Now comes the research portion of your software project.

If you have not yet registered with the site (or sites), you can do that now.

Then, go through the "top sellers", or "hot buys" list for each site.

 Visit the product page for each item and note down (Excel or are text file are both fine) the following:

• Name of product
• General category (e.g. Helpdesk, advertising, security)
• Any questions and features that are often mentioned.

Once you have done at least 20, go back over them and pick a general category you want to create a product for.

Go back through those products and note down all you can find out about the features they have, and those that are asked for.

You will use this to plan out your list of requirements before you create your product.

Note that while this shortcut gets you lined up on a product that people want, you are unlikely to end up on the top sellers list yourself unless you do a really good job.  Many of the products you find there will have been around for several years.  This is a quick way to get a product done and selling so you can use the revenue for other things.

Much like any other for of selling, to sell software, you need to start with a target market.  A group of people who are likely to be interested in what you have to offer them.  Fortunately, the internet makes this quite easy to discover, though it can take some time.

For the purposes of being able to sell without needing a web site or anything else that might cost, you need to go looking for a specific type of web site.

It needs the following features:

1. To be popular.  Fortunately, Google already figures this out for us.
2. To be focussed on a target group or market
3. To host and process payment for software products for you
4. To not charge any set up fees.
5. To have a "most popular" or "top sellers" list

Any easy way to get a ready made target market is to produce "add-ons", these are often referred to as "modules", "extensions", or "add-ins".  These are small pieces of software designed to extend or alter the behaviour of existing applications.  Your target market is then defined as the owners of that application, or a sub-group of them.

Some examples of applications you could target are:

• Photoshop
• DotNetNuke
• PHPNuke / PostNuke
• Microsoft Word / Excel / Access / etc
• FireFox
• Joomla
• WordPress
• Internet Explorer

I recommend you do some searches for programming languages you know, and  see what you can come up with.  I'm going to go with "DotNetNuke" for this as I'm familiar with it from previous work I've done.

Searching Google for dotnetnuke purchase commission brings up a number of sites.

Two that are potentially useful are:

• SnowCovered.com
• DotNetNuke Marketplace

You are likely to arrive somewhere deep inside the site, so make sure you check out the home page.  Both these sites are suitable for this because they meet all the criteria that I specified earlier.

If you want to follow along with this process, go and do your research now, I'll be posting the next step within a few days.

I must apologise for the long time between posts.

I'll be posting the first part on creating and selling a software product for $0 shortly, but in the mean time, I just wanted to let you know that I've released a guide to customer service that you can get from this site Customer Service Guide. It's just $4 until the 1st of Jan, and $10 after that.

It should be useful to anyone running, or looking to run a business, especially one which is mainly online.

I hope everyone has had a great holiday, and I'm looking forward to a fun and profitable New Year with you all.

By the way, if anyone has suggestions or questions for other guides they would like, drop a comment here and let me know about it.

Yes.  You can do it.  And since I like the idea of showing how, and someone else though it would be interesting, I'll go through it.

This will take me a few posts to go through, from locating an apropriate website, identifying a product, producing the product, and putting it up for sale.

Points to note:

• This is not hugely cost effective, you'll be giving away ~25-30% of your revenue to someone else in exchange for not doing payment processing
• I don't recommend this for long term use, but it works well for getting some cashflow up front.

You WILL need:

• A PayPal account (if you want to get the money quickly)
• The ability to program, or someone who will do the work in exchange for a profit share.

Things you need to do:

• Locate a website that acts as a "marketplace" and processes the payments for you
• Research the products that sell well
• Create a product specification
• Create the product (or get it created)
• Package it
• Set it up on the website
• Write sales copy for it

I typed that into Google, and I got nothing back.

Which is odd.  Google is usually pretty good at defining things.

Anyway, here is a good working definition of a microISV (borrowed from Wikipedia):

A Micro-ISV (abbr. mISV or μISV), a term coined by Eric Sink, is an independent software vendor with just one software developer. In such an environment the company owner develops software, manages sales and does public relations.

The definition is commonly accepted to be slightly wider than that.  Often encompassing up to 10 people, but most often one or two. An "Independent Software Vendor" by the way, is a company that sells software, but doesn't quite reach the scale of Microsoft or Oracle.

What this means is that one person can basically do everything required to run that business.  And that comes down to about 10% research, 5% design, 10% development, 10% support, and 65% marketing and promotion.

In fact, you can even farm out the development and support parts (though I recommend keeping that) if you are not a programmer.  The real keys are:

1. Finding out what people want (no technical skills required)
2. Designing something give it to them (some logical/planning skills required)
3. Getting it somehow
4. Marketing it (marketing skills)

Notice that programming skills don't actually appear there.  The only place those are needed are to create software (and that's just one of the ways of getting it), and it would help for designing it, but is not critical.

So, now you have the technical term for how I spend my evenings.

A lot of people think that businesses run on a bunch of complex and expensive applications.  SAP, JD Edwards, MS CRM and the like.

The truth is that the vast majority of businesses are SMALL businesses.  And a small business usually runs on a combination of an accounting package, pen and paper, MS Word, MS Excel and maybe MS Access.

However, a time comes when a growing business finds that the systems they have been using are now causing them more trouble than they solve.  A smart or lucky business finds that out before the whole thing breaks down.

Then they need to progress to a better system. 

• Pen and paper moves to Excel or Access. 
• Excel moves to Access. 
• Access moves to SQL Server, and a web or desktop front end,
• or maybe an off the shelf application.

Applications move from being single user to being able to function with 5 or 10 people using them at once.

A very large proportion of what I do as a bespoke developer involves taking an existing Excel or Access based system, and moving it to the next step.

I'm considering taking an Access application I wrote over 10 years ago, and turning it into a .NET Windows application.

