Creating a Hot Software Product with no
programming experience
Producing an information product is easy. If you can read this
book, you can write an e-book. There are really no special skills
required beyond the ability to write and some basic knowledge about
the subject. Producing a software product on the other hand does
require some special training. It needs someone who know how to
program, who understands how a computer works, and who knows how to
construct software. It’s a fair bit more complex than putting words
on a page. It’s also much more profitable.
With the right software product, the sky’s the limits for
profits; Bill gates proved that. But Bill Gates didn’t become a
multi-billionaire by just being a great programmer—most decent
programmers will tell you he’s barely that. And if you’ve been using
Windows for a few years, you’ll know exactly what they mean. He
became rich by combining some basic programming talent with some
outstanding marketing skills. It’s that combination that we’re
going to put together in this chapter.
There’s no two ways about, you’re going to need an idea. You
might have one already. Lucky you! But if you don’t, it’s time to
whip out your pen and paper, and start scribbling. There must be
some kind of tool that you wished you had on your computer, or a
program that you use every day that just drives you crazy. Maybe you
wish your Media Player stored favorites better, or there was a
graphics program that was as simple to use as Paint but as versatile
as Paintshop. Put down your ideas and then check out the
competition.
Do a quick search on Google to find out what other products
are already on the market that are just like the one you want to
create. There’s no point in putting a ton of effort into creating a
product that’s already out there. Check them out, figure out what’s
wrong with them and aim to create a new version that’s just the way
you like it.
(You'll also need to be sure that competition is selling. If
they aren’t finding a market, what’s the chance your program will?)
Programmers always begin with a written outline—at least the
good ones do. When you come to hire a programmer, the better your
outline, the easier the project is going to be and the more
successful the outcome.
Just as it sounds, the feature list is a list of all the
benefits you hope your product will contain. Put as many down as you
can think of. You’ll find that the list will come in handy not just
to explain to your programmer what you want your program to do, but
you’ll also use it when you come to put together the marketing
material. In effect, you’re writing a list of unique sales points.
You might end up with something like:
·
Capable of handling gifs, jpegs and bitmap images.
·
Easy, one-click picture editing.
·
Simple to use, fast to learn...
And so on...
I usually find that this is the most enjoyable part of the
whole project. As you come to think of each little feature, you’ll
find that you actually get quite excited. The project will begin to
form in your mind and each feature should lead naturally onto the
next.
Here we get into more detail. User stories describe the
program from the user’s perspective. For the programmer these are
the best way to understand precisely what your program is expected
to do. For example, you might have a user story that ran like this:
“User right-clicks on image and receives a menu offering Edit
functions. The user can then effect a change to the whole image by
clicking on one of the options.”
The user story has to be clear enough to be easily understood
by the programmer but detailed enough to provide guidance. You want
the programmer to be able to look at it and say, “Hey, that’s cool!”
And this is where things get complicated. Most software
programs work at some level by storing and retrieving data. If you
don’t put the right data in the right place, you’re going to get the
wrong results, bugs and delays.
Personally, I leave this to the programmer. If he can’t get it
right, what chance do I have?
The only way you can distinguish your software product from
that of your competitor’s is by formulating unique functionality
into the software. What is the most pragmatic way of devising a
unique offering? The answer to this is plain and simple. Study your
competition! This is probably the smartest thing you’ll ever do.
Make a list of all your competitors and their offerings.
Look out for news items and case studies on your competitors.
These would give you a fair idea of what makes them stand out and
what doesn’t. Sometimes it is also possible to study customer
reviews of software products offered by your competitors. This sort
of information is invaluable. It will help you in offering your
customers something your competitors don’t.
Assessing the competition also will also help you in deciding
what kind of software product you wish to develop. For instance,
sometimes it may not be worth selling a particular kind of product
if your competitors are dominant market leaders and cater to a high
percentage of the market segment. An example of this would be an
accounting system or a word processing application. There are many
standard accounting systems easily available in the market. Also, MS
Word is dominant in the segment of word processors.
Studying your competition also gives you a fair idea of what
should be the pricing of your product. The key is to price your
product competitively. You may offer a lower price for your product
or offer it at the same price but have additional promotions or
discounts. Apart from this, your break-even cost also plays a major
role in pricing. Moreover, the break even cost may be a good
indicator especially if your product is completely new in the
market.
The formula for calculating break even cost is
Initial Software Cost + Upgrade Software Cost + Package Cost /
Profit per Sale = Sales Needed to Cover Cost
Initial Software Cost is your investment into the core
software. Upgrade Software Cost is your investment into additional
features or bugs that need fixed. You might determine that you need
to add 3 or 4 major features and fine tune other features based on
customer response. Package Cost is your investment into packaging
your software – this includes hosting costs, marketing material,
documentation, web site design, and some other costs.
