(5 votes, average: 3.8 out of 5)
Loading ...I received this email the other day:
I’m looking for a software developer to build a simulator program.
Payment would be made from revenues after the product is available and producing revenues. The estimated market for this product is 100 million users with a target price of $50 per unit. After all your development costs have been covered from revenues, we would then share the proprietary rights to the product and net revenues on a 50/50 basis.
Are you interested in continuing?
My reply:
Thanks for your email.
I have one question for you: in this type of arrangement, you would be marketing and selling the product. Do you have experience marketing and selling software on the internet, and if so could you pass along links to previous successes?
I’ve developed and sold a lot of products on the web, and have learned that coming up with the idea and developing the software are two of the easier steps in the process (even though development is time intensive). Getting people to come and buy your product without spending a zillion dollars on advertising is the real challenge in this game.
If you have proven experience marketing software I would be interested in hearing more about your idea. Or, if you have a marketing plan of the steps you would take to market the product, I would be interested in seeing it. If not, you are going to have a difficult time finding a good developer to spend hundreds of hours working on a product that may never sell. Every one of the good developers I know have tens if not hundreds of ideas for software products…it’s not a lack of ideas, but a lack of time that keeps us from building and marketing them ourselves.
I look forward to hearing from you,
Rob
And you know what? He was quite cordial in his reply (an excerpt):
I don’t have any marketing experience and realize I’ll need help in that area after the product is available. Your other comments are right on.
===
Wrap Up
If you’ve never launched a product you have no way of knowing that it takes three legs to make this stool stand: the idea, the market, and the execution.
Finding a market you can afford to market to and executing the idea (including the marketing) are insanely hard.
Finding an idea is the easiest part.
This is why there are websites and blogs all over the place where people share their startup ideas with the world.
21 comments ↓
The one thing I learned in b-school: marketing is the key. Take for example Britney Spears - talented, musical genuis, or exceptional at hiring marketing/publicity managers?
Thanks for the insight. You continue to show the brains of small business development, and I believe it is absolutely encouraging to those who may follow in those footsteps.
Rob,
I agree with 98% of your sentiments.
Here is the 2% and the ‘other side of the coin’.
Does the programmer have any experience writing a ‘best seller’ mass market application?
Don’t programmers also need to partner with individuals with the time, energy, and funds to execute on the sales and marketing plan? Clearly, this individual should have a plan and supporting budget to generate revenue. If not then the programmer should go no further, if so then the programmer should assess the risks and opportunities.
My sense however, is that this type of inquiry is foolish and naive. The business side of the equation shouldn’t expect 100% sweat equity payment, they need to have some financial resources to fund in part some of the development and then share in the downstream opportunity.
At the end of the day, both parties need to be believe in each other and believe in the plan when their is based at least on part on results.
@Jerry - I should have mentioned this in the post: if he had emailed back with proof of his ability to market software I would have instantly engaged in discussions about how we could partner.
A developer needs a marketer as much as the other way around. The point of my post was that he had no marketing experience but was asking me to put in hundreds of hours for free on the hope that he would be able to market it.
A few weeks back, the wife and I were checking property-management companies, thinking about renting out our house. When I learned their monthly service fees are often directly related to how much rent I’m charging, I was appalled. What difference did it make how much rent I charged? The service they’d be providing would be (or should be) identical regardless of what I’d be earning (or, in our case, losing). Right?
Offers like the one you mention come along all too often, and drive me absolutely nuts, because subtextually, they say at least two things: one, I don’t think I should bear the risk of implementing my grand idea (which, by the way, will surely make us both rich and is basically risk-free, anyway; only a fool would bypass this amazing offer), and two, I don’t recognize your services as inherently valuable. Both are downright insulting. Who’d ever think of asking his plumber to forego his fees in exchange for a percentage of the savings from some newly installed water-saving feature?
If an idea inspired me, and made me want to take some of the responsibilities of making it successful, I’d absolutely consider an exchange for some ownership. But insinuating that professionals of any kind are just sitting around waiting to absorb risk of the world’s “idea people” is just loony.
What would you say about this middle of the road scenario (whitch happens to be exactly mine) :
A senior developper I have invested à good 5 months of R&D in a product I really believe in (visionnary, foolhardy, who knows ?) and its taking shape nicely.
Alas, I am nor a born marketer and not business person either.
