旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � HomeCraft's Small Business Journal 넴 � SPECIAL ISSUE 넴 � The 1992 Summer Shareware Seminar 넴 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸� 賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽� 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � 넴 � DISTRIBUTOR'S TRACK SESSIONS 넴 � 넴 � The Disk Vendor Business 넴 � 넴 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸� 賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽� MODERATOR, BOB OSTRANDER: Welcome to all disk vendors, BBS sysops, retail people etc., etc., etc. In case you are confused, this is the start of the distributors track. In this session, we're going to talk for the first hour basically to shareware disk vendors. How many people in the room are shareware disk vendors? I'm sorry, I should ask, how many of you here are not, presently, shareware disk vendors? Some of you are here out of curiosity to see how the heck we do our jobs and you've come to see about becoming a shareware disk vendor. At the far end of the podium we've got Jim Green, who is presently with Shareware Testing Laboratories, this being his second Shareware disk vendor venture. The first was the Generic Software Place, which literally was a push-cart in a shopping mall. He's one of the most experienced disk vendors around. He's from here in Indianapolis, and has been a thorn in our side for... oh... Next to him is Irv Salsky, the General Manager of PC-SIG. PC-SIG was the first disk vendor as far as anybody can tell, and is also, of course, one of the very largest. They did own the market for years and years and years. In the middle, Terry Ramsteader, who is the General Manager, if you will, of Public Brand Software. I could extol the virtues of PBS for a while, but I won't. Mike Comash, next to Terry, is Owner/President of Software Excitement in Oregon. Mike, you've only been around for three or four years? RESPONSE FROM MIKE: Since '85. MODERATOR: Since '85? I'm sorry. I should have said, nationally known for the last three or four years... and he is someone who has made quite a splash with some unique approaches to catalogs. I've noticed recently, specific catalogs for different areas and your approach to smaller catalogs versus large catalogs etc. And at this end is Anthony Saleba of Most Significant Bits. Anthony, have you been in business three or four years...? RESPONSE FROM ANTHONY: Three years. MODERATOR: Three years. Your company, which has an extensive catalog with a very, very large library, has been sending out one heck of a lot of mailing pieces, I've noticed. That's something that we want to talk about later. Basically, I'd like to again start at the far end of the table and just have everybody tell, for about three or five minutes, their innermost secrets about how their company got to be where it is today; what they think is the most prominent or the most important things that they've done right; and maybe what they've done wrong. Let's start with Mike, and work down and come back. Go ahead, Mike. PANEL MEMBER MIKE COMISH: Mike Comish, Software Excitement. Gosh, we've been around since late 1985. We actually started in the Amiga area, and then started in IBM in 1987. I started doing this full-time in 1988, before that it was sort of a part-time venture while I was in college. Something that we've done -- something I think is unique with our company -- is that we focus on and carry a smaller number of titles. We do this for a reason, not just because we're lazy. We like to focus on what we consider to be the best programs for the market we serve. For the type of computer user that we go after, we try to find the programs they will enjoy the most and buy the most. This causes us to constantly reevaluate each program in our collection because, as we get new programs, we have to make room and decide what has to go. I guess we basically have two major rules in selecting what goes in our catalog. Rule #1 is: no matter how popular it is, if it's not good, we won't carry it. Rule #2 is: no matter how good it is, if it's not popular, we won't carry it. Some of the programs we've loved the most just didn't sell well in the catalog, no matter what we did. So when we had to make room for other things that our customer wanted, they had to go. We've had programs that were #1, but we found out something about them we didn't like or we lost track of the author, or couldn't locate the author, or just we found better programs. We've actually sometimes dropped our most popular programs just because we felt they didn't belong there, quality-wise, any more. Because we have the smaller catalog, it's allowed us to do a good job with the programs we do carry. We publish a color catalog. I think we're one of the few, if any, that do that. And we find that showing people a screen shot of the program works well. Basically, since we've gone to color, the programs we've done screen shots for in the catalog have sold about three times as well