Tag Archives: microISV

My new ‘Start your own software business’ training course

Things have been a little quiet on this blog as I have been busy on some new projects as well as continuing to work on PerfectTablePlan. I am announcing one of those new projects today.

Start your own software business

A two day intensive training course on how to create a profitable business selling your own software product

22/23 November 2013

Swindon, England

There is a lot more to running a software business than knowing how to program. The last 8 years of running my own software business have been a huge learning experience for me. In this course I am going share as much as I can to help others succeed with their businesses. This is the course I wish had been available when I started out. I am looking forward to getting out from behind my computer and meeting aspiring software entrepreneurs.

There is a £50 discount if you book before the end of September and the course is limited to just 10 attendees. If you have ever dreamed of escaping your cubicle and becoming your own boss, what are you waiting for?

Click this link for more details

I am just beginning to publicise the course and I would really appreciate a mention on Twitter, Facebook, LinkedIn, blogs, social news sites etc.

The brutal truth about marketing your software product

badwaterWe 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.

VAT basics for software vendors

The dreaded VAT. Ugh. Value Added Tax (VAT) is the European equivalent of sales tax and it is a Royal Pain In The Arse. However, if you are running a business that makes sales in Europe you need to understand VAT. In particular it has important implications for your choice of payment processor, even if you are based outside the EU or below VAT registration thresholds. I have put together a few pointers here in the hope that it will help someone grappling with the complexities of VAT. But please note:

  • I am not an accountant. If you need proper advice, talk to a proper accountant.
  • The VAT rules are complex and may be interpreted differently by different people.
  • The rules may be different in different countries.
  • The rules change over time.

Only VAT registered businesses have to charge VAT. You have to register for VAT once your sales reach a certain threshold. At the time of writing,  UK-based businesses have to register for VAT if their EU sales exceed £77k in a 12 month period (technically it is UK sales, but the ‘place of supply’ for EU consumers is classified as the country of the seller). You can also choose to register for VAT before you reach the threshold. But it usually isn’t worth it, unless perhaps you think having a VAT number is essential for your credibility. Personally I waited until I couldn’t avoid it any longer.

Even if your business is not based in the EU, the EU still expect you to pay VAT on any sales inside the EU once you reach a threshold. This is controversial and it isn’t clear to me exactly what the EU can do to enforce this if you are based outside the EU. Talk to your accountant.

The VAT rate varies between countries. At the time of writing it is 20% in the UK and 19% in the Netherlands. It also varies over time, it used to be 17.5% in the UK.

The UK also has a simplified flat rate VAT scheme with a lower VAT rate. But you can’t claim back VAT on purchases. Worse still, it appears that you will effectively be paying VAT on sales outside the EU. So that doesn’t seem at all attractive.

The VAT rules are complex and depend on:

  • where you are based
  • where your customer is based
  • whether your customer is a business or a consumer
  • whether you are selling goods or services

Technically you do not have to charge VAT to an EU business, even if they aren’t registered for VAT. Apparently they are then responsible for “self-charging” the VAT. However the burden of proof is on you to show that the customer is a business. So most vendors require a VAT number as proof of business status.

There also seem to be disagreements over whether software is goods or services. What if you ship a CD?

Here is a simplified summary in pseudo-code of whether a seller needs to charge VAT on software as I understand it:

paysVAT()
{
    if ( seller registered for VAT)
        if ( customer in EU )
            if ( customer is a business )
                if ( customer in same country as you )
                    return TRUE;
                else
                    return FALSE;
            else
                return TRUE;
        else
            return FALSE;
    else
        return FALSE;
}

Except that people in Norway and Switzerland (which aren’t in the EU) pay VAT in some circumstances. Don’t ask me why. Also you don’t pay VAT on some items, e.g. postage. And outside the scope of VAT (O), not rated for VAT (N) and zero rated for VAT (Z) are all different VAT codes meaning no VAT is payable. As I said, it’s complicated. Not complicated and interesting like quantum mechanics or the love lives of celebrities. Just complicated.

