Small Software Companies: The other side of the coin

Posted by Phil
Mar 7, 2007 at 06:55 PM

I think that some of the previous threads have evolved into a conversation about how software companies treat us, and about how we treat them. I have a few thoughts on this topic and will start a new thread.

I know that most of these companies take legitimate and thoughtful suggestions and concerns very seriously, so I assume that some of you are not advocating that they should smilingly accept some of the hypercriticism they sometimes get. In fact,
sometimes I think that a large number of the posts on any given product’s forum are false users from competitors who are there to insult the product with hypercritical nitpicking, erode its business, and spam their own products. Most or all of these posts are uninformed and unproductive. But, fascinatingly, these companies are expected to pay for the privilege (it costs them to run and staff the bulletin board) and are looked upon as somehow illegitimate when they don’t have one….Unfortunately, all of this puts off new users and clouds good discussion of real suggestions and concerns.

So, why do we have such massive expectations from small software vendors? I can only guess, but I suppose its because people think that software is easy to develop and assemble and has low capital costs. The truth is that its cost in human capital is much higher than for many products.

What other businesses are any of us consumers in where we have such expectations? Some examples…
—The iPod’s battery is designed to be unreplaceable so that Apple can encourage you to buy a new one every year (re-purchase of the iPod by consumers yearly is a stated goal of Apple).
—We’ll drop $50 on a mediocre meal or a lousy movie with the family and never mention it to anyone.
—If we buy the R1000 DVD player today, we don’t expect Sony to give us the R1001 six months from now for free.
—If you make a product suggestion to some of these large companies, how often do you get (or expect) a response? Do you even bother?
—Where else do you get to try a product for 30 days for free? Many products offer a return policy, but most want the money up front and provide the refund only if you ask for it.

Obviously I don’t want to lay down $100 on new software an see it disappear from development in a year, and I’m disappointed if that happens. On the other hand, much of the software we talk about on this forum is incredibly useful for its price, if you use it to a productive end. If you write one article with an UltraRecall, Ideamason, or Whizfolders, its organizational power probably was worth its cost in the time and energy it would have cost you to do the job with a less efficient tool. (Of course, if you just endlessly move piles of info from one piece of software to another year after year, it probably does start to look a little pointless). I also, like Jan, don’t think the solution is to buy sofware from the one or two very large companies (like MS) and assume everyone else will be highly proprietary or out of business.

All of which leads me to the conclusion that I’m not sure the economics of the modern software market makes sense, as it currently stands, with consumers having the expectations of it that they do. I would say that dan7000’s medium scenario of $250,000 or so in yearly sales are quite optimistic and probably rarely achieved. And then, we blame them when (as dan7000 so aptly put it), they tire of the constant flaming and proportionally low rewards and either give up or check out.

Of the participants in this forum, there are some excellent advocates for small software companies, and there are those whose expectations far exceed what any company is able to deliver, let alone companies in their first stages of business. As the avant garde for this sofware, I think we need to start looking at our own behavior as consumers and ask ourselves why we’ve been getting the results we’ve been getting; I don’t think that it is because the vendors entered the market to become crooks—the work is probably way too hard for that.

—Phil