What is a Small ISV?
On this weblog I often use the term "small ISV". It's time to define
what I mean.
ISV stands for "Independent Software Vendor". The acronym seems to be
most often used within the Microsoft ecosystem, so it carries somewhat of a
Windows-centric connotation, but that's not really part of its definition.
An ISV creates, markets and sells software products. Consulting shops
are not ISVs, although an ISV sometimes does consulting work. Value-added
resellers are not ISVs, although an ISV sometimes resells stuff from somebody
else. In an ISV, you have to envision the product you want to build and
take a risk that somebody will still want to buy it by the time you get it
built. If you don't have a software product, you are not an ISV.
A small ISV is an ISV which is not big. :-)
When I think of a small ISV, I think of a privately held, self-funded
company, but I won't reject you just because you happen to have a VC
The word "small" is a relative term, so I won't define a quantitative
limit. Your small ISV might have 3 employees, 25 employees or 50. If
you have more than 100, you might want to start asking yourself if the word
"small" is still appropriate, but I won't kick you out of my club just because
your headcount has 3 digits.
Small ISVs tend to stay small. If they get big, they do it very
slowly. They grow organically, funding their growth with their own
revenues. Small ISVs are often very boring and very profitable.
I like writing about small ISVs because I work in one. I believe small ISVs are where
the opportunities are today. I know that not everyone is going to agree
with me on this point. :-)
I'm suggesting it may be time to reset our expectations. During the
bubble, we put a lot of our efforts into building big companies
fast. Our perspective changed radically when we saw things
like LNUX with a $13 billion valuation on its first day. Small
private companies could not begin to produce that level of excitement, so we
began to treat them with disdain.
It's 2003 now, and not much of the bubble survived. LNUX has lost 99.7% off its
value. I could name dozens of other examples with similar results.
In fact, one of the few remaining leftovers from the bubble is that we still
have widespread disdain for small companies. I think this attitude
sometimes blinds us to the cool opportunities to be found in building a small