What is the point in running a business if we dont want to become a billion-dollar company? This was the conversation I had a couple of weeks ago, and the person that I was talking to asked me this question. I felt that it is a great motivation to run a business but beyond that, what are the compromises and the challenges that typically get associated with running a billion-dollar game?

The question that cropped up in my mind was, why do you need to be a billion-dollar company when you can easily be a million-dollar company? I mean it and especially when you look at this from an ISVs point of view, this talks more about realism than being obsessed with projections and CAGR.

To become a billion-dollar game, you need to be either seeking investments or go public before you can eventually get there (this generally is the case!). From the ISVs perspective, this primarily depends on the nature of the idea and the approach you have towards making your business profitable. Plus, all the biggies are not going to be running after you to acquire with their purse strings open, till you make them really interested (it is a tough call to sell anyway!).

More of ten than not, many ISVs operate in a niche market and not necessarily world changing businesses and it is easier to build million-dollar companies as opposed to building billion-dollar ones. This would allow you to run your shops profitably with the products that you enjoy building and servicing your customers.

Many an ISV fail due to their inability to raise funds as they find it difficult to convince a VC on the business potential of their ideas. Even engineering takes a hit and the product never enters the market and remains at the prototype stage itself. A large percentage of these in my mind, are not ideas that require funding for evolution, and I would suggest that you put together version 1.0 of the product in $100K or thereabouts and take it to the market. They (market) are the best judges of validating your business ideas.

All said and done, there are some ideas that definitely require the VCs; not just their funding, but their ability to suggest the direction as well. Though, a majority of ISVs need not necessarily need VCs to be with them, to get themselves to profitability. The most important thing is to identify where your ideas lie.