Kalzumeus Software

I love both my jobs, actually.  I just got my brain picked for an hour and a half by an elementary school student who had a school project to find a foreigner and ask them about schools in their country.  So he and his mother went hunting among everyone they knew asking “Do you know any foreigners?” and they eventually came to the team leader of another group at my company, who threw the request laterally to my group, which lead to me getting to chat about school uniforms (“We didn’t really have those”) and guns (“We didn’t really have those, either”) and To Kill A Mockingbird for an hour.

And while I was away from my desk I got two thank-you letters (“I’m telling all my homeschooling friends!”), a support request (“So how’s that Mac version coming along?”), and a sale.  This whole “get a sale every day” thing is starting to get a little overwhelming (yep, last 5 weekdays I’ve gotten 1 or 2 sales a day).  If it hasn’t just been a fluke I might have to break down and seek professional advice.  $24x30x12 > $8,000 per annum, and thats enough for, e.g., the government to start wondering “Hey, where is that all coming from”.  I’ll have to get legal before legal gets me.

Its been two weeks since my last numbers update so I thought I’d briefly summarize things.

First a brief recap: My first two weeks in business (July 1st through 15th) I saw one sale.  My next two weeks I saw 2 sales (through July 31st).  These past two weeks, lets see, 6 sales?  I’m going to shoot waaaaaaay past my personal goal for August, which was originally 4 sales.

Expenses: I recently upgraded my GoDaddy account to their next higher level of Linux hosting ($7 a month, egads!) and Traffic Facts (their analytic software… which is garbage, incidentally.  The only feature I find useful is the fact that they let me actually have my raw log files, which I can extract the important information out of with gawk and grep.)  Plus $30 a month on Yahoo and ~$70 a month on Google (budgeted for $90 but search volume isn’t always high enough to make that), and $5 a month for e-junkie.  I’m going to cut my spending on Yahoo from next month, as it seems to have stopped generating results.

Anyhow, going forward, thats ~$110 a month in expenses, or 4.5 sales.  I now feel rather confident that I can make at least 10 sales a month, consistently, for about as long as I want with rather little additional work.  By my quick back-of-the-envelope math, thats about $1,500 a year, which won’t exactly have me sipping iced cocoa on the beach.  Actually, check that, that is enough for me to afford a quick jaunt out to Okinawa every year.  And I couldn’t go to the beach every day — I burn in minutes, its terrible.

Alright, daydreaming aside:

Sales sources are approximately 50% Google (no purchasers from organic search as of yet, oddly enough), 25% download sites (don’t know which — whoops!),  25% one single teacher message board which apparently loves me.  (Seth Godin, a marketing genius whose key insight is “make it easy for people to tell their friends about you”, would be proud.)

My ballpark estimate for download-to-purchase conversion is 3%.  So one of my Ad Groups (average CPA: $0.30) costs $10 per purchaser and another ($0.45) costs $15, leaving me comfortably profitable with either.

Some other statistics:

Total number of support requests: 0 (1 if you count the 1 refund I processed, which is not counted in the above sales)

Total customer contacts: hmm, call that 3.  3 teachers read about me on the aforementioned message board and asked where they could get a copy of my program.

Total downloads per week: I’ve written before about how this is difficult to estimate, especially with my software being available on 100 sites now.  Some of them cache the installer so the download doesn’t end up on my logs.  I estimate that there are approximately 200 downloads per week.  Of these, I get confirmation that at least 30 installed successfully through use of my check-for-updates feature.

Scott Meade, who by my calculations will be starting his crazy coding week any minute now (good luck!), recently wrote about the difficulties of convincing a customer to pay for something done in a week. As this is a subject near and dear to my heart, I thought I would give my thoughts.

First off, your customers can only hold the fact that your product was built in a week against you if they know it was built in a week. I would suggest, well, not advertising this. Conception To Launch In Seven Days — Get Yours Now! does not strike me as a winning formula for AdWords anyway. I’m all for openness with the customer in most things, and if they asked me I might even tell them — but there is no reason to volunteer the information. Your heart surgeon doesn’t tell you he’s billing you $50,000 for three hours’ labor to implant 32 cents worth of plastic and a $5 chip made in Taiwan. And you’re not likely to ask after he’s just saved your life.

