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Bob Walsh Launches Consultancy

Posted on July 13, 2007 by in microISV

Bob Walsh, who literally wrote the book about uISVs, has opened up a software consultancy for uISVs with the suitably Web 2.0-y name 47hats.  Not sure I would go for that name myself but, hey, not my business on the line.  While I have occassional disagreements with Bob about the relative ranking of priorities for the uISV*, he has contributed a lot to the community and one more resource for uISVs trying to cross the chasm from $0 to $1 in revenue is always a good thing.  (And there are plenty of chasms after that one, too.)

* Two examples: I think he places more emphasis on incorporation and legal documents than is warranted for many uISVs, and I think some of the recommendations he makes in his super-helpful series of website reviews for uISVs are based more on intuition than on data, and I suspect the intuition is flawed.

Speaking of his book: while I somehow managed to avoid reading it, my understanding is it would have shaved a heck of a lot of time off my first week of nailing down administrivia decisions like payment processors, bank accounts, hosting, etc.

June 2007 Stats

Posted on July 7, 2007 by in microISV, stats

Capsule Review: Easily my best month ever, and its summer vacation.  I’m really looking forward to the start of the term in August.

Sales: 36 (1 refund, customer was unhappy with font sizing)

Gross Income (less refund): 918.25

Expenses:

SwiftCD $54

AdWords $49.27

GoDaddy $7

e-junkie $5

AdCenter $19.59

CrazyEgg $9

Paypal: $18.04

Total Expenses: $161.90

Net Profit: $756.35

Selected Web Stats:

Visitors: 8,400

Visits: 9,200

Free Trials Downloaded: 1,017 from my site, several hundred from other sites.

Known-good Free Trial Installs (clicked a tagged link from within program): 354

Trial to Purchase Conversion: ~2.5%

Visits to my Purchasing Page: 402

Percent of folks who purchased after reaching purchasing page: 9%

Biggest Coup This Month: Snowflake queries.  I rewrote one page of mine, which had previously been very underused, to snap up more of them.  Handily, that rewrite was completed on May 30th.  During June, that page saw 5,600 page views (or about 27% of my total).  During May, that was 2,700 page views, or 12% of my total.  The “extra” 3,000 page views were a major part of the reason that, despite the fact traffic on my major teacher-related search terms declined since teachers are out of school, my overall traffic stayed mostly flat while my sales increased markedly.  I can’t wait to get some time to write some more content and catch myself some more snowflakes. 

Conflict of Interest: Payment Processors vs uISVs

Posted on July 5, 2007 by in Checkout, customer service, microISV, Paypal

I sometimes take a bit of guff from other uISVs for not using a “real” payment processor.  Some folks believe Google Checkout/Paypal are “unprofessional” or “hobbyist”.  I respect that opinion.  However, if the recent events at SWREG are any indication, I’ll wear that amateur label proudly.  They recently introduced a new upsell item in shopping carts of the uISVs they serve, and its one that makes one recall the many alternate definitions of the word professional.

Andy Brice has got the story covered and the BoS forums are buzzing about it, but in brief, SWREG has placed a button labeled Continue after the last page after the checkout funnel.  If you click the button, you will be billed $9 a month to your credit card, silently, until you figure out who the heck is billing you and try to cancel.  This is orchestrated by an outfit called Reservation Rewards aka WebLoyalty.com aka TravelValuePlus aka BuyersAssurance.com aka AnyoneWithSixDBAsIsTryingToScamYou.com.  Theoretically, they send you coupons in return for your $9 a month.  Many, many folks report never getting the coupons, never receiving a single of the multiple emails they steadfastly claim to send, and never having done the double opt-in gymnastics that they claim isolates people from getting locked into their service without wanting to be.

See, here’s the rub.  There is a nice feature of the Internet that folks learn early: if you don’t give your credit card details to someone, they can’t bill you.  Entering your credit card details is a signal both of major trust and of the fact that you understand that, absent you taking some action, you’re about to authorize forking over some money.  WebScamInc could never get “millions of satisfied customers” to authorize the $9 for nothing purchase with their lack of service, so they piggyback on the trust the customer has in you.

And THAT, more than anything else, is what burns my biscuit about this.  It is bad enough that a business would abuse their own customers enough to facilitate theft by fraud from them, and some large businesses did this quite often in the Wild West days of the Internet.  What makes it particularly galling, though, is that a customer at SWREG is not SWREG’s customer — he’s the customer of some uISV somewhere who stays up nights toiling away writing emails, polishing web copy, and smashing bugs to earn the trust of people he has never met over the Internet.  And what does the customer get for being foolish enough to trust him?  He gets stabbed in the back by someone whose only purpose in life is to be a convenient CGI interface to a merchant account.

