To go for a startup selling licenced copies, I would need an investor but I don't really know how much the product will sell. The investors like to see hockey stick graphs which I can't claim.
I know there are companies that created open source projects on github and then have businesses doing custom work around it, but I don't know if this will work for me. I feel the product itself provides value and I would like to make some revenue off it.
Now I am thinking this is a good fit for shareware - i.e distribute freely - let anyone who feels it is worth pay for it. I can distribute with source so if someone wants to modify sections they can do so.
Please let me know your thoughts.
I made one (1) sale, despite receiving e-mails from several people thanking me that they're happily using it at work, and that sale was to a company who wanted customization, and only ended up actually paying the invoice when they asked for another round of customization and I pointed out that they haven't paid their last invoice.
Donationware does not work for companies, I think - the bureaucracy required to make money move from the company to you will keep people from doing it even if they think you deserve it. If it is labelled as voluntary instead of a legally required license fee, it will also be hard to make it happen.
If you're targeting companies, and want to do a shareware model, you should:
* Make it easy to buy (with credit card etc.), but also provide a contact for volume licensing. If you're lucky, this allows employees to pay you for your software without having to go through approvals.
* Make it hard to use permanently without buying (beyond just a nag screen, e.g. blocking the save feature once an expiration time is reached)
Your goal isn't to convince someone to pay for the software. Your goal is to convince the person sitting in front of the computer that dealing with the bureaucracy to pay you is easier than not dealing with it, and if given the choice between a nag screen and the bureaucracy, the nag screen is easier to deal with.
Except 'IT'.
I can't buy a $5 mouse at Best Buy. Or a Lightning cable to charge my company-provided iPhone. That will trigger long chains of accusatory emails from Accounting and Procurement. Software and 'IT equipment' has to be purchased according to the Policy, which to be quite honest I've never successfully figured out how to do.
It's come to the point that I'd rather buy small things (<$50) out of my own pocket than persecute myself by spending days going through some convoluted process and knowing at the end of it that we paid 3x the market price to get it from our 'Preferred Supplier'.
Lots of managers have credit cards and will pay the SaaS fee and ignore procurement processes. The the app becomes embedded in the company and the procurement team has to accept the reality of it.
It's not even just the cost of the item itself - I often have to spend hours of time over a period of months to get something purchased, with multiple levels of management also having to spend time on approvals and chasing people up. The cost of all that time can easily exceed the cost of the item.
Sometimes I hate working for a megacorp :(
Very clear what’s going on there once you get to the end. Somebody’s got themselves a nice cash cow sewn up.
(And yes I know that's because of terrible design decisions in the intranet itself, but has anyone seriously worked at a large company where that wasn't the case?)
This is a really important point. Small companies I've worked at generally have had sensible and manageable procurement processes, but big companies have sometimes had mind bogglingly labyrinthine processes even for small purchases. There was once I had to raise an "Approval To Spend" and "on-board" a new vendor, and as far as I could tell the process changed 3 times while I was going through the "process", although I'm not completely sure because while everyone was telling me I had to go through "the process" no-one seemed completely sure what the process was, including those responsible for "the process". All very Kafkaesque. Anyway, it all comes down to your target market - if it is individuals you won't face this problem, but if it is businesses you will face the problem on a scale according to the size of business.
So I'd imagine most people wouldn't risk it.
If you really want a legal way to get companies to pay, phrase it as "free for non-commercial use" and include that in the public documentation as well as somewhere in the tool itself. Non-commercial includes the indirect commercial cases that would apply to the tool.
AIUI that is wrong in USA and UK (don't know about other countries). At least if using the "non-commercial" definition used in IP law.
For example, you create an advert for free for an event that charges money, that's commercial. You give stuff away that impacts someone else's ability to sell, that's commercial. You do a free event, charge for snacks, it's a commercial event.
Use an app privately the results of which you use to benefit your employer, that's a commercial use.
It's pretty hard to answer the general question for "an app" rather than a specific app and associated action.
