In this talk I interview Patrick McKenzie, who has been running a successfull MicroISV - Bingo Card Creator. Patrick has been very kind, and agreed to share with us the things he learned while developing and marketing his product. For those of you who are not familiar with the term, microISV usually refers to a one person company, or a few people company, but always a very small company.
Patrick McKenzie moved to Japan from America shortly after graduating from college. He worked as a technical translator for a while, opened a small software business on the side, and eventually changed jobs to engineering then quit after the small business took over. When not spending too much time on the Internet, he enjoys trashy vampire novels and spending time with his friends.
Parag: Hi Patrick, I recently read your awesome blog post 'Software businesses in 5 hours a week'. It's really wonderful that you are running a successful microISV. Did you always want to create and run your own microISV, or did you discover this calling somewhere along the way?
Patrick: I actually was very risk averse, and wanted nothing more than to get a nice safe job at a megacorporation when I was in college. At the time, I knew I wanted to be an engineer, but reading the Wall Street Journal every day had me worried about competing with hundreds of thousands of talented engineers in India and China. So I decided that, if I did one hard thing in addition to engineering, the intersection of people who could do both hard things would be minuscule. Languages seemed an obvious choice, so I looked for a language where there was lots of economic opportunity. Japanese was a great candidate: few Japanese people speak English, virtually no Americans speak Japanese, and our trade in high tech industries is in the billions every year. I figured if I was one of the four American engineers who can actually speak Japanese, Microsoft would have to give me a job as PM of their Japanese Office group.
When I got out of college, I went to Japan to firm up my Japanese while working as a technical translator. For a variety of reasons, that job was very underchallenging, and I needed a side project to keep from going insane. Bingo Card Creator, my microISV, was that side project.
?Parag: How long did it take Bingo Card Creator to succeed to a point, where you were comfortable leaving your day job, to work on Bingo Card Creator full time?
Patrick: I actually did not intend on quitting my job in favor of BCC for a very long time. Other things were going on in my life, principally work-related, and when BCC was quite young I changed jobs and committed to the new job that I would be there for about three years. By the time I was done with my commitment, BCC was routinely exceeding my day job salary. I've written elsewhere about the culture of Japanese megacorps and the lack of work-life balance: suffice it to say that when you work a 19 hour day and make less than when you do while sleeping (since BCC customers would purchase mostly while I slept), you very quickly lose motivation to continue with salaried employment.
Anyhow, I noticed that I could probably quit on BCC revenues about 3 years into the project and actually quit at about 3 years 8 months.
Parag: Can you talk a bit about the process you followed to take Bingo Card Creator from a (good) concept to a point where you had real figures that validated the concept and gave you the courage of leaving your day job.
Patrick: There wasn't really much of a process to get it out the door: make the product, make a website, start selling it to people. That only took 8 days. As for the long slog from getting from that first sale to the point where I left the day job, I have blogged most of it, but some major milestones were:
- Using my first few hundred dollars of revenue to test out Google AdWords, which took almost a year before I cracked the code and was very profitable. Google used me as a case study for one of their products as a result of my success with it (which floored me at the time).
- Switching from a downloadable Java application to a web application, which virtually doubled sales due to higher conversion rates, while simultaneously decreasing support costs by 90%. I strongly, strongly recommend web applications.
- Figuring out organic SEO, which drives about 50% of my sales (the remainder mostly AdWords) and 75% of my profits. My main technique is called scalable content creation -- basically, creating a system and process which allows a freelancer to create more activities for my website. Each activity (I have nearly a thousand) solves a very specific pain point for a few dozen teachers every month. Many of them will trial BCC when they find my site on Google, and I sell a copy to about 2% of them. 1,000 * a few dozen * 2% * $29.95 = a lot more money than you would expect from the likes of Owls of East Asian Bingo.
Parag: Can you tell us, what are the highlights of running your own microISV??
Patrick: Particularly in comparison to the old day job, my work/life balance is so good that I sometimes wonder if I'm living in a dream and will wake up and lose it all. I set my own hours, I have virtually infinite flexibility to travel, I can see my family when I want, and I'm immune to the social pressures which cause many Japanese (and American engineers) to sacrifice their waking lives in the service of a regular paycheck. I also periodically get folks who write me to tell me that they were inspired to start a business. Those emails are very motivational, particularly when they come from folks who are already successful. (There are quite a few of them who have bigger businesses than me now -- and I'm very, very happy for them.)
Parag: Can any developer with a good idea, a good process for scalable content creation, and good execution, achieve success like you have achieved for Bingo Card Creator?
Patrick: I think that any developer can learn the skills they need to be successful running a software business. Bingo Card Creator didn't start with a good idea, a process for scalable content creation, or good execution! It started with the most minimal software and website that I could possibly bang out in a week. I spent years trying X, Y, and Z prior to scalable content creation really making the business take off (for certain modest values of "take off"). Patience, willingness to learn, and a capacity for experimentation will eventually lead to success in this business. Running a business is both harder and much easier than people think it is: there are an awful lot of moving parts in the system, but programming is about understanding systems which are orders of magnitude more complicated than a small business.
Parag: What would be your advise to software developers who wish to create their own microISV ?
Patrick: Launch. Do the simplest possible thing, but launch. Release software below your usual level of quality, but launch. Get laughed at, but launch. Be afraid, but launch. The single biggest thing that prevents people I know from becoming software entrepreneurs is that they express the desire to eventually do it, but they do not ship software. Shipping software -- writing it and then charging real people money for it -- defines software businesses. Stop making excuses and get it done.
Thank you Patrick for giving us your time and valuable advise. I am going to repeat the last line you said, because it is so very important ‘stop making excuses and get it done’. Dear reader, if Patrick has inspired you to create your own microISV, then - don’t just sit on your thoughts - get it done.
Patrick, thank you once again, and we wish you and Bingo Card Creator lots of luck and continued success.?