It’s Not About the Programmer
Phil has a great post about the intersection of marketing and programming and which is more important to a startup.I would also add that making a great product does not mean making a feature complete one. HelpSpot isn't feature complete by any means. It's about making what you will launch with work very well at what it does. Get things rolling, then layer on the functionality you left out over time.
Nice job Phil!
-----
4 Rules for the Practical Entrepreneur
There are two types of entrepreneurs in this world, visionary and practical. The visionary entrepreneur has a grand vision for a product. They most likely found this vision while climbing in Huascaran National Park (Peru) or shopping in Calcutta. This type of entrepreneur needs no advice other than follow the dream. They'll doggedly chase it until they succeed or they end up in the gutter.
The practical entrepreneur is a much different beast. This article is for you! Most likely you know you want to do "something". You long to be your own boss and determine your own fate, but you don't have a grand vision to pursue. Instead, your looking to put your skills to work in a project that has a good chance at success. Millions would be great, but replacing your salary is just as appealing at least as a first step.
This description fits me completely. Before I came up with the idea for HelpSpot I looked everywhere for ideas on what I could do. I had the talent to succeed, but I didn't have any good ideas. Even worse, I wanted to give myself the best chance to succeed, but how do I find a good market to enter?
With HelpSpot off to a good start I thought it might be a good time to share the criteria I developed for picking my product. These 4 rules have done well by me and would be a good basis for other practical entrepreneurs looking to figure out a focus for a new venture.
1. Fragmented Market This is my most critical factor and something I almost never see discussed anywhere else. A fragmented market is the practical entrepreneurs best friend. It's simple the most important thing to look for in your market research.
A fragmented market is one where there are lots of small to mid size companies and where even the big players have stiff competition. There should be no dominant company. No company should have a double digit percentage of the market or at worst low double digits.
The reason this is the most critical factor is because of what it represents. First, it indicates that there are customers for this type of product. If you want to give yourself the best chance to succeed you need to enter a market where there are already customers looking for a solution. You don't want to have to spend a lot of time and money explaining to potential customers why they need a solution for problem X. You want a market where they already know they have a problem and are looking for solutions. Creating markets is the province of the visionary entrepreneur not the practical one.
Second, while there is lots of competition there is no competitor who is dominant. There is no competitor who you will always be compared against and have to stand up to. For example, building a piece of presentation software means you will always be compared to PowerPoint, building an image editor means going up against Photoshop, building a search engine means being compared with Google. These comparisons put you in a severe disadvantage. Those are dominant companies with dominant positions in the market. Potential customers already have a clear idea in their head about what those products do and why they're the best which means you'll need to do a lot more work to explain why yours is better/different.
Third, lots of other companies talking about the market and advertising in the market helps you. It creates awareness for potential customers all without you having to spend a cent. A rising tide raises all ships, etc.
Finally, in a varied market there's sure to be several companies which you compare very favorably against. Hence, you become a best of breed product when compared to these lesser alternatives. Since there's no obvious product to choose, potential customers will end up taking a somewhat random sampling of the market and you'll have a better chance at being seen as a best of breed option when compared to a random set of alternatives.
2. Business Before Consumer In general, I would lean towards a B2B model over B2C. Primarily because I think early success is easier in a B2B market. When selling to businesses you're free to charge more for your product this means you need to attract less potential customers early on to start being profitable. Business customers also have more opportunity for future growth. For example if a business buys 5 licenses to your product and in 6 months they've expanded their operations and now need 5 more these additional 5 licenses cost you exactly $0 to acquire and are pure profit. These scenarios are very common in business and much less common in consumer products.
Consumer products are also much more dependent on "being a hit". If you make a utility that sells for $20 then you need to sell at least 4000 licenses to cover your previous $80,000 year salary. While not a huge number it's still 4000 individuals you need to reach and convert. There's also little chance of hitting a home run by finding someone who wants 500 licenses at once, which is very possible in a corporate scenario.
3. Clear and Simple Revenue Model You should be able to explain your revenue model in a sentence. "We're going to sell per seat licenses for $100 a seat and a 15% yearly maintenance fee". If the product you're researching would require special pricing then you need to avoid that market. Micro-transactions and the like are the domain of the visionary not the practical.
Beyond just being simple to explain you should have a complete understanding of how you would sell the product and your gross margins before you write one line of code. If it's unclear what approximate price you could charge or what your costs would be in this market then it's not a good market to enter. It doesn't have to be down to the dollar but you should know if you can charge $50 a person or $150.
Clear and simple revenue models can also provide a competitive advantage over your competition. Older companies tend to have their pricing "evolve" over time into multiple tiers often separated by versions with unclear definitions like "pro" vs "enterprise". Making your pricing simpler to understand means customers can figure out your pricing at a glance rather than using a calculator and reading 5 pages of marketing hype to figure out the differences between versions. That's a lot of extra work for the consumer and we all know how people feel about extra work.