Feel free to hit me up on twitter @m_herrmann if you have further questions. :-)
2: https://blog.qt.io/blog/2018/11/15/python-qt-3000-hours-deve...
Have you even tried to just sell licenses for it? If your software delivers value then that should convert better than a nag screen. Worth giving users a 30 day trial and seeing how that converts.
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Do you just nag or actually disable the product after a period? I was always surprised by the Sublime model, my experience indicates that if people can avoid paying then they will, even business customers.
I literally went from using Kagi for ten years, to using Patreon. At first it's a decimating change because you're going from 'sale of a product' to 'literally giving product away free and telling people they can support you if they like'.
However, if your cashflow isn't too tough, one benefit is that Patreon is a LOT more stable and predictable than shareware ever was. You stop having boom and bust product releases and instead have months where you grow kinda briskly and months where you grow not so briskly.
You're not making revenue off the product, you're making revenue off 'I am the one who makes products such as this'. I've got suggestions for what people should pledge if they would've bought my stuff commercially, but it's entirely voluntary and I'm also MIT-licensing it all. I'm airwindows on github, and as a website.
Look at the statistics [0]: unless you are in the top 100 creators, you'll get far less than your regular FAANG pay.
In the current market you will hardly find a private player looking for a return on their investment through profits/dividends; they will be more likely trying to cash out when you create enough buzz to get acquired or IPOed. That's a completely different game from the naive "sell licenses - make profit" option, but that's the game private equity plays in 2018. And no, desktop applications are not buzzwordy enough for that game, sorry.
That said, there's plenty of money to be made selling desktop products to businesses. You just need to approach it differently, get the actual product/market fit, grow your presence organically, listen to your customers, learn from your mistakes and so on. Don't get discouraged by bootstrapping - you don't need a fully functional product to see if there is a market for the problem you are solving. Create a minimal prototype, write a few articles showing it off and tune in on the feedback. Once you start hearing from real people trying to solve real problems with your prototype, it will be very easy to find which next features will make your product more usable and will inevitably bring more revenue.
Build the thing, and sell it (not necessarily for shareware, either). There are new channels for software now (like Setapp[0]) that you can look at, too, depending on who the customer and platform is.
Then you can make decisions based on actual sales, demand, market size, etc, and if investors are needed at that stage, then you have a waaaaay better proposition for them.
[0]: https://setapp.com/
So you will need to add some kind of restriction to make people pay for your app.
The restriction depends on the usage type of your app.
- If it is something that lots of people use everyday (like a text editor), you might get away with a nag dialog. Annoy a large number of people just a bit every day, and some of them will buy a license.
- If it is something that people use just once (eg. a file conversion app) you absolutely have to require payment before people can do what they want, or they will never come back.
- If is something that companies will want to customise, and you want to distribute source code, you probably need to charge a lot of money for it. Only few companies can afford to hire someone to write custom software, so you need to make sure you charge them enough that it is sustainable.
Did this make a difference for most users? No. But, when I wrote shareware, I usually got one or two 4 figure site licenses per year from companies for my product. It was just a sideline but the difference between pure donationware and "you're really legally required to pay for this" did make a difference.
That said, today I'd probably just do it as open source donationware though the money wasn't completely trivial for me at the time.
These days, yeah, but the term shareware started out as OP described. It later became synonymous with trialware.
https://asp-software.org/www/history/the-origin-of-shareware...
A lot of it was on the covers of magazines or you could order a set of disks from people like Atlantic Coast:
More specifically - allow to use the program without a license for X days and the cripple it in some annoying way until the installation is licensed. Activation should pass some machine details to the licensing server, which will then pass back them hashed and signed. The program should have the public part of the licensing key embedded, so on launch it would read the license, verify the sig and check that the license still matches the machine.
Also, for this to work well you will want to have some basic protection against reversing in place. It should not be possible to NOP the IF in the license check, replace the signing pub key or to side-load DLLs. This is a large subject of its own, but there are off-the-shelf solutions for this (called exe protectors)... though the con here is the perpetual hassle with false positive detection from anti-viruses and such.
PS.
