Based on feedback and some further research I have published an update to my ‘Do customers need to see an advertisement seven times?’ post at the end of the original post.
Do customers need to see an advertisement seven times?
A few years ago, when I was buying magazine ad space for my table planner software, I was told by an ad salesman that customers need to see an advertisement seven times before it is effective. How very convenient for his commission. I have heard variants of this “advertising rule of 7” quite a few times since, but I have never been able to find out where it originally comes from. I have now taken to asking people that quote it what evidence they have to back it up. So far no-one has been able to point me at a paper, study or any other form of credible evidence.
I have just searched google for see “ad seven times” and I found lots of mentions of the “advertising rule of 7”. Here are some of them that appeared high in the search results:
surveys prove people need to see the same ad seven times in order to buy
Statics show that people see an ad seven times before responding.
This is not all bad since people generally need to see your ad seven times or more before they buy
In marketing, it is said that a customer has to see an ad seven times to remember it.
But again, no links, references or citations to back it up, even from the people that said it was based on “statistics”, “surveys” or “research”. What statistics/surveys/research? Is it based on some form of scientific study that can be reproduced, is it a rule of thumb that has been given more credit than it deserves or is it total bullshit made up by a crafty ad salesman? I suspect the latter, but I would love to know. If you know the origin of this “rule of 7”, please post a comment below.
** Update 09-Jun-10 **
I have had some useful feedback from this post, particular in the private ASP forums[1] (always a great resource). David Trump posted a link to this paper:
THE REPETITION/VARIATION HYPOTHESES CONCEPTUAL AND METHOLOGICAL ISSUES [Schumann & Clemons]
I used references and keywords in this paper to find 3 other relevant papers:
The shape of the advertising response function [Simon & Arndt]
These papers talk about an ‘advertising response function’. This is a curve plotting the number of exposures to an ad against the customer likelihood of being influenced. Some theorise that there is a threshold below which ads don’t have an effect, a saturation point above which exposures may have a negative effect and a sweet-spot in between. This ‘S’ shaped response function could provide some support for ‘you have to see an ad 7 times’, except support for the presence of a threshold effect seems to be weak to non-existent. Only one of the papers [Vakratsas, Feinberg, Bass & Kalyanaram] cited any evidence and that seemed less than convincing from my quick reading.
For effective frequency to be valid, advertising must be subject to a threshold effect, reflected in an S-shaped advertising response curve (Stankey 1989). But research suggests that, in actual advertising situations, response curves tend to be concave, characterized by Continually diminishing returns (Simon and Arndt 1980; Schultz and Block 1986; Zielske 1986). [Cannon and Leckenby]
In brief, then we are satisfied that the field experiments as a group show no solid evidence for increasing returns over operating ranges. … Taken together, the studies using physical and monetary variables add up to the conclusion that there are not increasing returns to advertising—that is, no S-shaped response function-over the normal operating range. [Simon & Arndt]
Futhermore, some of the papers mention a theory that a customer might have to see an ad 3 times, but none of them mention 7 times.
Krugman (1972; 1977) captured the imagination of the industry with his three-exposure theory, which described an intuitively appealing sequence of consumer responses to television advertising that appeared to be consistent with a communication threshold. He suggested that the first exposure causes consumers to ask, “What is it?” The second causes them to ask, “What of it?” The third exposure is both a reminder and the beginning of disengagement. … The magic number “three” came to be a commonly accepted industry standard (Lancaster, Kreshel and Harris 1986). [Cannon and Leckenby]
Al Harberg pointed out that those claiming a “7 times rule” might be confusing the ability to recall information (where 7 has been shown experimentally to be the “magic number” for short term memory) with the number of ad exposures taken to influence someone. Two completely different things.
So please shout “bullshit” very loudly next time you hear the “advertising rule of 7″ mentioned. Especially if it is by someone trying to sell you ad space.
[1]Private correspondence in the ASP forum referenced with permission.
** Update 13-Mar-19 **
Paul Moore writes:
“I read your blog post from a few years back, and thought you might find this of interest. It’s a article passed around several newspapers at least as far back as 1859. It showed up even in 1910. Here’s the earliest iteration I was able to find on Google – the text is identical in several other American newspapers of the time. I have no idea where it originated, but the theory has been around for a while. I guess in modern times the number of impressions went from six to seven!”
A French editor gives the following amusing description of the effect of an advertisement: The first time a man sees an advertisement, he takes no notice of it; the second time he looks at the name; the third time he looks at the price; the fourth time he reads it; the fifth time he speaks of it to his wife; the sixth time he buys. [Weekly Constitutionalist (Augusta, Georgia) June 1, 1859]
Lessons learned from 13 failed software products
“No physician is really good before he has killed one or two patients.” – Proverb
Software entrepreneur culture is full of stories of the products that succeeded. But what about the products that failed? We rarely hear much about them. This can lead to a very skewed perspective on what works and what doesn’t (survivor bias). But I believe that failure can teach us as much as success. So I asked other software entrepreneurs to share their stories of failure in the hope that we might save others from making the same mistakes. To my surprise I got 12 excellent responses, which I include below along with one of my own. It is a small sample and biased by self selection, but I think it contains a lot of useful insights. It is an unashamedly a long post, as I didn’t want to lose any of these insights by editing it down.
Case #1: DRAMA
Contributor
The product
DRAMA (Design RAtionale MAnagement) was a commercialization of a University prototype for recording the decision-making process during the design of complex and long-lived artefacts, for example nuclear reactors and chemical plants. By recording it in a structured database this information would still be available long after the original engineers had forgotten it, retired or been run over by buses. This information was believed to be incredibly valuable to later maintainers of the system, engineers creating similar designs and industry regulators. The development was part funded by 4 big process engineering companies.
Why it was judged a commercial failure
Everyone told us what a great idea it was, but no-one bought it. despite some early funding from some big process engineering companies, none of them put it into use properly and we never sold any licences to anyone else.
