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Ask HN: Making a living selling software components, not SaaS?

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Re: Ask HN: Making a living selling software components, not SaaS?

#11

Post by hackula1 »

meemoo wrote: post #6
smartaleckkill wrote: post #5

Earlier quoted context omitted.

That's interesting. As you say, it's a no-brainer. I wonder if some kind of micropayment market in functions could be pulled off... The kind of thing Ted Nelson or Jaron Lanier talk about, only for small pieces of reusable code rather than small pieces of reusable text.

Stackoverflow is close, but the only currency is karma. But you can offer it as bounty to answer your question. Throwing money into that dynamic is opening all kinds of worm cans.

This pretty much sums up how that would go down.

Q:

Should return 3 for this test case

x = add(1, 2) assert.equals(x, 3)

A:

function add(a, b){ return 3 }

Re: Ask HN: Making a living selling software components, not SaaS?

#13

Post by rachelandrew »

We sell a downloadable, self hosted CMS (http://grabaperch.com). We launched it as a side product of our consultancy business just over four years ago and by the beginning of this year we stopped taking on client work as the income from Perch has essentially replaced that of a successful consultancy, so it is possible.

We don't have recurring revenue as such, a license is a one-off purchase and includes all support, first party addons etc. However our customers tend to be web designers buying a license for each project. If we do a good job they want to use Perch for more than one project!

Growth was slow and steady, I think the toughest part was when we were 50% client work and 50% Perch, as we had customer support making it hard to get on with client projects and we really just wanted to be working on Perch!

Re: Ask HN: Making a living selling software components, not SaaS?

#14

Post by smartaleckkill »

meemoo wrote: post #6
smartaleckkill wrote: post #5

Earlier quoted context omitted.

That's interesting. As you say, it's a no-brainer. I wonder if some kind of micropayment market in functions could be pulled off... The kind of thing Ted Nelson or Jaron Lanier talk about, only for small pieces of reusable code rather than small pieces of reusable text.

Stackoverflow is close, but the only currency is karma. But you can offer it as bounty to answer your question. Throwing money into that dynamic is opening all kinds of worm cans.

That's true. But money in that micropayment sense might not be entirely insane (assuming the whole micropayment model isn't entirely insane to begin with). The idea (as I understand it) is that you'd get a tiny wee payment every time someone quoted your work; so why not every time someone quoted your code? In the context of some Xanadu-like system, wouldn't that make sense?

Re: Ask HN: Making a living selling software components, not SaaS?

#15

Post by reboog711 »

Do you want to hear about failures?

I tried; with Flextras ( http://www.flextras.com ). I wanted to build a set of UI Components which would extend Adobe's Flex Framework. For various reasons it was a failure; and I shut down the "commercial" portion of the company in January of this year.

At the time I launched the business; Flash was still viable and Adobe was pumping a lot of money into growing Flex--which was basically "Flash for programmers". Adobe was trying to grow the user base for Flex to a million developers and I wanted to get in early and ride the wave, so to speak. I thought there would be a market for high quality components that extended the Flex Framework and Adobe stated they wanted to focus on the tooling and infrastructure while leaving components to third parties. I thought I was in a good spot.

When I was preparing to launch Flextras, I was planning for a 70% drop in income [compared to consulting rates] and hoped it would grow from there. I ended up with a 90% drop in income; so that hurt a bit.

We launched with a single component, and the first year only had one sale, and all my energy was spent on building out our Calendar component. [which took a year and I threw everything out and restarted from scratch 3 times because I decided the API/implementation wouldn't provide enough flexibility].

I think it was in our second year released the Calendar component and an AutoComplete component. A "Spark" Version of our AutoComplete came out later to integrate w/ Flex's new component model. Then we released some mobile components. We were growing from our "first year" revenue and averaged about $10K per year before shutting down. The business was growing, but very slowly. Then Adobe had some bad PR mishaps and sales stopped overnight.

I could go on and on about problems and mistakes I made along the way.

I focused on the wrong things--I think I spent three months creating transitions on our Calendar component. Business users don't care about such things [although I got a lot of 'hey cool' during demos]. During this development time; the new version of Flex came out [a point release] which broke all of that work.

The model of selling individual components is inherently flawed. It does not present recurring revenue. I hoped to combat this by releasing a lot of products; unfortunately that didn't happen for a variety of reasons. Components took longer to build than I anticipated [especially the Calendar].

We should have had a package of some sort [one price gets everything we built]. We should have had a subscription [one yearly price gets everything we built; plus everything we will build]. My attempt to switch our business model was a colossal failure on many levels.

I covered quite a bit of the business failures in a presentation called "How to Fail Fantastically" at the 360|Stack conference ( http://vimeopro.com/360conferences/360stack-2013/video/72773... ).

Re: Ask HN: Making a living selling software components, not SaaS?

