We set up a phone screen the next day and then he silently hung up halfway through my answer to the first question. He'd asked "so are you a dev or a designer or what" and I guess "I configure and integrate custom enterprise software packages" was the wrong opening for me to use.
I'm going to have to assume we wouldn't have been a good match.
Feels like you should name names, but even if you don't here, you'll probably do so when retelling this in person to other people.
There are a few glaring exceptions like Google, but for the most part conventional desktop software sells much better than web software. Many web startups have no real monetization plan and are going nowhere fast, some inspired by attitude embodied in The Social Network's telling of "I don't even know what it is yet, how can we monetize!" I've actually had a friend tell me that his startup is not going to do anything to make money at first, because "like Facebook", they "just want to see where things go", or something like that. I think this attitude is pretty dangerous and misguided.
No, web is not the last refuge of software, and $20/mo. is not a high price point.
Before my current job I had no idea of the sort of money that corporations would throw at enterprise software if it filled an need.
We have an enterprise product in a under-developed market; in the first six months we pushed prices up literally 1000 fold without any drop in interest.
I've observed this even in competitive markets.
Enterprise is a seriously seriously big money spinner; you're looking at more cash in a single sale than some of the exits we see.
EDIT: and the irony is that most of this software is not particularly hard to build. A lot of it is just databases with a front end on it; the only bar to entry is being able to work your way through the policy document/guideline/law that you are providing a tool for and figure out what is needed. After struggling to throw together relatively complex web apps for a couple of years, this sort of development is almost cheating :D
"An operating system," replied the programmer.
The warlord uttered an exclamation of disbelief. "Surely an accounting package is trivial next to the complexity of an operating system," he said.
"Not so," said the programmer, "when designing an accounting package, the programmer operates as a mediator between people having different ideas: how it must operate, how its reports must appear, and how it must conform to the tax laws. By contrast, an operating system is not limited by outside appearances. When designing an operating system, the programmer seeks the simplest harmony between machine and ideas. This is why an operating system is easier to design."
- from the Tao of Programming
Yes, I didn't believe it either.
And this is just one of the many line items.
According to VC, some of our bigger customers didn't take us seriously until we charged the money they were used to paying.
The problem with building enterprise (highly-domain specific business) software is that to start, you need to know that a problem exists.
You won't find this information on the Internet or even in books. You need someone with very deep domain knowledge and the insight to recognize that a problem exists, that it has a possible solution, and that the solution has a larger market it can be sold to. The people who know all that, and are willing to take a risk and start a company around it are rare. If you're a programmer, find and work with them.
Figure out a way for a company to do most of X itself with some software whilst still leaving some "wrapping up" or auditing for consultants to do.
Convince consultant to come onboard with their expertise to help develop the software (revenue sharing deal). He/she becomes a ready made sales person once launched.
Price product at fraction of the cost of getting consultant to do the work (i.e. instead of 100K - price it at 10K).
Any tips on the "find a consultant who charges a lot of money to go and do X at a company" stage? Do consultants have conventions or anything like that?
Most web companies would kill (but not alas sell their startup soul) for the average 10 - 15% of the initial license fee for enterprise software that big companies pay annually for ongoing support, maintenance and upgrades. Similarly, I just heard of another iPhone app that clears $6,000 a month. And it's not even at the top of its list when you search by the niche keyword. Some of the decent cash-flow being made in the App Store is never blogged about.
The six percent sales commission that top enterprise salespersons can get on a seven figure deal can easily eclipse a startup's lifetime revenues. Enterprise software is hard because it deals with real world complexity. Consider a payroll system. How do you deal with exceptions? The employees who are grandfathered and get certain perks. The Quasi-legal employment contracts.
There is a famous saying that if you buy SAP software you fit your company around the software. That is you adjust your internal processes and controls to meet The One True SAP Way.
Seriously, I don't understand that part. I'm not sure I understand your main point either, come to think of it. Non-web software matters? I don't think that was disputed.
