The Business of Software

I'm hitting something of a wall in my efforts to grow my software business to the point where it can become a full-time enterprise. Revenue grew in 2007, but was down slightly last year and is down a bit more this year. While I think I can attribute at least some of this to the economy, I still want to see what I can do better.

--The website: http://www.codebykevin.com
--The product mix: Mac desktop applications, mostly focused on leveraging the Mac's Unix foundation and command-line tools with GUI's.
--The marketing strategy: Product submissions to major Mac download sites, particularly Apple (http://www.apple.com/downloads/) and Macupdate (http://www.macupdate.com); PR announcements sent to Mac news sites, with a focus on MacNN (http://www.macupdate.com); an opt-out mailing list to registered users with product announcements, special offers and discounts, etc.; participation in Mac download promotional offers, particularly MacZot (http://www.maczot.com); some search-engine optimization with my product copy on my website; and an active blog. I have tried different pricing strategies, and have settled on a $24.95 price point for my products. (One of my programs sold somewhat better at $19.95, but I'd prefer to keep the price a little higher.)

I am currently using AWStats (http://awstats.sourceforge.net/) to track my web traffic; it's not perfect, especially in that it doesn't seem to keep legacy data (I can't see how many downloads my program had two months ago), but it's adequate for day-by-day snapshots. Most of my daily download traffic comes from Apple.com, with big spikes from MacUpdate when I post a new release; news sites also drive some traffic when my PR gets picked up. E-mails to my mailing list with discount offer is also usually good for some quick, discounted sales.

These efforts have led to revenue in the high four digits, with a slight downward trend over the past 18 months.  I have very little overhead, so my revenue is almost all profit. Still, I would like to push my revenue higher. One product (PortAuthority) accounts for the majority of my revenue, although all of my programs sell in varying amounts.

I haven't used Google AdWords, in part because other Mac don't seem to find them useful, and I'm also concerned that they would eat up any growth in revenue that they might drive. (Patrick MacKenzie's revelation at http://www.kalzumeus.com/2009/03/13/2008-taxes-done-well-ahead-of-schedule/ that he achieved about $9,000 in profit on sales of $21,000 and expenses (mostly AdWords) of $12,000 isn't, in my view, a positive recommendation for AdWords; my profit is somewhat less than that with almost no overhead.)

So, with all this context, please take a look at my site and let me know what you think. I'm sure there's room for improvement in my approach; I just don't know what it is.

I suggest a bit more descriptive text on the home page for each product--something more than two or three words for those who land there first.

To the extent that your potential customers may be wary of purchasing products from a small operation, I suggest a name change and perhaps the adoption of a corporate structure. It's not expensive or difficult. Present your operation as a serious business, not a hobby.

Why do I see a WordTech Communications header at PayPal when I want to purchase a product from Code by Kevin? Seems fishy.

I don't like the navigation. If I click on the portauthority-running.png image to get a better view of it and then click the Back button in my browser, I should return to portauthority.html, not the home page.

Move all of the Sales Policies paragraphs off to a separate page. They are premature clutter on the product pages.

You have dozens of HTML and CSS errors. Please fix those as time permits.

Have you tried Google Analytics in place of AWStats?

@Charles: Thanks for the feedback. Some comments:

"I suggest a bit more descriptive text on the home page for each product--something more than two or three words for those who land there first."

Any suggestions?

"To the extent that your potential customers may be wary of purchasing products from a small operation, I suggest a name change and perhaps the adoption of a corporate structure. It's not expensive or difficult. Present your operation as a serious business, not a hobby."

I do have a corporate structure--WordTech Communications LLC. It's in the fine print. However, since I'm not selling b2b or enterprise stuff, it doesn't hurt for my brand to reflect that there's a human being doing everything--many successful indie Mac developers are solo practitioners, and don't hide this fact.

"Why do I see a WordTech Communications header at PayPal when I want to purchase a product from Code by Kevin? Seems fishy."

See above.

"I don't like the navigation. If I click on the portauthority-running.png image to get a better view of it and then click the Back button in my browser, I should return to portauthority.html, not the home page."

