Category Archives: reviews

Start Small, Stay Small: A Developer’s Guide To Launching a Startup

I recently read ‘Start small, stay small: A developer’s guide to launching a startup’ by Rob Walling. The preface states:

“This book is aimed at developers who want to launch their startup with no outside funding. It’s for companies started by real developers solving real pain points using desktop, web and mobile applications.”

Many of you are probably already familiar with Rob’s work, including: a blog, a podcast and the micropreneur academy. Rob’s approach has been to develop a portfolio of niche websites as a solo founder (for example ApprenticeLinemanJobs.com), funding it with his own capital and outsourcing work where appropriate. The intention being to have a business that produces a decent income, but allows the founder a flexible lifestyle. He uses the portmanteau ‘micropreneur’ to refer to this approach. It is not a term I care for, with its awkward shunting together of Greek and French. But I guess it is no worse than ‘microISV’. He develops on these themes in the book, with a particular emphasis on the early phases (as implied by the title).

The chapter headings are:

  1. The chasm between developer and entrepreneur
  2. Why niches are the name of the game
  3. Your product
  4. Bulding a killer sales website
  5. Startup marketing
  6. Virtual assistants and outsourcing
  7. Grow it or start over

As with Rob’s blog and podcast, there is plenty of insight and actionable information based on real experience. Some of the writing is taken straight from the blog, but I believe most of it is new. There are links to useful online tools, some of which I hadn’t come across before. It even includes some of that rarest of commodities – real data. He also dispells a few myths – for example: that creating a software product is a quick and easy way to riches and that Facebook and Twitter are all the marketing you need.

The book is particularly strong on market research – a subject I haven’t seen covered much in the context of small software companies. He includes a step-by-step methodology for measuring market size. It also covers other useful subjects such as: pricing, choosing web vs desktop vs mobile vs plug-in, website design, SEO, mailing lists and buying and selling websites. The paper version of the book is 202 pages long. There isn’t a lot of unecessary waffling or padding, so you are getting a fair amount of information for your money. An index might have been useful. Perhaps for the next edition?

While the book will have most benefit for those first starting out, I think even experienced software entrepreneurs will probably find some of it useful. The book is available in paper, electronic and audio formats from $19 at www.startupbook.net. Given its niche market, I think this is good value.

Full disclosure: I recieved a free (paper) copy of the book from the author.

The Web Startup Success Guide

startup_success_guideBob Walsh has followed up his excellent MicroISV: From Vision to Reality book with The Web Startup Success Guide. While the first book is aimed squarely at at developers of desktop software, the second is aimed more at web-based start-ups. I have to confess, I haven’t had time to read my review copy of the accompanying e-book yet (I’m moving house, moving office and putting out a major new software release). But I see from the contents it includes chapters on:

  • the idea
  • choosing a platforms
  • tools
  • fund raising
  • social media
  • getting the message across

And interviews with

  • Dharmesh Shah
  • Eric Sink
  • Joel Spolsky
  • Pamela Slim
  • Guy Kawasaki
  • …and others

If it is anything like as good as Bob’s MicroISV book, it will be worth a read by anyone doing (or thinking of doing) a web-based start-up. It is currently $19.79 on Amazon.com. You can also buy the e-book from Apress. Here are some reviews from people that have actually read it:

Neil Davidson

Willie Faler

A test of Cost Per Action (CPA) vs Cost Per Click (CPC) in Google Adwords

CPA vs CPCThe traditional approach to Google Adwords is to set a bid price for each keyword. This is known as Cost Per Click (CPC). Google then then uses the bid prices in conjunction with a secret formula (the quality score) to decide how high to rank your ad in the Adwords results. If you bid more, your ad will appear higher and typically get more clicks, but your cost per click will increase. So setting an optimal bid price is important. Bid too little and you won’t rank high enough to get a decent number of clickthroughs. Bid too much and you will potentially end paying more to Google than you recoup in sales.

An alternative approach is to tell Google Adwords how much you are prepared to pay for a particular action, e.g. a sign-up, download or sale. This is known as Cost Per Action (CPA) or Conversion Optimizer. Google will then automatically calculate your bid prices and attempt not to exceed the CPA you set (although this isn’t guaranteed).

