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Micro-ISV From Vision to Reality
■■■
Bob Walsh
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Micro-ISV: From Vision to Reality Copyright © 2006 by Bob Walsh All rights reserved. No part of this work may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage or retrieval system, without the prior written permission of the copyright owner and the publisher. ISBN (pbk): 1-59059-601-3 Printed and bound in the United States of America 9 8 7 6 5 4 3 2 1 Trademarked names may appear in this book. Rather than use a trademark symbol with every occurrence of a trademarked name, we use the names only in an editorial fashion and to the benefit of the trademark owner, with no intention of infringement of the trademark. Lead Editor: Jonathan Hassell Technical Reviewers: Craig Snyder, Thomas Rushton Editorial Board: Steve Anglin, Dan Appleman, Ewan Buckingham, Gary Cornell, Tony Davis, Jason Gilmore, Jonathan Hassell, Chris Mills, Dominic Shakeshaft, Jim Sumser Project Manager: Kylie Johnston Copy Edit Manager: Nicole LeClerc Copy Editor: Kim Wimpsett Assistant Production Director: Kari Brooks-Copony Production Editor: Lori Bring Compositor: Susan Glinert Proofreader: Linda Seifert Indexer: Carol Burbo Cover Designer: Kurt Krames Manufacturing Director: Tom Debolski Distributed to the book trade worldwide by Springer-Verlag New York, Inc., 233 Spring Street, 6th Floor, New York, NY 10013. Phone 1-800-SPRINGER, fax 201-348-4505, e-mail [emailprotected], or visit http://www.springeronline.com. For information on translations, please contact Apress directly at 2560 Ninth Street, Suite 219, Berkeley, CA 94710. Phone 510-549-5930, fax 510-549-5939, e-mail [emailprotected], or visit http://www.apress.com. The information in this book is distributed on an “as is” basis, without warranty. Although every precaution has been taken in the preparation of this work, neither the author(s) nor Apress shall have any liability to any person or entity with respect to any loss or damage caused or alleged to be caused directly or indirectly by the information contained in this work. The source code for this book is available to readers at http://www.apress.com in the Source Code section.
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This book is for the woman I love and my partner in life, love, and work: Tina Marie Rossi.
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Contents at a Glance Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii About the Technical Reviewers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xix
■CHAPTER 1
Having a Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
■CHAPTER 2
Developing the Micro-ISV Way . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
■CHAPTER 3
Presenting the Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
■CHAPTER 4
Business Is Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
■CHAPTER 5
Focusing on the Customer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
■CHAPTER 6
Welcome to Your Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
■CHAPTER 7
What Happens Next? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
■APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 ■INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325
v
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Contents Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii About the Technical Reviewers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xix
■CHAPTER 1
Having a Vision
............................................1
How We Got Here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 What Here Looks Like . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Joining the Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 The Systematic Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 The Joel Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 An Even Shorter Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Paying the Cover Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
■CHAPTER 2
Developing the Micro-ISV Way
. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Designing Your Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Creating Use Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Creating Paper Prototypes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Decisions, Decisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Developing the Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Examining Your Development Infrastructure . . . . . . . . . . . . . . . . . . . . . . . 33 Using SourceGear Vault . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Using Perforce Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 When the Going Gets Tough, the Tough Get Virtual . . . . . . . . . . . . . 37 Addressing the Quality Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Getting the Beta Advantage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Quantity Has a Quality All Its Own. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Organizing Your Beta Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
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■C O N T E N T S
■CHAPTER 3
Presenting the Product
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Getting on the Cluetrain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Beginning at the Beginning: Who Are You? . . . . . . . . . . . . . . . . . . . . . . . . 56 Good Looks Matter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Icons for You . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Happy People Being Happy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Show, Don’t Tell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Moving Pictures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Templates for Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Mastering Your Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Creating a Good Domain Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 “But All the Good Names Are Taken!” . . . . . . . . . . . . . . . . . . . . . . . . 72 Buying Your Domain: Go Daddy, Go! . . . . . . . . . . . . . . . . . . . . . . . . . 74 Covering the Nuts and Bolts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Getting Paid: Nuts, Bolts, and Bucks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Working with PayPal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Doing Business the 2Checkout.com Way . . . . . . . . . . . . . . . . . . . . . 93 Going with VeriSign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 To Host or Not to Host . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Blogging for Fun and Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 Hi-Ho, Hi-Ho, It’s Off to Blog We Go…. . . . . . . . . . . . . . . . . . . . . . . 105 Blogs and Micro-ISVs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
■CHAPTER 4
Business Is Business
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
You, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 Sole Proprietorship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Limited Liability Company (LLC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 Subchapter S Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 Subchapter C Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 Getting Things Done in Your Micro-ISV . . . . . . . . . . . . . . . . . . . . . . . . . . 136 GTD for Micro-ISVs: The Overview . . . . . . . . . . . . . . . . . . . . . . . . . . 136 The Government, the Law, and You . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 Your Product’s EULA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 Legally Protecting Your Software . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 And What About the Government? . . . . . . . . . . . . . . . . . . . . . . . . . . 155
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■CHAPTER 5
Focusing on the Customer
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Your Marketing Re-Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 Marketing for Micro-ISVs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Starting with SIMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 Hand Me the MAP, Please . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 Email: Retail, Wholesale, and You. . . . . . . . . . . . . . . . . . . . . . . . . . . 163 You Have Mail—Lots of It! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 You Can’t Say That Anymore! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 Current Email Marketing Realities . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Technical Support Is Customer Support . . . . . . . . . . . . . . . . . . . . . . . . . . 171 No Sympathy for the Devil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 Doing Tech Support Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 Tech Support Is Like Beta Support, Only More So . . . . . . . . . . . . . 173 Discussion Boards: Listening to Your Customers . . . . . . . . . . . . . . . . . . 176 What to Look For . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 When to Do It . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 Approach 1: Code It Yourself . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 Approach 2: Open Source, Kind Of: phpBB . . . . . . . . . . . . . . . . . . . 180 Approach 3: Outsource to Invision . . . . . . . . . . . . . . . . . . . . . . . . . . 181 Approach 4: By, for, and of Micro-ISVs . . . . . . . . . . . . . . . . . . . . . . 182 Where Your Customers Start . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 How to Do General Site Submission Right . . . . . . . . . . . . . . . . . . . . 186 Google, Relevancy, and Your Micro-ISV . . . . . . . . . . . . . . . . . . . . . . 191 Doing the Download Tango . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 CNET Download.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 Tucows.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 Microsoft Office Marketplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 All the Rest and Lessons Learned . . . . . . . . . . . . . . . . . . . . . . . . . . . 203 The Influencers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
■CHAPTER 6
Welcome to Your Industry
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
What About Microsoft? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 The Microsoft Empower Program . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 The Microsoft Buddy Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 The Other Microsoft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 The Microsoft Digital Locker Program . . . . . . . . . . . . . . . . . . . . . . . 218 The Office Marketplace Program . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 Microsoft Wants You! (Maybe.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 Keeping an Eye on Microsoft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
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Business Intelligence Is Intelligent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 The Initial Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 Strengths, Weaknesses, Opportunities, and Threats (SWOT) . . . . 232 Talk, Talk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 Finding Others on the Road . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238 Joel on Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238 Association of Independent Software Industry Professionals (AISIP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239 Association of Shareware Professionals (ASP) . . . . . . . . . . . . . . . . 240 Educational Software Cooperative (ESC) . . . . . . . . . . . . . . . . . . . . . 242 Your Micro-ISV Industry Cheat Sheet . . . . . . . . . . . . . . . . . . . . . . . . 244
■CHAPTER 7
What Happens Next?
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
Emerging Micro-ISVs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 Successful Micro-ISVs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 Very Successful Micro-ISVs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294 You’ve Reached the Bottom Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313
■APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 Chapter 1: “Having a Vision” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 Chapter 2: “Developing the Micro-ISV Way” . . . . . . . . . . . . . . . . . . . . . . 315 Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 Chapter 3: “Presenting the Product” . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 Chapter 4: “Business Is Business” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320 Chapter 5: “Focusing on the Customer” . . . . . . . . . . . . . . . . . . . . . . . . . 321 Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 Chapter 6: “Welcome to Your Industry” . . . . . . . . . . . . . . . . . . . . . . . . . . 323 Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323 Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323
■INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325
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Foreword H
ow the heck did I become the poster child for the micro-ISV movement? Of all people. Sheesh. When I started Fog Creek Software, there was gonna be nothing “micro” about it. The plan was to build a big, multinational software company with offices in 120 countries and a skyscraper headquarters in Manhattan, complete with a heliport on the roof for quick access to the Hamptons. It might be a few decades—after all, we were going to be bootstrapped, and we always planned to grow slowly and carefully—but our ambitions were anything but small. Heck, I don’t even like the term micro-ISV. The ISV part stands for Independent Software Vendor. It’s a made-up word, made up by Microsoft, to mean “software company that is not Microsoft,” or, more specifically, “software company that for some reason we have not yet bought or eliminated, probably because they are in some charming, twee line of business, like wedding table arrangements, the quaintness of which we are just way too cool to stoop down to, but you little people feel free to enjoy yourselves. Just remember to use .NET!” It’s like that other term, legacy, that Microsoft uses to refer to all non-Microsoft software. So when they refer to Google, say, as a legacy search engine, they are trying to imply that Google is merely “an old, crappy search engine that you’re still using by historical accident, until you bow to the inevitable and switch to MSN.” Whatever. I prefer software company, and there’s nothing wrong with being a start-up. Start-up software company, that’s how we describe ourselves, and we don’t see any need to define ourselves in relation to Microsoft. I suppose you’re reading this book because you want to start a small software company, and it’s a good book to read for that purpose, so let me use my pulpit here to provide you with my personal checklist of three things you should have before you start your micro…ahem, start-up software company. You should also do some other things—Bob covers them pretty well in the rest of the book—but before you get started, here’s my contribution. Number One: Don’t start a business if you can’t explain what pain it solves, for whom, why your product will eliminate this pain, and how the customer will pay to solve this pain. The other day I went to a presentation of six high-tech start-ups and not one of them had a clear idea for what pain they were proposing to solve. For example, I saw a start-up that was building a way to set a time to meet your friends for coffee, a start-up that wanted you to install a plug-in in your browser to track your every movement online in exchange for being able to delete things from that history, and a start-up that wanted you to be able to leave text messages for your friend who was tied to a particular location (so if they ever walked past the same bar they could get a message you had left for them there). What they all had in common was that none of them solved a problem, and all of them were as doomed as a long-tailed cat in a room full of rocking chairs. Number Two: Don’t start a business by yourself. I know, there are lots of successful oneperson start-ups, but there are even more failed one-person start-ups. If you can’t even convince one friend that your idea has merit…um…maybe it doesn’t. Besides, it’s lonely and depressing, xi
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■F O R E W O R D
and you won’t have anyone to bounce ideas off of. And when the going gets tough, which it will, as a one-person operation, you’ll just fold up shop. With two people, you’ll feel an obligation to your partner to push on through. (P.S. Cats do not count.) Number Three: Don’t expect much at first. People never know how much money they’re going to make in the first month when their product goes on sale. I remember five years ago, when we started selling FogBugz, we had no idea if the first month of sales would be $0 or $50,000. Both figures seemed just as likely to me. I have talked to enough entrepreneurs and have enough data now to give you a definitive answer for your start-up. That’s right, I have a crystal ball and can now tell you the one fact you need to know more than anything else: exactly how much money you’re going to make during the first month after your product goes live. Ready? OK. In the first month, you are going to make… about… $364, if you do everything right. If you charge too little, you’re going to make $40. If you charge too much, you’re going to make $0. If you expect to make any more than that, you’re going to be really disappointed and you’re going to give up and get a job working for The Man and referring to us people in start-up-land as legacy micro-ISVs. That $364 sounds depressing, but it’s not, because you’ll soon discover the one fatal flaw that’s keeping 50 percent of your potential customers from whipping out their wallets, and then tada! you’ll be making $728 a month. And then you’ll work really hard, and you’ll get some publicity, and you’ll figure out how to use AdWords effectively, and there will be a story about your company in the local wedding planner newsletter, and tada! You’ll be making $1,456 a month. And you’ll ship version 2.0, with spam filtering and a Common Lisp interpreter built in, and your customers will chat amongst themselves, and tada! You’ll be making $2,912 a month. And you’ll tweak the pricing, add support contracts, ship version 3.0, and get mentioned by Jon Stewart on The Daily Show and tada! $5,824 a month. Now we’re cooking with fire. Project out a few years, and if you plug away at it, there’s no reason you can’t double your revenues every 12 to 18 months. So, no matter how small you start (detailed math formula omitted—Ed.), you’ll soon be building your own skyscraper in Manhattan with a heliport so you can get to that 20-acre Southampton spread in 30 minutes flat. And that, I think, is the real joy of starting a company: creating something all by yourself, nurturing it, working on it, investing in it, watching it grow, and watching the investments pay off. It’s a hell of a journey, and I wouldn’t miss it for the world. Joel Spolsky Cofounder, Fog Creek Software
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About the Author
■BOB WALSH has been a contract software developer in the San Francisco Bay Area for the past 22 years, specializing in desktop information systems. His company, Safari Software, has for the past decade amazingly focused on the same thing, albeit at a higher hourly rate. In 2003, as outsourcing finished what the dot-com bust started, he developed MasterList Standard Version, an Excel-based project and task management application. Two years and 40,000 users later, Safari Software became a real, live, rootin’-tootin’ micro-ISV by releasing MasterList Professional, a Windows personal project and task management application that, unlike traditional time management tools, gives you total control over your business and personal life while improving how you spend your time. Before joining the ranks of the computer industry, Bob was a reporter for several news organizations, most worth bragging about being United Press International (UPI).
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About the Technical Reviewers
■CRAIG SNYDER is currently the chief software architect for Inclue, the publisher of a new RSS/ Web feed reader for Microsoft Outlook. Craig has a bachelor’s degree in computer science from a local university in San Diego and and has more than 25 years of experience in all facets of engineering and engineering management, including software development, quality assurance, and technical publications for start-ups and established organizations. Craig has a diverse background in several vertical markets spanning entertainment, financial, Internet security, homeland security, industrial controls, customer management, real estate, and communications. ■THOMAS RUSHTON has been programming since his first computer, a Sinclair ZX80. He has since progressed through creating complex workflow and document management systems for financial and legal organizations and now works as the IT technical development manager for a U.K.-based law firm. He has a bachelor’s degree in computer science from Durham University and spent some research time in the field of software quality before moving into the more financially rewarding IT career roles of programmer, DBA, and consultant. When not slaving away over a hot keyboard, he enjoys spending time with his wife, Sarah; their young son, William; and his double bass.
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Acknowledgments A
cknowledgement sections of books tend to get skipped by readers eager to get to the good stuff, and that’s a shame because without these people this book would not have happened. First off to my Apress editor, Jonathan Hassell, and project manager, Kylie Johnston: thanks guys for your help and support and for holding my feet to the fire when deadlines loomed! Also thanks to Kim Wimpsett for whacking my poor prose into proper copyedited shape, Kurt Krames for the cover, and to Susan Glinert and Lori Bring for getting everything to actually fit on a printed page. Next off, Joel Spolsky, who helped sell Apress on the idea of this book, let me badger him with questions and has helped hundreds of developers with Joel on Software: thanks, Joel! A great many people were interviewed for this book, and to each and every one of them I say, thanks for taking the time out of your busy lives to answer my questions about what you do.
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Introduction I
n February 2005, after releasing my first commercial application, I went looking for all sorts of information that would help me market, support, and improve my product. I wasn’t especially happy with what I found. There were books aplenty on starting retail businesses, restaurants, inns—you name it— except a self-funded software company. There were a few pre-Internet books, now mostly out of print, about how to start a shareware company, and there were a few books out about how to write the killer business plan that would woo venture capitalists to fund your start-up but nothing about how to define a product, develop it, support it, market it, and do all this 100 percent on the Web. I did find one really good Web site, the Business of Software forum at Joel on Software (http://discuss.joelonsoftware.com/?biz), where a whole bunch of developers starting or running companies would offer suggestions and advice to anyone politely asking. As plentiful as the advice was at Joel on Software, it tended to be uneven and fragmentary. I decided that if there wasn’t a single good book on how to start an Internet-based software company, then I should go out there and research and write one. This is that book. A very long time ago, before becoming a programmer, then a developer, I was a reporter. I figured that if I dusted off my old journalism habits and went looking for the information I and lots of other developers needed, I could find people out there with the answers. What I did not figure on when I started this book was that there is real news going on here: from Boise to Bulgaria, developers are starting their own companies to bring to market their own solutions in record numbers. For every Internet software vendor you read about who just got funded by one or another venture capital funds, there are hundreds of micro–Internet software vendors successfully building desktop applications and Web-based products, distributing their software exclusively on the Net, and building companies that start with one person and often scale up to 20, 50, and 100 employees in a few short years.
Who This Book Is For This book is for that one developer who starts the whole thing off. One day, after yet another mind-numbing meeting at Big Company, Inc., when they’ve had a bellyful of working for clueless people, I want that developer to go searching with Google or browsing Amazon, find this book, and see how the pieces can come together for them to start their own, wildly successful micro-ISV. I’m assuming you already know how to code: in fact, this is one of those rare Apress books without a single line of code! What I’m guessing you’re looking for is really current, Internetcentric information about how to go from the desire to be your own boss, how to define what you want to work on, and exactly how best to code a solution through all the facets of running an online software business all the way to seeing the money roll in. xix
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■I N T R O D U C T I O N
How This Book Is Structured In a lot of ways, this book is a process book. You start at the beginning with a desire and then work through in roughly chronological order all the moving parts you need to connect to get to the point where your micro-ISV is up, running, and making money. Here’s the chapter-by-chapter rundown: Chapter 1, “Having the Vision”: The two big take-aways from this chapter are how we got to a place where micro-ISVs can be successful and how you can find a problem worth solving as your micro-ISV’s first product. I’ll also cover who thought up this mouthful of a term, micro-ISV, and seven rules for avoiding much micro-ISV pain. Chapter 2, “Developing the Micro-ISV Way”: Once you’ve found the right idea, it’s time to get into developing. But not so fast—developing your micro-ISV’s product is unlike working at Big Company, Inc., or being a contract developer. In this chapter, I cover those differences and look at designing your first commercial product, setting up a development environment that leverages your limited time and money to produce high-quality, customer-focused software, and finding and managing beta testers. Chapter 3, “Presenting the Product”: While you’re developing away, it’s time to look at your product. Your application is not your product. Your application plus your Web site, blog, documentation, installer, license, graphics, collaterals, payment processing, customer experience, and Unique Selling Proposition is your product. Everything from finding the right domain name to how easy it is to buy your software is going to affect your sales, and in this chapter, I cover a slew of things that go into how potential customers experience your software. You will especially take a look, bit by bit, at what makes a good micro-ISV Web site good. And I’ll talk with Mena Trott, cofounder of Six Apart (makers of TypePad and Movable Type), about how to build a blog that makes friends, builds credibility, and influences potential customers. Chapter 4, “Business Is Business”: This chapter focuses on the business aspects of creating a micro-ISV business: finding the right legal structure for your fledgling firm (in the United States, in the United Kingdom, or in Australia). Once you get the paperwork out of the way, you need to focus on Getting Things Done (GTD), so I’ll review the GTD approach many micro-ISVs use and talk with its creator, David Allen, about applying GTD to building and running a micro-ISV. Chapter 5, “Focusing on the Customer”: Now we get to the start of your micro-ISV show— your customers. In this chapter, I cover a systematic way of defining, finding, and marketing to your customers. I’ll also cover some of the other ways you interface with your customers: email (wholesale and retail), customer support (a micro-ISV must get right), and how to set up and run a robust discussion forum about your company and its products. You’ll also look at how customers find you on the Net: Search Engine Optimization techniques, download sites, and Google AdWords. And you’ll see how you can and should get the attention of reporters and editors in the mainstream media.
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Chapter 6, “Welcome to Your Industry”: In this chapter you’ll broaden your micro-ISV horizons and take a look at what developer and ISV resources are out there that you can benefit from. Interestingly enough, several of those resources come from Microsoft, and whether you love or loath Microsoft, you can’t afford to ignore them. Chapter 7, “What Happens Next?”: That’s going to be largely up to you. But in this chapter you’ll hear from 25 micro and not-so-micro ISVs about how their stories have turned out so far and what advice they’d like to pass on to you. Appendix: Don’t look for 200 pages of error codes and API syntax in this appendix—you won’t find it. Instead, I’ll recap all the links you’ve seen in Chapters 1–7 and recommend books for those who want to dig deeper into specific aspects of business, law, productivity, developer best practices, and online marketing. And yes, the links in this chapter are online! (See the next section.)
Downloading the Code You’ll find all the checklists, templates, and other files for this book, as well as a page of links chapter by chapter, at this book’s page at Apress (http://www.apress.com) and at my micro-ISV, Safari Software, at http://safarisoftware.com.
Contacting the Author Got a question, or want to learn more? Please visit my blog, http://www.todoorelse.com; stop by my micro-ISV’s Web site at http://safarisoftware.com; or drop me an email at [emailprotected].
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CHAPTER 1 ■■■
Having a Vision
We are told that talent creates its opportunities. But it sometimes seems that intense desire creates not only its own opportunities, but its own talents. —Eric Hoffer, author and philosopher1
T
his chapter introduces what this book is all about: building a successful micro-ISV. But before getting into all the plans and practices of creating an Internet-based, self-funded, start-up company to sell software, a service, or a product (and make a nice pile of change in the process), I’ll discuss a few issues. For example, is it really possible you can—from scratch—build a real, live company in today’s global, interconnected, multinational marketplace? And if you can in theory do that, how do you in practice decide on and define an application, a Web service, or a product for which people will pay good money? The short answer to both questions is the Internet. Ten years ago, when Netscape blew away the collective wisdom of the financial establishment, people wondered, “Where is this Internet thing going?” Now, after a dot-com boom and a bust, as well as tens of thousands of new companies—large and small—selling applications, services, and products not possible ten years ago, you can see where at least some of this is heading: • The Internet makes possible a different kind of business model than what has worked in the past. • The Internet means even a one-person company can connect to the right people in a billion-person market instantaneously if that person has something of value to offer. I could bore you to death right now by citing all the little one-person start-ups that are now 60-person businesses valued in the millions or by citing all the cool apps and products popping up all over the Net being produced by other little companies, but I won’t. Well, I’ll mention just one: Niklas Zennström and Janus Friis started a company called Skype in Europe late in 2003. It was their fourth start-up, so they had some experience and access to capital and had weathered some legal troubles, but the bottom line was that these two guys built and sold an Internetbased company that delivered a new service to 54 million people in 24 months for $4.1 billion to eBay. That’s $4.1 billion—with a b. In 24 months.
1. http://quotations.about.com/cs/inspirationquotes/a/Ability12.htm
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Still doubt that conventional business wisdom isn’t worth the paper it’s not written on? Look at your Start menu or your favorite Web sites. Besides Microsoft (or Apple) products, how many of the apps or Web services you use are sold by obviously big companies, and how many are brought to you by inconspicuously small start-ups? Game, set, and match. In this chapter, I’ll cover four topics: how we got here, what here looks like, how you can join the micro-ISV party, and what the cover charge is for getting in the door.
How We Got Here To understand just how you can make a bigger pile of money than you’d make in a hundred years of working in a corporation’s cubicle, you’ll have to jump in your handy time machine and go back in history—back before the Internet was public, back before Microsoft had more money than Norway, back when Osborne was a type of computer, back when laptops were bigger than suitcases, and back when coffee came in two flavors: Folgers and Maxwell House. Let’s say your time machine deposited you in San Francisco, California, in 1983. Ignoring the boring politics, economics, and all the rest, what was going on with software and personal computers? • IBM had made the idea of Personal Computers (PCs) safe for businesses with its IBM PC two years before. PCs were springing up in offices all over the place. • Hundreds of programs were available for PCs—either running CP/M or the newfangled MS-DOS operating system. But they weren’t cheap; you had to buy them to try them, and most were saddled with copy protection schemes heavier than a 20-pound bicycle lock. • Three programmers—one an IBMer in Bellevue, Washington; one an attorney and computer magazine editor based near San Francisco; and one a programmer who was one of the first programmers to leave Microsoft—each decided to buck this trend of expensive, shrink-wrapped software with a different approach. Jim Knopf (known as Jim Button), Andrew Fluegelman, and Bob Wallace were selling, respectively, a flat-file database, a modem application, and a word processor by giving the software away and requesting a small payment. All three programs, despite distributions limited to fledgling computer clubs, disk duplicators, and word of mouth, did extremely well financially. “I could not have predicted what would happen next,” says Jim, in a piece he posted years later on the Internet.2 My wife said I was “a foolish old man” if I thought even one person would voluntarily send me money for the program. I was more optimistic. I suspected that enough voluntary payments would come to help pay for expansions to my personal computer hobby—perhaps several hundred dollars. Maybe even a thousand dollars (in my wildest dreams!). But my tiny post office box was too small to receive the responses from a wildly enthusiastic public. I had always said I would never consider leaving my secure job with IBM until I was receiving at least twice as much money from another source. I was wrong. By the summer of 1984 I was making ten times as much with my little software business. 2. http://www.freewarehof.org/sstory.html
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In another interview,3 Jim reiterates the point: Question: Do you believe being a shareware programmer will make you rich someday? Answer: Well, it already has. My shareware program PC-File netted many millions of dollars in sales. If I had spent the money more wisely in my business, I would be a gazillionaire today. But as it is, I’m merely comfortably retired. If you put your time machine in fast-forward mode, you’d see throughout the 1980s the rise and fall of shareware-centric little companies all over the world, filling specific niches in business in the United States and other countries. You’d see little tiny ads in the back of computer magazines and hear the squeal of modems dialing into Bulletin Board Systems (BBSs) at the blazing speed of 9,600 baud. As you move into the 1990s, click Pause on your time machine in 1994. Marc Andreessen (whose University of Illinois–Champaign’s undergraduate project had, through his strong tech support efforts, gotten a lot of attention) hooked up with one of the Silicon Valley start-up legends, Jim Clark. They started a company, and after a quick name change pressed on them by Andreessen’s alma mater, Netscape Communications started giving away the first commercial Internet browser, as shown in Figure 1-1. Over the next five years, Netscape went from the third largest initial public offering ever on the NASDAQ stock exchange to Microsoft roadkill. While the “browser wars” and “search engine wars” were being fought on the Internet, the number of people and businesses using the Internet continued to grow like some sort of mad scientist’s dream project. Meanwhile, venture capital–funded start-ups intent on becoming first movers of something were having nightly bonfires of greenbacks in the City by the Bay, and Internet Millionaires were roaming Ferrari dealerships looking for new toys to buy. The dot-com boom was in full swing. As you get to 2000–2001, you can speed up the ol’ time machine and zip past the dot-com bust when the Other People’s Money (OPM) ran out. It wasn’t pretty. The mainstream media declared the Internet age officially dead, and September 11, 2001 changed everything in the real world. While the dot-com party was coming to a screeching halt, another movement was gathering strength. It was a movement programmers in developed nations found deeply troubling: the jobs started going to India. Seemingly overnight, the party was over for programmers in the United States, the United Kingdom, Europe, and Australia, and the good times were rolling in Bangalore, Beijing, Romania, and elsewhere.
■Note Since our hypothetical time machine doesn’t cover side trips, I’ll reluctantly skip over outsourcing and its tangible goods’ twin, offshoring—not because they aren’t important (they are) and not because I don’t have strong feelings about them (I do) but because three other writers4 have already done a better job than I could, and this trip down memory lane is for your benefit, not mine.
3. http://www.sharewarejunkies.com/invjikn.htm 4. Offshoring IT: The Good, The Bad, and The Ugly by Bill Blunden (Apress, 2004); The World Is Flat: A Brief History of the Twenty-first Century by Thomas L. Friedman (Farrar, Straus, and Giroux, 2005); and Exporting America: Why Corporate Greed Is Shipping American Jobs Overseas by Lou Dobbs (Warner Business Books, 2004)
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Figure 1-1. Netscape’s home page in 1994 If your time machine had a micro-ISV meter, you’d be wondering if it’s broken right now. As venture capital–funded start-ups were popping like balloons, little one- and two-person software companies were springing up all over the Internet, at an increasing rate. It’s almost as if as the Internet grew, the shareware companies that started with Jim and Andrew and Bob in 1983 and continued through the 1980s and 1990s were starting to draw all seven lucky numbers in the evolutionary lottery. This could be interesting! Well, the time machine has stopped, and you’re now back to where you started, the here and now. What does here look like, though?
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What Here Looks Like Here looks very different from 1983. While the first Internet age died when the dot-com boom went bust, someone forgot to tell the Internet. Each year more people with faster connections are spending more time and buying more products via the Internet while interacting with more people in more ways. First, something like one billion people now use the Internet,5 with more people all over the world getting online. One billion is such a nice round number; the cynic in you might distrust it. That’s fine—it may only be 995 million, or perhaps by the time you read this it’s 1.1 billion. Either way, it’s the largest number of potential customers for anything—ever. Second, e-commerce continues to grow, even faster than the number of Internet users. In the United States in 2004, online sales were estimated at $69 billion+, with predictions for 2005 heading north of $80 billion.6 Third, although no one has a handle on the hard numbers, something is changing: • In CorpTech’s (http://www.corptech.com/) database of 95,111 high-tech companies, 20,823 have fewer than 10 employees, 12,575 have 5 or fewer employees, and 3,846 have just 1 employee. And traditionally, such databases underreport these numbers. • CNET Download.com “serves over 27,000 publishers representing 35,000 products and 132 countries around the world, [with more than] 2.3 million downloads each day.” Somewhere around 85 percent of these publishers are in fact micro-ISVs. • Several leading companies in their market segments are actually micro-ISVs: Fog Creek Software (FogBugz), Webroot Software (Spy Sweeper), and Sunbelt Software (CounterSpy) come to mind. Although the number of small, self-funded companies is growing like wild, how they describe themselves and how they see themselves vary. Some call themselves shareware companies, others call themselves ISVs, and most don’t know what to call themselves. And then along comes Eric Sink.
ERIC SINK, SOFTWARE CRAFTSMAN, SOURCEGEAR In September 2004, Eric Sink was running his successful source control software company and writing a column for Microsoft’s MSDN site about the business of software. Eleven columns in, Eric’s “Exploring Micro-ISVs” column hit a nerve with me and many other developers looking for a way to describe our as-yet-unnamed business model. Eric is also the moderator for the Business of Software forum at Joel on Software (http://discuss. joelonsoftware.com/?biz), a longtime haunt and great information source for people starting micro-ISVs. Q. Tell me about SourceGear—did it start as a micro-ISV? A. First of all, I would have to confess that calling us a micro-ISV was not quite accurate—although I coined that term, I’ve never succeeded at running a micro-ISV.
5. http://www.Internetworldstats.com/stats.htm and http://www.c-i-a.com/pr0904.htm 6. http://answers.google.com/answers/threadview?id=555501 and http://www.census.gov/mrts/www/ data/html/05Q1.html
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Q. OK…. A. The real stars are people like Thomas Warfield, with the [Pretty Good] Solitaire game (http://www. asharewarelife.com/); he’s made millions off that game, I think. When I started out, it was as a oneperson company but purely with the intention of doing consulting. I had no intention of building something or a product, and I ended up doing both. Q. When was that? A. SourceGear started in early ’97. Q. When you started and you were basically a one-man company, what type of consulting were you doing? A. Just kind of rent-a-brain type of work, I guess you’d say—hiring myself out to do contract development, advice on development, things like that. Primarily, I was just writing code as a hired gun. Q. Been there, done that, and have the T-shirts. So, how did you go from “I’m a happy contractor” to doing a product? A. Well, the first thing that changed was that about two months after I got started, the company I previously worked for laid off all my former co-workers. So, all of a sudden, there’s 40 people I know well out of a job. So I started talking with them, and the idea of hiring one or two of them started to get some airtime. Anyway, by the end of that year, I’d hired seven of them. And we were doing contracting. Along the way, our first product was not my idea; it was somebody else’s. In fact, I tried to shoot it down because I did not think it was a good idea. But to make a long story short, we’re still shipping it today. Q. Was that the application you sell that lets you do Microsoft Visual SourceSafe remotely (SourceOffSite)? A. That’s right. It really all started because we used SourceSafe as our source control tool and one of our guys commutes from an hour away, and he wanted to work from home sometimes and couldn’t. So, he wrote this tool, and people started talking about shipping it as a product, and before you know it, we did. Q. So, basically, it started out solving a problem you had, and then you realized that you had a really good solution here and other people had the same problem? A. That’s right. Q. That explains how SourceOffSite came to be, but how did Vault come to be? A. Vault happened because from the day we built SourceOffSite, we understood that Microsoft could kill it by simply adding remote access to SourceSafe. We have always believed that SourceOffSite is, say, one year away from being stopped by Microsoft, but the thing is, they kept not doing it. After three or four years of SourceOffSite shipping, we had accumulated a pretty large number of SourceSafe customers who were also our customers. Microsoft was just not doing much with SourceSafe, and some of our customers started planting the idea in our heads, “You know, you guys ought to just create a replacement for SourceSafe, because Microsoft clearly isn’t doing anything decent with it.” And we had thought about it ourselves, plus being prodded by our customers; we decided to just go ahead and do it. Q. So, you developed Vault and started selling it in February 2003. Were your first customers the people you’d already been selling to? A. Yep. Q. I never ask people how much they’ve made because I never get an answer. But has Vault met your sales expectations? A. It has—significantly—exceeded our sales expectations. We went into this thinking this might be a decent idea, but the response from customers has been quite a bit larger than we ever expected. Q. So, how did you come up with this micro-ISV thing? A. I was writing a column for Chris Sells at Microsoft. After writing my first few columns, I somehow got it into my head I wanted to write about the notion of a one-person company, partly because I had talked to several guys doing this one-person company thing, and some of them were a lot more successful than anyone thinks they are.
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So, partly, I wanted to shine a light on their success and kind of spread the word that a one-person company can accomplish more than you might think even if they never grow more, and if they do, it’s a great way to get started. So, I sat down to write this article after I dealt with the research; one of the things I wanted to tell you in this phone call, and I cannot find it, is that I am quite confident from memory that the article was changed at the last minute—I had another term for micro-ISV. The day before I submitted it to my editors, I decided I didn’t like the term and changed it to micro-ISV instead. But I don’t remember what the other term was! Q. What has been the response to that article? A. The overwhelming response has been positive. I get mail almost every day from somebody telling me about their micro-ISV [or] their product idea; I get requests to review business plans. I mean, I get a steady stream of enthusiasm from people who say, “You know, I like this idea. I want to do a product of my own!” That aspect has resonated with people. Now Winnable Solitaire, that’s a whole different story. That was my little stunt to basically give me an excuse to write an article. Q. Halfway between that article and your Winnable Solitaire experiment, you started moderating the Business of Software forum at Joel on Software. How did that happen? A. No big story there. Joel asked me to do it one day, and I said, “Sure.” I would consider Joel a friend, and I’ve known him at somewhat arm’s length for several years. It was the kind of thing where we knew each other fairly well, so I did [it]. Q. I’m curious—how long does it take you to moderate this forum? A. Oh, not very long; I pop into it once or twice a day. The forum is to some extent self-moderating because he’s got this Bayesian filtering thing that actually filters out a lot of the spam. So most of what I do is just confirm that the system has properly identified something as spam. Q. Sounds like a no-brainer, or at least a lot easier to moderate than some of the forum software out there…. A. Yeah. The real issue for moderating the forum is not administration but to actually be a valued contributor to the forum by posting my thoughts and opinions. And that takes more time. And frankly, I don’t necessarily do a very good job of it, but I try to chime in on questions every now and then. Q. Let’s go back to Winnable Solitaire for a moment. There’s a question on the forum right now: whatever happened to it? A. [laughs] Well, it still sells! Q. That’s good! Would you be willing to say how many a day? A. Oh, it doesn’t sell a copy a day. The revenue from it has been insignificant. I spent more on a dinner last week than I’ve made with Winnable Solitaire in total. Q. So, was it just to illustrate the article? A. To be honest, I thought it might sell more than it has, but it really was just a stunt to write an article. When I talked to Chris Sells about the article, I said, “Hey, everyone else has sample code on MSDN. I write about the business of software—what do I use for a sample?” A sample product, so I did one. I was able to justify the time spent developing it because for totally unrelated reasons I needed to learn the wxWindows API anyway. Q. There was one other thing I wanted to ask you. A couple of your articles talked about business transparency— the idea of letting the world in on how your business is run. What has been the reaction to that, and do you still think transparency is the right way to go for micro-ISVs? A. I don’t think a blanket statement like that makes sense. I can say a couple of things I do think make sense as blanket statements. Q. Please do! A. Every micro-ISV needs to figure out what level of transparency makes sense to them and not treat transparency as a bool or a checkbox. What I do think makes sense in general is if you are not willing to trust your customers, your customers will figure it out and they won’t trust you.
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Now, does that mean trusting your customers means the same thing for every company? No. But it’s an attitude that has to be thought about. In our case, since we are software developers and our market is also software developers, transparency has a bigger advantage for us. It’s like trying to sell car repairs to people who know how to repair cars—they want to know. Q. OK, by the way, how big is SourceGear now? A. A little under 20 employees. Q. Any advice for anyone starting a micro-ISV now? A. One thing I would say is that it’s worth the journey.
Eric’s article gave this new type of business a name: micro-ISV. A micro-ISV is the following: Self-funded: This means maybe you max your credit cards and maybe Uncle Jim helps you out, but your business is going to be largely self-funded and way below the radar of venture capitalists looking for the next billion-dollar hit. Small: This means your company is one person the majority of the time or has maybe a couple of partners. If it’s larger than that, other dynamics such as what you’re using for salaries come into play. Internet: Although Eric was talking about small, independent software vendors, independent software vendors was a term coined at Microsoft to cover everyone else in the software industry it had not acquired, partnered with, or driven out of business.7 In actuality, the I in micro-ISV really means Internet, since it’s the Internet that makes micro-ISVs possible, not Microsoft. I’ll have a lot more to say about micro-ISVs, a whole book in fact, but the last point I want to make before getting to the part of this chapter you really want to read (how to start your micro-ISV) is that a few years ago, we hit a point of discontinuity. Although today’s micro-ISV can trace its roots back to when shareware was born more than 20 years ago, micro-ISVs are more than that. For starters, with the laudable exception of people and companies under the open source banner, self-funded start-ups don’t merely hope to get paid—they do get paid, or the software stops or the account is canceled. On the Internet, no one knows or cares how big your company is, how many people work there, or whether you’re sitting in a cubicle or sitting on your redwood deck with one of your cats in your lap. The only thing they care about is whether your software, Web service, or emerging tangible product gets the job done. The Internet, the billion people using it every day, the hundreds of billions of dollars of commerce taking place via it, and the sheer near-instantaneous speed and connectivity of all things Internet have made micro-ISVs not just a viable way to start a company but the real next killer app.
