Saturday, May 7, 2011

A Hard Business Lesson Learned at Stir Trek

Yesterday I attended the Stir Trek developer conference. My company, Kellerman Software was the Refreshments sponsor. It was a fairly inexpensive advertising test, $500 for; a slick in the attendee bag, the company name on the website, a label on the popcorn bags, and the logo in the conference program. The graphics for the slick cost me $114, the slick printing cost $180, the labels $59, the label printing cost $22, and the popcorn bags $36. My wife and I spent two hours putting labels on popcorn bags on a Saturday (our time was considered free). All for a grand total of $911. The goal of the advertising was to get the attendees to purchase a $1400 product for only $99 (Ninja Database Ultimate). The end goal to acquire a new customer that would purchase other items in the future.

I watched people as they opened their attendee bags. I noticed that they did not look at any of the other sponsor material. When they saw the Kellerman Software slick, they read it and then put the attendee bag in their backpack or threw the attendee bag on the floor. I was excited to see that at least they had actually read the advertisement. I was hopeful at this point for a couple new customers from this conference.

When they received their popcorn, there were a bunch of people all at the same time, trying to scan the QR Code that I had put on the bag. Again I was excited about the prospect of new customers. This is what I heard from the row of seats that I was in and the row in front and behind me (they had no idea I was the Kellerman Software CEO):
* What is this thing on the bags?
* A $1400 product for only $99? This must be a joke.
* It probably cost the sponsor $1400 to put the labels on these popcorn bags.
* I can just use my database that I built.
* Ha ha, maybe you can sell your database for $600

I went on to tell the person in back row that the price wasn't a joke. I asked them if they thought it was a good deal. I told them I was the developer of the database. I could tell they were embarrassed at what they said and they replied with "Oh, great."

The person that was sitting next to me had developed a small database to save with JSON. He was upset with me and with Kellerman Software for selling a database. The only features that it had was CRUD. He went on and on about the performance. Of course with hardly any features the performance was high. There were no indexes, no foreign key relationships, no constraints, and no transactions. I guess that is fine if you are not writing a business application.

Clearly even though it is only the day after the conference, with reactions like that, I will not be selling a single license of Ninja Database Ultimate for $99. So was the $911 a complete waste of money? No. Why? Because of the lesson that I learned.

I thought it was maybe just me, the advertising, or maybe it was just too good of a deal. It was none of that. After lunch I heard a bunch of developers talking in disgust about the lunch presentation. Telerik had paid $2500 for the lunch sponsorship and the ability to give a 15 minute presentation. Telerik is a well respected control vendor that is in the top 10 in sales on component source. Here is what the attendees were saying:
* The lunch presentation was a waste
* Thank God the proctor in our room lowered the audio to 20%
* Phil is a good speaker but JustMock is clearly a rip off of Rhino Mocks
* Yeah, I bet if you use reflector you will just find Rhino Mocks in there

Hmmmm. So the reaction to a vendor that has just paid for their lunch is not gratitude but disgust? It is shocking that they accused a respected vendor of fraud. What is wrong with this picture? What is wrong with the attendees?

Most conference developers are business ignorant. The attendees, all software developers, have no idea about conference costs; nor should they. One CodeMash attendee said it best, "Wow these are pretty good buffets for only $110" It costs thousands of dollars to put on a conference. Without the sponsors it would be impossible to put them on.

Some developers believe all software should be free. A lot of the developers at these conferences are at the top of their game. They are always learning something new, they love open source projects, and have their own open source projects. There is a prevalent anti-commercial software attitude at these conferences.

Some developers are dishonest. Since the developers believe the software should be free they daily violate copyright laws by downloading pirated movies and running pirated software. I overheard one developer say recently that he had to start deleting movies from his 2 Terabyte Hard drive because it was filling up. One developer smirked as he said he was still "Evaluating" TestDriven.NET...forever. It doesn't stop at developers, IT managers are dishonest too; I have seen a lot of license violations over the years; a company buying a single developer Infragistics Suite license and using it for 10 developers, a company buying a single user license of Active Reports and using it with three developers. I still remember being laughed at when I told the other developers on my team that I bought WinZip to be honest. They continued to use the 30 day trial for months.

So some of the conference attendees, are business ignorant, dishonest, free loaders. So should this be my target audience? No! No! No! It took me 6 years to figure this out! Wow I feel so stupid just now connecting the dots. My business should target other companies and not developers. I should have known this from all my other advertising tests:
* Did the $10,000 I spent in print advertising work? Not a single person bought.
* Did the $2500 web advertisement on Code Project work? Not a single person bought.
* Did the $2000 SharpToolbox web advertisement work? Not a single person bought.
* Did the $2500 email advertisement on Code Project work? Not a single person bought.
* Did the $911 I spent at StirTrek work? Not a single person bought.
* Did Scott Hanselman's tweets work? Not a single person bought.

I asked one of the developers there if he was going to buy and he said "That is a $100 I don't have." The funny thing is he paid $35 to attend the conference and took the entire day off work to attend. I bet he gets paid more than $8.13 per hour.

Developers don't buy, companies do. Developers recommend but if you try to sell to them they are flat out angry. So with all this information I am going to change my strategy. I was originally intending to sponsor the local CONDG meeting and do some free give aways. The next goal was to sponsor and do give aways at all the INETA groups in North America. I can now see the reaction to that would not be gratefulness but disgust. Developers simply do not like being sold to at all.

Obviously the other control vendors in my industry haven't figured this out yet either as they are still ignorantly throwing money away by sponsoring these conferences. If someone from Telerik, Infragistics, or Component One is reading this, it would be best to stop throwing advertising into these conferences as it does not work. If you can, track sales for the conference; guaranteed it will be zero.

So you may still have the question in your mind. Is Ninja Database Ultimate really worth the $1400? No, actually it is worth $17,000. Over a period of 9 months I wrote 600 unit tests and paid a group of developers $17,000. Yeah, $99 for a $17,000 database is not that great of a deal.

Thus ends my rant. Thank you for allowing me to vent.


#stirtrek @stirtrek