* The Business of Software

A former community discussing the business of software, from the smallest shareware operation to Microsoft. A part of Joel on Software.

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Moderators:

Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

Can you earn a living selling $20 Software?

I want a $20 price point because I want to sell something I can write in short period of time, and get started learning internet marketing with some real world experience. I just don’t have the time to waste six month programming a serous product; only to find out I can’t market it.

Say you need 110k a year that’s (110000/20)/365=15.07 copies a day….

Let’s add in some expenses\overhead ….. Say 30K … (140000/20)/365=19.18 copies a day. This doesn’t sound too bad.

But if I get only a modest .05% visitor: sale ratio, I need a whopping 4000 unique visitors a day to make those 20 sales! I think this won’t be easy but it is doable, although I am not sure how much of that 30k overhead I will be forced to use in advertising expenses to attain those 4000 visitors.

 How big of a market do I need target? What is the most reliable way to estimate market size for a software product? I can’t just call up the market leader and ask for his\her numbers…. Anyone know of a company that provides such a service?

Anything clearly wrong with my math\estimates?

Any other comments?

PS: Not even a product idea yet… just a sketchy business model.
Anon Ranter Send private email
Monday, May 14, 2007
 
 
>Anything clearly wrong with my math\estimates?

Yes. 0.5% of 4000 is 20. 0.05% of 4000 is 2.
Andy Brice Send private email
Monday, May 14, 2007
 
 
Well, if you can dream for 110K, I can certainly dream for my 30K. Good luck :)
Goran Burcevski Send private email
Monday, May 14, 2007
 
 
There seems to be a bit of putting the cart before the horse here.  I rather like the idea of a starter project to teach yourself how to run a uISV, but you seem to want a starter project which will also pay $120k and be viable within six months.  This strikes me as unrealistic bordering on fantasy.

On the question of "Can you earn a living selling [cheap] software?", the answer is "Yes."  See goodsol.com, for example -- the author is a millionaire and got there $24.00 at a time by owning the daylights out of a niche.  That took him years to do, though.  Meanwhile, the overwhelming majority of authors (at any price point) will not become millionaires or, indeed, anywhere close.

Assuming a .05% visitor to purchaser conversion ratio, you'd need 40,000 visitors a day to get twenty sales.  For traffic which is fairly highly motivated, I get about 20% of visitors to download the free trial.  Roughly 3% of my free trial downloads result in sales, which implies a visitor to purchaser conversion of .6%.  Your mileage WILL vary -- the often quoted industry standard of 1% trial-to-purchase conversions is basically made up.

I don't know where you're coming up with that overhead number.  Figure on losing between $1 and $3 of every sale to transaction costs (depends on your e-commerce provider).  All other costs except for advertising are trivial amounts of money at $700 a month sales to say nothing of $10,000 a month sales.  Advertising costs to drive a marginal sale depend largely on how you advertise and your niche.  85% of my sales cost me nothing, the remaining 15% (give or take) come from AdWords and those cost somewhere on the order of $10 each at the margin.  I'm in a niche where the keywords are fairly cheap -- if you're not, then say goodbye to any profit on that $20 sale if you needed CPC ads to generate it.
Patrick McKenzie (Bingo Card Creator) Send private email
Monday, May 14, 2007
 
 
"Say you need 110k a year"

Where do you live? Nob Hill? If you "need" that much money then you have other, much more serious, problems than software.

"I want a $20 price point because I want to sell something I can write in short period of time"

I don't know why exactly, but I feel somewhat insulted by that statement. Are we all in some cheap, easy profession here? You want 20 dollar software? I'll save you a penny, and give you some $19.99 software:

http://www.amazon.com/Activision-47875329737-Quake-Special-Edition/dp/B000AQE79E/

Can you write something comparable to Quake 4 in a "short period of time"? Do you think anyone is making 110K a year off of it? I'd say so--but maybe not the people who actually pounded out the code.
mynameishere
Monday, May 14, 2007
 
 
>> Yes. 0.5% of 4000 is 20. 0.05% of 4000 is 2.

