* 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.

We're closed, folks!


» Business of Software FAQ
» The Business of Software Conference (held every fall, usually in Boston)
» Forum guidelines (Please read before posting!)


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

The dream I had about generating sales

In this thread...


...I mentioned at the bottom about a dream I had to generate sales without worrying about piracy.  I remembered it now!  :)

It probably sounds stupid, but I don't think so.  Basically, the app is unprotected, uncrippled, and payment is 100% optional.  Paid users are the only ones entitled to personal support, with non-payers only getting canned responses with a link to a FAQ.  Paid users also get new versions 3 months before non-payers.

Now, to generate sales, my dream was this: at the end of every month, I hold a contest where I post a question on my website about my app, and the first paid user to email me the answer on the first day of the new month, wins $100.

Sounds stupid?  Possibly.  But it's no different to current marketing concepts on Facebook where people have to "like" something to win a prize.  In my case, instead of "liking", they just flick me an email on the first of the month and if their email is the first to arrive, they get the moola.  And if no paid user even bothers to email an answer, then great: I don't even have to pay up for that month.  :)

The legalities?  Can't see any issues because they're not paying to enter the contest -- they paid only for support and early bird versions, and there's no requirement to enter each month and no penalty for not doing so.  This is just an extra optional benefit available to paid users for their support.  And luck plays no part because it's not a random draw -- just the first email to arrive on the first day of the month, gets the prize.  A savvy user could win month after month if they tried, such as if they set up an email script.

So, if you downloaded the app, liked it, and hadn't paid, and then found out you could be winning $100 each month, plus get support, plus get early bird versions; surely that'd be an incentive for you to pay up?

It's a weird concept, but I'm a weird guy with unashamedly eccentric marketing ideas, so I'll be trying it with another app in the near future.  As before, I'll keep you posted.  :)
PSB136 Send private email
Friday, November 22, 2013
PSB - Don't take this the wrong way but you seem somewhat obsessed with not charging up front for your software. Having a simple price and having the user pay it to use your software is the simples and (imo) best way to make money.
Jonathan Matthews Send private email
Friday, November 22, 2013
One of the hardest parts of marketing is figuring out just how to ensure your target audience knows what your product is, what it does for them and how it differs from their other options.

Trying to ALSO explain weird pricing and prizes and stuff is just a recipe for disaster.

Figure out how much people are willing to pay for your product and charge them that much, minus a little discount for the warm fuzzies and goodwill.

Reluctantlyregistered Send private email
Friday, November 22, 2013
I definitely admit that I'm obsessed about not worrying about piracy.  That's my main motivation and focus.  I want to avoid paying people like Wyatt for their protection.  I can't shake the feeling that there has to be a better way than employing bodyguards for our software.  I hope to find it.

I never want to see a crack or keygen for my software again (which happened in the past).  I never got over it, and so I'm on a mission to make sure none *can* exist again, but I still want to encourage payment, too.  If prizes work, so be it.  It hasn't been tried before so who's to say it won't work?  Why should selling software be a case of "buy an unlock code" or "buy the full version" all the time?  I don't believe it.

There has to be a better way.
PSB136 Send private email
Friday, November 22, 2013
You need to look at it differently.  Having a hack show up for your software is a compliment!  Think of how much time someone obsessed and focused on your software!  Breaking _your_ software was considered a challenge, and gave them street cred when they accomplished it.

There are lots of other ways so you can keep thinking about them.  But they are all sub-optimal.  What will stop a hacker from getting your version 3 months early and releasing it to everyone?  What will stop a forum from opening and everyone providing personalized support for free?

In short, get over it.  I've seen many hacks of my software.  But I'm still making a very good living. 

One more way to look at it -- making very hard to hack system is one heck of a fun engineering challenge.  Sort of like a game of Risk or Stratego, except it's in code :)    That's how I look at it, and so far, no more hacks (at least for the past 7-8 years).
Doug Send private email
Friday, November 22, 2013
"There has to be a better way." - I think this is one of the motivations for SaaS. I see it that way anyway.

So - if I schedule my email to go out at 12.00:01 on the first of each month, I can earn an extra $1200 a year? Let me know when you are launching :)
Anon123 Send private email
Friday, November 22, 2013
The trouble with this idea (which IMHO isn't a bad one) is that if it's successful, it all boils down to who has the fastest mail server.  This is both unfair and unsustainable.