7. You’ll find out more about how to stop worrying and love Microsoft (or Apple or whatever firm is big in your programming world) in Chapter 6.
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Joining the Party So, you’ve decided to trade in your seat and oar in some corporation’s galley and start your own micro-ISV. After all, you bought this book! So, where’s the party with all the attractive people, great food, cool music, and adult beverages?8 In other words, where do you start? You start with a vision. This isn’t just an idea, a concept, a marketing niche, or a business plan. You’ll need a trueblue vision to sustain you when you start working longer and harder than you ever thought humanly (or inhumanly) possible. You’ll need a burning bush’s worth of ambition to make it. Of the nearly 200 founders of micro-ISVs I’ve talked to, interviewed, emailed, or read about, the single trait that comes across in each of them is a strong desire to be their own bosses and run their own lives. Since California strongly frowns on dispensing visions without at least a medical license, you’ll have to find your own. Sorry, you won’t find any easy answers here. But what I can do in the following sections of this chapter is show you three approaches for creating the vision of what your micro-ISV could be. If you’ve found your muse or your muse has found you, by all means skip ahead. If not, the following sections offer you some takes on getting into the right space to find your vision.
The Systematic Approach The following sections are a “I haven’t a clue what application to write to start my micro-ISV” guide for your consideration. Your experience may vary, but these sections will at least get you going.
Step 1: Find at Least Three Interesting Industries or Marketplaces The goal here is not to find three industries where you think your micro-ISV can make money but three areas of human endeavor you find interesting. I’ll get to the money part next (in the “Paying the Cover Charge” section). If you’re not sure what you find interesting, you need to do some remedial work. Read What Color Is Your Parachute? 2005: A Practical Manual for Job-Hunters and Career-Changers by Richard Nelson Bolles (Ten Speed Press, 2004), which is an excellent guide for dissecting not just how to find a job working for someone else but what sort of topics, people, and businesses you find interesting. And like many good books, you’ll find that this classic is supplemented by a Web site (http://www.jobhuntersbible.com/), as shown in Figure 1-2.
8. Er...not quite. See the “Paying the Cover Charge” section.
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Figure 1-2. Finding your interests Another way to find interesting parts of the economy is to refer to the more than 300 California Occupational Guides (http://www.labormarketinfo.edd.ca.gov/cgi/career/ ?PageID=3&SubID=139), as shown in Figure 1-3.
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Figure 1-3. Starting your career goals with A Of course, you can always research industries by…researching industries. Visit the excellent research portal hosted by market research firm Polson Enterprises at http://www. virtualpet.com/industry/howto/search.htm#identify, as shown in Figure 1-4. Don’t let the dull appearance and lack of pretty pictures fool you; you can spend the next year or so just working through half of the Web sites listed at this site.
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Figure 1-4. Researching industries step by step OK, so you want pictures. Check out Hoovers, one of the early Internet-based business research companies that’s now a Dun & Bradstreet company. The breakdown of industries at http://www.hoovers.com/free/ind/dir.xhtml, as shown in Figure 1-5, leads to a helpful list of major players, which in turn leads to a free dossier about each company, as shown in Figure 1-6.
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Figure 1-5. Exploring Hoovers
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Figure 1-6. Viewing a company snapshot at Hoovers Prefer a more academic approach? The State University of New York at Geneseo has a good list at http://library.geneseo.edu/info/sirind.shtml, as shown in Figure 1-7. Now, the tough part of step 1 isn’t finding information, and it isn’t getting your head rearranged by the plethora of information available. Don’t try to do this in one sitting or be overly serious about it. You haven’t made any emotional investment yet, and you can go wherever you like. Just start a new bookmarks folder in your favorite browser, stick it at the start of your bookmarks toolbar so you can actually find it again, and let your fingers do the clicking for you. When the list is feeling long enough, you’re ready for step 2.
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Figure 1-7. Taking a more academic approach
Step 2: Research Computer-Related Topics in Your Three Markets Here’s a nice bit of pseudocode for you: for each interesting industry/marketplace, find three interesting segments, and research who and how people/organizations use computers and are making money. Take, for example, agriculture: this is a big industry, with lots of needs. But am I talking about small farmers, agribusiness, food transport companies, distributors, large retail chains, or the corner neighborhood store? Dig deeper with the tools you liked in step 1. And as you look at your favorite segments, figure out who uses computers and who is making money and therefore has money to spend. If your potential market targets don’t have money and don’t use computers, it’s unlikely they’ll connect with and buy from your micro-ISV.
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Step 3: Talk with People Working in Each Market Pick up the phone, and call them. Ask them, “Hi, I’m [insert name here]. I’m thinking about writing a [desktop application][Web-based service] to help people who do what you do. What problems do you have you wish were solved?” It may sound weird to call up people you’ve never met, and some may take offense and hang up on you. But if you make it clear you’re not looking for a job or a donation, some of these people will start getting excited and start telling you about issues you never knew about the industry market segment you’re interested in; before you know it, you might find a really good problem that you can solve in a totally cool way and make money for doing so! This is called defining the problem domain. Write a one-page, top-level description about how you’d apply your technical know-how to solve the problem you just heard about and got excited about. Keep it to one page, if you can. (If you just can’t, that’s a good sign.) You might be tempted to stop after the first person you connect with, but resist that temptation. You’re still in the exploration stage, and the next person you talk to might have an even more interesting problem that you could solve in an even cooler way while making even more money! Do some due diligence here, and corral a set of possibilities; you’ll need them for the gloomy step 4.
Step 4: Determine Whether Someone Already Solved the Same Problem in the Same Way Your goal in this step is to winnow your list to just those possible apps on which you can build a successful micro-ISV. For each of your possible apps for a potential market segment, pretend you get a $10,000 check if you can find on Google the same solution to that problem. If you find that solution, put that choice out of its misery, and cross it off your list now. Congratulations— you just saved substantially more than $10,000! Micro-ISVs have the advantages of being fast, nimble, and flexible, but they’re roadkill when going up against an established, large company already selling the same solution. Don’t go there; it will hurt. This step does have some wiggle room: what does in the same way mean? If you have a potential app that solves a problem that existing companies solve but does it much better, or much more cheaply or much more deeply, you may still have a chance. Having competitors is a good thing—they give you legitimacy, potential customers, price points, and all sorts of good things, if, and only if, you can do a better job of solving some or all of the problems they solve for their customers in a new way and those potential customers aren’t locked in tighter than the occupants of the penitentiary at Leavenworth, Kansas.
Step 5: Listen to Yourself By this point in this process, you’ve most likely found two or three market segments that have computers and money to spend with problems you can solve that aren’t currently being solved. Now it’s decision time: which one do you pick? Put another way, you’re about to trade a couple of years of your life and more hard work than you ever imagined for the chance to maybe, just maybe, make some serious money while living and breathing the challenges, concerns, and worldview of your selected market segment. Are you really comfortable with that idea? Do you like these people and feel good when their lives improve? If not, move to the next item on your list. If so, welcome to your new life.
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The Joel Approach So, perhaps a smarter way exists for finding the right application to build. Joel Spolsky, founder of Fog Creek Software and a “graduated” micro-ISV, has a different approach.
JOEL SPOLSKY, CEO, FOG CREEK SOFTWARE After researching my five-step approach to finding the right application, I decided to ask someone who had been there and done that. Joel Spolsky’s Fog Creek Software currently sells three very different products: CityDesk, a Windows desktop Web site content management tool; FogBugz, a Web-based defect-tracking application; and Fog Creek Copilot, a new remote PC control service. Q. How did you get the idea of starting Fog Creek Software with CityDesk? A. Well, we really didn’t start Fog Creek Software with CityDesk—we started with FogBugz, and the product we really wanted to launch never launched, and that was probably a good thing. We really didn’t have a commitment then to any particular product; we didn’t start the company because there was some particular product we wanted to make. Q. So the first product didn’t come out? A. We had three ideas. There was CityDesk, FogBugz, and this thing we called TinTin. It was going to be an application server basically. And we already had code for most of these things. FogBugz was the closest to being ready, and a bunch of people kept asking me if they could have the code. And we had to say, “Yeah, but it’s kind of hard to install and set up and get running on your system, and we’d have to make a bunch of changes to customize it for you, so it would take a few days—and in those days we were set up as a consulting business—so we’d say three days of consulting and the license, maybe $10,000, and it just wasn’t a product worth $10,000 to people then. Q. When was that? A. Fall of 2000. So, given how many people were asking for it and that it just was not selling as consultingware, we thought if we could make it shrink-wrap and lower the price to a tenth, we could actually sell some copies. So we put a bunch of effort into an easy setup and cleaning out all the dependencies on the particular server it had been installed on and started selling it, sort of as an experiment. And it did quite well, and we did start getting sales right away. At first it was a few thousand dollars a month, but it built up pretty quickly, and now that’s the bulk of our business. Q. So basically, you started with three ideas, and the one that ran is the one you’re running with? A. And that was the one we expected. Q. If there were a couple of guys like you and Michael Pryor [Fog Creek Software’s cofounder] and they were casting about for an idea to build their micro-ISV on, what would you advise them? A. It’s a little hard to say, but you have to know where the pain is. My rule of thumb is, tell me what pain you are eliminating with this product. If you’re not eliminating some piece of pain, nobody is going to break out the checkbook. You have to tell me what’s not working, what one thing is painful. If it’s Skype, it’s long-distance phone bills that’s the pain. If it’s FogBugz, it’s that you just can’t get a handle on what it’s going to take to ship your software. If it’s CityDesk, you have to change 27 different things in 28 different steps every time you want to make a small change in your Web site. So, if there isn’t a piece of pain you can explain, then I don’t feel you have a product. And I see a lot of products that are spiffy, cool doodads, but they’re not going to make you money unless you can explain what problem they solve really.
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There’s a small market for things that just make people happy, like Konfabulator, where you can put a little analog clock on your desktop, but it’s really hard to make a living that way. You really have to identify the pain and solve it. Now, other people will come up with other criteria that I don’t agree with for the micro-ISV. For example, a venture capitalist will say, “Does this have the potential to be a multibillion-dollar business?” For a microISV, it doesn’t matter. You’re not taking venture capital; you’re bootstrapping. If it’s a three-million-dollar business, you’re going to be the richest guy in Chattanooga, Tennessee.
An Even Shorter Approach “What’s your ‘dammit’?” says Mike Johnson, chief executive officer (CEO) of BigAtticHouse Software (http://www.bigattichouse.com/whaddidoo.html), as shown in Figure 1-8. He add this: When you find a customer’s “dammit” (the part about their current process or software that eats up their day and makes them say “Dammit!”), then you have found something you can build. You just found a project. Immersed in a domain/field for a year or more, and you can find “dammit” for a whole industry. You just found a product. In case you’re wondering about the history, it’s just that I noticed when speaking with secretaries and managers that they tend to have something they must “fight with” every day on their systems...hence “dammit.” I just try to help find their “dammit” and make it go away. Whatever approach you take to finding the right problem you can solve and people are willing and able to pay you to solve, take heart. Every technological, social, and business advance; invention; or labor-saving innovation has a whole new slew of problems, hassles, and annoyances just waiting. Damn it!
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Figure 1-8. Exploring BigAtticHouse.com
Paying the Cover Charge Before you head to the following chapters, which cover the nuts and bolts of building your micro-ISV and your first commercial application, I’ll discuss a rather large charge on your account in life that this little venture is going to cost you. Make no mistake—writing a commercial-grade application and defining and building your micro-ISV are going to take a large bite out of your life for at least months, probably years, and there’s always the chance that all your blood, sweat, toil, and tears will get you exactly nothing. All the parts of starting a micro-ISV are (except for writing the actual code) pretty simple. In other words, the tasks are simple like moving the ball down the field in soccer, or American football, or sometimes more like rugby or Australian rules (what rules?) football—and sometimes just as painful. Simple doesn’t—emphatically—mean the same as painless.
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If you’d like to avoid some of this pain, the following are eight opinionated rules for you to consider before taking the plunge: Rule 1: Be prepared to work more and longer hours than you ever thought possible: If you thought working in today’s Internet-speed IT world was grueling, wait until you try to both work in IT in some fashion and start your micro-ISV. Remember the self-funded part of the micro-ISV definition? This means odds are good you’ll be working days, nights, weekends, and your birthday to get your micro-ISV off the ground. Rule 2: The only thing you get for free is failure: While the direct costs of starting a micro-ISV are potentially as little as zero, using certain tools and services will significantly improve your chances of producing a successful micro-ISV. These tools will cost money, and you’ll have to finance your regular monthly expenses.9 Yes, you can get away with financing your micro-ISV on credit, but you’ll pay for it in stress. Rule 3: If you have a wife, husband, spouse, significant other, or combination thereof, fully disclose what you’re going to do, and get their buy-in before you start: Do this, or don’t even start. Some things money can’t buy, and if you lose sight of that, you’ll bitterly regret it. On the plus side, having a supportive person—not to mention a steady second income coming in—can make all the difference between success and failure. For me, without Tina’s support, love, and help, I wouldn’t have gotten my micro-ISV off the ground, let alone written this book. Rule 4: You’ll need a plan: Actually, you’ll need a bunch of them—an application development plan with milestones, a software development plan, a code backup plan so your code base doesn’t disappear one fine day, a Web site development plan, a payment processing plan, a tech support plan, a marketing plan, and so on. Now, you could spend, say, six months or so defining and detailing each part of each plan. Don’t. Planning is good, and you’ll need to do some, but all the plans in the world aren’t going to earn you a single dollar. Also, you don’t yet know what you don’t know that you need to know. Plan in broad strokes, and fill in as needs and circ*mstances dictate, but paralysis by analysis has been the downfall of many too obsessive IT people. Rule 5: Law 1440 doesn’t take a day off: Just like gravity, you can’t ignore that you get 1,440 minutes to the day and no more. If you haven’t gotten good at managing your time and tasks at your day job, you need to find the time and task management procedures that work for you. You’ll find more about living with Law 1440 in Chapter 4. Rule 6: Focus on revenue: This is a simple but profound rule. How do you decide whether to add a feature to your first application? Focus on revenue. Don’t know what to do next today among half a dozen different tasks? Focus on revenue. Building a micro-ISV is all about making money: other programming efforts may be noble, but a micro-ISV is all about the money, and you need to prioritize your time on what is going to maximize your revenue. Sometimes you can overdo applying this rule; it’s not just about today’s revenue but also this week’s and month’s and year’s revenue. Don’t forget that your customers expect to see a better product over time, including more useful features and less obnoxious bugs.
9. Good news! I can confidently predict you’ll save a pile on vacations. You won’t have one for the first three years.
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Rule 7: Listen: Listen to your beta testers, your market, your customers, and your potential customers. You don’t already know everything; otherwise, you’d be so rich you wouldn’t need to build a micro-ISV. A little considered listening can go a long way to finding the tipping point from a struggling to a soaring micro-ISV. Rule 8: Rock on: Don’t spend your days in a cubicle wondering if you can turn that burning desire in your guts into something real—go for it!
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Developing the Micro-ISV Way Y
ou were probably tempted to skip this chapter. The first chapter was helpful for finding what to write, and the following chapters on the business and marketing stuff look useful—but you already know how to program, you’ve done it for a living, and you’ve found what works for classes, for clients, or in your IT shop, right? If only that were so! Writing software from scratch to solve a problem you’ve picked, especially software you’re going to turn around and actually sell to some (you hope!) measurable part of the human race, is incredibly different from what you’re most likely used to doing in a class or a job. That’s why this chapter is a must read: you need to understand the realities of micro-ISV design and development. When you’re working for a company, a good grade, or a client, someone else defines at least initially what you’re developing. In other words, when you get a requirements document, meet with the users, get a class syllabus, or sit down with someone who is going to pay you, someone else defines the problem you need to solve. When you’re a micro-ISV, there is no someone else. It’s all up to you, whether the you at your micro-ISV means one programmer or a set of partners. In this chapter, you’ll move from vision to beta product. Along the way, you’ll see some of the tools and methods that work for micro-ISV development and look at some of the features of the code base about which you need to be concerned. In this chapter, however, you won’t find a whole lot about software development methodologies you may have used or at least read about: no Extreme Programming (XP) or Agile Software Development (ASD) and no Scrum, Rational Unified Process (RUP), Common Object Request Broker Architecture (CORBA), or Structured Systems Analysis and Design Methodology (SSADM). All these methodologies focus on how groups of programmers can work together—which isn’t much help when your programming team consists of just you. While I’m still wearing my flame-proof shorts, let me throw a bit more lighter fluid around: I won’t cover how embracing open source will make your micro-ISV a success, because I don’t think it will. Now, please, before every open source zealot flames me and my copy of Firefox stops working, hear me out. Open source may just be the greatest way to create anything, but it’s a lousy way to start a small profit-making business, which is the focus of this book. Instead, I’ll first cover a few techniques that have worked in my micro-ISV and have worked for other micro-ISVs for getting to beta—that wonderful point when you actually have something to show for all your hard work and something that may, just may, replace that regular paycheck you gave up. Then, again from a profit-making perspective, you’ll learn some of the “production values” that will make your micro-ISV ready for the big time. 23
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Designing Your Application Before you can start coding your micro-ISV application or manufacturing your micro-product, you need to design it. At the start of the process (see Chapter 1), you identified a problem a bunch of people have that you want to solve in a better or different way from the existing solutions. By the end of the design phase, you want a coherent and realistic definition of what your product looks like, acts like, and feels like for the people who are going to buy it. Once you have the design, although plenty of technical challenges are still ahead, you’ve accomplished the first goal and can see where you have to go from there. Now, one fine day some bright young thing is going to build something that is half–crystal ball and half–neural net that will read your innermost design thoughts, pass them through the collective unconsciousness, and spit out a 300-page specification detailing every function, screen, dialog box, and button your application will need. In the meantime, there’s use cases and paper prototyping.
Creating Use Cases Way back when, in 1986, Ivar Jacobson formalized the idea of writing down how users interact with a software application, instead of leaving that to the tech writers who would write the documentation a few weeks before the app shipped. At the time, it was a fairly heretical idea that a programmer would actually leave the MIS department (the old buzzword for IT), sit down with a bunch of users, and actually work out what those users would see an application doing. The funny thing about heretical ideas is that given enough time, more than a few of them become conventional wisdom: whether you do XP, ASD, RUP, or some flavor of Unified Modeling Language (UML), use cases have become the accepted way of defining the interaction between people and software for design purposes. Use cases are the natural bridge between the overall concept of your micro-ISV application and the stuff on the screen that performs actions when clicked; working through how your customers will use your software is a surefire technique for getting the scope of your application down on paper. Generally, a use case will have the following sections: A name: For example, Print Reports, Subscribe to New Service, or Add Task to Task Catalog. A date stamp, version number, and IDs of related use cases: Use cases are meant to be iterative; keeping track of what version you’re looking at is a must. A summary: For example, “The user has decided to add an existing task to the Task Catalog. They select the task, click Add, and immediately see a copy of the task listed in the Task Catalog.” Precondition(s): This is where you cover what has to already be true before this use case will work. For example, “A task exists.” Trigger(s): This is how the use case starts. For example, a trigger could be “The user selects a task displayed in the section grid.” Main path: This is the play-by-play description of what the user does, how the system responds, and the back-and-forth through the main path of what the user case is about. Usually this is the successful path, and it doesn’t describe at all what the application is doing internally.
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Alternatives: This is a polite way of saying what happens when either the user or the application (or both) does something wrong in the main path. This can also cover alternative ways of performing actions. Postconditions: Postconditions describe the effects of the use case and cover what has been accomplished. Business rules: Here’s where you make sure you capture whatever rules and restrictions your program needs to correctly mirror what people expect. For example, a business rule could be that “A checking account contains debits and credits.” Notes: Sometimes this is the best part of a use case; this is where you stick protoclass structure ideas, features to check, and open issues. One of the nice parts of starting a micro-ISV (besides burning most of your ties) is that you get to decide how much or how little of any given structure or formalism you want to use. For me, as I work through a major chunk of a program, I first write a bunch of use case headlines, as shown in Figure 2-1. Then, once I have good coverage of everything, I flesh out the preconditions, triggers, main path, and postconditions. When I started working on my micro-ISV’s first commercial product, a task and project management application called MasterList Professional, I defined what problems MasterList Professional would solve by creating use cases. By doing this, I could start thinking about how best to solve those problems.
Figure 2-1. Jotting down use case headlines for MasterList Professional
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Use cases are the logical, deterministic, word-processed half of the design story. They don’t really describe the application—just the interaction between your potential customers and your application. As helpful as use cases are for identifying what your application will do, they are by no means the only tool you need to develop a design you can start architecting.
Creating Paper Prototypes Most programmers, once they’ve gotten their use cases together, will either jump right in and start defining classes and objects or, worse, fire up their Integrated Development Environment (IDE) and start creating code—anything to avoid that messy, gooey human interface stuff. Big mistake. Pick any category of software you want at http://www.download.com. Take a quick look at any eight of the apps from what sound like small companies. Write down your gut reaction to the screen shot for each app, ranking it from a low of 1 (“Yuck!”) to a high of 5 (“Ooh, shiny!”). Now look at their number of downloads. Notice the correlation? The bottom-line reality of selling software is, Ugly doesn’t cut it. As indifferent as you might be to how a program or a Web service looks because you have an educated idea about how a given function works, the other 99.9 percent of people will pick pretty over ugly every time. This has some pretty serious implications for micro-ISV development: it’s not enough for your application, Web service, or product to work right; it needs to make it past the customer’s ugly filter if you’re going to have the chance to sell it. Instead of slapping a Windows Explorer– like tree view on top of your application, you need to take a user interface–centric approach to both design and development. The specifics of good user interface design are beyond the scope of this book, but you’ll find a slew of books and Web sites listed in this book’s appendix to get you started. I also can summarize the general principles of good user interface design, particularly for micro-ISV applications, in three bullet points: • Do what people expect. (And if you’re not sure what that is, ask.) • Be nice to your users. • Create prototypes on paper until your application makes sense to someone who has never seen it. Paper prototyping is the tool of choice for defining the user interface for your micro-ISV’s software, Web service, or product for several reasons: Paper prototypes are fast: No matter how many years you’ve programmed, you can still draw a screen faster on paper than programming one in Flash, Delphi, or Visual Basic 6. Paper prototypes let you focus on one aspect of the interface: Say, for example, you’re trying to decide the layout of a dialog box for your app. You can start with how the user makes their initial selections and “squiggle” out the rest. Paper prototypes keep you focused on the interface: If you use, say, Visual Basic 6 to work out the design of your app’s interface, you’ll have to constantly fight the temptation to think about the programming that will be needed, not the interface that defines what’s needed. Paper prototypes keep expectations low: No one expects a paper prototype to work, and for every drawing you save, you’ll toss four.
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While paper prototyping MasterList Professional, and about 50 custom applications for corporate customers, I’ve found that not all paper is created equal. When it comes time to start defining a new part of an application’s interface, I take three or four 5×8-inch legal pads, a large cup of strong coffee, and a cat and then go sit away from all computers and start sketching the user interface. Now, these sketches are terrible—they’re just little squiggly lines in something like a box, as shown in Figure 2-2.
Figure 2-2. Creating MasterList Professional’s small paper prototype The nice feature of paper prototypes is that I can whip out five or six in the time it takes for the cat to get fidgety and decide he has better things to do. With the rough cuts and the relevant use cases, I can sit down, finish my coffee, and draw a full paper version of the screen I’m working on (as shown in Figure 2-3) and then move on to the next thing.
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Figure 2-3. Creating an early paper prototype for MasterList Professional’s Home tab Paper prototypes aren’t just about static screens. Another technique I’ve found that works is storyboarding. A storyboard is nothing more than a successive set of drawings or sketches showing how features progress; creative types in film, television, and advertising have been using storyboards for decades, as shown in Figure 2-4. The reason I’m showing you some of the 70,000 or so images of storyboards Google has indexed is to drive home two points about storyboarding: there’s no one right way to create storyboards, and storyboards can be extremely flexible to suit your needs. Now, I’ll be the first to admit that if I had to make my living drawing, I’d be living under an overpass in short order. Your drawing ability isn’t the point. All you want to do when you initially create paper prototypes is create something that’s a useful approximation of what your customers will ultimately see.
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Figure 2-4. Viewing storyboards in Google Images If you want to dig further into paper prototyping, I strongly recommend Paper Prototyping: The Fast and Easy Way to Design and Refine User Interfaces by Carolyn Snyder (Morgan Kaufmann, 2003). In the meantime, Table 2-1 describes some of the finer points to keep in mind when paper prototyping your micro-ISV application.
Table 2-1. Dos and Don’ts for Paper Prototyping
Do
Don’t
Do draw first, critique later.
Don’t get hung up on making features exactly to scale.
Do use big pads, little pads, and paper stolen from your printer.
Don’t redo entire drawings because one part is wrong. (Instead, draw it on another sheet, cut it out, and paste over it.)
Do try to find a methodology for paper prototyping that yields the same level of detail each time.
Don’t ignore times when you find too many interface elements on one paper “screen shot.” This is a warning you’re expecting too much from your customer!
Do write as many notes as you need on the same sheet as the drawing.
Don’t forget to process these notes into your decisions document (see the next section) and your schedule (see the “Developing the Schedule” section).
Do refer to your use cases to make sure your interface delivers.
Don’t try to draw every possible variation of a process.
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Decisions, Decisions One of the less frequently mentioned parts of designing is that it isn’t just about what you put into an application, Web service, or product; it’s about what you decide to omit. As you develop your micro-ISV flagship product, keep a log or project notebook of the decisions you make as you go along in a decisions document, as shown in Figure 2-5.
Figure 2-5. Creating a decisions document for MasterList Professional
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Few tasks are more frustrating than working through how one part of your program should work and then revisiting the design weeks or months later and wondering why you decided on that design. A good decisions document helps you set the scope of your product, records the fruits of your research efforts, and identifies potential enhancements. Whether you create the document in a word processor, a spreadsheet, a database, as Web pages, or a wiki is up to you. Just keep in mind that like a lot of design issues, you want to keep it simple enough so you never need to worry about how to record your decisions. Instead, you can worry about something everybody just loves: the schedule.
Developing the Schedule A man is known by the company he organizes. —Ambrose Bierce (1842–1914), American author, editor, journalist1 Ambrose didn’t have to deal with milestones, deadlines, or the dreaded schedule; otherwise, his dictionary would have been about three times longer. But you do, even if the only resource you have to level is you, and every critical path runs from your fingers to your keyboard. When you’re a team of one programmer (or even two or three people), you can narrow the process of creating, revising, updating, and completing the dreaded schedule to the core essentials: • What has to be done? • How long do you think it will take to do each task? • How long did it take in reality? Reread that last bullet—it’s a killer. Estimating software tasks is somewhere between a best guess and throwing darts blindfolded in a high wind. Results are going to vary widely. That may be OK if you’re working for someone else (even if you’re working 18-hour days, your paycheck is hitting your account as scheduled); it’s Definitely Not OK if you’re in a race between getting your micro-ISV up and running and making money before the last of yours runs out. Make no mistake: if you’re going to make it to the Promised Land of milk, honey, and revenue, you’ll have to find some way to keep and maintain your development schedule. In the following sections, I’ll cover the two methods that I know work: a method based on Joe Spolsky’s Painless Software Schedules and MasterList Professional.
Using Painless Software Schedules If you search for the term software schedule on Google, the first entry you’re likely to find is the “Painless Software Schedules” article Joel Spolsky wrote on his Web site in 2000.2 Now, Joel is a genuinely Smart Guy, and this article lays out a simple way to use Microsoft Excel to create software schedules worth the paper they’re printed on. Here’s the gist of Joel’s approach:
1. The Devil’s Dictionary (Bloomsbury, 2004) 2. http://www.joelonsoftware.com/articles/fog0000000245.html
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1. Use Microsoft Excel. 2. Keep it simple. Seven columns will do, as shown in Figure 2-6.
Figure 2-6. Doing Painless Software Schedules the Joel way 3. Divide features into tasks. 4. Only the programmer who is going to write the code can schedule it. 5. Define tasks as hours so you describe real blocks of programming effort, not wishful thinking. 6. Keep your schedule working by keeping track of both the original estimate and current estimate for each task. The difference between the two is important and useful. 7. Update your elapsed time daily. 8. Include debugging, integration, and other tasks such as updating your documentation and performing unit test cases. 9. The schedule works if it’s telling you the truth. You may not like the truth, you may have to decide to cut features, but that’s not the schedule’s fault. The beauty of Joel’s method is that as long as you stick to it, the method will tell you the truth about your development schedule; I know of several micro-ISVs that have used Joel’s method to develop their software. And, in 2002 and 2003, I used Joel’s method to plan and execute my first foray into noncustom software, MasterList-XL. MasterList-XL (http://www.safarisoftware.com/mlxlDownload.htm) took Joel’s ideas and ran. Specifically, I tracked my tasks in Microsoft Excel, made them real tasks and not wishes, and added two points I thought were missing from Joel’s original equation: some tasks have to be done by a certain date, and the more time you spend on less important tasks, the less time you can spend on more important tasks. Something like 40,000 people have downloaded MasterList-XL since I first made it available, and I’ve heard from enough people over the years who still use it to manage all sorts of projects, including micro-ISV projects, to know it works.
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But although I still give MasterList-XL away for free, I’ve developed what I think is a better tool for managing projects: MasterList Professional.
Using MasterList Professional I’ll keep this section of this book ultrashort for a couple of reasons. First, the software itself, my company’s Web site, and my blog do a good job of making the case for using MasterList Professional to manage not just the design and development of a micro-ISV’s product but all the other projects you need to complete. You can read about it, watch movies of it, and try it for free for 45 days at http://www.safarisoftware.com. The second reason is to demonstrate a little applied earnestness of intent here: the main message I hope you take away from this section of the book is that whatever has been your business experience with scheduling projects, scheduling your micro-ISV product’s development is both doable and necessary.
Examining Your Development Infrastructure Source Control Management (SCM) is one of those “infrastructure” things you usually get to take for granted when you get paid on a regular schedule to program and get a steady supply of electricity, phones that work, and office supplies. Entire chunks of IT departments spend their time worrying about repository backups and the like; aren’t you glad you don’t have to do this? That was then, this is now, and now the IT department is just you. Just as there’s a programmer’s heaven where you can buy fun, interesting things, there’s a programmer’s hell where you go if you don’t build a safety net for your development efforts. You don’t want to go there—it’s a painful place, with lots of unhappy people, and it takes a long time to leave. Been there, done that. Let me tell you a quick story of why SCM for a micro-ISV isn’t like shoes for fish: In the first half of 2005 when I was still doing contract development, the latest version of an application I wrote for a good client of mine who provides specialized management consulting to certain portions of the U.S. government developed a wee problem. The app stopped working. Build 79 worked fine on my dev machine, my test boxes, and the client’s test boxes, and it locked up tight when installed using a special installer that had worked fine for the past 78 builds. Now, the usual solution would be to rebuild the install script or, if necessary, change installers. No can-do: we had to use the existing installer, because it manages to let you install a Windows app through some parallel dimension that never touches the actual operating system, letting people install the app and run it from a CD—something my client’s client, those certain portions of the federal government, is quite fond of nowadays. Did I mention the installer stopped running the new build five days before a key presentation to one of my client’s clients? Did I mention that some features in the new build absolutely had to be demonstrated? Did I mention that the makers of this installer had decided to take a collective trip to some small Pacific island and weren’t answering their phones or emails? Did I mention that the man whom this presentation was going to be made to was at the top of a chain of command with more firepower than all the bombs dropped during World War II? Now, I wish I could say that with a quick flip of the SCM’s diffing software I was able to move the key features back into a build that this transdimensional installer liked, but I can’t.
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You see, about five years ago when the SCM system that came with a certain IDE I used for most of my work died for no apparent reason, I did what a lot of small developers do and swore off SCM as something just not worth the bother. Oops! Well, after spending 36 hours straight programming the new features back into a build that could be installed, the presentation went off without a hitch. And after the install vendor’s staff came back from wherever they were and revved their installer, the mysterious problem disappeared. And after I had ended up with two differing code bases because some of my client’s clients control weapons of mass destruction and others don’t, I was able to easily merge the two code bases into one using one of the two SCMs I’ll cover next. What’s more, by some fluke in the free market system, both these SCM tools offer a free license to solo developers.
Using SourceGear Vault Remember Eric Sink from Chapter 1, the guy who coined the term micro-ISV? Eric’s company, SourceGear, makes one of the best ways micro-ISVs can protect their code: Vault. Vault (http://www.sourcegear.com, $199 USD per license without support) is a source control client-server application for Windows environments built as a seamless replacement for Microsoft’s moribund Visual SourceSafe. Figure 2-7 shows Vault at work.
Figure 2-7. A tale of two code bases: Vault at work
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SourceGear’s main market is all those development shops and IT departments that are fed up with Microsoft Visual SourceSafe’s limitations and arthritis and are comfortable adding another SQL Server–driven application to their production mix. Although SourceGear’s main market is enterprise, Sink makes the following points about why SCM should be part of every programmer’s development infrastructure in his blog: When I use a source control tool all by myself, here are the benefits that I find still apply: It’s an undo mechanism. Whenever I get to a good stopping point in my code, I check in my changes to the repository. From that point on, I can be less careful. I can try coding some crazy new idea, and when it doesn’t work, I just revert my working folder to my last check-in point. It’s a historical archive. Sometimes I want to undo much further back. My repository history contains a full copy of every version I have ever checked in. If I ever need to go back and find something I once had, it’s there. It’s a reference point for diff. A source control tool can easily show a diff of all the changes I’ve made since my last check-in. It’s a backup. When I regularly check in my work, I always know that there are two copies of it. If my *&^%#@! laptop hard drive dies again, my code is still safe in the repository. It’s a journal of my progress. When I do my regular check-ins, I write a comment explaining what I was doing. These comments serve as a log or a journal, explaining the motivation behind every change I have ever made. It’s a server. Sometimes I’m coding on different computers. The repository becomes my central server. I can go anywhere I want, and I can still get to my code. When I interviewed Sink for this book, I asked him if he had any other points to add: People who don’t think source control is helpful for one person are usually the same people who think they can live without it for a team of two or three. So they try to “just get by,” storing their files on a public file server. Anyone who has experienced the pain of this situation has realized that source control is always worth the trouble for any plurality of developers and has vowed never to repeat the mistake. Those who have not experienced this pain would be wise to learn from those who have. Another interesting aspect of Vault is that it’s free for a single developer. Why? “The main reason is that it allows Vault to be used by a whole bunch of solo consultants, many of whom go on to recommend Vault to their clients,” Sink explains.
Using Perforce Software With more than 160,000 developers at 3,500+ organizations worldwide, Perforce is based in Alameda, California, and is a major player in the SCM world. The Perforce SCM system (http:// www.perforce.com/perforce/products.html, $800 USD per single annual license) has clients for Windows, Mac OS X, Linux, Solaris, and FreeBSD. Figure 2-8 shows Perforce’s Windows client, and Figure 2-9 shows Perforce’s WinMerge program.
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Figure 2-8. Perforce’s Windows client
Figure 2-9. Perforce’s WinMerge program
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Perforce may look like massive overkill for a micro-ISV. This isn’t so, says Nigel Chanter, Perforce’s chief operating officer (COO): Programming teams of any size need Source Control. Without it, releases go out the door with uncertain contents. Bug fixes get lost, and engineers see their development efforts wasted in a blundered process. What could be more frustrating than debugging a block of code only to discover that someone else debugged that same block of code the day before? Imagine hunting for the most recent revision of a software module, completed three weeks ago by a team that has since been reassigned.... Finally, picture the amount of time wasted if you had to re-create a specific version of a piece of software shipped to a customer six months ago, and the customer is now calling you because there are bugs that need fixing. All of these problems could be avoided by employing Source Control. Source Control tools are the means by which the evolution of a software product can be tracked and managed. As a subject, Source Control has often been accused of lacking excitement. That is, in fact, the point of SCM: some excitement can be done without. All these examples apply to teams of two or two thousand, and some apply to that lone developer. Also, interestingly enough, Perforce is free for up to two developers: “Perforce does indeed offer a free two-user version (five client workspaces); however, we offer technical support only to paying customers or prospects evaluating the product for purchase,” Chanter adds.
When the Going Gets Tough, the Tough Get Virtual One of the hardest parts of being a micro-ISV is dealing with the god-awful configuration mess. Regardless of whether you’re developing a desktop, server-based, or hybrid application, the endless permutations of operating systems, browsers, and core components can drive you crazy. Then, just for fun, add the need to support at least a modicum of international audiences, and you have a major risk factor to becoming a successful micro-ISV. For example, MasterList Professional is a relatively simple Visual Basic 6 application storing its data in a single Microsoft Access (.mdb) file, incorporating ten third-party controls (.ocx files). Or at least I thought it was simple until I found myself dealing with about ten flavors of ActiveX Data Objects (ADO), screen resolutions that ran from 640×800 to dual 1600×1200 monitors, and the joys of Hungarian date formats. If you want your application to succeed (make money and not drive you crazy), you want to manage this risk from the start of your development process. And unless you happen to own a couple dozen computers, you need to think about how to create and manage virtual test environments. In the following sections, I’ll cover three strategies that use different toolsets and give you a way to define your own. These strategies are by no means equal, but they’re all better than not having any strategy at all.
Strategy 1: Back Up Images Until a few years ago, creating hard disk images was the best available way of “provisioning” your testing environment. You can still use a product such as Symantec Norton Ghost 10.0
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(http://www.symantec.com, $69.95 USD) to create images of a working base machine and then restore your test machine as needed by overwriting it with an image when you need to do so. Although creating a test machine from an image works, it’s at best only a partial solution. It’s slow, taking anywhere from 10 to 20 minutes to reapply an image stored on the testing computer’s hard drive and longer—much longer—if you have to go across the network. Many a developer cried out for a better tool, and unsurprisingly, the call was answered.
