The Business of Software

Having been sale-less until only recently, I know how encouraging these "First Sale!" posts are. So here's mine!

I had pretty much decided that my product needed more work before anybody would hand over 30$ for it. This is no surprise, given that I taught myself object-oriented programming and WPF while I was working on it. It took me a long time, and the code I write now is exponentially improved over my first lines (I wrote my first betas without really knowing how events work!). Result: it works, but isn't up to par.

I had put all advertising and blog posts on hold for a month till I finished the new version (I know, bad move). Last Tuesday, I was in Kuwait visiting my parents, and I was up at 3:30am, trying to adjust back to Montreal time before my flight. Just before going to bed, I get an email/sms from PayPal. Out of nowhere, someone in California had bought my product! I literally jumped out of my seat!

Anyway, here are a few stats, for those who don't have data of their own yet (hang in there!). I know how useful concrete data is to get some encouragement in the pre-sale stage. (Thanks immensely, Patrick McKenzie, for sharing your stats!)

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All stats are from Feb 14th to Apr 28 (74 days).

Adwords Impressions: 18531 (250 per day)
Adwords Clicks: 216  (2.9 per day)
Organic Visits: 227  (3.1 per day)
Referrals: 256  (3.5 per day)
Direct: 89  (1.2 per day)
Total visits: 788    (10.6 per day)

Trial Downloads: 43  (1 every other day. Includes 18 day dry spell when I stupidly stopped showing signs of life through blog.)
Total Purchases: 1    (a lonely data-point!)
Sale price: 29.95 $

Overall conversion rate (Visit -> Purchase): 0.1269 %
Trial -> purchase conversion rate: 2.3 %

(There was someone in Norway who loved my product, but his feedback/bug reports were brilliant, so I gave him a license for free. He probably would have purchased it had I not, so in my internal numbers I count him as half a sale. In which case, overall conversion is 0.19%, trial conversion is 3.5%)
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I have a lot to learn, and a lot of work to do (on my code, website, logo, Adwords, SEO, blog, etc...). I'm still in the red (mostly advertising money).

But, I am greatly encouraged.

Congrats on the first sell. However, I think you could do a bit more work on your landing page. In my opinion, it seems a bit too wide, among other things.

http://www.copyblogger.com/landing-pages/ should have enough information to keep you busy. :)

Thanks Andrew!

I have "Work on homepage" on my cyclical ToDo list:

Work on...
* program
* purchase page
* features page
* home page
* blog
* SEO
* Adwords
... repeat!

Does it not fit on your screen, or is it just coming "uncomfortably close" to the edges?
What resolution?

I tried to make sure that it fits on 1024 x 768, but still looks ok on higher resolutions (including widescreen).

I'll re-evaluate the layout. Thanks for the link.

Hi Adriano,

Congratulations! I downloaded the application and the WPF interface looks great. What a BIG download anyway.

I liked your website, colors, layout, etc.

Thanks for sharing, I agree with you that for us who are just starting, seeing real stats is encouraging.

Keep the good work and good luck.

I think the whole site should look crisper
everything seems blurry and grainy.
why is that?

I almost had to wipe my monitor for dust :)

But overall nice job.

Congrats on first sale.

Next thing you know your making over 10k a month :)

That's pretty cool - I wonder if you can run it, or just a demo using XBAP?

http://www.xbap.org/

Hi!

Congratulations!!
Your site looks great, and the application looks interesting, something new.

I'm adding finishing touches to my app, before I put a price on it (now in beta), so your post is very relevant.

I wish you good luck and thanks for sharing your data.

Adriano,

I apologize as I had a weird resolution set, I fixed it and your site looks correct.

On http://habitshaper.com/purchase.php I would make the Buy Now buttons bigger. Is there a way to purchase the application from within your application? (I have a mac, so I can't see for myself)

Also, I'd try making the landing page buttons and see how well they convert.

I gotta say, 10K to me looks to be quite tough. To make 10K a month from this application alone, it seems like he needs between 250-300 sales per month.

Maybe that is doable, I don't know.

Congratulations!!

And you are right, this sort of posts are really encouraging to all of us (the ones trying to establish a product).

Hope you have more and more sales!

Hi Adriano,

Congratulations and thanks for sharing your stats!
It's great to hear someone is making the first sale.

Cheers,
Hendro

In my opinion, I would suspend Google Adwords for now.

