It’s Twitter Time
Hi All,
Sorry for not writing in.... a long time. It’s just so busy here that it’s hard to find the time, plus the burden of managing the comments makes it all just too much. So I wanted to let you know that I am very active every day over on Twitter. The format and time requirements just fit in better with my life at this point.
I’m not shutting down shop here, but you can expect fairly infrequent posts as it’s been for some time.
So if you want to keep the interaction going please follow me at @ianlandsman and you can get HelpSpot related Tweets at @helpspot.
Thanks!
Your Product is Free Because You’re Lazy and Scared
David over at 37signals had a nice post today about why startups seem to have abandoned charging customers for goods and services: ”How did the web lose faith in charging for stuff?.
Of course, I agree with charging people for a quality product. I make my living doing it. However, I think there’s a point he’s missing in there. It’s a point that people often put aside as not the primary reason, but I think it’s a much more prominent factor than people think. What’s changed in the past few years is that many startups are founded by programmers and programmers are inherently lazy.
In most cases, this is a good trait for a programmer. It leads to wanting to do things more efficiently, maximize speed, and can even lead to better quality IMHO. However, when it comes to running a business this attribute has some negative consequences. In my work the one I most often see is the total disregard for customer service.
Customer service is almost always viewed as a necessary evil. Annoying customers always poking around looking for answers to things which are right in front of them and causing us to take time out of programming to help them.
So this leads into the great cop-out. Make it beta and hey, make it free. Those 2 tags let the programmer get out of so much. Customer has a problem? Screw off, it’s free. Can’t find a phone number or email address to contact us by? Screw off, it’s free.
It’s so much easier to think that Google’s going to buy you and that’s how you’ll get paid or that throwing up a Google ad will make you so much money that you can safely ignore the ad clicking drones users.
Things that are outside your comfort zone are always scary and I think that’s the case here. Programming focused startups fear customer service. They’d much rather have a half hidden link to a forum they occasionally check (only after a 36 hour Mountain Dew fueled coding session) than a prominent email address which they answer promptly.
In some ways of course they’re not wrong. It does take an incredible amount of time to answer all those emails. On the other hand, if you have more emails than you can handle that’s probably a good sign. Also, those people who take the time to email in often end up being your best customers and biggest spokespeople. They have more than just time invested, they have hard cash invested and that’s a big difference. They want you to succeed, they’re loyal and they are in many ways a new companies biggest asset.
David obviously has a business focused mind and 37 started out as a customer focused company, which is why it seems logical to them to charge for things you create. I think this is very much the exception these days so it’ll be interesting to see if David is correct and this starts to swing the other way.
On the upside, us profitable money charging companies can just keep tooling along 
How to Sell More Software by Adding 12 Characters to Your Homepage
Yes, this is the secret to how to sell more software. I’m the first one to break the sacred oath of profitable software companies and reveal the secret of how just 12 characters can make you significantly more money. Are you ready to hear it? Are you sure.....
OK here it is. Put your phone number on your website. Just like this:
It really is that easy, it WILL lead to more sales. If you sell B2B it will lead to bigger sales as generally people making large purchases like to talk to a human.
Now I know all the excuses you people use in not publishing a phone number. It’s all BS. I don’t care that 37 signals only does email support. I don’t care that you only do this part time and you can’t be there to answer the phone. I don’t care that you hate talking on the phone.
It’s time to suck it up, especially in this economy where people are going to be shopping around. Having a phone conversation puts you in a much stronger position with the consumer than just an email. Just having a phone number clearly available improves your product positioning in peoples mind. It implies you’re here to stay, you’re approachable, if they ever had a problem they could call. The biggest secret of all is that most people don’t call. We still only get a call or two a day on average and often no calls at all and we’ve been in business 4 years, are linked from everywhere and have a sizable customer base at this point.
So let’s go through your excuses.
1) 37Signals only does email support, why should I have to do phone support
Of course this one is the easiest. Because you’re not them. You will never ever ever ever be them or anything close to them. You’re trying to make a solid living. The chance of you hitting the jackpot is slim, don’t pretend it isn’t. You can’t tell customers to go scratch like they can. Every single potential customer is hugely important to you (or should be).
2) I only work on my business part time and am not there to answer the phone
Umm, so what. Get an answering machine or digital voicemail box. You don’t have to answer the phone every time it rings. Let it go to voicemail and respond once a day or when you get home from your day job. It’s a big myth that if you have a phone number you need to have someone there to answer it every time it rings. Sure that’s better, but having a phone number is still way more important than not having one and at this point everyone is comfortable leaving voicemail’s as long as you get back to people in a reasonable time (say 1 business day).
