In software business, a company will need to carefully define its niche market. The application developed will need to be able to serve the targeted market, better than any other competitor’s application. Basically there are two types of application

Horizontal Application:

This apps is aimed to be sold to everybody. Its features and modules are general yet applicable to all kind of people. Since it has a huge market scope, this apps is usually sold at a low price (read: affordable). This apps is marketed to individuals(students or professional) or small businesses/companies.

Vertical Application:

This type of apps is aimed to be sold only to a certain business groups. The features and modules are only relevant to the nature of that group. For an example, a tax filing software for a tax company or a blueprint design software for an architecture company. Since this apps is much more focused(in terms of its market and available features), the price is usually high. It can reach millions of dollar and big corporates are more than willing to pay such a high price and install that apps for the use of its own specific departments.

Both services are important for software startups. The first type will help the company to breath and survive for a period of time, but it is the second type that will put the company onto the industry map. The second apps will make the company rich.

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Jay White from Dumb Little Man learned these things in his life:

“If you want to start a business or if you have some wild dream, your wife, boyfriend or friends will rarely have as much confidence as you. Listen to their concerns and strongly consider them, but don’t let popular opinion be the sole factor in your conclusion. If you believe in it, do it.”

“If you have to give a presentation today guess what? The audience goes home and they all have their own lives and problems. Don’t get stressed out about interactions with others. Simply said, they are just like you! They are doing their jobs and they’re going to lunch each day and worrying about money, etc. They are people!”

“When you turn 23, you will wake up one day and you’ll be 32. Choose your destination carefully my friend because in many cases, you are stuck with it. By the time you are 32 you will most likely have a family and a mortgage that requires your steady income. Your time to experiment is over quickly. Before your obligations consume you, be sure you are happy with your personal path.”

Jaime Morrison in her book, entitled Prudent Advice: Lessons for My Baby Daughter (A Life List for Every Woman) , she wrote:

“Be generous. With your time, your money, your heart. If, on my best day, there was a single lesson I could hope to impart to you, this would be it.”

“Try not to wait eagerly for people to finish their stories just so you can tell your own versions that more directly involve you.”

“Pursue more than just the things you are good at. You will be told at a young age what your talents are. Enjoy the compliments, but don’t accept them at face value. You don’t want to walk a narrow path; attempt things you aren’t comfortable with and uncover skills or proclivities you didn’t know you possessed.”

C.A Kobu compiled her 4o life lessons when she turned 40:

“Develop a strong handshake, look people in the eye, and smile when answering the phone. This one needs no further explanation.”

“Mean what you say. And then do what you say you’re going to do. Walk your talk, and do it modestly, for God’s sake.”

“You’re always free to change your mind about anything and everything. And you’re always free to stop and start everything from scratch at any point in your life because the only person you’re accountable to is yourself.”

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As 2010 is coming to an end, I think it’s an appropriate time to look back at this year; identify what has been accomplished, what has failed and what has been learned. To prepare for the coming of 2011, I’ve compiled several advices from other people, people of age, so that I can learn from their successes and failures.

These are some of the lessons learned that I found online, in no particular order.

Marc Chernoff recalled some of the lessons he learned in his early 20s:

“The biggest mistake you can make is doing nothing because you’re scared to make a mistake.”

“Complaining is like slapping yourself for slapping yourself. It doesn’t solve the problem, it just hurts you more.”

“There’s a big difference between knowing and doing. Knowledge is basically useless without action.”

Metrodad prepared 25 life lessons for his daughter and I can totally relate:

“When posing for any photos, assume that the only people who will see them are me, your mother, your boss and the dean of admissions.”

“Give charitably, generously and anonymously.”

“It may be a small world but it’s a huge planet. Grab every opportunity to see as much of it as you possibly can. Most people don’t.”

Leo Babauta, one of my favorite bloggers, shared some of his things-i-wish-i-had-known:

“All the stuff you’re doing that seems hard – it will be of use”

“Make time to pursue your passion, no matter how busy you are.”

“All that stuff that’s stressing you out – it won’t matter in 5 years, let alone 15.”

Yeah, you just gave a good opinion. But I think mine is better.

Dan Ariely mentioned in his book that people adore their own opinion/idea/invention more than other people’s opinion/idea/invention. He called this the Not-Invented-Here bias.

He simply put it as the fact that everyone wants a toothbrush, everyone needs one but nobody wants to use anyone else’s.

If we are aware of this not-invented-here bias, perhaps we can give ourselves two to three minutes of thinking time after somebody throws out an idea in a brainstorming meeting.

Perhaps, we can take that person’s idea and look at it from an objective point of view, not from our limited, “i-think-i-have-better-idea” bias point of view.

Perhaps, we can encourage our employees/teammates/colleagues to put extra hard work by making them come out with their own work ideas. After all, human beings are in love with their own fruit of thoughts. They will take their opinions to heart. Hence, willingly committed to execute it.

Perhaps, in every day life, mothers can let children plant their own veggies in small pots in the kitchen. Children will love their own inventions (in this case, green veggies in the pots) and willingly eat them at lunch or dinner.

Read: The Upside of Irrationality by Dan Ariely.

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The reason why CEO receives such an abundant amount of salary is not necessarily to motivate the CEO to perform well.