The only upside of being registered for VAT is that you can claim back the VAT you pay on any purchases you have made (make sure you get a VAT receipt). Or, if you are buying from another EU country, you can tell them your VAT ID and they shouldn’t charge VAT (see above). So any equipment you buy in the EU is now 20% cheaper. This is small recompense for the giving 20% of your sales in the EU to the VAT man. Try not to think about that. Instead give yourself a pat on the back for having reached the VAT threshold. A lot of businesses never do.

Note that when you register for VAT you may be able to claim back the VAT of products purchased before you registered. When I registered I could claim back VAT paid on goods purchased within the last 3 years and services purchases within the last 6 months. So keep your VAT receipts.

Congratulations on making it this far. Here is the important bit. How you process payments has important implications for VAT. When someone pays you via a payment processor, such as PayPal, legally they are buying from you and the payment processor is just handling the payment on your behalf (like a bank cashing a cheque). So you are responsible for collecting what VAT is due and paying it to the appropriate government. This can be a major headache if you are selling hundreds or thousands of licences per month.

When you use a reseller, such as Avangate or Fastspring, legally you are selling your licence to the reseller and the reseller is then reselling it to the customer. The reseller is then responsible for deciding what VAT is due, collecting the VAT and doing the paperwork. They then pay you net of the VAT and their commission. Leaving you to sort out the VAT for their one payment to you per month.

Using a reseller is a big win if you are registered for VAT. I am registered for VAT and use Avangate as my payment processor. They do the heavy lifting in terms of calculating, collecting and paying the VAT on my sales. But if you aren’t registered for VAT be wary of using a VAT registered reseller – approximately 20% of your sales will be disappearing in VAT (which the VAT registered reseller has to charge) which you could be keeping if the customer bought from you direct. So if you aren’t registered for VAT, a reseller such as Avangate or Fastspring may not be the best solution for you. Check out e-junkie.

VAT admin is fairly straightforward. To keep the VAT man happy I have to file:

  • an EC sales list every month
  • a VAT return every quarter

My Quickbooks accounting package generates the numbers for these. It only takes a few minutes to file reports online once all the transactions and VAT codes are entered correctly into QuickBooks. The VAT man then debits (or credits) the appropriate amount from my business account each quarter. It is not too bad, as long as I don’t think about the wheelbarrow loads of cash Avangate keeps to pay the VAT man. Maybe they roll around naked in it on the last day of every quarter. I probably would.

When I first registered for VAT I tried adding the VAT onto my existing prices. But I found that sales dropped more than 20%. So I ended up keeping the gross price (including VAT) the same, whether the customer pays VAT or not (Avangate gives you this option). Whatever you do, make sure it is clear whether any prices you quote include VAT. EU consumer expect to be quoted prices inclusive of VAT and won’t appreciate it if you try to sneak on an extra 20% at the end of the purchase process. You may be legally required to quote the price including VAT in some countries.

A final note of warning. The VAT man has a lot of powers. I understand the UK VAT man can kick your door in and seize your equipment without needing even a warrant. He might not be impressed to find out that the computer you reclaimed the VAT for is an XBox. Do not mess with the VAT man.

If I have made any mistakes, missed anything out or if the rules are substantially different in your country, please add a comment.

** Please note that this article was written in 2012. It doesn’t cover changes since then, notably ‘VAT MOSS’. **

Thanks to Marcus Tettmar of Macro Scheduler automation software for checking this through and advising me on some of the finer points.

33 tips for giving great technical support at a small software company without being swamped

To have the best chance of success you need a great product, great marketing and great support. Many companies with great products and marketing fall down on the support.

Good support is essential to a good user experience. Any non-trivial piece of software is going to result in questions that need to be answered and issues that need to be resolved. But supporting customers is often seen as an onerous chore. An overhead. Something to be done by those not talented enough to be developers.  This is a very unfortunate attitude. But it also an opportunity, as software companies that provide great support can really stand out from their competitors. The lower they set the bar, the more opportunity you have to shine.

