Startup Spark

Bingo! Patrick McKenzie Puts His Cards on the Table

by Ben Yoskovitz on February 6th, 2007

Patrick McKenzie isn’t Japanese. But he lives in Japan. I visited Japan once for 2 days (on a stop-over from a vacation in Bali, Indonesia) and I can tell you it’s an amazing, strange place.

But enough about that. Patrick runs a MicroISV (or uISV) called Bingo Card Creator. His application allows teachers to quickly and easily create bingo cards for their classes. It’s not a feature-loaded, cumbersome, costly software application. It’s simple, does what it needs to do and helps teachers out. I think that’s really the crux of being a successful MicroISV - you can’t be everything to everyone. Find a small niche, work smarter (not harder), and go from there.

INTERVIEW HIGHLIGHTS

• Patrick is extremely open and honest. It’s reflected in his answers and in his blog on running a MicroISV. Patrick talks flat out about what works and doesn’t, about the challenges he faces and even reveals his revenue numbers.
• Running a MicroISV (or any business) is an awesome learning experience. And you’ll be put out of your comfort zone, learning about all aspects of running a successful business.
• The sense from Patrick that he truly enjoys what he’s doing and that he knows where he’s going with things.
• I love his attention to detail. Patrick and I are cut from the same cloth in that regard.

The Interview

1. Please give us a bit of history/background and how you got into creating your MicroISV?

My name is Patrick McKenzie and I’m currently the Coordinator of International Relations for the R&D group in a technology incubator located in central Japan. That’s a fancy way of saying that I can be a programmer, consultant, or translator depending on what time of day it is. One of my numerous previous jobs was as an English teacher, and since my employers have an educational focus in their mission, I keep my toe in the local teaching community.

One day, someone asked me if there wasn’t a good way to make bingo cards, because they wanted to use them in a classroom exercise and didn’t want to spend all day making them. I thought there had to be a program out there on Google to do this, but after looking for an hour or so I couldn’t find one which I would have been personally satisfied using during my teaching days. So I decided to make one. It was a slow day at work so I banged something up in 3 hours, and while it was very, very rough (it was incapable of printing, so the instructions said to take the output .htm files and print them in IE!), the person who had asked for advice was quite happy about it. I passed it to a mailing list of English teachers in my prefecture and got approximately 25 responses thanking me. That was that, for the moment (incidentally, that program lives on, somewhere in the bowels of the prefectural educational association fileserver.)

Some months later, roughly the last week of June in 2006, I was feeling very under-challenged (professionally and otherwise) and, having just quit World of Warcraft, I had a lot of time on my hands. I spent an increasing amount of time reading uISV blogs, which I had followed off and on (mostly off) for a few years. I finally decided that this was the year I was going to actually start a business instead of daydreaming about it, and set July 1st as my launch date. When I was casting around for an idea on what to launch with, I remembered getting 25 glowing responses for a program which was absolutely terrible, and thought I could do a better job and make it into a product people would be happy to pay money for. The rest, as they say, is history.

2. Do you consider yourself an entrepreneur?

Yes, and a businessman, at least when I have my uISV hat on.

3. You sell your product to teachers, but your blog is mostly about business / MicroISV issues. Do you do any networking (online and off) to reach your target market?

I originally started my blog mostly to practice my English (don’t laugh: I write so little English in the average month at work that I was genuinely afraid of being unable to continue writing at an educated level, despite being a native speaker) and to self-motivate to finish the product. The massive marketing advantages were pretty far from my mind at the time (strolling back through memory lane, I never really expected Bingo Card Creator to be more than a hobby project with ~10-15 sales or so a month). My offline marketing is really de minimis — sometimes a teacher I know will mention that they are so stressed because preparation takes up too much of their time, and I tell them that I make a program which can give them an hour or so back a week.

One of these conversations resulted in some internal discussion in a large Japanese English teaching company to get site licenses of my software for a few of their schools, but that regrettably has not come to pass. At the very start of my company I did a bit of lounging about on ESL teacher blogs and forums trying to reach my market directly, but I found that the return on time invested was not nearly as good as it is for investing time in SEO or tweaking CPC campaigns, at least for my market.

4. Do you have any plans to diversify? Build another related product for the same target market? Or something completely different? Your blog is an excellent source of technical and business information for MicroISVs, any plans on re-packaging that into book form?

I do have plans to diversify, and the next product will most likely not be aimed primarily at schoolteachers. What can I say, I have eclectic interests — I’d also love a market prepared for a slightly higher ticket price than $25-$30. Several people have suggested packaging my blog up into a book, and while I would love being a “published author” from a vanity perspective, from a financial and personal perspective it doesn’t make much sense. It would require vast amounts of my time and the share of a book sale that the author gets is rather minimal compared to the share of a sale that a uISV gets. (If I went through a traditional publisher, we’d be talking about 5% to about, oh, 90%.)