Are you worried that your customers are going to implement your product in a week themselves? That is, perhaps, a realistic worry if your customers are primarily developers. If you have a 200 line shell script and want to sell it to a bunch of Linux mavens for $15, well, God be with you. Sometimes developers spend time on things which they really should just buy off the shelves, too — I’m as guilty as that as anybody. But the rest of the world doesn’t want to program your program. If they had the skills or desire to reinvent your wheel, they’d be programmers, but they’re not. They’re teachers or real-estate brokers or heart surgeons. Everything that happens inside of the computer is black magic to them and you are the shaman they rely on for magical amulets to keep the evil spirits at bay. So long as your amulets work, you can pretty much charge what you like for them.

One of the lovely things about producing software as a product, as opposed to consulting or otherwise turning one hour of your labor into one hour of revenue, is that the marginal costs of making an additional sale are, to a first approximation, nothing. High school microecon 101 says that when this is the case, you can pretty much pick your price point at any point on the demand curve (in the absence of competition, at any rate). The demand curve doesn’t magically shift up or shift down just because you spent 10 years or $3 million on the development effort — the demand curve is external to you. Its not totally beyond your power to affect, but it certainly isn’t reading your time cards to decide whether to slope or slide. Speaking of being a product company, since you’re operating under the assumption that you’re going to sell this same product dozens or hundreds or thousands of times, the price you’re charging any one customer is such a ridiculously small fraction of what it would take to re-implement that most people with an ounce of sense will buy to save themselves the trouble (assuming you meet their needs).
Let’s talk about that heart surgeon again. Do you think he paid $5.32 for that doohickey he just planted in you? No possible way. He probably paid $500 or $1000 for it. And, if it ever occurred to him to argue with the sales rep from HeartTech (“Technology with a Heart”), the conversation probably went something like this: “Thats an interesting perspective. I suppose you could try making it yourself for $5.32… or, alternately, you could make $49,500 tomorrow installing one and be on the golf course by 3:00.” And then the good doctor’s eyes lit up and the deal got closed. Thats essentially what your conversation with the customer should be: regardless of what it took to make my product, my price is a “fair” one because you’ll get oh so much more out of it. And, seen in that light, most of your customers will agree.

Speaking of which: I think a lot of uISVs, myself included when I was starting, undervalue their own software. Sometimes severely (I know of at least one product out there which would probably see higher sales if it were priced at triple what it is right now, but thats a post for another day). Part of this is from being involved with the software day by day and seeing all the warts, the imperfections, the bug reports, and the compromises. You started with such high hopes for the software and those got pared down by schedule presure and implementation concerns, and you value the software as compared to the image you had when you started. Stop. There is no competitor who released your ImaginationWare into the market — you’re competing only with what actually exists, not with what could exist, and when your customers find out that their needs get met if they only part with a trifling sum of money they’ll happily part with it no matter how the project looked from your perspective. Don’t fall for coder’s remorse.

Forgive me for indulging in a bit of a rant here. I recently checked a particular RSS feed and, of the first ten articles, 7 of them were in the style of this post’s title. For the two people on the Internet who have not caught onto this trick yet, this is because list-style articles are widely considered to be good bait for digg et al and engage finicky Internet readers who don’t want to read so much as scan. And, I concede begrudgingly, there is a place for that and used in moderation 10 Actionable Tips For You To Increase Widget Sales has some value for people. As a writer, however, I would caution you against overly imbiding.

The reasons (of which there will not be ten, and they will not be numbered) boil down to the following: if you write for people with the attention span of an ADHD flea who is hopped up on methamphetamines, then this is who you’ll end up with for readers. Yes, you’ll get the odd link here and there, and the Internet is full of high PR/high traffic sites whose readers are there precisely because they want articles that they can absorb in 90 seconds or less. However, and this is rather important, this is not the sum toto of value on the Internet. For people who actually read what they “read”, the top ten lists are just so much dross: everyone does them, they rarely contain insights (especially after you’ve seen one on the given topic), and they go in one ear and out the other.

