In one corner of Red Gate, next to the giant mural of the coloured pencils and about 20 feet from where I sit, you’ll find a curious bunch of people:

Curious? Why curious?

Martin and Conrad are working on a start-up called go-test.it (Martin’s also starting his PhD in the Cambridge University computer labs in a few weeks’ time – topic of ‘analysing the social web’). Peter, Lee and Jamie are working on Broadersheet.com. They want to change the way you get your daily news. Jamie is also working on his own start-up (Binary Cake), and is running the Cambridge Geek Day later on this year. Sam, Rahul and Stew were working on mo.jo. Unfortunately that didn’t work out so now they’re figuring out what to do next. Mat and Amir are working on webticketing.net. Mat is past the start-up stage: he’s also the founder of mixcloud.com (soon to become the youtube of radio) and wakari, and his Facebook apps (including the ones for Rambo and Quantum of Solace) have been used by tens of millions of people.

Martin, Conrad, Peter, Lee, Jamie, Sam, Rahul, Stew and Mat might work at Red Gate, but they don’t work for Red Gate. We’ve accidentally built ourselves a start-up incubator, and it’s going pretty well. The Accidentals (as we’re calling them) get free food (from our awesome canteen, the SQL Servery), a free desk and the chance to mix with other start-ups and people here. We get the benefit of having even more smart, energetic people we can beat at foosball. It’s a great people cocktail: take smart people from us and them, add free food, internet access, and shake.

The next step is to take what we’ve learned so far, mix in some brazenly stolen ideas, and formalise our accidental incubator into something we’re calling Springboard.

Here’s how it’s going to work. If you’re a UK or European start-up and want to spend three months in Cambridge, UK turning your idea into a product then go to http://springboard.red-gate.com. If your application is successful, we’ll provide:

• A three-month program with weekly talks over pizza and beer with the likes of Joel Spolsky, Ryan Carson and Dharmesh Shah. We’ll also hold half-day seminars with world experts on topics such as usability, software sales and product management.
• A free place to live (if you want it) as well as some cash to keep you going.
• A place to work, full of smart people, free food and fast Internet access
• Advice

In return, here’s what you have to do:

• Be good

That’s it. No strings, no legal work, no giving us stock. No seat on the board, no paperwork. None.

Here are some questions you might have:

Why are you doing this? What’s in it for you?

We think that getting to know smart people doing interesting things will, in the long term, be good for Red Gate. In the future, we might end up licensing your technology, investing in your company or maybe even buying it. Or maybe we won’t. Ultimately, all deals come down to relationships. So we want to build them.

Plus, it just feels like a good thing to do. We don’t know what they’ll be, but we think interesting things will happen

Why won’t you take a stake in my start-up?

Frankly, we don’t need the hassle. Introduce lawyers and things get complicated. People get hung up on valuations, deal structures. The paperwork increases. We have to think about incorporating companies, or restructuring them. We don’t need that. If Red Gate succeeds it’s not going to be because we take 10% stakes in start-ups. It might, however, be because we manage to build long-term, meaningful relationships with people creating the products of the future.

What’s the ideal start-up profile for you?

Ideally, two or three people working on business-to-business software. We’ll give priority to start-ups working in markets adjacent to Red Gate’s since that’s where we can be the most useful Take a look at the Red Gate website if you want to find out more about what we do.

We’re looking for people who can ask us great questions and who are interested in learning. People with something to contribute.

Where can I find out more?

Visit http://springboard.red-gate.com to find out more about the program and to send in your application. The deadline for applications is 1pm on Friday 28th August so it’s not for away.

You can also stay up to date with Springboard updates by following @springboardnews on Twitter. I’ll be posting updates too (I’m @neildavidson), as will @amirmc (he’s doing all the hard work – thank you Amir).

Back in 1999, after quitting a job I hated that involved working on products that sucked and with and for (with some exceptions) people I didn't respect, I found myself in the small life boat that was Red Gate, with Simon as co-navigator, a small contracting revenue as a paddle and no hat.

Bob Walsh's slightly mistitled "The Web Startup Guide" is the chart we never had. And it's a damn fine chart, with land, rocks, reefs, currents, winds and pirates clearly marked. Why mistitled? Because it’s suitable for all product-based startups, not just those on the web.

This book, wisely and following its own advice, is targeted very specifically. If you're a software developer, are thinking about setting up (or have just set up) a product-based start-up, and are prepared to work – damn hard – at something you love doing then this book is for you. Equally importantly, if you're more than a few months into your start-up, or if this is your second start-up, or if you aren't a geek, or if you want to set up a consulting business, or if you want to get rich quick, then this book isn't for you.