This is easy enough to solve. Just change the rules so that all the emails you receive go into a tombola and you pick one at random each month. This way everyone stands an equal chance of winning.

You'd need to go to some effort to explain this on the site and it would be difficult to implement this without:

1. Looking Cheesy
2. Looking cheap
3. Looking desperate

Perhaps if you took the novel approach of being completely upfront with your customers about exactly why you are taking this approach it could reap some rewards. You are certainly not alone in your dislike of DRM.
Andrew Gibson Send private email
Friday, November 22, 2013
I like this idea, but there is only one winner and that person would be the one that parks on his email account.  How about instead of one $100 prize, 10 $10 prizes or 20 $5 prizes?  Or you could return a portion of sales in prize money rather than $100 every month.  I guess I like gimmicks.
Deprecated Send private email
Friday, November 22, 2013
> I never want to see a crack or keygen for my software again (which happened in the past).

Isn't that simple? Either make a web app that only works online / on your website, or require online activation for your software.
IdeaSkeer Send private email
Friday, November 22, 2013
Thanks for the replies.

As for the first email idea, that would lead to some people not bothering because they'll assume their PC is too slow and they'll never have a chance.  So, I could always just choose one winner each month based on merit of all entries received on the first of the month.  That means the users would feel they have a sporting chance.  I can't just do a random draw because that's when legalities come into it, and you need government licenses and such for anything based on luck alone. 

Software as a service or web apps: no way.  I have a great dislike of relying on the internet to run any app, and I won't impose that on my users, ever.  If it can't run offline, I won't make it.  Yes, that means I'm creating my own issues, but that's my decision.  Too often my own internet connection has been down and if I couldn't run an app during that time, I'd be p*ssed.

Gimmicks for selling products have existed for millennia.  Whether it's a hardware store having a BBQ out the front (so the users then wander inside for a browse, which may lead to a purchase), or just a standard "buy this and get that for free".  I don't see it as a problem to use gimmicks for software.  As I said, I've never seen any app use this approach, so who can prove it won't work?

To make it not look cheap or desperate, my app would simply pop up a message at the end of every month saying something like "Paid for MyApp?  Then you are eligible to win $100 in next month's prize draw.  Go to MySite.com now to enter!"  And if the app only costs $9.95 to buy, it's quite a good return on investment for them -- they'll have that nagging feeling that they're throwing away $100 just because they don't want to spend 10% of that.

Finally, I don't feel that a crack is a compliment at all.  I hated it.  My app was cracked by "SavaGe" of "Phrozen Crew" in 1999, and when I asked why he did it, he said because the app was there and didn't think people should pay for software.  He wasn't even a user of it!  He then said not to post news of my apps on websites because that's where he'd spot them in future.  Bastard.
PSB136 Send private email
Friday, November 22, 2013
"What will stop a hacker from getting your version 3 months early and releasing it to everyone?"

It's not published on my website, so they can't get it.  And if a paid user gets it and then decides to share it, they instantly become a fired customer and won't get updates again, ever; and neither will I do business with them again, ever.  It's their choice.  You don't have to keep a customer for life just because they paid for your app.  If they break your EULA, it's goodbye.

"What will stop a forum from opening and everyone providing personalized support for free?"

True, there's not much you can do about that.  The best I can do is state something like: "Paid users get the best support option available: direct email contact with myself, the software's author.  Why trust anyone else?"
PSB136 Send private email
Friday, November 22, 2013
Gimmicks are fine but let me repeat my point - you only have a moment to tell them your sales pitch.

Muddying the water about how you buy it just creates problems for no reason. Instead you could offer such things *inside* the software perhaps but don't use it as a selling point per se.

As for winning prizes, nobody believes you until you're a big household name, and even then they're sceptical.

Reluctantlyregistered Send private email
Saturday, November 23, 2013
The way I look at it, you have allowed yourself to get sidetracked at some point.

Your current goal is "not to be hacked".

Don't you think your goal should be more along the lines of "provide great value for my customers and make as much profit as possible doing so"?

Providing an inferior product (no support) for free and enrolling your paid customers in a sweepstakes all for the purpose of not getting hacked...

