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2004-10-05 14:55:53

First Report from My Micro-ISV

Summary: Eric reports and discusses the early results from his micro-ISV.

In my previous column I wrote about something I call a "micro-ISV", a software product company comprised of just one person. As I confessed in that article, I am fascinated with this concept. In fact, so intrigued am I with the notion of solo software that I decided to launch a micro-ISV of my own, promising to run it openly and disclose all results to my readers.

It has only been a month, but I am ready to report and discuss some early results from my endeavor.

My Results So Far

When I launched Winnable Solitaire, I believed that I would end up with one of two possible outcomes:

So which outcome actually happened? Let me put it this way: A sense of kinship with my readers is nice, but I would much rather have had the fortune and fame. :-)

As of 29 September 2004, I have sold six copies of Winnable Solitaire, for a not so grand total of $42 (US) in revenue.

If I had kept my expenses at zero, I could go on a wild shopping spree with all my newfound wealth. However, during development I spent $379 on artwork. Since the release, I've spent $271 on advertising. Finally, I spent $18 on that lunch I promised Thomas Warfield.

Bottom line: My income statement currently shows a net loss of $626.

Ten Things I Think I Think

For this month's column, I'm going to mimic the format used by one of my favorite sportswriters, Peter King from Sports Illustrated. Each week during the NFL season, King writes a column called "Monday Morning Quarterback" where he provides his fresh opinions on the previous day's pro football games. The meat of his column is always in a section entitled "Ten things I think I think".

1. I think I am disappointed.

I'm not going to try and hide how I feel about these results: I am disappointed.

Yes, my motivation for this project was to learn and to write about my experiences. Yes, my attention and energy remain largely focused on SourceGear. But I actually thought I might make some money on this. So far, I'm not.

So I find myself genuinely disappointed, even though I believed that I had very little emotional investment in this project.

2. I think this proves my experiment was fair.

Reactions to my Winnable Solitaire experiment were mostly positive, but several people claimed my experiment was "unfair" or "invalid". In a nutshell, they argued that because I am already "famous" for my writings about the business of software, I have an advantage that is not available to my readers. My experiment is therefore meaningless because I did not duplicate the conditions a regular person would be facing when trying to launch their own micro-ISV.

First of all, these folks are overestimating my celebrity by several orders of magnitude. Yes, I have lots of readers, but even in the software world, I am a nobody. My audience is far smaller than somebody like Joel Spolsky, and Joel is also a nobody.

If I were a hundred times more famous as a software developer, I still couldn't leverage that fame to sell a product to consumer markets. People who buy solitaire games have never heard my thoughts on managing your career or Joel's thoughts on leaky abstractions.

My column here on MSDN is a lousy place to market a consumer game, but it is a great place for me to say "I told you so" to the folks who claimed my experiment was unfair. My results strongly suggest that I am in fact a regular person, just like you.

However, I will share some of the responsibility for this little error in judgment. In retrospect, I wish I had not used words like "experiment" and "hypotheses" to describe this project. These terms imply a formality of method that is not available in this context. Marketing simply isn't that precise.

The scientific method doesn't really work here. In general, I cannot prove or disprove my claims. All I can do is gain some experience and tell you about it.

3. I still think my hypotheses are mostly correct.

Last month I offered six of these so-called "hypotheses" about how to make micro-ISV successful:

For most of these, my opinions have not changed. I still recommend keeping your risk low by starting small and keeping your day job. I still believe in the Law of Focus and in being very careful about ad spending.

Several people have told me they disagreed with my advice to not "fake the plural". Point taken. There are situations where the use of the word "we" is more appropriate. Use your judgment.

Others (including Thomas Warfield himself) opined that I went a little overboard when I decided not to keep any sort of a customer list for my micro-ISV. I now think those people are probably right. I still believe in not hassling the user. I still believe in letting the customer be in charge. But those things need not prevent me from keeping basic records.

4. I think "winnability" might be too small of a differentiator.

So why are my sales so absurdly low? I wish I knew for sure. Just like Peter King can speculate about why a certain team lost, all I can do right now is make educated guesses.

Perhaps my game simply is not yet widely known. After all, I've only been doing this for a month or two.

However, I think it is possible that my differentiator is just too small. The only area where my app is clearly better than the competition is that my solitaire game is always winnable. In every other category, the existing products win.

I still believe my overall approach is correct. Markets are segmented. People want different things. Find a niche where you can win, and dominate that niche. My mistake is not in my approach, but rather, in the fact that I chose a niche which may be too small.

However, I want to note one important thing about this approach to marketing: My product has an extremely narrow focus with just one point of differentiation. This approach isn't working for me right now, but it might work a lot better if I were selling something that people actually need. People who need something make their purchasing decisions differently from those who want something. Winnable Solitaire is just a game, so the purchasing decision is quite different from something like a network security product or a publishing system. In need-driven situations, a product can more easily succeed with just one differentiator, as long as there are enough people who really do need the one thing that makes your product unique.

5. I think I could be more successful with a different kind of product.

Approximately half of my development time was spent trying to make Winnable Solitaire look good. This is a consumer product, and I knew that consumers don't have much tolerance for ugly software, so I paid a lot of attention to this area:

I was rather proud of the way this app looked when I released it. And then people told me how ugly it is. :-(

People want more. They want traditional graphics on the face cards, not pictures of wood grain. They want a more modern-looking user interface with gradients and transparency and shadows. When they win, they want a card animation that uses OpenGL and requires an nVidia 6800 to get a decent frame rate.

I chose to write a game because I didn't want my micro-ISV to be even close to the business of SourceGear. I think I could do better if I chose a product that is in more familiar territory.