I meant 0.5% :-)

I was thinking 4000*0.05=20
Anon Ranter Send private email
Monday, May 14, 2007
 
 
You can get retail sales numbers at least and market estimates from npd.com (costs a couple thousand or so).

I also agree though your numbers are fantasy... if people could make $110K a year for six months work, everybody would be doing it. It took me 10 years working evenings and inching my product line up to where I could go full-time.
Jim
Monday, May 14, 2007
 
 
taxes
Phil C Send private email
Monday, May 14, 2007
 
 
The eye opener for me was the cost of getting customers via advertising (especially AdWords).  I naively assumed it was linear (ie spend $5 and get 2 customers, should be able to spend $50 and get 20 customers).  But it isn't--it's exponential!!  Getting the first few customers is easy, getting each successive group of customers is harder and more expensive as you go.

++ To the comment above saying everyone would do it if it was as easy as you seem to think it is.

HOWEVER, you have the right idea by starting something small just to learn the ropes.  But don't expect to live off of it for a very long time.

One other thought: Customer support for customers that are buying $20 apps can become a REAL cost that you need to consider (especially if you're selling the kind of volume that you're hoping for).  You need to make the app REALLY easy to install and use (lots of polish).  That alone will take a long time to accomplish.
Doug
Monday, May 14, 2007
 
 
>>"Say you need 110k a year” Where do you live?

This is approx what I earn now.

I live in outer boroughs of NYC, I own a home (a tiny house on a 20x100 plot of land that cost a small fortune) and have a family I pay my bills on time and have no dept (Except for my mortgage). I also contribute regular to my retirement and kids collage savings.  I ALSO pay for heath insurance for myself and family. I ALSO HAVE to pay for nearly 1,000,000 in life insurance for that off chance I get hit by car!

And I’m FAR from rich!!

You sir, are an idiot who obviously has no clue what it takes to RESPONSIBLY support a family and live decent life in this country.
Anon Ranter Send private email
Monday, May 14, 2007
 
 
Here are my numbers - keep in mind though that this is after 6 years of business. These are averages for 2007 so far. Also I sell multiple but related products to individuals (not businesses).

Average Unique Visitors per Day: 2000
Average Completed Downloads per Day: 500
Average Sales per Day: 20
Average Sales Price (net of payment charges): $17
Average Advertising Costs per Day: $60
Average Other Costs per Day: $20

Bottom line: $260 per day net but before tax = $95,000 a year.
Hairy Irish
Monday, May 14, 2007
 
 
My apologies for anyone on this board for that unfortunate but nastiness.

I’m not looking quit my job… I’m looking to laying the foundation to one day becoming self sufficient. I learn by doing. That is what I am looking to do for now learn, But I don’t want to waste six month just to get started. I figure a small product for cheap price modest sales then on to something bigger. I’m not really looking to earn 100k with this but I what to know what if it can be done and what it takes.

I guess I’ll just have to try…
Anon Ranter Send private email
Monday, May 14, 2007
 
 
"You sir, are an idiot who obviously has no clue what it takes to RESPONSIBLY support a family and live decent life in this country"

Oops. So Sir, you'd better stay out of the mISV arena. It's simply not for you. Most people who start such a venture can afford to live on the cheap for years.
Methy
Monday, May 14, 2007
 
 
>>
This is approx what I earn now.
>>

Mazeltov.  Why don't you scale your expectations down a wee bit, do your trial project in your spare time while keeping up with the day job, gradually built your skills while seeing if this has any attraction for you, and then if all signs point to Go you can progressively dip more of yourself into the water.
Patrick McKenzie (Bingo Card Creator) Send private email
Monday, May 14, 2007
 
 
Hairy

Do You mind if I ask you what kind of product you are selling.?
60 for 20 sales sounds unbelievable!

