It’s cheap to open a company that just builds software: at the bare minimum, you need a computer and a way to feed yourself until you can produce revenue. In other industries, entrepreneurs have to sink funds into creating a new business — buying equipment, leasing space and making other investments that they hope will pay off.
There are several factors driving down the cost of creating software, some of which you may be able to take even more advantage of than you already are.
It’s All About the Ecosystem
Many companies make their web apps available for free or inexpensively, which in turn lowers costs across the board. A decade ago, even a startup would have needed to pay quite a bit to get email and basic office software. These days, you just open up a Google Apps account for $50 per person. Add in open source and the cost of running any company is minute.
You can get most of the help you need — even in learning to program — for a fraction of the cost you might have faced in the past. This ecosystem is what makes the entire concept of the Lean Startup work.
A Founder’s Willingness to Live Cheap
As it’s gotten cheaper to start a business, the information on how to do so has also become more widely available. You don’t have to have an MBA or even any experience in business to go out and start building a company. You just need to do some research online and be okay with screwing up occasionally.
That, in turn, means that anyone can start a business, skipping the cost of getting degree and jumping in before you have a family or other obligations. You can live cheap and afford to work towards just becoming ramen profitable, rather than shooting for a big profit immediately.
By taking advantage of a minimal need for investment, software companies are able to get ahead in a way that no other industry can currently compete with.
Image by Flickr user davidd
