Today’s guest post is by Simon Galbraith. Simon is co-founder and joint CEO of Red Gate Software.

I’ve been a long-time believer that, correctly chosen, professional photography is a key element in marketing. I’ve backed this belief with the money of my company and have approved countless campaigns that involve professionally taken photographs.

A couple of weeks ago I blogged about an experiment where four of us (including two world experts in marketing) guessed how two photos of me posted under aliases on hotornot.com would be ranked. I also asked readers of this blog to comment on how they thought the rankings would turn out.  As expected almost everyone thought the professionally taken photo would score higher.  The only differences were the actual numbers.
Here are the hotornot results based on the professionally taken photo of “Jeremy” (left), and the point-and-click amateur photograph of “Aden” (right). Click on the images to view larger versions.

Surprise! The professionally taken photograph scored substantially lower (8.1, 79%) than the amateur photo (8.7, 86%), both in absolute terms and in the percentage ranking of attractiveness.

I’ve a quick confession to make: had the professional photograph scored higher than the amateur photograph, I would have immediately stopped thinking about this issue and have considered my case totally proven. But when the results belied a premise I’ve supported with huge sums of money, I was compelled to find a way to prove the experiment wrong; to start looking at the sample size, the details of the photo and so on.

Hotornot is a compelling site and it has a whole heap of great features enabling people to show increasing levels of interest that might ultimately lead to a relationship. I thought I might be able to use some of the more anecdotal data on hotornot to demonstrate that although the score for professionally photographed Jeremy was lower, it actually was better by some other measure.

Although less statistically rigorous, the results from my further study were the same. Aden has had one woman approach him to meet, whereas Jeremy hasn’t had that honor. Aden has been “favorited” twice by women, compared to Jeremy’s one solitary bit of interest. In every way I could think of to analyze it, Jeremy did worse than Aden.

Looking at the outliers in the histogram is interesting. Aden is more polarizing – more women ranked him at the extreme ends of the scale.  This might be valuable from a marketing point of view – perhaps people who are prone to polarization are more likely to take notice and act (another theory I’m now propounding that I need to prove).

I asked the opinion of some experts who work for the best marketers in the world, and their opinion was worthless compared to an experiment that took less than an hour to set up and cost me nothing. Given the eye-popping sums I’ve spent so far on marketing with professional photographs, it seems crazy that I haven’t tested this before. I’m still not sure that I want to use amateurish photos in our marketing, but now I have to admit that my past decisions have been based on blind prejudice rather than wise insight. It leads me to wonder: how many other of my opinions are as fact-free as my views on professionally taken photographs?

On a personal note, I’m amazed and flattered that I scored so much better than when I was a shy 16-year-old, but I suspect that might come down to the rather unusual way that hotornot averages the numbers in the histograms rather than a change in my attractiveness.  But, in this case, it might not be worth analyzing too closely.

In I.D., Philip Davis’s 1995 film, Reece Dinsdale plays John, one of four undercover policemen sent to infiltrate a group of football hooligans at the fictional Shadwell Football Club. As John starts drinking, fighting and copying the behaviour of the thugs he is monitoring, he slowly becomes one of them.In the final scene, we see him at a neo-Nazi march.

In Dexter, Michael C. Hall plays a serial killer who hides his true identity. To fit in with society, he learns to fake the emotions that he lacks but others have. Towards the end of the second series – series 3 hasn’t aired in the UK yet – Dexter is showing signs of developing the feelings he has long been feigning.

But what has this got to do with Seth Godin?

A few weeks ago, I was at Seth’s talk in London. Somebody from the audience asked Seth how he became the person he now is.

Seth replied (and I’m paraphrasing here – Seth was more eloquent than this – but I think I’ve caught the gist):

“When I started out, I had this idea of ‘Seth Godin’, the person I wanted to be. This person had certain standards, and would behave in certain ways. He was ultra-ethical and would do nothing to contradict the principles of permission marketing. Whenever I was faced by a tricky question, I asked myself “what would ‘Seth Godin’ do”. And, over time, I became the person I wanted to be.”

I’d like to make one point, and ask one question.

Firstly, rather than asking “What would Bill Gates do?” to gain perspective when faced by a difficult problem, you can ask what the hypothetical you – the person you aspire to be – would do.

Secondly, if you consistently do that, will you, over time, become the person that you want to be, as Seth has? Or will you just be a fraud whose actions betray your essence?

