September 19, 2013

Eric Sink of the Business of Software

Eric Sink on the Busines of Software
Eric Sink


(September 19, 2013)

This series of basic essays on starting and running a small software business says what you'd expect it to say. I didn't find much news here, but I've been running a small software business for a long time. I also didn't find mistakes or distortions.

Inevitably, some of the lessons are just repeating the author's prejudices ("business instincts"). Sink likes trade shows, and thinks advertising is often ill-advised. Fine. What is needed in this argument are two things — income and expense — about which Sink essentially waves his hands. Rogue Amoeba did a series on exhibiting at MacWorld last year that provides the necessary detail; Sink, essentially, likes working a trade show and so finds arguments that the intangibles are worth the cost.

More important, Sink thinks that very small ISV's, including one-person companies, can be very successful. This is interesting, and somewhat contrary to conventional wisdom. It's one thing, though, to argue that software companies that actually make software and make money can be worth building; it's another thing entirely to figure out what the right size is. Sink seems to say that the right size starts at a headcount of 1/2, but a lot of the businesses he talks about have 1-3M of revenues and employ 10-30 people. Which really makes sense? Do you need to build out to 30? Should you want to? I think there's a real difference between aiming at $300K and aiming at $3M, and it's not obvious how to follow the money.