Software Products as a Service?

[Mr.Donnerhuhn]

Hey everyone,

I want to build a business that offers subscribers a wide variety of software products for a specific niche and in order to pull this off I figure I need a few basic things:

-Third-party developers willing to offer their products up through my service

-Something akin to an API for the developers to implement in their code to make the service work, functionally

Now the API I can pretty much handle, I know a guy who's a great coder that could handle that sort of implementation. My question is how can get the third-party developers interested in offering their product when I don't have an existing customer base, and not a TON of solid evidence of validation to show them?

Tips on building business validation, I think might be my core question.

 

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[Andrew Ward]

Convincing should be easy.

Are there any costs to the third party software provider? No; Is the risk of the relationship low? Yes; Is there a chance of making extra sales? Yes;

You are selling the benefit of a potential new and free revenue stream to them at no cost.

You should be able to just sell it on the idea. Get some small players involved first then use them as an example when selling the idea to bigger ones.

Sent from my Nexus 6 using Tapatalk

 

[Mr.Donnerhuhn]

Well that's something that is still a bit up in the air: the cost of implementation to the third party developers.

It's possible that it will cost them nothing more than just adding a few lines of code to their source code, but there is a possibility that the code we write will have a difficult time working in conjunction with the licensing/registration systems of their products. I don't imagine that will be a HUGE problem, but it could add a bit more costs to their shoulders. That shouldn't end up as a make-or-break issue.

In negotiating with early developers should I offer an incentive up-front, or just a percentage of whatever the company makes, presumably on an annual or other recurring schedule?

 

[Andrew Ward]

Well that's something that is still a bit up in the air: the cost of implementation to the third party developers.

It's possible that it will cost them nothing more than just adding a few lines of code to their source code, but there is a possibility that the code we write will have a difficult time working in conjunction with the licensing/registration systems of their products. I don't imagine that will be a HUGE problem, but it could add a bit more costs to their shoulders. That shouldn't end up as a make-or-break issue.

In negotiating with early developers should I offer an incentive up-front, or just a percentage of whatever the company makes, presumably on an annual or other recurring schedule?

Ultimately you need to construct an offer that is attractive to both parties. Bear in mind if you leave it too long to tell them you plan on working based on an equity stake then they may be annoyed you didn't tell them earlier. Just make sure you can sell the concept and idea of becoming a partner with you early on.

 

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