Blog

Ignore Relationships at Your Own Peril

Bob Cramblitt reports on Jennifer Aaker’s talk from Business of Software 2007. To sign up for BoS 2008, visit www.businessofsoftware.org

What’s your favorite product at Trader Joe’s?  If you are a Trader Joe’s customer, you can no doubt name more than a few.  What’s your favorite product at Safeway? You probably have trouble naming one.

What would your reaction be to torn packaging at Trader Joe’s vs. the same thing at Safeway?

The companies are in the same industry, and offer the same basic products.  But, your reactions to and perceptions of the two are quite different, because you have different relationships and social contracts with the two stores.

Relationships — formed immediately and changing over time — define brands and your perception of the companies behind them, according to Jennifer Aaker (http://gsbapps.stanford.edu/facultybios/biomain.asp?id=04071874) of the Haas School of Business and Stanford Graduate School of Business.  Good companies know this and make decisions based on the impact of relationships.

In her presentation at the Business of Software conference, Aaker defined four basic points:

(1) Rethink your concept of brand. Reputations color all interactions.
(2) Reactions to brands depend on implicit contracts — the do’s and don’ts of the relationship.
(3) Rethink transgressions: Letdowns aren’t always bad; they can serve as an opportunity to re-engage.
(4) Engagement is multi-dimensional — essentially about memories of the time spent.

Many companies tend to see relationships with customers as an optional thing, without a solid impact on the bottom line.  Studies and business results show otherwise.  Ignore the relationship with your customers at your own peril.

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

Are You Ready for the SaaS Tsunami?

Bob Cramblitt reports on Rick Chapman’s talk from Business of Software 2007. To sign up for BoS 2008, visit www.businessofsoftware.org

It’s coming, and many software companies will either ride it or drown in it.  It’s the SaaS tsunami, and its success is inevitable, according to Rick Chapman’s presentation today at Business of Software 2007.

The success of SaaS is evidenced by a 21% a year growth rate. It will be a $21B market by 2009, according to Gartner.  Ironically, Microsoft has supplied two key drivers for SaaS success: The failure of Microsoft Vista, and Microsoft WGA copyright protection, which, in Chapman’s words, makes Microsoft look like an "old fart company" interested only in circling the wagons around its fiefdom.

Companies buy Saas for the following reasons:
new capabilities — 59%
operating, not capital expense — 16%
other — 14%
replace client/server — 11%

For those interested in following the SaaS tsunami and other software issues, subscribe to Rick Chapman’s Softletter: http://www.softletter.com/

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

Piracy is Good

Bob Cramblitt reports on Matt Mason’s talk from Business of Software 2007. To sign up for BoS 2008, visit www.businessofsoftware.org

"Greed is good," said the Gordon Gekko character in the movie Wall Street.  Although it goes against most established thought about software, Matt Mason, author of the upcoming book, The Pirate’s Dilemma (www.thepiratesdilemma.com), says that piracy can be good.

Mason, a former pirate radio DJ, makes the compelling argument that piracy drives innovation by exposing flaws in the current marketplace — the music business is a prime example.  Historically, piracy has been imbedded into the very fabric of business, especially in America, a nation practically founded on piracy.

Having your work copied can be a powerful force in the market — think about mods in the gaming industry or designer copying in fashion. And, pirating doesn’t necessarily hurt the marketplace as much as one might think: Despite all the pirating of movies, Hollywood had its biggest summer ever this year.

The dilemma comes from the thin line between when piracy does good for an industry and when it does harm.  I have a feeling that Mason’s book, with a cover blurb by Seth Godin, will be a "must read" for business book readers.   

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

Marketing Made Simple

Bob Cramblitt reports on Dan Nunan’s talk from Business of Software 2007. To sign up for BoS 2008, visit www.businessofsoftware.org

Writers have long known that it is easier to churn out 1,000 words on a subject than 100.  The same goes for software according to Dan Nunan, chief marketing officer for Red Gate (www.red-gate.com).  Nunan kicked off the second day of the Business of Software 2007 conference, attended by more than 150 people from 30 states and 12 different countries.

Although simplicity is more difficult to achieve, it is worth it, according to Nunan.  Unnecessary complexity — such as the four different versions of Microsoft Vista — tends to inhibit decision-making, effectively paralyzing the customer.