3) I’m a programming dork, I don’t want to talk on the phone
If you’re reading my blog you’re likely trying to be in business. In business you have to do stuff you don’t like doing, oh… 75% of the time. That’s just the way it is. If you want customers you have to understand your customers and the phone is a great way to do that. If you’re serious about having a business then working with people is going to be key to your success and the phone is a big part of that.
Listen, the phone is your friend. The phone is the key you making your business approachable to customers. It’s also how you’re likely to get some of your best customers, so bust out your website code and throw your number up there. The worst case scenario is you get lots of phone calls and if they’re not relevant you can always pull it down. On the other hand you may get great calls that lead to sales and happy customers. It’s worth a shot.
.NET and Java Logging
The Gurock brothers have started up two new micro sites about logging, .NET Logging and Java Logging in the style of my open source help desk list. Hopefully they’ll have as much success as I’ve had with open source help desk list. If you have a blog go ahead and give them a link and help support our fellow MicroISV’s.
Winter Pictures
Here’s a few nice winter pictures from the past few days just to change it up. Actually I didn’t spend a lot of time framing the pictures nicely, but still I think they’re nice. I could do without that house being there, but I’d need a bulldozer for that.
Ice on the Hudson:
Sunset:
Poughkeepsie at Night:
How to Start a MicroISV
Andy with a great quick start guide to starting a MicroISV. This covers all that boring stuff nobody covers in their starting a business articles. Well, maybe not nobody.
How to Compete When All You Do is Solve Problems
Scoble has an interesting post today. In many ways I think it sums up or represents some of the frustration I’ve felt working in the tech software world. Getting publicity, links, mentions, any type of reasonable attention when all your product does is solve real world problems is very hard, bordering on impossible. There’s simple no market any longer for reporting on hard working, profitable companies.
I’ve thought about this a lot and I don’t have a really good solution for how to bring the conversation back to our side. Short of building in features or even entire products devoted to just getting attention (and not solving real problems) I’m not sure what to do. My current thinking though is to try and ride it out. This environment can’t last forever, hopefully when it changes companies that have kept having good results and making real customers happy will be popular again.
On the up side, the impending downturn in 09 could help shake some of this up as there will likely be less ego companies around which should be good news for the rest of us.
Help Desk Priority Structure
Over on HelpSpotted: Creating a Help Desk Priority Structure
HelpSpot 2.6 Sneak Peek
If you’re interested in seeing some of the new features in the next HelpSpot release we have a post about it on HelpSpotted. http://helpspotted.userscape.com/2008/12/10/version-26-sneak-peek/
HelpSpotted: The HelpSpot Blog
Just a quick post to let you know that we’ve launched HelpSpotted. The official HelpSpot blog. We’re going to be posting tips, tricks, sneak peeks and more there. We already have a lot of good stuff up so take a look.
I’m also trying to setup a blogroll of HelpSpot customer blogs on the site so if you’re a customer and have a blog please post your URL on this post: http://helpspotted.userscape.com/2008/12/10/customer-blogroll/
Blog Blazers Book Giveaway!
HelpSpot customer and fellow MicroISV Stephane Grenier just released his work of love, Blog Blazers. The book is a series of interviews Stephane conducted with 40 popular bloggers. I’m honored to be one of the bloggers, though there’s a lot more talented bloggers than myself in the book including the likes of Seth Godin, Eric Sink, Jeff Atwood, etc.
One of the keys to my success if not the primary key has been this blog. While I don’t write as much as I used to, the early years of UserScape and it’s success were almost completely dependent on this blog and the traffic it generated. Without this blog I’d almost certainly be working “For the Man”, filed away in some cubical farm.
While blogs are no longer “new” as they were when I started, I still think they’re a key component to any startups business, especially a MicroISV. Now, one problem with blogs is that it’s often hard to find concise advice on how to blog well. Even just figuring out where to start looking for advice is difficult. Sure there’s lots of “how to blog” links in Google, but few get into the subtle details that make a truly successful blogger. Blog Blazers does just that. If you’re starting out in blogging or want to grow your blogging presence this book is where to start.
Now, Stephane has been kind enough to offer my readers an amazing opportunity. He’s given me 10 copies of Blog Blazers to give away free on this here blog. I’ve thought a lot about how I might give these away. I don’t want to do anything cheesy nor do I have time for a very complicated give away. So here’s what I’ve decided:
To receive a free copy of Blog Blazers be one of the first 10 people to agree to write up a complete review of Blog Blazers on their own blog. That’s it. This is on the honor system. If you’re not going to write up a review about it then please don’t ask for a copy and let someone else have it. You must have a blog to be eligible.