CPA sounds great. I can stay in bed a bit longer while the mighty Google brain does the bid tweaking for me. Unfortunately I wasn’t able to use CPA. I  count sales as conversions (not downloads) and I have my adwords account split into a number of campaigns by geographic region and by type (e.g. search vs content). Having my campaigns structured like this, rather than one monolithic campaign, makes for more flexibility (e.g. different ads, phrases and bid prices for different geographical areas) and more useful reports (e.g. separate reports for search and content). But it also meant none of my Adwords campaigns made the minimum threshold for conversions per month.

When Google dropped the minimum threshold for CPA to 30 conversions per campaign per month, one of my Perfect Table Plan search campaigns became eligible. So I did an experiment. I ran a campaign for 4 weeks using CPC, then 9 weeks using CPA, then another 4 weeks using CPC. I set the CPA bid to roughly the average cost per conversion I got for CPC. I was curious to see if Google would find sweet spots that I had been missing or whether they would bid as high as they could to take as much money off me as possible. Summary: CPC outperformed CPA on all key metrics, including: 4.4% higher conversions, 9.4% lower cost per conversions and 8.0% higher profit.

The detailed results are as follows:

metric CPC  (vs CPA)
impressions/day +13.9%
clicks/day +1.3%
conversions/day +4.4%
CTR -11.1%
conv rate +3.1%
income/day +4.4%
cost/day -5.5%
CPC -6.6%
profit/day +8.0%
PKI -5.2%
ROI +10.4%
cost per conversion -9.4%

In graphical form (click to enlarge):

CPA vs CPC graph 50pc

Notes:

  • The values given are taken by computing (CPC metric – CPA metric)/(CPA metric). E.g. ROI of +10.4% means that CPC had a 10.4% higher ROI than CPA.
  • Only a single (geographically based) search campaign was measured. The total number of conversions during the time period of the test was in 3 figures.
  • I only measured sale conversions. This gives me less data than measuring downloads, but I think it is unsafe to assume the number of downloads correlates closely to the number of sales.
  • The PerfectTablePlan sale price is £19.95/$29.95. To calculate profit I only counted 75% of the price of a sale (the other 25% was assumed to cover the cost of support, ecommerce fees and other overheads associated with the sale).
  • Each of the time periods was a multiple of 7 days to avoid any issues with different results on different days of the week.
  • I ran CPC for an equal amount of time either side of the CPA test to try to balance out any seasonal factors.
  • Google conversion tracking uses Cookies and is therefore not 100% accurate.
  • PKI is Profit Per Thousand Impressions.
  • ROI is Return On Investment.

It wouldn’t be wise to draw any sweeping conclusions from one test with a limited amount of data. However I believe the results show:

  • A CPA campaign running for 9 weeks wasn’t able to outperform a mature CPC campaign. The CPC campaign had been running for over 4 years, but one would have thought CPA would have been able to use that pre-existing  data. CPA might have performed better if given longer. It would probably also have done better against a less mature CPC campaign.
  • Google didn’t rob me blind using CPA bidding. The CPA cost per day was only 5.5% higher.
  • The results weren’t hugely different. On the basis of the above results one might still conclude that CPA is superior to CPC as it requires less time to manage.

Using a Mac mini for development

mac miniI have been using a Mac mini to port my C++/Qt based code to Mac OS X for the last 3.5 years. This is one of the early PowerPC based Mac minis, upgraded to 1GB of RAM. Being Apple hardware, it is expensive for what you get. But it has served me well. The small form factor (approx 17 x 17 x 5 cm) has also been useful in my cramped office, where I have it attached to the same monitor, mouse and keyboard as my Windows box through a KVM switch. But it is struggling to keep up with PerfectTablePlan’s ever increasing code base. A clean build of the PerfectTablePlan source into a Universal (fat) binary now takes an eye-watering 36 minutes to compile and link on the Mac mini. Building a PowerPC-only debug version still takes nearly half that time. That is painful, even just for occasional porting work.