Ideally you should estimate the profit per sale to be enough
so as to reach break even after around 25 to 30 sales. Again, while
doing this you need to keep your competitor’s price in mind. If you
offer a niche product, customers may be willing to pay more.
There is no simple answer to how much should you charge your
customers for your product. A client based software could be charged
at a higher price compared to a web based software. Besides, you can
also have different versions of the same product. The basic version
would have the most common functionality and would be priced the
lowest. Premium or advanced versions would have much higher
functionality and would be priced higher.
No one’s expecting you to sit down and code this baby by
yourself. There are plenty of people who can do a great job in a
decent amount of time—and sometimes even for free.
Why would a programmer who usually charges about $100 an hour
work for you for nothing? Well, that's where things get
interesting...
A great programmer is a genius at coding. He can put together
1 and 1 and make it equal 10 or 11, or whatever two is in binary.
That’s his job. But few of them could sell you water if you were
dying of thirst in the Sahara. They’ll tell you what water’s made of
and design a program to count the molecules in the bottle but
they’ll have absolutely no idea how to persuade you to buy it.
In effect, you’re going to offer a programmer a joint venture:
a collaboration of his programming skills with your marketing
ability. Neither of you will make any money with a program idea
alone. But together you can make a fortune.
That’s what most corporate programmers dream of. They’re just
dying for someone with a great idea to come along and help them with
the marketing. It’s a match made in Silicon Valley heaven.
So where can you find these freelance programmers waiting to
hit the big time? Again, Elance is a pretty good place to look. Many
of the programmers advertising there are professionals who have made
their money and are looking for a lower stress level than the 9-to-9
that most computer companies expect their whizzes to work. Many will
expect payment but you should be able to find some looking to code
for a 50/50 split of the profits.
Scriptlance is even better. This works in pretty much the same
way as Elance, except that it’s targeted precisely at programmers.
Again, you just submit a description of your project and wait for
programmers to bid on it. As with Elance, the person you choose will
depend in part in their price and in part on their experience.
Now, I’m not going to claim it’s a walkover to find a
programmer who will work on the promise of future profits. They are
out there, but you’re not going to bump into them on the street.
Most of the programmers on Elance will expect payment—and
that’s fair enough.
But there are plenty of programmers who have been waiting
years for the chance to come up with that one idea that will give
them a constant income month after month for no extra effort.
Be careful who you
choose though. There’s nothing worse than picking up a duffer who
isn’t prepare to put in the time needed to make the deal work.
Ideally, try to find someone local; the whole process is going to go
much smoother if you can create a decent personal relationship.
And most importantly, make sure your programmer is
genuinely blown away by your idea.
If you’re going into a partnership with someone, they have to
believe in the project as much as you do. In some ways, this is an
advantage over paying someone to do the job (this and the $5,000 it
would cost). When someone is truly captivated by the idea they have
the motivation to do it right.
When you find a programmer who sounds interested in working
with you ask the following questions:
·
Have you programmed a product like this before?
(There’s a fair amount of specialization within programming; if your
programmer hasn’t worked in this field, he might have no idea what’s
needed.)
·
How much experience do you have? (Some newbies will
work for free to fill their portfolio; that’s fine for you, but it
might take a little longer).
·
How would you improve the product? (Every product can
be improved; be suspicious if the programmer says it’s perfect.)
·
How long will it take? (Take too long and the market
could change—or fill.)
It goes without saying, but
you want to make sure that there is a level of interest within your
target market for the software you plan to develop. Again, studying
your competition is essential to ensure that your product is
sustainable. After all, you would need to at least provide as much
functionality in your product as your competitor.
The best way to assess what
kind of specifications and functionality should go into your product
is by asking your prospective customers themselves. A good strategy
of achieving this is by surveying your existing customers and
visitors on your website. You could have the survey on your website
itself of Email all your customers with a list of specifications for
your software product – Just ask them what functionality they would
prefer at a given price. Don’t name the software at this time - just
list the features and give a short description of what it will do.
That should be more than enough to peak your customers’ interests
and generate a response.
Even if you hire a programmer through an established freelance
site like Elance or Scriptlance, it’s still a good idea to draw up
some kind of legal agreement. The last thing you want to happen is
that you reveal your idea for the greatest software product since
Windows and watch some programmer put it together, cut you off and
sell it to the highest bidder.
When you’re entering into a business relationship like this
with a total stranger, it is definitely worth paying a lawyer a
couple of hundred dollars to draw you up a basic contract.
The agreement should contain the following:
A Confidentiality Clause
If your programmer spills the beans, he gets twenty years in a
Turkish prison. That would be nice, but pretty unenforceable. A
whopping great financial penalty is enforceable though and par for
the course in a work contract.
The information you share stays between you. If the programmer
tells someone else and you lose money, you want to be sure you’re
going to be compensated.