Now, you have to ask yourself, why do I write? If you’re a queer sort whose personal worth is measured by how many top ten lists you have produced in your life, well, do what makes you happy. If, on the other hand, you’re trying to build a base of loyal readers, for whatever reason (you hope to use your blog to get traffic, you intrinsically enjoy writing for an audience, whatever), Top Ten lists will not get you there. Say, for example, you have a blog to promote your widget management software. Ten Ways To Manage Widgets is a good way to get a lot of hits in a hurry, but the majority of them will be in and out in 90 seconds and if you asked them two minutes later they’d be unable to recall your name.

If, however, you over time build up a reputation for writing nuanced, in-depth analyses of the pleasures and perils of widget management, people will take notice. Other widget aficionados will begin writing articles about you and putting you on their blogroll (and saying “Wow , he can write, too!”) . This is what you want for a couple of reasons. The first is that it pleases your harsh mistress, Google. You see, blogs (and digg, and social bookmarking, and everything else Web 2.0 can come up with) exist in snippets of time. You never look at the same blog twice, in the same way you can never enter a river twice. Google, on the other hand, really wants to be able to enter the same 100 million rivers on a daily basis. And so there is a little tension here with links-which-will-soon-be-irrelevant: since Google reserves most of the link-juice for links which are on the front page, links which fall to the archives are worth rather less to you. Links which fall to the archive in the space of literally hours (helllllo, Digg) are worth, in SEO terms, practically nothing.

You know the one type of link which never falls to the archives? Blogrolling. Getting blogrolled requires someone to make a commitment to you. You don’t get blogrolled after the first visit any more than you get to meet the parents after the first date. You have to impress (some would say seduce) the prospect over time, and if you continue to provide value to them over weeks or months then you’ll end up on their blogroll. That is good for you — not only will you get SEO mana, but they’ll visit you more frequently, comment on what you have to say more frequently, and count you among their few trusted sources of information. And when they trust you, their readers will come to trust you. And so trust for you expands throughout your niche and eventually makes you money.

Another reason you’ll want to write to be read, not to be scanned, is the growth of RSS readers. RSS readers are a disruptive innovation in how people read blogs. They change the ballgame almost as much as the existence of Google changes the ballgame for web design. In the absence of an RSS reader, people congregate to a starting point (a portal, Slashdot, digg, a known-trusted blog) and begin getting their daily dose of news there. They might leave that site a dozen times over their news-cycle but they always come back to it. None of the dozen sites they visit “owns” (I’ve always thought this use of the word was vulgar) them — they keep coming back to the aggregator. RSS readers make every reader into their own aggregator. I cannot overemphasize how fundamental a change this is. Now, even though perhaps 1% of the blog reading public has ever blogrolled anyone, a huge percentage of your readers are trying to make a forward-looking decision about your blog: it’s good today, but will it be good tomorrow when I open its RSS feed? Quality writing is a great way to convince folks that yes, you will be there for them tomorrow.

Incidentally, articles which are well-written often tend to stand the test of time better than articles which are not. If you constantly keep cranking out the top 10 lists to an audience who thinks yesterday was ages ago, you’ll have to produce something new every day or the readers will stop coming. If, on the other hand, you write pieces which are both genuinely useful and written well, people will continue to find those and refer other people to them long after they have fallen off your front page and the radar screen of the Internet’s mayflies. My blog is pretty tiny in the grand scheme of things, and yet yesterday 60 people (yikes, two months ago I didn’t even know sixty people) decided to take some time out of their day to read something I wrote about customer service some two to three weeks ago.

Now, clearly it’s easier to write top-ten lists than it is to write well. Writing well, though, is a skill which can be taught and which can be learned. Imitate writers you admire. You’ll eventually end up with a voice of your own, but it will tend to bear a little resemblance to your favorite authors. Practice, practice, practice. Spellcheck and have a decent, but not slavish, respect for the formal rules of the English language. (Poor writers ignore the rules, good writers follow the rules, great writers break the rules, and the very best writers make the rules.) Finally, write in a way that shows off your own voice, personality, and ideas, the better to stand out against a sea of mediocrity.