As my main development environment is Windows, I can’t really justify the cost (or office space requirements) of a Mac Pro. So I decided to buy a new Mac mini, with an Intel Core 2 Duo processor. I did look around to see if I could find one at a discount. However, this being Apple hardware, no-one dares sell  at anything significantly less than Apple’s RRP. I bought the smaller (120GB) disk variant and had the dealer upgrade it to 2GB RAM, which tests on my old Mac mini indicated should be plenty for compiling and linking. I didn’t want to do the memory upgrade myself as I know, from experience with my first Mac mini, that removing the case involves putty knives and some very worrying cracking noises.

I had all sorts of problems trying to get the right cables. Firstly I wanted a Firewire cable so I could copy the set-up across from the old machine to the new machine using Apple’s Migration Assistant software. But it turns out that the old Mac Mini has a Firewire 400 6-pin socket, whereas the new Mac Mini has a Firewire 800 9-pin socket. I ordered a 6-pin to 9-pin Firewire cable cable. Then I discovered that there is more than one type of DVI cable. The old Mac mini was attached to my KVM switch with a DVI-I cable. The new Mac mini only accepts mini-DVI or (via a supplied adaptor) DVI-D. So I ordered a dual link DVI-D to DVI-D cable as well.

Once I had the right cables things went relatively smoothly. The Migration Assistant software copied almost all the apps and data across from the old machine to the new one. It even preserved settings for the apps, e.g. the email accounts in my Thunderbird email client. I just had to re-install XCode (which wasn’t copied across) and rebuild my Qt libraries (to avoid copious warnings due to the fact they had been built with an earlier version of XCode/gcc).

To use the migration assistant you simply:

  1. connect the 2 machines with a Firewire cable
  2. start-up the old machine with the ‘T’ key depresses to put it in ‘Target’ mode
  3. start-up the new machine
  4. follow the on-screen instructions

Nice. If only it was was that easy to set-up a new Windows machine.

A quick test shows that the new Mac mini is nearly 6 times faster at compiling and linking a Universal binary of PerfectTablePlan from scratch[1]:

mac mini performance

The time the new Mac mini takes to compile and link an Intel-only debug release of PerfectTablePlan also compares favourably with a similar build on my Windows 2.13 GHz Intel Core 2 Duo box with 4GB of RAM[2].

mac mini performance 2

This isn’t a fair hardware comparison, as the two machines are using completely different compilers and linkers and the Windows box was running various background services. But it certainly shows that Intel-based Mac minis are worth considering for use as development machines.

[1] The newer machine is using a newer version of XCode/gcc.

[2] The Windows box is using Visual Studio 2005.

TrialPay results

trialpayTrialPay is an interesting idea. In basic terms:

  • merchants (e.g. microISVs like me) want to sell products, such as software
  • customers want to get a product without paying for it
  • advertisers (such as Netflix and Gap) want to sell their goods

TrialPay brings the 3 together by letting the customer get the merchant’s product for ‘free’ by buying something from the advertiser. The advertiser then pays the merchant, with TrialPay taking a cut. The merchant gets paid, even though the customer might not have been prepared to pay the price of their product. The customer gets your product ‘free’ by buying something else, which they might have wanted anyway. The advertiser gets a new customer. TrialPay get some commission. Everyone is happy. I decided to give it a try and signed up in October last year.

get_it_free

I decided not to mention the TrialPay offer on my main payment page. I could visualise eager potential buyers of my table plan software, credit card in hand, being distracted by the TrialPay ‘Get it free’ logo. Off they would wander to the TrialPay pages and become so engrossed/confused/distracted by the offers there, they would forget all about my product. Sale lost. Instead I modified my Inno setup Windows installer to pop up the following dialog when someone uninstalls the free trial without ever adding a licence key:

trialpay_uninstall

If they click ‘No’ the software uninstalls. If they click ‘Yes’ they are taken to the PerfectTablePlan TrialPay page. I hoped that this would entice some of those who had decided not to part with $29.95 to ‘buy’ PerfectTablePlan anyway through TrialPay.

TrialPay allows you to set the mimum payout to any level you like. You can also vary the payout by customer country (e.g. less for poorer countres). The lower the minimum payout you set, the more advertisers deals are available to customers (and presumably the higher the chance of a conversion).

