Let's Talk About Our Future Together
By Jeff Apr 24, 2008It's probably not a secret - I love 37signals . Not only do they build great products, but they have a way of cutting through the clutter and bringing refreshing clarity to often complex issues. They never fail to inspire me and their recent blog post titled The Secret of Making Money Online was no exception. This is a video of a talk that David Heinemeier (of 37signals) gave at Statup School.
David tackled one of the more pressing dilemmas in modern software development...something like:
Build great application
???
Profit
What miracle happens at #2??? Good question. Some of David's more salient points:
Having a price helps create profit (it's almost too simple to work).
This notion has been lost in the web world.
There are many ways to have a price - not just one.
If people like your product, they pay you for it and if they continue to like it, they continue to pay.
This has been a successful business model for thousands of years.
Building the next Facebook and selling it for 3 billion dollars is an extremely remote possibility. The chance that you might build a decent niche product that a few thousand people like and will make you a decent living - much better odds.
So, David's talk got me to thinking about my original intent for CPO and it's future. My intent from the beginning was for CPO to become profitable somehow - the question was always the HOW. In my perfect world, CPO would always be a free product and earn revenue in other ways.
As you might have noticed, we have been trying some of these options out for the past month. Since early March, we've solicited paid contributions, paid ads and non-financial contributions like monitoring the forum, translating or writing documentation. So far this experiment has had limited...ok, NO success. Now, I'm not expecting miracles here but I genuinely believed that CPO had enough active and loyal users to spin this plan up a bit by now. I'm a little skeptical - looking around I find that others are in the same boat with contribution/ad supported business models. But it's ok - I've decided to give this plan a total of three months to prove itself one way or the other and then I'll move to Plan B.
So I'll level with you and try to be brief. CPO needs to begin earning its own living - pure and simple. I see 2 possible scenarios playing out over the next 6 months:
CPO begins generating enough revenue to justify better support, a more robust hosting infrastructure, regular bug fixes and more features. This doesn't have to be a lot of money at this stage - just enough to entice a little help and to keep motivation up enough to get things to the next level.
Or, CPO generates no revenue and things stay as they are indefinitely. I can always afford the hosting account but there will be limited support, few if any new features and bug fixes when I get around to it.
I'm not satisfied with scenario #2 mostly because I know it doesn't have to occur. I know that there are some problems with CPO - I know that support has been virtually non-existent for the past several months. I also know that I'm still passionate about turning CPO into a truly great product - but not for free. The key word here is sustainable - we don't need a $5,000,000 infusion of cash but we do need something that will generate revenue next month, and the month after that and on and so on and so forth. Otherwise, everything will stop.
So, how can we remedy this? I'm coming to you, the CPO user community, before making any firm decisions because I feel it's fair that you have a say in how this all goes down. I'll throw out the first pitch...here are some ideas I have for generating revenue:
Created a tiered hosted account model. A free version with no support, no file uploads and limits on projects, clients and invoices. A paid ($5-$10 per month) premium account that would include responsive support, file uploads and unlimited number of clients, projects, etc.
Offer the source code for download and installation on any server for $149. This would include 3 months of support and free upgrades forever.
Offer a combination of 1 and 2.
Charge only for the source code and keep the hosted accounts free.
That's about all I can think of at the moment but I'm open to suggestions. I just got done reading some blog posts over at ActiveCollab and it looks like the community really hit them hard for springing a pay only revenue model on a previously free product without any warning. I'm trying to avoid making their mistake so let's all be constructive and try to find a win-win. I trust my users.
One request though...let's stay away from comments like 'Yeah but Joomla/WordPress/Drupal/eGroupWare [insert favorite open source poster child here] give their stuff away for free and still make money.' unless you can provide explicit ways in which they bring in revenue. Otherwise it's just not very helpful. I know there are a number of quality open source initiatives that make money in ways other than selling software - but I think in the grand scheme of things, they tend to be the exception and not the rule. There are, however, numerous examples of shitty OSS that is completely free and worth every penny...I don't want CPO to fall into that camp if I can avoid it.
Thanks for reading and for your thoughts.
Jeff
Good to hear your honest chat. We're a 2 year old design firm gaining ground and now have been thrust into an agency type model. that said - more management/structure needed. And thus I've been on the hunt. I love Bacecamp - but I still find there's too much stuff, I like OS apps, but the glitches and slow support can get a bit tiresome. I've tried Kiwi and Copper - which are robust, but frankly too much stuff/multiple screens/ levels upon levels - I like simple.
