On this weblog I often use the term "small ISV".  It's time to define what I mean.

ISV stands for "Independent Software Vendor".  The acronym seems to be most often used within the Microsoft ecosystem, so it carries somewhat of a Windows-centric connotation, but that's not really part of its definition. 

An ISV creates, markets and sells software products.  Consulting shops are not ISVs, although an ISV sometimes does consulting work.  Value-added resellers are not ISVs, although an ISV sometimes resells stuff from somebody else.  In an ISV, you have to envision the product you want to build and take a risk that somebody will still want to buy it by the time you get it built.  If you don't have a software product, you are not an ISV.

A small ISV is an ISV which is not big. 

When I think of a small ISV, I think of a privately held, self-funded company, but I won't reject you just because you happen to have a VC lurking around. 

The word "small" is a relative term, so I won't define a quantitative limit.  Your small ISV might have 3 employees, 25 employees or 50.  If you have more than 100, you might want to start asking yourself if the word "small" is still appropriate, but I won't kick you out of my club just because your headcount has 3 digits.

Small ISVs tend to stay small.  If they get big, they do it very slowly.  They grow organically, funding their growth with their own revenues.  Small ISVs are often very boring and very profitable.

I like writing about small ISVs because I work in one.  I believe small ISVs are where the opportunities are today.  I know that not everyone is going to agree with me on this point. 

I'm suggesting it may be time to reset our expectations.  During the bubble, we put a lot of our efforts into building big companies fast.  Our perspective changed radically when we saw things like LNUX with a $13 billion valuation on its first day.  Small private companies could not begin to produce that level of excitement, so we began to treat them with disdain. 

It's 2003 now, and not much of the bubble survived.  LNUX has lost 99.7% off its value.  I could name dozens of other examples with similar results.  In fact, one of the few remaining leftovers from the bubble is that we still have widespread disdain for small companies.  I think this attitude sometimes blinds us to the cool opportunities to be found in building a small ISV.

I see lots of discussion lately about the possibility that software is a dead industry, or that perhaps the good times are behind us.  I myself am fond of moaning that I was born ten years too late, missing out on the frontier-like climate of the software industry in the eighties. 

But the software industry is alive and there are plenty of good times ahead.  I think lots of cool products are wanting to be built.  Not very many of them will get you VC funding or put you on your way to the NASDAQ.  But this isn't a bad time to build a successful small ISV.

Need ideas?  I just finished reading Carlos Perez' 101 Reasons Why Java is Better than .NET.  Note that I certainly don't agree with the claim made in his title.  Some of his items are FUD or just plain wrong.  But some of those items are accurate. 

We .NET fans have to admit that Java has been around longer and therefore has things that are not yet available in the .NET ecosystem.  You can view those things as disadvantages of .NET or you can view them as product opportunities.  Carlos' list could have been titled 101 Product Ideas for a .NET Small ISV.  I'm not saying that all those ideas are good ones, but something on the list might get the idea flow started.

The Register:  "the FTC is looking into the Passport breach and could slap Microsoft with a fine of $2.2 trillion"

Hmmm.  I think I'm going to choose to believe that the author of this article doesn't know that $2.2 trillion is 7 times more than Microsoft is worth.  I wonder if we should tell them?