It is split into ten chapters. The first couple of chapters explore the different types of startups, talk about how to choose a problem to solve and provide a handy checklist for your startup idea. Too often, startups bite off too much they can chew, or not enough worth chewing. Follow the checklist and you'll avoid these, and other, errors. Equally important is the list of ten startup antipatterns ('the me-too! startup' and the 'outsourced startup' to name just two).

Chapter three discusses possible platforms and works through their pros and cons. Should you create a standalone online application, or base it on the Amazon or Google platform? Or use a higher level platform such as salesforce.com? Or maybe a Facebook app would be more suitable? This chapter will help you decide.

Chapter 4 is about the tools and groups you might find useful. As a developer, you'll know some of this already (you use source control, right?), but will learn something new too, whether it's about site analytics, user feedback sites or testing tools. Starting up a business can be lonely, and the online forums and physical meet-ups covered here will prove useful.

Chapter 5 covers main funding options – friends, angels, VCs and incubators (but ignores other options such as government grants, bank loans and joint ventures). It is agnostic about what sort of financing you should get, but, as an earlier chapter pointed out, if you are reading this book you are unlikely to seek, find, or even need VC funding. The assumption that startups must follow the Silicon Valley approach of seed, series A then series B funding is rightly challenged here. This chapter also includes a brief section on payment processing.

Chapter 6 is about social media and the tools you should be using to track what people are saying about your product online, the role of your startup's blog, Twitter, press releases and their more modern equivalents.

Chapter 7 covers the basics of creating a web site that works. Follow the guidelines here – hook people, be credible and have a clear call to action – and you can't go far wrong.

Chapter 8 takes a detour to explain David Allen's Getting Things Done program and its five core principles. If you struggle with time management then you'll benefit from this.

Chapter 9 contains interviews from 'six wise people', and chapter 10 wraps everything up with some more good advice and a final, quick tub thump.

On the whole, this book is outstanding. There is a lot of information here, but its fast-paced, colloquial writing style make it digestible. What's more, the book is well thought-out, balanced, well structured and accurate. It's an excellent combination of fact, anecdote, theory, analysis and practical advice. The interviews alone (Joel Spolsky, Dharmesh Shah, Eric Sink, David Allen and Guy Kawasaki are among the fifty in-depth, thought-provoking interviews in the book) make it worth reading.

There are, however, a handful of cavills.

Firstly, the interviews are included verbatim. It would have been better to edit them – clarity is more important than word-for-word accuracy.

Secondly, the book gets a bit starry eyed about social media. Although traditional print, TV and radio-based advertising might be dying, social media is just one – not the only – tool left in the modern marketer's toolbelt. Furthermore, it's not true that every company must build a community around its product to succeed. Logistically, it's not possible. I happily use hundreds, if not thousands, of products, yet can only – almost by definition – belong to a handful of true communities. When I fly with my favourite airline, or surf with my favourite browser or buy my favourite sausages I do so because of the awesomeness of the product and the marketing, not because I feel a deep need to engage with the Virgin / Firefox / Musks Sausages community.

Thirdly, it's clearly impossible to include absolutely everything relevant to a start-up in a single book, but it's a shame that Bob chose not to talk about sales and talks only minimally about marketing. Finding people who like your product and persuading them to actually buy it is the single biggest issue that your startup, bogged down in the technology, will forget about. On the other hand, there are plenty of other resources that cover that (Jay Conrad Levinson's Guerilla Marketing, Seth Godin's Permission Marketing, Joe Sugarman's Adweek Copywriting Handbook and Jeff Cox's Selling the Wheel are readable starting points).

But these are minor niggles. Overall, this is an excellent, must-have primer for any geek wanting to set up a product-based business. Buy it.

Bob Walsh's "The Web Startup Success Guide" is available on Amazon for a bit under $20.

Enjoyed this post? Follow me on Twitter (I'm @neildavidson)

We’ve got a bunch of great speakers lined up for this year’s conference (Joel Spolsky, Geoffrey Moore, Paul Graham, Ryan Carson and Kathy Sierra, just to name a handful – the full list is here).

There could be one more name on that list. Yours.

We’re holding a pecha kucha competition. Interested? Send me an e-mail to explain why you should speak (see here for hints). In a few weeks’ time Joel and I will pick a handful of finalists. They’ll each get a free conference pass, and the chance to present 20 slides, 20 seconds each, at BoS 2009 in San Francisco in November.

Want to find out more details, and see the winning entry from last year? Go here.