Post here …

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In June last year, at Tech Ed in Orlando, Red Gate announced that we’d soon be launching an archiving tool for Microsoft Exchange. The beta was weeks away, and we’d release a final version by November. But the signs were already bad – the team was hitting problems and deadlines were whizzing past. The target release date hurpled relentlessly from November to December, then to January and then beyond. And although the team worked as hard and fast as Achilles himself, and the gap narrowed, it seemed they would never catch it. Zeno would have been proud.

It’s a reminder of how even the best teams (and the team working on this is awesome), can get bogged down. But there’s a bright side. We’re not as bad as some people, and although I shouldn’t revel in other people’s mistakes, sometimes it can be reassuring.

Legend has it that in 1966 Marvin Minsky – a man who Isaac Asimov described as one of only two people cleverer than himself – assigned Gerald Sussman, an undergraduate, the task of solving computer vision. As a summer project. Forty years on and, although some astonishing advances have been made, the problem remains unsolved.

In 1960, Ted Nelson founded Project Xanadu, software that would allow people to cross-reference and version the world’s information. In 2007, Project Xanadu released version 1.0 of XanaduSpace.

On 28th April 1997, 3D Realms announced the upcoming release of Duke Nukem Forever. It still hasn’t shipped. According to the web site, it will be released “when it’s done”.

No matter how competent – nay, brilliant – you are, and no matter how hard you try, things go wrong. What defines you is how you react. Do you bang the table, shout “THIS IS NOT ACCEPTABLE” and force the team to ship something, anything? Or do you say hey, shit happens, c’est la vie, it’ll be ready when it’s ready? Of course, either of these actions can be appropriate in the right circumstances, but how do you make sure you’re not screaming when you should be chilling, and chilling when you should be screaming? And when is something more measured appropriate? Post here.

And what’s the worst project you’ve ever been on? Post here.

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P.S. We’re currently hoping to get the product shipped by Tech Ed 2009 and have even got a pre-release build out. Try it out and you can win a free pass to Tech Ed.

Today’s guest post is by Simon Galbraith. Simon is co-founder and joint CEO of Red Gate Software.

My company, Red Gate Software, has a photo board. When new people start work, someone from HR takes a photo using a digital camera. That photo is eventually replaced by one taken by a professional photographer. The photo board at any one time has mostly professionally taken photos with the recent amateur photos dotted amongst them. To my mind the difference is palpable – people look a LOT more attractive in the professionally taken photos.

This is important for marketing. Photos and images of people are used extensively in marketing and are especially significant in things like blogs, twitter and facebook. The fact that Seth Godin has chosen an iconic, professionally taken, image of himself to accompany his blog isn’t a coincidence.

As I was espousing my professional-photo-attractiveness-is-important-for-marketing theory to a couple of friends who were at my house for New Year, I realised that rather than just spouting off we should do an experiment.

First, some background: like most teenagers, when I was 16 years old I was self-conscious about my appearance. I was convinced that I was the least attractive boy in my class: gangly, crooked-nosed and spotty. One day in math class Mr Ranson conducted an exercise in a statistic module. He lined up all the boys in the class and asked the girls to rank our attractiveness. After standing awkwardly at the front, my worst fears were realised: I was indeed the most unattractive boy in the class. The case for the prosecution was overwhelming, with 12 out of 14 girls supporting the last-place ranking. Mr Ransom then burbled on about different methods of collating ranking but, unusually for me, I wasn’t taking it in. I was absorbing a more painful lesson about the shape of the probability density function of my getting a date within the next millennium.

You can imagine how this might have left me unwilling to subject myself to another public vote on my attractiveness. But the occasion, my theory and the wine led me to shed a few inhibitions and have a go with myself as the guinea pig.

So I’ve created two new characters for the dating website HotorNot, which asks visitors to rate the attractiveness of people on a scale of 1 to 10:

First, meet Jeremy Pemberton, a 36-year-old man based in Cambridge, England:

This is a cropping of a photograph taken by professional photographer Chris Bouchier.

Secondly, meet Aden Pemberton, a 36-year-old man based in Cambridge, England.

This photograph was taken by my wife using a cheap point-and-shoot digital camera after we’d drunk a couple of glasses of home-made mulled wine.

