Ask YC: Can I make money with shareware? | Hacker News Reader

Ask YC: Can I make money with shareware?

46 pointsdeviltastic43 comments

By reading this site, it looks like you're all getting rich by building web sites. OK, not everyone is getting rich, but everyone assumes that there is a chance that it will happen to them.

But what about shareware? In 2008, is it too late to start writing software, actual installable software, and sell it on the internet? Or are my chance of getting rich much higher with web applications?

I know some Mac or iPhone developer got rich, but what about Windows and Linux and the other mobile devices.

I love programming too much to do anything else, but I also would like to acquire wealth.

Thanks, Norman

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>Can I make money with shareware?

In short - hell, yes.

>In 2008, is it too late to start writing software, actual installable software, and sell it on the internet?

Hahahaha .. funny. Of course, not. Here's some anecdotal and motivational evidence for you:

# Project 1 - a software to deal with file transfers - feeds about 10 people for past 10 years. 3-4 major competitors of the same level and in the same niche. End-user oriented, effectively outdated at the moment, but still selling well due to a market inertia. The program itself is about 3-5 months of work to write from scratch (e.g. by just looking at the screenshots and a feature list).

# Project 2 - network sniffer application - brings about 800k a year in sales. Oriented on professional market, sales cycle is outsourced to a dedicated company and so it the support.

# Project 3 - a remote computer/desktop access app. I don't know exact numbers, but they are in the range of #2.

These are not, of course, very typical, but they all are single-developer projects. Moreover their success is a result of persistent focused effort rather than a fad or a blind luck. On the other hand if you work on a project in your spare time, it's not unreasonable to expect 10-30k a year. Assuming you are catering to a general home user crowd and your app in fact works and doesn't look like crap.

Also, if you investigate shareware development a bit you will see that there's an established and mature "shareware support" ecosystem. In a simple case you just write an app and other people will gladly do the rest - anything from creating a website and producing boxed version of the app (i.e. "publishing") to payment processing and a front-line support (i.e. "e-com"). Some care is needed dealing with these guys though, because frequently they rely on ignorance of the developer to milk him out of disproportionate % of a revenue.

Good luck, dude. You asked a great question and the answer is that the shareware is very much doable and it is in fact less delusional get-rich scheme compared to web-2.0 craze.

IS it a no-no to consider the respective markets for shareware/Web 2.0 companies?

As opposed to the products themselves, I mean.

I don't understand the question, sorry.

http://discuss.joelonsoftware.com/?biz

That is a forum for shareware developers.

One of the biggest posters there makes a bingo card creator app that does like 1.5k a month sales. If you do that 10 times you can make some pretty decent money.

The key is finding a niche I think.

Indeed. I used to work for these guys (http://www.fullshot.com) and I can tell you they make plenty of money servicing a niche that small businesses need. They certain made more money per employee than my current internet (web-based) startup!

1.5k a month in sales is nothing. Plenty of people and small businesses make a living off of "shareware". The key when you get into this market is more about usability, marketing, and distribution as opposed to coolness, technology, or complex feature-sets (though the latter three can't hurt)

>>The key when you get into this market is more about usability, marketing, and distribution as opposed to coolness, technology, or complex feature-sets<< Great line. I might even go so far as to say that serving a small business niche with apps is more about price, marketing and distribution than the usability and complex features of your product. Simple and minimum functionality seem to work as long as the product has a minimum of functionality.

Asking whether you can "make money" and whether you can become wealthy by developing shareware are two different questions.

Yes, you definitely can make money from developing shareware. You can make good money. But wealth? People define that in different ways, but I assume true "wealth" to be a, say, multi-million dollar net worth. Now, that's certainly possible, but still rare in the shareware business compared to the number of players.

The short answer is, yes. But you will need to be on top of your game, ready to redefine what you're doing, and be prepared to put in an absolutely insane amount of time (unless you manage to catch a certain wave or craze at the right time to milk it fast).

You can still acquire wealth as employees do, by living beneath your means and investing the rest.

It's not as cool as a huge hit, but you still get to do what you love and be your own boss.

The web is more fashionable than the desktop right now, but plenty of guys make a living writing desktop software.

Another guy mentioned Joel on Software /?biz, which is more desktop oriented than HN, and with a different tone to the conversation. You have truisms there like "picking a niche market is the key to success", and "25% of the work is coding and 75% is business management." You should stop by and see if it speaks to you.

