deal with your client is very important. As they have been doing their business in the market for a while, they also have some good connections and strong networks. So building a good relationship with them is another key way to get new leads. For me, it was a major channel to get my new clients.
Lessons I’ve Learned: I found out that so many software development companies rely on non-technical people to deal with clients. I know it’s really hard and quite expensive for a small company to keep a technical or software engineer background with people who want to deal with clients. But trust me, I was one of the key reasons my clients always wanted to hire us as a company.
4. Why do some of my clients want to share their 15% — 35% business equity with me?
It’s a very interesting story, three of my clients offered me their company shares. One of them was a very interesting product. I and one of my co-founders have a background in Machine Learning we built that product from scratch, and also I helped my clients to build the product roadmap based on users’ demands. My client didn’t have any knowledge about Machine Learning. So I taught him some basic ML and Python so that he could understand what I was talking about. Also, I always made sure I explained every single detail very well so that he could continue with this project by himself and he was able to understand his stuff. About nine months later, he wanted to bring me on board to his company as a CTO.
Anyways, I almost accepted his offer but later I didn’t give in because of my different vision and mission.
Well, I’m really not sure why they offered me their company shares but I think I can point some reasons that validate their offers.
a) Dedication & Commitment: They worked with me for a long time on their project. They had gotten to know me and validated my skills throughout their product development cycle so they thought I would be a good asset to their company. My bar is very high, and to be honest, I really don’t think I did anything exceptional for them. I just did my job as always I do.
b) Transparency: This is very important. I also found people don’t want to be transparent about their business or the decisions they make. But from my experience, I found out that this is one of the keys to building a successful company. I strongly recommend anyone who is building products or doing business, please be transparent with your Co-Founder, team members, and most importantly with your users/clients. Make them evangelists of your company or your product.
c) Be a good listener: To build a good product or understand your client’s problems and requirements, you have to be a good listener. Try to understand their problems and help them to solve that. Please for God’s sake don’t always say “we can do this and that”. I can proudly say that I saved a ton of money for my clients by simply understanding their business goals and ideas clearly and advising them to use an existing or alternative solution to validate their ideas and solutions.
d) Post development support: Custom software is never really completely developed. Client’s particular needs are never really complete and at any time the company that created the software will offer assistance in adapting this custom codebase to new demands and fixes. So you have to be ready for your post development support. Make sure you write and keep your technical project documents safe as it will save you a ton of time and money. Also, don’t forget to transfer your knowledge to your clients.
Lessons I’ve Learned: You don’t have to build everything from scratch in order to keep that client long term. Build a great product for them and do not forget to build a good relationship with them.
5. Why am I closing down my profitable software company?
We never wanted to be a full-time software development company. We built couple of in-house products. Working on client projects and maintaining in-house products was another hard challenge on top of the way we were running our business. We didn’t have any funds, so we had to work for our clients to earn the fuel for our in-house project. Although we continued, it didn’t work out well.
The main reason it didn’t work out for us because focusing on full-time client projects and at the same time building in-house products was too hard for a 5 members team. We love engineering and building new stuff and the mistake we made early on was not focusing on the real problems. As you know, building a successful product is not all about engineering, building, or adding cool features. You also have to do market research effectively, find out your ideal users, talk with them regularly, try to understand their problems and needs, identify a target market and ask them if they would spend money for it, do proper marketing and find the right distribution channel for your product and so on.
So, I eventually realized we were unable to do both at the same time because it is really hard to work this way. On the other hand, as we work on different types of client projects every time, we have to learn new tech or business domains for that. Ultimately, we got a very short time to focus on our in-house product. Most importantly I like high growth and love to solve the problem that will create a positive impact on a large scale in people’s life.
Slowly, I lost my motivation and wanted to take a break from my company. I also totally stopped onboarding and searching for new clients. Our fund was very limited; it was slowly burning without any income being generated.
At that time we were also building an AI based Copywriting assistant CopywriterPro.ai because we were struggling to write our blog post. For a small business like us, we didn’t have the budget to hire professional content writers. As I stopped focusing on clients I was able to fully focus on this and got time to work on this product full time. This time I didn’t make our previous mistake.
I made sure I did proper market research and talked with users about their pain points. This helped me a lot to ultimately find the ideal people for my product. I also made sure our product development roadmap was based on users’ problems and demands. So this time we built a product that solves real problems for real people.
I talked with my Co-Founders about everything including why we should close our software development company and why we should move on with CopywriterPro.ai They understood the situation, and they agreed to close the software development company for a better and exciting future.
If you have questions, bring them on! I wish you a successful journey. Thank you so much for your time in reading this post. Have a nice day.