Strategy 2: Use Microsoft Virtual PC (Connectix) In the last decade, Connectix started selling a nifty application that could somehow create a Windows PC running inside a Windows PC. This Virtual PC for Windows solution could do just about everything a real PC could do: install and test software, run Microsoft Office, talk to the network, and talk to the Internet. If you crashed the virtual machine, no big deal: just restart the app, and try again. This development didn’t go unnoticed in Redmond, Washington. In August 2003, Microsoft acquired Connectix for a large, undisclosed sum, promising to continue to develop and support these virtualization products. As of this writing, not much has happened with Microsoft Virtual PC. It still lets you run as a guest operating system every operating system Microsoft has released back to MS-DOS 6.22; the software comes free as part of the MSDN Universal Subscription via the Empower Program, which is very good. Or, you can buy it as a stand-alone product (https://partner.microsoft.com/ global/40010429, $129 USD).
Strategy 3: Use VMware and VMTN Then there’s VMware. Where Virtual PC ends, VMware Workstation 5 (http://www.vmware.com/, $189 USD per developer), Physical to Virtual (P2V) Assistant, and virtualization servers take off. Take, for instance, the Snapshot Manager, as shown in Figure 2-10. With snapshots, you can incrementally save your virtual machine like you would a document or spreadsheet. With the Snapshot Manager, you get a clear, simple interface for managing those snapshots that shows how each virtual machine you created relates to its predecessor and successors. VMware performs all the features Microsoft Virtual PC does but does them so much better that you end up with another level of functionality. Figure 2-11 and Figure 2-12 show running Windows XP in a virtual PC in VMware on a Windows XP notebook, complete with antispyware and antivirus programs running. Figure 2-13 and Figure 2-14 show MasterList Professional being downloaded and installed, and Figure 2-15 shows it running.
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Figure 2-10. I’m in love: the Snapshot Manager.
Figure 2-11. Running Windows XP in VMware
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Figure 2-12. Viewing a too real virtual machine
Figure 2-13. Downloading MasterList Professional
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Figure 2-14. Installing MasterList Professional
Figure 2-15. Running MasterList Professional in its own VM
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Although aimed squarely at enterprise-sized companies that want to save on development and deployment costs, a VMware solution means micro-ISVs can create and manage entire virtual testing centers for a pittance. “I would argue that VMware is one of those critical pieces of software for a start-up, precisely because it allows you to use the resources of a much larger company without actually deploying those physical resources,” says Kevin Epstein, VMware’s vice president for marketing. He adds the following: If I’m a single guy in a garage with two solid server machines, and I’m trying to develop a multitier app and test it against ten clients, I don’t have the physical resources to do that. But if I choose to deploy all those resources within a set of virtual machines, I could create that infrastructure within the confines of a single physical machine and still have leftover workspace—instead of developing something, testing something, and finding it doesn’t work and having to wipe the entire system and start over [on a test PC]. Even if I backed it up, it’s still several hours’ time. With VMware, I just hit reset, and I’m back to a clean state. Like Virtual PC, VMware lets you create a virtual PC, install your operating system and app, and then test. But it’s the “deeper-thinking” features of VMware that make it a compelling micro-ISV tool: • You can quickly take snapshots while deep in your application and then quickly reset to exactly where you were (no more virtual reboots). • The built-in movie recorder lets you capture the steps leading to a bug’s appearance. • You can set how much random access memory (RAM), disk space, and bandwidth your virtual PC will have. Besides meaning you no longer need to keep old PCs around for testing, you can test other features such as how your Web site looks to a visitor accessing the Internet via dial-up access. • Multiple virtual PCs and servers can run at the same time, talking with each other and, if desired, other real resources such as the Internet. You can box sets of virtual PCs, controlling them as a set. You can easily modify these teams of virtual PCs, adding or dropping virtual PCs as needed. • It offers extremely good optimization. A virtual PC typically runs faster than a real PC, you can clone a virtual PC as a linked clone that saves only the difference between states, and memory is managed and shared between virtual PCs running at the same time, meaning you don’t need about a third more memory for each virtual PC. • You can run VMware on a PC running either Windows or Linux and create virtual machines running Windows, Linux, or a variety of other x86-based operating systems. • It offers a scriptable application programming interface (API) for VMware’s virtualization servers; for example, you could launch a series of virtual PCs that each launches your application or a test harness application and then takes snapshots of the results while you sleep after a hard day’s work. • It gives you the ability to import a Microsoft Virtual PC or a Norton Ghost image file into a VMware virtual machine file.
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So, what does your testing or development PC need to run VMware well? From my experience, a virtual Windows XP PC runs as fast or faster than a physical computer on a notebook computer with an Intel Pentium M processor 750 and 1GB of PC2700 DDR RAM. The key factor is memory; you need “good, high-speed RAM and lots of it,” according to Epstein. “With a lot of RAM, you can build things that will work faster and better in virtual space than in physical space. He adds the following: It’s the same thing as if you had a room full of physical machines, with someone walking around, turning one on, starting tests, waiting for results to compile, and stopping tests. But instead of physically turning them on, the API is doing all the work for you. In June 2005, VMware went one large step further and started offering its entire set of applications and servers on a subscription basis for $299 USD per developer per year for development and testing.
Addressing the Quality Issue Although it may seem strange to talk about quality here, ensuring that your development process delivers a product with as few bugs as possible is an infrastructure issue. You can’t add quality to a code base; you need to have a process that makes quality code. The quality issue is especially important for micro-ISVs. Customers tend to take bugs more personally when they’re in an application from a small company than from, say, Microsoft. Also, the more bugs in your product, the more of your limited time will have to go to tech support and be stolen from marketing; remember, you get only 1,440 minutes a day. A robust beta program with at least the second phase of it public will reveal bugs (see the next section), but you want to give some serious thought about how to make quality improvements part of your development infrastructure. And that means testing. By and by, programmers hate to test their code. For some, this is because they came up the ranks from testing. For others, this is because that’s what testers do. For most, this is because after spending two or six or sixteen hours coding, all the little gray cells are limp. However, as bad as testing is, not testing is worse. At the very least, you need to reread the code you write. Let me tell you a little story about what not reading your code can cost you: In the early 1980s, I got one of my first contract programming jobs at AT&T when the big, nasty monopoly was being subdivided into a bunch of mini-monopolies, and somebody had to do the programming to tally for the first time whether a customer was going to defect from Ma Bell. Since AT&T’s MIS division said it would take five years to develop a polling system, but the federal judge said it would take one year, each region got to work out—somehow—how to process this data. I got to be, along with a few others, a junior part of the somehow. The processing had to be done using a statistics package called SAS and JCL—that’s Statistical Analysis System and Job Control Language—because that was all we could run on AT&T’s mainframes. Think of the scene in Mel Brooks’ Young Frankenstein when the creature is brought to life, and you have the right idea. Anyway, one day when I got to work I found the rest of the team huddled around a desk looking fairly nauseous, pouring over the job results of the run I’d coded and submitted the day before. Roy, my boss, looked up, and asked me the following:
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“Bob, did you remember to check your JCL code before submitting it last night?” “Yeah, I think I did…uhh…why?” “Well, if you’d checked line 144, you would have found the statement where you incremented by zero.” “Incremented by zero?” “Right. And that means this entire data run is junk. Expensive junk. Very, very expensive junk.” “Uhh…how expensive, Roy?” “Oh, about a quarter million dollars. But don’t worry, we won’t take it out of your pay this time.” Needless to say, the lesson stuck in my mind. The following are three methods you can use to avoid the mistakes that might cost your micro-ISV a great deal of potential revenue. These are by no means the only ways of ensuring quality code, but they should get you started.
Method 1: Use a Code Checklist Using a code checklist is the easiest method of the lot. Go into Microsoft Word, write the halfdozen coding mistakes you’ve last made, print the document, and look at the list as you review the code you wrote today. See any familiar faces? Write down other ways you miss the mark as they crop up, and revise your code’s checklist.doc periodically. What you’ll notice over time is coding is just like spelling. You make certain coding mistakes repeatedly, but if you focus on them, you’ll make them less often. Just the process of checking my code against my private coding checklist identifies about half of the coding mistakes I make, especially those nasty increment-by-zero blunders and other simple errors. Give it a try!
Strategy 2: Use Unit Testing and Test Driven Development Depending on what you’re using to code your micro-ISV’s application, you may be able to sufficiently modularize your code to test each unit independently from the rest of your code base. Visual Basic 6, ASP Classic, and JavaScript don’t lend themselves to class-by-class or unitby-unit testing; Visual Basic .NET, C#, .NET, ASP.NET, Java, and other modern languages do. The concept of unit testing is simple: build a test harness that exercises each unit of code for correctness and can be repeated as often as that code changes. One of the shining success stories of the open source movement has been a family of tools by different teams, starting with Erick Gamma and Kent Beck, for automating creating and running unit tests for Java. In the Windows development community, NUnit (http://www.nunit.org) is by far the most popular tool and has spawned a constellation of alternative interfaces and add-ons. With Microsoft Visual Studio 2005, NUnit has been “embraced and expanded” as a standard best practice for enterprise programming. Figure 2-16 shows you NUnit in action.
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Figure 2-16. Running NUnit 2.2 tests How to use NUnit as part of your testing and development infrastructure is beyond the scope of this book; you’ll find a set of resources to get you started in the appendix. The point I’m making here is one of the emerging core best practices of professional programmers (bugs = less money): you should strongly consider incorporating at least some unit testing in your micro-ISV development process. In fact, a growing school (swarm? flock?) of developers say not only should developers create and manage their own unit tests but they should create the unit tests before they code. Pioneered by XP proponents, Test Driven Development (TDD) is unit testing squared and cubed: 1. Quickly add a test. 2. Run all tests to see the new one fail (there’s no code there yet!). 3. Code just enough so the new test might work. 4. Run all the tests, and see them all work, including the new test. 5. Refactor your code. By iteratively writing your tests first, several good things happen: you’re forced to think about what each module or class is supposed to do, your code has far fewer bugs, and your refactored code tends to be of a higher quality. TDD has its disadvantages too: much of your time is going to go to writing tests, not production code. And, although TDD works great on the internal aspects of an application, it
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isn’t well suited to testing the user interface. Although you’ll find a list of TDD resources in the appendix, here are two thoughts to consider before dismissing TDD as too “out there” for practical use: • Would you rather spend x amount of time writing tests or at least 2x debugging code downstream? • Software tools exist that are explicitly designed for testing applications from the user interface in; in fact, one of them is the third method for building quality into your development infrastructure.
Strategy 3: Use AutomatedQA’s Test Complete As thoroughly as you check your code against your list and unit test your classes, there’s still the little matter of something going wrong as your customers actually use your application. Actually, it’s not a little matter; nothing will kill a potential sale as fast as when a potential customer clicks a button in your application only to have it crash. In the past, most companies’ IT shops had dedicated testers who spent their days (and nights sometimes) clicking through test scripts and black-box testing your apps. Or, if an IT department was well funded (or has been recently embarrassed), the testers would work within an expensive automated testing suite such as IBM Rational Functional Tester or Mercury TestDirector. Like your company ID card, those resources have gone away. So, what’s a micro-ISV to do? In short, get AutomatedQA’s TestComplete (http://www.automatedqa.com/products/ testcomplete/; $349.99 USD for the standard version, $799.99 USD for the web application testing enterprise version, 30-day trial version available). TestComplete is a remarkable product for various forms of testing but shines for its ability to test on Windows platform desktop applications. Learning, let alone mastering, TestComplete isn’t something you can do over a lunch break, so let me run quickly through how this tool works so you can see whether it will work for your micro-ISV. Let’s say you’re planning to make a million bucks with your micro-ISV’s first Windows desktop application, Orders.3 After you download, install, and start TestComplete, you start your application and click the Record Script button in TestComplete. You’ll then see TestComplete’s Recording toolbar, as shown in Figure 2-17. Next, you exercise a function, such as creating a new order while TestComplete is recording your mouse and keyboard’s events. (You can opt for recording at an even lower level, but most times that just gets in the way, since TestComplete can find most controls in most programming environments.) Along the way, you can save what your app or the screen looks like and the internal state of most variables in your application for later automated comparison. So, you’ve created your order, stopped recording, and returned to TestComplete. TestComplete has written the test for you, as shown in Figure 2-18.
3. Yes, some micro-ISVs have made more than $1 million over the course of a few years; no, they didn’t do so with this example application.
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Figure 2-17. Recording your application with TestComplete
Figure 2-18. Viewing the recorded script
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Now, TestComplete could have written this test in any of five programming languages (VBScript, JScript, Delphi, C++, and C#). Also, this could have been an app written in any .NET language, Visual Basic 6, Visual C++, MFC, ATL, Java, or Borland VCL, or it could have been a Web-based application (PHP or Ruby on Rails). In any of these cases, TestComplete could have handled it with aplomb. By the way, if this looks more like an IDE than a simple editor, it is. TestComplete supports breakpoints, call stacks, watchpoints, and the ever-popular autocompletion feature when you’re editing or writing tests, as shown in Figure 2-19.
Figure 2-19. Using TestComplete autocompletion Now that you have a test, you can run it. TestComplete saves detailed information on each test run inside itself or externally as Extensible Markup Language (XML), XML Style Language (XSL), and Hypertext Markup Language (HTML) that you can peruse in a browser, and you can build a whole set of structured and conditional tests as part of your test project, as shown in Figure 2-20. TestComplete has been around since 1999 and has won numerous industry awards. The bottom line is the time, effort, and money it will cost you to implement TestComplete are all paid back when you release, and it pays back even more with each subsequent release.
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Figure 2-20. Viewing the results of this test
ATANAS STOYANOV, CHIEF SCIENTIST AND CEO, AUTOMATEDQA It doesn’t hurt that AutomatedQA, the company that makes, supports, and sells TestComplete (and several other useful products), was started by one man. Q. For starters, why should a start-up company care about Quality Assurance (QA)? A. Well, for background, AutomatedQA started out pretty much as a micro-ISV. I myself created the first product for the company between two jobs, so technically it was a single-man company. Q. So, you were a micro-ISV as well. A. Well, let’s say yes, but we were lucky and able to grow very fast. In retrospect, there have been a couple things that have been very valuable. From the beginning, as I was designing the product and creating it, I had in mind that quality would be one of the top factors for our growth. As a small company, we relied heavily on customer satisfaction—we did not have money to advertise at all or go to shows, so definitely word of mouth has been the biggest factor in our growth. Q. So, would you say the quality of the product can substitute for a marketing budget? A. I would definitely say so, yes. At the initial phase, you don’t have funds to advertise, and you don’t have funds to market to other companies. In this respect, I can’t say enough good things about the power of wordof-mouth advertising and how much of a driving force it has been.
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Second, even when you are starting on your own, you are setting the company’s culture. So, whatever you do when you are one, two, or five people, those things will be repeated when you grow. So, if you don’t implement a proper setting by yourself of tracking issues, doing automated builds, and doing regression testing, and so on, those will be things that when you start having employees will get worse. So, if the founder doesn’t really care about quality, obviously that will pass on to your company’s culture. Another thing I would say, especially about regression tests, is they really allow you to go very fast and be very flexible in the marketplace. Again, when you are a small company, that is one of the deciding factors when you are competing against huge companies with R&D budgets in the millions. Being fast and able to satisfy customers needs to be a driving force; you don’t have the luxury of being able to send them a salesperson or invite them onto a golf course. Instead, you satisfy their wish list. Again, if you don’t have the regression tests, you start adding features, but you’ll be breaking something else. Q. By the way, where are you from? A. Bulgaria. Q. And you came to California when? A. About nine years ago—AutomatedQA started seven years ago. Q. That counts as hitting the ground running where I’m from! A. Developer tools for quality assurance and the development process has always been an area I have had personal interest. So, when I had an opportunity to create some products, that was the area I focused on. Before creating AutomatedQA, I created a freeware tool for mainly the Borland market, which gained a lot of popularity, and it was a driving factor for the commercial product as well. Q. When you start developing for yourself, and you’re not part of a company, how do you get into the mind-set of developing quality code? A. Well, you’re a developer yourself. When you worked at a company, didn’t you have the feeling that ‘If I were able to make the decisions, that’s how I would have done it’? Not just coding but application structure—the whole development process. Then, once you are working for yourself, isn’t it a little bit like the dream came true? At least for me, that’s how it has been. Finally, the possibility of actually working on those things and concentrating on the quality of the product instead of more on, let’s say, management issues. Q. There’s various industry benchmarks of how many defects are acceptable per x lines of code. Where do you think most developers are, and where can they go with tools like those your company sells? A. Well, I would rather say that most developers are quality conscious. But the problem is, they are not aware of those defects. If they knew there were bugs in the code, if nothing else than as a matter of professional pride, they would fix them. So, probably tools like TestComplete, our profiling tools, and so on, help them become aware that these problems exist. As a profession, especially these last years, it has been pretty clear that features are nice, but without quality, software just doesn’t sell. Especially nowadays with the Internet, if you release a bad version, pretty much everyone will know it very soon. There’s a lot more communication going on, and customers are more aware that they can get this type of information. Q. So, you see that since the Internet is becoming the predominant means of getting information, let alone information about software, that that’s upping the ante as far as the level of quality? A. I would say so, yes. You know, blogs, forums…all those tools have a huge impact today. It’s a lot more transparent today. About 20 years ago, I was working in the United Kingdom, in Africa, and in Tunisia, and I do remember years when you were pretty much on your own about a product; be it a good product or a bad product, you had to try it on your own. Nowadays, if you need a tool or a component, in about an hour you can see a lot of information from a lot of people about it, and you don’t have to waste your time.
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Q. What do you think of TDD? A. Pretty much as a company that’s how we develop. If not completely developing the tests first, then tests are always developed at the same time as code, in the same way we develop the documentation, the installation…all of those things at the same time. But we are not a test-driven shop in the sense that developers develop all tests. We have a separate testing department from the development department. Q. What would you say to a single programmer, however you define it, who is going to be the tester and the developer for much of what they do. Would you say TDD is an avenue worth perusing? A. Yes, definitely. The biggest problem is not writing good code but forgetting your code—forgetting what you wrote a month ago. So, if you consider TDD as writing the documentation of what you had in mind when you wrote the code, definitely. Q. One thing I’ve had problems doing and I know other developers have too is testing the interface. It’s all fine to build unit tests for various classes, but when it comes time to test the interface, the idea has a tendency to break down. Any advice there? A. Well, I can give you the sales pitch for TestComplete…. Q. Please do. A. Basically, TestComplete is mostly a Graphical User Interface (GUI) testing tool. For unit testing, there are a lot of free tools, like NUnit and NMock, and with Visual Studio 2005 they have their own variation. Unit tests— I would say petty much everyone has them available. GUI tests have been more difficult. Q But it’s the GUI that customers see. A. Yes, and basically TestComplete automates the manual testing of the GUI. In a big organization, you have testers who are testing the product, and if they find anything they will see it as the customers would see it. For a small developer, they will see it the way developers see it. But it is a little bit different; it’s disconnected from what the customer actually sees. Again, as a single developer, you don’t really have manual testers until you do the beta, and an automated GUI testing tool can save on those resources. Q. Well, what about the objection to automated testing that the testing can get more complicated than the application? And if the application is already complicated, you can end up with ten times the code, but only 1/ 10 the code actually ships. Based on what you’ve heard from your customers, what’s the most complex project you’ve heard TestComplete and/or AQTime [a profiler tool] being used on successfully? How big can it scale? A. One of our customers I am intimately involved with is McDonald’s Worldwide. They standardized worldwide on TestComplete. They have several different user interfaces for their points of sale. They are testing from the customer ordering a hamburger to the order going to the kitchen to the order going the front desk where they are using barcode readers. The project is also in multiple languages because they have franchises all over the world and sometimes with slightly different systems in different countries. We’ve worked with them on a one-on-one basis, so it is a fairly large deployment. Worldwide, it has all the complexities you can imagine. They have tests in the thousands in their test suite. I have another customer who sells ticketing software. They will have for their daily test—or their nightly test—about a half an hour of testing. For their weekly test that runs over the weekend, they have 23 hours of regression testing. Q. Twenty-three hours of tests for a single application? A. Yes, because they sell worldwide, and they have to rewrite their taxation modules. So, the developers were all happy; they developed a new taxation module that was so much better, and so on, and they ran the regression tests for the first time and found more than 1,000 bugs compared to the old system. And again, this happens fairly frequently. The new code works much better, and it’s much better refactored, but it introduced issues the old code did not have. Overall, the developers were really happy about having the bugs get found.
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Q. Should you start creating tests as soon as you have a GUI? Even if it’s one form with one button and you know it’s going to change? Should GUI testing run concurrently with unit testing? Maybe that’s the way to ask this question. A. GUI testing should be at the level of, let’s say, acceptance testing. Once you feel you are reaching the functionality acceptance level for a form, then that’s the best time to actually write the tests for that form. Q. I want to make sure I’ve got this point. With unit testing, especially TDD, you are constantly refactoring as you develop from the very first line of code. I think what you are telling me is at the point where the code starts to manifest a GUI of some sort, that’s when you should start using a GUI test application? A. Yes, I would say that’s the most effective way. Q. And if you develop out from your classes, you should be doing more and more GUI testing and less and less unit testing. A. Yes. And that’s how it works in our company. Q. Now that Microsoft has gotten the testing religion, at least as far as Visual Studio 2005 Team System, do you think it has sort of taken over your space? Or do you think there’s still room for you and other people like you? A. They haven’t really taken on our space, especially for the testing part. In the Team System they will have unit testing, and they will have a little bit of user interface to manage tests, manual tests, and unit tests, but they do not have GUI tests. So, they are not really encroaching into our market. On the other hand, there are sometimes opportunities also. They have an integration SDK for Team System, and we have already integrated into it. Q. I notice that you have a blog at your company’s site. How have people responded to that? A. To be honest, we started it fairly recently. I don’t have hard data about it. But overall, I did some measurements on our return on printed advertisem*nts, our return on shows, and our return on Google advertising. And basically, the Internet is the number-one sales-driving venue for us. If we increase by 20 percent the number of people coming to our Web site, we have about 20 percent more business as well. Q. Have Google Adwords worked for you? A. Yes, consistently. We don’t really go into a price war for keywords. Some of our competitors are spending ten times our expenses. Obviously, for them to pay $4 or $5 a lead it’s worthwhile; for us, it’s not. But it has been consistently very good for us. Q. Anything you care to mention that has not turned out to be good? A. Probably printed advertisem*nts haven’t really worked. We’ve tracked ads in different magazines, and pretty much across the board results have been very poor. We also ask on our order form why our customers are purchasing. The number-one reason is referrals from friends and associates. That’s what the data suggests. It might be skewed because people don’t want to admit they are influenced by ads, but we included discount codes in the ads as an incentive, and to be honest I wouldn’t do that again. Q. Just not worthwhile for you? A. It’s one of those things you start doing; it’s a little hard. You think, “Oh, maybe if I stop my advertising, maybe my revenue might go down.” It’s a little bit like drugs. Q. I promise I won’t share that with anyone I know who sells print advertising! How many people now work at AutomatedQA? A. About 50. Q. I guess you’re out of the leagues of micro-ISVs now. Any advice you would give to a micro-ISV about testing or anything else? A. Again, on testing, sometimes their budgets are so small they can’t afford to purchase anything. But definitely have the quality of the application during the development process in mind.
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They can also use some of the open source solutions to unit test and then use some issue tracking— again, there are some open source; it doesn’t matter really which specific tool. Later on, when they get some revenue, they can upgrade or not. But again, they can start the culture of the company so that quality is important and it’s one of the main features of the product. When they are designing version 1 of their product, put as a main feature quality. It is a major selling point—a major marketing point.
Getting the Beta Advantage Up to now I’ve been talking about your micro-ISV as if it were a one-person show and its success were up to you (and your partners, if you have them). But you should be working with a whole other crew of people during the design and development phase: your beta testers. At some point between when the last major feature is working and before you expect to actually make money, it’s time to find as many people as you can who, in exchange for your undying gratitude and a free license, will put your software or Web service through various kinds of tests, tortures, and tribulations. I say various because beta testers will range from a bunch of people who say they will try your software to a precious few who will stay up nights coming up with suggestions to improve your product. Over the years, more and more micro-ISVs have come to realize the power, value, and necessity of getting lots of beta testers to try their product, so you actually have two problems as a start-up: how do you get enough beta testers to give your product a thorough whacking, and how do get good enough beta testers who will like your product so much that they start that all-important word of mouth?
Quantity Has a Quality All Its Own How hard it will be to solve the first problem—getting enough active beta testers—will depend on two considerations primarily: the type of product you’re developing and the size of your market. A nearly infinite number of people seem to exist who are willing to play…er…test game software, and exactly zero exist who are willing to work the bugs out of your electrical power grid optimization software. Although no one solution exists for every micro-ISV, here are five strategies you can try: • Ask everyone for whom you have an email address. • Announce it on your Web site, if you have one. • Post short announcements at any forum you regularly contribute to and that allows such notices. • Post short announcements at forums concerned with the problem you’re going to solve, if that forum, mailing list, or discussion group allows such postings. • Blog about your micro-ISV, and let people find you. • Email bloggers who are writing about the problem, and invite them to try your application, Web service, or product before it goes public.
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This last tactic is a definite win-win: bloggers get more grist for their mills, an opportunity to “discover” something neat, and at the least a new take on something they care about. You get a beta tester who, if they like your product, can pull in a whole bunch more beta testers and perhaps get a buzz about your product going. The tactics that work for your micro-ISV and how hard you have to work to attract beta testers will give you a changeable prediction of how your product is likely to fare once you release it: if no one is interested in beta testing it, the outlook isn’t good.
Organizing Your Beta Program However you find beta testers, you’ll want at least three features in place before you launch your beta test: • A mailing list program or service that will let you easily communicate with just your beta testers. I’ve used both Infacta’s GroupMail (http://www.infacta.com/asp/common/ groupmail.asp, starting at $99 USD) and MailerMailer (http://www.mailermailer.com/; see also Chapter 5) and recommend both. They make it easy to send semipersonalized emails to the people who raised their hand when you asked for volunteers. • Some form of a beta tester agreement each person agrees to before they get access. At a minimum, the agreement should spell out what you want (frequent bug reports), what they get (something valuable for free), that they don’t get what they want unless you get what you want, and that they shouldn’t attempt to share, sell, or otherwise distribute access to your product without your prior consent. • A way for beta testers to be able to talk to other testers without giving up their privacy— in short, some form of discussion forum. Forums are a great way to let your beta testers know you know what they know. Once you have your initial batch of beta testers (you’ll need more later when half your beta testers find better uses of their time, believe me), how do you get the quality of information out of them you want? First, your software or Web service needs to report beta problems to you automatically. Second, talk to them—not just about bugs that surface but about what they like or dislike about your app. The more you talk to them and listen to what they have to say, the more likely they are to help you by pointing out missing features, suggesting improvements, and asking questions you haven’t thought of asking.
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emember the last time you bought software online? Maybe it was a utility, blog reader, or whatever, but I bet if you think about it, you’ll get a warm, cozy feeling, and you’ll remember the Web site you bought the app at but not the payment process, because it was easy and normal. In fact, you might be tempted right now to put this book down and take a quick look at the site to see what’s new. Even if you don’t remember the name of the company exactly, you probably remember what it looked like, and you’re not about to mistake it for some other site. That’s positive brand identity at work and the customer experience you want your customers to have, which are the reasons for this chapter. Your product—be it desktop software, a Web service, or an actual entity that comes in a box—isn’t going to make you enough to buy a small Caribbean island let alone quit your day job if it’s not firmly embedded in an identity your customers can understand, remember, relate to, and like. Your application alone isn’t your product. Your application plus your Web site, blog, graphics, payment processing, and overall customer experience is your product. This fundamental shift in mind-set—from developer to brand manager of a three-dimensional, multilayered, message-consistent way of describing how you help people solve some of their problems—is what I’ll cover in this chapter. One topic I won’t cover is advertising. This isn’t because it doesn’t work—it does. In fact, it works very, very well. That’s why every person reading this book goes through life being pummeled with product messages about how they can be younger, sexier, wealthier, or thinner if they just buy Product X. Traditional mainstream advertising—whether it be TV commercials, newspaper ads, or Web site banner ads—works on the proposition that if you smack 1,000 people in the face, two of them are going listen to you. It’s weird but true: a typical advertising campaign is considered successful if a tiny percent1 of the people who see it buy the product. But advertising has a problem: it takes money and time you don’t have. Instead, you have (you hope) an original and fresh way to make the lives of some people easier, and if you can hitch your micro-ISV to the back of the roaring juggernaut called the Internet, you have a good chance at an exhilarating and rewarding ride on something called the cluetrain.
1. http://www.morganstanley.com/institutional/techresearch/pdfs/iadc0222.pdf, http://www.agorabusiness-center.com/0805postcards.htm, and http://www.forbes.com/fdc/mediaresourcecenter/ documents/gertner.pdf
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Getting on the Cluetrain In 1999, four early “Internet sages,” for lack of a better term, created a Web site (http:// www.cluetrain.com) and authored a best-selling book2 about how the Internet was changing the relationship between companies, markets, and people. This public call for change—The Cluetrain Manifesto—was adopted by hundreds of people, many of them influential in how the Internet grows and evolves. In a nutshell, the cluetrain is the idea that in the Internet age, the old way of doing marketing—advertisers interrupt and consumers listen—would be overtaken by the concept and practice of markets as conversations in which both parties speak and listen. For micro-ISVs, the idea of not being a faceless corporation working to your advantage is sweet indeed, since micro-ISVs have no chance of doing business the old way. The Cluetrain Manifesto of 95 theses was meant to stir up trouble, and it did: it’s anticorporate tone rubbed more than a few people the wrong way. Yet, you can’t deny that many of the Web’s hottest areas— blogs, social networking, and podcasting, to name three—are in sync with the manifesto. As I cover all the moving parts you need to assemble correctly to coherently bring your micro-ISV’s product to market, keep in mind I’m talking more about how you present you than anything else.
Beginning at the Beginning: Who Are You? When you’re starting a micro-ISV, even before you name your company or product or search for a domain name, you need to figure out a few issues. Different people describe these issues in different ways: your brand, your market position, your corporate identity, your logo, your name…in a word: you. Danny Altman, Chief Executive Officer (CEO) and founder of the naming and branding consulting company A Hundred Monkeys (http://www.ahundredmonkeys.com), suggests— whether you’re a one-person start-up or a major corporate effort—that the place to start is figuring out the answers to what he calls his list of primal questions: • Who are you? • Why are you here? • What do you believe in? • What territory do you want to own? • Who do you want to connect with? • And, what kind of relationship do you want to have with them? “Basically, our view is that these are questions that you have to answer, whether you’re a large company or a small company,” Danny says. “Those answers will provide the foundation, because these are the foundational questions that define how are we different from everyone else, what’s the kind of soul of our brand, [and] what are the things that are compelling to us.”
2. The book, The Cluetrain Manifesto (Perseus Book Group, 2001), is available for free at http:// www.cluetrain.com.
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Answering these questions might not be easy: These are things that people have a really hard time grappling with. But if you kind of force them to go through this process, or you force yourself to go through this process, you’ll actually find yourself with a lot of material that shows you how unique you really are. We tell people it’s really important to be committed to doing something different—don’t build a brand that makes you one of the trees in the forest and then spend the rest of your marketing budget trying to stand out—because that’s what most companies do, and it’s an appalling waste. When should a micro-ISV tackle these questions or seek help if “you lack the marketing instinct,” as Danny puts it? All of this stuff can happen pretty early in the process, and what happens is that it becomes a kind of a template or a guide for a lot of other decisions that this company has to make. That’s the whole reason you do all this foundational stuff because it keeps you from reinventing the wheel every time you have to do something. Because, if I know who I am, and I know what the problem is, then a lot of times the answer is, like, right in front of me. But if I don’t know who I am, then I’ve got to figure out who I am right now, which is different [from] who I am tomorrow. And that’s the trap I think a lot of companies get into. Having a company is about building equity in your identity. Danny’s ten-year-old company, based in the San Francisco Bay Area, uses the same approach of working through these questions when consulting with large multinational companies or small businesses. A Hundred Monkeys has two divisions, and one works exclusively with small companies through a process that can take place both face to face and remotely. The time and cost for expert help in defining who you are from your company’s name on up isn’t cheap. Danny says that a typical small company brand definition project can take twoand-a-half months and cost from $5,000 to $10,000. On the other hand, the only thing more expensive than knowledge is ignorance! If you decide to come up with your own name (or if the cost for one of the leading professionals in the business is a bit out of your budget), refer to A Hundred Monkeys’ client profiles to get a feel for how this works, and then download the Igor Naming Guide (http:// www.igorinternational.com/process/naming-guide-product-company-names.php). The Igor naming and branding agency’s great guide demystifies the naming process.
Good Looks Matter A long time ago, I happened to end up on a stage in Monte Carlo, Monaco, with Michael Spindler, then CEO of Apple Computer. This wasn’t by choice—I would have preferred being dead. I had been awake for about 40 hours straight after flying to Monaco from California, redoing the redos of the redone speaker support slides I’d been contracted by Apple to do. And he couldn’t decide whether he wanted thin, blue lines on his slides or thick, red lines, so he had me up there changing them as fast as my fatigued, shaking hands could since the sales conference was ten minutes from starting. Five minutes. Two minutes. Thirty seconds. I finished changing the last slide to bold, red, ten-point lines as the walk-in music faded, and as I scampered off the stage, I could hear the CEO say, “Now it will make the right impression!”
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Whatever “the Diesel’s” shortcomings as a CEO, he was absolutely right: you get only one chance to make a first impression, and looks matter. While you may have built an absolutely killer app or the best Web service since Google came along, it will die a miserable, slow death in the market if it’s ugly or introduced to the world via an ugly Web site. As the head honcho of your own micro-ISV, you’re not only the head developer but the artistic director, in charge of getting the visuals right. This may not come naturally to you. You may not be able to draw a straight line or tell teal from aquamarine to save your life. That’s OK: you have a computer and the Internet. But you’ve got to start from the point of view that visual impressions matter, and like the ferret in a popular online cartoon strip,3 you want your prospective customers to exclaim, “Oooh, shiny!” rather than feel physical discomfort when they see your graphics. You can use a couple of straightforward strategies to give your graphics a professional, attractive feel, and I’ll cover them in a moment. But first, Mike Rohde, the design director at MakaluMedia, talks about the first bit of artwork you’ll need: your micro-ISV’s and product’s logos.
MIKE ROHDE, DESIGN DIRECTOR, MAKALUMEDIA In early 2005, Ian Landsman, who is starting a micro-ISV called UserScape to sell a Web-based application called HelpSpot, hooked up with a professional graphic artist to create logos for UserScape and HelpSpot. Ian created a great blog well worth reading (http://www.userscape.com/blog/2005/01/31/creatinga-business-logo/) on his experience working with Mike Rohde, a graphic artist based in Milwaukee, Wisconsin, who is the design director of the distributed company MakaluMedia (http:// www.makalumedia.com/). You can read Ian’s blog to see how the process went for him; I followed up with Mike to see what he thought of working with a micro-ISV. Q. Why should a micro-ISV hire a professional to do their logo? A. There are certainly ways of doing it yourself or buying an off-the-shelf stock logo for 50 bucks, with exclusive rights in the $200 range. One of the problems with that approach is if you have a very specific company and you are looking to suggest an idea of what your company means, the problem is you are already adapting to a logo that already exists that doesn’t necessarily fit what it is you do. You are already starting off on the foot of compromising in some way. It’s subtle, but it becomes an issue because if it’s important to you to get the idea of your company or product over quickly. If it’s confusing in any way or disjointed or not clear, that can be a problem because design is becoming more and more a critical thing for businesses on the Internet. In a nutshell, the reason to hire a design professional is it’s not your specialty; and if you are a micro-ISV, you are trying to be very effective with your time and your energy, and by doing it yourself you can spend a lot more time on it and may not be as happy with the results. Q. When you work with a micro-ISV, what kind of money are we talking about? A. We charge usually between $400 and $600, and [this] includes lots of back and forth [and] lots of collaboration with the client, which may be different from other places. One of the differences is I’m sort of old-school and start by making a lot of sketches. And one of the advantages of this is that I can produce a lot of ideas on paper very quickly, and it also involves the client because they can see the process going forward, instead of waiting two to three weeks and being presented with a color logo and being told that’s your logo.
3. http://www.sluggy.com/
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Q. It sounds like that collaborative process between yourself who is a professional at this and the client is the meat of what you’re selling. A. Yes, I think it is. The more I’ve sat back and thought about why do people come to me—and obviously some people are going to choose other ways for various reasons such as budget—the people who have chosen me like the fact that I sketch, and they feel like they can be involved in the process and have a say in where things are going. Q. So how long does the process take? A. Generally a couple of weeks, from sketch to final. Sometimes as short as a week, sometimes three to four weeks. It varies. Q. Do you get involved before they have a name or after? A. Up to this point we get involved after the naming. And I think in a way that works well because the client generally thought about what they are going to do, what is the idea behind the thing they are going to do, what separates them from others—and they’ve usually got a name down before they come to us. Q. Are you finding your micro-ISV customers want one logo for both the company and the product or two different logos? A. Generally they’re separate. In the case of Ian, he wanted a product logo and a company logo and came to us to do both because he wanted them to be consistent and complementary to each other and work as a unit. But it varies; generally it’s the company logo and one product. Q. What mistakes do you see start-up companies making when it comes to graphic design? A. I think a lot of times they don’t consider it at all or think of it as an afterthought. If they don’t have those skills, they tend to put up something very rudimentary. They don’t consider design to be important, and I think that is something that they are missing in the world going forward. Design, whether it’s complex or simple, needs to be thought about. It needs to be considered. Q. Why? A. It’s the identity of your company. We’re raising a very visual generation who’s coming up now, and they identify with visual things. I think it is becoming more of an accepted or assumed thing that you’re going to have some kind of identity—whether it’s complex or simple. I think it’s important with a company, especially a micro-ISV, that the more professional it can look, the more comfortable people are with it. Q. What should a micro-ISV look for in a graphic designer? A. Nowadays everything is done remotely, so you need a designer who can design visually and can communicate in writing and by telephone as well to be able to understand what a client wants. It’s not always easy to put in writing what a design should be. Reliability is another issue. And I think the way to do that is to request references from that person. I think reliability, a good eye for design, and the ability to communicate pretty much covers everything.
Icons for You Once you’ve sorted out your company’s and product’s logos, and before releasing your software or Web service, take a look at another way potential customers will judge your product: your icons. Are you using the same old, crappy images that came with Visual Basic 4, circa 1995? Do they look professional and snappy or haphazard and last-century? In 2004 I was prepping MasterList Professional for release, and I asked Nick Bradbury— founder of the micro-ISV Bradbury Software (now “graduated” to a subsidiary of NewsGator) and creator of the RSS aggregator FeedDemon—for the name of his graphic artist. “Glad to hear you like FeedDemon,” Nick said in an email. “I hired GlyFX (http://www.glyfx.com/) to
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design the graphics for both TopStyle and FeedDemon, and I recommend them highly.” Figure 3-1 shows the GlyFX site.
