Wisdom Is Earned: highs and lows of going it alone with a small business
James Holland talked with Graham Smith of Wiseman Designs on the highs and lows of going it alone with your own small business.
Hi Graham, how did you come to start Wiseman designs?
The idea came about in 2011. A friend and I had both left University and having had pretty good years out in industry we felt that we had the knowledge to start our own software design firm. At the time Android technology was still relatively new and unknown. Most people felt they only had the choice between Apple and Blackberry and weren’t necessarily a fan of one or the other. We saw the potential of Android to be a serious competitor and it helped that we’d come across the platform during University work. Both myself and Richard, my business partner, had offers of employment from other media and petroleum companies. The turning point came when, during my YINI (year in industry), I had worked for an agency that worked closely with a major airport. I went back to that company and offered to make an Android app. We were also lucky – as we pushed Android, manufacturers started to do the same. Additionally, Android has a large development community that we were keen to utilise, through knowledge sharing and insights.
What kind of projects have you engaged in over the years?
All sorts! We’ve worked with companies ranging from the very small to multinational corporations. I can’t name too many of the larger ones for non-disclosure agreement reasons but one did include a large automobile manufacturer. We did some interesting work for an app that let users rent out their parking spaces in London when they weren’t using them.
What advice would you offer to potential customers looking for an IT company to make them an app?
Basically, there are three main options for the customer. Firstly, you can build a native app from the ground up which is a tailor made product and is obviously usually going to be the most expensive route but one that offers great customization & performance. The second way is to make an app by basically packaging up a web page but, as you probably know yourself, this often results in a second rate experience for the user. Finally, we created a modular, native solution, of making apps. Essentially, we offered customers a shop window of parts that we could help them package into a finished product. Think of it say, as building a great car from parts of a Lamborghini, the engine from a Ferrari and the wheels from a Lotus. We had about 30% of our customers using the modular approach and the rest on bespoke solutions due to the nature of the project.
Do you have any advice for app developers as far as the actual building of apps?
Bear in mind that not everything necessarily needs an app. The slogan ‘There’s an app for that’ used to be particularly annoying to me as they don’t solve everything. The best apps use the performance of a mobile device to work – think of Pokemon Go for example. If you do think you have an app worth developing you need to bear in mind certain things. Firstly, your publisher will usually take a large cut of sales. Secondly, apps just like movies can carry a PEGI age guidance rating. In America particular apps of an erotic nature are unlikely to be published. Similarly, if your app is featured alongside inappropriate adverts it may be pulled. One of the newest areas that has potential to perform well are apps for the family or education – the reason being that these can be sold again and again due to very large audiences, such as school bulk buying.
The golden goose of software development is to design something that can be sold en masse. There can be a lot less money in one-off bespoke packages and, as with any business, make sure your customers want to keep coming back for more! One of the unique properties of software development is that you have the ability to make money on the same hours of work many times over vs selling a physical product that needs to be created each time.
As far as the app itself goes, you need an easy sign-up process especially if you’re offering a service. Speaking of services, one of the better ideas is to make an app that offers content, such as training courses as these can keep people coming back for further modules and add ons. It also gives you time to develop more whilst the public digests say, chapter one of your course. However, the number one piece of advice that I’d offer to an app developer would be to keep in mind that if your idea may not be patentable and that easy to protect, the set up costs may not be worth developing the product, so look hard and if that product seems viable then look at developing the minimum viable product to get to market sooner rather than later, so that you can theoretically generate some cash flow.
What about business advice for aspiring developers?
Your good intentions may not always translate into success. One of our key values was always going above and beyond the customer's orders. We also would often not take payment until the product was delivered; whilst this meant that we earned lots of loyal customers we also exposed ourselves to serious risk if our client ran into difficulties. Unfortunately, this did happen with a large project and there was little way for us to get paid when the government stepped in to claim their unpaid tax from our client.
So the old adage high risk - high return still hold true?
Of course, but that saying simplifies things too much. It’s not that a series of smaller projects may not yield big results. Furthermore, in larger projects you can protect yourself by various methods. Insurance is good, but a staged payment plan may be even better. Risk is sometimes a necessity but it has to be managed.
Do you have any final advice for SME’s?
If your business does fail, then you can still consider selling it. Your list of contacts and connections can be worth something. You won’t necessarily receive a large amount but it can be significant in helping you recover. You may also need some kind of initial support, that could financial or sometimes just plain emotional (especially when you are are alone). Fortunately for us, Wiseman only took about eighteen months to become self-sufficient but the process is often longer.
I don’t want to sound too negative and put people off but the reality is a large number of small businesses fail. Mitigating for that failure can put you in a better position to do something else. Also, be honest about why you’re running your own business. Many people I know use an SME not for the long term but as a vehicle to enjoy for the short-term, and one day use it to apply for a higher up position in an established firm, based on the experience and insight gained. That’s becoming the new sexy option rather than say just going straight for full employment or internship, largely due to the economic climate and the opportunities it can afford.
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First published on Company Connecting August 2016