A Frog in the Valley

Alex Williams has a post about choosing how to sell your (software) product or service. He outlines three options ;

1. Closed-source hosted application running on my own servers with various subscription plans (i.e. blinksale)
2. Closed-source downloadable self-hosted application with a one-time fee + extra charge for upgrades (i.e: userscape)
3. Open-source extendable & downloadable self-hosted application with a one-time fee + extra charge for upgrades (i.e. mint)

He then goes on pros and cons of each, from a sales perspective. It struck me how this “selling prcess” was such a strong influence on the software development process (including operations and post-sale tech support). Here my partial accumulated wisdom on this subjet (posted in his comments) :

That�??s a good question to ask up front, how is your product going to be �??sold�?�, because each of these completely change the type of companie and the team you need to build and prosper. I did all three options and the pains for each are quite different :

1. Closed source on your server is nice, but you need to have a solid process for planned downtime, upgrades and not skimp on training for customers. When there is a bug, all of your customers have it at the same time! This call for much tighter risk management and strict process.

2. Download and install seems to suggest that it will be easier since your customers �??take care of the server�?�. The problem with that is you are in a subtle way drawn in the IT department of all your clients, because it can�??t be their problem, everything was fine before they installed your software! Insist on dedicated servers with exact specs for underlying tech (ie. not just �??linux�?� but �??Red Hat Enterprise 5 with xyz packages�?�).

3. The third one is my favorite, because open-source often hints at �??no support for free, that�??s how we make money!�?�. Just throwing code on sourceforge does not make an opensource success. You need to have a product manager and a technical lead that are willing to go on the mailing lists, answer questions, to FAQs and public documentation. But in the end, it�??s a much saner technical process, because bugs come out fast and in pulbic, it�??s the right amout of pressure to develop a great product�?�

The main take away for me here is that your technology skills must be aligned with the business objectives, that includes sales. Most often, sales and software development are seen as complete opposites in companies, a quick look at the corporate subcultures in these department will reveal a lot!

But if you think of software development as a cycle (iterative development) and sales as an ongoing process (not a one shot deal), you can picture the line from “idea/need to development to sales” as a circle (with many other steps in between, I’m taking shortcuts here). Then sales and software development are right next to each other!

Tags: programming, software development, startup