

Kalzumeus Software Year In Review 2013 - kayhi
http://www.kalzumeus.com/2014/01/06/kalzumeus-software-year-in-review-2013/

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gjm11
A pedantic correction not for its own sake -- Patrick's meaning wasn't in any
doubt -- but because I think it's quite interesting.

Not "bellweather" but "bellwether". A wether is a male sheep. A bellwether is
a male sheep at the head of a flock, around whose neck a bell is hung so that
you can hear where the flock is even when you can't see it. (The rest of the
flock will follow its leader like, um, sheep.)

So a bellwether is a single thing whose behaviour is a leading indicator of
that of a larger-scale bunch of other related things.

------
graeme
I appreciate how open this post is. The cash crunch section struck a cord. For
anyone considering starting something on their own: build a buffer. Build a
bigger buffer than you think you'll need.

I started three years ago, out of school. I'm not a hacker, and didn't have an
immediately monetizeable skill. I saw an opportunity to build recurring
revenues (through e-book sales with a partner) and pursued it as fast as I
could.

The strategy worked. Those recurring revenues are wind under my wings, and
gave me the skills to expand my business into other areas.

But man, that was a tough couple years. I was constantly short on cash.
Historically, when people guessed my age, they guessed [biological age - 3].
Once in this rough period, people guessed my biological age!

2013 was the year my business took off. In the final six months I earned
enough to pay off my loans from school, my taxes for the year, and build a
savings buffer. That was from being almost bankrupt in June.

What a difference. I feel relaxed. People now guess [biological age - 1 or 2],
so the decrease in stress must be having an effect. I look more rejunvenated
to myself in the mirror.

I can see and pursue opportunities much more effectively. And it's all because
I have a relatively small amount of excess dollars in a bank account. That
surplus allows you to raise your head and look around.

Build a buffer.

Some time ago a HN member posted about maxims he uses to guide his life, and
he ended up making a daily maxim site. This one came up yesterday, it's quite
relevant:

[http://www.maxims.us/build-superreserves/](http://www.maxims.us/build-
superreserves/)

~~~
davidjgraph
It's good advice, and maybe build that buffer working contracts that might
give you domain insight into markets you're thinking about working with.

And to extend the advice slightly, learn to live more cheaply...

~~~
graeme
Thanks, I should have pointed out the second part. I should have lived more
cheaply than I did. I frittered away money here and there that could easily
have tided me through a couple of short term crunches. And I could have more
easily pursued several medium run goals had I had such a buffer earlier on
through saving.

I've found tracking spending has made me a lot more conscious of where the
money goes, and doesn't take much effort. My spending fell naturally once I
knew where it was.

I also incorporated more of those hidden liabilities patrick talked about into
a spreadsheet where I have an estimate of finances at month's end. Seeing my
total net worth on this sheet rise has been highly motivational. It also
helped me accurately assess what margin of savings I'd need at bare minimum.

Note: I tried mint, but found it didn't produce the same effect as entering
data manually.

------
uniclaude
_When I got very busy or stressed, one of my coping mechanisms was avoiding
opening email, out of an irrational fear of finding more work or stress in my
inbox._

Reading such a honest sentence triggers a lot of emotions at the same time. It
helped me realise that I've really been guilty of this, and that it is now
time for me to change.

I had no idea I would learn so much before I clicked this link. Great post.

------
cygwin98
Found an interesting comment from a guy called Fildo on patio11's blog:

 _Hmm,

that makes me wonder. 2013 was the first year I started selling my (desktop)
software and I made a little more than you – without doing all the A/B testing
and marketing dance. Makes me wonder if I should follow your path (originally
I intended to do so) or if I should keep improving my product (adding more
features).

The thing is that my software is not trivial and does some pretty complex
things. Maybe that’s the difference? The retail price is about the same.

I’m pretty confused now._

~~~
davidjgraph
The thing is, we believe patio11, there's no way to work out whether this
poster is simply trolling or not. Making six figures in 12 months from a
standing start working alone is very, very hard.

That said, I was surprised, initially, to see the total profit of $60k.
Thinking again, I'd say the call he made was that BCC was never going to scale
to any major extent. Instead, it's just background cash generation while he
searches for a market/product with more promise.

~~~
cygwin98
I agree with your point: BCC is a niche market.

