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typeof="mw:File"><span><img alt="" src="//upload.wikimedia.org/wikipedia/en/thumb/b/b4/Ambox_important.svg/40px-Ambox_important.svg.png" decoding="async" width="40" height="40" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/en/thumb/b/b4/Ambox_important.svg/60px-Ambox_important.svg.png 1.5x, //upload.wikimedia.org/wikipedia/en/thumb/b/b4/Ambox_important.svg/80px-Ambox_important.svg.png 2x" data-file-width="40" data-file-height="40" /></span></span></div></td><td class="mbox-text"><div class="mbox-text-span"><div class="multiple-issues-text mw-collapsible"><b>This article has multiple issues.</b> Please help <b><a href="/wiki/Special:EditPage/Software_entrepreneurship" title="Special:EditPage/Software entrepreneurship">improve it</a></b> or discuss these issues on the <b><a href="/wiki/Talk:Software_entrepreneurship" title="Talk:Software entrepreneurship">talk page</a></b>. <small><i>(<a href="/wiki/Help:Maintenance_template_removal" title="Help:Maintenance template 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href="/wiki/Wikipedia:No_original_research#Synthesis_of_published_material" title="Wikipedia:No original research">synthesis of material</a> that does not <a href="/wiki/Wikipedia:Verifiability" title="Wikipedia:Verifiability">verifiably mention</a> or <a href="/wiki/Wikipedia:Content_removal#Irrelevant_information" title="Wikipedia:Content removal">relate</a> to the main topic.</b><span class="hide-when-compact"> Relevant discussion may be found on the <a href="/wiki/Talk:Software_entrepreneurship##" title="Talk:Software entrepreneurship">talk page</a>.</span> <span class="date-container"><i>(<span class="date">March 2009</span>)</i></span><span class="hide-when-compact"><i> (<small><a href="/wiki/Help:Maintenance_template_removal" title="Help:Maintenance template removal">Learn how and when to remove this message</a></small>)</i></span></div></td></tr></tbody></table> <link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1251242444"><table class="box-More_citations_needed plainlinks metadata ambox ambox-content ambox-Refimprove" role="presentation"><tbody><tr><td class="mbox-image"><div class="mbox-image-div"><span typeof="mw:File"><a href="/wiki/File:Question_book-new.svg" class="mw-file-description"><img alt="" src="//upload.wikimedia.org/wikipedia/en/thumb/9/99/Question_book-new.svg/50px-Question_book-new.svg.png" decoding="async" width="50" height="39" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/en/thumb/9/99/Question_book-new.svg/75px-Question_book-new.svg.png 1.5x, //upload.wikimedia.org/wikipedia/en/thumb/9/99/Question_book-new.svg/100px-Question_book-new.svg.png 2x" data-file-width="512" data-file-height="399" /></a></span></div></td><td class="mbox-text"><div class="mbox-text-span">This article <b>needs additional citations for <a href="/wiki/Wikipedia:Verifiability" title="Wikipedia:Verifiability">verification</a></b>.<span class="hide-when-compact"> Please help <a href="/wiki/Special:EditPage/Software_entrepreneurship" title="Special:EditPage/Software entrepreneurship">improve this article</a> by <a href="/wiki/Help:Referencing_for_beginners" title="Help:Referencing for beginners">adding citations to reliable sources</a>. Unsourced material may be challenged and removed.<br /><small><span class="plainlinks"><i>Find sources:</i> <a rel="nofollow" class="external text" href="https://www.google.com/search?as_eq=wikipedia&q=%22Software+entrepreneurship%22">"Software entrepreneurship"</a> – <a rel="nofollow" class="external text" href="https://www.google.com/search?tbm=nws&q=%22Software+entrepreneurship%22+-wikipedia&tbs=ar:1">news</a> <b>·</b> <a rel="nofollow" class="external text" href="https://www.google.com/search?