Liked this post? Follow me on twitter (I’m @neildavidson)

The hardest part of learning something – whether it's quantum
electrodynamics, a foreign language or sketching – is getting past the
stage of total freaking hopelessness.

Read more on my other blog:

http://blog.neildavidson.com/2009/07/the-chasm-of-total-freaking-hopelessness.html

When somebody downloads software from our web site we follow up a few days later with an e-mail asking how their trial went. Sometimes people write back. Here's a reply that made me smile.

From: ***** [mailto:******@*****.com]
Sent: 17 July 2009 19:03
To: Red Gate
Subject: RE: Red Gate Customer follow up

I did not, in fact, enjoy my trial.  Nor did I enjoy the fact that my attorney slept through half of it.  And the only answer I got was to the question "Where will Adam be spending the next five to ten years?"

I was set up.  I had no idea she was 13.  She looked 15.

Now I have to register as a sex offender in every state, and they won't let me entertain at kids' birthday parties with my "Pockets the Clown" character's "Guess What's In My Pocket?" routine.

Oh, wait–

You mean the software, right?

Sorry, I thought you meant–

Anyway…

Yes, the software was wonderful.  Stupendous, in fact.  Truthfully, in a word, it was glorious.

*****

Enjoyed this post? Follow me on Twitter (I'm @neildavidson)

I've set up a second blog where I'll be writing about topics other than the business of software. I've already put up a couple of posts. Here's the link:

http://blog.neildavidson.com

In any sale, you spend a lot of your time listening. You find out what your customer’s problems are, explain how your product fixes them and help him through his evaluation. But there comes a point when you need to ask for something. It might be money, or a favour: for him to talk to his boss, or to kick off an approval process.

When’s the best time to do this? It’s when his goodwill is at its peak – when he feels warm towards you and your product. When he wants to help you, in other words. But when exactly is that? It depends on your product. Here are some examples.

If you’re selling a product like Word 2007, then the time to ask for something is after the ‘hey, a shiny new toy’ phase, and before the ‘dang, why did they change that?’ phase. If you miss it, then you must wait until goodwill returns to neutral. Since the first stage might be extremely short and hard to hit, waiting as long as possible might be the least risky approach:

[Click on this, or any, image to see a larger version]

If you’re selling a product that people hate and buy because they need it and not because they want it (Norton Antivirus, say), then the goodwill curve is different. You should ask very fast, before the dip, or very late, long after it:

The goodwill curve of most web 2.0 apps mean you need to act fast, before it returns to boredom. iPhone apps are like this too (in fact, the curve peaks so fast you get to pay before the curve even starts and the goodwill has been created entirely by anticipation).

One reason that Application Lifecycle Management tools (and other shelfware) are a hard sell is because they generate very little goodwill, and it’s hard to know when that goodwill will happen. You need an aggressive sales force to shift stuff like this:

The goodwill curve of some software shows an initial kick (the shiny new tool phase), then a dip (the dang this is hard phase), followed by a prolonged rise as the user understands the benefits of the tool. Development tools and databases are like this:

Here’s the goodwill curve of some software we sell at Red Gate. People try it, and they like it. Then they don’t use it for a while, but some of the goodwill sticks. It peaks again the next few times they use it, and then slowly deteriorates into familiarity. The best time to act? At the first peak.

Finally, this doesn’t just apply to selling software. Here’s what – I hope – your goodwill graph from this blog post looks like:

I hope I’ve generated enough goodwill to ask you a favour and get you to act. If you enjoyed this post, then please follow me on Twitter (I’m @neildavidson)

In a post last week, Seth Godin explained a problem with giving people feedback about their work. In essence, what happens is this. You say ‘I don’t like your logo / artwork / project plan*’, but they hear ‘I suck’ since the work people do is so tied into who they are.

There is a neat way round this though. It’s a trick I learnt from Bill Buxton’s excellent book about sketching, but it applies to much more than just product design.

Rather than asking for a single outcome (‘Tell me how you’re going to market X’), ask for options (‘Give me three serious ways of marketing X’**).

At this point, the person who’s done the work has no motivation to defend their sole proposal beyond all reason. The conversation stops being an argument of “I’m right / you’re wrong” and, instead, becomes a de-personalised deliberation of “here’s a bunch of different ideas; let’s discuss, together, the pros and cons of each one.”

It works, really. Try it.

Enjoyed this post? Follow me on twitter (I’m @neildavidson).

*Of course, you try to be constructive about this, but the message is the same

** Note that the ways need to be serious – not two obviously bad ideas and one good one that they guide you towards

Running a software business is like crossing a river by feeling for the stones. You take one pace, and then a second, and then you search around with your toes for the next stone. You lean on it gently, testing its smoothness and seeing if it wobbles. It it’s a good stone, you slowly shift your weight across and then seek the next step. If it isn’t, you search elsewhere.

