Category Archives: guest posts

Experiences promoting niche software

This is a guest post from fellow software developer, Simon Kravis.

It’s sometimes said that software development is only 10% of what’s required to earn money from software and I can attest to that. Since 2018 I have been developing photo captioning and related software, more as a retirement diversion than a serious source of income (after a career mostly involved in writing scientific and engineering analysis software), in the hope that sales income would at least cover running costs. My best marketing tool has been writing reviews of the class of software that I produce, and the hosting site (Hub Pages) provides some useful analytics on how often these are accessed and for how long. Below is the graph for an article on tagging.

The decline since early 2022 is hard to explain – the article is periodically updated so the steady decline is not due to diminishing ‘freshness’ – which for Google is probably a file Modified date.

Here is another review article profile (Scanning Multiple Photos) showing a similar decline:

But another (Best Photo Captioning Software) has held up, though at a low level.

I offer digital photo captioning software (Caption Pro) on Windows and Mac platforms, and an iPhone captioning app (CaptionEdit), with the Windows version dating back to 2017. I also offer part of the functionality of Caption Pro on Windows for auto-cropping scans of multiple paper photos (ImageSplit). On Windows neither Caption Pro software downloads or sales seem to correlate with review accesses, despite about 1/3 of web site accesses coming from the review. However, downloads do show some correlation with Caption Pro web site sessions, as shown in the graph below.

Sales do not correlate with downloads, which perhaps explains why most advertising for niche products is not successful – it may increase downloads but this does not appear to increase sales. The observed proportion of downloads resulting in sales for ImageSplit and Caption Pro are 6% and 9% respectively. The lack of correlation between sales and downloads may be due to the small number of sales per month, which results in random fluctuation dominating the results.

The decision to enter the Apple “Walled Garden” of software was partly at the prompting of friends rather than a commercial evaluation. Apple Developer membership (costing ~US$100 per year) is required to prevent software being blocked from installation through being from an unknown publisher. Further costs were purchasing a fairly modern Mac on which to perform development, as the App Store will only accept software developed using recent versions of the Xcode development environment, which will only run on fairly recent hardware. The App Store takes a commission of 15% on sales, which is quite reasonable when compared to the difficulty of implementing e-commerce on Windows, where a PayPal account eases the problem of low-value foreign-currency transactions, but e-commerce plug-ins may stop working after years for no discernible reason. The review process for software acceptance into the App Store is generally fast, but seemly trivial issues can require resubmission. Features which have passed one review may be rejected in a later one. The review process is generally fast, but on one occasion took 4 weeks.

Caption Pro for Mac has been available (via the App Store) only since Sep 2021.It appears within the top 6 results for a search using “Caption Photos”, which is the source for most downloads. About 3.5% of downloads result in sales. This figure is much less than the Windows version of the same app, despite Mac users’ reputation for being more willing to pay for software. The iPhone app did not appear at all initially when searching for “Caption Photos” in the App Store. After 6 months it began appearing as result number 140, after it had 360 downloads. This poor ranking performance is probably because “Caption Photos” is a very popular keyword used by many apps, including those that only caption videos. It has had very few downloads and sales, despite Apple Search Ads and Apptimizer campaigns. The number of downloads increased dramatically during the Apptimizer campaign between Jan 24 and Feb 2 (as they were purchased) but the change in ranking from these downloads did not result in any sales, perhaps because no installs were purchased. The Apple search ads campaign (which resulted in the app being shown as an ad 1 in 50 times when the search phrase “Caption Photos” was used) did not greatly affect downloads or sales. A Facebook ad campaign to show a link to the app whenever “Genealogy” or “Genealogy Software” was searched for was also unsuccessful, and very expensive, as Facebook charges by impressions rather than clicks. Additional backlinks to the web site were purchased in September 2022 from Links Management in an attempt to improve the web site Google ranking, but this did not appear to have any effect on web traffic.

Mac and Windows users contacting me with problems have had a wide range of experience level – from completely naïve to former programmers. Most have been from the US, which reflects the geographic distribution of sales. There have many downloads to non-English speaking countries but very few sales.

Some results from the Mac and iPhone Apps are shown below:

On balance, developing for Apple platforms was not a good commercial decision, as the advantages of a mostly captive audience (completely captive in the case of the iPhone) do not seem to result in higher rates of downloads or sales. Competition for iPhone apps is so intense that niche products without massive advertising budgets are unlikely to succeed. The same is likely to apply to Android phone apps, which anecdotally have a less rigorous review process. My experience is that advertising and backlink purchase for any platform are not effective in increasing sales for niche software.

Simon Kravis runs Aleka Consulting, a small software and consultancy company in Canberra, Australia specializing in information management and offering a number of software products. He has mainly developed scientific and engineering programs, starting in the era of paper tape.

Positioning Software in a Crowded Market

This is a guest post from serial software entrepreneur Dennis Gurock.

Thinking about product positioning (and matching branding) is especially important if you build a product for a crowded market with many established competitors (and there are many reasons why this can be a good idea). We were in exactly this situation when we initially thought about building and marketing our new test management tool.

Positioning will allow you to better focus on a specific market segment to target, it makes it easier to build a clearer and stronger message to reach customers, and it helps develop the initial product vision and feature set.

What does successful positioning mean for software products? It can mean identifying a unique angle to focus on so you can stand out with your product among other products and competitors. Especially if you are entering a crowded market, this allows you to better communicate the key benefits and features you have to offer. It will help you reach the right customers and ensures that customers remember you when they look for a new product to try.

To come up with positioning for your new product, you can focus on a specific customer segment or niche that you think will be easier to market to or that you think is underserved by existing offerings. It can also help you limit the initial product scope, so you can go to market faster. Then rigorously optimizing for this initial customer segment allows you to establish a market presence and expand to other segments more easily later.

Why is positioning useful?

There are many benefits of coming up with and deciding on positioning for your new software product early on. Once you decide on the positioning, many marketing, product management and sales decisions become more straightforward.

Clear message & benefits: it is not easy to stand out in a crowded market. Positioning allows you to come up with clear messaging so you can explain and highlight unique selling points in few words.
Target and identify niche/marketing opportunities: it can be difficult to decide which marketing options to try, which campaigns to book and which niches to target. Focusing on a specific market segment based on the product positioning can be a great way to identify matching niches and opportunities.
Identify customer fit during sales: one of the most important aspects of the sales process is identifying and ensuring prospects are actually a great fit for your product. It’s wasted time for both you and for your prospects to invest a lot of effort evaluating and piloting a product if they will not benefit from it. Positioning can help you quickly filter and identify which customers to focus on.
Better focus on initial product vision: there are a lot of directions to choose when building a new product. If you don’t have a clear vision to guide you, it is easy to be distracted by different directions and work on too many things at the same time. Clear positioning makes it easy to focus product management on specific goals and use cases.
Easier to choose features: when you start working with customers, you will (hopefully) receive a lot of feedback on features you should add. Positioning helps you decide which of these features you should actually implement. Often times the most successful products are developed by following strong opinions and saying ‘No’ to many requests.

Examples of software product positioning

Let’s look at a few examples of companies that use positioning to market and build their products. All these examples are from industries and product categories with many existing competitors and products.

Testmo: we entered a crowded market with many established testing tools when we developed our new product. Most existing offerings either focus on manual testing, or they offer a complete ALM toolset to handle the entire development lifecycle. With Testmo we had other ideas and wanted to position it differently, focusing on unified testing. This means we combine test cases, automation and exploratory testing in a single platform. At the same time it allows us to limit the scope of the product. We won’t add our own issue tracking, or CI pipelines, or existing DevOps features. Instead of we focus on integrating with other tools customers already use.
Another example is the documentation and wiki product GitBook. They heavily focus on software developers and position themselves as the primary tool for developers to publish user docs and to document internal knowledge. With this positioning in mind, they can focus on features that primarily make sense for developers, such as Git synchronization, Markdown support and code snippets. It also allows them to more easily market directly to software developers with a clear message.
Then there’s the application monitoring service Checkly. There are many services and products that enable you to monitor apps and sites for downtime and notify you about issues. Checkly positions itself as a tool that enables end-to-end monitoring with flexible scripting. So it doesn’t just make simple web requests to see if a site is still live. It allows customers to write custom scripts to implement complex user flows and thereby not just check if a site is reachable, but also test the entire stack with the front-end, database, authentication and much more. This focus allows them to build more targeted features for advanced use cases and thereby provides more value to customers compared to simpler competitors.
The popular email marketing service Campaign Monitor also started with very focused positioning. In the first few years they concentrated on providing the best possible campaign tool for web designers and design agencies. This focus allowed them to invest more in features designers needed, such as white labeling, reusable themes and live email previews. Once they established their market presence, they started to expand their customer base to capture a larger part of the overall market for newsletter tools.

These are just some examples of companies and products that have benefited from clear positioning. Of course there are also countless of examples of companies choosing not to have such clear positioning. There is nothing wrong with this and you can certainly be very successful even if you ignore these points. But more often than not positioning is a useful tool to improve focus on specific goals and customer needs, which increases your chance to build a successful software business.