Though I wonder if BCC even has achieved its potential. I was surprised by
patio11's statement:

 _I’m sorry, Bingo Card Creator does not support using clip art. Have a nice
day._

Maybe he was joking. Clip art seems to be a feature straightforward to
implement, IMHO should have been part of the feature set to begin with.

~~~
patio11
The straightforward implementation of clip art would be larger than BCC in
complexity, be used by almost no one, and not appreciably increase sales.

For example, you have to create a UX which allows non-technical customers who
largely do not understand the file system metaphor to upload 25+ images, edit
them, scale them to bingo card box size without making them look terrible, and
then successfully print in greyscale.

~~~
tg3
I (obviously) don't know your business, but the fact that the clip art /
images question is part of your standard operating procedure gives me the
impression that it would be used by quite a few of your customers. You may be
right that it wouldn't improve sales numbers.

As to the UX, I was under the (possibly mistaken) impression that in today's
day and age, most users on the internet, technical or not, understand the
filesystem metaphor just fine. They send photos and other files over email,
facebook, and other media frequently.

~~~
rmc
_I was under the (possibly mistaken) impression that in today 's day and age,
most users on the internet, technical or not, understand the filesystem
metaphor just fine._

Did you see Google's video where they asked people what browser they use? Many
used Google, sometimes using Yahoo.

------
djb_hackernews
I found it interesting that in one breath you lay out your plan to land
enterprise sales and in the next speak of the poor quality of the underlying
code base.

A good lesson for software developers, you don't need NASA hardened code to
make money.

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pbiggar
"MarkDev"? Assuming its the same thing, I've been calling this "dev-
marketing", in the same vein as "dev-ops". Much better than calling it "growth
hacking".

(In the future, everything will be prefixed with dev- because _software is
eating the world_ (TM), until eventually everything is software and we can
drop the prefix again.)

~~~
hkmurakami
One caveat is that "developer marketing" already exists as a term representing
the effort to market a product/technology to developers for adoption. (ex:
developer evangelist)

~~~
pbiggar
Right, but "dev-marketing" is a different word than "developer marketing".

------
davidw
patio11, no idea if this is applicable in Japan, but in certain conditions
here in Italy (you work as an independent consultant), you have to pay into
Social Security rather than the Italian equivalent. This saved me a _bundle_
of money, but it's not a widely known fact, and I didn't realize it before I
found an accountant that knows how to deal with financial stuff for US persons
living in Italy. Worth looking into for other Americans living abroad. I found
that H&R Block had an office near the US base in Vicenza with a guy that knows
both systems pretty well. It was a very happy discovery for me, because I've
always felt that the US-based guys were just kind of guessing about how things
worked with my living abroad.

~~~
patio11
Yeah, I pay into Japanese SS and am exempted from the US version due to the
US-Japan Social Security Totalization Agreement. Figuring this out was not
exactly trivial for me, and absolutely mystified the local clerks in Ogaki.

------
WA
Thanks for the great write-up.

You state that your mailing list is far more beneficial for yourself and your
readers than your blog, because it allows a more personal relationship. This
bears the question: How would you start such a mailing list from scratch
without a blog? Or do you think a blog is still the first step? I mean,
somehow, you have to be known for your skills and there must be some sort of
desire to sign up for it.

Your mailing list is not necessarily "advice on conversion optimization" but
more "patio11's take on stuff". I, at least, am in your mailing list, because
I'm interested in what this patio11 guy in particular (with your skills and
your background) has to say about things.

~~~
patio11
_How would you start such a mailing list from scratch without a blog?_

Say one (or more) interesting thing publicly, promise more interesting things
in return for signing up for the mailing list.

It's certainly easier to bolt things onto a platform than to build a platform
from scratch, but everybody starts with +/\- nothing, so having nothing should
not deter you from starting that.

------
icebraining
Stormpulse seems interesting. Enterprisy but not the run-of-the-mill CRUD
application, so probably more fun to make.

------
stickhandle
Patrick - have you considered selling BCC?

~~~
patio11
I suppose like all businesses it is on sale for the right price, but I haven't
given much thought to actively attempting to sell it beyond "I don't think the
standard going rates for small Internet businesses would value this highly
enough to make me want the lump-sum of money more than I like owning it."

~~~
dennisgorelik
Have you considered that selling BCC would give you more time for Appointment
Reminder?

~~~
patio11
I don't believe that to be true. BCC is very close to running itself at
present. Selling BCC would mean a lot of effort to make a clean break from it
-- for example, my bookkeeping system is inextricably entangled it it at
present ("It sounded like a great idea in 2008!"), so I'd need to rip that
out, set up a new bookkeeping system, teach my VA how to work that, sanitize
the DB backups, etc. Also, selling it is likely to be a protracted process --
there would need to be contracts/escrow/technical assistance/etc.

