The 10,000 Most Tempting Software Startup Categories

Dharmesh Shah has a great post up today at OnStartups: The 10 Most Tempting Software Startup Categories. I won’t steal his punchline by quoting all ten here, but the first 5 are:

  • Project Management / Time Tracking / Bug Tracking
  • Community / Discussion Forums
  • Personalized News Aggregation/Filtering
  • Content Management (website, blog)
  • Social Voting and Reviews

These 5 – and the other 5 – are the low hanging fruit, the low barrier to entry app categories that are a easy first grab for the firsttime startup (my first app fit squarely under project management; StartupToDo.com is a variant of #2). People will say these kinds of apps have for the most part been done to death, but paradoxically that these are the only kinds of apps that will reliably sell, so stick with the “tried and true”.

So how do you explain a mint.com? Various VC’s seem to be bitching and moaning that Mint founder, Aaron Patzer cashed out for “only” $170 million when he sold to Intuit (“Don’t “Pull A Patzer” And Other Lessons Learned On Our Trip Down Sand Hill Road“).

Why is this so bad? “Here’s why: with large funds being raised on Sand Hill Road and returns from previous funds underperforming, investors are becoming increasingly desperate for that single homerun investment that returns $1B or greater. Even though Mint.com was a huge success for the founder and team, generating $60 million in equity value per year, many VCs believe they sold too early and left too much potential value on the table.” (props to Rob Hayes at First Round Capital for having a good laugh at this kind of nonsense.)

And how do you explain all those iPhone Apps? One news report puts the number at 189,000.

I think that what the VC Mavens are missing, and why Dharmesh’s list of 10 Tempting Software Startup Categories is good but incomplete, is it’s 2010, not 2005 or 1999 anymore. Three forces made possible by the Internet today means there are literally thousands of Most Tempting Software Startup Categories out there for the taking. Those forces are:

  • The demassification of the more developed societies. Which is a fancy way of saying that markets, categories, conventions, convictions and all the other “mass” things that worked throughout the 1900′s are increasingly irrelevant to more and more people.
  • The changing nature of software: a decade ago, would I have paid an extra $50 bucks when I bought a digital camera that had the option of doing a cat growl so my cats would look at my camera? Of course not, nor would I have found it for sale. Yet I bought exactly that app for my iPhone a month ago – for $1.99. The great secret of the iPhone’s success is not AT&T (which sucks), or Apple’s “specialness”, it’s that my iPhone is a Kindle reader, Mint interface that let’s me set what will record from DirecTV while I’m brewing my premium tea and entering my calories for lunch device. And you iPhone is something entirely different. The Apple iPad is the next generation of whatever you want it to be computers.
  • Digital people have digital problems and need digital solutions. Whether it’s remote support for my cranky copy of WordPress or coping with Twitter, or doing cash flow when I sell nothing tangible, let alone have a “real job”, more and more people live in the Digital World, and care very little and connect with only minimally to the old industrial economy/society. Want to sell me a new toothpaste? It had better be on Alice.com, come with a social network and have an iPhone app. Mass apps – spreadsheets, word processors etc. made sense then. They don’t now.

It’s time for “traditional” VCs and the (now online) trade press to understand they need to get with the times, and it’s a great time for developers to become startups who neither want or need to play by the old rules.

MicroISV Digest – 02/27/2010

Community News:

  • Mike Schoeffler, roadbud.com: the right three words could win you a top-of-the-line iPhone. Mike is running a contest to find a great tagline for his new iPhone app coming out March 1st – details here.
  • David Christian, Bright Spark Software, SimpleGlucose is trying an experiment, switching to the ‘freemium’ model: membership is now free with Google Adwords ads in the main members area, later diabetic specific companies (such as manufacturers of blood glucose meters). What do you think?
  • Marcus McConnel, bvsoftware, has released a major upgrade to his hosted shopping cart platform. They have a free store plan for up to 10 products which might be of interest to some of you. Marcus is presently working on adding electronic download functionality for MicroISVs looking for inexpensive tools to sell digital goods.
  • Wayne Allen, devZing.com, has released devZing.com, a software project management hosting solution where we deploy and manage the software and hardware and you make your product better. They call it “No Hassle Project Management Hosting”. Currently they provide Bugzilla and MantisBT with TikiWiki coming soon.

