Thousands of startup success stories have been told to date and we read about new ones daily. While many of these stories cover a one-year path to developing a viable startup business or ways to promote your business ‘overnight’, very few cover the bare essentials to starting a profitable software business. Let’s cover a few things that no software startup can do without.


We’ve all heard of businesses that “started from scratch” or “bootstrapped” from beginning to market entry, but neither of those claims are ever true. The truth is that financial backing of one type or another is always needed to create any business, especially one that takes months of developing a finished product that can then be sold, such as software.

The first things any software startup must have are a business plan and enough funding to get through the development phase, at the very least. The plan should include things like the period of time and staff necessary to build the product, along with other indispensables like tools, software, space, and supplies. Once the plan and costs are calculated, there are several types of funding to consider, from bootstrapping the whole thing, if the team can handle the expenses, to seeking seed funding or partnering with an established company or incubator.

Development Team

Choosing the right team is perhaps paramount to the success of a software startup. Having a lot of people coming in and out of a startup during the product development phase is what ends most software startup businesses. First, a new software development team must make sure to have all the expertise they’ll need for their product to be ready.

Aside from having a complete dev team, every software startup will also need sales, marketing, and legal experts on board, whether in-house or outsourced, to see their finished and tested product to market. These can be brought on board later, but without a constant, stable, and experienced development team to build and maintain the software, the whole thing will fall dead in the water.


Speaking of additional staff and requirements, legal advisory services are among the first that will be needed to even begin building a software startup. As soon as an idea for a new piece of software comes up, that idea needs to be vetted by legal experts. Creating a piece of software that may be infringing a patent owned by someone else or simply doesn’t comply with the laws in place in the intended market may translate into months or even years of useless work and wasted time.

Thankfully, there are legal and advisory companies that specialize in exactly this sort of thing, as well as mentors in coworking networks and incubators who will offer their advice in this area for free.

Source Code Escrow

This is a two-fold must-have that not too many software startups think off as they’re starting out. Enterprise customers will often insist that there are protections in place in case your startup doesn’t succeed. Source code escrow is a service that protects the software, data, source code, and other documentation necessary from an unexpected and permanent interruption of the software vendor, such as bankruptcy.  If the unforeseen does happen your customer can continue to use the mission critical software you developed for them.

Planning ahead shows your potential enterprise clients that you have thought about their concerns and are willing to do what it takes to earn their business.  This helps ease the mind of companies anxious to work with a young startup which results in a quicker and more successful software license contract.


Once all of the above is in place, it’s time to start preparing for market readiness. And that implies just about as much work as the development of the software did in the first place. Creating a product is one thing, preparing it and launching it into a market is quite another. As a software company develops its product, they also need to be getting ready to actually sell that product to an audience who needs it.

This is where market research, pricing, sales, marketing, customer support, and a plethora of other factors must fall into place to make the company and its product successful. Without all of the elements listed, a software startup remains nothing more than an idea. Before wasting time developing something that will never see the light of day, it’s best to put all of these pieces together and get started right. Even then, there are no guarantees, but there are models that have been proven to work and winging it in a new business just isn’t among those models.

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