Dennis Gurock is one of the founders of Testmo, a QA testing tool that unifies test case management with exploratory testing and test automation in one platform. He has been working on products that help teams improve software quality for more than 15 years.

A Windows Developer in Mac Land

This is a guest post from fellow software developer, Simon Kravis.

Few developers would choose their development platform on the merits of their respective Integrated Development Environments (IDEs) but it happens that applications developed in Windows need to be made available on the Mac platform.

There are many environments offering cross-platform (Mac, Windows and sometimes Android) functionality, but close inspection shows that they all have limitations. Visual Studio (the native Windows IDE) can produce apps which will run on a Mac using .Net Core – but only if they are command line apps on Windows. Other environments (like Xamarin) do support interfaces, but only involving simple controls like text boxes or drop-downs. There are other cross-platform IDEs (such as Qt) which offer better graphics support, but they are not cheap and the extent of their support is not evident. If you need functionality such as computer vision, there seems to be no alternative to creating a separate code base for the Mac. Once you start on this path it becomes obvious that Macs handle graphics (and interfaces) very differently from Windows.

Macs have evolved rather more than PCs over the decades: they abandoned their proprietary Mac operating system in favour of UNIX in 1999, adopting the NeXTSTEP platform created by NeXT. Apple originally used PowerPC chips, replacing them with Intel Core processors in 2006, and they are currently transitioning to RISC chips. The Mac NeXTSTEP programming language was Objective C, developed in the 1980s and this is still supported, although the modern Swift language was introduced in 2014, and the Xcode IDE appeared in 2003. Xcode is free, even for teams. It uses the Cocoa API, which is accessible from other environments. The current release (MacOS 13.0) supports both Objective-C and Swift and is also used for developing iPhone and iPad apps. Mac operating systems since Catalina (released in 2019) are 64-bit only. Xcode can only develop apps for Apple operating systems, notably iOS, which powers the iPhone. Most of the web questions and examples relate to iOS rather than MacOS. MacOS uses different frameworks from iOS, so some functions used in iOS are not available in MacOS, or have different parameters.

The Windows IDE (Visual Studio) dates from 1997, when it bundled together Visual Basic, Visual Fox Pro and Visual Source Safe and Visual C++. It has an open architecture based on plug-ins and supports 36 different programming languages, but the major ones are C#, VB.Net and C++. Visual Studio can develop apps for any platform via the .NetCore framework, but capability for non-Windows platforms is limited. The Community edition is free, and has almost all the functionality of paid versions.

Both Visual Studio and Xcode are highly complex applications. They both have graphical interface builders where controls are dragged from a library onto a form. Each application has a vocal supporters and detractors. My experience comes from about 5 years with Visual Studio developing C# applications. Before this I worked with Visual Basic for Applications in Microsoft Access, so I am well-versed in the Microsoft way of doing things.

Like most complex applications, Visual Studio and Xcode each have plenty of bugs, often producing completely unhelpful error messages. Reporting an Xcode bug through standard channels resulted in … nothing. Not even an automated message saying “Thank you for feedback. It will be used to improve future versions”. I haven’t even tried to report a Visual Studio bug, but I suspect that the much larger user base for Visual Studio will mean that workarounds are more readily available, even if the giant ship of Microsoft takes years to respond.

Moving to the Mac and Xcode for development was a shock as I found I didn’t know how to do the most basic things. String manipulation (used in most applications) in Objective C is highly verbose compared to C#. Google was invaluable for finding answers – mostly they were from Stack Overflow, but often from 10 or more years ago, sometimes from Apple Developer Forums. As Xcode has changed considerably since then, answers often had to be adjusted before they could be used. Another problem is that functionality once provided externally has since been incorporated into Cocoa, so attempts to find a current version of a component (or framework as they called in Cocoa) are often unsuccessful.

MacOS provides more native functionality than Windows. Features such as computer vision and PDF generation are included in MacOS, rather than requiring the use of 3^rd party components, which may not as robust as desired, and may require a license for commercial use. However, documentation of MacOS functionality, if present at all, was rarely useful. A few times I asked questions on Stack Overflow which attracted the ire of the Mac gurus for either through having obvious (to them) answers or through not conforming to the forum guidelines (in their opinion). However, the integration of NuGet with Visual Studio provides easy access to the massive number of 3rd party libraries available for .Net on Windows.

The model-view-controller paradigm used on the Mac took some getting used to, as did the design of the main Xcode screen. Sometimes a useful display would disappear and I had difficulty in finding it how to bring it back. I often had to resort to retrieving earlier versions from the excellent Time Machine backup. Form design is similar on both platforms – dragging and dropping components from a library. Both Xcode and Visual Studio have bugs, as would be expected for such complex apps. Events from components are generated automatically in Windows, but have to be defined on the Mac (as Actions). References to the component you’ve added also need to be defined on the Mac (as Outlets) and are not a property of the component, whereas on Windows they are.

The Xcode environment provides only basic facilities from scratch: if you need to do something more sophisticated you’ll have to Google around to find out how. Once you know – it’s easy, but the learning curve for Xcode is much higher than for Visual Studio.

Rather than starting from scratch with the Mac version of my Caption Pro app, which uses local computer vision functionality to detect multiple photos, changes image dimensions and adds text to images, I found an existing open-source project on GitHub with similar basic functionality. This dated from 7 years ago and used Objective-C, so that was the language I opted for. An immediate handicap was that many of the answers I found to my questions used Swift in their example code, which is not interconvertible with Objective-C in the way that C# and VB.Net are. iOS applications for the iPhone (which are most common) use different frameworks from Mac apps, and routines in them sometimes have completely different syntax.

The user interfaces for the Mac and Windows versions look quite different, as shown below. There are some basic differences – menus appear separately to the application window on the Mac and are locked to the top of the screen, whereas Windows menus are part of the application screen. Toolbars offer access to common functionality on the Mac. Differences also arise from the fact the Mac application was adapted from existing code rather than created from scratch.

Open-source examples (often from GitHub) are useful, but rarely work out-of-the- box. Sometimes the modifications need are minor – like defining the development team- but sometimes it’s not possible to get them to build in a current version of Xcode.

Debugging on Xcode is frustrating – the call stack frequently contains assembler (which is perhaps why app performance tends to be better on Macs), and the debug variables window does not list all relevant variable values. Variable types may not be correct – Boolean values may appear as dates, and sometimes variables cannot even be evaluated by po (print out) statements. Printing out structure variables may show nothing. Despite the generally superior performance of Mac apps, building apps in Xcode appears to be much slower than in Visual Studio on similar vintage machines, and after code stops at a breakpoint, it may take a long time before the variables window is filled. Deployment of Mac apps can still be done on an ad-hoc basis, but you have to register as an Apple Developer to avoid blockages in installation arising from being an ‘untrusted source’. Bypassing these blockages is more than a matter of clicking “Install anyway” so it’s hard to avoid forking out US$100 per year for registration. Windows has similar blockages, which can be bypassed with a code-signing certificate. These certificates are available from many vendors, and are slightly cheaper than Apple developer registration, but the process of obtaining one may be very involved.

Ad-hoc deployment is somewhat easier on the Mac than on Windows, but the method of doing it via Archive generation is anything but obvious. Mac applications are actually disk images and applications keep all of relevant files in a folder. This makes uninstallation a matter of dragging the application icon into the recycle bin, a far simpler process than on Windows. dmg files are not recognized by IIS web servers (and may not be by Apache either), so unless the file type is registered, download from a web site will not be possible.

Apple pioneered the App Store for iPhones (it is the only way in which iPhone apps can be installed) and Mac apps can also be put there. Apple takes a commission of 30% (or 15% if you are a small company) and they review all apps before adding them. Passing the review process may be a lngthy process, as not all problems are detected in a review cycle. Fixing these issues and resubmitting may result in further problems coming to light. The review process may also be somewhat arbitrary. One App Store app presented an interface in German by default. English was available as Preferences option, but only after guessing where the Preferences option was located. App Store apps operate within a sandbox, which places restrictions on filesystem operations. Whether App Store deployment makes economic sense depends on the nature of the app, its market and price structure. Its advantages are that it targets the 16% of desktop users who use Macs, and streamlines installation (and payment, if applicable). The App Store supports ‘freemium’ pricing, where additional features are made available to paying users, but apps with free trial periods are shown as being free but with ‘in-app purchases’, which annoys some users.

Windows deployment can use .msi files, which have been around for decades, but are not easily installed by non-admin users. Self-extracting executables are more tractable, but 3^rd party tools have to be used to create them. Windows 10 introduced Universal Windows Programs, which are easier to install and can be placed in the Microsoft Store, which operates in a similar way to the Apple App store, but for Windows desktops and tablets.

