Sometimes it's just desperation. Sometimes it just actually works. You'd be amazed how much easier it is to pitch buzz word heavy software to non-technical people. Presumably most serious investors aren't that easily fooled, but surely some are. And some are simply cynically acknowledging that a company which exploits the zeitgeist for marketing purposes is more likely to succeed with its non-technical customer base.
If you can actually get the potential users clamoring for your software, that can certainly make the sales team's job easier. It's a higher bar before you start even having an impact, though.
Good point. As programmers, we sometimes forget that we can get the business going without the software. Most of the time, all we need is some sales hustle going to confirm viability and get initial traction.
I was just explaining to some friends recently that the only way to become a large non-entertainment tech company these days is to find a captive market (education, healthcare, power, logistics, emergency response, etc.), insert yourself as a cheap solution to a complicated and expensive problem, and then infect the entire sphere until your terrible software is load-bearing and senior managers can't be convinced to replace it. I'm not surprised that this practice also works well in non-software areas like hospice, elder care, transportation, etc.
Maybe it depends on the perspective of who's looking for profits and how to achieve them... and just perhaps someone is riding the hype train to sell some software?
It depends. If your product is obviously a revenue empowerment tool, then sure, pitch that, but that is not usually the case. Even money-making software is still effective because it automates manual processes, which is a cost savings... it just happens to be automating processes most companies don't actually perform at all.
If it was actually working for anyone, then they would be selling software engineering time at the same but slightly cheaper price as existing software engineering time costs today so they could capture those sweet margins.
This is a company spending investor money selling pickaxe hand grips during a gold rush.
For real evidence, look for companies selling engineering time much greater than the amount of their total engineer count who have good customer retention across projects.
The unspoken alternative in articles like this is that they don't know why they failed, or their view of the market is just not clear enough to form a judgement.
The industry is still in an awkward position where software deals in 'intellectual property', but the concept was never really developed with an understanding of whatever it is that software is. Something like PostgreSQL for example isn't exactly a product, a service or a novel idea. Most of its consumers don't use most of its features. It is almost a perspective on a problem and some codified good design ideas.
It isn't obvious if selling a perspective is profitable. There are a lot of winners in software that don't actually sell software. Eg, Facebook/Google sells eyeballs, Amazon sells infrastructure, Apple sells iPhones.
MongoDB.Inc probably doesn't sell 'a database' if the details of their customer relationships were open for inspection.
> But each of the approaches requires that you get serious traction.
Which is part of what makes proprietary software so much easier: you don't have to have "serious traction". You could even do something like bingo cards and make some money at it, growing the business a bit at a time.
I think that many "software companies" are actually marketing companies that plan to make almost all of their profit from a product that has already been built. They're not necessarily a joke... it's just that software engineering is no longer their main business.
That is the rub of it. Making software and selling it are different skill sets. Not everyone has both. Selling things about getting others to think your incentive is good enough. Not everyone has that skill set.
Though this obviously isn’t the kind of thing that will appeal to the average HN reader, Wix does appear to be having success in the realm. How many of us have a friend or three that wants to bootstrap a small business but can’t afford proper web design/dev skills and are smart enough to figure something like this out? You might argue to them “learn how to code and do it properly”, but there is a group of people that are a large subset of the above group of which no matter how you try to educate will have some sort of allergy to writing actual code. This product is for them.
Side anecdote, in college nearly 10 years ago I had an entrepreneurship professor that singled out Wix as one to watch for a good success story. I guess he was right on that bet.
This is a popular perspective among some technical folks but it's a bit insular. You could tar employees with some tag, there must be space to separate good and bad executives.
A lot of technical folks seem to have very little understanding or even interest in what for instance marketing and sales do. There are generalizations and often anecdotal knowledge that passes for understanding.
Developing software is just one small part of the process of creating value. Software does does sell itself. Creating demand and getting customers is incredibly difficult, expensive and unpredictable. If your target is advertisers based on users then acquiring users and advertisers is equally challenging.
As a thought experiment, get the best technical team and develop a product. Now after it is done, then what, how to do make money, how do you sell it or get users?
reply