Dear 4bby: What to Do with My Technology | Hacker News Reader

Dear 4bby: What to Do with My Technology

4 pointsConfusedInPalo8 comments

I could use some advice.

Over the years, I have developed security software that I believe is of tremendous value to both businesses and home users. I tried to make a go of it as a startup without taking on investors. That has been unsuccessful in large part due to the inexperience of the team (including myself) and lack of industry connections.

I have reached a point where I need to decide where to take the company and the tech. I believe the tech can do a tremendous amount of good and feel that it addresses consumer needs that are unlikely to be adequately addressed otherwise (venture-backed companies will not see massive revenue potential in securing home users and are unlikely to address the space as a result).

From a personal standpoint, a pretty appealing outcome would be to continue developing the software full-time, distribute it for free to consumers, and make enough off user donations (or even a philanthropic benefactor who wants to see the technology made available) to make a reasonable salary. That allows me to continue working diligently on my passion while also potentially doing a tremendous amount of good.

But I do feel a strong obligation to compensate those who were part of the team even if we weren't successful in our first attempt. And I don't think that the above solution is as likely to result in that sort of outcome.

So for me it's a dilemma. Going in the consumer direction has the potential to do good but potentially at the expense of generating the sort of revenue or exit I feel would satisfy those who joined the team. Trying to find a way to monetize it in the enterprise space could satisfy that compensation of team members but likely comes at the exclusion of offering a free consumer product long term. Both have the potential to fail even if I pursue them aggressively.

So I am wondering if anyone has any advice or observations I may want to consider as I try to figure out what to do. Thanks.

You could try some of the open source business models.

http://www.zdnet.com/article/11-open-source-business-models/

Completely agree that open sourcing the software can be very good for the business (I'm a little biased though).

Think of OSS as an entry into the market - you get exposure, feedback and community (if you actively invest into building it). If your software creates value for enterprises, they will pay you anyway because they need commercial support and some sort of warranty and reliability.

Check out https://www.minohubs.com/ (disclaimer: I'm a co-founder). We help open source developers to monetize and fund their projects.

I spent quite a bit of time thinking about a security startup of my own recently and talked to a single investor about it. The wisdom seems to be that the consumer market for security products is a pretty hard one to be in. You can probably make some amount of money as AV & Password managers show, and there are business models that make money on the backend through data, but the prices people are willing to pay are pretty low and you're battling against whatever your customer acquisition cost is.

Personally, I threw out my thoughts of doing anything in the consumer space after writing down some basic numbers of what revenue, customer acquisition cost, etc would have to look like for me to consider it a success. The enterprise space seems a lot easier since I work as a security engineer and have a lot of contacts in the field, but I can see how it would be a lot harder without it. But if the tech is good you should be able to convince someone with connections to come on board and help you sell.

I don't think having an enterprise offering necessarily precludes having a consumer version (enterprises need mgmt features and are generally willing to pay), though it will obviously not be the focus of your company and your tech may morph over time as you align yourself closer with enterprises, but unless you're willing to spend money up front on customer acquisition and charge the customers more than that, you're always going to just be subsidising a free version that most people don't really know about and your real focus will be elsewhere.

I put an email in my profile if you want to talk about it at more length.

Thanks for your reply, and sorry for the delay in mine. I would be happy to speak with you in more detail if you'd like (I can also share my experiences with you in case they are of value to you should you pursue a security startup of your own). I did not find an email address in your profile however.

Hmm, I can't figure out what HN wants before it will show my email; anyway, ping me at eridrus@gmail.com if you have some time, I'd love to find out more.

I have your email address now, so feel free to edit it out of the post. Thanks.

Thank you everyone for your responses.

@razeonex @bestan

I have considered the Open Source route, but I do believe it basically closes the door on compensating contributors sufficiently. If the software gained any traction, other security companies would simply integrate the functionality into their own offerings with full access to the source code. Even restricting use fro re-sale would offer little practical protection as litigating a company for violating the terms would be prohibitively expensive. It is something I would strongly consider if I didn't feel a sense of obligation to others to compensate their work to this point.

@Carbide

I am a rather firm believer that, particularly in a space that is traditionally as conservative as IT Security, software startups need to have founders or investors who have direct influence into other organizations to land early adopters. As you mentioned, once you have a few marquee customers it gets easier. But our lack of experience and connections have hurt us there. As a point of clarification, I don't have interest into selling to consumers, only giving the software away for free to them to do some good with the technology.

I don't know if going the OSS route would help -- in fact I significantly doubt it. What kind of a sales team do you have? That's more important than your tech, a good salesman can sell junk.. a technology guy might not be able to sell the best piece of tech out there for a penny because you just don't know how.

Do you have someone who can do cold calls? If you're after the home consumer do you have someone that can go door to door? It's even viable in today's age. What have you done for local advertising? Once you start getting some customers it's a lot easier to get more.

Remember, you can always change your business model. Do what's right for now right now and adapt for the future to do what you really want to do.

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