Micro-ISV: From Vision to Reality

prostoalex writes "When you read a news item about a company buyout or a two-person research project hitting big, how many times have you thought "I wonder if I could run a software company." Apparently, quite a few of software developers are discovering the entrepreneur within, which explains the ever-increasing number of threads on the Business of Software, Software CEO and other similar forums. However, most of the software entrepreneurs are coders, and not business majors. For them the business side of running a company constitutes that grey area that people with suits, expensive glasses and knowledge of word "synergy" learn in business schools. What will be the market for your product? What should you charge for a software app? Should you go freeware, ad-ware, shareware, trialware or open source? How will you accept payments? What are the laws for incorporating a company in the state of Nebraska, and will the IRS go after you, if you don't hire an accountant, and incorporate in Moms basement, which is zoned for residential area? How about marketing - will you be able to reach all the left-handed accountants in the Eastern United States, or should you buy a highway billboard advertising your image editing application?" Read the rest of Alex's review.

Micro-ISV: from Vision to Reality
author	Bob Walsh
pages	376
publisher	Apress
rating	8/10
reviewer	Alex Moskalyuk
ISBN	1590596013
summary	Step-by-step guide to building a software empire

The questions are all valid and so are the suspicions. As young entrepreneur travels around the Web forums and self-help sites, he, perhaps, becomes discouraged, overwhelmed by the amount of information and by the obvious risk factor of the software business. There are just so many things involved in running a software company, that someone ought to write a book. A book that wouldn't talk about C++ vs. Java, or object-oriented vs. procedural languages. But a book about running a small, one-person software company. Bob Walsh's Micro-ISV: from Vision to Reality introduces an aspiring software enthusiast to all aspects of running a software company. Whats a micro-ISV, you ask? The term ISV or independent software vendor, was coined by Microsoft to describe the set of software companies that were

• not yet killed by Microsoft
• not yet bought by Microsoft
• too small and insignificant to present any interest to Microsoft, except for selling them developer tools and MSDN subscriptions

The term micro-ISV was coined by SourceGears Eric Sink, who was writing a "Business of Software" series of columns for Microsoft Developer Network, and relates to one- (seldom, two- or more-) person software development company.

Micro-ISV: from Vision to Reality is a handbook for independent software developers interested in generating a side or main income on their own. A quick glance at the table of contents will be a bit deceptive, as there are only 7 chapters. But they are surely packed with lots of useful information and references. Bob Walsh takes the reader from coming up with a good idea for a software product (Chapter 1) to establishing a development environment for a successful software startup (Chapter 2), where the reader learns that CVS servers are not optional. Chapter 3 - "Presenting the Product", is 60 pages long, and talks about appealing presentation and promotion of the product mainly through the product or company Web site. A spoiler: Bob Walsh chose BlogJet Web site as an ideal candidate for a case study on how to design customer-friendly and at the same time income-generating Web sites for a software product.

Chapter 4 - "Business is Business", focuses on what a developer from US, UK or Australia need to know about their local incorporation laws, and what should be done come April 15th. Throughout the book the author assumes that the reader is on a very tight budget (sorry, venture-funded startups), and thus prefers to do most of the stuff himself or get the best quality for the money. "Focusing on the customer" (Chapter 5) deals with marketing (and offers some practical advice instead of general sentences about "solving the customers problem") and establishing support business. Chapter 6 - "Welcome to the industry", discusses potential promotions and partnerships that are useful for software developers and their companies, and finally Chapter 7 - "What Happens Next?", offers some perspective on micro-ISVs who made it big.

The book is sprinkled with illustrations, references to existing micro-ISV practices, and interviews with owners and managers of successful software companies. Interviews are essential part of the book, and they help the reader to gain the perspective on the software industry from someone else than the author.

Throughout the book Bob Walsh recommends numerous services, but at the same time they never feel like a plug. His suggestions include glyfx for icons, GoDaddy for domain names, 2checkout and PayPal for payment processing, InvisionPower for customer support message boards, DemoCharge for producing those walk-through tutorial movies, and are generally motivated by personal experience or recommendations from the others in the industry. He also pays a great deal of attention into available free sources, if the software developer is on a really tight budget.

The book itself is Windows-centric, which is hardly authors fault - this is the single largest market for independent software vendors, defined by hundreds of millions of users who are online, and thus marketable via Download.com, Google AdWords, Yahoo! Search Marketing or Windows Marketplace. Mac OS market is never really discussed in the book, although some chapters, which are not market-specific, might be interesting to independent software vendors for Mac OS. Commercial market for Linux software applications is close to non-existent, unless answering telephone support calls or selling service contracts excites you.

The language of the book is approachable and makes the title an easy read. I found it a bit over-packed with Web site screenshots - after all, do we really need a screenshot of www.businesslink.gov.uk to get the point that this site offers entrepreneurial advice for those in the UK?

