How to sell your software for $20,000(nukemanbill.blogspot.com)
nukemanbill.blogspot.com
How to sell your software for $20,000
http://nukemanbill.blogspot.com/2008/06/how-to-sell-your-software-for-20000.html
55 comments
The usual recipe is: spend 10x as much time selling it as writing it. That's one reason hackers tend not to like this route.
I absolutely agree, but if a hacker can accept the fact that their code truly has value, they can bring in someone they trust to sell that to companies.
10x as much time selling it as writing it
This is not my experience.
I'm guessing my split would be more like:
Sales and marketing was never a problem. There is business everywhere. I mention what I do everywhere I go (who doesn't), and find business almost anywhere. Everyone uses software these days and everyone needs something. I've gotten 5 figure deals at parties, family functions, networking events, and mostly from word of mouth.
I love to hack, but I also love to talk about what I do. I may not be typical, but isn't helping people with cool tech what it's all about?
In my mind, the problem isn't the time needed for selling and marketing. The real problem is that this kind of business (consultingware, one-off packages, lite package with customization, whatever you want to call it) isn't scalable.
If my competitive advantage is better value because "the boss" (not some lightweight on an 800 number) is supporting you, then it's also my biggest limitation. I only have so many hours in a year. Sure, I can extend myself with advanced methods and technology, but sooner or later, I hit my limit. That's why it's so important to find a way to convert your consultingware business into a product business. Not an easy feat, but certainly worth the effort.
This is not my experience.
I'm guessing my split would be more like:
sales & marketing - 10%
analysis - 15%
design - 5%
development - 50%
implementation - 10%
support - 10%
Sales and marketing was never a problem. There is business everywhere. I mention what I do everywhere I go (who doesn't), and find business almost anywhere. Everyone uses software these days and everyone needs something. I've gotten 5 figure deals at parties, family functions, networking events, and mostly from word of mouth.
I love to hack, but I also love to talk about what I do. I may not be typical, but isn't helping people with cool tech what it's all about?
In my mind, the problem isn't the time needed for selling and marketing. The real problem is that this kind of business (consultingware, one-off packages, lite package with customization, whatever you want to call it) isn't scalable.
If my competitive advantage is better value because "the boss" (not some lightweight on an 800 number) is supporting you, then it's also my biggest limitation. I only have so many hours in a year. Sure, I can extend myself with advanced methods and technology, but sooner or later, I hit my limit. That's why it's so important to find a way to convert your consultingware business into a product business. Not an easy feat, but certainly worth the effort.
I don't think he's talking about consulting. I think he's talking about big ticket business software which almost always costs an arm and a leg to sell and market. Hell, that's true of almost all SMB software as well.
The OP was talking about a microISV (he even calls it "consultingware" himself). No mention of "big ticket business software" anywhere in this thread.
Hrm.
"I think then the best way to come up with a $20,000 B2B product idea is to focus not on "what kind of software do businesses really need?"
and:
"So, how do you sell it? Firstly, the fact you have a "lite" version is covered by your reduced price. You're going to sell your lite version for $5K or $10K a seat or something well below the competition, to account for its being a basic product."
I think his mention of consultingware is in reference to positioning it as "product-plus-consulting". Not uncommon in enterprise software to layer on services.
And, uh- $5 to $10k a seat isn't big ticket?!
"I think then the best way to come up with a $20,000 B2B product idea is to focus not on "what kind of software do businesses really need?"
and:
"So, how do you sell it? Firstly, the fact you have a "lite" version is covered by your reduced price. You're going to sell your lite version for $5K or $10K a seat or something well below the competition, to account for its being a basic product."
I think his mention of consultingware is in reference to positioning it as "product-plus-consulting". Not uncommon in enterprise software to layer on services.
And, uh- $5 to $10k a seat isn't big ticket?!
The biggest problems faced by the two consultingware shops I've worked at, is that they thought they were product based shops and every design desision reflected that. But the product became so complicated that every client had there own special configuration and no-one really understood them all at the same time. It became very common to make a change for one client and break a feature for someone else when they upgraded.
IMO they would have been much better off to embrace consultingware and plan for it.
IMO they would have been much better off to embrace consultingware and plan for it.
He doesn't need to scale since he doesn't care about making more money than it takes to have a comfortable lifestyle.