What went wrong
- Lack of support from the people who would actually have to use it. There are lots of social factors that work against engineers wanting to record their design rationale, including:
- The person taking the time to record the rationale probably isn’t the person getting the benefit from it.
- Extra work for people who are already under a lot of time pressure.
- It might make it easier for others to question decisions and hold companies and engineers accountable for mistakes.
- Engineers may see giving away this knowledge as undermining their job security.
- Problems integrating with the other software tools that engineers spend most of their time in (e.g. CAD packages). This would probably be easier with modern web-based technology.
- It is difficult to capture the subtleties of the design process in a structured form.
- A bad hire. If you hire the wrong person, you should face up to it and get rid of them. Rather than keep moving them around in a vain attempt to find something they are good at.
- We took a phased approach, starting with a single-user proof of concept and then creating a client-server version. In hindsight it should have been obvious that not enough people were actively using the single-user system and we should have killed it then.
Time/money invested
At least 3 man years of work went into this product, with me doing most of it. Thankfully I was a salaried employee. But the lack of success of this product contributed to the demise of the part of the company I was in.
Current product status
The product is long dead.
Any regrets?
It was a fairly painful experience. I would rather have spent all that money, time and energy on something that someone actually used. But at least I learnt some expensive lessons without using my own money.
Lessons learned
- Creating a new market is difficult and risky.
- Changing people’s working habits is hard.
- Social factors can make or break a product. The end-users didn’t see anything in it for them.
- If the end-users don’t like a product, they will find a way not to use it, even if their bosses appear to be enthusiastic about it.
- Talk is cheap. Lots of people telling you how great your product is doesn’t mean much. You only really find out if your product is commercially viable when you start asking people to buy it.
Case #2: CleanChief
Contributor
The product
CleanChief was to be ‘The easy management solution for cleaning organisations’. Managing assets, employee schedules, ordering supplies, you name it CleanChief handled it. Essentially it was light weight accounting software for cleaning companies.
Why it was judged a commercial failure
A small number of copies were sold. No one is actively using it at present. Once I realised that it wasn’t a complete product and that additional development was required I moved on to other product ideas. I had basically run out of enthusiasm for the product.
What went wrong
- I am not an accountant.
- I have never run a cleaning company.
- I developed it for more than two years without getting feedback from real cleaning companies. I was arrogant enough to think that I knew what they wanted (or could work it out on my own). Or maybe it was that I was just where I was most happy and comfortable – writing software. Talking to real users was new and to be honest a bit scary for me.
- A successful cleaning company operator, a friend of a friend, offered to become involved for a 30% share. This was a gift from the heavens, exactly what I needed. I refused.
- In a way, even though I spent so long on the product, I gave in too soon, I was just getting feedback from real users, just getting my first batch of sales when I decided to move on.
- I developed the application in VB6 even though I knew it was outdated technology when I started the project.This meant there was no ‘cool factor’ when discussing it with other developers, I told myself it didn’t bother me, but it probably did.
Time/money invested
I worked on it at night and weekends for about 2 1/2 years. I paid for graphic design work, purchased stock icons and images. I probably spent a couple of thousand Australian dollars in total and an awful lot of time.
Current product status
I moved on to other products that have gone much better. My newer products were released in months rather than years and I looked for real feedback from real users from day one. they are:
- QueryCell – an Excel add-in making SQL in Excel easy.
- QuizNightChief – the easy way to organise a quiz Night.
- CustomerCradle – The easiest way to record and report on where your customers come from.
I do occasionally ponder returning to CleanChief and trying to raise it from the ashes.
Any regrets?
No. Looking back I learned a few lessons from a huge amount of time and work, it was a very inefficient way to learn those lessons. But when you are new to something like starting a business or creating useful software being inefficient at learning lessons is the best you can do, it’s a thousand times better than not learning lessons at all.
I learned so much more in my two and a half years of trying to develop CleanChief than I did in the two and a half years prior to that, during which time I really wanted to start a software business but didn’t take any action.
Lessons learned
Hearing or reading some piece of advice is totally different to living it. Here are some of the ideas that I always agreed were true but didn’t fully understand the implications of until I had lived them out:
- Force yourself to get out and talk to people. Ask their advice. Almost everyone will help if you ask them for feedback.
- Force yourself to cold call a few businesses in your target market.
- Create a plan of how to market your product.
- Try and use your product as much as possible as you build it.
- Get out of your comfort zone from day one
- Do not have the mind set that the day you release version 1.0 is the finish line, it’s the starting line, so hurry up and get there.
Case #3: Chimsoft
Contributor
The product
ChimSoft – Software for Chimney Sweeps.
Why it was judged a commercial failure
I believe this failed for two reasons:
- Focusing on too small of a niche
- Me not being able to work full time on it.
I don’t consider it a complete failure because I sold two copies when it retailed for $2k, and maybe 10-15 more copies when I lowered the price to $200. Those sales proved that I wasn’t completely off base in thinking there was a market for the software, but the cost of customer acquisition and the size of the market were too small. Customers wanted to have a bunch of phone calls, face-to-face etc… the type of stuff you only see with much more expensive software. The problem was that for a niche this small we had to charge a lot of money to make it worthwhile for us, but the customers were small businesses where this is a major investment, so the fit was never right. The other issue was the people that did buy it were not super tech savvy, so there was a high cost of support that made even a $200 product not worth it.
What went wrong
- Having all partners who were not full-time, and had equal equity. I ended up doing most of the work and this is the main reason I didn’t force success is I felt I was in it alone.
- Focusing on too narrow of a niche. The plan all along was to expand for all service industries, but it was much harder to make that move than we expected.
- Not researching pricing more, we knew small businesses made major purchases for things that really helped their business, but I think it would have been better to have a cheaper product with wider appeal than an expensive product with narrow appeal.