Nunan presented four steps toward marketing simplicity:

  • Be authentic — Be transparent, trust your employees and use common sense (Microsoft’s policy on blogging).
  • Make do with limited resources.  Throwing money at marketing doesn’t make marketing more effective.
  • Respect your customers  — and don’t worry about what your competitors are having for breakfast.
  • Worry about complexity — Your customers don’t need 100 reasons to use your software or be presented with 300 new features.  Focus on one or two things that resonate with customers.

Nunan has learned 10 things about software marketing:

1. If your software is completely lousy, go home.
2. Just because a piece of software doesn’t have any bugs, doesn’t mean it is high quality.  The customer is the arbiter of quality.
3. Software marketing people are the organizational glue between technical people and sales.
4. Sales works (but you need something to sell).
5. Print advertising doesn’t work (but not for the reasons you think). It doesn’t work because of how much time is spent doing it; time that could be better spent doing something more effective.
6. PR isn’t press releases. Work with influencers; those who write books, blogs.  Communicate with the community and get feedback.
7. Understand Google. You need someone in the organization who understands Google and everything they do.
8. The future of graphical display ads is dim. Use of ad blockers is increasing; it’s difficult to display graphics in e-mail.
9. Software is a great place for the future of marketing.
10. Branding still counts, but you don’t need $10M to build an awesome brand.

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

Joel on Hiring and Retention

Bob Cramblitt reports on Joel Spolsky’s talk from Business of Software 2007. To sign up for BoS 2008, visit www.businessofsoftware.org

Everybody in the capacity audience at Business of Software 2007 wanted to know what he thought about employee hiring and retention.  He is Joel Spolsky, CEO of Fog Creek Software and author of the popular Joel on Software blog.  In a fast-paced presentation and question-and-answer period, Spolsky covered what type of people his company looks for, how he attracts them, and how they are kept in the fold.

The Fog Creek screening process for incoming resumes includes the following factors:

  • Passion – This is manifested by long-time interest in programming and an agressive pursuit of goals.
  • English – Not mastery of the English language, but good communication skills.
  • Creativity – As evidenced by whether applicants have shown that they want this particular job at this particular company.
  • Selectivity – The candidate has been selected by good schools and/or employers.
  • Brains – As reflected by good grades, participation in math camps, and special honors.
  • Diversity – People unlike those currently in the company; people with different ideas, and ethnic, cultural backgrounds.

Those who make the resume cut go through a phone interview, then could be invited to NYC for a personal interview, with all expenses paid.  Spolsky says it is important to make a good impression on the prospective employee.  The most important factors for most applicants are working with smart and interesting people, working on interesting problems, free lunches and other benefits, a nice office, and a boss who "gets" them.  Way down on the list is salary, although that certainly has to be competitive.

Two key criteria outweigh all for Fog Creek (1) being smart and (2) getting things done. An optional third factor: not being an asshole.

Things that Spolsky and his team have done to help make Fog Creek a great place to work include:

  • private offices
  • nice computing systems with large monitors
  • Aeron chairs
  • giving employees what they need to do their jobs
  • free lunches
  • more vacation than the average company
  • high bonuses

Brand awareness has become a major factor not just for products, but for attracting recruits, and the prominence of the Joel on Software blog definitely helps.  Spolsky says he has been on campus recruiting trips and heard Fog Creek mentioned in the same breath as Google and Microsoft.

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

A Man Who Knows His Crap

Bob Cramblitt reports on Alberto Savoia’s talk from Business of Software 2007. To sign up for BoS 2008, visit www.businessofsoftware.org

Alberto Savoia of Agitar Software (www.agitar.com) knows crappy software, in every permutation.  More than talking about it, his company is eradicating crappy software through better testing.  Business of Software 2007 attendees were treated to a hilarious treatise on crappy software from Savoia.  Those who experienced Alberto live won’t forget him anytime soon.  For the rest of you, there’s the interview on this blog: http://blog.businessofsoftware.org/2007/09/alberto-savoia-.html

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

And the Software Idol is…

Steve Johnson of Pragmatic Marketing (www.pragmaticmarketing.com) won the closely contested Software Idol competition at Business of Software 2007.  Johnson’s presentation centered on a market-driven model for managing and marketing technology software.