Both photos are of the same person taken in the same house within 4 weeks of each other. After looking at the photos we came up with the following guesses at how they would be rated on average by the visitors to HotorNot:

*This is my wife of 10 years; she feels she can be brutally frank with me without hurting my feelings**

**Which just goes to show that deep knowledge of someone only goes so far.

By the way, both Pam and Pete work in marketing; multinationals like Philip Morris and Proctor and Gamble pay their organisations a king’s ransom for their insights.

I’m going tell you what happened and what my conclusions are in a second blog post. But for now, it would be fun if you could comment with your prediction of the scores. Don’t worry, my feelings can’t possibly be hurt anymore…I think.

If you're not a sysadmin then the odds are you deal with one. But makes a good sysadmin, and why are there so few great ones?

For me, an end user, what distinguishes a great sysadmin from a merely
competent one is attitude. Technical skills are easy, problem solving
ability is harder, but it's great attitude that's truly rare.

Read more on the sysadmin social network…

Back at the beginning of 2003, Red Gate was doing well: our products were selling, we were profitable, and life was good. Our SQL Comparison tools – version 2 – were popular and, I thought, fully baked. There was very little more we could do with them. Sure, they were a bit slow, there were a few bugs, and we had some competitors snapping at our heels, but there was nothing dramatic that we could add to the products.

We needed a new product. Something that would take us to the next level.

So we had a brainstorming session. Simon and I got everybody together – there were around 20 of us at the time – in a room and we spent an hour writing ideas on post-it notes and sticking them to walls. All good, non-judgemental, brainstorming stuff. At the end of the hour we gathered up the notes, categorised them and got judgemental. Should we do a lint tool for SQL Server, or a test management tool, or something for Oracle or DB2? These were all possibilities, but none of them really inspired us. So we took the easy option and decided to rewrite our existing tools. We threw away all the VB6 code base and started from scratch in C#.

On paper, this was a really stupid thing to do. A classic, unforced error that's killed, or scarred, companies such as Borland, Netscape, Wordstar and Ashton-Tate. Microsoft even took a stab at bizarre self-harm with their initial attempt to write Longhorn (now Vista) from the ground up in .net.

It was one of the best decisions we've ever made.

With the version 2 tools we'd coded ourselves into a dead-end. To get dramatic results sometimes you need to take dramatic action. To get out of that dead end – to radically improve the products, our customers' lives and, ultimately, Red Gate's sales – we needed to do something beyond the incremental. And that dramatic action was to throw away several man-years of work and start afresh.

But that's hindsight speaking. In reality, we rewrote the tools because we lacked the imagination to do anything grander. It was a lucky mistake. If we'd been more adventurous or had had more vision – if we'd tried to break into new markets or create new tools – then Red Gate would probably have been doomed.

Here are a few things I learnt from this.

Firstly, it illustrates how companies abandon profitable markets too quickly. This is, according to some people, one of the classic reasons that companies stall.

Secondly, sometimes it's right to throw away a successful product and start again. Apple did this with Mac OS X, and Microsoft with Windows NT. It's hard, and you're going to irritate some of your customers, and there's a good chance you'll fail, but it can – occasionally – be the right thing to do. If you're down a blind alley, or if the platform you're targetting is changing, or if inaction (which is, don't forget, a decision as much as action is, just easier) is clearly going to lead to failure, then it's an option you should at least consider.

Thirdly, the important decisions aren't always the ones that seem important at the time. Looking back on this decision, it was one of the most important ones that we ever made. But it didn't seem that way back in 2003. There was no sense of urgency, no feeling that this was a decision that could make or break the company. But it was. Not in the dramatic sense of a cause with an immediate effect, but it set us down a path that branched slightly off the alternative and, over time, that route diverged to take us in the happier direction.

It's the third point that interests me right now. So, this week's question of the week is "In building your business, was it obvious when a decision you were making was crucial, or were the forks in the road only obvious in hindsight?" $20 of amazon vouchers will go to the best answer. Post on the Business of Software social network.

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Malcolm Gladwell is getting a bit of a kicking right now. It’s all my fault. Well, your fault too. All of us, in fact. We all love it when somebody takes the bitter complexity of the world, breaks it down, simplifies it, wraps it up in a tasty story and places it in front of us with a warm glass of milk for easy digestion. And then we love complaining when we consume too many stories and feel sick.