There is, of course, a nuclear option to shut down transactions, EOL the
product, and shut down any support other than FAQ/T1/"Here's how to request a
refund check." That's probably less work to set up than selling it.

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losvedir
Excellent read! I always enjoy seeing these and am so appreciative that you
put them out there. Was 2013 not the year where AR went crazy and called a
bunch of people in the middle of the night? I remember reading about that and
being impressed with how you handled that situation, but if that wasn't in
2013.... then, sigh, time flies.

Also, I'm almost positive "asterix" (vs asterisk) is used tongue-in-cheekly,
right? Just making sure...

~~~
patio11
I might have retold that story in 2013, but off the top of my head I think it
was back in November 2011 or so.

The great thing about being a good writer is people assume your spelling
mistakes aren't! Maybe I'll eventually level up to Shakespeare Tier, where
words come into being just because I liked the sound of them.

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edanm
As always, thanks for a great writeup.

I think I speak for everyone when I say that I'm enormously appreciative of
your writing, and the internet would be a whole lot duller without you around.
More importantly, our wallets would be a whole lot lighter without you around
as well. And I say this as someone who doesn't directly do dev-marketing.

------
charlieirish
Patrick, thank you for another enlightening writeup. Sometimes I feel the HN
crowd take the honesty and transparency of these 'internet-famous'
entrepreneurs for granted.

Posts like these have been a great source of inspiration for running my own
startups and whilst each individual business is different, I have gained
immeasurably from them. Thank you.

I've also learned from a few others who have written on this subject:

[http://www.startupclarity.com/blog/bootstrappers-2013-year-r...](http://www.startupclarity.com/blog/bootstrappers-2013-year-
review/)

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sourc3
Having had a similar business to appointment reminder in the past and not
getting the traction I was looking for, folded too quickly (after 6 months of
operations) and I still regret the decision.

I applaud Patrick for keeping that business around for long enough to get
paying customers and even trying to penetrate the enterprise world.

Patrick, besides the SEO ninja skills you applied to appointment reminder for
inbound traffic, did you reach out to others via any outbound marketing?

------
mrfusion
A couple questions about the virtual agent if you're inclined to answer.

How did you choose that company? How much does it cost? Can she also do phone
support or only email?

~~~
patio11
I had heard from a few friends that they had good experiences with VAs from
the Philippines so I googled something generic and found Pepper. This was
years ago. I tried them out and they were adequate for my needs.

I'm on the "20 hours for ~$300 a month" plan. This is, FWIW, within striking
distance of what you'd pay to hire a college graduate full time, but I find it
easier to go through a company to avoid the headaches of that.

The VAs are pretty amenable to doing anything reasonable with a computer,
which includes phone support. I haven't asked for it, both because I don't
offer phone support for Bingo Card Creator and because the US workday would
mean anyone offering it from the Philippines would have to be up very late at
night, which I do not feel is a reasonable thing to ask of
freelancers/employees under most circumstances.

~~~
mrfusion
Thanks for detailed response.

Is this a typical cost for VA's, or is there a way to save substantial money
compared to hiring a US employee?

~~~
beneth
If you hire directly you can find competent employees in the Philippines with
good english for around $2/hour USD.

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k-mcgrady
Great post! I enjoy reading these, thanks for making the info public. I have
one question: Is it not very risky to angel invest in only 1-2 companies per
year? I thought you needed to invest in around 5-10 in order to have a decent
chance at finding the 'hit' business as most of the others will fail.

------
follower
Thanks for taking the time to write this up, Patrick, it was worth the read.
Hope your goal for looking after yourself better this year is achieved
successfully! :)

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pm
I'm intrigued that you have a person named Sugar working for you.

~~~
davidw
Some people in some countries on the "periphery" (I'm not quite sure what the
right term is, but places that use English for some things without it really
being native) of the English speaking world sometimes adapt English words for
names in interesting ways. My son goes to nursery school with a boy named
Happiness Prosper.

~~~
ableal
Sounds like a 17th century English puritan ...
[http://www.slate.com/blogs/the_vault/2013/09/13/puritan_name...](http://www.slate.com/blogs/the_vault/2013/09/13/puritan_names_lists_of_bizarre_religious_nomenclature_used_by_puritans.html)