Interesting  Answers.Onstartups.com questions with useful answers:

News/posts for microISVs and Startups:

StartupToDo.com, The Startup Success Podcast and other plugs:

  • Three new Guides at StartupToDo.com:
    • Google Adwords for the Startup: High Level Overview by Ben Wootton
    • Google Adwords for the Startup: Increasing Adwords ROI by Ben Wootton
    • Rekindling your Motivation.
  • Show #57 of the Startup Success Podcast is up:  [link] [iTunes]. A very special interview with author and marketing authority Seth Godin on how startups can succeed in a world where fitting in doesn’t work anymore. Seth is the author of a dozen bestselling books including Purple Cow, Tribes, Permission Marketing and most recently and perhaps most importantly, Linchpin.In this interview Bob and Pat have the opportunity to ask Seth how Linchpin applies to startups, the IT industry, what art means to developers, what keeps you from shipping, what Ayn Rand would say and succeeding in this post-industrial world. And, we get to several of the questions you asked us to ask.
  • Show #56 of the Startup Success Podcast:  [link] [iTunes]. Bob and Pat interview Carl Erickson, President of Atomic Object, on the importance of testing regardless of platform, how to outsource startup development, applying Agile techniques – pair programming and standup meetings – to startup development, why programming deathmarches are a bad idea and more.

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(If you have an announcement of interest to your fellow microISV, indies or startups, please email me at bob.walsh@47hats.com with the word digest in the subject.)

The secret to succeeding for startups: from Seth Godin’s lips to your ears.

How to overcome the resistance to shipping your product, why doing an app to spec isn’t enough anymore, why Steve Jobs is an artist and so are you, and lot more in this week’s the Startup Success Podcast (iTunes) with author Seth Godin. Pat and I had the great pleasure of interviewing Seth – author of a dozen bestselling books including Purple Cow, Tribes, Permission Marketing and now Linchpin – on how his insights apply to our world of startups.

If you don’t generally listen to the Startup Success Podcast that’s okay. But this is one podcast you really do want to hear.

Involuntary exactitude is involuntary servitude.

Maybe because we’ve all been burned at one time or another by a boss or client who didn’t spec out the software we ended up trying to build. Or maybe it’s because we live in a world where everything that matters is true or false, none of this messy in-between stuff that’s impossible to code. Developers crave specificity, exactitude, precision.

We are far better at dealing with 3.14159265358979323846264338327950288 than “a little more than 3″ so we don’t look for good enough, we want the best. The One True Answer.

For example,

There’s absolutely nothing wrong with looking for the best solutions when you build your startup – an absolutely zero chance you will find those answers outside of your codebase.

Best? By what standard? For who? In what context? In a world where there are programmers still at each other’s throats over whether VIm or Emacs “rules” setting your standard for what you’re going to attempt to an impossible degree of certainty is just another way of dodging the bullet you fire when you try to build something new, exciting and daring.

Defining the “best” process is a worthy and profitable way of making car seats by the million when the few less than best, the more money you make. But you’re building one software business, with probably one application and definitely one chance to get more business answers right than wrong. You can’t afford best – what you need is what will work for you, get that item off your multi-thousand entry To Do List and will let you move on.

Save the precision for your code, where it can do some good.

Are you going stale?

So here we are, starting another week at your software company. Are you excited? Eager to make new friends, features and customers? If you are not, it will show. Maybe you’ve been doing what you’ve been doing for too long. Or maybe the press of business and constantly tending to your software application has left you just a bit bored and stale by the whole thing.

You may be a developer who’s fired your employer, but you’re still a developer first. And developers want, and need, to develop new software, learn new programming languages, explore new practices, push the envelope. That’s the part of what we do that most of us really enjoy.

No one ever said you can only have one app, only pour all your creativity and curiosity into one codebase, month after month, year after year.

So live a little. Go load up what you need to learn a different language, a different kind of programming, even a different platform. For fun. For motivation. As a reward for getting through the urgencies and priorities of your day job.

For example, For the past 2 years my day job has been learning Rails/JavaScript and coding http://startuptodo.com. But for fun, as a hobby, as a side project without deadlines, responsibilities, stress, I’m going to go play around with creating native iPhone/iPad apps.

I’ve never programmed one line of Objective C, don’t know the first thing about it and will start with Sams Teach Yourself iPhone Application Development in 24 Hours. I’ll reward myself at the end of day – If I finish recoding profile and about 4 other screens for version 2 – by becoming a real live Apple Developer.

Now that’s my idea of fun! And maybe yours.