as they used to before we did color. Now, our total gross sales haven't really increased that much -- maybe I'd say about 10-15% because of the color -- so it's kind of at the expense of the programs that don't have screen-shots. Of course, certain programs lend themselves to that better. PANEL MEMBER TERRY RAMSTEADER: Okay, I'm Terry Ramsteader, with Public Brand Software. We - actually, Bob - started Public Brand Software back in 1985. I came aboard in 1986. It cost me my real job in 1986, and now I've been doing this for six years. We basically went to a lot of trade shows early on, went to Ham Fests, wherever there were computer-minded people, we went out after them. We also started early on with rating the software and being quite selective in what we also put into our library. We're a little bit different than Mike in that we will carry odd programs, even if they don't sell real well, if there's nothing else out there that will do the same job for us. We later on started doing a little advertising, and started using it more than the hand-to-hand contact we had used in the past at trade shows. We did inserts with various magazines, some space ads, but generally speaking, our best tool for Public Brand growth has always been hand-to-hand, word of mouth. The core of our business is word-of-mouth. Look at this great catalog. It'll have the tool for you to do your job and it'll be the best tool for that job. That's really the market that we go after. I think that pretty well sums it for that part of it, so we can go on to Irv. PANEL MEMBER IRV SALAKY: I'm Irv Salasky with PC-SIG. PC-SIG was started in 1983 with Richard Peterson running, I think, running a small 1/8 or 1/16 inch ad in Byte Magazine. I think he had perhaps half a dozen or so shareware titles. As far as some recent history... the shareware market, as far I can see, has been pretty much selling to just about the same people. It was easy to have growth in the early years. I think a lot of people, especially through bulletin boards, came to know what shareware was. In many cases, shareware was typically the leading edge technology for particular types of programs. PC-SIG grew rapidly and did very well, but ... mother nature doesn't like a vacuum. So competition came in. I think what had then happened is that any newcomer pretty much grew rapidly to a certain point, and then peaked out and stopped growing. I think it was because we were servicing the same customer base. PC-SIG's current direction is not toward that same base. I've only been with PC-SIG since July. From what I can see, and excluding the people in this room, I doubt that many people know what shareware is. I'm talking about the average computer user. If you take a computer user who has a computer both at the office and at home, and you ask them whether they know what shareware is, I would pay money that perhaps only 5% even know what shareware is. As far as PC-SIG's current direction: it's to spread the gospel, the word if you will, on what shareware actually is. That's what we're now geared to do. Take the magazine. You may have noticed the cover has changed significantly from what it was before. We're looking to make the cover purely a marketing tool to get people to pick up the magazine. That's it. If they pick up the magazine and see what's inside, hopefully they'll buy something, or at least become acquainted with what shareware is. People within the educational market still do not know what shareware is. There's a vast population of computer users that we need to get in touch with. We've been doing that by getting additional marketing lists. We're no longer looking to service just our own customer base. Here's an example. Today, I had a copy of the recent issue of Shareware Magazine on the plane, flying in here. I had finished going over it and just laid it to the side. There was an individual about four rows in back of me who said, "Hey, I saw that cover. I need to know what it is." He read it from cover to cover. I asked him whether he knew what shareware was. He said, "No, not until just now." And he was an experienced computer user. Unless we're able to get the word out, I think sales will be relatively static, or at an even level. The past year has not been the best year for us, and it's a result of all the competition servicing the same base. We need to increase that base. We need to let more people know about shareware. That's what we're striving to do. That's why we've increased the number of pages within our magazine. And it's essentially all color at this point. Those again are marketing motivated changes. If we can get someone to open it up, look at it, read it and see what's available, they've got to find something. As far as the types of programs we're looking at, we're looking at every one of them. Every one that comes in. We typically get an average of perhaps 75 programs a week as submissions, and we need to go through each and every one. We want to find out which ones work. We know that