Oh, but it gets better.  Over at Andy’s blog, Jessy from SWREG has this explanation of why they allowed a scammer to take up residence on their service.  Its… well… here, read it.

Hello,

The offering is a perks offering for customers. In no way are they tricked into using this, and it is clearly disclosed what they are signing up for. The signup page looks nothing like the order form or SWREG clearly differentiating it from the product purchase.

Customers are also very easily able to cancel the perk offering at any time. They can choose to pay the fee and receive great discounts at very popular, well-known brands/stores within their country.

SWREG has made this optional for our clients. These are offerings used at Amazon and EBay, nothing new or out of the ordinary for customers.

If you have any questions please don’t hesitate to contact me.

Thanks,

Jessy

(Email address omitted by me.)

This is willfully obtuse.  Yes, if you read every word on the SWREG order page, you will indeed realize that the 8pt font says you are submitting your data to a third party and authorizing them to debit your credit card.  The 24 point font on the blue button, however, says “Yes.  Click here now”.  And SWREG, as an e-commerce merchant, should darn well better know that Internet pages are not made to be read.  They are made to be scanned — readers evaluate, in a period of seconds, whether or not anything on the page has interest to them and then they drill down into that content, either by reading it or interacting with their interface.

A large block of small text font on a web page, placed against a blue button with a strong call to action, isn’t asking to be read.  Its asking to be missed.  It is exactly where any web site designer worth their salt would say “You know, if I put that in CrazyEgg or did a real heat map study, that area would be a deep blue dead zone.  I sure hope the content writers don’t put anything important there.”

There is also the context to consider.  This is important — if you are in the middle of a transaction, and you have already gotten over the mental “Give this vendor [i.e. the uISV] money” barrier, then everything from the start of the funnel to the end of the funnel reads Click next to continue.  If that button had said, in 48 point font, “Click here to format C:\” I still could have gotten 5% conversion with it!  Its like putting something on the second to last page of an installer — we all know that nobody reads anything, they just mindlessly click next until the application pops up or they are dumped to their desktop because our industry has trained them for decades that nothing they are about to see is important.  That is why, when we design web applications, we put destructive actions behind popup confirmations, and we put really destructive actions behind things which are designed to jar the user out of their GUI induced fugue, like “Type d-e-l-e-t-e to drop the database”.  Spending money is customarily put behind a similar speedbump, entering credit card details, and this scam is designed precisely to circumvent that safety valve.

Oh, but spending money isn’t necessarily destructive, as Jess points out.  Maybe folks like the discounts they’re getting at a wide variety of establishments in their country, for the low, low price of $9 a month.

Tell me, do the one thousand, nine hundred, and seventeen customers who commented on just one of the “Reservation Rewards is a scam” thread sound like they are satisfied customers happy to have received discounts?  Lets review a couple of these comments, shall we?

Daniel said

wow i cant belive this i just noticed these same charges on my account and only noticed because it made me overdraft in my debit account. i called the bank and they told me that it has been going on since july thats $54 that they have talken with out me knowing i have no idea where they got the info tho i always shop through paypal but makbe that is the problem all i know is that this needs to be stopped it is wrong. 

Matt said

Thanks for putting this up. I just got off the phone with these guys. They claimed they “were making an exception to the rules” when they refunded 4 months worth of charges to me. I asked where they got my CC# and they claimed it was from ebgames.com, a site I sometimes buy stuff from. I’m filing a complaint with the Connecticut Department of Consumer Protection and will be taking the issue up with ebgames.com customer service and perhaps the Pennsylvania Bureau of Consumer Protection if that doesn’t work out well.

(You can feel free to add this to the SWREG defense: Well, if Reservations Rewards is good enough to scam ebgames’ customers, then it is good enough to scam ours!)

Don said:

I am currently serving in Iraq, have been for 4 months, and noticed that I have been recieving charges from WLI for $7 (am I a lucky one to get off so cheap?). I have gone to their webpage with an unloaded weapon—you see, you have a logon & password to see “your” account information. Beings I did not know I was a member, needless to say I do not have that info. So I e-mailed them my name as it appears on my credit card, told them to cease, desist & refund….. Hoping for the best.

You know what lack of capital letters, fractured syntax, and a certain lack of savvy about e-commerce reminds me of?  Oh, yeah, a significant portion of my customers.  (Even English teachers “let their hair down” when they are writing emails, sometimes.)  Unlike any significant portion of my customers, these folks are howling for blood.  And if you’re using SWREG, they are howling for your blood, because despite the fact that you are the little minnow and SWREG is the multi-million dollar corporation to the extent that anyone realizes you are in fact separate entities (and most don’t) the presence of SWREG’s website wrapped within a mere portion of your own makes it look like they’re working for you.  And, hey, with them getting a sliver of the transaction, that is what the relationship really is.