A key question which is very difficult to answer is “How long will it take me to convert my Windows app to run on a Mac?” Factors affecting this are app complexity, functionality and programmer skill. The time between starting work on the Mac app and first deploying it on the company web site was about 3 months, but the amount of time spent on the project each day varied between zero and 3 or 4 hours. If you are a paid resource, then the cost of a cross-platform IDE may be justified, but the requirement for local computer vision functionality added a great deal of complexity to my requirements, which is one reason why I opted for a separate code base. Substantial evaluation would be required before deciding if a cross-platform environment could support any required functionality.

Deciding what features to implement

This is a guest post from roving software entrepreneur, Steve McLeod.

Each feature you add to your software product takes time to implement, adds ongoing complexity, and is hard to get rid of later. So you need to choose wisely when adding new features.

Here are some tips on choosing which features to implement.

Does your product really need new features?

This question might be surprising, but it is an important one to ask yourself. A software product is never completely finished. There is always scope for improvement. This makes it hard to know when to stop working on it.

If your product is mature and has stable revenue, there might not be much opportunity to increase sales. Adding new features would please some customers, but would not be a good use of your time.

Products that should be considered “done” can still have a large backlog. Don’t be fooled into thinking that your product will only be done once all existing feature requests are done.

Your product might have great potential to grow, but not by adding new features. Perhaps you need to improve your sales and marketing efforts. Don’t use your feature request backlog as an excuse to neglect the other important parts of running your product.

It’s okay to ignore your backlog

Feature request backlogs seem to never shrink. Implementing improvements leads to even more feature requests.

Looking at your backlog can be overwhelming. You’ll see feature requests that are years old. There are others that you intended to implement, but never did. It is okay to ignore these.

Don’t feel that the entire backlog consists of promises that must be kept. Some requests are no longer relevant. Some are from customers who no longer need your product. Some are simply not worth the substantial effort.

Keep your grand vision in mind

Prefer to implement highly requested features. But before you do, make sure each feature fits your long-term plans. Ask yourself:

who is your ideal customer? Is the feature relevant to them? For example, your enterprise customers might be asking for “single sign-on”, whereas you are more interested in working with small businesses.
will this be an ongoing cost- and time-sink? For example, a particular feature could require HIPAA (a US health industry regulation) compliance, while you have no interest in the extra workload and costs of HIPAA compliance.
does this proposed feature agree with your marketing angle?

Each new feature has ongoing costs

Remember that each additional feature comes with ongoing costs in support and complexity. Each new feature is an additional place for bugs to hide, adding to your future workload. Take these future costs into account when deciding if a feature should be added.

Features interact with each other, sometimes in unexpected ways. Even one additional checkbox in a settings panel can lead to ongoing confusion.

Be wary in particular of features that require integration with third party products. For example, many a product owner was burned when Twitter turned off some parts of their public API. Another example is my own experience adding support for connecting to customers’ email inboxes. I then found myself supporting not just my own product’s problems, but those caused by customers’ email service provider.

Sales-blockers are high priority

Not all feature requests are equal. Requests for feature A might come only from long time customers of your product, while feature B is requested only by your trial customers. It sounds ruthless, but you should prioritise the feature requested by trial customers.

When running a business, you do need to care for financial concerns. Take into consideration that:

A trial customer is likely to report a showstopper (for them). When you implement features requested by several trial customers, you are likely to increase revenue.
An existing customer is likely to report an inconvenience. You probably won’t lose the customer by delaying the improvement they asked for.
You need new customers to keep your business healthy.

It is important, of course, to care for existing customers. Don’t take this as an argument to ignore existing customers altogether in favour of potential customers.

Identifying and fixing sales blockers as a matter of priority is especially important for new products. It takes time to find the right balance of features a new product needs to meet the demands of the market.

Prefer the easy things, but not always

Let’s say you are deciding which of two features to implement next. Both feature A and feature B have been requested dozens of times. Feature A will take a week’s worth of work, and feature B will take a month’s work. Which one do you do?

Feature A, right? Maybe not.

Feature A is usually the correct choice. But you’ll be repeating this scenario over and over. Your product will gradually gain many relatively trivial features, while never getting the important features you need to create a compelling product.

Sometimes you need to do the hard work to add the features that are difficult to implement.

Listen to your customers…

Your customers are a great source of ideas for improvements to your product. As they use your product they discover what’s missing and what’s poorly implemented.

Therefore make it exceedingly easy for your customers to get suggestions to you. Consider adding a “Suggest an Improvement” link to your support page and to your help menu, if applicable. This makes it clear to your customers that you are actively seeking suggestions. My experience has been that customers notice these links and use them.

A “Suggest an Improvement” link can be as simple as a “mailto” link. A basic dialog or web form also works well. If you are seeking inspiration on how to do this, look at the “Report an Issue” form linked from the Google Chrome’s Help menu.

Another way to get customer suggestions is by asking them via a survey. This is okay, but it requires people to imagine back to when they last used your product. Us humans tend to be pretty poor at recalling things. It is much better to encourage customers to send suggestions as they encounter difficulties, while it is foremost in their mind.

I found collecting and organizing feedback for my own product, Poker Copilot, to be a pain. So I launched a new product to help manage feature requests. It allows your customers to suggest and upvote improvements for your product.

…and not your competitors

You’ve probably already heard that you should “listen to your customers, not your competitors.” I’m repeating it, because forgetting this can be deadly to your business.

Feature-envy leads us to believe we have to add every feature our competitors offer. Like regular envy, it is best to ignore it.

When your competitor announces a new feature, it can be demoralising. You feel you are falling behind and unable to compete. If the feature looks impressive, you’ll be tempted to add it to your product as soon as you can.

But wait. Have any of your customers actually requested this feature that your competitor added? If not, it is probably because it is not all that useful to your customers.

Your competitor might eventually regret adding that feature, as it turns out that only a small but demanding percentage of their customers use it. By not adding it, you could be giving yourself an advantage.

I’ve discovered that customers often learn about the good features my competitors have. They then tell me that they want these features. Only then do I start considering adding them.

Small tweaks versus major features

I just recommended listening to customers. But be careful of only using customer requests as a source for improvements.

Your customers tend to ask for incremental improvements. Customers are more likely to ask for an additional option in a drop-down menu than they are for a innovative new way to view their data.

If you rely on customer suggestions alone, you’ll never get the innovative new features that can make your product something much grander.

Make sure you balance your customer-contributed requests with your own innovative improvements.

Beware of preferring “pet” features

I just argued in favour of choosing innovative improvements. However this comes with a warning. Innovation can be used to justify poor choices. When you are in charge of decisions for your product, you are in danger of choosing improvements that you find interesting instead of those that have a strong business case.

Be careful. You could spend months working on a feature that is not very helpful to your business.

This is the type of feature that only one customer requested, but because it sounds more interesting to you than anything else in your massive backlog of feature requests, you immediately start working on it.

My own experience with this: I added scripting to a product even though no-one had asked for it and my target customer was not the type of person who would be interested in custom scripting. When I announced the scripting feature, not a single person seemed to use it. I eventually got rid of it.

How do you decide?

The tips I’ve offered you in this article come from my own experience. Do you have tips of your own for deciding which features to implement? If so, please add them in the comments below. I’d love to read them!

Steve McLeod runs a small software company in Barcelona, Spain. His products are Poker Copilot, a desktop analytics app for online poker players, and Feature Upvote, a web app that allows your customers to openly suggest and upvote features they want to see in your product.

A Few Good Links – Why you need them and how to get them

In this guest post Christoph Engelhardt talks about why link building is an important part of online marketing and the most effective ways to do it.

When you are promoting your product online, there is a myriad of different ways to do it: Display Ads, Google Adwords, Facebook Ads, Social Media, Email Marketing, Online PR, and SEO – to just name a few.

Deciding on the right method for your business can be tricky. They are all so different. Some of those methods can be turned on and off like a faucet; others are more like a flywheel that need a lot of pushing to get going, but will keep delivering results after you’ve stopped.

Hopefully you’re in it for the long haul, so I’m going to talk about a strategy that is more of a flywheel: link building. Building links on the internet is a long-term strategy that factors into multiple traction channels.

Inside this article you will learn:

How to supercharge your PR, SEO, and Content Marketing with outreach marketing.
How you can get more links to your website without angering the Google gods.
At least 3 different ways to find high-quality outreach and link building opportunities.
The secret to drafting the perfect outreach email.

I’ve been in online business for more than a decade now. I’ve been struggling with moonlighting multiple products to profitability, online marketing and SEO long enough to call myself “somewhat of an expert” on those topics. ;-)

I want to share with you what I have learned in those years to help you avoid making the same mistakes I made.

Let’s get started.

On the ethics of SEO and link building

SEO and link building in particular are often seen as scammy online marketing tactics and I won’t deny that there is some merit to that argument. SEO for the first 10 years has been a lot like the Wild West – minus the random killings. There was no one to effectively enforce the “law of the land” and spammers thrived.

Yes, you could cheat your way to the top of Google’s search results in the past. BUT, it is getting harder and harder with every passing day. Getting to #1 on Google today means you have to “dot the i’s and cross the t’s” in technical SEO (more on what this is later) and get some buzz going for your product – i.e. build some links.