The project is big (nation-wide potential on the web) and I need to offload part of ongoing development on a skilled partner.
No revenue to be expected right now (got ideas, skills and chronical overdraft)
I have a busines plan, intersted pospects (I shoulb be spending more time with) but not in a formalized way.
Would you take a second look at my offer (not actually asking you of course, we’re across the Atlantic from each other
?
@Philippe - Speaking as a developer I would want to hear your idea, see your business plan, and see what you’ve built in your 5 months of work on the project. From there I would evaluate whether (in my opinion) the idea would fly, and then decide whether or not to partner up. But right off the bat it sounds like you’ve spent a lot of time thinking about it and working on it, which shows me you are dedicated to the idea and believe in its success.
The more code you had to demo and the more time you have to give to the marketing effort on an ongoing basis the better off you will be.
BTW - I see people looking for partnerships like this on the SitePoint forums from time to time. You may want to check them out. You could also look at BusinessPartners.com and PartnerUp.com.
Good luck in your search!
Great article Rob! I would just add one thing, which I now find even more important. Above being able to do it, are they actually going to do it?
By this I mean that I now find execution the most important aspect. Even with great experience most people aren’t willing to put in the time. Execution is the really hard part. And those that do execute often only do so for a few months before dropping out (much like going to the gym).
Therefore as of the last few years one of my newer requirements is that the person has done something in the past for at least 6-12 months. It doesn’t have to be a successful endeavour, they just have to prove to me that they will follow through with it! Most people can’t past a few months, if that.
Advertising capital has little to do with brand equity, particularly in today’s markets. That is an old myth, i.e. Sharper Image just went belly up this week for example — do you realize how much they’ve spent on infomercials?
I bet you think that if you had all those infomercials for your software you’d be rich right? Not bankrupt? Hee.
The roadside is littered with the spent carcasses of umpteen brands who keeled over amid lavish ad budgets. So get that myth out of your purview, you’ll be better for it.
Anyhow bottom line is that I call BS on you. I don’t believe that you, or anyone else, know any developers who have great code they can’t sell. That’s pure nonsense, you’re making that up to be sensational.
The disconnect has nothing to do with marketing, it’s just old fashioned laziness. No developer in the world ever made great software they couldn’t sell. Period. So cut the BS.
I tend to agree with Corey above in that marketing is something a developer can learn. If the developer has already branched out enough that they are trying a microISV then they likely are willing to learn and work on marketing. Further, I would say that the people starting microISVs are no longer “developers” because they have already accepted that they are doing more than just writing the code. Thus, this new type of person (entrepreneur?) is capable of learning everything that is required.
It would be the same if a marketer decided they wanted to learn to program and spent the time to do it (admittedly to get to a minimum level of effectiveness is marketing it takes less effort/time than to get to a minimum level of programming proficiency).
Great article! I get asked to work for free once in a while. I wouldn’t actually mind teaming up, but it always seems such a bad deal: you do all the programming (90% of the work) but we split the earnings among all the team members. If there are 5 people in the team, I would get 20% for doing 90% of the work. The worst part is, no one in the team has a clue in marketing. The idea is usually a rip off of an existing product with not much new added…
I used to be a partner in a small little technology and design firm. We had an idea and all of the resources to implement it quickly and cheap. Everyone loved the idea that we told about it. We built a website with a shopping cart, sent out media kits, gave out samples, sent out press releases, etc.
We got one $7 order from a lady in Italy 6 months later.
Fortunately, it wasn’t a software product. Otherwise, I’d have hundreds (if not thousands) of hours invested. But it did prove to me that an idea “ain’t worth squat” without a comprehensive plan and serious post-launch effort with constant TLC.
BTW, we’ve decided to ressurect the project and take a different approach this time around.
@Corey - I’m not sure why you’re bringing up advertising capital and brand equity - I was not implying that money spent on ads turns into sales - in fact, I was stating the exact opposite - that big advertising budgets tend to be a waste of money.
“Finding a market you can afford to market to…” was commenting on the fact that you will quickly go bankrupt unless you can find a way to make at least $5 in gross profit on every customer who costs $5 to acquire (unlike Sharper Image).
Next, your comment:
“I don’t believe that you, or anyone else, know any developers who have great code they can’t sell…No developer in the world ever made great software they couldn’t sell.”
