Alex Hormozi: Starting a software company is a TERRIBLE F@#$ING IDEA... [TRIGGER WARNING]

Last updated: Jun 16, 2023

The video discusses why starting a software company as an information and service marketer or e-course guru is a bad idea, as it is difficult to create sticky software and compete with experienced software entrepreneurs, and the likelihood of success is low.

This video by Alex Hormozi was published on Apr 4, 2022.
Video length: 10:47.

In this video, Alex Hormozi discusses why starting a software company as an information and service marketer, e-course guru, etc.

is a terrible idea. He explains that many people believe that creating software will make their service company stickier and give them a good multiple upon exit, but in reality, software is not sticky, and it is one of the hardest businesses to get into.

Hormozi argues that unless someone is a hardcore true god in the software world and willing to risk it all, they should not try to create a software company.

  • Starting a software company as an information and service marketer or e-course guru is a bad idea.
  • Software is not sticky, and the likelihood of success is low.
  • People need to be a hardcore true god balls to bones software entrepreneur to succeed in the software business.
  • The future value of a company is based on a discount applied to future sales between now and the day that the company dies, and the likelihood that those sales occur.
  • Software is not a shortcut to success.
  • Most software companies fail because they are not the best on the market, customers complain, and competitors copy the software.
  • Stick to your game, make your service stickier, buy other companies, find affiliate partners, expand your TAM, and make the company you have more valuable.

Starting a software company is a TERRIBLE F@#$ING IDEA... [TRIGGER WARNING] - YouTube

Alex Hormozi: Starting a software company is a TERRIBLE F@#$ING IDEA... [TRIGGER WARNING] 001

Introduction

  • Alex Hormozi warns against starting a software company as an information and service marketer or e-course guru.
  • People think software will make their service company stickier and give them a good multiple upon exit.
  • However, software is not sticky, and the likelihood of success is low.
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Why Starting a Software Company is a Terrible Idea

  • Most people in the info guru space have not had big successful software exits.
  • 99% of people want to continue running their info business and drive it to a software company, which results in a mix of both that is not successful.
  • Software is one of the hardest businesses to get into because it costs money to develop, and people are competing against experienced software entrepreneurs.
  • The likelihood of success is low, and people end up taking their eye off the main game and playing the one in 50 game likelihood of succeeding, which destroys both.
  • The future value of a company is based on a discount applied to future sales between now and the day that the company dies, and the likelihood that those sales occur.
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Why Software is Not Sticky

  • Good software is sticky, but most software is not sticky.
  • People think that introducing software to their service company will make it stickier, but it is not true.
  • Software is one of the hardest businesses to get into, and people need to be really good at software and know a lot about the business.
  • Software churns people out, and if a software has less than or above 10 annual churn, it is just a service business.
  • Unless people are a hardcore true god balls to bones software entrepreneur, they should not risk it to go all in on software.
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Starting a software company is a TERRIBLE F@#$ING IDEA... [TRIGGER WARNING] - YouTube

Why People Want to Start a Software Company

  • People think software will make their service company stickier and give them a good multiple upon exit.
  • People want to continue running their info business and drive it to a software company.
  • People think they can market software like a course and people will stick with it, but it is not true.
  • People want to solve the same problem as others, but others are doing it better because they focus only on software.
  • People think they can have an offshore team, but it has its own risks.
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Conclusion

  • Starting a software company as an information and service marketer or e-course guru is a bad idea.
  • Software is not sticky, and the likelihood of success is low.
  • People need to be a hardcore true god balls to bones software entrepreneur to succeed in the software business.
  • The future value of a company is based on a discount applied to future sales between now and the day that the company dies, and the likelihood that those sales occur.
Alex Hormozi: Starting a software company is a TERRIBLE F@#$ING IDEA... [TRIGGER WARNING] 006

Why Starting a Software Company is a Bad Idea

  • Software is not a shortcut to success.
  • Creating sticky software is difficult.
  • Competing with experienced software entrepreneurs is challenging.
  • The likelihood of success is low.
  • Investors who have 100 million to give are not stupid.
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Why Most Software Companies Fail

  • Most software is not the best on the market.
  • Customers complain about the product.
  • Real competitors copy the software in two seconds.
  • Software is a competitive space.
  • Companies end up hawking something with a worse value proposition.
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Stick to Your Game

  • Make your service stickier.
  • Buy other companies with similar characteristics.
  • Find affiliate partners or get more referrals.
  • Expand your TAM.
  • Make the company you have more valuable.
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Focus on Solving the Problem

  • Software is not valuable until people buy it, use it regularly, and tell others about it.
  • Blowing people through your software is not valuable.
  • Make a smarter affiliate relationship with someone instead of adding a weird tech thing.
  • Solve the problem and build something that's sellable and has value.
  • Customers come highly recommended, and you have a great reputation.

Watch the video on YouTube:
Starting a software company is a TERRIBLE F@#$ING IDEA... [TRIGGER WARNING] - YouTube

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