Going multi-media: here's what you should know before you venture into the world of interactive software development

Black Enterprise, March, 1996 by Joyce Jones

IMAGINE IF THE TALENTS OF Spike Lee, Bill Gates, Walt Disney, Quincy Jones and Ntozake Shange were in one project. Their creation would probably engage consumers in ways previously unimagined--perhaps a multimedia world of Technicolor girls taking a team of 101 Dalmatians on a razzmatazz journey of sights and sounds. Most everyone would be wowed by the experience.

Well, such collaborations are not too far off in the future, courtesy of interactive multimedia technology. Interactive multimedia, an intriguing mix of text and sound, art and animation, video and graphics, runs the gamut from virtual computer games and military fighter-jet flight simulators to Internet home pages, computer software and CD-plus technology. Both art and science, this new industry is limited only by the imagination.

One of the fastest growing lanes on the information highway, multimedia yielded approximately $786 million in 1994. And unlike other industries in which minority are still trying to catch up, this is an area in which no one has a clear advantage--yet.

As in most industries, there are few products that appeal specifically to African Americans. Bill Shelton started Bingwa Software (bingwa@bingwa.com) in 1993 with his wife Karen and cousin James Curry, an international investment banker. The threesome saw a tremendous business opportunity in developing software targeted specifically to African Americans and other ethnic groups. So they created a program that uses animated figures of multi-ethnic scientists, inventors and entrepreneurs to teach children math and science: The Mathematical Heritage series was born.

Analysts from Simba, a market research company, predict that over the next year, consumers will spend $1.45 billion worldwide on CD-ROMs. Entertainment software sales will total $716 million, followed by $522 million in home education titles. With sales of PCs growing at a record pace, there appears to be plenty of room for would-be entrepreneurs to cut themselves a piece of this expanding pie.

"Content is going to drive the information superhighway," says Larry Irving, head of the National Telecommunications and Information Administration (NTIA) at the U.S. Department of Commerce. Irving gets frequent requests for information about broadcasting and wireless communications. But he says people should really be asking, "How do I get into software development or content?" There is a limit to the number of people who can own and expand distribution systems, such as personal communications services (PCS) licenses and the Internet, but opportunities to develop software are limitless.

Compared with other opportunities in telecommunications, interactive multimedia software development is not capital intensive, making it a more accessible opportunity for African American entrepreneurs. Depending on staffing and equipment needs, producing a software tide from concept to finished product could cost less than $1 million. This is low compared with the millions of dollars required just to bid on a PCS license.

With a strong business plan and a lot of luck, it may be possible to attract venture capital. But it's often necessary to use personal funds or investments from family and friends. "When you first start, financing will come from people who know you and are willing to bet on your reputation," says Shelton. "After you come up with a product, you can then go to outside sources." Until then, he advises, "It's critical to always be out there selling your idea. Some of our largest investors were people I didn't even know had any money."

If you can't afford to devote a full-time effort to the business, then it's wise to keep your day job. When the Sheltons started, Karen ran the company while Bill continued working on Wall Street is in investment banker.

CREATE A WINNING PROGRAM

A software development company begins with the right equipment and a great idea. You can start with as little as one or two computers that have a 486 CPU or better, as well as extensive hard drives and memory storage capacity, a variety of software packages, a scanner and a color printer. Equipment costs can range anywhere from $10,000 to $50,000 or more.

Despite the newness of this industry, there's a lot of competition for the limited shelf space in retail stores. Choosing the right format for your application is important because in many ways this may determine how many customers you ultimately reach. There are many more PCs than Macintosh computers in people's homes. So deciding to create Windows or Mac-based programs may influence your bottom line, depending on the market you're after.

Deciding whether to create CD-ROMs or floppy disks for your software is important as well. The Sheltons' largest customers were school systems across the country, so they chose a floppy disk format for their initial product since most urban schools do not have CD-ROM-capable equipment. Most retail products, however, use a CD-ROM platform, because the amount of information interactive software program consume would require many disks. The more disks you use, the higher the cost to produce the software.