Right now I use HARVEST for time tracking - great program!!
I use Box.net for storing and sharing files with clients and staff - another great app! but I wish these 2 simple, clean intuitive apps could come together along with a PM tool - now that would be the ultimate Killer PM Tool.
I have 2 major folks I need to keep informed and happy - Clients and staff. I have projects with budgets and deadlines.
For clients - I need a simple place for them to view comps/proofs and finals and comment along the way. Showing progress would be great.
For staff - I need a place to post projects/tasks/track time and collaborate through chat/blog/viewing proofs (comments)
Projects - a place to store info (briefs, proposals, etc) Somewhere to show progress using a pipeline (phase tracking) and calender
I need a place to view, comment, and store proof versions
And a place to store all assets for each project if possible.
I've signed up to test CPO, but I wanted to share my thoughts as well. As to your comments...I'd pay $150 if works and clients and staff don't complain about using another productivity tool. they having to log in to yet another app. We creative types don't like tools that slow us down and make us type type type and re-type data just so it makes a pretty gantt chart, ya know?
Cheers!!
I love the UI. As long as there is fast support, constant upgrades, and your continuing personable personality, then it's all good.
Preferably, I'd like to host this locally or on a server of my own, so I'm not at the mercy of Creative Pro Office's server. Also, it's cool that I'd have access to the code, as I'm a developer, and can add functionality as needed.
I've been a loyal user to CPO since the beginning, and we've exchanged emails a bit back and forth. I actually would like to have the app on my own server with constant development, and wouldn't be really against paying for it if it is developed and updated regularly.
I actually saw this coming. For a while you were on fire with updates, but then kind of teetered off. But I guess in the end, nothing really is for free. I think what these other open source "poster children" had that you didn't, was a solid developer base as opposed to a one man show - and they became bigger than the original founder.
Whatever you do, good luck. Please just warn us before you lock up accounts or yank the site down etc.
I think your office system has a unique logic, because of its "client based" structure. Other business systems use separated Project Management and Customer Relationship Management respectively. The generic Project Management programs are project based, and the CRM systems are client based, usually without project management capability. CPO is a great idea for certain type of business. For example: I have an architectural firm. In my office I have client folders with some project and not vice versa. My friend has civil engineering firm. He has project folders. Both of us have similar profile but different office logic. I prefer the "CPO-logic" ;-) in my practice.
If I were you, I should point out the advantage of the client based business system in my communication all around the web.
And yes, I agree with you, there has to be paid version of CPO and also free version with restricted capability.
I just want to say that I love CPO! I'm a writer who is just breaking into the freelance world and I've been looking at various tools to manage my time and projects. Csaba is right, most tools out there are either Project based or client based, with no connection in between. That's why your product is so refreshing. I love the fact that I can manage my time, projects, clients and finances in one place. My only suggestion is to add a Mac OSX dashboard widget. Right now, I'm considering using Harvest because of their widget (and a few other features). But if you had a widget, there would be no contest and I'd have no problem paying for the service. The advantage to having one tool instead of two or three is worth the price. Thanks for all your hard work!
@Jive, I want to address your concern directly. I want to assure you that, in no case would I lock user accounts or pull the site down - ever. That's what I would call a lose-lose in the extreme. I'm also looking at ways to pull more people into the development/support circle for CPO and I'm having some luck in that respect. I want to enter a for-pay business model with a team larger than just myself. Thanks for being a faithful user, Jive. I hope that helps answer some questions.
Please keep on keeping it simple. Thanks again.
I love CPO! I think that charging would be a good idea and inspire you to build out some features that your users are currently looking for. And since you have a child on the way, it would be a great way to pay for a crib, too :o).
Your ability to build a friendly and useful app is demonstrated! You are good at what you do! Come here and give me a kiss!
your wife
I'm a new user of your great products as it is only my 2nd day here...
I must say I'm quite impressed by all the features you've got ! Of course I would be a little sad if you had to price it while I'm discovering it but that would be totally understandable.
One thing I wanted to highlight is that if you decide to price your products, you will then have a pretty strong pression coming from the user who usually want a lot as soon as they pay a little. Just a thought...
btw, exporting to exell would be a incredibly useful feature to add, why not price it...