Congrats to Steve and the other finalists: Geoff Perlman of Real Software; Bob Walsh of 47hats.com; Jeffrey Gordon, author of the Software Licensing Handbook; and Jerry Foster of Plexus Systems.

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

And the Geeks Shall Market

Bob Cramblitt reports on Eric Sink’s talk from Business of Software 2007. To sign up for the BoS 2008, visit www.businessofsoftware.org

Why did the marketing guy cross the road?  To avoid the geek approaching him.  Or vice versa.

Why would any company want to have geeks involved in marketing?  Or, conversely, why would any geek want to be involved with the marketing wonks, or “clueless weinees” as Erik Sink called them in his Business of Software 2007 presentation.

Sink, the author of the Apress book The Business of Software, says that developers are often involved in marketing whether they know it or not.  If they are involved in deciding what features to build, they are doing marketing.

Geeks have three problems with the marketing role, according to Sink:
(1) Generally, they suck at marketing, but then again, everyone does.
(2) They tend not to be too normal in discriminating between good ideas and bad ideas.
(3) They fall in love with technology for technology’s sake.

Still, having geeks involved in marketing is generally a big plus for both the company and its developers.  The company gets the unique perspective of technical staff, and developers get to play a greater role in the fate of the products they produce.

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

An Angry Man's Solution for a Broken Process

Bob Cramblitt reports on Bill Buxton’s talk from Business of Software 2007. To sign up for the BoS 2008, visit www.businessofsoftware.org

Software product development is broken, and Bill Buxton is angry.  Addressing the current process turns Buxton into a raging, slightly profane comedian with a very serious agenda.

Buxton, a principal researcher at Microsoft Research, said today at the Business of Software 2007 conference that the industry is based almost entirely on N+1 products.  In its history, according to Buxton, Adobe has created just two new products in house: Acrobat and Illustrator.

The problem is that new software projects are greenlighted from day 1, before the company really knows what it is going to build, if it can be built, and how it is going to be sold. Rarely is there participation from all the important elements within the company: technical, marketing and creative.

Buxton likens the typical approach of software engineers having sole responsibility for new product development to an ice hockey team with all goalies.  No matter how good your goalies are, they aren’t going to beat even a bad team with the proper mix of players.

The Buxton approach centers on the power of sketching user experiences at the beginning of the product development period.  Sketching is quick, timely, inexpensive, disposable, and plentiful. 

There is an ambiguity in sketching: If you want to get the most out of a sketch, you need to leave big enough holes – like Swiss cheese.  There has to be enough room for the imagination.  The goal is not arriving at a design, but the best design.

One of the overriding lessons from Buxton is this: Everything is best for something, and worst for something else.  The participation of people from multiple disciplines, combined with the experimental flexibility of sketching, can determine whether a product will fly before critical resources are committed.

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

An Anthropologist Looks at Project Management

Bob Cramblitt reports on Tim Lister’s talk from Business of Software 2007. To sign up for the BoS 2008, visit www.businessofsoftware.org


“Tim Lister is an anthropologist,” says Simon Galbraith, co-CEO of Red Gate Software. It’s an apt description. Lister uncovers the often-hidden patterns that constitute software culture, everything from the developers’ war against perceived inferiors (i.e. marketing wonks) within the company, to the smell of dead fish that permeates a project that’s doomed from the beginning.

More than 70 patterns are outlined in the upcoming book, Project Patterns: From Adrenaline Junkies to Template Zombies, co-authored by Lister. Here are some of the ones he discussed in his Business of Software 2007 presentation:

  • Mañana – the loss of a natural sense of urgency. Agile development fights mañana.
  • The dead fish of failure – projects that are dead from the start. Everyone smells it right away, but they hunker down and work.
  • Lessons unlearned – Retrospectives rarely trigger change.
  • What smell? – People in the organization cannot detect its underlying vitality or decay.
  • Marilyn Munster – Like the normal girl among the monsters in the old TV family, the esteem often given technical workers versus managerial staff varies. In some organizations, developers are king; in others they are pawns.
  • Surprise! – The manager offering rewards and incentives gets responses in addition to those he planned.
  • Everyone wears clothes for a reason – Complete openness grinds progress to a halt.
  • Music – people with real musical skills are disproportionably represented, sometimes extremely so, in technology organizations.