Which is the problem from SWREG’s point of view.  They can’t increase their cut of the transaction size, or you will flee to one of their competitors, or decide to go to e-junkie/Paypal.  You can get a customer to purchase from you multiple times to increase your revenue, but that is only an option for SWREG to the extent that you stay one of their vendors.  So they are constantly on the lookout for new revenue streams, and both aggressive cross-selling to your customers and selling them down the river to scumbuckets.com are apparently options on the table.

So, what to do about it?  Well, if you’re not a customer of SWREG, great.  Celebrate your good fortune… and give your e-commerce provider a jaundiced look and a quick assessment of whether they would ever stab your customers in the back.  If they would, make preparations for your inevitable separation as soon as that provider makes the decision that your future loyalty is worth less than the amount they can extract out of your customers today. 

I came very close to giving Google Checkout the boot once, on Earth Day.  They proposed to cross-sell my customers into a $10 carbon offset.  It wasn’t nearly this scummy — the carbon offset was clearly marketed as a separate item, it would have required another separate checkout process to buy, and of course the only reason you would actually click on a button saying Click Here To Buy a $10 carbon offset is if you wanted to actually buy an indulgence offset.  Google’s saving grace was that they realized this was going to be controversial and offered me an opt-out.  (It really should have been an opt-in.  I have no strong opinions either way on begging for alms soliciting charitable contributions but impair your customers’ experience to do it, not mine.  I don’t see any “Thanks for searching for flapjack recipes on Google.  While you’re here, interested in buying a carbon offset?” cluttering up your famously minimalist interface.)

And if you are a SWREG customer?  I think Tom Rath on the BoS boards said it best:

Now I need to spend the next few days alerting my customers of this con, apologizing profusely to those who found themselves roped into it, and write cheques to cover whatever expenses have been incurred by those foolish enough to trust my company’s judgment.

I don’t know what Tom Rath sells off the top of my head, but whatever it is, that paragraph makes me want to buy one on general principle.  Those are the words of a man you can trust.  That is the tone that we strive to strike as little honest fish in a stormy ocean filled with unscrupulous sharks trying to take a bite off of anyone doing business on the Internet. 

And SWREG?  Well, suffice it to say that the W in the name is looking like a dorsal fin to me at the moment.  Duh duh, duh duh, duh duh duh duh duh duh…

A Happy Milestone

Posted on June 21, 2007 by in microISV

Since I started using e-junkie almost 9 months ago (has it been that long?), I have gotten three automated emails every time someone purchases from me:

1)  Copy of the payment receipt from Paypal or Google Checkout

2)  Copy of the IPN information, from e-junkie

3)  Copy of the customer’s registration email

That worked pretty well for a long time, and I always had a brief catch in my breath when I saw Thunderbird downloading “1/3 mails on the server”.  However, with the numbers of sales I’m getting this month (26 at last count on the 20th — keep in mind 30 is my best month ever), it was starting to get a little excessive.  Not that I mind every other email I received telling me that I had money, but it was getting harder to spot the mails which actually required action from the ones which were just for my reference.

So I turned off one of the three notifications.  If my sales go up about 25% more, I’ll be going down to one email per transaction.

Stats in Pretty Pictures

Posted on June 14, 2007 by in microISV, stats

Images may be truncated by WordPress.  Feel free to click them to see the whole thing.

I had been planning to post these on my first year anniversary but somebody asked for them early so here they are.  Same disclaimers as normally: these were prepared for a blog post, not the IRS, and I did not exactly go to the extra mile to ensure their accuracy.  (They understate my July to December expenses as reported to the IRS by about $80, which I think is an artifact of cash accounting for the IRS and accrual accounting for the blog posts I grabbed most of this info from.  For example, when I pay for 12 months of service in advance to the IRS that all gets expensed in that tax year but in my blog posts I break it out on a per-month basis.) 

Keep in mind that the Google tracking, despite being mechanized, still depends on me not borking the tracking code, which I used to do on a semi-regular basis.  That is the main reason I’m not showing conversions on the graphs here. 