The fact that the support staff and the developers are often the same people in a small company is a real strength. Because the developer knows the product better than anyone else, they can give better answers. Also, the direct feedback developers get from customers can be very helpful in further improving the product. This means that a small company can often provide much better support than a large company that has multiple layers of support between the customer and the developer. The downside is that the more time developers spend on support, the less time they can spend doing development. Eventually you may reach a level of sales where you are spending nearly all your time doing support, with very little left for the development and marketing required to grow the business. The challenge is to provide great support without being swamped by support work.

I have been supporting my own wedding table plan software since it was first released in 2005. I have managed to grow my sales for 7 consecutive years without being overwhelmed by support. In fact technical support emails have stayed at roughly 40 per week for the last few years despite increasing sales. Before that I had never really done much technical support, so it has been a learning experience. Here are some of the things I have learnt along the way.

Manage customer expectations

Make the level of support clear to the customer:

  • Is it free or does it have to be paid for?
  • Is it email only or is telephone support also available?
  • What sort of response time can they expect?
  • What languages do you provide support in – just English?

I don’t provide technical support by telephone or instant messaging, because it is too disruptive to me as a one-man-band.

Manage your own expectations

Your software is a means to an end for the customer. Very few customers will read the documentation you spent all those hours writing if they can possibly avoid it. Some of them won’t even read to the end of a 1 sentence error message (really). Some of your customers will be ‘technically’ challenged (often without even realizing). Sometimes the problem exists between keyboard and chair. Get used to it, because human nature isn’t going to change any time soon.

Make it easy for the customer to contact you

Don’t hide your support email address. Allow the customer to email you from the software itself. This also gives you the opportunity to add some useful information to the email (the software version, their OS, whether they have a licence etc).

Be responsive

Generally speaking, the faster you respond, the better. When I send an email to support I expect to get a response by the same time on the next working day and hopefully within a few hours. I try to answer my support emails at least twice a day, 364 days a year. I do this because I want to give a great service, but it also means I don’t come in to a massive pile of support emails every Monday morning. It means taking a laptop with me whenever I am away for a night. But I find it isn’t a huge chore to spend an hour a day answering support emails on holiday. Especially when I remember that the business is paying for the holiday!

But not too responsive

The downside of being very responsive is that it makes some customers lazy. If they know they will get a response within a few hours they may email you about things they could easily look up themselves. The best response to this is ‘throttling’ (NB/ I don’t mean strangling) – when you notice that a customer is being lazy, take longer and longer to respond to each email. Eventually they will take the hint.

If you are trying to look like a bigger company than you are, then you probably don’t want to answer support emails outside of normal work hours.

Respond as clearly as possible

  • Quote the customers email in your reply where appropriate for context.
  • Number step-by-step instructions.
  • Use quotes to refer to elements in your software, e.g. select ‘Help’>’About’ from the main menu.
  • Write in short paragraphs, not big chunks of text.
  • Avoid technical jargon unless you are sure that your customer will understand. For example, say “window” rather than “modal dialog”.
  • Use proper grammar and check the spelling.
  • Avoid long email signatures.

Use images and videos

It is often helpful to include an annotated image with your response. For example you can do a screenshot, highlight important items in the screenshot and then email this as an attachment, along with some text. I find the screen capture tool SnagIt is excellent for doing this (available for both Windows and Mac). In some cases it may also be worth doing a short screencast, uploading it and then sending the customer a link (SnagIt can also do this).

Restate unclear questions

Support questions can be very vague. I have even had people email me just “It doesn’t work” – it wasn’t even clear whether they were referring to the website, the installer or the software. It often takes a few emails to understand what the problem is. If you aren’t 100% sure what they mean, make your best guess at what they are trying to say and restate it in your own words followed by “Did I understand correctly?”. Ask them if there are any error messages. Ask them to send you a screenshot (include a link to instructions on how to do this).