At the end of the day, there are 2 items of interest:
1. How many people have you helped with your product and
2. How much money you have made in the process

Produce something of value, find customers who find it valuable and get them to pay you for it.

1. Some people will stiff you somewhere along the line, even if it costs them hundreds of hours of work to dodge a $100 fee.
2. Others will stiff you if it's easy and
3. A rare few will hunt you down to the end of the Earth to pay you your dues.

Your goal is to get people in #2 to pay you, but with your solution, everyone in #2 will just take the free license. Worse, some of the guys in #3 won't pay either because they just don't need the support and if you say it's free, they'll say "thank you" and take it.

And then there is the nasty side effect that the harder you work to improve your product and make it easier to use, the less you get paid.

About the sweepstakes thing, some people like to gamble, others don't, but if the main incentive to buy your product is the right to enter in a sweepstakes, it clearly will only appeal to gambler types, and for those, your $100 offer isn't all that exciting - they already have thousands of gambling opportunities that look a lot better to them. Not sure why this would prompt them to buy a license, unless the license is paid by their company and they get the money personally.
Sylvain Galibert Send private email
Saturday, November 23, 2013
+1 Sylvain
Jonathan Matthews Send private email
Sunday, November 24, 2013
"if the main incentive to buy your product is the right to enter in a sweepstakes, it clearly will only appeal to gambler types"

But how is that any different to buying a chocolate bar that has a unique code inside the wrapper, where the buyer can win $10,000?  After all, that's basically what my idea is.
PSB136 Send private email
Sunday, November 24, 2013
It's the "Willy Wonka Incentive".  :)
PSB136 Send private email
Sunday, November 24, 2013
Actually, that made me think of something else... Willy Wonka had 5 Golden Tickets and people wanted to win so badly... as Grandpa Joe said, he'll sell a million bars.  Perhaps I should say on my website that every 5th purchase wins the buyer $50!  The sales from the previous 4 would more than cover it.  Hmm, interesting!
PSB136 Send private email
Sunday, November 24, 2013
There are few differences

1. The hypothetical chocolate bar maker has an army of lawyers that made sure that the rules are compatible with all the applicable state and federal rules. You don't have an army of lawyers.

2. When Coca-Cola does that, they spend millions on advertising to promote that scheme. You don't have millions of dollars to spend on advertising.

3. When Coca-Cola does that, people don't think "What is this Coca-Cola company? Will they rip me off?"

When a random guy on the internet does that, people do think "Who is this PSB136 guy? Will he rip me off?"

4. The hypothetical chocolate bar costs the same whether there is prize behind or not. People will derive as much enjoyment from it if they don't win.

The risks of buying software (i.e. that it might not work at all for a given person) are much higher than a risk of buying a chocolate bar.

The prize is not the reason people buy those things, it's just a small nudge.

Coca-Cola does this kinds of marketing schemes because at their volume even a small relative bump in sales generates huge profits.

It's not, however, their main or even significant, marketing tactic. This comes after millions spend building a brand via traditional TV and newspaper advertising.

And the end of the day - just do it. Then come back and tell us how it went.

If you, however, want to hear our opinion beforehand, the feedback has been pretty clear: it's a stupid and possibly illegal idea.
Krzysztof Kowalczyk Send private email
Sunday, November 24, 2013
> it's a stupid and possibly illegal idea

I understand the risks.  I was just musing out loud.  :)
PSB136 Send private email
Monday, November 25, 2013
Very true.

There's no such thing as a job for life now. It used to take generations to build up a large company, now big corporations come and go in a few years.

You can't say it's a big company, I've got a secure job - big companies exist but secure jobs don't.

Reluctantlyregistered Send private email
Monday, November 25, 2013
You are obviously quite taken with the idea and it looks like you mostly want to be told it is great.

But since we aren't in the business of sugar coating (or chocolate coating) our feedback, it isn't really turning out that way. Doesn't mean you can't just go ahead and do it anyway, but if you really want feedback...

"But how is that any different to buying a chocolate bar that has a unique code inside the wrapper, where the buyer can win $10,000?  After all, that's basically what my idea is. "


"Perhaps I should say on my website that every 5th purchase wins the buyer $50!"