Figure 3-1. Visiting GlyFX The $150 or so I spent on GlyFX’s tool icon sets for using in MasterList Professional was money incredibly well spent. Not only did I pick up a well-written explanation of dos and don’ts for Windows icons (at http://www.glyfx.com/article_application_icons.html), but I got hundreds of immediately recognizable, professionally rendered icons. GlyFX, based in Perth, Australia, creates both icon sets for sale and custom development. GlyFX is part of a larger Web design firm based in Perth, PerthWeb, and is headed up by David Ridgway.
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DAVID RIDGWAY, MANAGER, GLYFX Having seen way too many good Micro-ISV applications ruined by bad graphics, I thought I’d seek out the advice of someone who spends most of his waking moments creating great icons for applications. You can find David’s GlyFX icons and artwork in numerous applications. Q. Any advice for nonartistic programmers on using icons, making their app look good, or working with companies such as yours? A. Number-one rule—don't reinvent the wheel. Stick to accepted standards when designing your interface. I am not discouraging innovation, of course, because if I did, we would still be using the Windows 3.1 interface. However, I would very much recommend doing research and user testing before implementing a “never seen before” feature of the interface. You have to ask yourself, “Why have I not seen this feature before? Is there something about it that I am overlooking?” Doing this can save you a lot of time and support issues. The other thing being—if you know that you are not good at interface design (or if your users tell you that, and you cannot see where you went wrong)—get some help from a professional. The interface is what sells your product; feature lists are important, of course, but if your application is hard to use or unappealing, the potential user may not even download it to test. Don’t underestimate the value that a polished, slick interface plays on the sale of your products. There is a huge amount of software on the market and in any particular category you are up against some major competition. Make your product shine. We do a lot of UI recommendations for developers; one of our services is a full range of GUI design/redesign. You need to calculate the cost of designing an effective interface vs. having it done (or evaluated after being done). Has everything been considered—fonts, control layout, tab stops, menu layout, colors, choice of control, etc.? The last point to make of course would be icons—if you are on a tight budget and can only afford to have some of your icons in a high-color style, don’t. There is nothing worse than a toolbar displaying a mish-mash of 16-color and high-color icons. You are better off keeping the older style, until you can convert the whole thing. If you are unsure about what to do with an icon, ask your friendly local icon developer. :) As a shameless plug, we package our icons into affordable sets, so you can buy what you need at the time. It is also important to know the technical implications/limitations of icons: color depths, sizes, and where to use them. There are many documents available describing this. I have written an article [that] gives a rundown on the basics, which can be found here: http://www.glyfx.com/article_application_icons.html. Also, when updating your interface, don’t just stop at the toolbar icons. Make sure your application icon is also done with a matching style and quality, along with your splash screen. The app icon is the first thing your users see, so give them something really great to look at. Finally, don’t be afraid to ask about the cost of custom work—you may be pleasantly surprised. While I can’t comment about other companies, we are always happy to speak to developers and not just quote a job as outlined but try to find something that will fit their budget. Even if you are not sure what you actually want and need, please ask—I am more than happy to talk and run over concepts/ideas and to give feedback on products.
Happy People Being Happy I’ll now cover a few more visual topics before getting down to the nuts and bolts of your Web site. Have you noticed when visiting Web sites that sell products that there seems to be an endless supply of photos of businesspeople looking businesslike and consumers just like you
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looking happy? This is for good reason—showing happy people being happy is a proven advertising technique. Despite rumors that some hidden cloning machine is turning out these scenes, for decades a niche industry has provided stock images to print advertisers who need just the right image of people looking happy, concerned, or businesslike. The Google Directory lists 207 stock image companies on the Web under Business > Arts and Entertainment > Photography > Stock > Royalty Free.4 (The royalty-free part refers to not having to pay a fee based on the number of magazines printed, instead paying a flat fee for the specified use.) In addition to the big names in stock photography such as Comstock and iStockPhoto,5 hundreds if not thousands of professional photographers all over the world are selling their images directly via the Web, as shown in Figure 3-2; I buy images through CafePress.com from a photographer who lives and works in Mozambique, Africa.
Figure 3-2. Exploring iStockPhoto.com The ascendancy of the Web has not been kind to stock image companies; many have consolidated or been bought. That trend will probably only accelerate as more and more
4. http://www.google.com/Top/Business/Arts_and_Entertainment/Photography/Stock/Royalty_Free/ 5. http://www.comstock.com/Web/default.asp and http://www.istockphoto.com/
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people share their visual point of view via sites such as Flickr (http://www.flickr.com/), as shown in Figure 3-3.
Figure 3-3. Exploring the photos at Flickr Now, before you start commandeering images right and left, keep in mind that it’s illegal to use copyrighted images without prior permission, and there’s no faster way to kill your micro-ISV than to get an online reputation as someone who steals other people’s work. That’s why Flickr’s adoption of the Creative Commons copyright process is extremely cool. Simply put, people who want you to use their photos have already granted you a clear means to do so, as shown in Figure 3-4. As of this writing there are more than 350,000 photos with a Creative Commons Attribution License, meaning you’re free to use them as artwork on your site as long as you provide a photo credit. And new ones are being added at the rate of several thousand a day. (For more information about the license, see Flickr’s Creative Commons page at http://www.flickr.com/creativecommons/, or visit Creative Commons at http:// creativecommons.org/.)
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These people may put the stock agencies out of business!
Figure 3-4. Viewing recent photos under the Creative Commons Attribution License at Flickr
Show, Don’t Tell As nice as it is to have pictures of happy people being happy, it’s not as important as communicating a clear message of what your application, Web service, or product is all about. One of the first tasks potential customers do when evaluating software is to look at your screen shots. Producing good software screen shots is fairly easy. You start with a screen-capture program that lets you annotate and add short annotations that don’t get in the way of the pretty picture you’re providing would-be downloaders. You’ll want to keep the file size small but the image large enough to tell the story. One strong recommendation: spend the time to annotate your screen shots and narrate them. Many good applications have been crippled by a page of itsy-bitsy screen shots with
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uncaptivating titles such as “main input screen.” Blah! Step back from your software, show off the most exciting features, and explain their benefits to the person looking at them. An excellent screen-capture tool I’ve used for several years is TechSmith’s SnagIt (http:// www.techsmith.com/products/snagit/default.asp, $39.95 USD, 30-day trial), as shown in Figure 3-5. SnagIt’s ability to scroll browser windows and to capture menus, as well as its excellent free technical support, make this an easy recommendation.
Figure 3-5. Checking out SnagIt
Moving Pictures Although making sure you have good screen shots of your software on your Web site is important, static images in and by themselves aren’t enough. Potential customers want to see their problems being solved right before their eyes—screen shots are necessary but not sufficient.
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Whether you call them animated demos, interactive video tutorials, or Macromedia Flash movies, few offerings beat a well-done three-minute product demo showing your software hard at work making the viewer’s life easy. One product that does a great job of this is DemoCharge 2005 from YesSoftware (http:// www.yessoftware.com/products/product.php?product_id=19, starting at $49.95 USD, 20-day trial version), as shown in Figure 3-6.
Figure 3-6. Seeing DemoCharge 2005 solve your customers’ problems right before their eyes I first came across DemoCharge at Mike Gunderloy’s site (http://www.larkware.com/) where he uses it to create animated movies to illustrate some of his excellent software reviews. Using DemoCharge to make a movie of your app is deceptively simple, as shown in Figure 3-7: start DemoCharge, run through what you want to demo, and then save and output it as a Flash movie or animated GIF file. It turns out that the makers of this tool, YesSoftware, started a few years ago as a micro-ISV; their story and advice makes for interesting reading (see the following sidebar).
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Figure 3-7. Going to the movies with DemoCharge 2005 Of course, a world of difference exists between making good movies and bad movies, whether you’re talking Hollywood, Bollywood, or your laptop. Here are a few pointers: Have a script: Like any good movie, your software demos need a script. Take the time to plan what you want to demo. Rehearsals are cheaper than takes: Before saying “Action!” walk your application through your script several times to ensure it works, it’s easy to follow, and you’re ready. Don’t try to imitate Orson Wells: A movie needs a soundtrack, and that means planning the voice narration that you add in DemoCharge. Use your normal speaking voice, keep it simple, don’t chatter, and let the movie tell the story. Postproduction matters: After you’ve recorded your movie, you can in DemoCharge change how long things take, delete dead time, and generally clean it up. Welcome to multimedia: Keep in mind that you can spend hours, days, and even weeks tweaking your movie, fiddling with fonts for adding pop-up annotations, and generally getting lost in multimedia hell. Good is often good enough, and no one expects you to be the next Hitchco*ck, so set limits. Besides, you’ll need to do it again when the next version of your app or Web service ships.
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KONRAD MUSIAL, CEO AND FOUNDER, YESSOFTWARE YesSoftware is a good example of a micro-ISV that turned an in-house solution into a profitable second product. In this interview, Konrad Musial, CEO of YesSoftware, talks about how that happened. Q. So Konrad, what are some ways that a micro-ISV could use DemoCharge 2005? A. DemoCharge demos have many applications that a micro-ISV could benefit from. It can be used to • Create online and offline presentations that demonstrate their product’s capabilities, • Create walk-through demos for the press and users, • Create animated tutorials, • Create animated documentation (help), [and] • Provide support for case resolution in visual format, as step-by-step instructions. As you know, the product requires no programming skills and can literally be used by anybody. According to customers this is one of its main strengths—simplicity. It is a tool that can help any company add significant value to their Web site and product(s). Q. Are your micro-ISV customers finding Flash/Java/GIF demos are easier to create, more interesting to their customers, or both? A. This really depends on the demo’s final use. All resulting demos are similar, while the selection of the format usually depends on the benefits of the format itself. Flash is always a popular format for Web-based demos and was widely requested by our customers. GIF is a great format to use in documentation or for a simple online demo to show product features. EXE is great for emailing demos internally, for example, within [the] QA department. AVI might be best for including on tutorial CDs. Basically it comes down to preference, but I would say Flash is the most widely accepted format. Q. How did you get the idea for DemoCharge? A. The idea came from an internal need and desire to offer better documentation to our customers for our main product, CodeCharge Studio. We decided that screen shots are not sufficient to explain the complexities of the product, and the animated images would help us transfer our knowledge to the users. At the same time, many users asked for more tutorials; therefore, we thought that it would be best to combine animated documentation that uses GIFs with online demos in Flash. Q. I notice you have an “affiliate” version besides the professional and standard. What’s the idea there? A. The idea is twofold. First, we wanted to create a viral marketing campaign for DemoCharge. Users of the DemoCharge copromoted version get a heavily discount product in exchange for doing viral marketing for us. All demos created with the copromoted version have a logo at the bottom of the page that reads “Created with DemoCharge.” Second, it was a way for us to offer the product at a price point that just about anybody can afford. Q. Can you tell me how YesSoftware got started and when? How many people = YesSoftware? A. YesSoftware got started in 2000 with two partners who funded the company and about ten employees, and we currently have approximately forty people.
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We started the company and the development of our first product, CodeCharge, after realizing that there were no software development tools for Web developers, except high-end Java IDEs. Like most Web developers at that time, we were programming our applications using text editors and other unsophisticated tools. We were basically manually coding entire Web applications, which later would need to be modified or sometimes rewritten [because of] changing requirements and the lack of prototyping. It was clear to me that there was a need for a tool that would maximize a developer’s skills to quickly create everything from a prototype to a complete, multiplatform application—and YesSoftware was started. CodeCharge has since evolved into CodeCharge Studio (now in version 3), we’ve released DemoCharge, and we have a road map in place to support our long-term goal of providing multiple solutions for software developers and Webmasters. Q. Can you tell me a bit about yourself? A. Here’s a brief bio of my experience: I’ve worked in the software industry for over 15 years in product development and marketing. Before YesSoftware, I was involved with several Silicon Valley technology incubators and Internet companies. I spent the first part of my career as a developer and technology consultant to manufacturing companies in the United States, including Cott Corporation where I received Cott’s corporate award for “Excellence in Innovation” for the creation of an enterprise, neutral-language processing and reporting system. I have a bachelor’s of science degree in computer science from Silesian Polytechnic in Poland. Q. Any advice for other micro-ISVs? Any lessons to pass on? A. In today’s highly competitive technology environment we differentiate by originality, ease of use, and overall customer experience. All these are keys to any successful company. This means that you need good, smart people working with you; you need to make a product that customers need and want; and [you need to] offer them better technology than they currently have available to them.
Templates for Success More than a decade ago, I had fun creating an early Web site to promote New Zealand to American tourists for the New Zealand consulate in Los Angeles. I learned three valuable lessons: • Creating a Web site from scratch can be a daunting task. • It’s easy to get lost in the tiny details of building a good-looking Web site. • Clients who are prepared to fly you from San Francisco to Los Angeles may not be willing to fly from San Francisco to New Zealand themselves, no matter how good a case you make for on-site research. Time and redoing my own Web site have reinforced the first two lessons: unless you’re a Web designer by trade or you plan to sell a Web design tool, use templates to give your Web site a solid, professional look. Over the years, I’ve bought and deployed several Microsoft FrontPage templates from PixelMill (http://www.pixelmill.com), as shown in Figure 3-8, where they have about 3,000 FrontPage, Dreamweaver, and generic HTML templates, from $20 to $100 USD. Although plenty of template vendors exist (115 are currently listed in the Google Directory6), a lot of really good Web designers sell their wares through PixelMill.
6. http://www.google.com/Top/Computers/Graphics/Web/Templates/
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Figure 3-8. PixelMill: nearly 3,000 FrontPage templates and counting Another source for good templates is Open Source Web Design at http://oswd.org/, as shown in Figure 3-9. You’ll find more than 1,000 for-fee templates and a great range of good free templates by designers who want to give something back, promote their services, and make the Web a prettier place (or all three).
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Figure 3-9. Giving back and showing off at Open Source Web Design
Mastering Your Domain A lot of the moving parts covered in this chapter will come together as your Web site, so now I’ll cover the core nuts and bolts of Web site building, visit with a micro-ISV whose site is well worth emulating, and consider one of the most perplexing issues for micro-ISVs—getting paid. Keep in mind that although some of these topics may be kindergarten-type technological information for you, you’ll find more than a few marketing/branding/positioning nuggets mixed in; even if you’ve been running your own site on your own server for a decade, read on!
Creating a Good Domain Name It’s always good to start at the beginning, and the beginning of the beginning of your microISV’s presence on the Internet is securing a good domain name for either your micro-ISV or your product. Notice how I said that? Even before you start checking possible Uniform Resource
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Locators (URLs) in your favorite WHOIS interface, you need to make a marketing decision: will you promote the product or promote your new company’s identity? The key question isn’t about the general advantages and disadvantages of linking your URL to either your company or your product; it’s about what you want to be. Are you building a micro-ISV in order to start your own business, or are focusing on a Really Good Idea that you want to make real? Both approaches work, but they have implications you’ll be wise to consider now (see Table 3-1).
Table 3-1. Promoting the Product or the Company: Pros vs. Cons
URL Identifies
Pros
Cons
Company
Supports multiple products or services Generally easier to define Less gimmicky
Less recognition for your first product More likely to collide with other companies Less effective for your first product
Product
Keeps it simple for your Makes it hard to rename your product customer Requires one very good set of logos/ Requires only one set of logos/ graphics graphics
In either case, here are few tried-and-true rules to keep in mind as you start kicking around names for your site: Be clear: This is the first and foremost rule of creating a “good” URL; violators will be punished. Being clear means you shouldn’t misspell words just to get the domain. And don’t use dashes or numerals. Be short: While your URL can be up to 67 characters, the shorter it is, the less likely it will be mistyped. Be different: Be different from your potential competitors in your market; large existing companies take brand identity seriously and will sue you to death. Be dot-com: The .com domain remains the most prestigious, the default for most browsers, and the first choice most people will make when trying to remember your name. Be national, if national makes sense: The one major exception to the previous rule is if your company/product focuses on a particular national market. For example, if you focus your micro-ISV on a new business translation application between British English and French, either or both http://bettertrans.co.uk and http://bettertrans.fr makes sense.
“But All the Good Names Are Taken!” If you visit any online marketing forum, you’ll find post after post along the lines of “I’ve tried 214 different names, and every one of them is taken! Help!” Just about all of these people are making the mistake of trying to get a domain name that either uses some common hot term or is a variation on some other company’s name. This is the wrong approach.
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Instead, if you’re going to promote your product in your URL, think about what your product does for its user. Here’s one approach: Let’s say I decide after looking at all the other Internet bookmark managers available that I can create a much better one, and it will be the first product my new micro-ISV releases. Now, there’s no shortage of competing micro-ISVs for this type of product, and just about every imaginable use of the word bookmark or favorite is already in use. In fact, as of this writing, Google finds 77 Web-based bookmark managers, 26 non-Web-based bookmark products, and 16 shareware applications. What to do? Well, let’s say the most important feature of my hypothetical product is its ability to take all my bookmarks and reorganize them for me. How do I know what my product’s most important feature is? It’s the point you make first in your “elevator pitch”—your 60-second explanation of what your product is good for.7 Now I have a verb—reorganize. And a noun—bookmark. And a URL: reorgbookmarks.com. One of the least used—and therefore powerful—ways of creating a URL is to combine the one verb and the one noun that describes your product best, as shown in Figure 3-10.
Figure 3-10. Viewing reorgbookmarks.com’s WHOIS record 7. For an excellent summary of what to include in an elevator pitch, see http://www.fastcompany.com/ articles/archive/act_joos1.html. Hint: assume a short building!
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Naming the business after the URL can be trickier. I’ll cover the mechanics of naming your business for all the world to see in Chapter 4; for now, all you need to be concerned with is devising a means to come up with that all-important URL. If you’d like to see an expert name maker at work, refer to A Hundred Monkeys (http:// ahundredmonkeys.com). This site can give you a bunch of ideas, but the best advice can be summed up in five words: every name tells a story.
Buying Your Domain: Go Daddy, Go! Worth a special mention because of its fanatical customer service, GoDaddy.com (http:// godaddy.com) is a cheap, fast, and easy way to register domains, as shown in Figure 3-11.
Figure 3-11. Buying your name via GoDaddy.com Also, GoDaddy.com lets you get deep into your domain record: a necessity if you decide to set up a blog through a hosting service and want to give it your unique domain name.
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In an age of outsourced and offshored technical support, it’s nice to find a company that understands that great tech support equals raving customers, as shown in Figure 3-12.
Figure 3-12. Controlling your domains at GoDaddy.com
Covering the Nuts and Bolts And now, I’ll cover the star of this chapter: your Web site. Actually, since your Web site may not yet exist, I’ll pick apart an existing micro-ISV’s Web site: BlogJet at http://blogjet.com. When I started researching this chapter, I expected to have to pull bits and pieces from several sites to illustrate the right way to do a micro-ISV Web site. Happily, this site, as shown in Figure 3-13, covers all the features a good micro-ISV should include.
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Figure 3-13. Viewing all the right parts for a micro-ISV Web site at BlogJet Let’s start dissecting this page starting with the menu. Complexity isn’t what you want on your micro-ISV Web site’s home page. BlogJet’s menu contains seven straightforward choices, as shown in Figure 3-14. On a general note, people handle situations where they have about a maximum of nine options, be it your site’s menu or your Web or desktop application. Next, look at what you see first on the site. The first text you probably read is what BlogJet is and why should you care, as shown in Figure 3-15. Furthermore, the site gives you a specific idea of the main differentiator (“without opening a browser”), its main market (“serious bloggers”), and its main selling point (“elegant interface”).
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Figure 3-14. Keeping menus simple and easy to read
Figure 3-15. Placing the important information up front This is BlogJet’s Unique Selling Proposition (USP). If you don’t have a USP, neither you nor your customers know what you’re selling. These are the five parts of a complete USP: • The name of your micro-ISV product (“BlogJet”) • The type of category of product (“blog client”) • The main market segment of your product (“those who are seriously concerned with blogging”) • Its key benefit to that market (“wonderful tool with elegant interface”) • The key thing that differentiates you from your competitors (“manage your blog without opening a browser”) Take the time to define your USP—it’s a key tool in defining and selling your product. (For more information about creating USPs, see http://en.wikipedia.org/wiki/ Unique_selling_proposition and the appendix.) BlogJet’s USP: but is it true or spin? You don’t know yet, but if you consider yourself a serious blogger and want some other way of posting than via the interface you get in your browser, you’ll probably read more. Next—and it should be close to the USP—the makers of BlogJet start backing up their USP with benefits, as shown in Figure 3-16. The site doesn’t say “Account Wizard is used to create a blog or use one,” which would be a feature or function but says the following (the emphasis is mine): Easy to setup, easy to use. Intuitive Account Wizard helps you to create a new blog or use an existing one with BlogJet (it supports almost all leading blog services). Furthermore, the intuitive smart interface of BlogJet will help you to start using the program right away.
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Figure 3-16. Layering the message People buy products for their perceived benefits, not for their actual functions. If I want to buy a new lawn mower, for example, I spend a couple hundred dollars to get a self-propelled mower because it makes it easier and faster, not because it has a little metal box that transfers some of the engine’s power to the back wheels. Also note that by having the really key point in bold, BlogJet layers the message. If your eyes are zipping past the “blah blah” text, you’ll still probably read the 11 bold words out of 197. Also worth noting is the drawing of an analogy to a product the prospective BlogJet customer probably knows: Microsoft Word. Now, if someone reads those 197 words, they probably took about 42 seconds to do so. They’re tired. They need a rest. In Internet Time, 42 seconds is a long time. So, it’s time for a little visual change of pace and the first graphic you encounter, as shown in Figure 3-17. This visual change of pace is a good thing and continues the next four paragraphs that further buttress the USP. Next comes a two-word link—nicely set off by whitespace above and below that leads to an animated walk-through of BlogJet, as shown in Figure 3-18.
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Figure 3-17. I’ve been reading for 42 whole seconds. Time for a break!
Figure 3-18. It’s movie time!
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This 45-second walk-through of creating a blog posting in BlogJet is a gem: slow enough to follow and have a sense of what’s being done but fast enough not to be boring. When various dialog boxes open, you see them being used and you see them long enough to get the sense of them, but they are not explained in mind-numbing detail (see Figure 3-19).
Figure 3-19. Viewing the nine-second Insert Image dialog box A lot is potentially going on in this Insert Image dialog box, but it doesn’t matter yet; BlogJet stays on message, and the message is this tool makes blogging easier for serious bloggers. By now, some of BlogJet’s prospective customers are ready, willing, and eager to buy. So, let them, and deal with a concern they have because everybody has, as shown in Figure 3-20: can they get their money back?
Figure 3-20. Ask for the order—it never hurts.
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However you plan to get paid (see the next section), odds are good your customers are going to use a credit card, and that credit card company expects you to let their customers “unbuy” from you for at least 30 days. So, say so, and mean it. And if they aren’t ready to spend an as yet unknown amount of money, give them the application or service for 30 days so they get hooked on it. The bottom line is that if you’re a micro-ISV, plan from the start to offer a free 30-day trial and a 30-day money-back guarantee. Shortening or skipping either of these expectations will cost you sales. Let’s return to the BlogJet site. Oh, look, here’s the name of the company! Other than the About Us menu item, Figure 3-21 shows the only mention of who sells BlogJet. Every micro-ISV has to decide where the balance point is between promoting their company vs. a product or products for their Web site. DiFolders Software goes about as far as it can to focus on the product.
Figure 3-21. Deemphasizing the company and playing up the product You’ll also see something else here that you definitely need: a privacy policy, as shown in Figure 3-22.
Figure 3-22. Privacy policy: no lawyers, please!
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Besides a 30-day free demo and a 30-day money-back guarantee, you better have a privacy policy and better still have one that can easily be understood. That’s the end of the left column. It’s time to continue this digital dissection from the top of the right column, as shown in Figure 3-23.
Figure 3-23. Getting four messages in one A couple things are happening here: First, you learn BlogJet’s price, $39.95. Next, you’re reminded that there’s a 30-day money-back guarantee, and you get a third way to order the product. Finally, you see that a new version of BlogJet is out, and you can go to a page where the company covers what’s new. But not really. You can click the release notes link and see a lot of information, but since you don’t have BlogJet, that information conveys only that DiFolders Software is serious about making BlogJet a great product. And that is the point. No one expects software or Web services to be perfect when they’re first released; conventional wisdom says avoid 1.0 products. Apparently knowing this—or just doing the right thing anyway—DiFolders Software shows you it’s serious about improving BlogJet and moves you over to the Download tab, as shown in Figure 3-24. Figure 3-25 shows a good example of what a screen shot should look like: fewer than nine callouts and maybe a little humor too. A screen shot doesn’t explain; it entices, it reassures, and it gets your prospective customer to do something that moves along this process. But let’s say you’re not quite ready to download, so you hit the back button to return to the Home tab. Maybe it’s time to take another tack to convince you to buy: show a screen shot.
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Figure 3-24. Viewing the release notes, requirements, and, for the brave, a beta version
Figure 3-25. Making six points (girl not included)
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If you happen to want to see more screen shots, clicking this one opens the Screenshots tab, as shown in Figure 3-26.
Figure 3-26. Explaining screen shots Again, this is nothing fancy; nothing is too hard to figure out. The page has eight screen shots, two Flash movies, and a link to take you to more detail for each screen shot, if you so desire. If you click Post Properties, you get a bigger image. Now, since I’ve been talking up BlogJet’s site, I should point out it’s far from perfect. For example, clicking the Show Full Image link takes you to a completely unrelated image. No one is perfect, especially micro-ISVs!
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Let’s return to the home page. So far, DiFolders Software has done a good job of selling BlogJet. But what is the most likely question customers are going to have? It’s this: BlogJet might be great and all that, but does it work with my way of blogging? Figure 3-27 answers this question.
Figure 3-27. Finding 22 ways to be happy Well, so much for that question. OK—you’ve read it, watched it, and looked at it. Any other ways to convince you to at least try this app? How about having someone else tell you about BlogJet? Figure 3-28 shows that DiFolders Software covers that too.
Figure 3-28. People listen to testimonials. Every 15 seconds or so, you’ll see a new testimonial with attribution. And, these testimonials aren’t by football players or movie stars; they’re by bloggers just like you. Good testimonials are priceless for micro-ISVs. Gather them when you can from your beta testers and customers and even by giving your product away to people you want to influence. The only golden rule is make sure you have their explicit permission to quote them. Speaking of permission, DiFolders Software asks you whether you’d like to subscribe to its free newsletter; fortunately, the micro-ISV promises to keep your email confidential and use it only to send you its free newsletter, as shown in Figure 3-29.
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Figure 3-29. Everybody wants to do better. Repeating the word free is good, and so is being clear about why you want people’s email addresses and why it’s worth their time to sign up. Email newsletters work, but only if the people who receive them gave their permission and feel the time they spend reading them is worth it. (See Chapter 5 for more about permissions and email.) By now, if this Web site were a salesperson, they would be collapsed on the ground and be ready to call it quits. They’ve done everything to get you to buy or at least try this product, and you’re still here! It’s time for one more go, as shown in Figure 3-30.
Figure 3-30. When all else fails, give people helpful links. You can take a few last shots at selling: maybe potential customers aren’t sure what a blog is (see the “Blogging for Fun and Profit” section). Or maybe someone isn’t sure how to create one. Maybe they’re actually a returning customer, and you can get them to email their friends or link to your Web site. When all else fails, you can try money, as shown in Figure 3-31.
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Figure 3-31. We really want you! All and all, this site does a masterful job of marketing without heavy-handed selling. Of course, no two visitors to this site are going to read all the text or read it in the order I’ve covered it. They’re going to pick and choose their preferred way of getting information about a product for the purposes of deciding whether to spend their hard-earned dollars on it. Or rubles, as in this case!
DMITRY CHESTNYKH, FOUNDER AND CEO, DIFOLDERS SOFTWARE Just before starting this book, I went looking on the Internet for a better way to blog. When I found BlogJet, it took me about 30 seconds to be convinced this was an excellent product presented professionally. Here’s Dmitry’s story of how BlogJet came to be. Q. Can you tell me a bit about yourself and why you started DiFolders? A. When I was young (something about 13), I developed my first shareware product; that’s because I thought it was cool to have a nag screen [and] write all those license.txt and readme.txt [files]. It was a text-mode game for DOS called Dome. Though, I was the only user of this software....
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I released my first product, DiFolders, in 2002. I always wanted to be financially independent, and I thought that was the real path for this. The first sale was in the next month after releasing it. The second sale came in the next few hours. But...I had only two sales per month or so. Then I decided to write another application called Active Cleaner. With it I began to earn about $300– $400 per month—not so successful but enough to tell my friends and my mom that I earn money in the Internet selling my own software. (My mom earns less working here in Russia as a nurse.) Then I created BlogJet, and it was a success. Now I’m 22, still working alone for myself, [and] still have big plans. I live near Moscow, Russia. I graduated from the Moscow Institute of Physics and Technology in 2005. My email is [emailprotected]. :) Q. Why did you create BlogJet? A. [I was] blogging since 2000 or 2001 and never liked [the] Web interface. My first blog was on DeadJournal (which was based on LiveJournal sources), and they had a simple client for posting from [the] desktop. I liked it, but I wanted more. Then I found a few freeware tools, which offered basically the same features but were compatible with other blog services (such as Blogger [and] Movable Type). I never used them, though—they had ugly interfaces, and I had to write HTML code. Then I thought that I wanted to write my posts using a WYSIWYG editor—something like Microsoft Word. I wanted to easily include pictures in my posts without having to upload them to server. Finally, I came to conclusion that it must be me who would write this application. :) Also, I read in Thomas Warfield’s blog A Shareware Life (http://www.asharewarelife.com) that if he didn’t make games, he would create something connected with blogs. Good enough for marketing research. :) Q. I noticed your Web site does a lot of things right—did you design it, or did you/do you have someone you work with? A. I design my Web sites myself (excluding the BlogJet icon; it was designed by Alexandra Pavlova). Like all things in my micro-ISV business (programming, marketing, etc.), I learned how to design Web sites myself. Of course, I could outsource this work, but—hey—I like to do things! I just enjoy creating software, creating sites, [and] selling and marketing products. I always try to do only what I love to do. Q. What advice would you give to other people starting their own micro-ISVs? A. My advice: • Learn marketing. • Don’t stop on one product if it’s not successful. • Stop copying. Start creating “wow!” products. • Look for a growing but empty niche. • Release your first beta for free. • Try to get a lot of buzz. • Don’t bother if you have free competitors—people like to spend money! • Forget about cracks, hacks, keygen, etc. (at least for the first version); you’ll never win this fight. Don’t care about piracy too much. • Be remarkable; make your products remarkable. • Believe that you can do it! • Don’t worry—be happy! • Enjoy your life. Enjoy what you do.
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Q. [Dmitry also had some good advice pertaining to another section later in this chapter, “Blogging for Fun and Profit.”] What should be a micro-ISV’s “blogging strategy”? A. I wrote a small article about blogging strategy for micro-ISVs at SharewareBlogs.com, so you can count it as my answer: “Having a Blog Is Critical for Your Shareware Business” (http://sharewareblogs.com/ node/35). See especially the “What Should I Write About?” section. Q. Can you share any instances when your blog has led to increased sales of your software or product reviews? A. Well, since I’m totally blog-related, and just so close to blogosphere with my application, I can’t depict some special statistics about increased sales: I must have a blog, and I have it. I didn’t make any testing of how it helps, but I know it does. :) I know a lot of examples of how blogs help sell software (Nick Bradbury, Joel Spolsky, Delicious Monster, etc.). Anyway, micro-ISVs should test themselves for what is good for their business. Do you have a moneyback guarantee? Why not? Try it, and then decide. Does your Order button look like button, or is it just a link? Try different things, and then decide. Just set up a blog (it’s so easy), and write. Then see how your sales increase/buzz. If not, perhaps, stop doing it. Test! As for product reviews, yes, it’s very easy to track such things with blogs: someone who reviews your product on their blog just left a trackback on your blog. This helps not only track reviews but respond to their writings. I call blogs word of mouth on steroids. They help create a lot of buzz about your products and your company (or personality). Q. I notice that you are interviewing people (Jack Trout) on your blog; what’s your strategy for getting/doing these interviews? A. I learned a great lesson from my software business. It can be expressed in only two words: just ask. Most people like to be asked. When you ask someone for help or advice, they are most likely to help you because they feel comfortable doing this. So, again, just ask. If a person does not answer, don’t annoy her. But most likely you’ll get a response.
Getting Paid: Nuts, Bolts, and Bucks Few tasks are as enjoyable for a micro-ISV as seeing the money start coming in. I still remember when two days after starting to sell MasterList Professional I saw my first sales email notification that someone I’d never heard of liked my product well enough to part with their $24.95 USD. Of course, getting paid means you have a reliable, hack-proof mechanism that moves real, live customers through the purchase process in absolutely the least amount of clicks, fill-ins, and minutes as possible.
■Note Usability study after study has shown that the more steps in the process, the fewer people finish making an online purchase. See, for example, Webcredible at http://www.webcredible.co.uk/ user-friendly-resources/web-usability/ecommerce-usability.shtml. Getting paid isn’t hard, but it’s not simple either. You’ll need to bring three worldviews together to see the money: the technical world of online processing, the financial world of payment transactions, and the customer’s world of online shopping experiences. Complicating
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matters is a decade’s worth of e-commerce evolution, mutation, and innovation. The problem isn’t too few options—it’s too many. You’ll take a cursory look at two ways of getting paid that I think time has passed by before getting down to business: the shareware approach and the shareware author’s payment processors. Once long ago (before the commercial Internet), programmers who wanted to sell applications outside retail channels would make their software available via electronic BBSs such as CompuServe and America Online in the hope that passersby who liked their software would throw a few coins in their hats. This was the pure expression of the shareware model, where users would pay what they thought the application was worth. If this approach sounds a lot like buskers—starving musicians who play for money in public places—it is (especially the starving part)! Few people could make this work pre-Internet, but you’ll still find good and steward programmers who take this approach. Starting with the rise of the Internet in the early 1990s, a host of companies sprang into existence to make it possible for shareware authors to actually sell their wares. These shareware author payment processors offered a good deal at the time: for about 10 percent of the retail price, they would send you a regular check and provide shareware buyers with a reliable, trustworthy, real company to do business with. Some of these companies did more than just collect payments; they would help promote your product, issue keys to registered users, find paying customers, and track sales. These companies prospered at a time when buying something on the Internet was akin to jumping through flaming hoops—new, exciting, and a bit dangerous. However, by this decade, online shopping had gone from something amazing to something mundane, and more than a few of these shareware payment processors went under, merged, or were acquired by Digital River (http://www.digitalriver.com/corporate/solutions03.shtml), as shown in Figure 3-32. Although many existing micro-ISVs swear by shareware payment processors, the industry has moved on in two ways: it’s altogether possible to build a robust payment processing system for your micro-ISV yourself, and more than a few companies now exist to do this for you for a lot less than 10 percent of your sales price. You’ll take an in-depth look at three of these, but before I get into the technical details of all this, I’m going to steal from you. That’s right, steal. Here’s how it’s done: I go to your Web site where I buy your product, and like 93 percent of the online transactions, I pay with a credit card.8 Only it’s not my card—it’s someone else’s. I “bought” this card and a few dozen other identities for a pittance online from a Web site you won’t find in Google, and besides a bunch of other goodies, I’m going to pick up a copy of your latest and greatest. But what do I care? It’s not like it costs you anything, right? Wrong. Let’s say you decide to build your own custom online processing system—you take transactions through your shopping cart and fire them off to your merchant account at your bank, just like you would cash a check. While the bank may initially process it and you see another $19.95 or $199.95 in your account, sooner or later that transaction is going to be discovered as fraudulent and transform from a credit in your merchant account to a debit for the same amount called a chargeback and a nice fat bank processing fee ($20–$30 is common in the United States). If this happens enough, you’ll get a little letter from your friendly bank informing you your account has been closed and you’re in deep doo-doo.
8. “The Truth About Internet Fraud,” Ziff Davis Smart Business, April 2001. See also http://www. findarticles.com/p/articles/mi_zdzsb/is_200104/ai_ziff8442.
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Figure 3-32. Exploring Digital River’s flock of shareware payment processors
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This isn’t what you want to be doing, but online fraud is a reality that every micro-ISV has to face; and the smaller your company, the bigger the problem is for you. Unless your micro-ISV is about an e-commerce solution, it’s time to think like a businessperson, not a developer; and businesspeople—at least the successful ones—think about costs. In the following sections, I’ll cover three approaches for a micro-ISV to get paid: • Without having a merchant account, getting paid via PayPal. • Without having a merchant account, “reselling” your products through 2Checkout.com. • Having a merchant account with processing provided by VeriSign.
Working with PayPal PayPal (http://paypal.com), as shown in Figure 3-33, is one of those companies online people either love or hate. Started in 1998 and acquired by eBay in 2002, PayPal has grown to become the nonbank, payment-processing company today. It does business in 57 countries and has 78.9 million accounts (as of the second quarter of 2005).9 It’s the nonbank status of PayPal that has in many ways led to the creation of more than a few anti-PayPal sites replete with true horror stories of accounts frozen without explanation, week-long service interruptions, snarling customer service reps, and a reputation for high-handed secrecy. Doing business with PayPal means as a merchant you preauthorize PayPal not only to collect money on your behalf and deposit it into your bank account in any one of 25 different countries but also to remove money from that account, without explanation or recourse. With all that baggage, why on Earth would a micro-ISV do business with PayPal? Well, it’s an excellent way of getting paid! It has low processing rates (a maximum of 2.9 percent plus 30 cents for each transaction), better than average technical support (at least in the three calls I’ve made), and no setup fees. And although it used to be that a customer needed to have a PayPal account in order to pay you, that’s no longer the case. In fact, in June 2005, PayPal added a Payments Pro service for U.S.-based merchants, which processes the transaction for you without leaving your site. For the past six months, I’ve used PayPal as one of the two ways customers can buy MasterList Professional and haven’t had a single issue, customer complaint, or chargeback. I have to say— I’m crazy for how easy PayPal has been to use. While I may be crazy, I’m not stupid. I also have a payment alternative to PayPal for customers who don’t want to do business with PayPal and one business bank account I use only for receiving PayPal payments. As the saying goes, your mileage may vary.
