Why is it that some shareware developers seem to be hugely successful in financial terms, growing their sales from scratch to generate tens of thousands of dollars in income, while the vast majority struggle to generate even a handful of sales? The answer can be found by exploring the difference in mindsets between both groups. For convenience we'll label them as the professional and the amateur.

First, let's examine the...

Product Development Cycle

After the first pass through this cycle, the initial results for the amateur and the professional may be virtually identical. But whereas the amateur typically stops after the first pass, the professional understands that this is just the beginning. Let's say they each release products that initially generate $100 per month in sales. The amateur will often conclude that the product is a failure, perhaps make a few minor revisions that don't help much, and then move onto the next product. But the professional says, "How can I get to $200 per month?" By iterating through this cycle of refinement and re-release many times (often more than ten times over a period of several years), the professional may ultimately end up with a hit that generates thousands of dollars in monthly income. To the amateur that initial $100 per month is seen as a flop. To the professional, however, it is seen as a seed. The professional understands that the initial launch is only the first step in a long stream of future updates and refinements, not just to the product but also to the sales system and the marketing plan. Here's why this works:

In order to make a single shareware sale, there are an enormous number of factors that must all come together synergistically. The chance of getting all these factors correct on the initial release is slim to none. Let's say there are only ten critical factors in making a shareware sale (the quality of the product, the market demand for the product, the effectiveness of your registration incentives, the effectiveness of your ordering system, the file size of your shareware demo, and so on). And let's say that for each factor there is a range of effectiveness from 0% to 100%. Understand this: these factors don't add -- they multiply! If all of your critical factors are at 100%, but just one is at 0%, that means you could be getting zero sales, even though you did most things perfectly. For instance, you could have a truly brilliant product, but if people don't feel secure using your order form, that single flaw could cost you most of your potential sales.

What if each of these 10 factors was at 60% effectiveness? Do you realize that this means you're only getting 0.6¹⁰ = 0.6% of the sales you could be getting. Even if each factor is at 90% effectiveness, that's still only 35% of optimal. Obviously this model is oversimplified. My goal is to dispel the prevailing myth that if each part of your ordering pathway is "good but not great," that your final sales will be good too -- the reality is that lots of good factors multiply together to create "utterly dismal." Here's the formula: (Good but not great)^N = Utterly dismal (for a sufficiently large N). If everything about your product is just good (say 60% of optimal), this doesn't mean you'll be getting 60% of the potential sales. It means you're more likely getting less than 1% of the sales you could be getting. Refining the critical success factors and making each part of your product, your sales system, and your marketing just a little bit better with each consecutive release is how you grow your sales massively over time. It isn't out of the question that you can double or triple your sales in a day by doing this. See this article for some ideas on that.

Now the truth of the matter is that most initial releases are nowhere near averaging 60% effectiveness for all critical success factors. Especially for first-time developers, there are probably many factors that are at 10% or less. The headline on your product web page, for instance, may be nonexistent or poorly written. Your product may have bugs or compatibility problems that prevent many people from running it. Your web site may look unprofessional and scare potential customers away. You may not have even scratched the surface of all the marketing you should be doing. Perhaps you only have one product and aren't experiencing the benefits of cross-selling other products. It's entirely possible that when all these factors come together, you may be generating something like 0.01% of the potential results that your product is capable of, if you were continue to nurture its development.

Selling software through shareware channels is very different than selling software at retail. With try-before-you buy, there are a huge number of steps each potential customer can go through before buying, any one of which can kill the sale. Just one suboptimal factor can cost you most of your potential sales, and when combined, multiple suboptimal factors may be tossing out potential customers left and right. Picture a ball rolling down a pipe with ten holes. If the ball passes all the way through the pipe without falling through any holes, you make a sale. But if the ball falls through even one of those ten holes, the sale is lost. The way you get your product from dismal sales to outstanding sales is by systematically identifying and plugging those holes.

Having been in this industry for many years, I've seen this cycle repeat itself again and again. You would be absolutely amazed at how many of the greatest shareware hits experienced dismal sales after their initial release... sometimes even no sales at all in the entire first year. But the developers turned them into hits by continuously improving those critical success factors over a period of years.

So which is the better approach? To release five products in five years, each at 0.01% effectiveness, or to raise a single product from 0.01% to 2%? If 0.01% makes you an average of $100 per month, the first scenario will get you to $500 per month, and this is exactly what amateur developers do. But the second scenario will get you to $20,000 per month with just one product, and it requires less work too.

There are three good reasons why experienced professional shareware developers are often able to release more consistent hits than less experienced amateurs. First, the pros have already plugged many of the holes in their system that are shared by all products, such as optimizing their web sites to sell, refining the ordering process, implementing a money-back guarantee, crafting a solid marketing plan, gaining excellent search engine placement, etc. So when a new product is released, it inherits the benefits of prior system-wide optimization work. Secondly, the pros can apply the wisdom gained from refining each previous product to any new release, so when they release a new product, they've already eliminated all the obvious sale-killers that still plague amateur developers. And thirdly, the pros have already internalized the attitude that the first release is just the beginning; thus, they expect to continue to refine the product and immediately start listening to user feedback to help them locate new holes that need to be plugged.

It is rare in the extreme that a developer's initial release will be anywhere near its full potential, even if the developer has vast experience. If you release a new shareware product, I guarantee it's going to be riddled with flaws, and it's probably earning less than 1% of its potential. If you raise each of ten critical success factors by just 5%, you'll increase your sales by 60%. And if you do this over and over again, you'll see your monthly sales gradually climb: $100... $160... $250... $400... $650... $1000... $1700... $2700... $4300... $6900... $11,000... $18,000... and so on. Note that you don't even reach $1000 per month until the 5th iteration!!!

In order to improve these critical success factors, you have to confront the brutal, objective facts. Invite others to evaluate your product, your web site, and your ordering system. This requires putting your ego aside and being as open-minded as possible. Find out how others are marketing their products (feel free to ask in our developer forums if you'd like). Listen to what others have to say; don't delude yourself by trying to persuade them you're right and they're wrong. Don't worry about trying to make everything perfect all at once. But see if you can increase several critical success factors by a small amount with each successive release. For instance, you might try to make your product page just 20% more effective, your registration incentives 10% more enticing, your product interface 30% more intuitive, and so on.

As a personal example, shortly after I released Dweep in mid-1999, I began getting requests for an expansion pack of more levels. So I released an expansion pack. Players also complained that Dweep moved too slow and needed a speed control. So I added a speed control. Then players wanted another expansion pack, so I released that. Then players wanted a level editor, so I added that. Then players wanted to be able to post their own levels, so I added a free levels archive. That turned out to be too much work to maintain, so I eventually took it down and replaced it with a forum where players can post their own levels, which has been working out wonderfully. During this time I also made major revisions to the web site, the marketing process, the ordering system, cross-promotions with others games, and the price (raising it from $9.95 to $24.95 while increasing the number of levels from 30 to 152). Most of Dweep's sales were a result of these later refinements, not the initial release.

The amateur mindset leaves most of the potential rewards forever untapped, wallowing below 1% of the true potential. But professionals keep going... treating that shareware product as a tree that must be patiently watered before it bears a full harvest of fruit. I suppose you could say that the amateur sees the glass as 99.99% empty, while the professional sees it at 0.01% full.

Now lets explore the differences between shareware amateurs and professionals in terms of...

Personal Development