The appendix includes all the referenced URLs, books and articles for each chapter, which makes it a useful resource. Its also available online on the companion site for the book, that also contains authors blog. The question of whether to blog or not to blog is also discussed in Chapter 3, together with a review of available blogging platforms and downloadable packages that might be suitable for a software company. The interviews in the last chapter also seem to be presented in a haphazard manner, as if the author collected some content, did not find an appropriate place in the book for a sidebar, and then decided to dump everything left over into a single chapter. However, for someone starting a software company some of the interviews might be invaluable.

Bob Walsh's book is not a good material when your next startup involves creating a social bookmarking Web site, a highly popular blog, Linux consultancy or a scientific application that would be interesting to 5 big clients on this planet. However, for the use case when you think you can write a usable and popular Windows application and also sell it online to hundreds, thousands and (hopefully) millions of users, this book will be indispensable. If you're just thinking on whether or not you should start a software company, perhaps you should familiarize yourself with the writings of Paul Graham first. If you think, however, that the software industry is dominated by major players like Microsoft, Adobe, Google or Symantec, consider the top downloads list on Download.com and then see how many of popular products in that list are made by the companies that you might have never heard of.

In his spare time Alex likes to read good technical books."

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You can purchase Micro-ISV: from Vision to Reality from bn.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.

Har

Slashdotters discussing business is like accountants trying to discuss Linux... Like it or not, it is the truth...

Here's your answer.

"When you read a news item about a company buyout or a two-person research project hitting big, how many times have you thought "I wonder if I could run a software company." "

Never.

Not even once. Thanks for asking.

Don't forget the other 80% of your company

Ansonmont said, "but you are probably better off doing something to help your business than spending a lot of time reading how to help your business."

I can't comment on the value of the book being reviewed, but I can say that techies have a tendency to blowoff "the other 80%" of the business of being in business. In particular, techies are notoriously weak at marketing. I am speaking from direct, personal, and expensive experience here.

There is a book, "Crossing the Chasm". Had I read and understood it when it first came out 1991(?), I might still have a company. My company made the error described in paragraph 3, page 40 (first edition numbering). I did not understand (and claimed I didn't need to) the difference between Early Adopters and Visionaires (early part of the adoption curve) and the Early Majority.

Was I a smart guy? Absolutely! Did I need anyone telling me how my product was only a piece of the solution to the customer's problem? Hell no! This is hubris before the fall. It's bad enough when you are doing it with Other People's Money, but it's a lot worse when you are funding product 2 with the profits from product 1. Can you say crater? I knew you could.

My point is that no matter how high your IQ is, or how uber-geek you are, you don't know everything. Reading business books at home won't tend to impact your productivity on the project and it just might prevent you driving a good idea off a cliff you never even knew was there.

One thing I do know...

never hire someone just because they are your friend.

And the book is good IMHO.

To charge or not to charge?

There's an interesting post on Dharmesh Shah's blog [onstartups.com] about how startups may not want to give away their software for free. One of the points he makes is that in order to charge for something you've got to set up an infrastructure - credit card validation/debiting, SSL cert, and so on - and it's good to get that in place so you can start bringing in some money right away. It's a good read.

I suppose a middle ground might be a free, but invitation-only beta. This seems to be working well for indi [getindi.com], at least so far...

Accept what?

How will you accept payments?

Uh, this is /. We've all taken a vow of poverty. We conceive, design, code, debug and distribute all our work for free, as Saint Stallman has decreed we should. At night we stab our tender parts 100 times with those cheap ballpoint pens given out at every Linuxworld, and chant "Down with the evil money-grubbing Microserf infidels!"

got webcam?

At night we stab our tender parts 100 times with those cheap ballpoint pens

You know, there's a commercial market for that sort of thing.

Chapter 16: Just write an anti-spy application

"If you think, however, that the software industry is dominated by major players like Microsoft, Adobe, Google or Symantec, consider the top downloads list on Download.com and then see how many of popular products in that list are made by the companies that you might have never heard of."

4 of the top 10 downloads (including #1) are anti-spy applications. In other words, automatic ways to clean out all the other crap you've caught from surfing download.com are download.com's biggest application.

what can suck is when your spirit is crushed...

... because the area you live in is zoned as residential. Then, you try to explain you're ONLY doing business via the web and on your computer. There's no noise, light, vibration, fumes, em-emissions... no customers coming to the house, and even if there IS an OCCASIONAL business meeting, the neighbors won't know the visitors from regular visitors.

Then, the clerk tells you need to get a neighborhood review, you need to disclose in drawing, almost architecturally, you layout of your business area in relation to the home area, you need to list and describe ALL your equipment used for the business, and so forth. ALL neighbors within 250 or 300 feet of your house are entitled to shoot down your getting a permit. ALL THEY HAVE TO DO is oppose you. Slow you down. Discourage you. Waste your time and money. Force you out of the neighborhood or make you return to corporate America (whether or not they have an agenda to do so) outside of YOUR terms... You can appeal, fight, and win, but...