4. Dog Food When you're a small shop there's not a lot of time for all the functions you need to perform. There's programming, marketing, testing,PR, and so on. One part that often gets left out is product research. Not just does the product work, but how can it be better. What features would make the experience of using this product superior. When your time is tight, avoiding these issues is an easy way to free up more time.
One way to help ensure that at least some of this gets done is to make sure you build a product you'll actually use on a daily basis ("eat your own dog food"). This way there's at least some time built right in to your normal day. What features frustrate you, where could you do something better. Because you're getting the true customer experience you'll gain more insight into the product than if you just sat down and brainstormed about a product you don't use yourself.
New ISV Blog
Mike has a new ISV blog you may want to keep an eye on. We've emailed back and forth a bit and he's got some interesting ideas for his first product.Welcome Mike!
Book Deal for TurboGears
Congratulations to Kevin on getting a book deal from Prentice Hall for his open source behemoth, TurboGears. That's fantastic news. Perhaps he'll be able to make a career of TurboGears. I wonder if Zesty will ever hit the street?On a side note PH is my old employer. I worked with technology in higher ed. It's a pretty wacky place, but I hear the tech books are run a little better than higher ed so hopefully it will be a smooth process for Kevin.
Mobile HelpSpot
A little sneak peak at the mobile version of HelpSpot coming in the next release. There's so many compromises when doing a mobile version and I expect to have to make adjustments over time, but for the first rev of it I'm keeping it simple. Just basic functionality and keeping it optimized for small cellphone screens. If I find more people are interested in PDA use I could perhaps change things a bit to take advantage of the increased space, but for now keeping it small will work well on PDA's and phones.
MicroISV Digest
Gavin is doing a great job each week or so pointing to top MicroISV stories each week. Nice job Gavin.Office is Dead?
Scoble links over to more insanity on the demise of Microsoft Office from Steve Gillmore. These articles actually make me mad. Why you say? It's not because I loooove Office or because I hate Google or because I have something against Steve Gillmore (never meet him). It's because the article is obviously written by someone who's never, ever, ever been inside a real IT department (or at least not in a looong time). Not some silicon valley venture backed startup IT department. I'm talking about the guys keeping the exchange server running in Boise.Guess what, the guys in Boise don't give two hoots about an Office Like system that can pulling in graphics from Riya or even Gmail for that matter. They just want to be able to help you when email "doesn't work". Or explain to you what the Big E is (internet explorer).
Hey you know what. Microsoft sold 11 BILLION dollars worth of Office last year. Not bad eh for something that's dead. That's 11 billion dollars worth of users who aren't switching anytime soon just because they might be able to post to their del.icio.us accounts if they use some other startup alternative.
At the end of the day you have to train employees, you have to build systems, you have to build support. These things are simply not possible with Google's solutions (or any other new wave office products I've seen). Gmail doesn't always work, I've gotten errors and I barely use it. But guess what there's nobody to call when it doesn't work. Training? How? Google makes changes on the fly. You can't manage your IT department like that. You're going to come into work one day and have 9000 messages because Google changed a buttons location and now nobody knows what's going on or perhaps they change how archives work and nobody can find their messages.
Everyone isn't tech savvy, heck MOST of the world isn't tech savvy. Who's going to pay for retraining my entire company? Is the benefits of using Gmail and Gcalendar really worth the cost of retraining my entire company?
OK this rants gone out of control. I think you get my point. Perhaps I've just read one to many of these articles. Hey I'm not saying the world isn't changing, but I think we're a long way from Office being dead. They've got time built in because of a huge user base and they've got plenty of $$$ so just because Gmail is snazzy doesn't mean MS is going anywhere. And for everyone out there who writes these types of articles please please please, I don't care about what your friends think and if they're "influential" or not. Take a day and go visit some real IT people in the trenches. I think you'll be glad you did.
$10,000
The other day HelpSpot passed $10,000 in sales so it seems like a good time to catch everyone up one how things are going. While I won't be regularly sharing sales data I've been pretty happy with my success so far and I think it may be good inspiration for aspiring ISV's.It's been a pretty amazing start especially considering the $10,000 number includes beta users who purchased at a 50% discount. It also included a 30 day period with basically no sales. This was expected because free trials only started when I launched the product on October 24th. Hence, there was a big space between the beta group purchases right at launch and the first trial user purchases usually 30 days or so after signing up for the trial.
