Welcome to interview 4 in the software buying series, and our second interview about the things you should consider when using app builder software to create software by yourself - without needing to know any programming languages, or write any code!
Robert Cardiff is the Director of Sales at BuildFire, a mobile app builder platform which describes itself as “The world's most advanced mobile app builder.”
We’ll find out more about Buildfire, and the app builder market in general, which empowers non-technical entrepreneurs and business owners, and allows them to create their own mobile apps from scratch.
Thanks for joining me today. What can you tell us about BuildFire?
Buildfire got started about 5 years ago.
Our 2 co-founders started off building apps, and got some customers who were asking for iOS and Android mobile apps. They found developers from overseas, and started building apps for their customers from the ground up.
A few apps in, they started to realise that they were building the same things for every customer.
Separate code bases are needed for iOS and Android, but they needed to build a dashboard for the clients to manage typical things like push notification messages used to send updates to users, and content management tools to manage the text visible in the apps.
Every time changes were required for these elements, a developer was needed to push the new updates, or files.
So they thought: “Why don’t we build the fundamental pieces needed for mobile apps and then we can customise the apps from there to change the layout, and add additional features?”
So they built Buildfire 1.0, which:
Our purpose statement at BuildFire is:
"BuildFire empowers the business professional to solve complex problems with elegant mobile solutions that are simple to build, easy to manage and available to everyone."
Today, we have apps being used in every single country except for North Korea.
We’ve had great success, because we’ve already created all the fundamental mobile components that typically take many months to develop.
If you’re serious about developing a mobile app, chances are we are a perfect fit!
Maybe we’ll see the North Koreans using BuildFire in the future! I can see how having these common reusable components is a pretty smart idea. It’s efficient! Every app needs login / logout screens, password management / reset functionality, basic navigation and settings management etc. Every company with a decent app will expect to create these items, they’re pretty much universal, so it makes perfect sense.
How would you describe the app builder market today, and how would you describe your positioning in the market, in comparison with your competitors?
We’re very aware that there are tons of competitors in our space, and you have 2 different options: i) rigid platforms where you’re quite boxed into the functionality offered, or ii) huge monster companies like IBM with products where you still need to build everything up from scratch using their tools, although for small businesses, spending several hundred thousand dollars on tools like that just isn’t a realistic investment.
With Buildfire we sit in the middle, we have a quality product, and scalable core infrastructure, we provide customers with a management dashboard, and we have a bunch of features that can be used across a range of apps to solve problems, or to capitalise on opportunities that are relevant for businesses.
Just to clarify, what kind of volume of apps does BuildFire manage?
We have 5,000 apps in the App Store, and over the course of 5 years, over 10,000 apps have been created.
Thank you. So, what should a person know before getting started with Buildfire?
Be aware of the options available.
When we do a demo with a client, or prospect we’ll educate them and say: “You can hire a local developer in your own country, and potentially get a great product, and the developer will speak your language, and be in your time zone, but you’ll be paying a high hourly rate. Or, you could outsource the development overseas for $30-40+ an hour.
Then there are the app builder platforms which are quite rigid, and whales like IBM, and the more full-featured ones like ours.
Do you class yourselves as a SaaS business?
We are a SaaS platform. We have apps that have millions of end users on them. We can set up your app, and develop code for you, or you can have your own developers, or designers do the work for you.
Alternatively, you can figure things out for yourself.
Could you give us an example of how long it might take to build an app using your platform?
You can build an app in less than a week!
That's fast! What kind of app?
To give you an example, an education app. Without any technical, or coding knowledge, you can go to our website, click on the button in the top right hand corner to say you want to build an app, say you want to build it yourself, choose an education template, name it, and start putting in your app icon design, your landing screen designs, and start uploading your YouTube videos, and your PDFs and you’re done!
We do have people come onto the platform and create apps very quickly.
As an example, there’s a blogger with a pretty good online following, who has scaled their app to millions of end users without doing any custom development on the platform, they just used the templates that we have.
At the other end of the scale, if you want to develop a custom app on our platform, you can spend 3 to 6 months developing custom integrations with different back-end systems, pulling in the relevant data, and displaying the data how you want it.
Once you’re ready to deploy to iOS, or Android, there are additional costs, and you’ll need to get the app approved.
There are some limitations to approval, and app marketplace submission costs to pay. The approval process can take between 1-3 weeks depending on Apple and Google and how they’re feeling!
(If you're wondering about app submission costs, these are $99 USD annual membership to have an app in Apple's App Store, and a $25 USD one off registration fee for the Google Play Store.)
Yes, I talk about that in Don't Hire a Software Developer Until You Read this Book, my handbook for tech startups & entrepreneurs. If you’re not careful, you’ll play “app ping-pong” with Apple in particular, who will bounce your app back to you repeatedly if it’s not up to their standards.
Allow plenty of time for app store rejections - especially if you’re new to app development, because you’ll have to keep resubmitting your mobile app until the folks in the app marketplaces are 100% satisfied.
This is also why product, and usability testing throughout the development of your app is so important. Even if you’re blind to the bugs, usability issues, and kinks in your app, the app stores won’t be and you could end up with a long list of amendments to make before you’ll be allowed into the app marketplaces, frequent feedback means that you can “clean up” the app as you go along, rather than having a shocking amount of rework to do when you mistakenly thought the app was ready for use!
The “back-end” of the product, and what goes on behind the mobile screens is the backbone of an app, so when I prepared my questions for you, I wanted to consider how well different app builder tools can support long-term growth. These NFRs, or non-functional requirements, are capabilities, qualities, and boundaries that a system should have that go beyond the functionality and features that an app user can see, or touch. Often people don’t give them a lot of thought, but without these, most software would be unusable, or of extremely poor quality.
EXTENSIBILITY is about the ability of an app to be extended so, I’d like to confirm whether it’s possible to hire a coder to do major coding on top of the existing platform, or to add custom code within the app? How would this work?
If you wanted an ecommerce store, there’s no way you’d build an ecommerce platform from the ground up, you’d go to Shopify, and if you were going to go and start a blog, you’d probably go to WordPress, because they power something like 30% of the world’s websites, and it has templates, and plugins.
We also offer templates and plugins, and we say that what WordPress does for websites, we do for mobile apps.
If you need something that’s custom, we can help with that. People come to us and say: “I only have $1000 and I just want to set up an app to help us communicate more effectively with our customers”, then 6 months down the line they say: “Hey, I want to integrate our back-end ordering system into the app, so customers not only get announcements about new products, they can order products using the app.” We can then do that custom back-end tie-in for them.
You can also use your own developer to create the features you want, and integrate that feature into our core. We have a developer portal that allows for a fully custom mobile app on the front-end to be built while leveraging our core solution.
MAINTENANCE, AND AVAILABILITY OF THE SERVICE
What is the standard uptime / availability of your service?
(If you're wondering, that translates to just over 7 hours of unplanned downtime per month...)
How do you monitor app health and maintenance for each customer?
We have a DevOps team constantly running tests on the servers to ensure that each app is healthy. When there is an issue with a feature the customer reports the issue and our support team creates a development ticket and our developers fix the issue.
How would I report an issue and get it resolved?
Each customer has the ability to reach out to our support team through the BuildFire Web Control Panel, and to notify our support team of an issue.
Our support team reviews and confirms the issue, and then creates a development ticket. When the issue is fixed we notify the customer and ask them to test the fix.
What’s your average turnaround time for fixing production bugs?
It varies depending on type of issue.
What security measures exist to prevent app cloning, hacks, and to keep customer data, including credit cards safe?
We run penetration tests regularly (this involves hacking, or attacking one's own systems, or hiring testers, or specialist testers such as "ethical hackers" to do this for you, to identify vulnerabilities so they can be addressed.) We maintain the most up-to-date standards related to data compliance.
SCALABILITY is the ability of an app to grow, and to support growth in terms of increased users and other increases in demand for resources such as database storage, memory, and other computing requirements.) How does BuildFire enable users to scale their apps?
Finding an app builder product that you can grow with is something that I’d encourage every business to be conscious of as they develop their mobile strategy.
With BuildFire, you can start small, and grow, so that mid-way through the process, you don’t have to switch platforms, because you can’t scale and have to deal with that headache.
We have a global cloud infrastructure that handles scalability and any latency issues related to geography.
Latency issues present themselves in the form of slowness and delays when using apps. You can find a checklist of NFRs taken from one of my software survival guides here.
