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2Inspire Interview Series
We continue our series of Web VIP interviews with Paris Karahalios, one of the co-founders of the Shareware Industry Awards Foundation .
Given the fact, that the term "shareware" has become rather controversial during the last years (I remember reading an article on OISV, Is it time to kill "shareware"?), I thought what better way to get to the bottom of this issue than to interview the people who were among the first users of this marketing method and one of the founders of the Shareware Industry Awards Foundation - and so I'm grateful that Paris Karahalios agreed to talk to me.
Paris Karahalios is one of the first software vendors to sell its products using shareware as a marketing method. He has an active implication in software organizations and he is the author of the As-Easy-As, a spreadsheet software product succesfully sold all around the world. He also acted as an advisor and resource person for the creation of the European Software Conference. In recognition of his efforts, he was given in 2004 the Shareware Industry Lifetime Achievement award.
Adriana Iordan: This year was the 17th edition of the Software Industry Conference. As one of the five founders of the conference , can you tell us which is the difference between how the conference was perceived 17 years ago and how it is perceived now? What's the success recipe?
Paris Karahalios: The first conference was the brain child of Bob Ostrander, it was funded by his company, Public Brand Software , and was really an opportunity of some people in the shareware industry to get together and meet each other - more like a schmooze. It was not even called a conference, it was the Summer Shareware Seminar (SSS).
Our most successful ventures have been when we admitted that we did not understand the markets outside the USA and started partnering with local companies in each country.
Although there were impromptu panels where 4-5 people shared their knowledge and experience with everyone, it was very casual, and very exciting - at the same time, because we all got to meet people that we had only read about, up to that point.
I don't think too many of us got much sleep for the 3 days of the first SSS. We all had so much to learn from each other, that we stayed up till 3:00 - 4:00 in the morning, in the foyer, or someone's room, just talking, listening, learning... You could feel the energy.
The conference has grown over the years, to a much more structured event, aimed at providing as much value to the attendees, as possible. I believe the conference is now perceived as the premier event of the industry, and it is starting to expand and include micro-ISV's in general, not only those strictly associated with shareware.
Although dozens of people have helped make the event successful, I have to mention the two people that " I " believe were instrumental in steering the conference from the informal get-together of 17 years ago, to the big classy event it is today. One of them was Randy MacLean, one of the co-founders of SIAF, and the other was Donna Rintamaki (Trujillo), a SIAF Board member emeritus.
Success recipe? Hmm, I wish it were that simple... As with everything else, lots of hard work, but above all, passion! The 5-member volunteer board collectively spends thousands of hours each year, planning and managing the event. Their passion for it and the constant support from all the sponsors and speakers each year, is the recipe.
Adriana Iordan: Do you have any feedback on the other software/shareware conferences held in Russia or Europe? How do they compare to SIC?
Paris Karahalios: We do get some feedback on other conferences, and I am also an advisor to the European Software Conference (ESWC), so I get some "extra" feedback regarding that event. It's hard to compare the conferences to each-other. I think that each conference is a success in its own right. There was a lot more chatter about the Russian conference, in years past, than recently, and I don't know what that really means.
The market was not as crowded, and it was much easier to identify segments of the market that were begging for new applications.
The ESWC, is closer in structure to the SIC, and appears to be steadily growing and attracting more attendees each year, with "very" positive feedback! However, as I said earlier, it's hard to compare the different conferences, as each has its own character and flavor.
Adriana Iordan: Since you have been one of the first software vendors who used the shareware model, can you tell us which is the difference between how shareware was perceived 15 years ago and how it is seen now? Have your expectations been confirmed in regard to the impact of this concept on the software business?
Paris Karahalios: You touched a nerve. The perception of shareware has indeed changed, significantly. 15 years ago, although still only a small percentage of users would register and pay for software distributed through shareware, most knew what shareware really meant, and were making a conscious decision to register/pay for a specific software product, or not. Fifteen years ago, a good percentage of PC users were still "hackers" of sorts, and they were aware of the "sharing-but-having-to-pay" concept.
The new "internet culture" has changed all that. Most users, nowadays, expect to be able to download "your" program from the internet and use it for free. Why not, they can do that with so many other programs! What this means, is that the developer/vendor has to become more creative in convincing trial users to pay for the product. It's a challenge, but not impossible. I don't want to give away other people's secrets, but there were a couple of sessions in this year's conference, in Denver, dealing exactly with that subject. Innovative ways of getting paid for software you distribute as shareware/trialware.
As to whether my expectations have been confirmed, yes and no. I often think of what Steve Lee, one of the first shareware disk vendors from the UK told me, many years ago, regarding shareware (it eventually became the logo for his company's letterhead). "All software will be sold this way, someday". Nowadays, you can download evaluation versions of Microsoft software! Who would have thought that Steve Lee's prediction was right on the money! On the other hand, I did expect that more computer users would understand that they need to pay for trial software, if they continue to use it, and I am not certain that it is happening.
Adriana Iordan: I know you run your own company and you were among first to use the shareware marketing method to sell your software products. Was there a moment when you thought you should have given up and closed Trius Inc.? What did you do when you didn't have any clients?
Paris Karahalios: We developed software products that we marketed in many different ways (direct mail, resellers, private label, retail,...) including the shareware marketing method. I have had my share of frustrating moments, in the last 21 years of running TRIUS Inc , and although in the heat of the moment I sometimes thought "I wish I just worked for someone else, and let them have the headaches", each time I quickly realized that TRIUS, Inc. is part of me.
Perceptions are very important. Have procedures in place for doing things, releasing upgrades, tracking support problems, tracking sales, etc., rather than doing it on the back of the envelope.
