Software developers are usually so busy writing software for other techies, that they often forget there is a bigger world out there. Terrell Miller has a successful herd management software product for cattle ranchers. He generously agreed to share his experiences on what it has been like building a software business in a non-techie niche market.
Can you tell us a bit about CattleMax?
CattleMax is herd management software designed specifically for beef (meat) cattle, and helps ranchers keep track of their cattle records including births, purchases, sales, breeding history, measurements, lineage, and more. Having the records in one location enables producers to stay organized and helps them make better decisions – which in turn helps them be more efficient and profitable in their operation.
What was your background before CattleMax?
My wife Penny and I met at Texas A&M University while we were both in Undergraduate programs. My degree in Information Systems in the College of Business and family member’s involvement in cattle, along with Penny’s degree in Agricultural Leadership and years of showing cattle, proved to be a great compliment for us to start a business where we could work together.
How long have you been working on CattleMax?
I started working on the first version of CattleMax, which started out as a custom application for a local ranch, in July 1999 right after I graduated and have worked for Cattlesoft ever since. Penny worked at the local university on a full and then part time basis for 18 months before joining the business on a full-time basis.
What technologies and languages do you use to develop CattleMax?
CattleMax is developed in Microsoft Access 2007. Access has been a key ingredient to our desktop software’s success. A lot of developers don’t give Access the credit it deserves as a powerful and rapid development tool. We have done extensive customizations to our interface to differentiate from the Access default templates and many customers don’t realize we are even using Access.
If you were starting CattleMax from scratch today would you go for a web based solution? Or would you stick with a desktop solution?
That’s a hard choice to make right now in January 2011 because I think we are in a transitionary period. Developers want to embrace the latest technology because it’s clearly the future. However, you don’t want to create a product that cannot be utilized by all of your customers (Internet in rural areas can still be spotty). Though we are in the process of developing a web-based version of our CattleMax, I expect the desktop version to continue selling well for years to come.
While a desktop software offers a larger revenue up front to cover customer acquisition costs, a web app can potentially offer more revenue in the long run assuming you have good customer retention. I think it’s easier to get started with a desktop app because you can use the up-front revenue to reinvest in marketing.
Why did you choose this market? How confident were you that it was a commercially viable market?
You could say the market chose us. Initially, we wanted to create a side project that involved both of our interests. Being students at Texas A&M helped open doors to talk with professors and experts about our product and ideas. Through these talks, we were introduced to a nearby ranch who needed an easy-to-use cattle record keeping system. They became our first customer and continue to use our software today.
How long did it take you you to get CattleMax to v1.0?
It took about 9 months to get CattleMax marketable and stable. Our first public release date was at a local trade show where we received great response. Being a student, we didn’t really have any income to replace – it was the ideal time for us to have started Cattlesoft and the software. We had little to lose and the rest of our life to recover from any business or financial mistakes made.
How technically proficient are your customers? Can you reach them with online marketing?
Our average customer is in the 45 – 65 age range. Over the years, cattle ranchers have become much more knowledgeable with technology. Our marketing is primarily online (PPC, SEO, direct website advertising) along with some print advertising.
The CattleMax user interface looks very slick and intuitive. Do you do any usability testing? Did you find the switch to a ribbon bar difficult for you or your customers?
In the beginning, I would go to a customer’s ranch and watch them use the software. By listening and watching how they interacted with the software, I was able to identify areas of confusion and see ways that we could make processes and areas easier to work with.
The ribbon was mandatory when we switched to Access 2007. While I was initially apprehensive about the change, I now see that the ribbon has made CattleMax easier to use, since it allows priority of certain menu items/common areas by giving them larger icons and visibility.
I see you have a Facebook widget on your home page. Have you found Facebook to be a useful marketing tool?
We use Facebook to post upcoming events, interesting articles and ask our customers for their feedback, plus it’s another way for customers to ask us questions. While advertising on Facebook allows for laser targeting based on interests, our in-house email list is larger than the number of ranchers on Facebook according to their PPC platform. Therefore most of our communications efforts are through our email newsletter and Cattle Management blog.
How did you choose the price of the product?
