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A Few Thoughts on the Economics of Software Product Development

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A Few Thoughts on the Economics of Software Product Development

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Some of you probably already get this… some of you might even disagree… but unless you are building software as a hobby… chances are, you building software for money. In other words, someone is paying you to write software for them.

Why would someone pay you money to show up and write software? They are paying you money to write software because they hope to sell that software and get even more money in return. It is an investment.

Ideally, we should want our investors to get a good return on that investment so they’ll keep investing. It’s our job as software professionals to help our sponsors get good, working software into the hands of paying customers as quickly as possible.  That’s how we make money.

The act of selling software funds our ability to build more software.

Conversely, our inability to sell software makes investors grumpy and a lot less likely to want to keep paying you to write software. Unless we sell software, we don’t have any money to pay people to build software.

To many, the thought that we are writing software for money cheapens our craft… it cheapens our art. We want to be pure. We want to build perfect products. We want to perfect our craft and be artisans.

Don’t get me wrong, I’m all for building great products. That said, at some point, we have to strike a balance between perfection and getting products to market, products that can sell and start generating revenue.

Why am I writing this post?

Over the past few years, I’ve worked with a bunch of folks that have seem to have lost this fundamental connection to the economics of software development. Some where along the way, software became and end unto itself.

…somewhere along the way it became more important to be great engineers.

…somewhere along the way it became more important to be great testers.

…somewhere along the way the design became more important than the delivery.

Some where along the way, it became more important to deliver everything at one time rather than to getting something into the hands of our customers as quickly as possible. I think that mindset is killing many of our companies.

If you were spending your own money to build software, you’d want to see a return on that investment as quickly as possible. As software professionals, we have to start thinking about the economics of software delivery and act accordingly.  How would be build software if our own money was at risk and failure wasn’t an option?

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