Let’s explore this further - if downloads of my app suddenly exploded, and the number of daily users I have on the app dramatically increases, say from 1,000, to 100,000, to 1,000,000 daily users just to give an extreme example (to put this into context, Twitter has more than 150 million daily users, and Instagram have more than 500 million daily users) or I had a sudden extreme spike in traffic, which can happen if content that drives visitors to your app were to go viral, for instance, how would BuildFire handle that? Are there any boundaries on scalability?
That is why we recommend using a service like ours! Those big headaches about scaling up to many thousands of users are things you don’t have to worry about as a business owner.
As usage increases, our architecture spins up multiple servers to handle an increase in demand.
Can Buildfire apps be internationalised to support multiple languages?
Yes. We have over 20 languages that an app administrator can choose from to set as the core language for standard fields. Additionally, an app administrator can build different sections with the same content in different languages.
If I build an app using your platform, who owns the app, the code, and the Intellectual Property (IP) behind the app?
The content, data, user information, revenue generating potential, and design is 100% your property.
BuildFire has developed over 50 different features (e.g. YouTube integration for video streaming, chat forum, etc.) We own the IP for those.
We also provide it as an open source feature, so if a developer wanted to make a copy of the code, enhance the feature, and maintain it, then that developer or app owner would own the IP.
Additionally, when we develop custom features / integrations for our customers, the customer owns the IP.
What happens to apps that are not in use, but still exist on your platform?
Do those customers still pay you a fee, and can customers leave “dormant” apps on the platform for an extended period if they need to?
We provide the ability for a customer to remove their app from the app stores and pay us a small monthly or annual fee to keep it "dormant" whilst still retaining access to their app. In the event they cancel the hosting subscription altogether, then the customer would no longer have access.
In the event we develop a custom code (plugin) for a customer, they will always have access to that code because they own the IP.
What skills, or knowledge are needed before people start using your tool? Are there any top tips that you can share for new BuildFire users?
First, they need an idea for an app that solves a problem.
They also need the time to add content into the app, and to make it an app that is worth downloading.
If users are not doing any custom development, the app still needs to be made as attractive as possible using the features, or templates we provide. You can use an online design editor like Adobe Photoshop or Adobe Illustrator to create app icons, loading screens, banners, elements, and tools to crop and resize images.
We recently launched a photo editor right inside our platform too, so that’s another option.
What you don’t need is a development background.
My mom is the least technical person I’ve ever encountered. I said to her: “I want you to build an app” and she said there’s no way she could ever do it, but I talked her through it. She selected a template, and we started dragging and dropping, and adding and removing features, and before she knew it, she had developed an app.
We have a full development and design team to assist you. It’s not a 1 person development team, where if something happens to them, you’re out of luck. We have a team of 35 people to support you.
Planning, and clarity are essential, in terms of at least having a clear starting point in terms of a target market and the key features you need in order to solve a problem, otherwise you’ll go round in circles without a clear idea of what you’re trying to achieve!
Can you give us a high-level breakdown of the types of people, and businesses that use your app?
Typically, there are a few types of customers – there are customers with a design who have a few support questions, and we answer them, and they’re off to the races.
The next type does not have a design background, and they want to set up an app, and do most of the heavy lifting but need help from a designer.
Are there any use cases for which your platform would be unsuitable? If so, why?
In the event a customer wanted to develop a mobile app game that needed a high-sensitivity touch screen, we would recommend developing the mobile app from the ground-up for iOS and Android.
If someone wanted to mix and match – to do some DIY work, and get some design help from you – how much should they expect to spend?
We have a professional services team, and a design team, and in 3 to 5 hours they can work alongside a customer to help them with the design related elements that the business owner might not know how to do themselves.
5-10 hours of work for our design team might cost $750 / £565 upwards. For that price, we’ll have a designer create some design assets for you, and help you set up a structure for your app, and show you how to put the content in it, so when you’re ready to publish the app it’s aesthetically pleasing to whoever is going to download it.
From there, the sky’s the limit. It depends how much custom work you need.
We have custom apps where users have spent a quarter of a million dollars on customisation, and built apps for Fortune 500 companies that have paid us $150,000 for a custom integration to their back-end employee management system. At the other end of the scale, we have a small, non-profit church with a budget of $500, who pay us $60 a month to have an app so they can better communicate with their audience.
So it really varies!
Can we talk more about the key features of your app? Which features and benefits do you think are most helpful for users? You mentioned photo editing, but also your templates…
A lot of people need inspiration to start with.
If you go to Buildfire.com, and choose the option to build an app on your own (see the previous screenshot above), and right there you’re prompted with a range of options as a starting point; whether it’s a university app, an internal communications app, a restaurant app, including online ordering features – there are different options that people can choose so they can get started right away.
So, for example, if I’m a restaurant, I may have a bunch of people who buy from me repeatedly, and I might want a lot of features for my app:
All the features I’ve just listed are already developed, but if you don’t want all those features yet, you can choose which ones you want, and remove the others with just a click of a button to edit the app.
The list above is a nice starting point for noting down the list of features you require.
Just start by saying “I want customers to be able to do…. [insert activity] using the app” and create a list of items grouped into topics, or categories.
Agile teams will say “As a customer, I want to be able to [Insert activity], so that I can [insert benefit].”
This is done to make sure that build requirements are clear, but also because by stating the activity and benefit, you can really see what the customer will get from using each feature, and this will help you to prioritise one feature over another in terms of value. This is important, because there is ALWAYS more to do, than time and money available, so by picking the right activities and benefits, and not wasting time on low value, or “meh, so what?” features (even if YOU personally like them) this can really make a difference. In the interview with Christopher Gimmer from Snappa, we talked about teams being more excited over features than their customers, and this is a very good way to waste time and money!
Two entrepreneurs could choose to build the same app, and one could end up with a much better product, because they made better decisions about which features to build (and which to drop!) This will also come down to how well the entrepreneur identifies, and interprets the needs of their target market, the problems they have, and the method they use to solve those problems. So don’t just build based on your own ideas and opinions – you need external feedback!
What other advantages do app builder tools have over hiring a developer to create an app for you?
A big one is this - when you hire a developer to build a mobile app, you might say: “I want people to be able to book rides, and on the other side: “I want drivers to be able to see those rides, and choose a ride, and despatch their vehicle to collect the user.”
I’m talking about Uber, right? But then the developer finishes development for your Android, or iOS app, and you say: “I also want to be able to see all the rides coming through, the back-end analytics, what’s happening, and who’s being dispatched” and the developer says, “well, you didn’t tell me you needed that before”, and you say “well that’s obvious I need to be able to manage this!” and they say, “Well… that’s an extra $X,000.”
What we’ve done at BuildFire, is built up a web control panel, where everything that has been built, can be managed, along with a robust analytics system, because whatever you’ve selected for the front-end of the app that the user can see, needs to be controlled and managed from a business standpoint at the back-end, and all that needs to be considered.
A developer might literally develop exactly what you’ve asked for, but not necessarily think about all the use cases, (the scenarios and circumstances under which users will need specific functionality) or edge cases (less common scenarios) that you haven’t thought of because you’ve never developed software before.
That’s one of the key challenge in building software for people who are new to it. Be careful what you ask (or don’t ask) for! This is where Purposeful Products steps in to help its clients.
You do need to plan at a more detailed level than most entrepreneurs realise when they first start thinking about building an app, otherwise both you, and the developer(s) relying on details from you will be stumbling around in the dark, and this is often how people end up with a “bad” product that isn’t fit for purpose because it doesn’t hang together well, or have all the key elements it needs.
Nothing is obvious, and everything has to be clearly stated because developers aren’t mind readers, and are expecting you to provide them with information because you're "the boss", and you're paying them to do a job for you!
People often forget (or don’t know to ask about) account administration, app monitoring, analytics tools, and functionality (or integrations) to provide customer support.
The onus is on the entrepreneur to think of these things and be clear about how the whole app needs to work.
The problem is that entrepreneurs new to tech don’t yet know about all the elements that go into building an app, so there are often big gaps in their knowledge about what is possible, and what they should do, and ask for.
Book a free 30 minute consultation session to ask us any questions about getting started via our Calendly appointment booking page: https://calendly.com/purposeful-products.
