About three months ago, Rob Walling and I announced that MicroConf was coming to the Riviera in Las Vegas. Two weeks ago, it happened. And more than 100 people descended on the hotel for a conference we put together from beginning to end in a mere three months. If I saw you there, then I want to say “Hello, and thanks again for coming”. If you weren’t able to make it, I think you missed a great conference.

Rob and I kicked around the idea of having a conference for nearly a year before we decided to do it. Several people asked us to put it on but it never seemed like a good time. But I suppose it’s like having a child. There’s never a good time and if it’s something you want to do, you have to just do it.

But why have this conference in the first place? What made it so important? Justin Vincent from the TechZing podcast asked me if we were going to make a lot of money on it and I explained that the economics were such that we would most likely break even, but it would be close. On his podcast with Jason the next day, he called it a “labor of love”, which is a pretty accurate assessment.

But that doesn’t quite answer the question. Why bother putting on the conference if we weren’t going to make money? What made this conference so important to us?

After seeing how everything went down, this was exactly the type of conference that I would have wanted to attend more than five years ago when I was first starting out with my business. More than 100 people came to the conference with exactly the same goal in mind: to learn about how to build a software business from other people who were doing it and how to go about it without external funding. Virtually everyone there had a product they were building or a product idea that they wanted to launch but most needed a bit of help in figuring out how to do it.

Ideas flowed like free drinks at the casino. It wasn’t the type of atmosphere where people were afraid to talk about their ideas for fear that someone might steal them. Everyone was too busy working on their own products to take an interest in someone else’s, so everyone talked quite openly about their problems, their fears and more importantly, were willing and able to help each other solve those problems.

During the evenings, speakers mixed freely and at great length with the attendees. We got a lot of compliments on that. I got the distinct impression that many of the other conferences people have attended, speakers show up for their speech, give their talk and are out the door shortly thereafter. That didn’t happen at MicroConf and it was, in a word, awesome. Every speaker hung around to listen to all of the other speakers. Some of the speakers asked some of the harder questions during the Q&A sessions. There was genuine interest in what everyone else was saying and in learning from the experiences of others.

Lunch on both days was a highly intimate affair with about a dozen entrepreneurs sitting at every table and we made sure that the tables were packed together in a really tiny room. Everyone just sat there talking about whatever came to mind with people commenting left and right on a variety of topics and sharing their experiences. Speakers were mixed among those tables, handing out advice and even cannibalizing their upcoming talks to help people. I felt like I spoke with nearly everyone there, although I know I likely missed a few people. Minutes before I had to catch my flight, I ran into the three guys from Ninja Otter and thanked them for coming. I’m sure they weren’t the only ones I didn’t quite catch up with.

Sunday night at the pub I was told: “This conference has already paid for itself and it hasn’t even started yet.”

One attendee came up to me between sessions and said “I think Patrick McKenzie just saved me $5,000 on AdWords.”

And yet another introduced himself to me and said: “You probably don’t remember, but I’m here because of the very long explanation you sent to me about why I should come to this conference. I wanted to say thanks. I wouldn’t be here if it weren’t for that email and I’m really glad I came.”

For days afterwards, blog posts about the conference appeared. On Sunday, I listened to the Techzing podcast discussing the conference, and read through hundreds of tweets about the conference. We set up an online group for conference attendees and more than 30 people joined it within 72 hours. Another couple days and the membership was over 50. Between the times my speech started and ended, my Twitter following increased by more than 60 people. By the end of the conference it was up by more than 80 and today is more than 100. I imagine other speakers got the same treatment.

It feels good to get that kind of a response and I can’t begin to express my thanks to the speakers for giving up their time, the attendees for taking a chance on the conference, and to all of the people who helped out with all the random things that came up, like Dave Rodenbaugh taking photos and Ruben Gamez recording video.

Not to mention the sponsors. Whew! We had Microsoft, Red Gate, Balsamiq, bvsoftware, Bidsketch, UserVoice, Pluralsight and Appsumo. Rob and I also contributed on our own with sponsorships from our podcast Startups For the Rest of Us and our online startup school called the Micropreneur Academy. There were loads of giveaways and it was hard to squeeze them all in, but we managed it. Special congratulations go out to the Xbox with Kinect winner. I bet he’s a happy camper!

