My story

I've decided to start blogging I guess because my story might be interesting to others trying to build a software company or who might be at the same stage as me. I've gone from a one-man "micro ISV" selling shareware for a few hundred bucks a month on the side, to building up into a 5-employee, $2 million software company. That's not a wild success, but maybe for fellow developers sitting in their cube watching the clock like I was just five years ago, it's a pretty good accomplishment and I think a realistic, attainable goal.

I was motivated for this because I've lurked at joelonsoftware in the "business of software" section for a long time now -- 4 years or so -- and have always been a little surprised at the misdirected advice and "conventional wisdom" there that developers seeking to make money should try to come up with some "widget" nobody's ever thought of before, post it to some shareware sites, advertise on google, and hope it takes off.

I think that model really misses out on where the money is. My own case is an example. Yes, you could come up with something none of the other half-million developers in the world ever thought of and end up with a runway hit, but the odds are there's probably a good reason nobody's made that product before -- there's no market for it.

It really comes down to, would you rather make a new widget with 99% chance of making nothing and 1% chance of making $10 million; or a 50% chance of making $1 million for the same amount of time and effort (for a remake of some boring business-to-business product but done better)? The former is what everybody seems to do, but the latter is what I did making my very niche vertical market software. It took me over a decade to build, but the money keeps coming in and last year my sales were just under $2 million of which $800K was profit. Not bad for under 200K lines of code!

I can't give a sure-fire formula for how to make a $2 million company with very little investment, but at least I can give an example of how I did it and maybe that'll help someone. So that's the purpose of this blog, I guess... here's another anecdotal story of someone who started a software business and makes good money with it.

My Company

I wish I could link to my company website, but I can't because it's such a small niche and my competitors and employees would read this which wouldn't let me be honest and truthful about things. Maybe I will eventually reveal it, but for now let's just say it's software for nuclear plant control room management. That is similar complexity to my product, a similar narrow niche, similar customer dynamics, similar sales pipeline, similar marketing issues, just similar all around. It's not that, but it's close enough -- so there's my metaphor.

How I developed it and got the idea: let's say in college I was a Nuke Engineering and Computer Science double-major for a couple years. Then I gave up the Nuke E part but at the college job fair my senior year a Nuke plant company recruited me heavily for a basically entry-level control room engineer position and I took it. I worked there a few years and saw a lot of crappy software they "had" to use because they had no choice. They also used a lot of manual techniques -- checklists on laminated pages stored in a binder, to be pulled out and thumbed through in an emergency, for example. Why not just have a monitor right there and page through some things to get it a lot quicker? Or tied to the sensors and immediately display the right checklists based on the situation in big bold text?

I saw a lot of problems like that. But the plant functioned okay with their crappy procedures and laminated pages, and people tend to make do with what they have. The software providers kept selling their crappy products because there was just not much competition so not much incentive to improve.

That's what you'd call a "problem needing a better solution."

I think there are problems needing better solutions still in a lot of niches. Entrepreneurs thinking big probably neglect the niches and focus on the problems of the broad mass consumer market, thinking volume. But so does everyone else, driving down the prices. In truth though though you can make as much or more servicing the small, obscure niches since few others do, so they're that much more desperate and willing to pay more. Simple "supply and demand" from microecon 101, but it's absolutely true. Businesses and government are out there, and they're willing to pay.

Although I soon quit and moved into software development at a large engineering company, I knew all along I was going to develop that app in my spare time and break away into my own business eventually. I also needed to gain development experience as well as build my savings, so having that day job and developing in the evenings seemed the best route.

Unfortunately, Much of Being an Entrepreneur Sucks

Now some of the bad side. I have to say despite making good money and having "freedom" as my own "boss," there's a lot of Entrepreneurship that really sucks.

The main thing is, I used to be really easy, always happy and always laid back as an 8-5'er working for the "man," but now I realize I have actually become sort of an asshole. Unfortunately, the realities of business make you that way. And you really have to be an asshole to be successful. I'll explain more about that in another post.

Second, my stress level is a whole lot higher in "charge" than being in that cubicle. That's really not the reason for turning into an asshole, that just comes with the job. I am responsible and take the blame for everything. Before I could care less, I did what I was told and went home at 5.

Third, turns out all along they were right, money doesn't make you happy. It's a number on some web page on my bank account online. Whoop-dee-do. No I don't worry about how I'm going to pay the electric bill like I used too, but back then I also didn't worry about blowing $100K on some new huckster employee who expertly covers how he does nothing all year and embezzles from the company. Or any of the other 100 things that could go wrong and make me lose everything.

So despite the potential for money, being your own boss can really suck sometimes and I'm not always glad I did it. Sometimes I am though.