But I don’t think the problem is one of technique, or presentation. Instead, Gladwell – and many of the authors of well known business books – are fossicking for universal laws where there is really only grit. The truths they are looking for do not exist, or are too simple to be useful.

In the set of all successful companies, some have no assholes but some do. Some rely on shiny new strategies, and some just do the basics better than the competition. Some have humble, thoughtful leaders, while others, well, don’t.

It’s entirely possible for IBM to share some success factors with Microsoft, and Microsoft with Google, and Google with Apple, but for IBM to have nothing in common with Apple. There might be a family resemblance in the histories and behaviours of these companies that allows you to lump them together in the same category of ‘successful’, but not a common theme, much in the same way that the members of a family – sons, daughters, husband, wife, uncle and aunt – can visibly belong in the same group without sharing any single physical trait.

To give rules, you need to be narrow. Examine all companies in a particular sector, at a particular time, and facing particular threats, then you might, if you look closely enough, find a law. But the broader the domain you’re trying to create a rule for, the more banal your law becomes (sometimes people’s instincts are right, but sometimes they’re wrong, and it’s damn hard to tell when), and the more likely it is to be demonstrably wrong (we all need to be more like Enron).

My hunch is that business laws cannot be universal, correct and useful. I can’t prove it though.

The big news this week in the business of software is that the Business of Software 2009 web site is now live, and we’re taking bookings. Plus you can download a free eBook.

On the BoS social network, Greg Atkins asks how he can become a product manager, Matt Richards asks how to deal with domain name squatters, and Steve Schoon would like to know what percentage of sales revenue to budget to technical support. Answer these questions, and others, on the forum.

On Wednesday, Paul Kenny is hosting an online chat about software sales. Sales is a fence most ISVs stumble at, and Paul is an expert, so this chat is worth signing up to.

If you can get to London for February 17th and want to see Seth Godin then there’s a spare ticket up for a charity auction.

Hope to see you in San Francisco!

Liked this post? Follow me on Twitter.

The good news: Seth Godin – marketing guru, tribal leader and possibly the best speaker I’ve ever heard – is coming to London.

The bad news: all the tickets are sold out

The good news: I have a spare ticket

The best news: Mark of Evil Genius Media, the organizers, has given me permission to auction it off for charity. Thanks Mark!

So, if you can make it to London for the 17th February, want to spend 3 hours in Seth’s company, and want to put in an offer, then send me a bid on Twitter (I’m @neildavidson) and tag it with #sethinlondon

Here are the rules:

• Bids close at 12 noon on Friday 13th February
• All bids must be to me via twitter, and tagged with #sethinlondon
• All proceeds will go Great Gorillas, a charity working to save the world’s remaining gorillas from extinction
• Open to all, apart from Red Gate employees
• Your name will go on the ticket. You won’t be able to sell it on / give it to anybody else

Bid away!

I was going to write a long blog post about how wonderful Business of Software 2009 is going to be, but then I realised that no matter what I wrote it wouldn't be as compelling as this video that Lerone did of BoS 2008. It's a couple of minutes long, and I think you'll enjoy it.

The past isn't always the most reliable guide to the future, but it's often damn good. If you want to find out more about this year's conference then go to www.businessofsoftware.org

Simplicity vs Value in Software Development

In this talk from Business of Software 2009, Joel flies in the face of what is often accepted as current wisdom and says that building new features does add value to your product. Simplicity is often a way to avoid your customers knowing you are releasing a product without enough features. Features are good if you can add them without making a product too complex. This can create real value for customers and revenue for your business.

You can watch the video or read the full transcript below.

Last year, the Zimbabwean division of Barclays bank made one hundred quadrillion Zimbabwe dollars profit. With inflation at 231 million percent and rising, the numbers will soon breach the magic threshold of Z$ 922,337,203,685,477.5807. Why magic? The true geeks among you will instantly recognise 9,223,372,036,854,775,807 as 2^63 – 1, or the maximum value that the 8 byte SQL Server money data type can store.

Software is at its best when it's specific, and it's assumptions that provide the constraints that make it so. We've all seen software that makes bad assumptions – the web site that assumes you have a US phone number; the application that only installs to the C: drive and the banking site that assumes nobody is ever called O'Neill or Geneviève or wants a password with – heaven forbid – punctu@ti0n.

These are just plain bad assumptions.