MicroISV Digest – 02/13/2010

Community News:

  • The 19th annual Software Industry Conference will be held this year in Dallas, Texas at the Hyatt Regency DFW, July 15-17, 2010. The conference runs each year from Thursday through Saturday. It is designed for both beginners and experienced Micro ISVs and internet marketers. At SIC you can go to sessions on current software and internet marketing topics, take part in web site and marketing tutorials, participate in networking opportunities, attend Exhibit Night, and mingle with your peers at the Gala Networking Dinner. For more information on the SIC visit their web site at: http://sic.org
  • Mike Davis, Centripetal Software, has launched Centripetal Retrieve for Basecamp a comprehensive backup solution for 37Signals Basecamp. It provides automated backups of all your Basecamp files, writeboards and data and delivers it to you via Dropbox or FTP. If you’re interested, email Mike first and just mention mention my name, and you’ll get a discount.
  • Dennis Gurock, Gurock Software, has released his second product after 18 months of development: TestRail – a web-based test case management tool.
  • Will Rayer, ubercode.com, has updated Ubercode (a programming environment for Windows designed to make it easy to build EXE files). The improvements in v1.2 include full support for Windows Vista, updated help and documentation, over 63 tested example programs, CHM and HTML help, and many other tweaks and improvements.

Interesting  Answers.Onstartups.com questions with useful answers:

News/posts for microISVs and Startups:

StartupToDo.com, The Startup Success Podcast and other plugs:

  • Four new Guides at StartupToDo.com:
    • Getting Started with Rails if you’re a .NET developer.
    • Continuous Integration – Why Do It?
    • Creating a Business and Marketing Plan for a startup. Part 1: Introduction.
    • Email Productivity for startups.
  • Show #55 of the Startup Success Podcast is up:  [link] [iTunes]. Bob and Pat interview David Allen, creator of the Getting Things Done ™ methodology on what GTD can do for you and your startup. If you are feeling overwhelmed by all the projects, tasks, and emails you need to manage to successfully build your product and startup, this show is for you.

    We focused in this interview on how to apply GTD to the common problems startups face: coping with email, beating your project/task list down to an actionable next steps, how and what a Weekly Review is and how it keeps the process going, what tools and technology David uses and much, much more.

  • Show #54 of the Startup Success Podcast:  [link] [iTunes]. Bob and Pat talk with Brian Fitzpatrick about his project at Google, The Data Liberation Front. The Data Liberation Front is an engineering team at Google whose singular goal is to make it easier for users to move their data in and out of Google products – and promotes making it easier for everyone to be able to do the same for any software product. And, Bob and Pat mull over the announcement of the Apple iPad.

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(If you have an announcement of interest to your fellow microISV, indies or startups, please email me at bob.walsh@47hats.com with the word digest in the subject.)

And the winner is…

Michael Buckbee. Michael asked the best question during our recent contest with Legal River and its new answerboard. Michael gets an hour of free legal advice/work and a free year’s membership to StartupToDo.com.

“I’m a software developer for The Social Collective (http://www.thesocialcollective.com) we create specialized social network tools for conference, festivals and tradeshows. If you’re going to SXSW this year, we’re the company behind their my.sxsw.com website where you can create your own custom personal schedule on the site, sync it to your iPhone and see where your friends are heading.”

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Also, Patrick and I are interviewing productivity guru David Allen on ways and methods of applying his Getting Things Done methodology to building software companies and working online. If you’ve got a question for David, add a comment now.

MicroISV Digest – 01/30/2010

Community News:

  • Rob Bazinet, Stillriversoftware.com, has purchased Expens’d from Atlantic Dominion Solutions (Robert Dempsey). This is a good move for Rob, Robert and Expens’d’s customers. It’s also a good model – on both sides – how to create and grow value.
  • Michael Douma, IDEA, has launched ColorRotate – a 3D color picker for PhotoShop and other programs unlike – and better – than any color picker you’ve ever seen. Seriously. Their pricing model is interesting too: $39 as a PhotoShop plugin, $49/year as an online service. Also, checkout what else IDEA is up to.
  • Mike Schoeffler, http://roadbud.com/, has launched a site to support his new iPhone exercise app. Not much info here, but I like the concept: put play back into workouts.
  • Rade Stojsavljevic, Jet Set Apps, has released BottomLine for the Apple iPhone. BottomLine allows small business owners to quickly and easily track key financial data anytime, anywhere. Users enter three simple data points daily (opening amount, closing amount and average cost), and BottomLine displays the business’ weekly and monthly progress.

Interesting  Answers.Onstartups.com questions with useful answers:

News/posts for microISVs and Startups:

As you may have heard, Apple introduced the iPad January 27th, unleashing a wave of opinion to follow the wave of speculation. I’m very much of the [as yet unsupported by evidence] opinion that iPads are a Very Big Thing and startups/microISVs who ignore the opportunities and disruptions the iPad will bring do so at their peril. Here’s three posts, in my opinion you should read.

