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Deversus CEO's Tips: How To Move From Custom Software Development to Become a Product Company (Page 1 of 3)

Headquartered in Vancouver, B.C., Deversus Software was founded in 2007 by two software engineers: Mike Polga and Mike Walsh. Polga is on the development and project management side, while Walsh does the marketing, "but there are lots of overlapping roles," Walsh says.

At the outset the two Mikes ran a custom software development shop, very successfully; Deversus has 40+ clients in several different vertical markets that leverage unique, one-of-a-kind web-based applications created by Deversus.

Now, Deversus is getting ready to make the leap to become a product company, with their recently released Socket product, an online app that companies can use for automated quoting, lead management, payments, and reporting.

It's a logical move for any small company looking to grow and build equity value, but it isn't easy. Walsh offers a number of tips, gleaned from his own experience with the transformation.

Tip #1: The custom world requires specialization.

"For us, it's all about finding your niche," says Walsh. "We started with one client who had a specific need for a product that wasn't out there. 

"Since then, we've struggled to figure out where we wanted to go with the company; custom development is a very a broad thing. 

"You need to try to find your niche -- to become an expert in a field -- because clients want to know that you have that expertise they need. Don't try to  market yourself to everybody.

"A lot of people are worried about cutting themselves short; they worry that maybe the market isn't big enough, and maybe they’ll shoot themselves in the foot. 

"But the world is big place, and there's a lot of business out there. You can be more profitable when you specialize in something. 

"Most clients we found were on the web side, so we dug our little hole in specialization with web-based apps."

Tip #2: Marketing and sales starts with connections.

"Most of our luck has been with putting our stuff out there and letting people find us," Walsh says. "Approaching someone and trying to sell them on something they aren't looking for is difficult. People will contact us, we'll bring them in and talk about what they need.

"We started  out with family and friends -- we milked all our connections, but our network is only so big. Then we put an ad on Craigslist."

Tip #3: Don't just advertise, analyze.

"We created variations of the Craigslist ad," says Walsh. "We tweaked it as much as we could, tried to measure the results, and looked at Google Analytics: time spent on our site, number of pages visited, and so on. We found that even tweaking the title of the ad would make a significant difference."

Walsh shared with us (and our readers) his spreadsheet that shows average metrics of ad performance  from variations in the ad title. 

He also gave us a text file, complete with HTML coding, of the latest variation of the ad itself. 

If you'd like to easily see what the ad looks like online, you can paste the text into the handy preview tool at The JavaScript Source.

Tip #4: Narrow your key words for more qualified leads.

"We're self-taught about SEO [search engine optimization], and it really takes a concerted effort," Walsh says. "We took our niche and tried to optimize on those key words and the long-tail versions of those.

"For example, 'custom software development' is a key word for us, but there are huge companies with millions of dollars doing the same thing. So we've focused on finding niche key words. We maybe don't get as much traffic, but the traffic that we do get is much more qualified.

"We tried Google AdWords, but it's extremely competitive and not effective for us. The cost per click could be $5 to $10 for us. It was more effective for us to go with long-tail key words.

"So, instead of 'custom software development' we might try 'Vancouver custom software development' to find people in our area, or we might focus in on our niche with 'custom web application development.'

"Those key words were easier for us to optimize on our web site. We're going to be finding the people who want we do."

Tip #5: As you move to a product orientation, keep it simple.

"We plan to keep it small and agile right now," Walsh says. "We're trying to focus more on Socket. We'd like to build out revenue from that, and we want to keep costs under control.

"I'd say the best business advice I've received is from 'Rework' [by Jason Fried and David Heinemeier Hansson]:  Keep everything simple and transparent. 

"Focus on doing what it is you enjoy doing, rather than focusing on just making money. If you focus on what you enjoy, there's always a way to figure out how to make money around that. After all, financial projections are guesswork."

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