Actual totals:

Sales: $6,333

Expenses: $1,720

Profits: $4,613

Visits: 63,429

OK, pretty picture time:

 Bingo Card Creator Year One Profits

 Visitors:

Visitor timeline for Bingo Card Creator

Both Slashdot and the Joel on Software mentions were of my blog, not of my product site, but they resulted in a few clickthroughs to the main site.  (Incidentally: the blog gets about twice as many hits as the product site.)  You’ll note that the dog that didn’t bark is “Why is Patrick not seeing a trough of visitors (and sales!) now that school is out for summer, much like he saw troughs at Christmas, Easter, and every single US public holiday?”  Thats a good question, and I’m mulling some potential answers, but we’ll know more about them in about 2 weeks.

Notes on December: I don’t have a blog post for stats in December so I guesstimated my expenses by hand with a cursory glance at my credit card statement and Paypal account.  The sales stats are accurate — thanks, e-junkie.  Again, you’re not the IRS, so please don’t audit me.  It is in the right ballpark if I take the number claimed on my schedule C and subtract out the months I do have exact numbers for, remembering that my quixotic accounting standard screws up that comparison a bit.

Notes on June: Its the 14th of June as I posted this, and I did the uberscientific “multiply sales and expenses by two” to estimate income for the month.  That was probably overly aggressive for both numbers.  Ask me in two weeks.

Increase Your Software Sales

Posted on May 14, 2007 by in marketing, microISV

Here is a question which comes up all the time on the Business of Software forums.

Hello, my name is XXX and I created an application N months ago which sells for $Y. I have gotten Z sales so far. What can I do to increase sales?

First off, congratulations on finishing an application that real people think was worth spending money on. That’s an accomplishment. It is also the easiest part about running a software business, and you’ve got a long road ahead of you. Lets get cracking.

Actually, first, the obligatory disclaimer: everyone’s markets are different. Everyone’s goals are different. Everyone’s strengths are different. I sell to technically disinclined B2C customers and make enough money to nicely supplement my dayjob every month but could not go full time on Bingo Card Creator (a good thing, too, as 1-2 hours of work a week would leave me with far too much free time). I’ve also only been doing this for, hmm, coming on 10 months now. This isn’t the Bible of Internet Software Marketing, its just things that I have found effective and advice passed along from people I trust.

1. Install Analytics. It is critical that you have enough data on how your business is working to make informed decisions. Analytics software (I like Google Analytics and CrazyEgg) lets you know how many people are visiting your website, how they got there (in particular, what search engine terms got them there), how many of them go on to download your free trial or purchase, what pages are most of interest to them, etc.

2. Start Search Engine Optimization. Ideally, you’ll have had your website domain up for a significant portion of the time you were developing, packed full of keyword-rich content gradually aging like a fine cheese and convincing Google that you’re not some fly-by-night spam site operator. Didn’t do that? Don’t worry, I didn’t either — its a great thing to have done but for first projects it is a great idea in hindsight for almost anyone. Anyhow, age is one factor which gets you out of the Google sandbox, which is where sites languish without getting headway on competitive search terms.

However, even if your website went up 2 months ago, you can still start SEOing actively. Concentrate first on making your website very useful for people who land on it. This involves sharpening your pencils (or WYSIWYG editors) and writing some compelling content. Its shocking the number of folks who come in for advice on the forums who have less than 100 words of content on their website in total. Google can’t read minds, folks — if it isn’t on the page or in referring links they have no clue your web page is about that. So start writing.

Write about what your customers care about in language similar to what they use. You know that plastic marketing speak that large companies seem to produce far too much of? Introducing a new paradigm in best-of-breed B2C customer empowerment synergies? Nobody writes “new paradigm in best-of-breed B2C customer empowerment synergies” in Google! They write things like “How do I deal with abusive customers?” (natural language search is very scarily common among non-technical users, incidentally). If you write your page like they write their search queries, you win. (Simple example: My original title for this post was “So You’ve Got Sales. What Now?”. That is how I talk, but its certainly not a natural search string. “increase software sales” is, however, and this post will probably be on the front page of Google for that query within a week.)

Don’t neglect the technical end of onsite search optimization. There are stupidly simple five minute fixes which will improve your rankings dramatically. Use your title tags. Use h1 and bold to call out the important bits of your page (that helps Web readability, too). Add descriptive alt text to your images. Use this really easy trick I shamelessly stole from Nick Hebb (who makes flowchart software, which he handily describes in a terminology box) and include a sidebar box listing synonyms for your key search terms. Its not obvious to Google that I sell a bingo card maker without the bold callout on my frontpage saying so.

3. Start getting links.

This is the other side of the SEO puzzle. I have tried buying links and, well, that was a crushing failure. (I ended up paying $40 to get mentioned on a Chinese forum and a spam site… thank you sir, may I have another.) Its the links I didn’t lift a finger to get that are actually worthwhile to me in terms of traffic and SEO juice.