for one particular utility we may have 20 or 30 programs. A new one comes in and we ask ourselves, "Is this any better than the previous one?" When we send out a rejection letter to the author we receive a lot of static, and this is something we have to bear with. We're looking to get to all the types of people, all the professions, all the applications, whether it's hobbies, education, games, business uses; we need to get to all these people. That's what we're driven to do. NEXT PANELIST, JIM GREEN: My background's a little bit different from these gentlemen because I've been primarily in retail establishments instead of mail order. Back in, oh, I guess late '86, early 1987, I took a look across town and saw Bob Ostrander over there doing very well in mail order. I noticed that there were lots of other mail order companies out there and I said, "Well, by gosh, that's good. These guys are making money, but there's a whole market they aren't reaching." I didn't have capital to start a new company, but I found myself a partner, went into one of the malls -- the biggest mall in Indianapolis, Castleton Square Mall -- and sat there for 12 hours a day, working when I could work and selling when I could sell, and creating the library. I would go over and get a disk from Public Brand Software and look at it and find out whether it was something I wanted to put in my catalog... COMMENT FROM BOB OSTRANDER: I still think you have an outstanding invoice... JIM GREEN: That's true... and they were very gracious about it. But I would meet a whole class of people that either didn't want to order through the mail, or didn't want to download from BBSs, or didn't know what BBSs were. So I based my business on service. I could help the novice user who didn't know how to use his computer, because I could show him right on the spot. I had my computer there. I followed PBS' cue and I started to put some instructions on my disk. They were the leader in that area. So the person typed in, in the case of Generic Software GSP, and up on the screen would pop a message that said, "Here's what you do to get started," I did very well and made a lot of contacts that way. You'd be amazed at what kind of people come through the mall, and they'd get interested and excited about this. Some of them with money, and some of them saying, "Hey, you know, if you ever want to expand this, if you ever want to do something else, come to me, maybe we can get together." Well, I reached a point where I wanted to expand and my partner didn't, and we were at loggerheads because he was content coming to work three or four hours a day and collecting half of the money that was earned and then going off. I was sitting there for 12 hours a day, and so finally I quit. But I had made contacts during my years there; one of them was the largest classified advertiser in the country. They said to me, "Hey, we want to get into the shareware business, and we're ready to back you. Come work for us." Thus was born Shareware Testing Laboratories. Again, I felt that the thrust should be retail rack sales. Back in '86 and '87, I was kind of a dirty guy in the shareware business. Bob [Ostrander] would relate stories to me about how he'd talk to authors, and Bob would tell them, "Well, there's a guy out in the middle of the mall selling shareware." And the authors would respond, "Oh, that's the guy we want to stop." It was terrible to distribute shareware in the retail environment. And then last year, when we announced we were going into rack sales, that caused somewhat of a commotion, too. It was kind of new, even though there had already been one company doing it kind of unobtrusively for a number of years. But in the last year, a number of companies have gone into rack sales. It takes a lot of money to get into rack vending. If you're trying to get into the business, you're going to have to start small, and get known, and find somebody with money, if you don't have it. It's incredibly expensive to get started. I still think that in major malls there are opportunities for somebody to be a vendor to get into the mall: work in the mall, build your reputation there, and start to create income from there. One or two people in a mall can earn a very nice living, if it's a big mall. It's expensive -- when you start thinking about it, a little scary. But $5,000 will get you in and give you a cushion as you get started. We have since gone to automatic installs on all the disks we have. The public is incredibly naive when it comes to following even simple instructions about getting something installed in their computer. I had a number of calls in which I was told, "You sold me a blank disk." And I said, "I did?" And they'd respond, "Yes." In one case the guy said he typed in STL, which is our start-up comnmand, and it came back and said, "BAD COMMAND OR FILE NAME." So I asked him, "What's showing on your screen?" And he said, "Well, there's a C and this caret symbol." I then said, "Well, why don't you change to the A drive?" And he asked me, "How do I do that?" 