Ian Landsman is Starting From Scratch, April 28, 2007:
No Market Too Small
If you're in the market for a powerful and user friendly Help Desk solution, please take a look at my company's flagship product HelpSpot.
Over on the BOS forums there’s an interesting thread by a MicroISV who thinks his market is too small and that’s why he’s not selling enough software. In his post, his two theories for why the sales are slow are:
1) The market size is really, really small
2) My marketing skills are not very good (yet)
I’m here to tell you that in the modern software world there is simple no software market that is too small. It doesn’t exist. If you’re selling your software over the interwebs you’re reaching the entire world. At least a billion people have internet access. Those people have infinite needs. If you’re a MicroISV there is NO market too small to make you at least an decent living (say 100K/year).
In this fellows case he says there are competitors, in that case then you know for sure that the market is there. So the correct reason why he can’t make sales is almost certainly #2 plus any execution problems he may have. If his product doesn’t stack up then that will always be a problem, but it’s not a market problem.
This isn’t to imply that all markets are equal and that some won’t be easier than others, but almost any known market (not something you just invented out of the air) will have enough space for a MicroISV given enough skill and determination.
Discussion
"there is simple no software market that is too small"
Oh that just begs to be argued.
OTOH, I'll admit that my usual example of a market too small is a retail shop selling yellow bowler hats in Mazon, Illinois.
I usually have trouble thinking of a software market that is too small for a micro-ISV, so you might be right.
Created by Eric Sink on 04.28.2007 2:59 pm
Heh. That logic certainly doesn't apply to the "real world" only the virtual one we live in.
Shouldn't we be outside enjoying the spring? Why the heck are we blogging at 3pm on a Saturday?
Created by Ian on 04.28.2007 3:09 pm
Speaking from personal experience, there definitely ARE markets that are too small. It's one of the reasons I threw in the towel for ChimSoft. There are not enough chimney sweeps willing to pay a dollar amount that would get you $100k a year. Even in my most optimistic projections I figured $40k a year from Chimney Sweeps alone. There are certainly smaller markets then chimney sweeps too. For example if you make software for managing people's bottle cap collections or something bizarre like that, there is money in it, but not $100k a year.
Created by Phil on 04.28.2007 4:35 pm
Perhaps Phil, but in some quick searches there were other software companies in that market. So I don't really think it's that the market is too small, but perhaps it was just difficult to penetrate. Also didn't you just launch the product in early 2006? I know you recently called it quits, perhaps you just gave in a bit too early, no? I could see a market like that taking a long time to develop.
Created by Ian on 04.28.2007 7:36 pm
Hi Ian. Way to be provocative! 
There's one major issue here that doesn't get much play. That is, if you can't reach and sell to an audience for a reasonable price, then that market doesn't exist.
The net is great. It lowers barriers. But not all of them. If a market isn't comfortable or used-to buying software online, it might as well not be there.
Created by SH on 04.28.2007 8:20 pm
That's certainly true, but I think those are pretty few and far between. Lots of markets have both and I think that's really true of most markets. For instance lots of companies get their help desk software from trade rags and trade shows. Yet, there's still plenty who search online and find me.
Of course you still need to research your market. If there's no way to sell them software then I would agree there's no market, but those markets are more the exceptions than the rule. My post is really made in the context of markets that can actually be reached (which I think is 99% nowadays but not all).
Created by Ian on 04.28.2007 8:26 pm
Ian, there are a few other companies that target chimney sweeps as some small portion of their much larger product. We were the only ones to sell just chimney sweep software. Market penetration was no problem, we were number one on Google within months, we were at all the major events, talked to major guilds, had connections with parts suppliers, etc... I'm pretty confident that most of the people who would be interested in chimney sweep software knew about us. But there's still the simple problem of numbers. There are maybe 2000 sweeps in the USA, maybe another 200 in Canada. I'd say maybe half of them even own computers, and you'll never get 100% purchasing your software.
It's also not really true that you have the whole world to sell to either, because for the most part Asia and Africa will not buy any software from the US, and many other regions like South/Central America and Eastern Europe can't afford our software prices.
Created by Phil on 04.29.2007 9:32 am
Melbourne has approximately 20% of Australia's population and there are 28 entries under "chimney sweep" in the Yellow Pages. I'd bet there were a higher proportion in some European countries, especially England.
Created by David Foskey on 04.30.2007 8:05 am
Good point David. I have about 18 just around me in upstate NY. Phil there has to be more than 2000 across the entire country and if you include Australia, Western Europe, and say a even a small percentage of the "rest" of the world it seems like it should be a fair number.
PS. Thanks for sharing Phil I think it's interesting and informative to go through this since you kicked off the conversation.
Created by Ian on 04.30.2007 8:48 am