Well, “didn’t lift a finger” understates the efforts a bit. Sites don’t attract links. Content attracts links. A person who tosses you a link from their site, blog, livejournal, email to Mom, newsletter, whatever, has taken a bit of time out of their day to promote something you have done to people whose trust they have built up. They really value that trust, and they don’t waste it by wasting people’s times with links to useless pages (and God knows there are enough of those on the Internet). Rather, they send links to pages which are interesting, topical, useful, etc.

So how do you get links? Write content which is designed to be linked to, sometimes called linkbait. Sure, you’ve got your software to sell, but unless you’re exceptionally lucky people won’t wake up one morning and decide their blog readers need to hear about your product. However, folks in your niche have a variety of common interests, and they’re always eager to hear about that. For example, elementary school English teachers are some of my best customers. One thing they really like is having lists of Dolch sight words, which form the basis of early English instruction. They pass them around to colleagues, print them out and hand them to parents, include them in the classroom’s weekly newsletter, link them from the Early Readers Homepage, etc etc. Writing that one page, which does genuinely provide value to people in my niche, took a few hours but pays off every single day of the year.

By the way, notice the instructions at the top on how to link to the page? This is a fairly important thing for non-technical customers, who might not know what a URL is. Blogging software, etc, makes it easier than every for folks to provide links to things. For folks not using it yet, I try to make it as easy as possible for them to help their friends out while in the process helping me. Putting up a simple HTML sample helps quite a bit for that.

4. Blog.

In the category of providing useful, easily linkable content, blogging has few equals. If you talk about what your customers care about, people toss around links like candy. The culture and technical nature of blogging strongly encourages links. You can capitalize this by having a customer-focused blog on your site. (This blog is neither customer focused nor on my site, yet it sends me 10% of my traffic and a few hundred dollars worth of sales. Please, do better at following my advice than I do. :) ) I strongly prefer http://www.mysite.com/blog over http://blog.mysite.com and http://myblog.myblogprovider.com in terms of SEO benefits. Oh, a word on software — WordPress just works. I have heard good things about MovableType, too, but WordPress is good enough for me.

Andy Brice (he makes software that does table plans for weddings and also has a very interesting series on marketing methods on his blog) is of the opinion that blogging rapidly diminishes in relevance, so it is a constant time commitment. I agree for blogging as practiced by many technically inclined folks, where you are perpetually identifying the New and Shiny or the controversies of the day and commenting on them. TechCrunch, for example, has archives which are stale mere days or weeks after the posts are written.

So don’t write like TechCrunch.

I like to think of blogging in terms of producing resources for readers. The best resources are evergreens — they’re good today, they’ll be good tomorrow, they’ll probably be good in years. Some of my more popular posts here, for example on software registration systems, would have been topical ten years ago and will probably be topical ten years from now. That post picks up links, visits, and comments six months after being written. Writing evergreens is like investing in yourself — it is a way for today’s labor to pay dividends tomorrow and every day thereafter.

Blogs also foster a sense of community. Having communities of your customers online is nice. It allows you to hear useful feedback on how to improve your product, gives you a built-in base of passionate folks who spread the word for you, and folks eventually get to know you personally and are nice to you because of that. For example, there is a vibrant little uISV community on the BoS boards and in a wee little circle of blogs, and within that community there are both passionate users (I have been described as the local sales rep for e-junkie before, and this blog has probably sold more copies of Direct Access than it has Bingo Card Creator) and lots of folks who help each other out. One example: I’m not sure exactly who started it but Ian Landsman and a couple folks noticed when I was writing about Free Bingo Cards and decided to spread the word.

5. Eliminate barriers to checkout.

Presumably if you’ve got sales you’re already capable of processing credit card payments through at least one processor. Good. Can you offer another one, for example if folks don’t trust Paypal? One of my favorite features of e-junkie (watch me sell them again — I swear, I really don’t make any money doing this ;) ) is that you can get Paypal and Google Checkout working for the same amount of work (i.e. not much). Some folks already have Paypal accounts, some have heard horror stories and will never trust their credit cards with them, and never the twain shall meet. Checkout is a useful (and cheap) safety valve for those prospects.

Also, make sure your prospective customers know you can process credit cards and checks. “Pay here through Paypal” doesn’t provide useful information to customers who don’t know what Paypal is (they exist, trust me). Mention that “Paypal is a trustworthy company used by millions (including eBayers) which processes your Visa, Mastercard, or checking account so that you can buy things online” and watch your conversion rate go up. There are a variety of possible checkout logos available or you can roll your own, but for goodness sake put the credit card logos on or near the button. Its one of those no-brainer “having logos beats not having them by 3-1″ type decisions.