1. There is a theory that claims that the real reason behind the high salary and huge bonus of a CEO is to motivate the other employees, those in the lower positions, to “work hard in the hope that they too will one day be overpaid like the CEO.” This is quite brilliant. So instead of motivating one person e.g the CEO, the high salary is used to motivate hundreds or thousands of the subordinates to input higher effort for job promotions.
2. Having said that, the high salary does not actually do any good to the performance of the CEO. In fact, there’s a research that says the salary can actually backfire the company. The CEO is likely to fail to perform due to the i-must-perform-or-else-they-will-take-away-the-money pressure induced by none other than…wait for it….the high salary.

Interesting.

Read: The Upside of Irrationality by Dan Ariely

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I sometimes wonder why people love to go to IKEA and buy home furnishing items from that store. What makes it different than other stores(Courts, moms and pops furniture stores etc)?

Apparently, it’s the do-it-yourself model that makes people keep coming back to IKEA. People feels much more attached to their IKEA bookshelves, than any other bookshelves, because they had spent half an hour(sometimes even more) assembling those pieces of woods together.

“Hey, nice shelf you have there.”

“Oh yeah, I built it myself.”

Notice that the owner said “BUILT” instead of “BOUGHT.”

The same shelf will make the owner smiles every time he walk pass through it in the living room. He remembers all the sweats he produced at that fateful day.

In short, IKEA products give the users a sense of ownership, pride and experience that makes people more attached and overvalue their belongings. These are the reasons why people love to go and shop at IKEA and this is what they call, the IKEA Effect.

Read: The Upside of Irrationality by Dan Ariely

So couple of things learned from the past few weeks.

1. Do not disregard that crazy idea – You can go far from where you are now if you just brave enough to let yourself come out with all those perceived-to-be-crazy-by-others ideas and go through them and really, consider them. It is also imperative to not to let the fear of being judged by others to creep in. It will just limit you. Now, this crazy idea must, in one way or another, help you to improve yourself or your state of life or to help you to achieve your dreams.
2. You don’t need money to make money – It is typical to think that you will need to have an abundant financial resource before you can start a business or to generate more money. Think again. Be creative. Sometimes, all you need is your brain, or your eloquent speech or your persuasive language.
3. You don’t have to settle for less – They say don’t be greedy. They say be grateful with what you have and who you are. Yes true, but only to a certain extent. What if who you are now(spiritually, physically, financially etc) is less than what you CAN be? What if what you have now is less than what you CAN actually have? Hard work, conviction, hope and trust in God is crucial. Do.not.settle.for.less.

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You have several great opportunities lying in front of you. Which one to go for?

Sometimes in life, several things will just come in your way, all at the same time. For you to ignore the rest, just for that ONE opportunity, that is normal. Or should i say mediocre?

Now how about trying to find the middle ground i.e. accepting the fact that you will go through that one particular door(and you are pretty excited to see what’s in store behind that door) but not necessarily or completely close the other door? Easy said that done eh? But surely enough, it can be done.

What’s important are these things:

1) Your decision should conform with your goals in life. It’s very easy to overlook the long term goal.

2) Differentiate between good opportunities and great opportunities. Which one is better?

3) It doesn’t have to be white or black. This or that. Open one door and close another door. Try to be creative and see if you can interweave those things together.

Yes, two roads diverged in a yellow wood. But I am pretty sure i can travel both.

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If you can’t beat your competitors, don’t bother. Just join them.

Let say you’re interested to build a new business in the, say, automotive industry. You have all these giant companies that rule most of the market share and the chance for you to beat them in the next 10 years are slim.

What you can do is this:

Create a new service that, instead of competing with your competitors’ services, will completing their services.

So you don’t have to necessarily build a factory that will manufacture the next best car. If you adopt this as the business idea, you will be swimming in the bloody red sea. What you can manufacture instead is the newest car accessories that will be the coolest add-ons to your competitors’ cars. Accessories that will make the current cars users feel at lost if they don’t buy your products and install them to their cars.

Through these complementary services/products, you are slowly capturing the market share or even better creating a new market segment and already on your way to monopolizing it.

Now go ahead and apply this in your daily life. It makes sense too.

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It all starts with this simple mind set: “You don’t work for money. You let the money do the work for you.”

Easy said that done eh? Yes, but before you let the doubt, fear and cynicism conquer your feelings, try to consider this thought.

Money is not a thing. It is just an idea. If you can think differently about money, how to generate it without having you to work and be there to earn it, then you have succesfully create a new thinking about money. If you can just get rid of the idea that you need to work hard to earn it (on hourly basis, on overtime basis), that you need money to get more money, then you will free your mind from that conventional, old way of thinking.

A simple guideline is this: You have to start investing on assets that will generate a passive income for you. You can then take this passively generated income to cover your expenses WITH the balance of that amount reinvested into new assets that will, again, generate passive income for you. If you keep doing this, you can start to see a cycle of nonstop passive incomes and this is how your wealth starts to build. And this is exactly how the rich get richer.

Other tips: Spend less on liabilities, spend on expenses only when you have a passive income that will cover those expenses, learn about the local tax system and law, invest on education and learn more to gain financial knowledge and finally, understand that the more money you need, the more money you’ll need to give/donate.

Read: Rich Dad Poor Dad.

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