Time/money invested
I invested maybe a year of time and $3k into the company. I did not take any huge risks on it, so there were no big negative outcomes.
Current product status
The company folded in 2007, I refocused my efforts on my existing companies (AUsedCar.com and BudgetSimple.com) and both have been doing well enough that I quit my day job.
Any regrets?
I don’t regret it entirely, I think I learned several valuable lessons about working with other people, small business sales, trade-shows and software development.
Lessons learned
- Pick partners wisely. Don’t try to be even-steven with equity. Use restricted stock to ensure everyone does their part.
- Know what your customers expect (24/7 phone support?) to determine if you can do this while working a day job.
Case #4: PC Desktop Cleaner
Contributor
The product
PC Desktop Cleaner. Simple software that cleans your desktop and archives your files.
Why it was judged a commercial failure
My goal was to sell 10 units per month. I’ve sold less than 1 unit per month.
What went wrong
- I think that the product concept is not useful enough. It’s not a thing that people would pay for.
- The market exists (some people buy) but it’s too little or difficult to reach.
- I didn’t do any market research. I just got in love with the idea and did it. Later, I’ve learnt to use “lazy instantiation marketing” and have trashed a lot of embryo projects. :-)
Time/money invested
I think I wasted near $500 in development tools and some freelancers. Not too much.
Current product status
I’m still selling it. I’ve thought about others products, but not really decided yet.
Any regrets?
No, it was a lot of fun and I learnt lot of things. In my “day job” I own a small firm that sells software for production scheduling. I’ve learn a lot of SEO and AdWords in the DesktopCleaner project that now I’m using with great results.
Lessons learned
Go for it, maybe you win, maybe you fail, but you will grow and get tons of useful knowledge on the way.
Case #5: Smart Diary Suite
Contributor
The product
Why it was judged a commercial failure
It sells and the profits cover current investments in the product, but there is little left over on top of that.
What went wrong
If I had a chance to do anything differently:
- Take it seriously from day one.
- Never stop developing and supporting.
- Invest as much as possible in marketing early on.
- Don’t stop believing in your creation.
Time/money invested
Up to this point, I have spent 13 years on Smart Diary Suite and a lot of money went into buying hardware, software, hosting, marketing, etc… All of that money came from my day job, but at this point SDS has recovered all of that back and is now making a small profit. The actual amount is hard to calculate (over the 13 year span), but we would be talking in tens of thousands of US dollars.
Current product status
For a while it may have seemed like SDS is not going to be successful, but that’s probably my fault – I stopped believing for a little while. Now I am back, starting again and this time I’ll make sure it doesn’t fail.
Any regrets?
I do not regret doing it. I regret allowing myself to stop working on it, basically bailing out on it for a while – that is my biggest mistake.
Lessons learned
If you want a successful product – believe in it and let others know that you believe in it.
Case #6: Highlighter
Contributor
The product
Highlighter. A utility to print neatly formatted, syntax highlighted source code listings.
Why it was judged a commercial failure
I earnt a grand total of £442.52 (about $700 in todays money) in just over two years, so I guess it paid for itself if you exclude my time.
What went wrong
Since it was my first product and I was very green about both marketing and product development. I would suggest the following would have made things better:
- Get feedback from potential users about the product (eg from the ASP forums). Some parts of the program where probably too option heavy and geeky.
- Diversify. If people didn’t want to print fancy listings, maybe they would have wanted them formatted in HTML.
- Better marketing. I’m not sure this would have saved it, but all I knew in those days was uploading to shareware sites. I never even sent a press release.
I figure it failed simply because it was a product nobody wanted. Actually, more importantly than that,, it was a product *I* didn’t want to use, but it developed from a larger product I was working on, on the assumption I could earn some money on the side from part of the code. Since then I’ve stuck to products which I’ve actually wanted to use myself. There’s a lot to be said for dogfooding, not just for debugging, but for knowing where the pain points are and what extra features could be added.
Time/money invested
I would guess a couple of months of evening/weekend development time. Financially there was little spent, except that I offered the option of a printed manual and CD for an extra charge. One customer took me up on the offer, so I had to get 100 manuals printed and 99 of them went in the bin.
Current product status
I moved on to another product which has sold over £50,000 and a third which has earnt even more than that. Not enough to retire on but considering I only do this part time it must work out at a great hourly rate. There’s a lot to be said for not giving up…
Any regrets?
Nope. I figure every failure in life teaches you valuable lessons. Of course if I’d made a large financial investment I may feel differently, but that’s one of the big advantages of software over physical product sales.
Lessons learned
Just to reiterate – develop something which you find useful, instead of second guessing others.
Case #7: R10Clean
Contributor
The product
R10Clean. A data cleaning and manipulation tool.
Why it was judged a commercial failure
In the 18 months or so it’s been on the market I have sold 6. It has been £199, £99 and £19 – with no effect on sales !
What went wrong
Not sure what I did wrong ? The product is maybe too techie ?
Time/money invested
No effect financially as at the time I was in a strong financial position.
Current product status
I still have it for sale but do not market it at all. I have other products.
Any regrets?
I don’t regret it as it saved me a ton of time when I was working with legacy databases a lot, as a commercial product it has been raved about (once!) and received a good review from the Kleper report, but has failed totally.
Lessons learned
Advice to others ? Just because you need it personally, don’t assume the rest of the world does too. :-)
Case #8: nBinder
Contributor
The product
nBinder, packs multiple files into a stand alone executable with over 50 advanced output and file unpack options, conditional run and commands.
Why it was judged a commercial failure
It was the first product I began selling. It sold to 300+ customers in 4 years. But for about a year the sales began to go down and have finally stopped completely.