Send direct emails to people... see "send direct emails" section here:
http://www.balsamiq.com/blog/?p=198

Why?

Because you're starting out, your software may have some usability issues that makes it convert poorly.  If your product is something where users search for reviews before buying (e.g. because there are ten gazillion competing products that do the same thing), then you'll be at a disadvantage because you don't have other people writing about you.
Some people even make purchasing decisions before even *looking* at the company website.  (I have.)

Sending direct emails is
A- Effective
B- Cheap
C- Gets you feedback about your product to make it better, which is *great* for SEO and advertising by itself.
D- A good step before tackling Adwords. (*I never really figured out how to get Adwords to work for me.)

Glenn C - I sent a few direct emails, but I stopped and didn't pick it up again. You're right, I should be doing more of that to start with!
As for Adwords, I am already very close to the required threshold to make it profitable (cost to obtain sale < sale price), and I haven't been working on it too long. I do need to boost the numbers, because "profitable != worthwhile" until the margin increases.

Andrew Austin - Now that I am more familiar with CSS,HTML, and general web design, I can fiddle with things like button sizes. Thing is, I don't have enough traffic yet for valid A/B testing.
As for the "purchase within app" question: I have a couple of "Buy Now" buttons, but they simply open a browser to the purchase page.

Bob Frances - Making an XBAP demo is a GREAT idea! Thank you!

Anonymouse - I made the background a little grainy, for texture. I tried to look at it with a "new eye" after your comment, and yes, it might be a little annoying. I'll try again with a plain gradient, and compare. Plus, a plain gradient will greatly reduce the BG image filesize, since it can be one pixel wide, instead of 200!

Thanks for all the comments, everyone.
I can't wait to get to work on these, and other issues. I am not expecting 10K a month, but I know I can get more than one sale every other month!

One step at a time.

congratulations. nice application, i will try it myself =]

what about posting on stevepavlina's forum[1]? or even better, send a free copy to Steve Pavlina for a review. if he likes it, i garantee you that you will have a HUGE community behind you.

if i had an application like the one you have i would send copy to bloggers who get a lot of traffic and are into personal development.

[1]: www.stevepavlina.com

just tried it.

the format for entering a goal was forced on me =[ going back to excel for the moment.

Thanks for the link, Victor. I'll have a look at it.
As for the goal formatting, this program is geared towards specific kinds of goals: ones that can be tracked numerically.

Could you tell me the goal format that you wanted to use, instead of the one that is forced on you?

Thanks,

well Adriano, one of my goal was to master all Japanese kanas. i have a freeware called kana-no-quiz[1] which lets me practice 50 randomly chosen kanas a day, and tell me how many i got right and where i was wrong.

i have an excel sheet to keep my records. so the row for a week goes like this: 30, 29, 49, 30, 20, and so on. the goal is to make less mistake as possible and be close to 50 every single day. then i will move to 75 or 100 kanas a day.

the other thing is i like meditating. i have a goal of doing 100 hours of meditation. it does not really matter how much hour i meditate a day, i just want to reach that goal. excel is also keeping track for that.

[1]: http://www.choplair.org/?Kana_no_quiz

so many typos. i'm sorry, just woke up.

Well done Adriano!

Posts like your are a real inspiration!

also Adriano =]

i tried to enter a string where a number is expected and i got a .NET runtime error and a stack dump, which i think you don't wanna show your users ;]

Thanks for all the feedback Victor!

I'll think about the "progressive learning/testing" situation.

That exception is embarrassing! Thanks for pointing it out.

Congrats on that first sale.

You need a lot more daily traffic to make the business viable (see http://successfulsoftware.net/2007/04/03/how-much-money-will-my-software-make-and-what-has-that-got-to-do-with-aliens/ ). I suggest a bit of reading on SEO. Try having a different title on each page and better image ALT tags for a start. Also some articles on topics relevant to your target market would help - maybe some case studies on weight loss, sporting achievement etc. And definitely offer  free review copies to personal improvement focussed bloggers.

Have you thought about 'eating your own dogfood' by publishing your progress on certain goals?

Good luck!

Ps/ Your favicon is a bit ugly IMHO. An anti-alisased version might look better.

I disagree with using a formula such as
S = P x N x Ft x Fb
Where:

    * S is the sales per month in units of currency
    * P is the price of a licence (in the same units as S)
    * N is the number of unique visitors to your website per month
    * Ft is the fraction of visitors who try your software
    * Fb is the fraction of visitors who buy the software after trying it

---
Why?