You always have your eye on the far bank of the river, but your path zigs and zags, you hit dead ends and you back track, but eventually – hopefully – you make it across.

If this metaphor holds – and I think it does – then what’s the point of a business plan? First of all, here’s one thing a business plan does not do:

A business plan does not give you a precise set of instructions for how to cross the river. It does not tell you where each stone lies, and how to move from one to the next. It does not give you a mechanism for tracking your actual progress against your plan.

Instead, the point of a business plan is to answer a handful of fundamentally important questions:

Can the river theoretically be crossed? How fast does it seem to be flowing and how wide does it look? Would even tempting a crossing just be a dumb-ass thing to do?

Is it worth crossing? What’s on the other side? Do you really want to get there?

Where are the crocodiles? If you slip, will your feet get wet, or eaten?

Are you crossing it from the correct point? Or should you move a few hundred yards downstream? Maybe somebody’s already built a bridge there.

Where is the first stepping stone? And can you reach it, and will it bear your weight?

Of course, all these are essentially calls of judgement. Do your best to answer them, then reach out your foot, open your eyes and make that first step.

Enjoyed this post? Follow me on Twitter (I’m @neildavidson)

Last week, Wil Harris spoke eloquently and convincingly about how ChannelFlip launched. Off the shelf software, string, sticky tape, some CSS, plenty of tea and a spare afternoon* was all it took to create and get this top-notch video magazine off the ground.

That anybody can launch a successful web site or business is a common message. Just release early and often, and be embarrassed by version one, and you’ll surely succeed. But I find it hard to reconcile this with my experience that writing software is hard, dirty and time-consuming. Our Exchange archiving tool took an awesome team of fine people well over a year to build. How come?

There are a number of reasons – ChannelFlip launched into a market with few competitors; if they screwed up they had no existing customers to disappoint or brand to stain; what they were doing wasn’t technically difficult. I doubt these are accidental though – they’re the results of extremely smart choices that Wil and his team made.

But I think these reasons miss the point. ChannelFlip succeeds not because of the technology, but because of the videos. What distinguishes ChannelFlip from competitors current and future is content, not software. And like most companies, they have constraints. Every hour and dollar spent creating video is an hour and dollar less spent on technology. But – for now – the benefits of spending on content outweigh the costs of scrimping on technology.

If you think you’re in the business of software, here are some questions worth asking about your company or product:

• Of all the things you do, what really matters? What will delight your customers? What will make you damn hard to compete against?
• Of all the things you do, what doesn’t matter?
• Where are you focussing?
• Are you any good at what matters?

Maybe the answer to the first question is software – its quality, technical excellence or performance. But maybe it’s something else.

Enjoyed this post? Comment below, or carry on the conversation on Twitter (I’m @neildavidson)

* OK, so I’m exaggerating a bit

The first computer I ever programmed was my uncle’s Sharp PC-1211. Keen for me to hone my skills on Forth, away from what he considered the mind-softening influence of BASIC, he soon gave me a Jupiter Ace, the first computer I ever owned. It was 1982 and I was ten years old.

These two computers uncovered an itch. It took over twenty years – programming the Acorn Electron, BBC Micro, Acorn Archimedes and then, reluctantly at first, the Wintel platform – for me to finish scratching that itch. I still code now and then, but I no longer feel the same compulsion that I once did.

By the time my urge had dwindled I’d found a new obsession – Red Gate – to fill the void. But I sometimes ask myself what I would have done had I not co-founded Red Gate, and what my advice would be to other people who find themselves faced with the same realization that coding is longer enough.

Obvious, but – for me – wrong, choices would be project manager (I’m just not organised or disciplined enough), technical architect (flow charts and diagrams aren’t my thing) or technical lead (not a big enough jump away from the coding).

The unobvious – but correct – choice would have been product manager. Why unobvious? Because it’s a role that’s often misunderstood. Why correct? Read on.

Product managers help decide what products get built. They don’t necessarily generate the initial idea, and they don’t make the final call, but it’s their job to flesh out ideas and turn them into proposals so solid they can withstand any sticks and stones others can throw. Not only must they make sure the product solves a pain that people really have, but they need to work with developers to make sure their proposals can be – and do get – built, with marketeers to make sure that customers can be found and with sales people to make sure those customers will buy it.

Being a product manager is a bit like running your own business, but with much of the work that is overly familiar (actually building the product), frustrating (project management) and unpleasant (firing people) removed. If you do your job well, you can easily connect what you put in (defining the product) to the end result (happy customers), and that makes it a satisfying role*.