What went wrong
- The biggest problem was that because it was a packer intended for people that wanted to pack their products (software or games) into a single package (compressed and encrypted) many have used it for creating malware by binding malware files to legit files and then distributing the output so it isn’t detected by antivrus software (although it would be detected at runtime). Because of this I had lots of problems with antivirus companies that flagged files create with nBinder as malware. This was of course affecting legit users as their files would be falsely marked as malware. I used virustotal.com to see which antivirus detected it and contacted the antivirus manufacturer as soon as I detected the problem. In most cases they would remove it from their definitions. But it was an uphill battle because it would appear again in a matter of weeks. Some small AV companies didn’t event bother to reply to my emails to fix the problem. Others were using heuristics to flag files create with my applications and AV developers were reluctant to whitelist files created with nBinder. You can imagine it that it was enough for an AV such as Kaspersky or Norton to pick my files as malware for a day and customers would be affected and not use my product any more, especially that it took about 3 days for AVs to remove the false positive.
- Infrequent updates. Due to lack of time I only updated the product once or twice a year and this affected the product a lot.
- No marketing. I decided that I didn’t want to invest money in marketing so, except for a short AdWords campaign, I invested no money in marketing.
- My decision to develop 3 products instead of concentrating on one or two affected development time and quality. I have worked on 3 products simultaneously instead of concentrating on making a single good one. The reason I worked on 3 is because I enjoyed developing different software in different categories. I didn’t start this for money but for the fun of development.
Time/money invested
I invested almost no money (except for hosting costs). Time invested I can’t really say exactly, but not too much as I only worked on nBinder in short bursts like 6 hours a day for a week or so before releases.
Current product status
Still for sale. My other products are:
- nCleaner – a free system cleaner that has gone quite well (over 2 million downloads).
- nMacro – an automation tool that has seen some limited success (bought by over 100 customers in a year or so).
Any regrets?
It’s not a total failure as I did make some money out of it with no investment, so I don’t regret starting it, but it could have been much better.
Lessons learned
Words of advice for others trying to make money from software development:
- Study the market and the current trends very well.
- Before deciding to take on large competition make sure you have something better (at least from one point of view) than the competition ( for example you might not have the same features but you have a better GUI and general presentation).
- Do not get scared of an overly populated market segment. For example with nBinder I picked a segment with very little competition but also few possible users and the results were not so great (I didn’t have many users). With nCleaner I went head-to-head with lots of already established products but also the market is very big. Although nCleaner is free it has had the most success because there are so many potential users (anyone with a PC actually), so it had over 2 millions downloads and I still receive lots of mails regarding it, even if the last update was in 2007. So it is possible to have success in a market with lots of competition with no investment but it’s hard to reach the level of more established products.
Case #9: Net-Herald
Contributor
The product
Net-Herald – a monitoring application for water supply companies. It was a complex client server application that would receive monitoring data from specialized hardware and store that data inside a SQL database. The client displays that data in different graphs, provides printable reports or sends alarm messages via SMS if a monitored value is not within its specified limits.
I developed Net-Herald as a perfect fit for that specialized hardware that is provided by a local manufacturer. That way, so I hoped, I could profit from their sales leads and would find a smoother way into these water supply companies. The downside of course, was that my software would only work with their hardware.
Why it was judged a commercial failure
I sold a first license fairly soon after I had a sellable product, although it took the customer nearly a year until they finally bought. But since then I sold only one more license within the last 4 years or so.
What went wrong
- I didn’t do my own marketing and the hardware guys weren’t really concerned with selling my software.
- Water management companies have a terribly long sales cycle. Other vendors monitoring applications usually cost tens of thousands and are geared toward large suppliers. Whenever a supplier buys into such a product he is unlikely to change within the next decade or more. I tried to position my software towards small suppliers but even then most of them were already locked into another vendor’s solution.
- My software only worked with a specific hardware. That narrowed the marked down substantially.
- In the end the software became too complex for one poor mortal to maintain. Because the software didn’t produce any substantial income I had to stop adding new features which would make it attractive for more prospective clients.
- This kind of software is not sold over the Internet. Rather it needs very active sales people that nurture clients over a rather long period of time.
- All these facts indicate that software like this should not be developed by a one man show.
Time/money invested
The development time for the first sellable version was maybe about 9 months. I didn’t have a job income at that time, but got funding due to government support for small start-up businesses. So I didn’t drain our family’s personal finances. But I did of course invest a great deal of time and sweat.
Current product status
Now, I have drawn a line and stopped active development of Net-Herald. I still do some custom extensions for my first clients. But I no longer market the software. I have instead focused on my consulting services. I also try to learn developing and selling software with my cross-platform drag and drop product Simidude.
Any regrets?
I didn’t succeed yet selling my own software (which is still my goal) but I do not regret doing it. I developed Net-Herald using (Java) technologies that now give me leverage at my consulting gigs. All in all it was a heavy ride. But it was fun and I would do it again.
Lessons learned
- My biggest mistake was the lack of market analysis. I trusted the word of the hardware manufacturer without verification.
- I have written more about the above and some other failures on my blog.
Case #10: HabitShaper
Contributor
Adriano Ferrari.
The product
HabitShaper – set and track daily targets for your goals (weight loss, quit smoking, jogging, writing, etc…).
Why it was judged a commercial failure
I sold a few copies, but not enough to make back the time I invested in it and my conversion numbers and traffic are below average.
What went wrong
- Did not do enough pre-production research (talking to customers, etc).
- Did not do a large enough beta to make up for lack of initial research.
- Ignored gut-feeling that my product is better suited to being web-based and multi-platform (incl. mobile).
- Did EVERYTHING myself (logo, web design, video, software, AdWords, etc).
Time/money invested
I worked on it two years, part-time, while doing Masters/PhD in Physics. It had no impact on my finances (very little money invested) or circumstances.
Current product status
I am relaunching as a web-based product this summer.
Any regrets?
Not in the least! I learned about as much from making HabitShaper as I have from my MSc thesis and PhD work.
