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Successful Software

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Inspiring companies

I'm preparing a presentation to a group of young software engineering students. I want to talk to them about how small teams of people can make incredible successful software products. So I am looking for small companies with proven success and better if there exist some public revenue numbers.

So far my list is:
- Balsamiq (3 people)
- 37Signals (14 people)

I'm just starting, if any of you can remind me of other small and successful companies it would be great!
Javier Send private email
Thursday, September 24, 2009
 
 
Don't fall into the "out of sight, out of mind" fallacy. There are many successful software businesses that you never heard of.
Anonymoose Send private email
Thursday, September 24, 2009
 
 
"There are many successful software businesses that you never heard of"

Kind of obvious, don't you think?
Javier Send private email
Thursday, September 24, 2009
 
 
plentyoffish.com
sixapart.com

look at "Founders at Work" by Jessica Livingtsone, it has profiles of many successful software companies, many of them small
Jason Send private email
Thursday, September 24, 2009
 
 
Javier by "never heard of", I mean you would have to struggle really hard to find them. Hidden.
Anonymoose Send private email
Thursday, September 24, 2009
 
 
Delicious Monster is known to have a lot of success with a handful of people.

http://en.wikipedia.org/wiki/Delicious_Monster
Martin C. Send private email
Thursday, September 24, 2009
 
 
Why focus on just revenue-generating products?  I'd rather aspire to be like Miguel De Icaza than some punk with a stupidly lucky website service.  (e.g. hotornot and plentyoffish)

Probably more important is for people to do what they think is fun and interesting - not going for riches.  that is a path to misery.  Really. 

Be careful what you tell the young folks.  Don't force them into thinking that revenue from software is the only value they have in this world.
Tim J Send private email
Friday, September 25, 2009
 
 
@Anonymoose
The reason he started this thread is to find those hidden, struggle really hard to find, successful software businesses that you never heard of. Obvious, no?


@Javier
The ones I know of are from indie game development. You know the one that made all that dash games - diner dash, diner dash 2, coffee dash, prison dash.  Created by Gamelab.
Jonathan Ho Send private email
Friday, September 25, 2009
 
 
Looking at the "small teams" part (not small companies), I'm inclined to think that *most* incredibly successful software was written by small teams (or even one person):

Java, unix, photoshop, flash, Apple Basic, Microsoft Basic, postscript, Netscape.

If I'm right, you could start with any successful software product, and work backwards (check its history on wikipedia). Although incredibly successful companies usually become big companies (the defining goal of a "startup", by some definitions) you'll often find it was either written by a small company that was acquired, or by a small in-house team.

Their current success probably required the bigger company for marketing and/or product polishing, so maybe that doesn't target your point. Maybe you want small companies that are incredibly successful, while staying small? If financial success is a relevant metric, you could include small companies that are acquired. Google plans to acquire one small company pcm, and Oracle, Microsoft and Adobe also do a fair bit of this. Their annual reports could be another source of examples.
yow Send private email
Friday, September 25, 2009
 
 
My point was don't point those poor suckers to these companies who are excellent marketers and say that the only way to do it is to be highly visible.

There are invisible but successful companies too.
Anonymoose Send private email
Friday, September 25, 2009
 
 
And no, I'm not going to tell you because I have privileged knowledge in the ones that I know of.
Anonymoose Send private email
Friday, September 25, 2009
 
 
@ Anonymoose,  "My point was don't point those poor suckers to these companies who are excellent marketers and say that the only way to do it is to be highly visible."

I understand and suspect you are right, but I'm trying to get some concrete examples, and don't have insider info so I must focus on the visible ones, what else can I do?.

@Tim J, "Why focus on just revenue-generating products?",

because I'm talking to them in the context of for-profit business. I agree, there are lots of non-profit valuable and interesting projects.

@Yow, "Looking at the "small teams" part (not small companies), I'm inclined to think that *most* incredibly successful software was written by small teams (or even one person):

Java, unix, photoshop, flash, Apple Basic, Microsoft Basic, postscript, Netscape."

I absolutely agree. Quality software products are always made by a small bunch of people, or so it seems. But I'm focusing on business that, as a whole, employ a small number of people, counting management, sales, etc.

Thanks all for the ideas, useful as always
Javier Send private email
Friday, September 25, 2009
 
 
Again, I think it is a mistake to focus on commercial success in terms of money/revenue only.  There was another recent post on this forum about some ridiculous high-priced sports car, and then of course is the egomaniac entrepreneur blogger and his Tesla. 

I would not encourage that kind of mindset.  Be careful how you set these folks up.

