Picking your micro-ISV niche

Picking your micro-ISV niche. By Bob Walsh, Safari Software, Inc.

Over at The Business of Software forum, Jackson asked today,

“…But the problem is – how to know what kind of (web or desktop)
app to build. How do you detect the trend that will be big, while the
trend is still in its infancy?”

Of the 68 things you have to do to be a successful micro-ISV,
figuring out what kind of app you’re going to build is first and
foremost. Get this right, a few years of sweat, toil and work may just
make you the next Google Guy; get it wrong and all that effort will be
wasted barking up the wrong tree.

Now if I had the absolute right, one-size-fits-all, ironclad answer
to this I’d package it up, sell it, and sail off to some very nice
tropical isle. No such luck. But I can suggest three pointers, based on
the research I did for my micro-ISV book, and a bit more rumination since it came out in January to get you started.

Get off the Hype Cycle.

Teenagers have cloths and cell phones, programmers have the latest
and greatest programming technology. They share one thing in common:
the Hype Cycle. The Gartner Group defined this 12 years ago as the
cycle new technologies go through, whether they’re as big as P2P VoIP
or as small as Ruby on Rails.

They cycle starts with a Technology Trigger, such as Jesse James Garrett’s seminal post on Ajax. Then it moves to the Peak of Inflated Expectations (where we are now) when everybody who is anybody or wants to be anybody is doing it and getting VC money to do it. Next is the Trough of Disillusionment,
when the shine is off the apple, the VC money runs away and people
wonder what all the fuss was about. Finally, maybe, the technology
makes it to the Slope of Enlightenment and perhaps the Plateau of Productivity where real benefits, revenue and results accrue.

Over 25 years, I’ve seen a multitude of technologies ride the Garner Hype Cycle (more info here and here). The Hype Cycle is not your friend if you’re starting or building a micro-ISV:

  • Hype Cycles and VC money were made for each other, hence the VC
    saying, “fund 20, pray for 2”. Unless you get very lucky, or can
    program very fast, your odds of catching a Hype Cycle at the very
    beginning are marginal.
  • If you miss the wave, you are going to go down. “Me too!” is not a
    revenue strategy for micro-ISVs – we usually don’t have OPM (Other
    People’s Money) to burn.
  • Micro-ISVs have customers – or hope to. Customers have problems
    they hope to have fixed. If the technology being hyped can’t be used to
    fix a real problem, it’s not going to fuel your micro-ISV.

Don’t write a product for programmers.

For most programmers who decide to go micro-ISV, the first impulse
is to write an app or tool or library for other programmers. Very
common, very human, very wrong. Now don’t get me wrong, I love new
programming tools and stuff as much as the next programmer. And if
you’ve got a genuine product that will solve one of my many unmet
needs, I’m going to poke around Google until I find you.

But as a micro-ISV market, programmers suck. Unless you’re product does something I really am impressed with,
the typical programmer is going to puff up their chest and huff, “I
could code that in an afternoon!” as they click off your web page.
What’s more, the programmer market is from a marketing point of view
dozens of tiny little programming language enclaves, each jealous of
the others.

Finally, a programming tool is not the same as a way to solve a
specific problem that people online with money actually have, it’s just
a potential: it will be a very hard sell to convince IT managers or
individual programmers that they need another tool unless they just so
happen to need that particular tool at that particular time.

Pick part of the Long Tail, and solve it well.

One of the few key advantages micro-ISVs have over existing
companies is the opportunity to look at a problem and solve it better
and deeper. The world abounds with problems solved poorly or not at all.

Think about any company you’ve ever worked work and how they used
Microsoft Excel as the application to solve all sorts of specific small
business problems. Why? Because until very recently it was just not
economically feasible to develop, market and support a solution to a
business or consumer information problem that only a few people here
and there had.

With a billion people using the Internet, and the ability to create
an instant market with the right search terms, there are tens of
thousands of problems that can be solved lucratively now by micro-ISVs.
It’s called the Long Tail, and if you don’t know about it, it’s time you get read in. The Long Tail and micro-ISVs were made for each other.

Picking your micro-ISV’s market and defining your first application
– be it for the web or desktop or mobile or PDA – is not easy, but it
is critical. I’ll have more to say down the road re finding problems
worth solving, but for now, avoiding the Hype Cycle, getting
knowledgeable about the Long Tail and not writing a programmer product
will get you off to a good start.  [MyMicroISV]

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