Lessons learned
- Most important: PAPER prototypes, minimum viable product, and iterate.
- Don’t be afraid to launch early.
- Launch a little bigger than you’d expect (it’s harder to find those initial customers than you think).
- Don’t be afraid to change directions, especially early on.
- Doing things yourself is a great learning experience, but if you want to get your product out to customers as fast as possible, don’t be afraid to invest money and outsource your weaknesses.
Case #11: BPL
Contributor
The product
BPL – Batch Programming Language Interpreter.
Why it was judged a commercial failure
I sold about 10 copies.
What went wrong
- I didn’t really do enough research to find out if the target market was in existence. I was hoping that network admins and support staff members would find it easier to use than batch files and less complicated than any of the free scripting language options available. So, I just rushed to get the MVP (Minimum Viable Product) out the door.
- I never did provide a compiler that would build a stand-alone EXE. I think that might have met with more success.
- I didn’t do much as far as advertising the existence of the product.
Time/money invested
I only spent a few weeks coding and documenting it in my spare time. Support issues sometimes took a whole evening, but nothing major. It did not have any impact on my finances as I had invested nothing but my time.
Current product status
I will still address support issues with this product for registered users, but I don’t actively sell it. I’ve open-sourced the program and it still really isn’t seeing heavy use.
I was more successful with other products. I have a few retired products that saw some good bulk-purchase deals ( command-line DUN HangUp, command-line scheduler ) and I still sell the following (for Windows):
- MailSend – Command-line SMTP mailer.
- MailGrab – Command-line POP3 reader.
- CMD2EXE – Packages up a batch file into an EXE.
- ScreenKap – Command-line screen capture.
All of the above still bring in a modest passive income.
Any regrets?
Not at all. “Nothing ventured,…”.
Lessons learned
Had I not attempted to bring the BPL product to life, I might still be sitting here wondering “what if?” I think it was very beneficial for me to invest the time to try out this idea.
Case #12: Anonymous
Contributor
Anonymous.
The product
A time tracker.
Why it was judged a commercial failure
Because it is not my primary income. I have about 150 customers in one year.
What went wrong
- No marketing.
- No real thought into features.
- I don’t spend any time on it.
In my defense, the reason I do not spend much time on it is that the market became saturated with ‘me toos’ right after I released, which was quite expected. In fact, as I was looking for users, I got an email from a competitor suggesting that I don’t enter the market because they are working on the same thing! I don’t know what I would do differently. Maybe spend more time on it? I think the law of diminishing returns applies quite early in this space so I am not sure.
Time/money invested
Since inception (Nov 2008), I’ve spent close to 250 hours total. Total cash outlay was something like $500.
Current product status
I never tried to make it succeed, to be honest. It was only a learning experience for me. What I probably need now is to go all in. Quite frankly, if I double the sales for this product, I can quit all consulting work. But I really do not think it is a good idea to work on this app full time as it is too simple.
Any regrets?
Definitely not.
Lessons learned
- Do it!
- Solve a problem people know they have.
- Don’t invest too much time and money at the beginning.
- Don’t be wedded to a particular idea.
- Don’t only listen to your customers. Listen to yourself. After all, you created the idea which attracted the customers.
- Never promise a feature for a sale. I’ve never done it but the pressure is really great. My stock response is always: “While such a feature may be available in the future, I recommend that you only use current features when deciding on your purchase.”
- Do use Google to your advantage.
Case #13: ScreenRest
Contributor
The product
ScreenRest – a consumer software product that reminds users to take regular rest breaks while using their computer.
Why it was judged a commercial failure
ScreenRest failed commercially because we built a product without having a clearly defined market. This was compounded by it offering prevention, not a solution. ScreenRest continues to regularly sell a small number of licences but not in sufficient quantity to justify further enhancements. The conversion rates are good, but there are simply not enough visitors to the website.
What went wrong
- Not doing market research first.
- Creating a prevention rather than solution product – people generally wait until they have a problem and then look for a solution.
- Creating a product with medical associations – the SEO and PPC competition for related keywords is prohibitive for a product with a low purchase price.
Time/money invested
At least £2000 was spent on the project, including software licences and additional hardware. The product and website were created over roughly 12 months by myself and my wife Lindsay, some during spare time, then part-time and finally full-time so it is difficult to determine the total number of hours. Working part-time and then full-time on ScreenRest caused a significant impact on our finances. Although right from the beginning we saw this as in investment for building a business.
Current product status
Once the product was complete and we started learning SEO it became all too apparent that organic search traffic for related keywords was going to be insufficient. Research into PPC then revealed that the price point was too low to support purchasing medical terms. Planned features for ScreenRest have been put on hold and no further marketing is planned. We continue to support new and existing ScreenRest customers and plan to do so for the foreseeable future. Rather than create another software product we chose to use what we had learned about marketing, copywriting and SEO to create a series of websites targeting a range of topics (often known as niche sites). The most successful of these sites we are expanding in value and functionality to fill gaps not serviced by the competition.
Any regrets?
No. ScreenRest succeeded in every way intended, other than commercially. Creating it was a rewarding learning exercise that started us down a path to finding the intersection of our skills, experience and market opportunities.
Lessons learned
- Start with market research – creating a high-quality product you believe in is not enough on its own.
- Make sure you can identify a specific target market, that you can reach that market and that it is large enough to support your financial goals.
Conclusion
Analysing the above (admittedly small and self-selected sample) it is clear that by far the commonest cause of failure were:
- lack of market research
- lack of marketing
With the benefitof 20/20 hindsight it seems blindingly obvious that we should:
- spend a few days researching if a product is commercially viable before we spend months or years creating it
- put considerable effort into letting people know about the products we create
Yet, by my count, a whopping 6 out of 13 of us admitted to failing to do each of these adequately. Probably we were too busy obsessing over the features and technical issues so beloved of developers, which actually contributed to far fewer failures.