>>Do your trial project in your spare time while keeping up with the day job.
This was always my intention.
Anon Ranter Send private email
Monday, May 14, 2007
 
 
"RESPONSIBLY support a family and live decent life in this country"

My first software job, a guy was making 25K and supporting a wife and 2 kids. I'm not an idiot. I had the same job and was saving 40 percent of my income. And when I get my business rolling I won't need any 110K to get by--that's a king's ransom in any context other than spoiled-rotten latter day exurban USA.
mynameishere
Monday, May 14, 2007
 
 
I agree that $110K really isn't that much anymore.  With family, health insurance costs, SE taxes, expenses, the money goes quickly.  I guess if I was still in my twenties, $30K might seem fine.  When you approach forty with family stuff, the money goes so bloody quick. 

Anon Ranter - I've had similiar thoughts.  I wanted to put together a $30ish app and sell it to a focused recreational group.  I figure I could probably top out around $30-$40K/year.  I simply couldn't make the numbers work.  On the other hand, my big app idea would require a year or two to develop, but I could sell this app in the $500/range to a very vertical market.  Since I've worked in this market, I know the potential sales and market and realize I could approach $200K/year in sales.  I've decided to bypass the smaller app, for now, and focus 100% on the bigger item.

Perhaps you should re-evaluate your product idea and look for something that might be able to realize better profits?
Grinder Send private email
Monday, May 14, 2007
 
 
>>My first software job, a guy was making 25K and supporting a wife and 2 kids.

Sure he was... In 1962.
Anon Ranter Send private email
Monday, May 14, 2007
 
 
_Sure he was... In 1962_

No perspective. Shit, when I was in college working for side-money, I knew people raising kids on 8 dollars an hour. It's people like you who make me _wish_ a depression would hit, just so you could get some damn perspective. I don't doubt the aristocrats of Rome complained about the tartness of the grapes served by a bevy of slaves.
mynameishere
Monday, May 14, 2007
 
 
If you figure $15 per sale for advertising costs, processing fees and support, you are not left with much from $20. If you charge $40 you only need to make 20% as many sales to make the same profit. Its an oversimplification, but you get the idea.
Andy Brice Send private email
Monday, May 14, 2007
 
 
mynameishere - I wish it was the mid-80's and I could live on $30k/year.  The fact is the economy has grown rapidly over the past 20 or so years.  Maybe you live live in a low cost of living area, but my health insurance cost, out of pocket, is approaching $12K/year.  Please tell me how I can pay my mortgage, food, taxes and other expenses on $25k/year?
Grinder Send private email
Monday, May 14, 2007
 
 
Anon Ranter, you seem very emotional and defensive.  Lose that and the spoiled victim attitude, and decide that the price you are willing to pay is to lower your standard of living.  Don't hide behind the excuse of needing a "decent life" for your children (I bet this involves cell phones and cars for the precious teenagers, and the refusal to accept something "low-class" like sending them to community college for their education).  Otherwise you are just not suited for it.
anon ranter mirror
Monday, May 14, 2007
 
 
"Please tell me how I can pay my mortgage, food, taxes and other expenses on $25k/year?"

Move to cheaper area.  Sell your house and car(s) if you can't afford it.  Eat rice and beans.  None of these things will kill you, or your children.  They just may be hard to do and kind of embarrassing, if you care about how "successful" you appear to friends or family members.  But it's your choice, so stop whining.
anon ranter mirror
Monday, May 14, 2007
 
 
==>Customer support for customers that are buying $20 apps can become a REAL cost that you need to consider

Sorry, but I don't see where support fits in on a $20 app. The first support call you took would wipe out the entire day's profits.

$20 bucks buys you the app. It doesn't buy support.
Sgt.Sausage
Monday, May 14, 2007
 
 
Grinder, quick breakdown (I'm assuming health insurance from work)

At 25K, the taxes only bring it down a little, to say 20K (not including the Welfare, err, earned income credits if you have children). Thats about 1666 a month. My expenses roughly:

500 rent
200 food
100 utilities
200 "other".

