How to Start a Software Business

July 31, 2014 , 27 Comments

What’s the best way to build a successful software startup?

As you can imagine, this is not simple question, but in response to an email sent by a reader, I made a video with the simplest possible (and most important) answer I can give.

If you’ve ever wanted to get into the business of selling software, apps or SaaS, this is a must-watch:

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If you have any questions or thoughts you’d like to share, please leave a comment below!

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About ​Shane Melaugh

I'm the founder of ActiveGrowth and Thrive Themes and over the last years, I've created and marketed a dozen different software, information and SaaS products. Apart from running my business, I spend most of my time reading, learning, developing skills and helping other people develop theirs. On ActiveGrowth, I want to help you become a better entrepreneur and product creator. Read more about my story here.

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  • Hey Shane,

    Thanks for this great post, as usual your way make sense, and not to forget you can use you infoproduct as lead generator for you software.

    Greetings from the Maldives

    • Yes, that’s a good point. It’s not like the initial work put into the info product is all for nothing, once you do have some software to sell.

  • Great video. Thnx! I am about to start a personal development project (website under “TCB construction) and your IM strategies are priceless :)

    • Thank you for the comment, Birgir! Good luck with your new site!

  • You make it sound like work, dude!

    Thanks for the overview. Make me want to stick to affiliate sites.

  • Hi Shane, great post

    I have 2 questions about plugin development.

    where is the best place to get a plugin developed?
    Can you reccomend user interface design solutions/software?

    As i am looking for a good plugin programmer
    but i need to show him/her how it should look,
    a mock up if you will.

    • Hello Stephen,

      To get software developed, I’ve generally had a better experience working with agencies than working with individual contractors. For example, if you hire developers via oDesk, I recommend hiring them through an agency on oDesk instead of hiring individuals.

      But either way, you’ll have to do a lot of filtering to find really good people.

      To create mockups and wireframes, Balsamiq is quite nice.

  • Hi Shane,
    Although I am not in the software business, I completely understand your reasoning for this post. Bootstrapping is a very common sense and practical approach Working this way requires serious commitment but can be very rewarding and certainly separates the serious business person from the hobbyist. I have been very successful in information marketing over the last 11 years and have become fascinated with the idea of creating a software business. So it appears I have 50% already, of what is needed to succeed in the software industry.
    Thank you for this thoughtful and enlightening post.


    • Thank you for your comment, Leelo. Your extensive background in information marketing is a great basis for getting into software. There will be many new challenges, but you’ll also have a major edge over anyone jumping right into software.

  • Hi Shane
    That is great information backed by your own experience. It is the most trusted,sincere and credible information. Thanks

  • Hi Shane,

    Just reading yo email inside my inbox,
    yes yo process is unusual. non-typical.i get u well.

    typical people do not produce results.

    i like you shane.
    i understand what yo telling us.
    but its not easy for many to get it.
    but i can understand what yo saying……

    Thanks shane

    • Thank you for the comment! I’m glad to know you’re getting good value out of this post.

  • Excellent videos you are sharing Shane. Wish I had learned about giving away a free info product on my site when I first started working online. Building our list is critical to long term success and once someone subscribes to our mailing list, we can send them offers from time to time.

    I will leave the software development to people that are experienced in building programs and apps.

    • Absolutely, yes. Starting to build a mailing list was something I did early on and it has paid off every step of the way.

  • Shane

    I have your excellent Hybrid Connect WP plugin and the Thrive Theme for 2 of our businesses. You are right on with the software business. I also run a stock market software business, we provide a free ebook to harvest e-mail addresses. We’ve been selling software since 1987 and SaaS since 1998. Always been profitable and the giveaway is the perfect segueway to a trial of our software



    • Thank you for your comment, Stephen. SaaS since 1998? Wow, you guys must have been pioneers at that time! :)

  • The “worst-case” scenario you describe is not what *I* would consider worst-case. In the case you described, you have failed quickly, learned something valuable, and can go on to something else. So falling flat on your face is *not* worst-case.

    The real worst-case scenario is where you get just barely enough interest and sales that you keep going, but you end up working your butt off for almost no money. I’ve been there, done that.

    • That’s an interesting point. I think this is a topic worth dedicating a separate post or podcast episode to.

  • Your video really activated my courage bugs, so to say. I’ve wanted to start developing my own software but I’ve been postponing for ages. Either because the competition is too big, or because I don’t have enough time, it’s been all about finding excuses. Thanks for sharing this, Shane; it was just what I needed to hear!

    • Awesome stuff! That’s very encouraging to hear, so thanks for leaving this comment, Christopher!

  • Hi Shane,

    Nice strategy for building a start up software business over here.

    I really like the angle to which you have taken in answering the readers question using yourself as a case study.

    I would like to dabble into building of software products in the future and i would like to follow this simple strategy you have laid down though its much more complex than the way you have pointed out.

    Meanwhile, i know you have covered most of these steps in your earlier articles but we would be more passionate to watch you teach us the steps on video via a follow up video.

    -Oloyede Jamiu.

    • Good stuff. Definitely go for it, since with this strategy the risk is very low.

  • ana pascoa says:

    Hi Shane,
    Although I currently have three options in order to create a product online, the three are very expensive, as aspiring to create a course of wordpress. A dream, I learned to do video, because I have no qualities of writing. After buying several courses of wordpress in my language Portuguese. Sad to say but I have learned more on youtube, wordpress and several courses in English, in companies such as bluehost, and another that exists in Portuguese has excellent support, but only has the Softaculos, I wanted more, I met hostgator, but I was bluehost , after registering more than 20 domains, namecheap to know well, and gogaddy.
    I learned a lot with them, with their themes. Already had acquired some tools such as affiliates, before knowing your great work. I tried but did not like Aweber, I will install getresponse.
    How can I learn to create a course of wordpress, or other products, who you would recommend using video to teach me everything there is to learn, I stopped blaming myself for not knowing how to write, so I learned video out there on the net.
    But first I have to learn how to create a decent blog, but I’m only in elementary school or online dream world.
    Thanks for your work
    ana pascoa

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