I should add that "pay what you want" model doesn't work at all. It absolutely doesn't work for enterprise software and it doesn't even work with home users. It basically makes the software look not valued enough even by its own creator.
Ditto for the donation model unless the active audience size is in 100s of thousands. Donation model is not really a model to begin with, it lacks predictability.
Differntiating pricing tiers just by the user type - personal/home vs. business/commercial - works very poorly as well. People cheat. The only thing that really works as a price differentiator are the features. Pay more - get more. Also, charging for Windows Server installs 10x the normal price is a perfectly acceptable practice that works well.
If you have any questions - ask, I'd be happy to answer what I can.
As an example Lichess (www.lichess.org) is an amazing service for playing chess. It supplanted services like ICC (internet chess club) and now competes against services such as chess.com and really stands head and shoulders above the rest of the sites. Now let's consider compensation. ICC had on the order of tens of thousands of users and charged around $50/year for what would have required extremely little overhead. They were undoubtedly making millions. Chess.com today is heavily ad-driven and works hard to push their users into a premium access model. No idea about their revenue, but they happily spend 5 figures a year in contracts just to get various players/streamers to exclusively play/stream on their site, and have an extensive paid staff. In contrast to these two sites, the founder of Lichess is able to gives himself a salary of $22,218, about $2k above the French minimum wage. It's not like he's then getting loads in options each year - that's it, that's what he gets for building software that beats out other sites making countless millions offering arguably inferior services.
It sucks, because I wish this model worked, but I think it simply does not. There are exceptions, but they are definitely the exception.
You should also tailor your business model to the product's market. If you have a broad market - home users, small business, large businesses, etc - some can use it for free, but some will still pay. If it's a smaller market - only small businesses - maybe only a few will pay if it's available for free.
You can also change the business model to be free software that drives paying for something else - like a cool cli tool, but a much more useful premium GUI. Or a free tool that's easier to set up and use as a SaaS.
Put it out there for sale and test it out.
To be specific, it's importing tables from Excel to AutoCAD and Revit. It seems like this is something that AutoCAD and Revit should be able to do, but they handle it very poorly.
http://www.cadig.com/products/
Licenses are ~$30-50 each and every company I've worked at has happily paid it rather than let employees waste time fiddling with the terrible native functionality.
I don't know how much the creators are actually making, but it seems to be enough to keep them going for the past 10 years or so.
Also it sounds like you are doing enterprise software. Shareware was more of a consumer pricing model. With enterprise you want to make it totally free for small scale grassroots adoption by champions and then monetize large scale adoption.
Though I'm sure it was always a game of chance like everywhere in business.
Distribution was not a solved problem back then, and required significant capital. Shareware use a viral engine of growth (though this did mean that there were far more products for which shareware didn't work versus the handle for which it did).
There are a number of approaches to doing that. After getting burned a few times paying $(100s) full-price for products just to find out that a feature I expected/needed was missing, I stopped doing that. I've since found some feature-limited stuff that lets me 'create-but-not-output' that I liked.
If it turns out to be a hit, you can change strategy. If the audience is limited, you can move back to shareware.
https://www.qcad.org/
The first thing I would say is that shareware (in the classic definition) is not really a thing anymore, but “try before you buy” software (which is really the evolution of shareware) is very much alive and well.
The second thing I would say is that most people would be surprised by how much some of these companies sell. Certainly not everyone does well, but we see small companies selling tens or hundreds of thousands (USD equivalent) per month. Some reach seven figures a month.
I can’t think of a single company that I’ve worked with that had VC-style funding. Most are bootstrapped with a small minority getting small “friends and family” investments.
It is still possible to make a lot of money with try-before-you-buy software. A few tips:
Don’t underprice. If you can provide enough value that they’ll pay something you’ve got more room in your price than you might think.
Feature limitations work better than time limitations.
75% of you sales come within one day of the trial download, and of those, 75% come within the first two hours. It’s important that the product conveys why and how to buy.