Car is paid off. Adjust up for children as needed. Now, I make well over 25K, so you can imagine my savings.

Hell, let's say we live in Nob Hill. I see a studio apt for 1350 here: http://sfbay.craigslist.org/search/hhh?query=nob%20hill

1350 rent
200 food (not much different)
50 utilities (frisco doesn't get too cold)
200 "other" (a little low for the city, but we're scraping by here)

...geez 1800/month for one person in a rich SF neighborhood? I must have done my math wrong. But...no I didn't. People just blow money and then stick the word "need" onto their crapulence.
mynameishere
Monday, May 14, 2007
 
 
>> mirror

I’m running a hypothetical here on what it would take to match my current income working for myself. That it. The reason I get annoyed is because people like yourself who talk to me like I’m some kind of spoiled brat who rasping a bunch of  spoiled  kids. 

What the basis of such assumption? Because I live with in my means? Average income in this city is about 75k. Most people earning that Live well above there mean and have high CC Dept… No saving for retirement, no emergency fund… and no mortgage. Many times living with there parent till they 32.

These same people Assume I handle my money the same way as they do. So I must be living in the lap of luxury.  It’s Nonsense.

Whey make you think I rotten teenage kids? Let alone teenagers? 

I propose a challenge I am going to list a few thing and I want to and nameishere to fill in what you think it cost per month and if it is a necessity or not..

1)    Food for a baby
2)    Health insurance for a family of four
3)    Rent\Mortgage
4)    Home owner insurance
5)    Life insurance
6)    Heating you house in North East
7)    Utilities Water\Gas\Electricity
8)    Car insurance\gas
9)    Federal state and CITY tax
10)    Saving for retirement\emergencies
11)    Food for a family of four
12)    Clothes for growing children
Anon Ranter Send private email
Monday, May 14, 2007
 
 
By the way nobody, except for my wife and employer know what I earn. And the reason is because of people like nameishere and mirror, who get all would up because someone so much as aspires to earn a decent living.
Anon Ranter Send private email
Monday, May 14, 2007
 
 
While I know what some of you guys are saying, I'm guessing you are young and have no family.  I've saved and have enough money to go out on my own for a little over 4 years.  If I do a little consulting, the number grows by a factor of 1.5 to 2.  So I've done my homework, no my budget needs, and of course it is well under the $110k/year.  However, I want to be back at that level, or higher, so I can save for retirement and provide well for my kids and family after the initial crunch.  I think Anon Ranter is reasonable in his expectations.  As you grow older and have a family, most of us have no desire to live like we were in college.
Grinder Send private email
Monday, May 14, 2007
 
 
Anon Ranter > I'm not going to fill in your blanks. I've known people who fit the mold (house+car+clothing+kids+sundries) on 25 miserable thousand dollars. I know it can be done, because I've seen it. In recent years, yes. Case closed.

It doesn't matter that much _how_ you live, if you are _happy_ and can pay for it. But we ain't talking about your current job. We're talking business, and almost every story about starting a business that I've read has involved, at some level or another RAMEN NOODLES. Reality is a bitch. What can I say?
mynameishere
Monday, May 14, 2007
 
 
Anon Ranter, are you Brad Burns in disguise?

Monday, May 14, 2007
 
 
+1 'exponential Google' poster.

For this reason alone I'd recommend you stay away from $20 software. In my book $500 is the minimum & $1,000 optimal.

Remember Bill's Law (which I just made up): "If you want to make a living from software at pizza prices you're better off delivering the pizza instead".
230 Volts
Monday, May 14, 2007
 
 
I also live and work in NYC and would need similar profits to Anon Ranter to make a mISV a comparable choice to my current salary.

The difference is that now I work 40 hours per week, have 1.5 hours total daily commute and have nice coworkers. With a mISV I would have no commute but probably have to work more than 40 hours per week and no bosses. I say would work out the same.