Another thing to note when going this route is that word of mouth marketing is INCREDIBLY POWERFUL in a niche market.
If you're in a market where people are paying this much for their software, everyone talks to everyone else (competitors included).
So, you live and die by your reputation.
If you're in a market where people are paying this much for their software, everyone talks to everyone else (competitors included).
So, you live and die by your reputation.
Great read, the author seems very realistic and down to earth. A welcome change from the TechCrunch microverse.
After reading this I went back and read all his other posts. They're very good, and it's excellent to read stuff by someone who's actually done this - i.e. built a profitable software business from scratch.
This is a great article! I don't agree with everything it in, but it's packed full of wisdom obviously backed by blood, sweat, and tears. Just a few thoughts off the top of my head:
if there isn't a product for it already, it's probably because there just isn't a need
This may be true for software packages, but it is most certainly not true for custom apps. I wish I had a nickel for every time I heard, "Now if you can get it to do that, you'd have something there." Oh wait, I do have those nickels.
you have to convince businesses or organizations they need it
Not if it's their idea. And that's where your ideas should be coming from anyway.
I knew I could make it better so that's where I happened to get my idea.
Yes! Sometimes I think the last thing said before conceiving a software product is, "Who wrote this crap?"
I know if I decided to make automatic parking garage systems, I'd at least want to hang out at some garage and shadow the workers for a few days. Not to figure out what they're doing wrong and how my software could fix it, but just to learn their job, learn what their current system does, and find out what they like and don't like about what they currently use.
This is solid gold! If you're not sure what "analysis" is, then re-read this paragraph. Better yet, cut it out and put it on your bulletin board. Everything here is necessary but not sufficient. I would follow this up with: Ask questions to everyone about everything they do, preferably in groups, until you have no more questions to ask. Get a list of every single data element you'll need from paperwork, screens, or people's heads. Don't stop until you know you've "got it".
In some markets, business customers may not want to use the same things their competitors use, and will be willing to try a new or unproven system in the hopes of getting an advantage (better productivity, lower overhead costs...). The unproven product may fail, but some are willing to try.
This is an almost always overlooked factor in buying decisions, even by the best of sales people. I don't think I've ever seen it mentioned in an article like this. Kudos to OP for bringing it up.
See? A one-person company is actually a good thing!
Addressing the concerns about a one person operation is again, solid gold bulletin board material. I love the "hit by a bus" question. (Does anyone here actually know anyone who was ever hit by a bus?)
Excellent material from someone who has been in the trenches. Thank you, Bill!
if there isn't a product for it already, it's probably because there just isn't a need
This may be true for software packages, but it is most certainly not true for custom apps. I wish I had a nickel for every time I heard, "Now if you can get it to do that, you'd have something there." Oh wait, I do have those nickels.
you have to convince businesses or organizations they need it
Not if it's their idea. And that's where your ideas should be coming from anyway.
I knew I could make it better so that's where I happened to get my idea.
Yes! Sometimes I think the last thing said before conceiving a software product is, "Who wrote this crap?"
I know if I decided to make automatic parking garage systems, I'd at least want to hang out at some garage and shadow the workers for a few days. Not to figure out what they're doing wrong and how my software could fix it, but just to learn their job, learn what their current system does, and find out what they like and don't like about what they currently use.
This is solid gold! If you're not sure what "analysis" is, then re-read this paragraph. Better yet, cut it out and put it on your bulletin board. Everything here is necessary but not sufficient. I would follow this up with: Ask questions to everyone about everything they do, preferably in groups, until you have no more questions to ask. Get a list of every single data element you'll need from paperwork, screens, or people's heads. Don't stop until you know you've "got it".
In some markets, business customers may not want to use the same things their competitors use, and will be willing to try a new or unproven system in the hopes of getting an advantage (better productivity, lower overhead costs...). The unproven product may fail, but some are willing to try.
This is an almost always overlooked factor in buying decisions, even by the best of sales people. I don't think I've ever seen it mentioned in an article like this. Kudos to OP for bringing it up.
See? A one-person company is actually a good thing!
Addressing the concerns about a one person operation is again, solid gold bulletin board material. I love the "hit by a bus" question. (Does anyone here actually know anyone who was ever hit by a bus?)