“Link building” as a term is loathed by white-hat SEOs, as it implies spamming comment sections on random blogs and free web directories. They would much rather talk about “earning links” through “Content Marketing” and “Social Amplification”. That’s fine by me, but make no mistake: Having a rich and diverse link profile for your website is still THE major ranking factor for Google’s search results.

Spreading your links around the world wide web isn’t a problem per se. Links are what make the world wide web a WEB in the first place. But the way you do it makes all the difference: If you’re leaving useless comments on unrelated blogs, you’ll do more harm than good. If you get your product reviewed (without paying for it) on a major website where your target audience hangs out, the value gained can hardly be put into words.

Fundamentally, whenever you do any sort of online marketing you are building links. Sharing your content on social media? You’re sharing a link back to your content, because you want people to click that link. Buying Adwords? You’re buying links right on Google’s website. Sharing your news release in a PR campaign? You’re spreading your links.

This means that, if you have a website, you’ve probably started building links without thinking too much about it. All you need to do is be more intentional and active in your efforts.

Why you should include outreach marketing in your marketing mix

Building links helps you in two distinct ways: a) you’re getting referral traffic directly via the links you get, b) the links you get improve your rankings in the search engines, bringing you additional organic SEO traffic.

In the long term, the SEO benefits will often have a greater effect on your traffic than the referral traffic you receive through the links. This is because a great link profile will lift your website to the top of Google across 100’s or 1000’s of keywords (all other things being equal)! That is why link building is related to SEO in most people’s minds. Traditionally it was done almost exclusively to get that sweet #1 spot on Google.

However, you should not neglect the sheer amount of traffic you can get from a well-placed link. Depending on where you get that link from (and we will talk about this in a minute) a single link can send you 1000’s of visitors.

In fact, I advise everyone to completely neglect the SEO benefits when they think about where to get a link from. When you try to get a link from another website, here are the questions you should ask yourself:

Is this a trusted website in your niche?
Does that website have a big enough audience to send you meaningful traffic?
Is that website’s audience interested in your product at all?

You don’t want to get a link from a website outside your niche – especially not from a 3P-website (porn, poker, pay-day loans), no matter how good their SEO metrics are. Similarly, getting a link from Joan Doe’s blog that has two readers (her mom and her dog). Finally, you shouldn’t chase after getting featured on TechCrunch, even if they are a big ass website and you’re doing something in tech, because their readers are most likely not interested in what you have to offer. They are killing their time with their butts firmly planted in an office chair and are not looking to buy stuff.

See how I don’t even mention SEO in there? Focus on getting your links in front of your target audience. If you focus your outreach marketing on having a direct ROI from the referral traffic you get, you will be taking good care of the SEO-side of things automatically.

Calculating the ROI of outreach marketing

I hope that I have convinced you by now that outreach marketing is not a scam and you can do it without causing harm to your website or your brand (assuming you do it right).

But before you rush off to get your outreach marketing going, we need to talk ROI. You’d be ill-advised jumping into anything without at least computing the possible ROI before you do it. After all, you might have other (more valuable) options to spend what limited time you have.

First you need to know how much you’re going to invest into getting one link. Say you’re investing two hours to write a guest post and an additional half-hour for outreach and administrative work related to getting that link and you value your time at $50 per hour. This means you’re investing (roughly) $125 into getting this single link.

This number obviously depends on the website we’re talking about: Some websites like directories or profile pages won’t take you more than 10 minutes to get a link from (and links from them are worth less to you), while getting featured on a popular website in your niche might costs you an arm and a leg (but it might be worth it).

Now we know the costs, but how do we calculate (well… guesstimate) the value of one link?

There are two ways you can do so, let’s explore them – assuming we want to get a link from this blog: www.successfulsoftware.net .

Go to www.opensiteexplorer.org
Enter the URL of the website you’re trying to get a link from into the box (i.e. www.successfulsoftware.net) and hit RETURN.
Search for the “Domain Authority” value (45).
Multiply that value by $2.5 (Read my full research here).

This gives you a rough guesstimate of the dollar value of any link on the web – in the case of Andy’s website that’s roughly $110. It’s a great rule of thumb for small and medium sized websites. The problem with this method is, that Domain Authority is capped at 100 – so no link can be worth more than $250 with this method. But clearly, getting featured on the White house website or Google’s blog will have a slightly (!) higher value than that.

The second approach is more complicated, but it takes into account the specifics of your business. We are going to work our way backwards from the sale for this one.

We need your customer lifetime value (LTV – say $200) and your conversion rate from visitor to sale (CR – say 1%)
Multiplying LTV * CR we get the average value per visitor (VPV – that’s 0.01 * $200 = $2) for your business
Dividing the cost for the link by the value per visitor (cost / VPV) we get: $125 / $2 = 62.5

This tells you, that you need to get at least 63 visitors from the link to break even on your time investment. That isn’t too big a number and it can be even lower, if you have a higher LTV or when you get the link in front of just the right audience (which will increase the conversion rate for that cohort).

The only question that remains – and that I sadly can’t answer for you – is this: Will you get 63 people to click on that link on that website? If you can answer this question with a “Yes”, I think you should chase that link down.

Lastly, remember that we don’t take SEO into account here at all. It is hard to measure the effect of a single link, so consider it gravy on top.

The Good, The Bad, The Ugly – which links you want and which you want to avoid

Now that we’ve covered the fundamentals, it is time to talk a bit more in-depth about where to get links from and which websites you should definitely avoid.

As mentioned before, you don’t want to get any links from websites in dubious niches like poker, porn and payday loans. These are not good company for a respectable website. You also don’t want to have too many incoming links from the 1000’s of free web directories (startup directories anyone?) out there as it may harm your standing with the SEO gods. Having a few (high-quality, say ProductHunt) directories link to you isn’t a problem, but having 100’s or 1000’s certainly is.

The same goes for comment spamming random blogs around the internet, creating dozens of free blogs on WordPress.com or Tumblr, and poorly written, mass-produced guest posts all across the web. Just don’t. That’s not to say that blog comments or guest posts don’t have value. You just need to do it right. If it can be automated (or outsourced for $0.50/hour to developing countries), you’re doing it wrong. The rule of thumb is to get links that take significant work to acquire. This will keep you in good standing with the SEO gods.

The way to go about link building/link earning/outreach marketing today is to find suitable websites, find a contact there, develop a relationship and eventually you will get a link from it. Case in point: Andy and I go back well over a year. We’ve been to conferences, chatted a lot, he gave me advice on discuss.bootstrapped.fm, we even had lunch together when I visited his home town. NB: I wasn’t after getting a link from Andy – in this case it just happened – but building a relationship always comes before building a link. [Editor’s note: I approached Christoph to write an article for this blog]

Here are some ideas where you can get your links placed:

editorial content on websites in your niche (news articles, blog posts like this one, etc)
lists of related products/websites/etc (like LinksSpy.com on this list of SEO tools)
partner/sponsors directories (e.g. this plugin directory from Stripe or sponsors for meetups)

Website content (blog posts, news articles, etc) usually results in a spike of traffic and then it slows down to a crawl. Lists and partner directories on the other hand will give you a more constant flow of traffic.

Just look at these two images below: One is from LinksSpy getting published on ProductHunt – and the other is the traffic from when someone included LinksSpy on their ProductHunt list (with a small spike in the middle when that list was itself mentioned on a newsletter).

Finding Outreach Opportunities

But how does one find these websites? I’m quite sure you could name a few websites in your niche off the top of your head, but that will ultimately give you maybe one or two links – which won’t turn you into an overnight success. You need more; you want more.

Option A is to just Google for it. Use terms like “best $PRODUCT_NICHE in 2015” or “$NICHE blog”. If you want to get really smart(-y) you can use one of the tips from Ann Smarty and search for “blog for us $PRODUCT_NICHE”. You can also use blog directories like AllTop and look for opportunities there. Here’s a quick link you can use: Google search for blogging opportunities (Replace “NICHE” with your own niche after the page loads)

Option B is to use MyBlogU, where people are constantly searching for industry experts to do interview round-ups. Just search through the list and see if you can make a meaningful contribution to any of the interviews. You’ll usually get a nice mention in the process. (Bonus for content marketers: You can post your own interview questions and convert the answers into a blog post with built-in content promotion – all the experts will want to share it)

Option C is a bit more involved. Using OpenSiteExplorer and the URLs of your competitors you can find the places where they get their links from. Knowing where they got their links from allows you to contact the very same websites and get the same links.

This list isn’t complete – there are way more ways to find outreach opportunities. But these three will allow you to find the first few, get your feet wet and experience the success that comes with building links. You can always go deeper later on.

Competitive Link Analysis

Options A and B are pretty much straight-forward, but you’re likely wondering by now “why would I want to get the same links my competitors already have?”

Well, there’s a reason your competitors are ranking ahead of you in Google’s search results. Aside from them nailing technical/on-site SEO (Read my blog post on bare minimum SEO for designers where I describe the basics), they have more and better links than you have. A little spying on your competition to see what works can’t hurt.