But what about when good assumptions turn bad? In hindsight, they might seem dumb, but they were sensible at the time. Assumptions that $922 quadrillion was the most currency anybody would ever need, or that programs written in the 1970s would be obsolete by the year 2000, or that 64kb would be plenty, or that screen sizes would never be the size of buildings with resolution better than paper? Is there any way to mitigate against the very good assumptions you are making today turning evil tomorrow?

Like the punchline to the how many philosophers does it take to change a light-bulb joke, I have no answers, only questions. But I'd like to hear what you think.

So this week's QOTW is "Have you seen good assumptions go bad? And what can you do about it?". As always, $20 of Amazon vouchers will go to the best answer.

Last week's QOTW was "Have you ever been to a remarkable networking session at a conference?" Thank you Ken Hughes, Matt Lacey, Ed Loessi, David Locke, Steve Jones, Mark Dalgarno, Bob Cramblitt, Erietta Sapounakis and Sean Murphy for your excellent answers, and Cliff McCollum wins the $20 for his World Café idea. Send me an e-mail Cliff and I'll send you the $20 vouchers.

On the social network, Mark Dalgarno asks when should you retire a software product? and Phil Factor has some excellent, seasoned, and characteristically weird advice about how to survive the recession in his clinging to the flotsam blog post. Make sure you check out the other forum posts too.

If you're in Cambridge then make sure you come to Software East next week.

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How do you take a group of 400 and introduce each person to a handful of relevant people? And get them to know each other, to discuss a mutual topic of interest, and form a bond that will last more than the hour they spend in each other's company?

That's the problem I'm facing with Business of Software 2009. I've tried a couple of things in previous years. In 2007, we had a handful of break out sessions. That didn't really work: there were too few sessions so each session had too many people and by the time introductions were done we'd run out of time. In 2008, we had table sessions. People signed up in advance to one of a series of topics and then sat at pre-allocated tables of 10, each with a moderator. This worked for some people, but failed for others, depending on the topic, the people at the table and the skill of the moderator.

Inspired in part by Open Space Technology, I'm contemplating moving away from a structured session in favour of a marketplace metaphor. Maybe I'd let people loose over the venue and tell them to self organise for an hour. I'd encourage them to set up topics in advance through the Business of Social network site, use Twitter to communicate locations and organise impromptu groups, and provide helium balloons,  large pieces of card and marker pens for anybody passionate enough about a topic to broadcast their interest. It could be an interesting experiment.

All of which leads me on to this week's question of the week: have you ever been to a remarkable networking session at a conference? The best answer will get $20 of Amazon vouchers. Post here.

Networking in smaller groups is much easier: food and alcohol normally do the trick. Over several centuries, the ancient Greeks perfected it to an art form. They gathered in private symposia, one or two to a couch, and the symposiarch watered down the wine to an appropriate level (usually three parts water to one part wine) and made sure that everybody got the correct level of alcohol calibrated to his (and it was always his) personal level of tolerance and reaction to alcohol. They then discussed poetry and philosophy, with the symposiarch guiding and regulating the talk. I can't promise anything like that, and there's certainly no requirement to drink, at next week's London BoS dinner. But it should be a good chance to talk about the business of software with like-minded people. It's open to all, and you can sign up at http://network.businessofsoftware.org/events/london-bos-dinner-1

The two previous QOTWs (What are your predictions for 2009?  and Who would you like to hear speak at Business of Software 2009?) have been won by Dave Collins and John Hsu.

Paul Graham has tentatively agreed to speak at BoS 2009. He joins the current line-up of Joel Spolsky, Don Norman and Geoffrey Moore. If you want to keep up to date as I announce new speakers then follow me on twitter.

On the forums, Sam Ng asks how do you price SaaS, Scott Cote would like to know how product managers fit into the sales process and Mark Dalgarno asks about rental models vs perpetual licences for software. Answer these questions, and more, on the forums.

How important is integrity in business? Read Phil Factor's opinion in his A chilling prophesy blog post, and I have a guest post on interruption marketing (is it really dead?) on Avangate's blog.

Enjoyed this blog post? Subscribe to my RSS feed or follow me on twitter.

