The Software/Web Business Is Hard As It’s Ever Been (Or Harder)

One of the things you might believe if you read the press over the last few years is how much easier it is now to start a tech company than it used to be. And on some level this is true. There are open source tools, and servers are cheaper, and we now have Amazon Web Services, making hardware costs much more predictable.

But this sort of talk belies the longer term truth. Website development *did* get very expensive during the last bubble of the late 90s. The need for server farms and expensive database products did shoot the cost up. But if you look at the history of the computer business, where we are at now in terms of costs is probably similar to where we were in the 80’s and early to mid 90s. Most of the cost was in manpower. That was the case then and it is the case now.

Just as it has always been, huge teams of people were not the key to success. One or two, or at most a handful of really smart people generally made everything happen inside a development effort. In fact Lotus 1-2-3, the seminal “killer app” from the 80s was written by one guy, Jonathan Sachs, and designed by another, Mitch Kapor. In short, little has changed in terms of development.

The big difference between then and now is really not the development process, or the resources required to create a great product. The difference is in what it takes to get noticed.

In that era, despite the fact that we have viral marketing and blogs and such, I would argue it was *easier* to get noticed than it is today. There was less noise, fewer people who fancied themselves the next Bill Gates or Larry and Sergey. And during those days, regular folks actually *expected* to have to plunk down $399 for a copy of 1-2-3. A single good review in a major PC magazine actually triggered real revenue for most products. And if your product was good, that was very likely to happen.

Today, if you make a communications related product, you *can* go viral. But those products tend not to make money. People confuse fast user growth with success but they shouldn’t.

And so, while it is no easier to launch a successful product, today you have lots of people, lured by the purported ease, that are throwing more junk into the breech. The good news for people that are really doing something useful is most of this stuff really is insignificant. But noise is still noise. If you need proof, you should check out killerstartups.com. It is a daily compendium of everything that anyone is doing that is new. Not good. Of course the quality ebbs and flows. But subscribe for a month if you really want to get a good sense of the almost deafening cacophony of mediocrity.

But again, the point is that to build a compelling product is no easier than it ever was, and to find actual paying customers is, today, much harder than it was in the pre-Internet era. In short, don’t believe the hype.