The Minimum Acceptable Payout (or MAP) is the lowest amount you are willing to accept per transaction and determines which advertiser offers are available to your customers. The lower the minimum, the more offers that will appear for your product and the more likely a user is to find an offer that compels him to complete his transaction. While you may set a low MAP, your average payout will greatly exceed the minimums you set. (from the TrialPay website)

It quickly became apparent that very few advertisers offer deals that pay the $29.95 I charge for my product (possibly none, in some countries).

trialpay map

I set a minimum payout of $25 in rich countries and $20 in poorer ones. After a few weeks with no TrialPay conversion I reduced the mimum payout to $20 in rich countries and $15 in poorer ones. TrialPay suggested that a $2 minimum payout was optimal in Africa and Central America if I was accepting $20 in the USA. $2? I don’t think so. That doesn’t even cover the cost of answering a support email. Especially if they aren’t a native English speaker.

I also gave the TrialPay option a mention in my PerfectTablePlan newsletter. Most of the recipients already have licences, but I hoped that that they might forward it to friends and colleagues.

The results to date have not been encouraging. Lots of people have gone to the PerfectTablePlan TrialPay page (approximately 1 for every 10 downloads), but the conversion rate has been dismal. The total number of TrialPay sales since I signed up over 7 months ago is two, for a total of $43.60. That certainly isn’t worth the time it took me to sign up, modify the installer and test the ecommerce integration with e-junkie. I am not sure why the conversion rate was so poor:

  • The TrialPay landing page isn’t compelling enough?
  • The advertiser offers aren’t attractive enough?
  • The concept of TrialPay is too complicated?
  • People are suspicious of ‘free’?

TrialPay’s poster child LavaSoft claim an impressive  5,000 additional sales per month through TrialPay. At $26.95 per licence this is an additional $1.6 million per year. But the numbers look a bit less impressive on closer inspection. 5,000 additional sales/month from 10 million visitors/month is only an extra +0.05% conversion rate[1]. And TrialPay probably didn’t pay out the $26.95 per licence Lavasoft normally charge. It is also noticeable that TrialPay only seems to get a mention on the download page of their free product, not the products they charge for.

Obviously the only way to know for sure whether TrialPay will work for you, is to try it. Your results might be very different from mine. If you do still want to try TrialPay, you can find out some details of how to integrate it here [2].

[1]I am being a little unfair here, as the quoted 10 million visitors probably aren’t just for Lavasoft’s Ad-Aware product.

[2]Note there is a bug in some older versions of Inno setup which means you can’t continue with the uninstall if they click “No” when you display a dialog, as shown above. So, if you are using Inno setup (which I recommend highly), make sure you are using v5.2.3 or later.

Tips on travelling with a laptop

airbus a380I recently returned from a month’s holiday in New Zealand. As a one-man software company I still have to check my email every day, even on holiday. Here are a few tips from my experiences of running my business from a laptop whilst travelling.

Laptop

In theory you can run your business from a Blackberry or a mobile phone that supports email. But it is impossible to answer some support emails if you can’t run your own software. So I took a Toshiba laptop PC with a 13 inch screen with me. I find a 13 inch screen is a good compromise between portability and ease of use. Much bigger and it would have been too bulky. Much smaller and I would have struggled with the screen and keyboard.

The laptop contained my licence key generator and customer database. I owe it to my business and my customers to keep these secure and the Windows password is no protection at all if someone gains physical access to  your machine. So anything sensitive was encrypted using the free Truecrypt software. Whenever I brought the laptop out of hibernation or restarted it I just had to type the password to mount the Truecrypt volume as a virtual drive[1][2].

laptop lockI took a combination laptop lock, but I rarely used it. The problem with laptop locks is that the only things strong enough to secure your laptop to are usually in plain view, and a laptop left in plain view is a bit of an invitation. Locked or not. I am also not convinced how strong the laptop security slot is. I suspect an attempted theft would wreck the laptop, even if it wasn’t successful. So I generally prefer to keep the laptop with me or hide it somewhere a crook wouldn’t think to look. I have since found out that laptop locks aren’t even very secure (see here and here). There are still occasions when a laptop lock is better than nothing though. Incidentally, don’t rely on that padlock on your hold baggage either.