&q=%22Software+entrepreneurship%22&tbs=bkt:s&tbm=bks">newspapers</a> <b>·</b> <a rel="nofollow" class="external text" href="https://www.google.com/search?tbs=bks:1&q=%22Software+entrepreneurship%22+-wikipedia">books</a> <b>·</b> <a rel="nofollow" class="external text" href="https://scholar.google.com/scholar?q=%22Software+entrepreneurship%22">scholar</a> <b>·</b> <a rel="nofollow" class="external text" href="https://www.jstor.org/action/doBasicSearch?Query=%22Software+entrepreneurship%22&acc=on&wc=on">JSTOR</a></span></small></span> <span class="date-container"><i>(<span class="date">March 2009</span>)</i></span><span class="hide-when-compact"><i> (<small><a href="/wiki/Help:Maintenance_template_removal" title="Help:Maintenance template removal">Learn how and when to remove this message</a></small>)</i></span></div></td></tr></tbody></table> <link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1251242444"><table class="box-Essay-like plainlinks metadata ambox ambox-style ambox-essay-like" role="presentation"><tbody><tr><td class="mbox-image"><div class="mbox-image-div"><span typeof="mw:File"><span><img alt="" src="//upload.wikimedia.org/wikipedia/en/thumb/f/f2/Edit-clear.svg/40px-Edit-clear.svg.png" decoding="async" width="40" height="40" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/en/thumb/f/f2/Edit-clear.svg/60px-Edit-clear.svg.png 1.5x, //upload.wikimedia.org/wikipedia/en/thumb/f/f2/Edit-clear.svg/80px-Edit-clear.svg.png 2x" data-file-width="48" data-file-height="48" /></span></span></div></td><td class="mbox-text"><div class="mbox-text-span">This article <b>is written like a <a href="/wiki/Wikipedia:What_Wikipedia_is_not#Wikipedia_is_not_a_publisher_of_original_thought" title="Wikipedia:What Wikipedia is not">personal reflection, personal essay, or argumentative essay</a></b> that states a Wikipedia editor's personal feelings or presents an original argument about a topic.<span class="hide-when-compact"> Please <a class="external text" href="https://en.wikipedia.org/w/index.php?title=Software_entrepreneurship&action=edit">help improve it</a> by rewriting it in an <a href="/wiki/Wikipedia:Writing_better_articles#Information_style_and_tone" title="Wikipedia:Writing better articles">encyclopedic style</a>.</span> <span class="date-container"><i>(<span class="date">March 2009</span>)</i></span><span class="hide-when-compact"><i> (<small><a href="/wiki/Help:Maintenance_template_removal" title="Help:Maintenance template removal">Learn how and when to remove this message</a></small>)</i></span></div></td></tr></tbody></table> </div> </div><span class="hide-when-compact"><i> (<small><a href="/wiki/Help:Maintenance_template_removal" title="Help:Maintenance template removal">Learn how and when to remove this message</a></small>)</i></span></div></td></tr></tbody></table> <p><b>Software entrepreneurship</b> has a different set of developing strategies than other business start-ups. The development of software, a digital "soft" good, involves different <a href="/wiki/Business_models" class="mw-redirect" title="Business models">business models</a>, product strategy, people management, and development plan compared to the traditional manufacturing and service industries. For example in the software business, making one or ten million copies of a product cost about the same. Furthermore, the productivity difference between a good and bad employee is ten to twentyfold. As well, software projects tolerate 80 percent lateness and ongoing design changes on a regular basis.<sup id="cite_ref-1" class="reference"><a href="#cite_note-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> </p><p>Software entrepreneurship involves a broad range of businesses; from helping people plan daily events to controlling a space shuttle. There are mainly three kinds of software businesses: products, services and content business such as Wikipedia. </p> <meta property="mw:PageProp/toc" /> <div class="mw-heading mw-heading2"><h2 id="Products_Versus_Services">Products Versus Services</h2></div> <p>The first thing software entrepreneurs should understand is the difference and the interrelationship between products and services business. The software product business is about selling licensed packages to customers. These products help solve a user pain and have potential for growth and profits. One advantage of starting up in this direction is the ability to attract stock market investors and venture capitalists for funding. This business also enjoys enormous economies of scale in selling multiple copies of the same software. The downside of creating products is that software sales are subject to fluctuations. Sales will drop drastically in economic recessions. </p><p>The service business involves creating applications for clients that tailor to their business needs. This includes the maintenance of software products they have purchased before. One advantage of service business is that long-term customer contracts can allow the company to survive rough economic times. The downside is that the business needs to attract enough clients to keep developers and consultants busy. </p><p>Software companies can also develop a hybrid solution involving a mixture of products and services.