Finish an email exchange

If the customer started the exchange, you should generally finish it (i.e. send the last email). But it is probably not worth responding to an email that is just a 1-line thank you.

Pick up the phone when required

Even if you don’t officially offer telephone support, it sometimes can sometimes save a lot of time and aggravation on both sides if you pick up the phone and talk to the customer.

Put your documentation online

If you have your documentation online you can easily include links to relevant pages in your documentation in your email. This might also encourage the customer to look in the documentation first next time. But don’t just send a link. Answer their question in the email and then include the link as supplemental information.

Help the customers to help themselves

The beauty of a software product business is scalability. In theory, you only need to create your product once and then you can sell it to as many people as you can convince to buy it with negligible marginal cost. In theory. In reality, while a software product business is inherently much more scalable than a consulting business, the marginal cost per sale is not negligible. Far from it. Customers need support.  Here are some of the way you can reduce the support cost per customer:

  • improve the user interface and documentation, based on customer feedback
  • add an FAQ
  • allow customers to retrieve their licence key direct from your website (emailed to the registered email address, for obvious reasons)
  • encourage customers to look at documentation, FAQs, forums etc before emailing you (below is the window I show when customers select Help>Technical support in PerfectTablePlan).

Note that it has been shown experimentally that the more text you show someone, the lower the percentage of it they read. So it is generally more productive to concentrate on simplifying the user interface, rather than writing more documentation.

Of course, you can also reduce support requests by making it difficult for the customer to contact you (the Amazon model). But this leads to less feedback and a worse user experience, so I wouldn’t recommend it.

Allow customers to help each other

If you have a sizeable user base you can set-up a forum to encourage users to help each other. This can have various benefits:

  • customers may be able to get answers straight-away by searching existing content on the forum
  • customers may answer some questions for you
  • customers may respond faster than you can
  • it increases your SEO footprint

But it also has its drawbacks:

  • nothing looks sadder than a deserted forum
  • a forum has to be actively moderated or it will end up reflecting badly on your company
  • spam can be a problem

Automatically report crashes

It is often possible to detect that the software is going to crash or has crashed and send yourself some diagnostic information. This allows you to monitor how stable the software is and gives you some clues for debugging. For example, on Windows you can use the Win32 API method SetUnhandledExceptionFilter() to detect when things have gone horribly wrong. Don’t send it without their permission though. Give them the option to see the information you are going to send and then allow them to send it with a single button click.

Remember that every computer is different

There is a rumour that there are 2 identically configured PCs somewhere in Nebraska. But I don’t believe it. The customer may have configured their OS with all sorts of strange options you have never heard of. Anti-virus software, malware, DLL hell and hardware issues can cause problems. A cosmic ray might have even passed through their RAM! So I generally don’t spend too much time on a bug report unless either I can replicate it myself or 2 separate people have reported it.

Be proactive

I actively seek feedback from my customers. It increases the support burden somewhat, but I think this is more than compensated for by increased customer satisfaction and improved feedback.

Make use of feedback

I think all developers should spend at least some time supporting the products they developed. A few days every now and then in the support trenches answering customer emails and phone calls would give developers a better appreciation of how customers think and of the real costs of that cool feature shoe-horned into the release a week before the ship date.

Look at every support request as a possible way to improve your product. The first time you get a support request you answer it. The second time you get the same request you need to start thinking about how you can improve the product so that question doesn’t get asked a third time. By continually improving your product in this way you can greatly reduce the average amount of support time required per customer over time. Obviously you need to make it easy for customers to contact you to make this work.

Don’t take things personally

No matter how hard you try some people are not going to like your software. I once got so angry with Microsoft Project that I nearly threw a monitor out of a window. An angry customer might send you an angry email. Try not to take the criticism personally (link note: funny, but sweary). Maybe the customer is having a bad day. Perhaps they just don’t have any manners. As long as they remain a small minority, try not to lose any sleep over it. On the plus side – at least they cared! And it is often possible to turn a passionately angry customer into a passionate advocate for the product. Indifference is much harder to convert into a sale.

