As I look back, this year has been significant in many ways. First of all my visitor traffic is now less than a third of what it used to be because of an algorithmic change in Google's search engine. As a result of this my business was running at a loss for half a year at a 25% revenue loss compared to the previous year.
How did I react? I think I panicked for a while, like anyone would. Thoughts of doom and gloom and whether or not this is sustainable ran through my mind. Eventually I came to my senses. What I did next was very significant, I did what anyone with common sense would do, develop a better product. The matter of fact is, I cannot control search engine changes but I can develop a better product to increase its conversion ratio. I spent about 2 to 3 months revamping my software, writing a lot of new code and thinking about what users want. Was it a gamble? I didn't feel it was. I am very glad I made the changes. My product is now significantly better than its predecessor and not only that, I learnt a lot during this process. Really to increase revenue, the best way is to develop a better product, not SEO, not marketing hype, but to deliver where it matters most, usage and sheer quality. There's a book called "Founders at work" where an ex Microsoft employee named Joel Spolsky was interviewed and he cited the same reason when asked about increasing revenues. Develop a better product and you can also justify an increase in price.
How to develop a better product
- Surveys, ask your customers. You are not your customer, your friends are not your customers. Ask your customers what they want and listen to them.
- Look at competing products and understand how you can be better than them, but don't match them feature for feature.
- Features are important, but usability is even more important. Code is malleable, the user interface is not. Develop an interface that is hard to understand or use and your software will not sell even if it was free.
- Implement lots and lots of tutorials to help users and make it easy for them to access help. More help to them means less support that you have to spend time on replying to their questions.
- But if they do, always always help them!
- Cut down complexity. Always always try to reduce the amount of clicks and data entry that users have to input. Make things flexible but rigid, sounds like a paradox I know!
Now if only I had my former traffic back.
Secondly, I started my first full time "job" working for a company aka Boeing. Where "job" refers to working for another company other than mine, of course (Boeing actually use my software, and are one of the first to purchase my software when it was released many years ago, you could say it's come full circle). And I still have to say, nothing beats doing your own thing. I'm only doing this to make myself "employable", and also to increase my nett worth and salary. Many years ago when I was 14 I said to myself when I start my first real full time "job", it will be at least $X per month. And I'm happy to say I've achieved that. Combined with my business, I am very sure that I make at least the same level, if not higher, than the senior engineers at Boeing. But I'm younger and hungrier than they are. Needless to say among my peers.. I am very sure I make more than all of them, salary wise anyway. It will take years and years and years for them to achieve the same level as I am making now and by the time they do I'm pretty sure I'll be at a different level. I have to admit with my present salary level I am having trouble spending the money as I don't usually spend much. Now I'm not boasting, I'm just stating the facts. The fact is even with what I'm earning I have a very high level of self worth so I don't feel it's enough. Of course I won't say this to their face, which is why I say it here. I don't care for titles, or career progression, I just want to work with smart people and help other people with my software. To me my business is more important than my full time "job" with Boeing even though it's risky, because there's no salary cap with my business and I get far greater recognition. Every time I receive an email from a new customer, there is a level of excitement which I simply cannot describe and never diminishes. It's like having your own creation being appreciated and desired by many other people in the world.
Business goals for next year?
Hopefully two companies in the US will be selling my software, one's a distributorship and the other a partnership deal. So the opportunity for increased revenue will exist, and growth should result from that. But right now I'm very very concerned with the economic situation around the world particularly the US. If it goes into recession, where the chances are increasing day by day, then my business will no doubt suffer as the US constitutes a significant portion of earnings. If that is indeed the case then at least I have my "job" backup and money saved in case of an economic downturn. Most likely in this scenario, earnings will shrink no matter what I do. The plus points are I can take heart that I've done far better at writing and selling software than many others and the fact that my business has been running at a profit since it began and for several years now proves this. So in the event that the economy recovers after a recession, I can safely assume that my revenues will more or less maintain at the present level. Here are some important lessons that I've learned.
Lessons as a software entrepreneur
- Some things are beyond your control, anticipate what you don't expect and then decide on an appropriate plan of action
- Code is important, the user interface is 10x more important
- Pay attention to customers, your actual users. Friends are not your customer, developers are not your customer
- No one cares what technology you use as long as it works
- Build for quality, but focus on the important things. If something that works but isn't used often, don't waste time perfecting it. Focus on your energies on the things that matter.
- Rankings can get you noticed but only your software will make you money
- Don't think about the money, think about how your software can better lives for others
Milestones
- Sell at least 1000 copies
- Sell at least 100K nett worth of software
- Sustain the business for at least 3 years
- Make a sustainable living off the business