Lister’s essential message: Look for patterns, name them, then propagate or defeat them.

For more, check out the Tim Lister interview on this blog:

http://blog.businessofsoftware.org/2007/07/from-project-sl.html

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

Guy's 11-Step Program for Innovation

Bob Cramblitt reports on Guy Kawasaki’s talk from Business of Software 2007. To sign up for the BoS 2008, visit www.businessofsoftware.org

Guy Kawasaki was part of the Mac team at Apple between 1983 and 1987, which he called “the largest collection of egomaniacs until Google.” He’s had huge successes, and made some mistakes, including not taking a job in the early days of Yahoo.

Kawasaki kicked off Business of Software 2007 with 11 key points for fulfilling “The Art of Innovation”:

  1. Make meaning – Decide how you are going to make meaning. Nike makes meaning out of shoes.
  2. Make mantra – Put together 2 or 3 words that explain why your software exists. Most companies have mission statements, not mantras. Some proposed mantras from Guy: Wendy’s: “Healthy fast food.” Nike: “Authentic athletic performance.” FedEx: “Peace of mind.” eBay: “Democratize commerce.”
  3. Jump to the next curve – Don’t go for 10% better, shoot for 10X better: Mac vs. Apple II; telephone vs. telegraph. No ice harvester became an ice factory and no ice factory became a refrigerator company.
  4. Role the DICEE – Deep: PhotoShop. Intelligent: Someone anticipating what I need to do. Complete: Create a totality of experience. Elegant: Nano controls thousands of songs with a wheel. Emotive – Harley-Davidson.
  5. Don’t worry, be crappy – Version 1 means never having to say you’re sorry. Shoot then test. A first product can have elements of crappiness.
  6. Polarize people – The Scion xB isn’t for everyone. The more people you try to serve, the greater the mediocrity.
  7. Let a hundred flowers blossom (Mao) – If you ship software and find users are not the right people (the audience you anticipated), “take the money.” Ask people who are buying why they are buying
  8. Churn, baby, churn – The first permutation of the next curve will have elements of crappiness, but you have to move beyond crappiness quickly. Need to fix your revolution. Can’t stay crappy forever.
  9. Niche thyself – Provide a unique product or service that delivers value to the customer. Examples: Fandango movie reservations – no standing in line. Breitling Emergency wristwatch – antenna sends out emergency signal. Smart Car – park perpendicular to curb. Trek Lime – automatic transmission in a bike. LG Kimchi refrigerator. Royal Caribbean – ice skating rink on a cruise ship.
  10. Follow the 10/20/30 rule of pitching: Maximum of 10 slides in PowerPoint for 60 minutes. Complete presentation in 20 minutes. Use 30 point font size. Dark background; sans serif font; fill or left justify.
  11. Don’t let the bozos grind you down – Bozos don’t have vision. Examples: Ken Olsen of DEC saying that people didn’t need computers at home. Kawasaki’s response to Yahoo: “It’s too far to drive and I don’t see how it can be a business.”

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

Today's line-up

Yeah, the Red Sox had a great line-up for the World Series (maybe we should start calling it the "American Series"?), but check out this one for today’s Business of Software 2007 conference, listed by order of appearance.

Guy Kawasaki
Tim Lister
Bill Buxton
Software Idol winners
Eric Sink
Breakout sessions (take your dilemmas to the experts)
Alberto Savoia
Joel Spolsky

Stay tuned for highlights throughout the day.

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

Lessons relearned

The idea for the Business of Software conference first popped into my head in March this year. We’ve now got 2 weeks to go until the conference starts. This is the second business I’ve started (I also co-founded Red Gate Software). Although the businesses are clearly very different, there are some interesting parallels. Here are some lessons I’ve relearned:

Having a good product isn’t enough
Even if you have an excellent product, you can’t just drop it into the marketplace and expect people to find it, and buy it. If you build a better mousetrap, the world will not beat a path to your door. Of course, you can’t market a dog: a good product is necessary, but not sufficient. Whatever your product – whether it’s software or a conference – you need to spend a lot of time, thought, effort and, less importantly, money on getting people to notice it.

