Bill — he only reveals his first name — has “gone from a one-man micro ISV selling shareware for a few hundred bucks a month on the side, to building up into a 5-employee, $2 million software company.”
When he started his company, he saw a choice:
It really comes down to, would you rather make a new widget with 99% chance of making nothing and 1% chance of making $10 million; or a 50% chance of making $1 million for the same amount of time and effort (for a remake of some boring business-to-business product but done better)? The former is what everybody seems to do, but the latter is what I did making my very niche vertical market software. It took me over a decade to build, but the money keeps coming in and last year my sales were just under $2 million of which $800K was profit. Not bad for under 200K lines of code!
Once he had a little success, he quickly became cynical:
For some reason I got inundated with all kinds of companies wanting to be “strategic partners” or form a “strategic alliance.” No, they never want to buy anything, in fact they all would in effect be suppliers to me. But they still want to fly out and meet with me, and get my brochures and specs, and see demos, and have telecons, and talk about “joint marketing opportunities,” and sign this NDA and that exclusive teaming agreement, and oh yea, could I help pay for some ad or some trade show booth with them, or help them put together a proposal for some bid. Huh? Yet for some reason at first I couldn’t say “no” if it was just talking with them or trading information. I was a nice guy. I wasn’t about to spend anything or sign anything, but when they’d say “we’ll be out there the 22nd, how’s 3pm sound?” what was I supposed to say? So there I was giving demos all the time and sitting on telecons about nothing and writing up this and that.Soon all the overhead phone calls and emails and visits and demos with these wanna-be “strategic partners” I realized were a complete waste. None of them would bring me any new business — they all just wanted a piece of my action.
He also became cynical about his friends who said they wanted to work with him on his new project:
So when it came down to it, no, my coworker couldn’t quit and work with me for free for a year for a big chunk of the company if we hit it off, because he didn’t want to spend his savings and 401K until we had income. Too risky for him and that was totally understandable.What wasn’t so understandable and was disappointing to me, was over the next several years as I took all the risk, finished the product, hit the road selling it, fretted over meeting delivery schedules, took out loans to pay for the equipment and hoped the customer would pay on time, after all that he finally wanted to join. [...] He seemed disappointed and finally said he expected he’d get a share of the company “since I’m one of the first employees.” I asked how much were you thinking? He replied “I don’t know, 30, 40 percent maybe.”
Wow.
Anyway, Bill goes on to explain how to sell your software for $20,000:
- Find software out there that sells for $20,000 a copy
- Pick the products that are supporting a handful of million-dollar companies.
- Build the product but only with the core features
- Get your name out in the industry
- Present yourself as consultingware — it won’t matter that it’s you against big companies