Don’t shoot the messenger

If someone reports what they think is a bug, you should thank them, rather than taking it as an insult to your programming skills. Experience shows me that most people who encounter a bug won’t bother to report it. If you have ever tried reporting a problem to a big company like Microsoft, you will understand why. An unreported bug can result in a lot of unhappy customers and lost sales. Customers who report bugs are a precious resource and should be treated accordingly.

Tell a customer when you have fixed their bug

Whenever a customer reports a bug  I record their email address along with the bug report. When it is fixed I then email them. This encourages them to report other bugs they find in future. Similarly for feature requests.

Give credit where credit is due

When I list bugs fixed in a release I also give the names of the customers who reported the bugs (first name + initial of last name). If a customer has been particularly helpful, e.g. putting significant effort into helping me find a bug, I may also list them in the software ‘credits’ window. It doesn’t cost me anything and it encourages these customers to feel more ownership of the product and report more bugs.

Google translate is your friend

I only officially provide support in English. But if someone emails me in another language I will use Google translate to read their email and reply in English, including a translation of my reply from Google translate. The quality of the translation may not be great, but it is probably good enough.

Use the right tone

Being professional doesn’t have to mean cold and impersonal. Try to sound like a real person, rather than a robot. Include your name in your signature. I address people by their first name (where known) and I’m not above including a smiley, where I think it is appropriate. Different markets and cultures may demand different levels of formality. Usually you can take your cue from how formal the customer is. Above all, try not to blame your customer or make them feel stupid.

Only support your own product

It isn’t your job to teach your customer how to use a computer. Try to steer clear of providing support that isn’t directly related to your own product. Otherwise you might find you end up as their general IT helpdesk.

Get the price right

If you are swamped in support emails, consider raising your price. Depending on the price elasticity of your product, you may be  able to generate the same or more revenue with less customers and therefore (hopefully) less support emails.

Firing a customer is the final resort

Sometimes a customer will buy your product when they really shouldn’t have, either because it is the wrong tool for the job or because they don’t have the skills required to use it. They will then bombard you with email after email. In such cases it may be best to refund them. Allow them to keep using the software, but tell them that you won’t be able to provide any further support. Something along the lines of “It appears that our software is not a good fit for your requirements. We have therefore refunded your purchase in full. Please feel free to keep using the software, but please note that we won’t be able to provide further technical support.”. This is the nuclear option. I have only had to resort to it a handful of times in 7 years.

Don’t tolerate abusive customers

The customer is not always right. Buying your product does not give them a right to be abusive, no matter how much they paid. Politely and professionally fire them if they can’t behave like a decent human being.

Never send an email in anger

People can sometimes be unreasonable, even downright rude, especially when they are safely at the other end of an Internet connection. But never, under any circumstances, respond with a rude or sarcastic email. Your email might be posted onto forums for all the world to see, forever more, devoid of its original context. Not good. Also, sending a rude response is only going to pour petrol on the fire. Always keep your emails polite and professional. If you find yourself getting angry, go and do something else for a while, until you can send a calm reply. If you can’t reply professionally, don’t reply at all.

Use the right tools

You don’t need a lot of tools to provide good support. I mainly use:

  • an email client (Thunderbird)
  • a bug/feature request tracking database (OnTime)
  • a screen capture tool (SnagIt)
  • a phrase expander for quickly typing common phrases (PhraseExpander)
  • a database of licence keys (home rolled)
  • VM software for emulating different operating systems (WMWare Workstation)

As I am the only one doing support I find that it is sufficient for me to use my Thunderbird email client to check previous correspondence (search by email address), track status (using different coloured tags for: awaiting their response, follow-up later etc) and enforce a simple workflow (move to different folders). If you have multiple people doing support you may also need helpdesk software (such as Helpspot) and/or a ticketing system.

You can use remote access software such as CoPilot to remotely log in to a customers computer. But I try to avoid this where possible, as it is time consuming and also the customer might blame me for any problem they have with their computer afterwards (e.g. a virus infection).