9. http://en.wikipedia.org/wiki/PayPal
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Figure 3-33. Visiting PayPal today
Doing Business the 2Checkout.com Way Another way of collecting payments for your micro-ISV’s wares without setting up a merchant account is through 2Checkout.com (http://2checkout.com), as shown in Figure 3-34. This Columbus, Ohio, payment processor charges $49 USD as a setup charge and then charges 5.5 percent plus $0.45 USD per sale.
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Figure 3-34. Selling your product via 2Checkout.com 2Checkout.com is technically a reseller—it buys your software, subscription, or product at a discount and then sells it for the Suggested Retail Price (SRP). This means 2Checkout.com holds 5 percent of your sales for 90 days before paying you as a reserve for returns and other issues. You get this revenue, but it’s held for 90 days while 2Checkout.com pays the rest of your sales twice a month. Unlike PayPal where you can spend money from your account, 2Checkout.com is strictly a payment processor, depositing to your U.S. bank account twice a month your revenue or, for a nominal fee, sending your money via bank wire or check. Also unlike PayPal, 2Checkout.com can handle payment processing for micro-ISVs located just about anywhere in the world (except, as of this writing, North Korea, Cuba, Libya, Iraq, Iran Sudan, and UNITA-controlled portions of Angola).
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I’ve been a satisfied 2Checkout.com (see Figure 3-35) since January 2005 and always have been able to speak to someone knowledgeable, friendly, and helpful when I’ve called for either technical support or business transaction support.
Figure 3-35. Going inside 2Checkout.com 2Checkout.com strongly screens transactions for fraud, but unlike some processors that reject the transaction automatically, 2Checkout.com will take an iffy transaction and then alert the merchant to its potentially questionable status while a real person evaluates the transaction, often contacting the buyer by phone and/or email to verify it. In the dozen or so fraud alerts I’ve received, 2Checkout.com was able to verify all of them within a day as legitimate, none of my customers complained, and one even complimented me on the process. Any day a company I buy a service from can make my customers happier is a good day.
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ALAN HOMEWOOD, CEO AND FOUNDER, 2CHECKOUT.COM When you read online questions about who should do your micro-ISV’s processing, 2Checkout.com often is at or near the top of the list. In this interview, Alan Homewood, founder of 2Checkout.com, explains what his company has to offer micro-ISVs. Q. In today’s business environment on the Web, what are the three best reasons for doing business with 2Checkout.com? A. Probably the three best are the ease of signing up, the low cost of entry for start-up, self-funded entities, and 2Checkout.com was the same thing, so we understand the business. Q. Really? A. Yeah, I started the company in 1999 myself, when I saw the cost of getting paid online was quite steep for a small company that may or may not have large sales or may take a while to start selling. There’s the merchant account that’s $500 and [then] $50 a month, the SSL certificate, the dedicated servers you really should have to store sensitive information like credit card numbers, the technical resources to manage the servers, and in a lot of cases a shopping cart. I decided there needed to be an alternative where you didn’t have the up-front costs, and paid a little more each transaction, to hit that niche market. Q. What’s your history on this? Is 2Checkout.com your first business or your third or….? A. Personally, I was an Oracle consultant, with a billing background, an antifraud background, a varied background, and I became interested in Web businesses, and that’s where the company came from. Q. Can you give me an idea of how big 2Checkout.com now is? A. Right now we have roughly 60 employees; we’re all located here in Columbus, [Ohio], and at last count we had about 40,000 vendors, we’re adding about 2,000 a month, and we do roughly $17 million a month in sales. Q. I can see that at a certain price point it’s more economical to bring payment processing in-house. What’s your ideal size client here? How big is big for you? A. We do have clients at a certain level, but really at $10,000 and below of sales a month is kind of where the breakpoint comes in. Right around that number, I can bring some of these costs in-house and save money; I can pay to do these things directly. Something people don’t realize often is that there is a lot of processing that goes on [at] the backend of processing credit cards. There’s a lot of overhead and headache people don’t calculate in. I roughly say that around $10,000 [sales per month] is the level it might make sense to take a lot of the things we do for them in-house, particularly if they are going to grow and grow and grow. Of course, we have quite a few clients that stay with us at higher levels because the expense of monitoring fraud can be significant. Q. Besides the ease of entry and low costs, two things I wondered about was credit card fraud and potential taxes. Can you give me a bit of an education there about what you guys do—especially about fraud? A. We have a seasoned fraud staff and tools developed in-house over years to help identify fraud. And we pay for a lot of other sources where we get information. We take a lot of that burden away from our clients, most of which are small businesses. They need to concentrate on running their businesses, not being an expert in the myriad ways someone may try to defraud them. There’s a massive amount of credit card fraud that goes on on the Internet. Q. How massive is massive? A. Just in the United States last year, $400 million to $500 million in losses sustained by merchants; that’s not even counting the amount of fraud they stop at the door or the cost of battling the fraud. Q. Can you give me an idea of what percentage that translates to? A. I’d say that on a daily basis we catch five to ten percent of transactions as fraudulent. If you are not a bit prudent on the front end, you can catch even more than that. It depends on the product. Some vendors will have one in five orders that come in being fraudulent.
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Q. The other question was taxes. Do you get into collecting taxes, or is that something that’s not happening on the Internet? A. It is happening on the Internet; actually, we absorb some tax costs and pay taxes for our clients. In the United States, if you are in Ohio, you sell to someone in Ohio, and you have a presence here or in whatever state you sell in, you are required to pay taxes. But the way we are set up, our relationship with our sellers and vendors is that they resell through us. That basically means that whoever you are, [you are] selling to someone in Ohio, and then we resell the products. That puts the tax liability on us. At this point, we just absorb it; we don’t pass it on. Q. I guess sales tax in Ohio is a lot lower than in California! [Sonoma, California, has a 7.75% sales tax, but Internet sales are exempt statewide.] A. We pay quite a bit a month for sales that are in Ohio to people in Ohio. Q. Two more questions. What mistakes do you see start-ups making that they could avoid? A. I guess the advice I would give is to not give up. It can become difficult early on for a small company. It takes time to grow. In most cases it takes time to grow slowly, and that can become frustrating to a smaller entity. I guess another problem for smaller entities is that they can become defrauded [and] become the victims of fraud very easily online. That’s definitely something to be careful of. And to test the waters online—some things definitely work for some entities and don’t work for others. For instance, entities may believe that it’s a great use of my investment to pay for pay-for-click advertising. That can quickly add up to a lot of money that doesn’t produce any results. In some industries it may provide great results. One of the most important things to do, at least for start-up online businesses, is to mine the information they get from people coming to their Web site and to constantly ask their clients and customers what they are looking for and try to get information from people who don’t buy as well. Q. One other question. I noticed you made a point of saying all your employees are there in Columbus, Ohio. A lot of financial services companies outsource to India and other places. Is there something here you want to say, or is it that’s just how things have worked out? A. Well, it’s a conscious effort. I know [outsourcing] has worked out for some companies, but I prefer to keep jobs here in the community, as long as it’s feasible for us. I like to employ people locally, have them here in the office, [and] be able to meet with face to face. I know [outsourcing] works for some companies; it isn’t my ideal situation.
Going with VeriSign One of the key aspects of doing business online is trust. Without the trust of customers in your e-commerce process, you won’t have any commerce to process. VeriSign’s stock in trade is trust; it manages the .com, .net, .cc, and .tv domains for ICANN (the overseeing board for the Internet), is the foremost provider of Secure Sockets Layer (SSL) certificates used to encode financial transactions on the Net, provides one of the best-known site verification programs on the Net, and performs payment processing for large and small companies worldwide. VeriSign is one of the biggest, if not the biggest, payment processor on the Net today. In the first quarter of 2005, VeriSign processed 79.21 million transactions worth $10.69 billion.10 VeriSign sells two payment-processing services to merchants who plan to use a merchant account and conduct business online, both come with the “Verified by VeriSign” seal:
10. VeriSign Internet Security Intelligence Briefing, http://www.verisign.com/static/030910.pdf
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Payflow Link: Customers are directed to VeriSign’s site where they enter their financial information. Payflow Link costs $179 USD to set up and for a monthly fee of $19.95 will process up to 500 transactions a month. Payflow Pro: The customer stays on your site, but VeriSign handles the transaction in the background. Payflow Pro costs $249 USD to set up and for a monthly fee of $59 will process up to 1,000 transactions a month. VeriSign offers a range of add-on services to both Payflow Link and Payflow Pro, as shown in Table 3-2.
Table 3-2. VeriSign Add-Ons
Add-On
Features
Price
Basic fraud protection
Includes seven basic fraud filters
Setup: $29.95, monthly fee: $19.95, transaction fee: $0.05 per transaction
Advanced fraud protection
An additional 13 filters and basic fraud filters
Setup: $89.95, monthly fee: $19.95, transaction fee: $0.10 per transaction
Account monitoring
Transaction monitoring by a person
Setup: $29.95, monthly fee: $19.95, transaction fee: no charge
Buyer authentication
Inclusion of the Verified by Visa and MasterCard SecureCode programs
Setup: $150, monthly fee: $9.95, transaction fee: $0.10 per transaction
Although VeriSign provides free, unlimited email and Web support to its customers, it charges anywhere from $12 to $495 a month for telephone technical support. And speaking of fees, keep in mind if you go this route for handling your sales, you’ll encounter the following fees: Merchant account: Your bank will take a percentage of all the credit card transactions it processes for you, plus probably charge a monthly fee and other charges. For example, Wells Fargo Bank charges for its Online Merchant Services Account a one-time setup fee of $99, a monthly fee of $31, and then 2.40 percent of each transaction. It will also charge you $7.50 for a paper statement and $15 per transaction that becomes a chargeback. Shopping cart: If your micro-ISV has more than one product for sale, you’ll want some form of online shopping cart so that customers can buy more than one product at a time. Depending on how you do this, your shopping cart may be something you code, an open source tool, an application you buy, or part of what Web site the host provider includes in your package. Rest assured, you’ll be paying for it one way or another. SSL certificate: Although there hasn’t been one verified instance of an online credit card transaction in the United States, Europe, or Asia as of this writing being intercepted by a nefarious third-party, payment processing without an SSL certificate to encode the data raises instant suspicions on the part of the buying public. If you go with Payflow Link, the processing takes place on VerSign’s site, and this is a nonissue. But, if you go with Payflow Pro, you’re required to have a SSL certificate, which costs $995 a year through VeriSign. By no coincidence, VeriSign and its subsidiary, Thawte, sell most of the SSL certificates in use today.
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MITCHEL VEYS, DIRECTOR OF PRODUCTS, VERISIGN PAYMENT PRODUCTS VeriSign is one of the commercial Internet’s “first-mover” companies, both in terms of domain registrations and e-commerce. In this interview, Mitchel Veys, director of VeriSign Payment Products, talks about what VeriSign offers to micro-ISVs. Q. What’s the argument to be made for a self-funded start-up not to do all the e-commerce functions in-house and to go with a company like VeriSign? A. A lot of the people I work with are very much like you describe. VeriSign Payment Products is the market leader in this space—we are part of the larger VeriSign corporation—a $1.4 billion company. We have today over 140,000 merchants who are working with us. When I say working with us, we are powering their e-commerce. We take care of everything for them. We make it as easy as possible for them to get going and focus on their business. Since a lot of the feedback we’ve gotten from merchants is that [what] they want from us is simplicity, a high level of security, reliability, and safety, we are really focused on this middle market [between individuals and large companies] that you describe—people who start their business, who focus on their business, who may have a few employees. We provide everything they need so they don’t need to worry anymore about their payment component. Q. So you benefit from the rest of VeriSign’s infrastructure? A. As you may know, VeriSign runs the .com and .net registry, so that means that there are billions of transactions a day [and] billions of queries that are hitting those servers. And as long as we’ve been running it, almost eight years now, we’ve never been down, not a single hour, not a single day. And we’re lucky in VeriSign Payment Services to actually benefit from all that infrastructure/investment that has been made in there. So it’s a whole piece of the business taken care of, providing very high reliability for our merchants. Q. So how does this all work? A. Well, you have two components: a financial component [that] includes having your Internet merchant account, and then it includes the technical component, so that all of the electronic data can be taken in, validated, and transferred within the payment system, so that all the different parties can get paid. Typically when a small company wants to do payments over the Internet, most of the payments are done with credit cards. About 90 percent of all transactions are done with credit cards. They will need two components— the financial and the technical components. On the financial side, they do need a bank account where the money is going to be deposited—a merchant account. And we can help them with that because we have two partners who do that (as well as the technical side). Once you’re set up on the banking side, you have your account; then on the technical side you typically use a shopping cart. So what we have done is we’re integrated with a very long list of shopping carts and all of the leading shopping carts. As you integrate your shopping cart with your Web site, you will have a plug-in that integrates with VeriSign, and we will work with you to activate that plug-in, and you are ready to roll. When your customer goes to your purchase page and enters their Visa or MasterCard information and clicks Purchase, we will capture that information with Payflow Pro or Payflow Link, validate that information, and send it on through the payment process. There’s two pieces to that—an authorization piece and a settlement piece. On the authorization side, the first thing a bank will do is see if it is a valid cardholder and that the cardholder actually has the funds in his or her bank account to actually make this purchase.
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Q. When you say funds, you mean the credit available on their credit card? A. That’s absolutely correct, or it could be a debit card as well as a credit card. What happens next is that the transaction will be passed onto a payment processor that will actually calculate the settlement. The merchant [could be] working with Wells Fargo, but the customer is with Bank of America, so money will have to be transferred from one bank to the other. They will do all that calculation. That’s called the clearing and settlement process. These processors are effectively doing the IT functions the banks used to do in the past. Q. So VeriSign is doing the fraud detection? A. That is correct. Q. Without giving away any secrets you don’t want to give away, how do you detect fraud? A. What it means to detect fraud is to actually do a number of checks. We have a whole bunch of filters we’ve put in place, for example, checking where the IP address comes from. In general our philosophy on fraud is the following: we provide a number of core fraud detection filters in place and then let the merchant decide what decisions we make for that. We can just provide the information to the merchant, or we can stop the transaction at a certain level if the merchant wants that. In each of those cases the filters will do a number of matches. For example, if the IP is coming from one country and the shipping address is to another country, that looks very suspicious. I’m not saying it’s necessarily fraudulent, just that it’s very suspicious. If on top of it, say the last three digits are different from the digits that should be associated with the card number, that increases again the probability of the chances of fraud. If it is being shipped to a freight forwarder or a P.O. box, it again increases the chances of fraud. If it’s a certain ticket item, it’s going to increase the probability of fraud. If this is the fifth time in a very short period of time that this cardholder has bought, say, a plasma TV, that will increase the probability of fraud. We have all those filters in place and we will do an analysis based on those filters, and we can say this is very likely to be a fraudulent transaction. When the merchant signs up with VeriSign, they will decide if they want us to stop those transactions or they want us to flag them. In most instances what we have seen is that merchants are rejecting many more valid transactions they believe are fraudulent than actual fraudulent transactions. So they are better off signing up for fraud protection system that actually has a much higher probability of catching those real fraudulent transactions than those false positives. Q. So, the payment processors don’t get into the business of fraud detection; they take the transaction to be legitimate when they get it. So, someone has to do it—it’s either going to be the merchant or VeriSign or someone else. A. Yeah, again, everything here is a shade of gray. Some payment processors do some of this, [and] VeriSign does a lot of it, because we feel this is a responsibility we have vis-à-vis our merchants. The other thing is that a lot of what VeriSign stands for, a lot of what we do, is being the trusted brand. We are a security company, so this is part of our DNA.
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Q. Another part of what you are offering merchants who sign up with VeriSign is that people are paying who they think they are paying—I’ve seen that “Verified by VeriSign” logo on a lot of sites. A. Exactly. Very important component. Absolutely. What we have realized is that a large number of cardholders actually go through the whole process, and at the last point when they’re asked to fill in their card details, they stop the process if they are not familiar with the merchant. Because we have such a large market share [and] because we power so many Web sites, we know that a lot of those merchants who may not have a well-known brand name actually are real, valid merchants. So what we have done is we have started to push the VeriSign seal into the marketplace, and it’s free for merchants to use if they use any of the VeriSign services. Be it the certificates, the payment services, or any of our other services we offer, we know that is a valid merchant because we have already done all the verification that they are a valid merchant. Then the merchant can show the VeriSign seal on his or her Web site, and that indeed provides that extra level of trust that the consumer needs to make him or her feel comfortable to finish that transaction. Q. What mistakes have you seen small start-up companies make when it comes to e-commerce? A. I think we’ve seen a number of them. For example, with our own products, we have a number of security settings that we encourage people to use, and in some instance either people may not use all of them or they may not update them as their business changes. An example of that is they might start selling small-ticket items, and as their business grows they might start selling higher-ticket items. That changes the mix, that changes the fraud, that changes the risk component…and they may not actually make all those tweaks, opening up the potential for more fraud. The other thing that we have captured working with our base and all the surveys that we do is that for most merchants, payment needs to be 100 percent reliable, and once it’s in place, they really don’t want to have to worry about it anymore. So we encourage companies to shop around and find a company that is very stable so they don’t have to mess around with payments once they are in place. It’s an industry that is shaking up a lot. Lots of smaller companies have started and gone out of business. And a small company just can’t afford that.
All in all, most micro-ISVs shouldn’t start with a merchant account and either VeriSign or a competing service: it’s too complex, too costly, and too time-consuming. Once your micro-ISV is established, revenues are more than $10,000 a month and growing, and you’ve handled more important issues such as marketing, customer support, and ongoing product development, then you have plenty of time to consider moving to a full e-commerce solution. For me, the combination of PayPal and 2Checkout.com has worked extremely well, as shown in Figure 3-36. Not all of my eggs are in one other person’s basket, my customers have told me they like having a choice, and other than the $49 dollars it cost to sign up with 2Checkout.com, all my costs are a fixed percentage of each sale, not part of the monthly overhead of running a business.
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Figure 3-36. Giving your micro-ISV’s customers a choice
To Host or Not to Host To wrap up the discussion of your Web site, I’ll discuss whether you should host your site yourself or pay a company to do it for you. Now, if your micro-ISV is developing a Web-based application or service, you probably know all there is to know about Web hosting and can skip this section. Or, at least you should know more about it than me! If you’re reading this, odds are good you’ve never had your own Web site or you’re on only your second or third attempt to find a good Web host. I’m currently on my fifth and sixth such companies, having launched my first Web site in 1994. Before shamelessly plugging the two companies I use, Table 3-3 presents my short checklist for finding the right company or companies for you.
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Table 3-3. Evaluating a Web Host Service
Questions to Ask
Contender 1
Contender 2
Does the company pick up the phone when you call during business hours?
If you create a technical support request, do you get a reply from a person within one hour?
Can you pay month to month instead of being locked into a quarterly or yearly contract?
Does the company provide support for the technology you want to use to create your Web site?
Does the company offer the additional services (such as shopping carts or online forums) you want?
When you go shopping for a Web host, remember that most times you get what you pay for. I’ve been lucky to find two good Web hosting companies; Alentus (http://alentus.com), as shown in Figure 3-37, based in Edmonton, Canada, hosts my main site, and Server Intellect (http://www.serverintellect.com/) out of Orlando, Florida, hosts a second site I mainly use for Fog Creek Software’s FogBugz bug-reporting/discussion board system.
Figure 3-37. Getting the Canadian advantage
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Although it’s a little unusual to cross international borders to get a Web hosting company, I’ve found that Canadian-based Alentus has some of the nicest and most helpful staff I’ve ever encountered. Meanwhile, the people at Server Intellect offer excellent support for FogBugz, as shown in Figure 3-38, a Web service you’ll hear much more about in Chapter 5.
Figure 3-38. Server Intellect’s hosting service offers FogBugz. If you decide to pay a company to host your site(s), don’t be afraid to “test-drive” their tech support by calling them or contacting a few of their “valued customers” to see just why they value that vendor.
Blogging for Fun and Profit Finally for this chapter, I’ll cover something that is sweeping across the Web this decade— blogging. Short for Web logging, blogs are different in four respects from all those billions of other Web pages you see: • Blogs are written in the first-person, not in a third-person, anonymous voice. • Blogs let readers post comments about each blog posting. • Blogs are for the most part fast and immediate—they’re the flash wire stories of the Net, not the histories or studies.
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• Blogs are red hot, not because an estimated 7 percent of the 120 million U.S. adults who use the Internet have created one, or that 27 percent of Internet readers say they read blogs,11 but because blogs influence what readers buy, think, and read more than traditional media or “traditional” Web sites. Influence makes reporters and editors perk up. Influence makes politicians, political activists, and people who follow politics pay attention. And influence, not to mention the attention that the political sphere and media sphere are paying various blogs, rings the dinner bell and gets CEOs and marketing directors salivating at the thought of getting around the market’s spin filter to reach customers.
Hi-Ho, Hi-Ho, It’s Off to Blog We Go…. Why do people blog? You could pick any one of 15 million blogs Technorati (http://www. technorati.com/) indexes as of right now and find a different reason and rationale: some blogs are rants, some are journals, some are by people who want attention, and some are by people who want to share their interests, as shown in Figure 3-39.
Figure 3-39. Exploring the blogs at Technorati.com 11. “The State of Blogging,” The Pew Internet & American Life Project, January 2005. See also http://www.pewinternet.org/pdfs/PIP_blogging_data.pdf.
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Why do people read blogs? Again, they read them for a host of reasons: for the latest in information and news about something they care about, for good writing, for provocative writing, and for a different point of view. The mechanics of blogging are dirt easy. You can host your blog at Blogger.com, a free service offered by Google (http://blogger.com), as shown in Figure 3-40, or MSN Spaces, a free service offered by Microsoft (http://spaces.msn.com/). You can host your blog via countless smaller companies such as TypePad (http://typepad.com) or buy and install a blogging package for your Web site such as WordPress (http://wordpress.org/) or Movable Type (http://www.sixapart.com/movabletype/), as shown in Figure 3-41.
Figure 3-40. Welcome to Blogger.com.
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Figure 3-41. Welcome to MovableType.
Blogs and Micro-ISVs So, why should micro-ISVs do a blog? Here’s one micro-ISV’s (blogged) opinion: How Blogging Really Pays Off July 20th, 2005 There’s always [a lot] of talk about how to make money with blogs. While I think some people will do OK with advertising and such, the real money is and will continue to be in the indirect benefits of blogging, [in other words,] not getting paid for blogging, but rather the opportunities it provides you. So in my case, [having] this blog has lead to a mailing list for my upcoming product [that] is many times bigger than I had anticipated. Of course, I still have to “close the deal” to make the $, but I now have more opportunity than I would have without blogging.12 12. http://www.userscape.com/blog/page/2/
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For me, my blog (http://safarisoftware.typepad.com a.k.a. http://www.todoorelse.com), as shown in Figure 3-42, has been a way to blow off steam, explain some of the finer points of my micro-ISV product, pontificate on my approach to Getting Things Done and time management, release a few of the interviews done for this book, and show off my cats.
Figure 3-42. Viewing my micro-ISV’s blog The most useful part of this blog so far has been the feedback—both via the blog and via email from people reading it—that they like the product I’m bringing to market and wish me well. Being a micro-ISV means all too often long hours alone with your computer with little contact with others. Being a micro-ISV makes it easy to do what some call a business blog. You can write about why you’re building a business and selling your product, and that enthusiasm and passion will make for good reading.
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MENA TROTT, COFOUNDER, SIX APART In late 2001, Mena and Ben Trott were running their micro-ISV business from their San Francisco Bay Area one-bedroom apartment when they realized their cute little web logging software, Movable Type, had become a 600-pound tiger called blogging. After taking on venture capital funding, launching a blogging service (TypePad), hiring 60 employees, and acquiring several companies, Mena and Ben are at the center of the online whirlwind called blogging. Q. How can a micro-ISV blog successfully? A. What does ISV stand for? Q. ISV stands for independent software vendor. It’s a term Microsoft came up with to describe everyone they haven’t bought already. It kind of stuck as a label. Let me ask another question some suggested to me: what are three things you should not put in your blog? I think the most obvious thing is something that’s not new to blogging; it’s your company’s secrets. When you start a company, or actually you become an employee of a company, it’s very understandable that you sign a contract with the company stating you are not going to blog about proprietary information or information that’s sensitive. Using that as your basic judgment is one of the easiest things to do. A lot of times when you see bloggers fired from their jobs, they are just writing about things they shouldn’t be writing about in any form. They shouldn’t be posting it on an email list; they shouldn’t be talking about it at a party or on the street. Just the fact there are blogs now just makes it easier to disseminate information, but it’s a commonsense thing. As far as someone running their own company, one of the guidelines we’ve always said is when you write a post, you should consider that your worst enemy will see it at that moment you post it [and] you wouldn’t be able to take it back, so you should always write with the sort of knowledge that anything you are going to write is going to be indexed by Google, it’s going to be found right away, it’s going to be there forever. And if you’re not comfortable with that, don’t write in a rage, [and] don’t write in reaction to something without really thinking. Be deliberate but still have that spontaneity that people like, and that’s why—and we can talk in a little bit about it—why I think small companies should have blogs. And also, understand that your blog is a reflection on your company and that personal voice is really important, and it’s good to show there are people behind a company and that there’s a personality. I write with a personality that may not be corporate, but it’s me. But make sure you don’t blur the lines and write about something completely random that has nothing to do with the company and that will not bring the company any sort of benefit. Save those sorts of posts for a private blog. Q. Why should a small company blog? A. A small company can really leverage bloggers in the sense that bloggers out there are very interested in small companies; they are interested in underdogs, [and] they are interested in people out there doing interesting things. And you can get your customers who are bloggers to be advocates for your product because they are writing about things that interesting to them. Having that sort of connection with your customers is extremely important. When I attend a blog business conference, one of the things I tell people is that it’s not necessarily important to have the CEO blogging or the major executives or the management blog. Having someone with a lot of passion in the company blog is as good if not better than having a ghostwritten CEO’s post or a lackluster post. The person who is blogging should be very interested in continuing to communicate with the customers and the readers; it shouldn’t be felt like it was an obligation. I can use Six Apart as an example. I found that with blogging we had a real connection with our customers; we were able to see what they wanted in our products. They used comments and trackbacks to give us feedback. The biggest example was our [Movable Type] 3.0 license.
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This happened last May, and we changed the licensing from unlimited authors and unlimited weblogs to restrictions because we found that the license was a little to loose, and we needed to make changes. When we made changes, we really didn’t listen to community feedback initially. When we posted the changes, our customers were pretty upset. We allowed them to communicate using trackbacks—they were able to write on their blogs what they felt was wrong with what we doing, and we were able to get that feedback. The point is the posts are all still on our Web site, and a lot of them are very negative. But the fact is that we are able to know what they wanted specifically and amend our licenses to address those needs. And that helps us a great deal. And it’s interesting: we keep all the negativity on our blog, because it’s a part of the history of the company, and if we were to delete somebody’s negative comments just because they were negative, that would be a disservice to our customers. We have the good and bad. We’re very quick to put the good out, and while we don’t want the bad posts, we realize that people want an open book. And I think we are one of the few companies that is really doing this. You need to put everything out there, and you let product speak for itself. There are times we give fodder to our competitors because of this, but at least we know we’re proud at the end of the day. Q. This may be a chicken/egg question, but do blogs make companies more open or are companies that are open more likely to blog? A. [laughs] That is a chicken-and-egg question. Right now when people start blogs within a company, they have some motivation to do so. And to do that, there has to be some sort of openness to start. I think that once you start blogging and you see the feedback, it tends to make you think, “Wow people are actually reading this!” And it tends to either scare people or empowers them. I think that getting comfortable with being transparent is a hard thing to do, but once you do, it’s incredibly rewarding. Q. So how often should you post? A. I think it’s harder to post if you’ve stopped posting, because there’s a lot of pressure: you’re staring at this empty screen and thinking, “All right, this must be an important post because I haven’t written in three months.” But if you write something once a day, with varying degrees of importance, it gives you the kind of momentum that’s easy to sustain. Q. I’m sure you’ve been asked this before, but how can I get my blog to the A list? To put a tighter focus on that, how can I get my micro-ISV’s blog to be A list? A. That’s probably a harder thing to do than a personal blog; it’s associated with business. One of the things you can do is not post things just about your company but post things that are relevant to the space. That’s something we try to do especially in our ProNet log (http://www.sixapart.com/pronet/weblog) that’s written basically written by Anil Dash, our third employee. He writes about things that are relevant to our users, but he also writes about what people are doing in the blogging spaces as a whole. If you are running a company, you have to be aware of businesses out there and that there are other applications that are interesting. It can’t just be only about you. I think that being able to write an engaging blog in a personal voice is crucial to—I hate to say it—get to that A list. It’s crucial, I think, because all the blogs that are popular, you can really tell the voice behind it. It’s also putting yourself out on a limb and saying things about the industry you really believe. And being someone respected for your opinion, not just your product. Q. Then should I lambaste all the lame products out there? Should I name them? Is that being relevant in the space or is that being sort of confrontational? A. I think that is being confrontational; there are companies that do that, but I don’t necessarily respect that tactic. We never say negative things about our competitors—that’s just something we’ve done since 2001. It was something we never wanted to get popular by doing that. I think it’s important to raise your company up by pointing to what you are doing right, not lambaste your competitors for what they do wrong. It’s always important to stay positive. If there’s something to be said negative about your competition, people are likely going to find it out; you don’t need to point it out.
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Learn from what they are doing, don’t do the mistakes, and be content in that you are doing things right. I’ve learned that the hard way, because you know, we have a lot of competition that criticizes things that we do. But we don’t then turn around and say things about the competition, because we wouldn’t gain anything. If you go into the mud with them, you just end up dirty. You can point out things and not necessarily name companies. If you see something that’s being done negatively, you can tall about how it could be done positively. Never say things negative just to say things negative.
On Improving Your Blog Q. Which matters more, comments or trackbacks? A. On the whole, I think trackbacks are better because people who have taken the time to send a trackback and write in their blog have taken the time to make it part of the contents of their blog. It gives them accountability. I would rather have five trackbacks going off to someone else’s site where you could read about the person; you can see the context of what they have to say and write than anonymous hit-and-run comments from people who might visit the site once and never visit it again. As a whole, trackbacks don’t devolve; they’re more independent—they stand up. Comments cause sometimes what we call a pile-on; I think trackbacks are a more valuable mechanism. Q. I think that comes back to why and how you become popular in the blogosphere, or not. It’s the web of other peoples trackbacks that determines whether you are popular or not, not those anonymous or semianonymous comments. A. Yes, I think that’s right. And I think it’s also important that when you’re trying to become a prominent weblog, that you let it happen organically. Bloggers tend not to like emails that say, “Link to me.” They view it as spam, and they are more likely not only to not link to you but to criticize you. So it’s important I think to let people discover you by posting quality thoughts that people find on their own. A trackback would be a good example. If you are writing something clearly relevant to somebody’s post and you trackback, that’s a way for them to find you. But you should never do it just for us to look at your blog. Q. Where do you see blogging going in the next two years? Business blogging or personal blogging? A. Business blogs. I think that more transparency is going to become more and more important. The fact that when you blog and release a product, you pretty much instantly know what people think of it through referrers, through trackbacks, through comments—that’s only going to help companies act in response more quickly. I think more and more companies are—and this can be either a good thing or a bad thing—going to get their company’s PR departments involved in creating blogs, and people are going to have to evaluate which blogs they feel are genuine. You’re going to see that the blogs that continue to be popular are the ones with strong voices. This is something I’ve been saying for four years about all kinds of blogs—that knowing the personality behind them is incredibly important. Blogs right now are used in businesses both internally and externally. One thing I encourage businesses to do is set up internal blogs/set up blogs as an intranet. And let them [all employees] write the posts that they want to write and then take the posts you find that are particularly strong and bring them out externally. For companies who are kind of scared of letting your employees blog, this is a way of allowing people to have the freedom inside and then elevating the people who are doing a good job. And that’s the way to find the strong bloggers in your company and promote them. Q. For a micro-ISV when maybe we are talking one person, maybe three or three or five at most, how often should they blog about whatever space that product lives in?
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A. People like to know about the product cycle, about your product development. I know that I said you can’t talk about secrets or proprietary information, but you can let people kind of know what’s going on. We’ve been running a beta for Movable Type right now for 3.2 [http://www.sixapart.com/movabletype/beta/], and people are loving the beta blog because we are talking about the release. We are talking about questions people are asking. It’s really important that you let people see inside the company. So for a small company, I don’t think you need to post every day, especially if you have RSS that lets people discover your blog and know when it’s been updated and not have to go back every day. I think it’s important to get a good post or two out every week and map what the company is doing. Something I’ve learned is that it’s incredibly hard to do blogging when you’re doing so many things and you’re incredibly busy. “Why should I take the time to do this?” Setting some time to blog is actually a good thing because it helps you process what you’re doing. And it helps you kind of realize how the company grows. If I look back at the archives, I can see what we’ve done as we’ve grown from two people—me and my husband—to what we are today. It’s journaling in a way. And it’s good because it helps shape the company as well. Q. I see the beta blog—189 comments on one posting? A. This is the first time we’ve ever had a beta blog public, and we’ve been very successful with it. Q. I notice that you have a web design background. When I look at TypePad, it’s very visually and graphically appealing. How much does graphics and design matter in an application? A. For building applications or your blog? Q. For either. A. One of the goals we’ve always had for all of our products is that we believe you should be able to have a professional-looking blog/a nicely designed blog, even if you don’t do anything. You shouldn’t have to know how to edit CSS or HTML; you should have the tools that do that. With my design background to try to figure out how the best-looking blogs should be created with the least amount of effort. And I think what we do in TypePad is indicative of that goal. I think it’s really important to have a professional-looking site because it’s a first impression sort of thing. If I’m going to a person’s site and I realize they haven’t done anything to make it look good, or it’s covered in ads, it lowers the credibility. It could be the best content in the world, but I might not get that far. So I think for a business, if you don’t have the skills to design a site, then I think it’s worth it to get a contractor in just to spruce up your blog.
Going from Micro-ISV to “Big Company” Q. Going from micro-ISV to “Big Company”: anything you wish you could email yourself back in 2001? A. I’m lucky that I haven’t gotten to a place where I have regrets. In terms of advice, I would say it’s important to keep the drive I’ve always had but to realize that it is a company. But at the end of the day your life is more important. I’ve had a lot of stress in the course of four years, and I’ve realized I’ve gone to a point right now that the company is running really smoothly—knock on wood—and doing well. What we’ve accomplished has been incredibly important, and if the company were to fail—God forbid!—we’ve done so much that we have made a difference, and so I’d be happy with that. I think if I wanted to give me more concrete advice, it would be staff up sooner than we did. If [you’re] growing as a company and can afford to grow, it’s important to not be so worried about being too big that you end up doing all the work, because that’s connected to the stress. Ben and I were very reluctant to hire, so we did the entire first version of TypePad ourselves, and getting some help in doing that might have made me a little saner in terms of my well being.
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Q. You’ve got something of a complicated pricing model for Movable Type, with a lot of price points. Has that worked out well for you? A. It actually has worked out well. For businesses, it has been a no-brainer. Businesses are incredibly happy to have structured pricing they can invoice and to know this is what we are paying for. Personal pricing was more difficult—we went from free to free and two tiers of paid. One of the things we limited was that you could not have unlimited weblogs or unlimited authors unless you bought the highest level of Movable Type. In the newest release, 3.2, we’ve actually taken away the limits for weblogs for all. That was something we realized was not something that needed to be limited, especially since 3.2 has really good blog management. Q. Have you considered partnering with radio (like subscription radio like XM or Sirius) to have top blogs broadcast in text-to-speech? A. I wouldn’t be against it, but we haven’t really gotten to that point. I think that audio is an important component and think one of the ways audio and podcasting can become more adopted is if there are easy ways to parse. One of the things I find frustrating is that you don’t want to sit through an audio recording to find out what it’s about. You want to be able to skim. And that’s one of the things I think that makes blogs so important— you’re able to scan and skim and know what content you want to read really quickly. Audio needs to find a way to do that. We really need some one or some company to figure out a way to do that. Q. Do you see wikis and blogs converging, or are they going to stay in their separate worlds? A. I think there are features of both that can be used for the other, but as far as that goes, I think they are different mental models. We have wikis internally and we have weblogs internally, and some people’s minds work in a different way. I know that I have to have a more linear structure. Having pages exist in a way that you have to link to them or not find them—that’s difficult for me. Both serve different needs; they can co-exist. Q. Blogs have become the first movers when it comes to influence/politics especially in this country and fashion and other things. Would you say that blogging has climbed to the top of the influence food chain? A. I think in all areas—in fashion, in film, in music—that there are definitely things that are influencing, and I think that blogs have become a component of it. I don’t want blogs to seem trendy. I don’t think everyone needs a blog. It’s like email. One of our goals is to get blogging as ubiquitous as email. Q. Do you think there will be as many people blogging as emailing? A. I think it’s very possible. I should explain that more. In terms of blogging, I don’t think blogging always has to be necessarily public. There’s personal blogging, there’s private blogging, and then there’s public. More people are going to want to have private weblogs, where they’re chronicling events [and] sharing things with small groups. And so we see this with LiveJournal, which we purchased this year. These are small groups of people kind of having a conversation. My mom when she starts to blog isn’t going to want anyone but me and my aunt reading it—and that’s an important form. That’s why I think blogging is going to be as important as emailing—it’s a form of communication that takes the form of archiving, of photo management, of comments, and of RSS, and it allows people to communicate better. There’s that group, and then there’s the other group that wants to reach larger groups. That will be a lot of businesses, people who have stories to tell or [talk] politics, or just larger communities. Blogging can be used for any purpose. Q. Any advice to micro-ISV in general? A. I think definitely read what people have to say about you. Use something like PubSub (http:// www.pubsub.com). Q. What’s that?
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A. It’s a service where you basically enter keywords—I have one with Six Apart, Mena Trott—and I basically get an RRS feed for anyone who references those keywords. So I’m able to read every day what people are saying about the company, what people are saying about our products, what people are saying about me. And it helps—it helps you gauge the public’s perception of your company and of yourself, and it helps you find ways of opening up lines of communication. One of the things that’s really important once you start blogging is to listen to the community out there. And don’t be a spammer!
Who’s talking about your micro-ISV?
