* The Business of Software

A former community discussing the business of software, from the smallest shareware operation to Microsoft. A part of Joel on Software.

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Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

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BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

How much does an ISV earn per month

Ok, I am trying to get a mental picture of the state of the ISV industry from anecdotal evidence. :-)

So, if anyone would like, please reply with how much some xyz ISV earns per month in revenue and its income per month.  You don't have to specify as to whether it is an ISV that ou work for or are the owner of, just say something like, a little bird whispered into my ear. ;-)  Also, what filed the ISV is in.

So, I'll start off:

A little bird whispered into my ear about this ISV...

The ISV sells really cool database software to the chemical industry (tiny to small companies).  The database also has an extremely sophisticated a.i. system for datamining.
This ISV makes around $70,000 US per month and has an income of $59,500 (a profit margin of 85%).

Please reply to this post with similar data.  Thx.
Ary M
Monday, January 09, 2006
 
 
This is pretty cool. Whats the marketing and sales approach this ISV took?
AnISV Send private email
Monday, January 09, 2006
 
 
Well, I won't give out my numbers, but over a year ago I sat down with someone who was very inspirational.

He created a simple Windows desktop utility that makes a certain aspect of the Internet faster and more efficient.  (I would rather not give him away).

He initially developed the software right out of high school, while in college.  It was written in C++ and is over 12 million downloads strong on download.com right now, and that's ONLY download.com.

For nearly 6 years, he has been self employed by means of this software alone, moved to California from Washington, and now he, his wife, and a new partner all work together.

Since then, they launched another successful utility for Windows as well.

The program retails at $25 and he told me that around 1% convert from download to sale.

That math brings total sales to around $3 million. (based on download.com alone and the sale price of their software)

Is this a normal scenario?  Do you find yourself on track to reach similar goals?  I don't know many people with these kinds of numbers on download.com.  My first product only recently broke 1800 downloads after 1 year.

Here is the bad news.  Over the last year, hundreds of competitors have popped up.  Some free services have emerged, open source has gobbled up the market for their flagship product.  The outcome is now somewhat bleak for the original tool that moved this company to the top.  The new product looks very promising however.

Monday, January 09, 2006
 
 
The first few months may be $0, or -$ve, while you set yourself up and make a lot of mistakes. In fact if you are building a large app for a small number of customers it could take months or years to break even.

The upper limit depends on how much time and effort you are willing to commit to the business. A yearly income could be anything from $100 to $1,000,000 per employee.
PDF Send private email
Monday, January 09, 2006
 
 
It is quite hard to speak of anything 'typical' in the microISV industry.

One thing is certain, it is definitely possible to do it full time, contrary to the doubts some people have.

Take a look at this for example:
http://www.borisyankov.com/archive/my-rise-to-full-time-microisver/

As to wether you can get rich by having a microISV, it would definitely not be typical, but it is still possible. And that is what I am aiming for :)
Boris Yankov Send private email
Monday, January 09, 2006
 
 
Hey, exactly the type of answers I was expecting, keep em coming guys and gals.

While 70,000/month isn't bad right after college... see my other post on "what to do next" on this forum itself.

Anyway, it by no means is my road to riches.  Well, ok, so I could hypothetically reach a million dollars in 17 months... but that is still a whopping long time to earn a million.

But, I am intrigued by the idea of $3,000,000 from a windows utility software... man I wish I had the ability to come up with something as cool as that.  Anyway, keep em coming.
Ary M
Monday, January 09, 2006
 
 
Like most businesses there are a lot of people earning next to nothing and a few earning large amounts.

When I started out I craved information on how well other people were doing but now I have got established I know the success of other people in the market has little to do with my own success.