袴袴袴袴袴袴袴袴袴袴袴袴袴� ADVERTISEMENT 袴袴袴袴袴袴袴袴袴袴袴袴袴袴 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� 넴 Vendors! Authors! Installation is FAST and EASY with GO! Used 枋 넴 by major shareware vendors. Recommended by Jim Hood's Shareware 枋 넴 Marketing System newsletter. 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JIM GREEN: You don't have to be big to be there to answer customer's questions; you don't have to be big to give them instructions, or to put an automatic install on the stuff you do. The more you can help your customer use your stuff, the more likely he is going to be to come back to you. I think the days of just copying a disk exactly the way it comes from the author and handing it out are over, because people are not sophisticated, especially in the retail market. They don't want to do it. And they don't have the knowledge to figure out how to do it. I think maybe I've rambled on long enough. NEXT PANELIST, ANTHONY SALEBA: I'm Anthony Saleba with Most Significant Bits. We started out in 1988 and we were called Better Bits and Bytes. We started with a two page flyer. We found we couldn't register the name so we had to change it and go with Most Significant Bits, which was a more professional name. Since then, our catalog has grown into 112 pages. We believe in good product. If the product's not beneficial to the customer, we don't put it in the catalog. We don't allow overlapping products; we try to avoid that. Try to make the software very easy to use for the user. Test it on somebody who doesn't know anything about computers. Give them the disk. Give them the command to start the software. Or just have them read the label and see if he can run the program just from the disk. If the author sends you a disk with no installation or no PKUNZIP, put it on the disk and make it easy for them. Our policy is that our customer is our boss because they pay our bills. So we take good care of them. Have a good catalog. Have pictures in your catalog, if possible. Pictures sell disks. A glossy would be preferable. Mailing is very important. Advertising, also, is very important. I've found PC Computing to be a very good advertising source. We advertise with them about three months a year or sometimes more. That's basically all I have to say for now. BOB OSTRANDER: One thing that I've heard here is, "Our customers are..." Everybody seems to have, to some degree, a market segment they're aiming at. In 25 words or less, can you each tell me what segment of the marketplace you are aiming at, if you are targeting at all towards anybody? PANELIST: STL's racks are geared towards a number of markets. We don't have just one rack we put out there. We have one rack that goes into Christian bookstores, and it's heavily oriented towards Christian titles. We have one that goes into college stores, and you're going to have things like Algebra Tutor and some of the foreign languages and a fair number of games. We have another one that would go into a drugstore, for example, with titles that would appeal to that kind of market. The possibilities for segmenting are endless. You know, hardware stores can have "How To" software and that kind of thing. BOB OSTRANDER: Irv, does PC-SIG target, or are you shot gun? PANELIST: No, it's been essentially a shotgun, based on our own customer base. We do have plans to get into other areas, but they're in the development stage now. BOB OSTRANDER: Terry? PANELIST: Well, actually, we had a shotgun approach, too. Now we go after the professional user. We don't alienate ourselves from any other users, but the professional and businesses have the money up available and they are ready to go ahead and purchase. In our case, we've made a lot of decisions for them and they seem to appreciate that. They appreciate that we're putting the best tool out there for them, so they're more easily convinced and seem to be good repeat buyers. NEXT PANELIST: Oh, we started out carrying a very general mix of software and found that certain types just seemed to work for us. After that, I guess it's become a self-fulfilling prophesy as we've followed the buying habits of our customers. We've made the catalog even more oriented toward what those customers want. So I would say our customers are somebody using a computer at home -- a family. A typical order will have something for dad, something for mom, and something for the kids. We sell more games and more educational programs than anything else and are very light on the utilities except the real general things like Virus-Scan or something like that. BOB OSTRANDER: I've noticed that you've had a catalog you brought out of just games, for instance. SAME PANELIST: Yes, and we have one just for Windows and we have some other ones. We have quite a few customers. We track all of our customers and we track what they buy. Not so much specifically each program, although we could compile that, but the categories. We code that information. We have, for