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Winding down a product company

Winding down a product company

Winding down a product company

This month we started to wind down DNNspot.com one of Web Ascender’s product ventures.  It was a difficult task to decide the future of that mini-company because it was profitable, but that isn’t the only thing that matters.  DNNspot.com is a set of a dozen modules that could be purchased and installed into a company’s DNN website.  This would allow a company to easily add a shopping cart, photo rotator or map system to their website with little effort.

 

DNNspot started in 2008 and grew fast and quick but then hit a sales plateau.  One of the biggest reasons we didn’t hit it out of the park is the simple fact that we treated this more like a hobby then a business.  We made these products because we (Web Ascender) needed them in fulfilling our consulting obligations.  We then followed the mentality of selling our by-product. We already had it created the products; why not just sell them to more people.  Seems good in theory.

 

5 years after starting DNNspot we released all of our modules 100% for free.

 

Here are the primary reasons:

·      DNNspot was profitable, probably 2-3x cost.

·      The primary cost was support, which was a lot more than expected. Majority were just users who were in-experience with DNN. We didn’t have a good support model, and our module prices were between $20 - $300 so any support on a purchase killed our profits immediately.

·      We weren’t really committed to rolling out new features and improvements to the modules. They worked great as is, but didn’t have all the bells and whistles some other modules have. We didn’t keep adding features because we didn’t want to support the increased complexity of a full blown e-commerce system.  That stuff is complicated.

·      Overall our programming team has been very interested in Ruby on Rails in the last 2 years, we have been working on some prototypes and products that have been more exciting to us then continuing to release DNN modules.

·      The time we were spending on “support” type of work for DNNspot could make us a lot more money focusing on consulting.

·      We didn’t have a good recurring model for these products. Setting this up early in your product is critical. Our products could easily be a one-time purchase that we supported questions forever.

·      DNN is a self-hosted content management system, users install tons of weird modules, javascript plugins, different skins and designs and there are lots of factors that could affect other modules. In experienced users were always doing odd things that we had to investigate.

 

We actually outlined a really good game plan with some great ideas:

·      Setup bundled module pricing for selling more modules as a set

·      From the day of purchase you would get support and free upgrades for a set period of time

·      You could buy more support or a support subscription

·      Some changes to our licensing and pricing models

 

But with our consulting business growing and the focus on some of our other products we have been excited about such as Post Kudos we decided to do the DNN community a favor and our team a favor and open source our modules and release them for free. 

 

Downside: revenue for DNNSpot drops to 0. 

The upside: no more required support and customers can modify modules at will.  Our team can focus more on consulting and more profitable endeavors.

During the lifetime of DNNspot we actually had a couple people who were interested in acquiring the company.  The offers however, were not a good fit.  One was about a year into the project and we were still having a lot of fun with it and it wasn’t high enough. One of our last ones was when we were going through the transition to start open sourcing it.  The issue with our last one was that it would have taken time and effort to transition to another company. Educating the new developers on the source code, our licensing systems and doing a lot of hand holding to support them during the transition. 

 

We just didn’t want DNNspot to drain our time any longer as we were working on other interesting consulting projects and products.  It was as simple as that. If an AS IS offer would have come in, we would have considered it, but that would be unlikely to not require a lot of our effort in a transition.

 


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  • Web Ascender

    Web Ascender

    Web/Mobile design & development.
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  • Post Kudos

    Post Kudos

    Mobile App for client testimonials and customer reviews.
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    DNN Spot

    High quality, easy to use, accessible and search engine friendly modules.
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