Wednesday, 16 April 2008

How to Compete Against Free Software

Filed under: Business of Software — Jan Goyvaerts @ 15:01

I recently argued that there’s no such thing as free software. All software costs a combination of time, money and “being stuck with it”. Of course, all those costs apply to paid software just as much as they apply to free software. And charging for something, even just a penny, changes people’s reaction to it entirely. So how does a Micro-ISV compete with a paid product against free software?

Free software doesn’t go away. Once somebody publishes a free product that competes with your own, it never goes away. If it’s a bad product, nobody will pay attention. But if it’s a good product, it will remain available on sites like download.com for a long time, even if the author ignores it. But you can make the free product bad. Or rather, you can make it a worse alternative to your paid product by improving what you sell and how you sell it.

Build a provably better mousetrap. Free stuff gets much more word of mouth. People don’t like to sell their friends on things. But if it was free, “you got what you paid for” is an easy cop-out. For a paid product to get word of mouth, it’d better be significantly better than the free alternatives. The free software then become’s the cheapskate’s choice. That’s a market you don’t really want to sell into anyway.

Promote your product. Since you’re selling your software, you have a budget to invest back into it. Spend on Google Adwords and any kind of advertising that you can track. While it may be difficult to get a top ranking in the organic search results between all the freeware, that freeware isn’t going to show up between the ads at the right. While some people ignore those, others specifically look for them. I do. If an advertiser is willing to pay Google to show me their ad, they’re making an investment in me. Even if it’s just a penny.

Tell me about your product me. The prospective customer has heard about your product or clicked on your Adwords link. Now hold their attention! They have your freeware competitor’s page open in another browser tab. That page likely only has a few paragraphs of text, a few screen shots, a changelog and a download link. You’re not going to get by on that. Tell the customer how they’ll benefit from your product. Talk about what the customer wants and needs. Leave the technical stuff for the changelog. And show your product with abundant screen shots, informative flash demos and glowing customer feedback.

Make your product easy to get into. This is the most critical part in my experience. They’ve read a few pages on your site and watched a short movie and a half. Your product sounds interesting, and they’re going to download it. Make the download easy to find. Make it easy to install, with just a few clicks. That’s the easy part. When your software is finally running, make it present a welcoming face. Nothing’s more disheartening than a complex UI popping up leaving the user to think “now what”? Uninstall is pretty standardized on Windows. :-)

For software that costs $100 or less, the biggest investment in starting to use it is the time spent to figure it out. So bring out those tutorials and getting started guides. Just Great Software products turn the “nag screen” (reminding the customer to buy the full product if they like the trial) into a “welcome screen”. It explains the first few steps in using the software, and where to find more help (handy items in the Help menu). The text on the screen actually changes each time the trial is run, and eventually rotates around if the trial lasts more than a few days.

Provide strong backing. Nobody likes to buy a lemon. You can say all you want about how great your product is. But nothing speaks better than putting your money where your mouth is. Provide a generous (in time) and unconditional money-back guarantee. It’s a strong statement that you have faith in your own software. It’s a statement freeware authors can’t make.

Provide free and prompt technical support. The key issue with technical support is that it doesn’t really scale. User forums alleviate the issue, but only if your product already has a wide user base. And even then the advice offered is often questionable. But when you’re selling your software, you’re taking money from each and every customer. Invest some of that to provide support to each and every customer. Freeware authors generally enjoy writing software, but not supporting it. Don’t fall into that trap. Providing technical support is a way of saying thanks to your customers for putting up with the problems they’ve purchased from you. :-) See their complaints as valuable feedback to improve your product. That scales much better than putting up a FAQ on your web site that everybody ignores.

Don’t make me get stuck with it. If your customers will be using your product to create their own content, make sure to provide various export features. Make it clear they’re not stuck with you. Vendor lock-in doesn’t work unless you have a monopoly. Excel languished until Microsoft added the ability to save files in Lotus 1-2-3 format. While you might keep a few customers because they can’t easily export their data, you’ll lose far more sales to customers who figure out early on your product keeps a lock on their data. Even if your product doesn’t really have any direct competitors that could work with its files, use XML-based or other human-readable formats and explain the benefits.

Yes, this really does read like a list from Micro-ISV 101. If you’re not doing all of the above, you’ll have a hard time competing with both free and paid software.


  1. Funny, I just about now published a blog about the value of excellent support with a software product. See http://sevensteps.blogspot.com/2008/04/spending-lot-of-time-on-your-support.html

    I’ll add a link to your post in my blog…

    Comment by Bart Roozendaal — Wednesday, 16 April 2008 @ 19:14

  2. “…Make it clear they’re not stuck with you. Vendor lock-in doesn’t work unless you have a monopoly…” Well that lets me hope, that the next release of your great regex buddy, will allow to integrate any text-editor I like, not just the one of your own company (Edit Pad)

    Comment by Gorky — Wednesday, 23 April 2008 @ 22:42

  3. “Vendor lock-in” means that you’re stuck with using a product once you’ve started using it. If you uninstall RegexBuddy, all your regular expressions will still work. So you’re not locked into continue using RegexBuddy.

    RegexBuddy currently indeed does not have an option to configure external editors to open files found by the built-in GREP. It can open files on its own Test tab, in the application configured as the default in Windows for opening the file, and in EditPad. If you want to directly open files from the GREP tab in another application, you’ll have to associate it with the “open” or “edit” action in Windows Explorer for the relevant file types.

    Obviously, integration between two applications from the same vendor is always going to be better than integration between applications from different vendors, simply because it’s much easier to build the integration when you control both ends.

    Comment by Jan — Thursday, 24 April 2008 @ 16:05

  4. […] weeks ago I gave some tips on how to compete against free software. All of these tips are in fact essential things that every Micro-ISV has to do to become or stay […]

    Pingback by How to Stop Competing - Micro-ISV.asia — Wednesday, 30 April 2008 @ 15:42

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