Perhaps you should be asking questions about your own ability first, can see projects through to the finish, what marketing skills do you have, are you reliable. It's these personal characteristics which will indicate your potential.
Tony
Monday, January 09, 2006
 
 
Boris, your blog is extremely insightful.  Thanks a lot.  Tons of great info and great apps you have created.  Bravo!
Ary M
Monday, January 09, 2006
 
 
Tony, I know that what others earn has little or no correlation to my future prospects.  It is just fun to guage how I am doing as compared to others, and get some sort of a mental map if you will and let the subconcious work on all the data to figure out what should be my next move.  You never know how some info gained on how much some ISVs make can influence my decisions in the future.
Ary M
Monday, January 09, 2006
 
 
You may find this membership poll of the ASP interesting:
http://www.asp-shareware.org/polls/sept04poll.asp
Gert
Monday, January 09, 2006
 
 
Are MicroISVers only in it for the money?

When I started my company it was because I had a passion for the work I do and wanted more than anything else to, run my own business and employ good people.

Now I’m not saying that money has nothing to do with it, I would not be able to live my dream if my company did not make a good profit.

Quick Poll: How many of you guys have or are going into a MicroISV with the sole intention of making $xMILLION per month?
Floyd Price Send private email
Monday, January 09, 2006
 
 
From my 7 years experience in the shareware game, I would say that:

75% of people make nothing
24% make less than $100 a month
1% make a tangible amount.
Jim Clark
Monday, January 09, 2006
 
 
Jim: I'm about 10 years in the business and I think the ratio is about the same for the whole mISV\shareware industry.
Dennis Crane (Dr.Explain software) Send private email
Monday, January 09, 2006
 
 
a bird whispered $2k/month
not much, but consistent for some years
Anon and anon
Monday, January 09, 2006
 
 
Oh, I didn't realize that was the same as Boris until I read his article... but the example I am talking about is not just in the last year...
Anon and anon
Monday, January 09, 2006
 
 
Not enough to give up my day job :)

Ie below the official poverty level!
Too embarrased
Monday, January 09, 2006
 
 
I started off doing custom projects while I still had a fulltime job because my job was simply terrible and in a bunch of dead technologies.

Since I started (about 16 months ago), things grew quickly for the first 6 months... flat (but highly profittable) for the next 6-8 months and now things are taking off again.
KC Send private email
Monday, January 09, 2006
 
 
Regarding the poll...

I'm not in it to make millions per month. I'm in it to make enough to keep me happy (tens of thousands per month). If I do better, so be it - money is good and I won't complain. If I can make a decent living ($10,000 a month) then that's ok too, but not as ok as making $20k or 50k a month =)

Actually, I've been making 7 digits a month for the last ten years... KRW not USD, but still 7 digits =) (8 digits at times.)

I'm also in it to buy freedom. I want my time to be mine and to do other things that I love. And my software is EXACTLY what I want to do - music. Oh, and smoking a lot of drugs too... (Just kidding - I couldn't resist that blatant stereo-type...)

However, I'm still one of the really little guys (micro-micro-ISV)... I make more than just beer money, but not a full-time income yet. They key word being "yet".

My biggest problem is that when I'm working on my software, I spend more time playing with it than actually programming.

Find something that you love and you'll never work a day in your life. Hey - it works for me! Even what I do in my day job is fun!  http://www.altools.net for those that are interested - Email me [ryan at that domain] that you read this here and I'll give you a free commercial license as long as you have at least 1 post here (include 1 link please). Just include your first name (last name optional) & email address so that I can create it for you. Offer good at least until my birthday =)

Cheers!
Ryan Smyth Send private email
Monday, January 09, 2006
 
 
$2K USD per month with occassional spikes to $3K.  Revenue has been steadily (but slowly) increasing for a couple of years. I probably put in 10 hours per week.  Hoping to really ramp it this year so I can go full time next year.
anon
Monday, January 09, 2006
 
 
ISV's typically make $15,000/week working only three days. They typically spend their time near the pool with bikini-clad models.

Some supplement their income with tiny classified ads.
Duff Send private email
Monday, January 09, 2006
 
 
> Are MicroISVers only in it for the money?

I doubt it, but everybody has to eat.

Monday, January 09, 2006
 
 
Last month...the first month...