instance, well over 100,000 people that have bought a certain number of games from us, and a similar number of people who have bought educational programs from us, and a lot of other categories. We find that those catalogs that are targeted -- because with targeting you're sending people more of what they want -- we'll get a larger order and a higher response rate. BOB OSTRANDER: So, if you can send the catalogs out to a selection that you know is interested in that, you can send out a smaller catalog and still keep your average order quantity up, in other words? SAME PANELIST: Oh yes, yeah. BOB OSTRANDER: The average order quantity, does everyone agree, is really one of the key things you need to have? SAME PANELIST: Yes. ANOTHER PANELIST: Well, response and average order size. BOB OSTRANDER: Most Significant Bits has a very large 120-130 page catalog. NEXT PANELIST: We try to basically target anybody: beginners, advanced, schools, libraries. Anybody we can really target. We have a lot of categories in there to choose from. BOB OSTRANDER: Yeah. The world, in other words. The marketing itself: Most people, excluding Jim here, do mainly acquisition of new customers via mail order or via sending them a catalog. But not everybody is going to buy mailing lists. Of the disk vendors here, how many people -- let's have a show of hands in the room -- how many people have bought mailing lists to send out catalogs? That's only about four or five. I know PBS has. Have the other three on the panel here bought mailing lists, and have they worked? PANELIST: Absolutely. Yes, some do and some don't. The key is to mail not too many as a test. See how the list works, test it again at a little higher quantity, and if it continues to work for you, then roll out and test large quantities or use large quantities of names. BOB OSTRANDER: Are the general list brokers basically where you're getting your names, everybody? ANOTHER PANELIST: Yes. I'd like to add to that. I think that people buy mailing lists, and think they'll receive an awful lot of responses. But if you receive on an average two to three percent response rate, that's considered good. ANOTHER PANELIST: Yes, that's what we've seen too. BOB OSTRANDER: Does PC-SIG mail out the magazine in blind mailings? PANELIST: No. We have the Computer Currents that we've been sending out. BOB OSTRANDER: Or the Hot Sheet sometimes, possibly? THE SAME PANELIST: Yeah, that's right. BOB OSTRANDER (speaking to the audience): If it's not easy to get to the microphone, fine, we can repeat the question. But for most questions, if you can come to the microphone then it will be on record and we won't have any gaps. QUESTION FROM THE FLOOR: You say that two to three percent is the average for response rates from mailings. I know that's generally true. However, we surely haven't got the luxury in our business of having a two to three percent response on a very expensive mailing for a low value product. I have to be honest. My experiences in cold mailings is very limited. I've mailed to 14,000 users from a list known as Alpha-Alpha Systems - and I've just done 35,000 of DL's customers. With the Alpha list I got a 17% response rate, and I felt anything below about 15-20% would result in my losing money. So how can you reconcile such a low return of your investment? RESPONSE FROM A PANELIST: You're looking to build up your own base, is what you're doing. You don't necessarily expect to make money every time you have a mailing. The idea is to build up your own mailing base for your own future products. To get to be known, quite frankly. QUESTION FROM THE FLOOR (same person): It's perhaps better to advertise in a computer magazine, wouldn't it, if you've got the capital. At least you're not... SAME PANELIST: Sometimes it's a little more expensive to get into a computer magazine than to do a mailing. You can be very selective in a mailing. You can order 5,000. You can order half a million names. You can be very selective. You can pick the 33 year old male with 2.3 children and mail to that individual who only uses a PC at 4 'til 5 p.m. It's very selective, but it's not necessary to spend a lot of money on a mailing list. The idea is to build your own base within the company. ANOTHER PANELIST: Something else, I think, both good and bad for the mail order vendors in America: I think we have lower postal rates that help keep the break-even a little lower, but on the bad side, the average person in the U.S. gets about ten times the amount of direct mail that people in other countries get, which tends to keep our response lower. BOB OSTRANDER: Buying mailing lists. Sending out blind mailings of the catalog or magazine, or a cut-down version of the catalog -- what we call a cut-down catalog. Going to computer shows, we've heard, and setting up booths. And selling directly. Handing out the catalogs, I know from PBS' experience: it's worthwhile mainly to hand out the catalog -- not so much to make money at the show itself. PANELIST: That's