When you develop mobile apps, you have to develop them in multiple languages – possibly for iOS, Android, or Windows (although it’s a little outdated) so you have multiple coding languages there, and you’ve got to hire a developer for each one of those, because finding someone who knows how to write code in all these languages, is not typical…
(iOS programming languages include Swift, and Objective-C, and Android apps can be coded in Java, and possibly C, or C++.)
Right, and even if they can develop in 2 or 3 of those languages most developers have a particular strength, so they will be more proficient in one than the others, so it might actually be best to hire a specialist who really understands each platform so you get the best results in each case…
This is why hybrid apps can be hugely convenient - another topic I cover in Don't Hire a Software Developer Until..., Hybrid apps are written in HTML5, and display characteristics common to both native apps developed exclusively for a particular app store, and web apps. They are actually web apps, which can put into "wrappers" and submitted to the Apple, or Google Play stores. Sadly, we've worked with people who had already paid to have an iOS app built by the time they made contact with us, when they could have built a hybrid app suitable for the web, iOS, and Android.
If you don’t require complex app gestures, a hybrid app maybe more than adequate to meet your needs, so if you want to build an app, consider how viable a hybrid app is before you shell out cash for separate apps.
It’s also important to remember that an app is a living breathing thing, it’s not like a website that you can build once and it’ll work as long as you keep paying your hosting fees.
iOS and Android come out with new operating system updates every 3-6 months, so you’ll probably need a developer on hand to maintain your mobile app(s) full-time.
We’re always maintaining, so when the iPhone X comes out, we’ll be developing updates for that app - you’re also paying us for that.
You’ve got to think about:
I explain how to plan what you need to build, step-by-step, and to create user journeys, and wireframes for your first software release in Don’t Hire a Software Developer Until you Read this Book. Understanding the components of an app, including what you can see, as well as what is needed behind the scenes, at least from a high level is important, and I explain all that in the book and audiobook, because how well you cover the bases can affect your success too.
There are different types of developers - you don’t want a rookie developer, or a “yes man” who won’t question you, ideally you need assistance from one who understand tech, and business.
You do need a business minded developer to guide you.
Aside from charging upfront for an app, does your app handle in app purchases, and/or support monthly recurring subscription charges?
Yes. We have an integration with Apple and Google Play to facilitate in-app purchases.
This feature allows the app administrator to segment parts of the app based on in-app purchases. Once a purchase has been made, then the section is made available to the user.
We provide in-app purchases on our Professional Hosting Plan for $149/month.
Can you talk to us about last years’ Apple's announcement? This looked like a serious threat, or even “the end” for apps created using templates, and the app builder market as a whole:
From Apple’s App Store Review Guidelines:
“4.2.6 Apps created from a commercialized template or app generation service will be rejected.”
What are my options following this change?
In the US, a large number of people use iPhones. When Apple released its 4.2.6 guideline saying that people could no longer use services like BuildFire, that was a big issue for our company, and other services like ours.
What Apple were saying was that they are trying to clean up the quality of apps in the App Store, meaning that they want unique apps. But the problem is, whether apps are templated, or custom many requirements are the same - people want geolocation, push notifications, list views, map views, to sell products…
Apple has since released an update that said that people can still use app builder platforms, and as we move forward, app builder platforms aren’t having specific issues having apps approved in Apple’s App Store.
Thanks for that, Robert. It's great to know that the app builder market is still open for business, because your industry really has increased the options, and opportunities available for entrepreneurs.
Another important thing to mention whilst we're on this topic, is that apps which aren't very interactive, and are too much like basic websites will also be rejected by the app stores, so that's another thing to be aware of when you're building an app. I also mention that in my software survival guide.
I’ve found the latest version of 4.2.6, which now reads:
“4.2.6 Apps created from a commercialized template or app generation service will be rejected unless they are submitted directly by the provider of the app’s content. These services should not submit apps on behalf of their clients and should offer tools that let their clients create customized, innovative apps that provide unique customer experiences. Another acceptable option for template providers is to create a single binary to host all client content in an aggregated or “picker” model, for example as a restaurant finder app with separate customized entries or pages for each client restaurant, or as an event app with separate entries for each client event.”
You can find the updated guidelines here: https://developer.apple.com/app-store/review/guidelines/#minimum-functionality.
The challenge of being in tech / software development is that there is constant change, and these changes can have major implications for you as a business owner.
It’s important to keep an eye on app marketplace guidelines, as any rule changes issued by the app marketplaces can impact on your app sales, functionality, back end technology, and even your right to use the platforms themselves.
TechCrunch have also written an article on the topic that you can find here.
If that were to happen again, and Apple released another guideline like 4.2.6 then I think there would be a big push towards progressive web apps (PWAs). That is something that Buildfire is positioned for.
I’m glad you have that as another option, and one lesson from all this is try not to keep all your eggs in one basket!
This applies to all areas of business, for example:
Developing your own app, on your own platform gives you additional control, but this comes with risks too, so we aren't talking about making one single risk-free decision, or saying "this option is definitely good, and that option is definitely bad" (a nice idea, but impossible, because tech is too complex!)
This is about assessing the risks, and advantages and disadvantages of everything you choose to do, and minimising your exposure to them through: i) the decisions you make, and ii) the actions that you are able to take to reduce and control your risks - a fundamental part of project management, and protecting your business interests.
In the case of choosing an app builder tool, you need to do some due diligence research, for example:
Thank you, Robert. We've covered all these questions in the case of BuildFire!
What's next for your company?
BuildFire WorkForce for teams... we are working to help companies to "Streamline employee communications, Engage employees in a more meaningful way and Measure success!
Where can people go to find out more about BuildFire?
People can find us at: https://buildfire.com/.
24/5/2018 0 Comments
How to buy a software business like a BOSS! Step by Step advice from the experts at Flippa.com
Welcome to interview 3 in the software buying series on the Purposeful Products Blog.
We began the series with an overview of the common mistakes that business owners make when buying software to use in their own businesses, and what techpreneurs can do to make this process easier for customers.
In this post, we’ll be looking at buying software as a ready-made business opportunity.
You may have heard about people buying businesses and getting ripped off, or otherwise short-changed. There can be a lot of anxiety around making a wise decision and not having the “wool pulled over one’s eyes” when handing over hundreds, or even thousands when buying an existing business.
Chris Holle - a marketing specialist at Flippa.com agreed to speak to me about this topic, so in this article, we'll take a deep-dive into how to buy a software business. We’ll bust some myths, and give you a blueprint to follow to help you tackle a process that for many, is just as nerve-wracking as hiring a developer to create software from scratch.
Thanks so much for agreeing to be interviewed Chris. I’ve been looking forward to shedding some light on this topic, and helping people interested in this option to educate themselves about how to buy a software business the smart way.
Please tell us about your platform.
Flippa is a marketplace for entrepreneurs looking to buy or sell online businesses.
We started in 2009 after being spun from our sister company, SitePoint. We noticed that people were posting on message boards and forums to sell their online businesses (mainly websites), which wasn’t very efficient or safe, and realized that we could create a marketplace that helped entrepreneurs buy and sell these businesses, and we established an MVP in under 24 hours!
Fast forward to today, and we’ve had over $200 million in online businesses bought and sold through Flippa.
That’s impressive! What do you see as your USPs over alternative ways to buy a business?
Our biggest selling point is having more businesses for sale at any one time than other marketplaces, or brokerages may have in an entire year.
Whether you’re looking for a website generating $20/month via Google AdSense, or an Amazon FBA business generating $500,000 annual profit, there’s a high probability that we’ll have several businesses for sale at any given time that meet your criteria.
We’ve also greatly increased the amount of high-value businesses on our platform in the last 3 months by partnering with over a dozen different brokerages.
The number 1 fear people have about buying a company is getting burned by a bad purchase.
This could include overestimating the companies value and assets and buying a worthless, or very low value company at a high price, missing the signs, or being completely unaware of important points about the business that should have influenced the buying decision, (or given the buyer scope to negotiate a lower price) or maybe even handing over money and not receiving a business at all!
What can people do to avoid these nightmare scenarios?
This is definitely a fear when purchasing a business, especially through an online marketplace. While virtually all transactions on our site go smoothly, there are cases every now and then where people feel that they’ve been ripped off.
If someone plans to buy their first business, there are three things that it is absolutely crucial to understand before placing a bid:
1. Understand how to value an online business
Business valuations typically range on a 2-3x annual net profit basis.
