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Sunday, Sep. 13, 1998
Software Success
Local company's product seeing worldwide success
By GLASTON FORD
Staff WriterWith a few strokes on the keyboard and clicks on the mouse, Nick Longo's software company launched its latest product recently.
No TV advertisements, clever slogans, or slick promotional materials accompanied the release of the new software. They weren't needed.
His company, CoffeeCup Software, creates a variety of web site creation tools and sells them over the World Wide Web.
CoffeeCup is one of tens of thousands of software developers in what is known as the shareware industry - basically, try-before-you-buy software that can be downloaded from the Internet.
Since its founding 2 1/2 years ago, CoffeeCup has achieved the rare status of being one of the most popular software lines in its market niche, say those in the industry. And the company recently launched a retail version of its product.
The CoffeeCup HTML Editor++ is one of the two most popular web editors out of more than 110 available on CNET Download.com, one of the premier online distribution sites for shareware, freeware and commercial demonstrations, said Tim Higbee, business manager for CNET Download.com.
Longo's new product, CoffeeCup HTML Editor Express, became the fifth most popular web editor downloaded for its debut week. And it was released with only two days left in the week.
``There are many big companies out there that are making web creation tools that are not getting the public response that CoffeeCup is,'' Higbee said.
Last month CoffeeCup's software made it off the Internet and onto store shelves with the introduction of the first boxed version in Sam's Club, said Longo, 30.
CoffeeCup has an estimated 2 million downloads in 67 countries, he said.
His company is an example of the innovation and opportunity that has grown up around the World Wide Web. Nobody knows how many shareware developers there are, said Richard Holler, executive director of the Association of Shareware Professionals.
A majority of the companies are small, like Longo's, with fewer than five employees, he said. But with the growth of the Internet and the World Wide Web, major companies like Microsoft and Intuit have adopted shareware marketing techniques, he said. That means they are letting users download trial versions of their software.
Shareware is a marketing method, not a type of software or even a means of distribution, according to the association. When a customer buys software off a retail shelf, they are forced to pay for it without knowing whether it meets their needs. With shareware, they can try it, usually for a limited time or number of uses, before buying it.
Longo has built his business from his onetime coffee shop in central Corpus Christi. He has two local employees and a handful of programmers across the country that actually write the code for the programs, he said.
A world map on the wall has pins in each of the countries where CoffeeCup software has sold.
Some chairs from the The Raven & The Sparrow Gourmet Cafe, Longo's former coffeeshop, are spread throughout the office.
As he talks about his business, his words come fast like bullets. He exudes a restless energy that makes him seem like he's moving when he's sitting still.
The idea for the software came in 1995 after Longo brought a computer with Internet access into the cafe, he said. He started getting calls from people who saw his cafe's website, asking him to create a website for them.
He soon realized he was having to use two or three different software tools to create the website and figured he could create a better tool. ``When I first came up with the idea, it wasn't to sell it,'' said Longo, an Air Force veteran and former City Council candidate.
``We are not programmers, we are users,'' Longo said. ``And users pretty much know how the software should be.''
In late 1996, he closed the cafe after battling with city zoning officials over not having enough parking spaces. He decided it wasn't worth $15,000 to build the new spaces, so he devoted himself full time to software development.
Longo rattles of the names of companies that have bought his software: AT&T, Ford, Netscape and Playboy. He still has the $20 check from Playboy Enterprises with the stamped signature of Christi Hefner.
He worked alone until April 1997 when he hired his first employee, HTML ``guru' Zeke Tamez. He hired his second employee, Mike Fitzgerald, this summer. The programmers work as independent contractors for a percentage of the revenue.
Longo has been successful in part because he realized early on that having a good program wasn't enough to make one succeed in the shareware industry.
Programmers can't market, he said. The World Wide Web is full of great programs that don't sell, he said.
But Longo can market, Higbee said. ``He has a strong business sense as far as what users are looking for, how to package it and how to sell it and how to deal with online distribution points,'' Higbee said. ``He works well with us, keeps us informed on what he is doing.''
He has an arrangement with CNET Download.com that lets that site have exclusive release of his new products for a few days. The editors at CNET Download.com have liked his products and consistently rate them a ``pick.''
Getting a high rating on a major download site dramatically increases the number of downloads of the software, Holler said.
And downloads translate into sales. About 1 percent of people who download a product actually buy it, according to industry averages, Higbee said.
``In the shareware business, you go for the masses,'' Longo said.
CoffeeCup has also avoided the complacency that can hurt promising software companies, said Scott Swedorski, president of TUCOWS International, which rates and reviews Internet software.
A lot of software developers forget who they are building their program for, which is the end user, he said. Two guys who make a program might think it is the best thing in the world and the easiest to use, but somebody else might not understand it.
``(CoffeeCup) is always listening to what users say, adding more support and better features and continuous updates,'' Swedorski said. ``Probably the key thing is to listen to the end users.''
CoffeeCup or any software company has to keep developing new products and improving its existing ones to survive, Longo said.
With the virtually nonexistent production and distribution costs associated with shareware, and Longo's apparent success, one wonders why he would go to the trouble of developing a retail product.
First Sam's Club sought him out in response to customer requests for CoffeeCup software, Longo said.
``When a large retailer says it wants your software and offers you the biggest check you've ever seen, it is hard to say no,'' Longo said.
And there are other advantages, he said, such as respectability. And there is still a large base of software users who shop for products in stores. Even if they don't buy your product from the store, the store product acts as a cross promotion for the Internet distribution.
Web-based marketing does have its advantages, but it has disadvantages that few people outside of the industry realize, Longo said. One challenge is that the web never sleeps, he said.
When a user in England or Germany has a question about a program, they want help immediately, even though it may be 2 a.m. in the United States, he said. Companies must have a way to respond, Longo said.
For the first year he tried to handle those responses himself.
``There were times when I would literally stay up 24 or 48 hours straight,'' Longo said. ``I used to live next door and I was always here. Then I had to find some separation.''
``Caffeine, nicotine and Visine,'' was the company motto, he said.
Automation and additional employees have given Longo a more normal life, he said. Now computer users who e-mail for help are directed to the list of Frequently Asked Questions, or FAQ, on the CoffeeCup homepage. Order taking is also automated with an on-line electronic payment system.
Longo could close his office today and his company would continue to make money as long as people bought his software.
But, existing and succeeding are different issues. And Longo knows that fortunes can change quickly in the high-tech industry - Apple and Netscape come to mind, he said.
Somebody could come along and make a better program, he said. Or a new technology could come along and make his software obsolete.
Fear is a motivator, he said. ``I fear competition and losing so much. I try to get myself paranoid.
``We know what boat we are in. We know that boat could end tomorrow.''
Staff writer Glaston Ford can be reached at 886-3678 or by e-mail at fordg@scripps.com.Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web