Because not all visitors are the same, and what people say about you off site really matters.  I've bought stuff before based on word of mouth and made my purchasing decision without ever looking at the vendor's site.

From a microISV standpoint, you want:
A- Relevant traffic.  People who have your problem, and zero barriers to buying your product. 
Barriers example: I am Canadian, and will not buy from most American eStores because of the brokerage fee situation (American vendors should ship USPS + give brokerage info on their site to target Canadians).

B- Depending on your product, it may be something that people look for reviews on before buying, and/or may decide to buy after somebody they trust likes it.
So go send some emails to bloggers like Steve Pavlina (he has a procrastination problem... like most humans).

For my niche, having a respected site say good things about my product makes a ***night and day*** difference in conversion rates.

This is also why so many affiliate marketers are shills and use fake review sites... they stick their page in between the landing page, so that they shill for the product that they are trying to sell and increase the conversion rate that way.
If you looked at things in terms of conversion rates, a funnel, and losing people at every step... that's the wrong way of looking at things.  It would predict that shill review sites + making people click through multiple webpages would decrease conversions... they do not.  e.g. google "easy weight loss tea" and click on the ads and check out the landing pages.  Some of them actually make the mark/customer jump through several webpages before they can place an order.

@Glenn C

My stats and the stats here:
http://successfulsoftware.net/2009/04/23/the-truth-about-conversion-ratios-for-software/
show a strong correlation between number of visitors and number of sales. How would you interpret that other than more (targeted) visitors = more sales?

Andy - You are correct, I won't get ANYWHERE with just 3 visitors a day ;). I really need to work on my SEO, and articles are definitely a must. I'm being held back because I haven't designed a template page for articles.
The logo is nothing special whatsoever, so I need a redesign. In the meantime, I can fix up the favicon (yes, it's ugly!).
Free review copies is part of my plan, but I'll wait till my next version.
And as for the dogfood, I started (but stupidly, stopped), doing that on my blog. Got to get back to that!

Glenn C - I think you misunderstand my use of that formula. Yes, what frame of mind people are in when they come to the site, where they hear about it, whether there are good reviews on trusted sites, all of those things are EXTREMELY important. Same for Zero barriers.

The point of that formula is simply to guide my progress, and see where I'd need work. For instance, I noticed that a couple people were stopped in the funnel at the first PayPal page. I checked, and on ie it was giving me a scary looking "non-secure items" warning which must have scared off at least two customers!

If I find that people come to my site, but don't dload, that tells me I should work on the myriad things that affect who comes to my site, from where, and what opinion (if any) do they have about my product. If people dload, but don't buy, it can mean another 10000 things. It won't tell me which one, but that's why I have a brain. I think (hope) the main reason people dload but don't buy is that the application lacks polish (another reason that would give the same result is if there is NO MARKET for this, which I don't believe).

You said it yourself, in the statement about "respected site say good things" and the resulting boost in conversion rates. Tracking these things is vital, because you need to know what works, and what doesn't.

I think those "jump through hoops" sites are outliers, and only work for a particular kind of mark: the gullible, semi-tech-literate. This was discussed elsewhere in this forum, in a post by Andy Brice: http://discuss.joelonsoftware.com/default.asp?biz.5.739411.21

Finally, that formula is really only valid for large numbers. It's in those cases where the particulars average out, and you are left with a broad picture of how people travel from first knowledge to final sale. All you can find out from that is your weak points and your strong points, but that's essential information.

PS: Glenn, I am not taking this as seriously as this long reply might lead you to believe. I just like discussions.

PS: I've had a great deal of feedback, constructive criticism, and support in this thread and in e-mails. Thanks a lot. And keep it coming! I am quite flak-proof, so don't worry about harsh criticisms.

PS: Fixed favicon. Was truly horrible.

Well what I'm saying is that you shouldn't arbitrarily assume that additional traffic will convert at a particular conversion rate.

If you post on forums asking for help on your web design, that will drive a lot of traffic to your site.  But it won't convert because that traffic is interested in web design.  (Ditto for posting your site on this forum.)

Now there are cases where you can make that assumption (e.g. increasing bidding on Adwords) and that formula would be useful in that context.

