Highlights from the 2009 Business of Software Conference

Business of Software is a conference organized by Neil Davidson and Joel Spolsky, and was held this year in San Francisco. The speaking line-up is a who’s who of software bloggers and authors, including Geoffrey Moore, Paul Graham, Dharmesh Shah and Joel Spolsky.

Overall the conference was well executed, the speakers were engaging and the opportunities to meet people abounded. The conference was the second reminder in just over a month that I need to get out of the house more often and meet other developers and entrepreneurs.

After getting used to hanging out with a few hundred people with a shared passion for starting “real” software companies, riding home on the train was a let-down as I realized the excitement of the previous 3 days was over.

There were several great presentations during the conference. These highlights focus on the key points I took away from my favorite talks.

Geoffrey Moore

Author of Crossing the Chasm and four other books, Geoffrey Moore has been thinking about high-tech product development longer than most of have been doing anything on a computer.

The key take-away is that product differentiation is how you make money, and neutralization (keeping up with your competition) is how you stay in the game. You have to focus on both neutralization and differentiation, but there is a no-man’s land “gap” in between them where your effort is totally wasted. In other words, being “best in class” is a waste of energy because it means you’ve expended resources to become the best among your peers, but you are not differentiated enough from them.

Geoffrey also talked through the product adoption cycle, but this was less applicable to the products I deal with as a Micropreneur.

Paul Graham

When I moved to the east coast in 2007 I made it a goal to see Joel Spolsky and Paul Graham speak at some point. I wound up seeing Joel, but I never caught Paul when I lived in New Haven or Boston.

Paul was the only presenter who didn’t use slides, and read from what looked like a tattered piece of binder paper he’d pulled from his back pocket. He spoke about 21 trends you should bet on, and 5 you shouldn’t. I won’t run through all of them (I’m sure he’ll publish them in essay form soon), but my favorites were:

Trends to Bet On (excerpt)

  • Software
  • Efficient markets
  • Small companies
  • Super good customer service
  • Server based apps
  • Open source
  • The iPhone
  • Design
  • Real-time
  • Founders

Trends Not to Bet On

  • Credentials granted by institutions
  • Business school
  • The government changing
  • Copyright
  • Anything that depends on the restricted flow of information

Dharmesh Shah

Dharmesh’s talk was my favorite since he left me with a full page of to-do items. An excellent presentation from a brilliant guy.

He spoke about risk (development, market, financial and execution), social media, how you must create content (most likely through a blog) to win in today’s “search” economy. He also looked at calculating the cost of a customer acquisition (COCA) and a customer’s lifetime value (LTV), as well as the customer happiness index (CHI) which is a good indicator of how long they will stay your customer.

Overall, Dharmesh’s talk was filled with behind the scenes metrics from his company, HubSpot, and actionable points for SEO, Twitter, and social media.

Kathy Sierra

“Don’t build a better [X]. Build a better user of [X].”

Give your user a better experience out of the box, as they are learning, and once they are experts with your product. Doing so will build loyal fans and create powerful word of mouth.

Joel Spolsky

Joel’s talk was the same one he gave at StackOverflow DevDays, which I attended and enjoyed about a month ago.

His basic premise is that building new features really does add value to your product. Simplicity is mostly a way to avoid looking like you’re releasing a product that lacks features. Adding features without making the product too complex creates real value for your customers and produces revenue for your company.

photos by http://www.flickr.com/photos/jmpk/

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