Seth Godin has written an interesting blog post The business of software. His blog is a must.
Some of the highlights I liked from the post:
it’s become clear that software alone isn’t the point. There isn’t a supply issue–it’s about demand. The business of software is now marketing (which includes design).
COMMUNICATE TO USERS: As we’ve seen in just about every industry, marketing involves effectively communicating a story about benefits to (and among) the people who will appreciate them. For software entrepreneurs, this means identifying a group of people who need the utility of what you can offer them and who are willing to give you permission to educate them about why they should buy. Without either element, the software is dead.
So, the questions I’d ask:
- Who can I reach?
- Is the product so remarkable that they will talk about my product with their peers?
- Can I earn and maintain permission to continue the conversation?
- Once they learn about the utility offered, will they pay for it?
When building a software business that uses the network effect, I’d ask:
- Does the connection this enables create demonstrable value?
- Is there an easy and obvious way for someone who benefits to recruit someone else to join in?
- Is it open enough to be easy to use but closed enough to avoid becoming a zero-cost commodity?