If you’re ready to commit to doing a review then just do the following:
* Post a comment below stating you’d like to review Blog Blazers and include your blog URL
* Include your real email in the email field
I’ll email the 10 people to get their address information and ship off the books, probably next week.
If you have a blog and think your readers might be interested in this giveaway please link them over.
Thanks!
Update: We’re at 10. Thanks everyone!
Advice for Peldi
One of the few blogs I create time to read regularly these days is the Balsamiq Blog by Peldi Guilizzoni. He’s a MicroISV, his first product is the really cool Balsamiq Mockups application which lets you build software mockups quick, easy, and in a fanciful fashion that keeps the focus on UI. So instead of deciding between Aquamarine and Bondi Blue for that button you can figure out if the button should be there at all.
Today Peldi had a post every MicroISV dreams of, reaching $100,000 in sales. It’s a good read and I suggest you read it before you read the rest of my post.
So in his post he has a few questions and observations. Since his experience seems to mirror mine very very closely (leaving his job, revenue growth, B2B, fantastic wife that’s a key part of the company) I thought I’d post my perspective on some of his questions/comments being 3 years farther down the road than him. So Peldi here’s some notes, they may or may not be very helpful
Congrats on the success!
Product Versions
I think you’ve made a great move having the Jira and Confluence versions. I bet they pay off handsomely over time as those customers are likely to upgrade at a high percentage in the future and are also more rich sales initially. My advice here is not to spend too much time on Balsamiq for open source. There’s very little upside there, especially if the market tightens. It’s also another version to support long term. Everything you add increases support, don’t underestimate that. I’d stick with building versions which are add-ons to existing server products people already pay for. That’s a great angle, run with it!
Adding Staff
No no no. I think it’s a really bad move to add anyone. $100,000 isn’t that much money. You can spend that money in much better ways. Before you hire anyone you should do the following (note to self:I need to write this up into a bigger post)
- Payoff ALL credit cards
- Payoff any student loans
- Payoff any personal loans
- Buy a house (if you don’t already own one)
- Payoff your cars if possible
- Save at least $50,000 in savings, more if possible. Not stock, not an IRA/401K, straight cash in an account.
The point here is you should be improving your personal financial situation. This is not greed, this is good business. Since it costs so little to run a MicroISV your first priority should be making sure you are personally in a very good financial situation. This will ensure that your business will survive should you hit a downturn. If you have no debt you could probably live on just a few thousand dollars a month, you want to make sure that’s possible.
Other benefits of waiting are that you’ll be very clear about what areas you need to add staff in. It’s so early for you that you don’t want to make a bad hire. Also hiring someone greatly increases headaches on multiple fronts. Trust me just dealing with getting health insurance is a multi-week process. These are distractions you don’t need.
The “Oh Crap” Question (what if you’re hit by a bus)
This question is not a concern. It feels scary, but it really isn’t a problem. It wasn’t a problem for me and my application is the type where companies depend completely on it, staff live in it 10 hours a day, all day, all week. Many companies LIKE dealing with a smaller company. This is an advantage, you can provide support on a level larger competitors can only dream about.
Here’s a few tips:
- Emphasize your size as a strength
- Superior support (Question, when was the last time a vendor replied to you within an hour?)
- Faster release cycles
- Direct developer contact means customer feature requests are often implemented and implemented fast
- Emphasize the money back guarantee (I assume you have one), this IS the best product of it’s type on the market and you stand behind it in a way others don’t.
- Your product is successful. If you disappear there will be no shortage of companies looking to purchase the source and continue development
I’ve found these to be enough, but if you wanted to take it one step further you could also provide an agreement that you’ll be releasing the source code in full should you be hit by a bus. You’d want a lawyer to do this since you wouldn’t want it to apply once you reached a certain size, etc.
You said everything you need to know about this in your post: “I don’t really feel like I have reached my limits in terms of how much I can do by myself”. Until you are there’s nothing more to discuss. You shouldn’t add staff until you are working crazy hours, until you are going crazy, until you are in a great financial position to ensure the survival of the company. This is the best way to support your customers. 90% of small business go out of business. You’re much more likely to leave them high and dry because you go out of business than because you get hit by a bus. That needs to be your primary concern.
Investors
Under no circumstances should you take money!! I’m glad to hear you don’t want to. You’ve proved the concept and now make enough to live comfortably. That’s it, there’s no reason you need one penny at this point. You’ve taken all the risk and it’s paid off. No need to let someone else in now that you’ve proven the product.