5. You mention on your blog that referrals don’t generate a lot of business. Any plans to change that?

There is a prayer I am rather fond of: “God, Give us serenity to accept the things that cannot be changed, courage to change the things which can be changed, and the wisdom to know the difference.” As a uISV, you can directly affect, with a fairly low amount of effort, how many prospects you get from download sites, organic searching, and CPC. Building word of mouth, however, is not something which you can directly control, and it will take time. Accordingly, I focus on the forms of marketing which I can affect directly and treat referrals as a nice bonus (and motivation to keep my customer service as good as possible.)

(There are, incidentally, strategies you can use to make referrals easier. For example, you could add “Send this to a friend!” links. I may implement those in the unspecified future.)

6. What are the key elements to success for a MicroISV?

Knowing what “success” for you is. For many people, Bingo Card Creator would not be considered a success — they might want profits comparable to the wage paid to a senior software developer, and $650 a month would fall far short of their expectations. For me, Bingo Card Creator has succeeded beyond my wildest dreams — it’s a wonderful project, I have learned so much from it and made excellent connections, and the experience has given me the confidence to think that perhaps eventually I could do this full time. (I am not going to do this in the immediate future, as unlike many people, I rather enjoy my job.) The money, for me, is a nice added bonus which I mostly stash in my retirement account or use to buy iced cocoa, my drink of choice.

That might be an unsatisfying answer to some of your readers. OK, so let’s assume that your personal yardstick of success is dollars in your pocket. If that is true, the keys to success are execution, execution, and execution. You need to take every aspect of your business, every single aspect, and fine tune it until it is excellent. *Don’t stop with the application.* I would estimate that approximately 10% of the work involved in running a uISV is development, and 90% is everything else.

If I wanted to make a splash, I would say that it is more important that your ordering pathway be flawless than your application be the best in its class. Do you have a design document for your ordering pathway? Why not?

7. What are the most interesting things you’ve learned running a MicroISV? Have those lessons helped you in your day job?

I learned some subtleties about the Java Swing and printing models which I could theoretically employ in a day job project, although at the moment I’m using C#/Perl at work. The most intellectually stimulating things I have learned about uISVs are the marketing side of things, particularly marketing over the Internet. I don’t often get asked much for marketing advice at work outside of the “We haven’t ever done business in America. How should we explain the benefits of our product there?” (same as here, incidentally — “You don’t have enough time or money. We can help.” is a template that just about everyone can appreciate, although its certainly not the last word in marketing strategies), but I’m much, much better informed on the mechanics of Internet marketing than I was 8 months ago.

8. How important is the money-back guarantee that you offer? And how many times have you given money back?

Remember what I said about polishing every last bit of your business? The reason is, and I am indebted to Steve Pavlina for this insight, is that the effectiveness of discrete bits of your business is multiplicative, not additive. That is, suppose you have five challenges you have to overcome to convince a prospect to buy from you. If each of these challenges is handled with half of the skill you could have brought to them, your sales aren’t 50% of what they could be, they are 3% of what they could be. Conversely, if you have X sales today and double the effectiveness of any one aspect of your business, you can expect 2X sales tomorrow. That makes seemingly small changes, such as offering a money-back guarantee, very, very powerful. And I honestly believe that, especially for the technically unsophisticated B2C market, who reads of little else in their newspapers other than stories of identity theft and Internet fraud schemes, a money-back guarantee will double your effectiveness in crossing the “Do I trust this anonymous entity enough to give it my credit card details?” hurdle.

I have given money back approximately once a month (and this has never cost me a penny.) I have never regretted the guarantee for a single second.

9. What drives you to keep working on your MicroISV? Passion for bingo? Fun? Money?

Passion for bingo? I love teaching, but bingo is just a means to an end there. I do my uISV because I intrinsically enjoy every aspect of it — the intellectual challenges of development and marketing, the writing of emails to little old ladies asking what the Start Menu is, the joy in doing a job well and seeing the results of it inside of a week (for example, rolling out my new purchasing page changes), and most especially the letters I get from customers. I won’t lie, I certainly don’t mind the money, either (it’s particularly nice to get home after working 16 hours for the day job, collapse into bed, then wake up, check your email, and realize you made more when you were asleep than when you were working — this has only happened to me once or twice.)

10. If you could give upcoming MicroISV owners one piece of advice, what would it be?

Understand the following: you are no longer just a programmer or just an engineer. You are not selling just a program. You are a businessman, and you sell a solution to a problem that your customer has been facing for a while. It may be that you have programmed part of this solution, but that is far from your only task. If you understand this and act accordingly, you will do very well in this business.

Thank you for the opportunity and I wish you and your readers the best.

Conclusion

Patrick was a great sport, and I think many people will benefit from his thoughts on running a business, MicroISVs and more.

Don’t forget his great blog about running a MicroISV and if you’re in the market for bingo card software or know someone that is, go check out Bingo Card Creator.

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POSTED IN: Entrepreneur Interviews