While playing the software game was lucrative, this blog helps software companies sidelined by innovation to re-enter the game and to win.
Once upon a time it was lucrative to play the software industry game. We sold functionality at excellent margins. Annual maintenance was steady money for (rather) little work. Technology advanced at a manageable pace. The peer community dispensed recognition. Growth was steady and life was good.
But then the software game changed. In many niches FOSS has turned functionality into a commodity. SaaS upsets perpetual licensing, while annual maintenance is increasingly suspect. The community scattered as global players bought and consolidated. Innovation quickened. New business slowed.
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Software protection schemes annoy customers and don’t stop real pirates. Better to have a remarkable product and a story to spread.
So, it only took 2 days to hack the Apple iPad. Trusting DRM to work was unrealistic on Apple’s part. Even so, we in the B2B software business have our own blind spot when it comes to software protection.
Each of the software products I’ve worked on has included a protection system. Sometimes a hardware dongle, but more commonly software-based schemes linking the software licence to the customer’s hardware configuration.
We were scared customers wouldn’t pay if they didn’t have to. With licence fees starting at $10K for each developer seat, hundreds of thousands were at stake.
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In a famine of qualified prospects, you’ll try to grab anything that appears edible. Lack of a reliable sales process is corrosive.
When prospects are rare you’ll do everything to win. Development adds features. Marketing invents ROI justifications. Prospects are too precious to waste; you cannot risk letting even one get away. You do whatever it takes.
Lack of a shared worldview is an increasing problem as you grow. Special cases abound; exceptions appear. Everybody is paranoid about saying no.
To see how sticking to a clear understanding of your worldview changes everything, take a look at 37signals. They are a 20 person company selling web-based apps for small groups and individuals. With more than 3 million users, they are very profitable.
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Future employers won’t need you, but they might want you. Your product is now your skills and the stories to go with them.
Many B2B developers are anonymous workers in a software factory, with little or no connection to customers. Perhaps they get a customer visit here, or a user conference there; but typically not much more.
As products become software and the stories to go with them, previously backstage developers have a new role. Your target audience cares who produces your software, where they are and how they do it. These all contribute to the stories customers tell themselves about how they expect your product to make them feel.
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Epic stories don’t grow on trees; you must design, build and ship them. Success depends on shipping these spreadable software stories.
Software that meets a need (horizontal or vertical) is a commodity. There’s always a cheaper or quicker supplier out there somewhere. Being just a little cheaper, or just a little quicker, cannot work for you long-term.
Focus on your target audience’s wants, not needs. While companies have needs and wants, talking about wants means talking about people and their emotions.
We decide on what we want based on how we think we’ll feel. And not just B2C; B2B buyers are also telling themselves stories about how your product will make them feel.
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