Is your checkout process instant? No? Fix that. None of this “You’ll get your registration key in 24 hours” nonsense, particularly not for B2C apps which may be impulse or time-sensitive purchases (I get LOTS of customers who need to make cards for a bridal shower tonight). Also remember, you don’t get the benefits of having your process be instant if you don’t mention them to your customers before checkout! Make sure they know they’re one simple 30 second form away from having shiny new software!

6. Offer a money-back guarantee prominently.

Don’t have one yet? Fix that. Really, what needs to be said has been said.

7. Work on your AdWords campaign.

I have poured dozens of hours and hundreds of dollars into my AdWords campaign (my #1 business expense by a factor of lots), and had my fair share of months where it cost me more money than it made and where Google had me pulling my hair out. The bottom line though? You can make it work, and when you figure out how to its free money. (My cost per trial is trending down from the profitable $.30 to the noticeably wealth-producing $.20-$.25, and its a nice hedge against fluctuations in organic search rankings.)

SharewarePromotions has some nice articles about AdWords optimization, and my archives have quite a few as well. Many of the improvements you make to your site at large, like improving landing pages and putting important keywords in your content, will help AdWords out. Other than that, use AdGroups well (focus them by theme), keep search and content networks in separate campaigns for ease of use, prune nonperforming or overly expensive keywords religiously, keep your eye on the cost per conversion number while keeping CTR at the back of your mind (keep it above about 1% on search ads or you’ll get penalized harshly by minimum bids which take MONTHS to work back down, and keep trying different ad texts/landing pages until you find copy that sells.

8. Take a break.

Really, don’t knock yourself out. Improving sales (warning: overused cliche alert) is more of a journey than a destination and the test, observe, retest, observe, cycle can take months or years. Don’t burn yourself out by trying to do it all in one day, and don’t get discouraged if you can’t make a $10,000 a month in 6 months after starting. Consistent sustained improvement is the key to long-term success. Set some goals for yourself, measure progress towards them, and have fund enjoying your hard-earned successes. (I’m blowing my revenue goals for this year, sadly, but my recent round of website improvements has my conversion rates and level of understanding of my customers up nicely.)

Timetable For Next Project

Posted on February 20, 2007 by in microISV

I know I said the next project was supposed to happen in the summer, but unfortunately I’ve drunken deeply from the Rails koolaid and am now afflicted with an acute condition known as programming fever.  The plan remains to actually launch in the summer, but I want to see if Rails lives up the the (substantial) boasts of its evangelists, and frankly I really want to get my hands dirty with something because after doing several months of crunch going coding cold-turkey makes me feel bored.  (We’ll see if the resurgence of carpal tunnel syndrome I’m feeling doesn’t cool my desire.) 

So here is the plan.  I want the application to be ready, in the full functional sense of the word, by April 1st.  I plan to devote no more than 20 hours per week on it, and to be reasonably diligent about tracking time that I spend.  This will include any time spent in design, learning Rails, and actual IDE time.  On April 1st, I will evaluate where I am (which should be done), and bring in the outside experts (principally a web designer — I’m going back and forth on whether I need to bring in the lawyer or not) to take the first few steps to make the application into a business.  That will also give me a month and a half or so to save my pocket change to pay for their fees.  (Memo to self: carry really big coin purse.)

I’m decided on developing this semi-publicly — I’ll be publishing the market, the spec, the thinking behind it, pretty much everything but the source code.  This will include sales figures for at least as long as I have a day job.  However, I’m not totally naive in the ways of the world and in particular I don’t want someone domain-name camping me for the project code name or obvious misspellings of the actual name (which I already picked out and registered), so I’ll be keeping those under my hat for a while.  I like the project code name so much I think I’m going to use it as the name for my LLC.  I suppose I should get that filed soon too.  The little bureaucratic hoops you have to jump through to make money are so annoying.

Anyhow, the plan:

Two weeks from now or so: Announce project codename and add category to this blog so people can track the development.  Ideally, establish US-side LLC and transfer Bingo Card Creator to it, which will give me instant business history as a software developer with that name, which will be useful for a trademark application. 

Some time after that: After I’ve got enough of the application done to be reasonably sure that I will indeed launch it, post the problem domain, the spec, and the reason why I chose this market to enter.

April 1st: Alpha showing of website (won’t be feature complete or pretty, but should give rough idea of scope).  Bring in web design guy, get the heck out of his way.  Begin dedicated blog (I’ll be keeping this one as my main web presence for the time being, naturally) devoted solely to issues facing target market.

Some time before summer: Launch.  Suffer through a few weeks of catching corner cases which I hadn’t anticipated before.