true in most of your advertising though, Bob. You probably aren't going to break even the first time around. But once you get that customer, then he becomes an asset. BOB OSTRANDER: Computer magazine ads we've heard about... are there any other ways that you people have gone out and gotten new customers? PANELIST: Trade shows have been our biggest way to get customers. We do a lot of trade shows on a weekly basis and we have a big catalog which brings us customers even though sometimes we don't do very well at the shows. We get a lot of customers that order later by phone or mail, or see us at our next show. So that's very helpful. BOB OSTRANDER: Comment here? Go ahead. I'll repeat it. The question was about locating trade shows and qualifying trade shows, as to which ones would be good and which ones would be bad. PANELIST: Nuts and Volts magazine has a section for trade shows. They can contact the dealers and send you contracts. BOB OSTRANDER: Yeah, the Nuts and Volts Magazine is probably the best list of electronic trade shows. Not all computer. But in the midwest there's hamfests and a lot of electronic and computer shows out on the west coast. Darn near every flea market in the country seems to have a disk vendor selling 99 cent or $1.99 disks with a mimeograph sheet and 100 titles. Sometimes you have to almost fight with those people. Go ahead, quickly. COMMENT FROM THE FLOOR: It's not a question -- more a statement. With your customer base, you have an asset. We have about 13,000 customers. This year, we expect about 15% of our revenue on profits from selling or renting that mailing list. So you have another asset that you might want to sell - your own customer mailing list. BOB OSTRANDER: He's saying he's making quite a bit of money by renting his mailing list back to the other companies. Yes, sir, quickly. QUESTION FROM THE FLOOR: Shareware Distributors. I came to this show hoping to find who was going to put their Shareware on CD-ROMS. BOB OSTRANDER: We'll be talking about that in just a minute here. In fact, let's just skip to that. PC-SIG has had a CD-ROM out for quite some time. Nobody else on the panel has a CD-ROM, correct? PANELIST: Right. BOB OSTRANDER: PC-SIG has a whole selection of CD-ROMs right now. First I'd like a show of hands of the other disk vendors who do have a CD-ROM out now. Anybody? No one. Anyone have one in the works or planned? Most Significant Bits, and there was a hand back there. Irv, tell us about CD-ROM, whether it is profitable, whether it cuts into your sales of disks etc., please. PANELIST: Well, it's a loser, so I suggest no one get into CD-ROMs. BOB OSTRANDER: Then why do you make so many of them? COMMENT FROM THE FLOOR: It may be a loser to you, but for a dealer, it's ideal, because I travel, and when somebody wants a thousand, I can cut them right on the spot. PANELIST: We'll be shipping our 11th edition CD-ROM probably next week, and it will have little over, I think, 3,000 programs. 500 updates. BOB OSTRANDER: PBS has a bulletin board service; STL also has a bulletin board availability of the library. Do any other dealers here have a bulletin board? One, two, three four. Did the bulletin board draw significantly from disk sales? PANELIST: We don't think so. There are people who like BBSs and then there's the retail customer that's going to buy from our rack. I don't see it as a conflict at all. Our BBS is active in three cities now and slowly going to about ten or more. We just don't consider it a problem. QUESTION FROM THE FLOOR: I think that last gentleman, what he was asking was, he wanted to acquire a CD-ROM -- <> PANELIST: Well, there are problems with that. I can sell you a CD- ROM, but you, as a vendor, if you haven't got permission from the author, still can't use it to make your diskettes from. You still have to either be a member of ASP or make your deal with the author, or in some cases, both. COMMENT FROM THE FLOOR: I don't require individual permission to distribute my programs. I have conditions that they have to meet, but they don't have to get back to me -- <> COMMENT FROM THE AUDIENCE: Excuse me, we can't hear. BOB OSTRANDER: Okay, yeah. What the discussion's about is whether or not there is a copyright on the individual programs and you must obtain the permission of the author to distribute their programs. There's also the problem of the copyright of the collection. That is to say, the entire collection or the entire CD-ROM is copyrighted by the people who put the library together, and if you're going to duplicate a library or duplicate a CD-ROM directly, then you need the permission of the person who put the library together. That's called a compilation copyright. You've got both those problems to worry about. We don't want to dwell on CD-ROMs here this morning that much. We want to talk about the shareware vending business as a whole. So I want to move on a little bit to the subject of building your library and maintaining your library. Public Brand has five software