From project to product business

I would love to tell a different story, but the truth is: most of our product stories unfold differently. Most begin the same way: an existing customer asks us to help them develop a solution. That's how it was with CERMAT.
The solution for employee certification, training, and health checks.

Our customer Bilfinger approached us with a request for a tool:
They wanted to manage their certifications, preventive medical checkups, and training for employees.
We called it BICEPS, and it worked well.
Years passed, and Bilfinger grew. They split into several customers within different departments and teams.

As with any software, there were feature requests, updates, and bug fixes.
A few years later, responsibilities within Bilfinger changed, and we discussed how Biceps was now a product and no longer a service.

That changed everything.

The positive: annual recurring revenue.
The downside: every update, every correction, and every feature is now a software requirement.

So when you develop a solution, be aware of the differences between a service contract and product development.
Sometimes it's not so obvious.

So we had a product, but no knowledge of the market for qualification software. As expected, CERMAT is one of many qualification management suites on the market. Others are already established and offer many attractive features. So in order to become attractive to new potential customers, we had to understand this market.

Even though we are quite successful with the few existing customers, we have hardly ever gained new customers.

Our marketing strategy

We worked with a sales agency and also generated some leads, but after more than a year, we only made a single sale.
Working with a sales agency is very time-consuming and expensive!

It's only worthwhile for high-priced products in the B2B segment.
Of course, we also tried PPC: such as Google Ads, LinkedIn, and Gartner Software Listings.
Such software listings and comparisons can be sponsored. But the PPC prices are enormous!
In total, we invested more than €20,000 in conferences, PPCs, and sales staff, and spent countless hours trying to find a way to sell CERMAT.

In the end, we at least learned a lot! 

Most products fail because they are not suited to the market.
I can imagine why: 
Founders naturally love their own ideas, and all other solutions available seem unattractive to them.

• Ask yourself: Why has no one invested in this idea yet?
• Ask potential customers: Would these customers be interested?
• What would it be worth? If it's just a convenience, it's probably not worth the effort.

After extensive market research, you will find that solutions already exist, and if these providers have an affiliate program—and believe me, almost every provider has an affiliate program.

Become an agency partner!

We know the marketing automation market. I spend a lot of time analyzing different tools: strengths and weaknesses, blind spots, and target groups. Unlike cookies, the market isn't flooded with countless solutions. When I joined in2code at the end of 2020, I immediately fell in love with LUX, but I underestimated the time it takes to develop, market, and establish a new product.
When Alex developed LUX in 2017, he used his knowledge of TYPO3 extension development from femanager and powermail to create LUX.

But then the GDPR came along and once again in2code lacked the necessary knowledge.
In addition, Alex, as lead developer at the time, had many product demonstrations but was unable to get a foot in the door.

When I joined in2code, we improved the process.

• Missing core features were developed.
• The sales process was improved.
• A partner program was established.

It took us five years to get to where we are now.

LUX today

Today, we focus on partnerships, target specific customer groups to a limited extent, and base our development primarily on the wishes and requirements of our partners. We also take a close look at data and trends in particular:

• Digital sovereignty
• First-party data
• Tracking trends
• A/B testing
• AI

We set strategic goals with long-term horizons and regularly scrutinize our ideas.
Changing conditions such as the Cyber Resilience Act (CRA) or the ruling of the European Court of Justice on November 13 are carefully analyzed.

LUX and in2publish are FOSS extensions, as are femanager, powermail, and more. We invest hundreds of hours in TYPO3 updates, respond to feature requests, and provide some free support. What we lack is a sustainable business model for TYPO3 extensions.

In short, the Early Access Program offers early access to the latest versions of our extensions to those who support us financially in the development of our open source extensions.

In the past, users wanted new features and developers were able to earn a living from them. As a result, these simple extensions became comprehensive solutions with many thousands of lines of code. Code that can no longer be easily maintained as a side project. Freelance developers became employees whose passion is not necessarily programming for TYPO3 in their limited free time.

So how should we deal with these feature-rich and heavily used extensions? Users expect compatible versions of these extensions to be immediately available for all new TYPO3 LTS versions. In my opinion, we need to develop a suitable business model for our ecosystem in order to maintain the diversity and quality of the extensions.

The Early Access Program allows us to at least achieve a contribution margin for new TYPO3 versions, and the next few months will be full of extension updates for the new TYPO3 v14.

One might think that in2code certainly earns a lot of money with all its products. However, that is not the case: it is still only a fraction of the support and project business, and we do not expect this to change in the near future. However, the strategy is clear: whenever possible, we invest in products and standardization.