6. I think this is a great way to fail.

The best decision I have made here was to keep my risk low. I only invested about a month of my free time in the original development. I only spent about seven hundred bucks in cash. I started small and I kept my day job. Because of all these conservative choices, my micro-ISV is still alive even though my total revenue wouldn't pay for a set of the new Star Wars DVDs.

This is the right way to fail. Or rather, what I am really saying here is that my micro-ISV has not failed—it has simply not succeeded yet. There's a big difference.

True failure is easy to identify. The cash is gone. Financial pressures take over. Creditors and investors get mad. The company cannot go on, so it dies.

In contrast, my micro-ISV is still alive. I am not profitable, but I am also not broke. There is nothing preventing Winnable Solitaire from going forward. I can improve my product. I can change my tactics or strategy. I don't have to figure out how to tell my wife that we can't make the mortgage payment. My back is not against the wall. I'm still in charge.

Some would say that my low-risk approach is a self-fulfilling prophecy. Steve Pavlina advises micro-ISV wannabes to "burn the ships". At some point, he is correct—there comes a time in the life of a successful ISV when quitting your day job is both necessary and appropriate.

However, I fundamentally disagree with the notion that the only way to win is to put all your chips on the table. In business, the way to win is to not lose.

7. I think I know why I admire micro-ISVs.

Some of my fascination with micro-ISVs is rooted in my wonderings about the path of my career over the long term.

When I was 22, I believed that I could write code until age 65. I saw no reason why I could not be a software developer for my entire professional career. Some folks told me that being a coder is a burnout job, but I didn't believe them.

I am 36 now, and I think I have a better understanding of things. I am starting to realize that someday I may actually want to make a career change. I am trying to picture myself running an ISV when I am 55, but I just don't see it. Running a company can be awfully stressful sometimes. Will I still want to be doing this in two more decades?

My prospects for a second career are bleak. The cold reality is that I only know how to do one thing. Instead of looking for a second career, maybe I should be looking for a way to stay in software.

This is one of the things I like about micro-ISVs. The lifestyle looks very different. The workflow looks like it might be a lot less stressful. Running a micro-ISV looks more like a marathon and less like a sprint.

At my recent lunch with Thomas Warfield (Pretty Good Solitaire), I asked him if he thought he could still be running his micro-ISV at age 50. He said yes. Warfield is 40 now, so this is not the perspective of a naïve young person just getting started. I believe him, and his answer makes me wonder if somebody I will be running some sort of a micro-ISV as my full-time job.

8. I think a little bit of failure won't hurt me at all.

My regular readers have seen it before, but I will once again cite my favorite quote from Thomas J. Watson, Sr., founder of IBM:

Would you like me to give you a formula for success? It's quite simple, really. Double your rate of failure. You are thinking of failure as the enemy of success. But it isn't at all. You can be discouraged by failureor you can learn from it. So go ahead and make mistakes. Make all you can. Because, remember that's where you will find success.
—Thomas J. Watson, Sr.

Like I said, I'm disappointed with my results, but I am not embarrassed. I believe strongly that the only true failure is not to try. When I try something that doesn't work, I try something else.

By the way: Lots of developers are reading about my micro-ISV experiment, but nobody is learning as much from it as I am. There is no substitute for actually doing something. In other words, get off your butt and seize the day. :-) You will get far more benefit from trying to make your own micro-ISV than by simply reading the story of mine.

9. I think my article is more successful than my product.

The most gratifying result of my micro-ISV article is the e-mail I have received. People are taking a fresh look at the shareware community and taking notice of the interesting stuff happening there. People are telling me that they have become encouraged to start their own micro-ISVs.

Those are exactly the kinds of things I hoped would happen.

10. I think I need to be persistent.

In his excellent article, Shareware Amateurs vs. Shareware Professionals, Steve Pavlina says that persistence is critical to success as a micro-ISV:

You would be absolutely amazed at how many of the greatest shareware hits experienced dismal sales after their initial release... sometimes even no sales at all in the entire first year. But the developers turned them into hits by continuously improving those critical success factors over a period of years.

On this point, I agree with him 100%. People give up too easily. The disappointment I mentioned above is basically inevitable for every micro-ISV. Persistence is not a sufficient condition for success, but it is a necessary one. We must patiently work through our disappointments and keep moving forward.

In the same article, Pavlina describes a cycle through which the developer uses customer feedback and observation to keep improving the product and increasing its sales:

After the first pass through this cycle, the initial results for the amateur and the professional may be virtually identical. But whereas the amateur typically stops after the first pass, the professional understands that this is just the beginning.

I could quote a lot more good stuff from this article, but you can read it yourself, and I recommend that you do so. Pavlina is one of the real success stories in shareware. This article is top notch, and it inspires me to continue.

But I must admit that my situation is unusual. Most people start a micro-ISV because they are attracted to the idea of being an entrepreneur. A sense of dissatisfaction with their current job is a source of motivation.

I've been there, but right now I don't have that particular set of problems. I am already an entrepreneur, and I am quite happy with my situation. Here at SourceGear we actually like building developer tools, and we're having some very nice success doing it.

So with Winnable Solitaire confined to my copious spare time, it may proceed slowly. But I do have some ideas for what I want to do next with this project. I will close with a few remarks about my next iteration through the cycle that Pavlina describes.

Next Steps

For this iteration, I will focus on a few incremental improvements:

I am intentionally trying to keep this cycle simple. In the future I will need to think about adding more solitaire variants and other new features. That can wait. As Pavlina says, "This is just the beginning".


Eric Sink is the non-legendary founder of SourceGear, a developer tools ISV located in Illinois. More of Eric's writings and rants can be found on his weblog is at https://ericsink.com/.

This article originally appeared on the MSDN website.