#16

Post by 23andwalnut »

rachelandrew wrote: post #13

We sell a downloadable, self hosted CMS ( http://grabaperch.com ). We launched it as a side product of our consultancy business just over four years ago and by the beginning of this year we stopped taking on client work as the income from Perch has essentially replaced that of a successful consultancy, so it is possible. We don't have recurring revenue as such, a license is a one-off purchase and includes all support…

I also sell a downloadable self hosted app that targets developers (www.duetapp.com). I would love to hear about how you market Perch. My app has been growing pretty well since it was launched 5 months ago, but it's not yet profitable enough to replace my client work. I'm in the 50/50 place you described and it's....challenging...

Re: Ask HN: Making a living selling software components, not SaaS?

#17

Post by jiggy2011 »

unreal37 wrote: post #9
QuantumDoja wrote: post #3

I'm a developer, I remember one time I needed to have a particular piece of functionality in an app. I could have built it, but I found that someone was selling what I wanted for $3.00 on the internet, it was a no-brainer. I paid with something like gumroad, downloaded and plugged it in within a matter of minutes, vs the few hours I would have spent writing/debugging.

Odd price, $3. He could have doubled his price to $6, doubled his income, and lost no sales. Anyone who would consider buying a component online would surely not blink at the difference if it saves them a half-a-day of effort.

Maybe he doesn't want to have to provide support and thinks that $3 would be the cut off point for that? Hard to say really.

I would happily sell a bunch of scripts for a few $ on an "if it works, it works" basis. Once you start thinking about saving days of dev time it makes sense to bump it up to $100+ but then you will have to deal with emails or calls.

Re: Ask HN: Making a living selling software components, not SaaS?

#19

Post by rachelandrew »

23andwalnut wrote: post #16
rachelandrew wrote: post #13

We sell a downloadable, self hosted CMS ( http://grabaperch.com ). We launched it as a side product of our consultancy business just over four years ago and by the beginning of this year we stopped taking on client work as the income from Perch has essentially replaced that of a successful consultancy, so it is possible. We don't have recurring revenue as such, a license is a one-off purchase and includes all support…

I also sell a downloadable self hosted app that targets developers (www.duetapp.com). I would love to hear about how you market Perch. My app has been growing pretty well since it was launched 5 months ago, but it's not yet profitable enough to replace my client work. I'm in the 50/50 place you described and it's....challenging...

5 months isn't a long time after launch for this sort of thing, it really took us most of 4 years to replace our consultancy (there are two of us, a husband and wife team).

The thing that works well for us is what people call "content marketing" these days. If you can write interesting articles and blog posts for your own blog and also for other sites, that appeal to your audience then it is likely that people will click through and have a look at your product. You don't need to write directly about your product - just to a developer audience.

The most surprising marketing success for us though has been sponsoring podcasts, specially where the hosts know and use our product and can talk personally about it. The return on investment on those has been really good.

Hope that helps in some way, I'm a member of a forum at http://discuss.bootstrapped.fm which is all people doing this kind of thing and talking about what they have tried so you might find that useful.

Re: Ask HN: Making a living selling software components, not SaaS?

#20

Post by 6ren »

I used to. The problem was I aimed at a component that was useful as a fixed standard (not always changing, upgrading etc). So, you can guess how this story ends...

I accomplished this. But it was by definition a stationary target, and competitors (in this case, open source) largely caught up. But worse, I lost interest, because I was no longer "the only/best in the world" at it.

Success: I not only made enough to live on, I made enough to invest in index funds giving a return that was itself enough to live on, and "retire" (for small values of retire, i.e. a student-level lifestyle - "ramen retirement"). Business began in 2000, able to retire in 2004 or so IIRC. Have lived off the business/investments since then.

  lessons learned:
- Automating sales (credit card etc) is a pain to setup, but is helpful for both you and customers. But for my case, about 30% of buyers still needed some contact for the sale (I'm not counting technical help). Sometimes to negotiate on specific issues, sometimes they didn't fit the sales process, maybe sometimes they just wanted reassurance that someone was there.

- I tried to make it too much a business; if I'd stayed truer to my roots, it might have been OK. If you have an open-source version (or, at least, free), it starves off the competition, leaving them with no oxygen to get started, because no one needs it, they get no interest. And everyone's happy, which actually is very important for one's personal happiness too.

- I actually made a lot of money selling to the enterprise; but I hated it. Like, it really really got to me. In one particular sale, there was 5-6 months of negotiation, admin, international tax laws, etc. Ugh. And it all feels dishonest, pointless, and interacting with people who aren't competent because aren't interested and don't care. (the standard story of a developer dealing with business issues). So, you can do it this way, if you keep going up-market. The enterprise likes old stuff, that is trusted, field-tested, known etc.

- turns out I don't enjoy making a fixed standard. There's beauty in it as a business model; but for a technologist, the fun part is making it (and for me, supporting and debugging was also fun). But when it's all done, all working perfectly, it stops being fun. It's a funny old world.

- the underlying factor is that progress marches on. It's good for the world, and it's fun to participate. But not so good for a self-sustaining business with a competitive moat (Warren Buffett likes candy, chewing gum, soft-drink, bricks, furniture etc - stuff that doesn't change fast). You have to keep investing in it - developing new features, new products, new users (analogous to the capital investment required by the cotton mills of Berkshire Hathaway, making them a terrible investment). But this is all OK, if it's fun for you. And it can be.

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