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Have You Accidentally Become a Software Company? Without realizing it, your business may have changed -- and that can be a good thing.

By Joel Basgall

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.


See if this sounds familiar.

We all try to work smarter, not harder. Of course that approach never quite works out, because while you often find ways to work smarter the demands of building a business means you also work harder, too. (That's why most successful people work smarter and harder.)

Working smarter means seeking ways to leverage your knowledge. One key way is to share your expertise with other people so you can create even more leverage, scale your abilities and drive better, more consistent service for your clients.

So maybe you start by capturing some of your thinking in a spreadsheet; that allows you to systematize and even automate some common tasks. Plus, you can store knowledge for later use and comparison and easily share that knowledge with others.

Much to your surprise, your spreadsheet works so well that others in your organization start to use it. You're a hero: you're the guy or gal that makes other employees more efficient and effective.

You're also the guy or gal that gets feedback and suggestions on how your spreadsheet can be improved. Enhancements beget further feedback, which beget more enhancements… and before you know it your spreadsheet has grown to Biblical proportions.

Related: Can a Software Development Company Be Your Co-Founder?

And even though it was never your intent, some of your coworkers have started to use your spreadsheet with clients. And why not? The knowledge and expertise contained within shows clients how your company is more efficient, more capable -- it sets you apart.

Of course all those client interactions naturally generate more feedback, which naturally spawns additional enhancements. And one day you wake up and realize you've built an incredible spreadsheet dozens of people not only use but rely on… and you realize that Excel definitely has its limits. Your spreadsheet should do more, but it can't do more.

So you, or a buddy, spend a weekend building a small software application that has greater capabilities than Excel. It could just be an Access database. Clients see your new application and love it even more. In fact, your new application becomes one of the reasons clients love your company. Your sales team and reps know that prospective customers are more likely to buy your service when they see your application, so suddenly all your reps are talking about it during the sales process. Although you never intended it, your application now helps inform client purchase decisions.

You're a superhero. But a superhero's work is never done. Feedback, suggestions, and requests for additional enhancements start to pour in. So you modify functions. You add features. You build in greater flexibility.

But you're always behind. Now that your customers not only use, but depend on your application, they complain when it doesn't work perfectly. They express concern when you don't immediately make improvements they request. They don't understand why your application is not infinitely customizable.

So you assign someone to work on your application for a few hours a day. Soon that turns into half a day… then all day, every day. Before you know it you need two developers working full-time to maintain and improve what was once a spreadsheet but is now a key driver of company revenue and customer satisfaction.

Before you know it -- and without thinking of it this way -- you now have a software product… and like it or not, you're on your way to becoming a software company. Now you have significant revenue tied to your application, both directly (because clients pay to use it) and indirectly (because the application facilitates your ability to service your clients.)

And now customer expectations have increased even though your ability to meet those expectations has not. Your little home-grown application is all grown up and become painful and expensive to maintain and evolve. Worse, it still has bugs and glitches… and it can't even handle the current number of users, much less allow for future growth.

Related: Why Your Company Should Consider Outsourcing Content Creation

So you call an outside company for help and learn it will take six months and cost a million dollars to build a "real" version of your application. That sounds like a lot of time and money for what started out as a spreadsheet, so naturally you shop around for other bids. Each response, unfortunately, is basically the same.

And you sit at your desk, head in your hands, feeling stuck: It's too late to turn back now -- but it also seems too expensive to move forward.

How did all this happen?

One mistake was that you could have afforded – even though you didn't realize it – to invest in your application as it evolved. You could have made small investments early on that set you up for further success and saved money in the months and years to come.

Another mistake was taking what seemed to be the easy road to product development. Early on you realized you needed greater expertise, but you also knew you couldn't afford to hire full-time developers and coders with the right skills. What you really needed was a software product group that you could use on a part-time basis… but that also provided all the expertise and experience you desperately needed.

What you needed, more than anything, were Product Vision and Architectural Vision.

Product Vision gives you insight into your customers and their needs. Product Vision provides a road map for how you will evolve a product over time.

Which features should you add, and when? Who will want those features? Can you charge -- or charge more -- for those features? What happens if you don't add those features? What is our competition doing -- and what will they do in response? Product Vision keeps you from simply reacting to employee and customer feedback and makes the enhancement process proactive instead of reactive. Product Vision, in short, provides a plan.

Architectural Vision saves you from being forced to make sudden, major investments with little forewarning. Having an architect involved, early and often, with your product can help you make decisions with real leverage so you can grow and evolve your product with controlled spending and minimal rework.

Related: Running a Software Development Company

Sure, some rework will always be necessary as your needs increase and your product evolves, but that rework should be performed in a systematic and controlled way -- and only when it's needed. Engage in rework too soon and you can't recover those investments soon enough; engage in rework too late and you annoy customers and risk losing them to your competitors.

But wait, there's more.

Product Vision, Architectural Vision, and Pricing Models create a plan, but no plan can be executed without great people.

Staffing is a real challenge if only because the software industry is different than most industries. People working in software are accustomed to regular, rapid change. They're accustomed to accustomed to the need for continual change and adaptation. The programming languages used today may be completely different than those used two years ago. Hardware and infrastructures change on a regular basis.

The rate of change means skilled coders and developers actually fear a lack of change -- and as a result they dislike repetition. They'll leave a job that isn't challenging. They'll leave a job that doesn't provide opportunities to grow and evolve their skills.

So how do you keep smart, talented people interested and engaged? You need a lot of work, work that constantly changes and evolves. And if you're new to being a software company -- if you're an accidental software company -- and you only have one product, you don't have that kind of work for your coders and developers to do. So they get bored. Or leave.

The trick to being a successful software company, whether an accidental software company or not, is scale. If you don't have enough products with extensive road maps, you really don't have the ability to grow and evolve any of your software products -- even though that's now what your customers not only expect but demand.

Joel Basgall

CEO and Co-Founder, Geneca

Joel Basgall’s penchant for finding new ways to use ideas has propelled his career as the CEO of Geneca. His passion is using software to drive market innovation.

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