reviewers, full-time, so Terri doesn't have to jump in here. How many reviewers, librarians and catalog editors - not catalog editors from the graphic or the layout standpoint, but selecting and writing the final reviews - does everybody have? PANELIST: Well, STL's got three. I mean, there's me, and I have two other reviewers. COMMENT FROM THE FLOOR: I can't hear you. BOB OSTRANDER: We've got an interference. There's some radio program on the PA system. Can you find somebody to fix this? PANELIST: It's right behind that wall there. BOB OSTRANDER: Oh, okay. This is interference from the next room. Sorry about that. Everybody speak a little louder. PANELIST: Okay. STL has three reviewers and editors for our rack sales. There's me and two others, and we're kept busy. I mean I like to work 16 hours a day, so we probably could use another one or two. ANOTHER PANELIST: PC-SIG has about four in various stages; some people do it part time as part of another function. ANOTHER PANELIST: We have one person who has the ultimate responsibility for what goes in the catalog, but there's any number of people that will look at it before he does and will recommend whether it's something he may consider. And, of course, because we have less space, sometimes we will disqualify something just because it doesn't fit our market, even if it may be a very good program. The EPA was really trying hard to get us to carry their waste-water treatment program and I have to admit we didn't even consider it. ANOTHER PANELIST: We have 2.5. I'm the .5 so any time it comes down to deciding which application goes in the catalog, I do the decisions. ANOTHER PANELIST: If you're small, you don't need a large staff -- if you're willing to work hard and you can do the reviews. You start in building your library with those titles that you feel are going to sell well to your customers. You don't have to spend time reviewing some obscure title at the beginning, because you may sell four or five of those over the course of the year, but you know you want to get the latest Apogee game in there, because you're going to sell hundreds of those. So start with the cream of the crop and then expand your library that way, and you can do it with fewer people. ANOTHER PANELIST: Since we're in the library for just a second... I think what Jim was saying before, about putting some sort of install program on the disk, is very important. I want to stress that again: it really does make the job for the end user a lot easier. They really do appreciate it, and I think that overall it'll be very good PR for shareware in general. BOB OSTRANDER: I also wanted to ask about business dealings with other people. For instance, having store fronts carry your library. Or user groups. Or having the library available on other BBSs. Or deals with major corporations to reproduce your software under licenses. I know PBS is into this a little bit. Some of the others probably are, also. Could you tell us, if you are doing this, in what type of an area, and whether you think it's a good thing to do. PANELIST: Well, in our case, since ZiffNet came and asked us for a lirary, we said okay, we'll do it, but... BOB OSTRANDER: They brought cash to the table though. SAME PANELIST: At least some paper transfer of some sort. The other parts... to do it is quite difficult. I think Jim has a pretty good niche in that area. The licensing agreements for other countries or other areas where we can do it are possible. I don't see it so much in BBSs in this country. But the avenues are there, the doors are open. It's just a matter of whether those decisions are good business decisions for me or Public Brand, and good also for the distributor. BOB OSTRANDER: Other people's experiences? PANELIST: I don't know if this is exactly what you're looking for: we are working on promotional ideas where we're selecting software for different businesses to give out as trial copies as part of a promotion. They're just to give to their customers. For us, it's sort of like being paid to advertise because it helps whet people's appetite for more software. BOB OSTRANDER: No one else has got into this very heavily at all, I see. Yes, sir? QUESTION FROM THE FLOOR: I don't understand. I know PBS has bulletin board. But I don't understand... don't you lose money by having a BBS? BOB OSTRANDER: We feel that the bulletin board has drawn off some disk sales. We charge $50 per year for access to the bulletin board and all the software's available there. To some degree, the bulletin board is now bringing in customers to PBS. The first year was definitely a loser. PANELIST: Initially, in 1989, when we started the BBS, we did see a significant number of our customers -- because they were after PBS software -- that switched over. They always did have modems and so we did lose them in the core disk business. But now they're BBS customers and BBS customers are wonderful because they re-up. They like the service. They come back and they're very easy to get to