Why don't I host Mockups myself?
A couple of beta testers have asked me why I don't host Mockups on balsamiq.com as a ad-based or subscription-based niche Web 2.0 app.
First let me get the "advertising-based" part out of the way: ad based business models for startups make me laugh. Ad-based business models only work if you have MASSIVE traffic numbers, so all the startups that say "we'll be ad-based" really mean "we hope a big player will buy us". Luckily I feel like that insanity is drying out. Not to mention that ads are annoying, look unprofessional and get totally tuned out unless they are useful to you (i.e. you are in the "I'm looking for answers" mode). Ok rant over.
As for subscription-based, my short answer is: I can't afford to.
Lots of startups today don't realize that hosting a web app on your site is a lot of work:
- you have to keep track of your users. Usernames, passwords or even credit card numbers. Private data that hackers would LOVE to get their hands on. Protecting that data is not easy and your customers will want to make sure that you protect it properly or they won't buy. I just don't want to take that risk right now, nor I can afford to spend the money to do it right. When you buy a Balsamiq product, I - actually, PayPal - asks you the minimum amount of personal information necessary to make the sale, and don't save any of it in a publicly accessible part of the site (I keep your name, company name and license key in a private Google Doc)
- if you are popular, you'll have lots of users. How are you going to support them? Sure forums and GetSatisfaction can help, but once people start paying you they expect to be able to get an email or even phone answer in a reasonable amount of time. As a small startup, I just cannot support tons of people, nor I can afford to hire people to do it. I'd much rather give a higher level of support to fewer customers, who each pay more than a few bucks a month.
- you have to keep your servers running. Three nines, four nines, yuck. Even two nines basically means "I can't ever take a vacation" to me. I appreciate people whose job is to keep things humming for the rest of the world, but as a small company, I don't want to live like that.
- the profit margins for hosted services are too low. Should I charge $5/month? I doubt I'll be able to justify the overhead, seems more like a hassle than anything else. Even 37Signals guy says that. Could I charge $30/month per user just to use Mockups? I wouldn't pay for that, and I doubt anyone else would. 37Signals builds very horizontal web apps because they need to have big numbers to justify the hosting.
- A good and reliable hosting provider is not cheap (around $100/mo maybe?) - please don't tell me that AWS or GAE will make it all cheaper and easier. That's just another ISP, the customers are still yours and you have to support them.
- if you are serious about selling subscriptions, you need tele-sales, i.e. lots of people who call potential customers and try to make the sale. Notice how the big subscription players like WebEx or Salesforce all do this. Now you wouldn't need to do this at first, but you would if are serious about your service and want to make it big. I can't afford to hire anyone to do this, nor I want to. I'd rather use my "cold calling" budget for someone who might give me $4K all at once, not $5-$40 a month.
- I would be stretching myself too thin: running a hosted service is an every day work (it's actually a 24/7 work). I would much rather have a regular work and spend time with my family without having to stress.
That said, I have lots of ideas of what a community site powered by Mockups could be. Interface architects giving each other feedback on UI's usability, a rating system, templates, designers iterating on designs with customers through my site, etc. Maybe one day...but now I can't afford to.
So what should you do if you really want to use mockups but don't have Confluence/Jira or another Web Offiuce platform? You can use the Mockups Live demo version, export your mockups as XML and email that to your friends/customers. They'll be able to import the XML, see your mockup, tweak it and send it back. I know, it's not ideal, but it works. Working that way is not a lot of work for you and not a lot of work for me. I think that's a fair deal.
Next time: why don't I sell Mockups Desktop for $30 a pop?
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