I am organizing a regular meetup in Swindon (UK) for people who are running (or are interested in running) their own bootstrapped (i.e. not VC funded) software product business. Come along and talk shop with other aspiring and experienced bootstrappers. It doesn’t matter if you are developing for web, Windows, Mac or mobile.
The first meetup is on the evening of Tuesday 16th June 2015. You can find out more and RSVP at meetup.com/South-West-Bootstrappers/.
It’s rare that I chat to other software developers without someone asking me when I am going to do a web version of my seating planner software. Because the market for desktop is dead, right? SAAS apps is where all the action is!
I think the web is a great platform for some products, not so much for others. Let’s look at the advantages of web apps over desktop apps.
Web advantage 1: No installation
You can access a web app from any device that has a browser. No need to install. There is no doubt this is a major convenience. However most desktop utilities can be downloaded and installed in 1-2 minutes with a decent broadband connection. Also you don’t have to keep logging in to most desktop apps, once they are installed.
Web advantage 2: No upgrades
End-users are always using the latest version. This is definitely an advantage for technical support. But it does take away some choice from the user. Perhaps they weren’t ready to upgrade or preferred the old version?
Web advantage 3: Better user insights
You can analyse how users are using your software. This allows you to improve usability and send out tailored lifecycle emails. It is possible to gather similar information for desktop software, but it involves a lot of extra work.
Web advantage 4: Distributed architecture
If you are writing web apps, you get a distributed architecture for free. No need to do socket programming.
Web advantage 5: Less piracy
Cracks and keygens are a fact of life for desktop software vendors. It is easier to protect against piracy with a web app.
Web advantage 6: Cross platform
In theory web apps are cross-platform. Write them once and they can run on any device with a browser. But browser compatibility issues mean it isn’t that easy in practice, especially if you are still forced to support the dreaded IE6. Also there are solutions (such as Qt) that allow you to deploy to multiple desktop devices from a single code base.
Web advantage 7: Subscriptions
Web apps lend themselves to subscription based payment. This is great because you get a more predictable monthly income and potentially get more money from each customer over the lifetime of the product.
So what about the advantages of desktop apps over web apps?
Desktop advantage 1: Responsiveness
Native apps are more responsive than web apps, partly due to lower level access to the machine and partly due to not having to talk to a remote server. However this advantage is eroding as bandwidth and JavaScript performance improves and more work is carried out by the client in web apps (e.g. using Ajax).
Desktop advantage 2: Reduced hosting costs
The costs of hosting a website for a desktop app is minimal. Typically you just need to serve a few pages and a download file to each visitor. They then won’t need to come back until there is an upgrade. But hosting costs can be significant for a web app, particularly if the app requires large amounts of bandwidth or compute power.
Desktop advantage 3: Better access to hardware
Desktop apps can make better use of the hardware available. For example, you can generally do printing a lot better from a desktop app.
Desktop advantage 4: Better development tools
The old joke is that JavaScript is to Java as the Taj Mahal curry restaurant is to the Taj Mahal. As a C++ developer I am used to working with a fully fledged IDE, debugger, profiler, static analyser and runtime coverage analyser. I tried some JavaScript development recently. Ugh. The development tools seemed very primitive andĀ JavaScript is a language so hideous that surely even it’s mother couldn’t love it. No classes, no strong typing, no templates and broken scoping. However frameworks such as jQuery have made JavaScript much more accessible over recent years.
Desktop advantage 5: Psychological
Many people feel that anything web-based should be free. Psychologically customers seem more ready to pay for desktop software. Perhaps they feel a greater sense of ownership. This perception is gradually changing for B2B, but I think it is still prevalent for B2C.
Desktop advantage 6: Privacy
Many customers don’t feel confident storing important and confidential information on third-party servers.
Desktop advantage 7: Availability
You can’t use a web app unless the server is up and you have an Internet connection. A desktop app installed on your local machine is always available. You can continue to use it, even if the vendor goes out of business.
Desktop advantage 8: Up-front payment
Desktop apps lend themselves to a single, up-front payment. This is great because you get all the money straight away, improving your cash flow.
So I have come up with similar number of advantages for web apps and for desktop apps. Which is better? It depends, of course. For my particular application, I think a desktop app still has significant advantages:
But other products are a better fit for the web. If I was writing a collaborative CRUD app, I would almost certainly do it as a web app. I have recently been working on a couple of new products. One is a web app and the other is a desktop app. Horses for courses.
A lot of the money I have spent on software over the last few years has been for desktop software. When I had to choose bookkeeping software, I chose a desktop package because I didn’t want to:
If I look through the list of useful tools and services on this site I see that 51 of them are web-based and 35 are desktop based. Peldi of Balsamiq reported in 2009 that 77% of their revenue comes from the desktop versions of their software. I asked him if that had changed much and he was kind enough to send me the following graph (myBalsamiq is the web version). You can see that it is still nearly 70% 4 years later.
