How can I avoid having Apple kill my shareware app?

First off, I'm not sure I agree that Apple is "screwing" software developers in this situation, because the marketplace is always evolving and it's hard to picture how any "platform" vendor like Apple or Microsoft could not adopt and integrate previously third party functionality into their operating system. We'd still be on Mac OS 7 and Windows 3.1 otherwise, wouldn't we?

I thought it would be interesting to ask a friend of mine, Kee Nethery, head of the popular shareware registration and license system Kagi, about this issue too. Here's what he had to say:

Having a view into the economics of shareware by operating Kagi for over a decade, I have a different view of this kind of situation.

First, when discussing Apple killing a developer's product by rolling the product into the OS, it happens, you want it to happen, get over it and deal with the reality. The very first example of this that I can recall was CE Software's Font/DA Mover. There was a loud hue and cry when Apple eliminated the need for their product by allowing users to drag fonts into System folders. If you think Apple should not continually add ease of use functionality into the OS, you have to consider how viable the Mac OS would be if you removed pretty much every function more sophisticated than moving fonts into folders. Did that specific action kill CE Software, no. They used their next booth at MacWorld to have all their customers suggest what software they should do next and from that came QuickMail and QuickKeys. QuickKeys is still an excellent product and CE Software still exists. So lesson one, Apple adds functionality into the OS and you want them to.

Secondly, from the outside it looks like "the little guy" gets screwed when Apple rolls new features into the OS but from experience I can tell you, it can be the exact opposite. If you write shareware and you understand this is how the game is played, you should be so lucky as to have Apple roll your product concept into the OS. There is no better endorsement.

So how is the game played? There are three stages in the shareware product life; 1) new and unique where you have to teach everyone what it is first and then sell them on buying it (two sales steps for each sale), 2) everyone knows what it is and all you need to do is sell them on buying it (one sales step for each sale), 3) selling the technology to a non-Mac platform (one sale period).

Stage 1: Teach and Sell For Each Product Sale

Many shareware products start in the "it is new and unique, let me teach you what it does, now let me tell you why you should pay for it" category. Those that have a compelling product gather word of mouth advertising and they sell quite well. But they are always teaching people what it is first and then convincing them that they should pay for it. It's a lot of work and not very efficient.

You have a nice little business and then ... Apple announces they are adding your product functionality into the OS for free. In pretty much all the cases that I know of, Apple employees have been very good at getting the message to the shareware developer and letting them know that this is about to happen. The information is never official but there are enough hints such that the shareware developer is typically not surprised and frequently can have a new version ready for release that can piggy back on the Apple announcement.

Stage 2: Just Sell For Each Product Sale

When Apple appropriates a technology, they typically simplify, beautify and roll it into the OS for free. When they add it to the OS they take on the "let me teach you why this is cool" part of the sales process. When that happens, the shareware supplier can skip
teaching every potential customer what it is and instead focus exclusively on why they should buy theirs instead of using the free version provided by Apple. If they make that transition, the sales process is half the work since Apple teaches people why it is a cool feature. They can then focus on why someone should be using the more advanced version they are selling (assuming theirs is actually more advanced). Typically Apple starts with a product that has fewer features than the existing developer product so typically the version the developer has been selling is already more advanced than what Apple announced. The sales during this stage can eclipse stage 1 sales because the message is easier to convey and the target audience is now anyone using a Mac who has ever tried the built-in feature.

How long this stage can last depends upon how aggressive Apple needs to be in enhancing their initial offering.

Stage 3: Sell The Technology Once

This is the last stage of the software product cycle. There is a single sales pitch of "Hello non-Mac company, you need this technology. Buy my company and you'll have a huge competitive advantage in your market place. You can see from Apple rolling into their OS and promoting it that this is a desirable feature." Many shareware authors fail to make this leap. But those that do, can reap substantial rewards.

Then the software author goes to work for the purchasing company and helps transition their product to the non-Mac OS while they ponder their next product.

Stage 4: Rinse and Repeat

Kee, thanks for your insight on this subject!