Overall I'm on pace with my "optimistic" estimates (as opposed to my worst case ones). Actually a bit ahead of my estimates since it's only about 50 days in. Best of all I've spent no money on advertising, it's all organic search engine traffic and word of mouth. I think this method has actually produced the "right" kind of 1.0 customers. For the most part all of my customers have been great about providing feedback and working through 1.0 type issues. I'm very much in the JOS camp of not trying to grow too much in the early stages because your product needs time to mature. Between the first release and the upcoming one the product is already way better than when I released it.
I continue to have strong sales overseas. More than half my customers are outside the US with a big chunk of that being the UK where the last several large sales have come from.
I've learned a bunch about making sure the security settings on your credit card gateway aren't too high, especially the address matching stuff. I've also done several PO's already so I can confirm that you need to handle these from the start if you're selling B2B. I only mention it because I see that question come up all the time.
Finally, trial downloads are really strong and I expect sales to stay strong. Just today 6 companies downloaded the trial and it's like that most days. It doesn't sound like alot but when you sell software which retails for $180/user and almost all installations are multi-user then 6 solid companies is a nice number
BarCamp Jan 14th
Looks like BarCamp NYC is on. Hopefully you all can make it, I'm looking forward to seeing some readers there. UserScape is a sponsor so come have a beer on me!Subversion OSX Client
I've always used the command line tools for working with Subversion, but lately I've been checking out svnX. It's pretty cool, especially for quickly looking back at past comments and the like.UTF-8, To Dream the Impossible Dream
I've spent the better part of a week trying to figure out how to do UTF-8 in PHP with data stored in MSSQL, MySQL, and PostgreSQL and I'm here to report that it's just about impossible. First off you have PHP which is pretty much a mess when it comes to UTF-8 or really any character encodings. Some functions take charset params some don't, there's 2 different but similar charset libraries (mbstring, iconv) both of which have issues and neither of which is installed by default until PHP 5 and then only iconv, except on FreeBSD (or so I read). It's enough to drive you insane.If you're building a custom application or an in house application there's enough there that you can make it work, but if you're trying to write a distributable application it's very very close to impossible especially when you factor in the database.
See each database handles things totally different. First you have SQL Server which doesn't even store UTF-8 at all. Instead it stores UCS-2 so right there you'd have to convert your nice UTF-8 to UCS-2 before inserting and when you do selects you'll need to convert it back. Then you have MySQL which as no support in the 3 series, no real support in 4 until 4.1 which is a pretty big limitation in terms of requirements. Finally you have PostgreSQL which I honestly barely got to look into. It seems that it stores UTF-8 so long as you compile it with support for it. I'm not sure if that's the "standard" way to compile it or not.
Hence, I've fallen back to fixing up some issues HelpSpot currently has with ISO-8859-X encodings and making sure things work well on that front. Hopefully at some point in the future these things start to come into line. The word on the street is that PHP6 will make unicode the native format and by that time perhaps Microsoft will have a better way to handle it in SQL Server and the install base of MySQL 4.1+ will be big enough to make the switch.
In case anyone else is looking to make the UTF journey with PHP here are a few links to some of the better resources I found:
1. Great discussion of PHP issues with UTF-8
2. Dokuwiki PHP UTF-8 library
3. Some sample UTF-8 characters
4. Textpatterns UTF page - they appear to have it mostly working though they note that sorting and indexing may not always work correctly. Probably not a huge deal in an open source CMS, but that's not acceptable for HelpSpot where sorting and filtering are perhaps the most important functions the system performs.
WSP Lives!
The Wall Street Programmer came back online today after causing a bit of a stir by going offline yesterday. Having had at least a minor role in his rise to fame (and forutune) it's good to see him back online. He's far and away the best and most entertaining blog out there. There are no less than 3 laugh out loud lines in his latest return post.Prospective ISV’s Check This Out
If you're a prospective ISV you should be checking out the IBM research projects. There's tons of great stuff in there and most have papers and other documentation on project details. Much of it is very useful stuff for ISV's like information management, email, and other down to earth topics that could spark an idea for a product.I even found some excellent research which backed up some ideas I had for a future feature of HelpSpot.
-----
ETech
I'm going to ETech in March. Looks like Joel is bringing his crew as well and there's a guy in the JOS forum trying to startup a JOS meet and greet. Hopefully some of my readers will be making the trip as well.Movin on Up …
Over the past year or so I've worked diligently to get my site ranked well in Google for key terms in my industry and it's finally starting to pay off. The homepage for HelpSpot (http://www.userscape.com/products/helpspot/) is now about #27 for the search: help desk software. Pretty good considering it's an insanely competitive keyword.It's competitive because it costs about $35 A CLICK to get into the top spots in adwords. That's a lot of dough.
Of course to start really having an impact I'll need to get somewhere on the first page, but I'm alot closer now than just a few months back. I'm also happy to say I've managed this without spamming, which is something I don't think some of the products ahead of mine can say. Of course I wrote up my SEO tips awhile ago but I have a few more specific ones for the ISV market so let me share them.