renew. QUESTION FROM THE FLOOR: <> SAME PANELIST: In our case, we have not really marketed our BBS, other than in the catalog. We give it the back cover sometimes; we market it in the catalog, but nothing other than that. It stands on its own. It does pretty well on its own. BOB OSTRANDER: Also, along the lines of the CD-ROMs and other products being sold. For instance, PBS has a book collection - a book library. Does anyone -- show of hands, again -- in the room sell other than shareware disks? Significant. A fourth of the people. Probably a third of the disk vendors here. What type of other products, and are they profitable? Are they profitable because it's a one-stop shopping service, or because it's the same market and it's related to Shareware? PANELIST: In the case of PC-SIG, we carry a commercial product called Power Basic. It has nothing to do with Shareware at all. BOB OSTRANDER: Since it's yours, you advertise it and sell it. SAME PANELIST: Exactly. ANOTHER PANELIST: Well, STL -- because we're out there and we're on racks -- means that we don't necessarily have to keep it all shareware. We can publish our own stuff at some point or other and put that on the rack. We've done that in a couple of cases. We still keep the price the same, but it's something that's exclusive with us. That opens up the door for us to publish other works as well. ANOTHER PANELIST: A few years ago, we carried a little bit more commercial software: we had a will maker; we had Hi-Jack; we had kids games. But since our business has moved more into the shareware market, we don't find it necessarily beneficial to carry those type of things, any more. The Hi-Jack software, when it used to be $49.95, was one thing, but now when it's $249.95, our customer base is not going to spend $200-300 with us. Not when they're buying a $5 disk. ANOTHER PANELIST: Well, pretty much all along, we've done blank diskettes and disk holders, and things like that. Things that people often need as a result of buying software from us - to make back-up copies or to store the diskettes in. We did pretty well with that and were adding on sales when people are calling their orders in. I think, then, we got a little carried away. We started carrying mice and track balls and all kinds of wild things, and I think that was a mistake. We're going more back towards just more room for software - sticking to the core business, but still keeping the real basic necessities of computer users -- like printer ribbons, blank diskettes and disk holders. And I think we're going to just carry those things from now on. ANOTHER PANELIST: We only have Shareware in our catalog. We have a retail outlet where we have some accessories (disk boxes, blank disks), just basically for the customer. We sell it at just about cost, almost, just to attract a customer into the store. BOB OSTRANDER: Any comments on that from the people in the audience - there's a lot of hands - on other products that you're carrying? TWO PEOPLE FROM THE AUDIENCE AT ONCE: Books. Computers. BOB OSTRANDER: Books? FROM THE AUDIENCE: How would you handle books? BOB OSTRANDER: Is books one of the popular ones that people are carrying? Yes. And are they selling for you again? Same hands up, yes. Books look to be worthwhile to sell. FROM THE FLOOR: Shareware registrations, for instance. U.S. and foreign registrations -- and we in the U.K. handle a lot of U.S. registrations... BOB OSTRANDER: You're taking registrations for the authors and selling the registered product for the authors. Any others? PANERLIST: It becomes more of a headache. Especially a couple of years ago. Now it may be a little bit easier to do. But now, with the way the ASP is all together and the business itself has evolved, I don't think it's necessary. I think as long as the author can do it -- or contract to have someone do it -- there really isn't a need. I think you're looking at more headaches than what it's worth. Especially with updates and all that. BOB OSTRANDER: At least here in the States that applies. That might be entirely different overseas, where dealing in local currency is a problem. The last question which I've got written down here is: installs. We're going to cover it very quickly. In fact, it is going to be covered more in another section entirely, as far as using your install, versus the author's install. But Jim and Terry were talking about install programs. Does everyone else have a GO THIS or a START type of command, that you add on your the disks? Everybody ... does. Is there any disk vendor out in the audience that does not have a GO-type command that you add to your disk to tell people how to unpack or ... etc.? No hands whatsoever on that. Very interesting. PANELIST: Yes, it is. BOB OSTRANDER: Basically, we're out of time. We're about a minute past time, and in order to keep the day rolling, be back here in about 15 minutes, with talking about interacting with authors and dealing with that install question etc. Thank you very much. Thank you, Pat.