Don’t forget about other markets. In the early days most sales came from the US. These days, the US represents about half. When you get traction, consider translating your product and don’t forget to offer your product for sale using multiple currencies and payment methods. Third-party e-commerce platforms make this easy. They’ll also take care of a lot of the regulatory burden for you (taxes, export controls, fraud & chargebacks, etc.).
If your product is targeted at large companies, offer premium support for a fee. Something as simple as a “response by email within one business day” SLA can be enough.
SEO matters a lot in helping people find your product. High quality content about the problem your product solves helps a lot. In the early days find where people who need your solution are talking about their problem. Be transparent, offer genuine, non-spammy help as a solution expert and people will allow you to talk about your product. This can help a lot as you get established.
If someone will donate, they’ll buy. You’ll feel more benevolent asking for donations but you’ll make a lot more money if you sell the product. We’ve seen both models. It’s not even close.
If your product is not targeted to a highly-technical audience, open source might sound cool but means nothing to them. They won’t buy more because it’s open source.
I could go on and on. I’ve said enough but there is still plenty of opportunity here. It takes time - be patient. Most of the successful companies I know started as a side gig.
> let anyone who feels it is worth pay for it
You should only do that if you want this to be a side project forever. If you want growth, charge people money. Most people aren't just going to donate money to you if they don't have to. Don't be shy about charging. People who find value in your software will pay you for a license to use it, especially businesses. If they don't find enough value to want to pay, then you don't have a good product yet and should talk to your users to determine value adds.
> To go for a startup selling licenced copies, I would need an investor
I don't see how you came to this conclusion. You can very easily license your software without investors, and charge customers per machine like you mentioned. I even built a business around that fact, which may also be able to help you start licensing your software quickly [0].
[0]: https://keygen.sh
I'm actually more surprised 200k people have downloaded a custom colour scheme. But since they have, I don't think 10 EUR is excessive to charge for something like that.
Don't rely on altruism to be a good indication of real demand. People like to get good deals. When you get for free something that is of good value -- it's a good deal and most people will go for it.
The freemium model would work better to estimate demand.
Just make a time limited trial, if they feel it is worth paying for then they will buy, if they don't then you don't owe them anything.
Not my parents. They started computers with buying software in boxes, but in the modern age almost all of their digital purchases are done on smartphones. Neither of them have any idea what Windows Store is. One of them uses Steam for games.
Not most power users I know, most of which bawk at UWP apps and the concept of a walled garden store on their desktop computer. Many power users are more likely to use Steam to buy apps despite it being gaming focused.
Anecdotally I see basically no group that would prefer Windows Store except out of ignorance or necessity. Buying on Windows Store means you don't get the Mac version if one exists. Admittedly, the same caveat applies in reverse to the more successful Mac App Store, but it's still something people have to consider.
Microsoft has been pushing Windows Store pretty hard for a long time. They came to my University back when I was in college, a bit after the Windows 8 launch. They talked numbers but only in terms of the whole Windows install base and not even Windows 8 adoption. Definitely no numbers on Windows Store.
To this day, I don't know if we've seen good stats on how much apps that were built and sold exclusively on Windows Store have fared. No doubt games have sold well - Microsoft can use its Xbox brand to deliver exclusives to Windows Store and not Steam - but I sincerely and absolutely doubt that success will translate to app developers.
I use probably about a dozen Windows Store apps with some regularity, though being in IT and dev, I obviously use a lot of apps outside of it as well. But while I rarely will install a traditional app from a no-name developer for fear it might do bad things to my system, I am pretty willing to try new UWP apps.
That's the key perk for someone just starting out/trying to make a living off small software offerings. The sandboxing offers a stand-in for trustworthiness. And of course, you don't have to stand up your own licensing servers, pay for bandwidth from downloads, etc.
Same applies to some of our customers that have done the migration to W10.
To start with I suggest you give the MVP product for free. The users will be paying you with their feedback.
Right now OP is making an assumption that his product is useful. It's a guess. Doing the beta for free for a small set of users validates it with small effort.
In fact the first release should be as minimal as possible. Op can charge those users in the subsequent releases.