So, not really, I haven't seriously thought of shutting down the company... When we didn't have any clients, and were not busy, I used the extra time I had, since by definition we were not busy, to think of what else TRIUS could do, to break out of the tough spot we might have been in.
Adriana Iordan: Can you tell us a little more about this? How it all started?
Paris Karahalios: A lot of this information is public knowledge, and has been posted in numerous forums, as part of the SIC/SIAF history , so I will try not bore you with too many details. I was working in the Nuclear industry, in the early 80's, spending lots of time developing and adopting mathematical models for mainframe computer solutions, when the company I was working for purchased their first IBM PCs. I used the original IBM PC 5150, with the dual full-size floppy drives once, and I was hooked. I started porting some of the mainframe solutions to the PC. In one of the company's PC User Group meetings (the company was large enough to have a few of these), I met David Schulz, who was also a PC enthusiast and "excellent" programmer and we became good friends.
A year or so later, while using a spreadsheet prototype program, that Dave was working on, to analyze some of the Chernobyl accident data, that I was working with, we decided to form TRIUS Inc (we even asked for a formal written release form the company's lawyers to do so - doing everything by the book). The intent was to market a Dot Matrix Printer utility program we had developed, and also turn the spreadsheet program (As-Easy-As) into a full product for users that could not afford Lotus 1-2-3.
Soon after TRIUS, Inc. was formed, there was a lot of interest in As-Easy-As, so we abandoned our printer utility program and concentrated on the spreadsheet. I was familiar with the shareware concept, having been a user of PC-Write for years, by then, and since our marketing budget was about $0, I realized that the only way for us to distribute the program was as shareware.
We did that, and started sending shareware disks to disk vendors, produced a printed bound manual, nice glossy disk labels, etc. Orders/registrations for As-Easy-As started coming in faster than we expected. We used to alternate with Dave, fulfilling the orders. He would handle them for a couple of months, until he got tired, and then I would do it, until we switched gain, and again,... It was hard to have full time jobs, and try to build this business on the side. We got very little sleep in those days.
It soon became too much for us to handle, so we rented office space, and started hiring people to take care of the orders, provide support, etc. We also hired another friend - from the same company we all worked for, Dave Leonard, to manage the office. A couple of years later, I had to quit my job and focus all my attention to TRIUS, and not much later, David Schulz had to also quit his job and come work for TRIUS full time.
Again, without too much detail, As-Easy-AS was very successful, the program was published in English, German, Spanish, French, Chinese, Japanese, Portuguese, Italian and the full product was being sold through partner vendors in 28 countries around the world. We also took advantage of our scientific/engineering formal training and developed a CAD product, Draft Choice, as well as a 3D modeling product and other derivative products.
In the early 90's, we got involved with mapping, at the beginning developing mapping applications for other companies to private label, and eventually developing mapping technology came to be our main activity. We currently develop end-user mapping applications (Precision Mapping Streets and Traveler) and mapping SDKs (MapOCX Pro, MapTivate, etc.)
Adriana Iordan: Which are the three marketing outlets for your products that you found most useful in leading to conversions?
Paris Karahalios: That's a tough one. However, what I can tell you is that our most successful ventures have been when we admitted that we did not understand the markets outside the USA and started partnering with local companies in each country, giving them exclusive rights and maximum latitude in marketing our products in their respective markets. We let them decide how they would market the products, set their own pricing, etc. and we did all we could to support their decisions.
My motto always was that it's hard enough to understand the "shareware market" here, how could we aver expect to understand how it worked in different countries, different cultures, etc.
Adriana Iordan: What are the common problems software vendors using the shareware as marketing method face today from your point of view?
Paris Karahalios: The common issues I believe software authors marketing their own products face, today, are:
- Competition with the plethora of freeware, some of which is getting to be of pretty good quality,
- Identifying a niche market to develop a product for.
- The age old problem of convincing users to pay for the software, once you are able to get it to them. I believe things were a bit easier when we got into the business, 20+ years ago.
The market was not as crowded, and it was much easier to identify segments of the market that were begging for new applications. So, in a way, we might have been at the right place at the right time, whereas new authors entering the market have to work at it a bit harder.
Adriana Iordan: Is there a piece of advice you would like to offer a software author just starting their business?
Even in today's "casual culture", many of the people that will be willing to pay for your product, will form an opinion based on what they see and the opinion they form - they don't know you personally.
Paris Karahalios: I guess... Don't give up, and approach everything with the professionalism that would be characteristic of a bigger company. I still remember what Marshall Magee , one of the first shareware developers to make a million dollars from shareware (back in the 90's) told a group of us at one of the first SSS meetings.
"I used to answer the phone using different voices and different names, when people called for sales or support, so that they would think that they were dealing with a stable company with many employees, rather than with a "one-man-show".
Perceptions are very important. Have procedures in place for doing things, releasing upgrades, tracking support problems, tracking sales, etc., rather than doing it on the back of the envelope. Make sure you present yourself and your product in the best light possible. Don't be afraid to spend time and (some) money to make whatever you do appear professional.
Even in today's "casual culture", many of the people that will be willing to pay for your product, will form an opinion based on what they see and the opinion they form - they don't know you personally. That still holds true, in particular with corporate buyers. So, show them the best you can afford, you will not regret it.
Adriana Iordan: When was the first time you heard about Avangate and where? Can you give us an advice for the future to succeed as an e-commerce provider!
Paris Karahalios: I first heard of Avangate last year, at the SIC. All were good things. The only piece of advice I could offer is, be responsive to the authors. Let them know if there is a problem, tell them that you'll fix it, etc. Don't ignore their calls for help or formation. That has been one of the issues authors complain about publicly, over the years. Be responsive and keep them in the loop.
Adriana Iordan: Paris, thank you for your interview and we promise to keep up the good work and flexibility for our clients!