Secondly, getting links from the same websites as your competition will (theoretically) put you on par with them. In reality you won’t be able to replicate the link profile of another website and you wouldn’t want to either, as they might have a bunch of dodgy links. What you can do is combine the best links from a number of competitors, effectively giving you a better link profile than any of your competitors.

When I say “competitor” I use that term loosely. It can be either an actual competitor, another website that ranks ahead of you in the search results, a website in your industry or any number of things. You can use all of them to find valuable link opportunities.

How to Find Websites Linking to your Competition

There is a number of websites that show you the backlink profile of any given website. There is Moz’s OpenSiteExplorer (Which I have mentioned above), then there is MajesticSEO, OpenLinkProfiler, and Ahrefs. They all give you information which websites link to the website (your competitor’s website) under scrutiny, but with varying levels of detail. I generally found Ahrefs to be most accurate, but OpenLinkProfiler and Moz are free(-mium), so we will just use those for now.

Here are the steps you need to take in OpenSiteExplorer to get the valuable links for your competitors:

Open OpenSiteExplorer in your browser
Enter your competitor URL in the form field. e.g.: “www.softwarebyrob.com“
Set the following parameters:
- Target: this root domain
- Link Source: only external
- Link Type: link equity
- select “Group by subdomain & show social/contact links”
This will give you the following search results

This list groups the incoming, external links by the domain they originate from. Additionally links that do not pass SEO juice are filtered out.

Looking through this list you will find some interesting websites you can ask for links. You can also see where the links were published (e.g. blog posts, partner lists). Repeat the process for as many competitors as you like.

When you examine multiple competitors make a special note for each website that links to more than one competitor. For example rachelandrew.co.uk links to the following “competitors” for Andy’s website:

These websites (the ones that link to many competitors) are often a good selection for your first batch of outreach targets. They have given links freely in the past and they have talked about your competition, which suggests they will be open to a cooperation with you. Incidentally, LinksSpy was built to find these websites.

Caveat: You still need to apply sound judgement whether you want a link from a given website or not. Some websites might be ‘dodgy’ and you would risk getting slapped by Google if you get a link from them. Or maybe they are really great websites and you would love to get a link from them, but you know that you won’t get a link from the New York Times a week after launching with six active users.

Putting the “Outreach” into “Outreach Marketing”

By now you should have a list of at least a hundred outreach targets. There are two more steps remaining on your way to making millions of dollars, getting world-famous, and saving the planet. That’s your plan – right?

As a first step you need to find contact details (i.e. the email address) of an author on that website. A few ways to find the right email address:

Look around for a “Contact Us” page.
Check if the author’s name is a link (if so check that page for his email address).
Check the author’s social media profiles.
Try to guess the right email address (e.g. firstname@mydomain.com will often work – Rapportive works great for this!).

If all else fails, you can always try your luck with “contact@mydomain.com” or “support@mydomain.com“.

Drafting the Perfect Outreach Email

Lastly, you (just) need to send the actual outreach email. If you’re cold emailing someone, it is best to not ask for favours/links right in the first email. What I recommend instead is to ask for their expert’s opinion on an article you have written. Everyone likes to be seen as an expert and to be asked for their opinion – as long as the topic interests them. Five out of ten times they will – at least – share your article. At this point you’ll be off to a good start: You’ve already got some value (social media mention!) and started to built a relationship that might end in a link for you.

So here are a few tips on how to write a great first outreach email:

Include the person’s name in the salutation (“Hi Andy” beats the hell out of “Hi/Hi there/Hiya!”).
Keep it short.
Do some research. It is really annoying to get emails from people who obviously haven’t bothered to find out what your blog/website is about and who the audience is.
Find something you genuinely appreciate about them/their work and mention it.
Be sincere. Don’t write something if you don’t mean it.
Don’t ask for a link. Repeat: DO NOT ASK FOR A LINK.
Keep. It. Short.

Motivational tip: When doing outreach marketing, always set your goal as “send X emails per day”. Don’t focus on “get X positive replies per day” as this is demotivating. “Send X emails per day” makes every email sent a small success, whereas with “get X positive replies” every email sent (without a reply) is a small defeat.

Get started with Outreach Marketing now

Wow. That certainly was a LOT to swallow. So here’s a short recap for you:

Link building/outreach marketing is a long-term strategy that boosts your SEO and PR efforts.
You can do it in an ethical way without spamming blogs/people.
Searching for “$NICHE write for us” on Google and competitive link analysis as described above are excellent ways to find outreach opportunities.
Drafting a good outreach email involves research and the email should be focused around the person you’re contacting.
The immediate goal of outreach marketing is not to get a link, it is to build a relationship. Links and social shares will follow.

You’ve got all the information you need:

You have a big list of outreach opportunities now.
You have the contact details for each opportunity.
You know how to craft an outreach email.

All that is left now, is for you to go out and hit those contacts. Build relationships and you’ll get links.

Christoph Engelhardt is the founder of LinksSpy.com – a SaaS application built to help SEO and PR agencies dig up the most valuable outreach opportunities for their clients’ websites.

Coding my way around 100 countries

Running a software company from a laptop while travelling the world sounds like a dream lifestyle. But what is it really like? Steve McLeod was kind enough to share his experiences as a nomadic software entrepreneur.

Running a one-person software company while travelling doesn’t work. And yet I’ve been doing it for years. I’m writing this in Patagonia, in a hotel lobby. There’s pop music playing too loud to fully concentrate. The Internet connection is sketchy; in fact I’m writing this now because the Internet is unavailable again. The chair is not good for my posture. The table is too high for comfortable typing. My productivity is abysmal.

I’m partway through adding a new feature to my software, and doing it in this environment is unproductive. There is a big glacier an hour’s drive from here that I’d rather be viewing. I know that tomorrow or the next day, when I see the glacier, I’ll come back to the hotel too exhausted to code or to deal with customer support.

What does this mean for my business? Low productivity and poorer-than-intended customer support response times, which lead to lower sales. My alternative to spending a decent part of each year travelling would be to stay in my home city, working better, selling more software and earning more money.

Here are some real problems I’ve faced working on the road:

In Ukraine my MacBook Pro’s screen stopped working. I didn’t intend to return home for another week. I had to choose between returning home earlier; trying to get the computer serviced promptly in a foreign country; supporting customers for my Mac software for the next week on Windows computer in Internet cafes; or buying a new computer and trying to get all my development tools on it.
In Turkey, YouTube was blocked. Which was mostly a good thing for productivity, but as my video demo was hosted on YouTube at the time, I couldn’t monitor it.
In Syria, Facebook was blocked. Okay, that was incontrovertibly good.
In Turkmenistan there was no Internet in my hotel. Or any hotel, just about, except on age-old computers in one hotel’s inaccurately-named “business centre”. No WiFi in cafes. For a few days my company was getting no attention.
Travelling in a shared taxi for hour after hour between obscure locations in Iraq (true story!) left me utterly spent. All I wanted to do after getting into a hotel is to relax. But that customer support backlog is nagging, nagging, nagging at me.
Skype is blocked in Qatar and in some other countries. This really ruins the conference call you had planned.
In Lebanon I needed to update my product with a critical fix. The Internet at the time in Beirut was so bad, it would take an hour to upload my 20 MB software. An hour! During which time I’m hoping not to get a network disruption, from one of Beirut’s daily 3-hour power outages. My 2-minute scripted solution for building and uploading updates, followed by a 5-minute smoke test turned into a 2-hour task, during which time I need to keep ordering coffees so as to keep the staff happy in the cafe supplying me with WiFi.
Coding while sipping a cocktail in a beach-side bar in the Caribbean is difficult. The brilliant midday sun makes the laptop screen hard to read. Actually that doesn’t sound too bad at all.

A very real risk includes getting my computer stolen, which, by some miracle, has not happened yet.

How do I make this running-a-one-person-company-while-travelling thing work? Here’s some things I do:

I keep everything in multiple online places. I use DropBox for documents and code. I use GitHub too. Without excuse, everything needs to be recoverable without drama if the computer breaks or gets stolen.
I set aside frequent rest periods where I can get through a backlog of harder customer support issues and work on new features or bug-fixes. It is actually nice sometimes to not climb Andean glaciers nor to see orang-utans in Borneo, and instead to do something prosaic like working for a day or two.
I try to be disciplined in keeping my customer support inbox empty. When I arrive at a new hotel after a long, dusty trip, before rewarding myself with an ice-cold beer, I’ll force myself to tackle the inbox.
In recent months I’ve been outsourcing customer support. I pay my support representative a monthly fee in return for which she deals with what she can handle herself each day. This helps so much.
I aim to spend my months in my home city in high-intensity bouts of feature-adding, taking advantage of having a good work environment.
I produce desktop software. Not SaaS, which would be terrible to support and monitor in these environments.
Moving source control from Subversion (which needs an Internet connection to be usable) to Git has helped a lot.
I concentrate on keeping my software as solid as I can, and the user experience as smooth as possible. These two things help reduce the customer support load.
I try to keep things in perspective. Yes, getting my computer stolen would be a minor catastrophe. Yes, a sketchy Internet connection is annoying. Yes, some customers might get irritated at the occasionally slow support. But here’s the other side: Three years ago the city I grew up in was destroyed by two earthquakes, killing hundreds and destroying a significant amount of the city. A year before that I suffered a terrible personal tragedy. Do other things matter so much that I should sit at home to keep customers as satisfied as possible?