[Edit: Fixed my English.]

Here’s yet another micro-tip, regarding your installer.  (You do have an installer, right?  If not, run over to NSIS and get started — scripting one up will take you less than an hour.  Trust me, it will work out much better for the majority of your customers than “Here’s a ZIP file, hope you know what to do”, at least if you’ve got non-technical users like me.)

1)  Drop a link on both their start menu and their desktop (asking permission is always nice).  I only did the start menu thing until version 1.03, when I decided to delve into the documentation and figure out how to put a link on the desktop.  This look me literally 45 seconds to accomplish.  It also literally doubled the percentage of my downloads which I can verify were executed (i.e. they accessed my website from within the application).

2)  Offer to run the program immediately after the installer is finished.  Have you ever seen the desktop of a non-technical user?  Its a rather cluttered place.  Don’t force them to hunt for your program, because there’s a large chance that they’ll get distracted away from the task at hand (getting hooked on your product) and will instead resume browsing the Internet, leave the computer and forget they downloaded anything, etc.  So take all the guesswork out of getting to your very best sales vehicle.  (I use a simply worded popup message: “Would you like to start making bingo cards right now?”.  A default-to-checked “Run now” box also works.)

Scott Meade is starting a seven-day Rails development extravaganza with the end goal of getting a product off of the group.  He mentioned I’m one of his inspirations, which I find absolutely mind-blowing.  Best of luck and keep us up to speed!

This is a bit old, but I love it to pieces and listen to it when I need inspiration. I try not to listen to it when actually coding because the tears of laughter make it hard to see semicolons. (The fact that its Creative Commons and totally free is a nice bonus, too — although after one listen to it I would have gladly paid money for it. However, since its free, I haven’t taken time to send the guy so much as a $1 Paypal thanking him for his time. I think there is a lesson here for a segment of the uISV community regarding pricing-as-signal.)

Code Monkey

Lyrics below the jump.

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“Light on functionality and appears to be mostly aimed at people studying English.  Still, if thats what you want, apparently its a pretty good choice.  Easy enough for a stay-at-home mother to use.  3/5″** — Chinese cracker “Poisonous Mists of Gold Mountain”  (* Not entirely sure that the character means mist, as it isn’t used in Japanese.)

Say what you will about Chinese hackers, at the very least they have more amusing pseudonyms than our home-grown miscreants.
** I do not stand by the accuracy of this translation, as I don’t actually read Chinese.  I can just sort of get the gist of it by picking out words in isolation which happen to be the same in Japanese, in much the same manner that you can sort-of understand Portuguese by way of Spanish.

My traffic on Monday, which isn’t yet all collected (I’d guess its approximately 60% over, given how Analytics imposes a delay on things) shows that I had my highest traffic ever today, surpassing even the spike from the pirate kings.  Its roughly 25% above my previous peak traffic, and roughly double what my traffic a week ago was.

Drilling down into the numbers, my paid advertising is performing at about the same level as normal (had an exceptionally good day on Google and a poor day on Yahoo, so they averaged out) and my organic search engine performance has not changed for a week.  However, the number of “direct” hits I got on my website increased by almost an order of magnitude, and I’m getting a significant number of referrals from one download site in particular and a long tail of them from two dozen smaller sites.

Most of the “direct” hits (when you get to a web page via your address bar) are coming from trial installs which originated off of my site.  Assuming that roughly 10% of folks downloading the trial are updating, which is what my numbers have generally looked like, I had more trial installs in the last 24 hours than I’ve had in the last two weeks (exclusive of download.com).  (Why can’t I just grep my HTTP logs for BingoCardCreatorInstaller.exe?  Because some download sites download the exe from my site and host it themselves, so if they give out 100 trials they only generate one result in my logs.)
Well, that certainly worked out well.  If any significant portion of this new traffic converts RoboSoft is getting my money as promised.