Summer and beyond: Grow business.  This is the most important part and so naturally I have given it the smallest section of this post and have not done much writing in my design notebook about it.  D’oh.

Budget:

Hosting: $125 for the first year.

Domains: $20 for initial two domains (product and LLC name), possibly $30 for additional ones.  First $20 is spent already.

Ruby Books: $90.  Got them today, they are fascinating.

Logo/Business Identity: Heck if I know.  I have a pretty good idea who I’m going to use for it.  Probably in the $250 range I’m guessing.

Web Design: Heck if I know.  I may do something outside the usual for getting this, we’ll see.  Currently I’m figuring that I’ll need a skin for the application, a simple template for the website outside the application (on the order of complexity of Bingo Card Creator’s, but prettier and thematically coherent with the application skin), and a blog template.  I’ll be blogging on a hosted WordPress blog.

Icons: Not sure if I’ll need them (I already own two sets which may be adequate, but this will largely be up to the web designer).  $100 budgeted. 

Legal: If I hire a lawyer, he is going to be put on a strict $500 leash.  I may not hire a lawyer.

LLC Filing Costs: Owwwwch.  Figuring on $500 for my American LLC and I just weep at the anticipation of having to apply for a Japanese one (suffice it to say that I had to count the number of zeroes in the filing fee a few times to make sure it was correct).  I will file for the Japanese registration after I have achieved significant profitability.

Total Initial Costs: $1,500 to $2,000, probably. 

On the plus side, monthly costs (absent advertising: not budgeting for it yet) are going to be pretty low, so I should be cash flow positive almost instantly again and, I’m hoping, profitable fairly quickly.  I expect revenue growth to be a significant multiple of Bingo Card Creator’s.  More on that at a later date.

Merry Christmas part 2

Posted on December 26, 2006 by in microISV

Well, I just woke up on the 26th and checked my mail, and it seems I’ve now sold 100 copies of Bingo Card Creator on the dot (since launching the program — not, regrettably, since December 1st).  Yay.  Aside from being great fun and a nice learning experience, thats about $1500 or so that I wouldn’t have had otherwise.  Not a shabby bit of money, as my newly paid-off student loan can attest.

Its not quite New Years yet but I thought I’d go ahead and set some business goals for the New Year:

1)  Release BCC v1.05 sometime in the month of January.  On the list of stuff to accomplish:

  • Fix minor printing niggles when you only have numeric “words” on the card.
  • Add Halloween/Christmas bingo to get ready for next year (low priority).
  • Improve printing of word lists to allow more than 25 words on them (done already on local machine).
  • Give option for advanced users to select printer (done already on local machine).
  • Make sure its Vista compatible.  This will probably involve changing on Windows boxes where I drop the serial key, user name, and timestamp for the last program update.  Oh, and I should move the document folder to My Documents, too.
  • Let people put in column headers (B-I-N-G-O or configurable).
  • Option for headers/footers, at least for single cards on a page.

2)  Retool the website.

  • Improve purchasing.htm so it makes the sales presentation better.
  • Eliminate eSellerate.net.  I have yet to be paid from a single sale from them, due to low volume, and having the option there when no one uses it needlessly complicates things.
  • Create a version (or versions) of the website which broadens the niche a wee bit from teachers.  Most of my search traffic these days is coming in for bingo stuff rather than teaching stuff, might as well oblige them.
  • Resume some content-writing SEO activities.
  • Blog some stuff of use to folks, out of my totally charitable desire to collect free links improve the sum of human knowledge.
  • Spend some time reaquainting myself with Adwords and AdCenter to see if I can’t squeeze a little more juice out of the turnip.  In particular, AdWords is still at $.40-$.45 a conversion and I want to fight that down to $.30 again.

3)  And some financial goals:

  • $1,000 a month in sales by April
  • Yearly sales of $10,000.
  • Maxxing a Roth-IRA from self employment (I am not eligible for any IRA normally as I don’t pay taxes in the US due to the Foreign Earned Income Exemption.  Incidentally, if you are a US taxperson, you run a uISV as a hobby,  and you don’t have an IRA, for the love of all that is holy fix that this year.)
  • Get legal in Japan (I am so NOT looking forward to those forms) and at least one American state.  The Japanese taxman “Oh, thats just a hobby, don’t worry about it” immunity phases out at 1 million yen (at 120 yen to the dollar thats about US$8,300) and I’d like to have stuff squared away by then.  Additionally, a legal entity in the US for my software company will make launching a more amibitious product much easier.
  • A wee bit more robustness from sales when the teaching market isn’t in a buying mood (wait a few days for my December stats, you’ll see what I mean).  In particular, I don’t really want to see income drop to $0 over the summer months (particularly because I have a move coming up in August and won’t be able to save as much from my day job as I usually can).