The line between desktop and web apps is also becoming more blurred. Many desktop apps now use web protocols and embed web browsers. For example, the Qt toolkit allows you to easily create applications that are hybrids of desktop and web. It is also possible to sell a web app that companies host on their own servers. This adds some of the advantages and disadvantages of a desktop app compared to a web app installed on the vendor’s server (SAAS). Perhaps desktop and web apps will converge to the point where there the whole desktop vs web debate becomes meaningless.
So I think reports of the death of desktop software have been greatly exaggerated. There is no doubt that long-term trends ( e.g. increasing bandwidth and attitude to paying for web apps, for B2B at least) have been changing the balance in favour of web apps for some types of product. Particular those where collaboration is more important than graphics or computer power. But I think there will continue to be plenty of markets where a desktop app is a better choice than a web app for the foreseeable future. In the final analysis, customers care a lot more about how well your software solves their problem, than how it happens to be deployed (if they even understand the difference).
Some of the most useful nuggets of information I come across in blogs and podcasts are mentions of tools and services used by other people to better run their software businesses. So I have put together my own list of useful tools and services to run a software business.
Feel free to recommend your own favourites in the comments below. Please include your relationship to the tool/service (e.g. customer, user, employee or owner). You can also comment below about your experiences (positive or negative) with any of the tools and services listed. Anonymous comments will be treated with suspicion and may be deleted
I am looking to outsource some self-contained programming tasks in areas that I don’t have expertise in. I am hoping that someone reading this blog might be able to help (or know someone that can) so I don’t have to go through outsourcing sites. These are the two skills sets I am currently looking for:
Details:
If you are interested in doing either of these tasks please email me ( andy at oryxdigital.com ) before the end of Friday 26th August with subject “programming work” and a brief outline of:
I will send detailed specs to a shortlist of the best candidates. The work will be awarded on the basis of fixed price bids against the spec. Please don’t apply unless you have relevant experience – if I wanted a programmer without experience in these areas I could do it myself. ;0)
I have just launched at new website at eventcountdown.com.Ā This website contains free countdown clocks,Ā for both Windows and web, to allow you to count down the days, hours, minutes and seconds to any event. It can be a wedding, a birthday or a major cultural or sporting event. Are your children wondering how many days, hours, minutes and seconds it is to Christmas ? Wonder no more! You can also use it to count up from an event e.g. giving up smoking or Perl.
web countdown clock for Mac, iPad, iPhone and Android
The hope is that a significant number of people interested in planning events will go to evencountdown.com for a free clock and a small percentage will click through to PerfectTablePlan.com and buy my software. I have no idea how successful this will be. I certainly don’t expect a quick payback on the investment. But hopefully it will pay for itself in a few years, and then anything after that is pure profit.
This project has also been a small scale experiment in outsourcing that might lead on to greater things.
They all did a great job and the total cost was less than I would have paid for a couple of ads in event industry newsletters (which I tried recently, with fairly miserable results).
I have quite a few ideas about how I can improve eventcountdown.com, but I wanted to get something out there ASAP. After all if you aren’t embarassed by v1.0 you didn’t release it early enough. I would be interested to hear any feedback. Backlinks to eventcountdown.com would also be very welcome. ;0)
Bob Walsh has followed up his excellent MicroISV: From Vision to Reality book with The Web Startup Success Guide. While the first book is aimed squarely at at developers of desktop software, the second is aimed more at web-based start-ups. I have to confess, I haven’t had time to read my review copy of the accompanying e-book yet (I’m moving house, moving office and putting out a major new software release). But I see from the contents it includes chapters on:
And interviews with
If it is anything like as good as Bob’s MicroISV book, it will be worth a read by anyone doing (or thinking of doing) a web-based start-up. It is currently $19.79 on Amazon.com. You can also buy the e-book from Apress. Here are some reviews from people that have actually read it:
OverviewAn anonymous survey of software vendors shows that the average sale to visit ratio is very close to the much quoted “industry average” of 1%. However the data shows large variations between products and across different sectors (e.g. Windows vs Mac OS X).
The data set comprises 92 valid survey responses to an 8 question survey in April 2009. The survey was advertised through a request on this blog, posts onĀ BOS, ASP, MACSB, OISV and BOSnetwork forums and emails to the author’s contacts. The results are inevitably biased towards small software vendors, due to the places where the survey was advertised. As the survey was anonymous it is impossible to verify the accuracy of the data. However it is unlikely that many vendors would have completed a survey that wasn’t anonymous.
