How will this make money ?

Patrick’s post on AppJet and my comment on their ability to make money made me dig up this old draft. Every software project you work on, whether it is in a startup or in a big company will eventually get asked the question – how will this make money ? Having thought about this question a bit, I think a much better question is – who will find this useful ? A subtle difference, one might argue, but I think it makes a big difference in how you design a solution.

The “making money” part has to be a side-effect of “build something useful”, so in that sense AppJet is on the right track. Promote money making to be the primary consideration and you will either end up in building a strong sales operation or a bad product (sometimes both). Selling is important and often a difficult task (one which programmers have very little appreciation for). However, it cannot be the foremost concern for a software project in it’s infancy.

If on the other hand you decide to build something useful, you will always focus on delivering something useful to a customer. Once you have succeeded at that, money is more likely to follow. More likely, not guaranteed. Google struck gold by building an excellent search engine, the ad revenue followed. That does not however mean much to all the other startups out there.

Finding a good answer to who will find this useful will contain clues on whether it will make money. The problem is, most of the time, programmers focus on tools other programmers will use. AppJet is an example. In my opinion, this is usually indication of something that will not make a whole lot of money. Examples include, the next big programming language, a compiler for the next programming language, the next big web framework, a framework for building frameworks, tools frameworks that build frameworks and other recursive framework related projects. These projects are ideally suited for open source and if successful, will end up in services and support based revenue streams at best.

Maybe AppJet will succeed with a lean, mean utility-like hosting model, differentiating itself from all the other hosting providers with a novel app development platform or maybe as Patrick pointed out, this is all just a big bubble.

This entry was posted on December 14th, 2007 and is filed under misc. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or Trackback from your own site.