Other stuff:

  • Locate a new day job by August.  My contract on the current job is expiring and while its been a wonderful three years its time to part ways.  My current thought is employment somewhere in the Nagoya area.
  • Start a new, more ambitious uISV project.  I’ve got a thought for one at the moment but am wondering if the market is big enough (think “consumer finance” and a ticket price, uh, a wee bit above $24.95).
  • Continue search for Ms. Right.

October Stats

Posted on November 6, 2006 by in microISV, stats

Summary: A strong early start to the month with a weak finish due to some problems with hosting (you can’t sell it if people can’t get to it!).  Same disclaimers as all other stats posts apply.

 Sales:

Items Sold: 22 download + 2 CD + 3 refunds (the refunds were largely “customer error” this month — somebody was actually willing to pay $29.95 for the CD and $24.95 for the program on it, which shocked and amazed me!).  Missed my goal for the month by a unit.  At least 4 of these were for the Mac version (I say “at least” because some folks install the trial, like it, Google or directly navigate to my page, and then purchase — if they don’t purchase from a link within my application I can’t capture that they were originally using the Mac version, and folks fitting this profile account for 50% of my sales).

Gross sales after returns: $533.95

Net sales after CD/Paypal costs: ~$500

Expenses:

GoDaddy: $10.02

e-junkie: $5.00

Icons for website: $49.95

Google AdWords (almost a positive ROI this month, after getting socked): $90

Total Expenses:  $154.97

Net Profit: ~$350.00

Not bad for missing most of a week of sales in there.

Website stats:

 Adwords:

CTR: 3.87%

CPC: $.10 (finally starting to trend down after the Quality Score algorithm moved most of my 15 cent bids to 10 cents)

Conversion-To-Demo: 23.91% (not bad, not bad)

CPC: $.43 (not going to be cost-effective above 30 cents, though.  I’m scraping that in the last week with some new alterations I made.)

Website proper:

Visits: 4,500 (note: pirate spike for about 600 in there)

Pageviews: 10,000 (note: pirate spike for about 1,000 in there)

Major sources in order: Google, AdWords, MSN, link in program, Blog (!), Yahoo, other

Trial Downloads: In excess of 1,000 (website records 873 hits on download.htm, which results in a download for “most” people, not going to bother breaking out the individual download sites this month, but come 1.05 I’ll be tagging the executables so that I can at least see website vs. Download.com vs. Tucows).  This would put me at approximately a 2.5% trial-to-purchase rate.  I’m quite happy with that.

Confirmed Installs (user takes action from program to visit my website): ~300

Best Performing Pages, Ranked In Terms of Money I Get Per Visitor:

Click on “Purchase Now” from Mac Trial: $10.64 (i.e. about 1 in 2 converts)

Click on “Purchase Now” from Windows Trial: $2.36 (i.e. about 1 in 10 converts)

License: $2.28 (One of the least visited pages on my site, incidentally.  This should be instructive for folks who obsess about their licensing terms — make them fair, make them short, and you can safely forget about them.)

Support: $.27 (for folks who actually mail me, its probably closer to $8.  Good support pays.)

Purchasing (my “sales” page): $.18

Somewhat suprisingly, the page describing my guarantee doesn’t make the list, although I now flaunt that on every page in the site with a big, appealing graphic, and I also flaunt it on the purchasing page, so I suppose most folks don’t feel the need to learn more about it.  Judging by the uncertainty most folks who ask for it have, I’d guess they hadn’t even seen the page (“Is this the right address?  Could you tell me who I should talk to to get my money back?” etc).

Belated October Stats

Posted on October 20, 2006 by in microISV, stats

Here are the stats from October 1st through October 15th.  I’ll update it with the website/download stats later, which I understand are more interesting to many folks.  Same disclaimers apply as always.

Sales:

Units Sold: 13 + 1 return  (1 included CD)

Gross Sales: $329.35

Net Sales (subtracting Paypal, cost of CD): $311.59

Expenses:

Web Hosting (GoDaddy, through end of month) : $10.02

E-junkie (through end of month): $5

AdWords budget (not likely to reach it, through end of month): $90

Net Expenses: $105.02

Net Profit: $206.57

 Business this month is going substantially stronger than last month.  I hope to sell a total of around 25-30 copies.  My target is to hit $500 in profit.  The Halloween promotion I was hoping to do has been mostly eclipsed by my work at work, but we’ll see if I can’t get something figured out this weekend.

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