It's very hard to make money in the desktop apps world. Most desktop apps have been commoditized. Piracy is rampant.

What could you reasonably sell your software for? $20? $50? How many copies would you need to sell per month, constantly to pay your bills? Does that number seem reasonable?

I come from the desktop software world. I love writing desktop software, but I'm glad that I'm not selling it.

"Everything that can be invented, has been invented"? ;-)

I agree with your point about SaaS, that people are tied to you. It stops piracy; and repeat sales are the norm. Theoretically, you could achieve the same by renting software - but it doesn't seem to work in practice (and doesn't stop piracy).

But one solution is to make a product into SaaS in an odd sense: that you keep releasing new versions - so the "service" you are selling is your on-going development. The ideal need for your software to meet therefore becomes one that can never be fully met, so that each improvement you make is needed. This differs from my perfectionistic urge to pick a problem that I can solve perfectly, and instead pick one that can't be solved.

In my software business, I experience the odd effect that when a new problem needs to be solved, people come out of the woodwork to buy it - as if they'd been using it without buying it. Before that they didn't have any problem, and so hadn't needed to contact me. Or is there a more probable and less cynical explanation?

This solution is not as good as SaaS, because you have to keep working. :-( But in SaaS, you also have to keep working, or the competition catches up. And that's a much more serious problem if the competition is free...

The last company I worked for before starting a startup did pro-audio stuff. Their stuff, generally, was cracked the same day it was released and estimates were that at least 80% of users weren't paying for the software. If you get popular enough, it tends to come back to haunt you.

I think one solution, as mentioned a couple times in the thread is to work on software for rich niches.

* The ideal need for your software to meet therefore becomes one that can never be fully met * That is brilliant

I avoid anything I have to pay for as far as software goes, but just the other day I paid for a license of TextMate. Why? Because it was an excellent piece of software, and it saved me a TON of time.

My point is, it can be very hard to get people to pay, but if you've got something that really adds value, or helps get something done faster/better, people will pay.

It's not scientific, but based on the seemingly sequential serial numbers and the dates of different serial numbers, a few of us in a Ruby IRC channel calculated the other day that approximately $1.5m worth of TextMate licenses are being sold each year.

That's a pretty inspiring number, even at half the amount.

I'd be interested in hearing your assumptions and napkin math that went into that number!

I'm not in a (physical) position to quote the numbers used, but I was one of the first people to buy the app and have a low serial number. I then got serial numbers and purchase dates from others to work out the intervals vs serial number increases (which we are assuming are sequential, as that seems to fit the pattern). Take numbers and multiply by usual license fee (not always applicable, but not a bad average).

Cool, thanks for sharing:)

I made more than my day-job salary for quite a while with shareware. I wrote a pop-up blocker and privacy suite.

If I were doing desktop apps again now, I would go after a niche business market and not use the word shareware per se. I would also take any idea, and hold it against the "should it be a web app" lens.

There are expensive specialized pieces of software in various niches that are not well suited to the web due to data privacy, the UI required, or other reasons. These niches can be tougher to see as an outsider, but great to target and build for--customers with budgets and IT departments that don't allow piracy can also be a great thing.

edit: Also, check out the Association of Shareware professionals. http://www.asp-shareware.org/ They typically do an end of year thread where members post their revenues--very eye-opening.

Well, if you want to be technical - the rise of shareware was mostly about the distribution model.

Shareware came about when distribution was very expensive. You needed to have retail channels to sell software - which is why software and hardware channels went hand in hand. If you wanted to sell Norton Commander, you needed to manufacture it, send it to stores, sell it, etc, etc. All very expensive.

So the idea behind Shareware was - make as many copies as you like, give them to your friends, if you like, send me some money. Obviously not everyone sends you money, but your distribution was free.

In a time where distribution was expensive, this was a big deal. You could make money from the occasional $20 contribution from what was a comparatively massive distribution channel - rather than charge many times more than that and have fewer sales. It enabled "smaller" applications to thrive.

Now - this isn't really applicable today. Distribution isn't as expensive as it was. So the same rules don't necessarily apply.

Not to say you shouldn't adopt the shareware, or philosophy of shareware, or some of the models - but depending on what you want to do there are many more options available to you nowadays. Have a think about your solution and how best to put it in the hands of people that need it.

