[aaronschroeder]

"...failures more often come down to a misjudgment of market need, growing too fast, and overly idealistic visions (all things, notably, that VCs encourage)"

So avoiding VC funding might drastically reduce failures? :-P. There are many opportunities for niche software and services, but most would never turn into the next unicorn. If you have a validated idea that has real potential and you are willing to take a huge risk, then by all means go for VC funding and talk to places like YC. This is what they are made for, and they are good at it. However, if your idea is part of the other 99%, there may still be real opportunity to create and build a successful small business. Just set your expectations appropriately.

I'm nobody special but have co-founded 2 small software companies in the past 8 years. Both provide much-needed niche software and services. Neither has taken any investment capital, and combined they employ about 30 people while paying above average wages.

If you really want to start a company, there are other paths, especially if becoming a millionaire isn't your primary motivation.

[thecleaner]

Definitely not a nobody. Results count. You made two companies and created 30 jobs. That's great.

[uxcolumbo]

Any tips for finding these niche opportunities?

How did you find them?

[aaronschroeder]

No magic formula, but in my case I worked for a research & evaluation office at a university for a number of years. I did everything from tech support to building small databases. During that time I learned about the needs of research projects, and a few specific grant programs, which led to opportunities to build systems to automate collecting and organizing data, then expand those beyond a single use case.

I'm no expert, so don't put too much stock in this, but a few tips from my experience:

1. Don't set out to start a business, then look for an idea. Instead, look for opportunities while you gain experience in a particular industry. I had 14 years of experience in the research/grant world before co-founding my first private business.

2. (Maybe) Look for a job as an SWE or IT support person within a non-IT company. Do a great job serving others and you'll become the go-to person for solutions. By the time I started the first company, we had already built over 10 small databases to solve specific problems, but none turned into anything more than one-off solutions to streamline specific processes.

3. Work hard, persevere, have a positive attitude, and always look for ways to help and serve everyone around you. Software is just the tool to provide a service. We support our clients through the software we build, but also through a very in-depth understanding of their world and how we can best help them. You also need a support network to start and grow a business, and people are much more likely to help and support you if they value and respect you.

4. Maybe owning your own business should be a 10 or 15 year goal. I know that's probably hard for people early in their careers seeing so many others self-employed. But there's something to spending a decade learning an industry and building a network. I'm not sure either company would have been successful had I started them in my early 20s. Just because the unicorn tech companies we hear about were founded by young college drop-outs doesn't mean that's the norm.I read somewhere that the average age of small business founders is somewhere in the 40s.

That was just my path, so take it with a grain of salt. There are many paths to starting a business and you'll want to decide what you want to get out of it. For me, it was never about making lots of money. It was about building something that helps others, creating good careers for people, and having the freedom to make our own decisions.

[uxcolumbo]

Thanks for your insight.

Yes - you're right - having some prior domain knowledge or being exposed to it or partnering with folks who are is probably the most obvious one. I was hoping to hear about a shortcut ;)

RE: It was about building something that helps others, creating good careers for people, and having the freedom to make our own decisions.

Respect. Everyone chasing after Billions and trying to achieve the goal of buying yachts within yachts is not sustainable anyway. Should be more along your path... achieving happiness without needing millions and also giving back to your community.