I just can't get a business plan together which would in reasonable  time allow me to make the same money from a mISV as from a regular job. I think you need to be prepared for a few meager years before you can expect to make any money. For this to be possible you need to have low costs, which means not living in NYC or any other high cost area.

Am I right? How many mISV owners live in high cost areas, like NYC or Bay Area?
pjsson Send private email
Monday, May 14, 2007
 
 
mynameishere, cut the crap. So what if its possible to live off $25k, that's not the question here. I sure wouldn't want to. I have a better standard of living (jealous?).

I make $110k on my day job (+ company sponsored car, + 6% paid for retirement savings on top of that), and I make about $25k on my side-business. I wouldn't take it full time before earning $100k a year unless my mortage was paid out (which I expect it to be when I'm about 50 with the current earnings).
Get over it, some earn more
Monday, May 14, 2007
 
 
I've been working my mISV for a few years on the side (4-5 years).  My family is more important to me than my job, so I work at night and a little on the weekends.  It's taken a long time.  Because my family matters most, I haven't made them move out of our home and into an apartment, or live on ramen or rice and beans.  I've been the one to sacrifice my spare time and hobbies (and TV, etc) to get this off the ground (because it's _my_ dream).  I consider this "perspective" about what really matters.

I'm now making about $150K per year on my mISV and will be going full time soon.  It can be done, but it takes a great deal of persistence.

Family of four on $25K?  That's called poverty (and it _is_ unfortunate.  trying to help a friend out of that situation now....)  No one would willingly go that route if they had a family.
anon because of $ disclosures
Monday, May 14, 2007
 
 
So, $20 for your first product.

What happens if you write a second product, also selling at $20?

And then a third?
xampl Send private email
Monday, May 14, 2007
 
 
Anon Ranter, no one is getting wound up here, except for you, perhaps... otherwise why would you respond to a simple question about where you live, with this productive statement:

"You sir, are an idiot who obviously has no clue what it takes to RESPONSIBLY support a family and live decent life in this country."

Translation: unless someone agrees with MY opinion about how much a person should earn, they are obviously idiots who are irresponsible in how they support their family, and live indecent lives with all those low-class people across town.
mirror
Monday, May 14, 2007
 
 
“Where do you live? Nob Hill? If you "need" that much money then you have other, much more serious, problems than software.”

This is NOT “a simple question about where you live”. It’s an insult implying I can't manage my finances.

Secondly I never said anything about how much anyone should earn, only about what is required to responsibly support a family.

Monday, May 14, 2007
 
 
Look like I my session timed out and didn’t notice… That last post was for me.
Anon Ranter Send private email
Monday, May 14, 2007
 
 
Living in NYC is indeed tough for a full-time uISV. What I make from my uISV would be considered a good salary for an experienced programmer out in the mid-west, but in NYC, my uISV earnings are comparable to a junior-to-mid level developer (think around 60-65k, year) -- I'm also based in NYC (Brooklyn), and that's barely enough to live on out here.
Andrey Butov Send private email
Monday, May 14, 2007
 
 
"what is required to responsibly support a family"

I'm sorry, but 110K is simply not required to responsibly support a family. I don't care if you live in Manhattan:

http://newyork.craigslist.org/aap/

I'm not sure what would put that in your head. Geez, I won't tell you what my single parent earned to raise two kids responsibly. I guess I'll just recommend: Don't quit your day job with pie-in-the-sky expectations. Go through some of the posts here on BoS, and you'll see, far from earning 110K or 25K, some people earn ZERO. Yeah, it happens. Better I tell you than the SOHK.
mynameishere
Monday, May 14, 2007
 
 
Did you even look at that link that you posted?
Anon Ranter Send private email
Monday, May 14, 2007
 
 
"Did you even look at that link that you posted?"

Yes. I did.