Great post, Norman.

I also love programming too much to do anything else, so much so that I have always been reluctant to change technologies with the times. In fact, I still do much of my work in a 40 year old language: PICK BASIC. (Much like the lisp crowd, I have my reasons for clinging to something tried and true.)

But here's a dirty little secret: the technology doesn't matter. Right now, I could write the same app in 5 totally different technologies, they would all be about as much fun, and they would all work about the same.

But if I wanted to reach the widest audience, build something for the future, and maybe make a couple of bucks, I would only write it one way: a web app. Learn to love javascript, PHP, and MySQL (or whatever combo you like) as much as you love whatever you're doing now. In 3 months you'll wonder what took you so long. Don't make the same mistake I did and wait too long to adopt what most others are using (and buying).

You can also look at it this way: a web app is also a desktop app anyway. Since every PC already has a browser, just put a web server on the client and throw in a little AJAX or FLASH and no one would hardly notice.

Hi Norman, I had the similar idea as well - what I most like to program are standalone windows applications.

I think it is still possible to get rich on that space, but maybe harder as it was before, since there is a global trend of using standalone apps less and less. I remember, how in the past I was keen to download and play with shareware software, but I virtually stopped doint that. First, I try to minimize the number of software apps I depend on and try to move on the web, and secondly, I don't already trust the apps from unknown companies (that they don't contain spyware etc.).

So this I think is a disadvantage - the market is very saturated and at the same time there is a trend to move standalone apps to web. But of course there is still a room. As funny as it might sound, I still don't know any really great POP3 client, there is also no clear winner in RSS readers, etc.

In my opinion, if you don't like web applications, the biggest opportunity is in the mobile apps. First, not enough apps exists for mobile phones yet, and secondly, many kinds of apps which didn't have a point in desktop are very useful in a mobile phone.

I started about 12 years ago writing shareware apps for the Mac, towards the end of high school. It was easier then since there was much less competition, so I think you'd have to pick your niche pretty carefully now.

My business (actually just me) made a small name for itself on the Mac scene (again, easier then than now) and pretty quickly hit around $50K/yr in revenue. It stayed around that level for many years, sometimes peaking at $7K/month after a significant release.

I haven't released any significant updates for years, yet it still brings around $30K/yr. This is in exchange for a couple of hours of sales and support per month. That's what great about shareware - just like a well-designed web business, once you've written the code, it can become a tidy passive income stream. And I've no doubt I could have made more of it by marketing it better, but I never quite had the inclination.

Two concrete bits of advice:

1. My two best and longest-selling products are tools for small (and occasionally large) businesses to get things done easier and quicker.

2. Work the feedback loop. My top selling product ended up being used in a way I never predicted. I heard about this from my customers and over time made it highly specialized for that purpose.

When it comes to acquiring wealth, did shareware make a millionaire? No - more like 1/3 of the way there, after tax.

But shareware did give me the income and freedom to not have to seek a job when I graduated, and in turn that let me pursue further study, and in parallel develop other (web-based) ideas which turned out to be the real earners.

Software is software. Monetization is monetization. Distribution is distribution.

Whether your app is installable or web-based is immaterial. The questions you need to ask are "is there a need?", "can I reach an audience?", and "will they pay for it?".

Web software has clear advantages-- lower support costs, no platform issues, easy to push updates, easy to charge recurring revenue, etc. All this means that you can build and operate your business with less cash.

The killer problem with software (aside from building something people want) is distribution. Assume that you can't/don't build something so freaking earth-shattering that people can't stop talking about it. How do you reach your buyer?

The iPhone phenomenon is so amazing because it solves that problem for app developers. The web can solve that problem (for web software or installable software) if a lot of people are searching for what you offer (and you're good/lucky with SEO).

I guess (in short), Shareware and "freemium" aren't that different. Installable / web apps aren't that different. If you can find a need/niche, go for it.

(note: our software has an installable and web component and we see very little drop-off when people realize they have to install something)

Let the choice of platform depend on your idea, not the other way around. Especially if you already have an idea in mind.

That's true, but his main idea is "I want to make money as well as write software". And some platforms are better for that than others.