The survey consisted of 3 compulsory questions (unique visits, downloads and sales over a given timeframe) and 5 optional questions (the time frame of the data, primary market, primary OS, licence price and trial type). One record had 0 visits (an iPod app), another had 0 downloads (presumably a web app) and a few had numbers that I didn’t consider statistically valid for some purposes (e.g. <500 visits per month or <3 sales transactions per month).Ā I did the best I could with the data available, ignoring obvious outliers in some cases.
The data set comprises a total of:
Where a time frame for the results was given it is possible to work out the range of visitors, downloads and sales per month.
Interestingly the distribution of monthly visits, downloads and sales across the different products all follow the Pareto 80:20 power law quite closely:
This gives me some faith that the data is reasonably accurate and representative of the industry as a whole.
The data is broken down by OS, market, price and trial type as follows:
The average (mean) ratio of downloads:visits across all products is 28%. 50% of products are in the range 12.1% to 35.3%.
I am surprised at how high the average ratio is. This could partly be due to products that receive a high percentage of downloads from download sites, without the downloader ever visiting the product site. Conversely sites where visitors make frequent returns after purchase (e.g. to read forums) will have a lower downloads:visits ratio.
The average ratio of sales:downloads across all products is 4.5%. 50% of products are in the range 1.3% to 6.4%.
The average sales:downloads ratio is noticeably lower than the average downloads:visits ratio. The sales:downloads ratio is noticeably skewed on the right of the graph – a sales:downloads ratio >20% seems very high.
The (logarithmic) scatter plots below show that the downloads:sales ratio varies a lot more than visits:downloads ratio.
The average (mean) sales:visits ratio of all products is 1.16%[1]. However one of the product ratios is an obvious outlier at 13.94% (see below). With this outlier removed the average sales:visits conversion ratio across all the products is 0.99%. 50% of products are in the range 0.28% to 1.39%.
0.99% is suspiciously close to the mythical ‘industry average’ of 1%. But I haven’t (consciously) massaged the results to get this figure.
You can work out how you compare to this data set using the red (cumulative) graph in the histogram below. For example, if your product sales:visits ratio is 1.5%, then it is higher than approximately 80% of the products in the data set.
We can also look at how the ratios vary across sectors. Surprisingly the average Mac product conversion ratio is more than 4 times the Windows product conversion ratio.
Even if we try to compare like for like, and only compare consumer products selling for <= $50, the ratios are still 2.27% for Mac and 0.51% for Windows. Possible reasons for this large disparity include:
My own experience with selling a cross-platform product (Perfect Table Plan) on Windows and Mac OS X is that the Mac sales:visits ratio is approximately double that for Windows.
The sales:visits ratio is similar for business and consumer products, with developer products lagging behind. However there are too few developer products in the data set to draw any real conclusions.
The sales:visits ratio does vary across the price range. However there are too few products with price >$50 in the data set to draw any real conclusions.
The sales:visits ratio does not seem to vary significantly by trial type. There were insufficient ‘number of use’ trial products to include them.
One has to be careful about drawing conclusions from a relatively small and unverifiable data set. However the results certainly seem to support the much-quoted “industry standard” sales:visits conversion ratio of 1%. But there are huge variations between products.
The fact that the sales:downloads ratio is both lower on average and more variable than the downloads:visitors ratio implies that getting people to download is the easy bit and converting the download to a sale is a tougher challenge.
The average sales:visits conversion ratio is noticeably higher for Mac OS X products than Windows products. This is supported by anecdotal evidence and the author’s own experience with a cross-platform product. However the number of Mac respondents to the survey is too small for the result to be stated with any great confidence. Also remember that the Mac market is still a lot smaller than the Windows market before you rush off to start learning Cocoa and Objective-C.
These ratios can be useful for a number of purposes, including: identifying a bottleneck in your conversion funnel (is your downloads:visitors ratio low compared to other products?); estimating how much traffic you might need for a viable business; or estimating how much you can afford to bid on Google Adwords. And it is useful to track how these ratios change over time (I track mine on a monthly basis). But make sure you compare like with like if you are comparing your ratios with other products. For example, a 10% sales:downloads ratio might be achievable for a niche business product, but unrealistic for a casual game. And remember that these ratios are only one part of a bigger picture. There are other, more important, metrics. Profitability for a start.
The data set is available here:
Raw data (some invalid records deleted), CSV format
Processed data, Excel XLSX format
Feel free to publish your own analysis. Thank you to everyone that took part in the survey.
[1] Calculating the mean of all the ratios probably isn’t the way a proper statistician would do it. But anything more seems overkill given the limited size and unverifiable nature of the data set.
Successful Software 