Micro-ISV.asia

Friday, 25 April 2008

Be Good, and Charge for It

Filed under: Business of Software — Jan Goyvaerts @ 17:05

If you combine the “be good” part of this blog post and the “charge for it” theme of this video, you get the philosophy I drew up for Just Great Software in 1999 and lauched in 2000. Almost 10 years later, Just Great Software is still here, stronger than ever, running on the same philosophy.

Conceptually, starting a Micro-ISV is easy. Write a decent product that solves a particular problem or fills a certain need that hasn’t been solved or filled as well yet for part of the target market in the past. You don’t need to come up with something totally new. It’s very difficult to get people to want something they’ve never wanted before. You don’t need to dominate your market. You’re better off serving 10% of the market really well. Those customers will be loyal, and you won’t make yourself a big target for a large company trying to move into the space.

Once you’ve got that nice product, charge for it! Giving it away for free would give you a much larger user base much faster. But converting freeloaders into paying customers is very hard. Charging up front will give you fewer customers. But you’ll have the money to take good care of them, and feed your family. Ultimately, that’s far more satisfying. Fewer customers means fewer support requests. Fewer support requests means that you (and you co-developers, if any) can handle them yourself. Though providing support can be stressful, it helps you keeps your finger on the pulse. Getting “thank you” notes (and sales!) after helping a (prospective) customer is very satisfying.

1,000 customers who buy your $99 product a year equals $99,000. 1,000 customers is not a lot. It’s less than 3 sales a day. It doesn’t matter if millions of people don’t want to pay for your software. You only need to find those 1,000 you need. According to salary.com, $99K about twice the average salary for a programmer in the US. And no corporate meetings to attend to!

Running a Micro-ISV is no get-rich-quick scheme. It’s hard work, but also very satisfying. And far more secure than a job. Piss off one boss, and your job is gone. Pissing off 1,000 customers all at the same time is much harder. Take care of them, and they’ll keep coming back for upgrades, more products, and refer their friends and colleagues to you.

Your first $100,000 will be tough. The second $100,000 will be easier. Good luck!

4 Comments

  1. Well said Jan! Most developers have a very skewed conception of how this business works – they see the media/blogger coverage and assume that’s the way it works. It’s not as you and tens of thousands of other microISVs have proven.

    Comment by Bob Walsh — Friday, 25 April 2008 @ 21:42

  2. I’d be interested in hearing some about your choice of Thailand. Did you grow up there or were you from somewhere else first? My co-worker is Thai, and he thought from your name that you were probably not a native of Thailand.

    BTW, I work for Cal Tech as a contractor to NASA, and the fact that your software has to be “imported” was the biggest headache in getting a purchase going. It took me over 2 months to get all the approvals signed off. The cost of the purchase process far exceeded the cost of the product. You could have charged 1 penny and I’d have had to do the same work to get the purchase.

    I learned that lesson, and the next purchase, I did on my own credit card and then just left a few hours early one afternoon to make up for it.

    Comment by Eric — Saturday, 26 April 2008 @ 4:29

  3. As a one-man company, I like your blog dealing with issues concerning small software developers. I couldn’t agree more that the quality of the product is what keeps users loyal. This year marks my 20th year of developing the same very specialized product. I am about to launch version 7.

    Comment by Phil Caracena — Sunday, 27 April 2008 @ 11:43

  4. […] work that way. People don’t come looking for free stuff with their wallets in their hands. Be good and charge for it is a much better model. Next time I’ll talk about why we do make EditPad Lite available for […]

    Pingback by Snarky about Snarketing - Micro-ISV.asia — Monday, 21 July 2008 @ 14:00

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