Did you see the "close" button on the popup image?

"Move all of the Sales Policies paragraphs off to a separate page. They are premature clutter on the product pages."

OK, I may do this--thanks.

"You have dozens of HTML and CSS errors. Please fix those as time permits."

What browser are you using? I don't see any in Safari or Firefox.

If I could change only one thing, I would change the domain name. "www.codebykevin.com/" sounds to me as a hobbyist more than anything else.

The site looks good, and the product line is very coherent, the theme (unix for mac made easy) seems a good niche.

It could very well be that you are the market leader in a market that will never generate the kind of revenue you are looking for.  The total market of power OSX users who are willing to pay for your GUI tools, instead of using free command line utilities is probably much smaller than the market for word processors, photo editors, multitrack sound recording, and so on.

Take a look at your not-free competition and if it appears that you are more successful than they are, you might be wasting your time trying to come up with a marketing strategy to increase revenue.  I suspect your best bet for increasing your revenue dramatically is to develop new products which aren't GUI Unix utilities.  If and when you do have a new program to sell, market it on its own (or at least not in connection with your current products) so you can properly evaluate its success.

The Boston Consulting Group came up with a model a long, long time ago that you might find useful.  On one axis is sales growth, the other axis is profitability.  Low growth, low profitability products are "dogs", low growth, high profitability is a "cash cow", high growth, high profitability is a "star" and high growth, low profitability is a "problem child."  A cash cow should be milked for profit as long as it produces, but you shouldn't invest any more in it than necessary to keep it alive.  There is nothing that says you will get rich off of a cash cow, but if you are going to invest in marketing or product development, do it for a product with high growth potential.

The website could definitely use a revamp, with the menu moved to the right (I cant remember the last time I saw a website menu on the right), strong call to actions (colored buttons, buy now, find out more) and screnshots (or a movie) of your main product on the front page.

Before doing the revamp you should read Bob Walsh's "Websites that sell" e-book as it provides some great info on what to do and what not to do on a site that sells software.

You could also use the help of a designer with some general web design tips (eyes are drawn to where the biggest contrast is, website should replace a discussion with a client, top 500px most important, etc...).

All of the above will increase visitors to sales ratio. Once you increase that you can work on getting more traffic (run a $10/day AdWords campaign for one week).

Also you should print Andy Brice's list of 100 ways to increase software sales:
http://successfulsoftware.net/2008/12/29/100-ways-to-increase-your-software-sales/

and address ALL of those items one at a time,

The Boston Colunting Group Matrix mentioned above:
http://www.google.ro/search?q=bcg+matrix

I agree w/Charles, as a potential customer I would feel more comfortable purchasing from something more professional sounding than "Code by Kevin".  I understand you want to give it the personal touch, but that name does sound like a hobby to me, even though I know it isn't.  I think the point Charles was making about "present[ing] your operation as a serious business" is not just to form an LLC, but to user a more serious name prominently - not many people will read the fine print anyway.  I don't think showing that there's a person behind it hurts your brand (or anyone elses) - maybe just in a slightly more "professional" manner that might comfort potential customers.

"Why do I see a WordTech Communications header at PayPal when I want to purchase a product from Code by Kevin? Seems fishy."

Customers aren't going to understand this.  It does seem fishy. 

With regard to the navigation and back button issue, I saw the close button but the point is that it should "just work" - use an inline anchor to handle the back button - then your customers won't have to think twice about it.

You've got some solid looking products.  Have you thought of hiring a graphic designer, or bartering services with one to make the site more user friendly? 

What about setting up Google Analytics so that you can start to better track and optimize visitor usage patterns?

>make the site more user friendly? <
Don't forget who the users are for these applications.  They are users who want to inspect data packets, or port a *nix program that they wrote to OS X.  The hip users you see in Apple commercials don't have a clue what any of these programs are to be used for.  I'm sorry, but what kind of sorry excuse for a software developer can't navigate the website, or might be turned off by the graphics?  Compared to a typical Sourceforge project, Code by Kevin is professionalism exemplified.