Anyway, the submitter knows the answer already: The way to make money is to note where the customers are and go to them. Quite a few people are making money selling Mac and iPhone shareware, and that's not surprising. These platforms have a culture of paying for quality, and there's a limited variety of hardware and software that you have to support. Windows shareware also exists and makes money. Meanwhile, I've paid for exactly one piece of Linux software in my life (printer drivers) and AFAIK my experience there is typical. If I want to pay for quality Unix software I buy it for my Mac.

So: Choose the Mac or Windows, and go for it.

Android is a wild card. I'm a skeptic myself, but there's no sales data yet, so maybe it will be a big hit.

Shareware is pretty much the same model that's used for web apps with paid plans. I don't know what the difference in odds are. I tend to think there's a better chance of succeeding with a web app just because your potential customer base is much larger and the barrier to entry is smaller. People are also hesitant to download/install programs these days. Then again, there's things you just can't do on the web. If you have an idea that really can't be a web app to work well then you should probably do it on the desktop and not worry about which is better.

The Linux community should embrace the Apple AppStore and sell apps for Linux for less than $9.95, specially games.

There will be a gold rush to that model if implemented, benefiting the platform and developers as well.

Some are doing pretty well (6 figs) on tiny little iPhone apps.

The Mac software market's humming pretty well. Their users appreciate good software and pay for it. A friend of mine's making a nice living on ~4 hrs a day on mac shareware.

I think you're asking two questions: 1) Is there money in desktop apps? 2) is there money in try-before-you-buy apps?

Plenty of money on the desktop (ask microsoft or adobe), and try-before-buy is just risk reduction. For both sides, actually, as you'll have fewer returns & customer complaints if they had a fair chance to try out the app first.

Yes, you can make good money making desktop apps. I'm on a Mac, where there's a vibrant shareware community. Here are some of the apps I've bought: TextMate, SmartBackup, VMWare, Times, Delicious Library.

Times has a GREAT interface that no other RSS reader has, on the web or desktop. Delicious Library turns my iSight into a barcode scanner.

Do whatever you're passionate about - that's how you'll make a great product that stands out.

Sure, and consider the new form of shareware: release two iPhone applications, one free with limited features and one < 10$, full version. Mobile appears the next big market for resident applications.

p.s. I can't find iPhone user base figures, somebody willing to share this numbers?

Being passionate about programming, and software development is great (be happy you've found your thing). Choosing your platform based on your desire for wealth is probably not a great idea.

Stick with what you love and you'll be happy. If the money comes than it makes it that much sweeter.

Definitely. Note that many great coders are rushing into web apps, by default. It's the obvious thing to do and you can get a result out a lot faster than a well-designed app that requires installation, licensing, help files, hassling with different operating system flavours.

Which is why it's great. If you're willing to put in the time to make an app really good, then you can do really well.

It is a momentum game. It can take a while to build up enough steam. Subbing to a web app is very easy. Convincing someone to fork over their cash to a download, is generally tougher. But you only need a couple of percent to do that, to do okay.

I'm kinda going to be doing both. I have a downloadable app and I'm extending it with Google App Engine to provide some online features.

Judging by the amount of money I spend on shareware apps (for the Mac) someone's making some money. I can't be the only one, can I?

The piece of OS X software I would gladly pay for is a good Typing Tutor. Make it a made-for-OS X typing app fitting the Apple keyboard layout, etc. The current typing apps on the market are horrific.

I'd say its probably pretty easy to make a living off shareware, but it's unlikely you'll get rich. Of course there are exceptions, but I would imagine your software needs to be very popular.

You could always code a shareware video game.

Thanks to the recent resurgence of indie games, it can actually be quite profitable if you manage to make a really good one.

Am I the only one who saw the "Ask YN" instead of "Ask HN" or "Ask YC"?

All software, even Microsoft software, is shareware now.

If it's a mass-market kind of thing, maybe.

If it's a niche application, then not so much.

You have this pretty much backwards.

Just noticed your reply. I have personal experience with this actually. I had a niche market shareware product, and it got rave reviews. It was awesome, dominated its niche, and users loved it. All seven of them.

In the meantime, my friend had made a mass market shareware program. He got thousands of registrations, and made a lot of money.

But your experience may be different. I'd love to read more if you have any good links or even some google terms (names, companies, products) to suggest I look at. Thanks.

You can make over 9000 dollars.

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