Although my lifestyle might seem enviable, it can be lonely at times. You don’t realise how nice it is to be able to regularly catch up with the same friends for dinner or a drink until you can’t do this for long periods. Luckily, I often manage to find someone I know well to join me for part of each trip. Here in Patagonia and beyond, my girlfriend is travelling with me for two months or so. I’d not be travelling for so long anymore without companionship.

On the other hand, my one-person software company has enabled me to reach a goal I’ve long had: to travel to more than 100 different countries. I earn a decent income from my work and thousands of customers love my software. And that is enough for me.

St Vincent and the Grenadines

St Lucia

Croatia

Guyana

Oman

Beirut

Perth

Photos copyright Steve McLeod.

Steve McLeod runs Barbary Software, a one-person software company. Barbary Software’s main product is Poker Copilot, hand history analysis software for online poker players on Mac OS X.

3 practical tips for finding software product ideas

Too many software products fail because no-one bothered to do basic market research. This is a guest post from Edmundo López B. with some useful advice on finding a viable market niche before you start creating your product.

The process of building software for a niche market is more or less well documented online. The basic workflow I found is (for example here or here):

choose some niche (with potential)
find out the problems that you can solve in that niche
create a product to solve the problem
sell it
enjoy life :-)

Here are three things you can look for when asking people about their problems.

Ask for the painful tasks that they do, not for the problem you can help with

The people I first talked to were persons that I already knew, so my pitch for them was: “Hello. As you know I’m a software engineer. I’m looking for problems to solve. I want to build software and sell it. And, if I solve a real problem, I’m sure people will pay for it. I was wondering if there is some problem in your business where you need some help. I could create some software, solve your problem and then sell it. I can help you with your problem and you will help me to find my problem.”

The first response was always positive however, everybody I talked to started to look at a problem they thought could be solved by a computer. The problem with that is that people’s vision of computers is very limited. First, some people limit the software I can build to desktop applications or some platform they know well. Second, they try to find problems to give you, and not the problems they really have. For example: one of my interviewees said to me that she needed some kind of tracking system for the expenses of her very small business (a small farm producing eggs). I told her: “Wow, that sounds like a problem I could solve, how are you solving that problem right now?.” She told me: “I’m not, I’m busy bootstrapping the whole business right now. But later I’d certainly like to have something for that.” Of course, if she is not solving that right now, then that is not a real problem. She sort of made that problem up to give an answer to my question.

People have real problems but sometimes they don’t even know they could tackle that problem with a computer. So, the lesson here is that you have to get them to tell you their real problems. Even the ones they don’t think that could be solved by a computer. You are the computer expert, not the people you interview, so you need to find out the real problem out there. Also it doesn’t have to be a problem from the future, it has to be an actual problem now. The question that I found works best is the following: Tell me about your day and what activities are the most tedious and boring to do, but do not add much value to your business. (I’m not the first to come up with this question, but I don’t remember the source, sorry.)

Look for their existing solution and ask what is wrong with it (the Excel spreadsheet)

From the people I interviewed, 2 of them had an Excel spreadsheet that solved their problem in a way that was not the best, but did the job. The third one had plans to solve her problem with an Excel spreadsheet in the future. Joel Spolsky talks about how Excel and other horizontal software are nothing more than glorified data structures. It is true, you can do almost anything involving simple mathematics and tables of data within Excel. Keeping track of costs, sales, etc. are a perfect match for it.

The common engineer will say: “If there is already a solution for that, why roll my own?” The entrepreneur will just ask what isn’t possible with the existing solution and think of ways of improving that. The existence of the Excel spreadsheet is a clear sign that there is a computing problem that can be solved in a better way. I can give you an example. Two of the persons I interviewed showed me their Excel spreadsheets (an architect and an event manager). A common problem was being able to slightly change some prices in a budget and immediately be able to show the old and the new price to the client. This kind of information is gold to the person creating an application. This is something they use, and if you can save them time using it, you can add value to their businesses.

If there is no Excel spreadsheet, I just try to find software on the net that does what they need. If there is something really good on the market, I don’t want to compete with them. If you are wondering why didn’t I let them do the search, the answer is simple: they do the search using the traditional channels, colleagues and networks of peers; I focus on the Google search. I’m a developer, I can Google for software in a much better way than they do. It took me an hour to do a research on software for architects. Then you can explain to them the pros and cons of the solutions, help them to sign up for a free trial and tell them if their set-up is supported. The golden rule is to be really helpful. It is true that you might end up finding a customer for someone else. But if there is not a good solution, you are finding a niche for yourself.

Do some simple mathematics to see if the problem is worth solving

My last tip is about the financial aspect. Let us say that you finally found a problem that you can solve. It is painful and there is no solution in the market that can solve it in the way people in that niche want. The question to ask now is: “What are people willing to pay for something like this?” I cannot give you an exact answer but I can tell you that it depends on the value you add to your client’s business.

What you want to know is:

How much time does it take monthly to do the task you are solving?
How much money could be earned in the same amount of time?
How much faster would it be to do the same task with your solution?

The basic idea is to convert saved time to saved dollars. Of course, if your solution saves dollars monthly, it becomes an investment for the business. My limited experience showed me that saving people money and pain gets them really excited.

I can give you an example from my interview with the architect. Once again, the problem was something he was solving with an Excel spreadsheet. I asked him how much time did it take and he told me at least three days. Three days of architect’s time means a lot of money. So, if you can help him solve the problem in one day, you are not only saving his money but avoiding pain (because the problem was painful to solve, but it needed to be done).

Conclusion

Now it’s up to you. Try to put these in practice, and find a niche to build your first product. Please share your thoughts and remarks in the comments.

Edmundo López B. is a PhD student in computer science at the University of Geneva and an entrepreneur in the making. He loves building things, learning new stuff, and playing classical guitar. He decided to make the jump directly from school to entrepreneurship. He blogs at edmundo.lopezbobeda.net.

The brutal truth about marketing your software product

badwater We tend to hear a lot about software industry success stories. But most of us mere mortals have to fail a few times before we learn enough to succeed. In this guest post William Echlin talks about the hard lessons he has learned about creating and selling software products.

Probably, like you, I started developing my own software application a few years back. I had this dream of working for myself and becoming financially independent. The money side was a nice goal to have but ultimately I was looking for the fulfilment of working for myself. Sound familiar? Well, if it does, you may have learnt many of the lessons I’ve learnt. I don’t mind admitting now that I got carried away. I got carried away with building a test management application to the extent that I forget about many of the key things you need in place to build a successful business.

After a few years work I’d created the leading open source test management application (a product called QaTraq that’s still available on Source Forge but a little dormant). It had cost me time, money and effort. I’d achieved some success with building and marketing a free product. Next stop taking it commercial. This is where it gets brutal.

About a year into leaving a full time job I’m taking the last £1,000 out of the joint bank account. I’m making some sales but it’s damn tough. A few months later and I’m in the supermarket £15,000 in debt wondering if my credit card is about to be rejected for the families weekly shop. You read about this sort of thing in biographies on successful entrepreneurs. These guys take it to the limit and then succeed and make millions. Sounds so glamorous. When your wife, 3 year old son and 1 year old daughter depend on that credit card being accepted believe me it’s NOT glamorous.

Building a business has always been about balancing design, development, sales, marketing, support, testing, etc. When you’re a one man band that’s not easy. You try to do everything. You’re bloody brilliant at building the product. The trouble is, once you want to make a living out of it, that “building” is almost the least important bit. After I’d spent 5 years building my product I stumbled upon one very useful piece of advice. It was a little late for me but maybe it’ll help you….

“Learn how to market and sell before you build your product. Learn these crafts by picking a product that’s already been built and act as a reseller”.

That’s worth reading again (it’s counter intuitive). What’s being said here is that if you can’t market and sell a product (ANY product) then the odds of succeeding with your own product are slim. If you can’t “market and sell” what on earth is the point in wasting all that time, effort and money building your own product? If you’re never going to be able to market it, and sell it, why build it?

So find a product in a slightly different sector and sign up as a reseller. Save yourself the time and effort of building a product and practice marketing and sales with someone else’s product first. Create a web site, develop an ad words campaign and start promoting with social media. Sell the product! If you can’t get the hang of this why bother building your own? If you can get the hang of building your own marketing machine it won’t be wasted effort. If you’re clever and pick the right product / sector you just need to switch the product on your site a year or so down the road. Once you’ve built the marketing and sales engine switch it to sell the product you’re building.