But there was one question that burned in my mind the entire conference and I took every opportunity to ask people the same question: “Would you pay to come back next year.” I asked that question not because I was looking to make more money next year, but to make sure that we delivered value to people and they were able to justify attending it again. If they said they wouldn’t come back, then we didn’t get it right. But you know what?

Not one person said they wouldn’t come back. And I realize that most people are going to be nicer in person than they would be in an anonymous survey, but the responses I heard were over the top and overwhelmingly positive. I would expect that there were a couple of people for whom the conference probably wasn’t a good fit, but the networking opportunities abounded.

In short, the overwhelming answer was always “Yes”. Several people said we didn’t charge enough and most said they couldn’t wait for the next MicroConf. One attendee even commented that he’d pay any amount of money to come back next year.

If that’s not a testament to what we were able to put together, then I don’t know what is.

I’m looking forward to reading the surveys that are going out this week. Thanks again to everyone who attended, helped out, or sponsored the event. We really appreciate your support.

And one more thing. If you’re interested in coming to MicroConf next year, be sure to sign up for Early Notification.

On a recent podcast, Rob Walling and I chatted about a new online magazine called Hacker Monthly. Today I dropped over and checked it out and found an article that really rang true with what I’ve been doing over the past several years. It was called “The Royal We: Single Founder Startups” by Ray Grieselhuber. Here’s the part that really rang true to me.

Think about all of the successful companies we know. Isn’t it true in many cases (though not all, of course) that even in companies that were started by co-founders, there is usually The One?

The One is that person who really makes the company work. The other founders no doubt contribute a great deal, but if it really came down to it, the company would survive and flourish in much the same way as long as The One was running it. In some cases, this actually happens.

Way to put it Ray. I tried several years ago to put this down in my own words in my article called “The Single Founder Myth” and I don’t think that many people fully understood what I was getting at. My point was that it’s entirely possible to make it work as a Single Founder and that Paul Graham was wrong in his assessment that a single founder company can’t make it work. Having a company with a single founder is not necessarily indicative of a mistake. It is indicative of someone who simply hasn’t found another whom he feels is his equal in terms of drive, ambition, ideas, talent, dedication, or some combination thereof. Over the last several years, as Ray pointed out, several notable examples have risen to the surface, such as the founders of Mint.com and Blogger.

In fact, after reviewing the Ginzametrics site a bit more, I realized something. The company is backed by Y-Combinator, which I can only assume means that: a) Paul was outvoted, b) Paul has discovered somehow that he was simply wrong, c) is testing his theory in on a live startup.

Had I thought this would be the case several years ago, I would have certainly gone down this path. Now, I’m not so sure.

But I will point out one other thing. It’s quite possible that this isn’t the first Single Founder startup that Y-Combinator has funded. I’ve just never noticed until now.

In other news, the summer is over so I really don’t have any excuses to delay my writings. You’ll start seeing new articles posted in the next week or two as I get them out the door. Feels good to be back.

About 6 weeks ago, I had dinner at a pizza place near Boston with some fellow developers. We were generally discussing various aspects of business, things to do, things not to do, etc. One of the guys asked me a question that I feel like I get quite frequently:

“What’s the most important thing you need to do to be successful as a single founder?”

I immediately came up with three different things, but settled on explaining the importance of setting goals and having a plan for meeting those goals. We talked about how to go about setting goals for a few minutes and then went on to discuss other things.

This isn’t a new question to me, but I was uncomfortable with the answer. I seem to answer it differently every time I’m asked and not usually the same way twice. This past Friday, as I sat white-knuckled in a small turbo-prop plane that was being buffeted violently by winds over the mountains of West Virginia, it dawned on me why I had been uncomfortable with my answer.

I was wrong.

If you ask 100 successful people what the secret of their success is, every last one of them is going to be more than happy to tell you because successful people like to tell you their story. In listening to 100 stories, you will probably end up with at least 50 different answers. You will also get a mix of things to do, and things not to do. This is a problem because after listening to all of the answers, you are still left wondering what the secret is because everything they said will make sense and for each of them, it was probably true.