In the beginning, we chose prices that were comparable to other cattle software programs. We have two editions of our software, one for the commercial/beef producer and another for the purebred/seedstock producer. Each of these editions is available in a Small Herd (50 cow limit) and Standard (no record limit). We chose two editions so that it would be easy for a rancher to confidently choose the edition right for their herd. The two herd size options are so we can offer a solution to small herd producers while providing additional value for larger herds that may require additional support. See Camels and Rubber Duckies.
You have a generous 60-day money back guarantee. Do you have to give many refunds?
We may have one customer, at most, per year return the software because of dissatisfaction. We may have 5 returns a year from people who bought without downloading our trial and wanted a refund – a few of those reasons are receiving it as a gift and not wanting it, software not working on their computer (Windows 95 anyone?), or lacking a key feature. I highly recommend a satisfaction guarantee as it does help customers buy with confidence, knowing that you will stand by your product. No software company wants a dissatisfied customer who feels you “took their money.”
Do you charge for upgrades? Is this a significant source of income?
Our upgrades have been on about a 2-3 year schedule, and current customers can purchase them at half the price of the full version. While upgrade purchases are a double-digit percent of our business, we focus more on new sales. One of the challenges of making a good product is it takes an even better product for customers to understand the value in upgrading.
Do you outsource much work?
We work frequently with independent contractors and freelancers. While we’ve had 6 or more full and part-time employees over the years, I find employee management and “keeping people busy” to be too distracting from working on the big picture. Having people working from their own locations gives us more flexibility, plus we are not limited to just our physical location/city for finding experienced workers.
Do you have any products besides CattleMax?
We adapted CattleMax into LonghornMax, a software for Texas Longhorn cattle that enables breeders to record horn measurements in addition. LonghornMax primarily arose from our connections with the Texas Longhorn Breeders Association where we were previously their official software program. We also raise Texas Longhorn cattle on our ranch near College Station, which is about 90 miles west of Houston. Another spinoff is EquineMax, a software program for horse owners to keep track of their horse records.
Stepping beyond software in 2010, we launched CattleTags.com which is a website for purchasing cattle ear tags. In 2011 we launched LivestockSupplies.com which includes additional equipment and supplies for the ranch. Selling livestock supplies has proven to be a nice complement to our software as it helps us offer additional services and value to customers by offering them convenience and variety of selections, without them even needing to leave the ranch!
Would you recommend others to start a business straight out of college? Or should they work for other people first to gain experience?
The younger you are and the less commitments you have, the easier it is to get started, because your opportunity cost on your time is lower than it will ever be. Also if your business fails, you have the rest of your life to recover. I think entrepreneurs can have the best of both: starting their own business while gaining experience. I’ve learned a lot through in-person networking as well as online communities like Business of Software, Hacker News, SEOBook.
Given that you started the business straight out of college, how did you learn all the business and marketing skills you needed? Did you make a lot of mistakes?
I learned much of my business & marketing skills through three sources: formal academic learning, informal discussions with other entrepreneurs and mentors, and of course personal experience. Several years out of college, I realized that my business skills and not technology skills were holding me back, so I decided to return to school and pursue my Masters of Business Administration (MBA).
As far as mistakes, I asked one of my mentors about his biggest mistake and he replied “I’ve not made any mistakes, but I’ve bought a lot of expensive learning lessons”. Many of my learning lessons have been as a result of losing focus and could have been avoided by asking myself “is this the highest priority and best use of my time?”.
Any advice you would like to give to aspiring software entrepreneurs?
I’ve visited with many software entrepreneurs over the years and frequently find an imbalance of priorities. As programmers we tend to gravitate towards technology and automation. However, once you’ve built a great product, often times the best return on your time and money is in marketing (blogs, PPC, SEO, print advertising, talking with customers).
Another bit of advice would be to embrace the lifestyle aspect of your business. Owning your own business helps you be in control of when you work, where you work, how you work, and what you work on. I consider it a good day when I can wake up in my house, walk down the hall to my office, work for a while, and then spend time outside on our ranch with my family.
Terrell and “Dude”, an 80 inch (200cm) tip-to-tip 2,000 pound (900kg) Texas Longhorn steer.