I've got a guest post on the Avangate blog where I talk about Napoleon, hemorrhoid treatment, toilet paper and why interruption marketing isn't dead:

"As Seth Godin says, you should create purple cows:
products that are remarkable. Products that people want to talk about.
But no matter how hard you try, your cow doesn’t always end up purple.
Sometimes you’re stuck with a product that is merely good, or a product
that people simply don’t want to talk about. Like hemorrhoid treatment.
What do you do then?"

You can read the full blog post here:

http://blog.avangate.com/interruption-marketing/

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This is a guest post by Bob Walsh of 47hats.com

Neil's latest post, BoS digest: why you can't just trim the fat,
I thought was a good one, but it neglected the 14th principle of the
Toyota Way: Become a learning organization through relentless
reflection (hansei) and continuous improvement (kaizen).

Put another way, that means stop ignoring and resisting the ways the
world has changed. I've noticed that established ISVs have extreme
difficulty in understanding some of the fundamental changes that have
happened in the last several years, especially when it comes to social
media.

Today, because so many of your customers connect with each other
online, your market is a conversation you do not control. Furthermore,
much of that conversation is happening on networks you don't
understand. But because of internal politics, inertia, and that few
C*O's are technology early adopters, this shift is someone else's
problem and the can gets kicked down the road to the next meeting.

If at this juncture you don't understand that interrupt advertising is
broken, that the old ways of doing business are broken, you have a
serious problem. Yes, there's plenty of hype in the social media world
– but dismissing social media as something unimportant at this point
misses the point.

Here's a little test:

1. Do know what getsatisfaction.com is and actively participate there?
2. Do you have a Chief Community Officer?
3. Do you and your other execs talk with customers via your robust company blog?
4. Do you and your other execs understand and use Twitter, Facebook and other social media?

If you don't at least get 2 out of 4 of the above, how do you expect to survive the next 24 months?

No one expects or wants your company to become a social media
powerhouse that transparently converses with your customers overnight.
But the time for sitting on the fence regarding social media is up. And
since social media is an intensely disruptive force to traditionally
organized hierarchical entities (read – your company), this is not a
matter to be taken lightly.

Time is not your friend right now.

Bob Walsh is by turns a consultant,
blogger, developer, microISV, startup, author and podcaster. Too much
free time on his hands is not a problem he has.

I've got a guest post over on Bob Walsh's 47hats.com and although it's aimed at Micro ISVs ready to hire their first person I think points 2 – 7 are relevant to business of all sizes. Here's point number 5:

If you’ve never hired for this role before, bring in an expert to
help you. Hiring a sales person? Find somebody who’s hired a hundred
sales people already. Don’t know an expert? Find somebody who does.
Never, ever hire for a role you do not understand without outside help.

You can read my other 8 tips here.

I think it was J.K. Galbraith, the economist, who pointed out the problem with trimming the fat in hard times. The image is of taking a slice of bacon and then cleanly removing the fatty rind with a sharp pair of scissors, just leaving the meat behind. In reality, the fat is marbled into your company’s flesh. There’s no easy way of getting rid of it. And, indeed, often you shouldn’t: it’s the fat that gives Wagya beef its flavour and keeps Eskimos warm in winter.

So what do companies do when they need to lose the flab? Unfortunately, a lot of them take the effective, if drastic, short-term weight-loss solution of cutting off both legs. Wouldn’t it be much better to be “lean”? As a Venture Hacks article in October explains:

“Lean” is the most capital-efficient way to run a business. Lean is the never-ending process of eliminating waste: finding every activity that does not create value for the customer and eliminating it. The two greatest wastes are overproduction (making things the customer doesn’t want) and inventory (making things that aren’t used immediately) […] Lean startups eliminate waste: they eliminate every activity that is not necessary for creating customer value.

Sounds sensible, right? What can be wrong with eliminating waste? And ‘lean’ is such a nice word, with its connotations of health, lissomness, agility and athleticism.

But drill into it and the metaphor shatters.

Sure, ‘lean’ is good if you’re trying to build as many widgets as possible, in the fastest time and with the lowest defect rate; or if you’re trying to fly as many people from London to Paris as cheaply and efficiently as possible; or maybe even if you’re trying to ship a single product release with a given feature set as quick as you can. But creating a software business isn’t like running an assembly line or running a no-frills airline. It’s not about maximising measurable output and minimising inventory or aircraft turnaround times. It’s about creating an environment where highly creative people can thrive, and building products that your customers might not even know they need yet.