Revenue 13K
Adwords  2k
Other    1K
------------
Net    10K

This month to date...
Revenue -1K -Refunds, etc...
Adwords  0  -On a break til new site is up
Other    1K -Software, etc...
-------------
Net      -2K

This month may have to be a mulligan.
Anon this time
Monday, January 09, 2006
 
 
I just started a new Micro-ISV in December selling goal-setting software for mobile phones and pda's and it is FUN BUT NOT EASY to try to set up a new business.
My reason to start: have control over my time and work while being able to live comfortably.
Currently my conversion rate between downloads/ buys is very low, but I just started and I think I still need to learn a lot.


When I make about 3000 euro per month, then I will stop my day-job.
In this first month I have made 4 sales, so I probably should keep my paying job for a while.

Regards,

Peter Muys
  www.go-mobile-software.com
Peter Muys Send private email
Monday, January 09, 2006
 
 
$100 a month average

Woot! I've almost paid back the initial starting funds.
John Goewert Send private email
Monday, January 09, 2006
 
 
I have developed and sold a single program during the last three and a half years (first release in the end of 2002). The average gross income last year was $11500 per month (with a record in Dec - $17000).

I've been working on evenings with this software for the last three years (~15 hours per week). The last six months I have reduced my normal daytime job with two days, so now I'm working two full days and 5 evenings a week as a mISV (~31 hours per week).
Another anonymous mISV
Monday, January 09, 2006
 
 
>Anyway, it by no means is my road to riches.  Well, ok, so I could hypothetically reach a million dollars in 17 months... but that is still a whopping long time to earn a million.

Ary, I find that statement puzzling. Won't the vast majority work a lifetime and never reach the $1 million mark? Why are you in such a hurry when you are actually doing pretty well?
Rubinelli
Monday, January 09, 2006
 
 
Hi all,  Exactly the type of answers I was looking for.  Except, I would have wished more people would give their websites rather than using anon... also, someone signed off as Too Embaressed.  I'll tell you something, there is nothing to be embarressed about.  You are doing something on your own... compare that to millions of people who never lift a finger to do something different or take the initiative.  My hat's off to all of you.  Also, it is fascinating going through some of the pages and looking at the amazing apps you guys have created.  I am truly inspired.

Rubinelli, I have a goal of achieving some things by the time I turn 25 and for that I would need atleast a few million dollars to actually fund that project.  I don't think anyone would ever give me even a few 1000 dollars for what I would like to do as it probably doesn't have a chance of turning a profit... sooo, I am in a rush to make a few million by the time I am 24, 2years to go.

Anyway, ya, actually you are right, a million dollars isn't a matter of joke, so I guess I should be proud of myself. ;-)  Thx.
Ary M
Monday, January 09, 2006
 
 
Ary M,

It's not fair of you to ask for URLs from others when you haven't given your product URL.

I am definitely curious about the kind of product you are selling which made you millionaire even before you turn 30. Congrats, I am jealous! :)
JD Send private email
Monday, January 09, 2006
 
 
Hey, JD.
Not a millionaire yet.  And, to be honest, I don't think I will get to it as soon as I hope...  The reason is that I have a feeling I have almost saturated the market already... atleast to my knowledge.  While I still forsee a few sales per month for a coupe of months, I have no idea what will happen after that...  anyway, I described it here:

http://discuss.joelonsoftware.com/default.asp?biz.5.282385.17
Ary M
Monday, January 09, 2006
 
 
The 3rd last post.
Ary M
Monday, January 09, 2006
 
 
Ary, your software sounds very cool. Well done. It sounds like you deserve the success you've gotten so far.

But I'm curious about how you did your marketing. Did you just look in the phone book under the "Chemistry" section and start cold-calling? Do you do your own sales? Tell us a little bit. (Maybe start a new thread, to avoid hijacking this one.)
BenjiSmith Send private email
Monday, January 09, 2006
 
 
Ary, let me get this straight. You want to make a few million by the time you are 25 so that you can really get into something that can make you money? Maybe you will do it, but common 2 million in the bank is a lot of money just by itself. Even if you keep your product line rolling along, you haven’t factored in the spending increase that will happen. You won’t hold down a significant other by living on the cheap while millions pile up in the bank.
CIFChamp
Tuesday, January 10, 2006
 
 
"You won’t hold down a significant other by living on the cheap while millions pile up in the bank."