Here's one with 2brs and a beautiful fireplace and hardwood floors:

http://newyork.craigslist.org/mnh/abo/330765369.html

http://www.google.com/maps?q=21+E+9th+St,+New+York,+NY+10003,+USA&sa=X&oi=map&ct=title

Is that not Manhattan? Does that rent not come out to 39600 a year? Is that not well under 110K minus taxes? Okay, then. And I'm using Manhattan as an example of the top end in terms of cost. If you want to start a business, then it's time to start thinking about cost efficiency, which means NOT living in Manhattan.
mynameishere
Monday, May 14, 2007
 
 
Thats 40K on rent alone!! 110k after 35% taxes 71.5k-40k=31.5k FOR EVERYTHING ELSE!! (see my list above)

This is officially my last post on this thread…
Anon Ranter Send private email
Monday, May 14, 2007
 
 
Well, if you're not willing to sacrifice a little even in theory...is business right for you? If some anonymous jerk on a forum can upset you, what do you do when a customer sends you an email telling you how "goddamn shitty" your software is? Just saying...
mynameishere
Monday, May 14, 2007
 
 
This discussion has been sidetracked into cost-of-living bickering. Let's get back to the REAL meat...

The fact is, OP is yet another person who thinks you can s**t out an "application" in two weeks and make a living off it. THIS IS NOT THE CASE. What you'll create is little more than rubbish.

A successful mISV application takes MONTHS to create and polish. Then comes the hard work of marketing, and that's a continuing process for the vast majority of mISVs. You don't just sit back and watch the orders come in.

Most ISVs don't bring in $110k per year, not from one product at least.

And the $20 price point combined with low cost of entry into the market (i.e. easy to program) makes it one of the most competitive areas you can imagine.

Don't assume you can get Hairy Irish sales with Patrick McKenzie programming effort (no offence, guys).
Here's the beef
Monday, May 14, 2007
 
 
No. But in Software, you'll find that a higher price sells better than a lower price. Especially for B2B side.

Monday, May 14, 2007
 
 
"A successful mISV application takes MONTHS to create and polish."

I could write "Digg" in about a day.
What takes "months" is marketing, word of mouth, and positioning yourself in the market.

If he has a good idea, don't make him think that you need to sit and develop an application for months.  That's ludicrous and it's a corporate mind-set if I've ever heard one.  You have no idea how good his idea is and how little effort it might take to "develop" into a working, polished, application.

If you can create a solid product in two weeks, go for it, just get it done.

Then start full-force into your marketing.  Talking to people is key.  People need to know your product is out there, they need to know you believe in it 100%.  Once it's well known, sales will start to pick-up.  Use your website as the "closer" so you can just push people there based on the idea, and the website sells them and settles the transaction.
Ben Mc Send private email
Monday, May 14, 2007
 
 
"I could write "Digg" in about a day."

Yes you could. But it's mainly because you have the spec and because you have no usabilty tests to do.

But if you're creating an original product and not a counterfeit, you will spend months polishing your specification, writing and testing prototypes, and deciding how the interface will look like.
Methy
Monday, May 14, 2007
 
 
Anon Ranter,

Don't get too upset over the comments on this post. Most of the people who post here are either early in their career or don't look what they do as a serious business. If your business generates less than your current paycheck and you have to work on it everyday, you have just created a second job for yourself. (I'm sure this will generate a comment or two :-)

Most of the time when looking for income generation and comparing it to your current salary factoring your current salary by 1.5 should keep you at the same standard of living. In your case you should generate approximately $165K to keep your standard of living. The business should be structured to be self sufficient so that you just haven't created a job for yourself again.

So what do you do? Start small like many of the poster's suggested. Create a portfolio of products and services each providing incremental increases in revenue. Become a relentless self promoter. Joel is a great example of this. Contunue building and look for opportunities. Hire people to complete the work you have found and to work on your ideas. Better yet, let them act on their ideas within your organization. Copilot, need I say more.

