Boris Yankov

In the last year, I have been working hard, developing my killer app FusionDesk.

Today is its official release.

Not being officially released, didn’t stop it from:

• Being published on a download site - Softpedia crawled my product I added to Plimus and published FusionDesk.
• Being cracked - some crackers saw the Softpedia publication and cracked a beta version of FusionDesk
• Being sold - I sold few copies to people that were eager to start using FusionDesk even in its unfinished state.

FusionDesk has a paid and a free version, so why not take a look at it?

Anyone even remotely interested in Web 2.0 apps will be delighted to learn that FreshBooks just reached 80,000 customers. You can read an interview with their CEO here.

But aren’t you asking yourself, do this number anything without no details are provided?

Users 2.0

One thing that has lost its meaning with Web 2.0, is the concept of a ‘user’. Is a user someone who is paying for your application? Or is he someone who typed in a user name and a password, for a chance to take a look at your service? The exact definition varies a lot, from person to person.

As a simple example: I have registered twice for a free account at FreshBooks. Am I considered two users or what? In the old days, no one cared to count the downloads of their programs as an actual user. Things certainly change.

Customers 2.0

To be fair, FreshBooks looks like a decent application, with good potential. I am sure they have real customers, paying real money. And money are so Web 1.0. Who needs money if they have visitors? I guess the real problem I have with this, is the number of 80,000 users cited.

But lets talk about me for a sec, before continuing, should we? I have a free program called MSConfig Cleanup. It is of the old-style type, out-of-fashion desktop application. It gets about 300 downloads per day. This should be about downloads 110,000 per year. Now I am confused. These people, downloading my app, are not paying anything. Are they customers of mine? Or should I have a Web 2.0 application to be able to claim them as customers?

Profits 2.0

Lets get back to FreshBooks. How much exactly are they earning each month?

To be honest, I don’t know. No one except them doesn’t know. But let’s try to calculate their revenues.

First try. The guys are not hyping anything. They actually have 80,000 paying users. Their prices are $14, $27 and $39 respectively, to an average of $26.7. Eighty thousand people paying this much means over 2 million dollars each month. Not bad at all, huh? Should we be waiting for an IPO soon?

Second try. The guys are reporting their total users, including the free accounts registered. We assume a typical rate of 1 paying customers per 100 visitors that registered for an account. We get 800 people that registered for FreshBooks and paid for using it. In the 2 years running this business, the FreshBook guys retained 30% of them (hey, we are trying to be realistic this time). And should we calculate in, the fact that the cheaper accounts usually (always?!?) get more registrations? So how much profits per month would are we speaking of? $5000.

Reality 2.0

There is so much hype around Web 2.0 that even successful businesses with reasonable, back-to-earth applications can’t resist the temptation to lie with their numbers.

Keep in mind that FreshBooks is not a social network site, and it is not even written on Ruby! It even does have profits! May be it is not a Web 2.0 application after all. Let get back to reality, should we?

As a microISV you most likely create your web sites yourself (and even design them yourself). You want your pages to be very persuasive and irresistible, so that your visitors jump to the order page without much hesitation.

In trying to persuade web site visitors, many microISVs do the mistake to crowd their pages with all things imaginable. An example would be the countless download site ‘awards’. Another would be the ‘happy faces’ of people, from stock photography. If you really insist on using these, use just one photo.

Seth Godin explains that despite the numerous signs explaining not to carry liquids on a plane, many people still manage to ignore them. Guess what? These same people are visiting your web site. They are in a hurry. Not in a life-threatening hurry, in the ‘I don’t care enough to bother’ hurry.

Do you really want to bore your prospects enough to make them abandon your web site and your product? What can you remove from your pages today, that doesn’t matter?

There is a tradition in The Association of Shareware Professionals that in the beginning of each year, many of its members reveal their profits for the previous year. The time has come. I decided to reveal my income openly here, on my blog.

Going full-time

My beginning in the software business was slow and painful. In 2004 I was doing 1-2 sales per month, which was dismal by any possible measurement.

But all this changed in 2005 when I finally decided to dedicate all my time on my business. The results soon came:

I am currently making my $2000/month from three products: InControl, Smart To-Do and OverSpy.

What’s next?

