Small Software Companies (Part Two)

This post originally appeared on the old site on September 16, 2004.

Continuing my discussion of Eric Sink's article Exploring Micro-ISVs (see part one below):

Eric lists six hypotheses that he thinks apply to small software company development.  They are:

Don't start too big
Don't quit your day job yet
Don't fake the plural
Don't forget the Law of Focus
Don't spend much on advertising
Don't hassle your users

I'll look at these based on my experience.

Don't start too big
Absolutely true. Eric made his first application small enough so that he could complete it in a month. That is also about how long it took me to complete the first version of Pretty Good Solitaire. People think you have to have the best application on the market from day 1. No, you just need something that is good at whatever it does. You can make it better over time. The important thing is to get it out there so that you can start getting feedback on it to find out how you need to make it better.

The first version of Pretty Good Solitaire contained only 5 games. It was not the best or biggest solitaire game available at the time, although it did have several features not found in other games that helped define it as different from everything else. That was more important than having everything in a first release.

Don't quit your day job yet
Also true.  Steve Pavlina is big on saying that you should "burn your ships", quit your job and give it everything you have. I think this is a very risky approach and sets you up for failure if things don't go well right away. Keeping your day job and working part time is a much safer method. It might take longer, but success does not necessarily go to the swiftest, just the most determined.

I kept my day job for nearly 3 years after I started. That may have been too long, but I was never in any danger of failure because of it.

Don't fake the plural
I agree with this as well, although a lot of people don't. There may be a difference here between business and consumer products, but I believe that with a consumer product you are actually better off if you appear like a smaller company. People feel that the company is more personal. I've never pretended that our company is anything other than a two person company and I think it has worked to our benefit.

Don't forget the Law of Focus
Yes, this is important.  You need to have some attribute that you can own in the market.  For Pretty Good Solitaire, while partly it has been "most games", it really is in the name itself. It owns "pretty good", the feeling of quality of the game itself, which emcompasses the many games but also the sense that it is the game for people who want to play solitaire seriously.

Don't spend much on advertising
This one I am in less agreement with. If you are just starting out, it is probably true. I didn't spend much on advertising the first few years. But now I spend quite a bit on it (in fact, it is by far my largest expense). But the key qualification is "don't spend much on advertising that you cannot directly track back to sales". With Google Adwords and Overture, you can directly tell how much your advertising is bringing back in sales. Used properly they can be quite profitable.

Don't hassle your users
I agree with Eric's sentiment but not with his implementation. You don't want to hassle your users (especially your paid users), but you absolutely need to know who your users are.

Conventional wisdom says I should grab customer contact information so that I can specifically target my customers with new products and upgrades and newsletters and books and T-shirts and socks.

Yes, conventional wisdom is right, selling to your previous customers is absolutely the best form of marketing. But there is an even more fundamental problem with not collecting contact information. Without a database of users, you don't know who your users are. When someone loses their code (or their copy of the application, if you don't use codes), you have no way of verifying who they are when they contact you. This is probably the single most common form of customer contact, and without a customer database you simply can't help them. So you will be unable to do the most important customer service task that a small shareware software company does. This won't earn goodwill, it will just get your customers mad when they contact you and you can't help them.

Comments

[Steve Pavlina]

My "burn the ships" line is often misinterpreted to mean that you should take big, foolish risks to start your own business. Although I've often suggested burning the ships to strengthen commitment, I did not say that you should burn the food and supplies as well.

I wrote a clarification about this in March 2005:
http://www.stevepavlina.com/blog/2005/03/cultivating-burning-desire/

When I switched from indie games to personal development in 2004, I burned the ships and cut off the possibility of turning back for myself. But I maintained my food and supplies, so I wasn't in danger of starvation.

[Jack Norton]

I kept my job for 5 months, then released USM that didn't go as expected, then switched to part-time and made Spin Around who did not so well, then I finally became full-time indie and started to have some satisfactions with Universal Boxing Manager, The Goalkeeper and other titles.
I was still living with my parents though :)