2- If you take the formula and plug in a 1% conversion, ---any--- product can look good.  It would give a very bad answer to "How much money will my software make?"... because it hides bad ideas.

3- Anyways, I wouldn't try to predict the future- usually it's too hard and you'll get it wrong.

Just stick to doing things that make sense.

--Make sure your market is profitable.
--Get into markets where your product would be way better than the customer's other choices, which makes marketing easier and you don't have to worry much about competition.
--Think about the generator / think about how your customers work. 
e.g. if I read Steve Pavlina's blog and he says that it helps beat procrastination, then I'd be very interested in the product.  (And if your product worked, it's likely that a lot of bloggers would talk about your product if you simply talked to them.)

Possibly a problem with Adwords is that people won't trust you and/or believe that the product works (regardless of whether you're trustworthy and whether the product works, because your visitor won't know that!). 
*Of course people vary so that is something to figure out.

3- If you can truly make software that helps people quit smoking or kick bad habits, then marketing your software is not going to be that hard.  A lot of people would give you free advertising if you can solve an important problem like that.

If your software won't do that, then marketing is going to be hard (unless you engage in unethical practices, which I don't recommend).

"Well what I'm saying is that you shouldn't arbitrarily assume that additional traffic will convert at a particular conversion rate."

Ok, I understand what you meant. When Andy and I talk about increasing traffic, and using the same conversion numbers, I suppose we were implicitly assuming that the increased traffic was from relevant sources.

Congratulations!

Here's some links you may find useful:

Looking for an inexpensive new logo then take a look at - http://www.crowdspring.com/how-it-works

SEO tips care of Google - http://services.google.com/breeze/webmasters/googleforwebmasters/

Just in case you've not jumped through Google's hoops yet - https://www.google.com/webmasters/tools/dashboard

Don't neglect Yahoo though - http://search.yahoo.com/info/submit.html

And for Press Releases I found this yesterday - http://www.youtube.com/watch?v=ltnuYu_PeJc

Good luck.

I would personally completely neglect Yahoo... and search engine directory submissions.  In my experience.

If you have good whitehat SEO going for your domain (e.g. put up some good content, or have a very good product; then post a bit on forums without being spammy) then your site will get indexed *and* do well in search engines.  Don't worry about getting indexed, and don't worry about Yahoo.

@Glenn C - I really feel that approach is failing to leverage SEO fully.

To get the most out of the search engines a more holistic approach is going to yield more traffic in the long run - http://www.seomoz.org/article/beginners-1-page

Maybe some information in that article is useful, but lots of  things have changed in SEO since 2005!

@Javier - Yes, I am aware things have changed since 2005.

My point was that it is important to understand the fundamentals of SEO and then to follow the steps Google recommends.

i.e. add a sitemap.xml, robots.txt, check your site is being indexed correctly, check you are ranking well for your keyword phrases etc.

Thanks for those links, Andy!

For now, I plan to complete my new and improved version.

To drive traffic, I'll do more direct e-mailing to bloggers, and try to encourage reviews.

I'll tackle general SEO after that. I have the basics done (site indexed, sitemaps, blog optimized for SEO, etc...).

Oddly enough, my highest Google ranking (4th) is for a blog post title with what I thought was a made-up phrase, but turns out to be a product that is relevant to mine!

Again, thanks for all the tips and suggestions everyone!

In my experience:

There is ***a lot*** of bad/uneffective and outdated SEO information out there.

A lot of SEO advice is targeted towards manipulating the search engines (e.g. directory submission, reciprocal link exchange, etc.).  Google tends to clamp down on all of these tactics so they won't work.  The only tactics that kind of work are comment links, widget links, template links (e.g. blog templates), and paid links.  As far as paid links go, Google does a pretty good job at that.  But there are sites that rank higher than they should be because of paid links (e.g. take a look at webhostinggeeks.com... they do paid links and template links).  Paid links is likely the most effective search engine-manipulating technique right now.  (And I think Google considers it blackhat, so for practical purposes it is definitely blackhat.  I agree.)

Really, the best thing to do right now is to put up useful information on your site.  **This has the added bonus that visitors will trust you more and are a lot more likely to convert.**

@Glenn C - I couldn't agree more that the legitimate techniques of producing relevant content and getting relevant links are the key.

It's also fair to say a lot of people starting out don't understand the benefits of helping the search engines make use of the content they have already produced -- I was certainly in this position for a while.