Think twice before outsourcing support

It is cheap to outsource your support to e-workers in developing countries. But they won’t know or care about your product as much as you do. And moving yourself further away from the customer reduces that all important feedback that you need to keep improving the product.

Time new releases carefully

You are going to get the most support emails after you put out a new release. So try to avoid putting out a new release just before you go on holiday.

Have the right attitude

While it can be frustrating to provide support to someone less technically minded than yourself, remember that not everyone is a computer geek and these people are paying your salary.

Remember the golden rule

The basic rule of technical support is to treat your customers how you would wish to be treated. If you bear that in mind, you shouldn’t go far wrong.

Further reading:

If You Want to Write Useful Software, You Have to Do Tech Support (Nick Bradbury)

Did I miss anything? What have been your experiences supporting your software? What surprised you?

The microISV test

Ok, so you’ve set yourself up as a one man software company and you’ve made some sales. But are you a real microISV/micropreneur/indie/startup? Take the test below and find out.

  1. You checked the number of sales you made overnight before you had your breakfast this morning.
  2. You measure the price of desirable objects (cars, houses, Xboxes) in terms of the number of licences you need to sell.
  3. You’ve outsourced some work to someone with no idea what they look like and only a vague idea where they live.
  4. When booking a hotel you are more interested in how good the Internet connection is than how good the restaurant is.
  5. Your product has at least 20 five star awards from download sites.
  6. You know what CTR, CPC and CPM mean.
  7. You have begged all your friends and family to ‘like’ your product’s Facebook page.
  8. You set up your computer or phone so it makes a special noise each time you get a sale.
  9. Your software has been cracked at least once.
  10. You have suggested to a particularly problematic customer that one of your competitors might have a more suitable product.
  11. You’ve done technical support while wearing a dressing gown/bathrobe (or less).
  12. You have Google alerts and Twitter searches set up for your product name.
  13. You start to get anxious after not checking your email for more than half a day.
  14. The last time you set an alarm clock it was because you were going on holiday and didn’t want to miss the flight.
  15. Your relatives think you don’t have a ‘real job’.
  16. You own at least 10 domain names.
  17. You have had to fix problems with your software or website while on holiday.
  18. You have had a least one chargeback.
  19. Your software has been flagged as malware by at least one anti-virus package.
  20. You use at least 3 different email addresses in the course of a day.
  21. You have explained what you do to someone and they said “And you make a living from that???”.
  22. You have used Google translate to answer a support email in a language you don’t understand.
  23. You use “we” when talking about your company, even though its really only you.
  24. Someone told you a half-baked idea they had in the shower that morning and said they would be willing to give you 50% of the profit if you did 100% of the work to  implement it.
  25. The last time you wore a suit and tie was to a wedding or a funeral.

I scored 25/25, of course (it’s my test). How did you do? Are there any other questions I should have added? Let me know in the comments.

Thanks to fellow microISVs Steph, Oliver, Terrell, Clay and Ian for suggesting some of the above.

A curated list of 200 articles for microISVs and startups

I have been steadily adding to the curated list of links on this site. Currently there are links to 200 articles, loosely categorized into topics such as ecommerce, market research, product naming, Pay Per Click and SEO. I have tried to select articles that contain ‘actionable’ information, rather than wafflely articles about ill-defined subjects such as time management and motivation. Some of the articles linked to were written by me, but the majority weren’t. I hope you find something useful. I would be surprised if you don’t.

Go to the links page

Success is always one feature away

In my consulting and various other dealings with aspiring microISVs, I notice certain recurring patterns. One of the most common is the belief that it is just one missing feature that is holding back a product from the commercial success it deserves. As soon as that feature is coded the sales are going to come pouring in! When they don’t, then maybe it was that other missing feature that our competitor has. It is a horizon that keeps receding until you run out of money or enthusiasm. But, in my experience, poor sales are almost always due to insufficient marketing. A fact that is borne out by these 13 case studies. It doesn’t matter how great your software is if no-one know about it, or if you can’t persuade them to try it when they do find out about it.