What can you do if you’re a top notch software developer but your passion for code is starting to fade? If you’re looking for the next step in your career, and if you don’t want to manage people or projects?

The first step is to learn more about product management and understand if it’s right for you. Here are three things you can do:

• Look at the Pragmatic Marketing web site
• Subscribe to one or two, or even three blogs
• Immerse yourself in the product management twitter stream (#prodmgmt).

The second step is to do it. If your organisation doesn’t have product managers, then it needs one. Become that person. If your organisation does have product managers, then talk with them and get involved.

Have you considered product management as a career? What are the pros and cons of this particular path? Post here, or carry on the conversation on Twitter (I’m @neildavidson, or tag with #prodmgmt).

Red Gate are hiring product managers. Check out our jobs page.

###

*The more Machiavellian of you will spot the flip side: if you do your job badly, there’s always some other factor to blame too, whether it’s changing market conditions, a recalcitrant development team or just pure bad luck.

If you’ve got a micro ISV or software product that you want to sell then we’ve got a million dollars to spend. The deadline for applications is on May 31st. Read more at the original post:

http://blog.businessofsoftware.org/2009/04/the-red-gate-million-dollar-challenge.html

Employee: “Boss, this gentleman’s got a Word document he’d like to print.”

Boss: “Damn him. Microsoft? Microsoft?! What sort of person uses Microsoft software? Why doesn’t he use a Mac? Out! Out! Tell him to get out!”

Employee: “But he’s the tenth person today who’s asked for that. And we are a print shop.”

Boss: “Yes, and I’m sick of telling these people to sod off. I bet he brought his document on a floppy disk too. Pah! A luddite as well a philistine.”

Employee: “Maybe we should stop saying no? Printing Word documents might even be a money-spinner. Enough people seem to want it.”

Boss: “I’ve got a better idea. I’ll put a big sign on my window to keep scum like this out of my shop. I’ve got principles, you know.”

Employee: ”But aren’t you worried that you might scare off genuine, Mac-using, pen-drive-toting customers too?”

Boss: “The cowards, you mean? Why would we want to serve cowards? They’re as bad as philistines and luddites.”

Employee: “Yes, boss. How big do you want that sign?”

You wouldn’t do this, right? Or would you? Post here, or carry on the conversation on Twitter (I’m @neildavidson). I’ll give $20 of Amazon vouchers to the best comment or tweet.

Dharmesh builds on his 2008 talk and tells us how to build better software businesses.

http://businessofsoftware.wistia.com/medias/3cjc7fu2kc?embedType=async&videoFoam=true&videoWidth=640

Software businesses should be infinitely scalable, right? You've done the hard work. You've built your product, your money making machine. All that's left is to turn its frictionless handle and churn out uncountable quantities of dollar bills. After all, the cost of shipping your creation's sweat-filled bits and bytes to your next customer, and the customer after that, is zero.

But that's not what happens in real life. Take a look at this graph of revenue per employee*, generated from the 2008 Software 500 data:

The median annual revenue per employee is around $160,000. Almost all (90%) of software businesses generate under $300,000 / employee. By comparison, General Motors has revenue of $600,000 per employee; Walmart $200,000; Intel $450,000; Exxon $5,000,000. It turns out that shipping electrons is no easier than building cars, selling cereal, building chips or drilling for oil. There's nothing special about software.

How come?

In 1980, Theodore Levitt – Harvard Business School superstar professor – wrote that there is no such thing as a commodity (or more accurately, there need not be such a thing as a commodity). In 1986, Bill Davidow – erstwhile product crusader for Intel's 8080 and 8086, now venture capitalist – expanded this theme beyond commodities and wrote about the concept of 'device' vs 'product'. In Davidow's terminology, a device is the good that, at first glance, you sell. It's the coffee beans, the silicon chips or the bits and bytes of your software. But the product is what you really sell:

• Trivially, bits and bytes
• Reassurance that you won't rip off your customers and that they're doing the right thing ('nobody ever got fired for buying IBM')
• Reassurance that your software will work as advertised, and that you will be there for customers if they get stuck (Rackspace's fanatical support)
• Reassurance that there is a roadmap, that you will continue fixing bugs, refining the product and releasing new versions (Intel's chipset)
• A statement about your customers (anything from Apple)
• The chance to belong (ditto)

Of these, only the first is scalable and easy to supply. The rest require people to deal with customers, communicate with the market, investigate new opportunities, build brands, grow communities, write documentation, create a company culture and so on. Those are the activities required to decommodify the bits and bytes. They're not cheap and they don't scale.