Wow... easy on there buddy. The type of significant other that would ditch you because you weren't blowing your millions on her isn't the type of significant other you'd want anyway.
redeye Send private email
Tuesday, January 10, 2006
 
 
"Wow... easy on there buddy. The type of significant other that would ditch you because you weren't blowing your millions on her isn't the type of significant other you'd want anyway."

Well then you will be tossing out 99% of the female population from your selection process. I was not thinking spending millions, but it would definitely need to be increased. It would go down like this:

Girlfriend: Hey Ary, our 6 month anniversary is coming up and I thought we could go somewhere romantic to celebrate.

Ary: That’s great because there is this steakhouse I wanted to try out and...

Girlfriend: Um…I was thinking more in the line of a trip to Maui. Wouldn’t it be great to see the sunset overlooking the beautiful reef. I already did some research on the trip and it would be easy to set up.

Ary: Err. um cough cough (clears throat), uh I don’t think that is quite what I had in mind.

Girlfriend: Why not?

Ary: Well isn’t Maui a tad expensive.

Girlfriend: Well, “we” are doing pretty well lately. I don’t see how it would even be an issue?

Ary: Well I need whatever capital I have to fulfill my dreams.

Girlfriend: Aren’t I in your dreams?

Ary: Well yes, but…

Girlfriend: But what?

..........

I think you can picture rest.
CIFChamp
Tuesday, January 10, 2006
 
 
Simple answer, don't let her know how much you make. :-)  I keep a really low profile.  Regarding marketing.  I knew a few people from the local industry and offered to install and support the apps for free.  I thought, heck even if I don't sell, atleast I get to gather experience (for whatever the experience is worth.)  Worse case, I thought that it would keep me busy and not make me look like a fool.  You have to understand, when I told my university friends and my professors that I would not pursue a masters degree and not apply for jobs and instead start my own business... my comp sci. professor laughed on my face, made fun of me infront of everyone in class, others chimed in.  Hahaha, isn't it fun crushing someones dreams and making fun of them.  Ah well, this is Canada... the dream you are supposed to follow is finish uni, get a 9 to 5 job, get married, have 2 kids, whine about everything, after that whine somemore, get old and die.  That's the Canadian way and if you do not want to follow that plan, people will make fun of you.  Well, atleast this is the impression I have got since my school days were the unionized socialist teachers drill this into your mind.  Enough of the rant.

Anyway, as I was saying, the immense psychological pressure to prove myself to, well, to myself... that I didn't make a stupid decision, I had to stay busy.  I literally called people up, used google maps and other portals to get the contact infos of these companies, got appointements... usually late evening, had a lot of condescending 2nd tier employees showing off without knowing head and tails of anything... I wonder how these idiots get their jobs... anyway, when I proposed to set up everything for free and let them even keep the app for free and promised to replace their computer(s) for any damage (well, if I really did have to do this, my mom and dad would have had to pay).  Anyway, long story, short, some actually called back and said they love the software... apparently the people who do inventory really loved the ease of using the package.. the ease of getting inwentory data not only from their warehouse, but from their supplier's, by simply entering the name or CAS no;, etc.  And all the other functions I wrote about in the other post.  They liked it, and even recommended me to some other comapnies, which called me up and fixed appointments.  The first few times were hard because they always commented on my age... but I guess when you offer something initially for free, it is hard for them to refuse.  Also, compared to a lot of software out there, mine is terribly cheap and the license is very felxible.

P.S. - regarding my gf, I did buy her lovely diamond earrings. :-)

Just wish me luck regarding my work and future ventures. 
And I wish all of you the best and I really hope to see all of you tremendously successful.  I know just how hard it is (psychologically) to do your own thing.
Ary M
Tuesday, January 10, 2006
 
 
Ary++ for old-fashioned "guts."
Mike
Tuesday, January 10, 2006
 
 
Mike, you made me blush like a 5 y/o girl. ;-)  Seriously though, thanks!
Ary M
Wednesday, January 11, 2006
 
 

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