That’s my 2 cents. Hopefully it’s been useful. Keep up the great work and interesting blog!
Are you Hiring? I’ve Got Your Man
My friend Kevin Dangoor recently lost his position at a technology company in Michigan. He’s looking for new opportunities that can make use of both his project management and development skills. If you’re in the Python community you might already know Kevin from the popular TurboGears framework he created. If you or someone you know is hiring please look him up. You can get more details on his background and his contact information here:
http://www.blueskyonmars.com/2008/10/29/in-the-market-for-a-job/
Another Way Your Product May Benefit in a Downturn
Nightly news is mostly doom and gloom these days, but it doesn’t have to be this way for some of us ISV’s. If you’ve been smart (lucky?) enough to position your product mid market these could turn out to be boom times for you.
Fear and/or true financial need is almost certainly going to affect business and consumer software spending. However, there are some bits of software that companies (and to a lesser extent consumers) can’t or won’t do without. If you sell a product like that you may have just hit the lottery. Your product is now “right priced”, “the cost effect solution”.
This is not about being cheapest. In fact I think the cheapest software could be hurt. Junk is junk. However, many people purchasing software are going to take a closer look at mid tier when they may have previously only been interested in premium.
Why Now is a Great Time to Start a Software Company
Is a depression a good time to start a software business? Of course I hope things in the financial system don’t get to that level, but even if things stabilize it’s obvious that there’s going to be a serious financial impact for some time.
As I’ve been thinking about this it’s struck me that this could be a great time to start a business, especially a MicroISV or small partnership. Here’s why:
1. The large or medium software companies are likely to feel an impact from the downturn. They have the most money out in advertising, payroll, etc. Some may not make it at all, others will certainly be cutting back to try to limit expenses. They’re likely to cut in places MicroISV’s can excel such as customer service.
2. #1 gives you a chance to get into an existing strong niche where the other competitors may have their guard down and generally be more focused on staying in business than providing great service and products. However, the niche itself still has the upside of these companies prior advertising and marketing. So customers are out there still needing this service which is the type of need that MicroISV’s can never create on their own.
3. Yes, customers will still need software. We’ll, certain types of software anyway. I wouldn’t go near consumer software with a 10 foot pole. Businesses, however, still need to run. And if anything they’ll be looking to run more efficiently than ever. If you can create a product that saves companies money you should be OK.
4. A small ISV can run on almost no money. Basically just the salary of the founder and a few bucks for hosting and computers. You probably only need to make 50-100K to do alright which is all you need to do in your first year. Meanwhile the competition must make many times that number to turn a profit and they’ll be distracted while they’re trying to do it. Perhaps a few competitors even disappear making it even easier to pick up market share.
5. Getting in at the bottom is often how you make the most money. Warren Buffet knows that, it’s why he’s buying up all these great companies. Getting in at the bottom means you can do things even cheaper than you’d expect. Server companies are discounting heavy to get sales, ad space will get cheaper, it may be cheaper to find high quality full time and part time employees or contractors if needed.
None of this means you still don’t need a great plan and a good idea for a product. All those things I’ve discussed before still apply, but if you’re on the sidelines and have some savings, it could be a good time to jump in.
Lunch Time Walk Over the Mid Hudson Bridge
It’s a perfect day here today so we decided to take a little walk and enjoy it before Fall sets in. In the year we’ve lived in this house we’ve never walked over the Mid Hudson Bridge which is just down the street. Our Favorite Italian Deli is just the other side of the bridge so we figured it’d be a good day to take a walk over. Here’s a few pics (click for a large version):
This is the Poughkeepsie Rail Bridge (no longer active). It actually passes next to our house inland.
Poughkeepsie, NY
Me and the Boy
The best deli in town, Rossi’s
Down river
It’s a long way down
I like this picture a lot
Cocoa Framework for the HelpSpot API
Over the last few weeks I’ve been working with one of our customers, Audiofile Engineering, on a Cocoa framework for the HS API. This takes all the heavy lifting out of building a Mac based application for HelpSpot or for adding support for HelpSpot to your existing Mac application. Audiofile has done an
amazing job (click unparalleled support) integrating their applications to their HelpSpot installation via the API. This new framework should allow others to do that as well as to come up with some interesting desktop apps and tools for HelpSpot.
We’re putting the finishing touches on v1 of the framework, if you’re interested in working with it please let me know and I can get you a copy of it when it’s ready. I’d like to get a few people kicking the tires a bit before releasing it to the general public.
A PHP library is also in the works, more on that when it’s a bit closer. It’s under development by CaseySoftware.
