starting a micro isv in the beginning there was nothing
This essay is inspired by a post by Kevin Dangoor, which in turn was inspired by a post on MicroISV.com, which was inspired by an article by Eric Sink!
The current hub bub in the ISV (independent software vendor) world right now is transparency and Kevin paid me a very nice complement by noting my attempts to be fairly transparent in the startup of my company, UserScape.
This then got me thinking a bit about what I'm doing and if I might be able to codify some of it for the benefit of all. I don't think I'm doing anything special per se, but in my short time going at this I've picked up a few items which may be useful to others. Let me disclaim myself here by saying that none of this is really proven to work! What I have is anecdotal evidence and if you stick around awhile I plan to write up some updates as time goes along.
In the beginning there was nothing: aka where to start
A big question I've already emailed with a few folks about is where to start. The answer to this is always start before you think you need to. Huh? What I mean is that I "started" almost 2 years ago by reading everything I could about starting a small software company. Reading as many ISV weblogs as you can is extremely important. It's just about the only place you can get a good in the trenches view on things. Back then there was no microisv.com, technorati, feedster etc. so I foraged for what I wanted. You have those tools now so use them effectively.
Some of the stronger influences on me include Joel Spolsky, Brent Simmons, Dave Winer, and Eric Sink among others. I also think it's very important to note Seth Godin as well. His books have had a huge influence on me. If you've never read Purple Cow run to amazon right now and get it.
Don't just read them, understand them. Think about how it's going to relate to you. See where they've made errors and learn from them. Make sure to note the things which have worked for them. Try as hard as you can not to reinvent the wheel. These people are out there giving you in depth details on their experiences, use that to your advantage. It means you may be able to avoid a few of the unavoidable pitfalls.
Pick your poison
How to choose a market to enter could be an essay all it's own. To keep it short here are a few things that led me into the help desk software market.
1. I've managed help desks for both software products and services. Having strong knowledge of the domain is extremely important. That doesn't necessarily mean you've worked in the area, but you definitely need to be sure you know your stuff or you are going to build something people don't want.
2. I didn't want to invent a new type of product. I think this is where alot of ISV's go wrong. It takes alot of money to explain to someone why they need something they have never heard of. Sure you could get lucky and create something very viral that takes off, but you're stacking the odds against yourself.
JotSpot comes to mind here. I'm sure it's a fine product but hardly anyone knows what a wiki is much less an application wiki. Search Google for wiki and you get 4 ads. Try application wiki and you get 0, not even JotSpot themselves. They have some $ so they'll probably be ok but most small ISV's don't. You don't want to start behind the 8 ball.
On the other hand, help desk software is a very established market. People know what it is and why they want it. Do a Google search for it and you get 10+ pages of ads. That companies are advertising heavily for it is strong evidence that people are buying it.
(of course I've oversimplified things with these searches but you get the idea)
3. Joel didn't invent bug tracking software
37Signals didn't invent project management software
Eric Sink didn't invent source control software
Microsoft didn't invent the word processor or the spreadsheet
The question is do you have fresh ideas you can bring to the table. Pick a market with stagnation. Take a look at the help desk software market and you'll see a bunch of websites and products that for the most part haven't been updated in years.
When it comes to innovation you can probably move faster than the current market leaders. In most cases their slower pace and existing customer base preclude them from making radical changes in their products. That's your big advantage as the newcomer to the market. Keep what works from the old models and innovate on that.
Get your money straight
Every situation is different so advice on money can be hard to give. All I would say is be realistic. Thinking you can do everything on the cheap and startup for $500 is not the case.
So you've started thinking about starting. What next?
Get a blog. It's that simple. I really can't express how much this simple act has done for me. It's opened up many doors and is already providing me leads on a software product that won't even be released for at least 3-4 months.
It's scary I know. You're going to make a fool of yourself. You're going to post things with misspellings. You're going to create sentences that sound like a 7th grader wrote them, and your readers will love you for it. Be open, be honest, be real.
Blogs are all about amplification. You can only reach X people, no matter how hard you try (well with your budget anyway :-) ). Bloggers help you amplify your message. If you write good stuff (interesting, useful, etc) other people are going to point to you and those "old time" bloggers have alot of readers. That gets your message out and those readers they drive to you post on their own blogs and on and on. Basically if you are starting a small ISV you can't afford to not blog.
Blog early. Don't start a blog the day your product launches. You need to be building interest in your blog and your product long before it launches otherwise you'll be spending the first 6 months after your products out trying to build those connections.
Don't be scared that you have nothing to sell yet. It's not about that. It's about building relationships with the sneezers, it's about building relationships with other bloggers in your market, it's about learning how to effectively communicate with the market you are trying to reach. If you have people contacting you about how to get your product then you know you are on the right path. It's going to pay off later.
OK I'm signed up with Typepad, now what?
*[This image was lost to time in my blog transition]* So you've got your blog up and running several months ahead of your launch. You're building interest, people are starting to occasionally link back to you and comment on your blog. You need a mailing list.
You need one because right now you have no idea about how many of your readers are simply interested parties (remember these people are very important don't discount them!) and how many are potential customers (super duper important). A mailing list helps you understand how many people are interested enough in your product to give you permission to contact them further about it.
I know what you're thinking. You can't remember the last time you signed up for a mailing list on a product. Me either! But I can tell you from experience that other people do, A shocking number of them. These folks are very important for a number of reasons.
If you can keep even a fraction of them interested in your product, then you might have a nice little group of purchasers right at your product launch. That's a very nice thing.
They are a great indicator of how well what you're writing is doing and what types of postings/articles drive the most potential customers to you. Once you have this information it makes targeting that market much easier.
They provide what I call "little bits of encouragement". You'll find yourself refreshing your mailing list subscriber page several times a day and every time that number jumps up by one or two it really really lifts you up. Somebody is interested in what you are working on. This really helps through the low points when you're working on that really terrible administrative page that's boring you to death.
Don't be cheap! You probably need to use a hosted mailing list service. It's not just about sending out emails. You want reporting on how many people received the mailing, how many opened it, how many bounced back, how many clicked a link in the mailing, etc. This reporting is vital in gauging the success of your campaign.
Get designed
*[This image was lost to time in my blog transition]* I already wrote one article on logo design and I'll have another shortly on website template design so I won't harp on it too much here, but you need a professional designer. You need to get your logo's, website templates, and interface designed by a professional who understands color combinations, fonts, etc. If you don't look professional you aren't professional.
Wrap Up
So that's where I'm at right now. Hopefully you've found some of it useful. If you have your own experiences or questions, I'd love to hear them in the comments below.
What I thought I'd leave you with is information on some of the applications and services I have found useful throughout this process.
MicroISV.com - A great place to find information on the ISV industry
StatCounter.com - I do have my own log analysis software but StatCounter is great for quickly checking out where people are coming from. It's real time and free!
CampaignMonitor - Makes it easy to run a mailing list. Very good reporting and very good pricing compared to other hosted mailing list services.
WordPress - Good self hosted weblog tool
TypePad - Nice hosted weblog tool
Everyone.net - Email hosting service. I've used them for about 3 years with 0 down time.