It isn’t surprising that microISVs fixate on features. MicroISVs tend to come from a programming background and learn marketing  on the job (I have yet to meet a microISV who started off in marketing and taught themself programming). Features and coding are what we like to do best and it feels like ‘real work’. But all too often the warm embrace of an IDE is just an excuse to stay in our comfort zone. Of course, features are important. No features = no product. But, if you have got low traffic to your website and/or you are doing a lousy job of communicating with people that arrive at your site, then adding more features really isn’t going to help much. If you are in a hole, stop digging. Successful marketing is about being different from your competitors. You can even make a virtue of your lack of features. If you are competing against more feature-rich competitors, then emphasize the simplicity and ease-of-use of your product instead. It certainly seems to work for 37Signals.

Marketing can seem like a very alien discipline for someone from a programming background. But you can learn it like any other skill. There is loads of great information out there, for example Eric Sink’s marketing for geeks. Also, some elements of online marketing are actually quite technical with plenty of opportunites for number crunching. Analytics, A/B testing and Adwords will give you more data than you know what to do with. This can give programmers a considerable advantage over people from a more traditional marketing background, many of whom don’t seem to be able to handle anything more complicated than a 2×2 matrix. You don’t have to be a marketing genius, you just need to be better than your competitors (in the same way that you don’t need to be able to run faster than a lion to survive a lion attack, you just need to be able to run faster than the next guy). Given that your competitors are likely to be other programmers (who are probably also not doing enough marketing) or people from a marketing background (who don’t really understand software and are probably more interested in long lunches) that may not be as hard as you think.

ESWC 2011 registration is now open

Registration is now open for the European Software Conference 2011. It is on 19th-20th November in London, with informal drinks the evening before. This is the top European event for microISVs and other small software businesses. It is always good to meet up with other microISVs and London is a great city to visit, even if only to remind yourself how glad you are you don’t live in a big city. The early bird rates are just 55 Euros (with no meals) and 155 Euros (including 2 networking dinners). The schedule is still being fleshed out. I will be doing a talk, provisionally titled “Promoting your software”. Watch this space for more details. There are still some spare speaking slots. It would be nice to see some new faces doing talks, so why not volunteer?

Sadly there might not be a Software Industry Conference this year. But if you are based in the USA you might want to consider MicroConf 2011 in Vegas 6th-7th June. There is also Business of Software 2011 in Boston 24th-26th October, but I think this is aimed more at larger software companies (or those that want to be larger software companies).

Is it possible to run a successful software business with a 4 hour work week?

Tim Ferriss’ ‘Four Hour Work Week’ is a thought provoking, but controversial, book. One of the central ideas he promotes is that you should be able to use outsourcing to create a money making business (‘muse’) that you can run in only a few hours per week. Leaving you with enough free time and income to travel the world, learn to tango or otherwise amuse yourself. But I am highly sceptical that anyone can sustain, let alone grow, a software business long term, working only 4 hours per week. I have run my own business working less than 10 hours week for a month or two at a time while travelling or doing house renovations. But it only gave me enough time to keep things ticking over. I wasn’t able to improve my product or marketing. I am sure my business would decline in the face of technological changes and hungrier competitors if I kept this up for too long. I have spoken to other owners of small software businesses and they were of a similar opinion.

So I was interested to see a case study on the Four Hour Work Week blog from someone running a software business. Brandon Pearce owns musicsteachershelper.com, a slick-looking web based app for music teachers.

He says that after 5 years he is making $25k in sales per month with $10-12k in expenses per month[1] and no employees[2]. So that is a net profit of around $168k per year. That’s not too shabby, especially when you consider that he lives in Costa Rica and says he works just 5 hours per week. That’s nearly $650 per hour!

But he doesn’t say how many hours per week he worked to build the business. He also says in the case study:

With a complex web application, you can’t write it once and be done; you need to continue making enhancements and listen to user feedback in order to have a successful product.