And what is “value for the customer” anyway? Value for the specific customers in your current customer base, right now? Or value for all your potential customers over all time? Or do you need to strike a nuanced balance between the two? And isn’t the “value” you can provide to your customer somehow correlated to the culture of your organisation? So how much time, and money, should you spend on that?

Earlier this year Red Gate hit a long-standing sales target. To celebrate, we hired out the local Apple store after hours, closed it to the public and gave everybody at Red Gate £300 ($600 at the time) of Apple vouchers. Was this an activity “necessary for creating customer value”? No. Was it a hell of a good thing to do anyway? I think so, and that’s because running a software company for the long term isn’t as narrow as shipping an individual product as quickly as possible with the minimum set of features to keep the maximum number of customers happy.

The Venture Hacks article goes on to quote Taiichi Ohno, the founder of the Toyota Production System:

True efficiency improvement comes when we produce zero waste and bring the percentage of work to 100 percent

Can you hear that rumbling noise? That’s Ohno turning in his grave. Sure, superficially, the Toyota Production System is about eliminating wastage and increasing productivity. But it’s deeper than that: it’s a product of the Toyota Way, which is not a set of processes but a philosophy. It’s about – among other things – being humble, reflecting on oneself, experimenting, iterating, learning and continuous improvement. Taking lessons learnt in one industry and blindly applying them to another would be anathema to Taiichi Ohno.

Hmm. Running a software company turns out to be a lot trickier than, paraphrasing, not spending time and money on worthless crap.

The Business of Software social network is growing, but can you help us grow it even more? Take a look at this link for a couple of ideas.

It’s almost the New Year, and Mark Dalgarno asks what are your New Year resolutions?

I’ve got a guest post on hiring your first employee at 47hats.com.

I’ve got three speakers signed up for BoS 2009 so far – Don Norman, Geoffrey Moore and Joel Spolsky. I’m hoping to announce some more soon.

Perry Ismangil is presenting to 7,000 people at a conference and would like to know how to maximise the opportunity.

Tom Moellering wants recommendations for a web usability company in San Francisco or Chicago.

I’m going to leave last week’s question of the week on who would you like to hear speak at Business of Software 2009 open for another week, and add a new QOTW for this week: what are your predictions for 2009? $20 of Amazon vouchers will go to the best replies on both posts.

I probably won’t blog again until the New Year, so, in the meantime, have a cracking Christmas and if you liked this post then please follow me on Twitter or subscribe to my blog’s RSS feed.

The economics of conferences are terrifying.

If you want to run a conference then you need a place to hold it. The places with the best locations, and the best meeting space, are the hotels. But hotels don't make their money from renting out their ballrooms. They make it from selling hotel rooms; from heads in beds. The more people stay in the hotel, the more $5 cans of coke, $10 videos and $20 cheeseburgers get sold.

So the hotel asks you to guarantee that people will stay in their hotel. And your conference delegates need a place to stay. That's why, for Business of Software 2009, I've had to promise the hotel that they'll sell some 600 hotel room nights. And if they don't, then I'll have to pay for them myself. And then there's the cost of feeding all those hungry conference delegates. With coffee at $10 a cup, and a bacon and egg muffin double that, it's not surprising that we spent $9,171.60 just on ice cream in one of the breaks last year.

Which is why, on Friday, I underwrote about $300,000 of costs. Which is terrifying.

But, as Theodore Roosevelt said about bear hunting, the thrill is in overcoming your own fear. So I did it anyway. With the economy nose-diving and the future opaque, it would have been sensible, understandable, not to run the conference in 2009. It's easy to be cautious, to cut back, to think twice, when things are uncertain. To lay people off, to cancel Christmas parties, to freeze and wait and see what everybody else does before you move. To kill your side projects, to abandon your mISV and to return to the cozy safety of your day job.

But if you do what everybody else does, what results do you get? You get the same results as everybody else. Which is great in a boom, but not in a bust. The only way to thrive in a bust, to beat the market, is to be different.

The second London Business of Software meet-up is under a month away. To join us, sign up online.

Last week's question of the week was 'What would you change about how you write software?' Jonathan Wax wins the $20 for the best answer of "stop making up requirements based on internal debate", a common problem in software development.

This week's QOTW is 'Who would you like to hear speak at Business of Software 2009, and why?'. I'll give $20 to the best answer.