Excellent material from someone who has been in the trenches. Thank you, Bill!
> Does anyone here actually know anyone who was ever hit by a bus?
Yes, but not because of forgetting to look both ways before crossing the street. A bus went through a building my father was in. He was paralyzed but is fine now (this was before I was born).
Yes, but not because of forgetting to look both ways before crossing the street. A bus went through a building my father was in. He was paralyzed but is fine now (this was before I was born).
I wouldn't normally joke about this, but since your father is fine...
I hope I can meet him some day. Then I'll have a great new response to the "hit by a bus" concern, "Not a problem. 100% of the people I know who were ever hit by a bus are fine now."
I hope I can meet him some day. Then I'll have a great new response to the "hit by a bus" concern, "Not a problem. 100% of the people I know who were ever hit by a bus are fine now."
True story: 100% of the people I know who were hit by a train are fine now.
(That man has the constitution of a bull. I stand in awe of his fortitude.)
(That man has the constitution of a bull. I stand in awe of his fortitude.)
> Does anyone here actually know anyone who was ever hit by a bus?
No, but I got married. Does it qualifies?
No, but I got married. Does it qualifies?
I actually know someone who was hit by a bus on the way to his software developer job - luckily he was fine but for a couple of cuts and bruises (inner city., hence bus was probably going v slow), but it can happen!
i went abroad to england during college. while there, two people were hit (and killed) by buses. the first, i actually witnessed (it was horrible). the second, i heard about because the girl went to my college and i had met her a few days before. they were both riding bikes when it happened. then, a family friend was hit and killed by a bus while jogging in Las Vegas (he was listening to an ipod). based on my experience, i'd say the "what if you get hit by a bus?" question is valid.
Interesting note on the sidebar: "Although successful I guess, I'm still trying to decide if it was really worth the hassle." His first post goes into a little more detail on this: http://nukemanbill.blogspot.com/2008/05/first.html
Thanks for finding that. I thought this was interesting:
"I used to be really easy, always happy and always laid back as an 8-5'er working for the 'man,' but now I realize I have actually become sort of an asshole. Unfortunately, the realities of business make you that way. And you really have to be an asshole to be successful."
I've heard the same thing from a lot of entrepreneurs and I've sensed it happening to myself as I've gotten more aggressive about pursuing my goals. I'm pretty sure I'm happier, or at least more fulfilled, but sometimes it sucks having to replace that lightheartedness with grim determination.
"I used to be really easy, always happy and always laid back as an 8-5'er working for the 'man,' but now I realize I have actually become sort of an asshole. Unfortunately, the realities of business make you that way. And you really have to be an asshole to be successful."
I've heard the same thing from a lot of entrepreneurs and I've sensed it happening to myself as I've gotten more aggressive about pursuing my goals. I'm pretty sure I'm happier, or at least more fulfilled, but sometimes it sucks having to replace that lightheartedness with grim determination.
"And you really have to be an asshole to be successful."
That part's not true. You may have to be in some areas of business, including perhaps the world of $20k software, but I know plenty of successful people who aren't assholes.
You do definitely have to be determined. But determination doesn't imply being an asshole.
That part's not true. You may have to be in some areas of business, including perhaps the world of $20k software, but I know plenty of successful people who aren't assholes.
You do definitely have to be determined. But determination doesn't imply being an asshole.
Point taken. I suppose for some it's a matter of degrees -- determination doesn't imply being an asshole, but sometimes really pushing yourself can lead you to take energy from the things you'd be doing to make the people around you happy and divert that energy into your own work. That is, you don't become cold so much as you sacrifice a bit of warmth.
I have a problem with the $20k+ business software industry: if you spend time adding anything to the software that isn't part of the checklist of features the customers want to see before, you're wasting time and money.
The customers make decisions in terms of things like keeping up with competitors ("we have to upgrade because they did"), and risk to their personal careers ("I dont want to rock the boat"), and compliance with industry standards/buzzwords ("Your competitor supports XYZ, why don't you?")
They want to hear that your software is scalable, easy to use, secure, and well-designed, but they don't actually care if it is or not, and won't even check.
If I had to sell a product that had sub-standard usability or UI response times, I'd feel like an asshole. To others, its just how you do business.