1. This one is really important! Pick the final URL for your products main page before you even write one line of code. What I mean is that I made the decision that the URL for my product would be http://www.userscape.com/products/helpspot/ very early on. Put your placeholder there are whatever. The key benefit of this is that as you build up interest and people link to information on your product you want them to be pointing to the final homepage of the product. Even though what's there now is a placeholder or a mailing list signup. This is critical, because once you actually put your product page up you'll instantly have all these links now pointing to real content. I see many apps who's temporary page is domain.com/mailinglist.php or whatever. Don't let that be you! You'll end up having to start all over getting links if you go down that path.
2. Get a blog of course. I've had tons and tons of bloggers link over with things like: "hey look, this guy is talking about XYZ he's developing for his new help desk software" ahhhhhh. Love that, love it more than anything! Having the keywords you want in the anchor is key to good SEO.
3. Put yourself in a few software directories that already have good rankings on your terms. So search through google and find software directories that are in the top 80 listings or so for your terms. Make sure they're legit! Don't go adding your product to some fly-by-night spam directory covered with ads (some ads are OK of course). Doing so could hurt as much as help.
That's about it really. I'm hoping this strategy can carry me the last few yards to page one. If you'd like to help please send a link
Squidoo ISV
During the Squidoo beta I picked up the ISV Squidoo page. I've just got basic stuff up there right now. I'm looking for classic articles that all ISV's especially startup ISV's should read. I'm also really looking for other discussion boards to link to other than the JOS, which are the only active ones I really know about. The Squidoo layout is hard to add lots of info to (I guess that's the idea) so we need to put up the really good stuff.http://www.squidoo.com/isv/
Yes I could have grabbed help desk software or some such thing, but that just didn't feel like very much fun. I'll leave it for the spammers
-----
i18n in TurboGears
Looks like Kevin and his 600+ helpers are making good progress on TurboGears. The linked post talks about new i18n internationalization capabilities being baked into TurboGears. This is one area where PHP just stinks. I mean it's really bad. Sure you "can" internationalize your PHP app, but it's not easy. Heck there isn't even any real documentation on how, it's all in bits and pieces. An article on one aspect here, a function document there, a user contributed note someplace else. I really hope the Zend Framework everyone is talking about addresses some of this, though I think the issues are really more in the core of PHP and won't be so easily worked around.Trial Customer Follow Up Strategy
I've found it very helpful to my business to follow up with my trial users at specific points in the evaluation process. To me trial users are one of my most valuable assets. Of course they turn into customers, which is extremely important but they also are often the users who find problems first since they're taking a critical look at the system. They also tend to ask very good questions and offer suggestions for improvements.The trouble is that they're often very busy especially in my industry where most trial users are in IT. Along with that, most will need to bring my product to upper management before it can be purchased. Hence I've found that providing the following reminders at different points in the review cycle has helped.
5 day follow up
The first reminder is at 5 days. This is simply a 'hope the installation went OK' type reminder. This can help catch people who had trouble but didn't ask for help and also people who got too busy to get it installed and this quick little note reminds them to get moving.
15 day follow up
At 15 days a note is sent which assumes they've spent a little time in the system. The note focuses on pointing out some of the more advanced features of HelpSpot along with links on how to use those features.
42 day follow up
I leave the customer alone for the rest of the time until day 42. As I said many customers will need management approval before a purchase so I like to send them a ' your trial is running out' email a few days early so they have a chance to get the required permissions.
45 day follow up
This lets them know that the trial is up along with information on how to purchase as well as an invitation to get additional help if they need it.
-----
Personal Knowbase
The folks over at Bitsmith Software were nice enough to include HelpSpot in their list of small business resources,
so I figured the least I could do is post a link to their Personal Knowbase software. Personal Knowbase is basically a knowledge base for yourself. Keep track of notes, messages, files, etc all searchable. I haven't used it (it's Windows only) but it does look interesting.Thanks Bitsmith!
-----
Trade Show How To
Mike did a nice job going through the list of items he needed to setup for a trade show:http://recdesk.blogspot.com/2005/12/tradeshows-what-to-buy-and-what-to.html
"OK.....So now I've got two tradeshows under my belt. That makes me a grizzly old veteran compared to where I was a month ago
I know for me anyway, as the first tradeshow date approached, I sort of obsessed over the details of what to bring and was pretty sure I was forgetting something important. Well, the shows came and went and I'm glad to report that I pretty much covered all the bases from a logistics and gear point of view. I'd like to share my Tradeshow List with others so they can avoid this needless worry and focus on the important stuff."- My favorite item ..... Duct Tape of course!
-----