Subtitle: So You Want to get into the Software Business
Software is a major part of many businesses. If you ask yourself whether your business or the businesses in your industry will have more or fewer people devoted to software in the next year, the answer is most likely, “yes.”
Why is that?
Most businesses live and die with efficiency. Software is a catalyst for efficiency, so most companies invest in it with the goal of becoming better at what they do. You strive to be better able to execute on the company’s vision faster, more accurately and more predictably.
Consulting companies are an option to achieve this end goal. But they are a lot pricier than employees, so why do it? A consulting company’s pitch is generally something like, “we can do this faster and better than you, and we can do it right now with a team that already knows each other and knows what they are doing.”
But many companies choose to do it on their own. Ultimately, most companies really should have their own teams if technology - and moving that technology forward - is going to be a key driver for the business. I think it will be for almost every business in the future.
Solo Developer Syndrome
The biggest pitfall, however, it hiring just one developer. Over the years, I’ve seen companies do this over and over again. One can see why it seems like an attractive option. If you’re going to spend $100,000 on a consultancy to do something with your technology, why not just spend that on an employee and get maybe up to three times the number of hours devoted to the project?
Here’s the rub. Does this person know what they are doing? As the only person in the organization who is in this new department, who is to say if he or she is doing a great job, an average job, or a terrible job? With whom does this person consult when they run into a problem? If they are tackling a new technology, are they climbing Everest on their own? And when they write code, can anyone but them understand it?
We have had many clients decide to not have our team maintain the software and websites we create with a single, in-house “technology person.” It’s been rare that the person is an expert in the field. More often they are someone really interested in technology, but come in with very basic skills or are sometimes armed only with enthusiasm.
The result is that something that would take an expert 30 minutes takes the new person a month because they have to learn the language, learn the system, and go through all the failures that the expert went through as a junior person.
TIme to market is a huge factor for product companies. But what about mid market or small companies? When a big company acquires a technology company, they are getting customers and ability to deliver the service right away. If they built it themselves, they would lose time by researching, then designing, then building, then marketing the new product. With a mid-market company, is it better to save the money by building both the product and expertise from scratch in-house?
Over the years I’ve seen many companies try this. The effect is that they take aim at a target, then look away while they build. When the product is finally ready, the target has moved and no one noticed. Worse, since they are committed to the investment, they plow ahead with a product that is 2 years too late.
On a smaller scale, we’ve seen companies take over a year to develop their content and delay launching a website. We’ve seen companies hire “a web guy” only to train him so that by the time he’s finally ready to be productive, he’s got bullet points on his resume that take him somewhere else.
What is the best strategy then?
If you’re going to hire just one developer, don’t do it. You will go slower than you thought and it will cost you more for less. Get the help you need from experts.
If you’re serious about making technology core to your business, you’ll need a team. It’s not just about “doing” the work. You’ll need managers, mentors, experts, junior people, and more. If you want a positive return, you’ll need to develop a technology culture using current and best thinking about how to deliver code, how to review it, how to manage technology teams, make decision about remote vs in-office. It’s going to be a new competency. It’s also likely the future of most businesses.
If now is not the time, get experts involved to get your product kickstarted and begin the long process of creating a competency together.
Your first hire should be a CTO. You want someone who can create a vision for what the department can do for the company, what skillsets you’ll need, what support you’ll need from other departments.
From there, that person will likely want to bring in people at different levels with different skillsets. As many have found, being is software is really being in the “great people” business. You’ll want to work on communicating that there is a culture there that attracts the right people who want to contribute and want to stay.
Over time, you want to make sure the department stays current and energized. You’ll likely have to bring in some new practices and policies.
For some companies, these changes are deal breakers. For those groups, it might be more productive and healthiest, a partnership might be the best fit. The lesson is mostly that getting into software isn’t just as simple as hiring one developer.