The customers make decisions in terms of things like keeping up with competitors ("we have to upgrade because they did"), and risk to their personal careers ("I dont want to rock the boat"), and compliance with industry standards/buzzwords ("Your competitor supports XYZ, why don't you?")
They want to hear that your software is scalable, easy to use, secure, and well-designed, but they don't actually care if it is or not, and won't even check.
If I had to sell a product that had sub-standard usability or UI response times, I'd feel like an asshole. To others, its just how you do business.
If I had to sell a product that had sub-standard usability or UI response times, I'd feel like an asshole.
Then don't.
Excellent usability and response time are minimum requirements for any software.
Then don't.
Excellent usability and response time are minimum requirements for any software.
Personally I hate the idea of building software with the intention to sell it for as much as possible, as soon as possible.
You will just end up with software which feels unloved. Plus you will treat the project as a job and will likely not have much fun building it.
You will just end up with software which feels unloved. Plus you will treat the project as a job and will likely not have much fun building it.
This author seems to be writing software for money, not for love. You can try to achieve both but ultimately one will have to take priority.
You will just end up with software which feels unloved. Plus you will treat the project as a job and will likely not have much fun building it.
Maybe I'm a counterexample, but this is not my experience.
I love what I do and everything I write is for money. Somehow I have a feeling I'm not the only one.
Maybe I'm a counterexample, but this is not my experience.
I love what I do and everything I write is for money. Somehow I have a feeling I'm not the only one.
Great article, but the one point it glosses over is how to get the first customer on board. It talks about how to identify good markets, as well as what to do when a company is already interested in buying from you. But getting a big company to come to that stage is non-trivial, and requires several meetings with their management for a big, enterprise sale.
So how do you do it? You can't point to a track record, or other customers, but what you can give your customer(s) is comfort with the sales process, and transparency. Still it's an uphill battle, and usually you have to talk to a lot more than a few companies to get a contract of this size.
So how do you do it? You can't point to a track record, or other customers, but what you can give your customer(s) is comfort with the sales process, and transparency. Still it's an uphill battle, and usually you have to talk to a lot more than a few companies to get a contract of this size.
He wrote the software and then showed it to potential buyers. The latter doesn't seem more difficult than the former ç:-)
As an example of how it is possible to sell software quickly- in one weekend I built a slideshow tool. only about ~350 lines of code and two months later after it got popular I sold it for $3,000 on sitepoint, domain included.
Mind if we see it, if it's still around?
One thing this made me think of is the notoriously badly written voting machine software. I wonder what would be required for someone to compete with existing providers to make better software for voting machines.
Easy. The CEO of your voting machine software company simply needs to drink human blood from the skull of Abraham Lincoln with various heads of state and government officials while they are all still juniors in various secret societies at Yale.
Excellent read and really makes you think about what you could build.
Where is the evidence the fellow did what he says he did? What's the company name? Who is he? What product did he sell? Who uses it?
We all love to read success stories but shouldn't we ask that the provenance of such stories be provided? Here we jump into discussing the advice of a total stranger - an unknow with no credentials. "Nukemanbill" could be sitting inside a mental institution or another teenager playing mind games. Or maybe he just read the book "All Marketers Are Liars" by Seth Godin and is testing Godin's ideas. Hell, maybe he's a SPAMmer selling Godin's book and thus this post.
The only URL on the site that has any provenance whatsoever is the one to JoelOnSoftware. Heck, I question even Joel's BS ofttimes because his is a private company and we don't know whether he's floating on his past Microsoft earnings or really makes money. Should I read someone's writings because he posts a known URL?
Taleb's right - humans are natural-born suckers. We're too trusting even here on HN. IMO if you own a company and want to give advice then you should be willing to name yourself and the company. Without that it's just SPAM.
To it's credit the advice given is worth every cent I paid for it.
We all love to read success stories but shouldn't we ask that the provenance of such stories be provided? Here we jump into discussing the advice of a total stranger - an unknow with no credentials. "Nukemanbill" could be sitting inside a mental institution or another teenager playing mind games. Or maybe he just read the book "All Marketers Are Liars" by Seth Godin and is testing Godin's ideas. Hell, maybe he's a SPAMmer selling Godin's book and thus this post.