If you have to ask what the difference is with a chocolate company running a $10,000 sweepstakes, my opinion is that you don't understand the first thing about gamblers. 

For most people, $100 is nothing. $10,000 is money. Gamblers go for the dream. They will spend serious cash for a chance (imaginary for most) to completely turn their lives around, or at the very least to get something cool that they can't already afford.

They go for the illusion that they can spend a very small amount, make a fortune and live happily ever after.

1 chance in 5 to get a $50 prize (discount really, they have to buy your product)??? There is no dream. There is no lure of anything.

Tell me, do you know what your main account balance is to $50 accuracy without looking first? Most people don't.

The only people who might go for a $100 are small children, because they estimate wealth based on the number of candy bars they can buy and $100 is a LOT of candy bars.

That's not your target audience, is it? You can NOT target gamblers with a prize below a certain threshold of "awesome".

BTW, there is a way around offering lot of money to gamblers: They are looking for a "dream". National lottery and Vegas hint at a brand new life of luxuries, but doing that requires a huge user base.

One way to go around the issue is to offer something that they can't get otherwise or that they irrationally value much higher than its cash value, by offering, say, an all expenses paid trip to some exotic location. Deeply discounted plane tickets, week-end deal with an hotel, it all comes down to less than 1000 bucks and has about the same "wow" factor as $10,000. After all, gambling is a tax on people who don't believe in Maths.

Next, with a chocolate bar, the gambler's investment is $1 and the pay out is $10,000. Plus he was gonna get one of the 10 chocolate bars on the display anyway and all they are trying to do is to get him to pick their chocolate bar.

Another issue is that gambling is a number game. You need users in the thousands at the very least.

Bottom line, sorry, but I think your idea will end up a net loss for you.
Sylvain Galibert Send private email
Monday, November 25, 2013
"I think your idea will end up a net loss"

That seems to be the consensus from the replies.  :(

There MUST be a way to generate sales without protecting your app.  I refuse to believe there isn't.  But, I'm starting to think I have no other choice.
PSB136 Send private email
Tuesday, November 26, 2013
You don't have to go overboard in protecting your app, but a minimum is required.

You lock your house before you leave for your holidays, you put your money at the bank and you avoid carrying large stacks of it in dark alleys. Don't you?

Same idea - I would love to live in a society where you can leave your door open and the keys in your car, but in most places nowadays, it's just not a smart thing to do.
Sylvain Galibert Send private email
Wednesday, November 27, 2013
It is funny how the same thing can happen to different people, yet they attach an entirely different meaning to it.  I believe that you were really upset about your software being cracked.  But only you can allow yourself to become upset.  And it was only because of the meaning that you attached to the event.

A search for "my product name crack"returns 5,000 results 600,000 if I take off the quotes.  There are even YouTube Videos with step by step instructions on how to install the cracked version.  I don't care!!!!  I never worried about cracks, or even pay any mind to them.  It is just a sign that you have achieved a certain level of success.  So congratulate yourself.  You probably made a good product that a lot of people want. 

Yes I take all basic precautions to try to prevent it, and enforce licenses.  But I don't obsess on it at all or even care. Someone will crack whatever we write if it becomes popular, and some people only want cracks.  I accept it as a fact of being in the business. 

While I don't condone people cracking my software.  I suspect there may even be some side benefits from having cracked users.  Maybe one will make a positive recommendation about your software in a popular forum.  In most respectable forums you can recommend using a product but you will be banned immediately if you give a link to a crack. 

If 1 million people were using a cracked version of your program and loved it, and were talking about it.  It would probably translate into a considerable amount of paid sales at Zero marketing cost. 

There are hundreds of millions of honest people out there who would never think of downloading a crack, and are happy to pay.  They want a product and service and they want to pay for it.  I put all of my focus on making my product fulfill the needs of these people, finding as many of them as I can,  getting them to try my product,  and making them pay for a license. 

Just my $0.02
C. Stark Send private email
Wednesday, November 27, 2013
C Stark, thanks for your advice.  In fact, your comment about the zero marketing cost is something I never considered... and it's a good point!  Thanks for opening my eyes about that.
PSB136 Send private email
Thursday, November 28, 2013

This topic is archived. No further replies will be accepted.

Other recent topics Other recent topics
Powered by FogBugz