My goal for 2006 will be to at least double my current profits.
This shouldn’t be hard at all. I intend to increase significantly the sales of my current products. And my upcoming software FusionDesk (which will kick ass) will additionally boost my income.

Are you using Google AdWords? If you aren’t you should. And if you do, you probably want to learn more about it. Being a better AdWords advertiser will definitely increase your profits.

eBooks?

One of the first steps of many is to seek eBooks on AdWords. But it turns out that most of them (if not all) are not worth the money.
Their prices usually start from $50 and go up to $250. And you are required to decide if a particular eBook is worth buying from its lousy web site. You them, the ones emulating a sales letter.

Have you ever wondered if they are worth buying? Now you know - they aren’t.

Just Books!

Why paying ridiculous prices for an eBook, when you can buy classic paper books from Amazon? They are better and cheaper!

Take a look at these three books.
Winning Results with Google AdWords
Search Engine Advertising
Building Your Business with Google For Dummies
You can buy them all, for less than a single eBook.

Online Resources

But you don’t have to pay anything. There are lots of free resources online:

Visit Google AdWords Help Center. It is extensive, and of course, up to date.

And finally, browse through these two great discussion groups:
Google AdWords Forum on WebMasterWorld.com
Google Groups Forums on Google AdWords

I am moving my old blog here from Blogger which served me well.
Being dead for almost an year, this blog is now reborn!

Expect interesting articles from me every week.

Should you join the ASP?

For some time I was wondering if joining the ASP (Association of Shareware Professionals) is a good idea. I knew it will be helpful to me but was hesitant to part with $100.

Well I had finally decided to join and have done this on 1st Dec, just 5 days ago. Let me share my impressions with you.

The Forums

I had heard that the private newsgroups are the biggest benefit you get when joining. Nevertheless I was impressed with the number of posts.

Take a look at the screen shot from my newsreader:

These are the counts of unread posts for the last 3 years. Impressive, huh? Not only there is plenty of relevant information but the average poster is very experienced in the software/shareware field. I was pleasantly surprised.

Now you can get a competent answer to your questions that were roaming your head for so long!

ASPects

ASPects is a monthly newsletter sent to the ASP members. It’s really nice and contains information written exclusively for it that you can’t find anywhere else.

And if you are in a research mood; there are a hundred issues to read from the 90s. Take a look at the first issue dating back from 1988!

Other benefits?

Furthermore you can get numerous discounts on software sold by ASP members. They range from 30% to getting the software free.

The Community

One of the unexpected benefits to me was the feeling to be a part of a great community and being able to have contacts with the successful people of the industry.

So should you join the ASP? The answer seems obvious: Yeah, definitely!

Download-To-Buy Ratio: The Myth

There is one thing everyone starting in shareware business knows. In order to get a sale he should get a hundred downloads. In other words the typical download-to-buy ratio is 100 to 1.

I remember the time before starting with shareware. I was browsing Download.com and was looking at the download counts. If an app had 50 000 downloads I knew it had sold about 500 copies.

I couldn’t be more wrong. There was a simple fact that I haven’t realized yet.

Einstein knew it!

You know about relativity?

In reality this ratio varies. And it varies a lot. You can have a sale on every 30 downloads or you may have one on every 1000 downloads. There are a lot of factors which come into play.

Actually the ‘industry standard’ 100 to 1 is not a standard at all. No one can really measure the average download-to-buy ratio for the industry in a matter of fact. And the value is typically worse than the well known value. It is more likely somewhere between 150 and 200 to 1.

Why, oh why?

There are plenty of reasons why the ratio is different throughout different products.

One simple reason why people don’t buy is that they don’t need your application. They may have been initially interested in it. Then they have downloaded it. And then they found that it wasn’t what they expected. Or that they don’t need it. Or they didn’t like it. Or it was so similar to other apps that they forgot about yours. The list can go on forever.

And what do you think about the price? It is even possible that they liked the app; but was too expensive. But don’t count much on that. It’s more likely that your app hasn’t brought enough value for its price. So the answer may be improving the product rather than lowering the price.

Is it really that important?