<sup id="cite_ref-2" class="reference"><a href="#cite_note-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> In this case, solutions are sold to clients that require extensive customization. Approximately 20 to 50 percent of coding is required for each individual client. Customers purchasing this type of IT solution usually do not switch vendors for long periods of time.<sup id="cite_ref-3" class="reference"><a href="#cite_note-3"><span class="cite-bracket">[</span>3<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="Funding">Funding</h2></div> <link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1251242444"><table class="box-Empty_section plainlinks metadata ambox mbox-small-left ambox-content" role="presentation"><tbody><tr><td class="mbox-image"><span typeof="mw:File"><a href="/wiki/File:Wiki_letter_w_cropped.svg" class="mw-file-description"><img alt="[icon]" src="//upload.wikimedia.org/wikipedia/commons/thumb/1/1c/Wiki_letter_w_cropped.svg/20px-Wiki_letter_w_cropped.svg.png" decoding="async" width="20" height="14" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/1/1c/Wiki_letter_w_cropped.svg/30px-Wiki_letter_w_cropped.svg.png 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/1/1c/Wiki_letter_w_cropped.svg/40px-Wiki_letter_w_cropped.svg.png 2x" data-file-width="44" data-file-height="31" /></a></span></td><td class="mbox-text"><div class="mbox-text-span"><b>This section is empty.</b> You can help by <a class="external text" href="https://en.wikipedia.org/w/index.php?title=Software_entrepreneurship&action=edit&section=">adding to it</a>. <span class="date-container"><i>(<span class="date">September 2018</span>)</i></span></div></td></tr></tbody></table><p> Funding is done by corporate professionals who are at high level management & cannot leave Job and take the career risk. They are well settled with their high paying jobs. They are interested in business, but do not possess personality of a businessman. At the same time want to engage in business. They can become passive partner, shareholder or investor (isafe notes is an instrument to invest without becoming partner/shareholder) and infuse capital. </p><p>These people invest to make money (The dirty but sole objective of business) </p> <div class="mw-heading mw-heading2"><h2 id="Bank_Financing">Bank Financing</h2></div> <p>This is practically an impossible method as the bank requires security and personal loan guarantees.<sup class="noprint Inline-Template Template-Fact" style="white-space:nowrap;">[<i><a href="/wiki/Wikipedia:Citation_needed" title="Wikipedia:Citation needed"><span title="This claim needs references to reliable sources. (September 2018)">citation needed</span></a></i>]</sup> </p> <div class="mw-heading mw-heading3"><h3 id="Government_Aid">Government Aid</h3></div> <p>Governments usually give out non-repayable grants to encourage start-ups. There are also investment tax credits that can be claimed. One thing to be careful about government aid is the lengthy procedures that may be required before obtaining the funds. </p> <div class="mw-heading mw-heading3"><h3 id="Venture_Capital">Venture Capital</h3></div> <p><a href="/wiki/Venture_capital" title="Venture capital">Venture capital</a> is risk capital invested into a start-up company at its early stages. Venture capitalists usually invest in start-ups that already have a relatively developed software product and some early sales. They look for products that have a large potential in a growing market with a competitive edge.