Would you have turned down an offer of $1.5 million and a car of your choice?
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Would you have turned down an offer of $1.5 million and a car of your choice?
One of the first questions everyone asks about when starting a microISV is “How much can I make?”. While most people are understandably secretive about how much money they are making, there is a place to go to get a good answer to this question.
While primarily used for people selling websites that generate revenue from advertising, the Sites for Sale forums at Sitepoint will often have people selling applications they have created. The sellers are required to post the url for the site and will show screenshots of revenues to prospective buyers. By viewing the forums regularly, you can get a feel for what the public is willing to pay and, even better, what is big in the market at the moment.
This current auction shows a good example of the depth of information that is available on the forums.
Last Tuesdays post, “Should you be leaving your day job?”, brought a few comments from people who disagreed with me, and I think that’s great! These disagreements, especially Warren who left his day job and couldn’t be happier (way to go Warren!), point out that there is no one solution for everyone. Some people think the only way to succeed to is to remove all obstacles, even if that obstacle is a salaried day job. Others think that leaving a salaried job is insane. Neither method is right for everyone.
It seems that the assumption was that a day job has to be that of a full time salaried employee where you aren’t the owner. There is no reason that your day job can’t be that of a freelance programmer like many microISV readers. These people are supporting their microISV aspirations as an independent consultants, a role somewhat in the middle of full time employee and full time microISV.
Ultimately, the key is to make the decision that will drive you to success. Either way of thinking can be correct depending on the situation. The only bad decision is to do nothing, because you never want to be successful at nothing.
Chances are, many of you are already following Steve Pavlina’s Million Dollar Experiment, and if you’re not then its worth checking out. Fortune has published an article along those same lines where they profile a performance coach who helps pro athletes perform better and is now helping business owners and entrepreneurs increase profitability through visualization. The coach, Jim Fannin takes the same approach with athletes and business people alike.
Whether his client is an athlete, an entrepreneur, or an entire workforce, Fannin’s prescriptions are fairly similar: visualization, relaxation, and positive thoughts. After meeting with a CEO to discuss the company’s overall goals, Fannin sets up a group meeting with the employees considered to be the company’s weakest links and explains the way that thoughts—both positive and negative—manifest themselves in actions.
Many people I’ve been around regard the idea of visualization and positive thinking as hokey and they feel that there’s no way that just thinking about something is enough to cause a change, especially when they view there challenges as being much bigger. These people, and I’m sure we’ve all been one of those people at some point, miss the point that their negative thinking is causing their inaction and inability to change for the better.
Building a successful business starts with the idea that you will be successful. Sustaining a business requires you to maintain that idea while navigating the ups and downs that come along with operating a business. Those who stay positive the longest are the ones who will realize the success they’ve always wanted.
One of the good quotes from the interview that many of us can benefit from:
“Just give yourself a 10 day deadline, and just launch it… with almost no features.”
When discussing success rates for new business startups, most people are quick to quote the statistic that 95% of new businesses will fail within X (1, 3, or 5 seem to be most common) number of years. If this is true, then the failure of microISV businesses will be no different. What’s interesting is why the majority of microISV companies fail.
The main reason that the majority of the companies with completed products fail is due to the lack of marketing. This would seem to be obvious because most microISV businesses are created by programmers who don’t have experience or, in a lot of cases, the desire to do the marketing that is necessary to make their product a success. My observation is that there are far more microISV companies that fail before they even get to this stage though.
The simple explanation is that most microISVs will fail because they will never complete their product. But why is this the case? Even though the common way of thinking is to start your microISV while holding down a day job, which is the method of minimal risk, most people fail because they actually fear the risk of success. Once someone starts down the path of creating a project with the grand idea of leaving their crappy job behind they will inevitably end up having to face the idea of not having a steady paycheck, paying self employment taxes, and, in the U.S., paying for health insurance entirely out of your own pocket. With these thoughts the spiral begins.
