First Thoughts After A Micro ISV Launch

About two weeks ago I stealthly announced my new micro venture. Since there seeems to be some interest in tracking experience reports as of late, I'm providing you with my latest thoughts on this.

First, the idea of what product one should sell. The first thought is that it should be fast and inexpensive to put together. You want to be able to test the market and fail fast, or put in anotherway "achieve success by doubling your failure rate". Therefore, allocate about 3 months of time developing in part-time.

The second aspect of the product is that it has got to "collect someone else's garbage". One of the biggest blind spots of technical people is the belief that if you build a better mousetrap the customers will come in hordes. The reality is, if you sell something that claims to be a the coolest technical wizardy since the wheel, then your potential customers may just want to do it themselves. Afterall, its so cool, they just have to do it.

Finally, there's that concept of "asymmetric information". That is when parties on one side of the market have much better information than those on the other side. The greater the difference between the information a buyer and seller perceives about a product, the greater the potential for profit. That is, if you try to sellsoftware built by software professionals to other similar software professional, it is more likely they'll pay next to nothing for it. Therefore, you should never target an audience just like yourself. Ever wonder why open source software tends to be free?

Ideas of course are a dime a dozen. Brilliant ideas don't make money, its execution that does. The business landscape is littered with brilliant ideas that have been utter failures. On the otherhand it's populated with mundane ideas with impeccable execution. Who would ever think that you could build an empire like Starbucks by simply selling coffee? Or even close to home, a conglomerate like Dell by simply selling white box personal computers? Lots of people have sold coffee, lot's of people have sold PCs, however to winm, it's all in the execution.

So let's get down to earth a bit and talk about execution in the context of micro ISV. That is in an environment that you simply aren't going to spend a whole lot of time on. Remember, the guideline "fail, fast and cheaply", in otherwords, you aren't going to gamble all your marbles on a single venture. That marbles includes both time and money. The quandry then is this, how can one execute effectively?

The first obstacle I've encountered is trying to get potential customers to know about the existence of the product. How can one drive traffic at an extremely low budget? First I made sure that I was listed on all the relevant sites. That is, you can find my product at dmoz, eclipse.org and other popular eclipse community sites. The next step is to get the word out to more traditional print media. In this day and age, there still are alot of people who read nothing other than paper.

Now regarding an advertising budget, like many I've taken advantage of google ads. One thing I noticed about google ads is that you can use it to get a glimpse of the market's interest in a subject matter. It doesn't cost too much, I'm not too sure about its effectiveness just yet, however my consolation is that it can build brand awareness.

In terms of payment processing, I chose to use a multitude of vendors. I initially started with Emetrix a ecommerce network under the umbrella of Digital River. The company takes away $3.00 or 13.9% out of every transaction, however it allows me to sell my wares worldwide. I've received orders from as far out as South Africa.

I also signed up for both Amazon and Paypal. The thought behind Amazon was that it would reduce the steps in purchasing. Many people already have their account information in Amazon, I was hoping this extra conveniece would help improve the sale. One unfortunate requirement for Amazon is that the product needs a universal identifier like an ISBN or a UPC code for them to list a product. Unfortunately, ISBNs and UPC are prohibitively expensive for a micro ISV. That is ISBNs entry costs start at $200 and UPC codes start at $700. It is hard to see if this kind of investment is worth the Amazon placement.

In the two weeks that the product has been out I can report that sales have far from spectacular, matter of fact I would consider them misereable. However, like any venture, it takes time to get the word out and it takes time to grow. I'll report more about my experiences in the coming weeks.