Se ha denunciado esta presentación.
Utilizamos tu perfil de LinkedIn y tus datos de actividad para personalizar los anuncios y mostrarte publicidad más relevante. Puedes cambiar tus preferencias de publicidad en cualquier momento.

Four Laws of Software Economics

1.426 visualizaciones

Publicado el

There are some fundamental laws of software economics that should drive executive-level decisions about business and product strategies. It’s easy to forget them, or decide they don’t apply to our special situation. ( After all, gravity’s not just a good idea, it’s the law.)

This describes some essential facts about the (software) world, and posits matching laws of product strategy:
- Your development team will never be big enough (thus: Law of Ruthless Prioritization)
- All of the profits are in the nth subscriber (thus: Law of Build Once, Sell Many)
- Software bits are not the product (thus: Law of Targeted Whole Products)
- You can’t outsource your strategy (thus: Law of Judgment)

Publicado en: Empresariales
  • Sé el primero en comentar

Four Laws of Software Economics

  1. 1. FOUR LAWS OF SOFTWARE ECONOMICS RICH MIRONOV @richmironov
  2. 2. Your development team will never be big enough Fact #1
  3. 3. Development can never build as fast as we can dream
  4. 4. Magical Thinking “CEO says it’s really important.” “We already promised it to a big prospect.” “How hard could it be? Probably only 10 lines of code.” “We’ve been talking about this for months.” “We’ve gone agile, which gives us infinite capacity...” “My neighbor’s kid could do this in an hour.”
  5. 5. #1 Law of Ruthless Prioritization • AND requests but EXCLUSIVE OR decisions • We succeed by finishing a few critical things Executive’s Job • Make hard trade-offs • Battle magical thinking and “specials”
  6. 6. 4 Laws of Software Economics 1. Your development team will never be big enough Law of Ruthless Prioritization 2. All of the profits are in the nth subscriber
  7. 7. Fact #2 All of the profits are in the nth copy or nth subscriber
  8. 8. Revenue Implications $1M/year $6M/year Close to zero • Your development team of 6 costs… • Implied revenue commitment… • Incremental cost per user? • Goal is not to minimize costs but to maximize revenue
  9. 9. Software Tiers/Bundles
  10. 10. Opposing Models 11 GrossProfit
  11. 11. Art courtesy of Arne Olav Gurvin Fredriksen
  12. 12. There’s nothing more wasteful than brilliantly engineering a product that doesn’t sell.
  13. 13. #2 Law of Build Once, Sell Many • Segmentation: strategic art of choosing customers who want the same solution Executive’s Job • Focus on segments, not deals
  14. 14. 4 Laws of Software Economics 1. Your development team will never be big enough Law of Ruthless Prioritization 2. All of the profits are in the nth subscriber Law of Build Once, Sell Many 3. Software bits are not the product
  15. 15. Naked without • Deep customer understanding • Specific target audience • Working solutions • Positioning, messaging, awareness, sales Fact #3: Software Bits < Whole Product
  16. 16. Undifferentiated or poorly positioned Marketing/sales /channel failures Late delivery Poor quality Wrong problem, wrong solution Commercial Software Failure Modes* *In my personal experience
  17. 17. Most of the success / failure of a product is determined before we pick our first developer or fill out our first story card
  18. 18. #3 Law of Targeted Whole Products • Customers buy solutions (which may include software) • Mean-Time-To-Joy Executive’s Job • Focus on problems worth solving for specific segments • Customer story as important as working software
  19. 19. 4 Laws of Software Economics 1. Your development team will never be big enough Law of Ruthless Prioritization 2. All of the profits are in the nth subscriber Law of Build Once, Sell Many 3. Software bits are not the product Law of Targeted Whole Products 4. You can’t outsource your strategy
  20. 20. Fact #4: Input < Decisions • Voice of the Customer • Surveys • Crowdsourced feature ranking • Showcase customers • Industry analysts • Competitor data sheets • Smartest customers • Smartest developers • Executive Survey-of-One • CEO’s mother-in-law • Inflight magazine
  21. 21. • Business value error bars >> engineering error bars • Bottom-up prioritization  ugly products • Trade-offs among unlike items are heavily biased Analytics < Strategy
  22. 22. Prioritizing Within Buckets Prioritization within Buckets
  23. 23. Features for current release 50% Quality (refactor, test automation) 15% Engineering overhead, 10% Big future bet, 5% Sales one-offs, non-roadmap 20% Typical Development Budget* 24 *In my personal experience
  24. 24. “I skate to where the puck is going to be” Strategy Requires Strategy Strategy requires judgment
  25. 25. 4 Laws of Software Economics 1. Your development team will never be big enough Law of Ruthless Prioritization 2. All of the profits are in the nth subscriber Law of Build Once, Sell Many 3. Software bits are not the product Law of Targeted Whole Products 4. You can’t outsource your strategy Law of Judgment
  26. 26. Rich Mironov Mironov Consulting San Francisco, CA rich@mironov.com +1-650-315-7394 twitter.com/richmironov linkedin.com/in/richmironov

×