Web software doesn't deserve the focus it gets on HN because it almost always starts out sans business model, and then half of the population never figures it out, and the other half does, and of that half, 2/3 fail to execute? If anything, that's a description of a pretty exciting, if somewhat high-variance, domain.
And wish your friend much good luck for when - not if - he will try to find a job again.
Funny point: the non-web companies I do freelancing for are totally ok with me using MongoDB, Ruby, JRuby or whatever does the job. They mostly don't care (in my case at least).
Absolutely. Software that runs warehouses. Payrolls. Manages inventory. Manages cash registers. Figures out how to optimize manufacturing across multiple vendors, multiple workstations. Robotics. Warehouse automation and robotics. Embedded systems. 3d rendering. Automated trading. Inventory control. Lot control. Pharmaceutical side effects tracking. Call centers, customer service...
Each of those, and ten thousand more, are all not web related, and each one of those has large communities of developers bigger than hacker news that bend their minds each and every day to the tasks at hand, and they're mostly not web related. Obscene amounts of money change hands every year for creating, maintaining, installing, and customizing all of those kinds of software.
Oracle's annual revenue is something like $100 billion, and it's just one player in a few of the above markets I mentioned. I'm not sure what SAP makes. But then also factor in the myriad of middlemen, integrators, and contractors, and it's a really large sum of money that goes into those things.
Web type businesses get more buzz because there is far more comparatively easy low-hanging fruit for effort vs. reward with a typical web business than in the world of enterprise software. Things like supply chain optimization are comparatively more mature and hashed out than things like making people's lives easier with computers, or connecting people and information in new and enriching ways.
There's still room for innovation in warehousing and so on, but the changes are more incremental, and you have to work harder for each advance than you do with web type companies. The progress still comes, and impacts our lives (witness Wal-Mart, lowering prices for everyone through awesome, difficult, supply chain optimization efforts), but it takes way more work to make a difference than it does with "web" businesses.
I'll be having fantasies tonight about the day I have that problem. NB: Having to go to work each day at a dotcom would is my nightmare.
one deal from these companies can feed a cool startup for 3 years.
More than 2/3rd of the software companies our (web-related) company is collaborating with provide services which are not web related, they might use port 80/443 for webservices but not more.
Casual observation of people around me reveals that almost no-one uses web based software at work. Instead all these companies they work for have invested their budgets into small, medium or large desktop or mainframe packages.
At least 20 of the devices lying around the table I'm sitting at now are stuffed with embedded software. Somebody built these, someone else put a price tag on them.
While it might be equally difficult to develop your customers when selling noWeb (hey!... quick, register domain...) software, the contact with the customers is closer leading to high retention. Moreover it's easier to server them well because you have more methods than just A/B testing to reveal the impact of changes. On previous jobs writing desktop/server-client software I never had the idea that web-based software would fit the customer better.
At the same time I use a lot of web-based stuff without a monetizing strategy, meaning, they charge me nothing.
2ct.
My wager would be that websites and web related stuff (also intranet) now makes up the bulk of the software written but that the money is still made on the other side.
Are you going to measure by line or byte or syntax-tree node or similar? Are we going to include throw-away scripts? What about zeroth order functional programming (i.e. spreadsheets)?
Anyway, I'd also wager that there's more money made outside of the web. (Though, how do we classify, e.g. Apple app-store sales?) For the wager about for what the majority of software is written, we'd need some clearer vision of what we're talking about before.
Let's agree on some definitions (and an arbiter), then we can put up some odds and money.
Face it, this is a rock-star-wannabe site, and unapologetic.
But with some cognitive filtering it's not that bad ...
I found myself at a party in SF on New Years at an apartment that housed a startup as well as its founders. While meeting someone there, the conversation went like this:
"Oh hey, are you part of the company here too?"
"No, I'm in a different startup"
"Oh cool, YC?"
"Yeah, what YC class are you?"
"Actually, I'm not in a startup, I work for..."
The guy turned his head and walked away. Sorry boys and girls, but you're not all Mark Zuckerberg just because you're doing the startup thing, and the rest of us that write code aren't relics of another era. Happy hacking.