As part of the exercise, I can record the process on video and create a training course out of it.

If anyone would be interested in learning how to convert Access applications to .NET "nicely", drop a comment in and I'll start the process.

You need to give some consideration to how you license the software you sell.

There are some important points to consider.

• All license issuing has a cost overhead.  You need a commerical licensing tool, or to write your own.  Plus support costs for issuing new or updated licenses.
• All licenses can be hacked, eventually, even if it requires someone to create binary patches of your code.
• A license will stop most people from trying to cheat anyway
• Licensing may reduce your sales

Because of all that, I recommend structuring your licensing as follows:

• Under $50 - Don't bother, the extra support costs will eat large chunks of your time.  But make sure you build in some ways for people to find out about other (more expensive) products you sell.
• Under $200 - Make it simple and Generous.  E.G.  A person can put it where ever they like.  All websites on a server can use the component.
• Above - Look at "per site", or "per user" licensing.  Give generous discounts as the number of licenses climb.
• Where possible, provide a service, not software.  This means you host the software on your own server, people connect to it and use it.  Monthly membership or lifetime membership fees apply.  But remember that lifetime fees imply a contractual obligation to provide the service, and that you will have ongoing hardware and bandwidth costs to pay.

There are many ways of coming up with ideas for your own software product, even if you don't already have an idea in the back of your mind.

Let's talk about one of the options.

If you'd like to jump into things quickly and you have capital available to spend to acquire software outright, you might consider purchasing existing source code.

You can purchase software that is already being sold publicly or you can find a programmer who has put code together but hasn't taken the time or energy to make it publicly available.

Buying Existing Software

Programmers are a notoriously introverted group.  In an episode of ScreenSavers on TechTV, a software programmer had put together an amazing piece of software that allowed artists to "paint" movies using film that had been shot with digital cameras.  It allowed for a surreal movie to be built in a matter of months using techniques that would have taken traditional artists years to complete.  This was some awesome software!

The host asked the developer the exact question I had in my mind: "Do you have any plans to market this software?" The response: "Well, I'm not sure yet." What was he thinking? This stuff was great! I wanted to download and try it out myself.

Even though it was an amazing piece of software, the developer hadn't even begun looking at ways to capitalize on it beyond what it was being used for the film they were currently producing.  You're going to find many similar stories for thousands of products that exist - but aren't on the market.

Yet.

THERE ARE THOUSANDS OF SOFTWARE PRODUCTS AVAILABLE, READY FOR YOU TO PACKAGE AND MARKET RIGHT NOW!

If you think I'm kidding.  Let me tell you some of what I have sitting on my hard drive waiting to be completed at the moment, and I sell software for a living.

• A ClickBank search engine, with Google style search functionality.  I'm just trying to figure a good licensing model, but I've left it for over a year.
• Improved version of my ConversionBooster split testing software.  Just need to install it and validate the results a few places.
• New Affiliate Program software.  Needs some more functionallity, but I'm currently testing the tracking / payments portion of it.
• Product Sales website.  Integrates membership, security, downloads, ordering via PayPal and 2Checkout.  Can include the split testing and affiliate software easily.  Need to package and promote it.
• License Key Generator.  Uses 256 bit Public/Private key encryption to secure license information.  You might be able to crack it to read the content, but you can't modify the license and have it work.

Any internet marketer will tell you that sales depends on three things.

1. Traffic
2. Copy 
3. Conversion

Any direct marketer will tell you three slightly different things

1. Targeted Market
2. Offer
3. Conversion

In the end though, they are basically about the same thing

1. How many interested people can find out about your product.
2. What you tell them about it
3. How likely they are to buy it

A lot of people consider traffic rather than eyeballs.  And they only think about getting traffic to their sales site.  I prefer to look at some other methods as well. 

If you have a product that is an extension of an existing piece of software, there is often a website that acts as a marketplace for those extensions.  For instance, this blog is run using BlogEngine.NET, which supports extensions.  Some of my products are modules for an open-source platform called DotNetNuke.  SnowCovered is one marketplace site that I use.  They take 25%, they host the files, manage payments, and run a helpdesk.  And 25% is less than you would pay most affiliates too.

If you are selling via the freeware/shareware model, the Association of Shareware Professionals has an XML file standard called PAD which allows download sites to create their site catalogs.  If you process your payments via a service like RegNow, then many of them will list your product for the affiliate fees.  Others will do it even without being able to use affiliate links.  This also has the advantage of building links to your site.

A lot of people ask me about this.

Or they settle for the obvious:

Write it and sell copies.

But there are some less obvious ways.

1. Write software for other people to sell.  Bespoke software development, or contracting.
2. Initial product idea, laid out in a 1-2 page document.  Ideas are easy to have, and harder to implement.
3. Add in some market research (5-10 pages).  Determine a target market, carry out a product survey, do some keyword research, maybe start a mailing list. 
4. Create a detailed plan, or software specification (10-100 pages).  By creating a plan someone can work from, you greatly increase the value.  This is similar to franchising, but less proven.
5. Create a complete package of everything you need, including all business software, etc already configured or with only a few options required
6. Create the software product required, and include the source files, etc in the package
7. Create the software and sell access as a monthly service. Great for recurring income.
8. Set everything up on a domain, promote it, get it profitable, build affiliates, etc, and establish a track record with it.  Sell it.
9. Create an offline company, and do pretty much the same as above.

Which have I done?

1. Write software for other people.
2. Initial Product Idea
3. Create the software product and sell it
4. Set up a domain and make it profitable.  But I've never sold one
5. I worked for an offline company which was sold.  Four years from the product concept until it was sold for US$26 million.  As a long standing employee, I was given a bonus large enough to put a deposit on my house.

Anyone else got any ideas they would like to add?  Comment away.