Finally get involved with other entrepenures in your area. Access is not based on the school you went to, it's based on what you can bring to the table. New York is a great place for this. Only San Hose is better. Start listening to the Venture Voice  podcast. Fugure out a way to meet Gregory Galant or someone like him. His office is only a train ride from your home.

The short of it is to get out and meet people. Tell everyone what your doing and treat this like a real business. 

Good luck.
Management.
Monday, May 14, 2007
 
 
"far from earning 110K or 25K, some people earn ZERO"

Sorry to say, MOST people who start an ISV earn zero. Only the lucky/smart few make >$100 per month.
Grown fat with decadence Send private email
Monday, May 14, 2007
 
 
I think there's another misconception here, started by the OP and continued by others.

Just because you only spent x days/weeks/months developing a piece of software does NOT mean it's only worth $y.

There are developers in this world who have literally spent years writing software that is completely worthless.  They missed the market, they insist theirs is easier to use when everyone who has ever tried it can't even figure out how to Ctrl-Alt-Shift-X-N-R-^ in that order to open a tablet (what the developer calls a file), they can't figure out that their software has only 1% of the features of their competition, etc.

There are developers in this world who have spent less than 20 hours developing software they then sold hundreds of copies of for $10,000 each (a friend of mine did that, admittedly years ago, but he did it).

The value of a piece of software has nothing to do with how long you spent writing it.  Its value is in how valuable is the problem it solves, and on how much competition there is for it in the market.

So the OP needs to stop thinking about writing a quickie he can sell for $20.  He needs to start thinking about where he has specialized expertise and how he can carve out a niche somewhere, and do it better than anyone else.  Then he will be able to charge whatever the market will bear, and his dreams will be likelier to come true.
Karl Perry Send private email
Monday, May 14, 2007
 
 
"Please tell me how I can pay my mortgage, food, taxes and other expenses on $25k/year?"

This is a good question to ask. I think we all would benefit from asking this question when visiting a restaurant where the servers work full time and make $2.25/hr - that's $4500 a year before taxes.
Meghraj Reddy
Monday, May 14, 2007
 
 
+1 Karl.  A friend of mine who is employed by a Japanese technical consultancy regularly has a specialized program written in 8 hours sold for $5,000.  My favorite example was $1,000 for a 15 line batch file.  "Hey, give me some credit.  It was a good batch file." he said :)
Patrick McKenzie (Bingo Card Creator) Send private email
Tuesday, May 15, 2007
 
 
+1 Karl Perry
Meghraj Reddy
Tuesday, May 15, 2007
 
 
Karl,

I think you have indirectly identified something that bothers me about the original post:

"I want a $20 price point because I want to sell something I can write in short period of time, and get started learning internet marketing with some real world experience. I just don’t have the time to waste six month programming a serous product; only to find out I can’t market it.

Say you need 110k a year that’s (110000/20)/365=15.07 copies a day…."

I don't know, but this attitude of "I want" "I need" "I don't have time to waste" seems to be incredibly narcissistic, and shows a basic lack of understanding that the market doesn't care at all about how much the developer wants or needs anything, or how much time and effort the developer puts into the product.
Suite
Tuesday, May 15, 2007
 
 
"There are developers in this world who have spent less than 20 hours developing software they then sold hundreds of copies of for $10,000 each (a friend of mine did that, admittedly years ago, but he did it)."

Let's rewrite this as:

There are people in this world who have bought a lottery ticket for $1 and then won $10 million dollars!

Anecdotes like this really don't help the OP.

To answer the question, it's very unlikely you will be able to make a good living selling $20 software with your first product.
Shlepper
Tuesday, May 15, 2007
 
 
>> Anecdotes like this really don't help the OP. <<

Karl's anecdote is very helpful to the OP because it emphasises that wealth is measured by what one delivers, not by how much effort it costs. As Paul Graham states so succinctly, if you paint someone's house, the owner shouldn't pay you extra for doing it with a toothbrush.

