Custom Development | Revenue Software | | --- | --- | --- | | Key Metric | Staff Utilization (busy developers) | Users (subscribers, licenses) | | Business Model | Mark-up on staff hours | Re-use of identical bits | | We track... | Projects/programs | Products/releases | | Essential skills | Sales, business development | Segmentation, validation | | Innovation ownership & risk | Client owns IP: we hope they pay and send more projects our way | We own IP: we hope target segment pays handsomely for perceived value | | Graded first on... | On time, on budget, on spec | Market winner vs. competition | | Customer wants a one-off? | "Great! Here's a change order" | "Let me put that (deep) into the backlog." | | Plan to productize platforms? | Always sacrificed when paid projects run late | Essential part of product line planning |
Software has high fixed development costs but also the opportunity to add users at near-zero incremental cost. That means our job as software executives is to
- Keep everyone’s focus on segments of similar-enough customers
- Make sure that we’ve selling the same bits many times
- Push back on one-off feature requests that inch us toward custom development