I’m not saying that this is the only way to go about it. I’m just saying that if you don’t have the determination to learn, understand and be successful with marketing and sales early on, then it’s unlikely you’ll succeed with your own product. So why waste time building it. It’s a tough lesson to learn. One I learnt the hard way.

And the specific lessons I learnt the hard way? Well I’d do these things first if I was ever to do this again:

1. Create at least one lead generation channel as an affiliate for another product. That lead generation channel will probably be a web site and as part of that you’ll need to master things like:

Google Adwords
Social media
Email marketing
Blogging
Link building

All these things take a lot of time. Do you have the determination to learn and execute on all of this?

2. Spend some time in a sales related role. Initially I was working in a full time job whilst building my own product in my spare time. The best thing I did was offer to help the sales team with product demos. I learnt lots from working closely with sales people (I didn’t like them very much, but that’s a different matter) and clients. If you can’t do product demos to clients, or you can’t talk to clients confidently then you don’t stand a chance of selling anything. People buy from people and a product demo is THE place to show case YOU (and the product)

3. Spend time learning about re-marketing. A lot of money goes into getting that initial lead. Don’t waste it! Understand Google’s re-marketing campaigns. These allow you to follow the people that came to your site and continue serving them banner ads on other sites. Understand email marketing once you’ve captured an email address. Yes I hate most of this when I’m on the receiving end. The reality is that it works though. That’s why companies do it (and why Google make so much money). I’ll tell you now that your business won’t survive if you don’t master some of these techniques. And if your business doesn’t survive then every ounce of effort you’ve put into building that application is wasted!

4. Spend time learning about cross selling. A significant amount of revenue can come from cross selling other products. When was the last time you went to a restaurant and they didn’t try to sell you a bread roll? When was the last time you flew somewhere and they didn’t try to sell you priority boarding? For you this might be in the guise of selling your leads to other companies that have complementary products. It might be providing different editions of your application. There are many other ways to add additional revenue streams to your prime product sale. These streams are absolutely critical to the success of your business.

5. Don’t try to become a sales person. You don’t have to be a sales man/woman to sell. Some of the best sales people I’ve worked with are those that just go out of their way to HELP the customer. They understand their niche inside out and have the gift, not to sell, but to HELP. People that are looking to buy something want help. They want an itch scratched or a problem solved. If you can help them with a solution then you’re most of the way towards making the sale. Forget all this rubbish about psychology and techniques to influence people. The best thing you can do is enter the mind set of helping! Go out of your way to help.

I don’t have all of this right by any stretch. I know one thing though. Products don’t sell themselves. And if you’re not prepared to start learning about sales and marketing you won’t sell your product.

It was all a bit ironic for me though. I spent years building my own test management product to help software testers. It even started out as the leading open source solution in it’s market for many years. I mastered SEO and created a great lead generation process (the oxygen of any business). I created a version which I put a price on and sold to companies. I even sold to a number of significant companies. But I just couldn’t do all of it. I couldn’t balance the design, development, testing, marketing, sales, support, etc. It’s brutally painful when this dawns on you.

In the end what I’d really mastered was lead generation. I ended up with a web site that attracted my target audience but failed to sell much. When you realise that, you realise that it’s the product. Nothing wrong with the marketing and sales. It’s the product. There were better products out there. Kind of tough to swallow but as soon as I did, I moved on. These leads, or rather people (because leads are actually real people), were looking for help. I just needed to provide them with the right product and services. So I started reselling other products and providing consultancy around those products on my test management website.

In the end I had one of the toughest bits right. If you get the lead generation right you’ve built a marketing foundation that you can build any type of business around. For me I just wished I figured the marketing piece out before I’d built my product. Now I just work on my marketing. Oh, and I help companies with their software testing and test management. For me at least, it’s much easier this way.

William Echlin has spent 20 years in testing, working on everything from air traffic control systems to anti-virus engines. He had a bad experience in his early childhood trying to effectively manage test cases with vi (he’s still a huge fan of vi but recognises that text files make a lousy repository for test cases). In an attempt to deal with these childhood demons he became a consultant on all things related to test management.

Monetization: Ads vs Toolbars vs Charging

I believe that the best way for most small software vendors to make money off their software is to charge for it. So I was interested to spot a post on BOS by someone who had tried ads, toolbars and charging to monetize the same piece of software. He kindly agreed to share his experience anonymously. Obviously it is only one data point, but the results are pretty unequivocal.

I developed a freeware program six or seven years ago. A piece of utility software, for either home or business use, in an extremely crowded and competitive niche. The downloads grew organically and settled into what they are now, around 30,000-40,000 per month. I’ve never used any paid advertising, but have always had a forum and been responsive to user queries. That, coupled with regular updates, built the software a fairly loyal user base.

My original idea was to make money by attracting visitors to the website and using Google Ads. This isn’t generally done on software sites, but it kind of worked for me (I still had a day job though). Eventually it was making one or two thousand dollars per month. I experimented with toolbar installer offers – Bing for the US and UK, Ask for the rest of the world. The revenue wasn’t too bad, but the ads made more.

Eventually I decided to try selling a ‘Pro’ version of the software, with even more features. I planned to keep the free version as a ‘gateway’. Note the free version still has more features than non-free competitors. It took about 6 months to write (evenings and weekends), and was finally released (with no marketing, apart from the website) in Jan 2012.

As you can see, from the first full month the sales revenue brought in ten times what the toolbar did. I wound down the site ads, and eventually removed the toolbar (you can see the revenue tail off in the chart).

I quit the day job!

3 Low-Competition Niches In Retail Software

This is a guest post by Joannes Vermorel, founder of the Lokad Forecasting Service.

Software developers seem to be herd animals. They like to stay very close to each other. As a result, the marketplace ends up riddled with hundreds of ToDo lists while other segments are deserted, despite high financial stakes. During my routine browsing of software business forums, I have noticed that the most common answer to Why the heck are you producing yet another ToDo list? is the desperately annoying Because I can’t find a better idea.

This is desperately annoying because the world is full (saturated even) with problems so painful that people or companies would be very willing to pay to relieve the pain, even if only a little. A tiny fraction of these problems are addressed by the software industry (such as the need for ToDo lists), but most are just lacking any decent solution.

Hence, I detail below 3 low-competition software niches in retail. Indeed, after half a decade of running sales forecasting software company Lokad, I believe, despite the potential survivor bias, that I have acquired insights on a few B2B markets close to my own. Firstly I will address a few inevitable questions:

Q: If you have uncovered such profitable niches, why don’t you take over them yourself?
A: Mostly because running a growing business already takes about 100% of my management bandwidth.

Q: If these niches have little competition, entry barriers must be high?
A: Herding problems aside, I believe not.

Q: Now these niches have been disclosed, they will be swarmed over by competitors, right?
A: Odds are extremely low on that one. The herd instinct is just too strong.

Q. Do I have to pay you if I use one of your ideas?
A. No, I am releasing this into the public domain. I expect no payment if you get rich (unless you want to!) and accept no liability if you fail miserably. Execution is everything. And don’t trust a random stranger on the Internet – do your own market research.

Before digging into the specifics of those niches, here are a couple of signs that I have noticed to be indicators of desperate lack of competition:

No one bothers about doing even basic SEO.
No prices on display.
No one offers self-signup – you have to go through a sales rep.
Little in the way of online documentation or screenshots are available.

However, lack of competition does not mean lack of competitors. It’s just not the sort of competition that keeps you up at night. Through private one-to-one discussions with clients of those solutions, here is the typical feedback I get:

Licenses are hideously expensive.
Setup takes months.
Upgrade takes months (and is hideously expensive).
Every single feature feels half-baked.

By way of anecdotal evidence – during a manufacturer integration with our forecasting technology a few months ago at Lokad, we discovered that the client had been charged $2,000 by its primary software provider in order to activate Remote Desktop on the Windows Server where the software was installed. Apparently, this was well within the norm of their usual fees for the inventory management system in place.

Granted, just being cheaper is usually not a good place to be in the market. Yet, when a competitor’s software is designed in such a way that it takes a small army of consultants to get it up and running, they can’t just lower their license fees to match yours – assuming that your design is not half-baked too. The competition would have to redesign their solution from scratch, and give up on their consultingware revenues. So you are in a great position to drive competition crazy.

With a market managing over two-thirds of the US gross domestic product, one would expected retail be saturated by fantastic software products. It turns out this is not the case. Not by a long shot – except eCommerce (e.g. online shopping carts) which attracts a zillion developers for no good reason.

Some salient aspects of the retail software market:

Most retailers are already equipped in basic stuff such as point-of-sale, inventory management and order management systems. So you don’t have to deliver that yourself. On the contrary, you should rely on the assumption that such software is already in place.
As far the Lokad experience goes with its online sales forecasting service, retailers are not unwilling to disclose their data to a 3rd party over the Internet. It takes trust and trust takes time. Interestingly enough, at Lokad we do sign NDAs, but rather infrequently. We are not unwilling, but most retailers (even top 100 worldwide ones) simply don’t even bother.
Retailers have a LOT of data, and yet unlike banks, they have little talented manpower to deal with it. Many retail businesses are highly profitable though and could afford to pay for this kind of manpower, but as far I can tell, it’s just not part of the usual Western retail culture. Talents go to management, not to the trenches.