As my plane was buffeted by high winds and we dropped another 20 meters in a very short timespan, it dawned on me that being successful with your business is a lot like flying a plane. There are a lot of things that have to be done right in order to keep it going. There’s no single factor that makes a business successful and in fact, most of the time it takes many things done right to be successful.

It also isn’t so much about being great at any of them as it is about being competent at most of them. I had an interesting conversation one day with a pilot who was on his way to an assignment and he explained that he flew the big jumbo jets out of Minneapolis to Shanghai. I explained that I had a great deal of difficulty driving a 26 foot truck with a car trailer hitched to the back through the Berkshire Mountains in the middle of the night through rain and fog. I couldn’t begin to imagine how hard it would be to land a Boeing 747.

He explained: “Landing a jumbo jet really isn’t that difficult. It’s all about systems management. You are just making small adjustments based on what the instruments tell you is happening and where you need to be.” I’m certain that he was oversimplifying the issue, but I also realize that my answer of setting goals and having a plan for meeting those goals is an oversimplification as well.

Running a small business is like flying an airplane. There’s not a single thing that keeps you in the air. It’s doing a lot of things right. But the truth is that whether it’s landing a plane or running your business, you can screw some things up and still be successful. You can recover from most mistakes, while others are going to be catastrophic. Forgot to refuel the plane before heading overseas? Probably catastrophic. Didn’t do the best SEO for your website? It will probably cost you more to acquire customers by using AdWords, but ultimately is probably not going to kill your business unless you screw that up as well.

If you compound your mistakes, your chances of failure increase dramatically. But each success will reduce the consequences of the mistakes. This is why large companies can have such a shoddy product and still make money off of it. They have so many things going on that the law of averages ultimately weighs in their favor. Does the product manager suck? No big deal. The engineering team will probably pull his weight. The code is riddled with bugs? No problem. The support team is there to help with workarounds.

So the secret to success is to realize that there isn’t a secret. Everywhere you look, you will find something that needs to be done competently. For everything you do that doesn’t measure up, you will have to make up ground in other places, keeping in mind that one success is less than or equal to one failure and that the sum of your successes must be greater than or equal to the sum of your failures.

If it’s not, then you probably just crash landed.

I published a popular article named “The Single Founder Myth” a few years back. In this article, I contended that contrary to popular opinion, it was not impossible to go it alone with a software startup and be successful. To clarify up front, what I mean by “going it alone” is that you build up the company without handing over equity to someone else, be it either investors or other co-founders.

In this article, I gave several reasons why companies have multiple founders and countered the necessity of each for a single founder company. I came to a sudden realization the other day why most technology companies have two founders.

It’s because one of them is a builder, and the other is a salesman.

The Builder is the person who is doing the bulk of the work building whatever it is that you’re trying to sell. The Builder is most likely the better of the two at development or engineering than the other and it is internally agreed that the Builder is going to make the major design decisions.

The Salesman is the person who spends most, if not all of his time trying to find customers and sell the product. It’s quite possible that this person will be the person searching for investors for the company as well and in essence, is “selling” the company as a viable investment.

Responsibilities other than building the product or finding customers are likely to be divided between them to some degree, but these primary roles will remain steady for quite some time until the company either starts hiring employees or falls apart. Things like creating marketing collateral, business negotiations, financial planning, etc. All of these things can be done by either co-founder.

But the ability to sell technology products and the ability to build technology products are two entirely different skill sets. There are very few people who possess both skills and even if you do possess them both, there are only so many hours in the day. The problem with trying to build up a product while you’re also acting as the salesman is that at the beginning, both of these tasks are extremely time consuming and tend to be mutually exclusive.

I know from experience that developing software or designing hardware is something of an art and it helps if you’re “in the zone”. It takes time to get into that zone and once you’re there, if you’re interrupted it can take a long time to get back, assuming you can get back that day at all.

I also know from experience that sales is very much an interrupt driven process. It takes several minutes to prepare for any “major” sales calls and when you’re leaving messages, people can reply at any time which is very disruptive to whatever schedule you were trying to keep. With a co-founder, it would be a lot easier to have one person field all of the calls while the other concentrates on building whatever it is that you need to build.