But if you want to grow, they're the most important things you need to do**.

I'd like to hear what you think. Post your comments here, or carry on the conversation on Twitter (I'm @neildavidson).

(* Yes, I know that revenue per employee isn't as important as profit, but they're the numbers I've got. Also, these numbers are from the Software 500 so may not be truly representative. But they illustrate my point that software businesses don't, on the whole, scale).

(** Assuming you've done the hard – and it is extremely hard – work of building the bits and bytes already).

Professor Noam Wasserman at Business of Software 2008 introducing the concept of, ‘Rich’ or ‘King’.

Are you a micro ISV or do you have a software product you want to sell? We’re setting aside a million dollars to buy the right desktop and web apps. Here’s why, and what you have to do if you want to sell.

In November 2006, Red Gate purchased SQLServerCentral. In the two and half years since then, we’ve invested several hundred thousand dollars in the site, quadrupled its traffic and continued, with Steve Jones, the great work that Steve and the other original founders – Andy Warren and Brian Knight – started. Everybody – Red Gate, SQLServerCentral users current and future, and the original founders – was a winner.

Over the past decade we’ve purchased a number of technologies from third parties and brought them into the Red Gate fold: SQL Server Central, Lutz Roeder’s Reflector, PromptSQL (now SQL Prompt), pInvoke.net and Mini SQL Backup (now SQL Backup). In all cases, we’ve tried to do the same thing: introduce the products to a wider audience, and help them fulfil their potential beyond the means or ambition of their original creators.

We’d like to do this some more, and now seems like a good time. So we’re going to run a competition.

We’re setting aside a million dollars to purchase third party technologies. We might buy a single thing for a million dollars, or ten for a hundred thousand, or any other variation. We might decide to spend more, or less, but a million dollars is our target.

Interested? Here’s what we’re looking for:

• You’ve got to have a product. We’re not interested in prototypes. You must have customers. Happy customers, who – ideally – are happy to give you money for what you’ve built.
• If you’re giving away, not selling, your product then we’re looking for high numbers (10,000+) of users.
• It’s got to be software aimed at software developers or sysadmins. We specialise in Microsoft platforms, but will consider others too.
• The product might be a desktop app or a web-based app. We don’t mind.
• if you’re selling your product then it must have at least a 10% conversion rate. In other words, if ten people download it, or trial it, then, on average, one person should buy it. For us, this is a sign that you’ve got a product that works. We don’t care how many customers you’ve got – the fewer the better, in fact. It’s the ratio of trials to purchases that counts. If you’re not charging for it then we’ll look for a sign that a significant proportion of your users are actually using it regularly.
• Now is a good time for you to sell. Maybe you’re struggling with marketing your product, or maybe you’re worried about the recession we’re in. Or maybe you just need the cash, or are bored.

If you’re interested, here’s what you have to do:

• Send me an e-mail at neil.davidson@red-gate.com explaining what your product is and why it fits what we’re looking for.

The closing dates for entries is May 31st 2009.

Here are some questions you might have:

Will Red Gate invest in my company?

No. We’re interested either in buying your company, or buying the product you’ve built. We won’t take a stake in your business.

Why should I sell?

You might have a number of reasons. The emotional ones might involve fear, boredom and excitement. Maybe you’ve taken the product as far as you can, or want, to and would like somebody else to continue to make it succeed.

Rationally, if your product is worth more to somebody else than to you, then it’s economically sensible to sell. Say you’re making $10,000 a month profit with your product. That’s a decent salary. It means that, over your product’s lifetime, it might generate you $300,000 – $400,000 profit, but with a high risk (since competitive products might emerge, you might fail, and so on). If somebody offers you $400,001 with no risk, tomorrow, then you should sell.

Why should I sell to Red Gate?

We’ve got a track record of buying products and, frankly, not screwing up.

Who is Red Gate?

Here’s Red Gate’s web site

What’s the process?

Send me an e-mail at neil.davidson@red-gate.com explaining what your product is and why it fits what we’re looking for. The closing date for entries is May 31st 2009. We’ll get back to you shortly after, either to let you know we’re not interested or to ask for more information. At some point, we’ll meet up with you, make a yes or no decision, and sort out the details. It will probably take a month or two to go through the process.

Will you sign an NDA?

Not at this stage. If we decide to take things further, and start asking for sensitive information, then we might do.

Will I be able to carry on working on my product?

Maybe, maybe not. It depends a lot on you – why you’re selling, and what you want to do long term. Sometimes we’ve bought technologies and people have carried on working on them, but sometimes they prefer not to.