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Business Is Business
I think maybe in every company today there is always at least one person who is going crazy slowly. —Joseph Heller, author of Catch-221
T
he point of this chapter is to make sure you’re not the one being driven crazy in your micro-ISV by all the rules, regulations, paperwork, forms, requirements, tasks, and projects you’re going to have to cope with in order to be in business. In this chapter, I’ll start by covering the foundation of your micro-ISV: what type of business entity are you? I’ll then cover the rudiments of the intellectual property law you need to know and why the government is your friend (really!). And, you’ll dig into how on Earth you can manage all the tasks and projects you’re going to need to do to get your micro-ISV up and running. Now, most of the business regulation stuff in this chapter is specific to the United States, but please see the sidebars on doing business in the United Kingdom and doing business in Australia. And I apologize in advance to the majority of the world that doesn’t speak English for not covering at least one non-English-speaking country in this chapter, but there is a reason for that.2 One topic this chapter can’t cover is what is best for you and your micro-ISV. Every choice has trade-offs, and your mileage may vary. But Micro-ISVs owners aren’t the only people who want to start their own businesses; although I’ll highlight a few of the “mainstream” resources available in this chapter and in the appendix, you’ll find no shortage of information about starting a business.3 If you can’t find the answers you seek, I strongly recommend visiting the Business of Software forum at Joel on Software (http://discuss.joelonsoftware.com/?biz). You’ll find many kindred souls there.
1. http://www.memorablequotations.com/heller.htm 2. When I was in high school, I struggled through a year of German, getting a barely passing grade from my teacher only by promising I would never take German again. In college, I struggled through an intensive summer course of French, getting a barely passing grade from my professor only if I promised not to take French again. A wise man knows his limits! 3. Searching for starting a business on Google yields about 60.5 million hits. See the appendix for recommended reading.
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You, Inc. Picking the legal form of your micro-ISV is all about defining who gets what and who’s responsible. Before I cover the pros and cons of various ways of setting up your business, the first order of business is nailing down who the who is here. If you, and only you, are going to own, create, manage, and profit from your micro-ISV, that’s one thing. If you means yourself and one or several partners, that is quite another. Both paths can work, but the roads traveled will be different. Now I must admit to a bias here: my micro-ISV is mine, with no partners.4 I can see the theoretical advantages of having partners—more people to get the work done and more insights, experience, contacts, energy, and camaraderie. However, for better or ill, that’s not the road I’ve chosen. If your circ*mstances are such that you’ve found the right people to help launch your business, that’s good news. In that case, implementing the steps in this chapter is even more important for you: a perennial reason business ventures die early is that the partners haven’t confronted and settled the key questions of who gets what and who’s in charge. If you’re going it alone, I recommend strongly you get some objective feedback as to whether you’re cut out to start a business. Odds are you are if you’re reading this, but it never hurts to get a second or third opinion. The U.S. Small Business Administration (SBA) offers a good, general self-test on its Web site at http://www.sba.gov/starting_business/startup/entrepreneurialtest.html, as shown in Figure 4-1. (I’ll talk about the SBA more in the “And What About the Government?” section.)
4. Except for my partner in life, Tina. She has a real job!
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Figure 4-1. Are you micro-ISV material? You’ll find another good self-test on the Web, courtesy of the Center for Entrepreneurship at Brigham Young University’s Marriott School of Management at http://marriottschool. byu.edu/cfe/startingout/test.cfm, as shown in Figure 4-2.
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Figure 4-2. The Center for Entrepreneurship’s self-test How you run your business is your business, but what form it takes in the United States is set by tax and commerce statutes: sole proprietorship, partnership, Limited Liability Company (LLC), a subchapter S corporation, or a subchapter C corporation. The next sections cover these ways of doing business from a micro-ISV perspective.
Sole Proprietorship A sole proprietorship is the easiest and simplest way for a single person to own and operate a business. Repeat after me: “I am a sole proprietorship.” By the power invested in me, I now pronounce you and your micro-ISV legally and financially inseparable.
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Now, it may get a little more complicated if you plan on doing business under a name other than your own (“Bob Walsh”); that’s when you’ll need to register your business’s name (“Deerhaven Computing”) with your county and take out a small advertisem*nt in a countyapproved paper announcing this. But unless you plan on hiring employees or need a small-business license, you’re good to go.
Advantages A sole proprietorship is cheap and simple. And your bank will cash checks written to you. Filing a Schedule C with your Form 1040 income tax return is about all the form filling you have to do. An attorney is unnecessary.
Disadvantages The disadvantages of a sole proprietorship are significant. You and your business are one. If your business is sued, you and your assets are at risk; in fact, if you’re in what’s called a community property state, your spouse is also at risk. A sole proprietorship screams small. Some companies will not buy goods or services from a sole proprietorship. Insurance for your business may be either more expensive or harder to obtain.
Bottom Line Creating and running a micro-ISV means you’re all the way in the water, not just sticking a toe in. Risking your assets, and perhaps the assets of your spouse, isn’t worth it. Of course, if you’re highly allergic to tax forms and other forms of paperwork, this option gets you going. You can always upgrade later.
Setup/Installation A sole proprietorship doesn’t really have setup requirements, unless you’re going to have a business name. In that case, you’ll need to do one of the following: • Visit your county registrar’s office, check that your desired name is available, fill in the form, pay the fee, take your copy of the filed form to a local newspaper that runs Doing Business As (DBA) ads, and pay to run your DBA ad. The cost will be about $100. • Go to http://dbaform.com or a similar online service (as shown in Figure 4-3), fill in the form, and pay $95; then you’re done.
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Figure 4-3. Online services make it easy to do a DBA.
STARTING A MICRO-ISV IN THE UNITED KINGDOM If you’re based in the United Kingdom, setting up your business vis-à-vis the government is relatively straightforward. Although no quick summary will cover everything you should know, this sidebar covers the basics you need to consider.
Legal Structures Your micro-ISV can take the form of three for-profit legal structures: sole trader, partnership, and LLC. Each of these structures sets a different balance between personal liability, ease of setup and maintenance, and capital-raising potential.
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• Sole trader: This is the simplest way to run your one-person micro-ISV, doesn’t require any paperwork other than registering as self-employed with HM Revenue and Customs (HMRC), and makes up the bulk (63 percent) of all British businesses according to Department of Trade and Industry figures.5 However, no legal separation exists between you and your business; you’re responsible for all liabilities, and its income is yours. Also, if you’re going to do business under a name other than your own, you’ll need to ensure you avoid confusion with other names used by other businesses and certain restricted words. (See the online resources later in this sidebar.)
Checking names at National Business Register
5. http://www.startups.co.uk/YaY6zhpowhgEFQ.html
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• Partnership: When two or more people form a business, it’s a partnership. Each partner receives a percentage of the income produced by the business, depending upon how much they invested. Like their U.S. counterparts, partnerships are defined by a partnership agreement and strongly need the advice of a solicitor to ensure all foreseeable contingencies are covered. Each partner is fully liable for all the debts of the business, with the exception of a Limited Liability Partnership (LLP), which has members with liability limited to funds invested and designated members with unlimited liability. • LLC: This is the equivalent (and precursor) to U.S. corporations; LLCs legally exist for purposes of liability and taxation in their own right. Shareholders can be individuals or other companies. Two types exist: private limited companies whose stock can’t be traded and Public Limited Companies (PLCs) that can be traded. LLCs require registration at Companies House, need directors, and have considerable reporting requirements.
Taxes Two taxes might affect your micro-ISV even if you do not have employees: income tax and VAT. • Sole trader: As a sole trader, your micro-ISV profits are taxed like any other income by Inland Revenue, under Schedule D, and you’re responsible for paying income tax twice a year. You’ll also be paying National Insurance Contributions (Class 2) and, depending on your profits, Class 4. If you’re making more than approximately £60,000 a year, you’ll also need to apply for Value Added Tax (VAT) registration. This means you’ll be collecting VAT from your U.K. customers and paying it to HMRC minus the VAT you’ve paid out in the course of business. You can also opt for the VAT optional Flat Rate Scheme (FRS) if your micro-ISV has less than £150,000 a year turnover and instead pay a flat rate on based on your sales (including VAT). • Partnerships: Profits and losses flow to the members of the partnership. As such, what applies to sole traders in terms of income tax and VAT applies to partnerships and their members. • LLC: As a separate legal entity, your corporation will need to comply with a variety of regulations and be taxed at a rate from 0 percent (less than £10,000 in profits) to 30 percent (more than £1,500,001 in profits). If you’re considering forming an LLC, you’ll need information beyond the scope of this book.
Worth Considering The points following are worth considering: • The FRS can reduce your paperwork and VAT liability. • Don’t muck around with VAT you collect, or you’ll be very, very sorry. • Cash accounting as it applies to VAT can make cash flow easier. • Be careful using contractual workers hired directly or through an intermediary as if they are employees; you run the risk of Inland Revenue characterizing this as “disguised employment,” and depending on the circ*mstance, you may be at risk for both fines and taxes.
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Online Resources Three web sites bubble to the top of just about everyone’s list of online resources for U.K.-based micro-ISVs: Startups.co.uk at http://startups.co.uk has a wide assortment of information about the legal, tax, and human ramifications of starting a business. Note, however, that some information, such as specifics on FRS, is somewhat out of date. Also worth checking is its sister site, MyBusiness.co.uk (http://www. mybusiness.co.uk), for information and advice on running a small business.
Start with Startups.co.uk Another good resource is Business Link at http://www.businesslink.gov.uk, offering what it calls practical advice for business. Business Link has a number of interactive tools and forms that will keep you on the side of the angels when it comes to employment, international trade, and data protection regulations. Next up are the friendly and considerate people at HMRC whose site politely lays downs the law. Find them at http://www.hmrc.gov.uk before they find you.
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Business Link has excellent VAT information.
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Doing it online at the HMRC site
Partnership You and your partner(s) are going to own your micro-ISV. It can be a general partnership where all of you manage your micro-ISV and are responsible for its debts or liabilities or a limited partnership where one or more partners don’t run the business, have limited liability, get to make money, and usually get to do so because they invested their money in the micro-ISV. Note that although all the general, active partners are each responsible for the micro-ISV debts and liabilities, who gets what is another matter you all (active and passive partners) get to specify. Once that’s settled—and it better be in writing—then all profits and losses “pass through” the company to the partners, at which point the Internal Revenue Service (IRS) and perhaps your state get interested and want information. (Your micro-ISV partnership files each year Form 1065, and each partner gets a Schedule K-1, or Form 1065, to file with their tax returns.)
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Advantages A partnership has two types of advantages. First, having real partners who sweat, toil, and worry alongside of you can mean your micro-ISV is bigger, faster, more profitable, and more fun. Second, forming a partnership with someone willing to be a passive partner in your enterprise in exchange for a portion of the profits may provide the capital you need to make your micro-ISV a successful reality. If you’re dealing with one or more “angel investors,” you can expect them to want your relationship to be legally, at the least, a partnership.
Disadvantages A partnership has many disadvantages. Like a sole proprietorship, all active partners are liable. Also, unless your partnership agreement (which you’ll need a lawyer for because every partnership agreement is unique) prohibits it, a partner can sell their interest in your micro-ISV or bequeath it. Besides the legal issues, a partnership can have personal issues, given the stresses of starting and running a business.
Bottom Line Although a partnership can work, you and your partners need just the right personality mix to get along and work with each other through good times and bad. If it sounds like a marriage, it is—with the chance of an extremely messy divorce. Think long and hard about going this route. Settle up front in writing and in no uncertain terms (that’s where the lawyer comes in) what each partner is putting into the pot. Trust and shared personal experience are the keys. The odds are against partnerships, and recognizing that up front is critical to improving your micro-ISV’s odds. One partnership that worked out spectacularly well was between a Honeywell employee and a Harvard sophom*ore with a wild idea and not much money.6
Setup/Installation Although the tax paperwork is only slightly more than for a sole proprietorship, you absolutely need a partnership agreement all parties can live with that’s written or at least vetted by an attorney all partners trust.
Limited Liability Company (LLC) An LLC is a mix of a corporation’s legal limits on liability and a sole proprietorship or partnership’s tax attributes. On one hand, the partners, called members, report profits and losses like they would in a partnership—the LLC isn’t a separate taxable entity. On the other hand, if your micro-ISV’s LLC owns money or gets sued, only the assets of the micro-ISV are normally at risk.
6. Bill Gates and Paul Allen founded Micro-soft (note the hyphen!) as an informal partnership on March 1, 1975; Microsoft didn’t incorporate until six years later. See http://www.thocp.net/companies/ microsoft/microsoft_company.htm and http://www.microsoft.com/presspass/insidefacts_ms.mspx.
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LLCs are relatively new in the United States, but they’re becoming popular since they combine relatively easy tax paperwork with corporate liability protection.
Advantages Whether you’re one person or a partnership, LLCs have some decided advantages. Since profits and losses are passed through the LLC to its members, you do the same tax paperwork as you would for a sole proprietorship or a partnership. At the same time, your micro-ISV is a legal entity, and if run legitimately, liability is limited to the assets of your company.
Disadvantages The disadvantages of an LLC are few. Basically, you do the same tax paperwork you would as a sole proprietorship or a partnership. Depending on whether some of your partners are investors, you’ll need the services of a good attorney to navigate through your state’s securities regulations and those of the Securities and Exchange Commission (SEC) to the “safe harbor” of exemption from securities law. LLC law, being relatively new, is less uniform across the 50 states, and you might find in your state that creating an LLC involves a few more steps, or it might be deliberately unavailable to you, as it is for architects, accountants, doctors, and licensed health-care professionals in California.
Bottom Line This is an attractive way of doing business for a micro-ISV, especially compared to the “nakedness” of a sole proprietorship or a partnership.
Setup/Installation Follow these steps: 1. Pick an available business name that complies with your state’s LLC rules. Nowadays, nearly every state lets you find a name and reserve it online. For example, you can check in California whether the name you want to give your micro-ISV is taken at http:// kepler.ss.ca.gov/list.html, as shown in Figure 4-4. 2. File your articles of organization with your state, and pay the fee ($40 to $900 depending on state). 3. Create an LLC operating agreement. You can do this without an attorney if you don’t need an attorney’s knowledge to advise you about unique issues with your company. 4. A few states require you to run a notice of your LLC’s creation in a state-approved newspaper.
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Figure 4-4. Searching for a California business name online
STARTING A MICRO-ISV IN AUSTRALIA More than a few excellent micro-ISVs already call Australia home. This sidebar covers the basics of how yours can too.
Legal Structures The three most common legal structures for Australian micro-ISVs are sole trader, partnership, and a Proprietary Limited Company (PLC). As in other developed countries, each of these legal structures define a different approach to doing business and a different set of liability, tax, and capital-raising realities. • Sole trader: A sole trader is just that. There is no difference between you and your business for tax or legal purposes. If you’re going to do business under a name other than your full name, you’ll need to register your business name and pay a fee ranging from nil in the Northern Territory to about $200 for a two- to three-year registration, with $120 being the most common registration fee.7 Although two sole traders or partnerships can operate with the same name in two different states or territories, two companies can’t. Each state or territory maintains its own registration listing, but you can check all using the National Names Index (http://www.search.asic.gov.au/gns001.html) provided by the Australian Securities and Investments Commission (ASIC).
7. http://www.incorporator.com.au/business_registration_register_business_name_search.asp
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Checking names at the National Names Index • Partnership: When two or more people form a business, it’s a partnership, and although there is some flexibility in how income is split, all partners are liable for the debts of the business in general. The main exception to this is limited partnerships, whose regulation and definition vary from state to state and territory to territory but in general limit liability of some members of the partnership to their contribution to it. Limited partnerships are treated for tax purposes as if they were companies. • PLC: With the Corporation Act of 2001, which reduces the number of required shareholders and directors to one, this form of business is substantially more attractive to micro-ISVs. Proprietary companies are separate legal entities that come into existence when the company is registered with the ASIC.
Taxes and Regulations These are the taxes and regulations that may affect you: • ABN: If your micro-ISV will be doing business with other businesses or the state or federal government, your business will need an Australian Business Number (ABN), which you can lodge online at http:// www.business.gov.au. If you don’t have an ABN, other businesses are obliged to withhold 48.5 percent from payments to you and send the withheld amount to the Australia Tax Office (ATO) in most cases. The Australian Business Register (http://abr.gov.au) handles the details of registering. (See the online resources later in this chapter.) • GST: The Goods and Services Tax (GST) of 10 percent applies to most things sold in Australia. If your business has a turnover of $50,000 or more a year, you’ll need to register for GST. You can do this at the same time as you apply for an ABN on the same form, but you must have an ABN in order to apply because your ABN becomes your GST registration number.
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• Income tax: Sole trader and partnership income is reported as part of the personal tax returns of the people involved. Companies file their own tax returns, and the general company tax rate on taxable income is 30 percent.
Worth Considering These points are worth considering: • Like partnerships elsewhere, a well-written agreement is the foundation you need to have to build a stable business. Strongly consider seeking the advice of a solicitor in this matter. • Check your state or territory’s small-business Web site. • Don’t forget you may need a business license. Check http://www.business.gov.au under Licenses & Permits for each state’s and territory’s Business License Information Service Web site. • As is often the case, if your micro-ISV also sells its (your) services, you need to be aware that if your income is derived more than 80 percent from one business, the ATO may determine you’re an employee of that company for tax purposes (but not for employment law purposes).
Online Resources A relatively short guide about GST is available from the ATO at http://www.ato.gov.au/content/ downloads/NAT3014-07-2005.pdf. Victoria has several excellent online resources for starting a business and a strong interest in IT-related businesses. Those sites include Business in Victoria (http://www.bus.vic.gov.au), the Small Business Council of Victoria (http://www.sbcs.org.au/), and Business Victoria (http://www.bizvic.com/ index.html).
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GST in clear terms
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Look for this tasty list at Business in Victoria’s Web site. Not to be outdone, NSW has a good site at NSW Small Business (http://www.smallbiz.nsw.gov.au) covering both the governmental issues and business practicalities of starting your micro-ISV.
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Getting down to business in NSW
Subchapter S Corporation Up until the last ten years or so when LLCs became fashionable and practical, forming a subchapter S corporation was often the best way to go for a micro-ISV. Your micro-ISV is a real company with Inc. at the end of its name, but once the IRS grants you a subchapter S exemption, all profits and losses flow through the corporation to its owner(s) in proportion to their ownership. Of course, it’s not all fun: there is a substantial set of requirements to running a corporation whether the staff is one or one hundred: holding a meeting of the board when you’re the board is considerably less fun than throwing a birthday party for yourself. And there’s all the other forms you’ll need (Pre-Incorporation Agreement, Corporate Bylaws, Shareholders’ Agreement, Notices of Shareholders’ meetings, Notice of Director’s Meetings, Minutes of Shareholder Meetings, Minutes of Director’s Meetings, Notices of Consent of Shareholders, Notices of Consent of Directors, and various financial authorizations—to name the basics).
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Advantages Corporations can do all sorts of fun things: issue stock, get corporate travel rates, give new meanings to the term legitimate business expense, have corporate credit cards, buy corporate jets, and go on corporate retreats. Of course, most of these activities require real, live employees other than you, a good accountant, a good lawyer, and lots of money. If you need to issue stock or stock options to attract money or people, going corporate makes sense. If you are your corporation, you may find it advantageous to be a cheapo employer, paying yourself a lot less than you really deserve in salary (which is taxable just like a “real” salary on both the part of yourself and your micro-ISV) and instead favoring the shareholders in your company (you) with healthy returns, dividends, and distributions that are just coincidently less taxed. Finally, many companies (corporations) will not buy your micro-ISV’s services unless you’re a corporate entity. The reason is simple: more than a few high-tech firms—Apple and Microsoft, to name two—found themselves in deep doo-doo in the 1980s and 1990s with franchise tax boards and the IRS over whether a noncorporate independent contractor was really an employee in drag. If these “independent contractors” looked like employees and worked like employees, then that company was liable for paying payroll and other taxes on them.
Disadvantages For a single person or set of partners launching a micro-ISV, an S corporation is just not the way to go compared to an LLC. Even in an age of “corporation kits” and sites that boilerplate the whole thing for you, it’s still a pain. I incorporated Safari Software in 1994 primarily so I could go after certain types of work for certain customers who did not want to sully their hands with an unincorporated entity. After more than a decade of having schizophrenic written conversations with myself in the form of board meetings, shareholder meetings, and resolutions, it almost feels normal. But if I decided to start what has become my micro-ISV anew, make no mistake—the initials at the end of my corporate name would be LLC, not Inc. Also, although at the federal level your micro-ISV profits and losses flow to your micro-ISV’s stockholders, your state may do business differently. For example, Safari Software, a California corporation (subchapter S), gets to enhance the state’s revenue each year to the tune of $800 for the privilege of existing.8 And, if your corporation’s annual revenues exceed a certain level ($250,000 in California), your state may have an income tax that applies to your corporation.
Bottom Line If you’re starting a micro-ISV or converting a sole proprietorship or partnership into a micro-ISV, going with LLC and not S corporation status can make your life easier.
8. Of course, California also charges LLCs $800 a year as a “minimum franchise tax.”
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Setup/Installation Follow these steps: 1. Choose a name not already taken in your state. 2. Appoint the initial board of directors. Depending on your state, you may be able to “triple hat” being president, treasurer, and secretary, or you may not. 3. File the “articles of incorporation” in your state, paying somewhere from $100 to $800. 4. Draft your corporate “bylaws” by spelling out in a totally vague and boilerplate way how your company will do business. 5. Hold your first meeting of your board of directors, where your board officially hires you, issues stock to your stockholders, authorizes opening bank accounts, and more. 6. Elect for S corporation status by filing IRS Form 2553.
Subchapter C Corporation A subchapter C corporation is a “legal person” and as such pays taxes in its own name, though at lower rates than what actual people pay. This double taxation is seldom favorable to a small company (and hence subchapter S corporations and LLCs). Micro-ISV and subchapter C are seldom seen together since it rarely makes sense for a fewer-than-five-person company to go this route. However, many subchapter S companies that are successful drop their S status and become full-blown corporations. When, why, and how? Your accounting and legal staff will tell you.
Advantages The greatest advantage a subchapter C corporation has over a subchapter S corporation is the ability to issue stock to more than 100 stockholders, all of whom have to be U.S. citizens or legal residents.
Disadvantages Forming a subchapter C corporation is total overkill for a micro-ISV. Don’t go there. If you do, make sure you know what you’re doing.
Bottom Line Although it might be fun to fantasize about getting listed on the NASDAQ, hold that thought until you’ve left the ranks of the micro-ISVs for a bigger (although perhaps not better) future.
Setup/Installation In theory, the steps for setting up a C corporation are the same as setting up a subchapter S corporation except for getting subchapter S status. In practice, though, setting up a C corporation is far more involved, to put it mildly.
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Getting Things Done in Your Micro-ISV As you’ve been reading this chapter, the other chapters in this book, and a zillion Web pages that have some bearing on your micro-ISV, you may be wondering, “How the hell am I going to get all this done?” This isn’t a trivial question. One of the hardest parts of going from a company that defines what you do to your own company where you define what needs to get done is figuring out a process for defining, evaluating, and executing what works for you. After 20+ years of being self-employed yet seeing how things get done (or not) in several hundred companies large and small, I’ve had to become an expert at recognizing ways to manage my time and workload that yield effective results. The bad news for micro-ISVs is that the “overload culture” most high-tech companies have where management by crisis takes the place of management and people work until they drop doesn’t scale down well. Throwing more staff at a project doesn’t work when you’re the staff, and endless meetings can’t substitute for shipping a sellable product. The good news for micro-ISVs is that certain people have been thinking quite hard about how to make one person, or a small group, productive in the face of task and information overload, and at the forefront of those thinkers is David Allen. One of David’s books, Getting Things Done: The Art of Stress-Free Productivity (Penguin Books, 2001), has become the missing “user’s guide to personal productivity.” In it, he describes the process he teaches at corporate and public seminars worldwide for becoming more productive with less stress. “It’s possible for a person to have an overwhelming number of things to do and still function productively with a clear head and a positive sense of relaxed control,” David says at the start of his book. Like hundreds of thousands of other people searching for better answers, I was hooked. So much so that when I decided to go micro-ISV myself, my products (MasterList-XL, MasterList Professional, and MasterList Professional 2) were strongly influenced by David’s Getting Things Done (GTD) approach. Somewhere, maybe on top of Everest or in a forgotten tomb in the Amazon, a better approach might exist for getting things done, but I’ve yet to find it. What I have found is that GTD works extremely well for micro-ISVs, and so, based on living the GTD approach and applying it to my own micro-ISV needs, the following sections summarize GTD to give you at least a second-hand guide to getting things done. I strongly advise you to get David’s books or, if you can, attend one of his seminars (http://www.davidco.com/products.php). He does a far better job of explaining GTD than I can in just a few pages. If you’d like to get a taste of what David has to offer, you can watch the Microsoft LiveMeeting Web seminar “Knowledge Work Athletics” at http://livemeeting.com/archive. It’s free, it’s an hour, and it’s a good, fast introduction to GTD. But you don’t need my micro-ISV’s products or anything more complicated than paper and pencil to make GTD work for you as a way of getting things done in your business: it’s the ideas, not the form, that matters.
GTD for Micro-ISVs: The Overview The GTD method has five stages: collecting, processing, organizing, reviewing, and doing. Each of these stages is governed by these key insights:
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Control your attention: The more tasks you have on your mind and the more tasks, projects, and obligations that have your attention, the less attention you can bring to what you’re trying to get done right now. A big part of GTD is clearing your mental desktop so you have somewhere to work. Nothing beats having lots of RAM to use. Build a comprehensive process: A leaky process is a bad process. If your commitments are scattered over multiple bits of paper, hundreds of emails in your Microsoft Outlook Inbox, and piles all over your office, that’s not a process. You’re building a process here, and everything that goes in has to go somewhere. Trust your process: Once you’ve got the GTD process working without any memory or commitment leaks, you can start to trust it and devote your full attention to what you’re doing at the moment. Keeping your GTD process trustworthy means keeping it up to date.
Collecting The first step in applying GTD to your micro-ISV life is establishing an In basket. Actually, you’ll probably have at least two—a physical In basket and the notorious Outlook Inbox. The two key features of In baskets are they’re the entry points for all the stuff that comes into your life— information, things to do, ideas, paper—and that stuff gets processed out of your Inbox on at least a daily basis following the GTD process. Now, collecting everything around your desk that’s not reference, supplies, equipment, or decoration, plus writing down or entering all the tasks floating loose in your head—all the things you’re suppose to do for other people and all the things you can remember other people are suppose to do—can take a good six hours. “It’s not a lightweight amount of stuff that people have committed to,” David says during the Web seminar. “[But] that’s what we do first, because we don’t want anyone’s attention on that when we start processing and organizing.” If you can’t spare the time to collect everything, pick an area—say your micro-ISV—and collect everything about it. Sooner than later, return to deal with other big chunks of what you’re doing: the relief you’ll feel by getting everything through this part of the GTD process goes a long way toward stress-free productivity. Here are some pointers: • Don’t forget to “collect” all the tasks expected of you or on which you’re waiting for someone else to finish. You may have to renegotiate them, but these are the tasks that eat at your concentration. • Favorites/bookmarks are a draining mess on everybody’s computer, including mine. Start draining the swamp by creating three folders: In, Reference, and Projects. Put them at the top of your bookmarks/favorites list. Reorganizing all your Web page references is an undertaking outside the scope of this book, but as of now, add only new bookmarks to these three folders. • As for your email Inbox, one of the goals of the GTD process is emptying it by the end of each day. So, if you have 500 (5,000?) emails, create a new folder called Stuff to Go Through, and move everything but the most recent emails from your Inbox into that folder. • As for the files on your computer(s), people who start micro-ISVs tend to have a completely outrageous number of files in folders in folders in folders ad infinitum. “Collecting” these files can be done, and you can organize them in a way that supports stress-free productivity, but for right now, leave this tar pit for later, and be glad there’s Google Desktop.
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Processing and Organizing Processing is just that—working each item you’ve collected through the GTD flowchart, as shown in Figure 4-5.
Figure 4-5. The GTD flowchart Ask the following questions for each item in your In basket: What is it? Is it actionable (something you can or need to act on)? If it isn’t actionable, that item needs to either be deleted, be filed in whatever reference system you have for that medium, or go somewhere to incubate that you regularly check—the Someday/Maybe folder. The key question to ask about each item is, what is the absolute next physical action that needs to be done with this item? If the answer is nothing, chuck it, file it, or sit on it for now.
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Now, things get a little trickier. Is the item you’re processing complete in and by itself? If this item has multiple steps or parts or is tightly coupled with other tasks, it goes over to Projects. It will return, but you’re trying to narrow your input to manageable bite-sized tasks, usually quicker than two hours in duration. I’ll return to Projects in a moment, but for now let’s say you have a simple, straightforward task. What happens to it next? Proceeding down the GTD flowchart, if the item is actionable, can you do it in two minutes? If yes, just do it, and be done with it. If it can’t be disposed of that easily, can you delegate it? Now, delegation opportunities are somewhat thin for micro-ISVers, but theoretically they’re possible. If you can delegate it, then forward it, but start a list, the Waiting For list, so you won’t lose track of who you sent it to and when they should be done with it. OK, so you can’t delegate it. Now what? You’ll have to plan to do it, either by putting a note in your calendar to do it on this date at this time or by putting it on your action reminder list or in a Pending folder. Organizing your Pending folder gets worthwhile quick. Whatever system you’re using—pad and pencil, Outlook, David’s GTD Outlook Add-in (http://www.davidco.com/productDetail. php?id=63&IDoption=20, $69.95 USD, 30-day trial), MasterList Professional (http:// safarisoftware.com, $24.95 USD, 45-day trial), or whatever—you need a set of filters so you can subset pending but unscheduled action items by at least context, duration, difficulty, and, I would add, value. Context: At your computer, in the car, at home…each of these are places where doing certain tasks but not others makes sense. Duration: How long is it going to take to do? If you have 20 minutes before the next thing you have to do, it’s helpful to be able to see only your pending tasks that take 20 minutes or less. Difficulty: Not all tasks are created equal, and after 14 hours straight programming, you might not be equal to the task. Even your laptop knows when it’s time to slack off and go slower. Value: This is one of my filters, used to detect and avoid pouring time into easy-to-do but low-value tasks. The more time you spend on what’s valuable, the more successful your micro-ISV will be. Let’s return to the decision point where you decide an item is a single step (and it can be done in two minutes, delegated, or deferred) or multiple steps. This is where the last two parts of the GTD processing stage need building out: your project list and your project plans. A project is whatever you decide it is, but it does have two characteristics: it culminates in a single outcome, and it consists of multiple steps or discrete tasks. Every “to do” you’re processing is going to be either a singleton, if you will, or a part of a project. Each project needs at least one plan—it can be as simple as paper clipping the stack of tasks together you want to do first, or it can be as complicated as you need. Either way, you need to plan when and how these tasks are going to get fed into the What’s the Next Action? box. It may seem equivalent to picking up your refrigerator and going for a run, but processing does get easier. The secret is getting your collection points to empty and then emptying them on a regular, daily basis. “It takes about a half minute a piece to go through that thinking process,” David says.
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All the emails, all the voice mails, all the meeting notes, all the business cards you collected, all the receipts to process, all the conversations in the hall, all the ideas you had in the shower—if you were responsible for really collecting all those and throwing them into your In basket, it would take you about an hour a day just to keep all this stuff current, just by defining all the stuff you need to do. If processing and organizing don’t sound like rocket science, that’s because they’re not. “It’s actually not that complex a system,” David says. You just need to keep track of projects you’re responsible for; you need to keep track of actions you need to do, either on a calendar or some sort of list of actions. And you need to keep track of projects and actions other people are doing. The organizing part of this system is not that complex, once you’ve gone through the thinking in the middle of this chart. If you haven’t figured out the next action on things, forget it: you’re just rearranging incomplete piles of unclear stuff. Here are some pointers: • Processing is simple, and the clock is ticking. Don’t agonize over whether something is a single physical actionable task; that’s a sure sign it’s not. • Good things develop for those who wait. Use, revel in, and honor your Someday/Maybe folder for everything that doesn’t fit in now but your gut tells you there might be a place for it later in your life. Put it in the Someday/Maybe folder for now. • You’re going to end up with a least four types of project folders—paper, email, favorites/ bookmarks, and electronic (MasterList Professional or a different project management application). Make life easier for yourself—have one master project list, and use the same name for each project across mediums. • Can’t decide what to do with something that’s interesting but not actionable—something you “might” need? If it’s paper, make a folder called Check on 1st/16th. Put items in that folder, writing a date, say, four months in advance. On the 1st or 16th of each month, cull the folder, and check anything still there after its four-month stay. A few months of this, especially with email, will build up your muscles to the point you won’t need this file. • “People don’t throw away enough,” is a point David makes often.
Reviewing At first glance, it might seem that processing and organizing is the heart of the GTD system and the core of what your micro-ISVs needs to do to get business done. It’s not. Regularly reviewing your project list, your projects, your Waiting For list, your calendar, your Pending folder, and even your Someday/Maybe folder is the heart of this process— pumping things to where they need to be and keeping your GTD system lean and healthy. The trick to getting GTD reviews right is to review the right tasks at the right time. “It’s not that you are looking at everything in your system every hour of every day; you wouldn’t get much done,” David says. For example, during the course of the day when you find yourself not
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sure what comes next, you might check your scheduling calendar, project list, and Pending folder. Or check your calendar in Outlook and your tasks by various categories. Or check your Home tab in MasterList Professional. Just enough review to stay on course. When it comes to reviewing, the next step up is the weekly review, and that’s where after a long week of coding, tech support, and marketing, it’s all too easy to slip up. “We coach a lot of people on how to do the weekly review, which is really driven off your project list. Most people are not taking the one to two hours at the end of the work week to sit down and catch up,” David says. What are the new projects I need to design, what are the old projects I’ve finished, what are the action items on the current project, and where do I need to be? That kind of operational review is absolutely critical for stress-free productivity. And it’s the behavior most lacking and most needed in the world. Most people don’t have a system to review, or they don’t have their system populated with enough inventory of their work to review, so it’s kind of challenging to review your game if you haven’t collected and processed everything. But once you do, this becomes a critical factor of keeping everything alive and well. Beyond the weekly review, you’ll want to establish your own set of periodic, more comprehensive reviews. It’s important to track your projects, but it’s also important to focus on a regular basis on the bigger questions: Is your micro-ISV going in the right direction? Is your marketing message getting out there across all the specific marketing projects? Are you going in the right direction? Here are some pointers: • Put your first, second, and third weekly reviews into Outlook’s calendar where they’ll hound you until you do them. • Want more information on how to do your weekly review? See http://www.davidco.com/ tips_tools/tip16.html for more information or David’s books. • If you’re wondering how to manage those bigger questions you need to review, you might want to supplement your reading with what Steven R. Covey had to say about roles and goals in his classic book, The 7 Habits of Highly Effective People, 15th Edition (Free Press, 2004).
Doing When all is said and done, processed, organized, and reviewed, it’s what gets done that matters. “One foot in front of the other,” David says, and if you’ve got your GTD system working, it’s just that simple. “It’s a lot easier to feel good about what you’re doing or not doing if you’ve collected, processed, and organized everything so you can review it and feel comfortable about your choices.” Remember the filters you set up when organizing? Those filters are your set of tools for determining what’s the next task you need to do. Context, duration, difficulty, and, I would add, value help you manage your choices in the moment. Another tool I’ve found helpful actually getting things done is a Current list. Now, this isn’t the infamous to-do list with As, Bs, Cs of traditional time management but a list of the tasks that have your attention in the order you expect, or at least hope, you’ll be able to address them.
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A second useful toolset for tasks you do day in and day out—for example, tech support, programming, and writing—are checklists. Checklists make it easier to cover everything in a consistent way, whether it be prepping a plane for taking off or ensuring the fewest bugs in the class you just wrote. A third idea to keep in mind, especially when deciding what to do next regarding your micro-ISV, is driving actions based on revenue. The closer a task is to increasing your micro-ISV’s revenue, the more wonderful it is! Here are some pointers: • There’s nothing magic about getting things done—the trick is managing the process up to that point. • Have a Current list that gets you through to the next point where you’ll reassess where you’re going. • Look for high-value tasks not getting the attention they need, and make appointments with yourself so you can do the best you can on these particular tasks.
DAVID ALLEN, AUTHOR, GETTING THINGS DONE David Allen is the author of Getting Things Done: The Art of Stress-Free Productivity (Penguin, 2001) and Ready for Anything (Penguin, 2003) and a productivity trainer. He’s someone you’ll run across quickly on the Net if you’re looking for better ways to manage all the tasks and projects you’ll need to do to get your micro-ISV off the ground. David, who started his quest for a better way of getting things done 20 years ago, has become—through his two books, numerous corporate training engagements, and seminars—the unofficial spokesperson for anyone overwhelmed by projects, tasks, and email. His GTD approach toward being productive and stress free works especially well for people facing the challenge of creating their own micro-ISVs. Q. One thing I’ve heard time and time again from people starting their own micro-ISV is the problem of email. Any suggestions from a GTD approach for how to deal with email? A. Well, don’t let it pile up. Email is a beast that is out of the barn; you’re not going to be able to shove it back in. What you do need to do is quickly get simple ways to make executive decisions about what an email means to you. You’ve got to decide, “Look, can I delete this?” That’s number one. If you can’t delete it, is it some actionable item: yes or no? If it’s not, you need to file it as reference. You need to file it wherever you need to file it, but get it out of hand—stop using your In basket as a reference folder. Or, if there’s some action you can take later on, you might want to defer it. Now, if it is actionable and it will take two minutes to do it, do it. Informal studies have shown that 40 percent of your emails are less than two-minute actions. And anything you can finish in two minutes or less, if you’re ever going to do it at all, you should do it right then because it will take you longer to track it or look at it again than to finish it. It’s a good idea to have a twominute timer so that you know how long it takes to deal with an email. And if it’s longer than two minutes, you need to ask yourself, “Look, can I delegate this to somebody else?” and so forward it on and have them do it. And if not, you’re it. Then you need to organize it in someplace you keep actionable emails. But get it out of your In basket. Q. Most of the people who end up reading these books practically live on the Web. They spend almost all their waking time on it. How about when it comes to Web sites and blogs and podcasts and RSS and all the rest of the ways of getting information today?
