The Recursive ISV

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We all have our favorite software development tools. The tools of our trade.  You most likely have yours, I know I have mine.  During the course of these articles I’ll expand on a few of them.  But first up I’m going to talk, as promised, about my two favorite business development tools.  Business plans and Marketing plans.

Before I do though, I’d like to elaborate on my statements in the Part 1 regarding the purchase of web templates, widgets and icons, a few people emailed to query this.  When I said “the best” I was referring to the best within my budget.  My budget is not huge so the “best” is not necessarily the “best there is”.  Like most things in life you get what you pay for when it comes to quality.  Aim for the best in your budget.  Don’t skimp just to be a cheapskate, if you can afford it do it and try to budget for the best you can.

OK.   Before we get to actually working with a business plan there’s the essential step that it seems most mISV’s completely ignore.  Now, you’ll note I said mISV and not ISV.

In this instance I have a reason for that.  Size.  Larger startups tend (though certainly not always) to have a team - even if there is only a single founder or partnership.  The team approach usually, again not always, brings experiences that most programmer started solo startups don’t have.  Namely experience dealing with marketing, finance, research and development and networks of folks in those areas.

These experiences, or even specializations, tend to go hand in hand with the first step.

Market Research.

You’ll hear from some developer quarters a chorus of howls dismissing market research as claptrap.  The same folks state marketing is bunk and the usual comments that come from folks who keep blaming piracy, customers, the world economy and space dust as reasons for why their mISV is as viable as a twelve month old peanut butter sandwich.

Truth is market research is probably the most critical step in starting up.  Without it you are blind.  You’re hoping to sell something to a market you haven’t even truly defined.  Ignore it at your peril. 

You might wing it - but the statistics are against you.  It’s one of the major reasons, not the only reason to be sure - quality and other factors play a role - for abandonware.

No market, no clue, no sales.  Or nearly as bad.  Wrong target market, no clue no sales - which basically means you have a product with potential and end up trying to sell it to the wrong people.  The old selling ice to Eskimos problem.  You can’t do it consistently and profitably.  You’re in the wrong market.  It’s imperative you know which one is right.

Get Some Focus

Finding out, or doing market research tends to be problematic for mISV’s.  It’s because what we do and how we run our lives is defined by the computer.  Research?  Oh - Google, right!  

Wrong.  At least wrong as the only tool.

Sure, you can do some research using a search engine.  You can do some more ploughing through Usenet (increasingly less so as Usenet fades away), joining forums and all the usual stuff you’ll see people recommending.  These are valid tools. 

But if you’re going to be running a business - and your serious about this, I’m not really addressing hobbyist developers here - then you need to start thinking beyond the monitor and keyboard.

The real world.

Now there’s a scary thought.  Looking for information in the “real world”.  But guess what - it’s where our customers live.  For the most part it’s where their pain lives and their pain and solutions to that is what we’re about, or should be about.

You can ring around and talk to folks, that’s a great start, but I recommend getting off your backside and actually meeting people face to face.  I’m not going to go into the psychology for this, though it plays a vital role in terms of garnering real honest feelings and perspectives from people, but suffice to say you’ll extract and learn more from people by talking face to face and observing what they do than reading about it on the Internet or a book. 

In politics we call it “meet and greet”.  It’s an essential tenet.  It’s not just about buying votes (marketing and sales), it’s market research.  It’s when we find out what people are thinking, good or bad, about us, themselves, our competitors, their problems, their pain, their dislikes, their likes, their passions and their methods.   

Without the meet and greet approach you’re getting half truths and fabrications if you rely entirely upon electronic or Internet based research tools. 

People find it easy to tell white lies via email, on forums, in blogs, on website’s and even over the phone.  There is a simple reason for this.  There is no eye contact.  Eye contact is essential in human communication.  Remember, you’re not asking them what their favorite colour is, you’re asking them to provide information that may well affect your future.

So, if you’re selling Baseball Collectors Cards software then get out their to Baseball Card swap meets, or whatever it is Baseball Card collector folks do. 

Ask them what their problems are - don’t just talk about computer solutions!!  Most people are not developers or developer like.  They define their computer type problems in paradigms they are used to, you’re job is to avoid preconception of ideas and only gather the raw data for analysis.  Listen to everything and anything they have to say and make notes.  You never know what little nuggets of information you’ll pick up. 

Folks writing B2B software should be visiting business and talking to business people.  Nobody, B2B or B2C gets off the hook on this one.  If you think you know everything there is to know then you are dead meat in the marketplace as you’ll rapidly atrophy.

“So Not Cool”

AS my daughters would say. 

But seriously, you might hate this stuff, but no market research is lazy, stupid and a prophecy in the making.  The outcome of the prophecy is literally “beyond blind luck you will fail without knowing your market.” 

The statistics for blind luck are not in your favor.

Competition

Competitive Edges

Another factor naturally is finding out what the heck your competitors are doing.

Whether mISV’s think they have competitors or not - they invariably do. 

A competitor need not be software.  When I wrote herpetology software my biggest competitor was actually the humble A4 spiral bound paper notebook. 

Folks found it easier and quicker to scribble animal observations into the paper notebook than to enter or even transfer them to a computer.  Portable devices were not as prevalent then (and had lots of compatibility issues) and so it was my job to recognize and address this. 

Another competitor I had was MS Excel ®.  Excel was actually easier to compete against than the paper based notebook because at least these people using Excel had made the jump to the computer from the paper notebook.  Importing spreadsheets solved this to some degree, though I never did come up with a viable method of importing paper. 

There are bundles and bundles of great books on Amazon that give detailed methods and ideas on how to do these things.  Because a lot of business development stuff is country and region specific it’s difficult to point to direct resources to assist you.  Most regions have small business development bureaus.  They usually have packs available on request, sometimes at a nominal fee, providing relevant local information and resources.

But nothing beats a little bit of creativity and  thinking outside the squares - and nothing beats a real “meet and greet” with people who are likely to be your customers.

Oh - and buy some market research books.  Read reviews, look for books with information relative to your region.  This should be part of your budget, not on top of it and not done with “what’s left over”.

I’ll continue in Part 3, aiming to cover some basic finance issues.

Scott Kane

Quote of the day:
I went into a McDonald’s yesterday and said, ‘I’d like some fries.’ The girl at the counter said, ‘Would you like some fries with that?’ - Jay Leno

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