Try twenty small things; not one big thing
If you don’t know what you’re doing, you can never tell what’s going to work and what’s not. Rather than intellectualising a lot, selecting the single best way of doing things, and then doing it, it’s best just to get out there and try things. Some things will work, some things will fail, but slowly you’ll start to turn the flywheel. We tried many things to market the conference: print ads, Google ads, web ads, asking speakers to publicise the conference, sofware giveaways, a free ebook, blog articles, themed fortune cookies and speaker interviews. In the end, the most successful bit of marketing was when Joel Spolsky mentioned an advert we’d run in San Jose airport. There’s no way we could have predicted that: we tried enough and eventually we got lucky.

Listen to other people
Getting other people’s perspectives, and their advice, is always useful. I’m fortunate enough to have had advice – and help – from some great people.

Ignore other people
Many people – often the same people – will tell you that what you want to do can’t be done; it’s a dumb idea; it will never work. Listen to them, but do it anyway.

Minimize the downside
Minimizing the downside is as important as maximizing the upside: only risk as deep as your pockets go. For the conference, that meant guaranteeing the minimum number of hotel rooms I could, even though that limited the potential upside. For Red Gate, it meant only spending the money we had, and carrying on contracting for my previous job for the first 6 months after start-up.

Maximize the downside
Although you don’t want to bankrupt yourself, your pride is less valuable. Putting yourself in a position where failure means humiliation, or embarrassment at least, is a powerful motivator. With Red Gate, running it as a Micro ISV for an hour or two a day in parallel with the day job would have been easy. If I failed, nobody would notice, and my world would have continued much as before. By quitting the day job and publicly announcing my intentions to friends, family and colleagues I removed the easy exit.

At some point, you need to take the plunge. You’re never going to have enough evidence or data to predict that what you’re going to do is going to work. Think about it, but then just do it. For the conference, that point came when we had about 30 attendees. The speakers were asking if the conference was going ahead and others were questioning its viability. Backing down and cancelling would have been easy. It was scary, but I decided to go ahead, knowing that there was a good chance that I wouldn’t get enough sign-ups, that the conference would flop, and that I’d make a tit of myself. Paradoxically, increasing the chance of looking like an idiot on failure actually decreased the overall chance of looking like an idiot.

I’ll be expanding on some of these points in more depth over the next couple of weeks, and I’ll add some more lessons learned once the conference is over. I hope to see you in San Jose.

Enjoyed this post? Subscribe to our RSS feed or subscribe by e-mail

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

One week left to get pre-event discount

If you want to hear Joel Spolsky, Rick Chapman, Dan Nunan, Jennifer Aaker, Jeff Pfeffer, Tim Lister, Matt Mason, Guy Kawasaki, Hugh MacLeod, Tim Lister, Bill Buxton and Alberto Savoia speak on the Business of Software in San Jose, October 29th-30th, then you’ve got until the 20th October until the pre-event discount expires. Go to www.businessofsoftware.org for more details.

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

Other people's property

Often people from outside a field bring an interesting perspective. It took a physicist (Richard Feynman) to decipher the Mayan Dresden codex (it described the movement of the planet Venus, not the actions of the gods). It’s taking a businessman (Bill Gates) to revolutionize global health. On a smaller scale, bringing an outsider with a different perspective (a designer, say) into a software team can change what they do. In this vein, this week’s guest post is by Matt Mason, author of The Pirate’s Dilemma. Matt’s background is as a pirate radio DJ, music journalist and magazine founder. Here, Matt outlines how piracy has consistently changed our world for the better, and will continue to do so:

There was a time when many people didn’t think of software as property at all. Thirty years ago everyone from multinational corporations such as IBM to hobbyists programming in their garages for fun, treated software as information – a public good. But that all changed on February 3rd 1976, when a 21 year-old programmer wrote to an open letter to a gang of hobbyists who called themselves the Homebrew Computer Club, saying they could no longer use his software anymore, a program called BASIC, without paying for it. “Who can afford to do professional work for nothing?” the letter asked the club, who huddled together in a garage to do exactly that. “What hobbyist can put 3-man years into programming, finding all bugs, documenting his product and distribute for free?” he asked. The young programmer had a point. Why shouldn’t he be paid for his time? Personal computing had reached a fork in the road.