This is a very important lesson to learn for any budding mISV.
Mark Pearce Send private email
Tuesday, May 15, 2007
 
 
+1 Karl

Take me as a good example. I took 3 years to write a complex software ended up having less revenue per month compared to simple software like Bingo Card Creator (Patrick), Blackberry Spam Filter (Andrey), etc. which most probably take less than 3 months to write.

I'm now looking for new ideas, time to let go of my 3 years of hard work and thousand $$ of investment, ended up nobody is buying.
Joe Send private email
Tuesday, May 15, 2007
 
 
I suspect these people with zero sales made the mistake of trying to make products for other developers, which probably only make up 0.01% of the software market, and that market is already flooded with people making the same mistake.
John
Tuesday, May 15, 2007
 
 
Or that there are open source competitors selling for free.

Tuesday, May 15, 2007
 
 
I have always thought that the more darts you throw at a dart board the more likely that one will hit bulls eye. Throw one dart and you may well miss.

I tried 8 different ideas before I found a good one that sold. Initial development was one month (plenty) to get an below average product. I priced it cheaply $19 and I sold a few over a few weeks which I had never done before. I then worked up improving the product,web site, checkout and seo etc etc.

The program does the same thing now as the first version did but now it has 18 months development behind it but I've been selling since the first month. I also developed 4 other related programs and my last has started to outsell the first! The middle 3 are stocking fillers and do OK.

Try lots as it will probably take lots. Some may disagree with my method but I don't have it in me to spend 2 years on something and then it fail.
Dart mad
Tuesday, May 15, 2007
 
 
Hey Dart mad, would you mind sharing your average revenue / month ??

I'd be interested in the figures for the last couple of months

Thanks
dart seeker
Tuesday, May 15, 2007
 
 
dart seeker,

What would my monthly average tell you if you?
Dart mad
Wednesday, May 16, 2007
 
 
Anecdotal evidence of a uisv revenue/month
Thanks
dart seeker
Thursday, May 17, 2007
 
 
>Anecdotal evidence of a uisv revenue/month

Thats a bit like asking us the number of people we have slept with with the intention of of working out whether you are going to get lucky this weekend. ;0)
Andy Brice Send private email
Thursday, May 17, 2007
 
 
OK, the first thing about earning a living off selling $20 software is that you need something that will sell at $20 a day. What this something is depends on the platform you target and what part of that platform you target.

Second thing is to try and keep your costs low. Don't start spending all your money on advertising all over the place, often a review on a blog can help more than buying advertising. Also try to get reviewed in magazines. Another way to keep your costs low is to limit tech support. Most pieces of software can get by just fine with a support site, forums or simply a contact form, all of which are very cheap if not free.

Thirdly, don't expect to be successful right away. My first app isn't selling particularly well at the moment, so I'm doing two things:
1. Developing a second application
2. Improving my current point until it gets that key feature that means people take a lot of notice

And lastly, look for somewhere cheaper to live. $110k/year is a LOT of money. Move to a cheaper part of the country. Contact your health and life insurance companies and ask them if your costs will come down if you were to start working from home. Car insurance might also come down and fuel costs would definitely come down.

As for needing $110k/year for a family of four, my parents earn around £30-35k/year ($60-70k) between them and they managed to support 5 of us, 2 cars, with me at university as well as various taxes and insurance policies and such. Now I know it's not a direct comparison given differences between the UK and US, the government provides health care and "loans" me the money to cover my university fees and living costs (for the most part) though taxes are also higher.

Now £30-35k/year isn't too bad for living in the North of England where we live, but if we lived down South, especially around London then that most definitely wouldn't be enough. As such if you were starting selling software in the UK I would call you insane if you were to try and live in London. You can most likely live pretty well of $60-70k in the US, if you reduced your living costs. This doesn't mean you have to give up your standard of living, it just means you have to look somewhere that doesn't cost you as much to live, where food, taxes, houses etc are cheaper.
Martin Pilkington Send private email
Saturday, May 19, 2007
 
 

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