So, if a business generates $15,000/year in revenue and $10,000/year in profit, the business (on average) will most likely be worth anywhere from $20,000-$30,000.
Factors that also influence the value are:
2. Understand due diligence
If there’s one point that I could leave each reader with, it’s understanding how to conduct due diligence on an online business.
Due diligence is the most important activity by far when buying an online business.
We’ve put together a Due Diligence Checklist that new buyers should review before purchasing anything on Flippa. It covers the basics on conducting due diligence
One of our top buyers on Flippa has stated that he spends roughly 5-6 hours reviewing a site, the financials, traffic, monetization, backlinks, etc. He mainly buys websites on Flippa, but the due diligence can (largely) be translated to other business types. We have a video which outlines his success story, and I highly recommend watching the full interview.
3. Make sure you know how to operate the business.
This ties into the due diligence stage, but is a big factor in itself.
Most of the time, people that feel scammed simply didn’t take the time to understand how the business operates.
For example, if someone sees an eCommerce site making $1,000/month in profit and ends up winning the auction without performing due diligence, they may not realize that the owner spends 3 hours per day packaging and shipping the items, with another 2 hours per day running social media ads that drive traffic to the store.
If the new owner doesn’t have the time to package and ship the items, or knows nothing about running social media campaigns, they may not be able to run the business as effectively as the previous owner.
To sum this up, when buying a business, make sure you understand the value of the business, perform proper due diligence, and have the experience, or knowledge to run the business.
Thank you! That information is gold.
Unless you’re going to hire a competent person to manage the business for you, you must know what needs to be done, how often, and how to perform the essential activities needed to run the business to a high enough standard - otherwise things could unravel pretty quickly. Whether you have someone build your software from the ground up, or buy it, we’ll be launching mini-courses on different aspects of running a tech business soon, which in addition to reading Don’t Hire a Software Developer Until you Read this Book, will offer additional information and guidance for tech entrepreneurs. Bear in mind also that even if you buy your software business, unless you never intend to improve it, upgrade it, fix bugs, or perform other maintenance on the software, or the platform it runs on, you’ll still need to hire tech staff to help you!
How do you help purchasers make informed decisions? What useful information and indicators around the Flippa site can you point out as examples?
From the get-go, each listing has a quick screenshot of the revenue, profits, and traffic (where applicable). The first thing you’ll see on any business listing is this:
Here we see a summary of the business, including:
We also require all sellers to add revenue proof to all listings that claim revenue.
This is typically screenshots of their accounts (in this case a screenshot of Amazon Affiliates dashboard). This helps verify that the revenue is legitimate.
Below this, we have detailed breakdowns of the traffic and financials. If a person has Google Analytics on their site, we have a plug-in that allows us to pull in all the site’s information, so a user can quickly see the verified traffic broken down by page views, visitors, traffic sources (organic, direct, social, etc.), as well as what countries are the top visitors.
We really aim to provide as much up-front information as possible, so each seller can really show their business in the best light possible. This also helps the buyers, as it’s less work for them during the due diligence process.
That’s great. I didn’t know proof of revenue was now required, and I like the fact that you’re pulling in this “real data” from websites. That would inspire confidence.
I can also see how due diligence (in terms of the buyer’s capability) fits in here. You might ask:
“Do I know how to manage the part of the business that relies on Amazon Affiliates to generate income?”, and
“Do I know how to run a WordPress site?” and if not, there is a need to skill-up, and/or to start looking to hire WordPress specialists. (We’ll be interviewing a business owner whose company fixes WP sites soon!)
You’ll also need to ask yourself if you even want to learn about these things. Be honest with yourself, and if not, you’ll need to think about hiring, or outsourcing, and whether the business can support the monthly amount you’ll need to spend to hire capable staff to take care of the things you don’t want to get involved with. Trying to run a business that you don't have a passion for is never a good idea. They need care, and attention to grow!
What are the best ways to assess the “true value” of businesses? What are some key signs that a business is overvalued?
Due to our auction format, businesses on Flippa tend not to be under or over-valued.
Our process is much like eBay’s, where users place bids on businesses. This is perhaps the best method of assessing the true value of a business, as the market will dictate the price of the business. If the business doesn’t meet the seller’s reserve price, then that means it’s worth more to the seller to keep the business than to sell it.
But surely some businesses must be undervalued? What about them? What are the more savvy and experienced buyers looking out for that others might miss?
Businesses that might be considered under-valued, are typically ones where the seller either doesn’t have the time or knowledge to grow the business, resulting in stagnation (or possibly even a decline). The buyer then sees this as an opportunity for them, as they may have the time, or expertise to take the business and run with it.
One of the best examples I can give is where a Flippa user bought a website for $1,250, and in two years was able to grow the site to generate $5,000 per month in revenue!
We have the full case study here. The buyer quickly identified that this site had excellent Google search rankings...
Simple but effective due diligence - Google the business, and see where it ranks!
The previous owner was unable to capitalize on long-tail keywords, primarily to do with local search rankings.
After using the buy-it-now option, he quickly transformed the site by targeting these keywords that were relatively uncompetitive, and due to the site’s original authority, it was quickly able to take over these markets. He also knew how to implement an additional monetization method, by adding lead generation forms and selling those leads.
To sum this up, the best businesses to buy are the ones where you can use your knowledge and expertise to grow the business.
[Here’s a link to a post about long tail keywords from Neil Patel, an authority on marketing and SEO.]
Brilliant! Can you give us some “due diligence” tips to use when buying software in particular?
I would say the biggest due diligence for software specifically is to test out the product, and see what you can do to make it better (if that’s your goal). Ideally, you’ll have the technical expertise to navigate around the code of the software to the point where you can make any changes or updates where necessary.
Some SaaS businesses that have sold on Flippa require a hands-on person developing it. Others have been completely passive and haven’t required any changes to it and instead needed marketing expertise to come in to grow the business.
Definitely. From my perspective, I'd advise that the buyer test the product, and look for issues (and opportunities).
Try and find out if there’s an up-to-date list of tasks to be taken care of, bugs to be fixed, and customer requests (or complaints) that has been maintained by the owner, or their team. This will give you an idea of the more tech-related jobs you’ll need to do in the first 3 to 6 months of running the business, in addition to sales and marketing, customer care, and other general management tasks.
Are there any other important considerations when buying software, as opposed to other types of businesses?
Just make sure you’re comfortable with operating that type of business model.
If you’re buying a software business, you should either be experienced enough to make changes or updates to it, or have an employee or contractor you trust to make the changes on your behalf.
Another suggestion would be to have the seller be available for questions for longer than the typical 3-month hand-off period. Many sellers (typically businesses selling for more than $10,000) are willing to hop on Skype calls to help the new owner adjust to operations.
It might be in your best interest to talk with the seller and see if this can be extended, or if s/he can offer some time in the future to work with a developer and explain the product. This is not the norm, but is not uncommon either.
Finally, I think it’s important to look at the reviews. Are people giving the product good feedback? Find out how this plays out and see if this is something you will need to invest your time in to improve, should you end up buying the business.
Reviews can be a great source of data. If there are enough of them, it should be easy to do a SWOT analysis of the product based on:
If I'm buying a tech business, I'll need to be given the source code for the product(s) too. How would that work?
My understanding is that they send all necessary files over (typically through Dropbox or Gmail) that the new owner would need.
When buying a tech business, make sure to outline everything you need from the seller before placing a bid.
Ok, well I would suggest the following:
You can download a PDF of the due diligence advice and the key points, and checklists, including the checklist I’ve provided above here.
These are all excellent things to ask about, and to make sure you understand before making your first bid.
Is there a formal process for handing over passwords, access codes and other important information?
This process varies for each buyer and seller. Typically, it’s sent in a notepad file or word doc, but there really is no set way.
For obvious reasons, it’s always important to change your passwords and financial information on each account prior to sending, or upon receiving access to these accounts.
Thanks for mentioning that.
So, Chris, how does one avoid coming across as a complete “noob” on the Flippa website?!!!
A problem for many people new to Flippa is that they’re worried about asking the seller too many questions, and decide to not ask them.
If you’ve never had control of a website or other business assets transferred to you before, it’s perfectly okay to talk to the seller about the process so you understand it more.
By not asking questions, buyers risk missing very basic information that would have easily turned up in conversation had they asked.
The most common mistake is buying a business and expecting it to run exactly as it was under the previous owner, but this is determined by how well the buyer understands the business and how to operate it.