It is also noticeable that, despite the failure of these products, there are few regrets. Important lessons were learned and no-one lost their house. Many of us have gone on to develop successful products and the others will be in a much stronger position if they do decide to try again.
A big thank you to everyone who ate a large slice of humble pie and submitted the above. I hope we can prevent other budding software entrepreneurs making the same mistakes. Even if you don’t succeed, you will learn a lot.
Feel free to add your own hard-won lessons from failure in the comments below.
“No physician is really good before he has killed one or two patients.” – Hindu proverb
Social factors can make or break a product.
Learning from failure – contributions wanted
We hear plenty about the businesses that succeed, but little about the businesses that fail. This can lead to a very skewed perspective on what works and what doesn’t. But I think failure can often teach us as much as success. So I am interested in trying to put together an article on my blog about commercial software products that have not been successful. If you have been involved in a failed product, or at least one that hasn’t been successful so far, I would love to hear from you. I need to know:
- A brief description of the product – (URL and/or product name optional, you can be deliberately vague if you want to stay anonymous).
- Why you consider it to have failed commercially. Did you sell any?
- What you did wrong (ideally 3-5 bullet points) or would do differently if you could do it again.
- How much time/money you invested in it and what impact that had on your personal finances and circumstances.
- What happened? Are you still trying to make it succeed? Have you given up? Did you succeed with another product?
- Do you regret doing it?
- Anything else you think might be useful to others thinking of creating their own commercial software product.
Maybe you can save someone from making the same mistakes you made? Please email me at andy {at} oryxdigital.com. Hopefully I can get enough contributions to make a viable article. Links to articles about failed products would also be great.
New Software Marketing Facebook group
Alwin Hoogerdijk has created a ‘Software marketing’ Facebook discussion group. Personally I’m not a fan of Facebook, as will be obvious to anyone that checks out the howling void that is my Facebook account. But Alwin is a very smart online marketer, so I have tried to overcome my aversion to Facebook and joined the group. Just don’t expect me to care how you are doing at Farmville …
How to find a great software product name
A while back I exchanged a few ideas with Dennis Gurock about names for their new testing product. Choosing a name is difficult, but it is something every product developer has to do. So I asked Dennis to write a guest post about the process they went through before they ended up with ‘TestRail’.
Coming up with a great name for your new business, product or service is hard. I’m sure you already noticed that! But what is a good name anyway? Deciding if you like a name is, of course, pretty subjective. But there are some useful criteria that can help you find a great name.
Around a year ago we desperately needed a name for the new test management software we had been working on. We aren’t very good with names. In fact, we used a codename for the project until the very last minute, so that we didn’t have to come up with the product name earlier. Still, even with many months to think about a name, it was difficult to find one that we liked.
So what did we do to finally decide a name? We made a list, of course (we are programmers for a reason). A list of objective criteria that the new name should meet. This helped us quickly evaluate new names that we brainstormed. So I figured, if it helped us coming up with a name, why not share our tips with other fellow programmers? So here are the criteria that we used to find a name for our new product.
#1 The shorter, the better
A good, catchy name needs to be short. Do you think Google would be used as a verb today if it had six syllables? I don’t think so either. But even if you don’t plan to become the next Google, having a short name that can be used in everyday discussions is a powerful way to make your brand stick. “Have you seen the bug report in Jira?”, “Could you post your meeting notes to Basecamp?”, “What’s the project status in TestRail?”
#2 Make it easy to spell
Coming up with “creative” and “hip” ways to spell your new name is generally not a very good idea. I’m pretty sure Joel Spolsky has regretted more than once naming his bug tracker FogBugz. I once talked to a customer who kept calling it fog bug zed and I’m sure he is not alone. You don’t want a customer’s purchasing department not find your product on the web because they are unable to spell it correctly.
#3 Own the .com domain
Did you notice that a lot of companies don’t own the .com domain of their new brand names lately? There’s a good reason for it: most good .com domains are taken. If you have been trying to register a good domain name recently you know how frustrating that can be. Still, I don’t believe it’s a good idea to just own widgethq.com, or foobarapp.com. Invest the time and resources to come up with a name that you can register or buy the .com domain for. You don’t want a competitor to purchase “your” .com domain from a domain squatter after you invested tens of thousands of dollars to promote your brand name.
#4 Trademarks, or: how not to get sued
This one is important. You really want to make sure that you are not infringing on someone else’s trademark. So make sure your new name is not already used or registered (at least in your industry) and that it’s not similar to an existing mark. Ideally you come up with a name that you can easily register with your country’s trademark office (and then do so when you actually use it). I’m not going to pretend that I know everything about trademarks and I’m not a lawyer. So make sure to either contact a lawyer or do your own research on this topic. I found Trademark: Legal Care for Your Business & Product Name from Nolo pretty helpful.
#5 Google is your friend
I’m sure Microsoft didn’t foresee how a simple name could impact developers’ life so negatively when they decided to name their new software platform .NET over ten years ago. It turned out that such a generic name (especially with a leading dot) made it really difficult for developers to find related resources online using a search engine. Don’t make the same mistake. Choose a name that is unique and can be easily found on Google. It can also help your search rankings if your product name contains relevant search terms. For example, our new product is related to software testing and having the term ‘test’ in the product name helped us considerably with this.
#6 Consult a native speaker
Are you not a native speaker of the language your primary market communicates in (e.g. English)? Have you found a great name that is unique, that no one uses, has no trademark registration and is available as a .com domain? Congratulations, you’ve probably found a name that is severely offensive to native speakers in one way or another! If it weren’t so embarrassing, this would now be the place where I told you a story about how I once almost named a product similar to a body part you don’t usually want to talk about in a business conversation. The moral of the story is that you should always discuss your name ideas with a native speaker before making a complete fool of yourself.
