Ask HN: Freelance Software Company?

[mfichman]

I intend to start a freelance software company. I'm not entirely sure if such a company would be successful, but I do know that many businesses need help with software development. Example: my friend works at an accounting firm, and complains constantly about a business application that he uses every day. The application was developed in-house, probably by developers who don't care about writing boring accounting software. A freelance software company with an experienced team would probably do a much better job.

The problem is that I have no idea how to start such a company. The biggest hurdle would be finding the first contract. Also, a freelance software company seems like a candidate for bootstrapping rather than VC funding, but I'm not entirely sure. Do you have any suggestions for a would-be entrepreneur? Have you heard of any successful freelance software companies? (for inspiration!)

[rpwilcox]

I'd guess a fair number of people on HN are freelancers. (Myself included).

For the last year or so I've written articles for a Macintosh technical magazine: MacTech (http://www.mactech.com/) on this topic (the Consultant Cowboy series, is what I call it).

I know I need to open it up to a wider audience (read: eBook, or something), but for now it's a semi-monthly column.

(Next article is on consulting with regard to pricing and startups!)

[kls]

You might find a small angle to fund a freelance firm but they would not be a professional angle most likely a doctor or such just looking to diversify funds. I don't know why there is not more angle money in the freelance market given the average freelance software firm fares better than the average software product company. Chances are you will have to build it up yourself.

A few high level tips I can give you are the following:

Specialize, don't throw a bunch of stuff at the wall and see what sticks. Find one thing that will be your trademark and stick with it. You can expand later if you need to but you need to build a solid brand on what you do well. If it is mobile do only mobile if it is web do only web. If eventually your clients will beg you to diversify when this happens you have a successful brand that people trust. Let you clients tell you when it is time to diversify.

Find a good name for your company, don't go with some silly high tech name, go with something that is personal and memorable. Skip the buzzwords, if you are coming up with items like digital binary systems or something as equally threatening to the non-technical you need to rethink your naming. Try to keep it simple and identifiable like Red systems or Bluewater or and acronym like IBM. Look at the top guys in tech they are not very technical names Apple, Oracle, IBM, HP etc. People know what you do by your marketing not by your name. Your name is a brand to quickly identify quality keep your brand simple.

Try to only take gigs that are time and materials at first (I only take time and materials). I look at myself as no different than a lawyer or an engineer and both of those professions only take fixed price gigs when the project is special (aka. They get rich). Too many programmers allow themselves to be bound into contracts that are suicide pacts. Never take the risk of none payment, unless the reward is great. At the point that you are doing fixed bid projects you are gambling make sure you know the game before you even start to play it. If I take a fixed bid project there is usually some equity involved in the compensation. If I am taking all the risk (which you are if you are doing fixed bid) I want some of the up side too. It is no different than a lawyer taking a product liability case. They take a cut of the amount won in the suit. Be very careful with fixed bid, they are not win-win contracts they are risk underwriting make sure you are compensated for underwriting that risk, triple hourly is usually about right for the risk if no equity is to change hands.

The best clients are found in social circles, so broaden you social circles for example I like boating and fishing, it just so happens that a lot of CEO's like boating as well. Joining the local Yacht club is a natural for a guy like me. It has to be authentic though don't join something you have no interest in smart people can see right through insincerity.

Contact recruiters, let them know you pay a commission on gigs they find. Many times they will run across short term gigs that are just too small for them to deal with. If they have a go to guy that they can kick them over to with little effort they will.

Many people will say to try out the freelance sites but I personally think they are a race to the bottom. You can use them if you need to but it is better to develop your own client base that look to you as the first stop in providing solutions.

Offer free consultations to come into businesses and look at ways that you can improve their efficiency provide them with a break down of which tools you can build to automate process the amount of hours you think it will take and the amount of hours you estimate you can save them over a year. If they take you up and have you build the apps ask if they will document the real savings so that you can double check your assumptions and refine your process.