Starting a Tech Business: A Practical Guide for Anyone Creating or Designing Applications or Software

Focus, Focus, Focus

Prospective customers and partners will start to bring you proposals once you get on the map and many of these will be outside your core strategy. It's easy to say yes, especially when money is attached. So, how do you decide when to sign and when to pass? It's easy to say, “I'm sticking to my knitting.” In other words, don't dilute your core strategy. But you might need the money and this might be the market speaking to you about what you should be doing.

Here are a few minimum qualifying questions you should make sure to answer explicitly:

• How do the numbers look?

  What is the initial and ongoing expense of the project versus the revenue attached? Roughly, how do these shake out over time? Work with your technical team to determine a way to make a coarse estimate without taking up a lot of their time. The engineer's inclination will usually be to make a detailed analysis. However, this can absorb huge amounts of key engineering time and will probably be more than you need for the first-order decision making. Don't underestimate the expense of maintaining what you build.

• How far off the path are you going?

  In other words, does the technical and operational infrastructure you have to execute for this deal diverge substantially from your core strategy? Is it 100 percent different than your current plan? Does some of the new infrastructure serve your current strategy?

• What is the extended opportunity?

  What other opportunities would building new infrastructure ...