I question using only money as the measure of success.  It is not a good idea IMO.
Tim J Send private email
Friday, September 25, 2009
 
 
> [S]mall teams of people can make incredible successful software products... companies

There are two ideas in the original post that can and should be separated.  The US auto industry has proven time and time again that it's possible to make successful products (popular products that people want to buy) but a failing business (i.e., losing billions of dollars selling popular products at a loss).

There are many popular, successful products that make little or no revenue.  There are unpopular products that have high margins.  What is the definition of success?

Money isn't everything, but in a business concern it is essential.  If your business isn't successful, then you can't adequately reward people for their efforts.

Fog Creek should be on your list.  It's proof that you can make money, develop popular products, and treat your employees well.
David C. Blake (Ardfry Imaging, LLC) Send private email
Friday, September 25, 2009
 
 
"Again, I think it is a mistake to focus on commercial success in terms of money/revenue only."

Isn't making money the definition of commercial success?
sloop Send private email
Friday, September 25, 2009
 
 
@Javier
I found 2 more, wikipedia and craigslist. Both of them are run by single person I think. I also think both of these satisfies Tim's criteria of not being exclusively profit driven. They are providing a most excellent service out of the goodness of human kind.

@Anonymoose
I fail to see your logic. First you told him there are secretive software developers that he should research. Next you did a total turnaround and say these secretive developers will not let themselves be known, only privileged people can know about them, blah blah blah... so he should forget about researching these secret developers. Huh?

Instead of using those guys who are trying to be secretive, why not use those guys whose successful products like wikipedia/craigslist/fogcreek speak for themselves? I mean if they want to be secretive then we should respect their privacy, no?
Jonathan Ho Send private email
Friday, September 25, 2009
 
 
@Tim,

"Again, I think it is a mistake to focus on commercial success in terms of money/revenue only.  There was another recent post on this forum about some ridiculous high-priced sports car, and then of course is the egomaniac entrepreneur blogger and his Tesla. 

I would not encourage that kind of mindset.  Be careful how you set these folks up.".

I understand the point, will think about it. Anyway, I wasn't thinking about Ferraris, I was thinking about small groups of people doing what they like and earning a good life.

@David,

"Fog Creek should be on your list.  It's proof that you can make money, develop popular products, and treat your employees well."

Fog Creek was on my list from the start, but then I saw that on Summer 2008 they were already 26 people just on the technical staff !!, I'm looking for really small companies, FC is too big...
 
http://www.fogcreek.com/About.html

@Jonathan, wikipedia & craiglist, will check them, thx.
Javier Send private email
Friday, September 25, 2009
 
 
Wikipedia and Craigslist are both larger than FC, I believe.
Jason Send private email
Friday, September 25, 2009
 
 
> FC is too big...

It is now, but it didn't start out that way.  FC is a good example of how to bootstrap from a very small team to a not so small team.  37signals will probably be at a similar head count in the not too distant future.  When 37signals reaches your cutoff, will they no longer be an interesting case study?
David C. Blake (Ardfry Imaging, LLC) Send private email
Friday, September 25, 2009
 
 
@David,

You're right, must rethink my criteria; anyway I have a fascination for small companies.
Javier Send private email
Friday, September 25, 2009
 
 
@jason
Currently yeah they're huge, but they were started as a small group. Craigslist was started singlehandedly by Craig. Wikipedia was started by 4 guys from Nupedia. Fogcreek by Joel, now employs by I dunno how many people heh, but they all started small, no?
Jonathan Ho Send private email
Friday, September 25, 2009
 
 
@Jonathan I think your mind is not working properly today.

Where did I tell him to find those companies? The answer is that I didn't. I just said they exist and not to let his audience be fooled into thinking that there is only one way to run a business.

Pretty sure Wikipedia is not a good example. Craigslist is a fantastic example!
Anonymoose Send private email
Friday, September 25, 2009
 
 
Check the INC biggest-growing software companies at http://inc.com/inc5000/2009/lists/top-industry-software.html . A lot of them were just a half million revenue a few years ago (and possibly a handful of founders and employees) and are now up to several million or more.
CC Send private email
Friday, September 25, 2009
 
 
@CC, thx, damned good pointer!
Javier Send private email
Friday, September 25, 2009
 
 
We're in the wrong business. Software companies with less than 10 employees on the INC 5000:

http://bit.ly/vMMib

All others (including software) with less than 10 employees:

http://bit.ly/Ve5bZ
Anonymoose Send private email
Friday, September 25, 2009
 
 
Hmm, seems some of those are under reporting employees!
Anonymoose Send private email
Friday, September 25, 2009
 
 
@Anonymoose

It would be interesting to compare the start up costs. It's much easier to bootstrap a software startup than a manufacturing startup.

@Javier

Maybe it's just me, but I don't find the huge success stories that inspiring. Maybe it's because I know that in any industry there will be big successes, but I also know that they are the exception not the norm.

