It’s got to be the single-most asked question in the software business world. Beginning startups – both rolling in VC hay and bootstrapping – ask it. Existing software companies, as they get whacked around by a changing market (Mobile, where’d that come from?) and changing user expectations (You mean, I don’t just run in my browser?) ask it. The polite form of the question is, “How do I/we define what product to create?“. What they’re really saying is, how the hell do we invent (or re-invent) a software product that will sell like mad before we go broke like in out of business?

The traditional way to cope with this is,

1. Founder has brilliant idea,
2. Team works like slaves to bring it to market before anyone else,
3. Startup gets funded by VCs whom Founder sells idea to and lo and behold!,
4. the Software arrives at Market, to adoration and sales.

Except for the other 9 out of 10 startups whose software arrives to a vast collective yawn and are dead meat in 3 months.

When William Gibson said “The future is here. It’s just not evenly distributed yet“, he could have been talking about how Google is reinventing its search results right now and incidentally altering the likelihood your software company will be found in 2010 Q1 by prospective customers worldwide.

There are three big changes confirmed and now being rolled out:

1. Adding real time search results to your Google results,
2. personalizing those results like never before and
3. giving every Google user a sidebar of options controlling the freshness of their results.

And there’s two other changes – Page Preview in results and the Wonder Wheel (no, I didn’t make this up) – that are not confirmed, but are also getting rolled out piecemeal at least in the United States and are strong bets for next quarter worldwide.

So you’ve tried endlessly tweaking your AdWords, starting a blog and even begun Twittering this year, and you’re still on the second or worse page of Google results for the keywords that matter most. How are you going to change this for 2010? Consider creating and maintaining a microsite.

A microsite (at least for the length of this post) isn’t a brochure-like static page about your product, or a shady way to generate inbound links. In fact, it only just touches your product and does everyone in your market a valuable service. A microsite is a way to monetize for reputation/attention a chunk of all that expertise you’ve built up, in the same way your software monetizes that expertise for money.

How would you like to be able to say this?

“Just a week after launching the sites they got to the first page of Google results for the main keywords… the .NET microsite ranks #1 for .NET logging as of today“.

Hammers Sell Better Than Software

Back in April my friend and fellow microISV Andy Brice conducted a software vendor survey that highlighted something that doesn’t get the attention it should: while about a third of the people that visit your site download your trial version, only 1% end up buying.

Why is that? Now maybe the 92 respondents to the survey were atypical, but I don’t think so: I’ve heard that “only 1% buy” adage for years.

Here’s a related factoid Andy’s survey unearthed: the average Mac product conversion ratio is more than 4 times higher than the Windows product conversion ratio.

Now maybe Mac owners are four times richer than Windows users, or maybe because there’s four times less software to choose from. But as a Windows developer who switched two years ago, I haven’t noticed four times more money in my bank account or not found a decent range of software to accessorize my MacBook Pro with. In fact, I’ve noticed – and so has my spouse – I’m much more likely to buy a Mac app I trial than I was likely to buy as a Windows guy.

So here you are, another ordinary day running your microISV. Pretty much like yesterday; not unlike tomorrow.

You’re doing what you’ve done, you’re all nice and cozy in your daily routine. The problem you have is that while you’ve been sleepwalking along, the rest of the world has been very much awake. And unless you wake up and stop drifting you’re going to be like someone falling asleep while driving: fine, until you hit the oncoming truck in the other lane.

Let’s take a little test, shall we? Maybe you don’t need a wake up call and can skip the rest of this post.

There’s two trends – the Cloud and the Crowd – afoot in the software world, and if these trends have gotten buried by all the day to day trivia, let me give you a quick rundown on how they’re changing our industry.

Way back say two years ago, one of the first checks you’d write launching your startup would be to a graphic artist for a couple thousand dollars to execute your new company’s logo. It wouldn’t be cheap, but it would be good and they’d been recommended to you as someone who did good startup logos.

Now what you’d do is spend $39 at 99designs.com to post a design contest for your new company logo for say 1/4 of what you would have paid and let the crowd of 31,000 graphic artists submit designs to you. Then watch as 56, 92 or 124 (actual numbers) designers submit logos for your consideration. Joe the Graphic Artist might be good, but is he better than a hundred other graphic artists?