Why is Red Gate doing this?

We’re always looking for new ideas. We get e-mailed them occasionally, and stumble across them sometimes, but we figured it’s better to be systematic. If buying technologies is a good thing to do, then let’s do it well.

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If you’re one of the 1.8 million people who’ve viewed the youtube 3D reconstruction of the Hudson River plane crash then you probably think it was a straightforward, runaway viral success. But the truth is different: it’s an illustration of how luck, time, hard work and old media are all needed to create an overnight sensation. Here I talk with Dan Nunan, the CEO of Scene Systems, the company that produced the video.

Neil Davidson: Tell me the background of the reconstruction

Dan Nunan: It all started at Legal Tech – a big tradeshow held once a year at the New York Hilton. We were new to the industry, and initially were only going to window-shop. But I got offered a price for a booth that I couldn’t refuse. I felt pretty smug with my bargaining until I remembered that we only had four days to put something together. It wasn’t enough time to get a fancy stand built, and one look at the dust gathering on the office laser printer told me that we would be at the mercy of Kinkos for anything printed. T-Shirts weren’t really the style for lawyers – so what could we do? One of my team – Steve Breeze – was watching the news, and saw an animated reconstruction of the US Airways Hudson river crash – you know, the one where the pilot glides in and lands the plane on the Hudson without any engines. And everyone survives. Now Steve just happened to have a background of producing high-end animations for TV, and thought that he could do a much better job. So we thought we would see if we could hire a big screen, and just show this animation.

There were three hundred and fifty other companies at the show, and we wanted to do something that would stand out. The Hudson plane crash had happened a couple of weeks earlier. It was a great candidate – plenty of drama, and it had a happy ending. Everyone in New York was still talking about it. It took two people two days to put the animation together, working from the information we mostly got from the Wall Street Journal and other newspapers. Because we thought it was just for the show Steve decided to use his TV production skills to edit some sections and increase the dramatic effect.

Neil: So everybody came over to your stand to see the crash reconstruction, and it took off from there?

Dan: Yes, but it wasn’t as straightforward as that. The tradeshow started on February 2^nd. When we arrived in New York we realised we didn’t know anyone going to the show. February 1^st was Superbowl Sunday. So we decided to have a Superbowl party. The only catch would be how we actually got people to turn up, not knowing anyone being something of a stumbling block for throwing good parties. I got the member of the team who was the football fanatic to join Twitter and mention and put the conference tag into the ‘tweet’ There were a lot of people at the conference using Twitter, and searching for traffic about the conference, so a few people picked up on the party.

We were staying in a lousy hotel with a great lobby, so even if no-one turned up it was a short trip back to our rooms. In the end about fifteen people turned up, but these were some high-end influencers. Between them, they had thousands of Twitter followers. We bought them some beer, and then they started buying us beer. In the end, the whole thing only cost us fifty dollars.

Neil: Did you show them the animation at this party?

Dan: No – we just said that we had done one, and that they should come and see us at the tradeshow the next day. We hadn’t even gotten round to putting it on youtube at this point.

So we had lots of people come to see the animation – we probably spoke to 900 people, which was hard work as there were only three of us on the booth at a time. We become very good at running two or three conversations at the same time. They were all twittering about it: stuff like this conference is really boring, but check out the plane crash reconstruction at Scene Systems’ stand. A few people blogged about it too, and then the pro journalists started getting in touch wondering what the fuss was about. After the conference finished, we put it up on youtube and e-mailed some contacts we had about it.

Neil: Then they told all their friends and it snowballed from there?

No, not yet. About fifteen thousand people had viewed it on YouTube at this point. People were starting to pirate our video too – they were downloading it from youtube, editing it, and then putting it back up onto youtube. At the start these pirated videos were getting many more views than our original one.

Neil: How did you react to that?

My first instinct was to send them a legal threat asking them to cease and desist. But Virgil – he’s a recent graduate who’s just started working for us – told us that that isn’t the way it works on youtube. I started to feel really old. He wrote to the pirates and gave them higher quality videos to work with. We copied their idea of overlaying the audio onto the animation – we pirated the pirates – and put them into our video too. They linked back to our original video, so that drove even more traffic.

Neil: Was that the point it took off?

No, not yet. One of the people I’d met at the conference was Jim Haggerty. He’s a lawyer who runs a PR firm that specialises in crisis PR. He called me and said that he knows lots of journalists and could get us some really good press. I was sceptical – every PR guy claims to know journalists – but he was as good as his word – a couple of days later we had consecutive pieces in the Wall Street Journal.