You bet it is! Imagine you have a product with a download-to-buy ratio of 1000-to-1. Now that is a pretty bad ratio but it’s not that uncommon as we would like it to be. And now imagine you have found a way to increase it to 100-to-1. That will be a tenfold increase of your sales!

Even if we put aside that simple, obvious fact there are other things that are affected. If we decide to use Pay-Per-Click advertising this ratio will be extremely important.

If we pay the minimum of 5c to Google for a click but we have a download-to-buy ratio of 1000-to-1 we will have to earn at least $50 from every visitor. And keep in mind that not every visitor will download your application. Actually we have another ratio here Add some other costs like the payment processing company commission and the things are getting pretty nasty. You will be loosing money.

Let’s look at the other case. We have a download-to-buy ratio of 100-to-1. If we consider that only one in thee visitors actually downloads our app we are still standing pretty well. We paid only $15 (0.05 * 100 * 3) for a sale.

You know nothing yet!

If you think my calculations are correct then think again. You haven’t learned the most important lesson. A ratio is nothing taken out of context. Why do I say that?

If we have done the ads well we had a more targeted traffic than the average one you would get. So we can expect that we get a better download-to-buy ratio from these customers coming from our Google ads. But that’s only if we have targeted our ads correctly.

The Conclusion

There are no magic formulas that you can use. But you can use common sense and your brain. It helps.

Selling your software

Create a great product and it will sell itself.
Right? No, it’s not; unfortunately.

What’s wrong?

Let’s suppose you have already developed a great software product and you are just waiting to make a fortune. It’s not going to be easy no matter how good your product is. And there is the problem: most software developers have no idea of marketing. And marketing is what is selling your product.

I am presenting here some concepts that will help you walk the way from total clueless ness to better understanding your customers.

So the product’s website is ready and is welcoming your first clients. And surprisingly they don’t seem to buy your application. What? It is a great product. What’s wrong with everyone? Well, probably the problem is in you. Probably you don’t understand how your customers mind works.

The first time a person looks at the description of your product he is being flooded with information about it. He is looking at a very long list of features. If that does not impress him what else will do?

Here is what is wrong. People are not looking for great products; they are looking for solution to their problems. And that is what your application should be: the solution to their problems. People are selfish. They don’t care about your product. But they do care about their problems. And they would like to hear how you can help.

Features vs. Benefits

Many software authors fail to express the way their product will help the visitors of their web sites if they buy it.

Let’s take for example a backup application. It can have these features announced:

• employ 128bit encrypting
• integrated ZIP compression
• support FTP upload
• have scheduler

And so on…

But these are features. These are not merely a reason for anyone to buy your backup application. Remember the customer had problem which he was trying to solve? Then let’s concentrate on the problem not on the product (which should be solving the problem).

The prospect needs to keep his valuable data safe. The ability to achieve that with your application is the reason for him to buy. Not because of the lots of great features your product has. Everything should be centered on helping the user to cope with his problems.

Think of your application in terms of benefits, not of features.

• The 128bit encryption is actually a way to ‘keep the customers valuable data away from others’.
• The integrated ZIP compression is helping him to ‘keep the backup file size small’.
• The FTP upload is providing the user with ‘a way to keep the data far and in a safe place’.
• The scheduler feature is ‘automating the backup process thus removing the possibility of forgetting to backup’.

See the difference? Your customers will definitely notice it. Now they clearly see the reason to give your product a try.

Keep the list short

Don’t do your long list again; this time full with benefits. It will still be boring to read if it is 10 pages long. Keep the list short and you will increase your chances that your visitors will read it all.

Concentrate on aspects that are unique to your product. This is called positioning. If you don’t have anything unique in your problem that is a serious problem. I will discuss the importance of positioning and differentiation in a later article.

And then help them more

And while we are concentrated on helping the customers; you can try helping them in another way. In case you are selling backup software, you can offer articles/whitepapers on how they can protect their important data better. Offer a newsletter. And don’t make this information very specific to your product.

But why should you do that? First, by giving useful information on the subject you are showing you are really an expert in this field. Second you show you are not a greedy bastard who only wants to get the customer’s money; you really want to help. And third, a visitor will remember your site and the help he received. He may visit again to seek out more on the subject. Even if he doesn’t buy or even download your software you are keeping the chance that he may do that on a next visit.