<sup id="cite_ref-4" class="reference"><a href="#cite_note-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup> </p><p>Venture capital help offers a large sum of money and often assistance in managing the company. People with software start-up experiences are available for mentoring. There are also help available in assisting the process of going public. </p> <div class="mw-heading mw-heading2"><h2 id="See_also">See also</h2></div> <ul><li><a href="/wiki/Entrepreneurship" title="Entrepreneurship">Entrepreneurship</a></li> <li><a href="/wiki/Entrepreneurs" class="mw-redirect" title="Entrepreneurs">Entrepreneurs</a></li></ul> <div class="mw-heading mw-heading2"><h2 id="References">References</h2></div> <style data-mw-deduplicate="TemplateStyles:r1239543626">.mw-parser-output .reflist{margin-bottom:0.5em;list-style-type:decimal}@media screen{.mw-parser-output .reflist{font-size:90%}}.mw-parser-output .reflist .references{font-size:100%;margin-bottom:0;list-style-type:inherit}.mw-parser-output .reflist-columns-2{column-width:30em}.mw-parser-output .reflist-columns-3{column-width:25em}.mw-parser-output .reflist-columns{margin-top:0.3em}.mw-parser-output .reflist-columns ol{margin-top:0}.mw-parser-output .reflist-columns li{page-break-inside:avoid;break-inside:avoid-column}.mw-parser-output .reflist-upper-alpha{list-style-type:upper-alpha}.mw-parser-output .reflist-upper-roman{list-style-type:upper-roman}.mw-parser-output .reflist-lower-alpha{list-style-type:lower-alpha}.mw-parser-output .reflist-lower-greek{list-style-type:lower-greek}.mw-parser-output .reflist-lower-roman{list-style-type:lower-roman}</style><div class="reflist"> <div class="mw-references-wrap"><ol class="references"> <li id="cite_note-1"><span class="mw-cite-backlink"><b><a href="#cite_ref-1">^</a></b></span> <span class="reference-text">Cusumano, Michael A. The Business of Software. New York: Free Press, 2004</span> </li> <li id="cite_note-2"><span class="mw-cite-backlink"><b><a href="#cite_ref-2">^</a></b></span> <span class="reference-text"><style data-mw-deduplicate="TemplateStyles:r1238218222">.mw-parser-output cite.citation{font-style:inherit;word-wrap:break-word}.mw-parser-output .citation q{quotes:"\"""\"""'""'"}.mw-parser-output .citation:target{background-color:rgba(0,127,255,0.133)}.mw-parser-output .id-lock-free.id-lock-free a{background:url("//upload.wikimedia.org/wikipedia/commons/6/65/Lock-green.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-limited.id-lock-limited a,.mw-parser-output .id-lock-registration.id-lock-registration a{background:url("//upload.wikimedia.org/wikipedia/commons/d/d6/Lock-gray-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-subscription.id-lock-subscription a{background:url("//upload.wikimedia.org/wikipedia/commons/a/aa/Lock-red-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .cs1-ws-icon a{background:url("//upload.wikimedia.org/wikipedia/commons/4/4c/Wikisource-logo.svg")right 0.1em center/12px no-repeat}body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-free a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-limited a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-registration a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-subscription a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .cs1-ws-icon a{background-size:contain;padding:0 1em 0 0}.mw-parser-output .cs1-code{color:inherit;background:inherit;border:none;padding:inherit}.mw-parser-output .cs1-hidden-error{display:none;color:var(--color-error,#d33)}.mw-parser-output .cs1-visible-error{color:var(--color-error,#d33)}.mw-parser-output .cs1-maint{display:none;color:#085;margin-left:0.3em}.mw-parser-output .cs1-kern-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right{padding-right:0.2em}.mw-parser-output .citation .mw-selflink{font-weight:inherit}@media screen{.mw-parser-output .cs1-format{font-size:95%}html.skin-theme-clientpref-night .mw-parser-output .cs1-maint{color:#18911f}}@media screen and (prefers-color-scheme:dark){html.skin-theme-clientpref-os .mw-parser-output .cs1-maint{color:#18911f}}</style><cite id="CITEREFKarl_M._Popp2011" class="citation book cs1">Karl M. Popp (2011). <i>Advances in software economics: A reader on business models and Partner Ecosystems in the software industry</i>. Norderstedt, Germany: BOD. <a href="/wiki/ISBN_(identifier)" class="mw-redirect" title="ISBN (identifier)">ISBN</a> <a href="/wiki/Special:BookSources/978-3-8448-0405-8" title="Special:BookSources/978-3-8448-0405-8"><bdi>978-3-8448-0405-8</bdi></a>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Abook&rft.genre=book&rft.btitle=Advances+in+software+economics%3A+A+reader+on+business+models+and+Partner+Ecosystems+in+the+software+industry&rft.place=Norderstedt%2C+Germany&rft.pub=BOD&rft.date=2011&rft.isbn=978-3-8448-0405-8&rft.au=Karl+M.