It can be a challenge to find a name that meets all these criteria perfectly. Some of the criteria are obviously more important than others, but I still recommend trying to come up with a name that meets most of them.
So how did we end up naming our new product? We called it TestRail. It’s not the best name in the world, but we are happy that we came up with a name we like. And most importantly, having finally found a name allowed us to concentrate on doing what we enjoy most: building great tools for software teams.
Dennis Gurock is the director and co-founder of Gurock Software, a company specialized in tools for software development teams and quality assurance departments. Gurock’s first product SmartInspect is a .NET, Java and Delphi logging tool. Gurock’s second product TestRail is comprehensive web-based test case management software to efficiently manage, track and organize software testing efforts. Dennis can also be found on Twitter as @dgurock.
It can also help your search rankings if your product name contains relevant search terms. For example, our new product is related to software testing and having the term 'test' in the product name helped us considerably with this.
SQL Pretty Printer
I did some consulting a few months back for James Wang of SQL Pretty Printer, concentrating mainly on marketing and usability. James was kind enough to send me an update on his progress and allow me to reproduce it here:
I launched my product SQL Pretty Printer several years ago, but I wasn’t satisfied with sales. So I contacted Andy to do some consulting about my product and website.
After several rounds of questions, Andy looked at my product and website and did some research. Andy’s final report is easy to read and understand, and lists about 100 actionable points about my product and website. After that, it took me about 3-4 weeks to apply this advice with the help of Andy. 3 months later, I’m really satisfied with the result: the downloads have increased 36%, and the sales increased 25%.
So my conclusion is if you have a product, and want to sell more, Andy is the person you need to approach.
SQL Pretty Printer is a good example of focussing on a single, well-defined problem and really nailing it, allowing you to turn this:
Into this:
SQL Pretty Printer has a wide range of formatting options and comes as a standalone Windows app, Visual Studio add-in, SSMS add-in and even an API for integration into your own app. If you have to work with less than beautiful SQL I recommend you try it.
2Checkout fail
I use 2Checkout.com as a backup payment processor (useful for when PayPal reject a valid card or for people who don’t want to use PayPal). I got this email from 2Checkout a few days ago:
Dear PerfectTablePlan,
The following notes have been added to your account.
Please review this information and take corrective action, if needed by: as soon as possible.
Details: It has come to our attention that you have one or more orders that did not bill because they have not been marked as shipped in the Vendor Admin(VA). 2Checkout.com’s policy will not allow an order for tangible goods to bill if the order is not marked shipped.
We strongly suggest that you notify customers before re-authorizing a charge for any order older than 30 days to prevent unexpected charges and/or bank overdraft fees. Here is a list of your order(s) not marked shipped:
[order no snipped]
To re-authorize and mark your orders as shipped, please follow these steps:
1. Log in to your account.
2. Click on the “Shipping” Tab
3. Click on the “Marked Shipped” sub-tab
4. Choose the option for “re-authorize” and click on “Find Sales”.
5. If the orders have been shipped click on “re-authorize card”
6. If the re-authorization is successful return to the mark shipped tab and choose “Unshipped”.
7. Mark each order as shipped. You are required to enter tracking information or “tracking number not available”.
8. Orders marked shipped will bill within 48 hours.
Please contact our Customer Care Center if you need further assistance.
Thank you,
[signature removed]
Because the customer ordered a CD, 2Checkout doesn’t bill them until I manually marked the order ‘shipped’. I forgot (I have other things to do). They waited nearly 3 months to remind me that I hadn’t marked the order shipped. Then I had to go through 8 steps in their clunky control panel to mark the order as shipped. Why do I have to manually mark the order shipped when other payment processors don’t require it? Why didn’t their email include a link that took me straight to the appropriate page? Why did they wait 3 months to remind me, when 3 days would make a lot more sense? The net result is a waste of my time and (much worse) a customer who may be unhappy about being billed nearly 3 months after the expected date.
I tried to send them some feedback about this through their feedback form, but the form returned:
Fail.
Consider this post as my feedback.
Surely no amount of execution can save this idea?
Things have been a quiet here as I have been on holiday in New Zealand for the last 5 weeks. I tell you this not merely to gloat (it was lovely, by the way) but to explain how we happened to be in Hong Kong overnight looking for somewhere to eat, when my wife spotted the ad below.
That’s right. A toilet themed restaurant where “Food is served in mini toilet bowls” and the dessert looks like a, well, see for yourself. The ad was in a tourist brochure and they have a website, so it appears to really exist.
I was curious about what the real toilets in this restaurant look like. Not curious enough to eat out of a toilet bowl to find out though.
Donationware – An interview with Hillel Stoler of GetSocial
This blog is hosted on WordPress.com. This has its advantages, but it means that I can’t use the huge range of add-ins that are available to those that host their own WordPress server. In my attempts to find a simple way to add social bookmarking to WordPress posts I stumbled across GetSocial, a Windows desktop program that generates the social bookmarking icons you see at the bottom of my recent posts. GetSocial is donationware – the author requests a small donation if you find the software useful. But the software is not crippled or time limited in any way and the donation is optional. I found the software useful so I made a small donation.
I use a number of donationware products. Human nature being what it is, I rarely get round to making donations – despite the best of intentions. It just never quite makes it to the top of my ever expanding TODO list. I have also heard various tales about how dismal the donation rates are. So I was curious about how well the donationware model works in this particular case. I emailed the author of GetSocial, Hillel Stoler, and he was kind enough to do this interview.
What was the motivation behind GetSocial?
GetSocial is not a business – it’s my contribution to the WordPress.com community. I needed a way to generate social bookmarking buttons for my own blog, and when I saw none was available I made GetSocial. I decided to request donations because I too was curious about the feasibility of donationware, and wanted to investigate the subject. I hate spammy “business models” such as installing Toolbars, embedding ads and so forth and wanted to make software that I would like to use.
