Eric Sink has been hanging around Joel on Software since the early days. He was one of the creators of the Spyglass web browser, he created the AbiWord open-source word processor, and now he’s a developer at SourceGear, which produces source code control software.

But most of us around here know him from his contributions as host of The Business of Software, a discussion group that has become the hub for the software startup crowd. He coined the term micro-ISV, he’s been writing about the business of software on his blog for several years, and he wrote an influential series of articles for MSDN. He just published a full-fledged, dead-trees paper book called Eric Sink on the Business of Software, and he asked me to write the foreword, which appears here.

Did I ever tell you the story of my first business?

Let me see if I can remember the whole thing. I was fourteen, I think. They were running some kind of a TESOL summer institute at the University of New Mexico, and I was hired to sit behind a desk and make copies of articles from journals if anybody wanted them.

There was a big urn full of coffee next to the desk, and if you wanted coffee, you helped yourself and left a quarter in a little cup. I didn’t drink coffee, myself, but I did like donuts and thought some nice donuts would go well with the coffee.

There were no donut stores within walking distance of my little world, so, being too young to drive, I was pretty much cut off from donuts in Albuquerque. Somehow, I persuaded a graduate student to buy a couple of dozen every day and bring them in. I put up a handwritten sign that said “Donuts: 25¢ (Cheap!)” and watched the money flow in.

Every day, people walked by, saw the little sign, dropped some money in the cup, and took a donut. We started to get regulars. The daily donut consumption was going up and up. People who didn’t even need to be in the institute lounge veered off of their daily routes to get one of our donuts.

I was, of course, entitled to free samples, but that barely made a dent in the profits. Donuts cost, maybe, a dollar a dozen. Some people would even pay a dollar for a donut just because they couldn’t be bothered to fish around in the money cup for change. I couldn’t believe it!

By the end of the summer, I was selling two big trays a day… maybe 100 donuts. Quite a lot of money had piled up… I don’t remember the exact amount, but it was hundreds of dollars. This is 1979, you know. In those days, that was enough money to buy, like, every donut in the world, although by then I was sick of donuts and starting to prefer really, really spicy cheese enchiladas.

So, what did I do with the money? Nothing. The chairman of the linguistics department took it all. He decided that the money should be used to hold a really big party for all the institute staff. I wasn’t allowed to come to the party because I was too young.

The moral of the story?

Um, there is no moral.

But there is something incredibly exciting about watching a new business grow. It’s the joy of watching the organic growth that every healthy business goes through. By “organic,” I mean, literally, “of or designating carbon compounds.” No, wait, that’s not what I mean. I mean plant-like, gradual growth. Last week you made $24. This week you made $26. By this time next year you might be making $100.

People love growing businesses for the same reason they love gardening. It’s really fun to plant a little seed in the ground, water it every day, remove the weeds, and watch a tiny sprout grow into a big bushy plant full of gorgeous hardy mums (if you’re lucky) or stinging nettles (if you got confused about what was a weed, but don’t lose hope, you can make tea out of the nettles, just be careful not to touch ‘em).

As you look at the revenues from your business, you’ll say, “gosh, it’s only 3:00, and we’ve already had nine customers! This is going to be the best day ever!” And the next year nine customers will seem like a joke, and a couple of years later you’ll realize that that intranet report listing all the sales from the last week is unmanageably large.

One day, you’ll turn off the feature that emails you every time someone buys your software. That’s a huge milestone.

Eventually, you’ll notice that one of the summer interns you hired is bringing in donuts on Friday morning and selling them for a buck. And I can only hope that you won’t take his profits and use it for a party he’s not invited to.