The letter-writer, one William Henry Gates III, or Bill Gates to his friends, managed to turn the tide of opinion in the programming world, and ended up scratching a pretty good living from his software, too. As did some members of the Homebrew Computer Club, such as Steve Jobs and Steve Wozniak. But when Microsoft unveiled Vista last year, a product 10,000 programmers had spent almost five years developing, many software people were already predicting it might be the last of its kind, because the way software is both produced and consumed has changed. Once again software has reached the same fork in the road, only this time it’s not just the software business facing this dilemma.

In every industry in the world, the line between information and property is blurring. In software this has clearly been underway on for some time – from open source alternatives such as Linux, to rampant software piracy, trying to define software strictly as property has been a constant problem for programmers. Now it’s also a problem for those in music, the movie business, the pharmaceutical industry, fashion and many other areas. We’re all at this fork in the road that I call the Pirate’s Dilemma. But instead of taking one route or the other, thinking of software as either information or property, maybe this time, the answer is to think of it as both.

Throughout history, there have been other groups like the Homebrew Computer Club who have gotten together to work out better ways to do things, in situations where copyright laws don’t always work. In 1960s Jamaica, an accident in a recording studio led a DJ to realize he could create amazing new forms of music by creating space for the audience and other DJs to collaborate with the artists on the original recording, a revelation which doubled the profitability of that record label, created several new types of music, and birthed what we now call the remix.

In 1970s New York, graffiti artists from diverse backgrounds and warring neighborhoods united and formed “crews” that were able to move across the gang-controlled boundaries, and develop one of the most explosive artistic movements the world has ever seen, using an informal, norms-based system that protected their work, but encouraged other artists to innovate and learn from them.

In the 1980s, three eleven-year-old kids realized video games were a lot more fun if you hacked into the code and re-wrote the story yourself. Their first hack showed every other fan that video games were as easy to manipulate as coloring books, and two decades later, “modding” as it’s now known, became a vital part of game development. Game developers encourage fans to hack their games, because it’s a great way for them to develop new ideas, find the most talented people, and extend the shelf life of the original game.

Thanks to the internet, in the late 1990s it became very obvious that information as we know it is now a two way street, whether we choose to define it as property or not. Sometimes we do need to think of this a problem, and try and stop others from using our property as information – that’s always going to hold in many cases. But not all the time. Often it can be incredibly beneficial to open up your information to others. Different perspectives bring new ideas, solutions and sometimes even entirely new business models that we couldn’t see before.

Finding innovative ways to let people to share information without risking our intellectual property will define the software success stories of the next few decades. The writing has been on the wall for some time; the game has quite clearly changed. There is no fork in the road, what lies ahead is actually a road with two lanes, which together add up to a more efficient way of getting where we need to be. 

Want to hear more about Matt’s ideas? Matt will be speaking at Business of Software 2007. Or check out his blog.

Enjoyed this post? Subscribe to our RSS feed.

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

SQL Bloat – will SQL Server 2008 be bloatware?

My latest post is over at the Simple-Talk web site. Here’s an extract:

At SQL Pass last week, Tom Casey – General Manager for the SQL Server Business Intelligence unit at Microsoft – made the point that "SQL Server is not really a database – it is a database platform and it has been a shift from a relational database to an end to end solution".

I find this interesting. When I use a database, I want a database and not a platform. I want to store and retrieve data in a way that’s fast, secure, easy to use and quick to learn. Watching what Microsoft is doing with SQL Server I’m left wondering if they are slowly drifting into bloatware.

You can read more, and vote, at Simple-Talk.

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

Name ten green things

Tell me about yourself. Write a blog post. Draw a picture. Name 10 things that are green.

These are hard things to do: they are too generic. Provide constraints and the tasks become easier: tell me what you did at your last job; write a blog post about profiling SQL Server; draw a self portrait; name 10 green things that you might find in your fridge.

Blank sheets of paper are scary: we work better when we’re given limitations. Not only do constraints make tasks easier, but they make them easier to do well. Rather than ramble, we focus and provide better, more structured, answers.