I would recommend steering well clear of Google Adwords until the day you can target ads by OS. Currently you can only target by 'platform' (desktop vs mobile).

I tend to agree with RGlasel. This might be a case that you can't do much better than you are already doing. I would listen to all the feedback that's in the forum and try the various things.

Then, if things are still not significantly better, try and figure out a way to leverage what you've got into adding a new product into the mix. After all, by now you know that writing the code is only a small part of running the business, and the web site, marketing, etc take quite a bit of time and expertise. You have these already, so adding a new program should be relatively easy.

Take a look at http://twitter.com/zvikico/status/1785282238 For instance, posted by a fellow BOSer. " I want a tool called “pause my firefox”. It will cease any firefox activity without quitting it. letting my CPU breathe.." You and I know that it'd take less than a day or two to create a tool to do something like this. Send a signal to suspend firefox and then another one to resume it. There might already be utilities that do something like this, but the point I'm trying to make is that instead of providing complex Unix utilities to Mac users, you might want to look at providing ways to Mac users to use Unix capabilities, but without their knowing that that's what your doing. In other words, zvikico doesn't know and care about Unix signals, he just wants to pause Firefox. I wonder if there are a bunch of other things that command line people take for granted that you can package into a program. Please note that I know close to nothing about OSX and there might already be utilities that provide this capabilities, but I do think that it's a direction worth exploring.

Dror

http://twitter.com/drormata

>make the site more user friendly? <
"Don't forget who the users are for these applications.  They are users who want to inspect data packets, or port a *nix program that they wrote to OS X.  The hip users you see in Apple commercials don't have a clue what any of these programs are to be used for.  I'm sorry, but what kind of sorry excuse for a software developer can't navigate the website, or might be turned off by the graphics?  Compared to a typical Sourceforge project, Code by Kevin is professionalism exemplified."

It's not just about "navigating a web site", it's about being attracted to the site (repeatedly over time), staying on the site (e.g. b/c of quick load times), loving the site (and referring it to others), and trusting the site (and buying from it).  I'll wager a dollar that there's not a single user on BoS who couldn't increase their income by having even a marginally better Web site.  There's always room for improvement. 

And why not target those "hip users", as you put it?  Maybe they need this software but they just don't know it yet.  One of the jobs of a Web presence is to teach people what they don't already know.

I find it hard to believe you've tapped out this market, as some posts suggest may be the case. Yes, this is a niche, but the cross section you are drawing from is made up of big components: mac users, unix users, people who prefer GUIs to command line, etc. Even this combination has got to be substantial - the internet is a very big place. Determining if you've stalled or topped out is difficult.

You mentioned sales have softened - what does the trend look like? Are you seeing a gradual decline while still making new sales, or longer gaps between sales?

How do you attempt to specifically reach a potential customer ? If you run some sort of targeted campaign do you see any affect on sales? The magnitude of bump can indicate if you've got an exposure problem or a lack of potential customer problem.

Do you have any direct competitors? if so, how are they doing (other commercial, Open source, etc)? What about indirect?

Basically I'd suggest you try and determine exactly who you should be targeting, how many people this comprises and think about how to reach them directly. Then you can decide if it's worth the effort.

One thing I noticed is that you say that 'sales are final'.  I think it is always worth providing an XX day 'Money Back Guarantee'.  Yes, this will occasionally be abused, but if a customer wants their money back they will get it anyway via Paypal, so you may as well be seen to be offering confidence in your product by offering the guarantee.

Just my 0.02p

>> You have dozens of HTML and CSS errors. Please fix those as time permits.
> What browser are you using?

It doesn't matter. Pass each Web page through an online validator. Pass each CSS through an online validator. Start with http://validator.w3.org/. The validators will point out the errors.

On another subject, neither I nor Google can find a mention of multiple licenses or an end user license agreement on your Website. May I assume that it is legal for me to purchase one license for $24.95 and then simultaneously run an unlimited number of instances of the software on my company computers? If that is the case, it is impossible to estimate how many free copies of your programs you have given away.

