I've been invited to speak at the upcoming Business of Software conference in
Boston (my home town!) on September 8, 2008.
As such, I've been thinking a bit about the business of software. I do this
regularly because my day job (and most of my night job) is running a software
business in the area of internet
more info: Business of Software Conference
There are a ton of great speakers scheduled for the conference -- and then
there's me. Other folks that will be there include Joel Spolsky (who is
sponsoring the conference), Seth Godin, Eric Sink, Steve Johnson, Richard
Stallman, Paul Kenny, Jessica Livingston and Jason Fried. It promises to be a
great conference and I'll do what I can to not bring down the average quality
If you're planning on making it to Boston for the conference, please reach
Meanwhile, here are somewhat pithy thoughts on the business of software.
Pithy Insights on The Business Of Software
1. Software businesses are not a low-cost play. You're probably better off
producing great software somewhat expensively than producing average software
2. Great software is produced by great people. Mediocre people don't ever
accidentally produce great software that makes millions of dollars.
3. Programmers have not been, and never will be, commodities. If you think
this way, I'd quit now.
4. Pricing software is hard. More people charge too little than charge too
5. If you're charging really small price-points, consider going to
a freemium model (some version for free, the upgrade is paid for). The free
version is a great way to get some distribution and customers.
6. Just because people should buy your software doesn't mean they
7. One of the trickiest parts about a software business is figuring out the
right level of services to sell. If the answer seems blindingly clear, you're
not thinking about it hard enough.
8. It's getting harder and harder to make money on pure software innovation
(i.e. lines of code and the product itself). Increasingly, business
innovation is what companies are using to drive differentiation and better
9. It's a great time for software startups. Capital costs are very low
(infrastructure, systems software are getting cheaper every day). And,
distribution is actually possible with some creative marketing on the internet.
Tiny companies have a shot at reaching big markets.
10. There are still people that believe massive spec documents and months of
planning will produce working software that users are going to be delighted
with. I feel sorry for these people. Think agile, folks!
11. Make sure you're deciding correctly between a horizontal offering and a
vertical offering. Horizontal offerings are tempting because of their potential
scale -- but they're much harder to execute.
12. Programmers often like to build platforms, not applications. But,
building a business around a platform takes lots of good strategic thinking (and
often a fair amount of capital and/or luck).
That's all I have for now. More on this particular topic in a later
article. I'm on vacation today, so didn't have enough time to really dig