HelpSpot on the Deck
Starting today you’ll be seeing HelpSpot ads on The Deck ad network. It’s the first serious advertising I’ve done for HelpSpot so I’m excited to see how it goes. I was originally looking for September, but they had a slot open up in August so we decided to take it even though I only found out yesterday.
The ads were a little rushed, but I don’t think they’re bad. Ads are going to be very much trial and error anyway. We can swap them out at any time so if one or both bomb we can make an adjustment.
The Deck certainly puts HelpSpot on some interesting sites. I wouldn’t say it’s a perfect match in terms of sites that people search for help desk software on, but I think the audience it reaches are certainly people who directly or indirectly deal with customer service a fair amount.
We’re going to run for 2 months as a started to see how it does and go from there.
Help Desk Talk Redux
So a few years ago I tried to launch a forum/community website around the help desk/customer service world. It was a complete failure. It’s unfortunate because there was some early traction, but I couldn’t devote the time or money to maintain it and it was overrun by spammers so I ended up taking it down.
Over the past few months I’ve thought of bringing it back and after asking around a bit I’ve decided to do so. I still don’t have much time, but HelpSpot is in a much more established position than it was then, so is the business and so is my ability to bring on help if needed.
The thing that keeps bringing me back to this idea is that there’s simply nothing else like it out there. Help desk related forums are always buried deep within general IT sites where they don’t belong. The help desk organizations have forums, but those are usually buried below white papers and conference announcements. There simply has to be room for a forum dedicated just to help desk professionals.
So this will be my last, best attempt at it. As often is the case I’m really going to lean on the support system that’s been built up on this blog and elsewhere online. If you have a blog, a link would be insanely appreciated. If you work on a help desk, tell your co-workers. Little things make all the difference in this type of venture and your support is truly appreciated!
HelpSpot Price Nudge
A price nudge sounds better than an increase, no? I think so. In any event today I’m announcing a small price increase for HelpSpot. The short of it is that HelpSpot is moving from $179 a user to $199 a user as of August 31st. This is about an 11% increase.
Important to note is that the support costs remain unchanged. So it’s still $49 per user per year for ongoing support.
There are a number of factors that went into making this decision. As always I thought it’d be nice to share, so in no particular order here’s some of my thinking:
1 - In September it will be 3 years (Wow!) since the first HelpSpot beta launched. The final release was in late October. During the past three years HelpSpot’s price has remained unchanged, while our competitors continued to increase their prices. Currently HelpSpot is less than half the price of many major competitors and many times less than others.
That said, HelpSpot does have a unique place I think in this market. It’s very accessible price wise and I didn’t want to put it out of reach for smaller companies, departments, and non-profits.
2 - Probably my favorite pricing article is Product Pricing Primer by Eric Sink. One of my favorite lines is “In fact, if nobody is complaining about your price, then it is probably too low. The trick is to tune your pricing until the volume of the whining is just right.”. For the past year or so we pretty much get no feedback on the price being too high and a great deal of “Wow, you’re giving this away, I’d pay $350/user”. Now, I’m not going to jump to charging $350/user, but I think Eric has a great observation here and it’s been a big consideration as to the timing of the increase.
3 - As with most businesses increased growth leads to increased costs. So far I’ve done a pretty good job of keeping those costs down, but I think over the next year we’ll be taking on some new costs and this increase is going to help offset those.
4 - One thing I don’t want to lose is the perception of HelpSpot as a high quality product (which it is). A products price unfortunately does have an impact on that perception. As with most companies I’m trying to find the right balance and I certainly don’t want to fall down into the “cheap” bin. This one is a little more fuzzy I know, but it just felt like time to nudge up a bit.
5 - A price increase helps to bring our support cost percentage inline with customer expectations. Many customers like to see maintenance costs at 20-25% of the license costs. I personally find this a little unfortunate for us as most companies are buying only support for that percentage and are not receiving major versions as part of it. So they’re paying that and then paying more license fees when the next major release comes out, where that’s not the case with our plan. In any event, this will be one positive side effect of the increase.
That’s pretty much all the hard facts. So much of pricing is just feel, so this is my first chance in three years at testing my feel. Given how conservative the increase is I don’t think they’ll be much controversy, it’s probably going to come down to deciding if I’ve left too much on the table. My initial reaction was to go for something like $229, but I’m very hesitant to move over $200 especially given the economy.
Time will tell and I’ll try and report back towards the end of the year when I’ll know a bit about how it’s worked out. If you’re interested you can see the new pricing for the various packs here: http://www.userscape.com/products/helpspot/pricing.php