Building a Software Company from Scratch

By Art Reisman, CEO, CTO, and Co-founder, APconnections, Inc.

At APconnections, our flagship product, NetEqualizer, is a traffic management and WAN optimization tool. Rather than using compression and caching techniques, NetEqualizer analyzes connections and then doles out bandwidth to them based on preset rules. We look at every connection on the network and compare it to the overall trunk size to determine how to eliminate congestion on the links. NetEqualizer also prevents peer-to-peer traffic from slowing down higher-priority application traffic without shutting down those connections.

When we started the company, we had lots of time, very little cash, some software development skills, and a technology idea. This article covers a couple of bootstrapping pearls that we learned to implement by doing.

Don't be Afraid to Use Open Source

Using open source technology to develop and commercialize new application software can be an invaluable bootstrapping tool for startup entrepreneurs. It has allowed us to validate new technology with a willing set of early adopters who, in turn, provided us with references and debugging.

We used this huge number of early adopters, who love to try open source applications, to legitimize our application. Further, this large set of commercial "installs" helped us ring out many of the bugs by users who have no grounds to demand perfection.

In addition, we jump-started our products without incurring large development expense. We used open source by starting with technology already in place and extending it, rather than building (or licensing) every piece from scratch.

Using open source code makes at least a portion of our technology publicly available. We use bundling, documentation, and proprietary extensions to make it difficult for larger players to steal our thunder. These will account for over half of development work but can be protected by copyright.

Afraid of copycats? In many cases, nothing could be better than to have a large player copy you. Big players value time to market. If one player clones your work, another may acquire your company to catch up in the market.

The transition from open source users to paying customers is a big jump, requiring traditional sales and marketing. Don't expect your loyal base of open source beta users to start paying for your product. We use testimonials from this critical mass of users to market to paying customers who are reluctant to be early adopters (see below).

Channels? Use Direct Selling and the Web

Our innovation is a bit of a stretch from existing products and, like most innovations, requires some education of the user. Much of the early advice we received related to picking a sales channel. Just signup reps, resellers, and distributors and revenues will grow.

We found the exact opposite to be true. Priming channels is expensive. And, after we pointed the sales channel at customers, closing the sale and supporting the customer fell back on us anyway. Direct selling is not the path to rapid growth. But as a bootstrapping tool direct selling has rewarded us with loyal customers, better margins, and many fewer returns.

We use the Internet to generate hot leads, but we don't worry about our Google ranking. They key for us is to get every satisfied customer to post somethig about our product. It probably hasn't improved our Google ratings but customer comments have surely improved our credibility.

Honest postings to blogs and user groups have significant influence on potential customers. We explain to each customer how important their posting is to our company. We often provide them with a link to a user group or appropriate blog. And, as you know, these blogs stay around forever. Then, when we encounter new potential customers, we suggest that they Google our "brand name" and blog, which always generates a slew of believable testimonials. (Check out our Web site to see some of the ways they use testimonials.)

Using open source code and direct sales are surely out-of-step with popular ideas for growing technology companies, especially those funded by equity investors. But they worked very well for us as we grew our company with limited resources to positive cash flow and beyond.

Small players trump big broadband rivals

By Jennifer Hill

LONDON (Reuters) - Small players in the broadband market are trumping their larger rivals in the customer satisfaction stakes, a study shows.

The four overall best providers are Be Broadband, Eclipse, Namesco and Madasafish, with each receiving scores of nine out of 10, according to an independent study that gauges users' views on customer service, technical support, speed, billing and reliability.

To read on, click here.

Bandwidth Shaping & Network Neutrality

As the debate over net neutrality continues, it has become clear that the issue is very polarized. Unfortunately, this often paints the issue in very extreme colors. For some, the fight for net neutrality has become a defense against the infringement of First Amendment rights and any type of bandwidth shaping/traffic management is despised.

While I don't like the idea of ISPs slowing or blocking traffic to different Web sites (especially a competitor's), I also have experienced the downsides of a network overrun by P2P traffic. This is an especially prevalent issue for smaller networks and independent ISPs. If everyone is paying the same price for access, there's no reason that certain users should affect the access of others. Just as advocates of net neutrality (and critics of bandwidth shaping) claim traffic management impedes one's ability to use the Internet freely, the same argument can be used to support shaping. If customers A-C are allowed to utilize as much bandwidth as they want while they download music and movies, customers D-Z in many cases can no longer use the Internet unimpeded. It's a double-edged sword.

So, for smaller networks and providers, net neutrality may actually allow what it's ostensibly trying to prevent. But, is there any way for large-scale traffic shaping on a file-type basis rather than monitoring content?

Any thoughts?

Dell may offer Linux as alternative to Windows - Any thoughts?

Dell Inc. is considering offering the Linux operating system as an alternative to Microsoft Corp.'s Windows on its personal computers, a Dell spokesman said on Tuesday.

The PC maker said it received more than 100,000 customer requests for Linux in a "suggestion box" posted on Dell's Web site less than three weeks ago.

"We are listening to what customers are saying about Linux and taking it into consideration," said Dell spokesman David Lord. "We are going forward. Let's say, 'Certainly stay tuned."'

Linux is an open-source operating system that is generally available for free and can be used to run most computers, including Dell's PCs.

Dell does not break out how much it charges for Windows when it calculates the cost of a computer system, but a basic upgrade version of the software generally retails for $99.

The only operating system that Dell currently offers on its PCs is Windows, with one exception, Lord said. It sells high-end Linux desktops designed specifically for use in oil and gas exploration, he said.

Making Linux available on other Dell PCs has been the top request since the Web site was launched on February 16, according to data posted on the site, as of Tuesday evening.

The second most popular request was that Dell offer another popular free software title, OpenOffice, which competes with Microsoft Office programs including Word, Excel and PowerPoint.

(Article courtesy of Reuters and originally posted on Yahoo! News)

What the blog is all about...

I started this in hopes of creating an informal forum for those of us who are some how connected to providing internet access. This could be as an IT person, independent ISP, or pretty much anything else related to internet service. While I've seen (and been part of) plenty of listservs, I've had a hard time finding a place easily accessible to everyone. I invite discussions of pretty much anything related to what we do. Anyone can post and anyone can respond. Hopefully this will work out.