That’s the point it started to take off. It was interesting watching it spread. We were tracking people’s IP addresses so we could see where the internet traffic was coming from. One day we’d notice that someone at Boeing had watched the video, then, within hours, two or three thousand people from Boeing would have watched it. The same thing happened with other big firms and government departments in the US, the Federal Aviation Authority and lots of big law firms too.

Neil: So it spread via e-mail and twitter?

Dan: Yes, but that’s not how it went mainstream. Most people, most normal people, don’t have twitter, or watch youtube. But journalists do. So we started getting calls from journalists asking if they could cover us. That’s where having a PR agency really helps. We tried to cope ourselves, but failed. In the heat of the moment we forgot that we had a PR agency. We had three national TV channels all asking us for information on the same day – they all wanted the video, but in slightly different formats. We screwed up, and lost the story on one of the channels. But it still went onto ABC that night, on the Rachel Maddow show, and was repeated on about a dozen channels after that.

And that’s when it really went mainstream. That caused the second wave. People saw it on television and then went on to the Internet and watched it. Pretty much every online publication had covered it in some way. Two weeks after we put the video online over a million people had watched it.

Neil: But did this actually generate any new business for you?

Dan: It’s too early to tell. We don’t specialise in crash reconstructions – we provide graphics and visuals for the legal system. One problem with the legal system is that it’s based on verbal argument. But this is often a bad way of presenting complex information to both judges and juries. Take a complex car crash – how do you explain what each person saw so as to establish what happened? You can have experts presenting reams of data, or you can show it visually. We use our own animation software to quickly create 3D reconstructions that explain complex evidence to an audience who aren&#
39;t technical experts, such
as juries. For example, we can quickly switch between different points of view, or focus in on a specific detail – such a pot-hole in the road or a part of the car that failed. The link between this and plane crash reconstructions is only tangential.

So, to come back to your question, although about two million people have now viewed the video, we’ve only had a dozen or so serious leads. It’s the difference between publicity and PR. A lot of eyeballs, but you aren’t after 1% of any old audience but 100% of the market that is right for you. But we’re hopeful they’ll be fruitful.

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“What’s your definition of marketing?” someone asked me a few days ago. I mumbled something vague and quickly passed the question on to the next person at the table.

People get hung up on definitions, trying to understand exactly what is sales and what is marketing and where the lexical boundary between the two lies. Much better to stop defining and start doing, I think.

But what does ‘doing marketing’ involve?

For me, it’s about reaching people who need your product, and then making them want it. There are two steps there and they’re both required. If you can reach your audience, but they don’t want your product, you’re doomed. If your audience wants your product, but you can’t reach them, then you’re doomed too.

A few weeks ago I sat in on a presentation given by a Cambridge University academic. Marketing, he said, is all about building a better product. Build a product that’s five, or ten, times better than your competitors and people will bash down your door to buy it. And if that doesn’t happen? Well, in that case the trick is to make your product even more brilliant.

This academic is only thinking about the second link in the chain, and is taking the narrow view that making a superb product is the only way to make your customers want to buy it. But there are other ways too – creating a tribe that people want to belong to, building a product that’s cheaper than your competitor’s or creating something that’s just a little bit better than the rest are all valid paths to take.

It’s less common for software companies to succeed in fulfilling the first step – since it’s so rare they even try – and fail the second, but one notable example is Windows Vista which people refused to buy despite near ubiquitous advertising. Everybody has their pet reasons as to why this was: mine include confused messaging, impossible to understand bundling and bewildering advertising.

So how do you reach your target audience?

There are many ways, but none of them is the single truth. If your target market is highly internally connected, and if your product is worth talking about, then sometimes you can reach a few key people inside the group and they will spread the word for you, much like a well evolved virus can spread like wildfire through a dense population. But don’t forget you need the second link in the chain too, which is ever so easy to do.

But that’s a hard trick to pull off. If your idea spreads too quickly, or too slowly, or is too sticky, or not sticky enough, if your market is too large, or too small, or too interconnected, or not interconnected enough, then it will flash through the population and burn out (the Hampster Dance) or simply fade away (think Snakes on a Plane).

If your market has no internal connections, or if you have a product that people are unlikely to talk about, then you need to reach people on your own, using traditional broadcast marketing such as advertising, product reviews and the more modern tools of blogging, Twitter and Google adwords.

Of course, the most likely scenario is that you need to do both. The characteristics of your product and market are probably such that you can’t just light the kindling and step back to watch as the market catches fire and blazes, but neither will you need to individually light every single twig.

The odds are that getting your fire going will be a long, hard slog requiring careful and regular stoking over many weeks, months and years.

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