You’re Not Building an App. You’re Going Into the Software Business

Last year, I was discussing a software development project with a senior manager at a major corporation here in NY. He had a $2M budget for software development to be spent over about 12 months. I asked him what kind of software team he was planning to build. “None,” he said. “I’m not starting a software business. I’m just building an app.”

How_Much_Would_it_Cost_QuoraThis is a really common attitude—on display in questions like this one on Quora: “How much does it cost to build a web-site like Etsy?” And you can laugh at the naiveté of the question, but the fundamental idea is really common: people still think that web-based products and apps are just big versions of shrink-wrapped software—like their own personal version of Microsoft Word.

It’s easy to fall into this way of thinking: we understand how to buy products like Microsoft Word. It’s not that different from buying a box of Cheerios. It sits on the shelf in the store. It has a fixed price. You pick it up, take it to the cashier, take it home, and you use it immediately and easily.

But building a web-based product or app for your business isn’t really like that. It’s like bringing home a puppy. Sure you only bring it home once, but you’ve signed up for a dog’s-life of obligation.

What obligations? My business partner Giff Constable just posted this on his blog:

“ The product lies at the center of a suite of capabilities that together form a total experience for customers (and often partners too). For customers, these capabilities include how you market to and acquire them, how you support and continually engage them, and how you charge them.”


Exactly. And it’s in the “suite of capabilities” that the obligation lies. This suite of capabilities… From software developers and operations people to all of the business operations that go into fulfilling the capabilities that the software enables—this suite of capabilities? Well… you’re not building an app. You’re in the software business.

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