So in the spring of 2005, we founded Kadonk, and started developing LiveProject. At first, we sought to drum up investments, and we spent a lot of time creating business plans, meeting angel investors and venture funds. It soon became clear that while they liked the idea, we were too young on such a competitive market. So we decided to begin development using evenings and weekends, and eventually taking half-time consultant jobs to pay the bills. Eventually we realized that finishing LiveProject 1.0 was within reach without investments. This is of course any entrepreneurs dream, as the founders retain full ownership of the company. It also allowed us to fully concentrate on making the best product possible.

In January 2007, we released LiveProject 1.0. It sported some great collaboration features, and everyone we showed it to almost instantly recognized its value. Soon, our customers started using LiveProject extensively and realized significant ROI's. Priced at only $99, saving just 1 hour per engineer per year typically pays for itself.

What are some of the key features of the new product? What sets it apart?

Still, as spring arrived in 2007, sales were slow, Not because of missing features, but because large companies have to perform extended evaluations before committing to a purchase. So we decided to change the game a bit: We realized that we needed to get our software onto our potential customers' computers first, without the need for long evaluations. Using LiveProject as a basic project viewer would do exactly that. Once installed, the extra benefits available by using the collaboration features would be obvious. So we decided to offer the viewer for free. It is the Adobe (Nasdaq: ADBE) Acrobat strategy; that is, give away a free reader and if they need to create documents, get a license.

Our major new features for LiveProject 2.0 are the added abilities that are expected in a project viewer: Gantt charts, resource tables and support for the many columns that exists in Microsoft Project. We have also revamped the entire user interface to support tabbed viewing of projects.

How has the startup process been? Tips for budding entrepreneurs?

Personally, starting a company is the most rewarding thing I have ever done. It is also the hardest thing I've ever done. It basically requires that you suspend almost all other aspects of your life for a number of years to create something truly unique. When your friends go to a party Friday night and you're up working until 2am, or when summer comes around and you're in your office working all weekend, that's when it gets hard. Still, I would do it again in a heartbeat, because the sense of ownership and of creating something that others wants/needs is amazing.

There are only a few Google's (NASDAQ: GOOG) and YouTube's, and most companies will never be like them. Nevertheless, most people will associate you with them once you start. "Ahh, so you're starting the next Google," is one of the most common statements I've heard. The answer, of course, is that "No, I'm most likely not." I'm starting what I hope to be a flourishing, growing and healthy business, which may grow slow or fast, but probably will never make a billion dollars. And that's great too.

If you want to start a business, focus on making it profitable. Build a product that your customers love, and always listen for their feedback. I've always had the opinion that if one customer takes the time to make a suggestion or report a bug, then 100 more customers have the same idea or problem. For whatever reason they may not have the time to tell us. Fixing a small issue, or adding a feature that makes sense benefits not just that customer, but everyone. My own personal motto is: "Think Crazy, Act Sanely."

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements