Advice for struggling PC software vendors

Advice for struggling PC software vendors

Summary: If your business is struggling, more and more of the same ol', same ol' isn't going to suddenly give you a lift. You need to make a few changes — and, fortunately, they're not all that hard or costly — or the vicious cycle will continue.


Update your installers

Another easy thing to do is update your installers. Even if the software you're installing is pretty much the same as you've been selling and updating for years, that installer that is sized for eight-character file names and likes to stick things in the root C:\ directory is going to seem completely anachronistic.

There are some great, free installers out there. I know it's another weekend's worth of work, but you do want to keep your company, don't you?

Update your system requirements specs

If the last OS listed in your system requirements is Vista, you have a problem. If you list NT in your system requirements, you have a bigger problem.

Test your product against Windows 7 and Windows 8, and then update your system requirements to explicitly call out that the product works on Windows 8. Don't worry about the idiotic "Metro" interface, but if you say you support the Windows 8 desktop (and you do), then your prospective customers won't think you've been in suspended animation since the Bush administration.

Post a frickin' phone number

Yeah, I know we're moving to a world where all interaction is online. But customers who want to buy stuff sometimes want to call and get an answer to a question right now.

I also know that posting a phone number is an invitation to your current customers to call, bitch you out, and ask you questions you can't answer, but that dialog is good, too. It'll reinforce to your customers that you're still there. Plus, you never know. That really loyal (if cranky customer) might just have a way to save your bacon -- simply because he needs your product as much as you do.

Acquire some other products

Most of the software tools vendors I've seen are one-trick ponies. They have their one product, and that's it. That means if you make a sale to a customer, you're done. There's no more money to be mined from that hole until you release a major update.

One great way to augment your income (and help maximize utilization of the business infrastructure you already have) is to acquire publishing rights for other programs. This isn't quite as easily done now as the days when distribution meant brick-and-mortar and manufacturing meant paying for packaging, but there are still a lot of talented programmers out there who don't want to do the administrivia.

Don't contract out to have something built. Instead, scour the Internet for great programs with poor descriptions, support, or web sites. Offer to publish those products, update the manual, sell them, and provide a royalty back of 15-30 percent after your cost.

You'll probably need a contract to do this, but don't go running to a lawyer. First, most lawyers don't know squat about the software business, and you'll wind up paying more for the contract than you'll make selling software. Instead, find another software vendor who isn't a direct competitor and ask them if they've got a publishing contract they don't mind you using.

Make friends with other software vendors. These sorts of mutual-support contacts are very helpful.

I know you may not think you can afford to acquire a product, but trust me, it can be done. In fact, I wrote two chapters on this phenomenon in two of my books. Read the first chapter in The Flexible Enterprise and read "Luck is a skill" in How To Save Jobs. Both are free downloads, so there's no excuse not to.

An even easier approach (although a little less profitable) is to resell other existing products on your web store and in mailings to your existing customers. Find complementary (or even competing products) that would appeal to your class of customer, do a deal with the software vendor to resell it (you'll usually get 40 to 60 percent of the selling price).

Do yourself a favor and start this process now. An extra five or ten SKUs will do wonders for your incremental income.

Know when to hold 'em, know when to fold 'em

Finally, we're at the tough love stage of our discussion. Sometimes, it's just time.

Look, if your product really hasn't been updated since 2005, if you can only run on 32-bit XP, and you crash constantly on 64-bit systems or anything running Windows 7 or later, it may be time to throw in the towel. This dog won't hunt anymore.

There are lots of ways to get out of this hole, but all of them involve a change in business strategy. Again, I'll point you to some great reading. Read the third section of How To Save Jobs. It will show you how to evaluate your assets and reinvent your business from the inside out.

Live long and prosper

I sometimes get the urge to go out and build another software product. I love to code and I actually love the entire chain of activity that is product marketing. But after more than two decades of running my own software and then publishing company, I also needed to get a life.

I was fortunate in that I was able to sell off my software assets back in the day, and have managed to transform my career so that I get to talk to you here on ZDNet, lecture, advise, and teach. I'm having more fun in my work life than I've ever had before, I get to spend time with my wife, enjoy my car, lift weights, and sometimes work on my house and hobbies.

The point is that there is life after software. While my advice here is intended to keep you in business, if that time comes, you should know that there is life after software entrepreneurship.

Good luck. Live long. And prosper.

Topics: Tech Industry, Software Development


David Gewirtz, Distinguished Lecturer at CBS Interactive, is an author, U.S. policy advisor, and computer scientist. He is featured in the History Channel special The President's Book of Secrets and is a member of the National Press Club.

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  • How do you get around

    How do you get around the fact the OS folks (Apple, MS, Google) are doing everything possible to keep users from installing your software unless you give them 1/3 of the sale and only if it gains their blessing?
    • Have I got an OS for you

      I know you're not interested, but Linux still lets you install whatever software you want. And you don't have to compile your own kernel, unless you want to.
      John L. Ries
      • The problem on Linux

        Is three fold.

        Linux users by and large don't like to "buy" applications.

        They love to hack and post "keys" to software on P2P sites.

        It's such a tiny percentage of Desktops there just is very little market. Especially when you are targeting a small market to begin with.
        • Responses

          1. From the user's point of view, this is irrelevant. From the developer's point of view, I assure you that my employer sells enough proprietary software for Linux to keep me gainfully employed. It must be understood, though, that if you don't produce software that's significantly better than the available free stuff, you're not going to make anything (which is how the free software should work).

          2. I suspect this is a small minority. There are certainly plenty of Windows users who develop viruses and trojan horses for it, but that doesn't seem to deter many people from using it.