When buying a business, you should always feel comfortable with the state of the business before placing your first bid.
Thanks Chris. No-one wants to come across as a pain in the behind, but get the information you need because you’re the one spending your hard-earned coin!
What are some useful do’s and don’ts when interacting with sellers?
I think just common sense stuff like being polite. And again, never be worried about asking too many questions.
We’ve talked about testing the goods, in other words assets such as SaaS, or web apps, mobile apps, Chrome extensions, to see just how useable they are, how buggy they are etc. You could even sign up as a user, in some cases to see what the experience is like!
If possible I’d also recommend asking for customer demographics etc., and confirmation of compliance with state and national regulations and now GDPR has come in, that too, if you want to serve, and manage the data of EU customers, or have clients who do. Not only will these give you a lot more information about the state of the business, but will also help with the smooth handover of the business.
How much detailed information about a business can buyers get usually access to before the sale?
As a buyer, you can expect to get nearly all the information upfront, excluding some confidential information that would be shared post-sale.
This confidential information may include suppliers, or employee names, etc. Buyers might not give these details out for fear that a competitor is simply fishing for information.
It shouldn’t be much of an issue for a seller to provide this information if it isn’t confidential.
Never be afraid to ask! It’s the seller’s job to make you feel comfortable, and it’s your job to do the due diligence. If the seller refuses to provide the information you’re hoping for, it may be best to walk away.
Is it common to acquire social media assets too, such as Twitter, Pinterest, Facebook, Instagram and YouTube accounts or channels, any banners designed for these sites, and all the existing followers as part of a sale?
This is a very standard practice. Unless stated otherwise, it is pretty much implied that when you buy a business or website on Flippa, that you are getting all of the assets.
Again, this is something to double check for during the due diligence stage, but only under very rare circumstances are social media accounts and other assets not included.
What are some other things that buyers could reasonably expect to acquire as part of the sale?
Some common items included in the sale are:
Thanks for those. If you’d like a checklist with ALL the things you should ask that have been covered in this post, you can find one here.
What kind of contract, or agreement should I expect to have with the buyer?
Sometimes a buyer will need to sign an NDA prior to buying the business. Many businesses for sale have an active audience, and if word got out the business was for sale, it could jeopardize their user base.
Another common agreement is a support period provided by the seller.
The length, and amount of time depends on what is negotiated between both parties, but having 1-3 months of post-sale support from the seller is fairly common, should the buyer have any questions on operating the business.
One other agreement may be a non-compete. This is typically for sales $25,000 and up, and prevents the seller from using their knowledge of the business and industry to set up a competing business in the same space. For example, if you bought a software business that scraped emails from website, you may want to have the seller sign a non-compete that prevented the scraping of sites for emails, as they could develop another tool and market that same business using the information they already knew about growing the business in the first place.
Who supplies these documents, and do I need to hire a lawyer?
For most sales, a lawyer isn’t necessary. If you’re buying a business for over $100,000, it may be worth it to have a lawyer look everything over, and make any necessary amends, or additions.
We do provide a template for NDA’s for sellers, but we highly recommend reading through it, and making changes to it as needed to ensure it is relevant to the business.
What should a fair contract include, or exclude?
What may be considered fair to one party, may be unfair to another. At the end of the day, both parties want the best deal for them, and that’s something the buyer and seller will need to work out together.
At what point should I hand over my money?
Only send the money once the auction closes. Most transactions will be through Flippa Escrow, which is by far the safest way to send money and gain control of the assets.
The reason for escrow is the money isn’t released until the seller sends over the account information, and the buyer is able to take full control of everything.
Once that happens, the funds will then be released to the seller.
If you’re using PayPal, (which I really wouldn’t recommend for sales over $1,000) then talk with the seller, and make sure they are ready to send everything over before you send the money. While this goes without any hiccups for the majority of the transactions, there are transactions every now and then where things can go awry. The only way to guarantee a transaction going smoothly is to use Flippa Escrow.
ESCROW is often used to protect the interests of the buyer and seller. I discuss it in my 3rd book, Don’t Buy Software for your Small Business Until You Read this Book in the scenario where a business has hired a software company to build a product for them, but it can also be applied to the successful fulfilment of software services, and for selling items, as it is in this case.
How about red flags? What are some common warning, or danger signs when assessing a business, or the behaviour of a seller?
If a seller doesn’t want to provide certain information, or doesn’t want to sign a non-compete, that should be a warning sign.
None of this should immediately cause you to run, but it’s something worth looking into. If the seller doesn’t want to give you certain information about the business, it’s important to know why they’re doing it. Are they worried about revealing information to a competitor phishing for info on the site, or about someone finding out the site isn’t what it’s cracked up to be?
As for non-competes, some sellers may operate similar businesses. This is something they should be disclosing upfront anyways, but if a non-compete might hurt other opportunities, then it’s not in their best interest to sign one. When cases like this arise, then as a buyer, I would go back to the seller and create a very specific non-compete form that directly pertains to the business I am considering buying. If that doesn’t work, it comes down to whether you trust the seller to not compete directly, and if that’s a risk you would be willing to take.
Can you complete the sentence, “Run like hell if ………………”?
… the seller wants to do a deal off-platform!
Obviously, it’s in our best interest if a deal remains on our platform so we can collect the success fee from the seller, but as a buyer, the risk of being scammed skyrockets when you go off platform and there is no real upside. By remaining on platform (and subsequently using Flippa Escrow), the chances of being scammed are virtually zero, provided you perform the proper due diligence.
Ah. I've discovered that the seller is in a different country to me. How does this affect the process?
People buying and selling websites may be located all over the world. Since the majority of these businesses are location independent, it’s common for people to be in different countries.
The biggest barrier is usually language. But with translation services, etc. this is greatly diminished as a problem.
Is there anything I should have asked you, but haven’t? ;-)
I can’t think of anything... you’ve been very thorough!
Thank you! What advice can you give to readers if they buy a business and things go wrong?
The first step is to identify why it went wrong. Once you understand what the problem is, reach out to the seller and ask for their advice. This may, or may not be included as part of the deal when buying a site, but whether it is or not, most sellers are willing to spend a bit of time to help you out.
Many of these businesses only had one prior owner and despite the fact they sold the business, they do want to see it succeed.
If you can’t seem to “right the ship,” so to speak, it may be best to chalk this up as a learning experience and list it back for sale on Flippa. If you do this, it’s best to be very open that you bought the business and it hasn’t worked out for you for reasons x, y, and z.
As a seller, it is always in your best interest to provide as much information as possible, and just because it isn’t working for you, that doesn’t mean it won’t work for someone else.
Can you tell us about any software purchases on the Flippa site that have become success stories?
In 2017, one user sold his SaaS business for $70,000. The business was a global wedding planner and invite list, and was quickly taking off. The original creator and seller, Ben, sold the business because he had no time in his life to run the business, and as a result had stable, but not growing, revenue, despite the excellent functionality and feedback the product was receiving.
A nice payday indeed!
What else can readers learn about the process that smart buyers follow?
Due diligence, due diligence, due diligence!
Thanks so much for taking the time to talk to me Chris, I think people are going to find this post incredibly useful!
My pleasure! Thank you so much for reaching out.
Where can people go to find out more about Flippa, and how to get started with buying a business?
To get started, simply go to Flippa.com to create your account. Once you’ve done that, I would recommend browsing our Editor’s Choice section to get an idea of some of the businesses for sale.
Once you know what you’re interested in buying, you can search for your ideal business by refining your search criteria.
Good luck! ☺
Welcome to the Software Buying Series on the Purposeful Products blog, where we’ll be talking about some of the software you might buy to help you start, grow, and run your tech startup business.
The series will look at "buying" software from three different perspectives:
Most Purposeful Products clients are planning to hire developers to build their software, but reviewing these other avenues provides a balanced view of the options available!
We'll kick off the series by exploring perspective 1.
The first time I sat on a software selection panel was back in 2006, and in this post I’ll be sharing some best practice tips based on my experiences from more than a decade of working with clients to build, buy, and integrate software.
I hope this will help you avoid pitfalls (and regrets) when deciding on the right business software to use.
But here’s the twist - we’ll look at each tip from both the build and buy perspectives, so whether you’re an aspiring techpreneur, or already run a tech business, you’ll gain knowledge that will help you make better decisions - both when you’re looking to buy software, and when you’re busy building, and selling it.
