If we consider the number of startups today, it comes close to 400+ million entrepreneurs who are trying to form 300+ million startups annually. The majority of these startups are software companies. Why has software occupied a majority of the market? Or is that just a myth? Let’s take a look at this by analyzing the pros and cons of the software industry.
Why is the software market great?
Though the software sector has faced setbacks, it has always been like a horse?—?which gets back up very soon. Right when the revolution was created in Silicon Valley, this sector has helped a lot of people in terms of employment, productivity, and assistance. It has other advantages as well.
The need is still there
The need for software is never depleting. This is because of the nature of software?—?virtual. Being virtually present can make it more flexible, customizable, scalable and can be transformed or created into anything. So for every business, there can always be a software solution and it has proved to be the best. So, as long as there is a need for software, this industry is going to rule the world.
Humongous talent pool
When there are more talented or skilled people, the industry’s roadmap will be set in motion for generations. The software industry holds an ecosystem of a variety of skilled personnel who strive to make an impact in this industry. Not only that, it also inspires many engineers and skilled personnel with it’s attractive luxury benefits.
Accelerated results
Software businesses will always produce accelerated results. Whether it is a success or a failure, it can be encountered within the first few months of starting it. This is once again a wonderful factor that I admire about this industry. Failing fast will trigger the necessary data for your next step.
Attractive funding
Many investors are ready to finance tech-based startups because of the accelerated results (the above factor). Either they grow 5x to 10x, or they fail immediately (which will ensure less loss for them).
Initial investment is less
This is not the case for all tech startups, but a few startups are created by engineers themselves and the cost of creating and deploying software will not cost much (pure software business). For example, for a B2C app business; if the co-founders are developers, then only the server cost is going to be the investment initially (time and effort is also an investment, but the context here is only money).
Inspiring stories
Many successful personalities have created their own milestones and people are really inspired by them all. Every tech entrepreneur wants to be the next millionaire and they are striving for that goal. With respect to the milestones that great leaders have created, this industry has also created very big empires and the empires are still growing. The point is, the limit is not set for this industry and it tends to expand every year to a new dimension.
Challenges in software business
Though the above factors may give you goose bumps, this industry has it’s own risks too. It can be taken as a risk or as a challenge. It all depends on one’s perspective.
Market timing
There something called market timing and the entire industry is dependent on it. Even if your business idea is awesome, you have sufficient funding and you have a great product; if the market is not open at that time, you will end up dismantled. Market need matters a lot and only when it is really needed, people succeed.
Uncertainty is more
The software market has seen potential growth but the uncertainty is more, i.e. the downfall or the recession cannot be predicted easily and the aftermath will be very catastrophic. The business will also tend to be very competitive, i.e. your product can be overthrown immediately by a competitor in few years.
Not as easy as you think
Surviving in this industry is not as easy as you think. Though there are many success stories, comparing millions of startups?—?the majority of them have failed. The success rate of the masses is always less and it takes great effort to be a rock star in this industry. I feel this is because of the myth that’s circulating recently in this industry?—?to be the young millionaire or to be a CEO. This makes your journey very tough if you don’t have the necessary skills and if you’re over ambitious.
Considering all of these factors, maybe starting a software business isn’t a bad idea after all. Though it has its ups and downs, it has continuously inspired a lot of lives. Every business journey is not easy and it is full of challenges.
“Computers themselves, and software yet to be developed, will revolutionize the way we learn.”
—Steve Jobs
About the Author
Hari Vignesh Jayapalan is a Google Certified Android app developer, IDF Certified UI & UX Professional, street magician, fitness freak, technology enthusiast, and wannabe entrepreneur. He can be found on Twitter @HariofSpades.