The laptop was also invaluable for playing Thomas the Tank Engine DVDs (using Windows Media Player) to keep my little one occupied for part of the very long flights and for backing up photos from the digital camera. I also took a universal power adapter.

Laptop bag

I have a traditional Targus laptop bag with a shoulder strap. But I have found this uncomfortable for carrying a laptop any distance due to the uneven distribution of weight. It also makes it extremely obvious that you have a laptop. A fact I would rather not advertise.

wenger-swissgear-hudson-1wenger swissgear hudson laptop rucksack bagFor this trip I purchased a Swissgear Hudson laptop rucksack from Swiss Army knife manufacturer Wenger. It was much more comfortable to wear with the weight distributed across both shoulders and left both hands free for dealing with passports, boarding passes and a bored two year old. It was small enough to take on to an aircraft as hand luggage, but surprisingly spacious. It also had some useful extras, including: a carry handle, a breathable back and a compartment for an MP3 player. I was impressed with the quality of the construction and finish. My only quibble is that there wasn’t as much padding around the top and bottom of the laptop as I might have liked. So I wrapped my laptop in bubblewrap for additional protection. But on the whole I would recommend this bag highly for travelling.

Back-ups

As well a backup on DVD I also took a 2 Gig USB memory stick that contained everything I would need should my laptop malfunction or be stolen. This included copies of my licence key generator, customer database and various passwords. All the sensitive files were encrypted using the free Axxcrypt software, except my passwords which were encrypted using the free Keepass software. The memory stick also stored various third party software installers (including Axxcrypt and Keepass). I kept the memory stick on a lanyard around my neck when I wasn’t sleeping.

I also stored an additional encrypted back-up on a secure server.

Internet access

Trying to find holiday accommodation that was the right size and budget, in the right location and free at the right time was problematic. Insisting on broadband Internet as well was a step too far. I also wasn’t keen on relying on broadband at accommodation. What if it didn’t work? Relying on Internet cafes seemed an even worse idea. What if I couldn’t find one? And the security issues of using Internet cafes are very real. So I needed my own mobile Internet access.

The roaming charges for using my UK three networks mobile Internet in New Zealand are an outrageous £6/MB. Vodaphone has more sensible roaming charges for some plans, but I couldn’t justify the high monthly price for the occasional trip abroad. So I tried to find a company that would rent me mobile data access in New Zealand for a month, without success. In the end my brother-in-law very kindly sorted me out with a USB mobile modem and a 1GB/mo data plan with Telecom New Zealand. He picked the modem up cheap second-hand on trademe.co.nz and the data plan was of the order of $70NZD/mo, with no minimum term. So, rather than paying >£1000, I ended up paying about £50 (thanks Derek!). There is definitely a business opportunity for someone there.

I am glad I didn’t rely on broadband at the accommodation. It turns out that most of the New Zealand ISPs have restricted SMTP access to prevent spam. So I could receive email via IMAP when plugged in to an xtra.co.nz broadband cable, but I couldn’t connect to their SMTP server to send email. Thankfully I didn’t have this problem with the mobile broadband or I would have been stuck with webmail for a month (the horror!).

Mobile coverage is patchy outside the bigger cities in the South Island of New Zealand, due to the low population density (sheep can’t afford broadband). But I was able to get some sort of signal everywhere we stayed. This might have been helped by the aerial attached to the mobile modem. During the month a I used approximately 40% of the 1GB allowance. I could have used quite a lot less, if necessary.

Stopping over in Singapore I just purchased wifi access from the hotel. It was quite expensive, but I didn’t need it for long. Wifi and hardwired Internet access are available for free in Singapore airport (I couldn’t get the wifi to work, so I just plugged in a network cable).

Conclusion

Running an Internet-based business while travelling isn’t that difficult, with a bit of planning. I doubt my customers even realised I was on holiday. What are you waiting for?

PS/ New Zealand is lovely.

[1] Truecrypt can also encrypt the whole OS, but that seemed excessive for my requirements and I wasn’t sure what impact it would have on performance.

[2] If Truecrypt is so easy to set-up and use, why is it apparently beyond the capabilites of the UK government to encrypt sensitive data?

Photo of Airbus A380 by Claire Brice