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.

I should introduce myself.  After all, it's always good to know something about someone you'd like to get to know better.  Which I would hope you do.

My name is Roger Willcocks.  I live in Auckland, New Zealand.  Manukau City to be precise.  About 30 km south of Mark Joyner of Simpleology and Sean D'Souza.  I'm married, with (currently) a two-year old daughter.  I roleplay, read fantasy, and sometimes do work around the house.

More to the point.  What do I know about writing and selling software?  Well, I first wrote games from magazines on my Atari 400, way back in 1980.  I graduated to an Apple IIe, which was what I used until I started University in 1992. 

My first piece of commercial software was written in 1993 working in a kumara packhouse over the Christmas holidays.  It was written in MS Access 2.0, and apart from having been upgraded to Access 2000, is still being used today.  They tried moving to the industry standard software package, and found that it would cost them an EXTRA $50,000 to get the modifications they needed, so they stayed put.

My second piece of software was written for my mothers child care centre in 1994.  It cut her paperwork requirement down from 20 hours per week (mostly on the weekend), to around 40 minutes per week.  They used that up until 2 years ago, when someone accidentally deleted the data files without a backup while making room for MYOB, and decided to move to their industry standard application instead.

So, I can write software that does what people need.  It saves them time, money and pain.  If you can solve any one of those problems, you can sell it.  If you can solve two or more, you have a product with a LOT of potential.

I currently have around 14 MCP (Microsoft Certified Professional) certificates, covering 5 different areas of specialisation.  I've written software for websites, freight companies, law firms, charities, other software companies, CRM systems.  So I have breadth of experience.

But this is what I need to teach you for you to be able to do what I do.

• Find someone who needs what you can offer
• Plan it out
• Create it
• Help people find it 
• Deliver it
• Repeat

OK.  So here is my opinion.

I'll go into why at the end of this post 

Science   Pronunciation [sahy-uhns]   -noun

Art  Pronunciation [ahrt]   -noun

1. the quality, production, expression, or realm, according to aesthetic
   principles, of what is beautiful, appealing, or of more than ordinary
   significance.
2. the class of objects subject to aesthetic criteria; works of art
   collectively, as paintings, sculptures, or drawings: a museum of art; an
   art collection.
3. a field, genre, or category of art: Dance is an art.
4. the fine arts collectively, often excluding architecture: art and
   architecture.
5. any field using the skills or techniques of art: advertising art;
   industrial art.
6. (in printed matter) illustrative or decorative material: Is there any
   art with the copy for this story?
7. the principles or methods governing any craft or branch of learning:
   the art of baking; the art of selling.
8. the craft or trade using these principles or methods.
9. skill in conducting any human activity: a master at the art of
   conversation.
10. a branch of learning or university study, esp. one of the fine arts
    or the humanities, as music, philosophy, or literature.
11. skilled workmanship, execution, or agency, as distinguished from
    nature.
12. trickery; cunning: glib and devious art.
13. studied action; artificiality in behavior.
14. an artifice or artful device: the innumerable arts and wiles of
    politics.
15. Archaic. science, learning, or scholarship.

Craft   Pronunciation [kraft, krahft]   -noun

1. an art, trade, or occupation requiring special skill, esp. manual
   skill: the craft of a mason.
2. skill; dexterity: The silversmith worked with great craft.
3. skill or ability used for bad purposes; cunning; deceit; guile.
4. the members of a trade or profession collectively; a guild.
5. a ship or other vessel.
6. a number of ships or other vessels taken as a whole: The craft were
   warned of possible heavy squalls.
7. aircraft collectively.
8. a single aircraft.
9. -verb (used with object)
   to make or manufacture (an object, objects, product, etc.) with skill
   and careful attention to detail.

OK.  I cheated a bit :)

Software development is treated by many as an ART.  Often a black art.  Everything is built by hand.  Slow, inefficient, and prone to error, but beautiful to its creator.

It is really a CRAFT.  Something done with consideration, consistency and attention to detail.  Note the word consistency.

Profitable software development needs to be approached as much as possible as a SCIENCE.  Controlled, automatic processes that produce consistent, quality code quickly.

Upwards of 90% of software development is "boiler-plate", code written to do the basic things that need to be done to get to the fun stuff.  Read, Write and Delete data.  Populate a screen.  Accept user input.  All of this can be reduced to a science.  Work out how to do it once, and create a system that can do it for you.

The remaining 10% is that art that keeps this a craft rather than a pure science.  It has to do with understanding what people need, and how they want to interact with it.

What is software development?  Here are some possible definitions I've borrowed from Dictionary.com, have a think and see if you can decide what it is. 

Post a comment with your opinion. I'll let you know mine in a couple of days.  

Science   Pronunciation [sahy-uhns]   -noun

1. a branch of knowledge or study dealing with a body of facts or truths systematically arranged and showing the operation of general laws: the mathematical sciences.
2. systematic knowledge of the physical or material world gained through observation and experimentation.
3. any of the branches of natural or physical science.
4. systematized knowledge in general.
5. knowledge, as of facts or principles; knowledge gained by systematic study.
6. a particular branch of knowledge.
7. skill, esp. reflecting a precise application of facts or principles; proficiency.

Art  Pronunciation [ahrt]   -noun

1. the quality, production, expression, or realm, according to aesthetic
   principles, of what is beautiful, appealing, or of more than ordinary
   significance.
2. the class of objects subject to aesthetic criteria; works of art
   collectively, as paintings, sculptures, or drawings: a museum of art; an
   art collection.
3. a field, genre, or category of art: Dance is an art.
4. the fine arts collectively, often excluding architecture: art and
   architecture.
5. any field using the skills or techniques of art: advertising art;
   industrial art.
6. (in printed matter) illustrative or decorative material: Is there any
   art with the copy for this story?
7. the principles or methods governing any craft or branch of learning:
   the art of baking; the art of selling.
8. the craft or trade using these principles or methods.
9. skill in conducting any human activity: a master at the art of
   conversation.
10. a branch of learning or university study, esp. one of the fine arts
    or the humanities, as music, philosophy, or literature.
11. skilled workmanship, execution, or agency, as distinguished from
    nature.
12. trickery; cunning: glib and devious art.
13. studied action; artificiality in behavior.
14. an artifice or artful device: the innumerable arts and wiles of
    politics.
15. Archaic. science, learning, or scholarship.

Craft   Pronunciation [kraft, krahft]   -noun

1. an art, trade, or occupation requiring special skill, esp. manual
   skill: the craft of a mason.
2. skill; dexterity: The silversmith worked with great craft.
3. skill or ability used for bad purposes; cunning; deceit; guile.
4. the members of a trade or profession collectively; a guild.
5. a ship or other vessel.
6. a number of ships or other vessels taken as a whole: The craft were
   warned of possible heavy squalls.
7. aircraft collectively.
8. a single aircraft.
9. -verb (used with object)
   to make or manufacture (an object, objects, product, etc.) with skill
   and careful attention to detail.