If you showed me a list of companies that made each owner a six-figure salary I would be more inspired because now I know it's attainable on a wide scale.
Nicholas Hebb Send private email
Friday, September 25, 2009
 
 
The most inspiring thing I can think of is my own company, as it exists in my head :)

Looking at other people's revenue does little for me.
Sales, some good feedback, a good review... those are the things that inspire me and keep me going.

Depending on the age of the people you are presenting to, a six figure salary and an Aston Martin might stick in their heads more, though. They'd have to learn through experience to make their own goals rather than take on other people's.

Anyway, my late-night 2cents...
Good luck!
Adriano Ferrari Send private email
Saturday, September 26, 2009
 
 
@Nicholas and Adrian,

Maybe a matter of personal tastes. In my day work, I'm always with people who think big business = lots of people. For them grow your business = grow in number of employees. I wanted to show them that you can earn big lots of money with small companies. That's all.
Javier Send private email
Saturday, September 26, 2009
 
 
freshbooks.com  is a very good success story
A Sharma Send private email
Saturday, September 26, 2009
 
 
"I wanted to show them that you can earn big lots of money with small companies. That's all. "

I don't know if you'll ever find that, because it's basic economics. Non-growing software companies tend to settle around $200-300K per employee, and growing companies less than that. If a $20 million company could support that revenue with 20 employees instead of 80, they would. That's what Six Sigma and "lean" is all about. But they end up with 80 or 100 employees because they need them.

There are anomalies like google (I think $800K an employee?) and craigslist, but those are extremes. I'm pretty sure the steady state is around $200K-300K per employee in the software industry, in the West anyway.
CC Send private email
Saturday, September 26, 2009
 
 
"I don't know if you'll ever find that, because it's basic economics."

Ever? What about the examples mentioned? To add another one, my company made more than $2 million in the last 12 months with just me and one business partner. Our revenue is still going up, and we certainly don't need any employees.

You will probably call us an anomaly, but I think a big part of the reason for that is that we made a conscious decision not to hire anyone until we absolutely, 100% need someone. Like Javier said, a lot of people think that growth must mean adding employees. If they were running my company they would probably have hired multiple people already even though there's no need for them.

I've worked for companies in the past whose main goal was to add more people. Revenue was not the primary goal, it was almost assumed that by adding people they'd get more revenue. And it was definitely assumed that more people were needed to get more revenue. Doesn't make sense to me.
sloop Send private email
Sunday, September 27, 2009
 
 
Hi Javier:

Balsamiq indeed and I like this also:

http://www.scootersoftware.com/

They are the makers of Beyond Compare.
Germán Arduino Send private email
Sunday, September 27, 2009
 
 
@Germán Arduino

Do you know if Scooter's Site and Enterprise pricing is standard (and/or successful)?  It's $30 single license, $4500 for 500 licenses (9x500), or $4,500 Site and $18,000 (x4) Enterprise.

http://www.scootersoftware.com/moreinfo.php?zz=pricing

I would never have thought of an "Enterprise" license as having this meaning, of covering all sites (locations) of an enterprise - but maybe it's the standard meaning?  If a customer has more than 4 sites (with over 500 users each), it's cheaper than x4 a site license. Probably not many customers that need that many licenses...
yow Send private email
Sunday, September 27, 2009
 
 
@yow

I don't know about the "enterprise" features but I read interviews to people of the company, were they talked about 7 persons working and mostly of the single license of usd 30.
Germán Arduino Send private email
Sunday, September 27, 2009
 
 
sloop what kind of stuff does your company do
Anonymoose Send private email
Sunday, September 27, 2009
 
 
Our income is all from licenses to a couple of web-based applications in some niche areas.

What we did was this: We found something typically done by big accounting/consulting companies for big bucks. Something that is very labor intensive when done by companies that have no clue how to do things any other way but to throw more people at a problem. These companies have tons of junior accountants sitting around doing repetitive work in Excel day in and day out.

We automated all that repetitive work, put a product on the web, undercut our competitors by a huge amount in addition to offering a much better (no human error) and quicker result, and there you go.

The best part is that a lot of this stuff isn't hard to do, technically. The other companies just don't have the expertise, and they don't want to be in the software business anyway. The biggest barriers to entry is getting the domain knowledge to be able to implement a solution, and then to gain legitimacy in the marketplace against the big boys.
sloop Send private email
Sunday, September 27, 2009
 
 
sloop, inspiring!
Anonymoose Send private email
Sunday, September 27, 2009
 
 
Thx sloop, very interesting, thanks Germán also, will check them.
Javier Send private email
Monday, September 28, 2009
 
 
@Germán thanks; I guess it doesn't hurt to have those $30,000 and $45,000 licenses up there!
yow Send private email
Monday, September 28, 2009
 
 

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