As a tech-centric business, you’re likely to spend a large proportion of your time on product development. However, other tools and activities will also be needed to keep your business afloat, including those related to sales and marketing, customer care and customer success, accounting and finance, and tools for organisation and planning.
You may also be surprised to find that you, and your tech team rely quite heavily on software to help you to monitor, maintain, and manage your core product on a daily basis. I wouldn’t be surprised if a tech startup with a full range of “kit” uses at least twice as many software products as non-tech focused business owners!
The great news is that there are a great range of free and low cost tools that you can use to run your business.
But then comes the task of comparing different products in the space, and coming to a decision about which ones to invest your time, money, and trust in.
“Eighteen months ago, we invested in a CRM that turned out to be complete rubbish.”
“The only thing that keeps us sane is knowing it’s not just us going through these [technology related] issues.”
"Software is a continual challenge…”
These are some of the comments I heard during the 60 minute interviews that took place with the CEOs, and directors of small businesses when Purposeful Products sponsored a research project called In Their Own Words, focused on the challenges faced by small businesses.
The majority of the companies had recently bought, or were planning to buy some form of software, and several had had horror stories and negative experiences to share.
The findings from this research led me to write my second book: Don't Buy Software For Your Small Business Until You Read This Book.
Let's's start with a few general points to consider before we drill down to some more specific tips.
Show empathy and take a walk in your customers' shoes
Buying software can be a confusing, and stressful experience for businesses. Bear in mind that buyers:
If you’re developing B2B (Business to Business) software, be aware that research from major players such as the Gartner Group, the world's leading information technology research firm, has highlighted a growing trend; businesses without formal or mature IT departments are increasingly making software purchasing decisions without technical advice. According to a recent Forbes article: “The face of tech purchases, both buying and selling, is changing in the digital age.”
As a techpreneur you will have a competitive advantage if you become great at putting yourself in your customers’ shoes as you build, and market your software.
Consider how you feel, and what your needs, hopes and fears are when you’re operating in “buyer” mode for your own business.
What annoys, or frustrates you, and what makes the process more confusing? In contrast, what makes it easier?
Get to know your customers, and their concerns and preferences so you can remove issues and common bugbears from your sales processes.
This will also help you tailor your marketing copy to your audience - using customers’ language and expressing their sentiments in your marketing copy is a great way to grab people’s attention, and is another cue which can indicate that your product is right for them – you can see how Highrise CRM do this in my interview with its CEO, Nathan Kontny.
Let's move on to some specifics.
Common issues experienced by customers when buying software.
Some of the most commonplace issues and complaints that I hear about software, and software vendors are that:
1. It’s difficult to gather the required information.
Sometimes getting a straight answer to “Does the software do X?” is a challenge, and customers are often bombarded with calls to action to “Sign Up!” before it’s quite clear what the product does, or what its benefits are.
Some product websites are wonderfully mysterious - sometimes because of fear of the competition discovering their latest innovation or how they price their product – but this does nothing to help customers, and increases the time it takes for them to compare and contrast products, and ultimately to gather enough information to make a well-informed decision about the best product to buy.
As a software builder…
Provide information that will help customers to make quicker decisions
At the end of the day, indecision is painful for everyone.
If you can help prospective customers to do their research and gather information about you, to address their concerns, and to put a tick, (or cross) against the relevant items on their “must have” list, you could be several steps closer to making a sale.
Help people decide whether they want to give you their business (or not) as quickly as possible:
Make sure your marketing copy clearly lays out who your software is for, and what your product is able to do. It’s refreshing when product information is easily accessible. People will appreciate you for this - and for not wasting their time.
Have a script prepared for “meaty” questions about things like data protection, contractual queries, and refund policies, so those supporting your product can answer questions fully, and comprehensively when asked.
Have an FAQs page and address these questions there too – and keep it updated! Good, easy to use FAQs (Frequently Asked Questions) will also reduce calls and emails from customers who can’t find, (or are too impatient) to trawl through the information you provide if the answers they’re looking for aren’t easy to find when they visit your app or help pages.
Increase confidence with social proof and other evidence that the customer is making a wise decision if they choose your product.
Quotes, reviews, case studies, and testimonials can really help your cause. Even if these are Beta users, or former user testers, displaying some evidence of customer satisfaction on your website is better than none!
If you’re going to be operating in the B2B higher-end of the market, with expensive, or enterprise level software, customers may be even more discerning and may take longer to make product decisions. Can you offer the details of any customers who would be willing to vouch for you as a referee? Ask for permission to use them as referees now, so you already have a list of referees who have agreed to be contacted. (This will cut out delays whilst you frantically call and email your network to ask if anyone would be prepared to vouch for you.)
Be everywhere on Google. Most of us start with Google when we’re looking for products and services, so do your best to appear in organic search results (which you don't pay to appear in) for relevant keywords relating to your business, and have a good general online presence.
That might include:
Having your company set up on LinkedIn and on other social media sites with user names as close to your business name as possible (sadly I missed out on mine, but try and get an identical username / handle across Facebook, Twitter, YouTube, and Instagram, as an example.)
Getting your product listed online in the major software directories. These are listed towards the end of this post.
Increasing the volume of content available about your business / product. Why not take the opportunity to rank for blog posts that you’ve written for your own site, or appeared in as a guest blogger, or podcast guest?
Tagging your product, logo, and any relevant company images so these become visible under Google image searches.
This is an example of how you might add alt text to an image from the Yoast website, a great place to learn more about SEO.
Having demo / “how to” or “explainer” videos on your website possibly hosted by Vimeo, or YouTube, which will appear in video search results in Google.
This means that you have a chance to rank for text based content, images, and video.
Let’s take a look at a few examples for Calendly, a company that create calendar management software.
If we were researching this product, we’d see a large number of product demo videos online:
There are also lots of images available under the keyword “Calendly” – including their logo and numerous examples of the Calendly appointment booking page.
You can also rank in search engine results under “News” by submitting a press release to Google News, or via a PR (press release) company.
Some are fiendishly expensive, but you’ll find some services that come in at under $100 via the link provided.
If you have a business address, register for Google My Business too.
This will also increase your chances of ranking for your company name and bring up your business in search results relating to maps.
2. That it “ticks the right boxes" on paper, but in practice is difficult, or time-consuming to understand, and operate.
In this scenario, once businesses start to use their new software, they quickly notice problems with it.
The menu options are in weird places, the processes are illogical, it takes 8 steps to do what could be possible in 3…
Companies often get caught out because they don’t dig into the detail of how a product does what it does. The savvy software purchaser asks not just what the product can do, they find out how it does it.
To avoid this pitfall, get hands-on with the product, and give it a thorough road test using some realistic scenarios that you regularly encounter in your business, and always take advantage of product demonstrations, free trials, and the opportunity to “try before you buy” to get a feel of how easy a product is to use.
As a software vendor…
There is no point investing time and effort into a product if it isn’t easy to use.
People just don’t have the time, or interest in “learning” complex systems.
Think carefully about your user journeys, and user experience across all device types - desktop, mobile devices browsing the web, and native mobile apps.
Use familiar menus and placements that people already understand how to use (coming up with unusual styles of user navigation is a risk that could impact on user experience / usability. If you do, you absolutely must carry out user tests to be sure that your innovations really work before you launch.)
Keep workflows tight, and look for ways to make the each process as simple, and quick as possible.
Test thoroughly, and objectively – if this wasn’t your app, how would you feel about the way it works?
Take a look at the reviews in the Android and Google Play stores and you’ll see negative reviews where you’ll see people I like to describe as being mad or sad - they are either driven to anger by user experience flaws which they just can’t understand, or saddened because they desperately want the product to be better in specific areas, but find that it isn’t. They can see what the product could be, and what it needs… but it just isn’t there yet. These people don’t want to switch products, they just want the product to mature a.s.a.p., so it can fulfil its potential!
I truly believe that sad customers can become massive advocates of your business that stick with you like glue and tell everyone how great the product is - once their needs are better met.
Learn to spot them, and if they start to appear in your own business, pay attention!
Allow them early access to new features, and develop relationships with them, because they will get behind you, and be your cheerleaders, and they will tell you the truth about their views because they care, and want you to succeed.
3. Is missing important features.
Usually in this case, important features are forgotten, and there is a failure to anticipate how requirements for software may change in the future.
