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Article:
  The Do's and Don'ts of Shareware, Part 1
Subject:   Thanks; further questions on sales models
Date:   2002-10-04 09:13:51
From:   tgmclean
Thanks, Sanford. Sales data on shareware (outside the anecdotal) do seem extremely difficult to come by. Your numbers may also be anecdotal, but (a) it's the first time I've ever seen actual NUMBERS presented; and (b) the size of your sample set is significant. Thanks again.


A few questions:


(1) What experience do you have with sales upon upgrade? Is it safe to assume upgrades (for a well-selling product) follow the same "100-200/day in first week, 10-20/day thereafter until new release" sales model of the initial release? Or do upgrades follow a sales model somewhere between "initial release" and "subsequent releases" (eg., 50-70/day in first week, 25-35 thereafter)?


(2) The sales model you describe doesn't seem to fit the typical "product life-cycle" curve of classical marketing described by Levitt (basically a bell-curve skewed to the right). Would you agree? Is it the same curve, only scrunched up in time? In your next article, would you be able to sketch a curve of the life-cycle as you see it?


(3) Any opinions on the "shareware publishers' business model" at interpubbooks.com? Using it to successfully model sales seems dependent, again, on the touchstone of past industry sales data, of which we seem to have none.


(4) Some posters to shareware listservs (eg., alt.comp.shareware., ~authors, ~programmer) have suggested it'd be great for someone to set up an online survey to gather the sales data experience we're missing. Like S&Ps Inndustry Surveys or RMA's similar studies, results could be presented in aggregate so that competitive advantages (ie., individual company sales data) wouldn't be revealed. Would O'Reilly be willing to host such a thing? If not, could you suggest how such a survey might be worded/ constructed (in case I get the gumption)?


Thanks in advance,


-- TG

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  • Thanks; further questions on sales models
    2003-08-20 20:58:40  anonymous2 [View]

    I am in the process of evaluating a sales distribution pathway for a disposable medical product. The selling process involves a product that will require the currect sales team to shift their thinking form a capital equipment sale to a much less expensive disposable product, but one which offers an annuity.
    Typically our capital products sell for around $40,000, with a depreciation schedule of approx 7 years. The produxt we need to sell is approx $8 and will be replaced on a per patient basis every 2 weeks. This product offers a real therapeutic advantage, but requires educating the end user to undersatnd the true benefits to the patient.
  • Thanks; further questions on sales models
    2002-10-05 08:14:56  sanford [View]

    Hello TG,

    I am not an MBA, nor have I studied any formal business models. The data presented in the series is derived from my own experience and from what I've gleaned from casual conversations with shareware developers. From your questions, I am glad to see that you are attempting to formalize a shareware business model. There is simply very little data available to help you. Answers to your questions are below.

    (1) The amount of money you make from an upgrade depends on two things: size of your userbase and the satisfaction of your userbase. This is obvious, but still needs to be stated. To date, my shareware company has released two upgrades. I found in both cases that 10% of my (apparently happy) userbase upgraded within the first 24 hours of the upgrade offer, and another 20-40% within the next two weeks. Upgrades are still straggling in, almost a year after the upgrade was released. But sales did drop precipitously to "normal" levels for the product after about two weeks. (This does not include users who purchased the "upgraded" product without owning the original... these sales were the same as any other release.) I've also found that press releases for moving the upgraded software from 2.0 to 2.1, 2.2, etc. also spurred more upgrades. (The upgrade offer from 1.x to 2.x is included with each new press release.)

    This is why expiration dates on upgrades are a bad idea: it keeps paying customers happy!

    (2) I don't know anything about this. I'll leave the sketching as an exercise to the reader. The one part of a release that cannot be quantitated however, is the height of the bell curve you describe. Variants include timing issues like day of the week for the release, impending holidays, competing with releases from major players (a system update), etc. Most shareware authors I've spoken with see a good release more as "timing luck" rather than as the result of real evidence.

    (3) There is really little data on this. I believe this is because many shareware businesses are one-person entities, and owners are very protective (and rightly so) of their sales figures. It's only meeting other authors one-on-one, getting to know them, and being sworn to anonymity, that I've collected the tidbits of data that I have.

    Please provide a URL to the shareware business model.

    (4) I don't know if O'Reilly would be willing to host such a thing. It wouldn't require any huge amount of hardware... just time to set up. Please contact me in e-mail about this and I can forward you to the O'Reilly editors.

    You may also consider attending conferences like MacHack (www.machack.com) where the atmosphere is conducive to meeting all types of programmers of all levels.

    -Sanford