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A, Well, it depends on your business. You have to decide what’s mission critical for you. And that’s a tough call—it’s hard to tell. It’s a tough enough call even to ask that question. A lot of people don’t even ask the question if they need to be doing and reading all that stuff. That’s when you have to get hardnosed with yourself: “How important is it that I be reading this?” Because the Web and all the accoutrements thereof can be a black sinkhole. Q. In the 20 years you’ve been teaching and training people about productivity, do you think the Internet has made it harder or easier to be more productive? A. That’s like [asking whether] a knife is a good or bad thing. The Web is fabulous—an interactive, live yellow pages. I mean, how cool can that be? It has all kinds of things out there. But it’s like anything else—like the morning paper—that can suck you in all day long, just reading the paper cover to cover. Q. You know a lot of high-tech people. What part of GTD don’t they get? A. Well, I think the hardest thing for high-tech people to get about GTD is that simpler is better and that overorganizing or overautomating doesn’t necessarily make it easier. There’s a point of diminishing returns about how much structure [and] how much automation actually make a thing easier. It’s not unique to the high-tech people, but the high-tech people are so smart and so lazy that they, like me, want to find that “Gee, if we can automate some of it, let’s automate it all.” But you can’t. Your brain still has to think. Q. In all the people you’ve trained who have attended your seminars, have you ever found someone who has achieved a level of GTD that is so far above what everyone else does, and if so, what would that look like? A. I met a guy once who blew me away. Now, I didn’t follow him around in his life, but from everything I could tell by hanging out with him for two days in a seminar, and all the staff who talked to me about it, it seemed he did work that way. This is guy who had taken Outlook, who’d taken the GTD stuff, and had gone into Outlook and customized extra fields so he could list things by priority, by how long they took, by context, and by areas of responsibility in his life. And then he would map it back to a PDA so that when he’d get home, his brain would be semi-toast but could say, “OK, I’m home. I want to do some family things, but I only have ten minutes. Give me all my family things that I can do in less than ten minutes sorted by priority.” And—bam!—he’d have those right in front of him. I mean, God! [laughs] This was a guy who’d come from South America to Florida, spoke three languages, had started up five businesses, and was half my age. I mean, oh, give me a break! Q. You mentioned in the Microsoft Live Meeting (archived at http://main.livemeeting.com/demos/ web_seminar_archive.cfm) that you’re 60 now and you’ve been doing this for 20 years. It seems that the pattern in companies is more and more meetings day in, day out, all day, everyday, and people trying to get things done around the edges of that workday. Is that the way productivity should be done? Are we doomed to that sort of rat race? A. I don’t know—it’s the knife thing again. How are you using meetings? Meetings can be the best things in the world because they get you focused and because they get you to make decisions you wouldn’t by yourself. Meetings are extremely productive in that way. Meetings can be extremely unproductive because the people aren’t focused on what they are trying to accomplish, [and] they are using meetings as a way to communicate inefficiently, with a lot of stuff that could be done much more virtually than in meetings. It’s hard to tell; you almost have to take it case by case, meeting by meeting. And frankly, I don’t know. As long as I’ve been in this game it seems like a universal internal phenomenon. I certainly see a lot of it, certainly in health care. But the same is true in a lot of these places. And a lot of it has to do with how critical it is that you get done what you have to get done out there. The more you know what you’re doing, the more you know if you should be going to a meeting or not.
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Maybe the reason “meetingitis” got everybody is that I think the speed of change going on out there has accelerated and magnified the amount of ambiguity that there is about what the heck you should be doing and what you should be focused on. It’s easy to get sucked into meetings. So, that would be my guess; I don’t have anything but anecdotal evidence on that.
The Finer Points of GTD Q. Let’s return for a second to some of the finer points of GTD. It seems that GTD is focused on reacting to things that come in. What’s the proactive side of GTD? A. Well, if you are setting a goal, where does that come from? The proactive side is if you generate something or someone else generates it as a goal, you need to throw things into your In basket. So the CEO part of you is the part that needs to create stuff. It’s like, “Hey, where do you want to be five years from now?” It’s all reactive in a way; it’s just there’s this proactive part of you creating or allowing or noticing. Q. Reacting to yourself if you will? A. Sure. Basically there’s the CEO part of you and the COO part of you. The CEO has ideas and throws them into the In basket; somebody else can run with them. The COO part shows up and says, “Hi, what’s that?” and “What the hell is that?” and “How dumb was I last night?” If anybody is going to tell me they don’t have a committee in their heads, they’re not grown up yet. I mean, you even set goals as a way to respond to a creative energy or a part of you that wants something. Some part of you is contracted or pushed or pulled, right? Q. Typically, well, I think you start with goals; you have to start with a philosophy you have goals in. A. Why do you set a goal? Q. It’s a result of your values, I would guess. A. Yeah—in other words, something is pulling or pushing you to set a goal, right? That’s what I’m talking about. Q. So, you’re trying to get control of that In basket, so you’re the person who decides what goes in it? A. Well, maybe. Or you are open to the serendipity of the world. Why not? [The GTD method] is not the key to life; that’s just [the GTD way] of processing and organizing. [It] doesn’t even include what goes in the In basket. What you let in there, what shows up…once it’s landed there and you have some attention on it—here’s how you get your attention off of it. Q. When you have a whole bunch of actionable items, how do you decide what to do next? What’s the process for processing decisions, if you will? A. The way you process is that chart [see Figure 4-5]. Is action required or not? If you’re saying, “How do I decide what to ultimately do out of my options of doing?” then that’s another decision. That’s how you use all of that to make a decision. If you mean by processing what it means to you, that’s one thing. If you mean all the other stuff, that’s another thing. Q. I look at things and see that there are things that have little value, there are things that have great value, and often the things that are most urgent have little value. And the things you want to get to have great value. How at any given time do you decide what to do next? A. Well, there are several criteria that come in. First of all, can you possibly do it where you are? For instance, I have a bunch of things I could do, but I can’t do because I’m talking to you on the phone. Right now, you can only do what you can do. If the server is down, forget writing email. Or if you’ve got no phone signal, forget about making phone calls. So the first thing is, what can you possibly do where you are? The second one is, how much time do you have before you have something else to do? If you’ve got five minutes, your highest priority if you want to do something is a 5-minute thing, not try and do a 20-minute thing, [because] you haven’t got 20 minutes. Third, how wasted are you? Are you fresh, or are you toast? There are times when you should not be doing important things or talking to important people because you’re not fully there, and you’ll screw it up.
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Then, all things being equal—assuming you have a choice, and you might not—if you still have a choice, then if you have a choice, which of these things will give me the highest payoff if it’s done? That’s when you need to have conversations with multiple horizons: why are you on the planet, what are your core values, where do you want to be short-term, what are your short-term goals, what are your areas of responsibility you want to maintain so that the whole engine works, what are all the projects you’ve got out of all that, and what are the action items you need to take out of all that? Those are six different horizons at least that you need to have conversations on. Q. One thing I’ve noticed is that it’s very easy to forgo that step of the weekly review. And you’ve mentioned that’s a mistake a lot of people make when they try to get the GTD idea right. A. All the reviews are necessary; it just seems the weekly review [is] the biggest weak step for people trying to get control of their stuff out there. You obviously need to review why you are on the planet every so often. You need to review your yearly goals, because those things matter; you need to review your values too. It’s not like that’s the only review that people need; it’s just that very few people have a project list, and very few people have a weekly review operationally at that metro level up of the actions in the their lives. That’s the most missing component for a lot of people. Q. One thing about traditional time management systems in general: You can end up spending a whole lot of time managing the system that you are using. When you start your day, do you have like a classic to-do list? A. Well, the first thing I do is look at my calendar, which has the hard landscape for the day. I mean, what will die if I don’t do it today? That’s the first thing. Assuming I have any time left—sometimes you don’t—but assuming you have some time left, I say, “OK, now what are all the other options?” That’s why I have a total life to-do list available all the time, so I can pick from. Then you have to evaluate all those things against ad hoc surprises that are not even on your list as they show up. Then you have to evaluate all those things against one another. So it’s a constant self-dialogue/self-reflection about, what are all the commitments, what could I possibly do, what’s the new thing I haven’t seen before, and how does it map against all the other stuff? And, yes, every once in a while—I did this last night—I said, “OK, David, you’ve got a big trip coming up, I’ve got all kinds of things thrown at me; they’re all coming to a head at once.” So I just went and did a mindmap real fast of all the things I have attention on right now to make sure I wasn’t missing anything. While I have those other lists, sometimes it’s necessary to sit down and do another iteration of all the things coming in. Q. I know MindManager from Mindjet well (http://mindjet.com, from $229 USD). So there are no easy answers? A. [laughs] Q. Aww, come on, give me an easy answer! A. Sure. Just keep track of everything you’re committed to. Make sure you are looking at where you’re going. And trust your gut. Q. On that note, if you are doing a start-up business, should you allow time to go wrap up all those open loops from your previous employment or way of doing business? A. Well, open loops just create drag on the system. It doesn’t mean you’re not moving or that you can’t do it. It’s kind of like, how important is it to get rid of drag on the system? Sometimes you don’t have time to get rid of drag on the system; you just got to work with a draggy system. But when in doubt, clean a drawer, because crap is occurring as we speak. Things change, so they change their nature, [and] today’s newspaper is tomorrow’s fire starter. So as time marches on, so does residue accrue. Anybody who is trying to ignore that they need to from time to time stop and clean up the open loops and renegotiate them are kidding themselves. But then it’s just a matter of how clean do you like to stay? I have a bias towards being as close to zero as possible, because it’s easier to deal with surprise with a lot less stress.
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If you get surprised with 3,000 emails, that’s one thing; if you get surprised with an empty In basket—hey, new opportunity. Q. Good point. Someone wanted me to ask you, what are some good tips for avoiding procrastination when you’re working alone? How do you stay focused? Would I need some “focusum” like Bart Simpson had, or is it simpler than that? A. It’s never that simple. Basically, it’s your brain that will screw you up. Procrastination is negative future scenario stuff in your head or your head throwing you into way more complexity than you can control, and you don’t want to step into it. So the idea is stay focused on very specific physical actions you can do and kind of bypass your mental process. Everybody has cleaned the refrigerator by accident. The big key there is to trick yourself into getting engaged physically before your brain freaks you out. Q. So get engaged physically as a solution to procrastination, but if you are procrastinating, maybe you should be asking yourself, are you procrastinating because the next actionable item is a big, amorphous project you need to do? A. Yeah, but it has a next action on it. That’s the thing, as long as you focus down on to the next action. The whole idea of breaking things down into next actions is to make it something you feel you can control. “I don’t know how to do this, but I can set a next action to meet with myself and maybe two to three people and think it through.” Or my next thing is to sit down and draft a mindmap about it. But again, you are up against all the issues everyone has got, called, “Gee, I don’t feel I’m capable of it.” There’s also subtler issues that people have—“Gee, if I actually went and did it, I might create success and move out of my comfort zone.”
Going with Your Gut Q. Put yourself in the shoes of someone who has decided to start their own business today for a moment. Where would you start? A. I have no idea. Q. Espressos and trust in God? A. All that. Q. Would you get yourself the world’s biggest whiteboard and start writing? A. That’s not a bad idea. I mean, basically get moving. That’s the key. It’s a lot easier to change direction if you are in motion than not. Q. So often you see online discussions of people who want all the answers to starting a business before starting a business. A. Yeah, but nobody ever started a really successful business with a business plan I think, except FedEx. I think you just have to pay attention to the fire in your belly if you’ve got one. Q. OK, a couple of more personal questions. You’ve been doing this for about 20 years. Why did you decide to focus on productivity as the thing you do in life? A. Ah, gee, it’s not a bad job. It beats waiting on tables most of the time. I was fascinated by human behavior, and also I was fascinated by how you actually get things done with as little effort as possible. It’s a combination of my lazy factor, and also, I think I’ve got educator in my DNA. I’ve always liked being an educator—to facilitate stuff and help people out and to help them with something valuable to them. And it was nice to find something that was valuable to everybody, or most people anyway. That I really didn’t have to change my song no matter who I was talking to. If it dealt with a universal issue, kind of like teaching people about gravity, all I had to do is point out basic principles and how to make it work, coaching people along the way. And it turned out that I latched on to something almost transformational for a lot of people. That’s fun.
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Q. Leaving aside the people who have attended your seminars and read your books, do you think businesspeople in the United States are more or less productive or more or less organized than they were 20 years ago when you got started with all of this? A. I really have no idea. I’ve sort of noticed what I’ve been noticing, but I’ve not been like a formal researcher. Anecdotally, the issues I deal with and teach people about people have always had. Q. Will there be a new book by 2006? A. There might. Q. You mentioned during the LiveMeeting seminar you are getting more and more interested in “train the trainer” sort of things. Broadening the reach, if you will. Do you see your company sticking with, for lack of a better term, a corporate focus? Or do you see it heading more toward consumers or single people? A. It’s actually both. My basic philosophy was just raise the flag and see who was going to salute. Make it as much as the world wanted or as little as the world wanted—that would be fine with me. So, a lot of it has been seeing who’s going to show up. The education itself is what’s important to me, and it turns out that the corporate world has in itself adult education going on. It’s a venue for that, it has the most happening, and it also pays for it so it’s not a bad place to be, if you are into education. Some of the best education development on the planet is going on in corporate education programs in the United States. But I could just as easily work with churches, with school systems, with the military; it doesn’t matter. I’ll work with whoever’s interested. It’s good information, so I’m not particularly wedded to one venue or another. Q. If you could tell some software developer out there what the perfect GTD solution would be and have them come up with it, what would you tell them? A. Well, I’ve drawn a number of screens myself back 11 years ago. I drew a bunch of screens and said this is what the software should do to clear your head. We actually started a company called Actioneer (http:// www.actioneer.com) [that] was designed around trying to do that. It turns out that to make that happen takes an awful amount of lines of code, or it least it did back then. Mitch Kapor is trying to grapple with that right now, trying to create an open source PIM operating system (http://wiki.osafoundation.org/bin/view/Projects/ChandlerHome), where cool stuff could be done without having to reinvent the wheel every time you do something cool. Q. The world does not need a calendar program that can’t talk to your outliner program? A. All that stuff. There’s a lot of connectors that need to happen in terms of how you do GTD, and those connectors require a lot of sophistication to make it happen. Now you could have fooled me, but I’m not a software engineer. But it could be done; it could be easily done. I know what the model is, but I don’t think the markets are mature enough yet to want it. Q. It’s too advanced for everyone? A. Most people don’t think they need GTD, much less the software version of it. Q. How is your cat, Nikos? A. He’s cool. He’s growing up. He slept with us last night. Q. You’re talking to a committed cat person here, so I understand that one real well. I was curious because I read about Nikos on your blog, and I’m also curious about how is this blogging stuff working out for you. A. The jury’s out. I think when I changed its name to “Between the lines…” and I say, “Hey, look.” When I very first started, I said, “Look, there’s no commitment to this.” I have no idea of what this is going to look like. It is kind of nice. I like sharing just stuff with people and chatting, hanging out, and BSing with cool folks. I figure [the blog] is a virtual way to do that. It’s weird, though. Once you get notoriety like I’m starting to get, like GTD is starting to get, it’s a mixed bag.
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I share how cool our $99 wallet is, and people say, “There are people starving in India; why are you doing this?” And I’m going, “Who needs this? Go get a life or something. Go help them out. Why are you reading a blog? And whose computer are you typing on?” So, the jury’s out. I think there’s a group of people out there that look to me as something of a model in terms of what the “GTD lifestyle” is like, and so letting people know I’m a real person like everybody else gives permission that they can have the same thing, so I’ve found there’s a lot of value in that. I’ve gotten a lot of positive feedback on it; people love it. Q. Does this guru thing bug you? A. Not really. The good news far outweighs the bad. Anything [that] gets people to pay attention when you have something to say is nice when they pay attention. It’s fun to be called a guru, and then people find out there really isn’t a guru. I’m just like them. Q. I guess there is one question that everyone kind of wonders. You’ve given so much thought to this—you live it, you teach it, and you train it. Is your life easier than everybody else’s? A. I don’t think so. I mean the better you get, the better you’d better get. I can overwhelm myself, and then I think, “Gee, didn’t I write a book about stress-free productivity? I need to read it.” I get myself in trouble as much as anybody. I just know how to get out, so that’s the difference.
The Government, the Law, and You Finally, I’ll cover briefly a few of the legal considerations and government-funded resources you should know about and put on your master micro-ISV to-do list for further research. A full treatment of these areas are books themselves—you’ll find a list of recommendations in the appendix.
Your Product’s EULA End User License Agreements (EULAs) are those bits of legal boilerplate you’ve agreed to by clicking I Agree or by opening the box on practically every program you own. Now, it’s you who will need a EULA for your micro-ISV product. There is a right way and a wrong way of doing a EULA. The wrong way is to copy and paste another company’s EULA into your installer after doing a search and replace. EULAs are legal documents, and most major software vendors (you know who I mean) have tailored their EULAs to do exactly what they want. Doing this can come back and bite you. The right way is to start at the Electronic Frontier Foundation’s white paper on bad EULA practices (http://www.eff.org/wp/eula.php). Suffice to say, this white paper covers the topics you don’t want in your EULA unless you enjoy being sued, vilified, and pilloried online. Next, you need a clean, generic software license template in one of two flavors: open or closed. You can find open source licensing information in several places, but the best place to start is the Wikipedia open source license article at http://en.wikipedia.org/wiki/ Open_source_licenses, as shown in Figure 4-6. You, as a micro-ISV, need to be aware of certain important subtleties.
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Figure 4-6. Starting at Wikipedia As for closed (that is, shrink-wrapped, proprietary) licenses, I’ve found only one intrepid soul willing to provide a free generic EULA at http://www.soft14.com/upload/ software_000039.htm, which might be too generic for your needs. As an alternative, you might want to buy a EULA template from MegaDox.com at http://www.megadox.com/documents.php/ 589?a_id=74, as shown in Figure 4-7.
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Figure 4-7. Buying a clean EULA
Legally Protecting Your Software If you’re in the closed software camp (as I am), of paramount concern is making sure you have as much legal protection of your Intellectual Property (IP) as possible. Practical protection will depend on how you design your software or Web service, but in theory, legal protection depends on copyright, patents, trade secrets, and trademarks.
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Of course, the difference between theory and reality is that in theory, there is no difference! Patents—which give the person a 17+-year monopoly on the use and distribution of what has been given the patent—aren’t a game for micro-ISVs for two reasons. First, it usually takes two to three years to successfully complete the process of applying for and being granted a patent by the U.S. Patent and Trademark Office (PTO). Second, it can take a lot of money; $100,000 is a good starting figure. Trade secrets are another tool in the IP arsenal, but they’re really relevant to a micro-ISV only if your former employer decides to sue you, citing your alleged misuse of their proprietary information to benefit your micro-ISV at their expense. Copyrights and trademarks do matter to micro-ISVs. Copyright is a legal device for letting the author of a literary work control how that work is used. Software, for the purposes of this law, is a literary work, and you automatically have a copyright on software you write. That means, in theory, no one can copy, distribute, display, or adapt the work without your permission. If someone infringes on your copyright, you can sue to make them stop and to pay. As usual with the law, however, the devil is in the details. Although your software automatically is copyrighted, unless it has been registered, the amount you can recover from an infringer in federal court is in most cases limited to actual damages you can—with difficulty—prove. If you’ve registered your software with the PTO, sue, and win, you’ll be able to collect your attorney fees, court costs, and up to $100,000 per infringement (statutory damages) without having to prove what damage you actually suffered. Registering your software usually costs $30, doesn’t require an attorney, and in effect serves notice on would-be evildoers that messing with you will make them fresh meat for a contingency fee-minded carnivorous member of the Bar. Trademarks for your software products and service marks for your Web-based micro-ISV service are another effective IP protection. A trademark or service mark establishes your legal right to the name, logo, or symbol of your product; costs from $275 to $375 per filing (depending on how its filed); and can take 18 months to approve. Although you can file online with the PTO (http://www.uspto.gov/teas/index.html), numerous online services such as LegalZoom.com (http://legalzoom.com), as shown in Figure 4-8, are competing for your business and can make the process of finding a trademarkable name or symbol and filing the correct paperwork relatively pain free.
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Figure 4-8. Using LegalZoom.com Now, you may be wondering what with all the online legal services and the multitude of self-help legal advice books from Nolo Press (http://www.nolo.com/index.cfm) and other publishers whether you actually need a real, live lawyer. Read on.
PATRICK CUNNINGHAM, ATTORNEY Attorney Patrick Cunningham runs his solo attorney practice from next to the old Pacific Stock Exchange in downtown San Francisco. I’ve known Patrick for more than 15 years, and as I was putting together this section of this book, I wanted to ask him about what a good attorney can do for someone starting a micro-ISV. Q. What can an attorney do for someone starting a micro-ISV that they can’t do online today? A. Well, I think the counseling aspect is critical. People don’t want to hear this, but you can give a macro view because of your experience whether the business they are proposing to do really makes sense compared to his other clients, some of whom have made money, some of whom have lost money. He can maybe give you some initial input on that. Then of course one of the critical things that any attorney can do is the tax angle. You can’t make a business decision without considering the tax consequences. A lot of business owners don’t think about that when they are just starting.
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Another thing related to the taxation is what type of business entity is going to make the most sense for you. Q. Let’s take the issue of partnerships. On several occasions I’ve seen a couple guys get together to start a software company only to have it turn into a mess. One partner wants more, another wants out, and so on. What can an attorney do to help? A. They can create a partnership agreement that will really work. And the first step is to have a written agreement. A lot of people don’t. But if you have a written agreement, then you have to think about what you’re going to write in that agreement and hopefully you think it through very clearly. But even if you have a very, very simple written agreement, at least you have the basics of an agreement between the two of you that’s signed, and when you do fall apart—as nine out of ten will—you’ve got a place to work from that’s not 100 miles from where the other guy is coming from. Q. Do attorneys often negotiate partnership agreements between partners? A. They can, but in a very small setting what often happens is two partners go to an attorney and say, “We want to become partners. Can you draw up the papers?” and the attorney can’t negotiate because which side is he going to be on? He can only ask them, why don’t you two come up with an agreement, and I’ll help you make that into a legal document? Q. What else can an attorney do for an aspiring young business? A. Number one is, make sure there’s a written agreement. Make sure it’s in the proper form. Make sure they have the proper business permits. They can introduce you to an accountant, which will probably be helpful to organize your accounting records [or] at least get a structure set up. Familiarize yourself a little bit with the laws of trademark and trade names so you don’t run afoul there. Talk with you about accounting and taxation. Talk to you about insurance for your business; maybe introduce you to an insurance broker or agent. Q. Should small businesses find small law firms or go with big law firms? A. Well, probably the very large law firms don’t want the very small business, and the small businesses can’t afford a larger law firm, for the most part. I do think for the smaller entrepreneur having a solo practitioner or a small law firm—fewer than ten attorneys in the law firm—would be better. You would have a more personal relationship with your legal counsel. And you can afford the rates a little better. It’s a little cheaper—maybe a lot cheaper. Q. Should that business owner find a lawyer when they need them or before they need them? A. Absolutely before you need them. If you have a lawyer who helps you with the business when you start it— and you should budget for legal when you start your business—when a problem arises, you’ll have someone you can call who may be able to help you directly with the problem or refer you to someone who can. So you’re going to have that kind of security blanket, that kind of member of the team. Q. If someone you knew were going to start a micro-ISV, and they came to you and asked, how do I find a good lawyer? What would you tell them to do? Just pick a name in the phone book? A. I think the first step is to contact a lawyer, maybe someone you have some kind of relationship with, a personal or family relationship or some pre-existing relationship, and get a referral. Most lawyers do have a network of acquaintances in different areas of law. Another good place to start is local lawyer referral organizations; for example, in San Francisco there’s BASF—Bar Association of San Francisco—they have lawyers who participate in their panels divided up according to practice areas. Q. OK, so let’s say you find John Smith, esquire. What would the lawyer expect you to ask? A. The lawyer would expect you to ask if he had a firm résumé; some of the smaller firms do have them, some do not. You could ask them about any specializations they have; the state bar specializations in different areas. You can ask them what additional degrees they may have beyond their law certificate. You can ask him what percentage of his work is dedicated towards business organizations. You might even ask them if he can name to you any of his, shall we say, model clients.
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Need a lawyer, start with your local bar association. Q. Any other advice you’d give to someone starting a micro-ISV? A. Well, one piece of advice I have heard that I think is valid is that before you hire your first employee, have an employee manual. Oh, and this is critical if you do nothing else—before you hire your first employee, have workers’ compensation insurance set up before the person sits in his chair, or her chair, so that she’s insured for worker’s comp. If you have an employee—or anyone working for you for that matter—who you may call an independent contractor and that person trips over a chair in your office and, say, sustains a brain injury, you’re facing catastrophic financial repercussions, if you’re not insured for comp. If you are insured for comp, it’s not a problem for you. Worker’s comp insurance is not as expensive as you think. Q. I’m confused. I thought someone had to be an employee to be covered by worker’s comp? A. In California the law presumes that someone doing services for another is an employee. And then it’s the burden of the employer to prove that the person is not his employee but an independent contractor. Generally speaking, it’s difficult to carry the burden when you’re up against the presumption of employment. It’s going to be heard in the Workmen’s Compensation Board with that presumption of employment, and in fact the Comp Board is required to let us, say, favor the employee in a comp case. It’s very likely that the person you thought was just your part-time independent contractor is in fact your employee. Q. Gotcha!
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A. Yeah. And suppose you have a part-time independent contractor doing some work for your firm, and he’s working for you 20 hours a week on a regular basis but he’s an independent contractor; that’s the way you arrange it. And you send them down to Radio Shack to pick up a computer cord. And on the way, he hits a pedestrian in the crosswalk. And then you find out he doesn’t have insurance. You’re going to be sued. And again, you’re probably going to lose, because of the presumption of employment. Q. Well, these are the sorts of things it might be good to know about before they happen. A. Before it happens. Before it happens. You’re in business to make money, right? Q. Right! A. And you want to make money, but at the same time you don’t want to lose money…lose your financial future. So you have to approach it with some degree of caution. Q. So this is why you want to have someone—I’m not going to say adult supervision—but somebody who knows what they are talking about. A. Yes, absolutely.
And What About the Government? Finally, I interviewed Teri Takahashi, the training manager for the Florida Atlantic University Small Business Development Center (FAUSBDC, and you thought computer acronyms were bad!), and she has some advice for micro-ISVs worth passing on. FAUSBDC, as shown in Figure 4-9, offers 450 classes and clinics a year, the vast majority for free, for start-up businesspeople in the areas of business planning, marketing, financing, accounting, bookkeeping, taxes, import/export disaster recovery, and more. The classes— typically two to four hours, the most expensive of which is $100—then get followed up with one-on-one mentoring between you and SBDC staff, for free. For example, FAUSBDC has a business plan clinic: “It’s four hours, in which you get your template started, what is a business plan, and why do [you] want one type of thing,” Teri says. We don’t do extensive training; our training is two to four hours, and that’s it—a oneshot deal, you come in, and you’re done. Our training seminars are set up so you get good information in as short a time as possible, [and] then we encourage you to follow that up with one-on-one consulting forever, for as long as you want. Say you come in and come to the Introduction to Business Plans seminar. After you go there, you get a good, basic idea of what you need to do, then you come in and work with somebody one on one. It’s always free, we’re the federal government. “Your tax dollars at work,” she emphatically adds. FAUSBDC is part of a network of federally funded Small Business Development Centers (SBDC) funded through the SBA. They all offer classes for people who want to start their own business, and most offer one-to-one mentoring as well. Although the SBDC near you will be clueless regarding the ins and outs of programming, they know a lot about the business side of being in business and can give you some objective advice on whether you really are the type of person who can start a business or would be better off staying within the structure of an existing company.
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To find the SBDC near you (and there is one, believe me) at the America’s Small Business Development Center Network site at http://asbdc-us.org/, click Lead Centers at the top. Click the FastTrac link, especially the FastTrac Tech information. As a matter of fact, you’ll find a lot of interesting to micro-ISV links listed here.
Figure 4-9. One of 450 members of the SBDC network
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Focusing on the Customer S
o far in this book I’ve focused on how you’ll define, construct, beta test, and market your micro-ISV’s first product. And I talked about customers and would-be customers in a general way: how they can help you define your application, service, or product as beta testers, why your Web site needs to be customer-centric and not product-centric, and so forth. All this work in producing your micro-ISV has been to get to this point, when you can start focusing on and creating paying customers. This chapter will dig deep into three major marketing topics: how to find your customers, how to interact with them, and how they will find you. I’ll start with how to locate the sometimeselusive customer by researching offline habits and online haunts, how they see the world, and how you reach an identifiable collection of them. This is the stuff MBAs like to call market research, market segmentation, and marketing plans, and I’ll use those same terms but gear the approach to the Internet and the realities of being a micro-ISV. Next, I’ll cover how to interact with customers and potential customers via email and, most important, via your technical support process. Finally, I’ll show you how to make sure potential clients can find you, the trial version of your product, and other people interested in it.
Your Marketing Re-Education Although you may think you know what marketing is, don’t bet on it. Remember all those jokes and Dilbert cartoons about marketing people? Surprise! When you get past the marketing of marketing and the fluff, a lot of well-tested, repeatable, applicable techniques consistently yield results you can take to the bank, if you apply them. So, as a first step, put aside the usual IT bias against marketing, and keep in mind you’re about to start having a new type of relationship with (you hope) a whole lot of people all over Earth. Customers aren’t employers, managers, bosses, project managers, or clients. And they’re not co-workers, friends, buddies, or even acquaintances. They’re something else entirely, and you need to learn the ins and outs of this new kind of relationship if your micro-ISV is going to succeed. The next step is to stop thinking about the supercolossal, megabig monster called The Market and start thinking about small slivers of people who, if they know about your product and what it could do for them, could become your very own market. You don’t need, don’t want, and can’t cope with 20 million customers at your online door today; one in twenty of all the left-handed accountants in firms of fewer than ten people will do quite nicely for your bank account for starters. 157
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The final step in your marketing re-education before you start working on how to market your micro-ISV is to firmly ignore all the ways large companies have marketed to you. Ditch all the television, radio, newspaper, magazine, billboard, and online banner advertising you’ve been taught in your lifelong education as a consumer. All that advertising and marketing you see every day (it’s estimated that a person in the United States sees from 245 to 6,000 marketing messages a day1) is completely irrelevant to how you and your micro-ISV will market. Why? If for no other reason, you can’t afford it. That’s the bad news. Advertising works—that’s why millions of businesses worldwide spend hundreds of billions of dollars on it each year. The good news is you have something that can work better than advertising: you have value and a story to tell. The trick—and the first part of this chapter—is about finding the right people to tell in the right way about that value.
Marketing for Micro-ISVs In Chapter 1 you started scoping out the market for your micro-ISV’s vision. To briefly recap, I covered how to do the basic online market research to determine whether other people (those with money!) might be interested in your product, and you identified at least three market segments you could target later. It’s later! Now, if you skipped ahead because you already have your vision and what you need are real, live customers, and you need them now because no one is buying your software, I understand. That’s the situation I found myself in back in spring 2005 when my Microsoft buddy Jason Hermitage started taking the time to gently hammer into my programmer brain that a business needs to identify specific markets and address them to succeed. “Bob, think about who needs MasterList Professional,” Jason would say during our twicea-month phone calls. “What do they do for a living? Who do they hang out with? Who do they associate with? What do they want?” You’ll hear more about Jason in Chapter 6; he’s a genuinely Smart Guy. Right now, it’s time to get down to the particulars of how you discover, understand, connect to, and get known in a specific Internet market. Internet market? What’s that? Well, it’s the place your micro-ISV lives, and unfortunately, it’s a place few of the “How to Start Your Own Business” and “How to Create a Marketing Plan” authors and experts understand. I’ll focus on two information tools I’ve created because micro-ISVs need to research, create, and implement marketing plans: the Specific Internet Marketing Segment (SIMS) Planner and the Marketing Segment Action Planner (MAP). You can find free versions of both these planners at this book’s Web page at http://www.apress.com/ and at http://www.microisv.com/. Here’s how to use SIMS and MAP: take a look at your research from Chapter 1, and pick one of the smallest, least critical market segments you identified there. Or, define one right now. Why small and (to be polite) least critical? Micro-ISV marketing, like performing surgery on yourself, should first be done on a nonvital part of your anatomy. Once you get the technique down and your confidence up, you can move on to bigger and better.
1. How many advertising messages (from all media sources) is the average American exposed to on a daily basis? See http://answers.google.com/answers/threadview?id=56750.
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These planners are starting points, not stone tablets. Undoubtedly, as you work through them, you’ll find ways to make them work better for your micro-ISV. But by working through them, you’ll take the most valuable step to making a rootin’-tootin’, revenue-producing success of your micro-ISV: identifying a specific market segment and doing the work necessary so the market segment learns about your software, Web service, or product.
Starting with SIMS Now, if you were reading this online at one of the ever-multiplying “Get Rich on the Internet with Our Secret Formula” sites, here’s where I’d tell you that SIMS will make you 247 percent richer in only a single afternoon while watching your favorite spectator sport if—and only if— you send me your $79.87 right now. Nope. Sorry. No secret sauce here. Although I’d be happy if you sent me your money, SIMS is just a set of pretty logical questions you’ll have to answer for your micro-ISV. Rather, think of SIMS as being a set of those fiendishly clever puzzles companies such as Microsoft and Google like to spring during job interviews, only they are nowhere near as hard.
SPECIFIC INTERNET MARKET SEGMENT (SIMS) PLANNER The goal of SIMS is to define in as much practical detail the attributes, characteristics, influences, and needs shared by a specific online group of people who have an unmet need your product fulfills. The keyword in that sentence is practical: fill in what you can, define these people in a way that can be marketed to, and go from there.
Preliminary Definition • What is the general term for this market? • What segment of that market am I focusing on?
Characteristics/Demographics/Market Size • Professional, amateur, nonprofit, consumer, small business, company, enterprise, multinational? • What language do they use? • What occupation titles describe what they do? • How many of these people are employed? • Is the number of people in this market segment increasing, decreasing, or holding steady? • How many of them are on the Net? • How old are they? • How do they become part of this market segment? How do they leave? • Are there educational, training, or other requirements to join this market segment? Who controls those requirements? • What’s the size of the market?
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Purchase Habits • What goods are bought by this market segment? • What services are bought by this market segment? • What things do people need to have access to in this market segment? • What things do people in this market segment buy on the Net? • Do they buy for themselves, or does someone buy for them?
Needs and Wants • How do people in this market segment define success? • What do they need to be successful? • What unmet or undermet needs do people in this market segment have?
The Internet • How do people in this market segment connect to the Internet? • Where do people in this market segment connect from? • What are the top community/portal Web sites people in this market segment currently visit?
Associations (Online and Off) • What associations (industry, professional, nonprofit) specifically serve this market segment? • Which ones have Web sites? • Does this market segment have one or more active mailing lists? • Does this market segment have one or more active Usenet groups? • Does this market segment have one or more active Google Groups? • Does this market segment have one or more active Yahoo Groups?
Trade Press/Trade Shows • What publications (magazines, weeklies, dailies, or newsletters) do people in this market segment read offline to keep up to date? • Which of these publications have Web sites? • Which writers or editors for these publications have blogs? • What trade shows are held regularly for members of this market?
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Blogs • What blogs can I find about this market segment at Technorati.com? • What blogs can I find about this market segment at Blogcatalog.com? • What blogs can I find about this market segment in Google Directory? • What blogs can I find about this market segment at Feedster.com?
Competitors • What competitors for my potential customers’ time are there in this market segment? • What competitors for my potential customers’ money are there in this market segment? • Who are the top competitors in this market segment? • What are their strengths compared to my product or service? • What are their weaknesses compared to my product or service? • How do my competitors sell to this market segment? • What do my competitors charge?
My Selling Proposition for This Market Segment • How can my micro-ISV’s product make people in this market segment successful? • What is different and better about my product than my competitors in this market segment? • What’s my Unique Selling Proposition (USP) to this market segment? • What are the key benefits of my product or service for people in this market segment?
James Thurber, a great 20th-century humorist once said, “It is better to know some of the questions than all of the answers.” By asking the right questions about one small sliver of all the people on the Net who might want to buy from your micro-ISV, you’ll be well on your way to answering the question your relatives, friends, and former co-workers will ask: “Are you making any money?”
Hand Me the MAP, Please Once you’ve worked through the questions about your target market segment, you can start planning and implementing how you connect with your target. MAP is one way to define the objectives and tasks you’ll need to execute in order to get results, as shown in Figure 5-1.
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Figure 5-1. MAP your marketing to event planners. Although the MAP I’ve written in Microsoft Excel has a few nice touches to make it easier for you to define your marketing objectives in measurable terms, parse those objectives into specific tasks, and track those tasks through execution, the best MAP is the one that works for you. If you’re not already using some tool (the MAP template, a big whiteboard, Microsoft Outlook, an open source project manager, or maybe even your own product), now is the time to start tracking the specifics of marketing your micro-ISV. The specifics of your MAP will turn out differently than the one shown in Figure 5-1, but here are a couple of MAP tips to keep in mind: Get specific: With your SIMS, you’ve gotten a lot of information about your target market segment. Now it’s time to define specific objectives about how to connect with that market segment and to schedule the time you need to do the work. Make your target market segment feel special: Make the effort to build a landing page for that segment, along with a customized set of benefits that make sense to them. One surefire technique is to create one or more online demos where your product addresses one or more of your target market segment’s problems.
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Identify your target market segment’s bloggers and trade press, and reach out to them: I’ll cover in more depth how to deal with the trade press and mainstream media in the section “The Influencers” later in this chapter. For bloggers, the best way is simply to email them, explain why your product is interesting to them and their readers, and go from there. Find and execute ways to bring your micro-ISV’s existence directly to the attention of potential customers in your target market segment: Later, in the section “Google, Relevancy, and Your Micro-ISV,” I’ll cover one of my favorite ways of doing this: Google AdWords. But whether it’s participating in online forums, joining mailing lists, writing online articles for Web sites where your market segment hangs out, or doing some other form of marketing, take steps to get visible.
Email: Retail, Wholesale, and You Starting a micro-ISV may make you richer, happier, and more fulfilled. But I guarantee starting a micro-ISV means you’ll be spammed like never before. Worse, if you don’t plan ahead, people will start accusing you of being a spammer. The purpose of the following sections is threefold: develop a plan for handling an order of magnitude more email you’ll get as an micro-ISV, learn the rules and tools you should follow and use now that you’re a business, and finally look at how you should and shouldn’t communicate with your customers—potential and otherwise.
You Have Mail—Lots of It! Being a micro-ISV means you need to change how you deal with email and spam. For starters, a whole bunch of people not on your email whitelist are going to start firing off messages to you: they’re called customers, and you want to respond to every one of them in a timely manner without going nuts. Second, anonymous seller is an oxymoron. If you plan to sell your software, hardware, or services on the Net, customers will expect to be able to contact you, which means you’ll need at least one public email address spammers will have ten minutes after you post it to your Web site. So, depending on how you get/filter email now, you may need to change spam filters, your Inbox configuration, and your email addresses to meet the demands of your business. Table 5-1 gives you a checklist of email tasks to do.