I couldn’t see how this squared with working only 5 hours per week. Even if you are outsourcing everything you still need to manage the outsourcing, which can be time consuming in itself. I emailed him for some clarification and he was kind enough to give some more details:

It’s hard to give an average time worked over the past five years, since it’s changed so much. The first two years I was also working full-time as a programmer, but spent most of my free time working on the site – probably 10-20 hours per week. Once I quit my job (years 3-4) I worked probably 40 hours per week on the site. The past year or two, it varies from week to week. Some weeks I’ll only work 2 hours on it, some I’ll work more like 15, if I’m preparing for a new feature, special offer, or doing a big launch of some kind. But these days I’m averaging about 5 hours per week, and it’s been that way for well over a year.

Yes, I can definitely sustain and improve profit levels at this number of hours. The business is a well-oiled machine, and I have teams that are working to help continue to improve and grow the business in various ways, largely without my constant supervision. The business continues to grow every month, regardless of how much I work.

What do I spend these 5 hours doing? Mainly reviewing the new features or bug fixes the programmers have been working on, the requests from customers that the support team has submitted, and determining which items I want the programmers working on next. I also spend a little time handling some of the more difficult support or billing issues, paying my workers, managing a few PPC campaigns, answering e-mails, and checking stats. Recently, I’ve also been writing the scripts for some new video tutorials, and finding people to help produce the videos, too.

So, pretty much everything I do at this point could also be outsourced, allowing me to work even less, but at this point, I still enjoy this work, and it allows me to keep some important aspect of control on the business. Some day I may decide to work even less, but I’m pretty happy with 5 hours at the moment. :)

So, unsurprisingly, it took a lot more than 5 hours per week to reach this point. And only time will tell whether he can continue to maintain (let alone grow) this business with such minimal input. It will be an impressive achievement if he can. But I think Brandon is the exception rather than the rule. Perhaps he is particularly talented or lucky. Very few of the successful software business owners I know work short hours for extended periods. Also I have no way to verify Brandon’s numbers. So I would recommend viewing Brandon’s case study as something to aspire to, rather than a likely outcome.

Brandon has a blog and is writing a book about his experiences creating MusicTeachersHelper.com “in the hopes that it will help others who want to do something similar”. It should be an interesting read. Given all the spare time he has it shouldn’t take him long to finish it!

Further reading:

http://brandonpearce.com/2009/02/i-lived-a-4-hour-work-week/

http://brandonpearce.com/2009/04/how-i-spend-my-time/

[1] He mentions the expenses in the comments.

[2] He does use several contractors, some of whom work full time.

Does the world *really* need yet another Twitter client, RSS reader, ToDo list or backup application?

My heart sinks every time I hear a would-be-entrepreneur announcing they have written yet another Twitter client, RSS reader, ToDo list or backup application. Haven’t we got enough of those already? There are more than 1,900 Twitter apps already (possibly a lot more). Somebody probably released another one while I was writing this post. We have passed the Twitter app event horizon, where it is probably quicker to write your own custom app than it is to try and work out if any of the existing apps fulfils your requirements.

Even if you have done something radically new, interesting and different in one of these markets, how are you ever going to get noticed amongst thousands of more established competitors? Wouldn’t it be better to find a market that is currently under-served by software? It may be less fashionable than writing software for other techies, but it will probably contribute more to the sum of human happiness and be a lot more profitable.

There must be thousands of niches where there is a real need for software, but limited competition. You just need to open your eyes to the bigger world around you. It may mean having to learn about an unfamiliar domain. But it is generally much easier for a software developer to learn some domain knowledge about, say, butterfly collecting, than it is for the average butterfly collector to learn to create a software product. Next time you are talking to a non-techie about their job or hobbies, just ask them “Do you use software for that?” and “Is it any good?”. The ideal answers you are looking for are “Yes” (if there are existing software packages, there is probably a market) and “No” (maybe you can do better).