Comment by throwaway204401 | Hacker News Reader

Comment by throwaway204401 | Hacker News Reader

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throwaway204401

We sell a desktop app with an involvement in dev and support of about 0.25-0.50 FTE, with revenues in the range of $50K/month although it was launched 9 years ago and the first year was only about $2K/month. The server side is just one Windows 4GB server for user signups, billing and license validation. One good thing of desktop apps is that the server side is so cheap, you are basically selling IP.

It has this features:

* B2B in a niche market (TAM < 100K-200K users)

* Some viral component so you do not have to spend money on ads for growth.

* Sold as a subscription and only as a subscription. Don't innovate with licensing focus on product, this is important. When users have fewer buying options, they decide faster. That's why Steve Jobs reduced 50 Mac models to just 3.

* When the subscription ends, the application must stop working. This is also very important. You want your entire user base to be able to install the last version. You do not want to support older versions, you only want to support one.

* Has to have a very generous trial so that users have time to find use cases with your product. Better a trial based in actual usage instead of exploding trial base in calendar days. You want your users to actually use your product and depend on it.

> * B2B in a niche market

> * Some viral component so you do not have to spend money on ads for growth.

Indeed. For years our sales department was simply our customers. They'd call their friends and tell them they need to get our software, or when they switched jobs they'd work hard to get our software used at the new place.

Now we have a small but proper sales team. However word of mouth got us very, very far.

> * Sold as a subscription and only as a subscription.

This was a key point my boss realized early on as well. It's much easier for the accounting department to handle a fixed recurring cost, than a bi-annual huge expense or similar.

It also allows you to incorporate usage into the price, so the price scales with the customers' income, not unlike cloud offerings.

We have a small fixed monthly cost, and a variable cost (per invoice/order essentially). The variable price depends on volume, but it's very predicable and makes it so the customer doesn't have to worry too much if business is slow for a while.

> Now we have a small but proper sales team. However word of mouth got us very, very far.

Note that viral is not the same thing as word of mouth. Viral means that one user expressly or subliminally forces other users to use that software.

For example, a customer asking or encouraging a vendor to use some specific software because it makes things easier for the customer and later, when that vendor is also infected with the need, they ask or encourage their own vendors to use that software too.

This is the distribution mechanism that we have for our tool.

Ah yes, my mistake. We have that for another product which works very much like that for our main product, but its effectiveness is mostly a quirk of our niche. Basically it's a product for the customers of our customers, or companies like them.

Since we integrate very well with our own products, we can supply superior data to this second product, causing the effect you're talking about as these other customers of ours puts pressure back up the chain.

I'd love to connect to compare notes. I'm well on way to $50k/month, but I have a feeling I can attain that revenue without a few of your bullet points.

* B2B niche - agreed, this is essential

* Viral component - I wish I could make label printing viral... but I feel like I'm dealing in the "colonoscopy of software" with my app

* Only subscription - I agree this maximizes revenue, but I find subscriptions user-hostile, so I also sell a one-time license

* Subscription expiration - obviously essential

* Generous trial - agreed, essential

If you’re selling B2B, it might be worth offering both perpetual (with yearly support & maintenance) and monthly subscriptions. Some businesses only want to do one or the other - might as well make it easy for them to give you money!

This sounds very interesting. Not to give away your company’s magic sauce of course, but if you were starting today, what niche would you target based on what you know?

In one in which you can truly empathise with your users, preferably something yourself have experienced as very inefficient and unnecessarily painful and complicated in your professional life.

It can be a relatively small gap in theory covered by several larger tools but only superficially covered either because they do not truly understand the pain point of that gap or because they simply want to limit complexity of their base product and their surface of support.

So then you focus on developing that feature to perfection with a strong focus on integrating with each of those larger tools, whenever possible without any collaboration of those larger tools (that will come anyways later if you get the traction).

The larger tools will never compete with you directly because if they created a tool doing the same thing you do, they would have to integrate with their direct competitors, which is a bad scenario for them as either they get expressly blocked by the other tool developer if seen as a threat or because by having such tool they would be ultimately improving their direct competitors tools.

Our current position is that if a customer of us decides it's time to change the larger tool, one of the factors of the decision is how well the new larger tool integrates with our tool.

Thanks for the detailed thoughts! Appreciate it.

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