Table 5-1. Checklist for Reconfiguring Your Email World
What?
Why?
Set up a new private email address.
This is the address you’ll be giving to family, friends, and loved ones and will never, ever use for business.
Set up, at a minimum, four new micro-ISV addresses: techsupport@, sales@, info@, and you@.
These should be new addresses at your micro-ISV’s domain (Hotmail/Gmail isn’t acceptable); these are the roles you’ll need to play.
Turn off/unsubscribe from any service you now use that requires new correspondents to prove they aren’t spammers.
Potential customers will not stand for it.
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Table 5-1. Checklist for Reconfiguring Your Email World (Continued)
What?
Why?
Configure your spam filter to hold, not delete, supposed spam.
Even the best Baysian spam filters will bag some inquiries from potential customers; you’ll need to review all spam to catch these “false positives.”
Prepare a signature file.
This is a small sales/CAN-SPAM notice that needs to be at the bottom of each original email from your micro-ISV. (See the “Current Email Marketing Realities” section for more about the CAN-SPAM Act.)
Reorganize your email folders to be aligned and streamlined to your micro-ISV.
The specifics will vary with your micro-ISV and email client, but you want to separate your email into an Action folder for what you need to do or respond to in your micro-ISV, a Reference folder for nonaction emails relating to your business and receipts, and a Nonbusiness folder for everything else.
Also, it’s a good idea to put in place an automated bug-tracking system that manages your tech support email as part of your overall email strategy. (See the section “Technical Support Is Customer Support” later in this chapter.)
You Can’t Say That Anymore! Now that I’ve covered how to reconfigure how you handle your email, I’ll cover how to reconfigure you—or at least the part of your brain you use to write and respond to email. You need to realize that the rules for permissible/acceptable/desirable emails changed when you started working for yourself, and worse, you’re now the dreaded email cop. Put another way, you’ll be swapping emails with hundreds, if not thousands, of strangers from all over the world, and you need to develop or at least refine your “email voice” so that it’s effective and, well, businesslike. This doesn’t mean you need to sound like a commercial or be boring or dull. It means you need to keep in the back of your head two thoughts: • The purpose of any email you write is to further your business. • Law 1440 never takes a break. Table 5-2 provides a short list of business email dos and don’ts to copy and stick by your keyboard until they become second nature.
Table 5-2. Business Email Dos and Don’ts
Do
Don’t
Do focus on the reason for the email.
Don’t ever curse, insult, or swear, no matter the provocation. (And you’ll get people who write you long emails along the lines of “Your software is a pile of crap, and you’re a worthless human being for writing it.”) Your first instinct may be to sear their eyes out of their head with a flaming email. Don’t. Either drive them crazy(ier) with a “Thank you for your input” one-liner or ignore them.
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Table 5-2. Business Email Dos and Don’ts
Do
Don’t
Do be cheerful, helpful, and unapologetic.
Don’t be defensive, sullen, or argumentative.
Do be clear in what you’re telling them or asking them to do.
Don’t assume their primary language is your primary language.
Do make clear what you want from them and or what you’ll be doing.
Don’t make assumptions about gender or nationality based on the person’s name. (In fact, gender, nationality, politics, religion, and personal stuff in general has no place in your business emails.)
TOOLS FOR LEVERAGING EMAIL This sidebar introduces four mail-related tools to help impress your customers with your micro-ISV’s email responsiveness and (not incidentally) reduce the amount of time you need to spend. The first tool you can use to leverage email is an autoresponder. Whether you set up autoresponders within your email server, your ISP’s email management tool, or a third party, autoresponders are an excellent way to automatically respond to an email and provide stock information to current and prospective customers who, for whatever reason, did not find what they needed on your Web site. A nice feature of the actual content of your autoresponse is you can write it once and then repurpose it or write the content for other reasons and repackage it. Here are a few typical autoresponder topics: • Policies: For example, support information, upgrade information, how to run your software on more than one computer, transferring ownership, and returns. • Sales information: For example, general sales, corporate/site sales, nonprofit organization sales, and governmental entity sales. • Guides: For example, a getting-started guide, a reviewer guide, and an integration guide. • Email courses: For example, this is a good technique: write a “How to Get the Most Out of Our Software in Five Easy Daily Lessons” set of five one-page HTML emails. You can offer the emails on your site and include a mailto link at the bottom of each one linking to the next lesson. Note that you should clearly state that the content comes from an autoresponder email address. And, you should clearly state either that the emails of people who tap your autoresponders fall under your general antispam/ privacy policy or, better still, that they will not be used or saved for any purpose except sending the requested information. I know, most micro-ISVs’ first inclination is to persist any and all data, but resist it: autoresponders will work only if the potential customer is assured they won’t be pummeled with advertising. The second tool I’ll cover is for Outlook users who use Microsoft Word as their email editor: capturing and reusing stock information using Word’s AutoText tool. With AutoText, you can capture your product’s name, main benefits, or a complete description as an abbreviation that Word will automatically expand. Here are two articles I’ve written about using AutoText: http://www.safarisoftware.com/fTip3.htm and http:// www.safarisoftware.com/fTip36.htm. AutoText is nice, and it’s free if you own Microsoft Office. But the next two tools take leveraging your text much further.
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Using AnswerTool from DTLink Software (http://www.answertool.com) could not be easier; after writing something you want to reuse, go to AnswerTool, create a new topic, and paste it in. When you want to reuse that text, go to AnswerTool, select the topic to put the text (plain or HTML) on the Clipboard, and then paste it into your email. At $29.95 USD (as of this writing) and available for a free 15-day trial, AnswerTool might be the right solution for you.
AnswerTool makes it easy to build a library of responses. The fourth email tool is ActiveWords (http://activewords.com, three versions starting at $19.95 USD, 60-day trial). ActiveWords is like adding a universal command prompt to your computer. The concept behind ActiveWords is deceptively simple: you type a word—say, blurb—and activate it by pressing F8, and the word is replaced by your 200-word product description. It doesn’t matter whether you’re replying to an email, posting to your blog, submitting information to a Web site, writing in Word, or creating content in your HTML editor. Type the word, hit F8, and get your text (or run a program, open a uniform resource locator [URL], or run a script). Or type maps+F8 to pull up Google Maps. Or type email+F8 to see Outlook open a new email editor window for you. Or type buy+F8 to choose whether you wanted to go to Amazon, Best Buy, or CDW (my personal choices, as is F8). As you start getting the hang of it and enlarge your ActiveWords vocabulary, you’ll wonder how you ever got anything done without it. One final word about ActiveWords: the two-man micro-ISV behind the product, ActiveWords Systems, does an extremely good job of marketing via email—it’s worth downloading the 60-day trial just to see what good email marketing looks like.
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Some of the activewords used for controlling Microsoft Outlook
Things you can make your PC do easily with ActiveWords. Notice the scripting.
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Current Email Marketing Realities (Washington, D.C., May 26, 2008)—The Centers for Disease Control announced today the eradication of the last-known spammer in the United States, Melvin Bulleseye, pleading that he didn’t really mean to send 25,000 emails announcing his new MelvinBull 2.0 to the end, was put to death in the now traditional way of being locked in a room with 1,000 starving rats and a lawyer. “After I stripped him of his assets, the rest was easy,” said Jennifer Gotem, 24, when she emerged from the room. “The rats did most of the work,” she added modestly. Done right, email marketing can bring smiles to your customers’ lips and money to your micro-ISV’s bank account. Done wrong, and you get to join Melvin. I simply can’t overstate how vital it is for your micro-ISV’s continued existence that you understand what you should and shouldn’t do when it comes to using email as a marketing tool. Email is an essential tool for a micro-ISV, but as of mid-2005 the carcinogenic spread of spam has forcefully rewritten the rules; these rules, at least in the United States, have become federal law. The CAN-SPAM Act now requires those who send commercial email (that’s you) to provide in each email a way for the recipient to opt out of receiving any further emails, to identify the email as an advertisem*nt, and to include the sender’s valid physical postal address. It prohibits using fake originating headers, deceptive subject lines, or harvested emails from sites that have posted a notice (http://www.ftc.gov/bcp/conline/pubs/buspubs/canspam.htm). Now, in case you just searched for the CAN-SPAM Act on Google and found various blogs, news stories, and other comments that the act has no teeth and no one but flagrant professional spammers have been pursued by the Federal Trade Commission (FTC), consider two points. First, in the United States, the typical way consumer protections such as protections against deceptive advertising, unfair debt collection practices, and being stuck with a terminally defective car become part of the business culture is that first Congress passes a law, then the FTC nails a few flagrant violators, then the FTC tweaks the law to be more realistic, then the states start passing various supplemental laws, and finally everybody gets the message that it’s Not Good Business. Second, the U.S. Department of Labor’s Bureau of Labor Statistics estimates between now and the year 2012 the number of lawyers (currently estimated at about 500,000) will increase about 10 to 20 percent a year. Just how long do you think it will be before a “SueTheSpammer.com” lets you click a button to have the site scan your offending email and you receive the first of many unpleasant legal communications? My point here is not only should you follow the letter of the law when it comes to how your business emails but the spirit as well. And following business best practices unless you have a very good reason not to is a good way to stay in business. So, what are the best practices for a micro-ISV that wants and needs to email current and prospective customers? The number-one rule is to comply with CAN-SPAM, even if you think you can get away with not complying. This means all your email correspondence should use real headers, descriptive subject lines, include your physical postal address (as of May 2005, the FTC wanted to tweak this to allow P.O. box addresses), and a clear means to opt out from being emailed by you.
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Although managing a customer database tied to an unsubscribe form in your favorite programming language (PHP, ASP, and so on) is fairly easy at first, the devil (and the distractions from your core activities) is in the details. Managing your mailing list is another one of those activities that lends itself to paying someone else to do it right. MailerMailer (http://www.mailermailer.com) is one company in the business of managing a company’s mailing lists. “We actually have a lot of software companies using our system,” explains Raj Khera, CEO of MailerMailer. “And one of the things we’ve found is just the ability to be able to communicate with your customers on a regular basis is very critical in differentiating you from the competition, because not everyone will necessarily keep in contact with you after you make a purchase.” MailerMailer—which was started as a post-dot-com micro-ISV by Raj Khera and his brother, Bivek Khera—handles the opt-in process of subscribing to a company’s mailing list and then sends a confirmation email to the supposed subscriber email address. It also gives the subscriber an easy way to opt out of your mailing list at any time and automatically includes this information in any emails (such as marketing promotions, upgrade announcements, and email newsletters) you send your list through MailerMailer.com. This is according to Raj Khera: One of the big benefits of using a double opt-in list like MailerMailer.com is that you’ve verified everyone’s intent of being on your list. There’s no chance someone could download some software, put in a fake address just to get access to your software, and then just go about on their merry way. This way [double opt-in], they’ve actually confirmed their address, and you know you have a real person you’re talking to. Like a lot of micro-ISVs, MailerMailer has a free trial available—you can send 200 emails a month free. The paid service starts at $29.95 a month for 20,000 messages and goes up from there. MailerMailer has a nice control console that makes making and managing mass emails easy, as shown in Figure 5-2. As for CAN-SPAM, which doesn’t require double opt-in, Khera says this: At MailerMailer.com, we try [to] follow the best practices, which happens to include the law, but there’s actually many more things we do on top of the law to try [to] make it a better experience for both the list manager and the recipient. Khera’s take on where email marketing is going is worth considering: “You hear these reports that spam is going to kill email marketing, but frankly, we just don’t see it, and our numbers back us up.” MailerMailer actually has the numbers, analyzing more than 200 million emails from more than 2,000 email marketers in 2004. Available at its sister site (http:// emailmarketingmetrics.com), MailerMailer releases an “Email Marketing Trends” report every six months with industry-by-industry data on what makes an email work, how quickly permissionbased email gets opened, and more.
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Figure 5-2. The MailerMailer control console: notice the Open Rate and Click Rate columns. Khera advises that instead of looking at it as email marketing, look at it as a way of effectively distributing the traditional marketing tactic of company newsletters, without the printing costs and with the large advantage of being able to track who is actually reading your material. Long before the Internet got commercialized, people were sending newsletters as a way of keeping in touch with their customers. What technology now allows you to do is save your money on print and production costs, and for a tiny fraction of what it costs to do a newsletter, you can do an email one and actually quantify your results. You’ll know who’s clicking on what. And that kind of data for the cost is invaluable [market research]. One other point Khera makes is that while it varies from industry to industry, HTML emails have a higher click-through rate than plain-text emails, although plain text is favored by people in the computer industry. Khera’s advice to micro-ISVs pretty much sums up business emailing strategy today:
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For everybody who downloads the product or purchases it, ask their permission to be on your email list. Then send regular notices—it could be monthly, even quarterly, although once a quarter is about the lowest frequency you want to go with—something to a least just say “hello” to your clients. Maybe you’re providing them with an online demo of your software, industry trends about that particular kind of product, or something to just touch base with those people every month or so. That alone will increase [the] loyalty of your customers. There’s an old saying that if you’re talking to your customers, they can’t be talking to your competition. If you are talking to them, then you have a much higher chance of retaining their loyalty.
Technical Support Is Customer Support “Well,” like my dentist said as he started to remove the last for four wisdom teeth, “this next bit might be a kind of painful.” If you’re reading this, odds are good you’ve already spent more of your life than you want to remember providing technical support at some company somewhere. At the least, you’ve spent some of your life trying to get technical support for something you bought or were thinking of buying. But the painful fact is no matter how great your vision, how elegant your code, how robust your testing, you—yes, you!—will need to provide technical support for your micro-ISV’s product. What’s more, unlike large software and hardware vendors, you have to provide good—nay, great—technical support that sets you apart from your competitors.
No Sympathy for the Devil Remember the last time you needed technical support? I do. About a month ago after replacing my computer with a spiffy laptop, I decided I wanted to change from streaming music and instead play a bunch of those 99-cent tunes I’d bought over the past year from an online music service that will go nameless. So, I loaded the software, added the tunes to the playlist, cued up “Sympathy for the Devil,” and got the message “Permission denied. You do not have a valid license to play this music.” What? So, off I went to Nameless’s Web site. I log into my account, figuring I could at least download again what I paid for, right? Wrong. Sometime between when they gleefully sucked 99 cents from my credit card and when I ungleefully found out which digit is extended when it comes to Digital Rights Management (DRM), these suckers had dumped my purchase history. No purchase history, no rights. No rights, no music. So, I can either kiss off 40 bucks worth of music or hope that Nameless’s tech support was better than their database programmers. I mean, they couldn’t be as clueless, right? Ha. Four times I emailed them, explaining I just wanted to play the music I bought on my new notebook, and I’d even go download them all, one by one—just give me something I could click. And four times I got back the same “read the following to fix your problem” email explaining why DRM is good for you and all I had to do was click the songs listed in my purchase history to download them again. I would have been better off rolling up two twenties, wedging them up my nose, and setting them alight. To say I’d rather have my toenails ripped out than spend another dime at Nameless.com is a gross understatement.
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I’m sure you’ve had at least one such descent into technical support hell yourself. Too many big companies have made a pact with the devil, and in exchange for somewhat lower costs, they consign your soul to voice mail, email, or Web “knowledgebase” hell. Those companies may be able to get away with that, although I suspect not forever. You can’t, not for much as a day. You’re too small. And that’s good—really, really good. By providing your customers with great technical support, you’ll convert many of those customers into raving fans instead of raging enemies. And those fans will put the word in word of mouth for you, both online and off.
Doing Tech Support Right So, just how do you, a micro-ISV, provide great technical support without going nuts or broke or both? If you happen to be sitting next to a CEO of a multinational company while you’re reading this, and they glance at this page, their answer is to offshore it—as far away as possible, as cheaply as possible. Wrong answer. I’ll leave what’s wrong with offshoring to my fellow Apress author, Bill Blunden, whose book Offshoring IT: The Good, the Bad, and the Ugly (Apress, 2004) does a great job of covering offshoring, both for and against, and instead focus on the micro-ISV practicalities: • As a micro-ISV, you can’t afford to offshore. • As a micro-ISV, being close to and responsive to your potential and actual customers is too important a function to trust to others. • As a micro-ISV, you can provide great technical support relatively easily if you plan for it: when the going gets tough, the tough use software. If you’re a entrepreneur first and a technical person second, think of technical support for your micro-ISV not as overhead or as a secondary priority but as a way of creating a vast, enthusiastic, believable, and unpaid sales force that will, without further supervision on your part, go find business opportunities, new market niches, and revenue for you. And if you’re a programmer first and a businessperson second, look at technical support for your micro-ISV not as the pain of dealing with dumb people who haven’t a clue but as the error checking and code handling for your program—something that separates the amateurs from the professionals. Whichever way you choose to view tech support, you’ll want to put in place a comprehensive system for receiving, responding to, resolving, and learning from tech support incidents. And although many good help desk/tech support programs are available, if you’ve already read Chapter 2, you’ll know what I’m going to say here: get Fog Creek Software’s FogBugz (http:// www.fogcreek.com, $129 per user, free 45-day online trial, 90-day money-back guarantee).
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Tech Support Is Like Beta Support, Only More So Put simply, you’ll need all the same elements you needed to make beta testing during development work for you, only more so. If you didn’t put in place a system then, now is the time for a quick review of what you need from your tech support system if you’re going to succeed. As I suggested in Chapter 2, baking error reporting into your software or Web site is one of those Really Good Ideas: it shows people you’re ready, willing, and able to take bugs seriously. For example, I’ll walk you through what happens when an exception gets raised the hard way in my software. Figure 5-3 shows an error report automatically generated by MasterList Professional.
Figure 5-3. Tech support starts within your application. The point of this error report is to immediately respond to the error just visited upon this person. Never mind what the error was, whose fault it was (probably mine), or whether it’s something I’m going to fix right away, for the next build, or maybe even never. The point is my tiny company is already treating this seriously, something most companies forgot to do long ago. Notice three other features of this bug report: I populate it with information as to where the bug happened, I ask the user how they received the error and how to reproduce it, and I practically beg but don’t require their email address.
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From your micro-ISV’s point of view, you need some clue as to how to reproduce this error, and the best time to get this is the minute it happened when it’s freshest in the person’s memory and their motivation is the highest. Tech support systems where you submit an trouble ticket, go fill in an online form, or get directed to some god-awful “knowledgebase” are prima fascia evidence that not only doesn’t the company care about customers but it doesn’t care about the people who are supposed to fix the problems. OK, flame off—back to the error walk-through. When the person clicks Send Error Report, the bug gets posted to my FogBugz and a few seconds later they get back a message within the program, as shown in Figure 5-4.
Figure 5-4. Message received. Now one of the many nice features of FogBugz is I can customize this message, and if I’d already gotten this bug, I could say “Do this,” “Do that,” “It’s fixed,” “Download the current version,” or anything else that makes sense. While they’re reading this message, I’m getting one of my own, as shown in Figure 5-5, and it’s going to the top of my list of bugs in FogBugz, as shown in Figure 5-6.
Figure 5-5. You’ve got mail–Oy!
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Figure 5-6. My FogBugz list What happens next depends on the message. If I’m lucky, I get enough information to find and kill the bug. Then I do the following: 1. Click once to edit the bug, changing the automatic response line. 2. Click Reply, and type fnr`, which FogBugz expands to “Thanks for reporting this bug. I’ve found the problem and corrected the code. This bug fix—along with others—will be automatically available to you with the next free update of MasterList Professional, due out in the next few weeks.” 3. Click one final time to send and close the bug. If I’m not lucky, then I continue the conversation, getting more information if I can about where they were in MasterList Professional when it went boom. You’ll see more about FogBugz in the next section when I cover discussion forums, but I’d be remiss to not mention an excellent book, Painless Project Management with FogBugz (Apress, 2005), by my fellow Apress author, Mike Gunderloy, that covers FogBugz far better than this one does. Two more quick points before leaving this topic: First, the following sidebar provides a short checklist of points to consider when you plan your tech support system. Second, you’ll find a free Tech Support Planner Excel workbook at this book’s page at Apress’s Web site (http://www.apress.com) and at http://mymicroisv.com to help you plan this important part of your micro-ISV.
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TECH SUPPORT PLANNER Here’s a checklist of points to keep in mind when setting up your micro-ISV’s tech support system and doing tech support in general:
Core System Requirements • Captures all bug reports, feature requests, and inquiries. • Gets information I need to reproduce bugs. • Takes as little of my micro-ISV’s staff time as possible to manage. • Requires as little effort from customers and potential customers as possible. • Can run 24/7. • I can afford it!
Managing Tech Support • Define when and how often during the business workday new bugs will be reviewed and responded to. • Define a workday, and communicate that on Web site, voice mail, and email. • Set who is responsible for processing new tech support requests.
Basics of Good Tech Support • Find out how to reproduce the bug. • Customers will tell what triggered the bug. They are often right, and they are often wrong. • Not all bugs are worth fixing, but all customers and potential customers are worth listening to. • One bug can be operator error; the same bug more than once is not. • Never belittle a customer. Ever. • Never tolerate abusive people. That’s what refunds are for.
Discussion Boards: Listening to Your Customers In the previous section I covered how to do one-to-one technical support right. But the Internet is more than a two-way street, and it’s at least equally important, especially for micro-ISVs, to listen to your potential and actual customers and talk with them in public. If you’re reading this book, odds are good you’ve seen at least a few dozen discussion boards or forums and perhaps have participated in several. Figure 5-7 shows Thraex Software.
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Figure 5-7. Supporting applications via a discussion forum Discussion boards have emerged as one of the best ways to have and foster two-way communication on the Web. Established brands such as General Electric, Microsoft, and even 125-year-old Pillsbury have discussion boards for tech support. These companies aren’t run by fools; if they’re doing it, it’s for good reason and not an Internet fashion statement. Here’s one of those points to write down and stick above your computer where you can see it every day: “Done right, a discussion board is a strategic advantage for my microISV.” Simply put, a good discussion board will build a loyal following, discover which aspects of your product sell, supply a legion of nonpaid Quality Assurance (QA) testers, provide you with new ideas to build and expand your company, and even recruit potential employees. But notice the “Done right” part of the previous motto. Done wrong, and your discussion boards will offend customers, repeal buyers, consume countless hours of your time with no bottom-line return, and become a painful experience for all.
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The key factor isn’t what you think is a great discussion board but what the people who spend their time on your board think. It’s the user experience, which means you have to take into account the types of people you want to attract, their habits, and their practices. That said, it’s up to you to consciously decide what type of discussion board you want and whether that board will be primarily a many-to-one or a many-to-many relationship. The many-to-one (the one being you) can start looking similar to tech support but with three advantages: • Some—but by no means all—of your tech support queries will get answered before they arrive in your Inbox. This is a good thing. • You can repurpose both your answers and their questions as Frequently Asked Questions (FAQs), best practices guides, demo scripts, and more. This is also good. • Potential customers see you’re not afraid to support your product in public and that you listen to them. This is a very good thing. The many-to-many type discussion board is frankly harder to create and isn’t likely to work until you’ve built a set of many-to-one relationships. You have to have a fairly sizable number of people interested in your product, and the problem it solves; also, the people must share a set of habits and practices that pull them together as an online community for this kind of forum to work. Luckily, for you, any forum software worth considering is going to let you build subforums for one-to-one tech support, and then when forum members start talking with each other, you can add other forums defined as many-to-many places. Here are two more facts to think about before you learn about four discussion board software packages for your micro-ISV: what are the base business requirements for a discussion board, and when should you start one?
What to Look For Although seemingly endless variations of this list exist, you really need to consider only the following four items to make your discussion forum shine: You need participants: For your discussion board to work, it needs to provide value to those who use it and be easy from their point of view to use. At the beginning, this value— in the form of access, information, tips, advice, and expertise—will come from you and the rest of your micro-ISV. If you require users to register before they post to prevent spam, keep it simple, and above all keep it fast. If you’re not going to automate your discussion board registration process, don’t make forum members register, and plan to kill spam when it appears. You should logically organize information for the benefit of participants: Paradoxically, the biggest problem a forum can have is too much information—too many “please help!” postings, too many loose discussion threads, and too much noise, not enough signal. Creating the right organization of your discussion board is key to concentrating discussions into useful information. A few subforums (Tech Support, Future Enhancements, and General Discussion) with clear editorial policies and purposes is better than a pack of little subforums.
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You or someone you trust has to take responsibility for it: This means you or one of your partners has to be responsible for answering posts, cutting off flame wars, nudging posters back to the stated topic, and eradicating spam in any way, shape, or form. This isn’t a chore to be taken lightly; you’re trying to build a relationship with people interested in your product, and relationships take time and commitment. It’s far worse for your sales to leave questions unanswered for days or weeks than it is to skip doing discussion forums altogether. A discussion forum complements but does not replace the need for tech support: By all means, use your forum to provide information. No matter what you do, people will post tech support issues on your forum, so have an easy way to move discussion postings into your bug-tracking system. But pushing customers into a forum when they have a technical issue almost guarantees their dissatisfaction with your product even if it solves their immediate problem.
When to Do It When should you start your online discussion forum? The short answer is concurrently with your first external beta version—or right now if you already have a product available. By launching your discussion board at the same time you start your first public beta, you leverage your efforts: just limit your forum to beta testers who do double-duty testing both your product and your discussion board. Furthermore, as discussed in Chapter 2, you want to establish a close relationship with your beta testers. Starting your forum with them means they’re a part of your venture from the start; don’t be surprised if some of them become evangelists, forum moderators, and perhaps even employees down the road. If you’re already selling a product, launching (or relaunching) a discussion board is a high, if indirect, priority. It’s a high priority, because more and more potential customers now look to discussion boards as an expected adjunct to your product. But it’s indirect, because while having a discussion board will lower tech support costs and increase sales, there is no easy way of measuring these benefits directly. Finally, it takes time to build a good, active discussion board. It takes a bit of time to plan it, a little more to implement it, and then lots of time for it to grow as people find value in participating or at least reading it. It can take months before your discussion forum really takes off, and this time is something most programmers unconsciously overlook. As you read through the following sections, which cover the four ways of implementing your discussion groups, keep the business points I’ve covered firmly in mind.
Approach 1: Code It Yourself Unless you plan to create, market, and sell a discussion board application, resist the urge to code it yourself. You may be just as good a PHP, ASP, .NET, Java, or whatever programmer as the (mostly) guys who wrote the next three offerings covered, and you may be a damn sight better. But, every minute you spend here is a minute you can’t spend on your product and its marketing.
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Approach 2: Open Source, Kind Of: phpBB Started in June 2000, phpBB is arguably the most well-established open source discussion board package available today. With its choice of database backends (MySQL, SQL Server, PostgresSQL, Access/ODBC), easy-to-use interface, and open source nature, phpBB is often the first choice of programmers and in many ways has defined what a discussion board should look like. Figure 5-8 and Figure 5-9 show a typical phpBB implementation. The discussion board for phpBB is an example of an extremely successful discussion board with more than 162,000 topics and more than 763,000 posts to its main discussion group.
Figure 5-8. A post and a tech support response within phpBB To implement phpBB, all you need to do is either go with a site hosting service that offers phpBB or learn enough to set up, configure, administer, and maintain it from the wealth of documentation at http://www.phpbb.com/support/ and then download the source code from http://www.phpbb.com/downloads.php to run this Web application on your own server. As of this writing, the 50 or so people who maintain the phpBB project have just released phpBB2, a more robust, security-aware successor to phpBB.
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Figure 5-9. Posting to a phpBB board
Approach 3: Outsource to Invision As good as phpBB/phpBB2 is, there’s always room for improvement and monetization. Invision Power Services (http://www.invisionboard.com/) of Forest, Virginia, is one such company, offering its own PHP-based discussion board products; offering free telephone support, installation, and upgrades; and offering hosting for your board. Invision’s excellent technical support system is worth the $69.95 USD for a one-year license for the software, and many tech-related discussion sites use it, as shown in Figure 5-10. As with many products, you get what you pay for; from my own experience I can say that Invision delivers an extremely robust and highly customizable discussion board, and its tech support lives up to its online reputation. But, in March 2005 before even contemplating this book, I was not a happy Invision camper. Although I had used Invision during the initial beta period of MasterList Professional, board maintenance was taking too much of my time, my users had to jump through too many hoops to post, and too many users were posting questions that I would have to answer but would never see again. I was ready for a different approach, and then Fog Creek Software released FogBugz 4.0.
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Figure 5-10. Lockergnome’s Problem Solvers site is powered by Invision.
Approach 4: By, for, and of Micro-ISVs As you’ve read the previous three approaches, you’ve seen more and more complex programming, features, and functionality. Now it’s time to talk about something that will work for micro-ISVs. Although the first three approaches make sense in general for discussion boards, in my opinion, Fog Creek Software’s FogBugz 4 (http://www.fogcreek.com/FogBugz/, $129 USD per user base price, 45-day trial available) has discussion forum functionality that is by far the best way for a micro-ISV to organize and maintain its conversations with current and potential customers. FogBugz has four characteristics that specifically help a micro-ISV: • The amount of time you’ll need to spend moderating has been cleverly reduced to the lowest possible value. • Through specific user interface decisions, FogBugz discussion boards keep people coming back to them and rapidly build the many-to-many relationships that make an online community work.
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• It’s cheap; in fact, you can think of it as free if the main reason you buy FogBugz is to track bugs. • By combining automatic Bayesian filtering found in antispam email applications with a bit of poetic justice, spammers, like co*ckroaches, check in but never get to check out. Now, are these four characteristics lucky, unintended consequences? Nah. As Michael Pryor, president and cofounder of Fog Creek Software tells it, they were the products of really thinking about the problem they were trying to solve. One of the things we try to do is make our software work in a social context. What is the problem that we are trying to solve, and how will the software solve that? A lot of the time as programmers you look at the problem, and you try [to] break it down into logical steps that will solve the problem. For example, when you have a discussion forum, you get troublemakers. You know, people who are going to write prose, they’re going to write posts that really don’t belong, they’re going to harass other people, and a lot of the discussion forums out there try to solve the problem by just giving moderators the right to delete posts. That gets rid of the post, but it doesn’t solve the real problem, which is to try [to] keep the troublemaker out of the view of everyone else. Because if you delete their post, they come back and post again, now saying you’re violating their free speech rights: you create ten posts for the one you deleted. So one of the things we did in FogBugz to solve the problem of how do you get the person to go away and leave you alone is, well, you take their post and make it invisible to everyone else, but they still see it. They won’t know they’ve been deleted. There’s no one fanning their flame. You can’t get into a flame war if no one responds to your criticism. So they get silenced and eventually just go away. Poetic justice indeed! But how effective is it? Pryor continues: We have several ways of telling if they come back, and it’s been proven to be extremely, extremely effective. Say a spammer posts to your board and then they come back to check if it’s still there, and they see it—to them it’s still there—but no one else sees it, so they’re not bothered by it. Besides applying social engineering to spammers, Fog Creek Software decided to apply a solution from another area that works well on the problem of unwanted messages:
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The other thing we did was integrate deleting those posts with Bayesian filtering, so once you start teaching the forum what sort of things are off-topic, it learns, and it will autodelete them. And all you have to do is go in occasionally and tweak how you trained it. So if some spammer comes along and posts a “Make Money Quick,” no one will ever see it because their post will start out deleted. FogBugz, compared to other discussion board packages, is positively minimalist: you start a topic, and other people post after you. There’s no threading, no autoquoting, and no way to even change your posting, as shown in Figure 5-11.
Figure 5-11. The FogBugz minimalist discussion group Why? This gets back to the whole idea of creating a community with the software, and in order to make that happen, we made a lot of decisions. We didn’t say, oh, we want to make a discussion board, and let’s look at what else is out there and copy that. The goal of the software that runs the forum was to provide technical support for our product. That really guided the design of the software. So features like threading are things we decided to not do, and we will never add that because we think it gets in the way of having a conversation—an online conversation but a conversation [see Figure 5-12]. We’re trying to get into the idea that you are talking with someone, but you just happen to be online.
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Figure 5-12. Notice the nonmoderator chiming in at the end of this question. All in all, FogBugz’s discussion board functionality is well suited to the needs of a micro-ISV.
Where Your Customers Start For micro-ISVs, understanding how your potential customers will look for you and making sure you’re there to be found are critical to your success. Simply put, it’s up to you, not your customers, to make sure they can find you, which means you need to see the process from their point of view. In this section, I’ll cover three major ways your customers will find out you exist and (you hope) try to perhaps even buy your micro-ISV application: Search engines and directories: I covered the basics in Chapter 3 of building a good Web site home page—making it easy for large search engines such as Google and MSN to find and correctly list you. But the Web is a big place, and many of your customers will use a wide variety of search tools and specialized directories, so you need to develop your site submission strategy to cast your potential customer dragnet as wide as possible.
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As useful as these specialized directories are, Internet search reality is now defined by Google. Google AdWords are such an important tool for micro-ISVs that I’ll talk with Emily White, the Google AdWords product manager, in the “Google, Relevancy, and Your Micro-ISV” section. Download sites: Although search engines are important, they cover every imaginable topic. Savvy Internet users turn to software download sites and so should you. Later in this chapter, you’ll look at three major download sites—CNET Download.com, Tucows.com and Microsoft Office Marketplace—and get the scoop from Kelly Morrison of CNET about what these sites can provide micro-ISVs (see the “CNET Download.com” section). The influencers: Finally, don’t forget traditional media, trade media, and the new medium of blogs as way to connect to your customer. In a world with too much media and too much information influencing the influencers, the reporters, editors, and respected bloggers are critical parts of your strategic marketing plan. I’ll talk with a mainstream tech reporter and an online software reviewer to better understand how these information matchmakers see the world and companies like yours (see “The Influencers”).
How to Do General Site Submission Right Few topics show just how much the Internet has grown and evolved than the ins and outs of getting listed on the Internet over the past ten years. First there was Yahoo!, where you could submit a site description, and that was that. Next, other directories started to spring up. Then directories became portals to offer you all things Internet. Next came the search engines rather than directories, which were the next hot thing until the boom went bust and Google redefined the whole game. Although it used to be you could handle, with a day or two of work, making sure your product was being found in the general places people would look, now you need a year or two. The rules are fundamentally different. Here’s how the game is played today: First, while you can still submit to the places you really want to be—Google, MSN, Yahoo, and a few others— these companies are in the business of finding you for their customers, if you’re relevant. So, one part of the puzzle is “optimizing” your company’s Web site so it’s relevant to potential customers. Part of this I covered in Chapter 3, when I discussed your Web site, but Search Engine Optimization (SEO) needs to be part of your submission marketing plan. Another recent site submission development is popular directories such as Yahoo, HotBot, Lycos, Ask Jeeves, and LookSmart “monetizing” (charging for) inclusion. Depending on your product and especially your market, it might make sense to include one or more of these in your annual marketing budget. Then again, it may not. What I’m focusing on right now, however, isn’t on the top few places people use to find sites on the Net but on the many places you probably never heard of. How many of these places exist? According to Google Directory, as of June 2005 at least 340 specialized search engines and 844 directories exist. That’s a lot—too many to manage manually. So, you have an information management problem, and that’s something every programmer understands.
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Now, before you reach for your favorite database tool to solve this particular information management problem, stop. Yes, you could probably whip up an app that does this, but should you? Unless you happen to be planning to sell a site/blog submission tool, it simply is not a good use of your time—remember Law 1440? Instead, it’s time to go shopping for the right tool or online service. Keep in mind that like all things Internet, site submission is an evolving field, and what worked last year may not work this year. In fact, over the past few years many site submission services and applications have withered away as search engines and directories counter their own form of spam—bulk automatic site submissions generated in the hopes of improving search engine scores. So, with this warning in mind, here’s your short-and-sweet shopping list: • Needs to work in a manner currently acceptable to search engines and popular directories. • Needs to be well supported, up to date, and evolving as the Internet evolves. • Needs to be able to tell you where you’re listed and not on an ongoing basis. • Cheap is better than expensive, all things considered. In the following sections, I’ll cover three such tools—one online, one desktop, and one a company that offers both. Then, for those who want to dig into how search engines work, I’ll cover one of the top search engine watcher’s Web site. Certainly more tools exist than I can cover in this chapter; you can find a good set of links at these four Yahoo pages: • http://dir.yahoo.com/Business_and_Economy/Business_to_Business/ Marketing_and_Advertising/Internet/Promotion/ • http://dir.yahoo.com/Computers_and_Internet/Internet/World_Wide_Web/ Searching_the_Web/Search_Engines_and_Directories/Submit_a_Site/ • http://dir.yahoo.com/business_and_economy/business_to_business/ marketing_and_advertising/internet/promotion/Software/ • http://dir.yahoo.com/computers_and_internet/internet/world_wide_Web/ Site_Announcement_and_Promotion/
Tool 1: Submit Express Submit Express (http://www.submitexpress.com/submit2500.html), as shown in Figure 5-13, offers two submission tools: a free submitter script that will send your URL and email to 40 major directories and a more tailored subscription service where your home page will be reviewed by Submit Express for its level of SEO and then submitted to more than 75,000 search engines, directories, and Free For All (FFA) links pages. Submit Express also offers SEO consulting services, apart from assessing your site if you use their paid submission service. As of May 2005, Submit Express will submit your site a single time for $24.95 USD or (as they recommend) monthly for six months ($99.95), monthly for a year ($189.95 USD), or quarterly for a year ($69.95 USD).
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Figure 5-13. Submit Express’ value proposition for micro-ISVs
Tool 2: IBP Internet Business Promoter (IBP) (http://www.axandra-web-site-promotion-software-tool. com/index.htm) is a Windows desktop application with 16 optimizing, promoting, and tracking tools and three tools (search engine, directory, and topic sites submitters) designed to make your site submission process effective. Unlike several other applications, IBP recognizes that most popular search engines verify that a real person exists at the other end of the submission process by either presenting a “machine-unreadable” image of a string you need to type in or by sending a confirmation email or both. What IBP excels at is managing the process and filling in as much of the information as possible for you, once you’ve targeted the all-important keywords your customers will use to search. The tool’s clever Top 10 Optimizer, as shown in Figure 5-14, shows you the optimization techniques of a competitor. For example, let’s say you’re launching a new time management application. You feed IBP your URL, select the search engines important to you from a large list, and enter the single search term your customers are likely to use. Then IBP goes out to the Net and compiles a list of the current top-ten Web sites for that keyword. Next, IBP analyzes each site’s search engine optimization techniques—such as the correct use of meta keywords and description,
