Yes, But

Joel writes about the perils of accepting VC funding. And he is basically right, as far as he goes. But the organically grown ISV that Joel promotes is only part of the possible spectrum of software companies. In particular, I think that the young, organic ISV is primarily limited to building better mousetraps in existing markets.

The advantage of working in an existing market is that your competitors have already validated that people will buy. Eric Sink believes you should find someone Big and Dumb and take part of their market away. And if the market is big and stable enough, your competition is stupid enough, and you are smart enough in ideas and execution, then you will succeed. With some luck, you’ll even grow to be big and smart.

But sometimes, your idea calls for a new way of doing business and a new market. And when that happens, you’ll need outside funding. Because it takes money to build a new market, to convince prospects that there is a real problem/opportunity, and to convince them that you can solve it.

5:38 PM Eric Sink chimes in