I’m not sure where I said that in my post, but in any case you are sorely mistaken, my friend. 100% incorrect. I can give you names and emails if you’d like, and while you’re at it drop a line to Bob Walsh, Joel Spolsky, and Eric Sink, all of whom have written about this in their blogs.
I have personally seen good software products that never sell because there is no market or no marketing effort. Look at DotNetInvoice - essentially the same product as I acquired a year ago, but the previous developers didn’t have the marketing experience to sell enough copies to make it worthwhile. They were going to close the doors on what is otherwise a good product.
Also, spend a week checking SitePoint and you’ll see sites like budgetpulse.com, v2commerce.com, and simplybill.com all for sale at fire sale prices because they have good developers behind them who wrote good software that doesn’t seem to “sell itself” as you are implying good software will do.
Interesting but services like Adsense make it easier to promote such products, of course at cost.
Yawn. Yeah I’m going to email Bob Walsh about you… And Joel. That’ll convince me and be a great use of time!
Bottom line, I call BS on you. So let’s cut to it. I challenge you to present me with one single developer who:
1. Is a reasonable business person.
2. Owns great software they can’t sell.
Present this person and I will make them money in short order with zero investment required. Period. Short of that you’re just talking out of your butt AFAIC.
And by “great” I mean compelling. Obviously crappy or useless software will never sell — and that fact is in no way reflective on the state of the market or supportive of your blog concepts.
Anyhow cheers, looking forward to making money for you folks.
P.S. “Good software sells itself” is the din of morons — you certainly never heard me participating in jibberish like that — no clue how you managed to extract that gem.
@Corey - You didn’t leave a URL or email address so I can’t send you contact info. But from my previous comment, drop a line to the guys at SimplyBill.com or BudgetPulse.com — both great pieces of software, both struggling to find customers. I look forward to hearing about your success.
SimplyBill is compelling software? How so?
Also, please justify the pricing at SimplyBill.com. Thanks.
Suffice to say that if you consider SimplyBill as compelling software which is struggling due to external reasons I really strongly disagree with you.
1. It’s not a good standalone concept.
2. The pricing is not sound.
3. It’s not compelling in any way.
I’m sorry Rob but I also very strongly disagree that a developer should be able to make living from anything as insubstantial as SimplyBill. It’s nothing.
But let’s talk solutions anyhow. SimplyBill needs integration to succeed, whether that be into something internal like a suite of office tools — or something external via licensing, co-branding, etc. Or both.
No one is going to pay 20 cents per invoice.
If a person did some sue diligence this, and much more, would be readily apparent. SimplyBill is desperate for some due diligence and common sense. You need to define a target consumer and use their feedback to craft something meaningful out of this nonsense.
No one knowledgable is buying SimplyBill as a great standalone retail concept. Sorry.
OK first sentence at Budget Pulse says, “What is budget pulse?” and then comes this text:
BudgetPulse is developed by a small team of experienced professionals in interactive and fresh web 2.0 outlook.
Utter garbage. Sorry Rob, garbage in, garbage out. The problem is not the software (maybe). The problem is utterly idiotic marketing. I mean really. How on earth does that sentence answer that question? It doesn’t.
I hate to sound harsh but it’s pure garbage. And I can almost guarantee you that you developers don’t see it, won’t see it and can’t see it. But the fact remains that it’s just atrocious.
No one in their right mind is going to entrust you with their personal financial data — to be put on the web no less.
You’re obviously having me on here.
Bottom line, stupidest thing you can do in marketing is set your buyer up and let them fall like that. They glaze over and wander away because they know from moment one that all your materials will be similarly worthless.
Good observations. From your descriptions it sounds like marketing (choosing what to build, pricing, website copy) is harder than building a good product. That sounds familiar…oh wait, that’s what I said in my post.
Since you are an expert in software marketing go ahead and post your blog URL, as I would like to subscribe and I’m sure my readers would be interested to hear more of what you have to say on the subject.
Really nice answer.
I normally just say “No, thank you”
“SimplyBill is desperate for some due diligence and common sense. You need to define a target consumer and use their feedback to craft something meaningful out of this nonsense.”
Sounds like your implying that they wrote the software but didn’t do the “marketing” to make it successful. And by this I don’t mean advertising/sales, which you seem to confuse with marketing in your earlier posts.
Leave a Comment