Tag: entrepreneur

From a post on Enterprise Ireland’s forum

“We’re a small software consultancy in business since Q3 2006; we’ve recently lost our main customer (they’ve pulled out of Ireland), upon whom we were dependent for about 90% of our revenue; we’re a small team made up exclusively of engineers; in advance of winding the operation up, I would like to explore our options with regard to getting new business; we have deep familiarity with many technologies, mainly in the enterprise computing area and I think it would be a shame to go back to the day jobs, considering we have a very strong team and can compete on cost and results with just about any comparable firm, but alas we have no sales function to speak of.”

Contrast this with a famous Joel Spolsky quote:

Watching non-programmers trying to run software companies is like watching someone who doesn’t know how to surf trying to surf.
“It’s ok! I have great advisors standing on the shore telling me what to do!” they say, and then fall off the board, again and again. The standard cry of the MBA who believes that management is a generic function.
…
The cult of the MBA likes to believe that you can run organizations that do things that you don’t understand.”

Now, I’m not promoting the use of the MBA as any yardstick of competency but I can both agree and disagree with Joel in the same quote based on the first paragraph from the Enterprise Ireland forum.

This small software consultancy has found itself up the creek without a paddle because they didn’t have someone smart in the ways of business at the helm. They may have had the best programmers they could source but their business is going down the toilet because they didn’t think of the business eventualities. They maybe didn’t think that their client would depart the country and this highlights two things to me:

1. Don’t Assume Anything: The directors of the company were not directing. They were just managing. A director needs to be anticipating the direction of the company from the minutiae right up to the ten-thousand-foot view. They should have been expecting the worst. In my own experience, I’ve always considered what would happen if Mac-Sys had a credible competitor and it’s done us well. Now, with the Belfast Apple Store only weeks away, Mac-Sys will have another potential challenge. I think they will be okay due to other things they have in place but the reality of a competitor or a change in business has to be fully realised.
2. Remove your Cataracts: The directors of the company are concerned because their client is leaving Ireland and they’re looking for alternatives. The most immediate thing that springs to mind is why their product is localised to Ireland? Can’t their client use their product elsewhere? Government agencies are always encouraging local companies to export – in this case there’s already a market. What about competitors? Can the product be re-purposed? Rather than winding up the company and posting on a local forum, they should get everyone who is able to walk out on the street looking for new software gigs).

This is why the person running a company, even a software company, needs to be a business person. She can be a programmer as well but she needs to understand the business world and take the unpredictability of business into account. It’s not the just the cult of the MBA who expects people to run organisations they don’t understand, Joel is taking for granted that the person running the software company is a programmer and therefore can understand business as well. While that may be great for him with his established pedigree, it’s not going to be the case for every person. Some people are lucky enough to be able to see with both sets of eyes: that of a programmer and a director. Some can’t. If you can’t you need to recognise this and stop running the company.

I was told a story a couple of years ago about a business that was kept running via multiple handouts from the directors and it wasn’t until the directors themselves were bankrupted that they thought to involve the workers in their own destiny. He was honest with the workers. He had no money left. And with only days to payday, he had to shut up shop unless they could do something. And do something is what they did. They worked on getting new customers, convinced them to pay within seven days and, most importantly, kept every promise they made.

Joel is fond of telling us that a great company needs great infrastructure and that the programmers may find themselves in the minority in a software company. Management is part of that infrastructure. Experienced programmers have been telling me over the last year that programming isn’t hard but you’ll hear an analogue from experienced business managers.

A software company certainly needs competent programmers – individuals who can work together to create a compelling product right from the sketch on the back of a napkin through to the version 1.0 and bug fixes. Without them you have no product. But without someone with a bit of business ken, you’ve no market.