It will take weeks. You have a zillion and one things to do: deal with the IRS, BOE, FTB, county registrar, find a newspaper to advertise in for 4 or 6 weeks, decide if you're REALLY ready to commit in spite of all the legal and procedural and code crap thrown at you.

Because you mention you're ONLY doing business via the internet and from home, you're assumed to be a perv, or a thief, or an ID grabber. You then are told you have to visit with the local police department: be photographed, thumb printed, and registered. And you're trying to run a SOFTWARE and art company and not doing anything related to anatomy or adult entertainment. Nevermind, that city doesn't want to become a haven for ID thieves and high tech criminals. It's not personal... so they say

You try to explain your neighborhood has more noise from the cars zooming up an down the street, that there is a 45-foot moving van owned by a homeowner who brings it home EVERYday... you try to convey your concerns that the pseudo ganger-banger kid next door might decide to burgle your home and fence your shit...

The city and county officials tell you to go to a city council meeting to express your concerns. They then tell you you must be a city resident, and must prove it by giving your name, address, and such before and to the committee/council and those present. It will be televised.

Talk about running a MODERN entrepreneur out of town (a town win piss-ant, archaic codes that do more harm to small, quiet, budding businesses).

Yes, that happened to me. IN CALIFORNIA. Fortunately, the timing of that bullshit coincided with my selling my home before any foreclosure happend. Talk about having your entrepreneurial spirit smashed by close-minded, myopic city planners looking out for money more than sensibility.

Re:what can suck is when your spirit is crushed...

A little bitter? I'm not surprised that happened in California. I left 5 years ago because I got tired of the inmates running the asylum. The whole world isn't the earthenware vessel of excrement you'd think it was from dealing with those kinds of people.

I opened my own home based company here in Arizona and it was amazingly simple. Probably took a total of 4 hours of my time. Most of that was time to go back and forth to the Corporation Commission office downtown to file and pick up my papers. I had to publish notice in a newspaper, but that took about 15 minutes with a phone, credit card and fax. I spent about 30 minutes on the phone with the IRS to get my EIN.

Then again, I did have a business license(home based business) around 10 years ago in Sunnyvale and it was nowhere nearly as onerous as your story either. I wouldn't be at all surprised if you lived in SF with all the problems you noted. If you don't like the way things are run where you live, you could consider moving.

Someone once said nobody can walk all over you without your consent. Someone who can get their spirit crushed by a little bureaocracy isn't going to be able to run their own business. There's a lot of BS you have to do, but how's that different from any other part of life? It may have been easier for me because I didn't ask for permission from anyone. I figured out what I needed to do and did it. Some minimum wage functionary could complain that I didn't fill out their form, but I don't think we have as many of those local government jobs for people with no skills or education here. I'm also not deeply concerned with whether or not the Chamber of Commerce puts a gold star next to my name. The IRS and state aren't going to come after me for some major problem, so I think I'm fine.

Re:what can suck is when your spirit is crushed...

What is it that you were trying to do? Did you make the fatal mistake of asking permission to do something before doing it? Never do that. Never. Just do it and if they question it, then that is when you fight. The first rule of citizenship is to never ask permission from your government, unless you need something from them or unless there is no ambiguity about what you want to do and what permit you need to do it and that there is no way they can turn you down.

Economics of a Microisv

With the world as your audience, it's quite possible to carve out a good living by servicing a niche market. The economics of a Microsoft vs. Joe Developer pursuing an end market are entirely different. A few millions may not mean anything to MS, while its quite sustaining from a small business's perspective.
-- Jim http://www.runfatboy.net/ [runfatboy.net]

It's ok, but I think it will age badly

I have this book and quite like it, it's something that fills a need and has moments of usefulness. With everything else to do in starting up a new software business this is nice to grasp and think 'that will do for my lack of experience'. The market it serves is desperate for 'silver bullet' info, and a lot of it is common sense - Use a Search Engine to Find Things! Pay Tax if you Need To! Don't Draw Your Own Icons! Its very readable though, kind of like business-porn for startup types.

My problem is a lot of the content is tips that consist of links to websites. I think a couple of years down the line this book will be basically the 'Micro-ISV's Guide to 404 Not Found', either that or the authors personal recommendations will have changed radically.

N/A

Independent Software Vendor?

Judging by the criteria, are you sure that isn't Insignificant Software Vendor?

I did it

I started my one man company about 10 years ago. Started by consulting to pay the bills and wrote code when not employed. It is certainly possible. In my case, I no longer consult as the products generate enough revenue. My experiences say you must keep updating the product, provide good service to your customers, and not get too discouraged when a prospect says your product sucks. Oh, and be ready for wide variations in your income.

Re:Marketing Lesson 1: Users Are Worse Than Idiots

You never know when a competitor's wife is your customer's sister. People purchase software for the worst of reasons and that's life. Some customers are flat out unwinnable. When I worked for a small ISV that built software for a data intensive industry, we always offered to convert potential customer's data to our software for free. Sometimes it was a day or two's work, but it was well worth it.