Taking on new staff, expansion in customer numbers, and changes in legislation, and internal, or external policies can all mean that software that was once adequate is no longer a good fit for a business.
To avoid this issue, be sure to cover all the bases by keeping a checklist of “must have” requirements you can use as a benchmark.
Consider what success looks like from your perspective.
What would cause you to feel delighted with your decision - or to feel disappointed? What ultimately makes the software worth the time, and money you’ll be investing?
Note down the top 5-10 key business activities that you’ll need to carry out, or problems that you want to solve, and write them down.
Once you have your list of deal-breakers, don’t wing it, or go off script, but stick to your key requirements.
If you’re a larger business, also speak with, or survey everyone who will be using, supporting, or benefitting from the new software, to get feedback and input from everyone about what the software should do, so important features aren’t overlooked.
As a software vendor…
It’s not your fault if customers forget their own requirements! However, being very clear on what features you offer will help organised customers to tick off key criteria on their lists with minimal effort, and will inform the less well prepared about items that they should be thinking about.
If there are features that customers want, that you don’t yet provide, make sure you highlight any “workarounds” (alternative ways to deal with gaps in functionality) that are available, so customers can decide whether your solution is right for them.
4. Is unreliable, or of poor quality.
After committing to a product, you may come to find that the software runs at a snail’s pace, or is unstable; “timing out,” and leaving you checking your watch, or distracting yourself with other tasks whilst it loads, crashing at the worst moments and losing work, and generally inspiring computer rage!
To avoid these pitfalls, make use of free trials, and pay close attention to how long it takes to perform commonplace activities.
As a software vendor…
Remember the 3 golden rules:
· Make it fast!
· Make it fast!!
· Make it fast!!!
Human attentions spans are at an all-time low.
There’s a debate about whether the “goldfish memory” attention span is a myth, but many sources report that goldfish now have the jump on us at 9 seconds vs 8 seconds (ouch!), so software should run quickly, and performance testing (checking how fast your app runs when performing different actions) and performance tuning (taking a range of measures to improve the speed of your app where necessary) are musts.
When testing, make sure you’re fully present and not just thinking: “Yes, ho hum, I’m doing some testing today, that was a little slow, but nevermind. It’s probably just my computer!” Instead, always test like an advocate of the customer: “Sheesh, I’d be mad if I was a paying customer having to wait this long for a page to load! What’s going on? I need to speak to the dev team about this urgently!”
Regularly monitor performance, including page load speeds, and the time taken to complete user journeys using your software.
This isn’t a one-time job when your software is first built - keep reviewing this as new features are added to your product, and the number and complexity of the journeys that your customers make through the system starts to increase. These changes will all contribute to your app slowing down. There are many different tech tools for performance management (ongoing control, and improvement of performance), and performance monitoring (for basic, and more complex stats and figures on performance), which can be used to help you to remain vigilant, such as Yslow, for performance monitoring.
I discuss performance testing, and many other types of testing, as well as the clever solutions that companies use when slowness in their systems can’t be avoided, in my software survival guide for tech startups Don’t Hire a Software Developer Until You Read this Book.
5. Does not support businesses in meeting legal, or regulatory requirements.
Even worse than suffering an inconvenience, this complaint can leave businesses open to fines, or even legal action.
No matter where you’re based, there is likely to be local business legislation in place, including Data Protection Acts, Disability Acts, and Privacy laws to comply with, as well as the new General Data Protection Regulation (GDPR) which becomes law in May 2018 and will affect you if you (or your clients) have customers in the European Economic Area.
Standards such as the Health Insurance Portability and Accountability Act (HIPAA), and the Payment Card Industry Data Security Standard (PCI DSS) may also be relevant to your business.
If you have access to legal, finance, security, and compliance teams then consult with them to make sure you haven’t forgotten any important legal, security, or financial factors that should have an impact on the type of software that you buy.
Online privacy, security, and data management are going to be hot topics for many years to come, so make sure the software you use helps you to operate within the law, and not outside of it.
Check the specifics of key regulations relevant to your business and industry, and get full responses from software companies which confirm whether they are compliant, and what measures they have taken. This may include gathering information about how they have interpreted legislation, and built, or configured their systems to comply with it.
As a software vendor…
If you are going to be collecting, storing, or processing EU members data, then GDPR may affect the way you build and run your tech business, and even where you choose to locate the servers that hold your customers’ data. (Servers located in the US, are not considered compliant with EU data protection regulations.) If you don’t already know about it, and will store, manage, process, transform, or manipulate consumer data on behalf of your B2B customers,’ start reading up about GDPR now:
Make compliance information easy to find.
Don’t make customers hunt for these details. Be aware that for some customers, this may be a key deciding factor when choosing a new software supplier.
6. Is incompatible with other software systems.
Your email marketing system comes from here, your CRM system comes from there…
You use a different system for your business email, which also contains a separate list of your contacts.
Small businesses tend to use lots of niche tools to run their operations, but even if the individual tools are satisfactory, often these do not “play nicely” with each other.
To bridge this gap, check if any integrations are offered by the companies that sell the products that you’re interested in.
Fortunately, software automation tools such as Zapier, IFTTT, Automate.io, Piesync and Microsoft Flow can be used to create connections between an increasingly wide range of products.
Try visiting pages like Zapier’s where you can type in the name of a product and get a list of all the integrations on offer.
As a software vendor…
Consider partnering with companies that offer complementary services to the same target market as your business.
Which software vendors you could form joint ventures with?
For example, a business that develops CRM software could team up with a company that provides accounting / invoicing software, so that when new clients are added to the CRM, it is easy to select the client in the CRM and then to send them a bill via the accounting software, and to update the CRM to confirm that a sale has been made, and the amount the client spent.
These collaborations benefit clients as their software processes become more seamless, and vendors also win because their products become more attractive when they work in harmony with other popular tools and enhance the customer experience. These ventures also raise the profile of both businesses, and widen their audience / customer base.
You can also approach Zapier and other automation software companies directly.
These businesses offer HUGE platforms for you to get more eyeballs on your product, and to showcase a variety of uses for it alongside other products.
7. Is more expensive to run than first anticipated.
“Ah. We didn’t factor those costs in when we chose the product…”
Unanticipated costs related to software purchases can be a real set back financially.
Keep a note of the monthly, quarterly and annual expenses, add-ons, upgrades, fees for services rendered, or other products or services you’ll need to get started, or to extract value from each product that you’re considering. Use this data to make like-for-like cost comparisons for at least the first 12 months, and to help you to assess the Total Cost of Ownership (TCO.)
Look at the costs and usage caps at the price tiers above the one that you need right now. Often companies don’t spend enough time thinking about what will happen when they hit the next, more expensive (and sometimes unaffordable) price tier. Will you take the financial hit and accept rising product costs, or start hunting for a replacement tool (and repeat the selection and set up processes all over again?
Choosing a product with a price-friendly model that your business can grow with will spare you from the upheaval of migrating to new products due to rising costs.
As a software vendor…
Avoid pricing models that mask additional costs, and necessary add-ons and extras required in order to use your service. Don’t bury this information. Of course you can make it look attractive, and justify your costs, or pricing structure, but make sure the information isn’t hidden away.
Few things aside from poor quality software leave customers feeling more annoyed, and manipulated than hidden costs.
8. Poor customer care
Consider customer support before you actually need it!
I like to ping an email to any businesses that I’m thinking of working with.
It’s surprising how many never respond, aren’t particularly helpful, or where it’s actually a challenge to contact them in the first place, because emails bounce back with a “this mailbox is not monitored” message!
Would this level of service be acceptable in an emergency?
The answer to this question should depend on what you use the product for, so consider that the quality and speed of customer care you receive should be better (and snappier) with products that you rely on heavily. If a tool is free, and non-critical to my business, I might give it a try even it looks like the lights are on, but no-one’s home, but if I’m paying – no way!
As a software vendor…
Don't set up a business and then go AWOL…
It leaves a poor impression, and it isn’t fair to customers - especially if you’re charging a fee for the use of your app.
Even if there are only one or two of you, there are ways you can manage customer support that are professional, and ensure that communications aren’t lost:
Let’s cover a few other tips to assist you with your due diligence:
Use comparison and review sites to gather information about the best products available.
As a software vendor…
Get yourself on these directories! They are seen by huge audiences and will help you raise your profile, and win more customers.