The only URL on the site that has any provenance whatsoever is the one to JoelOnSoftware. Heck, I question even Joel's BS ofttimes because his is a private company and we don't know whether he's floating on his past Microsoft earnings or really makes money. Should I read someone's writings because he posts a known URL?
Taleb's right - humans are natural-born suckers. We're too trusting even here on HN. IMO if you own a company and want to give advice then you should be willing to name yourself and the company. Without that it's just SPAM.
To it's credit the advice given is worth every cent I paid for it.
Hi giardini, I'm Bill from the blog (tracking back why my daily visitor stats suddenly went 2,4,0,1, then 7000...)
Honestly I'm just doing that blog as something to do and share some ideas about what I've experienced. I don't really care who reads it, so if it doesn't ring true with your experiences you can just move on. But posting my identity and company would mean my employees, competitors and customers would be reading every word, and I couldn't be truthful about anything. So I'm anonymous. I don't really care though, read it or not. I guess I'm just giving back a little to the anonymous cloud of internet people I've gotten advice from over the years, both good and bad.
Honestly I'm just doing that blog as something to do and share some ideas about what I've experienced. I don't really care who reads it, so if it doesn't ring true with your experiences you can just move on. But posting my identity and company would mean my employees, competitors and customers would be reading every word, and I couldn't be truthful about anything. So I'm anonymous. I don't really care though, read it or not. I guess I'm just giving back a little to the anonymous cloud of internet people I've gotten advice from over the years, both good and bad.
Well there you have it I guess. Anyways thank you so much for giving time to share your experiences with us.
Who are you? If you held yourself to your own standards you'd link to your full contact info and biography in your HN profile. Otherwise you're just, by your own criteria, another anonymous spammer with no credentials, not to mention a hypocrite.
This blogger explains that he wants to be as honest as possible with his blog, hence the anonymity. In one of his posts he details the deterioration of a previously close friendship due to differences of understanding about business risk and reward. In that context his anonymity can be seen as a form of consideration.
This guy's blog is one of the best reads I've come across on HN for quite some time. I look forward to reading his future posts, and ignoring your future objections.
This blogger explains that he wants to be as honest as possible with his blog, hence the anonymity. In one of his posts he details the deterioration of a previously close friendship due to differences of understanding about business risk and reward. In that context his anonymity can be seen as a form of consideration.
This guy's blog is one of the best reads I've come across on HN for quite some time. I look forward to reading his future posts, and ignoring your future objections.
Gasp! Such logic! Such wisdom! Such overwhelming intellect!
FWIW I'm not the one claiming I you can "sell your software for $20,000." I'm the one telling you, just like your mother did 20 years ago, "Don't be a fool: be careful what you accept as truth."
But if you must know: I _also_ remain anonymous because of the deterioration of a previously close friendship due to differences of understanding about business risk and reward.
Since that satisfied you in his case I am certain that you will find it acceptable in mine.
Or not. Bugger off.
FWIW I'm not the one claiming I you can "sell your software for $20,000." I'm the one telling you, just like your mother did 20 years ago, "Don't be a fool: be careful what you accept as truth."
But if you must know: I _also_ remain anonymous because of the deterioration of a previously close friendship due to differences of understanding about business risk and reward.
Since that satisfied you in his case I am certain that you will find it acceptable in mine.
Or not. Bugger off.
Please stop this.
Do you have any criteria for determining when to just ban someone from the site? Do you ever do that?
i know people do get banned, because i've seen it happen. it's always due to behavior a lot worse than this, however. it happens to accounts that were created purely for trolling or spamming, as far as i've seen.
My I haven't seen such trollish behavior in HN for a long time.
Ah, yes, but how do we know you weren't traumatically teased by the author in high school and are now stalking him online and trying to discredit him with vague insinuations? Huh?
Don't be silly. I'm picking on his blog because he is _anonymous_. Nobody knows who he is except himself. Unless you believe that I have some superhuman power to scan the Internet's tubes with my super-neuro-alien-brainprobe.
And that's the point - except in very unusual circumstances, do you read (and accept as authoritative) blogs whose authors don't reveal their identity?
I think not.
And that's the point - except in very unusual circumstances, do you read (and accept as authoritative) blogs whose authors don't reveal their identity?
I think not.
The comment you are responding to is clearly tonge-in-cheek.