Does that mean I’ve changed my tune? Do I now want to run out and find a co-founder for my company? Not a chance.

You see, the Builder and the Salesman model works great for companies where you really do need a sales force, be it for customers, angel investors, VC’s, or distributors. While one person is working hard in a back room somewhere, the other can be on the phones or hitting the pavement trying to land sales and close deals.

However a lot of software companies these days don’t hold themselves to that model. In fact, many shun it like the plague because the cost to acquire a customer on the internet is exponentially lower than it is if you require a sales rep to call on each of your prospective customers. It’s more efficient to use Google AdWords to solicit 1,000 visitors to a website and sell to 1,000 people at the same time than it is to have a sales rep call 1,000 people in succession and ask if they’d be interested in what you have.

“Hi, this is so-and-so from Acme Widgets and we’d like to sell you some software.” *click*
“Hi, this is so-and-so from Acme Widgets and we’d like to sell you some software.” *click*
“Hi, this is so-and-so from Acme Widgets and we’d like to sell you some software.” *click*
“Hi, do you have a minute?” *click*
“Hi, do you have 30 seconds?” *click*
“Hi, I am in contact with you to disperse a sum of $30 million US dollars from a bank in Nigeria that is no longer being claimed.” *click*

This sort of thing gets old quick. You can hone your story as good as you want, but at the end of the day it’s still difficult to make sales one on one. A lot of large companies are still very successful these days doing it because they have price points that are so high you absolutely need to have a sales rep.

Do I need a Salesman as a Cofounder to be successful?

Absolutely not. There are millions of products being sold online today which don’t require or use a sales rep at all. Don’t get me wrong, the price points are a lot lower, but let’s be honest. What price point do you expect to be putting on your software?

The reality is that in many organizations, the role of the salesman can be eliminated, especially if you’re selling your products online. In that case, what you really need is a marketer. Building a better mousetrap doesn’t do the job like it used to. When two products go to war, the one that wins is going to be the one that has better marketing, not the better product.

Now here’s the best part about this arrangement. Because you’ve eliminated the salesman in favor of a marketer, guess what time is the best time of day to do business on the internet?

The answer is that it doesn’t matter. Whether it’s 2pm or 2am, you can make changes to your website, update your marketing collateral, review website visitors and statistics, etc.  No matter what time of day it is, you’re not actually interfacing directly with customers. You’re setting things up so that customers will see what you want them to see, and when you want them to see it. There’s never a time when a customer comes to your website, you size him up and say “No, come back tomorrow.” It just doesn’t happen. Sales reps on the other hand are required to work within the schedules of their customers and try to convince them to allot time to speak with you.

What this means is that you can be both a builder and a marketer and so long as you’re selling your products online and don’t require a sales channel, you don’t need that salesman. Hence, you don’t absolutely need a cofounder.

A Word of Caution

To be a successful single founder business, you need to be really really good at two things: Building software, and marketing it. Without both of those, you’re basically sunk. If you’re a great builder, then you’ll have a wonderful product that nobody is ever going to hear about. If you’re a great marketer but a lousy builder, you’re going to find that you can put lipstick on a pig, but it’s still a pig and everybody knows it.

I remember the day very clearly, although it was not apparent to me at the time. It was the day that the Micro-ISV movement died.

A Brief History

For those of you who aren’t familiar with the history of the Micro-ISV, I’ll provide it for you here. Eric Sink is widely credited with the creation of the term “MicroISV”. As far back as May 8, 2003,  Eric was talking about what he referred to as “Small ISV’s“. The concept is rather simple in nature. An “ISV” is an independent software vendor, a phrase which is derived primarily from the Microsoft ecosystem and refers to software companies that are not Microsoft. As for the “Small” part, they’re small companies with anywhere from 3-100 employees. It’s a pretty simple definition, but definitive as well.

In September of 2004, Eric Sink published this article on his blog, which had appeared on MSDN a little bit earlier. His intent was to focus on what he called the “MicroISV”. It seems to have occurred to Eric that companies of only one or two employees were out there, producing software and doing rather well for themselves as single founder companies. This thought intrigued Eric. So much, in fact, that as part of his MSDN series of articles he decided to undertake the process of building a MicroISV himself to provide him additional content and experience to draw new articles from.