Payments
If this is going to be a cash job, you want every penny put
down. You don’t want to release your product, watch it make millions
then get hit with a lawsuit from your old buddy claiming 50% in
royalties. If you’re paying, the product is yours and so are the
profits.
On the other hand, if you’re not paying, the product isn’t
yours.
If you’re working on a profit-sharing scheme, you’ll have to
negotiate who gets how much of the profits and for how long. You’ll
definitely have to make sure that that’s all put down clearly in the
agreement.
Timeline
Creating a software product can take a fair bit of time—at
least several months and much longer for really complex programs.
Before you write the contract, ask the programmer to tell you how
much he thinks each section is going to take and include those in
the agreement. You could even put in penalties for failing to meet
deadlines, just as you would if you were hiring someone to fix your
house.
In my opinion though, it’s better to be flexible about
deadlines. All sorts of unseen problems can crop up while you’re
putting together a program—maybe you’ll have some changes; maybe the
programmer will have some suggestions—and these can have an effect
on the timeline. As long as you seem to be heading towards your
target release date, and as long as your programmer isn’t stringing
you along, I’d advise being flexible about the scheduling. It’s
better to get a great final product than a quick one.
You have created a great product and are ready to market it.
However, before you start marketing your product you need to package
it well. If you sell a product that can be downloaded directly from
the Internet you need to also provide proper documentation and
licensing information along with the software files. If your product
is such that it has to be shipped to the customer, apart from
documentation, licensing information, software files on a CD, you
also require to box up all the contents properly.
Documentation consists of all manuals required for a layman to
understand and use the product well. Without detailed documentation,
your products value would be “zero”, even if it’s the best product
around. Documentation generally consists of three guides:
-
The Set Up or Installation Guide, which explains how to set up the
software on the customers computer
-
The Tutorial, which explains how the software can be in a
day-to-day basis. It would also offer guidance and tips on how to
perform certain tasks.
-
The Reference Guide, which is much more detailed and describes
each of the functionality fully. This manual requires maximum time
to develop.
To create a box for your product, it may be best to hire a
professional to design and develop the box. However, if you are
familiar with tools such as Photoshop and are creative, you may
design the box yourself. This will save you money. However, this
should be done only if you are confident of developing an attractive
box.
Finally, you should always include licensing information with your
product. The licensing information would lay out all the terms of
the agreement between your company and your customer.
In order to develop a
good relationship with your customers, you must provide them with
quality customer service. Let them know that, should they have any
questions or problems pertaining to the product, they are free to
contact you. Provide them with all of your contact information to
make the process simple. Make sure that you have a good customer
support group ready to help. Reply to their support requests as
quickly as possible and assist them until the problem is resolved.
Customer service is
one of the most important factors in determining your customer's
satisfaction. Even if you have a great product, if your customer
support isn't good, your sales will suffer. Good customer service
is perhaps the most important way to build your credibility with the
customer. When you are doing your business online, building trust
and credibility is the most important factor. Prompt customer
service can make the difference.
For every dissatisfied customer, you can expect to lose one hundred
new customers. Why? When one customer has a bad experience with your
company, you can be certain that they'll tell everyone they know
about their bad experience. It will travel through the grapevine and
ultimately cost you sales.
Follow-up with your customers and ask them how they like your
product or if they have any questions. This is a great way to not
only provide good customer service, but to also obtain feedback
about your product. By listening to your customers, you will know
exactly what they want, what they're having problems with and how
you can develop a better product.
By following up with your customers and providing great
customer service, you are creating a life-long relationship.
Satisfied customers are more apt to purchase your new products in
the future. Treat them with the utmost respect and go above and
beyond the expected.
Your customer and support service should include:
-
A 24 hour toll free number
-
Email support that is quick and efficient
-
Online chat support
Provide an FAQ
Before the clients purchase the software product from you they
will probably ask a few questions regarding any concerns they have
about your product.
During the first few weeks of business you will experience
similar questions constantly resurfacing. You would be fairly well
advised to put this regularly asked for information on your website
to reduce your administrative workload. Your interested parties will
be happy to get the answers to their questions answered immediately;
and you didn't even need to lift a finger.
Have a detailed FAQ page that tries to offer clear explanation of
your policies and rules, how the product works and what are the most
common problems that customers may face and how they should tackle
them. Such measures will really reduce the need for your costly
support time.
So now you know
all about marketing on the Web. You also know how to create a couple
of great products that generate cash constantly. With information
products and software products, there’s no limit to the amount you
can sell. You don’t need massive warehouses to stock your goods, and
you don’t have to deal with postage and shipping or anything like
that. You just have to set up a website and keep the traffic
flowing. It’s a completely automated system that brings me money
week in, week out.
But it doesn’t
happen without some effort, especially at the beginning. In the next
chapter, we’re going to look at the best way to manage your time so
that your business becomes as profitable as possible as quickly as
possible—and with the fewest headaches as possible.
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