Business of Software 2009 will be held in central San Francisco from November 9th to November 11th. It's a Joel on Software conference for the second year running. To stay up to date, follow me on Twitter or subscribe to my blog's RSS feed.

The term "war on terror" has always made me squirm. But there's no denying the power of the metaphor. As a recent article in Scientific American argues, the metaphor you choose defines the way you think. Call the incompatibility between the West and fundamental Islam a "war on terror" and you are forced to think about how best to beat the "enemy" into submission; how to crush them militarily. It becomes a zero sum game, to be settled with violence.

But what would happen if you changed the metaphor? If you were to choose the metaphor of terrorism as disease, or crime, rather than military enemy? Then you would think about the problem in different ways. Rather than war, you might consider innoculation or policing as effective counter-strategies.

But this blog isn't about politics, it's about software. The reason I bring up the "war on terror" is because of something Tim Lister said last week. I'd always thought about our product plans as a "pipeline". But Tim said that his preferred metaphor was a bookshelf*.

Define product plans as a pipeline, and you immediately start thinking about funnels, filtering and distillation. You think about linear progression, of ideas entering the pipeline at one end and then emerging, linearly, first in first out, from the other. You worry about filling the pipeline and keeping the ideas flowing.

But change the metaphor to a bookshelf, and everything changes. Filling the bookshelf becomes a parallel task. You can put up different types and sizes of books, and you can take them down in any order. You pay attention to the book covers – how to make the book look good, and what blurb to put on the dust jacket so people will choose to pull your book off the shelf and read it.

What would happen if we changed an even more fundamental metaphor?

We aways talk about software projects. The word project makes you think of planning, spreadsheets, milestones, checkpoints and gantt charts. What if we chose a word other than project? What if we called them software organisms, or software shrubs, software herds or software jigsaws?

Would that change the way we thought about writing software? Would we come up with better ways of shipping software?

And how about "shipping" software? Is that another metaphor ripe for challenge?

Post your comments here …

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[* The bookshelf metaphor was actually one that Dom made and Tim picked up on]

I’m late to Twitter. At first, I didn’t see the point. Why would I care that you had bacon and eggs rather than your usual organic muesli this morning, and how exactly can the headache that’s currently splitting my head rock your boat? But now, I’m hooked. I still don’t care about your breakfast and won’t tell you about my aches and pains, but I’ve slowly realised that I’d missed the point. It’s not about sharing the boring minutiae of our lives. Instead, I’m using it to share useful snippets of information I come across.

Did you know that Teddy Roosevelt said “The thrill is in overcoming your own fear” about bear hunting, or that Paul Romer said “A crisis is a terrible thing to waste”? When I read these, I have an irresistible temptation to share them. Twitter means I don’t have to resist: as Oscar Wilde said, the only way to get rid of a temptation is to yield to it. And did you know that Stephen Fry declared December 1st to be Oscar Wilde day and got hundreds of replies from his 25,282 followers?

So, if you want to know that President Tubman of Liberia gave two pygmy hippopotamuses to the Duke of Edinburgh in 1961, or that Churchill once said that however beautiful the strategy, you should occasionally look at the results, then join twitter and follow me. Often, but not always, if you squint hard enough and if you're clever enough then you’ll be able to spot a tenuous link to the business of software. My account is http://twitter.com/neildavidson

I’m reinstating the question of the week on the Business of Software social network. This week’s question is Twitter: why do, or why don’t, you use it? I’ll send a $20 amazon voucher to whoever comes up with the best response.

I’ve posted the video of Jessica Livingston’s Business of Software 2008 talk online. Jessica talks about the lessons she’s learned from her interviews with, among others, Paul Graham, Steve Wozniak, Mitch Kapor and Joel Spolsky.

If you haven’t already done so, then check out the other videos of Steve Johnson, Cory Doctorow, Paul Kenny, Eric Sink, Dharmesh Shah, Jason Fried and Alexis Ohanian.

Elsewhere on the forums, people are still discussing their biggest marketing mistakes, whether to use resellers and whether product managers are overpaid.

Finally, I dug up Hewlett Packard’s original 1937 business plan. Read about it on my blog, and post up your comments. I’ll send a copy of the HP way by Dave Packard to the best reply.

Next week, I hope to bring news about Business of Software 2009. To stay up to date, follow me on Twitter, or subscribe to my blog, or sign up to the Business of Software social network.