For myself and my freelance work it's great - and cheap. I'd pony up for an annual subscription for just what I'm using now (for a small fee). I rarely have more than a few jobs going at once it's perfect. However, if this moves to a subscription based model and is really out to compete in this market as a real mover I think there will need to be a bit more spit and polish. Not that I don't think it isn't capable - I'm very excited about CPO and the potential. Basically, as a freelancer it does just what I need - I can track a few clients, a few active jobs and some invoices/expenses. For it to be a viable solution for a small studio I'd need some minimal project management, automatic job numbers by client with client codes, someway to track/traffic production of jobs through my shop. That's all we're really missing here. And I've used Clients & Profits, C&P ASAP, and we've looked at Function Fox, Studiometry and have a developer that we work with customizing his own time management/billing app for us (which has turned into a complete nightmare). Here we are at the end of May and our studio is closing in on job #400 - last year our Clients & Profits jobs for '07 alone topped over 800. CPO would need to have a way to manage that volume of projects before our studio could pay a fee for it - but we'd be willing to part with up to $50/mo. if the feature set was right.
Keep up the good work Jeff, and let me know if I can help in any way.
This is a wonderful program and is working to keep me organized. I have only used it a couple days.....but I believe it is worth it!
Seriously, I hate having online apps hosted on anything other than my own server. I would definitely pay for the ability to download the app so I can put it on my own server. And I hate having to pay monthly fees (just another bill I have to remember to pay...) and am happier to pay up front, with the choice to purchase additional upgrades. Think ExpressionEngine here - I think they've got a pretty good set-up. Sure, it's pricey, but it does exactly what many web designers need and want. I think CPO is on the same journey.
And, in the end, you really are your product (or your product really is you). From what I can gather in your blog posts, you seem like a pretty good guy and you'll make the right decision for you, your family and your dreams/hopes for CPO.
Good luck from an adoring fan! And thank you - I know how much work you must have put into this and really appreciate it.
Peace - Nikki
Well done for opening your thoughts with your customer. Understanding your customers is so important these days - understanding that your customers are NOT consumers, but rather people.
I've only just checked out CPO this evening and although I reported a minor bug I think CPO is a great tool. I've been looking around for something similar and only found the 37signals equivalent. I'll continue to use/play/test CPO and if I find it helpful, which I bet it will, then I'll recommend it to my company.
My company would then like to have the data secure and host it themselves thus paying for the code. So, I'd say option 4 is the way to go, personally anyway.
These days internet users expect tools for free. Once they can see the value then they get out their wallets and pay. It's often not how expensive or cheap it is but how useful and how it makes their life easier that matters.
Keep the hosted account free with minimal advertising (as you have it now) - non-intrusive and sell the code.
Good luck and take care,
Rob
I would at the very least continue developing the application and selling it for a nominal license, if I were you. It seems like so much work has gone into it, I'm sure many people including myself will continue using it. If you make it available as an install package for download, people can set it up on their own servers. This way people can pass auditing and security standards and have backup information.
Outstanding piece of software.
Very interesting discussion. I have a rival application, I have been at it 5 years, and it has never occurred to me to have a totally free version, for the simple reason that the software is not free to develop, host, or support, so why should it be free (other than a trial?) I have a two tier pricing structure (1-5 users, $10/user, >5 users, $20/user) and I don't have any objection on price from real users.
That said, what I have found is that there are a lot of dilettante freelancers out there who are not serious about being a business, and thus not serious about their tools. They are not my market. Probably not yours either.
Open source really only makes sense for organizations who have the resources to enhance and support the app on their own system. The TCO is the same, it is just funded differently. But I would bet that the return for small orgs implementing open source is horrible - i.e. they would be way better off buying an app and selling their services than spending one extra second enhancing/supporting/maintaing an open source app.
Good luck.
First off, you've done a great job so far and appreciate your efforts very much.
I echo the comments of those willing to pay a fair price for use of CPO, perhaps based on amount of clients or invoice creation limits, so those who strain the limits of your servers and require you to upgrade/expand will support a greater share. I also encourage (and would be interested perhaps) in hosting my own CPO at a higher price.
A couple of suggestions on the topic in the meantime:
You can encourage donations now by creating a policy that, if you go to a paid platform, donations can be deducted from the cost of the first paid version if it comes to that. I think a lot more people would be into donating if they new they knew it would be a hedge against your going to a paid platform...
Perhaps you can do the same (offer some discount against future paid ver.) to encourage people to donate their time towards working on the help wiki, blog posts, forum help, db or widget programing or any other area you can use help. The involvement of others would hopefully free you from some of the admin work, make CPO public areas more vibrant and reassure those who may be scared off because of the long time periods between blog entries and forum posts/answers.
Anyway, thanks again for your work and excellent app!
Steve
Anyway, thanks so much for the great service.
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