Does anyone actually make a donation?
Surprisingly, yes. Many people donate, and I think all of them are glad to do so.
What is the average donation?
At the beginning I was only asking for a fixed amount (5 USD). The reason for this was that a fixed donation simplifies the donation process (because the potential benefactor needs to make one less decision). I’ve selected 5 USD because it was the lowest sum of money for which the PayPal commissions amounted to less than 10% of the donation.
Recently I’ve enabled donations in different currencies and variable amounts (but only on my websites, donations made from inside the application are still fixed). I’ve seen some decline in the ratio of donations per download (although it could be explained by many factors, and cannot be directly attributed to the added complexity of the process without applying proper A/B testing methods). However, the average donation has increased to 9.19 USD, and I’ve also received donations of over 20 USD. This is interesting because 19.99 USD is enough to purchase many commercial software products. To date, no one has donated less than 5 USD.
What is the donation/download ratio?
First of all, please consider that GetSocial is upgraded frequently, and I cannot differentiate between a new download and an upgrade download. Also, I can only count downloads which originated from my own websites. That said, dividing the number of the donations by the total number of documented downloads yields a donate/download ratio of about 0.55 percent (e.g. a single donation is received on average about every 182 downloads).
Can you make any money out of donationware?
I do make some money out of GetSocial, but I’m far from making a living out of it. With the current donation/download ratio, GetSocial will only begin to become economically interesting when it hits the 500k download mark. It’s not impossible market-size wise (there are about 10 million bloggers in WordPress.com) but it’s not easy.
The amount of money one can make with donationware is directly proportional to the number of people involved. For example, in the case of GetSocial, take a million downloads, divide by 182 and multiply by 5 dollars and you have 27k USD (before PayPal commissions). This amount of money can cover the development costs for many small software products.
That said, a million is a big number, even for free software. If you’re thinking about making real money out of a donation based product, I would recommend that you research the size of your market carefully. Getting those million downloads is not an easy task.
I personally don’t think that money is the sole motivation for doing things though. When discussing profits, we should also take into account the indirect benefits I receive from GetSocial such as incoming links, a user base, visits to my website, comments, world fame (or at least some publicity), and even fan mail!
And hey, the donationware model works for Wikipedia, doesn’t it?
Why did you choose a donation model instead of selling licences?
The reason I made GetSocial was that when I started hillelstoler.com (on a WordPress.com platform), I wanted to add social bookmarking buttons for my visitors. When I realized no one was doing that (there was an old text file floating around for manual use) I decided to make GetSocial. I wanted to attract visitors to my new blog, and I knew that distributing a hyped piece of free software would help me build credibility and acquire an international audience. It did.
Why did you choose donationware over freeware?
Out of curiosity, I guess. I wanted to know if one could make any money this way, and if people actually pay when they don’t have to (especially in cases where no one is looking). Today I can clearly say that I was pleasantly surprised. I think that Donationware is a beautiful (and very user-friendly) concept, and I’m glad it’s not just another web myth. Besides, I knew that people needed GetSocial, but to be honest I didn’t really think that anyone would actually pay for such a service at the time. In the end, I think that my potential buyers are also the ones who made the effort and donated, even though they didn’t have to. I’ve actually received some donations larger than what I could possibly charge if GetSocial was a commercial product!
Another important factor in my decision was the fact that I could do it rather easily. Recall the old days, when Donationware DOS programs asked you to kindly snail-mail some cash to a P.O box? That’s the kind of thing I would never bother with, especially when we’re talking about an international market.
Do you think you have made more money through donations than you would have through selling licences?
Absolutely! When I’ve received my first donation I was surprised (so people do donate after all), and as donations kept pouring in I realized that there is a donation culture. Selling licenses also meant becoming a part-time police officer, and that’s not what I was after.
What really amazed me, is that even in this very specific niche of social bookmarking for WordPress.com blogs (where I offer an industry grade solution for free) competition still sprung!
How did you promote GetSocial?
I didn’t. I’ve posted about it on the WordPress.com forums several times, and wrote about it on my website, hillelstoler.com. Other people wrote about it too. No paid ads or anything like that. You’ll notice that I didn’t even include a link on the toolbar itself (the viral ‘Get one!’ link you see everywhere else) because it was important to me not to impose.
You now have a web version of GetSocial. How long did that take to create compared to the desktop version? How do the desktop and web version compare in terms of the amount of use and the amount of donations?
GetSocial Live (the on-line version) started as a weekend project actually. GetSocial is a Windows application, and many people wanted a Mac version. Since I don’t even own a Mac, I decided to make a cross-platform web service (currently, about 40% of GetSocial Live visitors are indeed Mac users). It was easy to make, because I copied some of the code directly from GetSocial. The images are all photos I took of the plants in my house. In the end it did mean additional costs (hosting, domain, etc), but originally it was hosted for free on (the late) Google Pages service.
Later on, I discovered that the on-line version made GetSocial much more flexible and dynamic. I can now post updates much more quickly and effectively. The web version is also much easier to upgrade and maintain because it lacks some of the internal complexity of the GetSocial application (things like self encryption).
Do you get any useful revenue from the Google ads on getsociallive.com ?
As in the case of the donations, I was curious about AdSense. I know for a fact that I never click sponsored links myself, but I guess some other people do because Google makes a living out of it. I didn’t bother with A/B testing and other cash boosters, I just added a single ribbon of ads.
So far revenue has been disappointing (this is also the place to mention that the process of getting my AdSense account approved was very annoying and arbitrary, with zero support). There were some cases where I got more than 1 dollar per click, but I currently get more money through donations than through AdSense. Interestingly, the ratio of ad clicks per page view is similar to (though a bit lower than) the ratio of donations per download.
You can find out more about GetSocial here and GetSocialLive here. Hillel’s blog is here.
Successful Software 