Be sure to check the “small print”
When buying software, read the terms of business, Service Level Agreement (SLA), End User License Agreement (EULA), or other forms of software licensing agreement before you commit.
Often these can be accessed from a link in the website footer of software vendors, or from the settings, or about menus in mobile apps.
Look out for clauses related to privacy. Is data shared? If so, who with? Where is data stored?
Who owns the content created using the app – does it belong to you, or the vendor?
Be aware that by using software, you may already be bound by the software vendor’s terms whether you signed an agreement, or not.
As a software builder…
Uh-huh. Most customers won’t bother to read your terms, but they should!
To be totally ethical, put your terms in places where customers would expect to find them.
Because these documents will also state what customers must not do when using your software, it is in your interest to make sure that people pay attention to them, and that you don't have users unwittingly breaking the terms of your agreement, because they just "thought it would be o.k." to share the same login and account information within their company, (or with a friend) or try and reverse engineer your code for a college project, for example!
As a final takeaway, remember the general rule - the bigger the role a piece of software plays in the smooth running of your business activities, the more time you should invest in the product selection process to avoid unpleasant surprises.
After reading this post, I hope that you feel more well-informed, both as a consumer and producer of software!
You will struggle to get much ROI (return on investment) if training is inadequate - the potential of your software can’t be fully realised without it!
Quality training will also minimise disruption within your business. If people have been well trained and know what they are doing, you will have a much smoother time transitioning to a new system.
Here are 7 ways to maximise the return on investment on your software through the management of staff training.
1. Select staff to act as "super users" or "power users."
Most businesses, or teams have at least one person who knows how to fix the printer, resolve technical issues and is the go-to person when these sorts of problems arise. Who is yours?
Consider asking them to become an advanced user of the system, able to help and support other staff.
Having internal super users reduces your reliance on external help. Multiple in-house experts can share super user responsibilities more easily, reducing the risk of you losing skills and knowledge when people leave your company. Allow additional time for super users to be trained and give them a head-start in learning how to use the product.
Super users may also be trained to manage configuration tasks (usually characterised by manual adjustments to data entry fields, label names, settings, menu options etc.) further reducing your reliance on your software provider. You may save money on fees and have changes made more quickly, but you will also need to consider the impact on super users’ "normal" duties.
2. Be prepared to offer refresher and mop-up training sessions to staff.
Don't attach any stigma to requesting refresher training. It's far better to allow staff to repeat training so they can be productive, than to have people unable to perform at their best because they haven't grasped everything the first time and are nervous about coming forward. Repetition is an important part of learning, so allow scope for refreshing staff’s knowledge and help them to reinforce the new information they have gained.
Repeat sessions will also be useful as a way to train new starters who had not joined your company when the initial training took place, or staff who were absent when others received their training.
3. Make sure training is contextual and relevant. Examples and scenarios provided during training should relate to the specifics of employees’ daily tasks and activities. Pointing out that “this button here does this, or that option will do that” without any reference to real-world scenarios is not necessarily good enough.
4. Make sure staff know exactly where to access training resources.
If there are self-service resources available, make them as easy to access as possible. The harder it is to access learning aides, the less motivated staff will be to hunt for the information, even if they need it. This may lead to people taking shortcuts or falling into bad habits.
5. Consider creating your own knowledge base.
This will help you retain knowledge within your business as existing staff leave and new employees join.
If all questions raised (and the answers to them) are captured, you will be able to build a very useful internal resource.
One page “cheat sheets” with reminders and tips and other easy-access training materials will be incredibly helpful for your staff. Depending on your policy about paper in the office and assuming there is no sensitive information on the cheat sheet, allow people to pin these up or put them in prominent places to help them as they work.
6. Set up a communication channel that makes it easy for staff to raise issues with a line manager, team leader or super user. Encourage staff to make suggestions and continue to fine-tune processes until they are optimal. This will have a positive effect on your ROI, will speed up your time to value (TTV, the time taken to derive benefit from your software), and increase staff’s morale and enthusiasm.
Make sure staff know who they should contact if they have a question, or issue. Set up an email mailbox for feedback and comments, or organise them in an electronic file, or desktop folder.
7. Be prepared to troubleshoot.
Be ready to chase the software vendor or service provider if necessary.
For best results, you’ll need them to provide answers quickly, so that staff aren’t inconvenienced, remain motivated and don't develop a negative impression of the product. It’s best to manage expectations - explain that a few teething troubles might arise early on, but this is no cause for alarm and confirm that you intend to deal with any issues promptly.
Support your super users in the event of any issues arising, and check that they are freed up and ready to help people, especially in the first few weeks after the new software has been rolled out.
Taken from the software survival guide - Don't Buy Software for Your Small Business Until You Read This Book, available now on Amazon.
Copyright 2017 © K.N. Kukoyi, Purposeful Products.
If so, there can be a lot to consider.
It is common to see articles, blog posts and the like, which immediately launch into comparisons between different types of software.
I believe this is a mistake which can mislead businesses.
Although these comparisons are useful, initially, try to take a step back from this sort of information, and first look inwards, before looking outwards.
Your starting position should always be your specific characteristics, and requirements as a business, or department.
From this point, with a clear picture of what you need and why, you are simply following a process of elimination, based on your business drivers and commercial needs.
Following this approach is far more likely to lead to a positive result.
Assuming that you've assessed the specific needs of your business, and the activities that you would like the software to perform for you, let’s take a look at 4 questions that you can ask yourself when thinking about purchasing software:
1. Do you wish to be able to “own” or adapt your software?
Do you want the freedom to use the software “for life,” potentially holding it for as long as 3-10+ years?
Is it important to have the scope to adapt it now, or in the future, or to be able to connect (i.e. integrate) it with other systems?
If you wish to extend, or flex a product to meet your needs, this is less likely to be possible with “rented” SaaS products, (although moving up to a higher pricing tier may allow you to access a wider range of options.)
On the other hand, "ownership" (via a license that allows you more flexibility to modify the software, or the ability to hold it for a longer period) may not be the best option if:
2. How urgently do you require the software?
If a short sales cycle is needed, consider that for larger and more complex software systems, it can take weeks (or even many months) to:
3. Is convenience, or control most important?
However, if you are less concerned about these items, then SaaS products are generally more convenient, with fewer set-up tasks required.
4. Do you seek highly-specialised functionality?
How niche are your requirements?
If you are unable to find functionality that meets your needs on the open market, or you have masterminded a process, or technique that you want your software systems to reflect, you may wish to consider software that can be altered by a software provider, or decide to have a product built in-house, or by a 3rd party. (In the next chapter, we’ll cover some key points to review if you are thinking of having software built, including options that could expedite the build of your product.)
Copyright 2017 © K.N. Kukoyi. Purposeful Products.
This content was taken from the software buyer's survival guide:
Don't Buy Software For Your Small Business Until You Read This Book:
A guide to choosing the right software for your SME & achieving a rapid return on your investment.
Now available on Amazon and featured on Kindle best-seller lists in Australia, Canada, France, the UK and US: bit.ly/SME-guide
Print versions of the book will be available from 18th June 2017.
You can access a free Business Requirements Assessment document in Word and Excel formats (1 of the 7 free resources provided to readers of the book) here: http://bit.ly/resource1-assessment
Here is an excerpt from our new software buyer's guide on the subject of taking up references on software products and suppliers.
When considering a company to work with, it’s advisable to ask the company that will be supplying the product to provide the names of two referees that can give you feedback about the performance of both the software and the supplier.
This is especially important if you are purchasing a permanent license, or are paying a large upfront fee for software and services.
Taking references is less common with SaaS contracts, which usually don’t have long tie-ins, however the more money you are investing in your purchase, the more inclined you should be to take references!
Ask the software supplier to arrange reference calls or site visits for two customers, ideally with similar requirements to yours, that have been using the product for at least 3 months.
If they can supply references from companies of a similar size, and in a similar, or complementary sector, that will give you an insight into the specific challenges and benefits a company like yours might realistically expect. (It is worth noting that introducing you to direct competitors may not work as well, because referees may not feel comfortable discussing how they really use the product with a rival company!)
Ask a combination of these questions, and you will be very well informed before making your final decision!:
Taken from "21 questions to ask when taking up references" from the software buyer's guide for businesses - Don't Buy Software for Your Small Business Until You Read This Book, available now on Amazon.
Copyright 2017 © K.N. Kukoyi, Purposeful Products.
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