Your company WILL bea software company

In short, software is eating the world.
—Marc Andreessen

Industries that don’t adopt software die. They’re overtaken by more efficient organizations or completely displaced by disruptive new technologies.

At this point, there are countless examples:

Media distribution (news, music, movies) was revolutionized by the internet. These companies used to completely control their own means of distribution. Nowadays people get their news from Twitter, their music from iTunes (which fragmented album sales into tracks), or by streaming it from Spotify. They get their movies, which were produced with software, on Netflix. These industries are realizing now, far too late, how important it is to own their distribution channel.

The automotive industry is adopting increasingly sophisticated software to decrease costs and improve the safety and user experience of driving. Everything uses software: from blind spot detection, self-parking/driving, to calculating optimal fuel injection and battery recharging strategies. Teslas was able to enter a competitive market with huge incumbents and become a premier player in just a few years partially because of their better application of software.

Software in the financial industry is an obvious competitive differentiator. High frequency trading algorithms have been driving $20B+ in profits to the banks with the resources to pursue them. On the consumer side, it’s a basic expectation now that banks have a readily available array of web services: bill pay, mobile check deposit, etc.

I could go on, and Marc Andreesen does. Let’s accept this point: Being a market leader will require software.

Adopting Software Isn’t Enough

Third-party software is an 80% solution

There are lots of really great existing software solutions for typical business problems today. Must Win relies on a few: Google apps, Slack, ZenPayroll, and several others. We love them, and they brought us far. But with all of these third-party tools, you will inevitably reach a point where you wish it did something a little differently. Often, you end up needing to do some development work to get what you want out of it.

We see a lot of companies that need customized strategic data dashboards, event collection or data exports for modeling their core metrics. Lots of companies would like to deeply integrate with multiple services. This typically requires some understanding of APIs and their usage. Glueing your tools together so they do exactly what you want will require custom development.

Software made for the masses isn’t made for you

Often processes in organizations are emergent and well-engrained. Shoehorning a rigid workflow that took many iterations and plenty of political hurdle-jumping to get right into an off-the-shelf tool may be too much of a disruption. These processes are special because they form fit your people, but they’re not special for technical reasons. They can still be made more efficient with software. You just might have to make software for them yourself.

It’s also possible that problems faced in your organization may be problems that don’t have existing SaaS solutions. One of our clients has project teams that give presentations regularly and there was a feeling that projects with better designers were awarded a disproportionate amount of attention, so they wanted to standardize their presentation formatting based on a static set of data. Ideas are now rated solely on merit. There’s probably not a huge market for a tool like that, so a SaaS offering isn’t around the corner, but it solved a very real organizational problem for this company.

Innovation tempers disruption

Innovation distinguishes between a leader and a follower.
—Steve Jobs

Software should become a core competency

We’ve applied software successfully at companies in a few key ways:

Process efficiencies

Efficiencies can come from automating tasks or by solving communication problems. Instead of scouring the internet for data to include in your weekly TPS report cover sheet, a computer could do that for you while making sure it’s up to date and it will maintain a nice historical record to boot. Another common one that makes me cringe is anytime versions of spreadsheets are being sent around via reply-all emails. Nobody is ever quite sure which version is the latest or what got changed along the way. It’s like a fun game of telephone — except it’s happening in your office and hours of productivity are lost every time something is missed.

Metrics data

Software companies (especially games and SaaS) are already very metrics oriented, but many other industries are not. TV show ratings are still archaically determined by Nielson’s statistical sampling of ~6000 households, compared to the 115MM households with TVs. Netflix and other on demand sources continue to grow in large part because of the significantly better data they can collect. It allows these services to suggest new things to you on the fly; adding consumer value and enabling them to cross-sell different products. Many industries haven’t even figured out how to collect any of the metrics that are absolutely core to their business!

User Experience / Distribution

Even non-technology businesses are benefiting from software.

Businesses without an online presence lose out on the quickly growing cohort of internet purchasers (22% annual growth, in Nordstrom’s case). Those same high-end, sophisticated customers expect to get high-quality support from those same convenient online channels.

“Just because you have a great brick and mortar store, customers won’t give you credit for that while they’re shopping your lousy online store, and vice versa.” — Jamie Nordstrom, president of Nordstrom Direct

Virgin Atlantic has notoriously good customer support, but when they added technology supporting live-chat, they were able to raise conversion rates of people that interact by 3.5x. Software technologies are improving customer spend, retention, and satisfaction in companies in every industry.

Research & Development

We’ve seen how software is driving optimizations and disruptions in every industry. It will continue to be a key part of successful iterative product development strategies. And we’ll also see companies adopt software in the pursuit of meaningful strategic initiatives to improve core areas of their business. Learning how to utilize it and actively developing products to harness its power to engage, satisfy or dazzle your customers is going to continue to be a key differentiator in companies that thrive.

This won’t always be practical

Software is hard and lots of companies are not made for it. That’s okay. Software can bring lots of advantages, but it also comes with a set of challenges. Recruiting top notch talent at reasonable prices is already difficult for the largest tech brands, so identifying it and retaining it in non-technical companies will be nearly impossible.

Must Win, and companies like us, can help companies that don’t have in-house expertise stay innovative. We work with a lot of companies that realize they need to become a software company but aren’t there yet. Some clients even have a small team of technical people to project-manage strategic initiatives internally, and they lean on consultancies like Must Win to deliver on their vision.

Shoot us an email when you’re ready for your company to become a software company. We’d love to help. In the mean time, join our mailing list for more updates on what’s going on in the world of software.

Mike Ihbe is a founding partner of The Must Win All Star Web & Mobile Consultancy.

Mike is an expert in a dizzying array of technologies and has loads of experience managing fast-moving dev teams, designing systems, and scaling large applications. When not on the job, he can be found cooking delicious meals on ski slopes in exotic locales.