As usual, I couldn't agree more with the vast majority and spirit of your post.
I still have a nit to pick with the "customers vote with their cash" point, which you also raised earlier in saying too many entrepreneurs give their product away in the early stages when they could be charging for it. Obviously you're right for many cases. But I do think there's something to be said for mind share, buzz, word-of-mouth type stuff that spreads more easily to more people when the service is free. I have to organize my thoughts on this topic and blog about it in more detail one day.
It's also fairly impressive how this blog is not regularly in the reddit hits ;)
Also, s/impossible/difficult in "the process is difficult to completely plan for" above ;)
I do indeed have a bias for cash (vs. other forms of customer value). Though, I do recognize that there are alternative models for value creation and other ways to get "signals" from the market.
Will plan to write about this as a follow-up to my prior article on giving software away for free. Now that I've had a chance to vent a bit, will take a more balanced (and thoughtful) view in the follow-up article.
Maybe I'm misunderstanding but although the tite says 'agile' doesn't all that upfront reqs and design work seem tad more like 'waterfall''?
"You can start a software business without raising funding, and you can raise funding without writing a business plan"
Dharmesh: I agree with #1. How about #2-- do you personally know of any VC who would fund your company without seeing a business plan or better yet, would you fund my company without a business plan?
On point #2 (raising money without a business plan), I would answer yes and yes to both questions.
Yes: I know of many companies that have been funded without a formal business plan.
Yes: I would fund a company (and have) that did not have a business plan.
When possible, investors would rather fund businesses (than business plans). The business plan is one "signal" that you have done some work and thought things through. But, show me a company with a product, some revenues and a vision, and the business plan is not meaningful.
Put a different way - if you're going to run a small business to compete with the big boys, take advantage of being a small business! Agility, speed, customer service, making hay from the small-scale, low-cost methods that are not available to the big guys because the methods themselves are too small for the big guys to profitably exploit.
Pit your strength against weakness. That's now David - armed with a sling and dead aim - beat Goliath's club.
JC Levinson writes on this a lot - his Guerrilla Marketing books should be required reading for entrepreneurs.
Great article...would love to see more ideas like this. They are really motivating and informative.
What a great 'mashup' post. I've been running my businesses using many of the same agile ideas that I learned as a software developer. I can relate to these ideas very well.
I hadn't thought of this before. It's a good article.
The one tiny reservation is that I'd add a caveat that "being agile" isn't as important as "being successful". Too many developers-turned-entrepreneurs like to choose business opinions first and then force their efforts/company to fit the opinion. For example, many people tend to decide that they want/hate VCs first rather than looking at their company and business and THEN deciding that they want/hate VCs.
Maybe an additional thing could be: "We are open to all possibilities, then we narrow our choices based on facts, estimates and analysis."
Pleace sned to me the free businessplan models