3 Clues That Your Business is a Software Company…and a Dead Giveaway That It’s Not

1024 576 David DeWolf

It’s fashionable in today’s digital economy to claim that your bank or retail store is a software company. The disruption of nearly every industry sector by tech startups has traditional businesses scrambling to keep up and stave off innovative competitors. These businesses want to compete and stay relevant in the digital economy and they know they must transform in order to do so.

But, the brutal reality is that the DNA of a software business is wildly different from the DNA of a traditional business. It’s nearly impossible to transform a legacy business into a digital business overnight. Just because you employ software developers or build apps doesn’t make you a software company. More importantly, it won’t keep you competitive. 

So how do you know whether a business is truly a software company? As the saying goes — if it walks like a duck, quacks like a duck, and has webbed feet like a duck, it probably is a duck.  Here are 5 clues that you are — and a dead give-away that you’re not — a software company. 

You call them engineers. 

Software companies employ software engineers. They don’t employ programmers and developers.

The main difference in these roles is scope and autonomy. Programmers simply write code. They are handed specifications and create syntax that implements requirements. Developers take a slightly broader approach. They may help build and test and may assist with the deployment of the syntax they write. 

Engineers, on the other hand, assume a broader set of responsibilities. They help define the software architecture, design the software and deployment pipelines and plan release schedules. According to the University of Arizona, “they bring a background in scientific method and have an understanding of engineering principles crucial to the role, along with good communication skills to relay information between teams and clients”.

If your business has “programmers” and “developers” you’re not a software company.  If you have hired engineers, you may be. 

Product, not project, managers run your teams.

In a software company, the most critical role is product management. 

According to Marty Kagan, the job of a product manager is “to discover a product that is valuable, usable, and feasible.” Product Managers sit at the intersection of the organization — from finance to technology. They gather market research and customer feedback. They assess and understand the competition. They oversee the planning, design, build and marketing of the product. Ultimately, the Product Manager facilitates decision-making between organizations in order to make sure that all efforts build value for the customers and the business.

In legacy businesses, project managers run the show. Their job is to keep efforts on time and on budget. They manage scope and drive efficiency. 

If your software development efforts are being run by project managers, you’re not a software company. If you’ve empowered product managers to navigate what’s being built, you may be.

You are obsessed with customer experience. 

In The Product Mindset, Jessica Hall and I explain how the digital world has enabled entrepreneurs to innovate and create value for customers with unforeseen efficiency and at an unprecedented pace. Not only do customers have a myriad of choices, the cost of making that change has never been so low.

As a result, digitally mature organizations are obsessed with their customer experience. They continually collect feedback and look to solve real customer needs. They seek to create a fully integrated customer experience that drives loyalty. They are continuously chosen. In a nutshell, software companies look to make customer interactions as seamless and delightful as possible.

If your Product Development is driven by customer research and you continuously collect customer feedback that helps you prune and prioritize your backlog, you may be a software company. On the other hand, if your software development efforts are dictated by requirements that have been defined by “experts,” you’re not a software company.

But, you need to get “funding.”

Software companies understand that software is their business. As a result, software development is embedded into their core operations.

The cost of ongoing innovation and product development is the ongoing cost of running a software business. As a result, software companies don’t “fund” software projects, approve capital expenses or get approval for an effort. Just like purchasing isn’t a one time project for a retail company or running the assembly line isn’t a project that needs approval at a manufacturing company, software companies consider product development core to their business.

If it walks like a duck, and talks like a duck.

You may have product managers, engineers and obsess with customer experience. Regardless, if you need to continually seek funding, you are absolutely not a software company and the brutal reality is that your bureaucratic processes will not allow you to thrive in this digital economy.