+Popp&rfr_id=info%3Asid%2Fen.wikipedia.org%3ASoftware+entrepreneurship" class="Z3988"></span></span> </li> <li id="cite_note-3"><span class="mw-cite-backlink"><b><a href="#cite_ref-3">^</a></b></span> <span class="reference-text">Cusumano, Michael A. The Business of Software. New York: Free Press, 2004</span> </li> <li id="cite_note-4"><span class="mw-cite-backlink"><b><a href="#cite_ref-4">^</a></b></span> <span class="reference-text">Kawasaki, Guy. The Art of the Start. England: Penguin Books Ltd, 2004</span> </li> </ol></div></div>    </div><noscript><img src="https://login.wikimedia.org/wiki/Special:CentralAutoLogin/start?useformat=desktop&type=1x1&usesul3=0" alt="" width="1" height="1" style="border: none; position: absolute;"></noscript> <div class="printfooter" data-nosnippet="">Retrieved from "<a dir="ltr" href="https://en.wikipedia.org/w/index.php?title=Software_entrepreneurship&oldid=1177810443">https://en.wikipedia.org/w/index.php?title=Software_entrepreneurship&oldid=1177810443</a>"</div></div> <div id="catlinks" class="catlinks" data-mw="interface"><div id="mw-normal-catlinks" class="mw-normal-catlinks"><a href="/wiki/Help:Category" title="Help:Category">Categories</a>: <ul><li><a href="/wiki/Category:Software_industry" title="Category:Software industry">Software industry</a></li><li><a href="/wiki/Category:Entrepreneurship" title="Category:Entrepreneurship">Entrepreneurship</a></li></ul></div><div id="mw-hidden-catlinks" class="mw-hidden-catlinks mw-hidden-cats-hidden">Hidden categories: <ul><li><a href="/wiki/Category:Articles_that_may_contain_original_research_from_March_2009" title="Category:Articles that may contain original research from March 2009">Articles that may contain original research from March 2009</a></li><li><a href="/wiki/Category:Articles_needing_additional_references_from_March_2009" title="Category:Articles needing additional references from March 2009">Articles needing additional references from March 2009</a></li><li><a href="/wiki/Category:All_articles_needing_additional_references" title="Category:All articles needing additional references">All articles needing additional references</a></li><li><a href="/wiki/Category:Wikipedia_articles_with_style_issues_from_March_2009" title="Category:Wikipedia articles with style issues from March 2009">Wikipedia articles with style issues from March 2009</a></li><li><a href="/wiki/Category:All_articles_with_style_issues" title="Category:All articles with style issues">All articles with style issues</a></li><li><a href="/wiki/Category:Articles_with_multiple_maintenance_issues" title="Category:Articles with multiple maintenance issues">Articles with multiple maintenance issues</a></li><li><a href="/wiki/Category:Articles_to_be_expanded_from_September_2018" title="Category:Articles to be expanded from September 2018">Articles to be expanded from September 2018</a></li><li><a href="/wiki/Category:All_articles_to_be_expanded" title="Category:All articles to be expanded">All articles to be expanded</a></li><li><a href="/wiki/Category:Articles_with_empty_sections_from_September_2018" title="Category:Articles with empty sections from September 2018">Articles with empty sections from September 2018</a></li><li><a href="/wiki/Category:All_articles_with_empty_sections" title="Category:All articles with empty sections">All articles with empty sections</a></li><li><a href="/wiki/Category:All_articles_with_unsourced_statements" title="Category:All articles with unsourced statements">All articles with unsourced statements</a></li><li><a href="/wiki/Category:Articles_with_unsourced_statements_from_September_2018" title="Category:Articles with unsourced statements from September 2018">Articles with unsourced statements from September 2018</a></li></ul></div></div> </div> </main> </div> <div class="mw-footer-container"> <footer id="footer" class="mw-footer" > <ul id="footer-info"> <li id="footer-info-lastmod"> This page was last edited on 29 September 2023, at 18:47<span class="anonymous-show"> (UTC)</span>.</li> <li id="footer-info-copyright">Text is available under the <a href="/wiki/Wikipedia:Text_of_the_Creative_Commons_Attribution-ShareAlike_4.0_International_License" title="Wikipedia:Text of the Creative Commons Attribution-ShareAlike 4.0 International License">Creative Commons Attribution-ShareAlike 4.0 License</a>; additional terms may apply. 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