Niche 1: EOQ (Economic Order Quantity) calculator

Retailers know they need to keep their stocks as low as possible, while preserving their service levels (aka rate of non stock-outs), see this safety stock tutorial for more details. If the marginal ordering cost for replenishment was zero, then retailers would produce myriads of incremental replenishment orders, precisely matching their own sales. This is not the case. One century ago, F. W. Harris introduced the economic order quantity (EOQ) which represents the optimal quantity to be ordered at once by the retailer, when friction factors such as the shipping cost are taken into account. Obviously, the Wilson Formula (see Wikipedia for details) is an extremely early attempt at addressing the question. It’s not too hard to see that many factors are not accounted for, such as non-flat shipping costs, volume discounts, obsolescence risks …etc.

Picking the right quantity to order is obviously a fundamental question for each retailer performing an inventory replenishment operation. Yet, AFAIK, there is no satisfying solution available on the market. ERP systems just graciously let the retailer manually enter the EOQ along with other product settings. Naturally, this process is extremely tedious, firstly because of the sheer number of products, secondly because whenever a supply parameter is changing, the retailer has to go through all the relevant products all over again.

The EOQ calculator would typically come as multi-tenant web app. Main features being:

Product and supplier data import from any remotely reachable SQL database[1].
Web UI for entering / editing EOQ settings.
EOQ calculation engine.
Optional EOQ export back to the ERP.

Pricing guestimate: Charge by the number of products rather than by the number of users. I would suggest to start around $50/month for small shops and go up to $10k/month for large retail networks.

Gut feeling: EOQ seemingly involves a lot of expert knowledge (my take: acquiring this knowledge is a matter of months, not years). So there is an opportunity to position yourself as an expert here, which is a good place to be as it facilitates inbound marketing and PR with specialized press. Also, EOQ can be narrowed down to sub-verticals in retail (e.g. textiles) in case competition grows stronger.

Niche 2: Supplier scorecard manager

For a retailer, there are about 3 qualities that define a good supplier: lowest prices, shortest shipment delays, best availability levels (aka no items out-of-stock delaying the shipments). Better, sometime exclusive, suppliers give a strong competitive edge to a retailer. Setting aside payment terms and complicated discounts, comparing supplier prices is simple, yet, this is only the tip of the iceberg. If the cheapest supplier doesn’t deliver half of the time, “savings” will turn into very expensive lost sales. As far I can observe, beyond pricing, assessing quality of the suppliers is hard, and most retailers suffer an ongoing struggle with this issue.

An idea that frequently comes to the mind of retailers is to establish contracts with suppliers that involve financial penalties if delays or availability levels are not enforced. In practice, the idea is often impractical. Firstly, you need to be Walmart-strong to inflict any punitive damage on your suppliers without simply losing them. Secondly, shipping delays and availabilities needs to be accurately monitored, which is typically not the case.

A much better alternative, yet infrequently implemented outside the large retail networks, consists of establishing a supplier scorecard based on the precise measuring of both lead times (i.e. the duration between the initial order and the final delivery) and of the item availability. The scorecard is a synthetic, typically 1-page, document refreshed every week or every month that provides the overall performance of each supplier. The scorecard includes a synthetic score like A (10% best performing suppliers), B and C (10% worst performing suppliers). Scorecards are shared with the suppliers themselves.

Instead of punishing bad suppliers, the scorecard helps them in realizing there is a problem in the first place. Then, if the situation doesn’t improve after a couple of months, it helps the retailer itself to realize the need for switching to another supplier…

The scorecard manager web app would feature:

Import of both purchase orders and delivery receipts (this might be 2 distinct systems). [2]
Consolidation of per-supplier lead time and availability statistics.
One-page scorecard reports with 3rd party access offered to the suppliers.

Pricing guestimate: Charge based on the number of suppliers and the numbers of orders to be processed. Again, the number of users having access to the system might not be a reliable indicator. Starting at $50/month for small shops up to $10k/month for large retail networks.

Gut feeling: By positioning your company as intermediate between retailers and their suppliers, you benefit from a built-in viral marketing effect, which is rather unusual in B2B. On the other hand, there isn’t that much expert knowledge (real or assumed) in the software itself.

Niche 3: Dead simple sales analytics

Retail is a fast-paced business, and a retailer needs to keep a really close eye on its sales figures in order to stay clear of bankruptcy. Globally, the software market is swarming with hundreds of sales analytics tools, most of them being distant competitors of Business Objects acquired by SAP years ago. However, the business model of most retailers is extremely simple and straightforward, making all those Business Intelligence tools vast overkill for small and medium retail networks.

Concepts that matter in retail are: sales per product, product categories and points of sale. That’s about it. Hence, all it should take to have a powerful sales visualization tool setup for a retailer should be access to the 2 or 3 SQL tables of the ERP defining products and transactions; and the rest being hard-coded defaults.

Google Analytics would be an inspiring model. Indeed, Google does not offer to webmasters any flexibility whatsoever in the way the web traffic is reported; but in exchange, setting-up Google Analytics requires no more than merely cutting-and-pasting a block of JavaScript into your web page footer.

Naturally it would be a web app, with the main features being:

Product and sales data import from any remotely reachable SQL database.[2]
Aggregate sales per day/week/month.
Aggregate per product/product category/point-of-sales.
A Web UI ala Google Analytics, with a single time-series graph per page.

Pricing guestimate: Regular per-usage fee, a la Salesforce.com. Starting at $5/user/month basic features to $100/user/month for more fancy stuff.

Gut feeling: probably the weakest of the 3 niches, precisely because it has too much potential and is therefore doomed to attract significant attention later on. Also, achieving a wow effect on first contact with the product will probably be critical to turn prospects into clients.

Market entry points

Worldwide, there are plenty of competitors already for these niches. Yet, again, this does not mean much. Firstly because retail is so huge, secondly because it’s a heavily fragmented market anyway. First, there are big guys like SAP, JDA or RedPrairie, typically way too expensive for anything but large retail networks. Second, there are hundreds of mid-market ERPs, typically with a strong national (or even regional) focus. However, those ERPs don’t delve into fine-grained specifics of retail, as they are too busy already dealing with a myriad of feature requests for their +20 modules (accounting, billing, HR, payments, shipping … etc). Hence, there is a lot of space for razor-sharp web apps that focus on one, and only one, aspect of the retail business. Basically single-minded, uncompromising obsession with one thing, leaving aside all other stuff to either ERPs or other web apps.

In order to enter the market, the good news is that mid-size retailers are pretty much everywhere. So you can just use a tiny bit of networking to get in touch with a couple of neighbouring businesses, even if you don’t have that much of a network in the first place. Then, being razor-sharp in a market where very little online content is available, offers you a cheap opportunity at doing some basic SEO based on the very specific questions your software is addressing.

Q: I am interested, I have questions, can I ask you those questions?
A: Naturally, my rate is 200€/h (no just kidding). Yes, email me.

[1] Don’t even bother about providing a super-complicated setup wizard. Just offer a $2k to $5k setup package that includes the ad-hoc handful of SQL lines to match the existing data of the retailer. We are already using this approach at Lokad with Salescast. Alternatively, we also offer an intermediate SQL schema, if the retailer is willing to deal with the data formatting on its own.

[2] Again, I suggest an approach similar to the one of Salescast by Lokad: don’t even try to robotize data import, just design the software in such a way that adding a custom adapter is cheap.

Joannes Vermorel is the founder of Lokad, company motto “You send data, we return forecasts”. Lokad won the first Windows Azure award from Microsoft in 2010, out of 3000 companies applying worldwide. He has a personal blog that mostly deals with cloud computing matters.

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Why is positioning useful?

Examples of software product positioning

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Does your product really need new features?

It’s okay to ignore your backlog

Keep your grand vision in mind

Each new feature has ongoing costs

Sales-blockers are high priority

Prefer the easy things, but not always

Listen to your customers…

…and not your competitors

Small tweaks versus major features

Beware of preferring “pet” features

How do you decide?

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On the ethics of SEO and link building

Why you should include outreach marketing in your marketing mix

Calculating the ROI of outreach marketing

The Good, The Bad, The Ugly – which links you want and which you want to avoid

Finding Outreach Opportunities

Competitive Link Analysis

How to Find Websites Linking to your Competition

Putting the “Outreach” into “Outreach Marketing”

Drafting the Perfect Outreach Email

Get started with Outreach Marketing now

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Ask for the painful tasks that they do, not for the problem you can help with

Look for their existing solution and ask what is wrong with it (the Excel spreadsheet)

Do some simple mathematics to see if the problem is worth solving

Conclusion

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Niche 1: EOQ (Economic Order Quantity) calculator

Niche 2: Supplier scorecard manager

Niche 3: Dead simple sales analytics

Market entry points

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