Conservatively

In theory, the level of competition is proportional to market size and market size is proportional to competition.

Anyone can be tempted by entering a market with an intense competition. A common business plan statement is: “market size is estimated at $100 Millions, we assume conservatively to get $1 Million”.

Never conservative enough, I think. Top players have marketing budgets matching their size, and newcomers-business will be hardly profitable.

Closer Than You Think

Few engineering companies use movies for marketing purposes, though a movie is worth a thousand pictures.

Take DEM software. It computes the motion of large numbers of small objects (like molecules or pills) for engineering. Now take Realflow software, computation of the same small objects but for the entertainment industry.

It’s amazing how engineering and entertainment became close to each other. Nevertheless the first still promotes through still images, the latter through video clips.

Features That Matter Most

Companies like Google and Netscape knows what it takes to run a successful business. It is the business model, and not the product that determines success or failure of software companies. That’s what many start-ups have unhappily discovered for themselves.

I’ve still much to learn, yet something have learned on what start-ups should better do:

1. -remain a “product company” long enough to build a customer base, before offering customization and services
2. -run the business independently from distribution channel
3. -avoid appointing the chief engineer as business manager.

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