By Bob Walsh

One of my favorite sayings is, “there’s nothing more practical than a good theory”. So what’s the theory, the economic model, the historical imperative behind the rise of micro-ISVs as a successful way of doing business? The Long Tail.

Back in October 2004, Chris Anderson, editor-in-chief of Wired Magazine, wrote a article called “The Long Tail”:

“Anderson argued that products that are in low demand or have low sales volume can collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters, if the store or distribution channel is large enough.” - Wikipedia.

Now I can hear you saying, “That’s nice, but what has it got to do with my micro-ISV?” Simply put, the Long Tail is where micro-ISVs can thrive and prosper.

Once upon a time (the eighties), if you wanted to break into the software business, you needed to create a product with high demand, like an operating system, a word processor, a spreadsheet. You needed a product that everybody with personal computers (as they were called then) would buy, because there were only a few million people out there with personal computers. You had to sell to most of the market to make enough to pay the rent on you officebuilding, bribe your way onto the shelves of stores and spend 30% of your revenues looking for customers.

That was then; this is now.

Now, we have over one billion people who use the Internet today. Now, we can if we’re relevant connect with customers anywhere in the world in four clicks. Now, everybody in the developed world has a PC. Now, If can find the one person out of every 100,000 people on the Net who has need of my software, I can make a great living; if I find 4 out of 100,000 online consumers or businesses, I can make real money.

Micro-ISVs are all about niches nearly all the time; but those niches add up quick. Large companies can’t compete effectively out in the Long Tail; it costs too much for them to operate.

But you can.

If you’d like to read more on this subject, here are several good places for a micro-ISV to start:

• The Long Tail of Software. Millions of Markets of Dozens.
• The Long Tail of Software.
• The Long Tail of Software. (Part 2)
• The Long Tail Squidoo Lense.

Popularity: 1% [?]