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From a www.softwareceo.com forum thread…

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Just another software idea
I have situation. A few years ago my wife and I started a small graphic design/commercial printing/dime-a-dozen homebased business. Anyway, she came up with a software idea that could be used throughout school systems across the country at just about every grade level. We are not programmers nor do we aspire to be programmers. I am looking for a reputable company that can put our ideas into program form. Does anyone know of such a company? Can your ideas be trusted that the company will say “Nahh” and then go and make it and market it themselves? If I find a company to create a prototype of the software, where do I go from there?

Any advice is truly appreciated.
Tom

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Hi Tom,

I’ll approach this differently, with our testimonial. Sometimes a story can paint a better picture than theory…

About 5-6 years ago I was in your shoes. I’m not a programmer, I was in advertising (15 years exp) and had a great idea that ‘All designers in the world could use to manage their staff, projects, tasks and time’ (based on my vast knowledge of all designers in the world of course – ha ha).
So my wife and I hunted out a developer to team up with, built the product, put up a website, did some marketing and waited….
and waited…
and waited..
and waited.. “No sales… No leads… Nobody knew we were alive or even cared… and the ones that tried it, just weren’t interested!”

Finally, we came to the conclusion that perhaps we should have done some market research (Hard Lesson no.1).
I spent a few months just talking to industry contacts, showing the product, getting feedback etc and the overwhelming feedback was that the product wasn’t good. It had too many ‘Wants’ built in and not enough ‘Needs’.

So we re-developed the application over another 2 months based on feedback, and used it in our own business for a few months, refining it. it worked well for us, so we bounced the ‘Redeveloped’ version off a few industry contacts. “They liked it! Great! We had a winner! My contacts like it, so it’ll sell, no! It’ll fly off the shelf!”

We updated the website again, and put our application online in some code libraries. (Did I mention it was in the form of a $99.00 download?). Then we waited…..
and waited…
and waited..
and waited..
We made a few sales here and there, but something was still wrong. Surely it should sell faster than this?

Finally, we came to the conclusion that perhaps we’re marketing to the wrong people (Hard Lesson no.2).
I realized that whilst is logical to sell a download in a code library, we were in front of geeks, not business owners. And it’s the business owners that would need to make the decision on a business management system, not the geeks.

So we marketed in other areas, ie: Google Ads, SEO, Campaigns etc… It was all fairly hit and miss, but we were slowly making sales and growing, still no profit though… It seemed we were working extremely hard for little reward. Any revenue had to go back into marketing – we had to keep making sales or there ‘was no revenue’ – it was an endless loop!

Finally, we came to the conclusion that our business model was wrong! (Hard Lesson no.3).
As we had no recurring revenue, we didn’t have a financial base to stand on. Also, the price was fixed ($99) but we were effectively giving free support forever! It cost more to acquire and keep a customer than we earnt from them! We had to work out how to create recurring element revenue to each sale to cover post-sale support, R&D, updates etc…

Right, so we developed a subscription based service as well as a download so some customers could pay monthly. Fantastic! Now we can build the cash flow! However it was slow… and very hard to get customers onboard… So we waited…
and waited…
and waited..
and waited..
What was wrong? Why isn’t it humming along? Great product, great price, great support, great marketing… so what was it?

Finally, we came to the conclusion that we needed credibility (Hard Lesson no.4).
Why would people trust us to keep their business info safe and secure on our server if they took a subscription account? That’s a hard one! We know the solution and service is good – they don’t. So we worked directly with some key customers to create whitepapers, worked with our server providers to put great infrastructure in, got in the media so the product and company name was on the radar (and about a million other things) and over time the customers started trusting us. They started signing up faster and in most cases we don’t even need to talk to customers before signup!

but!

We’re still missing something! We still had a fairly low conversion rate (it was high to trial, but low to sale). I thought our product would work for ‘All Creatives Everywhere’ but many don’t use us for one reason or another, so we began talking to most of the people who tried our trial account.

Finally, we came to the conclusion that ‘One shoe doesn’t really fit all feet!’ (Hard Lesson no.5).
Small, med and large businesses all have their differing processes and needs and it became very clear that we needed to add a few products to the range that catered for differing sizes of businesses. Actually, I wrote about it in my personal blog if anyone is interested: http://julian101.com/archives/30

As a result, we have some new offerings out soon!

But the point of all this is as follows:
No two businesses are the same. There is no ‘Magic formula, just great advice.
There is a very big difference between having a good product, and having a good business behind the product!

You’ll see above that getting the product built was just one barrier (and possibly the easiest one you’ll face). You should be making a short plan at this point, not a business plan that sits in a drawer, rather a short few page list of the key considerations to getting started.
The key items you should be considering at this stage (in order) are as follows:

1. Get some product visuals and a basic feature sheet made (in a graphics program, word, etc)
2. Talk to no less than 20 potential customers. Show them the visuals and bounce the idea (listen to what they say!)
3. Now you can actually start planning the actual application (using the customer feedback)
4. Get a price from a contract developer (or use www.rentacoder.com) – Don’t start it yet though!
5. Make a 6-12 month spreadsheet of costs. (A cash flow summary) list the following expenses:
— Staff pay (and money for you to survive)
— Server or hosting costs
— 1-2k a month minimum for Google advertising (forget SEO, waste of money at this stage)
— 2-5k for a basic professional website
— 10-30k for the actual beta application (or whatever the quote is)
— 1k a month for misc expenses
6. Add projected income (and halve it!)

– if you are still confident with the way the revenue looks then:

7. Get the developer building the application
8. Get the website built and online. (Must be able to collect emails for a ‘newsletter’
9 Think about pricing and licensing. Sell on value, not on price
10. Talk to the initial 20 potential customers. Make plans to demo the application to them when done
11. Talk to Google, plan the ‘Google Adwords’
12. After testing, Show the beta to 5 of the 20 potential customers. Offer it to them for free for 2 months in exchange for being ‘testers’
13. Work hard with these 5 customers to refine the application. Make fixes weekly!
14. Now offer the ‘v1.0’ release to the other 15 potential customers (if you sell 5 in 20, you’re doing well. Many potential customers are all talk and no action)
15. Email as many people on your mailing list as possible.
16. Start the Google campaigns
17. By now, you’ll know how to continue. The best businesses are built organically!

Have fun and let us all know how you get on!

If you want to talk directly, feel welcome to contact me through the website below. I’m an approachable chap!

Kind Regards,

Julian Stone – www.ProWorkflow.com
“Web Based Project Management Software”

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About the author:
Julian Stone, CEO – Project, Task & Time Management specialist for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com

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About The Author:
Julian Stone begin_of_the_skype_highlighting     end_of_the_skype_highlighting is the CEO of ProActive Software, developers and creators of the leading web based project management software http://www.proworkflow.com.