StartupToDo.com, The Startup Success Podcast and other plugs:

  • Three new Guides (so far!) at StartupToDo.com this week:
    • Getting business legal services in the US at an affordable price.
    • Meeting up with other startups via Meetup.com.
    • The power of Twitter Lists.
  • Show #53 of the Startup Success Podcast is up:  [link] [iTunes]. Bob and Pat talk with Ben Hatten, co-founder of Legal River, a startup creating a marketplace where attorneys bid for your startup’s business. Proper lawyering, like proper plumbing, makes sure bad stuff doesn’t flood your startup. But finding the right attorney who understands IT and startup issues is hard outside of Silicon Valley and impossibly expensive if you deal with a large Silicon Valley law firm. Legal River turns this situation on its head and in your favor.
  • Legal River/StartupToDo.com contest (ends Monday, act now!) – see this post and this post for details.

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Apologies for the lateness of this Digest – I’m really busy right now. I’m going to try posting these on Saturdays and see if that works better.
(If you have an announcement of interest to your fellow microISV, indies or startups, please email me at bob.walsh@47hats.com with the word digest in the subject.)

Disrupting the Law with a Lending Tree for Startups

It’s been an axiom of mine for a long time: everybody wants justice, but you’ve have to have the money to buy it. And for bootstrapping startups and microISVs, lawyering up even when you desperately need to has been too damn expensive.

Legal River, a new Washington D.C based startup is standing that on its head. Instead of a sellers market based on relying on recommendations of friends or the local bar association, Legal River has created a buyers market. At Legal River you anonymously post your requirements for free and within a business day bids by attorneys with their experience, price (fixed or hourly), and Legal River references start arriving. No more paying five grand for ten minutes with a partner while your file actually ends up on some paralegal’s desk.

The attorneys who Legal River vets and change per bid tend to be attorneys who have spun off their own practices after years of toiling in large legal firms and use and understand technology:  You’ll can get the key legal advice you need, not a suit filling in the same ZoomLegal.com forms you could figure out.

Whether it’s drafting a partnership agreement that won’t have you at each other’s throats, forming your business or protecting your intellectual property, Legal River lets you get what you need at a reasonable price.

Four other things you should know about Legal River:

  • They offer free Privacy Policy and Terms of Service generators, vetted by the law firm of General Counsel P.C.
  • They’ve launched an answerboard like Stack Overflow or Answers.Onstartups.com just for business owners (including startups and microISVs) with U.S. law questions. While the attorneys answering questions there can’t dispense free legal advise, that can give you accurate, timely and experienced advice about the law, and they’ve vetted as real live attorneys by Legal River.
  • In conjuntion with General Counsel P.C., Legal River and yours truly there’s a contest at Answer.LegalRiver.com this week: the Startup or MicroISV who gets the most votes for their question gets one full hour of legal services from General Counsel P.C. and a full year subscription to StartupToDo.com. More details here.
  • There will be more info up at this week’s Startup Success Podcast as we interview Ben Hatten, founder of Legal River. That should be available Wednesday.

Here’s a post in the New York Times about how Legal River works.

Legal River is only for Business legal matters, and only works with U.S. based attorneys, although since they soft-launched in October have helped several overseas companies find local representation.

Not sure if you need a lawyer? Do any of these practice catigories ring a bell with you?

  • Business Formation
  • Contracts
  • Mergers and Acquisitions
  • Employment
  • Real Estate
  • Intellectual Property
  • Government Contracting
  • Internet / E-Commerce
  • Corporate Tax
  • Bankruptcy
  • Arbitration / Mediation
  • Regulatory Compliance

47Hats: There’s an iPhone app for that!

Woke up this morning to a pleasant surprise: my Apple iPhone App was approved overnight and is waiting for you to download free! [iTunes link]. There’s a couple of reasons I thought this was worth doing for me and for any microISV or startup who wants to reach out to the 40 million or so iPhone users:

  • As good as HTML5 iPhone apps are (go to http://47hats.com on your mobile and you’ll see what I mean), they’re just not as good an experience as a native app. Click a post, it’s there. Click a podcast, it plays. Nice!
  • Since I don’t code iPhone apps yet, going with AppMakr looked to make sense and at the price last week of $50 I was willing to give it a try.
  • Like most of you reading this, my challenge isn’t creating worthwhile stuff, it’s getting known for creating worthwhile stuff. Anything that helps me reach my primary market of microISVs/startups is a Good Thing.

There’s only one Big Problem: 47Hats, the app, needs your love! Please download and rate it – I’d really appreciate it.