On the other hand, how is compatible to be both anonymous (thus unreachable) and a spammer?
I believe what this guy says because it's also my experience. I haven't set up a company like his, but I did see niche applications and know a little about this kind of markets. What he says is nothing really new, he just says it well.
On the other hand, how is compatible to be both anonymous (thus unreachable) and a spammer?
I believe what this guy says because it's also my experience. I haven't set up a company like his, but I did see niche applications and know a little about this kind of markets. What he says is nothing really new, he just says it well.
Most spammers are anonymous. Consider Amazon book reviews.
On most Internet social groups (e.g., reddit, HN, google, amazon) spammers are omnipresent. What an ideal medium HN is should you desire to capture the eyeballs of nerds and technoweenies: then you could sell them books, sell them ideas, direct them to other websites, sell them seminars, BS, etc.
Indeed, what communications channels are _not_ replete with spammers?
And if, as you say, he says "nothing really new", why bother? Shouldn't you be reading something else, something that is more informative to you, something that possibly contradicts your experience, surprises you and adds to your knowledge? Reading what you already "know" is a waste of time IMO.
On most Internet social groups (e.g., reddit, HN, google, amazon) spammers are omnipresent. What an ideal medium HN is should you desire to capture the eyeballs of nerds and technoweenies: then you could sell them books, sell them ideas, direct them to other websites, sell them seminars, BS, etc.
Indeed, what communications channels are _not_ replete with spammers?
And if, as you say, he says "nothing really new", why bother? Shouldn't you be reading something else, something that is more informative to you, something that possibly contradicts your experience, surprises you and adds to your knowledge? Reading what you already "know" is a waste of time IMO.
Geez take it for what it is alright? I personally can relate with Bill as my company is doing exactly what his company is doing. If anything it just validates the presence of what my company stands for and why we are here.
But hey I'm sure you've got something really useful to do right? aside from wowing us with your knowledge of Internet social groups and anonymous posters.
But hey I'm sure you've got something really useful to do right? aside from wowing us with your knowledge of Internet social groups and anonymous posters.
Why would you consider this suspicious of being made up? I think his path to success is far more realistic than almost all of the web 2.0 stuff out there.
I hate to point out the obvious, but
- I haven't read "almost all of the web 2.0 stuff out there."
- How would you know (that is personally)? Perhaps you've already done what he describes and can confirm it? If so, please post it on a blog, along with your name and your company's name. Unveil your product (not some imaginary "parking lot software").
- How would you know (that is, objectively whether what he's saying is true or BS)?
- Because "On the Internet no one knows you're a dog."
- I haven't read "almost all of the web 2.0 stuff out there."
- How would you know (that is personally)? Perhaps you've already done what he describes and can confirm it? If so, please post it on a blog, along with your name and your company's name. Unveil your product (not some imaginary "parking lot software").
- How would you know (that is, objectively whether what he's saying is true or BS)?
- Because "On the Internet no one knows you're a dog."
You must have pretty high standards if you consider his blog spam.
To me, his posts can't be validated. His ideas aren't "grounded".
How many blogs do you read that have anonymous authors? Of those, how many do you consider authoritative in their field and which give advice? Of those, how many give advice truly informative and worth following?
Anonymous blogging is useful for hiding a source. Why trust anonymously-posted content, my own included?
You can waste a lot of time on the Internet reading what? - Unbeknownst SPAM? - Mental garbage? - The thoughts of institutionalized programmers? - Good advice from seasoned veterans? - funny stories from young developers?
The answer is "All the above."
Think for yourself. Know your sources. Seek provenance before accepting advice. Beware of Greeks (and Geeks) bearing gifts.
How many blogs do you read that have anonymous authors? Of those, how many do you consider authoritative in their field and which give advice? Of those, how many give advice truly informative and worth following?
Anonymous blogging is useful for hiding a source. Why trust anonymously-posted content, my own included?
You can waste a lot of time on the Internet reading what? - Unbeknownst SPAM? - Mental garbage? - The thoughts of institutionalized programmers? - Good advice from seasoned veterans? - funny stories from young developers?
The answer is "All the above."
Think for yourself. Know your sources. Seek provenance before accepting advice. Beware of Greeks (and Geeks) bearing gifts.