So it was, that Eric Sink, CEO of Source Gear and self-proclaimed .NET Redneck undertook a 16 month journey in which he built a product in his spare time and sold it online. Over the course of those 16 months, he chronicled his progress on both his blog and in his MSDN column titled “The Business of Software“. Developers and geeks around the world rallied to the battle cry raised by Eric. Large numbers of new MicroISV’s were founded, forums were started, and journalists latched on to write books about the topic and ride the wave of popularity to success.

“He can show us the way!” some thought.

“He has unfair advantages like his MSDN column and a massive blog following. This isn’t going to show us anything!” said others.

How much money would he make? How do I follow in his footsteps? The world of Geeks held its collective breath and watched as Eric raced down the path laid before him. Behind him followed a crowd of geeks, waving flags and pom-poms, watching intently to see which way the story turned. So for 16 months, we followed Eric to see the conclusion of the story.

And Then Eric Killed the MicroISV

Abruptly, one day Eric announced that his journey had ended. He sold his MicroISV to Dennis Cronin for an undisclosed 4 figure sum, which implies a maximum sale price of $9,999. With sales reaching a mere $215 over the course of 16 months (including September of 2004), we can surmise that the actual amount was probably a lot closer to $1,000 due to the multiples at which products are typically acquired. The “profits” were donated to charity.

What did this mean for the MicroISV movement? A giant kick to the crotch. That’s what it meant. And it accomplished virtually the same thing.

I’ve seen the statistics for one such website that marketed directly at MicroISV’s starting in 2004. Website traffic has approximately halved every single year since Eric’s announcement. Websites are supposed to grow. You add content, you build out the site, more  visitors come, and website traffic grows. That hasn’t happened. In fact, the reverse has happened. Traffic for this particular site shows that the current traffic levels are a mere 6.25% of what they were at the end of 2005. That’s not just bad. That’s appalling. I did some in-depth research and found that traffic started dropping quickly immediately after Eric’s announcement, after showing month over month growth the prior year. Other sites have disappeared from the internet entirely.

Therefore, I submit to you that it was on December 26th, 2005 with not much more than a keyboard and a blog entry, that Eric Sink effectively killed the MicroISV movement.

This Is NOT Eric’s Fault. It’s Ours.

I’m going to be blunt here. Eric was not trying to start a movement, nor was he out to kill it once it started. He started his MicroISV for two reasons, and only two reasons: He was curious about what it took to run a MicroISV and he wanted to help generate content for his Business of Software column on MSDN’s website. That’s it. He didn’t do it for you, he didn’t do it for me, and he certainly didn’t do it to build a new revenue stream for himself. I’m fairly certain that he is well compensated as the CEO of SourceGear.

Far too many people are under the impression that if Eric Sink couldn’t make it work, then what chance do they have to make it work? This is the wrong way to look at it. Instead, as I’ve said in the past: “If at first, you’re not successful, take a good hard look at what went wrong.” Unfortunately nobody seems to have done that and when the appointed figurehead of a movement falls, people lose interest.

Everyone has honed in on the fact that Eric failed. Thank you, but I beg to differ. Let’s get one thing straight. Eric accomplished what he set out to do. He never intended for it to turn his MicroISV into something bigger. In fact, Eric intentionally stacked the deck against himself.

Eric’s (Self-Admitted) Mistakes

Lack of Motivation- Eric was simply not committed to building his MicroISV into a solid revenue stream. He built the product to write articles and once that had run its course, he had little use for the product or the MicroISV that was built from it. To quote him directly:

But I must admit that my situation is unusual. Most people start a micro-ISV because they are attracted to the idea of being an entrepreneur. A sense of dissatisfaction with their current job is a source of motivation.

I’ve been there, but right now I don’t have that particular set of problems. I am already an entrepreneur, and I am quite happy with my situation. Here at SourceGear we actually like building developer tools, and we’re having some very nice success doing it.