Unfortunately, we have become a world of comfort. It is all to easy to go to school, get a job, work up, around, and through the corporate world and continue to draw a steady paycheck. Faced with the comfort of a steady job, the decision to risk success on your own actually becomes a daunting thought to many. At this point, the easiest thing to do is quit. It requires no change since you have a steady, stable paycheck. You won’t have the hassle of working on your project at night and on the weekends. And think of all the time you won’t have to spend supporting your customers. Life will go back to being comfortable…and disappointing.
Always remember why you started your project in the first place. The goals you set originally were what you thought would provide you with an improved lifestyle. The lifestyle and level of comfort that can be attained by selling something you created yourself can be far more satisfactory even if you never make as much money as you did in your corporate job, so don’t become a microISV casualty before you even get started.
By Bob Walsh
As I’ve been writing my book on building a micro-ISV, I’ve noticed a set of problems that seem to afflict everyone starting their own software company. Brian Plexico has very graciously offered me the opportunity to post here about these issues and whatever small insights I can offer to micro-ISVs as to how to solve them.
As a micro-ISV you have to wear a stack of hats: developer, tech support person, marketing, sales, etc. But the hat most micro-ISVs forget to wear is CEO. A very good CEO spends most of their time worrying about their organization’s Strengths, Weaknesses, Opportunities and Threats. (A very bad CEO should be worrying if they’ll end up in a cell after the trial with Tiny, the 300-pound biker, but that’s another story.)
SWOTing your micro-ISV is something you should do even before you actually have a micro-ISV. What are the strengths you bring to the party? What are the weaknesses – technical and human – you need to remember and mitigate against? Where are the opportunities for your micro-ISV and how do you connect to them? And what are the threats you need to be mindful of from competitors, a changing society, and the world in general? Keep it bullet point short: 2 pages will do the job if you focus on the big things, and you should.
Once your micro-ISV is up and running, plan on SWOTing monthly as a way of checking your direction, your execution and identifying what’s being neglected. There will be things that are neglected because it’s in the nature of running a small business; there is never enough time to do everything. Think not? How up are you what’s happening in your industry? When’s the last time you checked Google for new competitors? When’s the last time you made time to improve your programming?
Reviewing your last two or three SWOTs as you do your monthly SWOT is a great way to see if what you’re making progress on and what needs more attention. Finally, keep your SWOTs to yourself: you don’t want to be sharing this info with anyone, including Tiny!
John Gruber of Daring Fireball provides his comments on the recent purchase of NetNewsWire creator Rachero Software. He looks at whether life as an indie is actually what everyone striving for this lifestyle actually achieve. His comments echo a lot of what we heard from Nick Bradbury when FeedDemon was purchased, that the time required to support a popular project force you to make a choice on the direction of life as an indie. The main one being, can you even remain independent.
This story will be repeated over and over in the next few years and I think its for the best. The best innovation comes from the people who are able to create the quickest, and those with the money will be happy to pay for an up and coming but proven product.
Forbes has profiled several people, all under 40 years old, that they deem mavericks because of the work they’re doing.
One of those profiled is Brian Behlendorf who helped write the web server Apache. He now has a company that is trying to get businesses to adopt an open-source mentality of sharing code with others to create better software.
People in the microISV world tend to protect their ideas as if they were their first born. Derek Sivers points out why its better to spend that time on execution of your idea.
I wonder where Derek would classify CD Baby which is the company he founded and where he is the sole programmer.
via Business Pundit
WorkHappy.net has posted a number of “Happy Links” for all of the current and aspiring business owners out there.
Sean Mountcastle has posted his notes from the recent Business for Geeks tutorial at the O’Reilly Open Source Convention. The talk was given by Marc Hedlund, O’Reilly’s entrepreneur in residence. Marc appeared to really push the microISV concept of starting small, keeping your day job, and bootstrapping but that only scratches the surface of the things he touched on.
If anyone else attended, I’d be interested in hearing your experiences in the comments.
David St. Lawrence, author of the blog Ripples and the book Danger Quicksand - Have a Nice Day, has posted the first entry in a series on starting a micro-business. I have been reading David’s work for quite some time and he always has something insightful and interesting to say. I’m looking forward to the rest of this series.