It's relatively common for software developers to give distributors and resellers overseas the ability to produce product CDs and other deliverables. Before you get talked into this practice, however, learn from someone who's been there.
Nowadays, Mark Riffey has his own six-person software company, Granite Bear; which develops and markets photo studio management software.
A few years ago, though, Riffey was a developer at a company that sold mainframe utilities; he was also part a small group that firm's owner went to for strategic decisions. This company had 40+ products in the price range from $500 to $10,000, and they sold through distributors overseas.
To make this work, they gave the distributor in England the ability to generate the keys needed to unlock full versions of the software. Well, it turns out this distributor was using Riffey's key-generation program to print money.
"The guy was not recording all the sales he was making," Riffey says. "He was reporting just enough to keep us chilled out. Over two to three years he had ripped us off for about half a million dollars."
How did Riffey catch the crook? "I had suspected something was up, so I made a change to the key program so that it would time out," he says. "After we gave the distributor a software update with this program change, suddenly the guy's sales increased.
"So, we started doing a little research. The owner flew over there and dropped in, with a representative from the English court. They ended up searching through all this guy's records, and found that he had money in Lichtenstein and the Bahamas and all the other places you can go to launder money."
Despite this sleuthing, the story does not have a happy ending. "If you're not used to the English court system well, you can basically expect to open your wallet, dump all the money on the floor, and not get anything out of it," Riffey says. "It's a very frustrating process, and it is not something you can do on your own. We ended up chasing the guy around for the better part of a year, and never got a dime out of it."
The moral of the story? "Never let a distributor distribute keys, under any circumstances," Riffey says. "If they want to duplicate CDs, I don't have a problem with that, but all the keys come out of here. When a customer purchases, they get a customer key from us.
"If we don't have full contact info on the customer, we won't issue the key. Of course, what we're doing won't work in all cases; if someone is going into a store and plucking your CD off a shelf, or if you don't capture customer information, all bets are off but we're not in that space."
The title of a new book by Alyssa Dver, "Software Product Management Essentials: A Practical Guide for Small and Mid-sized Companies," gets it half right, in our view. The book does teach the essentials, but it isn't just for smaller ISVs; we can think of lots of product managers at giant firms who'd benefit from this very useful guide.
In just 140 pages, Dver touches all the bases regarding product management, and, considering all that the job entails, that's saying quite a lot. There's a chapter on the BLIP development process, chapters on product requirements, delivery, and beta testing, and four more chapters on marketing and sales-related issues, including pricing and distribution.
However, the book's ambition is both its weakness and its strength. If you are already a successful product manager, you probably won't gain much from Dver's discussion there's just so much you can do in such a thin volume.
For example, the 12 pages she spends on product marketing provide a nice overview of the issues a product manager will need to face, including naming, logos, trademarks, lead generation, and sales support. But, obviously, there's no way you're going to become expert in product marketing in a 12-page read.
To be fair, that isn't Dver's intent, so we're not criticizing her book on those superficial grounds. "Software Product Management Essentials" does cover the essentials, and in that respect it's a terrific review of the sometimes mind-boggling range of knowledge that a product manager must possess.
Plus, there's a nice bonus: Dver has included 50 pages of appendices containing valuable templates and examples. There's a sample BLIP plan, product development team checklist and rules of engagement, a beta test plan, a list of additional Web and print resources, and more.
The cover price for "Software Product Management" is $34.95; SoftwareCEO Site Members can save $7 off that price and get free shipping through our Buyers' Club; it's in the R&D and Quality section.
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