So with Winnable Solitaire confined to my copious spare time, it may proceed slowly. But I do have some ideas for what I want to do next with this project. I will close with a few remarks about my next iteration through the cycle that Pavlina describes.

Choosing the Game Industry - Speaking from experience, I can tell you that the game industry is brutal. Either you have a hit or you don’t. And if you don’t, you need to dedicate significant resources to finding out how to make it more appealing. Selling games is different than selling business software because you’re not solving a pain point. You’re providing entertainment, which although it is technically a pain point for the consumer, there are millions of competitors.

If you’re selling source control products, you have maybe 20 competitors tops. When you sell games, you’re competing not only with other games, but all other types of entertainment mediums, such as tv, movies, newspapers, comic strips, not to mention all of the other computer games out there. I’m not saying this is impossible, just a lot harder than selling business software that solves a definitive need. Eric basically admits that he would likely be more successful in a different market, almost from day one in his First MicroISV report.

Competing with Free Products - Solitaire is included with every copy of Windows. I’m not sure I see the point in competing against Microsoft in what is arguably the smallest niche market I’ve ever seen. ie: Solitaire games that are guaranteed to be winnable. Thomas Warfield seems to do pretty well in the broader Solitaire niche.

Ignoring Common Sense – Eric openly admits in the Bottom Line of his initial blog entry that “Common sense would say that my product is doomed.” This is putting it lightly in my opinion, but is true nonetheless.

The bottom line is that if you know the mistakes that you’re making before you’ve even started, you’re going to wind up flat on your back like Charlie Brown. Letting Lucy hold the ball doesn’t excuse you from being the source of blame anymore than Charlie Brown’s faith that, just this once, Lucy will let him kick the ball.

Wait… How Is This Our Fault?

Eric killed the MicroISV movement because we let him. Eric never asked to be the poster child for the MicroISV movement. Neither did Joel Spolsky for that matter. But they have been for nearly a decade because we appointed them to those positions. The MicroISV concept struck a chord with a lot of developers and micropreneurs who wanted to start their own companies and quit their day jobs. The expectations that were placed on Eric to do well with Winnable Solitaire were unrealistic and quite frankly, not in line with what Eric was trying to do.

When Eric’s product failed to produce anything remotely close to a full-time income, scores of developers abandoned their MicroISV’s and started looking for another way out of their 9-5′s. They found what they were looking for in Paul Graham’s Y Combinator program. Paul launched Y Combinator with in early 2005 and quickly produced success with companies like Reddit and Loopt. The dynamic quickly shifted and as the MicroISV movement slowly withered away, the future for micropreneur hopefuls shifted to startup companies which leverage Angel and VC funding.

Let me be honest for a minute. In no way, shape or form would I claim that starting your own software company is for everyone. But the Angel and VC funding route is a lot harder to swing for most of us and living in the geographically blessed startup hubs is merely one of those reasons. Back in 2006, I wrote an article called “Startups for the Rest Of Us” and posed the question: What about me?

At the time, I had mixed feelings about Eric’s “failed” experiment. On one hand, I felt like he didn’t really follow through with it the way he could have. On the other, I had recently left the fold of Pedestal Software which was acquired for $65 million and the lure of doing a startup and cashing out after two or three years for millions was pretty high. I knew I could build products, but didn’t feel like I had any ideas at the time which were worthy of millions of dollars of investment. I had been offered $50k as an initial investment, but ultimately turned it down. Instead,  I decided to take it slow and build my own company.

The Landscape Today

Amazingly enough, the landscape of building an internet business today is not much different than it was five years ago. All you need is a computer, an internet connection, and knowledge of how to develop software and you can crank out a product. There are thousands of resources available to help you get started. There are countless blogs, startup schools, online academies, free or reduced cost software packages for startups, and a host of other advantages that didn’t exist several years ago.

It doesn’t matter how old you are today, where you live, or what you do for your full time job. If you have a computer, an internet connection, know how to write software, and most importantly, the drive to succeed, then you can sell products on the internet and make money from them.

Eric didn’t make a lot of money with his MicroISV. Big deal. Does one failed attempt from an internet legend define a movement? I think not.

Besides, just because you start out small, doesn’t mean you have to stay small.