          3. It's a small market with a lot of software available for it (a small fraction translates to millions of actual users). You won't get many of the name brands you're used to, but I haven't been a regular Windows user, except on the job, since 1995 and don't miss it.
          John L. Ries
        • Linux is for freetards

          Indeed. In the late 1990s, FrameMaker users were looking forward to the next whole-number release. But before it arrived, Adobe announced that Linux would be left out because Linux users, by and large, didn't feel they should have to pay for software.
          • Maybe...

            Framemaker wasn't worth what its publisher was charging for it. There's a lot of free software available for Linux, with which proprietary developers have to compete if they want to make money.

            As noted in my response to NAG, this is a problem for developers, not users.
            John L. Ries
          • I agree...

            It's a problem for developers which explains why so few are willing to code for Linux on a "for profit" basis.
          • FrameMaker's demand was inelastic

            The only software that can edit a FrameMaker file is FrameMaker. And large documentation shops had adopted FrameMaker as their tech publishing platform. As Adobe saw it, a tech writer who needed to produce a document in FrameMaker had no choice but to use FrameMaker--on one platform or another. By cutting off FrameMaker for Linux, Adobe probably figured it would drive sales of FrameMaker for Windows, Mac, or commercial Unix. In any case, Adobe has always priced FrameMaker high, apparently figuring that employers would foot the bill and that even freelancers would use the software to make money, so cost was secondary. I use it noncommercially, and haven't upgraded my FrameMaker 7.1 license in more than 10 years.
        • Re: Linux users by and large don't like to "buy" applications.

          Simple answer, which I thought would have been covered in Economics 101, sometime in the first week or so:

          Sell the scarcity, nor the abundance. Digital bits are abundant, and effectively available at a price that is zero as near as dammit. Software is just digital bits, so selling software was always going to be a dead end--why do you think Microsoft and Adobe are now trying to push their customers onto a subscription model?

          What IS scarce is your brain: after all, it took brain power to come up with that software. So use the software as a promotional tool to advertise the power of your brain. THAT'S what you can sell.
        • No, I Don't Like To Buy

          software when there is perfectly fine software available for free that is easier to use than a $200+ piece of commercial software where the vendor has never been able to make a decision on how it should look, feel, or act.

          No, I don't post nor use illegal keys to software or operating systems.
    • You give 1/3 because ...

      ... you get easy access to a potential market of hundreds of millions of users. Robber baronry ... perhaps but there is no free lunch.
      • It's not robber barony at all

        It's actually quite generous. Or do you think You get full retail for your product at Best Buy? Or do you think that the blog author was advocating robber barony when he suggested you contract with another developer and only pay THEM 30% and keep 70% for yourself?

        It's called business. Apple is offering you a service that is a tremendous help to your attempt to sell software and are charging you a 30% royalty to sell your software for you.

        That 30% is actually quite reasonable.
        • Just not true

          Ask the thousands of developers that tossed their hat in the ring and got lost in the swamp of useless apps and didn't make a thing. There is NO REASON a user should not be able to come to my web site and DL and install something they want. Well, other than the big three don't like it and can't get their greedy paws on the money.
      • Useless exposure...

        As the article pointed out, most PC apps / utilities are targeting a very small and selective audience. Having exposure to millions of people looking for "angry birds" is a waste of time and effort.
    • You jump for joy because it's better than the 30-10-10

      discount you used to have to offer to get your stuff in a brick and mortar store.
      • I haven't seen anyone...

        Push applications in brick and mortar for years. They sell from their own web site making it cheaper for the end user.
  • Depends on your perspective

    There are two parts to that question: the 30% cut, and the "gains their blessing". Unless you distribute to customers directly, all distribution channels take their cut. Back in the days of software stores like Egghead, software vendors would only get about 30-40% of the selling price, because both the retailer and distributor needed to get their cut -- and that was back when we had cost of goods for the printing and packaging.

    Even now, selling through Amazon or other resellers involves someone getting a piece of the pie. In the app store model, the Apple/MS/Google folks are providing a distribution mechanism, a collections mechanism, and something of a marketing resource. Since COGS is pretty much zero, their piece of the pie isn't generally a bad thing.

    What IS a bad thing is the risk of whether -- after you do all the work -- that you'll be able to sell your software. That's a big part of why I only did silly iPhone products and not the server monitor program I'd originally set out to do. The "vetting" process is worrisome, and -- speaking personally -- I don't think I'd be willing to devote a ton of time making a product without know I could sell it to customers one way or another.
    David Gewirtz
    • Walled gardens are not free markets

      Under the traditional model, one has a choice of software distributors to patronize, and one can shop for the best deals (and one can often buy from the developer directly). Under the iOS-style walled garden approach there is a single distributor that all users and developers have to work through (ie. a monopoly) who can set whatever conditions they choose without having to worry about being undercut by a competitor. One can, of course, jailbreak his iOS device, but that's considered to be illegal in the U.S., and Apple reserves the right to brick such devices (maybe you thought that iPad was yours?).
      John L. Ries
      • Walled gardens are precisely free

        markets. No one is forcing you to write iOS software. No one is forcing you to JUST write for iOS. Apple is offering a service. You are free to use it or not. People buying phones are free to use it or not, by deciding to buy an iPhone or an Android device.

        Your ability to choose to NOT offer your product for iOS, but instead for Android is the PERFECT example of a free market at work.

        What is NOT a free market is somebody like you demanding the state FORCE Apple to conduct it's business in a way that satisfies YOU personally.
        • Bull...

          If all three big players are in collusion to CONTROL all coders then there is no free market.