Software 2.0

It’s not just about a new kind of software, it’s also a new kind of software industry

While I’m sure nobody got into it expecting it to be easy, it turns out that building a successful cloud software business is incredibly difficult. In fact, I think the level of difficulty ramps several orders of magnitude more aggressively than many founders had reason to expect when they first got started.

I think part of the problem lies with our perception and our inability to fully comprehend the ultimate nature and future impact of new technologies when they first appear. I suspect the reason for this is that we have become collectively conditioned to expect hardware and software to improve in predictable, incremental steps and not huge exponential leaps.

And while those early browser based apps might have looked innocuous enough when they first leaked into mainstream awareness around a decade ago, it’s now clear that the high level of difficulty associated with building a successful cloud software business feels decidedly out of step with this notion of incremental improvement. Building a cloud software business is not incrementally harder, it’s exponentially harder.

Why is that?

Many of the disciplines required to succeed in a cloud software business; software development, marketing, sales and customer service models, the constant need for more funding etc., bear little or no relation to those of their desktop ancestors. In fact it’s frequently the case that classic software business thinking isn’t simply ineffective inside a cloud business, it can actually be toxic.

So, I think it’s much tougher to succeed in cloud because those who try not only require to build and construct their own products, teams and business processes, they’re also unwittingly constructing an entirely new software industry.

Therefore it’s logical that building a new industry should be several orders of magnitude harder than just building a business. And I guess not many thought they were signing up to build a new industry.