Opting to Service a Niche Market can Provide a Small ISV with an Attractive Revenue Stream

The concept of a “mom and pop store” is seldom applied to the ISV business. But we think that it’s worth the time required for a small ISV CEO to think about a notion like this one, meaning a plan that promises a healthy, albeit, limited revenue stream. The macro setting for this discussion, of course, has to do with scale, which is a very important setting, indeed, but one that we haven’t plans to cover here.

So how does one apply this cliche to the small ISV business? Attending to the specific needs for computer processing for niche markets can produce software that will not only pay for itself, but generate an attractive revenue stream in much the same manner that a small country store that serves as the only source for groceries for a town of a 1,000 people can do so for its owner.

In fact, we saw this done several years ago when we were based in just such a rural locale. A colleague (an ex professor of computer science from a prominent local university) set up an ISV around no more of a business model than as a production house for a software package that automated all of the steps required by non profit organizations as they plan conferences and actually manage them. One can argue that, today, there is a cloud application somewhere that will do all of that, but we have to say that we are not aware of such a package. An attractive unit retail price for this software application promised to keep this ISV running profitably with a staff of 4 or 5 programmers for quite a while.

It makes sense for entrepreneurs committed to an ISV business model, who want to maintain complete control over their business, and are not reluctant to address the needs of small markets with deep pockets to seriously consider product development for highly specific needs. Of course, an effort must be made to ensure that these small markets, nevertheless, still include some players with deep pockets. Certainly there is no excuse for wasting time developing solutions for highly limited markets that lack the financial means to feed a growing business.

But for markets that measure up, it should certainly make sense for small ISVs to build solutions, especially where these solutions can be delivered to customers via a subscription offer that avails of the cloud. Sometimes it makes sense to “think small.”

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

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