I create new products without requirements as a baseline. Why? Because giving requirements is free. The scope simply increases exponentially with new products. It also loses it’s focus to be useful for my own business, hobby, passion or whatever market I'm also participating in. So… I create the new product for my own business (hobby, passion, whatever) and then sell it to others who share that passion. I know it will be useful for those who follow my passion, because it’s useful to me.



When it’s time to upgrade it though, I always ask my customers for feedback to get a better requirements list. They are then familiar with the baseline and the requirements list is a lot more “real”… based on their experience with the product.

However, you still have to recognize that the requested features for the new version are all based on “if it were free”. Those requirements must still be filtered against what can actually be obtained for a price that is reasonable. For instance, I switched to video based on experience. That is both for instructions for software programs and information products themselves. Ebooks and text information have been proven to be major negative in my business model. I know from experience that people aren’t really willing to pay for PDF manuals. The request comes in a lot, but it’s already been tested and ruled out.

When I did text instructions, that took up 95% of the time that it took to create a new product. Are people willing to pay 20 times as much to get a product that includes text? Of course not. In addition… it’s a lie. They will request the information in that format because “it’s easier for me to learn from reading”, etc. Is that true?

No; the refund rate for textual material is much higher. The support tickets I received asking questions that are already covered in the textual manual are perhaps 20 times more in volume as compared to the video version. The action rate for text material is only around 0.5% to 1% as compared to 4%-7% with video material. That action rate directly affects the purchase rate of other products.

Another request that I see a bunch is for Mac support. Mac users are very religious about their support for the Mac. There is a cost associated with that though. After testing, I have found that market isn’t large enough to support. So… it’s free for Mac users to request support here… but that request has to be weighed against what they will actually pay to receive. It’s a known that they won’t pay for their support, so I ignore that market just like most other developers do.

If you have worked in a corporate environment, you know that the requirements creep can be much worse than you even see here on the blog. It is still important to ask for the feedback and get a requirements list whenever a product is updated… customers often come up with really great ideas based on their own experience with the software… but it is just as important to do a careful requirements analysis and eliminate requirements that really won’t fly when it’s time to pay for them. Or worse… will actually harm your business if met.

It may sound subjective about how you would do such a requirements analysis. It really isn’t. There are only two logical ways to eliminate items from the requirements list when doing your requirements analysis:

1. The old “following a proven plan”. You’ve just heard about two items that I eliminate from all requirements lists. You can add those to your own list.

2. The only other way is through experience. However, it still shouldn’t be subjective if you want to make good business decisions. It should be measured and compared. How do you do that? Each procedure (and you can bet that gathering requirements and analyzing requirements are both codified procedures in my business) should have a measurement.

This is covered in the above course. That measurement should relate somehow to the bottom line (ie: profit). Since support tickets and refund rate both directly affect expenses (and can be measured), you can actually put a cost on them. You can then compare text based information to video based information by cost and profit.

It really comes down to two dollar figures. One is $20,540. The other is $1,500. You go with the one that is most profitable regardless of what your customers claim. The fact is that your customer’s claims when money is involved are not the same as the claims they make when no money is involved. To run a successful business, you need to follow the dollar vote, not the freebie vote.

Those are really the only two ways to learn anything in life. It starts when you are a toddler (or perhaps even before). You can either watch and see that your mother and father never touch the stove… or you can touch it and get burned and learn from experience. When you are a teenager, you can learn from your parents that doing drugs is bad and can ruin your life, or you can experience it yourself. Those are the only two ways to learn anything. You can learn it from someone who has been there and done that… or you can go there and do that and experience it yourself.