In addition to the earlier recommendations, I suggest borrowing or buying a copy of "Don't Make Me Think" by Steve Krug.

@Charles:

"It doesn't matter. Pass each Web page through an online validator. Pass each CSS through an online validator. Start with http://validator.w3.org/. The validators will point out the errors."

If the errors aren't visible in a modern browser, then what's the point of fixing them? What harm do they cause? Am I losing sales because of them? I'm not clear on why this is a good investment of my time.

"On another subject, neither I nor Google can find a mention of multiple licenses or an end user license agreement on your Website. May I assume that it is legal for me to purchase one license for $24.95 and then simultaneously run an unlimited number of instances of the software on my company computers? If that is the case, it is impossible to estimate how many free copies of your programs you have given away."

I can certainly add some verbiage about this to the sales policies, but again, I'm not targeting businesses--these products are targeted at the consumer space.

"If the errors aren't visible in a modern browser, then what's the point of fixing them? What harm do they cause? Am I losing sales because of them? I'm not clear on why this is a good investment of my time."

Most Websites live and die by their search engine ranking. Google says they want correct HTML. (http://www.google.com/support/webmasters/bin/answer.py?hl=en&answer=35769) I don't argue with Google.

You sound a little too defensive about your site.  You're asking for advice so you should at least give a sincere consideration of ideas presented instead of trying to defend your way of doing things.

Regarding the site name, I definitely agree that it sounds too unprofessional.  "Code by Kevin" sounds to me like a hobby site which was mentioned before, and just based on the site name my first impression is that it's going to be free software.  I think giving the site a human touch is good, but you can do that through your word choice (maybe a touch of humor here and there) and the contact info.  The blog is a good place for that as well and you're already doing that which is good.  I don't think the site name is a good place to do that.

Since it's a site for multiple products I'd expect the URL and site name to be the name of the company I'm purchasing from, so I definitely also agree with the confusion with WordTech Communications on the Paypal page.  As it stands you have product names, site name and company name, and the site name shouldn't be a separate entity, it should either refer to a product or a company.

You mentioned that there's a close button on the popup for the screenshots.  Well on my laptop that button's outside of my viewable area and I need to scroll to even see it.  I can see the rest of the screenshot (enough of it anyway that I don't want to scroll the page) so I wouldn't scroll down right away and wouldn't see the button.  Perhaps having the close button on the top might be better.

Part of the issue with the WordTech name is that I also operate in a completely different market and business with WordTech, so I am reluctant to use that name too prominently. All my corporate infrastructure, including PayPal, is set up with WordTech, but I don't want that brand to be prominent with software. I may reference it a bit more than I do now, for instance, calling Code by Kevin a service mark or division of WordTech, but that's about it.

I do appreciate the other feedback about site navigation, the Lightbox script, etc.--I will study this closely.

I agree with DDL, Kevin.

There are some very intelligent and experienced people on this site, so I tend to think about Every comment and criticism as a gem, and give it serious consideration.

I know from experience that it is a challenge to take criticism. When I finished my first beta, after months of work, I showed it to someone I respect immensely and asked for critique. Her face fell, and she basically told me that, this was no good *at all*, because of X, Y, and Z. And she was a perfect example of my target market!
Well, that hurt. I almost blew up in anger, and wanted to explain all the reasons for why X/Y and Z were better this way. It happens to us all, at some point, I think.

But I let it simmer, and I eventually looked at it again, with new eyes. And by god, she was right on the money!

A million things can influence whether a person buys your product. If I had four different people on this site make a comment or suggestion about my site-name, I would thank the Graces that I've been given a clear message on something that can very well increase sales.

It sounds like you are doing well otherwise. This implies a market exists, people are able to find you, and they *buy your product*. Those are all major hurdles you've overcome. The small things mentioned here might be all you need to buck the trend, and start making more sales. I am sure that after hearing some of these comments, you'll come back to your site in a few days, and see it from a slightly different point-of-view.

It can only get better from there.
Good luck!