The same is true for software. Software is best when it’s specific, not generic. If you frame the problem tightly (write software to compare and synchronize Microsoft SQL Server databases) then it’s easier to solve, and solve well, than when framed loosely (write a database tool).

The same is also true for people. Although, apparently, we work better and are happier when we define our own goals, that blank sheet of paper can be paralysing. Total freedom is counter-productive: to be happy and effective, we need constraints. The constraints are almost arbitrary: it does not matter what the constraints are, just that there are constraints.

So, next time you or your team is flailing, try imposing constraints until the problem you are working on becomes solvable. If you cannot come up with reasoned constraints then try arbitrary ones.

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.

Start a software company or work in a bar?

The Micro ISV dream is that of quitting your day job and setting up your own one-man business. Instead of slaving away to make other people rich you can leave your cubicle behind, spend a few hours a day with some light coding and relax while the money rolls in. But is this possible? Can you afford to leave your job? Or should you get a job in a bar instead to get that extra income?

A handful of Micro ISVs are extremely successful. A Micro ISV can sell more than $50,000 a month. These rare successes skew the numbers for the majority of Micro ISVs though. Most one-man bands earn under $25 / hour. The most common number of sales per month is none. The most common amount of sales / month is no dollars. But the outlook isn’t quite as grim as those numbers make out. Read on to get the full picture.

I ran a survey on the Joel on Software forums a couple of weeks ago. 96 people replied. Here are some of the results (you can find the first part of this write-up here). Note that one issue with this survey is that it’s surveying JoS regulars who have the time and inclination to answer a survey: it’s not randomly sampling all Micro ISVs.

The definition of Micro ISV is loose. Some people think of Micro ISVs as being just one-man bands, for others it’s a synonym for small business. This survey side-steps the issue and only asked people who called themselves Micro ISVs: they are self-classified Micro ISVs. Here are their sizes:

As you can see, most Micro ISVs are a single person. Just 10% of all Micro ISVs consist of more than 2 people.

The average (mean) number of downloads or trials / per month is over 3,000. This is, however, skewed by some outliers [as with all these graphs, beware of the differing bin size which can be misleading]:

Although downloads and trials are important, it’s sales that really count. Again, some highly successfuly mISVs skew the numbers. The median sales / month is $2,000, but the mode (the most common sales figure) is zero:

Actually, it’s not sales that really count. It’s profits. Unfortunately I didn’t ask that question.

The average conversion rate is almost 8%, but under 3% is much more common:

Although some Micro ISVs sell products for more than $50,000, most products are priced at under $65:

The amount of time people spend working on their mISV varies, from almost nothing to over 80 hours per week. The average (mean) is about 25 hours per week:

The biggest issues that Micro ISVs face are time, motivation, sales and marketing:

I drilled down into the data and examined single person Micro ISVs who had been in business for 6 months or more (on the assumption that they should be earning money by then). Based on the hours / week and sales / week, and ignoring expenses, here are the hourly salaries:

A lot of people earn nothing at all. Half of people earn under $25 / hour. But some people earn $200 or more / hour.

Interestingly, there is only a weak correlation between sales and hours worked. There is, however, a moderate correlation (Spearman’s rho=0.55, p < 0.01) between months the mISV has been going and sales. In other words, there’s only a weak link between how many hours a Micro ISV is currently working and their revenue. How long they’ve been in business is a better indication of how much money they make. Of course, this could be because older businesses are, by definition, those that have not failed, and people making money now might be coasting on past successes.

So what’s the conclusion? Most people don’t have the time, motivation, marketing or sales skills to make it big as a Micro ISV. And running a Micro ISV can take up a lot of time. It’s an interesting hobby, but most people don’t make enough money to quit their day jobs, and the odds are they never will. But it can be done.

Enjoyed this post? Subscribe to the RSS feed.

Download the raw data (169.5K) for the survey results

Read more

Want more of these insightful talks?

At BoS we run events and publish highly-valued content for anyone building, running, or scaling a SaaS or software business.

Sign up for a weekly dose of latest actionable and useful content.

Unsubscribe any time. We will never sell your email address. It is yours.